An Affiliate of Communiqué - Amazon S3 · production registered 52.4%, an increase of 2.9...
Transcript of An Affiliate of Communiqué - Amazon S3 · production registered 52.4%, an increase of 2.9...
An Affiliate of
92 Years Old and still counting!
December 2012 Volume 21, Issue 7
Communiqué Newsletter of NAPM-Indianapolis, Inc. Established in 1917
Inside This
Issue:
Letter From
the Board
1
Manufacturing
Activity Picks
Up in October:
2-3
Purchasing Stra-
tegic Planning:
CPOs, Have You
Done Your
Homework?
4-5
Making Opera-
tional Excellence
a Way of Life
6
How can you
draw the line
between being
flexible and be-
ing spineless?
7-8
Six Traits of
Procurement
Excellence
9
Upcoming
CPSM Certifica-
tion Details
10
ISM Term of the
Month
11
New Member 11
NAPM-
Indianapolis
Calendar of
Events
12-14
As we bring 2012 to a close and look forward to 2013, we should take some
time to reflect on both our professional and personal successes of the past year.
We can also think about what we’ve learned from any of the projects that maybe
didn’t go quite as well as expected.
In early 2013, NAPM-I will become ISM – Central Indiana. The board members
have worked diligently to make this transition happen. Feedback from NAPM-I
members has been extremely valuable and much appreciated. (I especially appre-
ciate that you take the time to respond to my surveys.) Overall that feedback
has been very positive, but for those of you who may not be quite as certain
about this change, our hope is that ISM – Central Indiana will be an organization
of individuals comprising all supply chain functions. None of the current benefits
or services will be negatively impacted. Our organization will be more readily
recognized both locally and nationally.
Perhaps you’ve considered becoming more involved in our organization. The be-
ginning of a new year would be a great time to become a volunteer on one of our
committees. Our members are what make this a great organization and we are
always looking for innovative ideas and fresh new eyes. If you are interested, you
may contact any of the board members to discuss opportunities.
In closing, on behalf of the entire Board of Directors, I would like to wish each of
you a wonderful holiday season. Here’s hoping that next year is a great year for
everyone! Don’t forget our first PDM of the New Year, will be January 17th at
Maggiano’s. See you soon!
Mira Pike, Director of Excellence
Page 2
Manufacturing Activity Picks Up
in October:
Production and new orders show
growth but Europe, fiscal cliff worries
are drag on U.S. manufacturing.
The October manufacturing report from the Institute for Supply
Management showed the sector edging up to 51.7%, an increase of
0.2 percentage point from September's reading of 51.5%. Readings
in the widely followed index over 50 indicate growth in manufactur-
ing.
The ISM report showed both new orders and production increasing
in October. New orders rose 1.9 percentage points to 54.2%, and
production registered 52.4%, an increase of 2.9 percentage points.
However, the employment and prices indexes both weakened. The
employment index fell 2.6 percentage points to 52.1% and the
prices index was off 3 percentage points to 55%.
Comments from the purchasing managers polled “reflect continued
concern over a fragile global economy and soft orders across sev-
eral manufacturing sectors,” said Bradley J. Holcomb, chair of the
ISM’s Manufacturing Business Survey Committee.
“The October ISM report provides some reassurance that manufac-
turing is growing again, albeit at a slow rate, and not slipping back
into recession,” said Daniel J. Meckstroth, chief economist for the
Manufacturers Alliance for Productivity and Innovation (MAPI).
“Manufacturing activity was very much front-loaded in 2012. Manu-
facturing production, as measured by the Federal Reserve, grew at a
10% annual rate in the first quarter, expanded at only a 1% annual
rate in the second quarter, and fell at a 1% annual rate in the third
quarter—signaling that manufacturing was effectively flat in the
spring and summer. The ISM report supports MAPI’s forecast that
fourth quarter manufacturing production will grow at a 2% annual
rate.
President
Megan Mills President@napm-
indianapolis.org
Vice-President
Stacie Neuhaus, C.P.M.
VP@napm-
indianapolis.org
Treasurer
Erica Voetsch CPSM Treasurer@napm-
indianapolis.org
Director of Programs
Patrick Carroll, CPSM Programs@napm-
indianapolis.org
Director of Education
Michelle Moore Education@napm-
indianapolis.org
Director of Communications
Dan Levine Communications@napm-
indianapolis.org
Director of Membership
Ron Wright, C.P.M. Membership@napm-
indianapolis.org
Director of Excellence
Mira Pike Excellence@napm-
indianapolis.org
Secretary
David Mumper Secretary@napm-
indianapolis.org
Past President
Lea Anne Fuchs, C.P.M., CFSP PastPresident@napm-
indianapolis.org
Office Manager
Wendy Bayley
317-889-9225 CustomerService@napm-
indianapolis.org
Phone: 317-889-9225
E-mail:
CustomerService@NAPM-
Indianapolis.rg
We’re on the Web
www.napm-indianapolis.org
Page 3
Of the 18 manufacturing industries in the ISM index, eight reported
growth in October in the following order: petroleum & coal prod-
ucts; furniture & related products; apparel, leather & allied products;
paper products; miscellaneous manufacturing; food, beverage & to-
bacco products; plastics & rubber products; and chemical products.
The eight industries reporting contraction in October — listed in
order — were: primary metals; wood products; machinery; fabri-
cated metal products; transportation equipment; electrical equip-
ment, appliances & components; computer & electronic products;
and nonmetallic mineral products.
Manufacturing Outlook Should Improve
“The rebound in U.S. activity echoes the improvement in the Chi-
nese PMI, with both gaining on domestic related strength. European
PMIs, on the other hand, continued to pullback in October,” noted
James Marple, senior economist for TD Economics. “The European
recession continues to be a drag on manufacturing output, but the
nascent improvement in the U.S. housing sector is providing some
support to manufacturing activity. As Europe's recession fades and a
modest recovery takes hold, the outlook for manufacturing should
improve further - buoyed by both external and internal sources of
demand.”
“The current pace of growth in manufacturing is modest and
should be much stronger,” MAPI’s Meckstroth added. “There is pent
-up demand for motor vehicles and housing and the capital stock of
equipment and structures needs to be replenished. A potential capi-
tal spending boom is being held back by the uncertainty concerning
the ‘fiscal cliff,’ the uncertainty about the severity of the recession
in Europe, a lack of clarity on future business tax policy, and the
lack of business confidence that policymakers can come up with a
credible plan for federal deficit reduction.”
Phone: 317-889-9225
E-mail:
CustomerService@NAPM-
Indianapolis.rg
We’re on the Web
www.napm-indianapolis.org
Page 4
Purchasing Strategic Planning: CPOs, Have You
Done Your Homework?
By Paulo Moretti
Every single year all companies face the budget planning cycle. At com-
pany level, this is defined as the revenue target, the costs and expenses
to run the company, and, the profitability for the following year. In a
perfect world this process should be two-way street where the corpo-
rate leadership defines the targets with functions and businesses giving
their input. In the end, all functions and businesses must follow the cor-
porate guidelines.
Short Term Planning
Once the company’s targets are defined, the CPO or Vice President of
Purchasing should define the Purchasing targets for the following year.
There are several Purchasing metrics available in the function that
should be part of planning cycle. However I’ll mention a minimum of
four targets the function head should define: Total Spend, Addressable
Spend, Savings and Resources (FTE).
Total Spend can be calculated using the company’s revenue and
CAPEX (capital expenditures) plan.
Addressable Spend can be estimated based on the previous year’s
sourced spend; contracts which will expire in the following year as well
as major spend needs based on Revenue and CAPEX.
Savings can be defined based on improvement from the previous year’s
savings in percentages (Savings/Addressable Spend), market economic
cycle and relative position to market savings based on benchmarks.
Resources (FTE) can be calculated based on a budget defined by the
corporation and previous year’s capacity (Spend/FTE) for each commod-
ity.
With these four targets, as VP of Purchasing or CPO, you are covering
Efficiency (Addressable Spend / FTE) showing how much you can handle
with existing resources and Effectiveness (Savings/Addressable Spend)
showing the quality of your sourcing projects.
Based on these targets, each Commodity Director can start defining
Phone: 317-889-9225
E-mail:
CustomerService@NAPM-
Indianapolis.rg
We’re on the Web
www.napm-indianapolis.org
Page 5
the projects to be sourced next year, using the same metrics, and, the
Sourcing Managers (buyers) can define their personal goals using the
same metrics.
Long Term Planning
Strategic Planning is more elaborate and time consuming. The CPO or
VP of Purchasing should lead the Strategic Planning exercise every
three years covering the next five years. The objective is to define: Vi-
sion and Mission for the Purchasing function, as well as the Objectives
and Goals for the next five years.
There are several methodologies to define this roadmap; however my
preference is get grounded in facts; externally and internally. Let me
elaborate about it.
Externally: Generate data from Global Economy Trends, Your Indus-
try Trend and External Purchasing Trends.
Internally: Get data from Your Company (Business) Strategy and
Your Purchasing Function.
Once you get all the information and data, through several sessions
with the purchasing leadership, cluster and affinitize the ideas and
trends into five to seven themes related to the Purchasing function.
For each theme, define the strategic objective. Now you have enough
material to define the Vision and Mission for Purchasing.
For each strategic objective, you need to define the goals for the next
five years. Define as many goals as you think appropriate, then priori-
tize them by using value and impact to the company, also defining the
completion date. It is recommended that for each strategic objective,
the CPO defines a person from leadership as “owner” of the objec-
tive.
Once you complete the Long Term Planning, it is much easier to do
the Short Term Planning because now you understand the “roadmap”
and each year you refine the goals aligned with the business strategy.
As strategic planning is complex and time consuming, it can be worth-
while to have an outside consultant to help with the development of
this process, at least for the first time. The consultant is unbiased and
has an outside perspective helping to challenge the goals.
Phone: 317-889-9225
E-mail:
CustomerService@NAPM-
Indianapolis.rg
We’re on the Web
www.napm-indianapolis.org
Page 6
Making Operational Excellence a Way of Life Operational Excellence Update, Nov, 2012
In October, Hewlett-Packard’s six-year run as the dominant maker of
personal computers ended when China’s Lenovo group (owner of the former
IBM PC unit) edged out HP in shipments of PCs for the previous quarter. Was
the shift for HP inevitable? Perhaps it was a matter of time. PC sales are down
overall as people move from laptops to other types of personal devices such as
smartphones and tablets. HP has also suffered from acquisitions missteps, nota-
bly the Palm fiasco in 2010. And Lenovo has been gaining on HP, partly because
of its acquisitions but also because it is better positioned in emerging markets.
Here’s another crucial point: As HP’s chief executive Meg Whitman put
it during the company’s annual meeting with Wall Street analysts in early
October, “Operational excellence should have become a way of life” at
HP. “I’ve learned at HP that you do not get what you expect, you get what you
inspect.” These are telling remarks from a CEO about the criticality of opera-
tional excellence.
In an interview with the Wall Street Journal, Whitman also commented that HP
has diminished its capabilities for building talent internally over the past 10
years. Hewlett-Packard was long known for excellent talent development, and
was a pioneer of practices such as MBWA(management by walking around—a
management style in the same spirit of lean practices such as going to the
gemba and leader standard work). But the last four HP CEOs have come from
outside the company, and HP is in chaos (more or less) with problems in inter-
nal communications and ineffective management systems.
Two key takeaways here: 1) It’s virtually impossible for operational excellence
to take hold and be sustained in an organization unless its top leaders are ac-
tively and consistently engaged. And 2), instilling operational excellence in the
corporate culture is essential for long-term success.
As Art Byrne says in his new book The Lean Turnaround:
Improving your operations (i.e., your value-adding activities) by
relentlessly trying to find and eliminate the waste should be your primary,
all-consuming strategic focus. … Most people see Lean as some
“manufacturing thing,” and so they simply make it one element (usually
a minor one) of their overall strategy. Lean gets delegated to operations
and gets an increasingly narrow focus on cost or inventory reduction.
…. It can’t just be delegated down. The CEO must lead it in a hands-on,
out-front, in-the-gemba (workplace) way. If the CEO won’t change his
ways and become totally engaged …, then there is little, if any, chance of
turning any company around using the Lean principles. The focus has to
be on creating value, not on cutting costs.*
Phone: 317-889-9225
E-mail:
CustomerService@NAPM-
Indianapolis.rg
We’re on the Web
www.napm-indianapolis.org
Page 7
How can you draw the line between being
flexible and being spineless?
Written by: Lynn Zettler, Owner & President at LifeAction Coaching Inc.
In the business world there are those who are naturally assertive,
quick to make decisions and let others know if expectations are out
of line, and there are those who are naturally flexible and more in-
clined to be the giver when compromise is needed.
If you identify with the latter personality, you may find yourself strug-
gling to walk the line between flexibility and becoming what others
view as spineless, a pushover, or someone that can be taken advan-
tage of by being given extra assignments, pushed for a better deal by
clients, or asked to cover for another’s responsibilities. No one
wants to be treated this way in their business relationships. We want
to feel valued and respected – and the first step to successful busi-
ness relations is establishing boundaries early in the relationship that
allow for both flexibility and respect.
Boundaries are important in every relationship. You have to know
what your limits are – what you need to take care of and what you
don’t need to take care of, what you will tolerate and what you
won’t tolerate. In the business world, being too flexible or
“spineless” can impact not only your ability to do your job effec-
tively, but it can hurt the reputation you earn among coworkers and
clients alike.
Whether we are aware of the perception or not – weak boundaries
are associated with weak or needy personalities. Strong boundaries
are associated with strong, confident people – natural leaders. In ad-
dition, strong boundaries can enhance the work environment. For
example, a manager who sets a boundary that he must leave work
by 5:30 in an office that is used to putting out fires until 6 or 7 pm
had to find another way to get it done. Others in the office started
setting boundaries as well and the whole work process is now more
streamlined and efficient.
Phone: 317-889-9225
E-mail:
CustomerService@NAPM-
Indianapolis.rg
We’re on the Web
www.napm-indianapolis.org
Page 8
Your ability to set boundaries is a direct reflection on how much you
respect yourself, your time and your talents. Our behaviors are con-
stantly giving clues to others about how we will allow ourselves to
be treated. If you don’t like the way that you’re being treated by
someone, don’t blame them, change how you treat yourself. Make
your boundary known in a positive way and reinforce it whenever
needed. Remember — you are building a foundation for successful
and respectful relationships.
Setting boundaries with clients and coworkers is what is best not
only for you and your career – it is what is best for the corporation.
Boundaries encourage efficiency, keep us from becoming overcom-
mitted and overwhelmed, manage expectations, allow room for ap-
propriate flexibility and create a respectful, balanced atmosphere
where employees’ time and efforts are valued.
Even if being assertive doesn’t come easily, you can learn to set
boundaries that work within your comfort level – and are a match
for your naturally flexible personality, because the best boundaries
and solutions work towards a win-win for both parties. One of my
favorite books, Crucial Conversations, is a great read and will help
with any relationship and looking for a win-win solution.
Remember, opportunities to set boundaries are everywhere, and
once you establish your boundaries, learning when and where it
makes sense being flexible will come naturally.
Phone: 317-889-9225
E-mail:
CustomerService@NAPM-
Indianapolis.rg
We’re on the Web
www.napm-indianapolis.org
Page 9
Six Traits of Procurement Excellence The Point, November 2, 2012
Definitions of excellence are constantly changing. A friend of mine is
in rehab, gaining strength and learning to walk again. A few years ago,
hiking, swimming and running was no big deal. Now it is excellent
for them to walk down the hallway without resting.
The same is true in procurement. What skills have been utilized in
the past are not enough anymore. We have seen that in many of the
articles and publications that have been reviewed by Buyers Meeting
Point.
This blog from procureXcellence discusses Six Traits of Procure-
ment Excellence. Once again, we learn that being a good negotiator
is not enough for procurement professionals. In the past that was all
that mattered but now there is so much more. This was published
by Robert Brindle who has accomplished a great deal while trans-
forming procurement organizations.
Here are highlights of the six traits.
• “Leading companies align procurement strategy with the overall goals of
the company. These companies also engage more fully with other business
functions to address a larger percentage (94 percent) of external spend-
ing.”
• “Leading companies consistently outperform other companies in contri-
butions to top–and–bottom line strategies.
• “Leading procurement organizations excel at risk management by antici-
pating, tracking and planning mitigation strategies covering a wide range
of threats.”
• “Leading companies use supplier relationship management (SRM) proc-
esses more consistently than followers
• “Leading companies are far more advanced in their adoption of technol-
ogy.
“The leading companies are more forward-looking and bold in their
approaches to recruiting and retaining top talent, including establishing
relationships with universities and using a systematic approach to
managing a more diverse and dispersed workforce.”
Since none of us are perfect, which of these are strong traits for you?
Which need some attention to get better?
Page 10
Phone: 317-889-9225
E-mail:
CustomerService@NAPM-
Indianapolis.rg
We’re on the Web
www.napm-indianapolis.org
NAPM-Indianapol is MEMBERS HIP
September, 2009
270
Building a Powerful Profession:
One Member at a T ime
Social Media in the Supply Chain
Page 11 Volume 21, Issue 7
ISM Membership
38,996
Number of CPSM®s
5,211
Number of CPSD®s
253
NAPM-Indianapolis
Membership
224
New Members of our Affiliate
Please welcome the following new members of NAPM-Indianapolis, Inc.
Name Company
Ronald Young Rolls Royce
Rilla Borders Dupont
The Board of NAPM-Indianapolis would like to express a warm welcome to each of our new mem-
bers. Please let us know how we can better serve you by answering any questions you may have.
ISM Term of the Month:
DELIVERY TERMS
Conditions in a contract relating to carrier and routing, freight charges, place of deliv-
ery and time of delivery.
Join us on Linked-In and NETWORK, NETWORK, NETWORK with your colleagues.
http://www.linkedin.com/groups?about=&gid=1817281&report%2Esuccess=r3Tayp0nRRro3Er8iWS8vO-u_mFd11ndGIOEdAI27ES3KgpplepkOcIgotS3mJWzXqb2u21wqjDJwM
Phone: 317-889-9225
E-mail:
CustomerService@NAPM-
Indianapolis.rg
We’re on the Web
www.napm-indianapolis.org
Page 12
Registration & Networking—5:30 PM
Dinner—6:00 PM
“FREE” for Members $40 for Guests $20 for Students
Prior to Monday, Jan 14th.
PDM Location:
Maggiano’s 3550 E 86th Street
Indianapolis, IN 46240
Phone: 317-889-9225
E-mail:
CustomerService@NAPM-
Indianapolis.rg
We’re on the Web
www.napm-indianapolis.org
Page 13
NAPM-Indianapolis Monthly Calendar
DATE DAY TIME EVENT
1/17/2013 Thursday 5:30-8:00 PDM
Speaker Mike Hicks
Economic Outlook for Indiana in 2013
Location Maggianos, Keystone at Crossing
2/21/2013 Thursday 5:30-8:00 PDM
Speaker Joe Arruda
Health Care cost and the Supply Chain
Location TBD
All reservations must be received and paid prior to the Tues-
day before the PDM. No meal guarantee for reservations af-
ter this date or unpaid reservations. No price guarantee after
this date. All cancellations must be made 48 hours in advance
for a refund consideration.
Please remember that if your plans change and you cannot make an
event, you must contact the Office Manager, Wendy Bayley (317-889-
9225 or [email protected]), to cancel your res-
ervation. You cannot cancel a reservation on-line.
Members - Free.
Early Bird Specials: Academic Members - $30 if paid prior to Tuesday, Oct 23rd.,
fee then increases to $35. Students - $20 if paid prior to Tuesday, Oct 23rd., fee then in-
creases to $25. Non-Members $40 if paid prior to Tuesday, Oct 23rd, fee then
increases to $45.
Phone: 317-889-9225
E-mail:
CustomerService@NAPM-
Indianapolis.rg
We’re on the Web
www.napm-indianapolis.org
Page 14
NAPM-Indianapolis 2012-2013
January 17, 2013
Thurs-day
5:30 pm
PDM – Economic Outlook For 2013 – Mike Hicks – Maggianos, Keystone at The Crossing – Earn 1 CEH
January 19, 2013
Satur-day
8:00 am
Certification Review Classes – Foundation of Supply Management – University of Indianapolis – Earn 16 CEH’s
February 21,
2013
Thurs-
day
5:30
pm
PDM – Health Care Cost & The Supply Chain – Joe
Arruda – Indianapolis Zoo – Earn 1 CEH
March 21, 2013
Thurs-day
5:30 pm
PDM – Extended Supply Chain Management – Tech-nology Tools To Survive The Unforeseen – Don Jour-ney – Piper’s Grand Manor, Greenwood, Earn 1 CEH
March 16, 2013
Satur-day
8:00 am
Certification Review Classes – Effective Supply Man-agement Performance –University of Indianapolis – Earn 16 CEH’s
April 18, 2013 Thurs-day
5:30 pm
PDM – Venture Capital & The Supply Chain – Matt Neff – NCAA Hall of Champions – Earn 1 CEH
April 27, 2013 Satur-day
8:00 am
Certification Review Classes – Leadership in Supply Management –University of Indianapolis – Earn 16 CEH’s
May 16, 2013 Thurs-
day
5:30
pm
PDM – President’s Night & A Supply Chain Manage-
ment Guide To Business Continuity – Jazz Kitchen, Broad Ripple – Earn 1 CEH
May 2013 Thurs-day
12 Noon
Golf Outing