Register Today for the February 26, 2013Joint Meeting with APICS / SLMSDC / STL MAPP

In this ISSUE:

Managed Procurement Services

Procurement Consultants look to 2013

EVOLUTION OF PROCUREMENT

Tips on Time Management and what Smart People Do

Upcoming Events, Elections and Job Postings

This may sound a bit harsh, but this is a reality for most of us. Almost all of us started this year with a list of resolutions. But honestly, how many have we achieved? The fact is that most people do not stick to their resolutions beyond 31st of January.

So what’s the issue here? What makes us give-up the dreams within just 30 days? The secret to set realistic resolutions is to set them as SMART (Specific, Measurable, Achievable, Relevant and Timely) Goals. By doing so, you’ll make a quantum leap in the success rate of achieving your resolutions. Just by having a proper plan to start the New Year with, you’ll achieve more in first few months, than most people do in a whole year.

Learning new things takes on a life of its own. The most important aspect of learning something new as your resolution for 2013 is to focus on one thing at a time. Once your mind is open to learning new things it will crave and guide you to other areas for exploration. It’s a beautiful thing to watch. So what are your personal and professional goals for 2013? What’s on your company radars? In this issue, we share a few ideas…..

SAVE THE DATES!!!!!!

February General Meeting - The Regional Economy

Tue, Feb 26, 2013

March General Meeting

Tue, Mar 26, 2013

Managing risk & opportunity: Procurement Consultants look to 2013

Continuing economic uncertainty means procurement professionals must focus on balancing supply chain risks with new opportunities, according to a report by business consultants Efficio.

Ella Copeland

Business consultancyEfficioadvise procurement professionals to take nothing for granted in the year ahead, as supply chain risk is a central factor at a time of economic uncertainty.

In its firstViewpointarticle of 2013, the company claims the main challenge for this year is to cope with the continuing economic uncertainty and price pressure on commodities. The risk of suppliers going out of business is increased during difficult times and this must be managed effectively, according to Efficio’s Chief Operating Officer Alex Klein, senior consultant Tobias Regeniter and consultant Mika Partanen.

There has been a positive start to the year as the US economy appears to be holding up, UK unemployment is down and the Eurozone crisis seems to have eased for the moment. However, indicators such as the Purchasing Managers Index suggest there is little prospect of an imminent upturn.

Article authors Klein, Regeniter and Partanen have seven reccomendations that procurement leaders can take tmitigate the worst effects of current economic conditions.

1. Exploit opportunities offered by the continued economic downturn by internally positioning procurement as a key influencer maintaining margins through cost reduction.

2. Clearly delineate the effects of unavoidable commodity price rises and ring-fence their impact.

3. Offset market price increases wherever possible. In transportation-intensive companies, for example, increases in fuel prices can be offset by driving value from other elements of the cost base, by reconfiguring the network, making greater use of back-hauling, or moving to a 3PL.

4. Keep an eye on macro level developments such as the gradual upward trend of low-cost country prices. Revise volume allocations to such regions where appropriate.

5. Leverage shrinking demand on suppliers by driving competition through strategic sourcing programmes.

6. Pressure on suppliers should be applied upfront during the sourcing exercise. Once the suppliers are selected they should be supported through active SRM.

7. Manage the risk of supplier failure. As a minimum, actively monitor the financial situation of key strategic suppliers.

According to a spokesperson for Efficio, continuing uncertainty in 2013 calls for flexibility: “Procurement leaders who can adapt to changing market conditions, for example from a situation in which cost focus is the priority to one in which the most significant factor is a marked increase in demand, will be best positioned to take full advantage of the opportunities available.
“The ability to manage risk against costs and take advantage of changing globalsupplychains will become increasingly crucial in the year ahead and into the future.”

Managed Procurement Services Allow Companies to Optimize Transportation InvestmentsbyLisa Kerr

January17th,2013

From weight loss goals to cleaning out the garage, resolutions are around every corner as we kick off 2013. While you work on improving your lifestyle, why not do the same for your transportation sourcing?

Transportation sourcing is a significant challenge for many companies. Typically, the procurement process to identify potential new carriers and award business requires a major investment of resources. The transportation team must develop a request for proposal (RFP), follow up on carrier responses, evaluate multiple award scenarios, and implement new carriers into the mix. In many cases, companies do not have a dedicated resource to manage the freight procurement process, resulting in usage of key personnel from other areas to support the sourcing event. This is disruptive to current operations, and prevents the development of functional expertise to drive continuous improvement in the transportation network.

Lack of carrier profile data, vetted capabilities and industry benchmarks are also common issues for many companies. Without comparative data points, companies do not know if carriers are costing too much or if lanes are inefficient. Capacity can become an issue but it remains unclear if that is due to the current carrier’s inefficiencies or if more carriers are required to meet demand.

Managed procurement services that combine transportation procurement skills, knowledge of carrier capabilities, and supply chain expertise, can optimize a company’s transportation investment. These types of procurement services provide industry benchmarks and technology to more efficiently and effectively handle transportation procurement.

Typically the managed procurement process begins with a holistic review of a company’s lanes and rates to determine which need attention to best deliver on overall corporate goals. By comparing performance internally against external industry benchmarks, managed procurement service providers focus on out-of-tolerance conditions, identify new carrier opportunities and discover strategic cost and service improvement opportunities. Once a company’s current performance is analyzed, a transportation procurement project plan is created.

Companies leveraging managed procurement services can:

  • Optimize transportation and spend across lanes, carriers and modes
  • Identify which lanes and carriers represent the greatest opportunity for improvement
  • Increase efficiency of the transportation sourcing process

In addition to unlocking savings, transparency into carrier routes and pricing drives overall improved bid response quality. And with improved quality comes the likelihood of achieving expected results from your procurement awards. This shift from a manual to a technology-driven process may save companies up to 80% of their typical transportation procurement event costs. Managed procurement services offer fast realization of awarded rate reductions, introductions to new carriers and best-in-class cost performance across all lanes.

EVOLUTION OF PROCUREMENT: by Krishan K.Batra

Over the last 2 decades, procurement, as a function, has undergone a number of changes. These changes have meant that in some industries this has grown from a minor function within finance or operations, to become one of the most important components of modern corporate management. Procurement has come out of obscurity and into mainstream business. Once known merely as a back office function, it is now a mainstream business management activity for most organizations as it’s now understood that it is more than just a cost-saving measure but a way to gain competitive edge in this day of business globalization. Procurement competence has taken a more strategic approach because the way we do business has changed. There has been a natural strategic business evolution from purchasing to sourcing to strategic procurement to supply management in the last 10 - 15 years. Two enormous changes have revolutionized the face of procurement. First is that procurement has become deeply intertwined with business strategy. Rather than simply functioning as a standalone business unit, procurement managers and directors are now coordinating their purchases with senior executives to ensure that the company strategy is implemented across the board.The second change in procurement that has entirely changed its character is the rise of the internet, and thus the rise in e-Procurement. Whereas before procurement professionals worked over the telephone, compiling information as they went, they are now able to document information online, gaining access to far more information that allows them to make more effective decisions both at the level of cost and at the level of strategy. First and foremost, the internet gave them the possibility to improve the level of collaboration with suppliers, and to have one central web platform where all information is communicated and archived. What’s more, the advent of online catalogs has allowed procurement to both check prices and actually organize purchases via the internet, speed up the lead time for inquiries, and streamline the whole tactical procurement process of the order and beyond.Many companies have moved beyond the most basic stages of procurement maturity, often adopting strategic sourcing, category management, Supplier Relation Management tools to add value to the chain. Many companies are outsourcing whole bundle of IT, MRO, facilities management and critical parts for manufacturing. This has simplified administration but trade off is reduced visibility and control. When you outsource strategic services and critical components, there is need to understand the supply chain behind them. It appears that procurement is now poised to take on the broader role of overseeing the full supply chain. The above changes/ evolution of the procurement needs a much broader set of skills than the core functional skills of tender execution & supplier negotiation. The above evolution requires a change in name of the function to either supply management or Supply Chain Management. What changes in procurement have you noticed over the last few decades? We look forward to your feedback.

The Magic of Doing One Thing at a Time

By Tony Schwartz

Why is it that between 25% and 50% of people report feeling overwhelmed or burned out at work?

It's not just the number of hours we're working, but also the fact that we spend too many continuous hours juggling too many things at the same time.

What we've lost, above all, are stopping points, finish lines and boundaries. Technology has blurred them beyond recognition. Wherever we go, our work follows us, on our digital devices, ever insistent and intrusive. It's like an itch we can't resist scratching, even though scratching invariably makes it worse.

Tell the truth: Do you answer email during conference calls (and sometimes even during calls with one other person)? Do you bring your laptop to meetings and then pretend you're taking notes while you surf the net? Do you eat lunch at your desk? Do you make calls while you're driving, and even send the occasional text, even though you know you shouldn't?

The biggest cost — assuming you don't crash — is to your productivity. In part, that's a simple consequence of splitting your attention, so that you're partially engaged in multiple activities but rarely fully engaged in any one. In part, it's because when you switch away from a primary task to do something else, you're increasing the time it takes to finish that task by an average of 25 per cent.

But most insidiously, it's because if you're always doing something, you're relentlessly burning down your available reservoir of energy over the course of every day, so you have less available with every passing hour.

I know this from my own experience. I get two to three times as much writing accomplished when I focus without interruption for a designated period of time and then take a real break, away from my desk. The best way for an organization to fuel higher productivity and more innovative thinking is to strongly encourage finite periods of absorbed focus, as well as shorter periods of real renewal.

If you're a manager, here are three policies worth promoting:

1. Maintain meeting discipline. Schedule meetings for 45 minutes, rather than an hour or longer, so participants can stay focused, take time afterward to reflect on what's been discussed, and recover before the next obligation. Start all meetings at a precise time, end at a precise time, and insist that all digital devices be turned off throughout the meeting.

2. Stop demanding or expecting instant responsiveness at every moment of the day. It forces your people into reactive mode, fractures their attention, and makes it difficult for them to sustain attention on their priorities. Let them turn off their email at certain times. If it's urgent, you can call them — but that won't happen very often.

3. Encourage renewal. Create at least one time during the day when you encourage your people to stop working and take a break. Offer a midafternoon class in yoga, or meditation, organize a group walk or workout, or consider creating a renewal room where people can relax, or take a nap.
It's also up to individuals to set their own boundaries. Consider these three behaviors for yourself:

1. Do the most important thing first in the morning, preferably without interruption, for 60 to 90 minutes, with a clear start and stop time. If possible, work in a private space during this period, or with sound-reducing earphones. Finally, resist every impulse to distraction, knowing that you have a designated stopping point. The more absorbed you can get, the more productive you'll be. When you're done, take at least a few minutes to renew.

2. Establish regular, scheduled times to think more long term, creatively, or strategically. If you don't, you'll constantly succumb to the tyranny of the urgent. Also, find a different environment in which to do this activity — preferably one that's relaxed and conducive to open-ended thinking.

3. Take real and regular vacations. Real means that when you're off, you're truly disconnecting from work. Regular means several times a year if possible, even if some are only two or three days added to a weekend. The research strongly suggests that you'll be far healthier if you take all of your vacation time, and more productive overall.

A single principle lies at the heart of all these suggestions. When you're engaged at work, fully engage, for defined periods of time. When you're renewing, truly renew. Make waves. Stop living your life in the gray zone.

Something to consider…..

Letter From the ISM Professional Credentials Committee Chair

Every day, we see higher starting salaries and promotions strongly correlated with possessing an Institute for Supply Management™ (ISM) certification. We all hear quotes about the differential in starting salary negotiated by ISM certified job seekers vs. the noncertified.

The kind of individual who puts forth the effort and sacrifice to obtain an ISM certification typically also performs other job-related activities with the same relative excellence and professionalism:

• They are more active in ISM and other professional associations, which leads to extra knowledge and stronger personal and professional networks.

• They know ways to get the job done more efficiently and to make their employer profitable. If they do not have the answer, they know others who do and who are willing to assist them.

• Their accomplishments testify to superior performance and, when asked, professional references may be more enthusiastic.

The continuing dearth of qualified workers in our workforce, and our need to just get the work done, lead us to seek out individuals who can get more work done on their own. Therefore, an inflated premium is building for the more promising job seekers.

A recent professional development meeting speaker talked about e-commerce (electronic commerce), to be followed by i-commerce (informational commerce), and leading to c-commerce (collaborative commerce). It is these extra-effort individuals who find ways to make these concepts work and who will reap the rewards for their companies. It is companies that hire certified employees, and encourage and support noncertified employees in seeking certification, which will be the winners in this burgeoning global competition we face.

Just as a diploma, a four-year degree or an MBA imply a level of capability and therefore create an expectation of a certain level of performance, a CPSM® raises the bar of expectation. And typically, capability and performance follow that expectation. "We expect more, and therefore we get more." Be that exceptional performer. Better yet, create a team of exceptional performers and you will see. The results can be astounding.

Set your standards high and achieve your goals. ISM and your local ISM affiliate’s Professional Development Educational Committee are here to help you succeed in doing so.

David Van Valkenburgh, CPSM, C.P.M., CFPIM, CSCP, CFCM

Chair, ISM Professional Credentials Committee

Don’t Lose Your Edge During Your Job SearchChristy Eichelberger

In today's job market, more and more people are finding themselves unemployed for extended periods of time. Instead of being out of work for a month or two, many find themselves out of work for a year or more.

Being unemployed can be disappointing, but spending month after month searching for a job for an extended period of time can be draining. And if you spend that much time out of the professional loop, it may seem like it's going to be impossible to get back in.