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Volume 9, Number 2, April 2011
This newsletter is published in cooperation with the ISM Chemical Group.  


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In This Issue ...
  • Chemical Industry News
    • Market Research Role Revolving: A recent Best Practices, LLC report — The Future of Market Research: Challenges and Changes in a Core Pharmaceutical Function — suggests that leading pharmaceutical companies understand the value of using market research to inform their strategic planning and operational tactics across numerous functions. The report offers forward-looking insights around critical market research topics for executives and managers working in the market research/business intelligence area.  Read more.
    • Downsized Auto Supply Chain Might Block Growth: A recent Automotive News article contemplates increased consumer demand in 2011. It predicts U.S. sales for 2011 will hover round 12.7 million vehicles — up from a 11.7 million finish in 2010. And, some analysts predict sales of more than 13 million.  Read more.
    • "Chemophobia" on the Rise: In response to the growing level of "chemophobia" — the irrational fear of chemicals — in the United States, the American Council on Science and Health (ACSH) has released a position paper, Scared to Death: How Chemophobia Threatens Public Health. Written by Jon Entine, a scholar with the American Enterprise Institute and highly regarded science journalist, this resource book is intended to educate legislators, industry, media, consumers and parents on the actual risks of chemical exposure and use in everyday products.  Read more.
    • Tax Credit Oversight?: A wide-ranging tax credit buried in the 2008 farm bill legislation is an effort by legislators to preserve homeland security and to keep potentially harmful chemicals from those who would use them for nefarious purposes. Essentially, the tax credit rewards taxpayers who take appropriate measures to keep agricultural chemicals such as pesticides and fertilizers secure. It offsets 30 percent of the cost of certain types of security expenses that agricultural businesses have spent after May 22, 2008 — if, that is, they have the understanding of chemistry required to deduce which chemicals would qualify.  Read more.
  • Feature Article
    • Energy Commodities Forecasting — In recent years, instability in the price of energy sources and basic feedstocks — including oil and natural gas — has prompted companies to place more emphasis on supply chain market intelligence and business intelligence.  Read more.
  • Market Report
    • Plastic Bottles Recycling Reaches All-Time High, Records 20-Year Grown Trend — A joint report issued by the American Chemistry Council and the Association of Post-Consumer Plastic Recyclers indicates the U.S. plastics industry and recyclers have marked two decades of year-over-year increases in plastic bottle recycling. It also shows that the recycling rate for plastic bottles has reached a record high of nearly 2.5 billion pounds.  Read more.
  • Announcements: Institute for Supply Management™'s Pharmaceutical Forum recently marked its initial endowment to fund scholarships for students majoring in supply chain management curriculum at Rutgers University in New Jersey. ISM Pharmaceutical Forum leaders presented a check for US$25,000 to the Rutgers Business School to support merit-based financial assistance to both undergraduate and graduate students.  Read more.
  • Additional Resources: Check out these links to additional resources from the ISM website.  Read more.
  • Contact Us about ISM eDigest: Chemicals


Chemical Industry News

Market Research Role Evolving

Role of Market Research Evolving to Take on a More Strategic Responsibility

According to a recent report by Best Practices, LLC — The Future of Market Research: Challenges and Changes in a Core Pharmaceutical Function — leading pharmaceutical companies understand the value of using market research to inform their strategic planning and operational tactics across numerous functions. This report provides executives and managers working in the market research/business intelligence area with forward-looking insights around critical market research topics.

"As pharmaceutical, biotechnology and medical device companies evolve, market research in these companies must also evolve and develop new capabilities while refining current ones to support intelligent planning and decision-making," a related press release states.

Among the issues addressed in the report are:

Market research roles and responsibilities — "Currently, new product development and strategic planning responsibilities are split between market research and other organizations," according to the release. "A strong refocusing on development and planning suggests market research's vital role in strategic decision support."

Use of outside resources — The report suggests that spending on outside resources is likely to grow, in part because suppliers will be expected to function as full partners — "delivering fully vetted recommendations, not just data" -and to provide access to innovative methodologies and techniques.

Market research talent selection and development — Within the next three to five years, applicant expectations and hiring criteria will change, the report predicts:"Senior-level market researchers will be strategic thinkers; mid-level market researchers will provide insights and add value to projects; and junior market researchers must have the potential and adaptability to move around and up."

Metrics and performance — Survey respondents emphasize different aspects of something that almost all of them agree on: Market research must be measured on the timeliness and impact of actionable insights on the business. "The quality of the work, based on feedback from stakeholders, is often the mechanism for measuring these attributes," the release states.

Data for this study were collected using primary research via an online survey of more than 40 representatives from 35 companies in the pharmaceutical, biotechnology and medical device sectors. Additionally, six interviews were conducted with selected participants, including eight top 20 pharma companies.

A complimentary report excerpt is available online.


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Downsized Auto Supply Chain

Downsized Auto Supply Chain Might Block Growth

In a recent Automotive News article, Martin Schueble, BMW's North American vice president of procurement, says some of his suppliers cut too deeply during the recession. Now that a recovery is stirring, they can't meet demand.

"It's tragic. They survived the crisis, and now that "food" is available, they can't manage it," Schueble says. "But, it's only a very, very few companies that are struggling."

Additionally, access to financing is a problem, he points out: "It's more severe in the U.S. than in Europe. These suppliers know what they have to do, but they can't do it because they can't get the money."

This scenario worries many in the industry as they contemplate increased consumer demand in 2011, according to the article. U.S. sales forecasts for 2011 hover around 12.7 million vehicles — up from a 11.7 million finish in 2010. Some analysts predict sales of more than 13 million.

But, if suppliers — who are already leaner than they ever thought they could be — struggle to rebuild capacity, that could chill the sales recovery. That problem could play out in showrooms if carmakers can't meet consumer demand, according to the article.

Carlos Tavares, chair of Nissan Americas, got a taste of the problem this year. Buoyed by strong sales of pickups and SUVs, Nissan boosted production of body-on-frame vehicles in Smyrna, Tennessee and Canton, Mississippi. Then, a European supplier of generic semiconductors simply ran out of capacity, and the supply line stopped.

Now, Tavares wants to step up production for 2011. "We have teams working to identify the bottlenecks and make sure we avoid them," he says. "It's really a problem of making sure that our partners believe our forecasts."

Lean, But Profitable

Even gung-ho suppliers face problems, according to Automotive News. James McElya, CEO of Cooper-Standard Holdings Inc. — whose product offerings include body sealing systems, fluid-handling systems, and noise, vibration and harshness control systems — tells PlasticsNews.com that shortages of raw materials and difficulty in luring back skilled employees could slow expansion.

But, he adds, the big problem could be financially shaky tier two and tier three suppliers. "The subsuppliers, tier two and three — that's really going to be the gate event," he says. "In '08 and '09, only about one-third of the supply base restructured. Two-thirds kicked the can down the road."

Those suppliers got extensions on their debt, which will mature in 2011 and 2012, McElya adds. According to the article, that might force some large tier ones to prop up or buy smaller suppliers.

Just a Blip — Or Something More?

Other suppliers think it just isn't the right time to expand.

"The biggest issue in increasing our capacity is head count," says Ken Davis, who was named president of Eaton Corp.'s Vehicle Group in January. "The last thing we want to do is move from running overtime to increasing permanent staffing if all we're looking at is a temporary blip in sales."

Additionally, a survey of its members last month by the Original Equipment Suppliers Association, a trade group, found that North American suppliers want to see clearer signs of economic rebound.

Senior Vice President Dave Andrea says the cutbacks of the past two years remain fresh in suppliers' minds. "These companies went through a lot of pain over the past couple of years," he explains. "[They downsized] to become profitable at a smaller industry production level."


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"Chemophobia" on the Rise

Consumer Education Group Releases Evidence of Growing "Chemophobia" Among American Public

Recently, in response to the growing level of "chemophobia" — the irrational fear of chemicals — in the United States, the American Council on Science and Health (ACSH) released a position paper, Scared to Death: How Chemophobia Threatens Public Health. Written by Jon Entine, a scholar with the American Enterprise Institute and highly regarded science journalist, this resource book is intended to educate legislators, industry, media, consumers and parents on the actual risks of chemical exposure and use in everyday products.

"Over the last several years, the level of fear, misinformation and media hype surrounding the use of safe chemicals in everyday, household products has swelled to a level which we feel must be addressed in detail before this situation gets even further out of hand," explains ACSH President Elizabeth Whelan, Ph.D. "Pseudoscience and fear of perceived environmental risks among the public has led to what we call 'chemophobia.' Keeping in mind that exposure does not necessarily equate to risk, activists and some in the media have led Americans to believe that chemicals are not to be trusted in our environment — even those with 50 or more years' record of safe use."

According to Whelan, this kind of panic can (and historically has) led to potentially dangerous outcomes and unintended consequences. "A perfect example of this overhyped media misconception is the recent release of Environmental Health Perspectives on pregnant women," she says. "The study merely notes that chemicals have been detected in women's bodies. Yet, it fails to identify any definitive ill effects."

In contrast, Scared to Death addresses scientific realities and dispels unfounded fears regarding the safe use of chemicals. According to ACSH, the position paper and resource book bring research to light that illustrates how little evidence-based support exists for chemophobia and its subsequent harmful, unnecessary regulations.

More information about the resource book is on the ACSH website.


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Tax Credit Oversight?

Agricultural and Chemical Businesses Might Be Missing Out on Substantial Tax Credit

According to New York-based WTP Advisors, many businesses that deal in pesticides and fertilizers could be missing an opportunity to claim a tax credit. A related article by WTP tax specialists Yair Holtzman and Adam Packer appeared in a recent issue of the BNA Daily Tax Report.

"Buried in the 2008 farm bill legislation is a wide-ranging tax credit called the Agricultural Chemicals Security Credit, developed by legislators in an effort to preserve homeland security and to keep potentially harmful chemicals from those who would use them for nefarious purposes," Holtzman and Packer write. "For instance, the 'weapon of choice' in the 1995 Oklahoma City attack was fertilizer containing ammonium nitrate mixed with racing fuel to make a bomb. And, after 9/11, authorities discovered that some of the perpetrators had tried to gain access to crop dusters and other light aircraft in southwest Florida in order to spray pesticides or other toxins on a human population center."

Essentially, they continue, the ACS tax credit rewards taxpayers who take appropriate measures to keep agricultural chemicals such as pesticides and fertilizers secure. The credit is designed to offset 30 percent of the cost of certain types of security expenses that agricultural businesses have spent after May 22, 2008.

"However, despite the potentially broad nature of this tax credit, many eligible businesses that could qualify for the credit may not be claiming it," Holtzman says. Why? Probably because the credit requires an understanding of chemistry to deduce which chemicals would qualify.

"Those who are well-versed in tax matters may not have the necessary scientific background which would enable them to look at complex chemical names and know whether they would be included in any kind of commonly used fertilizers," Holtzman explains. "As a result, tax professionals probably shy away from this credit, given the difficulty of determining what will qualify — especially with the lack of guidance from the IRS.

"Additionally, agricultural industry chemists who are well-acquainted with the chemicals typically used in common fertilizers probably aren't familiar with an obscure tax credit that has barely received any Congressional attention," he points out.

The best solution, therefore, might be for taxpayers to find a tax consultant who can provide expertise in both areas. "To take full advantage of the ACS tax credit, agricultural businesses should engage tax experts with a chemistry background to fully understand the array of qualified fertilizers and pesticides and take full advantage of the credit," the authors assert.

The credit only extends to "qualified chemical security expenditures" that relate to the purpose of protecting "specified agricultural chemicals." These security measures can include a wide range of activities, including: employee security training and background checks; tagging, locking tanks valves and chemical additives to prevent the theft of specified agricultural chemicals or to render such chemicals unfit for illegal use; protection of the perimeter of specified agricultural chemicals; and installation of security lighting, cameras, recording equipment and intrusion detection sensors.

"The statutory definitions of what constitute an eligible agricultural business and a 'specified agricultural chemical' are very broad," according to Holtzman and Packer. "The IRS defines an eligible agricultural business as one that sells agricultural products, including specified agricultural chemicals, at retail predominantly to farmers and ranchers; or manufactures, formulates, distributes or aerially applies specified agricultural chemicals.

"As a result, businesses from all stages in the production of fertilizers and pesticides likely will qualify for this credit, from the initial manufacture of input chemicals to distribution and transportation of the final product."


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Feature Article

Energy Commodities Forecasting

Establishing an intelligence network gives you a competitive edge.

By Dian L. Chu, CPSM, C.P.M.

In recent years, there has been a great deal of instability in the price of energy sources and basic feedstocks, including oil and natural gas. This volatility is the result of tight supply resulting from changes in global demand. It has prompted companies to place more emphasis on supply chain market intelligence (MI), as well as on business intelligence (BI).

Institute for Supply Management™ (ISM) defines MI in supply management as "the process and the result of gathering and analyzing information about the aggregate forces (including economics) at work in trade and commerce in a specific service and commodity." In other words, MI looks at all external factors and forces affecting a corporation's supply chain.

Wikipedia defines BI as "computer-based techniques used in spotting, digging out and analyzing business data, such as sales revenue by products and/or departments, or by associated costs and incomes." So, BI technologies examine internal data to provide historical, current and predictive views of business operations.

Business Intelligence in Practice

Let me elaborate a little more on BI from a practical standpoint.

Nowadays, most corporations have an enterprise resource planning (ERP) system, such as SAP, to house all internal financial and planning information such as income, expense, budget and demand forecasting — all of which is part of the BI system.

In practice, another part of BI also involves data warehouse software — MicroStrategy, for example — to extract relevant data out of the massive ERP system.

For supply management purposes, BI also typically requires certain mapping mechanisms to relate the data extracted from the ERP system to provide meaningful information that can be used, such as on a category level. For example, certain accounting accounts, codes or material codes, in the ERP system (for example, pens, pencils, papers, and so on) may be grouped into one single category (office supplies) to provide a summarized, yet relevant, view of the historical and planned activities of an organization.

This BI process would help prioritize supply chain efforts based on the business plan and supplier relationship, among many other internal parameters. The decision and planning process typically occurs on a yearly basis (assuming business as usual) to support organizational and departmental goals, and objectives and budgets, and might involve stakeholders from outside the supply management function.

An integrated approach combining MI and BI in decision-making helps organizations manage market risks and volatility with a new level of effectiveness.

A Chemical Example

To better illustrate this integrated approach, consider an example of a company with three major spend categories — chemical, construction materials and contingent labor. First, let's look at BI.

Post-"Great Recession," the world economy is on the verge of roaring back, led mostly by emerging economies, including China and India. As such, during the yearly BI process for 2011 — and after taking into account that the macroeconomic recovery is underway — organizations should have been able to identify major and priority sourcing categories.

Integrated Approach Chart: Major Spend Categories

In this example, "chemical" (US$20 million) and "construction materials" (US$30 million) are classified as two of the major spend categories.

Based on historical industry and sector trends, market intelligence (MI) also indicates that prices and demand of these two categories rise and fall more quickly with the general economic condition (in this example, a recovery) compared with contingent labor, as shown. This identifies the "chemical" and "construction materials" categories as early-cycle.

In contrast, demand and pricing of contingent labor services tend to stay relatively stable throughout the ups and downs in a particular economic cycle. As such, contingent labor is designated as a late-cycle category in the aforementioned example.

Midcycle designations (not shown) could be assigned to categories that are less susceptible to marketplace changes than early-cycle categories, but more so than late-cycle ones. Such marketplace changes might include recessions, economic recoveries and even geopolitical events.

Tagging each major and priority category as early-, mid- or late-cycle, as part of the MI process — with each designation backed up by BI data — provides a timing framework to help prioritize these categories. This practice also helps resource allocation in the event of a change in market conditions — again, for example, recession, recovery and/or geopolitical events.

In the example offered earlier, the resulting recommendation — based on the network of BI and MI — would be for supply management professionals to focus very early on working with chemical suppliers (versus with contingent labor suppliers) to secure supplies, as well as pricing. An economic recovery would tend to drive up chemical prices and demand, causing price spikes and supply shortages.

Using the information mapped out in the chart above, supply chain professionals would devise a tactical plan that places priority on the early-cycle categories — in this case, chemicals and construction materials. Meanwhile, late-cycle categories — such as contingent labor, as shown — are assigned a later date in the project time line to better allocate personnel and other internal resources.

Shaken Sectors Chart
Market Intelligence — Macro Trend

Now, also as part of the MI process, the recent macroeconomic trend pertaining to the chemical sector could be summarized as follows: Faster global growth has been pushing up raw material prices, and the gains in oil accelerated after riots breaking out in Egypt and Tunisia, and are threatened in Libya. (See graphic at right.)

Meanwhile, crude's straight ascent also has driven the U.S. oil-to-natural gas price ratio close to 25:1 in recent months, nearing an historic 11-year high of 27:1 in 2009.

As long as the situation in the Middle East and North Africa remains volatile and unresolved, markets will keep adding a "fear premium" to crude oil and associated products, whereas natural gas is basically in the doldrums trapped within the U.S., with a rising glut of inventory. Additionally, most analysts predict U.S. natural gas prices will remain mostly flat for the next three to five years.

Feedstock Implication

For the chemical industry, this latest natural gas price trend means long-term, less expensive ethane. This will give U.S. players a feedstock cost advantage, compared with their peers in Asia and Europe, which use more naphtha.

Because natural gas prices in Europe and Asia are more directly linked to oil than those in the United States — and with crude oil supply and price becoming increasingly volatile — coal now appears to offer more reliability and less supply risk. This could drive the development of coal-to-chemicals technologies.

Around the world, meanwhile, government environmental regulations and renewable energy incentives have ramped up the commercialization of renewable-resource-based chemical feedstocks. Major players Dow and Dupont are already actively involved in the production of biofeedstock-based bulk chemicals.

Supplier Market Intelligence

Reviewing supplier market intelligence would reveal information such as pricing and a sector trend from a supplier's perspective (see the two charts below), as well as pricing trends based on a third-party benchmark — indexes from the Bureau of Labor Statistics, for instance.

Year-Over-Year Price Trends Chart

Outlook: Geography and Sector Insights

Furthermore, MI analysis would identify the major chemical suppliers with pertinent information (such as market shares, average margins and more), and that different sectors and regions have different pricing power.

For instance, because I have some oil and gas industry experience, I've learned that the energy industry (oil, gas, power generation and so on) requires specialty chemicals for very specific applications, but represents a relatively small portion of the chemical company's total revenues. As such, the energy sector typically does not have as much pricing power as other heavier end users, such as the fertilizer companies.

Putting It All Together

Incorporating analysis from BI and MI into the decision-making process could result in a supply management action plan, such as working with U.S.-based suppliers early in an economic recovery cycle to secure supplies and/or the establishment of a firm, index-based pricing structure.

Also, using the industry trend identified by MI, supply management professionals can form a strategic plan to start incorporating alternative technologies of coal-to-chemicals and biofeedstocks into the supply chain.

Staying Ahead

Market volatility affects the profitability and competitiveness of many companies, and is expected to intensify due to a synchronized global recovery after the Great Recession. Eventually, the goal of the intelligence network discussed in this article would be to create a better understanding of a corporation's current and future resource allocation, as well as relevant aspects of the market — including supply-and-demand trends and supplier dynamics — using thorough research and analysis.

This integrated approach of combining MI and BI helps companies stay nimble and take advantage of market opportunities to stay ahead of the curve.

Dian L. Chu, CPSM, C.P.M. is a market analyst currently based in the U.S. To contact this author, send an e-mail to author@ism.ws.


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Market Report

Plastics Recycling

Plastic Bottles Recycling Reaches All-Time High, Records 20-Year Grown Trend

By RaeAnn Slaybaugh

According to the 20th Annual National Post-Consumer Plastics Bottle Recycling Report — which was released jointly in December 2010 by the American Chemistry Council (ACC) and the Association of Post-Consumer Plastic Recyclers (APR) — plastic bottle recycling by consumers increased 46 million pounds in 2009 versus 2008. This 2 percent increase represents a record annual high of nearly 2.5 billion pounds.

"This happened in the face of decreased overall use of plastics to make bottles and the global financial meltdown that started in the fall of 2008 and continued through 2009," emphasizes APR Executive Director Steve Alexander.

The report also shows that 2009 marked the 20th consecutive year in which Americans have increased the pounds of plastic bottles they returned for recycling — a trend which has grown every year since 1990, when the first of such annual reports was co-issued by ACC and APR. Specifically, the 20-year compounded annual growth rate for plastic bottle recycling is 9.4 percent. As of year-end 2009 — the latest available data — the recycling rate for plastic bottles had reached 28 percent.

Economic Setbacks Encountered

While all these are signs of progress, Alexander points out that the recycling of plastics wasn't immune to the "perfect storms" of the 2008 economy. "While many polyethylene terephthalate (PET) water bottles became lighter, the slow economic recovery did result in more pounds of high-density polyethylene (HDPE) being used in 2009 than in 2008, but less than in either 2006 or 2007," he explains. PET and HDPE bottles comprise more than 96 percent of the U.S. plastic bottle market and about 99 percent of all bottles recycled domestically.

Additionally, although the change in total resin used to make bottles increased to 85 million pounds in 2009 — a decrease in bottle production of 1 percent, continuing the decline started in 2008 — the use of HDPE to make bottles increased by 130 million pounds, or 4 percent. Use of PET to make bottles decreased by 217 million pounds, or 4 percent.

And, while the report also shows that processing of recycled PET sourced domestically or imported rose by 22 million pounds in 2009 versus 2008, the processing of recycled HDPE was a different story: It fell by 76 million pounds in 2009 versus 2008.

What's on the Horizon

As the economy recovers, the report shows America's plastics and recycling industries continue to place recycling high on the priority list. These organizations are investing more resources than ever in technologies and programs designed to increase awareness of recycling opportunities among consumers and expand access to away-from-home recycling bins.

For example, recycling organizations are now urging consumers to replace the caps on plastic bottles prior to recycling. "By twisting caps back on our bottles before placing them in the bin, we can help make sure this valuable material says out of the litter stream and gets into the hands of recyclers," Alexander explains.

Additionally, the Association of Post-Consumer Plastic Recyclers — which represents more than 90 percent of the post-consumer plastics recycling capacity in North America — has initiated a series of recycling workshops and web seminars for recycling officials, intended to help increase the volume of plastics available for recycling. The organization works closely with packaging and consumer product companies on design for recycling of new containers, and with industry to minimize contamination of the recycling stream, as well.

Meanwhile, ACC — which represents the makers of plastic resins — has partnered with the California Department of Parks and Recreation and non-profit Keep California Beautiful to place nearly 700 recycling bins at 19 locations along the California coast. ACC also recently expanded its partnership efforts by teaming up with the California Department of Transportation to place recycling bins at rest stops en route to popular tourist destinations. According to the report, bins placed through the campaign help to recycle roughly 45 tons of plastics, and more than 100 tons of other materials, in public spaces along California's coast.

Making the Case Even Stronger

To make the business case for plastics recycling even more compelling, Keith Christman, managing director of plastics markets for ACC, cites a separate joint study released earlier this year by ACC, APR and other plastics groups: Final Report — Life Cycle Inventory of 100% Post-Consumer HDPE and PET Recycled Resin From Post-Consumer Containers and Packaging.

As Christman explains, life-cycle inventory typically looks at the total energy use, greenhouse gas emissions and waste generated from raw materials extraction through manufacturing, transportation, use and disposal or recycling, he says. "Life-cycle inventory studies involve the compilation and quantification of inputs and outputs for a given product system throughout its life cycle," he adds. "This report confirms that recycling plastics results in significant savings of energy and greenhouse gas emissions."

The full 2009 National Post-Consumer Plastics Bottle Recycling Report is available for download on the ACC website.

RaeAnn Slaybaugh is a senior writer for the Institute for Supply Management™. To reach this author, please send an e-mail to author@ism.ws.


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Announcements

ISM Pharmaceutical Forum Endows Supply Management Scholarships at Rutgers

Institute for Supply Management™'s Pharmaceutical Forum recently marked its initial endowment to fund scholarships for students majoring in supply chain management curriculum at Rutgers University in New Jersey. ISM Pharmaceutical Forum leaders presented a check for US$25,000 to the Rutgers Business School to support merit-based financial assistance to both undergraduate and graduate students.

This latest program is the third formal endowment the ISM Pharmaceutical Forum has established at a university. Prior endowments have been established at Arizona State University and Bowling Green State University. The most recent award brings the total value of financial support for scholarships and endowments to more than US$200,000 in the past decade.

According to ISM Pharmaceutical Forum Chair William A. Stirling, increasing the number of students in the area of supply management is one of the Forum's most paramount goals. "The ISM Pharmaceutical Forum has always been dedicated to supporting our future leaders in the supply management profession and we are proud to have the opportunity to establish this endowment at such a leading university," Stirling says. Stirling is vice president, global sourcing and supply management at Bristol-Myers Squibb.

ISM Forums are comprised of members who are employed in a specific sector and come together for the sole purpose of exchanging information and ideas about supply management in that specific sector. ISM Pharmaceutical Forum membership is comprised of members having supply management responsibility within the research-based pharmaceutical and biotech industry. Visit the ISM Pharmaceutical Forum online.


80th Annual Utility Purchasing Management Group (UPMG) Conference Scheduled for September 18-20, 2011

Join your colleagues at the 80th Annual Utility Purchasing Management Group (UPMG) Conference, September 18-20, 2011 at the Hyatt Regency in Louisville, Kentucky. The UPMG exists as a professional organization to implement industry-wide programs focused on the education and personal development of its membership, the sharing and development of best practices with a special emphasis on the strategic contribution of the supply chain, and the support and advancement of the supply chain management profession in accordance with the policies and guidelines established by Institute for Supply Management™.

This event offers a golf tournament, networking reception and guest/spouse program. Complete details are available on the UPMG website.


Strategic Sourcing Summit & Showcase Schedule for July 2011

Mark your calendar for July 13-14, 2011, for the ISM Pharmaceutical Forum's Strategic Sourcing Summit & Showcase. This year's event will take place in Newark, New Jersey at the Airport Sheraton. For details, contact William A. Stirling.


ISM's Annual Conference Happens Next Month; Destination: Orlando, Florida

Join ISM for four days of supply management professional development, training and networking at the 96th Annual International Supply Management Conference and Educational Exhibit, May 15-18, 2011 in Orlando, Florida.

Keynote speakers are Sidney Johnson, CPSM, vice president of global supply management for Delphi Corporation; technology futurist and business strategist Daniel Burrus; and Arianna Huffington, co-founder and editor-in-chief of The Huffington Post.

Attendees will meet the best and the brightest in supply management to find out what works (and what doesn't), who is best-in-class and how they can gain a competitive advantage in their own organizations.

Download the 2011 Conference Brochure for details, including session descriptions, speaker bios and a complete agenda.


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Additional Resources

A Wealth of Information at www.ism.ws

Visit ISM's website, 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, as presented last month at the 2011 ISM Chemical Group Conference in Atlanta:

  • What Does the Future Hold — and How Will It Impact Supply Chains? — John D. Mikan, CIH, president of Experien Health Sciences Inc., led this session on the changing chemical regulatory landscape. He began with a brief retrospective, moving on to how the European Union's chemical substances policy "changed the game" and, finally, the potential impacts and key implications on supply chains. A downloadable PDF of this session is available on the ISM website.

  • The Future of North American Natural Gas Supplies — Led by Larry Schwartz, senior NLG analyst at Wood Mackenzie, this session offers a short-term (through early 2010), midterm (late 2012-2016) and long-term (2016 and beyond) North American gas market overview.

  • Preparing for Demand Ramp-Up — Joe Bonem, author and consultant to the manufacturing, polymers and process engineering sectors, looked at typical production ramp-ups and their importance to supply management and impact on profit/loss. He also outlined three phases of problem-solving.

  • M&A and Key Chemical Market Trends for 2011 — Joseph Chang, global editor of ICIS Chemical Business, examined the current state of the chemical cycle and provided a market outlook for 2011, as well as an M&A update (key statistics and drivers).

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Contact Us

If you have editorial suggestions or would like to participate in upcoming editorial, contact RaeAnn Slaybaugh.

If you would like to sponsor this e-newsletter, contact Trish True or Kathy Braase, or call 800/888-6276.

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