This Issue ...
- Chemical Industry News
- Economist Irwin Makes Dire Predictions About U.S. Energy Independence: He predicts the United States will be dependent for transportation purposes on imported oil from unfriendly nations for the foreseeable future — whether or not we decide to drill at home. For transportation and other energy needs, neither nuclear nor alternative fuels can be developed quickly enough, even if politics and environmental concerns were not an issue. Read more.
- Study Shows Greenhouse Gas Emissions Limits Could Close 25 Percent of U.S. Power Plants by 2015: Electric Power Horizons, a scenario-based analysis of plausible energy futures to the year 2032, analyzes the predicted effects of renewable third-generation nuclear energy, natural gas supply and greenhouse gas (GHG) regulations on the United States' future energy security. Read more.
- Geothermal Energy Growth Continues, Industry Survey Reports: A survey by the Geothermal Energy Association (GEA) shows continued growth in the number of new geothermal power projects under development in the United States — a 20-percent increase since January 2008. Read more.
- 2009 World Methanol Analysis Completed: Chemical Market Associates, Inc. has completed its 2009 World Methanol Analysis, which contains information about supply, demand, production, history and forecasts for methanol capacity, as well as trade, technology analyses and price forecasts. The analysis leverages all CMAI's worldwide consultants to offer a global view of the major issues facing this important industry. Read more.
- Feature Article
- Chemical Sourcing Models for Cost and Risk Optimization: Chemical supply management professionals often find themselves in single-sourcing situations in which supply line risks exist and there is little price performance pressure on the supplier. Qualification of one to two additional suppliers and the introduction of reverse auctioning methodology can reap significant benefits in these situations, if implemented correctly. Here's how to make it happen. Read more.
- Market Report
- Pharmaceutical Industry Benchmarking: CAPS Research's Pharmaceutical Industry Summary Report 2008 focuses on operational and organizational structures, talent management and supplier relationships. Here, we present a breakdown of its findings. Read more.
- Announcements: The Institute for Supply Management™ Chemical Group's 2009 Winter Conference — "The Chemical Industry: Jazzed for Growth" — is scheduled for February 12-13 at the Royal Sonesta Hotel in New Orleans, Louisiana. The Conference will run a full day and a half, beginning at 8:30 a.m. on Thursday, February 12 and concluding at noon on Friday, February 13. Read more.
- Additional Resources: Check out these links to addition resources from the ISM Web site. Read more.
- Contact Us about ISM eDigest: Chemicals.
|Chemical Industry News
U.S. Energy Dependence Outlook Dire
Hudson Institute Economist Irwin Stelzer Makes Dire Predictions About U.S. Energy Independence
Hudson Institute, a nonpartisan policy research organization, recently published Energy Policy: Abandon Hope All Ye Who Enter Here, a paper devoted to energy policy. Economist Irwin Stelzer, director of Hudson's Center for Economic Policy Studies, wrote the monograph.
According to Stelzer, the United States will be dependent for transportation purposes on imported oil from unfriendly nations for the foreseeable future — whether or not we decide to drill at home. For transportation and other energy needs, he says, neither nuclear nor alternative fuels can be developed quickly enough, even if politics and environmental concerns were not an issue.
"Coal is our best nonoil source of energy in the near term," Stelzer explains. "And with market-based incentives, technological advances can make this abundant energy source even more promising."
Stelzer argues in favor of a market-based approach to energy policy that incorporates measures to include in the price the cost of such "externalities" as the effects of pollution and the need to defend the United States' oil-supply sources.
The 26-page white paper covers world supplies, world demand, natural gas, alternative fuels (wind, solar, ethanol and nuclear) and policy possibilities.
Energy Policy is available for free download.
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Power Plant Closures Eminent, Study Says
Study Shows Greenhouse Gas Emissions Limits Could Close 25 Percent of U.S. Power Plants by 2015
Electric Power Horizons, a scenario-based analysis of plausible energy futures to the year 2032, analyzes the predicted effects of renewable third-generation nuclear energy, natural gas supply and greenhouse gas (GHG) regulations on America's future energy security.
According to executives at software and services provider Ventyx, producer of the study, the scenarios outlined address many of the primary concerns identified by energy and utility industry executives in a recent workshop — uncertainty surrounding GHG legislation and its effect on prices, the impacts of economics and energy efficiency initiatives on demand, the potential for increasing renewable resources, and future constraints on resource supply.
Key findings include:
Moderate CO2 taxes will not curb GHG emissions. A moderate CO2 federal tax (less than $25 per ton by 2032 in 2008 dollars) on all tons of power sector CO2 emissions would collect nearly $1.9 trillion in tax revenue over the study period and raise customer bills 13 percent by 2032.
However, by 2032, CO2 emissions would still increase nearly 60 percent, and gas use would more than double. This could significantly increase U.S. dependence on imported liquefied natural gas (LNG).
CO2 reduction requires increased use of nuclear and renewables and decreased use of coal. Projecting a path to reach a stringent 70-percent CO2 reduction from 2005 levels by 2050 would require increasing U.S. nuclear capacity by more than 60 percent, call for the retirement of more than 170 GW of coal and necessitate the addition of more than 45 GW of solar resources by 2032. This scenario also assumes a long economic slowdown followed by a slow recovery which aids in limiting CO2 emissions.
GHG regulations might kill coal. Participation in G8+5 GHG emissions limits requires the closure of nearly one-fourth of U.S. coal plants by 2015, with the remaining fleet operating at a much lower output level. The U.S. might be the Saudi Arabia of coal, but greenhouse gas regulations might negate coal as a viable fuel source.
Renewable energy has an uncertain future. Geothermal, wind and solar are strong candidates for the future; however, questions remain as to whether renewable energy will fulfill its potential, and the transmission infrastructure investment will nearly triple current levels to move wind to load centers. "Aligning our political and economic objectives with our energy reality is a key to making renewable energy sustainable," says Senior Vice President of Ventyx Energy Advisors Doug Buresh.
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Geothermal Energy Growth Continues, Industry Survey Reports
Geothermal Energy Growth Continues, Industry Survey Reports
A survey by the Geothermal Energy Association (GEA) shows continued growth in the number of new geothermal power projects under development in the United States — a 20-percent increase since January 2008.
The report identified 103 projects underway in Alaska, Arizona, California, Colorado, Florida, Hawaii, Idaho, New Mexico, Nevada, Oregon, Utah, Washington and Wyoming. When developed, these projects could provide nearly 4,000 MW of new electric power — enough electricity to meet the needs of about 4 million homes.
"The surge in new geothermal power development continues," says GEA Executive Director Karl Gawell. Last January, GEA released a survey which identified 86 new projects with a potential of 3,368 MW. The new report identified 103 projects, which, when completed, could have up to 3,979 MW of power capacity. Also, two projects listed as under development in the January survey have since come on-line.
Current geothermal capacity on-line is 2,957 MW, according to the report. Additionally, geothermal power could reach nearly 7,000 MW.
"Given the high reliability and capacity factors for geothermal power, this would meet the household electricity needs of the cities of Los Angeles, Phoenix, San Francisco and Seattle combined," Gawell points out.
According to GEA executives, development of these new projects will provide significant economic benefits, resulting in the infusion of an estimated $15 billion in capital investment in the western states and the creation of 7,000 permanent jobs and more than 25,000 person-years of construction and manufacturing employment.
The report also states that geothermal power production is on target to meet — or even exceed — recent projections. "In January 2006, The Western Governors Association's Geothermal Task Force projected 15,000 MW of geothermal power on-line by 2025," Gawell explains. "At the current pace, geothermal production could exceed this estimate."
The results (number of geothermal projects/megawatts) are:
Alaska — 5/53-100 MW
Arizona — 2/2-20 MW
California — 21/927.6–1,036.6 MW
Colorado — 1/10 MW
Florida — 1/0.2-1 MW
Hawaii — 2/8 MW
Idaho — 6/251-326 MW
Nevada — 45/1,082.5-1,901.5 MW
New Mexico — 1/10 MW
Oregon — 11/297.4-322.4 MW
Utah — 6/244 MW
Washington — 1/Unspecified
Wyoming — 1/0.2 MW
Total — 103 geothermal projects/2,885.9-3,979.7 MW
The full text of the U.S. Geothermal Production and Development Update is available online.
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2009 World Methanol Analysis Completed
2009 World Methanol Analysis Completed
Chemical Market Associates, Inc. (CMAI) has completed its 2009 World Methanol Analysis, which contains information about supply, demand, production, history and forecasts for methanol capacity, as well as trade, technology analyses and price forecasts. The analysis leverages all CMAI's worldwide consultants to offer a global view of the major issues facing this important industry, such as:
- How much of the announced new capacity will come on-stream as planned
- How market pricing will be impacted as this material seeks a home
- How much new methanol demand and supply will actually be self-contained — and, for all practical purposes, removed from — the methanol industry as it is known today
CMAI consultants have assessed that the year-over-year growth seen in the methanol industry in the past few years stumbled in 2008. Record-high crude oil prices, a disastrous housing market in North America — and, to a lesser degree, in China and other parts of the world — plus a visibly slumping automobile sector have all negatively impacted 2008 methanol demand.
"If it weren't for the ‘newcomers' [of] DME and direct gasoline blending, methanol demand would fight to be positive in 2008 versus 2007," CMAI representatives report. "MTBE continues to erode slightly while acetic acid — due mostly to large expansions in Asia — continues to show solid growth."
China's appetite for methanol across much of the derivative slate, plus methanol blending into gasoline and DME, will continue to fuel methanol growth. Demand in 2009, 2010 and beyond will likely be in double digits due to more gasoline blending, DME demand and MTO/MTP feedstock requirements, the report predicts.
Methanol's value in fuel and new chemical intermediate technologies sets the stage. In spite of the ongoing decline in MTBE production/demand, the industry will continue to exhibit strong growth, predicts the report. However, it adds, adverse economic conditions affecting some of the major methanol derivative sectors mean that demand could have been significantly higher. Additionally, CMAI reps predict that biodiesel, direct gasoline blending, DME and MTO/MTP will drive methanol demand to levels far above the expectations of just a few years ago.
CMAI's 2009 World Methanol Analysis comprises 11 years (2003-2013) of study: five years of history, the current year and five years of forecast. It is available in book and CD-ROM formats, with access to CMAI's Online Capacity and Supply/Demand databases. For details, visit the CMAI Web site.
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Chemical Sourcing Models
Chemical Sourcing Models for Cost and Risk Optimization
By Omid Ghamami
The biggest challenges facing chemical purchasing professionals are supply line, cost and quality. Because chemicals are typically direct material components, supplier and product selection are subject to rigorous and lengthy approval processes. These processes typically involve both internal manufacturing technology organizations and similar approving bodies in external customer organizations. As a result of the arduous technology qualification process, supply management professionals often find themselves in single-sourcing situations in which supply line risks exist and there is little price performance pressure on the supplier.
To make matters more difficult, most favored-customer contract language typically does not help the supply management professional. The chemical being procured is often unique in some fashion and, therefore, is not subject to contractual price matching requirements which would otherwise apply.
In this situation, the supply management professional should develop a short but influential presentation to share with someone of sufficient authority in the internal manufacturing technology qualification organization. It should outline the inherent supply line and cost risks of the single-sourcing strategy being employed, and the critical need for qualification of one to two additional suppliers. It should be explicitly stated that a multisourcing strategy will not only improve supply line risk, but also set the stage for reverse auctioning methodologies that will reduce total cost over time.
This information can also be shared with a senior customer account manager of influence to bring added visibility to these risk factors. Both managers will likely be far more moved by the supply line risk factors; as such, the risk factors should be the primary area of focus the supply management professional uses when making the case.
Once approved, standard technology protocol should be followed to qualify additional suppliers and their products. A period of two to three months might pass before the new suppliers are formally qualified and approved to supply specific direct material chemical products.
Making the Case for Reverse Auctions
Because chemicals are true commodity products that — once qualified — have pricing as a primary decision criterion, they are ideal candidates for reverse auction practices. Reverse auctioning can be done via application-specific software or a manual process. In either case, all supplier contracts must be identical in terms of total cost components not directly related to price (lead time and inventory management model, for example) such that the demand allocation model may be driven using product price as the sole variable.
Additionally, special contract language must be embedded to release the supply management professional's firm from any detrimental reliance liability for resultant fluctuations in demand allocation, as the suppliers might experience significant shifts in business over time as they compete for the business.
The suppliers need to be advised of the new business paradigm under which they will operate moving forward. They can be told how many suppliers they will be competing against, but not the names of those firms for confidentiality reasons.
The supply management professional must determine a reverse auction bidding frequency model that is driven by the price volatility of that chemical commodity. Highly price-volatile chemical commodities might necessitate weekly bids, whereas quarterly bids might be more appropriate for those commodities that are relatively stable. A demand allocation algorithm should be developed which reflects distribution levels the supply management professional believes will keep suppliers both motivated and competitive. The initial assumption can be that each supplier is due an equal share of the business, with their allocation modified based on the pricing proposal given for that bidding period.
The following is an example of an algorithm that may be used. Assume a three-supplier situation in which the suppliers respond with the following pricing:
In this example, since there are three total suppliers, a figure of 33.3 percent each is the starting point for the demand allocation model. From there, the percentage difference between Supplier A and Supplier B's respective proposals (25 percent), and that of the lowest bidding supplier (Supplier C), is subtracted from their 33.3-percent allocation and added to that of the lowest bidding supplier, as shown below:
Supplier A: 33.3% - 25% = 8.3% allocation*
Supplier B: 33.3% - 12.5% = 20.8% allocation*
Supplier C: 33.3% + 25% + 12.5% = 70.8% allocation*
To arrive at the figures of 25 percent (Supplier A) and 12.5 percent (Supplier B):
Supplier A is pricing at $1/unit, while supplier C is $.80/unit. $1 divided by $.80 results in a figure of 125 percent, meaning that $1 is 125 percent of $.80. If we want to express that as a measure of how much greater $1 is than $.80 — as a percentage — we would subtract 100 percent to arrive at the difference, which is 25 percent. Mathematically, this would read as: (1/.8) – 1 = .25 = 25 percent.
Supplier B is pricing at $.90/unit, while supplier C is $.80/unit. $.90 divided by $.80 results in a figure of 112.5 percent, meaning that $.90 is 112.5 percent of $.80. If we want to express that as a measure of how much greater $.90 is than $.80 — again, as a percentage — we would subtract 100 percent to arrive at the difference, which is 12.5 percent. Mathematically, this would read: (.9/.8) – 1 = .125 = 12.5 percent.
The algorithm you choose should be very clearly stated to suppliers in advance, with multiple scenarios played out for clarity of process and potential outcomes.
The process for providing bid responses should also be extremely clear. If the supply management professional is using reverse auctioning software, the process will be inherently synchronous — typically over a prescribed time period spanning 15 to 30 minutes — whereby the suppliers bid against one another in a real-time and graphically displayed fashion. If a manual reverse auction model is employed, the process must be kept relatively synchronous, such that all bid responses are received by a particular time and date via a prescribed communication format.
The supplier debriefing process should also be documented and communicated to the supplier in a prescribed manner, with notification of exactly when the demand allocation model will change, what the new demand allocation percentage is for that supplier, and for what period of time.
A critical component of implementation involves ensuring that demand allocation does, in fact, change to the prescribed amounts for each supplier. This might necessitate spreadsheet management and tracking of purchase order volumes by supplier.
While suppliers might initially resist this model, they should be encouraged to view the process very opportunistically. The process is not meant to be punitive nor antagonistic. In fact, the transparency of information between supplier and the supply management group should be greatly improved; where suppliers do not receive the desired amount of business, they should know exactly why, and how far off they were.
If done right, suppliers can leverage the opportunity to continuously streamline their supply chain costs and develop a sustainable model to test their market competitiveness in a far more dynamic method than they would otherwise have been afforded.
The payoffs of this process provide these benefits:
- Suppliers committed to continuous improvement will become more competitive.
- The internal customer will appreciate the reduced supply line risk.
- The supply management professional will reap improved savings.
- The external customer will ultimately benefit as both risk and cost are managed better on its behalf.
In short, this model represents a true win-win for all involved parties.
* Allocation adds up to 99.9 percent due to decimal rounding.
Omid Ghamami has more than a decade of experience negotiating multimillion-dollar contracts and managing regional and global purchasing departments with Intel Corp. He is the president and chief consultant of Purchasing Advantage, a purchasing course and seminar solutions provider. To contact this author, please send an e-mail to email@example.com.
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CAPS Research's Pharmaceutical Industry Summary Report 2008
Key findings, including operational and organizational structures, talent management and supplier relationships
By D. Steven Wade
One of the best ways to understand how your supply management organization stacks up against others in its industry sector is to benchmark its performance against industry standards. Industry-specific benchmarking continues to be the one of the most cost-effective ways to obtain an overview of your performance standards. All it takes is a little time — and a little effort.
Here at CAPS Research, many of our industry reports are updated annually; however, pharmaceutical industry organizations asked that their report be updated every other year. To compile the Pharmaceutical Industry Summary Report 2008 — published on June 6, 2008 — guidance was provided by the ISM Pharmaceutical Forum leadership team. Together, we identified metrics of value to Forum members and other pharmaceutical organizations.
In this latest benchmarking activity, the pharmaceutical industry's emphasis was on operational and organizational structures, talent management and supplier relationships. Here is a breakdown of some key findings:
Operational and Organizational Structures
- Most participants reported that their supply management groups are operationally and organizationally aligned with their organizations' finance group. In about 50 percent of these instances, the chief procurement officer (CPO) or equivalent reports to the chief financial officer, or CFO.
- Organizationally, direct goods procurement activities are more centralized than procurement activities for indirect goods and services. More than half the participants (55 percent) reported that their procurement functions for direct goods are centralized. About one-third (36 percent) reported that their indirect goods and services purchases are centralized.
- This industry sector does rely on outsourcing — in fact, 45 percent of the 2008 industry-specific survey participants reported they outsource some parts of their procurement functions. The functions outsourced include services-related functions (data centers, distribution, freight, help desks, and IT services and telecommunications) as well as more tactical, procurement-related activities (laboratory supplies and MRO products).
The ISM Pharmaceutical Forum asked that CAPS Research define supply management employees as all persons who are in a full-time-equivalent supply management assignment, including contract and/or temporary employees. Overall, the numbers of pharmaceutical industry supply management professionals assigned to supply management organizations is less than 1 percent of total employees.
When comparing the pharmaceutical industry to the 16 other industries included in the cross-industry report of standard benchmarks, eight industries reported a larger percentage of employees who are considered supply management employees (average = 2.06 percent) than did the pharmaceutical industry.
Moreover, industry sectors reported a smaller number (average = 0.71 percent). When looking across all the industry sectors measured, the average number of supply management employees is 1.35 percent of the total number of employees. This chart shows the range of data for this key benchmark:
Across all the industries measured, supply management employees in
pharmaceuticals organizations represented less than 1 percent of the
entire workforce (.92 percent).
The pharmaceutical industry participants also reported that almost half their supply management employees are assigned strategic sourcing tasks. Meanwhile, less than 25 percent of these employees are assigned transactional processing tasks, and 13 percent perform tasks related to information technology, general operations or administrative support. About 4 percent are temporary, contract or outsourced employees.
Although data indicates the number of functions being outsourced is increasing in some organizations, (about 14 percent of the sample population), the data does not show the impact outsourcing has on the number of organizational employees. In fact, an equal number of survey respondents — 40 percent — reported their headcount either increased or decreased. An additional 20 percent reported no change in the numbers of supply management professionals
Other key performance metrics in the 2008 report focused on: training spend; sourceable spend as a percent of sales/revenue; direct and indirect/services spend as a percent of sourceable spend; percent of sourceable spend managed and/or controlled by supply management; sourceable spend per supply management employee (see "Average Training Spend Per Purchasing Employee" chart); sourceable spend that is outsourced; and outsourced (sourceable) spend that is direct spend, or indirect and services spend.
Across all sectors gauged in the report — from petroleum to semiconductors — the
median spend to train a purchasing employee ranged from $1,027 to $1,210. In the
pharmaceuticals industry, however, the average spend was significantly higher at
$1,836 per purchasing employee.
Additionally, the report measured: organizations' management of their sourceable spend globally; their participation in offshoring activities; their use of p-cards; their operating expense per supply management employee and as a percent of sales/revenue; the impact of cost savings on the budget process; active suppliers; strategic/preferred supplier performance programs; their performance program; and contracts information.
The Pharmaceutical Industry Summary Report 2008 was developed by CAPS Research with major assistance from a small group of supply management executives representing pharmaceutical organizations who are also active in the ISM Pharmaceutical Forum. These executives helped determine specific data to be collected.
After the survey document was written and tested for accuracy using an iterative development process — including participation by the advisory committee — it was released to different pharmaceutical companies for completion. Survey-related data were checked for completeness and accuracy. Specific ratios and calculations were developed to summarize specific data items. Where appropriate, data was compared to previous mean observations. Minimum, maximum and median values were observed and current mean values calculated.
How to Access the Report
The entire industry metric report can be found on the CAPS Research Web site. After logging in, click on the research tab at the top of the page, followed by the Benchmarking Reports link. This will display all recently published industry-specific reports, as well as cross-industry reports, topic-specific reports and market-baskets-of-goods reports for MRO goods, office supplies, IT goods and services and print services.
D. Steven Wade is the director of benchmarking programs at CAPS Research in Tempe, Arizona. To contact this author, please send an e-mail to firstname.lastname@example.org.
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2009 Winter ISM Chemical Group Conference
Register Now for the ISM Chemical Group 2009 Winter Conference in New Orleans
The Institute for Supply Management™ Chemical Group's 2009 Winter Conference — "The Chemical Industry: Jazzed for Growth" — is scheduled for February 12-13 at the Royal Sonesta Hotel in New Orleans, Louisiana. The Conference will run a full day and a half, beginning at 8:30 a.m. on Thursday, February 12 and concluding at noon on Friday, February 13.
Each attendee will earn nine Continuing Education Hours that can be applied towards recertification of the Certified Professional in Supply Management (CPSM®), Certified Purchasing Manager (C.P.M.) or reaccreditation of the Accredited Purchasing Practitioner (A.P.P.). A panel of speakers has been assembled to provide attendees with insight to the latest trends in the economy, energy, key commodities and the latest in procurement technology — useful information when dealing with the changes in the chemical marketplace that occur on a daily basis.
The conference fee is $495 per person, including a Thursday evening dinner full of networking and entertainment. This event will be a progressive dinner, with courses served at the finest restaurants in the French Quarter, providing time to socialize and network.
Any conference attendee who recruits one or more new attendees to this conference will receive a small gratuity recognizing their attendance at the event either as an ambassador for the Chemical Group or as a new recruit. To qualify for either of these awards, attendees must complete the section on the conference registration form indicating if they are first-time attendees and who referred them to the conference.
For additional questions or details, contact Glenda Cunningham at 727/540-1381 or Paul Kane at 317/277-7310. Online registration is available, as is a downloadable conference brochure.
Registration Now Open for Black Executive Supply Management Summit
Registration is officially open for ISM's 6th Annual Black Executive Supply Management Summit (BESMS), scheduled for March 25-27 at the Doubletree Hotel at the Entrance to Universal Orlando in Orlando, Florida.
BESMS is intended for executives and managers in supply management, with a special track for students enrolled in supply management degree programs. Attendees will learn best practices from supply management thought leaders and change agents representing leading organizations. Topics include supply management and the global economy; global energy and sustainability; and talent and leadership. A student case competition and valuable networking opportunities are also planned.
Early registrants (before February 23) will pay $695 for members and $895 for nonmembers. After that date, fees are $795 for members and $995 for nonmembers. A special $250 student rate is also offered.
For conference Information, the schedule or to register, log on to the ISM Web site.
ISM and ADR North America Integrate Training and Assessment Program
ISM and ADR North America have combined efforts to create one major force behind training and assessment in procurement and provide organizations with tools to lead them to increased profitability, enhanced staff competence and sustainable cost improvements.
- The integration of ISM and ADR assessment and training programs will offer clients a long list of expanded opportunities including:
- A wide range of services, including customized in-company training, and online and blended learning programs
- Assessment and diagnostic tools for supply management skills
- Global reach with multi-lingual instructors
- Professional development on every level from buyers to executives
ADR North America, led by CEO Bill Michels, C.P.M., is a consulting firm that focuses on procurement and has a track record of success when it comes to delivering significant changes in purchasing processes.
"The ISM/ADR alliance will provide the opportunity for many companies to assess and improve their team competency, build custom development programs tailored to their businesses, generate cost and value improvement, strengthen supply management and achieve extraordinary performance from ordinary people," Michels said.
ISM is an international leader in the field of supply management with more than 40,000 members worldwide. ISM CEO Paul Novak, CPSM, C.P.M, A.P.P, is also enthusiastic about the potential for growth and development as these two organizations merge their outstanding training capabilities.
"The ISM/ADR partnership will help both organizations broaden both their training and assessment offerings and will enhance the ability to train in various parts of the world in indigenous languages," he said. "With this partnership, training can be delivered wherever it is requested without moving trainers around the world."
To find out how your organization can take advantage of the ISM/ADR alliance, contact Rene Yates, CPSM, C.P.M., or Toni Caserta at 800/888-6276, extensions 3080 and 3095.
Take Control of Your Future Now — Get your CPSM®
In the midst of stock market volatility, foreclosures and layoffs, a candidate's credentials — or lack thereof — are more crucial than ever. Now is the ideal time for supply management professionals to start pursuing their CPSM® designations.
To date, nearly 1,000 supply management professionals worldwide have earned this prestigious designation. Through February 28, ISM is offering a limited-time, money-saving offer of 25-percent off a bundled CPSM® study and exam package. It includes:
- All study materials, the CPSM® Study Guide and ISM Professional Series
- All three CPSM® Exams or the CPSM® Bridge Exam
The complete package must be purchased to receive the discount, and this offer is not valid on prior sales of CPSM® study materials and/or CPSM® Exams or CPSM® Bridge Exams. This promotion cannot be combined with any other offer.
For complete details, log on to the ISM Web site.
2009 NARTS Program Cancelled
After discussions with various academic leaders, the 20th Annual North American Research and Teaching Symposium on Purchasing and Supply Chain Management (NARTS), scheduled for March 12-13 has been cancelled. The Institute for Supply Management™ (ISM) apologizes for any inconvenience this cancellation might have caused.
The economic challenges experienced globally over the last several months have caused very real challenges for academia and business alike. Feedback from the business and academic communities indicates that budgetary constraints exist at this time. In making this difficult decision, ISM re-evaluated the program's expenses and took into consideration the program's financial impact upon all organizations involved.
We are pleased to report that we received numerous quality papers for this event. ISM would like to thank those educators who submitted papers, as well as many of their colleagues who might have given input for their completion. We also appreciate those individuals who reviewed submitted papers and provided essential feedback regarding the submitted papers. These submissions represent the importance the academic and business community place on supply chain management — and makes the decision to cancel the event even more difficult.
Each year, NARTS surfaces unique and innovative papers from academic professionals across the globe. Although we anticipate that the 2010 program will proceed as scheduled, ISM will notify all concerned parties regarding the status of the event at a later date.
Webinar Scheduled for January 30: "Maximizing Value from Shared Services: An e-Procurement Success Story"
||Friday, January 30, 2009
||2 p.m. EST / 11 a.m. PST
||This no-cost, streaming-only Web seminar is 60 minutes long.
The move to a shared services structure can deliver the first level of efficiency for any large organization looking to achieve savings. But centralizing functions such as accounts payable and procurement is only the beginning; a strategy for extending those efficiencies can take many forms, some more successful than others.
Learn how Lafarge, a world leader in building materials, has developed a shared services vision designed to deliver immediate cost reductions and sustained efficiencies. It begins with the elimination of errors from the implementation of electronic POs and Invoices with the organization's supplier base and extends to full purchase-to-pay.
This seminar is tailored for supply management and accounts payable professionals looking for best practices in shared services and tools — such as e-invoicing and e-procurement to pay automation — that can immediately impact the corporate balance sheet.
Attend and learn to:
- Establish collaboration between purchasing, accounts payable, finance and other parts of the organization
- Manage the change a shared services approach requires
- Develop a vision beyond the initial implementation
- Establish reasonable KPIs
- Extend basic e-invoicing value to other business processes
- Develop a standardized approach to supplier selection
- Determine where you have gaps and might want to consider professional services
- Andrew Gablehouse, manager of eProcurement at Lafarge
- Heather McKinney, director of business process support and controls at Lafarge
- Pete Torrenti, regional vice president of Quadrem North America
Registration and complete details are available online.
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A Wealth of Information at www.ism.ws
Visit ISM's Web site, www.ism.ws, for more supply management resources. The site provides published articles, conference presentations and reference materials that pertain to supply managers in all industries. Here are some items that might be of interest:
- These days, taking an interest in the environment doesn't just pay personal dividends; hiring organizations now pay a premium for supply management candidates with green aptitudes. According to Nick Ellis, managing partner of San Francisco-based executive search, recruitment and talent consultancy Bright Green Talent, these hard-to-come-by job seekers can expect 10-percent to 20-percent higher salaries for most supply management positions.
It seems potential employees are taking note. Ellis expects the number of supply management professionals seeking green jobs to increase this year, particularly in the dietary supplement and food markets.
"A number of 2009 regulations will push suppliers to re-evaluate their supply chains and quality control processes," he explains. "And that's just a few examples of industries where demand is being driven by regulation and swelling consumer demand." Read this entire eSide Supply Management article online.
- Environmental legislation in the United Kingdom might be a solid model for the United States to follow at a time when the global economy is stretched thinner than ever.
One of the largest threats to the stability of future supply chains is invisible to the unaided eye, yet it is everywhere. Almost every organization on the planet produces particles that comprise the unseen threat, and nearly all supply management professionals are currently facing the threat head-on as they do business with suppliers around the globe. The threat can be summed up in one phrase: greenhouse gases (GHGs).
In uncertain economic times, can organizations — and governments — afford to draw attention and allocate funds to the invisible threat in the air that surrounds us? Or will digging out of the difficult economic troubles be the main focus in the near future?
To find out, visit the Inside Supply Management® Web site to read the December 2008 issue's cover story, "The Challenge to Cut Carbon Emissions."
- At no time in recent history has the need for advancing supplier relationships been more evident or necessary than it is today. With the current economic climate, the need to find cost-reduction and innovation-savings ideas is at its pinnacle. Best-in-class supply management organizations continue to work hard on lowering the acquired cost of goods and services through normal sourcing techniques, whether that is strategic sourcing, reverse auctions or renegotiating agreements with incumbent suppliers.
But these same best-in-class organizations have recognized and embraced the fact that improving our relationships with current key suppliers is absolutely mandatory if we are to be viewed as successful in our efforts. And we are learning that perhaps our most successful source of cost reductions and improvement lies with our existing supply base.
Visit the Inside Supply Management® Web site to learn how to become a better customer to your suppliers.
- If you missed last year's ISM Chemical Group Spring Conference in St. Augustine, Florida, the informative session presented there are still available online in PowerPoint format. Log on now to view these in-depth sessions:
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