This author had the opportunity to attend the annual conference of the Institute for Supply Management (ISM) annual conference held in Orlando Florida this week. This conference brings together supply management professionals spanning areas of direct and indirect supply sourcing and procurement. In this blog posting, we touch upon highlights and some important takeaways and learning expressed by those attending. 

This year’s conference drew a rather large number of attendees, much more than last year’s event.  We estimate attendees were more than 2500, and sensing from some hallway discussions, many came to seek added knowledge and understanding to rapidly changing industry and business environments.

The ISM organization deserves praise for recruiting two keynote speakers that spoke first-hand to the current wave of geo-political and economic events that could well impact industry supply chains in the months to come.

General Colin Powell, former U.S. Secretary of State and Chairmen of the Joint Chiefs delighted the conference audience with his comments on topics related to global events, politics, and industry supply chains. Regarding the latter, General Powell noted that Operation Desert Storm was won by superior logistics, and he shared some rather humorous stories relative to the challenges of moving vast amounts of material, supplies and personnel. He described today’s global landscape as a pressure cooker in the notions of the rise of populism, accelerated by the information revolution. General Powell voiced his view that the U.S. rejection of the Trans Pacific Partnership was an “unfortunate decision”, one that can likely benefit China as a larger influencer in global trade.

Former UK Prime Minister David Cameron’s address came on the morning of the tragic terrorist attack at a concert in Manchester England. Mr. Cameron spoke of the long struggle to defeat terrorism across the globe and on the renewed resolve of his country to march on. On the topic of supply chain management. Mr. Cameron observed: “What you do is extremely important to the global economy.” The Prime Minister later noted that he is a huge supporter of global trade, yet acknowledged that the rising tide has not lifted all boats. He noted that societies must reject tendencies toward protectionism because they failed miserably in the nineteen-thirties. He also addressed the rising tide of populism in observing that the pace of change has perhaps been too-fast, the scale of immigration too great, causing many to be fed-up with mainstream political parties. Addressing specific supply chain topics, he observed that ethical and sustainable supply chains are good for the brand and for society.  During a Q&A sit-down with ISM CEO Tom Derry, Mr. Cameron spoke of the implications of Brexit and what supply management teams can expect in scenarios of a hard or soft Brexit. Finally, responding to the question of what countries will likely be economic stars in the next five years, Mr. Cameron specifically mentioned India and Vietnam as emerging global commerce leaders.

A combined news conference featuring ISM CEO Tom Derry, Hans Melotte, Executive Vice President, Global Supply Chain for Starbucks Corporation, and Kristopher Pinow, Vice President and Chief Procurement Officer for B/E Aerospace, addressed some common themes impacting the supply management area. One was clearly the area of technology, described as quickly changing the current and future practices in supply management, which have typically been more transactional in-nature. Mr. Melotte observed that many in the profession are underestimating the impact of new technologies on processes, which he feels are coming sooner rather than later. CEO Derry observed that procurement managers are becoming much more aware of the importance of the Sales and Operations Planning (S&OP) processes, and the expansion of scope that it implies. This author had a later discussion with Jim Barnes, ISM Professional Services Director who shared feedback from various ISM regional chapters has reinforced the need for added education and involvement in S&OP, and why that involvement pulls procurement into the scope of the end-to-end supply chain.

Another top-of-mind topic remains talent management with an acknowledgement that absolutely, supply management does not have the talent to be able to leverage the tide of new technologies impacting the profession. Melotte noted- “We need to learn how to ask different questions as well as to sharpen our intellectual curiosity as to technology trends impacting our businesses.” Mr. Pinow noted- “We have to recognize that we do not know everything” and he quoted Shelly Stewart, Vice President, and CPO at Dupont in his observation that procurement leaders need to be more actively curious, including what is occurring external to procurement.

While attending other conference sessions, we further noted some rather consistent themes, especially from several panel discussions addressing timely topics. Addressing the challenge of CPO’s in making B2B networks work better together, Beverly Gaskin, Executive Director, Global Purchasing at General Motors observed that procurement has to improve practices in the science of marketing, namely how well procurement leaders sell and influence value to the business and to suppliers. Thomas Linton, CPO and Supply Chain Officer at Flextronics noted that procurement needs to understand the different management cultures of both internal and external partners and can build successful alliances based on different cultures. Many panelists addressed the need for leveraging knowledge and talent in today’s business environments, and that knowledge extends across the product value-chain to include close collaboration with supplier teams.

There were other common themes and takeaways and we will be sharing some of them in subsequent Supply Chain Matters commentaries.

A final note- after attending two subsequent ISM conferences, this author has noted a rising tide of desire and zeal among supply management professionals to become more recognized providers of business value, beyond procurement cost savings. It behooves other teams that make-up today’s broad supply chain management umbrella that spans product design to after-market services to include supply management in collaboration and to recognize suppliers for the partnership value that they can provide. That obviously includes S&OP teams.

Yes, the reality of increased supply chain cost saving needs is not going away and must be accommodated. However, it remains important that supply chain wide teams jointly recognize what capabilities in process, technology and people skills need to be preserved or augmented by trading-off cost savings for key investment needs.

 

Bob Ferrari

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