Now is the Time for Supply Management More Promising Than Ever! NAPM – Willamette Valley September 2013

1. Now is the Time for Supply Management More Promising Than Ever! NAPM – Willamette Valley September 2013 Darin Matthews, CPPO, C. P. M. Portland State University

2. Supply Management Defined “The identification, acquisition, access, positioning and management of resources and related capabilities that an organization needs o potentially needs in the attainment of its strategic objectives.” (Institute for Supply Management, 2008)

3. Supply Management Includes: Materials Management Inventory Control Disposition – Investment Recovery Logistics (Institute for Supply Management, 2008) Traffic - Shipping Warehousing Distribution Quality Control Product – Service Development Manufacturing Supervision Strategic Sourcing Procurement - Purchasing

4. Supply Management Impacts • Account for 15-20% of the gross domestic product (GDP) within the United States • Essential to operational efficiency • Can impact a company’s bottom line like no other discipline • Directly affects customer satisfaction and retention • The most critical business discipline in the world today Source: University of San Francisco

5. Principal Goals of Supply Management • Implementation of systems that utilize market intelligence and supplier relationship management • Efficiency in operations and achievement of cost minimization and improved profitability • Achievement of the strategic goals and objectivesof the organization • Recognition of globalization issues, negotiation strategies and cost analysis

6. National Headlines The Hot New M.B.A., Supply Chain Management More schools are ramping up their programs, adding majors and concentrations as employer demand grows The Wall Street Journal, June 2013

7. THE WALL STREET JOURNAL • Global operations becoming more complex • Companies are scrambling to hire supply managers • Manufacturing, retail, technology and consulting sectors • SM experts are hard to come by

8. Increasing the Supply of Supply Managers

9. More Headlines Supply Chain Management, The Next Big Thing More students are seeing career possibilities in the major Business Week, September 2011

10. Turning Students Away • Lehigh University College of Business has the most SCM majors in program history • Maxed out at 45 students per term • North Carolina State exploring possibiliy of SCM concentration with accounting degree • Portland State has a strong record of employment for graduates • Arizona State University has doubled SCM majors ince 2008

11. Supply Chain Jobs • ASU Carey School of Business • 64% have jobs at graduation (2010 undergraduate) • 100% of Supply Chain-MBAs placed • 75% of Marketing-MBAs placed • Institute for Supply Chain Management • SM salaries increased 8% (2011) • Entry-level salaries also on the rise • Existing supply management professionals • Improved stature within organization • Opportunity to exercise talent management

12. Sectors

13. Regional Case StudyPortland State University, Supply and Logistics Management Program • BS in Supply/Logistics Management (existing) • MS in Global Supply Chain Management (new) • Annual Career Fair at PSU • High percentage of graduates placed (90%+) • Industry partners that have hired PSU supply management graduates • Boeing, Nike, Ratheon, Boise • Portland Schools • Multnomah County

14. Current Workforce • Existing supply managers continue to demonstrate their value • Industry experience is leveraged for supply management positions and advancement opportunities • With ever competitive workforce, supply managers must continue to develop their skills (advancing technology, global markets, cost negotiations, etc.) • Assume a mentorship role for new professionals entering the workforce

15. Development Opportunities • Professional development courses through ISM and others • Managing Supplier Performance • Legal Considerations of Software Licensing • Earning professional credentials • (C.P.M., CPSM, CPSD) • Degree completion programs (many online) • Utilizing performance metrics to drive continuous improvement • Inventory performance (accuracy, turns) • Cost reduction (i.e. renegotiation) • Return on investment (ROI)

16. SM: Career Overview • Supply management continues to have impacts in all areas of a company’s operations • Leading firms are elevating the supply management function (WalMart, Dell, DHL) • Job outlook remains healthy in coming years for both new graduates and mid-career job seekers • Most companies seek functional experience as well as SM coursework • Certification (C.P.M., CPIM) are not required, but do provide an edge in competitive job market • Source: Career Overview, Supply Chain Management, 2012, Wet Feet

17. SM: Career Overview • Proficiency in enterprise resource planning (ERP) greatly enhances your marketability • Attention to detail is important and should be reflected throughout the job seeking process • Communication and people skills are more important than ever • The field will continue to blur over titles and responsibilities • Supply Management is standard term, replacing Logistics and Materials Management • Source: Career Overview, Supply Chain Management, 2012, Wet Feet

18. ISM Certification • Certified Professional in Supply Management (CPSM) • Certified Professional in Supplier Diversity (CPSD) • Certified in Supply Management (CSM) • Certified Purchasing Manager (C.P.M.) • Accredited Purchasing Practitioner (A.P.P.)

19. ISM Salary Survey 2012 • Median SM salary increased by 3.5% • Six-figure salaries increased to 41% (from 38% in prior year) • 79% reported increases, 7% decreases • Leader factors in job selection • Job satisfaction • Benefits package • Financial stability of organization • Work/life balance • Salary • Promotion opportunities

20. ISM Salary Survey 2012 • Factors impacting salary • Position, gender, responsibility, education level, credentials, location, and size of organization • More years of experience = higher salary • Males earned 32% more than female counterparts • Females in CPO roles earned 54% more than males • Degreed professionals earned 35% more • Certified professionals earned 8% more

21. Supply Chain TrendsUniversity of Tennessee Top 10 Game Changers • Customer relationship management • Segmenting customers, individualizing supply chain solutions • Collaborative supplier relationships • Increase collaboration, increase revenue • Transformational strategies • Document supply chain strategy • Process integration • Eliminating silo walls • Driver-based metrics • Measuring performance, setting goals

22. Supply Chain TrendsUniversity of Tennessee Top 10 Game Changers • Information sharing and visibility • Sharing and linking data • Demand management • Increase forecast accuracy • Talent management • Hiring top supply chain talent • Virtual integration • Stick to core competencies, outsource the rest • Value-based management • Supply chain excellence leads to shareholder value

23. Emerging Trends In Supply Chain Management Source: Iowa State University, University Extension, Supply Chain Management for Small and Medium Sized Manufacturers

24. Green supply chains • More than doing the “right thing” • Saves money and improves supply chain performance • Leading firms are extending green efforts to suppliers and logistics Source: Iowa State University, University Extension, Supply Chain Management for Small and Medium Sized Manufacturers

25. Supply chain risk management • Unanticipated disruptions to material flow (costly) • Finding better ways to deal with disruptions • Companies trying to anticipate disruptions • Key is to mitigate, not eliminate Source: Iowa State University, University Extension, Supply Chain Management for Small and Medium Sized Manufacturers

26. Supply chain agility • Ability to be nimble and agile • How quickly can a firm respond? • Real time information and visibility within the supply chain is key Source: Iowa State University, University Extension, Supply Chain Management for Small and Medium Sized Manufacturers

27. Moving supply closer to home • Low labor costs in developing countries been driving force behind outsourcing • In recent years those labor costs are increasing • Example: Labor in China increased 20% while US Labor only 3% • Firms are reconsidering past outsourcing decisions Source: Iowa State University, University Extension, Supply Chain Management for Small and Medium Sized Manufacturers

28. Dealing with increased logistics costs • In past 5 years transportation costs have increased over 50% • Energy prices are primary factor • Total costs in a supply chain network must be analyzed • Opportunities for cost reductions with logistics providers Source: Iowa State University, University Extension, Supply Chain Management for Small and Medium Sized Manufacturers

29. Emergence of Supply Management Procurement and supply has “emerged from being tactical and operational in nature … to being considered of major strategic importance.” (Humphries, 2001)

30. Traditional Characteristics of Purchasing and Supply According to Twyford(1915) • Reactive • Clerical • Unimaginative • Unglamorous

31. Evolution of Supply Management Supply chain management will continue to grow and evolve as organizations realize the benefits it provides Source: Lisa Ellram& Thomas Choi, Supply Management for Value Enhancement, 2000

32. Supply Management, technology and the future ... “..all of us must pay close attention to technological advancements…it is either that or be left behind.” Russell Broeckelmann

33. Supply Managers Must Assume • A leadership role – seeking new opportunities and driving them • A managerial role – managing systems and relationships • A creator role – identifying new opportunities and making them available to the organization (strategies, supply options, revenue streams) • A needs enabler role – enabling others in the organization to satisfy their own needs • (Joseph Cavinato, 2000)

34. Summary While historically overlooked (and under appreciated) Supply Management’s “star is on the rise” Opportunities will continue to exist in SM, both for new and established professionals Investment in education and professional development will only enhance marketability Experts have said for decades that SM is of strategic importance, now others realize this Trends in SM will continue to make it an exciting and rewarding field

35. Supply Management The world needs supply managers to make it happen! Victor Taylor, 2011

36. References and Resources Institute for Supply Management. Certification www.ism.ws/certification ISM 2012 Salary Survey, Inside Supply Management, May 2012 “The Hot New MBA: Supply Chain Management”, The Wall Street Journal, June 5, 2013 “Supply Chain Management: The Next Big Thing?”, Bloomberg Business Week, September 12, 2011 Six Key Trends Changing Supply Management Today, Hitachi Consulting Corporation, 2009 Emerging Trends in Supply Chain Management, Iowa State University, Supply Chain Management, University Extension, www.ciras.iastate.edu “Supply chain trends to boost shareholder value”, Supply Management, July 2, 2013, Chartered Institute of Purchasing and Supply “Career Overview: Supply Chain Management”, December 3, 2012, Wet Feet. www.wetfeet.com Supply Chain Management for Value Enhancement (2000), Ellram and Choi, ISM: Tempe, Arizona