|In This Issue ...
- Chemical Industry News
- Fiscal Cliff a Major Concern for Chemicals Executives: Amid economic uncertainty, companies focus on operational excellence and financial strength; Shale to drive growth in U.S., increase price competition and margin erosion in Asia. Read more.
- Pharma Anti-Counterfeit Market "Set for Strong Growth": The world market for pharmaceutical anti-counterfeiting technology will reach around US$1.2 billion in 2015, according to a recent report by Visiongain. The latest Pharmaceutical Anti-counterfeiting Technologies: Market Analysis report suggests that the market will grow "strongly" from 2012 to 2022. Read more.
- Polyurethanes Industry Creates Strong Economic Impact With Indirect Job Creation in the U.S.: The polyurethanes industry achieved a significant job multiplier effect in 2010, with every job in the industry creating more than four additional jobs indirectly, according to recent data from the Center for the Polyurethanes Industry (CPI).
In 2010, the industry created 37,700 jobs and indirectly supported nearly 165,000 additional jobs in companies that depend on polyurethanes — transportation, building and construction, appliances, furniture and bedding, to name a few. Overall, the polyurethanes industry operates in 935 locations in the U.S., directly generating US$19.7 billion in output. Read more.
- U.S. Plastic Container Demand to Hit US$32 Billion in 2016: U.S. demand for plastic containers will grow an average of 4.9 percent annually through 2016, as the market recovers from the 2007-2009 recession, according to a new market study — Plastic Containers — from Cleveland-based Fredonia Group Inc. Read more.
- Feature Article
- The Power of Procurement — A global survey of procurement functions uncovers five key areas of opportunity for procurement organizations to add significant value to their organizations. This includes some specific insights on the petrochemicals, energy and general chemicals spaces. Read more.
- Market Report
- The Fine Print: Understanding Energy Contracts — For all the uncertainty in the future of the energy market today, businesses in the chemicals industry can be sure of one thing: Energy will likely remain a major operating expense. And, managing use and costs will continue to be a critical component to ensuring productivity — and profitability. The question is how to do it. Read more.
- Announcements: More than 30 new podcasts have been added to the redesigned ISM™ Podcasts website. Visit the website to browse the ever-expanding library of audio podcasts covering a broad spectrum of supply management and general business topics — from the basic to advanced. Download and listen while you work, during your commute or even in your down time. 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
Fiscal Cliff Concerns Chemicals Executives
Fiscal Cliff a Major Concern for Chemicals Executives
Many chemical industry executives say that the U.S. fiscal cliff and general economic uncertainty are driving increased focus on operational excellence and a strong balance sheet. Despite economic challenges, executives say the chemicals industry will continue to see strong growth in the U.S. as a result of shale gas developments, according to the results of a poll conducted by KPMG LLP, the U.S. audit, tax and advisory services firm.
According to the KPMG poll, 41 percent of industry business leaders indicate that in the current macro-economic environment, their biggest concern is the U.S. fiscal cliff. An additional 20 percent point to a slowdown in emerging markets and 19 percent say Eurozone debt issues.
"The threat of the fiscal cliff is an obvious concern, leading many companies to focus on improving business effectiveness and maintaining a strong balance sheet," says Mike Shannon, global chair of KPMG's Chemicals and Performance Technologies practice. "Companies that are successful in these endeavors can gain a competitive advantage and be better positioned to capitalize if the economic tide turns."
According to nearly one-third of executives surveyed, shale gas developments in the U.S. will drive significant growth in petrochemical and downstream manufacturing. Additionally, 37 percent say U.S. shale exports will force increased competition leading to price and margin erosion in Asia.
Paul Harnick, chief operating officer of KPMG's Global Chemicals and Performance Technologies practice, adds, "Regardless of concerns about the fiscal cliff, U.S. companies should remain focused on long-term investment strategies. To support planned investments in capacity, companies must invest in broadening their supply chain capabilities to ensure that exports get to the high growth markets. These markets will be critical to the growth of the sector, especially in the U.S. where exports of product derived from shale gas are expected to become a critical growth platform."
According to the poll, however, 28 percent of chemical industry business leaders say their companies do not currently have an emerging markets growth strategy in place.
"This response is startling because we see emerging markets as a critical growth factor for any large chemical company over the next decade, especially as demand in those regions will only increase," Harnick says.
The KPMG Global Chemicals and Performance Technologies practice conducted a webcast providing insight into trends that are driving the chemicals industry, as well as a view on current risks and opportunities. During the webcast, a poll was conducted in an effort to gain a sense of market sentiment. The results reflect responses from 87 senior industry executives around the world who self-selected to participate in the webcast poll. A replay of the webcast can be found online.
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Report: Each Chemistry Industry Job Generates 7.6 More Jobs
Pharma Anti-Counterfeit Market "Set for Strong Growth"
The world market for pharmaceutical anti-counterfeiting technology will reach around US$1.2 billion in 2015, according to a recent report by Visiongain.
The latest Pharmaceutical Anti-counterfeiting Technologies: Market Analysis report suggests that the market will grow "strongly" from 2012 to 2022.
"Growth of the market will be stimulated by the introduction of industrywide standards," writes Peter Williamson, a pharmaceutical industry analyst at Visiongain. "To achieve this, regulatory bodies will enforce mandatory supply chain track-and-trace technologies."
In particular, the report predicts that radio-frequency identification (RFID), optical variable technology and 2D bar coding have a key role to play in fighting drug counterfeiting, with the latter driven a move towards serialization of medical products in the European Union (EU), U.S. and elsewhere.
Meanwhile, consumer empowerment will also help in efforts to counter fake drugs, further benefiting the technology market for pharma supply chain security, according to the report.
"The key to supply chain security lies in the successful introduction of industrywide standards worldwide," adds Williamson. "Cooperation and cohesion between regulatory authorities and manufacturers must improve."
The report spans technologies such as security printing, RFID, taggants and optical variable devices (such as holograms) and discusses trends for the U.S., Japan, the top five EU countries, Brazil, Russia, India and China.
For example, in the lattermost market — China — Visiongain analysts expect modest anti-counterfeiting sales of $28 million (in 2011) to grow at nearly 15 per cent a year, reaching $147 million in 2022.
Among the suppliers profiled in the report are 3M, Authentix, Colorcon, NanoGuardian and Thermo Scientific.
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Polyurethanes Drive Job Creation
Polyurethanes Industry Creates Strong Economic Impact with Indirect Job Creation in the U.S.
The polyurethanes industry achieved a significant job multiplier effect in 2010, with every job in the industry creating more than four additional jobs indirectly, according to recent data from the Center for the Polyurethanes Industry (CPI).
In 2010, the industry created 37,700 jobs and indirectly supported nearly 165,000 additional jobs in companies that depend on polyurethanes — transportation, building and construction, appliances, furniture and bedding, to name a few. Overall, the polyurethanes industry operates in 935 locations in the U.S., directly generating US$19.7 billion in output.
"While the polyurethanes industry has not yet returned to pre-recession levels, we are seeing positive developments in the sector overall," says CPI Senior Director Lee Salamone. "At the recession's lowest point, manufacturing output was off by 21 percent. Although current output remains 5 percent below its 2007 peak, that is a strong improvement from where the industry was a few years ago. This study confirms the feedback we received at the 2012 Polyurethanes Technical Conference in September — the industry is moving in the right direction."
Key statistics about the polyurethanes industry from 2008-2010 include:
- The top end-use markets for polyurethane consumption (in descending order) are building and construction, transportation, and furniture and bedding.
- The polyurethanes industry operates in 935 locations in the United States, directly generating $19.7 billion in output and 37,700 jobs.
- Indirectly, the polyurethanes industry supports an additional $40.1 billion in output and supports nearly 165,000 additional jobs.
- In total, the polyurethanes industry supports about 202,600 jobs and $59.9 billion in output.
- Additionally, polyurethane products are used in industries generating $245.5 billion in output and employing nearly one million workers.
This analysis, conducted by the Economics and Statistics department of the American Chemistry Council, builds upon the 2010 End-Use Market Survey
on the polyurethanes industry and summarizes the importance of the polyurethanes industry to the U.S. economy. It presents both the economic value created by its production activities and the value of the industries that use its products in the production of their output. This report focuses on diisocyanates and associated polyols. The research was conducted during September 2012 using 2010 end-use consumption patterns, which were the latest available at the time.
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U.S. Plastic Container Demand to Hit US$32 Billion in 2016
U.S. Plastic Container Demand to Hit US$32 Billion in 2016
U.S. demand for plastic containers will grow an average of 4.9 percent annually through 2016, as the market recovers from the 2007-2009 recession, according to a new market study — Plastic Containers — from Cleveland-based Fredonia Group Inc.
Growth will be moderated by a deceleration in bottled water growth and the lack of near areas for large-scale conversions from metal or glass.
Demand for containers will reach $32.4 billion in 2016, consuming 14.2 billion pounds of resin, according to the report.
Plastic containers will face competition from pouches and other types of flexible packaging, but these will often augment rather than replace rigid containers, according to the study.
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The Power of Procurement
A global survey of procurement functions uncovers five key areas of opportunity for procurement organizations to add significant value to their organizations. This includes some specific insights on the petrochemicals, energy and general chemicals spaces.
By KPMG LLP
Around the world and across all sectors, organizations are experiencing an unprecedented pace of change. As a result, businesses are rapidly re-evaluating their operating models and market strategies not just to withstand these market forces, but to capitalize on them.
Clearly, the procurement function has a significant role to play in helping an organization achieve its objectives and prepare for the uncertainty ahead. In part, this will require procurement to focus on driving costs out of the business. But, the opportunity also exists for the function to add value in a much more strategic way.
As we engage with procurement functions around the world, our firm's professionals have witnessed a number of highly mature procurement organizations that have stepped up their game, fundamentally changing the way they work with the business — and, as a result, are increasingly taking a leadership role in helping to drive growth and reduce costs across the organization.
But, what exactly does a "mature" procurement function look like? How is it adding value beyond traditional cost-cutting measures? And, what can less mature organizations learn from their more evolved peers?
5 Areas of Opportunity
To better quantify the maturity of procurement functions around the world, KPMG, in association with CPO Agenda, surveyed 585 procurement leaders across the world. What we found was that, overall, a significant gap exists where procurement is now and where it could be.
In particular, our research identified five key areas where procurement could be elevating its game to add significant value to its organization:
- Partnering with the organization. For procurement to achieve a place at the table, more work should be done to align to key stakeholders and understand the business operations to become a true strategic partner. This means moving up the value chain to ensure that the function is involved much earlier in the decision-making processes, allowing procurement to demonstrate clearly how active involvement adds tangible value to both the bottom and the top lines.
"For petrochemicals, this means procurement must collaborate across core business lines, and be involved early on in the strategic planning, sourcing and life-cycle management of their major spend categories, such as raw material feedstock and major capital expansion projects," says Robbie Thompson, a director in KPMG's Procurement Advisory practice.
- Moving beyond cost savings. Driving costs from supply contracts will always be a central tenet of procurement; but, many organizations seem to be struggling to extend their activities proactively into core capabilities such as category management, and beyond into demand management, supplier relationship management (SRM) and risk management. Indeed, respondents seem to indicate that procurement is continuing to struggle to make a strategic impact on the organization. For example, our survey shows that — on average — procurement influences less than 60 percent of spend across both direct and indirect categories.
Although most procurement functions have made great progress in terms of creating value for their organizations, our research indicates that momentum has somewhat stagnated recently. In large part, this is because much of the low-hanging fruit already has been harvested in terms of cost savings, leverage and price.
"For our clients in the energy and chemicals space, we're seeing more collaboration with suppliers to drive innovation around product development, performance, logistics and standardization," Thompson says. "This deeper level of partnering and transparent performance management offers procurement an opportunity to leverage the relationship — driving continuous incremental value to both the top and bottom line."
- Achieving the optimal operating model. While the majority of procurement organizations have already adopted a more centralized operating model, many still face challenges in translating this into strategic value for their businesses. CPOs and supply chain directors increasingly will find themselves reassessing their operating models to squeeze greater value from their activities around the world, while providing a robust centralized framework that delivers efficiencies across the business at a reduced operating cost for the function as a whole. It is not surprising, therefore, that centralized organizations tended to report the greatest value from a cost savings perspective (as shown, below).
- Prioritizing supply chain risk. Given the events of the past five years — financial crisis, natural disasters and massive supplier failures, to name just a few — the research demonstrates a worrying lack of leadership in the area of supplier risk. Procurement will need to push aggressively the inclusion of supply chain risk in the broader business agenda to protect the business from the uncertainty and turbulence that almost certainly lies ahead.
As illustrated in the figure below, more than a quarter of all respondents reported only "foundation" maturity in terms of risk management, and the vast majority (60 percent) ranked themselves as "established." And, while this means that a significant number now deploy a reasonable approach to categorizing and risk-assessing their suppliers in terms of criticality to the business, this level of maturity falls far short of best practice in risk management.
- Leveraging systems and technology. While supply chain technology and business systems have evolved rapidly, many procurement functions seem unable (and possibly unwilling) to leverage these new capabilities to bring greater automation to the business.
In many cases, the situation is even more alarming: having made the investments, they have yet to realize the value. In particular, the business increasingly will be looking to procurement to maximize its existing systems and technology to provide greater clarity into the management information and business intelligence processes.
Change Takes Work
Based on this research, it is clear there is ample opportunity for most procurement functions to drive additional value into their organizations. But, this means changing the status quo and actively working to enhance the value, capabilities and reputation of the procurement function throughout the business.
In part, this will require CPOs and supply chain directors to clearly articulate the tangible benefits of embedding procurement into the business planning and decision-making processes. But, it also means getting the basics right: bringing spend under contract, auditing and monitoring progress, reducing costs and making better use of systems and technology.
The results could be amazing. Organizations with mature procurement functions enjoy lower cost growth, greater business flexibility, increased market certainty — and, as a result, significant competitive advantage over their peers. Those that fail to mature will find themselves relegated to simply reviewing and negotiating contracts, forever to remain as tactical "order takers" rather than the strategic leaders that they could (and should) aspire to be.
We believe this research provides a clear and actionable roadmap to help procurement leaders plot their journey to maturity and, with it, a more strategic and valued role within their organizations.
Now, it is up to the CPOs and supply chain directors to change the status quo and claim their rightful place at the table.
KPMG LLP is the U.S. member firm of KPMG International helping clients drive sustainable improvements to make procurement a source of value and innovation across the enterprise. A full report of The Power of Procurement can be found online. To contact this author, send an email to firstname.lastname@example.org.
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The Fine Print: Understanding Energy Contracts
In the coming years, managing use and costs will continue to be a critical component to ensuring productivity — and profitability. The question is how to do it.
By Karthik Rajan
Outside economic pressures, combined with internal demands to control budgets and reduce uncertainty, can create significant challenges for businesses in the chemicals industry. And, that can be further compounded by nonstandardized multiple pricing product offers in certain regions of the United States, where electricity is open to competitive markets. (Examples include deregulated markets such as the Electric Reliability Council of Texas [ERCOT], which covers most of the state, and PJM, which covers the District of Columbia and all or parts of 13 eastern states, including Ohio, Pennsylvania, New Jersey and Maryland.)
Whether you're purchasing electricity for one location or several, the key is to understand exactly what you're getting out of your electricity contract. Here are four steps that can help you get on the road to the right decision for your business.
Step 1: Know the costs that go into your electricity bill.
Depending on the contract structure and regional market, there can be anywhere from 15 to 30 components that make up the total cost your company pays for electricity. These variables are often categorized into two basic groups: energy and delivery.
The energy component is the actual price of the energy your business consumes. It can constitute more than 75 percent of your total expense and can be very volatile, making it difficult to predict future costs.
The bulk of the remaining costs are included in delivery or the flow of energy from the output side of the generator to your meter. This portion is much less volatile, changes less often and is driven mostly by regulatory bodies and independent system operators who manage the reliability of the electric grid.
Step 2: Align your energy strategy with key business drivers.
Energy costs — the major component of your total expense — can be managed depending on the amount of exposure to price volatility your business is willing to accept. But, there's a trade-off between price certainty and cost.
The top three significant business drivers that can help guide the right procurement decision are: budget flexibility, energy use patterns and whether or not your company matches sales revenue to costs when pricing products.
If budget certainty is a must, a fixed price contract may be the most viable option to consider to ensure energy costs remain about the same from month to month. Companies with more budget flexibility — those that build energy prices into product costs and pass them through to customers — may prefer a contract with index pricing, which is based on the cost of power in the wholesale market. For companies whose revenues are tied to the price of natural gas, there is a third possibility called a "heat rate contract," which is a relevant option to consider.
Step 3: Get organized — and stay that way.
With your key business drivers in mind, it's time to take a close look at your energy profile in the regulated and deregulated markets. Understand the current structures and rates of your existing contracts. If you have energy agreements in deregulated markets, find out when they expire. Determine the consumption patterns of your business, and track how much power you use monthly and annually.
This data, combined with trends in retail commodity prices, will give you the information you need to execute the right contract at the right time by quickly responding to changing market conditions and taking advantage of cost-savings opportunities when they arise.
Step 4: Shop smart.
If you're operating in deregulated markets, shop wisely by establishing close relationships with two to three qualified retail electricity providers. Evaluate their financial standing, and be sure to research their credit ranking and balance sheet.
Once you have prospective contracts, make sure the offers are normalized for a true "apples-to-apples" comparison to avoid buried fees and add-ons. As a rule of thumb, agreements that give the most latitude will likely be the most expensive in the long run. So, beware of agreements that allow for broad swings in energy consumption, and understand the terms of contracts with extended payment language — these benefits may come with an added price.
Although most suppliers charge relatively similar rates when it comes to the delivery portion of your energy bill, not all retail electricity providers will include these costs in a quote. Fees such as capacity charges, line losses, ancillary services and transmission charges will certainly end up on your bill — so, insist on price transparency and be sure these fees are factored in while comparing quotes.
Ultimately, not all providers offer the same in terms of contracts and flexibility. But, by following these steps — and making it a point to understand the benefits each prospective agreement can bring your business — you can make a smarter, more informed decision when it comes to finding an energy solution that best fits your business and your bottom line.
Karthik Rajan is the regional vice president of sales for the ERCOT market for GDF SUEZ Energy Resources NA, one of the largest competitive retail electricity providers to commercial, industrial and institutional customers in the United States. To contact this author, send an email to email@example.com.
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More Than 30 New Podcast Available on the ISM Website
More than 30 new podcasts have been added to the redesigned ISM podcasts website. Visit the website to browse the ever-expanding library of podcasts covering a broad spectrum of supply management and general business topics — from the basic to advanced. Download and listen while you work, during your commute or even in your downtime.
All these podcasts are available right now:
"Career Management for Supply Professionals"
"Developing Supply Chain Talent"
"Mentor-Protégé Relationships in Light of Supply Management Strategy"
"Uncovering Power Through Effective Data Use"
"Time Management: Stop Working on the Wrong Things"
"Keeping Tabs on Ethics"
General Supply Management
"Defining Value Through Supply Management Integration"
"Project Management Tools for the Supply Professional"
"Savings With Source-to-Pay"
"Selling Supply Management's Value"
"The 'Cloak of Invisibility' Making the Supply Chain Truly Visible to Top Management"
"Understanding the Extent of Supply Management"
"A Global Mind-Set: Time, Technology and People"
"Global Supply Chain Management"
"Unfolding a Global Evolution"
"Best Practices in Negotiating Software Contracts"
"Limitation of Liability"
Personal Career Development
"Leadership Tools for Your Career"
"Lifelong Education: A Critical Endeavor"
"Making It in General Management"
"Managing Your Employability"
"American Airlines Negotiates Largest Aircraft Order"
"Identifying and Mitigating Supply Chain Risk"
"If It Can Happen..."
"Proactive Supply Chain Risk Management"
"Risk Management: Strengthening Your Supply Chain"
"Risk Management Tracks"
"Bringing Cloud Computing Down to Earth"
"Enlightened Marketing Procurement"
"Group Purchasing Organizations — A Low Risk, High Value Proposition"
"However You Slice It, Buying Energy Is Unique"
"Life Span — Technology Recycling"
"Saving Lives, Saving Money: Supply Chain Management at the American Red Cross"
"TCO and Mobility"
"Contract Manufacturing: Another Way to Satisfy Customer Requirements"
"Playing to Win"
"Benefit By Building Great Supplier Relationships"
"Dog Training and Supplier Management — Would Cesar Milan Be a Good Supply Manager?"
"Research in Supply Chain Management: Academic Insight for Managerial Relevance"
"Supplier Collaboration — A Paradigm Shift"
"Supply Chain Collaboration"
"How to Develop and Leverage Diverse Suppliers"
"Important Elements for a Successful Supplier Diversity Program"
"Mentoring Diverse Suppliers"
"Supplier Diversity From the CPO Perspective"
"Utilizing Diverse Businesses in Emerging Technologies"
"Value of Diverse Suppliers"
"CAPS Research Benchmarking Report: Conflict Minerals Reporting Requirements"
"Sustainable Procurement Metrics"
"Sustainability 2.0 — What Comes Next"
"Sustainable Water Management"
"Social Media in Supply Management"
"Turmoil in Europe/Social Media in Europe — the Promise and Peril"
"Social Media: A Waste of Time or A Catalyst for Supply Chain Innovation?"
"The Real World (Today and Tomorrow): Social Media on the Front Line"
Register Now for ISM Summit for Black Executives in Supply Management
Register now to attend the 10th Annual Black Executive Supply Management Summit, to be held February 5-7, 2013 at the Doubletree by Hilton New Orleans in New Orleans. This event delivers supply chain management strategies as well as general business approaches to help you streamline your enterprise. This is not only an opportunity for face-to-face learning, but for networking, as well.
Find out what other organizations are doing to get ahead. Hear from top performers representing General Mills, IBM Corporation, DuPont, Cisco WebEx, MeadWestvaco and more. The program is presented for black executives, their direct reports and those interested in building their career in supply management.
Hosted by Institute for Supply Management™ (ISM) the 10th Annual Black Executive Supply Management Summit is at the same time and location as the 5th Annual Women Executive Supply Management Summit. Each summit has its own set of workshops, but general sessions are together. Summit registrants are welcome to attend any of the concurrent sessions.
Student teams will present cases on the morning of February 7, 2013. In addition to showcasing the next generation of supply management talent, student team members will also hear from practitioners on how to establish themselves in the supply management profession.
Register now by visiting the ISM website. Registration is US$949 for ISM members and US$1,149 for nonmembers. Student member rate is US$250. Fees include all summit workshops and scheduled meals.
All sessions are at the Doubletree Hilton New Orleans, 300 Canal Street, New Orleans, LA 70130. For hotel reservations, please book online. NOTE: Free in-room Internet was negotiated for guests staying at the host facility.
Women in Supply Management — Register Now for 5th Annual Summit
Register now to attend the 5th Annual Women Executive Supply Management Summit, to be held February 5-7, 2013 at the Doubletree by Hilton New Orleans in New Orleans. This event delivers supply chain management strategies as well as general business approaches to help you streamline your enterprise.
Find out what other organizations are doing to get ahead. Hear from top performers representing General Mills, IBM Corporation and more. The program is open to all professionals in supply management who value diversity and innovation, with an emphasis on women executives, their direct reports and those interested in building their career in supply management. Women Executive Supply Management Summit sessions include:
- Navigating an Uncertain and Volatile World Economy
- Your Secret Weapon — Discover the benefits of using an organization that is WBENC- and/or NMSDC-certified.
- Supply Chain Management in a Global Economy — Join IBM, a multi-award winning company and thought-leader in supply chain management, for an engaging conversation on supply chain globalization.
- Leadership: Confidence, Complexity and Coaching
- Executive Roundtable Networking
- Two Essential Ingredients: Strong Teams, Unwavering Ethics
- WEConnect International: Women-Owned Enterprises and Value in the Supply Chain
Hosted by Institute for Supply Management™ (ISM), the 5th Annual Women Executive Supply Management Summit is at the same time and location as the 10th Annual Black Executive Supply Management Summit. Each summit has its own set of workshops, but general sessions are together. Summit registrants are welcome to attend any of the concurrent sessions. Additional time has been built into the schedule to allow for active networking. Students in supply management degree programs are also invited to attend.
Register now by visiting the ISM website. Registration is US$949 for ISM members and US$1,149 for nonmembers. Student member rate is US$250. Fees include all summit workshops and scheduled meals.
All sessions are at the Doubletree Hilton New Orleans, 300 Canal Street, New Orleans, LA 70130. For hotel reservations, please book online. NOTE: Free in-room Internet was negotiated for guests staying at host facility.
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A Wealth of Information at www.ism.ws
Visit ISM's website 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 may be of interest:
- Middle Markets in the Limelight
This Inside Supply Management® article contends that market companies are powerful segments of the U.S. economy that often get lost — well, in the middle. Yet, recent research into middle-market companies (those with annual revenue between US$10 million and $1 billion) finds they're the growth engines in today's economy.
- Get a Supplier Risk Management Initiative Going
This eSide Supply Management article contends that in today's turbulent economy, understanding the risks posed by your suppliers is critical. If a supplier isn't financially healthy, its potential inability to fulfill its obligations can have major repercussions for your own organization's financial health.
So, what does an effective supplier risk management initiative look like, in practice? Read this article and find out.
- Developing Diverse Global Supply Chains
This Inside Supply Management® article looks at two countries and their current supplier diversity environments. Canada and South Africa are quite different from one another, and yet supply management executives working in these countries and others are dealing with similar challenges. Who are the minority groups that make up the pool of WMBE suppliers in each country, and what are the objectives for companies working with these suppliers?
- Five Rules — and 10 Steps — to a Healthy Outsource Agreement
As this eSide Supply Management article explains, a flexible and nuanced outsourcing strategy follows five rules, each with its associated steps. Its author contends that if your outsourcing strategy isn't flexible and nuanced enough to deal with that fact of life, then it's long past the time for a change in the ways it outsources and its business contracts are negotiated and managed. "It's probably also time for a mind-set change — from "I-win/you-lose" to "win-win," she says.
- Make Better Decisions With Cost Modeling
This Inside Supply Management® article outlines how projected cost modeling — the analysis of resource data (direct labor; direct material; indirect costs; selling, general and administrative (SG&A) costs; R&D costs; and profit) — can help supply management organizations reduce procurement costs and generate information that could improve cost performance throughout the supply chain.
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