A Framework for Purchasing and Integrated Product Teams

THE SETTING Are teaming and empowerment simply two more short-lived management techniques? In the case of many new management initiatives, workers are saying, "Stop with the fads. No more posters, seminars, and training classes."[1] The trend to date suggests that teaming and empowerment are here to stay. Today the United States finds itself in an era of intense international competition and business upheaval, with rapid advances in technology and reduced product life cycles. In response, firms are reassessing their traditional ways of doing business. Revolutionary changes have already occurred in production philosophies and the treatment of inventories - witness the growth of just-in-time applications. Improving the process dimension of organizations has been the goal of total quality management (TQM) initiatives. The logical next step is to improve the human resource side of the operations. This is one of the few remaining untapped opportunities for American industry. In the future, world-class performance will be a function of how well industry is able to manage its human resources. Firms have made extensive investments in new technology and capital equipment, while attempts to improve the human side have been minimal at best. Ironically, this is the only resource that appreciates with time. In today's environment, technology can become obsolete overnight and capital equipment can depreciate rapidly.[2] Many believe that the best way to capitalize on a firm's human resources is through the use of teaming and empowerment. Teams can be created that include workers with different skills from different departments. Advocates claim that teams should be given the power to develop a product, manage a business, improve a system, or plan their own work schedules. Theory says that when employees gain this level of control, they will work faster and smarter, with an eye toward profitability. Such teams tend to manage themselves and may become the foundation of the new organization. Unfortunately, although many firms have tried this team approach during the past decade, most are still struggling to reap the advertised benefits of the teaming concept. This article is based on nine case studies of commercial and government organizations that have implemented the cross-functional teaming approach. These case studies provide significant insight into a broad range of organizations: * A chemical and manufacturing firm * A large computer/communications firm * A large paper products firm * Three firms that provide environmental remediation services * A federal government agency * A medium-sized municipality * A public utility The study examines how these organizations have tried to implement teaming arrangements in the past and it highlights the obstacles encountered. In the final analysis, the research has led the authors to a new approach in viewing the organization - one that uses integrated product teams to overcome shortcomings of past approaches and to provide for the integral role of purchasing in the corporate mission. The latter part of the article offers some implementation guidelines that tend to minimize potential obstacles to success. HOW THE STUDY WAS CONDUCTED With the objective of obtaining as diverse a sample as possible, numerous organizations were contacted to determine whether they employed cross-functional teams and whether they would be willing to participate in the study. The nine organizations finally included in the study represent a varied cross-section of both government and commercial organizations, as previously noted. The level of experience each organization previously had with using teams also varied widely. The federal agency had been using the team concept for over five years and had considerable experience with both large and small teams. One of the environmental remediation firms had begun testing the teaming approach only within the previous six months. …