IN THIS ISSUE - Amazon S3 · resources and related capabilities the organization needs or...
Transcript of IN THIS ISSUE - Amazon S3 · resources and related capabilities the organization needs or...
PRESIDENT’S MESSAGE
I hope that all who to
attended the February
meeting enjoyed the
economic overview
provided by Dr. Ernie
Goss as well as the
networking opportunities
with the attendees from
APICS, SLMSDC, and STL
MAPP. The meeting was
very well attended with
108 in attendance. This
was one of the highest
meeting turnouts in
recent memory. If you
were not able to attend, I
have posted Dr. Goss's
presentation on our
website.
I hope you can join us in
March to hear Jean Ponzi
speak regarding Green
Business Practices.
Larry
IN THIS ISSUE:
ISM LEADERSHIP Executing your Strategy Predictions - Tompkins Hear that train comin’ - ARA Contract Management US MARKET – a snap shot
Each year in March, Institute for Supply Management™ (ISM)
demonstrates its commitment to lead and serve supply management by encouraging celebrations and awareness activities showcasing the importance of the profession. Supply Management Month is a time
when professionals around the world — regardless of job title, organizational role or ISM membership status — can play an
important role in promoting supply management. Supply managers' capabilities and responsibilities have seen
unprecedented growth in importance in recent years. Never before have supply managers been asked to do so much and take on as
much responsibility as they do now. Supply Management Month is a perfect time to celebrate ... and educate others about who we are
and what we do!
Save the Date! MARCH 26th
– Green Business Practices
Jean Ponzi –Missouri Botanical Garden’s EarthWays Center
MARCH 28th - Contracts Basics Seminar
Instructor Rick Anzelone – DRS
APRIL 23rd – IT Strategy in Procurement
Andrew Ozlowski – ClearEdge Partners
ISM LEADERSHIPJoseph L. Cavinato, Ph.D., C.P.M.
The supply profession continues to change, expand, grow and evolve at an accelerating rate. Today's
dynamic times provide opportunities for new and better strategies, tools and practices which in turn, cultivate more complex supply professionals and companies. The ongoing development and sophistication
of this field of supply management requires a periodic look at the dimensions of supply to understand
how it is being practiced and influenced, and how supply impacts results and performance across the enterprise and the supply chain.
ISM leadership carefully crafted and periodically updates the future-oriented definition of supply
management. Today it reads: "The identification, acquisition, access, positioning, management of
resources and related capabilities the organization needs or potentially needs in the attainment of its
strategic objectives." The remainder of this paper discusses each of the dimensions of supply.
Identification: Supply professionals' interactions are broader than ever before, from consumer and
customer and across the company's stakeholders and top management and through the supply base—all
with the goal to identify opportunities and needs. Identification continues with understanding risks,
effects, performance requirements and paradigm shifts across products, services, processes and
geographies.
Acquisition and Access: Acquisition is a broad concept capturing the concept of the many ways an
organization can acquire and use products and services. Access reflects the use of the assets of others.
For example, outsourcing is a way of accessing the use of others' assets. Other forms of access include
creating close relationships that utilize innovation resources and energies from outsiders.
Positioning: Positioning is the posturing of the overall organization to acquire and access the best possible
goods, services, assets and energies from suppliers. It means becoming the best customer to a supplier
in order to attain superior services, attract first innovation, and assure quality and supply flow.
Positioning entails having the ability to influence and affect suppliers' actions, behaviors and investments
for the organization's own benefit.
Management of Resources: Management of resources spans both the internal and external spectrums.
Internally, the supply professional leads and manages how the organization produces goods and services
for its customers and constituents. Externally, the supply professional collaborates with suppliers and
influences product manufacturing, delivery of services, logistics performance and delivering value through
effective process management. Supply professionals manage resources to ensure lowest overall cost,
increase efficiency and transparency in processes, and shrink the asset base. Leading companies share
their engineering, IT, logistics and other experts to help suppliers innovate and enhance processes, thus
improving and lowering costs' levels and prices.
Related Capabilities: This final dimension, related capabilities, addresses approaches, personal strengths
and organizational abilities that best combine tasks, skills, competencies and systems to meet any
challenge or to identify and gain benefit from any first advantage. Classic examples include (a) strategic
sourcing, (b) total costs, including total cost of ownership, (c) life-cycle costs, (d) scenario planning, and
more recently (e) category and risk management and leadership. Broad capabilities reflect how effective
supply professionals detect and flex approaches to tight, loose and shifting markets. They also reflect the
ability to know and understand when it is best to apply primary buying power strength or gain advantage
through collaboration. A capable supply professional is financially savvy and seeks performance results
through a variety of mechanisms including lower price, total cost, working capital, speeded cash-to-cash
cycles and reduced asset bases, among others.
Building Supply Management for the Organization
Creating an expanded future for supply management requires two things: a vision and a roadmap.
Characteristics of an effective supply organization include:
A well-defined vision statement that is written and communicated throughout the entire
organization;
Strategic process models for products, services, outsourcing, insourcing, access and
technologies;
Business alignment that is synchronous with the strategies and initiatives of the rest of
the organization;
A highly-developed understanding of the need for global awareness, culture, geopolitics,
demographics and geography.
Assertive roles for influencing value-add throughout the organization and pulling it from
the suppliers;
Planning and support of on-going change, development of consultative skills, and
building talent;
Leading with new information, intelligence and measurements; and,
Extended influence and "selling" internally and externally.
In these dynamic times, the global environment can bring more change and demands in a month than
were experienced previously over a few years. The supply field and profession will continue to expand
and grow in complexity and challenges. Supply professionals today must understand strategic elements
of the business first and then competitively manage the business as an effective supply professional and
leader.
Developing a Supply Chain Strategy By Susan Happek UPS Supply Chain Solutions.
Understand the Business Strategy The first step is for supply chain executives to clearly understand how the enterprise chooses to compete. This is important not only for the obvious reason of working off the “same play book,” but also for the reason that it forces the supply chain operation to see itself as a customer facing entity serving the competitive goals of the enterprise—not merely an operational department. Supply chain strategy is not simply a linear derivative of the business strategy. At best, supply chain strategy can be the enabler of the business strategy. If the business strategy is to be the low cost provider, the supply chain strategy should support this. And just like when developing a business strategy, look to your core competencies, focus, and means of differentiation when developing a supply chain strategy. Being able to strategically source parts at an attractive price may support both your supply chain strategy and business strategy, but only if you have the capabilities to do so effectively. Look to your supply chain competencies and leverage what you do well. You may want to focus on a particular market or segment in which to gain supply chain efficiencies. Or you may want to differentiate your organization operationally by providing lower costs to customers or providing services that other industry players are unable to do.
Assess the Extended Supply Chain The next step is to conduct a detailed, realistic assessment of the capabilities that exist within the organization and even the extended supply chain. Begin by closely scrutinizing your organization’s assets and evaluate how well they support the strategy. Old machinery and disparate systems may mean high operational overhead and costly process inefficiencies and redundancies – clearly not supportive of a low cost provider strategy. A formal supply chain assessment by a non-biased outside party may assist you in better understanding your operational strengths and opportunities for improvement. Look for a firm that can provide you with operational benchmarks both inside and outside of your industry in order to gauge core competencies. Once the assessment is complete, assemble a team to review and prioritize recommendations, validate the opportunities, define the risks, and the requirements for implementation. Ultimately, if there is a disparity between the supply chain strategy and the operational assets, you may have to make capital investments. Of course, the other alternative is to change your assumptions and alter your strategy all together!
Develop an Implementation Plan From this critical work emerges the “go forward” supply chain strategy – directly tied to the business strategy, highly specific as to enablers and metrics, and with a defined set of implementation requirements and contingencies. The development of an implementation plan should include activities and tasks, roles, responsibilities, a corresponding timeline, and performance metrics. Establish a sub-team to shepherd the execution and provide project management responsibility to resolve issues and track status.
Development Considerations Cooperate and Collaborate with Your Partners – Throughout the development process remember to include your supply chain partners. While you don’t necessary need to divulge the full details of your strategy, you can certainly communicate how you would like to do business. Ideally, seek out mutual
REWARDS AND REPORTING Performance management
works best when people are rewarded for their performance
and reporting is conducted on a regular basis.
Good communications can keep the extended supply
chain in sync.
goals that both organizations can execute on. Not only will you be one step closer to realizing your supply chain strategy, you will learn more about the companies that you do business with. For example, collaboration in product design may meet your need to stem R&D costs and also alert you to new product concepts that you wouldn’t discover without working with your customer.
Outsource Where Appropriate
Part of developing a supply chain strategy includes evaluating opportunities to outsource areas that are not your core competency. If someone else can do it cheaper, it may be worth outsourcing not only to drive down costs, but also to focus more resources on the core competencies your organization does well.
Executing Supply Chain Strategy Performance Management Execution involves closely following your implementation plan and applying good project governance. You can improve your chances for success by managing performance throughout implementation and beyond. Tracking performance allows an organization to measure how successful it is in realizing the goals of a strategy. It also makes people understand their contribution and responsibilities, creating a more cohesive, in tune, organization. Performance management works best when people are rewarded for their performance and reporting is conducted on a regular basis. Moreover, performance goals should be used to communicate business expectations to outside entities as well. The more the extended supply chain is involved, the more the supply chain strategy is supported and reinforced.
Iterate the Cost – Benefit Evaluation Process On a periodic basis (e.g., annually) you should formally revisit your supply chain strategy. Did you meet the goals of the business strategy? Have the needs of your supply chain partners changed? How has the industry changed i.e., new competitors, business practices, products, technology? At this time, you may even want to reassess your supply chain organization, if the changes are significant enough to warrant it. Also, use this effort to look for new opportunities to further position your organization for success.
Keep Communicating with Your Partners Executing a supply chain strategy means dealing with many different entities, both internally and externally. Just as it is crucial to align the supply chain strategy with the business strategy, it is equally important to execute in a manner consistent with these different groups or stakeholders. The goals of your supply chain components and those that you deal with must be similar and conducted at the same speed. Your organization may be able to move at speeds other supply chain entities are unable to maintain, resulting in misalignment and poor efficiencies. And some of your supply chain partners may not have the resources to commit to realizing these goals. Good communication can keep the extended supply chain in sync. Rising from humble beginnings, Inamed, a leading medical device company, has seen itself grow to become a $300 million dollar company with its stock value increasing almost 200% over the last year. The company is credited with a clear business strategy of growth through acquisition and new product innovations. Anticipating continued growth and business success, Inamed needed a supply chain strategy consistent with an expanding organization. Faced with such challenging supply chain questions as “what is our optimal distribution network?”; “should we outsource some supply chain activities?” and “how can costs be better managed and contained?” the company conducted a
global supply chain assessment to identify supply chain costs and opportunities. In addition to offering supply chain strategy recommendations, the study provided a total picture of Inamed’s supply chain costs and compared them to industry and non-industry benchmarks. Over $4 million in process improvements and cost saving opportunities were identified. Now armed with a supply chain strategy, Inamed is in the process of implementing these changes. UPS Supply Chain Solutions 4
Avoiding Potential Pitfalls Even before the well-publicized dot com collapse, business failures due to poorly implemented strategy were very frequent. Fortune Magazine reported in a study that CEO strategy failures occurred primarily (est. 70%) because of failure in execution, not with the vision and strategy development. “The real problem isn’t the high-concept executives love to talk about. It’s bad execution. As simple as that: not getting things done, being indecisive, not delivering on commitments.” And supply chain strategy is no different! During the build &implement phases, there are additional challenges.
ase in Point: Dell broke into the big time by developing a business strategy and supply chain strategy
that worked together. In the late 1980’s and early 1990’s Dell’s business strategy was differentiation through low cost, speed of delivery, and customer service. The major channel for sales was from customers to call centers. However, the emergence of the internet called for more differentiation and fundamental
change. With a well understood business strategy, Dell began to formally integrate operational components (e.g., logistics, manufacturing, distribution, inventory management) and develop a supply chain strategy. The supply chain strategy focused at driving costs out of the supply chain – being the low cost provider – while at the same time supporting a business strategy emphasizing customer service. How was Dell successful with such conflicting charters? Internally, Business Performance Contracts (BPCs) were crafted that defined formal, but flexible operational agreements between each operational process area. These contracts tied to individual performance targets so that imperatives were clear. Execution concentrated on four areas: collaboration, value engineering, outsourcing, and the Out-of-Box Experience (OBE). As part of the process, the BPCs were also shared with the extended supply chain and similar operating agreements were arranged. These processes effectively kept the organization’s focus on strategy through performance management. Externally, Dell worked with suppliers to help control costs and improve customer service. Dell’s retail direct strategy requires processing orders direct from customers, building the computers to a customer’s specification, and delivery within a matter of days. To support this model, Dell asked suppliers to keep inventories within 15 minutes of the manufacturing locations. Virtually all products are made to order. “Every two hours, the factory planning system sends out a computerized message to suppliers detailing what parts the plant needs. That means there is almost no inventory of parts or products in the factory.”2 Besides excellent working capital advantages, Dell also sells computers that are about two months newer than the competition! In an industry where component prices fall about 20% per year, this means significant cost-of-goods-sold advantages for Dell.
he Future of Dell: Dell has continued to refine its business strategy, most recently by entering new
markets such as printers and electronics in order to grow revenue. The company has set aggressive revenue targets – $60 billion by 2006 – almost double the earned revenue today. To meet these goals and the changing business environment, the company proactively reevaluates its supply chain strategy. This is not
only to make sure that the supply chain is strategy aligned with the business strategy, but also to keep ahead of the competition. According to CEO Rollins, Dell “manages the value chain better than anyone else on the planet; the only one who might come close to us might be Wal-Mart.”
C
T
Align the Supply Chain Strategy with the Business Strategy Most companies develop a supply chain strategy after the business strategy has been defined. While this approach can deliver some value, it does not support the infusion into the business strategy development of very powerful supply chain model options, which could significantly improve the business strategy. A supply chain strategy should always support the intent of the business strategy has been defined. While this approach can deliver some value, it does not support the infusion into the business strategy development of very powerful supply chain model options, which could significantly improve the business strategy. A supply chain strategy should always support the intent of the business strategy and it is precisely because of these different “levels” of the enterprise at which strategies necessarily must be developed, that companies so often have major gaps between their highest level business strategy and their supply chain strategy. There are some additional risks associated with developing these separately, which include: Developing a supply chain strategy without a true understanding of the business case and value
propositions – the costs and benefits are not known Utilizing different or new resources in the operational model development that weren’t exposed to
the original business strategy thinking, thereby diluting and weakening the supply chain strategy Confusing or conflicting communications to the organization where objectives may be contradictory
Organization Challenges The company and its organizational culture play a key role in developing
and executing a supply chain strategy. The following are some common organizational challenges found in many companies:
Lack of ownership – many supply chain processes and value levers do not have an owner in the traditional sense
“Tower of Babel” problem – most organizations across the enterprise do not speak a common supply chain language
Organizational focus – some managers are functional or process oriented and do not understand the value levers’ multiple drivers model
Extending the Supply Chain – most supply chain initiatives involve external parties (trading partners) which makes strong collaboration a requirement
Conclusion As supply chains have moved from a cost focus to a customer
focus and now currently to a strategic focus, the need to think strategically about the supply chain has never been more important. The success of a strategy is only as good as the company’s ability to fully and properly execute it. A great supply chain strategy, linked with operational excellence, can provide success.
Predictions for Supply Chain Strategy Gene Tyndall, Tompkins International
I am pleased to provide my views on Supply Chain Strategies for 2013. I prefer to refer to these as views rather than predictions since, similar to forecasts, predictions connote some degree of certainty, and no one can really predict the future, especially these days.
Just as the CEO and Board are responsible for the Business Strategy of the Company, the CSCO (or the highest SC level person) is responsible for the Supply Chain Strategy; or, at least the supply chain component of the Operations Strategy. This is a key point - that often missing from companies is a clear and adopted Operations Strategy that is both aligned with the Business Strategy, and enables it to be achieved. While one can debate what is more important - strategy or execution - the fact is that executing
to the wrong strategy or direction is dangerous. I define Operations Strategy as the needed "capabilities" of the Operations of the company to insure the selected products are sold and delivered to the chosen targeted markets, with superior performance. Capabilities is the key word, and the new term for all CSCO’s. Supply Chain optimization is elusive, in today’s volatile world. What the best companies are doing is building
and providing the capabilities to meet the ever-changing customer needs and expectations, in accordance with "economic value". So, with that background and principles in mind, here are my views on the "top 5" topics that are in need of Supply Chain strategies this year: First, what is our Operations Strategy? What capabilities do our supply chains need to provide to
the business? My view is that CSCO’s are more and more realizing that this is the key strategic question. The growth and expansion of Multichannels for Sales, the competitive threat by Amazon, and the fast-changing demands by customers for "anything I want, anytime I want it, and anywhere I
need it", are themselves requiring new supply chains, new logistics networks, and new levels of performance. And, for other companies, those that sell to other businesses, there are other compelling market drivers for new capabilities. I believe strongly that if the CSCO cannot articulate their supply chain capabilities, and work toward building them all the time, then their company will not only lose
sales and market share, it will run the risk of failing due to weak Operations. Second, What is our Technology Road Map? This issue is facing all CSCO’s more than ever before, because we do not anymore have the luxury of time. The fast changing needs for supply chains outweigh the slow and deliberate planning for systems and architecture we were trained to follow. Multichannel sales require multi-systems to enable multi-processes. I believe most CSCO’s will come
to realize this early (if they do not already), and will pressure their IT Departments to move faster to the Cloud, to be more responsive to changing needs and capabilities, and to work closer with their supply chain leaders. We will see some advanced companies providing more technology decision authority to the supply chain/Operations leaders. And, we will see the advancement of more "social software" to its use in business.
Third, What about our Business Processes? We have all learned that IT enables Processes, but the
practice of fully reengineering processes before implementing new software is over. I believe more CSCO’s will adopt strategies of changing processes while a Pilot is underway, so that the affected processes are ready for the full implementation of the system immediately, and all that remains to do is excellent change management. Will this hamper Business Model Innovation? Perhaps. So, we need to have new processes for creating, and Pilot testing, innovations. While speed to market, speed to benefit, and speed to excellence will drive the new companies and the new supply chains, we must find ways to foster innovation in business processes at the same time.
Fourth, What about our Trading Partners? We have had years to get our internal Supply Chains to
work better, and most do; BUT, so few have reached end-to-end excellence from "supplier’s supplier
to customer’s customer", as our Vision has always been. The simple fact is that Trading Partner cooperation has begun, but collaboration has not evolved. The "Open World" has come faster than the collaborative world. With the new Cloud-based single platforms, it is finally possible to connect
federated networks with near real-time information. The conversion to true "Demand-Driven Supply Chains" is upon us, and I believe more and more CSCO’s will jump onto this new Operations Strategy and "reinvent" their supply chains to provide faster and superior performance - in costs, lead times, more intelligent inventory levels and locations, and customer satisfaction, and thus higher contributions to revenue growth. Fifth, What about our Talent Supply Chain? The goal of building and improving our supply chain
capabilities depends on processes, technologies, and -- oh, yes, do not forget - people. Today’s supply chains depend on the right mix of wisdom, knowledge, and innovation. Almost everything can be outsourced, but not talent. Even the best service and technology providers need to be managed by talented people. I believe that we will see a renewal of emphasis on people in 2013, as CSCO’s have to operate with the fact that wisdom has been lost, that new graduates are in need of training, and that middle managers have become stagnate. So many new supply chain tools and methods are
available; yet, so many supply chain managers have not had time to learn them, use them, or innovate with them. "Back to the future" is coming soon on the Talent front. There are other issues of supply chain strategies as well. I have named my "top 5", which I believe CSCO’s in 2013 will most need to have on their executive agenda. These will also shape the value of supply chains to the overall business, which is finally being appreciated by senior executives in most all industries. This is truly an exciting time for supply chain people. 2013 will prove this reality to those in business
or in public bodies, more than ever before.
The Association of American Railroads (AAR) have announced ‘the nation’s major freight railroads plan’, which will see an estimated $24.5 billion invested to build, maintain and upgrade America’s rail network.
The investment earmarks $13 billion for projected capital expenditures, which will contribute to upgrading and enhancing rail network capacity in 2013.
The project aims to ensure that railroads can continue to deliver in line with America’s economy. With hundreds of transportation infrastructure projects underway nationwide, railroads are investing in intermodal terminals that enable truck to rail freight, along with new tracks, bridges and tunnels. Modernized hardware such as safety equipment, locomotives and rail cars are being purchased to ensure that the US rail freight network remains at the top of its game.
In recent years, railroads have been spending roughly 17 percent of their annual revenue on capital expenditures, compared with the average U.S. manufacturer that spends roughly 3 percent of revenue on capital expenditures. “While most other transportation modes rely on government funds, America’s freight railroads operate on infrastructure they own, maintain and upgrade to serve their customers and power our economy,” said AAR
President and CEO Edward R. Hamberger. “This year, freight railroads plan to continue to focus on investments that maintain and enhance our physical infrastructure and safety systems, including cutting edge technology that ensures we are ready to deliver for the future.”
Employment Opportunities The freight railroads also estimate they will hire more than 11,000 new employees this year, primarily in response to retirements and attrition for positions that can be found across the U.S. With approximately 22 percent of the industry’s workforce eligible to retire in the next five years, railroads are dedicated to recruiting highly skilled people interested in making railroading a career.
“We are looking for employees who want a true potential life-long career and will want to help make the railroads safer and more reliable than they have ever been,” said Hamberger. “The success of our industry—from our importance to the economy to our continually improving safety record—can be attributed to the hard working men and women who make their careers with the railroads.”
Rail employee compensation, including benefits, averages roughly $107,000 per year, with jobs ranging from engineers and dispatchers, to law enforcement, to information technology and industrial development.
The Purchasing Manager as Contract Manager Ernest Gabbard, JD, C.P.M., CPCM; Janie Maddox, CPCM; Sandra Desbrow, JD, LL.M.
One element of effective contract drafting is appropriately designating by whom and how the
contract will be administered.
The purchasing and supply management profession is clearly transitioning from placing purchase orders to establishing and managing comprehensive contracts with strategic suppliers. This has created a need for purchasing and supply managers to develop and refine contract preparation and contract management skills. For some of the more complex transactions, there will also be a need to develop contract administration skills among other employees who will monitor supplier performance on the organization's behalf. It can be helpful to examine some key elements of contract administration and management which are relevant in the contemporary procurement environment. Make It Clear
Measures taken or not taken in contract preparation become evident during contract administration. One contract preparation activity that significantly contributes to successful contract administration is ensuring all contract language is clear and unambiguous. This is especially important for those clauses which establish the supplier's performance requirements. It is problematic, if not impossible, to administer contract performance where performance requirements are not clear and administrable. Contractual language should also be included which clearly outlines the authority of the purchaser's representative(s) for monitoring and recording contract performance and documenting compliance (or noncompliance). An example clause is below: "Purchaser will designate representative(s) who shall have authority and responsibility to perform the following tasks on behalf of purchaser:
Provide interpretation of the scope and specification for work to be performed under this contract;
Monitor performance of the work to ensure compliance with the work schedule(s); Inspect performance against the scope/specification, and report compliance and/or deficiencies; Obtain and review Work Progress Reports; and, Initiate "stop work" orders, to suspend work in accordance with other provisions of this
contract. Such representative(s) will not have authority to effect changes or modifications to the contract, or any contractual provisions. Contracting authority is expressly reserved for the contracting/procurement office which executed the original contract." It is beneficial to include in the contract the name(s) and/or title(s) of the personnel to whom administrative authority has been delegated. If this is not available, or may change periodically, this designation should be made in a letter that supplements the contract. Key Elements to Managing Contracts
While clarity of the contractual language is imperative, the most well-written contract is of limited value if it is not carefully administered or managed. While not all-inclusive, the items listed below are considered to be some of the most critical elements to successful contract management.
Effective written communication between purchaser and its suppliers is the key to effective contract management. All outgoing correspondence should be logged and suspended to ensure a timely response is received from the supplier. All incoming correspondence should likewise be logged and suspended to ensure a timely response is sent to the supplier. In the latter case, timely support from other departments (engineering, quality assurance, program office, etc.) is essential. Early commencement of regularly scheduled performance reviews can be instrumental to early identification of performance problems. Supplier performance schedules should provide sufficient detail for the contract or purchasing and supply manager to identify critical milestones and to track the performance of those milestones. Timely identification of performance problems is paramount to avoidance of schedule delays which would ultimately impact your organization's performance on its sales contracts. The first indicators of supplier problems are generally:
Percentage of progress payments exceeds percentage of performance completion. When this occurs, the purchasing and supply management professional needs to consider withholding or limiting the amount of progress payments until contract performance improves.
Delayed response to correspondence - particularly correspondence requesting or confirming performance schedules.
Supplier requests for delays in scheduled performance reviews. No visible progress on supplier plans and/or charts during performance reviews. Immediate written response to any indications of performance/schedule delays is imperative. A
supplier must be clearly held accountable for any identifiable delays, up to and including "show cause" and "termination" procedures.
Senior management should be exposed early to any supplier performance delays which might impact your organization's performance on its sales contracts. Such exposure may include escalation of signifcant problems to senior management - where pressure might be applied to executive levels of the supplier. Early exposure may also permit development of a backup or alternate source before it's too late to meet your sales contract commitments. If a detailed milestone schedule is incorporated in the initial purchase contract, it will be easier to withhold progress payments when milestones are missed, thereby maintaining adequate leverage to ultimately ensure performance. As may be concluded, effective contract management is an active, rather than a passive, responsibility. Implementation of the foregoing principles can make the difference between managing the supplier and merely administering the contract.
IN a SNAP SHOT! U.S. MARKET:
Gross Domestic Product The U.S. GDP decreased 0.1% in the fourth quarter of 2012 according to the first preliminary estimate released by the Bureau of Economic Analysis. (Source: US BEA)
U.S. Trade Deficit The U.S. trade deficit decreased by 20.7% in December to $38.5 billion, the lowest deficit since January 2010. Exports rose 2.1% to $186.4 billion and imports fell 2.7% to $224.9 billion. (Source: US DOC & Census Bureau)
Consumer Confidence The Consumer Confidence Index decreased to 58.6 in January 2013 from 66.7 in December 2012. (Source: The Conference Board) (The consumer confidence index is based on a monthly survey of 5,000 U.S. households. It is designed to gauge the financial health, spending power, and confidence of the average U.S. consumer.)
Unemployment Rate The unemployment rate in America increased to 7.9% in January 2013 as there were 157,000 net new jobs. (Source: US DOL)
Leading Economic Index The Leading Economic Index for the U.S. increased 0.5% in December to 93.9 (2004=100), following no change in November and a 0.3% increase in October. (Source: Conference Board) (The LEI is a composite of 10 economic indicators that together create an analytic system designed to signal peaks and troughs in the business cycle. The LEI reveals patterns in economic data in a clearer and more convincing manner than any individual component alone.)
Retail Sales Retail and food service sales rose in January to $416.6 billion, up 0.1% from the previous month, and up 4.4% above January 2012. Non-store retailer sales were up 15.7% from last year. (Source: US Census)
Manufacturing & Trade Sales Total combined sales and manufacturing shipments totaled $1.27 Trillion in December 2012, up 0.3% from November and up 3.6% from the previous year. (Source: US Census)
Manufacturing & Trade Inventory
Total value of inventory on hand is estimated at $1.62 Trillion in December 2012, up 0.1% from November and up 5.1% from December 2011. (Source: US Census)
Housing Starts In December, housing starts rose 12.1% to an annual rate of 954,000 units. December’s pace of residential groundbreaking was the fastest since June 2008. An estimated 780,000 housing units were started in 2012; a 28.1% increase over housing starts in 2011. Building permits (an indicator of future housing starts) rose 0.3% to an annual rate of 903,000. (Source: U.S. DOC)
Consumer & Producer Price Index
The consumer price index for all urban consumers decreased 0.3% in November from the previous month. Over the last 12 months, the all items index increased 1.8%. The producer price index for finished goods decreased 0.2% in December from the previous month. Prices for finished goods rose 1.3% over the previous year. (Source: US Bureau of Labor Statistics)
CALL FOR ARTICLES
The Materials Management Group (MMG) promotes professional development, best practices and networking opportunities within ISM affiliates, ISM Groups and Forums, and within our broad profession. In alignment with our mission, we are inviting our members to provide us with articles and best practices that may be shared among our readers. The content should be application focused and may cover all aspects of procurement, production planning, inventory management, warehousing, traffic, transportation and other related activities. Articles selected will be published in the MMG Newsletter, a bi-annual publication. MMG reserves the right not to publish articles it does not deem relevant or appropriate.
Guidelines for Articles:
1. The article(s) may be submitted in a Word, Excel, or PowerPoint format. 2. Articles will be selected based on the relevance of the content as an educational resource and
tool for our readers. 3. Articles that reference supplier names and/or pricing will not be accepted for publication. 4. Submission deadline: March 25, 2013, Midnight ET 5. Please complete the attached Copyright Assignment Agreement and submit it along with your
articles to Sheila Petcavage at [email protected].
We look forward to receiving your article. Should you have any questions, please contact Sheila at 440-724-5758.
JOB POSTINGS
Strategic Sourcing Manager
Synergetics, Inc.
Material Price Coordinator
Electrical Components
International
Contracting Officer 1 Metro St. Louis
Senior Buyer Siemens Product Lifecycle Management Software Inc.
To view these listing, visit https://ismstlouis.org
Welcome our new members! Steve Jackson Program Mgr Global Strtgc Sourcing MasterCard Worlwide Robert J Bielecki Director - Sourcing and Nordyne Tabitha L Young, CPSM Senior Buyer Control Devices Neal Haynes Production Manager Diagraph MSP Michael Morris Contracting Officer Sadayappan Mariappan Student Olin Business School
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contact our BOARD!
Speaking about Volunteering
In many survey's the membership have spoken of how much they like more pre-dinner sessions. Volunteering to teach a session helps to accomplish this. When you volunteer your time to teach a class or facilitate a workshop, you get a chance to polish your public speaking skills, and you get a nice credit to add to your résumé. Volunteering allows you to meet people who have similar interests. You may make new friends of the same professional background or a different one all together. Or you may make contacts that become important in the future. There are a variety of opportunities to get involved in our affiliate however let me encourage you to consider speaking at a pre-dinner meeting. Sharing your knowledge of purchasing or logistics topics is of vital importance to grow others in our field and the professional and personal rewards are abundant. If you have a passion for any aspect of purchasing please consider sharing that passion with the other members of your profession.
To volunteer or get more information please contact Larry Jackson, CPSM, C.P.M. at
TELL US WHAT YOU’RE
THINKING?
CPSM and CPSD Survey
Certified Professional in Supply Management and Certified Professional in
Supplier Diversity
1. Do you have plans to become certified as a CPSM? Yes/no
2. What is your time frame: A)0-3 months B)3-6 Months C)6-12 months D)12+ months
E)no time targeted
3. Do you have interest in attending a preparation class for CPSM certification? Yes/no
4. There are 3 modules for the CPSM certification. What format would you prefer? A)3 –
one day, 8 hour class covering each module, split up over several months B) 3- one
day, 8 hour classes in a row, covering all 3 modules C)Saturday sessions D) no
preference
5. If the format was one that you liked, at $200 per one day seminar how likely would
you be to attend: A) very likely B)likely C) not likely D) would not attend
6. When is the best time for ISM-STL to offer these classes: A) Spring 2013 B)Summer
2013 C)Fall 2013
7. Do you have plans to become certified as a CPSD? Yes/no
8. What is your time frame: A)0-3 months B)3-6 Months C)6-12 months D)12+ months
E)no time targeted
9. Do you have interest in attending a preparation class for CPSD certification? Yes/no
10. There is one module for the CPSD certification. What format would you prefer? A) A
one day, 8 hour class covering the module during the week B) Saturday Session C) no
preference
11. If the format was one that you liked, at $200 per one day seminar how likely would
you be to attend: A) very likely B)likely C) not likely D) would not attend
12. When is the best time for ISM-STL to offer this class: A) Spring 2013 B)Summer 2013
C)Fall 2013
PLEASE EMAIL YOUR RESPONSES TO [email protected]
UPCOMING MEETINGS and EVENTS
For more information and registration go to https://ismstlouis.org
Green Initiatives Jean Ponzi –Missouri Botanical Garden’s EarthWays Center Tue, Mar 26th, 2013 5:30 PM Spazio's Westport Having grown a Green focus from her professional roots in media communications, Jean Ponzi serves as the Green Resources Manager for EarthWays Center, a division of Missouri Botanical Garden in St. Louis. She responds to Green Resources Answer Service public inquiries with resources, referrals and information on sustainable practices, products and services. Working directly with over 100 local firms, she helps businesses problem-solve and advance sustainability measures as a Resource Advisor to the RCGA Green Business Challenge and through small business seminars and consultations sponsored by the St. Louis County Economic Council. She is in demand as a sustainability-focused speaker - in business and general public settings - integrating 25 years of experience with topics including energy and water conservation, recycling, composting and waste reduction, air quality, native plant landscaping, and the interconnectedness of fiscal, personal and environmental health. Jean regularly represents EarthWays Center in print and electronic media coverage. She has written for Home Energy, Grist and Missouri Resources magazines and many local publications, including contributing an environmental column to The Healthy Planet Magazine since 1997. As a volunteer community service, Jean has produced and hosted a weekly environmental radio talk show, “Earthworms,” on FM-88 KDHX for over 24 years. Her new AM-radio talk show, “Growing Green St. Louis,” airs Sundays 1-2 p.m. on The Big 550 KTRS.
Contract Basics - Richard J. Anzelone, DRS Technologies
Professional Development Event Thu, Mar 28th 2013 8:30 AM - 5:00 PM Monsanto - West Campus
Supply management professionals must ensure that contracts protect the interests of their organizations, the ability to understand contract clauses is a key skill. Discussions include key terminology and clauses that you will be able to use when forming agreements with your suppliers. In this seminar you will gain an understanding of:
Basic Contracting / Subcontracting Terms Contract Management Process - Including the Pre-Award and Post-Award Contracting Methods Contract Types and Pricing
Elements of a Contract Best Practices, Including Keys to Successful Negotiations How to Resolve Claims and Disputes Global Contract Basics
Strategies for Maximizing IT Value – Andrew Ozlowski, ClearEdge Partners Tue, April 28th, 2013 5:30 PM Spazio's Westport
Andrew Ozlowski came to ClearEdge Partners as a Managing Director in the Midwest after spending the previous 18+ years in business development, sales and leadership roles within enterprise software and IT consulting services industry. Andrew brings specific expertise to the ClearEdge Practice teams for application software, business intelligence solutions and consulting services drawing from his experience at SAP, Kronos and Computer Associates. He leverages his extensive background and training in IT vendor sales strategies, complex license agreements, IT service engagements and procurement processes in order to help clients level the playing field with their strategic IT suppliers and maximize solution value. Andrew has a B.S. in Organizational Leadership from Purdue University where he was also an intercollegiate athlete, letterman and youth mentor.
For More ISM - ST. LOUIS AFFILIATE Information and
Volunteer Opportunities, feel free to contact our
BOARD!
President
Larry B. Jackson, CPSM, C.P.M.
Vice President
Melissa Orlando, CPSM, C.P.M
Director of Finance
Max Merz III, CPSM, C.P.M.
Secretary
Jill Willhite
President-Elect
Patrick C. Williamson, C.P.M.
Director of Education
Dawn Fadler, CPSM
Director of Professional Development
Paula Matousek [email protected]
Director of Membership
Patricia Greathouse [email protected]
Director of Marketing
Christine Wojak