Supply Chain World - Fall 2017 - 136

solutions internap corp. (inap)

captured data and drilled down into
the company's purchasing processes to develop new buying metrics.
From there, the team learned
what products people within the
company were buying, from whom,
how frequently and at what price
points. With that new data, INAP
was able to determine a strategic
approach to consolidating suppliers and commodities.
"Having the right strategic
sourcing partners provided
benefits in lead time reduction as
well as savings, but understanding
the inventory across all the sites
was an opportunity that we also
wanted to leverage," Crowe says.
During the third and final phase of
its procurement transformation,
INAP focused on its visibility into
the inventory. By knowing which
facility had what part, Crowe says
the company became more reactive
to customers. It reduced lead
times by transferring needed parts
or equipment between facilities,
allowing it to consume resources it
already had instead of submitting
new orders that might take more
time to fulfill. Sites can now directly
ping INAP's inventory system and
see what materials are available.

Seeing Results
Since phase one implementation
began in 2015, those efficiency
improvements have contributed to
significant cost savings. "I believe
the transformation has been very
successful," Crowe says, adding
that employees throughout the
company have bought into the
process. "Not only were we able to
make the change, but the predominance of people were happy with
the approach."
136

Supply Chain World FALL 2017

"Personally, I believe
getting to a position
where you can deliver
in hours is possible on the
cloud side."
_________
The change to a centralized
procurement structure has already
created benefits for customers. As an
example, INAP recently added a key
customer to its Los Angeles data center. During that process, INAP pulled
materials not-in-use from other sites,
saving the customer two weeks of
lead-time and reducing the overall
cost to the company.
The move to centralization also
changed the company's vendors.
INAP eliminated redundant
suppliers and found areas where
it could increase its business with
some providers. In all, Crowe says
INAP refocused or changed about
70 percent of its supplier base.
Some suppliers, such as CDW,
were elevated from small players
to key providers, while others,
such as Iron Systems, became
primary contract manufacturers.
Iron Systems provides end-toend manufacturing and turnkey
integration for the server systems
that power INAP's hosting and
cloud services. Because supplier
consolidation has created a greater
spend with fewer partners, INAP
now enjoys a closer relationship
with manufacturers such as Iron
Systems. This allows the company
to work more closely to reduce
lead times when a client needs
server capacity.
"Iron Systems has been very
good at working with us to keep

lead times and cost in check,"
Crowe says. "They just seem to go
above and beyond to help us when
we really need to meet or exceed
customer expectations."
At the end of 2014, when INAP
still had a decentralized procurement process, it took as long as 14
weeks to manufacture and ship
servers to the data centers. Today, it
can take as few as five days because
of the fast response times and
direct coordination with suppliers
made possible by the centralized
buying structure and developing
relationships with key suppliers.
Improving demand forecasting
and preemptively installing server
racks that can be activated once
an order is placed will allow for
even faster response times in the
near future. "Personally, I believe
getting to a position where you can
deliver in hours is possible on the
cloud side," Crowe says.
Crowe's goal is to create a sourcing department that is continually improving the experience for
both INAP's external and internal
customers. He constantly mentions how important it is to have
a strong team that is capable of
making data-based decisions as
well as driving change within the
organization.
With the third phrase of the
transformation complete, the
team will not rest. "We will constantly be reviewing the system
and the processes for areas to drive
cost reductions and improve the
user experience," Crowe says. "We
made significant progress over
the past three years but the team
knows that we can't stop - we have
to continue to refine and improve
or fall behind."



Table of Contents for the Digital Edition of Supply Chain World - Fall 2017

Contents
Supply Chain World - Fall 2017 - Cover1
Supply Chain World - Fall 2017 - Cover2
Supply Chain World - Fall 2017 - 1
Supply Chain World - Fall 2017 - Contents
Supply Chain World - Fall 2017 - 3
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