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DAY TWO: Keynote -- Supply Management Critical in These Challenging Times

Posted 05-04-2009 at 10:43 PM by 94th Annual
Today’s keynote speaker was Paul A. Laudicina, managing officer and chairman of the board for A.T. Kearney. His topic of discussion was “Managing a Global Supply Chain in a Globally Challenged World.”

There are few audiences where a discussion about the economic crisis and how to manage it is more appropriate than those attending the Conference. Like the Purchasing Managers Index that ISM developed during the Great Depression, supply management professionals need the same insight to manage through the significant changes occurring today. “And in many ways, the global supply chain is the ‘canary in the mine’ of shifting business conditions,” says Laudicina. “So we need your expertise.”

He spoke of the identity crisis theory by psychologist Erik Erikson and how these turbulent times are part of an identity crisis whereby the stable environment of yesterday is in transition to the “new normal.” In many ways, we’re going through the awkward teenage years of this transition. “This is an inflection point that our global economy is in today — caught between those early, wide-eyed benign years of globalization’s unbridled bounty and the mature wisdom and balance that time and experience bring,” says Laudicina. “How we guide our global economy through this crisis will determine if it reaches its full potential to the benefit of all, or if it stalls and regresses, reversing decades of progress and prosperity.”

A new model will emerge from the crisis that doesn’t resemble the years of globalization but the outcome and challenges that globalization brings. How we respond to this new model and define it will determine our organizations’ future vitality. Supply management professionals cannot be influenced or affected by the daily news reports and coverage of the economic gloom. The focus must be on resilience and long-term success to guide our organizations through the storm. Look beyond the fire and to the horizon. “Our world today is at once enabled, imperiled and empowered,” says Laudicina.

We’re enabled by globalization to move goods and services around the globe in 24 hours. Technology enables collaboration and the exchange of ideas regardless of what organization you work for. However, these same advantages are also responsible for the emergence of terrorism, pandemics and illicit trade. “The knee-jerk reaction to the economic turbulence and decline of the past year — even with decades of data to support globalization — is that we’re tempted to retrench, to pull back from the very relationships and openness that nurtured our sustained prosperity,” says Laudicina. “We must add our weight to ensure that the world remains integrated, enabling sustainable growth that is consistent with social and moral imperatives.”

We also operate in an imperiled world where pirates are hijacking our container ships and carbon dioxide is polluting our air. These issues and others are having an influence on organizations’ products as consumers call for action. “The more consumers learn, the more they are raising their voices and exerting their influence to get information on the products they buy,” says Laudicina. “Consumer demands are changing the nature and extent of government intervention in the private sector. How you respond — how we respond — will determine the difference between resumed growth and prosperity or stagnation and regression.”

With today’s social networking abilities, we are empowered by technology — the kind that allows collaboration to occur anywhere, anytime. It’s the type of collaboration that generates strategic supplier relationships and competitive advantage. It also forces supply management professionals and organizations to respond quickly to customer and shareholder demands. “On a broader scale, as colleagues, consumers and constituents raise their voices — for whatever cause or concern — those in authority must respond and take action where needed,” says Laudicina. “And we in this room must use our authority and influence to find and adopt solutions that build the so-called ‘triple bottom line’ — this convergence of delivering economic benefit to shareholders in an environmentally and socially sound way, a way in which the private sector can simultaneously create value and deliver on the needs of society.”

With all three drivers: enabled, imperiled and empowered — will we lead or will we follow?

As we move forward toward recovery, Laudicina says the “watchwords” for government and business are summarized in the acronym FOCUS:
• Foresight to see what’s over the horizon and consider the future possibilities.
• Openness to new ideas and perspectives.
• Collaboration with others on a global scale to accomplish goals and initiatives.
• Understanding of when decisions need to be modified and the reasons for doing so.
• Speed to meet the demand of the global marketplace.

“We live in an amazingly precipitous time, where we — each of us in this room — can affect positive change far beyond the scope of what any previous generation of leaders has been able to do,” says Laudicina. “We are enabled. We are empowered. And it is our responsibility, our moral imperative, to be good stewards of our imperiled world.”
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