Supply Excellence — Chrysler Rolls Out Proven Formula for Purchasing Turnaround

Chrysler Rolls Out Proven Formula for Purchasing Turnaround

January 4th, 2008 · by Tim Minahan · No Comments · automotive sector, supply management

Eight months after taking the wheel of ailing Chrysler Corporation, former Home Depot CEO Robert Nardelli (and his well-heeled private equity backers) has named a new Chief Procurement Officer. Although who was appointed comes as no surprise to readers of Supply Excellence.

As speculated here back in September, Nardelli yesterday finally tapped his old lieutenant John Campi to lead Chrysler’s global purchasing organization. The reason is simple: As Senior Vice President of Global Sourcing and Vendor Management at The Home Depot, Campi helped fuel the retailers surge to market leadership by keeping a lid on costs and establishing reliable supply lines from far off locales to store shelves. This formula worked well at Home Depot. So why mess with it.

Nardelli is hoping Campi will deliver a repeat performance in Chrysler’s revival, especially in supplying markets outside of North America. But the road to recovery won’t be smooth riding. Although backed by Cerebus Capital, Chrysler is not as well funded as some of its larger competitors, giving it less leverage with suppliers. The company hopes to remedy this issue with increased joint ventures and alliances with other automakers, such as Nissan. The alliance strategy is intended to not only increase Chrysler’s buying power but also to expand its model lines, and to offer access and muscle in regional markets.

The automaker will also continue to face resistance from labor unions as it trims production in North America. And many suppliers, who were key to Chrysler’s first turnaround under Lee Iaccoca, are still smarting from the more heavy-handed tactics they experienced under the Daimler-Chrysler reign.

Despite these factors, Campi seems up to the task. And Chrysler seems committed to having purchasing and suppliers play a leading role in its revival. “Purchasing plays a critical role in cost management and building high- quality vehicles for our customers, and affects every facet of the Company,” Campi said in a company-issued release. “My goal is to take a disciplined approach to purchasing and apply best practices learned from both within and outside of the automotive industry.”

Campi certainly has the pedigree to make good on this mission statement. In addition to whipping Home Depot’s global sourcing operations into shape, Campi served as CPO for Global Sourcing and Logistics for DuPont, giving him ample experience in complex and global manufacturing environments, albeit in the process industry.

Also working in Campi’s favor is that he has had a few months to assess Chrysler’s procurement operations and supply relationships, while serving as a consultant to the automaker. So he is a good position to hit the ground running with a new plan to repair Chrysler’s existing supplier relationships and to develop new sources and supply lines to support Chrysler’s global expansion plans.

Campi’s new vision for Chrsyler’s supply strategy (and Nardelli’s vocal support of it) will not only help the automaker drive toward its goals, it could also help spotlight the strategic impact of the supply management discipline.

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