National Association of Purchasing Management ISM–Atlanta, Inc. the Peach State Purchaser FEBRUARY 2010 ISM-Atlanta Presents... The February 11th Professional Development Meeting Featuring Allan D. Kennedy M.Ed., LPC, BCPC Thursday, February 11, 2010 The Country Club of Roswell 6:00 p.m. STRESS: How to Cope!!! Comes from all directions... Family, Career, Marriage, Divorce, Debt, Joblessness, Too Little Time…STRESS comes from everywhere. At the February 11th Professional Development Meeting Hear Allan Kennedy Identify the Origins of Stress and How to Cope! Come early for a free Chat about Everything You Need to Know about CPSM with Debra Hansford, starting at 5:30! Kennedy will make you understand your stress causes and give your hope for managing. His very personable, lighthearted approach to this common and serious topic will lift your spirts. Stress – It’s Not All In your Head Stress had been called America’s number 1 health problem, and it is estimated by the American Institute for Stress that 75% to 90% percent of all doctor visits are stress related. Allan Kennedy’s presentation will look at the origins of stress as well as the affects of stress on our bodies, minds, jobs and families. In addition, why some of us are more susceptible to stress than others, will be addressed. Through the use of real life examples, humor and practical interventions, Mr. Kennedy will guide the audience towards a path in life that is much more relaxed and enjoyable. About the Speaker: Allan D. Kennedy M.Ed., LPC, BCPC Kennedy is a native of Alexandria, Virginia and is currently employed with AT&T as Senior Project Manager with primary responsibility for Employee Engagement. Prior to this assignment he spent 25 years as Regional EAP continued on next page Before the Meeting There will be a free CPSM question and answer session before the February Professional Development meeting. The session starts at 5:30PM until 6:15PM. David Pettitt and Debra Hansford will outline the costs and recommended course of action to obtain your CPSM designation, whether you are a C.P.M. looking at the Bridge exam, or are starting from scratch. Bring your questions and thoughts, there will be handouts. You are not required to stay for the dinner meeting, but if you want to hear our great speaker you must register at the ISM Atlanta website. See you there! INSIDE THIS ISSUE Registering Your Account on ISM-Atlanta.org........2 Save These 2009 Dates..............................................3 March 2010 is Supply Management Month . ..........4 From the Blogs...........................................................5 Welcome New Members............................................6 ISM-Atlanta Terms of the Month..............................7 The Reality of Green..................................................8 November Georgia PMI Report................................9 Having Problems Logging or Registering on the ISM-Atlanta Members Only Section? If you are a new ISM-Atlanta member or just need to register for an account on the ISM-Atlanta web site, please download our helpful guide. It will walk you through the 4 step process of registering your account and logging in. It’s easy (and only takes a few minutes) and it’s FREE for all of our members! Take advantage of all the benefits your ISMAtlanta membership has to offer today! CLICK HERE TO DOWNLOAD THE REGISTRATION/LOGIN GUIDE NOW! ** PLEASE NOTE: IF YOU HAVE REGISTERED FOR AN ACCOUNT ON THE NATIONAL ISM WEB SITE, YOU ARE NOT AUTOMATICALLY REGISTERED FOR AN ACCOUNT THE ISM-ATLANTA WEB SITE. THESE TWO SITES ARE INDEPENDENT OF EACH OTHER AND YOU MUST REGISTER SEPARATELY. Stress Continued from page 1 Administrator. (BellSouth) Following Hurricane Katrina, Kennedy oversaw the building of the then �BellSouth Tent City” for Katrina victims and their families. He then coordinated as well as provided CISD services to the affected BellSouth employees and families for several months. Prior to his graduate work, Mr. Kennedy was Director of Personnel at Kaus & Whitestone Inc. of Springfield, VA. He received his graduate degree in Counseling Psychology from James Madison University. After completing his graduate work Mr. Kennedy worked in a variety of clinical settings as a psychotherapist, consultant and program director. Prior to coming to BellSouth he worked as Director of Consultation and Education at the Northwest Counseling Center in Tennessee. In his current role at AT&T, Kennedy is also coresponsible for Coordinating as well as Administering Employee Care efforts after disasters. Kennedy has served on the National Business Group on Health’s National Advisory Committee on Maternal and Adolescent Health as well as the National Committee on Employer Sponsored Behavioral Health Services. Kennedy is currently serving as Vice President of the Board of Directors of Mental Health America/Georgia and is a Board Certified Professional Counselor. In addition, Kennedy has been a consultant to industry, school systems and universities. He is a frequent lecturer and trainer. He lectures on a variety of topics such as Stress Management, Marriage and Family Issues, Bereavement, Emotional IQ, Generational Conflict in the Workplace, Corporate Downsizing and its affect on the family and Violence in the Workplace. Mr. Kennedy also has a private practice in Alpharetta, Ga. While proud of his professional accomplishments, Kennedy is proudest of his marriage to the former Marsha Hazlewood and his two sons, Jacob and Patrick. Page 2 ISM-ATLANTA PEACH STATE PURCHASER BACK TO TABLE OF CONTENTS SAVE THESE 2010 DATES! March 11th Professional Development Meeting Speaker: Debra Hansford Topic: Negotiations: Honing your skills. We all know and love her as trainer and teacher of all things CPM and CPSM, but Debra also has 25+ years of professional procurement experience and will share her knowledge and expertise in successful negotiations tactics. April 8 and May 13 are being finalized and will be announced through email blasts and the website very soon. June 10th Professional Development Meeting Speaker: Paul Novak ISM-Atlanta welcomes Paul Novak – President of ISM International – who will examine with us “The Future of Supply Management”. More details to come….. To learn more or sign up for these events, please visit ISM-Atlanta calendar page now! ISM-Atlanta’s Professional Development meetings are always the 2nd Thursday of each month. July and August are summer holiday for all except board members. ANNOUNCING…… ISM-Atlanta’s latest website enhancement!!! The ISM Atlanta website at www.ism-atlanta.org now has videos available for some of our recent Professional Development meetings. Check out “Why Companies Lease?”, “Should Cost Modeling”, and “Alliance on the Rocks” and more to come. If you missed the meeting or just want to relive the thrill of the excellent presentations you experienced, please check out this new feature in the Members Only section of our site. This new enhancement to our website is cutting edge so take the time to check them out today!!! Page 3 ISM-ATLANTA PEACH STATE PURCHASER BACK TO TABLE OF CONTENTS March 2010 is Supply Management Month! ISM’s Role to Lead Supply Management Traditional purchasing activities have always contributed value, through negotiating lower prices and/or selecting the best supplier(s) for each given situation. But the role of the purchasing professional has expanded over the years and has grown into an even more critical and more strategic role of supply management. The mission of the Institute for Supply Management™ (ISM) is to lead supply management. We have for a long time been the leader in purchasing and supply management education, products, information and other resources. • ISM has established standards of knowledge and achievement through the C.P.M. professional certification program. • ISM has developed codes of ethics and professional behavior through the Principles and Standards of Ethical Supply Management Conduct and, most recently, the Principles of Social Responsibility. • ISM has issued the Manufacturing Report On Business® for more than 70 years and the Non-Manufacturing Report On Business® since June 1998. And now, ISM is embarking on a new endeavor …we want to share the value of supply management! ISM’s Supply Management Image Campaign The overall objective of the ISM public relations program is to increase the awareness of supply management and help shape the image of the profession. Our public relations efforts are focusing on aggressively seeking opportunities for sharing the value of supply management and gaining additional coverage in print and broadcast media. Speaking on Behalf of the Field As the leader for supply management, we are now identifying related issues and developing official position statements. Once an issue is identified, staff conducts research on the topic and draft potential statements for review by members of the ISM Board of Directors. Secret Revealed The role of supply management will no longer be a secret. Supply management has a critical role … and the world should know it! As the leader in supply management, ISM is committed to getting the message out! For more information on ISM, visit www.ism-atl.org or www. ism.ws About ISM-Atlanta Vision for the Association ISM-Atlanta is recognized as the leading organization in our area for the support of purchasing and materials management professionalism. Mission Statement ISM-Atlanta exists to educate, develop, and advance the purchasing and supply management professional in a contemporary environment. Organizational Objectives• Financial: Manage revenue and expense levels to insure that the association is able to fulfill its mission. • Personnel: Dedicated ourselves to recruit, retain, and motivate ACTIVE membership. • Educational: Provide our members with high quality, timely educational opportunities and tools that enhance their professional development. • Marketing: Insure that the current/potential membership is aware of all the resources and educational opportunities available to them through ISM-Atlanta and NAPM. • Professional: Promote professional excellence through the support of NAPM programs, Certification, Ethical standards, and Membership in ISMAtlanta. Page 4 ISM-ATLANTA PEACH STATE PURCHASER BACK TO TABLE OF CONTENTS From the Blogs... “New Normal” does not equal “No Growth” by Kris Colby Regardless of who might have authorship rights (Pimco? Ariba? Others?), the concept of “The New Normal” has definitely caught on in both the mainstream media and spend management circles . However, it’s important to remember that “the New Normal” doesn’t translate directly to “permanent low GDP growth” as has been put forth by some investment advisors. Instead, the New Normal is characterized by several trends that will, over time, become “SOP” for most large organizations: 1. Increased need for agility to respond more quickly to rapid change whether that’s in commodity markets, geopolitical supply risk, regulatory environments, or good oldfashioned competition. 2. Fewer permanent resources and increased reliance on your community of business partners. Let’s face it, many of the people laid off during the Recession aren’t coming back or at least not in the same capacity. But there’s even more to do. That means increased productivity and relying more heavily on your business partners and suppliers to do things that in the past might have been done internally 3. Reluctance to make large upfront investments with long payback times. Good luck with talking your CFO into any “$25M now and ROI in 48 months” business cases. ROI, especially in technology investments, needs to be measurable in weeks and months, not quarters and years. Surely, these are all challenges, but none mean “low growth forever”. Companies that can learn how to respond and scale quickly will have plenty of opportunities to deliver value to both customers and shareholders. So, don’t let the New Normal get you down. Growth will return like it always does. Instead, look at this new environment as an opportunity for your organization to get in front of the curve provided you’ve got the speed, agility, capabilities and community to grab it. Kris Colby is a Director in Ariba’s Spend Management Services group. Kris specializes in strategic sourcing and risk reduction for multinational organizations. Toyota Recall: Time to step on the gas of Risk Management? by Mark Oser Toyota consistently ranks among the most respected global corporations and is well-known for their manufacturing prowess and strong supplier ties. That’s exactly why this week’s news about the accelerator problems for 4 million vehicles came as a shock to so many of us. The impact of this episode will be long-term, far-reaching, and very expensive. Supply risk specialists speak often about the three distinct kinds of supply risk (Brand, Commodity, and Disruption). While this episode at Toyota may not have hit a trifecta, they are certainly dealing with an awful daily double. The only thing that might be more expensive than the disruptions in their supply chain could be the hit to their brand. If you think that only your biggest suppliers need to be involved in a formal supply risk management program (e.g. automated alerts and scorecards populated by both objective and subjective data inputs from various sources as one component) and the rest can be covered with just some historical financial information/ratios, on-time delivery ratios, and maybe an annual business review, think about the fact that CTS is almost certainly not even in the top 500 of Toyota’s list of largest suppliers. The important point for you is NOT what happened at continued on next page Page 5 ISM-ATLANTA PEACH STATE PURCHASER BACK TO TABLE OF CONTENTS Toyota. Toyota will obviously and thankfully weather this storm and, down the road, repair their image. What matters is this: If an event like this… • Can be linked to a small(ish) supplier • And cause so much damage • At the world’s most respected auto manufacturer Then all of us have reason to be very afraid. Tomorrow morning, we also need to ask some very tough questions of ourselves and our supply chain and procurement leadership. 1. Are we really running a thorough enough risk management process (including Finding risk, Fixing them, and Follow-through on Monitor/Management)? Most organizations only do parts of this 3-step process well or have the proverbial “binder on the shelf” risk assessment that was out of date three minutes after it arrived from the printer. 2. Are we executing this process with enough of your supply base? Most organizations execute on just a small slice of strategic suppliers. Most organizations employ some basic supplier stratification measures based on size, but this episode underscores the importance of deploying a more holistic and systematic approach to tiering and managing suppliers that includes risk. 3. Do their people have the right capabilities to manage risk across your supply chain? Most organizations do not have both the skills and bandwidth required to conduct risk management at any broad level of activity. 4. Do they access to the right information (i.e. audit trail)? If (when) something is to go wrong, you’ll have the information you need readily available about the expectations you set with suppliers, how you monitored their compliance, and how you graded them along the way. Depending on the answers you hear to these questions, you will probably want to take a closer look at that Supply Risk Management that’s been on your “nice-to-have” list for such a long time. There’s no telling the final costs associated with a major supply risk event. The only thing you do know for certain is that an ounce of prevention weighs a lot less than a pound of cure. Mark Oser is a director in the Ariba Global Services organization. He specializes in helping large organizations develop and execute complex sourcing, risk and procurement initiatives. Justin Fogarty is Managing Editor of Supply Excellence. For any questions or feedback on the blog or its contributors, Justin can be reached at [email protected]. Welcome new members! NAME COMPANY/ORGANIZATION NAME PRIMARY JOB TITLE Christopher Dixon Alvarez and Marshal Director Haytham Abbas Amtico Intl Purch Mgr Lisa Romano C.P.M. E Trade Head of Purch Annjeanette Fisher C.P.M. `Eclipsys Corp Purchasing Coordinator Dan Leveille Enablence Optical Products VP of Supply Chain Mgt Harla Acheson FISERV Financial Svc’s Sourcing Analyst William Johnson Flying Food Group Purch Mgr Gerry Cameron Hi Tech Solutions VP of Ops Robert Kinnebrew Home Depot Sr. Director Melody Simmons LXE Inc Buyer David Hawks Miller Zell Retail Design VP-Strategic Procurement Kevin Branch Morehouse College Student Jim Clous Nordson Corp Purchasing Agent Anthony Rufo Nordson Corp Purchasing Manager Beverly Laney Oldcastle Materials Deron Banke Oldcastle Materials Inc VP of Strategic Sourcing James Perkins C.P.M. RailAmerica Purch Mgr Maritza Padua Rubbernetwork Sourcing Mgr James Smith Shaw Industries Group Inc Manager, Capital Global Sourcing Shelly Sims The CLOROX Company Buyer II - Plastics Isatta Deen The CLOROX Company Sr Sourcing Analyst Vineeth Jacob The CLOROX Company Student Angela Smith The Home Depot Strategic Sourcing Mgr Heidi Pachura Director, Procurement James Link Procurement Analyst Mary Bennett Laurie Brunsky Page 6 ISM-ATLANTA PEACH STATE PURCHASER BACK TO TABLE OF CONTENTS ISM-Atlanta Terms of the Month ISM-Atlanta’s Terms of the Month are: Situations that might contribute to STRESS…… SUPPLIER COLLABORATION The process by which an organization works with its supplier to accomplish common goals or objectives; also known as supplier relationship management (SRM). FRAUD Deceit, trickery, breach of confidence or other illegal act used to gain unfair or dishonest advantage. May be the basis for a tort (personal injury) lawsuit. INVENTORY SHRINKAGE Loss of inventory due to deterioration, pilferage, outdating, scrap and so on. COMPENSATORY DAMAGES Financial remedy awarded to a plaintiff to compensate it for actual loss, injury or damage. A different Term of the Day is posted on the ISM Home Page (www.ism.ws) each day — seven days a week. The Term of the Day is taken from the ISM Glossary of Key Supply Management Terms. To access the online Glossary, go to http://www.ism.ws/Glossary/index.cfm? You must log in as a member to access. Enter for YOUR chance to win the Second ISM Free Trip If you attended the September, October, November, December and/or January Professional Development meetings, your name could be announced as the winner of the second trip to ISM International Conference in San Diego, CA on April 25-28, 2010. But if you don’t win in December, enter for the second trip at the February event and your name could be drawn in March 2010. Here’s the info below: • Two members will win free trips to the 95th Annual ISM International Supply Management Conference and Educational Exhibit, April 25-28, 2010, in beautiful San Diego, California. • This opportunity will be limited to current members of ISM-Atlanta. • For each event you attended, your name was entered into the contest once. These events included monthly professional development meetings, satellite seminars, and C.P.M. or C.P.S.M. review classes. • Winners are not allowed to transfer nor sell their trip to another member of ISM Atlanta or a colleague. Registration fees, lodging, meals outside of conference provided meals, and travel to and from the event, submitted on an ISM-Atlanta expense report, will be covered by ISM Atlanta for each winner. GOOD LUCK!!! Page 7 ISM-ATLANTA PEACH STATE PURCHASER BACK TO TABLE OF CONTENTS The Reality of Green The Impact of Green on Federal Sales 3rd in a Series By John Wilkerson, CPSM Does your Company Sell Products or Services to the Federal Government? Are you aware that the 2009 Federal Government environmental policy will impact 95% of all federal contracts in the future? Are you tuned into the strategic sourcing implications of this new Federal policy? Is Greenhouse Gas (GHG) Management part of your long term sourcing strategy? Are their benefits for initiating carbon footprint reduction initiatives? Background Corporate sourcing leaders are constantly challenged by numerous priorities such as; supplier performance, weekly cost savings reporting, and as always internal customer issues such as lack of clear specifications and sometimes unrealistic budgets. The newest challenge for companies that sell to the U.S. Federal Government centers around Presidential Federal Executive Order 13514, Federal Leadership in Environmental, Energy, and Economic Performance. This order signed on October 5, 2009 mandates numerous changes to Federal environmental policy which impacts the CPO. Here are several high level categories from Executive Order 13514: • Sustainable Buildings and Communities • Water Efficiency • Pollution Prevention and Waste Reduction • Strategic Sustainability Performance Planning • Greenhouse Gas (GHG) Management The balance of this article will focus on GHG Management (sometimes called Carbon Management) and it’s near term impact on global sourcing and global supply chain only. Not month’s article will focus on Sustainability Performance Planning. Strategic Sourcing Implications As the sourcing manager takes a deeper dive into this important environmental subject he (s) will discover that several typical job duties; negotiation strategy, supplier development, and contract management may be impacted in the 2010/2011. Before we go any further let’s understand the current federal environmental policy and potential near term implications. Here are a few potential strategic sourcing scenarios: Federal Greenhouse Gas Management Requirement Strategic Sourcing Next Steps Federal Contractors (Scope 3) must establish GHG emissions goals (fiscal year 2008 baseline) Should determine if Scope 3 applies to your industry and company Reduce Agency use of fossil fuels by 2020 Should understand the industry and company’s scope By 2011, establish and report a comprehensive inventory of absolute GHG emissions across all three scopes for fiscal year 2010. Should determine if this standard applies to your business and suppliers continued on page 11 Page 8 ISM-ATLANTA PEACH STATE PURCHASER BACK TO TABLE OF CONTENTS Georgia Purchasing Manager’s Index Report Furnished by Don Sabbarese, Ph.D., Kennesaw State University Econometric Center Reasons for January PMI’s Increase: New Orders: New Orders increased 10.3 points to 57.9. New Orders increase was based on 10.4% more respondents reporting higher New Orders for a total of 42.1% and 10.3% less respondents reporting lower New Orders for a total of 26.3%. Production: Production increased 0.8 of a point to 44.7. Production’s increase resulted from 0.5% less respondents reporting higher Production for a total of 26.3% and 2.2% less respondents reporting lower Production for a total of 36.8%. Employment: Employment decreased 1.7 points to 43.4 based on 4.5% less respondents reporting higher employment for a total of 5.3% and 1.1% less respondents reporting lower Employment for a total of 18.4%. Supplier Delivery Time: Supplier Delivery Time increased 2.8 points to 55.3 based on 1% more respondents reporting slower delivery time for a total of 13.2% and 4.7% less respondents reporting faster delivery for a total of 2.6%. Finished Inventory: Finished Inventory decreased 11.3 points to 28.9 based on 14.2% less respondents reporting higher FI for a total of 5.3% and 8.3% more respondents reporting lower Finished Inventory for a total of 47.4%. Commodity Price: Commodity Price decreased 0.1 of a point to 65.5 based on 2.5% more respondents reporting higher Commodity Price for a total of 34.2% and 2.6% more respondents reporting lower Commodity Price for a total of 2.6%. Future Expected Production: Forty two percent of respondents reported higher expected Production in the next 3-6 months, which is down from forty seven percent for December. Seven point nine percent expect it to be lower than their current production. This may help explain why Georgia Production did not respond to the increase in January New Orders, but instead drew down their inventories. Overview: New Orders rebounded with a 10.3 point increase following two straight months of sub-fifty readings. This was the result of the combined effect of more respondents reporting higher New Orders and less respondents reporting lower New Orders. January New Orders is 8.7 points above its six week average. New Orders experienced the strongest improvement in January. Production did not match the New Orders increase as respondents apparently used Finished Inventory to meet the pickup in New Orders. January Finished Inventory is 9 points below its 6 month average. Employment remains very weak with only 5.3% of respondents reporting increased hiring. January Employment is 1.6 points below its 6 month average. Supplier Delivery Time increased with 13.2% reporting slower delivery. Commodity Prices remain relatively high at 65.8, which is 3.2 points above its six month average. Georgia and the Southeast PMIs are both more than 10 points below the National PMI. National PMI Report: The National January PMI increased 3.5 points to 58.4, which was the result of the following increases: 1.1 points to 65.9 for New Orders, 6.5 points to 66.2 for Production, 3.3 points to 53.3 for Employment, and 3.5 points to 46.5 for Finished Inventory. Commodity Price increased 8.5 points to 70 points. Thirteen of the 18 manufacturing industries reported growth in January. Furniture and Related Products is the only industry reporting contraction. Industrial Production Report: The December Industrial Production Report reported an increase of 0.6% matching November’s revised 0.6%. The cold weather caused a jump in Utilities production of 5.9%, which was a major contribution to this strong improvement. Motor vehicle assembly fell again. Computer and electrical output is up 1.6%. Business equipment is up 0.9% for December. High tech is up 2.4%. Strength in capital spending is an encouraging way to start the 2010 year. It will play a critical role for sustaining the current economic improvement. Georgia versus the Southeast Survey: January Southeast (SE) and Georgia (GA) PMIs are moving lockstep with minimal increases of 0.6 and 0.2 of a point increases respectively. The greatest difference between the two PMIs is Georgia’s higher New Orders and lower Finished Inventory. continued on next page Page 9 ISM-ATLANTA PEACH STATE PURCHASER BACK TO TABLE OF CONTENTS The Three Survey Comparison: The January Georgia and SE PMIs are 12.3 and 12.6 points below the National PMI of 58.4 points. The National PMI’s New Orders, Production and Employment are 11.6, 19.3 and 11.9 points higher than the respective SE underlying variables. Georgia’s same underlying variables are 8.0, 21.5 and 9.9 points below the National variables. Comment: The Georgia and Southeast January PMIs and their underlying variables have fallen further behind the National PMI. The Georgia and the Southeast PMIs have underperformed the National PMI since August of 2009. Based on this history and current differences it is apparent that the Southeast and Georgia manufacturing sectors are not experiencing the strong rebound for the National Manufacturing Sector. Change In Percent of Georgia Participants Reporting Higher, Same and Lower JANUARY - DECEMBER New Orders Production Employment Deliveries Finished Inventory Commodity Prices Higher 10.4 -0.5 -4.5 1.0 -14.2 2.5 Same -0.1 2.7 5.6 3.7 5.9 -5.1 Lower -10.3 -2.2 -1.1 -4.7 8.3 2.6 PMI Georgia, PMI Southeast, and PMI National PMI GA PMI Southeast PMI National Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Jan-Dec 45.4 44.6 48.9 43.5 45.9 46.1 +0.2 46.2 46.7 49.2 47.5 45.2 45.8 +0.6 52.9 52.6 55.7 53.6 55.9 58.4 +2.5 COMMENTS FROM SURVEY PARTICIPANTS REGARDING CONDITIONS THAT AFFECT PURCHASING OPERATION: PRODUCTS WITH HIGHER PRICES “Copper wire, transformer oil, stainless steel, bearings, steel wire, copper, gasoline, copper, steel, oil based products, spruce boards, pine mouldings, treated pine lumber, castor oil, both aluminum and copper(though both have started to reverse their upward trend), sugar, resin, paper, phenol, freight, acetone, isohhexanes, polypropylene, corrugated, pallet lumber, aluminum, anthraquinone, ammonia, hydrochloric acid, diesel, lead for batteries, stearic acid, paper, palm oil lumber, OSB, polypropylene went up slightly, carbon steel, and aluminum ” calcium carbonate” PRODUCTS WITH LOWER PRICES “Aluminum, wheat, corn, starch, aluminum, sulfate, and GENERAL REMARKS - Give your frank opinion on any conditions, local, national or international, that affect your ITEMS IN SHORT SUPPLY “OSB, due to log shortages to heavy rain, aluminum flat rolled, bearings, diesel engines, cocoa products, and chemicals from China” BUYING POLICY CHANGE “Switching to lesser known brands and smaller (or local) providers to save money” “Business closing” continued on next page Page 10 ISM-ATLANTA PEACH STATE PURCHASER BACK TO TABLE OF CONTENTS Georgia Purchasing Manager’s Index Report Continued from previous page purchasing operation or your company’s outlook “Housing is still slow” “Day to day is no different but some encouraging signs for the next 6 months” “Expect flat to down order base until mid-2011 at the earliest” “Stainless pricing will increase in January. Steel mill lead times seemed to have shortened. Customers continue to operate without inventory” “Slight increase in NA sales, but still slow in EMEA” “Company’s outlook is good and would appear to be so for the 1st half of 2010” “Expect steel prices to increase in February” “Worst appears to be over but speed of recovery not clear” “Our business has a direct correlation to residential homebuilding. When homebuilding resumes , our sales will increase” “Slow recovery taking shape” “We expect to remain flat with little growth” “Our customers are beginning to build inventory” “Vote Republican and kick the “Do Nothing” Democrats out of office” “Inventories of finished goods that are raw materials seem lower than normal” The Reality of Green Continued from page 8 I admit the above scenarios are very broad and are not industry specific. Let’s work this example for illustration purposes: • Assume you are a category manager working for a consumer products manufacturer selling apparel to the Defense Logistics Agency, Philadelphia, PA. If GHG, Scope 3 emissions reporting applies to your organization, you could be tasked to track and report carbon (GHG) emissions for suppliers such as; raw materials, related transportation and storage, as well as dyes or ink. GHG must be measured and reported to the Defense Logistics Agency’s Chief Sustainability Officer during fiscal year 2011. Given this CPG example how does this impact strategic sourcing in 2010? Depending on your individual company and industry perspectives here are several potential near term impacts: • 2010 raw material sourcing strategy • 2010 contract negotiating strategy • 2010 / 2011 IT capital plan (or internal solution) • 2010 & beyond contract T & Cs (GHG reporting language) • 2011 supplier raw material, staffing & IT repercussions One, the supplier development team has an opportunity to clearly align supplier performance with the corporate sales, marketing, and manufacturing processes. Two, a deep dive into raw material sourcing and its carbon output could lead to new innovation and cost reduction strategies. Lastly, by reviewing boilerplate T&C’s this could lead to more open dialogue by the legal and contract management teams. Next Steps We all know that Sales and Marketing are constantly seeking new opportunities to set the organization apart from their peers. Given that 95% or more than 625,000 (valued at more than $474 billion annually in 2009) of future federal contracts must include an environmental component, federal suppliers are on the hook for action. This is a CPO opportunity! As a first step the Strategic Sourcing and Sustainability teams must join forces and clearly define if and how Greenhouse Gas Management applies to the business and industry. GHG measurement and supplier development are likely new 2010/2011 initiatives for companies seeking add value and stand out in the crowd. Potential Benefits It’s not all bad news! The newest CPO priority may have a silver lining for the strategic sourcing organization. 2009 Federal spend source: www.usaspending.gov Page 11 ISM-ATLANTA PEACH STATE PURCHASER BACK TO TABLE OF CONTENTS ISM-Atlanta Directory President Raymond Padgett, C.P.M., A.P.P. StagParkway, Inc. 7095 Tradewater Pkwy Atlanta, GA 30336 Phone: 404-349-1918 x225 E-mail: raymondpadgett@hotmail. com 1st Vice President Lauchlin McKinnon, C.P.M. Landis+Gyr 30000 Mill Creek Avenue, Suite 100 Alpharetta, GA 30022 Phone: 678-258-1661 E-mail: [email protected] 2nd Vice President Richard Angel, C.P.M. 2641 Fountainbleau Drive Atlanta, GA 30360 Phone: 770-757-4222 E-mail: [email protected] Treasurer Frank Kosakowski, C.P.S.M.; C.P.M. Emerson Climate Technologies Solutions 1308 Cobblestone Lane Woodstock, GA. 30189 Phone: 678-784-2737 E-mail: frank.kosakowski@ emerson.com. Secretary Debra Howington, C.P.M., A.P.P. SKF USA Inc. 5385 McEver Road Flowery Branch, GA 30542 Phone: 770-967-5309 H: 770-2878754 Fax: 770-967-4258 E-mail: [email protected] Professional Development Chair – Certification David Pettitt, C.P.S.M.; C.P.M. 3262 Devaughn Drive Marietta, GA 30066 Phone: 770-977-4466 Fax: 770-977-3345 E-mail: [email protected] Membership Chair William Howell, C.S.C.P. CAT Switichgear Supply Chain Mgt. Alpharetta, GA phone: 404-319-4423 E-mail: [email protected] Director / Career Development (ISM Employment Development Services) Thomas G. Alexander, C.P.M., CPIM The Clorox Company 3655 Brookside Parkway, Suite 300 Alpharetta, GA 30022 Phone: 678-893-8916 E-mail: [email protected] Institute for Supply Management-Atlanta ISM-Atlanta c/o Frank Kosakowski 1308 Cobblestone Lane Woodstock GA 30189 Professional Development Chair – Monthly Development Meeting TBD Director/Librarian Natalie Blankenship, C.P.M. Category Manager-Purchasing Rock-Tenn Company Norcross, GA Cell: 678-431-2202 E-mail: [email protected] Director/ Public Relations Pamela Johnson, C.P.M., M.B.A.; SSBB AT&T Services, Inc. Consumer Supply Chain 1277 Lenox Park Blvd. Atlanta, GA 30319 Phone: 404-499-3941 Fax: 404-420-8823 E-mail: [email protected] Director/Newsletter-Webmaster Penelope M. Murphy, C.P.M., A.P.P. Purchasing Manager City of Smyrna 2800 King Street Smyrna, GA 30080 Phone: 678-631-5337 Fax: 770-431-2814 E-mail: [email protected] Director/College Reachout Don Sabbarese, Ph.D. Director of Econometric Center Kennesaw State University 1000 Chastain Road Burruss Bldg., Rm 323 Kennesaw GA 30144-5591 Phone: 770-423-6094 E-Mail: [email protected] Scholarships E-mail: [email protected] Immediate Past President J. David Lister, C.P.S.M.; C.P.M. 1325 Badingham Drive Cumming, GA 30041 Phone: 678-746-5050 Fax: 770-664-6302 Email: [email protected] Dinner Meeting Reservation Information Web site: ism-atl.org E-mail: [email protected] OR Raymond.padgett@stagparkway. com ISM-Atlanta Peach State Purchaser February 2010 Edition Editor / Webmaster Penelope M. Murphy ISM—Atlanta, Inc. The PEACH STATE PURCHASER is the official publication of the Institute for Supply Management - Atlanta, Inc. ISM-Atlanta is an affiliate of the Institute for Supply Management (ISM) The PEACH STATE PURCHASER is published monthly and carries articles and notices regarding ISM-Atlanta activities. All editorial notices for publication in the PEACH STATE PURCHASER must be submitted to the editor by the third Monday of the month preceding publication. ISM-Atlanta cannot be held responsible for the content or opinions expressed in editorial material published herein. Contributors Penny Murphy, William Howell, Don Sabbarese, David Pettit, John Wilkerson. Designer Seth Brown Design www.sethbrowndesigns.com Articles and Photos from ISM-Atlanta members are welcome and will be considered for publication as appropriate and as space permits. Submissions should be in form of a word document or pdf file and should be sent to Penny Murphy at [email protected]. Page 12 ISM-ATLANTA PEACH STATE PURCHASER BACK TO TABLE OF CONTENTS
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