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1995 International Conference Proceedings (May 1995)

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Title:
(Just-in-)Time For Integrated Transportation And Logistics Management
Abstract:
We are at the threshold of a major technological breakthrough that will revolutionize the way purchasing professionals do business. This breakthrough is commonly referred to as the Information Superhighway, or the Digital Revolution, but is more properly, and more expressively, known as the National Information Infrastructure (NII). This paper addresses the origin and characteristic of the NII and the services currently available, describes the implications for today's purchasing manager, and provides some incentive to keep the PM from becoming overwhelmed by the technology -- otherwise identified as becoming "road kill" on the Information Superhighway! Some examples of actual NII networks are presented.
Authors:
Joel Childs


Title:
20/20 Vision: Do We Need Bifocals?
Abstract:
Much has recently been written about the nature of the purchasing profession and the changing role of acquisition personnel in the year 2000. That milestone -- and, in fact the turn of the century, is now only five years away. It would seem appropriate to the author to take a more long range view of the profession, perhaps as much as twenty-five years away. That perspective would bring us to the year 2020; an optimal point at which we should be able to view the profession with "perfect" vision. It has been said that the more things change, the more they remain the same. In many ways, we have seen the "return to basics" in many of our industries, adding credence to this clich­ in the business world. The next decade will see many changes affecting our personal and professional lives, and in both cases a solid understanding of basic trends will allow us to better manage change and the challenges or opportunities it may present.
Authors:
Rene A. Yates, C.P.M.


Title:
21st Century Macro Trends: Impact on Purchasing/Materials
Abstract:
Organizations have gone through a unprecedented level of change over the last twenty-five years. Competition is now based on the ability to recognize and act on opportunities, learn quickly, innovate, reduce cycle time, produce and deliver quality, be flexible, produce and deliver reliability and be responsive. This has created an increased focus on customers, processes, and the continuous improvement of quality, cost, speed and flexibility. What a great opportunity for purchasing--materials are often the pacing items in determining an organization's ability to compete in this new marketplace.
Authors:
Diane Brown, C.P.M., CFPIM


Title:
Analyzing Purchasing Performance Using Activity Based Costing
Abstract:
This paper presents a methodology for using Activity Based Management (ABM) to improve the contribution that the Purchasing function makes to its organization. The basis of ABM is an Activity Based Costing(ABC) analysis of the purchasing activities in the organization. A case study of purchasing costs in a large financial institution is used as an example. The focus of an ABC analysis is on distinguishing between those activities which add value to a purchase order and those which do not. Attempts must be made to eliminate those costs which do not add value or, at least, to reduce their cost.
Authors:
Michael F. Pohlen, Ph.D., C.P.M.
Scott K. Jones, Ph.D.


Title:
Assignment of Overhead Costs In a Service Organization Using Activity-Based
Abstract:
Financial and operating managers in a service organization should understand the cause-and-effect of costs, including both departmental, and general and administrative (G&A) overhead. They are responsible for selecting a suitable allocation methodology for determining the "true" costs associated with the development and delivery of a service. Further, their choice of such a methodology will allow them to: a) ascertain more clearly the business processes that drive costs, b) recognize those productivity enhancements that upgrade service delivery, and c) identify unambiguously the performance measures that affect cost control. These managers require relevant and useful information to operate their cost management systems. Activity-based costing (ABC) represents an innovation in cost management systems. It collects financial and operating performance information on the significant or key activities (cost drivers) of the organization, and relates these activities to the demands they make on the organization's resources. The cost of these resources, mostly labor, has risen faster than inflation in the last decade. Selecting the ABC system would permit the assignment of an individual service's cost based on the causal relationships of the activities required to develop and deliver each service. Managers from different industries value the ABC system, although designed primarily for manufacturing, for making critical operating decisions that require accurate cost reporting.
Authors:
Henry F. Garcia, C.P.M.


Title:
Beyond Buying: Purchasing's Changing Role
Abstract:
Buyers must focus beyond buying in order to assure that they continue to grow within the changing role of the purchasing professional. Traditional transaction based procurement must be replaced by strategic sourcing management.
Authors:
Jim Limperis, C.P.M., CFPIM
Richard G. Weissman, C.P.M.


Title:
Beyond Reengineering: What's Left and What's Next?
Abstract:
Purchasing professionals are coming under real pressure from management to respond to key business issues. Most firms have been looking to reengineering for salvation, but typical reengineering is not enough. Once we have reduced our fixed costs, restructured our staff, reduced our work process cycle times to their all-time low, and stopped the loss of market share, we are only competitive with the best in our market. Eventually, all competitors end up with the same equipment, the same service levels, and the same costs.
Authors:
Robert B. Ackerman, C.P.M., CPIM


Title:
Consolidating Repair Services Purchasing to Eliminate Non-Value Processes
Abstract:
Whenever repetitive purchases occur, a managerial goal will be the reduction of administrative cost through process simplification. Commonality of product or component across models or product lines only accentuates both the need for improvement and the magnitude of the result. Component repair services are needed by most manufacturers, yet often receive little process improvement attention. This paper will address this deficiency by examining the way Sequent Computer Systems, Inc. developed its innovative system.
Authors:
Bill Lasniewski, C.P.M.
Lee Buddress, C.P.M.


Title:
Creating Competitive Advantage Through Reengineering Paper Based Information
Abstract:
This paper presents an approach to creating a competitive advantage through a supplier-customer partnership to reengineer the paper based information system in an organization. The competitive advantage is created by reducing costs, enhancing process quality and increasing productivity. The nature of the partnership and the organizational changes needed to implement it are described. The paper briefly reviews the concepts of business process reengineering (BPR) and demonstrates how the redesign of the paper based information system can be integrated with BPR activities. The paper describes a methodology for redesigning paper based information systems based on a detailed analysis of the business processes. Lastly, the experiences of an organization which redesigned its paper based information system in partnership with a supplier are presented. Some results of this effort, including cost and time savings and quality improvements, are presented.
Authors:
Dr. Phillip L. Carter
Dan D. Siadak
Brian P. Behnken


Title:
Developing Your C.P.M. Examination Study and Test Taking Skills
Abstract:
This paper provides instruction on how to develop your study and test taking skills when preparing for the Certified Purchasing Manager (C.P.M.) Examination. Time management, stress management, and test taking skills are emphasized. The use of NAPM study aids is discussed. Insights for those preparing for the C.P.M. Examination and for those who teach C.P.M. Examination Review Courses are provided.
Authors:
Dr. Michael A. McGinnis, C.P.M.
Dr. Alvah E. Clark, Jr.


Title:
Developing a Supply Management Strategy
Abstract:
Introduction and explanation of the Material Positioning Grid and how to use it in the formulation of successful Supply Management strategies. Description of the process successfully used by companies from varied industries to develop and monitor their strategies and tactics. Thorough demonstration of the relationship between material and marketplace conditions.
Authors:
Wayne L. Douchkoff


Title:
Effects of Activity-Based Costing on Purchasing
Abstract:
In the late 1980's, a 1000-person plant converted its financial systems to Activity-Based Costing (ABC). All functions within the plant were involved in and affected by the change. Purchasing was required to define its activities and the drivers of those activities. Costs were established for most activities. Decisions began to be made on a clearer and much more intelligent basis.
Authors:
Mary Lu Harding, C.P.M., CPIM, CIRM


Title:
Flexible Staffing in the '90s - Using Temporary Purchasing/Materials Personnel
Abstract:
In the 1990s a variety of forces demand that organizations do more with less people. Due to the passage of the Family Leave Act, a slowly recovering world economy, the ending of the cold war arms race and other economic factors, temporary help of all kinds is being utilized with increasing frequency. All departments including Purchasing and Materials Management are being affected by this trend. Temporary purchasing and materials management personnel can contribute significantly to an organization's bottom line without significantly increasing overhead costs. Purchasing and Materials Managers must learn how and when to contract for and use temporary purchasing and materials staffing services in new and innovative ways that address manpower, skill and/or knowledge shortages while taking advantage of current technology (including temporary and at-home purchasing offices).
Authors:
Lee Krotseng, C.P.M.


Title:
Growth Pacts : Tomorrow's Success Begins Today
Abstract:
Today, global expansion and business transformation are catalysts for change behind virtually every company. The ultimate challenge to MBEs' growth and financial success is their ability to participate in this global expansion and corporate transformation. The challenge for purchasing personnel is to effectively integrate MBEs into their organization's existing structure in spite of the shrinking supplier base. GrowthPacts are viable alternatives to ensure long-term involvement of MBEs, provide solutions to vendor base reduction, and increase profitability in this new global economy.
Authors:
Tom Nesby


Title:
Healthcare Consolidation And Purchasing Management
Abstract:
The healthcare industry is going through tremendous upheaval. Medical inflation rates are down, but, the United States continues to spend a greater percentage of gross national product on healthcare than any other industrial nation in the world. In many respects we have the finest medical system in the world ("the best money can buy") and yet as a nation, rank surprisingly low in some very basic indicators of health (e.g. infant mortality).
Authors:
S. Randolph Hayas
Randall W. Luecke, CPA, CMA


Title:
How NOT To Blow It In A Negotiation
Abstract:
In negotiations, a few words one way or the other often influence the outcome. Similarly, a few simple mistakes can often spell disaster. Even experienced negotiators may turn around after an unsuccessful negotiation and conclude that they or their team "blew it."
Authors:
Brian G.Long, Ph.D., C.P.M.
Elaine N. Whittington, C.P.M.


Title:
How To Affect Cost Reductions By Converting Non-Traditional Purchases Into
Abstract:
Purchasing organizations traditionally have been recognized as being "champions" when it comes to reducing overall product costs. Such innovative activities as supplier teaming practices, value engineering, JIT ordering, the supply Chain Management process, inventory reduction practices, strategic contracting, the installation of automated and "paperless" purchasing systems, EDI, risk management, supplier performance measurement systems, and continuous supplier improvement programs, have contributed to economizing the expenditures for goods. The operative word here is "goods".
Authors:
Janet L. Sickinger, MA, MBA, CCA


Title:
Logistics: What Buyers Must Know
Abstract:
Logistics is often considered a function of the traffic department. Recently it has been recognized that purchasing plays a critical role in logistics. NAPM (National Association of Purchasing Management) selected as the theme for the 1993 International Purchasing Conference "Logistics: Navigating The Future.,, We will discuss the basics buyers should know about logistics and three important areas in which purchasing can help reduce the cost of logistics.
Authors:
Mark S. Miller, C.P.M.
James P. Weber, C.P.M.


Title:
MRPII For Planning JIT For Execution
Abstract:
The objective of this presentation is to demonstrate how successful companies are able to merge MRPII and JIT. We shall look at several companies and how they plan and control materials and capacities using both MRPII and JIT techniques.
Authors:
Terry Lunn, CFPIM, CIRM


Title:
Materials and Service Management - The Cornerstone of Reengineering America
Abstract:
Changes, in the way we do work in America's corporations, are escalating. These changes have created confusion and dislocation in the national employment pool. Hammer and Champy's work "Reengineering the Corporation" defines these changes and rationalizes the methods for taking charge of them and bringing them about. Professionals trained in purchasing and the other materials and services management disciplines have an advantage and can exert dynamic impact on these inevitable changes.
Authors:
John Kovach, Jr., C.P.M.


Title:
Merits Logistics Management
Abstract:
Fundamental business management requires detailed examination of all activities within a business. Without careful analysis of the real cost of any and all processes within a given business, it is difficult to manage a profit. Moreover, without regular re-evaluation of the process to improve the process to eliminate costs, it is impossible for businesses to achieve and maintain a competitive edge. Logistics is one of those elements of business that directly impacts several other areas within that same business. Therefore, logistics management should be approached holistically with true cost/benefit study which includes all actual costs.
Authors:
Gregory Stachura


Title:
Moving Beyond Purchasing: A More Comprehensive Approach To Business
Abstract:
Over the past few years much has been written concerning the value of cross functional teams to the procurement process. This paper attempts to move past the conceptual discussion of the team approach and through the review of a procurement case study provide quantifiable benefits to support this approach to business. For procurement professionals to survive and prosper they are going to have to broaden their focus. The title "Purchasing" is a relic, or will soon be one in most organizations. As organizations continue to review and reduce costs, positions narrowly focused on buying materials or processing requisitions will continue to be eliminated. Procurement professionals who develop more creative information system solutions, lead cross functional teams and contribute value on technical and business issues will become vital to the success of the organization.
Authors:
John Hanrahan, C.P.M.


Title:
Multi-Location Service Companies: There Is A Better Purchasing Organizational
Abstract:
Over the past fifty years much has been written about whether a company with offices across the country should have its purchasing function organized in a centralized or decentralized format. This polarization of purchasing organizations has given way to a compromise, team-oriented approach. Recent evidence has shown that most firms with multi-locations use a type of hybrid operation that utilizes aspects of both centralization and decentralization. All too often decisions on the type of purchasing organization are based on traditional production-based criteria. There is an inherent problem with that method, as these criteria are geared towards manufacturing facilities. The rapid growth of service companies requires a new look at how decisions are made in the selection of the organizational structure for a purchasing department. This paper will attempt to bring to light some new ideas on the subject.
Authors:
Peter E. O'Reilly, C.P.M.


Title:
National Health Care Outlook: Strategic Grand Rounds
Abstract:
The U.S. health care system is in one of the most turbulent periods of its history. No aspect of the medical industry will be left untouched by the forces of reform that emanate from our local communities, state capitols and the federal government. Amidst this activity, our nation's health care system continues to grow in complexity and size, as it attempts to meet the expanding needs of an aging society.
Authors:
William M. Dwyer


Title:
No Dragons Are Out There! The Art of Crisis Management
Abstract:
A crisis is a major, unpredictable event that has potentially negative results. The event and its aftermath may significantly damage an organization and its employees, products, services, financial condition, and reputation. In a crisis the stakes are incredibly high for a great many individuals and numerous organizations, and potentially for the economy of an entire country. Successful crisis management then becomes a necessity in today's business world.
Authors:
Preston J. Leavitt, Ph.D., J.D., C.P.M.


Title:
Organizations of The Future: SMT's - RDC's - TURF's
Abstract:
As corporations recognize the strategic role of purchasing to help meet increased competitive forces creative organizational structures are needed to balance this expanded role with the pressure to down size. Alliances and other cooperative arrangements with suppliers are being promoted throughout the purchasing profession. Equally important are the internal alliances between purchasing and its clients. Specifically addressed will be examples of new internal structures for; the purchasing function, internal client groups, and design teams with suppliers. These changes are being implemented in a telecommunications service industry (non - manufacturing) environment.
Authors:
Norman K. Owen, C.P.M.
W. J. Jack Wagner, C.P.M.


Title:
Public Purchasing: Meeting Tomorrow's Challenges Today
Abstract:
Budget and staff cuts are a way of life for many public purchasing organizations. At the same time, they must achieve more and better results in less time than ever. This paper explores initiatives developed by several public purchasers to meet the challenges of today and prepare for those of tomorrow. It highlights examples of improved service delivery, through customer service, team sourcing, reengineering, supplier partnerships and technology application.
Authors:
Carla S. Lallatin, C.P.M., CPPO
Cameron Birnie


Title:
Purchasing Price-Volatile Commodities: Risk Control And Forecasting
Abstract:
Significant volumes of price-volatile materials in the cost structure of a business can pose a risk-control and cost-savings challenge to purchasing. This paper addresses the various risks that are involved, how to determine what is worth doing, and several ways to devise a purchasing strategy for such materials. Focus is placed on major factors that impact the decision-making processes of purchasers.
Authors:
John D. Baker, Ph.D.


Title:
Re-engineering For Service
Abstract:
In today's competitive market, there is a need to evaluate and make drastic changes to our companies by assessing what is important to our customers. In service departments such as Purchasing, our customers are internal to the organization and are just as important as our companies outside customers. Re-engineering requires that we make customer service the priority and utilize technology to meet our customer demands. In our quest to re-engineer our organizations, there is a need to change the way we have done business in order to meet the challenges of the future.
Authors:
Jerry W. Claunch C.P.M.


Title:
Success Strategies For Cross-Functional Teams: Management's Role
Abstract:
The Issue. Look around at the most successful organizations today and you find quality at the core of their corporate goals and teamwork as the principle strategy for achieving the goal. As with most paradigm shifts we rarely recognize the change while we are living through it and, as a result, fail to successfully manage the ransition. The purpose of this paper is to suggest some ways to create a team-based organization which will successfully support both the quality goals and the vechicle of cross-functional teamwork.
Authors:
Glenn M. Parker


Title:
Supplier Development: Expectations vs. Results
Abstract:
This paper presents results of a survey on supplier development. Surveys were mailed to a random sample of 1,504 NAPM members. The sample was split into two groups on the basis of how respondents judged the results of their supplier development effort, either exceeding or falling short of expectations. The responses of these two groups to questions regarding the type of supplier development activities engaged in and their perceptions of their firm's communication efforts with its supplier are presented and discussed.
Authors:
Daniel R. Krause


Title:
Supplier Enterprise Management
Abstract:
Supplier Enterprise Management (SEM) is not just another academic acronym to sell books or to create another consulting practice. It is a higher level look at a total concept to manage the supplier base for any organization. This strategic approach takes the purchasing practices one step further in the financial management of an organization's funds.
Authors:
Walter E. Buczynski C.P.M., C.P.C.M.


Title:
Supply Management At CN: Strengthening The Links In The Chain
Abstract:
At an inaugural seminar in late 1993, rail carrier CN's Purchases and Materials department embraced Supply Management as both a new name and management philosophy. Employees have since partnered with internal customers and suppliers for greater supply-chain understanding and total cost-reduction. To date, this has been a "win-win-win" initiative for all supply-chain links: CN's suppliers, its Supply Management department, and its internal customers.
Authors:
Robert A. Gallant


Title:
The Case Against Global Sourcing
Abstract:
Buyers in many industries have for the past 30 years sought lower purchased prices of materials by sourcing with foreign suppliers. Few companies have fully assessed the actual cost of purchasing and using these foreign goods and comparing these costs with those of domestic producers. This a reexamination of the actual costs, not foreign source "bashing." The results may surprise you.
Authors:
Michael Harding, C.P.M., CPIM


Title:
The Effectiveness of Humor in Business Communications
Abstract:
Humor is the most effective form of assuring positive communications. It requires listening. It has the unique ability to open the barriers and emotional blocks of the mind. The success of humor in behavior modification is due to the persuasive human bonding of our frailties & weaknesses. In business performance the transmittal, receipt, understanding and subsequent action is paramount to success.
Authors:
James R. Martin


Title:
The Information Superhighway: What Does It Mean For Purchasing?
Abstract:
We are at the threshold of a major technological breakthrough that will revolutionize the way purchasing professionals do business. This breakthrough is commonly referred to as the Information Superhighway, or the Digital Revolution, but is more properly, and more expressively, known as the National Information Infrastructure (NII). This paper addresses the origin and characteristic of the NII and the services currently available, describes the implications for today's purchasing manager, and provides some incentive to keep the PM from becoming overwhelmed by the technology -- otherwise identified as becoming "road kill" on the Information Superhighway! Some examples of actual NII networks are presented.
Authors:
Charles A. Belisle


Title:
The Purchasing Consortium - Is It Right For My Company?
Abstract:
Group and cooperative buying has been practiced by buyers in non-profit and not-for-profit organizations such as hospitals, nursing homes, museums and educational institutions. These organizations buy such items as pharmaceuticals, office supplies, food stuffs and building services. Buying together brings the advantages of higher volume prices when lower volumes are combined or leveraged. In companies in business for-profit the endeavor of purchasing together is known as consortium buying.
Authors:
Kathleen E. Macie, C.P.M.


Title:
The Purchasing Professional - Future Culture/Future Role
Abstract:
In the past decade, the competitive demands on our organizations have created a "Challenge of Change" for our profession. Never before have the expectations of our external and internal customers been so great. This paper focuses on the mindset, strategies and skills required to meet the challenge facing us throughout the next generation.
Authors:
Sheila Finn, CPP


Title:
The Reality of Strategic Relationships: Ten Keys to Success
Abstract:
Systematic Source Management. The aim of this paper is to guide the reader through a number of key features of strategic relationships. It will enable you to assess, profile and challenge your purchasing approaches with key suppliers in this area.
Authors:
Jon Hughes, M.I.P.M., M.I.T.D.
William L. Michels, C.P.M.


Title:
The Seven Elements Of Employee Empowerment
Abstract:
Employee empowerment is not a "feel-good" program baked up by so-called New Agers. It is a practical strategy that the leading companies in this country have developed and employed with phenomenal success. We have worked with a number of companies in various industries in developing seven elements which can be used to accurately observe and measure indices normally thought to be purely subjective. These elements are Authority, Resources, Information Access, Skill Set, Alignment, Self-Determination, and Accountability. Based on experience gathered in the field, we have arranged each of these elements along an axis which indicates the strengths and weaknesses present in a company's empowerment program. Having diagnosed the areas of opportunity, the tool then allows a company to devise a strategy for bringing the different elements into a synchronous whole. This prescriptive tool enables a company to make the choices which are right for its particular set of circumstances. Our thrust is to present a method whereby a company can achieve a well-balanced employee empowerment program.
Authors:
Wayne L. Douchkoff


Title:
Transforming The Purchasing Organization - Beyond Reengineering
Abstract:
Continuous transformation is the new business challenge and, therefore, of preeminent concern for the purchasing organization of the future. Most proactive firms, today, are awash in initiatives. Major efforts are underway to enhance customer focus and to embed quality thought and approach through TQM. Value analysis and reengineering are feverishly attacking costs, and revamped software infrastructures are envisioning linkage with the information superhighway. Although these are enviable endeavors, they lack the cohesive impact of an orchestrated transformation approach.
Authors:
Philip D. Stang, C.P.M., CPIM


Title:
Using Awareness Of Behavior Styles To Interact More Effectively
Abstract:
As companies move closer to a team concept to achieve their policy deployment goals, it has become painfully obvious that many of us lack the interpersonal skills necessary to communicate effectively within our companies. We fail to recognize that we are not all alike--that we use time differently, that we make decisions differently, and that most of all we communicate and interact differently. In order to be an effective team member, we must learn to recognize differences among our colleagues and their behavior styles and to adjust our own behavior to interface more effectively. As our companies become more and more diverse, this issue will be one of the main contributors to the success of our organizations.
Authors:
Jacqueline L. Miller, C.P.M.


Title:
Using Warranty Claims for Product Quality Improvement
Abstract:
The paper describes in detail an inexpensive method - requiring limited expertise - utilized in determining whether failed products or services are within the warranty period as defined in the procurement contract. Once the component has been determined to have failed within the warranty period, the paper describes how data from the failure is compiled and utilized to monitor the incurred direct and estimated hidden costs associated with the failure. These failure data are used to evaluate both product and supplier performance. Finally, the paper describes how the product and supplier evaluation data are utilized to improve product quality.
Authors:
Rodney N. Doerr