|In This Issue ...
- Chemical Industry News
- U.S. Military Leaders Call for 30 Percent Oil-Use Reduction by 2021: A new analysis by CNA — a not-for-profit research organization that serves the public interest by providing in-depth analysis and results-oriented solutions to help government leaders choose the best course of action in setting policy and managing operations — finds if the United States reduces its current rate of oil consumption by 30 percent, and diversifies its fuel sources, the U.S. economy would be insulated from the impact of such disruptions. This would be the case even in the event of a complete shutdown of a strategic chokepoint such as the Strait of Hormuz, the international passageway for 33 percent of the world's seaborne oil shipments, CNA asserts. Read more.
- Electronics Industry Issues Guide for Reporting Substances Contained in Electronic Product Packaging: The Consumer Electronics Association (CEA)®, DIGITALEUROPE and Japanese Green Procurement Survey Standardization Initiative (JGPSSI) recently released a guide for the supply chain disclosure of substances used in packaging for the global sale and distribution of electronic products. Read more.
- New Study: Nonrecycled Plastics Could Contribute Significant Supply of Alternative Energy to U.S. Economy: A recent study conducted by the Earth Engineering Center (EEC) of Columbia University and sponsored by the American Chemistry Council has found that if all of the nonrecycled plastics that are currently put into landfills each year in the United States were converted to energy using currently available technologies, they could provide at least enough energy to fuel 6 million cars annually. Read more.
- Feature Article
- Driving Innovation From Procurement and Sourcing — Using the processes of collaborative innovation and idealized design, it's simpler than it sounds. Read more.
- Market Report
- Chemical Outlook Hostage to Eurozone Debt Crisis — After a turbulent 2011, the financial outlook for the global chemical sector in 2012 depends heavily on confidence that a resolution to the eurozone debt crisis will emerge. There have been more positive moves bringing us closer to this scenario, but there is a long way to go. Read more.
- Announcements: Scheduled for March 1-2, 2012 at the New York-New York Las Vegas Hotel & Casino in Las Vegas, the ISM Chemical Group Conference promises powerful presentations that will keep you informed of the many changes in the chemical industry.
In today's challenging environment, it's critical for supply managers to bring more value to their organizations. At this year's conference, speakers will share insights regarding the latest trends in the economy, energy, key commodities and the latest in procurement technology. And, there will be plenty of opportunities to network with peers. 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
Retired Military Leaders Mandate 30 Percent Oil-Use Reduction
Top Retired Military Leaders Call for 30 Percent Reduction in U.S. Oil Consumption By 2021
A new analysis by CNA — a not-for-profit research organization that serves the public interest by providing in-depth analysis and results-oriented solutions to help government leaders choose the best course of action in setting policy and managing operations — finds if the United States reduces its current rate of oil consumption by 30 percent, and diversifies its fuel sources, the U.S. economy would be insulated from the impact of such disruptions. This would be the case even in the event of a complete shutdown of a strategic chokepoint such as the Strait of Hormuz, the international passageway for 33 percent of the world's seaborne oil shipments, CNA asserts.
Released at U.S. House and Senate briefings in November 2011, Ensuring America's Freedom of Movement: A National Security Imperative to Reduce U.S. Oil Dependence is a report by the CNA research organization's Military Advisory Board (MAB). Members include some of the nation's highest-ranking retired military leaders, with 400-plus years of collective military experience. The report calls for immediate, swift and aggressive action over the next decade to achieve the 30 percent reduction in U.S. oil consumption.
"We have seen oil shocks before, and they have been immediate and far-reaching," states retired Army Gen. Paul Kern, who chairs the MAB. "But at today's level of U.S. consumption, a sustained disruption would be devastating — crippling our very freedom of movement. Our enemies know this fact, and they exploit it at will."
CNA analyzed the potential economic impact of a future oil disruption in one critical industrial sector that is heavily dependent on petroleum: the U.S. trucking industry. The analysis measured the effect of four different theoretical blockages in the flow of oil, each lasting 30 days, in the Strait of Hormuz, the Suez Canal, Bab el-Mandeb and the Panama Canal.
Under a worst-case scenario 30-day closure of the Strait of Hormuz, the analysis finds that the U.S. would lose nearly US$75 billion in GDP. But, by cutting current levels of U.S. oil dependence by 30 percent, the impact would be nearly zero. Oak Ridge National Laboratory found complementary results when measuring the impact of oil flow disruptions on other sectors.
The military could benefit significantly from a 30 percent reduction in U.S. oil consumption, according to the report. It contends that:
- Achieving a 30 percent reduction would undoubtedly require new methods of efficiency that would translate directly to the battlefield.
- In addition to greater efficiency resulting in saving lives by decreasing dangerous battlefield fuel convoys, a 30 percent reduction would spawn diversified power sources other than oil. Less oil use equals less oil the U.S. is required to import and greater flexibility for military presence in dangerous parts of the world.
- This flexibility could translate into putting fewer American troops in harm's way and keeping more dollars at home.
The report calls on national leaders to take the following steps to reduce U.S. oil demand by 30 percent in 10 years:
Increase efficiency. The first, fastest and most effective strategy to reduce oil consumption is to increase efficiency, the report asserts. CNA MAB professionals say that fuel economy standards for cars and trucks as a proven and effective way to reduce the use of oil, and call for strengthening those standards, as well as providing additional market incentives and research investments to help increase the fuel economy of America's vehicles.
Diversify supply. "Our current overreliance on a single fuel is a weakness; relying on diverse fuels and vehicle types can be a strength," the report notes. Specifically, NCA MAB experts cite increased domestic production of oil, which might be useful short-term as long as overall oil consumption is reduced at the same time.
Increase alternative fuels. The report acknowledges that not all alternatives to oil are created equal, and calls for a careful assessment of national security impacts. For the first time in any single document, the report assesses a suite of alternative fuels for impacts on a broad range of critical aspects of national security: economic, military, political/geopolitical and environmental.
While environmental concerns might not seem related to national security, there is a connection. For example, an extended drought in Darfur, Sudan led to economic instability, which in turn led to political instability and civil war.
Develop a national, cogent, dedicated and sustained energy roadmap that rises above partisan politics. The military leaders warn "security must trump ideology," adding "the scale of impact associated with our energy use is massive." They write that "the right energy choices can bring down our trade imbalance, lead to new jobs at home, launch new American-made technologies, strengthen our foreign policy hand and increase our military and foreign policy options.
"The cost of inaction is too high," concludes MAB Vice Chair retired Navy Adm. Dennis McGinn. "A 30 percent reduction in oil consumption would loosen our tether to hostile states, reduce our trade deficit and keep the money here at home to create jobs."
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Electronic Product Packing Guide Issued
Electronics Industry Issues Guide for Reporting Substances Contained in Electronic Product Packaging
The Consumer Electronics Association (CEA)®, DIGITALEUROPE, and Japanese Green Procurement Survey Standardization Initiative (JGPSSI) recently released a guide for the supply chain disclosure of substances used in packaging for the global sale and distribution of electronic products.
Joint Industry Guide — Material Composition Declaration for Packaging of Electrotechnical Products — JIG-201 Ed. 1.0 is the first industry materials declaration guide for reporting across the global supply chain on substances contained in materials used to transport and protect electrotechnical products, according to the CEA. Manufacturers and other purchasers are required to have this data to comply with regulations, to meet design specifications and to reach sustainability goals and other objectives.
The guide complements the already established material composition declaration guide for electrotechnical products called the "Joint Industry Guide" or "JIG 101" and adopts a similar reporting format. JIG-201 sets minimum requirements for material declaration for packaging of electrotechnical products, including a list of relevant substances and their reporting thresholds and reportable applications.
The JIG-201 guide can be downloaded free of charge on the CEA website.
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Nonrecycled Plastics = Alternative Energy Source
New Study: Nonrecycled Plastics Could Contribute Significant Supply of Alternative Energy to U.S. Economy
A recent study conducted by the Earth Engineering Center (EEC) of Columbia University and sponsored by the American Chemistry Council has found that if all of the nonrecycled plastics that are currently put into landfills each year in the United States were converted to energy using currently available technologies, they could provide at least enough energy to fuel 6 million cars annually.
"Plastics have a significantly higher energy value than coal," says Professor Marco J. Castaldi of the Earth and Environmental Engineering Department of Columbia University and Associate Director of EEC. "Capturing the energy value of nonrecycled plastics-and municipal solid waste in general-makes good sense because it provides a good domestic form of energy while minimizing impacts on the environment."
The study also estimated that if all the nonrecycled plastics discarded in the United States annually were diverted to modern waste-to-energy facilities, they could produce 52 million MWh of electricity, or enough to power 5.2 million households per year. Similarly, if all the municipal solid waste produced in the United States was diverted from landfills to waste-to-energy facilities, it could produce 162 MWh of electricity, or enough to power 16.2 million households every year.
"As the United States seeks alternative fuel sources, research like this is crucial to helping identify alternative fuel sources for policymakers," notes Nickolas Themelis, Ph.D., director of the Earth Engineering Center at Columbia University.
"Even after use, plastics continue to be a valuable resource," adds Steve Russell, vice president of plastics for the American Chemistry Council. "Whenever possible, plastics should be recycled," he adds. "But when plastics aren't recycled, there is still a tremendous opportunity to recover this abundant energy source to power our homes, vehicles and businesses."
Although in the United States plastics are made primarily from natural gas, a growing number of innovative technologies are effectively turning nonrecycled plastics into crude oil, electricity and other fuels. Many of these technologies are already being implemented on a commercial scale in Asia, Canada and Europe.
The full study, Energy and Economic Value of Non-Recycled Plastics (NRP) and Municipal Solid Wastes (MSW) that are Currently Landfilled in the Fifty States, summarizes information on nonrecycled plastics and total municipal solid waste in each of the 50 states and quantifies the potential energy and economic value of recovering this material.
Given that the study looked exclusively at municipal solid waste, the actual amount of recoverable materials in the United States and the energy values associated with them are likely greater than those included in the scope of this study.
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Driving Innovation from Procurement and Sourcing
Using the processes of collaborative innovation and idealized design, it's simpler than it sounds.
By Gregg Brandyberry
Companies of all kinds currently face ongoing cost pressures and the need to optimize their value chains. As a component of that effort, strategies to improve the supply chain — inclusive of sourcing and procurement activities — are important. In the overall discussion of driving innovation, a new term is often heard: collaborative innovation.
Collaborative innovation is a style of working that removes many of the traditional boundaries associated with improving current states and, more important, with real ideation. Individuals across functions, companies, geographies — even competitors — are bound together to achieve a common goal. Information, ideas and work-in-process are shared freely among the participants. In this model, significantly less formal governance structures are necessary; collaborative innovation groups are committed to operating with honest, ethical and transparent principles.
Two Driving Factors, Defined
Two major enablers make collaborative innovation an exciting and forward-thinking methodology to consider adopting at your own organization.
The first enabler is the groundbreaking work of both Russell L. Ackoff, Ph.D., a great systems thinker who developed an approach called idealized design while working with Bell Labs in the early 1950s, and Jason Magidson, Ph.D., former director of innovation at GlaxoSmithKline who now works as a sourcing professional with Jones Lang LaSalle.
Idealized design is based on the following concepts: design by users; eliminating constraints (in other words, pretending the current system was destroyed last night); and starting with the ideal, then working backwards to today by identifying a clear roadmap toward obtaining the ideal.
Practitioners of idealized design have a long history of achieving real breakthroughs, most likely because idealized design focuses on starting from scratch. Ackoff aptly explained it:
The righter we do the wrong thing, the wronger we become. When we make a mistake doing the wrong thing and correct it, we become wronger. When we make a mistake doing the right thing and correct it, we become righter. Therefore, it is better to do the right thing wrong than the wrong thing right.
The second enabler is technology and the ability to easily transmit and store data. Technology (which now encompasses social media and mobile platforms) significantly increases our collective ability to transform data to information, to knowledge, to understanding and ultimately to wisdom — another Ackoff model.
Different Approaches Deliver Different Results
Now, some organizations believe their current supplier relationship management, or SRM, programs can deliver the same benefit as true collaborative innovation driven by the idealized design process. My experience has indicated otherwise.
SRM is the discipline of working collaboratively with a group of suppliers that are thought to be critical to the ongoing success of an organization or corporation. As a process, it's intended to maximize the value coming from those supplier relationships. Some of the key SRM process steps include:
- Supplier segmentation — to ensure the right suppliers are picked
- Accountability — knowing who owns the relationship
- Governance — how all parties are to act
- Resourcing — making sure dedicated bodies are involved
- Metrics — asking if value is being generated.
Although the intentions behind these process steps are admirable, the skill sets to effectively achieve them are high-level. When circumstances make it difficult to complete these steps, SRM becomes a "tick box" approach, typically providing little in the way of real, significant benefits, either to the buying organization or to the supplier.
Unfortunately, SRM can become a bureaucratic management technique. While, ideally, some structure is in place to ensure that critical suppliers provide maximum benefit, and that the benefit is mutual between both parties, it is also strongly suggested that collaborative innovation through idealized design be widely adopted within the framework of SRM.
A Massive Opportunity
While large pharmaceutical companies in particular have embraced massive network rationalization programs over the past decade, these efforts were largely designed to reduce the abundance of complexity associated with manufacturing SKUs and eliminate excess capacity, not necessarily to drive new innovation. Therefore, a huge opportunity exists today within these biopharmaceutical supply chains to enhance current SRM programs by using the principles of idealized design, resulting in accelerated innovation from the truly collaborative process.
While large-scale network rationalization programs are often costly and complex, the use of idealized design is relatively inexpensive and simple to deploy. During an idealized design session, the participants perform two main activities. They start by making a list of ideal specifications, or characteristics, of something they would like to create. Then, they begin creating a design that will bring about those chosen specifications.
An effective idealized design session progresses as follows.
Step 1: Develop a session scope. Clearly identify the process, product or service to be designed.
Step 2: Arrange facility requirements. Secure a room big enough to comfortably hold 12 to 15 participants and observers — providers of the process, product or service. Make sure an LCD projector and flip charts are available. Provide food and beverages. Participants should be able to sit close together, while observers should occupy the back or sides of the room.
Step 3: Designate a session facilitator. Select a facilitator who is a good listener, is able to capture participants' statements quickly and doesn't demonstrate bias or judgment. Also, a good sense of humor is helpful.
Step 4: Screen and recruit. Find participants who are users of the product, process or service of interest. Recruit from existing databases or personal contacts.
Step 5: Determine the optimal number of participants. In my experience, 12 to 15 participants per facilitator are ideal. As applicable, invite the aforementioned observers.
Step 6: Determine which observers (users) and providers to include. Invite providers so they can experience the session live. Hearing the observers' (users') ideas will broaden the providers' consideration of opportunities and perceptions of priorities.
6 Key Sentiments
Additionally, there are six very important facilitator statements to incorporate into the idealized design session. Ultimately, these determine the session's success:
- "The current process/system was destroyed last night." This statement is intended to get participants to stop talking about the current state and focus on the ideal.
- "Focus on what you'd like to have if you could have whatever you wanted. Think of it as your ideal; stay in 'design-from-scratch' mode." Again, this simple statement incites participants to move past current practices.
- "Don't focus on what isn't wanted." Focusing on wants will help promote positive interaction and help create an environment wherein participants build upon each other's ideas.
- "Don't worry about whether resources are available to implement your wishes/ideals, or whether it's even possible to implement them at all." It is important to eliminate the normal constraints that limit one's thinking.
- "If you disagree with someone's specification or idea, simply state an alternative specification." At this point in the process, all ideas are good ideas.
- "Providers — observers — must agree to stay in 'listen-only' mode." Providers typically spend time defending the current state. In an idealized design session, they should be invited to share their opinions only at the end.
Potential Obstacles to Overcome
Whether we're buyers, sellers or both, it takes time to create an environment that promotes idealized design and collaborative innovation. Some of those barriers are as follows:
- True collaborative innovation requires a step-change in thinking. The idea of working openly and sharing information in a highly transparent environment with little traditional governance just won't resonate well in many corporate environments.
- In most organizations, a lack of skill sets exists — both on the supplier and buyer ends. This is especially true if the buyer's procurement organization is leading the effort with the supply base. Even today, most procurement professionals pride themselves on their ability to leverage down price. Although this isn't a negative trait, it's not very effective as the process adopted for every supplier engagement.
- Most often, some kind of monetary investment is in order. A monetary investment might need to be made to ensure you have the right technology, skill sets and overall solutions in place to help to facilitate the collaborative innovation process. It won't work well to match up professionals on the buyer side who have inadequate idealized design skill sets with equally unprepared collaborators on the supplier side.
To learn more about idealized design, a full chapter (No. 11) — rich in practical examples — is presented in a new book by Robert Rudzki and Robert Trent, Ph.D.: Next Level Supply Management Excellence: Your Straight to the Bottom Line® Roadmap.
Gregg Brandyberry is a senior adviser at AT Kearney Procurement and Analytic Solutions, a strategic adviser to FedBid, the premier online reverse auction marketplace, as well as CEO of Wildfire Commerce in Philadelphia. He is a former vice president of procurement at GlaxoSmithKline. To contact this author, send an email to firstname.lastname@example.org.
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Chemical Outlook Hostage to Eurozone Debt Crisis
By Joseph S. Chang
After a turbulent 2011, the financial outlook for the global chemical sector in 2012 depends heavily on confidence that a resolution to the eurozone debt crisis will emerge. There have been more positive moves bringing us closer to this scenario, but there is a long way to go.
On December 8, 2011, the European Central Bank (ECB) cut its key interest rate by a quarter of a percentage point to 1 percent — another step in the right direction, but the rate remains well above the U.S. federal funds' rate target of zero percent to 0.25 percent, with no inflation in sight in the eurozone. Clearly, rates could be cut further.
The ultimate resolution is likely to be a greater degree of fiscal unity — in which individual governments' spending behavior is more integrated, and thus constrained. Monetary unity (as it exists in the eurozone through the use of the euro) without fiscal unity gives the acting government body only one lever out of two to pull in times of crisis when all ammunition is needed.
Fiscal unity leading to a reduction in onerous sovereign debt loads will be needed to revive confidence in the bond markets. The hit to the debt markets from this crisis has already had a noticeable negative impact on mergers and acquisitions (M&A) activity in the second half of 2011 and still weighs on the outlook for 2012.
Markets received their first shot of confidence on November 30, 2011 in the form of a coordinated effort by the U.S. Federal Reserve and the European Central Bank — along with central banks in Canada, Japan, Switzerland and the United Kingdom — to provide the eurozone with ample dollar-denominated liquidity.
The central banks cut the rate for borrowing dollars on existing credit lines by half a percentage point, giving a lifeline to European banks facing a credit crunch. Separately, China's central bank lowered its reserve requirement ratio for commercial banks by 50 basis points, freeing up more capital for lending.
This was the first boost of confidence needed to kick-start stagnant and declining markets permeated by the fear of financial catastrophe.
The spread of the eurozone debt crisis has hit economies worldwide. In the chemical sector, as elsewhere, buyers have largely been ordering on an as-needed basis, fearful of a collapse in demand similar to that faced by the sector in the throes of the global financial crisis in the fourth quarter of 2008.
Fears of a double-dip recession have also hit the high-yield financing market, resulting in less available credit for M&A. Deal activity has slowed considerably; after all, who wants to buy large assets in such an uncertain economic environment?
While the latest government monetary-easing moves go a long way toward alleviating short-term liquidity issues, these measures do not address the structural problems of debt overload and stagnant growth. More needs to be done to lower debt to sustainable levels.
China's move could have a big impact on the ethylene market, according to Vincent Andrews, analyst at U.S.-based investment bank Morgan Stanley. "With a loosening of Chinese monetary policy, our base-case thesis that inventories stabilize at low levels (around 20 days) now looks conservative, and our bull case appears more likely," he says. Andrews expects China inventory destocking to end by the first half of 2012 and demand to drive global ethylene operating rates to 90 percent by 2014.
The fundamentals in the chemical sector are mildly favorable, with continuing modest growth in the global economy, low inventory levels across the board and balance sheets stuffed with cash.
However, the specter of a eurozone-led double-dip recession has chemical companies and their customers with one foot on the brake. Fundamentals will be held hostage to the eurozone debt crisis until confidence about an ultimate resolution more fully emerges.
ICIS Chemical Business provides analysis of commodity chemical and polymer markets, including price trends, and the macro factors impacting prices. Subscribe online.
Joseph S. Chang is the global editor of ICIS Chemical Business in New York. To contact this author, send an email to email@example.com.
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ISM Chemical Group Conference Scheduled for March 1-2, 2012 in Las Vegas
Scheduled for March 1-2, 2012 at the New York-New York Las Vegas Hotel & Casino in Las Vegas, the ISM Chemical Group Conference promises powerful presentations that will keep you informed of the many changes in the chemical industry.
In today's challenging environment, it's critical for supply managers to bring more value to their organizations. At this year's conference, speakers will share insights regarding the latest trends in the economy, energy, key commodities and the latest in procurement technology. And, there will be plenty of opportunities to network with peers.
Session topics include:
- ISM's Report On Business®
- Chemical Industry Market Trends
- Mitigating and Minimizing Chemicals Supply Risks
- Internal Challenges of Procurement
- Specific Petrochemical Supply Situations
- Mergers and Acquisitions in the Chemical Industry
- Peer Survey and Roundtable Discussion
The registration fee is US$549, and attendees will earn nine Continuing Education Hours (CEHs). Register on the ISM website.
Wednesday, February 29, 2012 - Thursday, March 1, 2012 — US$79
Friday, March 2, 2012 - Saturday, March 3, 2012 — US$139
(Add US$30 for additional guests in same room; maximum 4 guests per room.)
Rates do not include the daily resort fee of US$15, applicable taxes and other standard charges. Rates are good for reservations made by January 30, 2012 or until room block is sold out.
New York-New York Las Vegas Hotel & Casino is conveniently located on the Las Vegas strip, within walking distance of numerous restaurants, shops and attractions.
ISM Expands Service Offerings by Acquiring ADR North America
Two powerhouses unite to build on the strength of the ISM-ADR School for Supply Management.
Institute for Supply Management™ (ISM) has taken a significant step to amplify its capacity for delivering customized professional development, consulting and skills assessments to the world's leading companies and supply management organizations. ISM has invested in the consulting firm ADR North America (ADR NA). ADR NA will continue to operate under its own name, providing a full range of supply management consulting, including baseline assessments, transformations of supply management operations, coordination of procurement across enterprises, risk management, category strategies and other related services.
ISM and ADR NA have been partners for three years in a successful joint venture, the ISM-ADR School for Supply Management, which provides a broad range of professional development courses delivered in a variety of formats and native languages around the world. Last year, ISM and ADR NA established a permanent training location in China.
"As ISM expands its global influence and leads corporations to supply management excellence, it was a natural progression for us to take greater advantage of ADR's assessment tools, educational materials and instructors," said ISM CEO Paul Novak, CPSM, C.P.M., A.P.P., MCIPS. "This acquisition is a decisive way to do that. We've been delivering ADR's state-of-practice expertise through our ISM-ADR School, and now we will offer it to companies and organizations another way — as consulting from ADR North America."
As ISM and ADR North America unite to create a new business entity, ADR North America CEO Bill Michels, CPSM, will continue in his role as president of ADR NA and president of ADR-ISM Supply Chain Management Consulting (Shanghai) Co., Inc., and he has also been named a senior vice president of ISM. "We are delighted to be a part of an organization recognized for its global leadership in the supply management profession," said Michels. "I am confident that our clients will greatly benefit from this new relationship."
To execute its investment, ISM has established the for-profit company ISM Services, Inc. ADR North America will operate as a subsidiary of ISM Services, Inc., as will ADR-ISM Supply Management Consulting (Shanghai) Co., Ltd. ADR North America and ADR-ISM Supply Management Consulting (Shanghai) Co., Ltd. will continue to be licensees of ADR International, the U.K.-based global consulting firm.
ISM Pharmaceutical and Pharmaceutical Supplier Diversity Forums Announce 2012 Goals
The ISM Pharmaceutical Forum and Pharmaceutical Supplier Diversity Forum has announced its 2012 goals.
For the ISM Pharmaceutical Forum, these include the following.
Elevate the awareness and capabilities of procurement leaders — Share best practices in the areas of organization design, structure and impact; metrics; category strategies and supplier relationship management; sourcing tools; and implementation.
Partner with research organizations and universities — Continue to drive innovative approaches and new thinking.
Promote the procurement profession — Add a fourth endowment at a university offering a leading-edge supply management program.
For more information about the ISM Pharmaceutical Forum, contact:
Vice President, Global Sourcing & Supply Management
The ISM Supplier Diversity Pharmaceutical Forum is a subcommittee of the ISM Pharmaceutical Forum. This group is composed of supplier diversity professionals representing the pharmaceutical industry. Meetings are held three times a year at various locations throughout the United States.
This group's 2011-2012 goals include the following.
Increase innovation, productivity and business results — Anticipate and interpreting private and government compliance; integrate supplier diversity into sourcing and company culture; develop best and next practices in supplier diversity; perform internal and external benchmarking; support and influence key advocacy groups; and increase reportable diversity spend.
Build capacity of small and diverse suppliers — Provide supplier development (examples: workshops, mentoring); and identify opportunities for key innovative suppliers.
For more information regarding the ISM Supplier Diversity Pharmaceutical Forum, please contact its co-chairs:
Manager, Corporate Initiatives
Associate Director, Supplier Diversity
Novartis Pharmaceuticals Corporation
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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:
Leveraging RFID — In this October/November 2011 Inside Supply Management® article, find out how, from its first use as a wireless technology in aircraft near the end of World War II, radio frequency identification (RFID) has evolved into an important technology that helps supply organizations in various industries manage their global supply chains with greater efficiency and visibility. RFID, which uses radio waves to retrieve data stored in small integrated circuits, has different applications for different industries, from inventory control, to traceability, to security. While RFID has hurdles to clear, it has made significant strides over the years, and its use throughout the supply chain will continue to grow.
Strategic Cost Management and the Supply Base — In this November/December 2011 eSide Supply Management article, a global purchasing executive at Rolls-Royce plc offers his perspective on managing product cost with suppliers. He contends that for many organizations, an improvement in cost performance through external suppliers is currently a top management agenda item: "Big or small, global or local, maintaining — or, preferably, reducing — the costs for procured goods and services is a common priority for supply management professionals around the world."
Integrated Reports on the Rise — According to this December 2011/January 2012 Inside Supply Management® article, until recently it was relatively difficult to imagine how nonfinancial performance could be reported as thoroughly as the financial numbers that are meant to illuminate part of a company's overall health. As sustainability issues continue to influence activities in organizations of all sizes, it becomes even more important to accurately communicate the value stemming from this work. This is where integrated reporting — a method to demonstrate the links between an organization's strategy, governance and financial performance, and the social, environmental and economic context in which it operates — enters the picture.
Transportation Sourcing: Best Practices — This September/October 2011 eSide Supply Management article zeroes in on the findings put forth in the third annual American Shipper study on transportation procurement practices. Produced in cooperation with the Retail Industry Leaders Association (RILA), Transportation Procurement Benchmark Study: In Search of Value gauges the responses of 325 transportation buyers and sellers to a 40-question questionnaire. The result is a set of best practices of the 2011 "winner" (best-in-class) companies, which represent about 10 percent of the total study population.
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