Skip to the content

CAPS Research

Library Summary

Data Analytics Teams and Procurement - Who and What
December 2018
Benjamin Shao, Ph.D.;Robert D St. Louis, Ph.D.
Arizona State University
Procurement leaders are turning to data analytics teams to help them leverage the wealth of data available and meet business goals, but what skills should the team have? This research investigates assembling, structuring, retaining, and supporting the team. It examines how data analytics can facilitate procurement practices related to spend analysis, contract management, market intelligence, and supply chain risk. Insightful comments by CPOs at various stages of the data analytics journey offer a real-life look at how data analytics teams function and succeed in many organizations.
Demand Management and the Supply Management Group 2018
December 2018
Benchmarking Team
CAPS Research
This report provides insight into the level of engagement of supply management in demand management activity. A total of 19 organizations participated in this survey.
GPOs and Amazon for Business 2018
November 2018
Benchmarking Team
CAPS Research
This Snapshots report provides insight into the use and effectiveness of Group Purchasing Organizations (GPOs) and Amazon for Business. GPOs are used to create leverage in purchasing power for a group of businesses to attain better prices from suppliers based on collective buying power. Amazon for Business offers access to a variety of products with incentives for members, like Prime shipping and a multi-seller marketplace. There were 67 organizations that participated in the survey.
Human Rights and the Supply Chain 2018
November 2018
Benchmarking Team
CAPS Research
This report provides an overview of the practices of global corporations in their efforts to identify and mitigate/reduce human rights risks in their supply chains.
Business Partner Engagement 2018
November 2018
Benchmarking Team
CAPS Research
Aligning supply management with the goals and needs of internal business partners (also known as business owners or internal stakeholders) continues to be a key priority for strategically focused supply management leaders. This report covers specific activities that typically show the level of engagement with this key stakeholder group.
Recruiting Talent 2018
November 2018
Benchmarking Team
CAPS Research
As efforts to recruit talent have become more competitive, companies are interested in exploring recruitment sources and strategies. This report is designed to provide a snapshot of company practices in recruiting talent.
Supplier Assessments and Audits 2018
October 2018
Benchmarking Team
CAPS Research
This Snapshots report provides insight into understanding companies’ use of supplier audits and assessments.
Physician Preference Items Management: Challenges, Opportunities, and Strategies
October 2018
Gilbert Nyaga, Ph.D.;Eugene Schneller, Ph.D.
Northeastern University;Arizona State University
Physicians have autonomy in deciding the devices they use for patient care, which can circumvent cost savings, volume economies, and other benefits that come from including procurement. Approximately 60% of total spend by hospitals comes from physician preference items (PPI) - items that physicians strongly prefer and therefore play a key role in their acquisition. The goal of this report was to study challenges, opportunities, and management efficiencies involved in procuring PPIs. This study also looked to other industries to identify any commonalities and applications outside of healthcare. Download this new CAPS Research report today to find key insights and recommendations for managing PPIs. This Research Report provides the most comprehensive look at the research findings, conclusions, and recommended actions. A related project document is a Brief which lists the most salient points of the research findings.
Punchout and ERP-Hosted/CIF Catalogs 2018
September 2018
Benchmarking Team
CAPS Research
Punchout catalogs are web-based catalogs hosted at a supplier’s website and accessed through the buyer's ERP/procurement application. The buyer leaves (“punches out” of) the ERP/procurement application to enter the supplier’s web-based catalog or e-marketplace and then returns to complete the requisition process. ERP-hosted (also known as CIF) catalogs are static digital files that suppliers provide to the buying company that reside within the ERP/procurement application. CIF stands for Catalog Interchange Format. This report is designed to provide a snapshot of company practices in use of Punchout and ERP-Hosted/CIF Catalogs. There were 62 organizations that participated in the survey.
The Metrics of Supply Management (Cross-Industry) Report 2018 - Financial Services Industry
September 2018
Benchmarking Team
CAPS Research
This Financial Services Industry breakout report provides an industry-specific view of The Metrics of Supply Management (Cross-Industry) Report. It provides information on thirty-four identified Key Performance Indicators (KPIs). This year's report contains various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees.
The Metrics of Supply Management (Cross-Industry) Report 2018 - Industrial Manufacturing Industry
September 2018
Benchmarking Team
CAPS Research
This Industrial Manufacturing Industry breakout report provides an industry-specific view of The Metrics of Supply Management (Cross-Industry) Report. It provides information on thirty-four identified Key Performance Indicators (KPIs). This year's report contains various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees.
The Metrics of Supply Management (Cross-Industry) Report 2018 - Petroleum Industry
September 2018
Benchmarking Team
CAPS Research
This Petroleum Industry breakout report provides an industry-specific view of The Metrics of Supply Management (Cross-Industry) Report. It provides information on thirty-four identified Key Performance Indicators (KPIs). This year's report contains various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees.
The Metrics of Supply Management (Cross-Industry) Report 2018 - Utilities
September 2018
Benchmarking Team
CAPS Research
This Utilities Industry breakout report provides an industry-specific view of The Metrics of Supply Management (Cross-Industry) Report. It provides information on thirty-four identified Key Performance Indicators (KPIs). This year's report contains various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees.
The Metrics of Supply Management (Cross-Industry) Report 2018 - Aerospace & Defense
September 2018
Benchmarking Team
CAPS Research
This Aerospace & Defense Industry breakout report provides an industry-specific view of The Metrics of Supply Management (Cross-Industry) Report. It provides information on thirty-four identified Key Performance Indicators (KPIs). This year's report contains various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees.
Procurement Analytics - Enabling Data Architectures in the Age of Big Data
September 2018
Raghu T. Santanam, Ph.D.;Michael Goul, Ph.D.
Arizona State University
Procurement processes will be at the center of the emerging changes in the way organizations engage with their business partners, customers, and suppliers. This new report from CAPS Research examines the ways companies can architect their procurement data to lay foundations for the discovery of new insights. The research addresses the ways companies organize their procurement data structures and evolving them through various levels of maturity. This includes data sources and requirements at each maturity level, the functional capabilities and processes needed to advance, the value proposition of moving along the maturity curve, and what the future entails for already mature companies. Download the full report today to discover the insights and lessons learned from this new research report. This Research Report provides the most comprehensive look at the research findings, conclusions, and recommended actions. A related project document is a Brief which lists the most salient points of the research findings.
Supplier Safety Performance 2018
August 2018
Benchmarking Team
CAPS Research
As efforts to drive safety into the supply base continue to gain momentum in global corporations, companies are asking how supplier safety efforts can and should impact sourcing decisions, SRM programs, and supplier life-cycle programs. The starting point to integrate supplier safety into supply management is understanding and measuring supplier safety performance. This Snapshots report looks at company practices in supplier safety performance.
Talent: Is Your Team Ready for 2020?
August 2018
Roberta Jennings
CAPS Research
There are many reasons to have a comprehensive talent development program in the supply management organization: consistent standards, succession planning, creating a "learning" work culture, better skill and competency assessments, and greater employee satisfaction, among other things. This report summarizes good practices, lessons learned, and general thoughts on talent development, including recruiting, retaining, leadership development, changing demographics, and changing the perception of training.
Procurement Training 2018
July 2018
Benchmarking Team
CAPS Research
This report provides insight into understanding the training practices, certification and budget for supply management employees.
The Metrics of Supply Management (Cross-Industry) Report 2018
July 2018
Benchmarking Team
CAPS Research
The Metrics of Supply Management (Cross-Industry) Report provides data for thirty-four identified Key Performance Indicators (KPIs). Included are various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees. The report also has metrics on managed spend and operating efficiencies. Five industries and three sectors are broken out from the general population, allowing for supply management groups to see how they stack up against comparable organizations.
Procurement Automation 2018
July 2018
Benchmarking Team
CAPS Research
This Snapshots report provides insight into organizations' use of automation within procurement for selected activities.
Petroleum Industry Metric Benchmarking Report 2018
June 2018
Benchmarking Team
CAPS Research
This Metric Report provides an overview of the results of the survey created by and for procurement/supply management professionals from the Petroleum Industry. Results include benchmarks on spend, savings, supply management return on investment, category management, and warehousing.
EDI and API 2018
June 2018
Benchmarking Team
CAPS Research
This report provides insight into current EDI practices and the use of APIs to complement or replace EDI. EDI is a well-established, long-standing technology that enables efficient business communications between business partners. Application Program Interfaces, or APIs (the foundational technology underlying on-demand applications like Google Maps and Uber), have been transforming business for some time, but have seen slower adoption rates by supply management/chain groups as an alternative to EDI.
Procurement Team Skills and Roles 2018
June 2018
Benchmarking Team
CAPS Research
This report provides insight into participating organizations' practices regarding the development of the global procurement team, with a focus on skill sets and role design. It was requested by a CAPS Research member company. There were 84 organizations that participated in the survey.
Eyeing Success - From Analytics to Value Generation
May 2018
Mary Siegfried
CAPS Research
Supply management organizations need a comprehensive talent management program that starts with building a pipeline that attracts new talent and continues with learning and development programs to retain top talent. This topic was discussed at a recent CAPS Research Critical Issue Exchange. Other topics discussed included managing your value generation and innovation funnel, supplier risk and compliance management, and analytics strategy. Supply chain leaders from discrete manufacturing companies explored their challenges and solutions for these top-of-mind concerns. Lessons learned and case study examples are included in this new report from CAPS Research.
Cost Savings 2.0
May 2018
Roberta Jennings
CAPS Research
Cost savings is arguably the oldest and most anticipated function of procurement. As the supply management function continues to evolve and become more competitive, cost saving activities need to become more sophisticated. "Cost Savings 2.0" was the topic of a recent CAPS Critical Issue Exchange, where supply management executives discussed how to define, capture, and measure cost savings. This new report features real world examples and case studies from that event.
Sustainability in the Supply Chain
May 2018
Mary Siegfried
CAPS Research
In today’s ever-changing business world, managing risk and sustainability are no longer options – they’re requirements. Supply chain sustainability is of growing importance as companies realize that effective, comprehensive sustainability practices can contribute to a better world and a healthier bottom line. Sustainability covers a range of issues, from environmental concerns to fair labor practices to waste management. CAPS Research recently co-hosted a Critical Issue Exchange on “Sustainability in the Supply Chain.” This new report features lessons learned and case studies from that event.
How Tech and Innovation Create a Safer Supply Chain
May 2018
Roberta Jennings
CAPS Research
Regardless of industry, company size, geographic area or market share, all organizations have a vested interest in establishing safe operations at their facilities. Securing data, information, and intellectual property can be just as much of a safety issue as working with heavy and dangerous equipment. More than ever, firms are looking for ways to incorporate technology and innovation into their safety practices. "Safety in the Supply Chain" was the focus of a recent CAPS Research Critical Issue Exchange, co-sponsored by Bechtel Corporation. This new report features best practices that were shared as well as case studies with examples.
Supply Management Trends 2018
May 2018
Benchmarking Team
CAPS Research
This report provides insight into involvement in various trends for participating supply management organizations. A total of 42 organizations participated in this survey.
Approval Thresholds Outside Procurement 2018
April 2018
Benchmarking Team
CAPS Research
This report provides insight into participating organizations’ practices regarding approval limits outside supply management/procurement and the parameters that organizations use to instruct their employees when to involve supply management/procurement with purchases. There were 82 organizations that participated in this report.
New Tariffs Impact 2018
April 2018
Benchmarking Team
CAPS Research
In a White House signing ceremony on March 8, President Trump announced new import tariffs of 25% on steel and 10% on aluminum. Canada and Mexico are currently excluded from the tariffs, and other allies may pursue talks to have the tariffs lifted. This report provides insight into participating supply management organizations’ anticipated impact of the new tariffs and potential U.S. withdrawal from the NAFTA pact. There were 28 organizations that participated in the survey.
Blockchain and Supply Management
April 2018
Dale S. Rogers, Ph.D.;Todd W. Taylor;Raymundo Beristain-Barajas;Thomas Y. Choi, Ph.D.
Arizona State University;CAPS Research
Blockchain is an emerging technology that can assist a firm to securely manage its financial and inventory data to reduce risk, improve trust and validity through a supply network. Blockchains utilize a distributed ledger that use shared databases, consensus approval, and peer validation. Veracity of data is maintained among network participates through cryptographic proofs and data visibility. This research report explains blockchain technology, provides examples of early adopters, and details potential uses and barriers for mainstream implementation. This Research Report provides the most comprehensive look at the research findings, conclusions, and recommended actions. A related project document is a Brief which lists the most salient points of the research findings.
Health Care Sector Supply Chain Research Consortium Trends Report 2018
April 2018
Benchmarking Team
CAPS Research
The purpose of this report is to identify the level of importance of key trends in the U.S. Health Care value chain. Participants helped to identify which of the thirty-four trends included in the survey would be of the utmost importance to their supply chain organizations in the near future. The trends are divided into the following eight categories: Economic, Integration, Technology, Management, Organization, Reform, Supplier Relationship Management, and Value Based Purchasing.
Automation and Digitization in Procure-to-Pay
March 2018
Roberta J. Jennings
CAPS Research
Robotics process automation (RPA) can help organizations be more efficient by utilizing computers to complete predictable, repeatable tasks that would normally require human personnel. The automation programs can be implemented quickly and are ideal for the most routine and repetitive tasks. CAPS Research and ExxonMobil recently co-hosted a Critical Issue Exchange event on "Automation and Digitization in Procure-to-Pay." In this report you will find insights, best practices, and lessons learned from approximately 30 supply management professionals who have employed or are investigating these tools for their organizations. Case studies with examples are included.
Managing Real Estate Leasing Portfolios 2018
March 2018
Benchmarking Team
CAPS Research
This report provides insight into participating supply management organizations’ involvement in Real Estate Lease Portfolio management. For this report, Real Estate Lease Portfolio activity includes negotiations, contracting, lease administration, and termination. It does not include facilities management/operations activities.
Cyber Security in Supply Chains: Understanding Threats and Potential Security Practices
February 2018
Zac Rogers, Ph.D.;Victor Benjamin, Ph.D.;Mohan Gopalakrishnan, Ph.D.
Colorado State University;Arizona State University
Of all recent cyber breaches, approximately 60 percent are supply chain based. A new CAPS Research report identifies five supply network vulnerability archetypes. They are intended to help companies understand the malicious actors who search for the "path of least resistance" into their networks. The report offers an in-depth examination of publicly disclosed cyber breaches, details the various methods of cyber attacks, and demonstrates the key role procurement plays in ensuring a company's cyber security. This Research Report provides the most comprehensive look at the research findings, conclusions, and recommended actions. A related project document is a Brief which lists the most salient points of the research findings.
Buyer Training & Certification 2018
February 2018
Benchmarking Team
CAPS Research
The "Buyer Training & Certification" report will help you gain insight into organizations' buyer training and certification programs. For the purpose of this report, buyers are defined as supply management/procurement employees engaged in tactical purchasing of a repetitive, administrative nature in support of the Requisition-to-Payment cycle.
DOE/NNSA Contractors Procurement Performance Benchmarking Report 2017
February 2018
Benchmarking Team
CAPS Research
The DOE/NNSA (Department of Energy/National Nuclear Safety Administration) Contractors Procurement Performance Benchmarking Metric Report for 2017 contains key procurement performance measures including organizational structure, professional development, financial information, and supplier measures. Data was provided by 21 different DOE and NNSA laboratories (or sites). Key measures include spend per procurement employee, and supplier diversity goals and attainment. Other measures include customer satisfaction surveys and procurement card use.
Measuring Risk in Supply Chains 2018
January 2018
Research Team
CAPS Research
With advancements in technology and increased connectivity, risk measurement has become a moving target. While the changing supply chain landscape is the source for many of these risks, we also have opportunities to identify, measure, mitigate and manage risks today. This short report identifies how supply chain risks are measured in organizations.
The Role of Supply Management in Merger and Acquisitions: Separation and Integration
January 2018
Kevin Linderman, Ph.D.;David Wohler
University of Minnesota;MD Partners, LLC
Involving supply management in mergers and acquisitions (M&As) will help ensure a successful transition and avoid any missteps. In this new report from CAPS Research we detail four capabilities to help supply management can support M&As. Is your M&A business process up to date? Are you one of the 37 percent of companies today that do not have a formal business process in place for M&As? Download our new research report to find out what you will need to be successful. This Research Report provides the most comprehensive look at the research findings, conclusions, and recommended actions. A related project document is a Brief which lists the most salient points of the research findings.
Aerospace and Defense Industry Benchmarking Metric Report 2017
November 2017
Benchmarking Team
CAPS Research
The 2017 Aerospace and Defense Industry Benchmarking Metric Report includes metrics of importance to the aerospace and defense industry on topics including supply management organizational structure, spend and spend analytics, supply management operating expense, supplier relationships, and supply management return on investment.
Lead Time Management 2017
November 2017
Benchmarking Team
CAPS Research
This report provides insight into current lead time management and processes for direct materials that are MRP relevant.
The Metrics of Supply Management (Cross-Industry) Report 2017 - Aerospace & Defense Industry
November 2017
Benchmarking Team
CAPS Research
This Aerospace & Defense Industry breakout report provides an industry-specific view of The Metrics of Supply Management (Cross-Industry) Report. It provides information on thirty-four identified Key Performance Indicators (KPIs). This year's report contains various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees.
The Metrics of Supply Management (Cross-Industry) Report 2017 - Financial Services Industry
November 2017
Benchmarking Team
CAPS Research
This Financial Services Industry breakout report provides an industry-specific view of The Metrics of Supply Management (Cross-Industry) Report. It provides information on thirty-four identified Key Performance Indicators (KPIs). This year's report contains various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees.
The Metrics of Supply Management (Cross-Industry) Report 2017 - Industrial Manufacturing Industry
November 2017
Benchmarking Team
CAPS Research
This Industrial Manufacturing Industry breakout report provides an industry-specific view of The Metrics of Supply Management (Cross-Industry) Report. It provides information on thirty-four identified Key Performance Indicators (KPIs). This year's report contains various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees.
The Metrics of Supply Management (Cross-Industry) Report 2017 - Petroleum Industry
November 2017
Benchmarking Team
CAPS Research
This Petroleum Industry breakout report provides an industry-specific view of The Metrics of Supply Management (Cross-Industry) Report. It provides information on thirty-four identified Key Performance Indicators (KPIs). This year's report contains various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees.
The Metrics of Supply Management (Cross-Industry) Report 2017 - Utilities Industry
November 2017
Benchmarking Team
CAPS Research
This Utilities Industry breakout report provides an industry-specific view of The Metrics of Supply Management (Cross-Industry) Report. It provides information on thirty-four identified Key Performance Indicators (KPIs). This year's report contains various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees.
Indirect Bid Thresholds 2017
October 2017
Benchmarking Team
CAPS Research
Seventy-six percent of responding organizations indicated that they have bid thresholds for buying indirect goods and services. The average reported threshold is $88,492, with a range from a minimum reported $2,000 to a maximum of $500,000. Other factors may affect this threshold including specific commodities or spend categories or geographic location.
Managing Startup Suppliers
October 2017
Stephan M. Wagner, Ph.D.;Stefan Kurpjuweit;Thomas Y. Choi, Ph.D.
Swiss Federal Institute of Technology Zurich;Arizona State University
Buying companies source from startup suppliers, relatively young entrepreneurial firms, with the intent of tapping into their innovative products and services. The challenge comes when buying companies attempt to integrate startup suppliers into their current supplier management process. Startup suppliers require a different management style and process that buying companies may not be prepared for. In this new CAPS Research report we detail the three strategies that emerged for working with startup suppliers and provide examples through case studies. This Research Report provides the most comprehensive look at the research findings, conclusions, and recommended actions. A related project document is a Brief which lists the most salient points of the research findings.
Delivering Value to the Enterprise 2017
October 2017
Benchmarking Team
CAPS Research
This short SnapShots report looks at how supply management groups deliver value. Among those that were reported as "currently in place" were "Develop joint metrics with internal customers" and "Have Supplier Sustainability integrated in Supplier Risk".
Data Analytics Teams
October 2017
Research Team
CAPS Research
We are witnessing the rise of new data analytics teams in procurement. Procurement leaders are moving away from one or more data analytics individuals scattered throughout the function, to creating a cohesive, well-defined team that sits inside procurement and supports activity across the procurement/supply management group. This short report provides insight into the importance of these emerging teams.
Classification of Indirect Spend 2017
October 2017
Benchmarking Team
CAPS Research
The survey for this report was distributed at the CAPS Research Supply Management Roundtable North America. It asks which spend classification codes are used for Indirect Spend and how the codes are assigned. Responding companies also reported that 74 percent of indirect purchases have spend classification codes assigned.
Automating the P2P Process 2017
October 2017
Benchmarking Team
CAPS Research
The procure-to-pay (P2P) process represents an opportunity for automation for many companies. Automation and digitization can help eliminate human error and allow supply management employees to focus on strategic, high-value activity. This report provides an overview of the level of automation and digitization integrated into the procure-to-pay process of survey respondent companies.
Training and Development 2017
September 2017
Benchmarking Team
CAPS Research
Improving the performance of Supply Management/Procurement employees is key to creating and maintaining a function that is strategically-focused and delivers value to the enterprise. Many Supply Management/Procurement leaders rely on training and development programs to improve their employees' performance. This report provides an overview of the current state of such programs for Supply Management/Procurement groups at global organizations.
The Supply Chain Finance Journey and Beyond
September 2017
Roberta J. Jennings
CAPS Research
Standard practice for supply management professionals who identify and implement ways to save money has been to focus on reducing costs of goods and services, negotiate the best pricing from suppliers, and operate more cost-effectively. More recently, supply chain financing has emerged as a sophisticated practice that can produce high-yielding results for both the supply management organization and their suppliers. In this new Critical Issues Report from CAPS Research, you will gain an understanding of supply chain financing practices as well as possible challenges you will face and how to overcome them. Case studies are included with examples of current companies who are leading the way in these practices.
Gifts and Entertainment Policy 2017
September 2017
Benchmarking Team
CAPS Research
It is a common practice for companies to give gifts and entertainment benefits to customers, strategic partners, and suppliers to strengthen business relationships and express gratitude. However, accepting gifts and entertainment, especially those offered frequently or that are of significant value, may create an actual or perceived conflict of interest or illicit payment. This report provides insight into current gift and entertainment policies of Supply Management/Procurement organizations from global organizations.
The Metrics of Supply Management (Cross-Industry) Report 2017
August 2017
Benchmarking Team
CAPS Research
The Metrics of Supply Management (Cross-Industry) Report provides information on thirty-four identified Key Performance Indicators (KPIs). Included are various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees. The report also has metrics on managed spend and operating efficiencies. Five industries and three sectors are broken out from the general population, allowing for supply management groups to see how they stack up against comparable organizations.
Managing Service Outsourcing Triad - An Excel-Based Approach
August 2017
Mei Li; Ph.D.;John Fowler, Ph.D.;Thomas Y. Choi, Ph.D.
Michigan State University;Arizona State University
A service outsourcing triad is composed of three nodes – a service buyer, a service supplier and the service buyer's end customer. To accompany a CAPS Research report on this subject, a customizable Excel-based tool has been developed to help quantify the impact monitoring has on single and multiple projects. This tool can be utilized by any service buying firm, but can be especially helpful for customer facing services. A detailed guide is provided in the full research report with instructions to help you put this tool to work, today! Related project documents are the Research Report providing the most comprehensive look at the research findings, conclusions, and recommended actions; and a Brief which lists the most salient points of the research findings. This study was funded, in-part, by The Center for Services Leadership at Arizona State University.
Managing Service Outsourcing Triad: Decision Tools and Strategies
August 2017
Mei Li; Ph.D.;John Fowler, Ph.D.;Thomas Y. Choi, Ph.D.
Michigan State University;Arizona State University
A service outsourcing triad is composed of three nodes – a service buyer, a service supplier and the service buyer's end customer – with three links between the node pairs. Mismanagement of any of these links can be a major risk, resulting in the possibility of increased costs, product defects and even lawsuits. In this new CAPS Research report, we detail the interdependencies among links between nodes and explore Service Triads and Service Diamonds. A customizable Excel-based tool has been developed to help quantify the impact monitoring has on single and multiple projects. This tool can be utilized by any service buying firm, but can be especially helpful for customer facing services. A detailed guide is provided with instructions to help you put this tool to work, today! This Research Report provides the most comprehensive look at the research findings, conclusions, and recommended actions. Related project documents are a Brief which lists the most salient points of the research findings; and an Excel-based tool. This study was funded, in-part, by The Center for Services Leadership at Arizona State University.
Future Procurement Talent 2017
August 2017
Research Team
CAPS Research
CPOs are deeply concerned about future talent/skillset requirements. This CPO Insights Report identifies the key emerging trends that will impact Procurement/Supply Management in the next decade, as well as the knowledge, skills, and abilities (KSAs) needed to address these trends. Associated plans for dealing with talent/skillset deficiencies and lacking KSAs are also reported.
Supplier Relationship Management Communications 2017
August 2017
Benchmarking Team
CAPS Research
Supplier Relationship Management (SRM) communications are part of an organized approach to help facilitate two-way communication between the buying company and its suppliers. This report details some of the channels (inbound and outbound) through which an organization will communicate with its suppliers, as well the frequency at which these communications occur across different organizations. Different methods will, understandably, be more appropriate and available for more frequent communications.
Investment Recovery Performance Benchmarking Highlights Report 2017
July 2017
Benchmarking Team
CAPS Research
This highlights report details the best practices identified by the Investment Recovery Association, and was developed to offer further insights into tthe investment recovery function at various organizations. Metrics included in the report range from the implementation of best practices to the percentage of investment recovery activities that are managed. the report also looks at important cost benefits, including one that observes that for each dollar spent to maintain an organization's investment recovery function, an average $21 is returned to that organization.
3D Printing and the Impact on Supply Chain Costs and Working Capital 2017
July 2017
Research Team
CAPS Research
3D printing is an additive manufacturing process that creates a physical object from a digital design. There are different 3D printing technologies and materials, but all are based on the same principle: a digital model is turned into a solid three-dimensional physical object by adding material layer-by-layer. 3D printing is still a relatively new technology. As a result, we found fewer companies had interest in this survey. At CAPS, we believe the interest in and actual use of 3D printing will only grow over time, and wanted to begin tracking data on the topic early-on in the adoption stage. Even if your organization does not use 3D printing, this short report can provide you with a framework to think about its future application and importance to your organization.
Investment Recovery Performance Metric Report 2017
July 2017
Benchmarking Team
CAPS Research
This report was developed in partnership with the Investment Recovery Association. In addition to the organizational information and operational benchmarks provided, there are a number of financial metrics related to the overall cost benefits of investment recovery programs as well as best practice implementation. One key metric shows that for every dollar of investment recovery operating expense, $21 is returned to the bottom line. Other benchmarks relate information about investment recovery services and processes, the effectiveness of program-related tools and technologies, and investment recovery staffing. Breakout reports include Investment Recovery Association Members, Oil & Gas Companies, All Utility Companies, Utility Companies with Revenue Greater than $5 Billion, and Utility Companies with Revenue Less than $5 Billion. Sixty-one companies provided data for this report.
Profile of a CPO Benchmarking Metric Report 2017
July 2017
Benchmarking Team
CAPS Research
Establishing roles and responsibilities can be a difficult task for any organization, and it all starts from the top on down. This metric report provides details on Chief Purchasing Officer (or equivalent) job responsibilities, character qualities, career trajectories, and forms of compensation.
Supply Chain Cost Saving Strategies - Establishing and Achieving Cost Saving Goals
June 2017
Lisa M. Ellram, Ph.D.;Wendy L. Tate, Ph.D.;Thomas Y. Choi, Ph.D.
Miami University;University of Tennessee;Arizona State University
Cost savings is one of the key priorities for all procurement. Are you meeting your companies cost savings goals? With continued developments in business analytics and data availability, new ways of setting and achieving cost savings targets are being realized and implemented. In this new research report we'll walk you through what cutting-edge approaches are being used to set and achieve cost saving goals, how these goals are measured and tracked, who gets involved in cost savings, and how firms meet targets in multiple categories. More than 10 case studies, with examples, are provided in this in-depth report. This Research Report provides the most comprehensive look at the research findings, conclusions, and recommended actions. A related project document is a Brief which lists the most salient points of the research findings.
Petroleum Industry Metric Benchmarking Report 2017
June 2017
Benchmarking Team
CAPS Research
This Metric Report provides an overview of the results of the survey created by and for procurement/supply management professionals from the Petroleum Industry. Results include benchmarks on spend, savings, supply management return on investment, category management, and warehousing.
Petroleum Industry Metric Benchmarking Report 2017 - Corporate Data
June 2017
Benchmarking Team
CAPS Research
Petroleum Industry Metric Benchmarking Report 2017 breakout report that includes data only from companies that reported Corporate Data.
Petroleum Industry Metric Benchmarking Report 2017 - Downstream Data
June 2017
Benchmarking Team
CAPS Research
Petroleum Industry Metric Benchmarking Report 2017 breakout that includes only data from companies that reported Downstream Operations.
Petroleum Industry Metric Benchmarking Report 2017 - Upstream Data
June 2017
Benchmarking Team
CAPS Research
Petroleum Industry Metric Benchmarking Report 2017 that contains data only from companies that reported Upstream Operations.
Supplier Anti-Corruption Due Diligence 2017
June 2017
Benchmarking Team
CAPS Research
Compliance with global anti-corruption laws, specifically the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, has taken on renewed importance. With settlements routinely including multiple countries and fines into the billions of dollars, maintaining a sound global compliance and anti-corruption due diligence program is essential to avoid drawn-out government investigations and significant financial penalties. The purpose of this report is to offer a glimpse into organizations’ anti-corruption due diligence practices.
Material Handling Rates 2017
June 2017
Benchmarking Team
CAPS Research
Material handling rates are the per unit cost of moving materials from one point to another. The exact calculation of this rate, starting with the specific items included in the material handling rate, will vary from organization to organization. The purpose of this report is to illustrate the different ways that organizations outline their material handling rate, if applicable.
Sourcing Marketing Spend Categories 2017
May 2017
Benchmarking Team
CAPS Research
More and more global companies are influencing, and managing, the sourcing of marketing services as a spend category. The purpose of this report is to present data on specific activities related to the sourcing of marketing services as a spend category, as well as gauge the level of maturity of respondent organizations.
Procurement Policies Benchmarking Highlights Report 2016
May 2017
Benchmarking Team
CAPS Research
This summary report features select benchmarks from the comprehensive metric report called “Procurement Policies 2016.” Its purpose is to present relevant benchmarks in chart format for CAPS member companies. The comprehensive metric report, which includes all of the study benchmarks, is also available to CAPS member companies. There were 84 companies that provided data for the original survey.
New Measures of Value 2017
May 2017
Research Team
CAPS Research
As part of an ongoing effort to better understand how companies view and measure value creation beyond traditional savings and productivity, CAPS Research asked its member company CPOs about their internal efforts to establish new measurements of value. Responses reflect the frequency of evaluating potential value creation initiatives, as well as specific metrics monitored for cost savings.
Talent Skills Gap 2017
May 2017
Research Team
CAPS Research
Talent management is becoming a growing concern for organizations as their workforce is undergoing a generational shift. To better understand these concerns, CAPS Research asked the CPOs of its member companies about possible gaps in knowledge, skills, and abilities for members of their supply management groups.
Emerging Procurement Technology: Data Analytics and Cognitive Analytics
May 2017
Robert B. Handfield, Ph.D.;Thomas Choi, Ph.D.;Jaikishen Venkatraman;Shweta Murthy
North Carolina State University;Arizona State University
Where are you in the analytics journey? If you are like most major business organizations, you are near the beginning of this journey. The rise of the next wave of data analytics and cognitive analytics will probably affect procurement/supply chain management more than other business areas in the coming decade. What are the fundamentals you need to get in place today to prepare your company for this whole new world of data analytics? Through this new research report by CAPS Research you will gain an understanding of the future landscape, what future technologies might be able to do and what you need to do today to prepare yourself for tomorrow. This Research Report provides the most comprehensive look at the research findings, conclusions, and recommended actions. A related project document is a Brief which lists the most salient points of the research findings.
Health Care Sector Supply Chain Research Consortium Trends Report 2017
April 2017
Benchmarking Team
CAPS Research
The purpose of this report is to identify the level of importance of key trends in the U.S. Health Care value chain. Participants helped to identify which of the thirty-four trends included in the survey would be of the utmost importance to their supply chain organizations in the near future. The trends are divided into the following eight categories: Economic, Integration, Technology, Management, Organization, Reform, Supplier Relationship Management, and Value Based Purchasing.
Business Partner Engagement Benchmarking Report 2017
April 2017
Benchmarking Team
CAPS Research
Aligning the Supply Management Group with the goals and needs of its internal business partners (also referred to as business owners or internal customers) continues to be a key priority for strategically focused supply management leaders. This report details specific activities that typically show the level of engagement with this key stakeholder group.
Sourcing Services and Indirect Spend Benchmarking Highlights Report 2016
April 2017
Benchmarking Team
CAPS Research
This summary report features select benchmarks from the comprehensive metric report called "Sourcing Services and Indirect Spend 2016." Services, indirect, and non-traditional categories of spend typically include categories such as marketing, professional services, travel, IT (services and hardware), and others. The purpose of this report is to present relevant benchmarks in chart format for CAPS member companies. The comprehensive metric report, which includes all of the study benchmarks, is also available to CAPS member companies.
Sourcing Services and Indirect Spend Benchmarking 2016 - The Curve Report
April 2017
Benchmarking Team
CAPS Research
This detailed report features select benchmarks from the comprehensive metric report called "Sourcing Services and Indirect Spend 2016." Services, indirect, and non-traditional categories of spend typically include categories such as marketing, professional services, travel, IT (services and hardware), and others. The purpose of this report is to present selected benchmarks in an array of chart formats for CAPS member companies. These charts will offer a unique look at the data that is not possible through other formats. The comprehensive metric report, which includes all of the study benchmarks, is also available to CAPS member companies.
Measuring and Managing Supplier Innovation
April 2017
Tingting Yan, Ph.D.;Kevin J. Dooley, Ph.D.
Wayne State University;Arizona State University
More than 90 percent of CPOs think it's important to measure supplier innovation, but only 25 percent actually have a system to do so. Supplier innovation is critical to competitive advantage and can help increase revenue and open new markets, improve quality and timeliness, and reduce costs, but how do you go about measuring it? "Measuring and Managing Supplier Innovation," a new CAPS study will give you the tools to assess suppliers' innovation performance and potential, and assess your organization's ability to capture value from supplier innovation. This Research Report provides the most comprehensive look at the research findings, conclusions, and recommended actions. A related project document is a Brief which lists the most salient points of the research findings.
Procurement Policies Benchmarking Metric Report 2016 - Aerospace & Defense Industry
March 2017
Benchmarking Team
CAPS Research
The purpose of this report is to provide an overview of procurement policies at organizations that participated in the survey. The report includes details about these policies, as well as organizations' perceived level of compliance to their established policies. This industry breakout report details the responses from members of the Aerospace & Defense industry.
Procurement Policies Benchmarking Metric Report 2016 - Industrial Manufacturing Industry
March 2017
Benchmarking Team
CAPS Research
The purpose of this report is to provide an overview of procurement policies at organizations that participated in the survey. The report includes details about these policies, as well as organizations' perceived level of compliance to their established policies. This industry breakout report details the responses from members of the Industrial Manufacturing industry.
Procurement Policies Benchmarking Metric Report 2016 - Utilities Industry
March 2017
Benchmarking Team
CAPS Research
The purpose of this report is to provide an overview of procurement policies at organizations that participated in the survey. The report includes details about these policies, as well as organizations' perceived level of compliance to their established policies. This industry breakout report details the responses from members of the Utilities industry.
Blockchain 2017
March 2017
Research Team
CAPS Research
Background: CAPS Research asked CPOs from its member companies about whether or not they are familiar with blockchain, and if so, to what degree their organization is currently using blockchain. A blockchain is a shared, immutable ledger for recording a history of transactions that occur across distributed computing platforms. Blockchains provide a secure means for authenticating transactions without the need for a central authority approving the veracity of the transactions. They also provide full, end-to-end visibility of transactions within the business network.  
Supply Chain Mapping Benchmarking Metric Report 2017
March 2017
Benchmarking Team
CAPS Research
Effectively managing complex, multi-tier supply networks is a critical activity for today’s Supply Management Group. Knowing where and how suppliers are situated in relation to your organization and customers is important information that can be used to maximize the strategic value of suppliers while also mitigating potential risks. This benchmarking metric report details whether or not organizations conduct supply chain mapping, and if so, to what degree.   Supply Chain Mapping typically uses a graphical tool that creates a representation of the supply network and maps your organizations products/services to specific customers.
Building the Research Pipeline
March 2017
Mikaella Polyviou, Ph.D.
Arizona State University
Four top topics emerged from the research pipeline meeting in January 2017: 3-D printing, data infrastructure, data analytics team composition, and measuring risk. These topics are summarized in this meeting brief.
Currency and Procurement: Mitigate Risk and Reduce Costs
January 2017
Benchmarking Team
CAPS Research
This CPO Insights explores the various ways organizations manage currency exchange. The report includes percentage of respondents that pay in foreign currency, how they manage foreign currency payments, the use of formal metrics, and more.
Sourcing Services and Indirect Spend Benchmarking Metric Report 2016 - Financial Services Industry
January 2017
Benchmarking Team
CAPS Research
Services, indirect, and non-traditional spend typically includes categories such as marketing, professional services, travel, IT (services and hardware), HR, facilities, MRO, capital equipment and others. The purpose of this report is to provide a baseline of metrics to track year-over-year trends in the sourcing of services, indirect, and non-traditional spend categories. This breakout report provides the specific KPIs for only the Financial Services Industry.
Sourcing Services and Indirect Spend Benchmarking Metric Report 2016 - Industrial Manufacturing Industry
January 2017
Benchmarking Team
CAPS Research
Services, indirect, and non-traditional spend typically includes categories such as marketing, professional services, travel, IT (services and hardware), HR, facilities, MRO, capital equipment and others. The purpose of this report is to provide a baseline of metrics to track year-over-year trends in the sourcing of services, indirect, and non-traditional spend categories. This breakout report provides the specific KPIs for only the Industrial Manufacturing Industry.
Sourcing Services and Indirect Spend Benchmarking Metric Report 2016 - Utilities Industry
January 2017
Benchmarking Team
CAPS Research
Services, indirect, and non-traditional spend typically includes categories such as marketing, professional services, travel, IT (services and hardware), HR, facilities, MRO, capital equipment and others. The purpose of this report is to provide a baseline of metrics to track year-over-year trends in the sourcing of services, indirect, and non-traditional spend categories. This breakout report provides the specific KPIs for only the Utilities Industry.
DOE NNSA Contractors Benchmarking Metric Report 2016
January 2017
Benchmarking Team
CAPS Research
The DOE/NNSA (Department of Energy/National Nuclear Safety Administration) Contractors Procurement Performance Benchmarking Metric Report for 2016 contains key procurement performance measures including organizational structure, professional development, financial information, and supplier measures. Data was provided by 19 different DOE and NNSA laboratories (or sites). Key measures include spend per procurement employee, operating costs per procurement employee, and supplier diversity goals and attainment. Other measures include customer satisfaction surveys and procurement card use.
Supply Chain Safety in the 21st Century
January 2017
Roberta J. Jennings
CAPS Research
Organizations across many sectors, but especially those in construction/engineering, industrial manufacturing, and petrochemical, continually look at improving safety within their own processes and procedures but also driving it into the supply chain. In this third iteration of a Critical Issue Exchange devoted to safety, companies met again to look at how their peers deal with the challenges posed by a worldwide base of suppliers. How can a procurement organization ensure that they are reinforcing with their suppliers the high value that the organization places on safety? What processes are in place in the best organizations? What new technologies can help them with safety in terms of tools and on-site resources that provide data, monitor conditions, or automate processes? This report captures the lessons learned from the third, day-long discussion by professionals and safety experts at the CAPS Research Critical Issue Exchange.
Procurement Delegation of Authority 2017
January 2017
Benchmarking Team
CAPS Research
This report illustrates the results of a recent CPO Insights survey that was designed to find out how organizations structure their procurement delegation of authority. The results show how certain spend limits apply to different positions within the supply management hierarchy, examples of situations where the delegation of authority is not followed, and allowable exceptions to bypass the procurement delegation of authority.
Using FOB Origin to Manage Inbound Logistics Costs 2017
January 2017
Benchmarking Team
CAPS Research
Effectively managing the costs of inbound logistics typically means buying goods under the shipping designation of FOB Origin. While this designation requires more complexity and effort for inbound logistics, for many organizations the benefits outweigh the added effort. This report highlights the practices of organizations that use FOB Origin for their inbound logistics.
Purchasing Operations Centers Benchmarking Metric Report 2016
January 2017
Benchmarking Team
CAPS Research
The Purchasing Operations Center (POC) at many companies handles the transactional or tactical elements of the Purchase Order (PO) process. Most activities center around the PO transaction (i.e. creating, amending, revisions), and sometimes includes issuing RFx’s. This report offers insights into how organizations operate their POCs, or similarly dedicated group.
Payment Terms 2016
January 2017
Benchmarking Team
CAPS Research
A CAPS Research member company requested information on typical net payment terms used by other global organizations. A survey asking two questions (company industry and typical net payment terms) was distributed at the CAPS Executive Roundtable North America. The findings are reflected in this report.
Gender and the Supply Management Group 2016
January 2017
Benchmarking Team
CAPS Research
A short survey addressing the topic of gender and the supply management group was distributed at the CAPS Executive Roundtable North America. The findings in this short report provide a snapshot of the efforts of global organizations to recruit and retain women into their workforces.
Procurement Policies Benchmarking Metric Report 2016
January 2017
Benchmarking Team
CAPS Research
The purpose of this report is to provide an overview of procurement policies at organizations that participated in the survey. The report includes details about these policies, as well as organizations' perceived level of compliance to their established policies.
Sourcing Services and Indirect Spend Benchmarking Metric Report 2016
December 2016
Benchmarking Team
CAPS Research
Services, indirect, and non-traditional spend typically includes categories such as marketing, professional services, travel, IT (services and hardware), HR, facilities, MRO, capital equipment and others. The purpose of this report is to provide a baseline of metrics to track year-over-year trends in the sourcing of services, indirect, and non-traditional spend categories.
Successfully Managing Supplier Quality
December 2016
Mary Siegfried
CAPS Research
Getting ahead of supplier quality is a demanding task. Based on a Critical Issue Exchange co-hosted by a member company with CAPS Research, this report summarizes the key takeaways from the discussion and presentations by practitioners managing Supplier Quality within their organizations. A robust quality program requires monitoring, assessing, and evaluating suppliers. Great programs allow all parties to find and correct problems before they grow into large ones. Adept organizations sift available data to translate it into actionable items. Two case studies within this report show how each organization created a successful program that reduced costs, developed strong relationships, and fostered the belief that everyone has a stake in supplier quality.
Supplier Diversity Program Performance Benchmarking Summary Report 2016
December 2016
Benchmarking Team
CAPS Research
This report summarizes the findings of the previously published Supplier Diversity Program Performance Benchmarking Metric Report 2016, and highlights select metrics from that comprehensive report in chart format. Emphasis on supplier diversity has increased in recent years, as has the need to address the challenges faced when trying to define the importance and value of a diverse supply base.
Procure-to-Pay Metrics Benchmarking Metric Report 2016
December 2016
Benchmarking Team
CAPS Research
The purpose of this study is to help procurement/supply management professionals gain new insight into the metrics most commonly used by other organizations to measure their procure-to-pay (also known as P2P) process. The findings and benchmarks can be used to support any existing or planned review and revision efforts of current procure-to-pay metrics, or act as a template for organizations using such metrics for the first time. Compared to the report from 2015, this report offers 6 new metrics for organizations as well as a list of other metrics that may be less commonly used but still relevant in the discussion of measuring the procure-to-pay process.
Managing Supplier Quality Benchmarking Metric Report 2016 - Aerospace & Defense Industry
November 2016
Benchmarking Team
CAPS Research
Managing supplier quality is a priority for most global organizations. The impact and potential risk of poor quality products, services, processes, and/or performance can be far-reaching in the value chain. This breakout report provides the specific KPIs for only the Aerospace & Defense Industry.
Managing Supplier Quality Benchmarking Metric Report 2016 - Industrial Manufacturing Industry
November 2016
Benchmarking Team
CAPS Research
Managing supplier quality is a priority for most global organizations. The impact and potential risk of poor quality products, services, processes, and/or performance can be far-reaching in the value chain. This breakout report provides the specific KPIs only for the Industrial Manufacturing Industry.
Managing Supplier Quality Benchmarking Metric Report 2016 - Petroleum Industry
November 2016
Benchmarking Team
CAPS Research
Managing supplier quality is a priority for most global organizations. The impact and potential risk of poor quality products, services, processes, and/or performance can be far-reaching in the value chain. This breakout report provides the specific KPIs for only the Petroleum Industry.
Managing Supplier Quality Benchmarking Metric Report 2016 - Utilities Industry
November 2016
Benchmarking Team
CAPS Research
Managing supplier quality is a priority for most global organizations. The impact and potential risk of poor quality products, services, processes, and/or performance can be far-reaching in the value chain. This breakout report provides the specific KPIs only for the Utilities Industry.
Cognitive Procurement
November 2016
Roberta J. Jennings
CAPS Research
We're living in an interesting age. Many businesses are realizing, as they strive to gain competitive advantage, that the next new "natural" resource isn't something from the ground. It's data. As a society, we're generating unprecedented amounts of structured and unstructured data, and the technology industry has found ways to capture it all. However, merely capturing the data doesn't provide any benefit unless it can be put to use for progress or improvement. Many would say we are "data rich, but knowledge poor." Enter the possibility of cognitive tools — specifically cognitive procurement cognitive systems.
Price Benchmarking 2016
November 2016
Benchmarking Team
CAPS Research
A CAPS Research member company wanted to better understand how companies use and collect price benchmarking information. A SnapShots survey was distributed at the October 2016 CAPS North American Executive Roundtable event. The results of the survey are found in this short report.
Managing Supplier Quality Benchmarking Summary Report 2016
November 2016
Benchmarking Team
CAPS Research
Managing supplier quality is a priority for most global organizations. The impact and potential risk of poor quality products, services, and/or performance can be far-reaching in the value chain. This summary report highlights the findings from the previously published metric report.
Procurement Analytics 2016
November 2016
Benchmarking Team
CAPS Research
Procurement Analytics is an emerging tool that is becoming more necessary to help drive value to the enterprise, especially in the decision-making process. This report identifies current applications and the need for procurement analytics at organizations. The highest need reported for deeper analytic insights was spend analysis, with the highest importance rating as spend data.
Managing Supplier Quality Benchmarking Metric Report 2016
November 2016
Benchmarking Team
CAPS Research
Managing supplier quality is a priority for most global organizations. The impact and potential risk of poor quality products, services, processes, and/or performance can be far-reaching in the value chain. This metric report offers insights into how organizations structure their supplier quality efforts and their use of supplier quality data, physical supplier audits, having dedicated supplier quality employees, plus more.
Supply Management Metrics (Cross-Industry) Summary Report 2016
October 2016
Benchmarking Team
CAPS Research
This summary report takes a closer look at the 2016 Supply Management Metrics Report, offering visual representations of the data, as well as a closer look at select metrics. Find out how you compare to other organizations when looking at areas such as the percent of spend that is managed/controlled, operating expense per supply management employee, and the return-on-invesment of the supply management group.
M&A Activity and the CPO
October 2016
Benchmarking Team
CAPS Research
CAPS Research asked CPOs from its member companies about their Mergers & Acquisitions (M&A) activity and their CPO's involvement in that activity. The participants were also asked about the metrics used to measure the success of the integration as well as those used to measure the performance of the CPO and the Supply Management Group. Several companies were cited as demonstrating best practices in how their CPOs are involved in M&A Activity.
Healthcare GPOs: The Journey from Tactical Supply Chain to a Strategic Asset
October 2016
Pete Allen
Vizient
The first Group Purchasing Organization (GPO) started in Chicago in 1977 to aggregate and leverage purchasing volume for discounts from manufacturers, distributors and vendors. Acting on behalf of healthcare providers, GPOs can realize savings and increase efficiencies. Vizient is a non-profit organization with 3100 members, 1600 vendor relationships, and a portfolio of 3300 contracts. While purchasing is a core part of the business, serving 95% of academic medical centers, Vizient is now the fifth largest consulting company in healthcare, and has a massive analytics business with access to data on purchases by 16,000 healthcare systems in 14 different countries and patient-level detail in a clinical database. As increasing healthcare costs force hospitals to consolidate and cut administrative expenses, GPOs like Vizient are playing an increasingly important role in purchasing for hospitals, data analysis, trending, member advocacy, education and budgeting.
The New Supply Chain - THE Competitive Advantage
October 2016
Todd Snelgrove
SKF Group
What is the next frontier beyond Total Cost and Should-Cost strategies? In this presentation, Todd Snelgrove of SKF makes the case for focusing on Total Profit, and looking through the eyes of the ultimate customer/consumer. The ultimate goal is for the buying organization to look all the way through the supply chain, always focused on discovering where profit can be found. This strategy has changed the way SKF operates.
Procurement Analytics
October 2016
Robert B. Handfield, Ph.D.
North Carolina State University
Consider this: 90 percent of the world's entire data has been produced in the last two years, and it's mostly unstructured. So, how will the procurement professional begin to tap into this rich stream of data to help make better, faster, smarter procurement decisions? Professor Rob Handfield of North Carolina State University presents information on the mindset and skill sets required to begin to broach the brave new world of cognitive procurement in this presentation.
Managing Risk in the Supply Chain – Preventing Fraud
October 2016
Dennis Dienno
Dell Technologies
Dell works hard to diminish the amount of service fraud their company experiences. Industry experts estimate that 10 – 15% ($10 Billion industry wide) of service demand is fraudulent. Dell has developed dedicated teams and robust programs to pursue and prevent warranty claims on Dell products that were never purchased, and excessive or unneeded entitled warranty claims to obtain service parts or upgrades. Dennis Dienno describes the journey of developing the service fraud program, included the needed change in thinking the use of analytics, the integration of procurement and supply chain in the overall fraud prevention effort, and the launch of their successful pilot program.
Supply Base Cybersecurity
October 2016
Benchmarking Team
CAPS Research
CAPS Research asked CPOs from its member companies about their general cybersecurity policies. The report details the frequency of policy updates as well as who leads the cybersecurity operation and how it is paid for. The report also explores the use of mobile phones connecting to the company's network and the controls in place for network security.
Travel & Entertainment (T&E) Expense Management Benchmarking Summary Report 2016
September 2016
Benchmarking Team
CAPS Research
The T&E spend category is one of the largest controllable expenses for most global organizations. Improving corporate T&E policy, sourcing and operations is, therefore, a top priority for many supply management and procurement professionals. Find out how you compare to other organizations with your spend, as well as managing travel operations. This summary report highlights key data taken from the 2016 Travel & Entertainment Expense Management Metric Report.
Managing Supplier Quality
August 2016
Research Team
CAPS Research
CAPS Research asked CPOs from its member companies about how they manage supplier quality in their supply base. The report details how supplier quality responsibilities are distributed within entire organizations, as well as specific rationales for choosing each distribution. Respondents also self-assessed the level of maturity of their supplier quality efforts, providing insights into whether these organizations consider their supplier quality issue responses as either preventive or reactive in nature.
2016 Financial Services Industry Benchmarking Report
August 2016
Benchmarking Team
CAPS Research
The 2016 Financial Services Industry Supply Management Performance Benchmarking Report shows that 54 percent of organizations reported that the supply management group is directly responsible for supplier risk management and 67 percent include Tier 2 suppliers in their supplier risk program. These and many other metrics are found in the report that was created using data from a survey created with input from procurement and supply management professionals from financial services companies.
Supply Management Metrics (Cross-Industry) Report 2016 - Aerospace & Defense Industry
July 2016
Benchmarking Team
CAPS Research
This Aerospace & Defense Industry breakout report provides an industry-specific view of the Supply Management Metrics (Cross-Industry) Report. It provides information on thirty-one identified Key Performance Indicators (KPIs). New this year are various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees.
Supply Management Metrics (Cross-Industry) Report 2016 - Diversified Foods & Beverages Industry
July 2016
Benchmarking Team
CAPS Research
This Diversified Foods & Beverages Industry breakout report provides an industry-specific view of the Supply Management Metrics (Cross-Industry) Report. It provides information on thirty-one identified Key Performance Indicators (KPIs). New this year are various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees.
Supply Management Metrics (Cross-Industry) Report 2016 - Engineering & Construction Industry
July 2016
Benchmarking Team
CAPS Research
This Engineering & Construction Industry breakout report provides an industry-specific view of the Supply Management Metrics (Cross-Industry) Report. It provides information on thirty-one identified Key Performance Indicators (KPIs). New this year are various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees.
Supply Management Metrics (Cross-Industry) Report 2016 - Financial Services Industry
July 2016
Benchmarking Team
CAPS Research
This Financial Services Industry breakout report provides an industry-specific view of the Supply Management Metrics (Cross-Industry) Report. It provides information on thirty-one identified Key Performance Indicators (KPIs). New this year are various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees.
Supply Management Metrics (Cross-Industry) Report 2016 - Industrial Manufacturing Industry
July 2016
Benchmarking Team
CAPS Research
This Industrial Manufacturing Industry breakout report provides an industry-specific view of the Supply Management Metrics (Cross-Industry) Report. It provides information on thirty-one identified Key Performance Indicators (KPIs). New this year are various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees.
Supply Management Metrics (Cross-Industry) Report 2016 - Petroleum Industry
July 2016
Benchmarking Team
CAPS Research
This Petroleum Industry breakout report provides an industry-specific view of the Supply Management Metrics (Cross-Industry) Report. It provides information on thirty-one identified Key Performance Indicators (KPIs). New this year are various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees.
Supply Management Metrics (Cross-Industry) Report 2016 - Utilities Industry
July 2016
Benchmarking Team
CAPS Research
This Utilities Industry breakout report provides an industry-specific view of the Supply Management Metrics (Cross-Industry) Report. It provides information on thirty-one identified Key Performance Indicators (KPIs). New this year are various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees.
Supplier Diversity Program Performance Benchmarking 2016 - Aerospace & Defense
July 2016
Benchmarking Team
CAPS Research
This Aerospace & Defense Industry breakout is from the 2016 Supplier Diversity Program Performance Report. Key metrics include supplier diversity spend as a percent of managed spend and goals and spend in each socioeconomic category. New this year is a more strategic view of the diversity programs.
Supplier Diversity Program Performance Benchmarking Report 2016 - Financial Services
July 2016
Benchmarking Team
CAPS Research
This Financial Services Industry breakout is from the 2016 Supplier Diversity Program Performance Report. Key metrics include supplier diversity spend as a percent of managed spend and goals and spend in each socioeconomic category. New this year is a more strategic view of the diversity programs.
Supplier Diversity Program Performance Benchmarking Report 2016 - Health Care
July 2016
Benchmarking Team
CAPS Research
This Health Care Industry breakout is from the 2016 Supplier Diversity Program Performance Report. Key metrics include supplier diversity spend as a percent of managed spend and goals and spend in each socioeconomic category. New this year is a more strategic view of the diversity programs.
Supplier Diversity Program Performance Benchmarking Report 2016 - Industrial Manufacturing
July 2016
Benchmarking Team
CAPS Research
This Industrial Manufacturing Industry breakout is from the 2016 Supplier Diversity Program Performance Report. Key metrics include supplier diversity spend as a percent of managed spend and goals and spend in each socioeconomic category. New this year is a more strategic view of the diversity programs.
Supplier Diversity Program Performance Benchmarking Report 2016 - Utilities
July 2016
Benchmarking Team
CAPS Research
This Utilities Industry breakout is from the 2016 Supplier Diversity Program Performance Report. Key metrics include supplier diversity spend as a percent of managed spend and goals and spend in each socioeconomic category. New this year is a more strategic view of the diversity programs.
Supplier Innovation - CPO Insights
July 2016
Research Team
CAPS Research
CAPS Research asked CPOs from its member companies about how they view potential for innovation in their suppliers. Respondents offered their take on both the importance of this potential for innovation in their suppliers, as well as an assessment of how their current organization evaluates supplier innovation performance.
Supplier Diversity Program Performance Benchmarking Report 2016
July 2016
Benchmarking Team
CAPS Research
The 2016 update to the highly acclaimed Supplier Diversity Program Performance Report is now available. Key metrics include supplier diversity spend as a percent of managed spend and goals and spend in each socioeconomic category. New this year is a more strategic view of the diversity programs. The top three drivers behind having a supplier diversity program are corporate responsibility, compliance, and regulations. Challenges and barriers facing organizations when measuring the value of supplier diversity and communicating that value are also explored.
Supply Management Metrics (Cross-Industry) Report 2016
July 2016
Benchmarking Team
CAPS Research
The Supply Management Metrics (Cross-Industry) Report provides information on thirty-one identified Key Performance Indicators (KPIs). New this year are various headcount ratios for the supply management group, as well as an array of metrics to assess the cost savings generated by supply management employees. Seven industries and three sectors are broken out from the general population, allowing for supply management groups to see how they stack up against comparable organizations.
Petroleum Industry Metric Benchmarking Report 2016
June 2016
Benchmarking Team
CAPS Research
This Metric Report provides an overview of the survey results and includes benchmarks on spend, savings, supply management return on investment, as well as new benchmarks on contract management and warehousing.
Petroleum Industry Metric Benchmarking Report 2016 - Corporate Group
June 2016
Benchmarking Team
CAPS Research
The Corporate Group benchmarking report corresponds to the Petroleum Industry Metric Benchmarking Report published in June, 2016. This report, however, includes only data provided by the petroleum (oil & gas) companies who reported Corporate Group as an operational component.
Petroleum Industry Metric Benchmarking Report 2016 - Downstream
June 2016
Benchmarking Team
CAPS Research
The Downstream Operations benchmarking report corresponds to the Petroleum Industry Metric Benchmarking Report published in June 2016. This report, however, includes only data provided by the petroleum (oil & gas) companies that reported Downstream as an operational component. Downstream operations are commonly known as Refining & Marketing.
Petroleum Industry Metric Benchmarking Report 2016 - Upstream
June 2016
Benchmarking Team
CAPS Research
The Upstream Operations benchmarking report corresponds to the Petroleum Industry Metric Benchmarking Report. However, this report includes only data provided by the petroleum (oil & gas) companies who reported Upstream as an operational component. Upstream operations are commonly known as Exploration and Production (E&P).
New Measurements of Value
June 2016
Research Team
CAPS Research
CAPS Research asked CPOs from its member companies about how they view and measure value creation beyond traditional savings and productivity. More and more supply management groups are looking for ways to enhance the value they deliver to their internal customers and key stakeholders. Responses reflect the frequency of evaluating potential value creation initiatives, as well as specific metrics monitored for cost savings.
Migrating ERP Systems to the Cloud
June 2016
Research Team
CAPS Research
CAPS Research asked CPOs from its member companies about how supply management/procurement groups are migrating their enterprise resource planning (ERP) systems to the cloud. Many large global organizations are grappling with whether they should take the leap and migrate their ERP systems to the cloud or maintain their current systems. Information about cycle time for the migration, as well as individual modules that have been migrated, can be found within this report.
Futures Study 2020 - Overview
June 2016
Thomas J. Kull, Ph.D.;Thomas Y. Choi, Ph.D.;Rama Srinivasan, Ph.D., M.B.A.
Arizona State University
This report addresses the major issues and initiatives the supply management profession can expect 5 years into the future. Building on past CAPS Research "futures" studies, the results of this study should help supply management professionals understand potential factors that will impact their business models and change expectations for the supply function. Ultimately, the study should give valuable information that supply management professionals can use in discussion with the leadership of their company when developing and deploying supply strategies for the coming years. This document provides an overview of the research project and includes an introduction to the project. Other reports (which may only be available to CAPS Research member companies) include the Research Report that provides the most comprehensive look at the research findings, lessons learned and observations and a Brief which lists the most salient points of the research findings.
Futures Study 2020
June 2016
Thomas J. Kull, Ph.D.;Thomas Y. Choi, Ph.D.;Rama Srinivasan, Ph.D., M.B.A.
Arizona State University
This report addresses the major issues and initiatives the supply management profession can expect five years into the future. Building on past CAPS Research "futures" studies, the results of this study should help supply management professionals understand potential factors that will impact their business models and change expectations for the supply function. Ultimately, the study should give valuable information that supply management professionals can use in discussion with the leadership of their company when developing and deploying supply strategies for the coming years. This Research Report provides the most comprehensive look at the research findings, conclusions, and recommended actions. A related project document is a Brief which lists the most salient points of the research findings.
Managing Your Supply Base to Comply with Cyber Security
May 2016
Richard A. Boyle
CAPS Research
Cyber security attacks are a growing concern, in every industry sector. Procurement professionals are increasing and heavily involved in securing their own networks and making sure that suppliers bring no vulnerabilities to them as they interface with the buying organization. Subject-matter experts from aerospace-defense and other industries reviewed at a CAPS Research Critical Issue Exchange best practices and current strategies, as well as government regulations. This report reviews the lessons learned from new methods to make networks more secure to developing "kill chains" that thwart attackers.
Investment Recovery Performance Benchmarking Summary Report 2015
May 2016
Benchmarking Team
CAPS Research
This summary report details the best practices identified by the Investment Recovery Association, and was developed to offer further insights into the investment recovery function at various organizations. Metrics included in the report range from the implementation of best practices to the percentage of investment recovery activities that are managed. The report also looks at important cost benefits, including one that observes that for each dollar spent to maintain an organization's investment recovery function, on average $49 is returned to that organization.
Futures Survey 2020
April 2016
Thomas J. Kull, Ph.D.;Thomas Y. Choi, Ph.D.
Arizona State University
This presentation offers an overview of the results of the recent futures survey 2020. The focus of supply management professionals seems to be shifting from contending with upstream supply chain disruptions to managing downstream customer demands and integrating with other internal functional areas.
Fault Lines in the Global Economic Landscape
April 2016
Arvind Singh
University of Arizona
What should the astute CPO of a Global 1000 company need to be paying attention to in the 2016 global economy? Professor Singh, a leading economist, answered these with his focus on six key questions. 1) What will be the short-term U.S. monetary policy? 2) Can India and China lift up the “BRIC”s? 3) What is the near-term forecast for the decline in oil prices and the effect on global trade? 4) Will the US dollar’s strength continue in global currency markets? 5) Is world trade turning the corner and ramping up? 6) Is Britain going to exit (“BRexit”) the European Union?
Travel and Entertainment (T&E) Expense Management Benchmarking Metric Report 2016
April 2016
Benchmarking Team
CAPS Research
The Travel and Entertainment spend category is one of the largest controllable expenses for most global organizations. Improving corporate T&E policy, sourcing and operations is, therefore, a top priority for many supply management and procurement professionals. This report includes benchmarks and metrics on topics that are important for managing an effective T&E program.
Safety in the Supply Chain: Part 2
March 2016
Richard A. Boyle
CAPS Research
Many organizations – especially those in utilities, construction/engineering, industrial manufacturing, and petroleum – have made safety a top priority within their company. The topic is of such importance to them that they reconvened in a second Critical Issue Exchange to discuss how they have improved the standards of safety both within their internal programs and within their suppliers’ programs. This report captures the key points and lessons learned from the second, day-long discussion of this vital topic by procurement/supply management professionals and safety experts at a CAPS Research Critics Issues Exchange. Note: The first "Safety in the Supply Chain" report was authored by Roberta Jennings and was published in November 2014.
Supply Chain Costing Strategies - Establishing and Achieving Cost Goals
March 2016
Research Team
CAPS Research
Background: CAPS Research asked CPOs from its member companies about how they establish goals for purchasing-related cost savings or reductions, and what approaches are most successful. With the emergence of business analytics and more data availability in the last five years, companies may be taking advantage of these tools and developing new approaches to setting cost savings goals or targets, for both materials (e.g., raw materials, parts, modules, etc.) and services (e.g., backroom, maintenance, legal, etc.). The responses are in this report.
Investment Recovery 2015 All Other Industries Breakout Report
February 2016
Benchmarking Team
CAPS Research
Investment Recovery 2015 breakout report containing data from all industries except Oil & Gas and Utilities.
Investment Recovery 2015 All Utilities Breakout Report
February 2016
Benchmarking Team
CAPS Research
Investment Recovery 2015 breakout report containing data from all utilities.
Investment Recovery 2015 Investment Recovery Association Members Breakout Report
February 2016
Benchmarking Team
CAPS Research
Investment Recovery 2015 breakout report including data from Investment Recovery Association Members.
Investment Recovery 2015 Oil and Gas Breakout
February 2016
Benchmarking Team
CAPS Researcch
Investment Recovery 2015 breakout report containing data from Oil & Gas companies.
Investment Recovery 2015 Utilities with Revenue Greater than $5B Breakout Report
February 2016
Benchmarking Team
CAPS Research
Investment Recovery 2015 breakout report containing data from utilities with revenue greater than $5B.
Investment Recovery 2015 Utilities with Revenue Less than $5B Breakout Report
February 2016
Benchmarking Team
CAPS Research
Investment Recovery 2015 breakout report containing data from utilities with revenue less than $5B.
Managing Supplier Contract Audits Benchmarking Metric Report 2016
February 2016
Benchmarking Team
CAPS Research
This report provides an overview of the many ways that organizations manage their supplier contract auditing activities. The results of supplier contract audits can be used to determine whether suppliers are abiding by the terms and conditions of their contracts, as well as to determine if controls and processes are being followed internally by key stakeholders.
Investment Recovery Performance Metric Report 2015
February 2016
Benchmarking Team
CAPS Research
This report was developed in partnership with the Investment Recovery Association. In addition to the organizational information and operational benchmarks provided, there are a number of financial metrics related to the overall cost benefits of investment recovery programs as well as best practice implementation. One key metric shows that for every dollar of investment recovery operating expense, $49 is returned to the bottom line. Other benchmarks relate information about investment recovery services and processes, the effectiveness of program-related tools and technologies, and investment recovery staffing. Forty-two companies provided data for this report
Supply Chain Financing: Funding the Supply Chain and the Organization - Executive Report
February 2016
Dale S. Rogers, Ph.D.; Rudolf Leuschner, Ph.D.;Thomas Y. Choi, Ph.D.
Arizona State University;Rutgers University
This report recognizes an opportunity for supply professionals to expand their role into financial issues, as they can significantly alter how relationships with suppliers are managed. The study highlights areas of collaboration, especially involving the corporate finance function and treasury, in addition to suppliers and even customers. Some of the tools presented in this report can bring significant value to the organization because they provide access to liquidity, which is often difficult to access otherwise. This Executive Report is a condensed version of the larger report. The other documents in the series include the Focus Study which provides the most comprehensive look at the research findings, conclusions, and recommended actions and an Executive Brief, which lists the most salient points of the research findings.
Supply Chain Financing: Funding the Supply Chain and the Organization - Executive Overview
February 2016
Dale S. Rogers, Ph.D.; Rudolf Leuschner, Ph.D.;Thomas Y. Choi, Ph.D.
Arizona State University;Rutgers University
This report recognizes an opportunity for supply professionals to expand their role into financial issues, as they can significantly alter how relationships with suppliers are managed. The study highlights areas of collaboration, especially involving the corporate finance function and treasury, in addition to suppliers and even customers. Some of the tools presented in this report can bring significant value to the organization because they provide access to liquidity, which is often difficult to access otherwise. This document provides all an overview of the research project and includes an introduction to the project. Other reports (which may only be available to CAPS Research member companies) include a Focus Study report that provides the most comprehensive look at the research findings, lessons learned and observations; and an Executive Report that is a condensed version of the larger Focus Study report; and an Executive Brief which lists the most salient points of the research findings.
Supply Chain Financing: Funding the Supply Chain and the Organization
February 2016
Dale S. Rogers, Ph.D.;Rudolf Leuschner, Ph.D.;Thomas Y. Choi, Ph.D.
Arizona State University;Rutgers University
This report recognizes an opportunity for supply professionals to expand their role into financial issues, as they can significantly alter how relationships with suppliers are managed. The study highlights areas of collaboration, especially involving the corporate finance function and treasury, in addition to suppliers and even customers. Some of the tools presented in this report can bring significant value to the organization because they provide access to liquidity, which is often difficult to access otherwise. This Focus Study provides the most comprehensive look at the research findings, conclusions, and recommended actions. The other documents in the series include an Executive Report, a condensed version of the larger report and an Executive Brief, which lists the most salient points of the research findings.
DOE NNSA Contractors Benchmarking Metric Report 2015
January 2016
Benchmarking Team
CAPS Research
The DOE/NNSA (Department of Energy/National Nuclear Safety Administration) Contractors Benchmarking Metric Report for 2015 contains key procurement performance measures including organizational structure, professional development, financial information, and supplier measures. Data was provided by 20 different DOE and NNSA laboratories (or sites). Key measures include training hours and costs, spend per procurement employee, operating costs per procurement employee, and supplier diversity goals and attainment. Other measures include procurement card usage and customer satisfaction surveys.
Feasibility Study of Nexus Supplier Index: Identifying and Categorizing Nexus Suppliers through Business Analytics
January 2016
Benjamin B. M. Shao, Ph.D.;Zhan (Michael) Shi, Ph.D.;Thomas Y. Choi, Ph.D.
Arizona State University
Nexus suppliers are a new kind of critical supplier. Their criticality comes from their structural positions in the multi-tiered supply network of a focal buying firm. Nexus suppliers may have a profound impact on a buyer’s performance, due to their network characteristics rather than their internal capabilities or knowledge. The objective of this feasibility study is to develop and assess a data-driven business analytics model for Nexus Supplier Index (NSI) through which we can identify and categorize nexus suppliers in a focal buying firm’s supply network. This Focus Study provides the most comprehensive look at the research findings, conclusions, and recommended actions. The other documents in the series include an Executive Report, a condensed version of the larger report and an Executive Brief, which lists the most salient points of the research findings.
Feasibility Study of Nexus Supplier Index: Identifying and Categorizing Nexus Suppliers through Business Analytics – Executive Report
January 2016
Benjamin B. M. Shao, Ph.D.;Zhan (Michael) Shi, Ph.D.;Thomas Y. Choi, Ph.D.
Arizona State University
Nexus suppliers are a new kind of critical supplier. Their criticality comes from their structural positions in the multi-tiered supply network of a focal buying firm. Nexus suppliers may have a profound impact on a buyer’s performance, due to their network characteristics rather than their internal capabilities or knowledge. The objective of this feasibility study is to develop and assess a data-driven business analytics model for Nexus Supplier Index (NSI) through which we can identify and categorize nexus suppliers in a focal buying firm’s supply network. This Executive Report is a condensed version of the larger report. The other documents in the series include the Focus Study which provides the most comprehensive look at the research findings, conclusions, and recommended actions and an Executive Brief, which lists the most salient points of the research findings.
Feasibility Study of Nexus Supplier Index: Identifying and Categorizing Nexus Suppliers through Business Analytics – Executive Overview
January 2016
Benjamin B. M. Shao, Ph.D.;Zhan (Michael) Shi, Ph.D.;Thomas Y. Choi, Ph.D.
Arizona State University
Nexus suppliers are a new kind of critical supplier. Their criticality comes from their structural positions in the multi-tiered supply network of a focal buying firm. Nexus suppliers may have a profound impact on a buyer’s performance, due to their network characteristics rather than their internal capabilities or knowledge. The objective of this feasibility study is to develop and assess a data-driven business analytics model for Nexus Supplier Index (NSI) through which we can identify and categorize nexus suppliers in a focal buying firm’s supply network. This document provides all an overview of the research project and includes an introduction to the project. Other reports (which may only be available to CAPS Research member companies) include a Focus Study report that provides the most comprehensive look at the research findings, lessons learned and observations; and an Executive Report that is a condensed version of the larger Focus Study report; and an Executive Brief which lists the most salient points of the research findings.
Sourcing Cloud-Based Services: Underlying Issues and Strategies - Executive Report
December 2015
Sriram Narayanan, Ph.D.;Thomas Y.Choi, Ph.D.;Yu Huang
Michigan State University;Arizona State University
Despite high awareness of cloud-sourcing, buying firms are still in the process of developing more mature cloud strategies to better leverage the potentials. Procuring cloud-based services is taking on increasing salience for CPO’s today. More firms are considering outsourcing various forms of IT-related activities to suppliers that provide cloud-based services. However, effectiveness in cloud sourcing still remains elusive for many buying firms. This CAPS Research project was commissioned with the intention to better gain insights into strategies and risks of cloud sourcing for procurement managers. As firms are increasingly migrating to the cloud, understanding how the cloud can be leveraged for business growth, while minimizing the risks from pursuing cloud sourcing is critical. To facilitate this process, this report identifies cloud sourcing enablers; risks of cloud sourcing; risk mitigation and contract negotiation and governance issues in cloud sourcing. This Executive Report is a condensed version of the larger report. The other documents in the series include the Focus Study which provides the most comprehensive look at the research findings, conclusions, and recommended actions and an Executive Brief, which lists the most salient points of the research findings.
Sourcing Cloud-Based Services: Underlying Issues and Strategies - Executive Overview
December 2015
Sriram Narayanan, Ph.D.;Thomas Y.Choi, Ph.D.;Yu Huang
Michigan State University;Arizona State University
Despite high awareness of cloud-sourcing, buying firms are still in the process of developing more mature cloud strategies to better leverage the potentials. Procuring cloud-based services is taking on increasing salience for CPO’s today. More firms are considering outsourcing various forms of IT-related activities to suppliers that provide cloud-based services. However, effectiveness in cloud sourcing still remains elusive for many buying firms. This CAPS Research project was commissioned with the intention to better gain insights into strategies and risks of cloud sourcing for procurement managers. As firms are increasingly migrating to the cloud, understanding how the cloud can be leveraged for business growth, while minimizing the risks from pursuing cloud sourcing is critical. To facilitate this process, this report identifies cloud sourcing enablers; risks of cloud sourcing; risk mitigation and contract negotiation and governance issues in cloud sourcing. This document provides all an overview of the research project and includes an introduction to the project. Other reports (which may only be available to CAPS Research member companies) include a Focus Study report that provides the most comprehensive look at the research findings, lessons learned and observations; and an Executive Report that is a condensed version of the larger Focus Study report; and an Executive Brief which lists the most salient points of the research findings.
Sourcing Cloud-Based Services: Underlying Issues and Strategies
December 2015
Sriram Narayanan, Ph.D.;Thomas Y.Choi, Ph.D.;Yu Huang
Michigan State University;Arizona State University
Despite high awareness of cloud-sourcing, buying firms are still in the process of developing more mature cloud strategies to better leverage the potentials. Procuring cloud-based services is taking on increasing salience for CPO’s today. More firms are considering outsourcing various forms of IT-related activities to suppliers that provide cloud-based services. However, effectiveness in cloud sourcing still remains elusive for many buying firms. This CAPS Research project was commissioned with the intention to better gain insights into strategies and risks of cloud sourcing for procurement managers. As firms are increasingly migrating to the cloud, understanding how the cloud can be leveraged for business growth, while minimizing the risks from pursuing cloud sourcing is critical. To facilitate this process, this report identifies cloud sourcing enablers; risks of cloud sourcing; risk mitigation and contract negotiation and governance issues in cloud sourcing. This Focus Study provides the most comprehensive look at the research findings, conclusions, and recommended actions. The other documents in the series include an Executive Report, a condensed version of the larger report and an Executive Brief, which lists the most salient points of the research findings.
2015 International Traffic in Arms Regulations (ITAR)
December 2015
Benchmarking Team
CAPS Research
With input from companies that export and/or import defense-related articles and services found on the United States Munitions List (USML), this report explores how supply management/procurement groups ensure compliance with the International Traffic in Arms Regulations (ITAR)
Customs Broker Benchmarking Metric Report 2015
November 2015
Benchmarking Team
CAPS Research
This report details the different methods being used by organizations to clear customs during the import/export process. The findings are mostly qualitative, with respondents providing specific information regarding the advantages and/or disadvantages of their current method(s).
Sourcing in Emerging Markets Benchmarking Metric Report 2015
November 2015
Benchmarking Team
CAPS Research
This report provides insight into how companies are sourcing in emerging markets with a focus on mitigating risk and managing suppliers. The findings of the report demonstrate key differences between sourcing activities in developed and emerging markets, with details on topics ranging from unique documentation processes to the frequency of supplier development activities in emerging markets.
First-Time Buy Cost Savings Calculations
October 2015
Deborah Stanton
CAPS Research
Background A CAPS Research Member Company requested input regarding how supply management/procurement groups calculate cost savings in first-time buy negotiated savings scenarios, for products or services. Answers to the following questions are found in the report. 1. Does your supply management/procurement group measure cost savings for first-time buy scenarios? YES NO IF YES What calculations are used for first-time buy scenarios? (check all that apply) □ Lowest qualified initial bid price minus final awarded price □ Average qualified initial bid price minus final awarded price □ Highest qualified initial bid price minus final awarded price □ First-round negotiated price minus final negotiated price □ Impact to budget □ Business case savings □ List price minus final awarded price □ Typical corporate discounted price minus final awarded price □ Other (text box) IF NO Please explain why. (text box) 2. What is the first-time buy cost savings recorded as (check all that apply)? □ Cost avoidance □ Other 3. Please provide any other insights or explanations about how your organization calculates cost savings for first-time buy scenarios. (text box)
Supplier Segmentation
October 2015
Jeff Wood
Allegion
The supplier segmentation models must be driven by the customer needs and revenue side logic. Segmentation allows matching of supplier capability to the customer needs. In a traditional model, forecast pushes all production activities. The supplier segmentation follows a pull system where forecast is only for capacity planning, and sales at customer drives the production activities.
Category Strategy Management
October 2015
Marc Garrett
The Boeing Company
Category strategy management is presented from the perspective of Shared Services Group within Boeing Supplier Management Organization. Their model considers: supply chain architecture, category strategic plan, category management, and category profile. Category strategy management contributes to improving supplier relationships, driving innovation, and ensuring category strategy sustainability.
Supply Chain Financing at Siemens
October 2015
Douglas Schoch
Siemens Capital Company LLC
Often suppliers do not get paid on time whether 60 net or 90 net. So the benefit of supply chain financing to the suppliers is that they not only get paid early but also assuredly. Siemens Capital uses the multiple bank model as opposed to a single bank model. The mechanics of the supply chain financing program is explained, and the benefits for both Siemens and suppliers are enumerated. The challenges for Siemens accounting, procurement, IT, treasury, and legal are listed.
Supply Chain Financing (BPW 2015)
October 2015
Dale S. Rogers, Ph.D.
Arizona State University
Procurement plays an integral role in supply chain financing. SCF is about using the supply chain to fund the organization and using the organization to fund the supply chain. The key motivators are the buying company’s desire to improve working capital and supplier’s desire to get paid at the time point of its choice. A newly compiled list of financial technology (FinTech) companies is provided. Also, a list of non-traditional SCF funders is provided.
Supplier Relations at Honda
October 2015
Tom Lake
Honda North America
Honda, like many other companies, is involved in producing a wide variety of products. Therefore, it is not possible do a job without suppliers. If a small part breaks down on the road, from the consumer’s perspective, a Honda broke down. Therefore, maintaining good supplier relations is critical to Honda’s success. Honda establishes a fair and clear business relationship with the suppliers, equal partnership regardless of the size of the supplier, and respect for suppliers’ dignity. Factors that contribute to “voice of the supplier” are enumerated. How to remove barriers and promote communication are discussed.
Sourcing Cloud-Based Services: Underlying Issues and Strategies (BPW 2015)
October 2015
Sriram Narayanan, Ph.D.
Michigan State University
What makes cloud sourcing unique is the dynamic technological landscape within the IT environment and the increasing complexity involving the organizational IT infrastructure. Cloud sourcing drivers and cloud sourcing risks are compared. The issues involved in contracting and risk mitigation are discussed. A cloud sourcing decision framework is proposed. Cloud should be a solution to a “business problem” not a "process problem."
Capital Expenditures Sourcing
October 2015
Roberta J. Jennings
CAPS Research
Capital purchases are necessary in every type of organization. However, they create a unique environment for sourcing professionals — with both challenges and opportunities. On one hand, purchases may not be tied directly to productivity or revenue generation, so securing funds and forecasting needs takes a different spin. In a project environment or one-off buy, sourcing professionals must be creative about negotiating prices and ensuring supplier performance, without the leverage that repeat buys afford. However, goals around diversity spending is one area that can nicely compliment capital purchases. A recent CAPS Research Critical Issue Exchange event explored this topic.
Procure-to-Pay Metrics Benchmarking Metric Report 2015
September 2015
Benchmarking Team
CAPS Research
The purpose of this study was to help procurement/supply management professionals gain new insight into the metrics most commonly used by other organizations to measure their procure-to-pay (also known as P2P) process. The findings in this report can be used to support any existing or planned review and revision efforts of current procure-to-pay metrics, or act as a template for organizations using such metrics for the first time.
Best Practices for Driving Sustainability into your Supply Chain
September 2015
Roberta J. Jennings
CAPS Research
Leading organizations are continuing to incorporate environmental and sustainability best practices into their operations. In addition to considering it “the right thing to do,” some have realized economic benefits as well that can accompany, for example, waste reduction or more efficient energy use. However, companies are searching for more value throughout the entire supply chain and have become more active in assessing, measuring, and influencing suppliers’ sustainability activities as well. There are challenges, however, to establishing such a program. Activities take time and resources, suppliers may or may not be receptive, and it may be difficult to directly tie sustainability efforts to a firm’s economic performance. As such, a firm often must determine which suppliers to target for a sustainability program. Criteria include size, supplier criticality, suppliers’ existing sustainability programs, and risk. Based on a CAPS Research Critical Issues forum held on supplier sustainability, some strategies that firms use to segment suppliers are presented.
Air Freight Fuel Surcharges
August 2015
Deborah Stanton
CAPS Research
Background: A member company had questions regarding Air Freight Fuel Surcharges and how companies approach this issue when procuring air freight transportation services. Please respond to the following questions. Questions: 1. Do you primarily pay for fuel as an accessorial with your air transportation suppliers? ____Yes ____No If yes, how do you calculate fuel surcharges (select all that apply)? ____Based on an index or set of indices ____Air transportation suppliers charge a fuel surcharge based on actual pass-through costs from the airlines How do you audit those costs? ____Based on an index or indices created by your company ____Other (Please list) 2. Do your air transportation suppliers embed fuel costs into their freight rates? ____Yes ____No If yes, what pros and cons have you experienced with this approach? 3. Do you use an index or indices to determine the allowable fuel surcharge? ____Yes ____No If yes, which global or regional index or indices do you use? If your company has created its own index or indices, how was it created? Is your payout the full amount of your index or some portion of the index? Is your payout based on chargeable or actual weight? Are there any regional, distance, or other differences in your index and/or payout? How often do you update the allowable fuel surcharge? 4. Please describe any other methods used in dealing with Air Freight Fuel Surcharges when procuring air freight transportation services:
Managing Supplier Innovation
August 2015
Roberta J. Jennings
CAPS Research
As companies strive for competitive advantage, many are looking to the supply base as a source for innovative processes and products. Whether the motivation is purely financial or there is a desire to be at the cutting edge in the industry, firms are seeking the best methods for tapping into the knowledge and ideas that supply partners might have. According to a recent survey by CAPS Research, 82.6 percent of responding companies indicated that they either have, or shortly plan to have, a supplier innovation program in place that includes specific policies and practices. The challenge, however, is how to best cultivate the best ideas at the right time — and ultimately reward the supply partner for its contribution. If an innovative idea can come to fruition and meet a current need — ideally on an exclusive basis — it can be a game-changer. Many motivations for innovation link back to financial gain, whether it be profit, market share, process efficiencies, or time-to-market.
Aerospace and Defense Industry Benchmarking Metric Report 2015
July 2015
Benchmarking Team
CAPS Research
The 2015 Aerospace and Defense Industry Benchmarking Metric Report includes metrics of importance to the aerospace and defense industry on topics including supply management organizational structure, spend and spend analytics, supply management operating expense, supplier relationships, and supply management return on investment.
Managing Supplier Risk
July 2015
Benchmarking Team
CAPS Research
Highlights of this report show that 65% of companies with a Supplier Risk Management Program (SRMP) rated their program's maturity as Most Advanced or Moderately Advanced. When rating the level of importance (High, Medium, or Low) to their organizations, participants rated Availability of Supply as the highest importance, followed by Quality and Financial. Participants also reported that of the suppliers in their SRMP, an average of 10% were in the highest risk segment or tier.
Managing Supplier Risk - Aerospace Industry
July 2015
Benchmarking Team
CAPS Research
The 2015 Managing Supplier Risk report focuses primarily on the structure, components and maturity of an organization's Supplier Risk Management Program. This accompanying Breakout Report with the original KPIs uses data only from the Aerospace/Defense Contractors Industry.
Managing Supplier Risk - Financial Services Industry
July 2015
Benchmarking Team
CAPS Research
The 2015 Managing Supplier Risk report focuses primarily on the structure, components and maturity of an organization's Supplier Risk Management Program. This accompanying Breakout Report with the original KPIs uses data only from the Financial Services Industry.
Managing Supplier Risk - Industrial Manufacturing Industry
July 2015
Benchmarking Team
CAPS Research
The 2015 Managing Supplier Risk report focuses primarily on the structure, components and maturity of an organization's Supplier Risk Management Program. This accompanying Breakout Report with the original KPIs uses data only from Industrial Manufacturing Industry.
Managing Supplier Risk - Transportation Services Industry
July 2015
Benchmarking Team
CAPS Research
The 2015 Managing Supplier Risk report focuses primarily on the structure, components and maturity of an organization's Supplier Risk Management Program. This accompanying Breakout Report with the original KPIs uses data only from the Transportation Services Industry.
Cross-Industry Metric Report July 2015 - Aerospace & Defense Industry
July 2015
Benchmarking Team
CAPS Research
This Aerospace & Defense Industry breakout report provides an industry-specific view of the Cross-Industry Report of Standard Benchmarks' Key Performance Indicators (KPIs). New metrics this year include a look at the industry's average Supply Management Return on Investment (ROI) which shows an average ROI of 265%, or a return of $2.65 for every $1 of supply management operating expense. Other KPIs show the percent of total spend managed/controlled by the supply management organization, managed spend per supply management employee, the average operating expense per supply management employee, etc. This industry-specific breakout report is only available to CAPS Research member companies and benchmarking subscribers, who also receive comparative reports that show their company-specific data alongside the aggregated data of their industry peers.
Cross-Industry Metric Report July 2015 - DOE & NNSA Contractors
July 2015
Benchmarking Team
CAPS Research
This DOE/NNSA Contractors breakout report provides an industry-specific view of the Cross-Industry Report of Standard Benchmarks' Key Performance Indicators (KPIs). Relevant KPIs include the percent of total spend managed/controlled by the supply management organization, managed spend per supply management employee, the average operating expense per supply management employee, etc. This industry-specific breakout report is only available to CAPS Research corporate members and benchmarking subscribers, who also receive comparative reports that show their company-specific data alongside the aggregated data of their industry peers.
Cross-Industry Metric Report July 2015 - Engineering & Construction Industry
July 2015
Benchmarking Team
CAPS Research
This Engineering & Construction Industry breakout report provides an industry-specific view of the Cross-Industry Report of Standard Benchmarks' Key Performance Indicators (KPIs). Relevant KPIs include the percent of total spend managed/controlled by the supply management organization, managed spend per supply management employee, the average operating expense per supply management employee, etc. This industry-specific breakout report is only available to CAPS Research corporate members and benchmarking subscribers, who also receive comparative reports that show their company-specific data alongside the aggregated data of their industry peers.
Cross-Industry Metric Report July 2015 - Financial Services Industry
July 2015
Benchmarking Team
CAPS Research
This Financial Services Industry breakout report provides an industry-specific view of the Cross-Industry Report of Standard Benchmarks' Key Performance Indicators (KPIs). New metrics this year include a look at the industry's average Supply Management Return on Investment (ROI) which shows an average ROI of 1157%, or a return of $11.57 for every $1 of supply management operating expense. Other KPIs show the percent of total spend managed/controlled by the supply management organization, managed spend per supply management employee, the average operating expense per supply management employee, etc. This industry-specific breakout report is only available to CAPS Research member companies and benchmarking subscribers, who also receive comparative reports that show their company-specific data alongside the aggregated data of their industry peers.
Cross-Industry Metric Report July 2015 - Industrial Manufacturing Industry
July 2015
Benchmarking Team
CAPS Research
This Industrial Manufacturing Industry breakout report provides an industry-specific view of the Cross-Industry Report of Standard Benchmarks' Key Performance Indicators (KPIs). New metrics this year include a look at the industry's average Supply Management Return on Investment (ROI) which shows an average ROI of 344%, or a return of $3.44 for every $1 of supply management operating expense. Other KPIs show the percent of total spend managed/controlled by the supply management organization, managed spend per supply management employee, the average operating expense per supply management employee, etc. This industry-specific breakout report is only available to CAPS Research member companies and benchmarking subscribers, who also receive comparative reports that show their company-specific data alongside the aggregated data of their industry peers.
Cross-Industry Metric Report July 2015 - Metals & Mining Industry
July 2015
Benchmarking Team
CAPS Research
This Metals & Mining Industry breakout report provides an industry-specific view of the Cross-Industry Report of Standard Benchmarks' Key Performance Indicators (KPIs). New metrics this year include a look at the industry's average Supply Management Return on Investment (ROI) which shows an average ROI of 856%, or a return of $8.56 for every $1 of supply management operating expense. Other KPIs show the percent of total spend managed/controlled by the supply management organization, managed spend per supply management employee, the average operating expense per supply management employee, etc. This industry-specific breakout report is only available to CAPS Research member companies and benchmarking subscribers, who also receive comparative reports that show their company-specific data alongside the aggregated data of their industry peers.
Cross-Industry Metric Report July 2015 - Petroleum Industry
July 2015
Benchmarking Team
CAPS Research
This Petroleum Industry breakout report provides an industry-specific view of the Cross-Industry Report of Standard Benchmarks' Key Performance Indicators (KPIs). New metrics this year include a look at the industry's average Supply Management Return on Investment (ROI) which shows an average ROI of 630%, or a return of $6.30 for every $1 of supply management operating expense. Other KPIs show the percent of total spend managed/controlled by the supply management organization, managed spend per supply management employee, the average operating expense per supply management employee, etc. This industry-specific breakout report is only available to CAPS Research member companies and benchmarking subscribers, who also receive comparative reports that show their company-specific data alongside the aggregated data of their industry peers.
Cross-Industry Metric Report July 2015 - Utilities Industry
July 2015
Benchmarking Team
CAPS Research
This Utilities Industry breakout report provides an industry-specific view of the Cross-Industry Report of Standard Benchmarks' Key Performance Indicators (KPIs). New metrics this year include a look at the industry's average Supply Management Return on Investment (ROI) which shows an average ROI of 525%, or a return of $5.25 for every $1 of supply management operating expense. Other KPIs show the percent of total spend managed/controlled by the supply management organization, managed spend per supply management employee, the average operating expense per supply management employee, etc. This industry-specific breakout report is only available to CAPS Research member companies and benchmarking subscribers, who also receive comparative reports that show their company-specific data alongside the aggregated data of their industry peers.
Cross-Industry Metric Report July 2015 - Other Manufacturing Industries
July 2015
Benchmarking Team
CAPS Research
This Other Manufacturing Industries breakout report provides an industry sector view of the Cross-Industry Report of Standard Benchmarks' Key Performance Indicators (KPIs). New metrics this year include a look at the industry's average Supply Management Return on Investment (ROI) which shows an average ROI of 692%, or a return of $6.92 for every $1 of supply management operating expense. Other KPIs show the percent of total spend managed/controlled by the supply management organization, managed spend per supply management employee, the average operating expense per supply management employee, etc. This industry-specific breakout report is only available to CAPS Research member companies and benchmarking subscribers, who also receive comparative reports that show their company-specific data alongside the aggregated data of their industry peers.
Cross-Industry Metric Report July 2015 - Other Non-Manufacturing Industries
July 2015
Benchmarking Team
CAPS Research
This Other Non-Manufacturing Industries breakout report provides an industry sector view of the Cross-Industry Report of Standard Benchmarks' Key Performance Indicators (KPIs). New metrics this year include a look at the industry's average Supply Management Return on Investment (ROI) which shows an average ROI of 947%, or a return of $9.47 for every $1 of supply management operating expense. Other KPIs show the percent of total spend managed/controlled by the supply management organization, managed spend per supply management employee, the average operating expense per supply management employee, etc. This industry-specific breakout report is only available to CAPS Research member companies and benchmarking subscribers, who also receive comparative reports that show their company-specific data alongside the aggregated data of their industry peers.
Persistence and Change in Trends: The Post Reform Environment For Supply Chain Management
July 2015
Eugene S. Schneller, Ph.D.
Arizona State University
A new term is entering our vocabulary – "post reform" – referring to the five year period since the enactment of the Affordable Care Act. It has been a period of uncertainty, change, challenge and opportunity. It is characterized by a combination of stressors and opportunities that impact supply chain, for providers, suppliers and intermediaries and ultimately patients – in significant ways. Since 2008 the Health Sector Supply Chain Research Consortium has published its list of "top trends." This year we took a somewhat different approach to identifying trends and important issues in the health sector supply chain by requesting that our panel of Consortium members identify the three most persistent trends/issues and assesses the evolution of these trends in the changing marketplace.
Cross-Industry Metric Report July 2015
July 2015
Benchmarking Team
CAPS Research
The Cross-Industry Report of Standard Benchmarks provides information on twenty-one commonly referenced Key Performance Indicators (KPIs). One of the newer KPIs is Supply Management Return on Investment (ROI). The average ROI across all industries is 676.9%, or a return of $6.76 for every $1 of supply management operating expense. ROI values are provided for eight industries. Other KPIs show the percent of total spend managed/controlled by the supply management organization, managed spend per supply management employee, the average operating expense per supply management employee, etc. In addition to this metric report, CAPS Research corporate members and benchmarking subscribers are provided corresponding industry-specific breakout reports and comparative reports showing their data alongside industry-specific aggregated data.
Best Practices in Sourcing Cloud Services
June 2015
Roberta J. Jennings
CAPS Research
Cloud technology services are becoming increasingly popular in today's business environment. The cloud model can bring many monetary and efficiency advantages, but requires an organization to do a total value analysis and deeply assess its own comfort level with the risks introduced in a cloud-based environment. What is the cloud and why are so many firms finding cloud technology services attractive? CAPS Research recently conducted a Critical Issue Exchange on this topic: this report is based on comments from the several supply and technology professionals who shared their experiences with sourcing and implementing cloud services.
Labor/Service Agreements for Utilities Industry Companies 2015
June 2015
Benchmarking Team
CAPS Research
This report addresses the frequency and types of contract labor agreements, service agreements, etc., that utility companies use for various programs or projects. Four types of commonly referenced labor/service agreements are specifically examined: Time & Material, Unit Price or Lump Sum, Cost-Plus, and Cost Reimbursable.
Outsourcing Supply Management Activities
June 2015
Benchmarking Team
CAPS Research
Supply Management Groups are reevaluating all sourcing activities and/or business processes to determine if a new outsourcing model or approach can be identified that will reduce overlooked costs and deliver newly discovered value back to the company. This report identifies companies use of 3rd party outsourciing solutions for direct/indirect, high/low strategic categories, and for business activities that support sourcing. The report also provides a list of other spend activities/areas that are (or may be) outsourced, along with different criteria used for outsourcing determinations.
Nexus Suppliers and Multi-Tier Supply Management (ISM2015)
May 2015
Thomas Y. Choi, Ph.D.
CAPS Research
Nexus Suppliers are a new type of critical suppliers that emerge as we gain more visibility into our multi-tier supply networks. Traditional critical suppliers are those that have significant impact on a buying firm’s profit and risk position and tend to be top-tier suppliers. In contrast, a nexus supplier can come from anywhere in a multi-tier supply network and is critical due to its network positions and the resultant portfolio of inter-organizational ties. We will first introduce different types of nexus suppliers and then illustrate their characteristics using the data from actual supply networks.
Corporate Procurement/SCM Employees Benchmarking Metric Report 2015
April 2015
Benchmarking Team
CAPS Research
This report was developed from a brief, 8-question survey that asked about the numbers of corporate procurement/supply chain management employees (full-time equivalent and contract temporary) assigned to the supply management group. The survey data yielded 11 benchmarks, as well as an overview of 9 different activities (policy, strategic governance, market intelligence, etc.) that are usually aligned within a company’s supply management group.
Petroleum Industry Metric Benchmarking Report 2014 - Upstream Operations
April 2015
Benchmarking Team
CAPS Research
The Upstream Operations benchmarking report corresponds to the Petroleum Industry Metric Benchmarking Report published in March 2015. However, this report includes only data provided by the petroleum (oil & gas) companies who reported Upstream as an operational component. Upstream operations are commonly known as Exploration and Production (E&P) which includes searching for potential underground or underwater crude oil and natural gas fields, drilling of exploratory wells, and subsequently drilling and operating the wells that recover and bring the crude oil and/or raw natural gas to the surface.
Investment Recovery Job Descriptions and Titles 2015
April 2015
Benchmarking Team
CAPS Research
The Investment Recovery Association and its member companies asked CAPS Research to identify commonly accepted job descriptions and position titles assigned to employees whose primary function is to support the company's investment recovery operations. The summary report shows frequently used position titles of individuals assigned primarily to support their company’s investment recovery operations; the numbers of individuals assigned to different categories (level 1 through level 4); the percent of companies who reported their investment recovery positions are aligned with CMIR certification; and the percent of companies who require (or encourage) level 1 & 2 employees to achieve CMIR certification.
Supply Chain Financing (ERT 2015)
April 2015
Dale S. Rogers, Ph.D.
Arizona State University
Supply chain management has been characterized as consisting of three primary flows: product, information and financial. Organizations often concentrate on the product and information flows and have difficulty understanding all of the complexities of the financial flow. Supply chain financing is a relatively new field that combines supply chain and finance processes, and focuses on how best to manage those processes from the perspective of the supply chain manager. This can include working capital management, risk management, and numerous other topics that impact how the supply chain is managed. The presentation discusses how organizations can adopt a supply chain finance perspective and some of the tools that managers can utilize to manage this important flow better.
New, Expanded Buyer-Supplier Relationship Management
April 2015
Thomas Y. Choi, Ph.D.
CAPS Research
The cooperative-adversarial dichotomy has served as the prevailing buyer-supplier relationship. Cooperative buyer-supplier relationships have been associated with closely-tied relationships, while adversarial relationships have been equated to arms-length relationships. However, there can be a closely-tied yet adversarial relationship and an arms-length yet cooperative relationship. The new framework is organized in two aspects—(1) relational posture, i.e., how two firms regard each other (as cooperative partners or as adversaries) and (2) relational intensity, i.e., how much two firms’ operations are interlinked (closely-tied or arms-length). The framework labels a closely-tied and cooperative buyer-supplier type as "deep"; closely-tied but adversarial type as "sticky"; arms-length and adversarial type as "transient"; and arms-length but cooperative type as "gracious." The data are collected from Toyota Motor Engineering and Manufacturing North America, Inc. and 163 of its suppliers. The results of analysis suggest that the expanded relationship types are associated with different relational outcome trade-offs.
The Dramatic Fall in Oil Prices and the Impact on Logistics/Supply Chains
April 2015
William Villalon
APL Logistics, Ltd.
Falling oil prices equals better transportation rates? Not so fast. The informed CPO needs to be thinking about other factors as well. Representing APL Logistics, part of the $9-billion NOL Group, a global provider of ocean and intermodal logistics, the speaker noted the current "Rubik’s Cube" of logistics challenges, including, but not limited to: varying pricing mechanisms on transport modes, the rising costs of warehouse labor especially in the coastal regions of the North America and elsewhere, and the shortage of truck drivers in specific corridors in North America. The speaker also reviewed the challenges presented by selective volatility in ocean freight rates, reshoring and near-shoring decisions, infrastructure challenges, as well as currency fluctuation.
Supply Chain Segmentation: Linking Business Strategy with Sourcing Strategy
April 2015
Gordon Lam
The Fung Group
The speaker began by giving an overview of the vast and segmented supply chains that Li & Fung—a Hong Kong-based global company more than a century old and now employing 31,000--controls and directs, in its four core businesses of sourcing, logistics, distribution, and retail. He then focused on the seven core principles that drive their supply chain management, which work together to help Li & Fung discover and deliver more value along the supply chain than its competitors. He cited several cases in their recent history that highlighted how they employ the resources of a large company but act like a small one. He also reviewed their strategic planning, their approach to acquisitions, and their talent development that help ensure continuous improvement in their supply chain management business.
Strengthening Your Supply Chain Strategy
April 2015
Vincent J. Hrenak
Raytheon
During this presentation, the speaker provided an overview of how he has utilized CAPS Research's different products and services to establish credibility across all levels of supply management. Key examples include different benchmarking metrics that provide industry-specific comparisons of supply management key performance indicators; the Executive Assessments that identify the relative importance of, and implementation of, different critical strategy areas. The speaker pointed out that he actively participates in new and leading edge research and has repeatedly found that the detailed focus study research projects help identify best-in class metrics. He and his leadership team have gained valuable insight from participating in International Executive Roundtables, Industry Advisory Group Meeting, Best Practices Workshops, and Critical Issues events. He summarized his presentation by encouraging other member companies to use CAPS Research's various resources to bring best practices to their own strategic planning process.
Profile of a CPO: Based on 2014 Research Study "CPO Mobility and Compensation"
April 2015
Deborah Stanton
CAPS Research
This presentation shares results from the 2014 CAPS Research Focus Study: "Chief Purchasing Officers' Mobility and Compensation: A 2014 Study of Fortune 500 Firms". It is an interesting look at the profile of a CPO, including compensation, tenure, gender, mobility and many other characteristics. The CPO's role continues to become more important in the organization; in fact, their careers in regards to compensation, mobility, and other job-related factors are also improving.
Semi-Autonomous Knowledge Base Statement of Work Development
April 2015
Joseph A. Yacura
Fannie Mae
The underlying theme of the presentation was the observation that the need for real-time business information is driving the evolution of "smart systems" based on inference engine technology. Inference engines are developed using artificial intelligence techniques to instantaneously derive conclusions from a knowledge base that contains different facts and information. The presentation suggests that companies will, in the near future, establish a formal method of creating "Institutional Knowledge" that resides within their own smart systems. These smart systems will provide procurement organizations an ability to make real-time decisions based on multiple/variable sources of information. Fannie Mae is using a smart system (based on inference engine technology) to create a semi-autonomous Statement of Work (SOW) generation tool that uses different sources of knowledge from human-based information and systems data.
Industrial Manufacturing Industry Metric Benchmarking Report 2014
April 2015
Benchmarking Team
CAPS Research
This industry-specific benchmarking report provides a comparative look at how industry supply management dynamics have changed since this report was last published in 2012. In addition to data earlier published (e.g., functional assignments within the supply management group, financial management metrics, key supplier relationship data, and supply management’s engagement in hedging strategies) new metrics include the percent of companies with supply management employees assigned to different global regions, and the increase/decrease in spend in the global regions. Also new this year is the percent of organizations that are responsible for spend associated with inbound and outbound logistics and transportation.
Petroleum Industry Metric Benchmarking Report 2014
March 2015
Benchmarking Team
CAPS Research
This Metric Report provides an overview of the survey results and includes new benchmarks which include cost savings as a percent of supply management operating expense (often referred to as the supply management group's Return on Investment), as well as several new benchmarks that measure strategic and operational supply management employees, both as aggregated and by function.
Impact of Recent Declines in Oil Prices (March Update)
March 2015
Benchmarking Team
CAPS Research
The topic of declining oil prices and the uncertainties around any near-term price reversal has created opportunities for businesses to rethink their strategies for acquiring oil and related petroleum-based products (fuels, chemicals, etc.). This report provides insight into the actions organizations are taking (or have taken) to realize savings and other benefits as a result of the decline in fuel costs.
Utilities Industry Benchmarking Metric Report 2014
March 2015
Benchmarking Team
CAPS Research
The 2014 Utilities Industry Metric Benchmarking Report provides an overview of the industry-specific survey and includes metrics of importance to the utilities industry on topics including supply management organizational structure, spend, supply management operating expense, supplier relationships, and supply management return on investment.
Demand-Side Energy Management
February 2015
Benchmarking Team
CAPS Research
Effective demand-side energy management programs include energy efficiency practices that do not necessarily impact business operations during periods of peak energy demand. Efficiency practices may include drawing power from backup generators, reduced lighting, adjusting heating/air conditioning levels, etc. A key finding from the study was the overwhelming success organizations found in both the implementation of their demand-side energy management program, and in meeting the program's goals and objectives.
Measuring Capital Projects Sourcing and Management Metric Report
January 2015
Benchmarking Team
CAPS Research
There are numerous types of capital projects for which companies allocate resources to build, acquire, and maintain assets such as production and process equipment, buildings, and other related infrastructure. This metric report is based on responses from large, global companies in capital intensive industries and addresses capital expenditures issues including sourcing team structure, internal client engagement, metrics and goals, and future trends.
Impact of Recent Declines in Oil Prices
January 2015
Deborah Stanton
CAPS Research
Background: In view of the rapid decline in oil prices, and the uncertainty around any near-term price reversal, CAPS Research would like to learn what actions you have taken (or will take) to realize savings and other benefits as a result of the decline in fuel costs. Please respond to the following questions. Questions: 1. Has the recent decline in oil prices had a positive or negative effect on your supply chain costs? ____ Positive ____ Negative What costs were affected? 2. Have lower oil prices impacted your ability to source and secure oil and related petroleum-based products (fuels, chemicals, etc.)? ____Yes ____ No How? 3. Does your organization currently use hedging techniques/strategies to minimize your exposure to fluctuating prices for oil and related petroleum-based products? ____Yes ____ No 4. If you are locked into a contract price for oil and related petroleum-based products, how do you plan on taking advantage of the lower costs? (check all that apply) ____ Seek alternate sources of supply ____ Purchase minimal amounts from current supplier(s) ____ Postpone fuel purchases from current supplier(s) ____ Renegotiate current contract(s) ____ Other actions (please list below): 5. Based on the current cost of oil, is this is the right time to secure a long term hedge for oil and petroleum-based products that you will need in the future? ____Yes ____ No Why? 6. How has the current price for oil and petroleum-based products influenced your organization's "buying behavior"? (for example, increased related inventories, renegotiated long-term contracts, postponed purchases, etc.)
DOE NNSA Contractors Benchmarking Metric Report 2014
January 2015
Benchmark Team
CAPS Research
The DOE/NNSA (Department of Energy/National Nuclear Safety Administration) Contractors Benchmarking Metric Report for 2014 contains key procurement performance measures including organizational structure, professional development, financial information, and supplier measures. Data was provided by 22 different DOE and NNSA laboratories (or sites). Key measures include training hours and costs, spend per procurement employee, operating costs per procurement employee, and supplier diversity goals and attainment. Other measures include procurement card usage and customer satisfaction surveys.
Measuring Capital Projects Sourcing and Management 2014
January 2015
Benchmarking Team
CAPS Research
This summary report corresponds to a CAPS Research benchmarking survey which asked participants to provide information about four areas related to capital projects within their organization: Sourcing team structure; Internal client engagement; Capital expense (CapEx) metrics and goals; and significant trends that might impact future capital projects sourcing. The survey participants reported the spend for capital projects within their companies is about 8.1 percent of revenue.
Creative Agency Sourcing
December 2014
Deborah Stanton
CAPS Research
In many companies Supply Management is just beginning to engage their organization’s marketing group and others to source non-traditional spend categories such as Creative Agencies. 3M Company is interested to learn how your organization is managing creative agencies, agency spend, and the process for identifying new creative agencies. Please respond to the following questions from 3M Company. Questions: 1. What is your supply management group’s role in creative agency sourcing? ____ Supply management has sole responsibility for sourcing the creative agencies. ____ Supply Management has shared responsibility for sourcing the creative agencies. List other groups with whom this responsibility is shared (e.g., marketing, communications, public relations): ____ Supply management is not responsible for sourcing creative agencies. 2. How many creative agencies does your organization presently have under contract, and what services do they provide? Number of creative agencies under contract ________ Services provided (e.g., creative design, digital media, web-design, media placement): 3. What percent of your total annual budget for creative services is outsourced to creative agencies? ________ % 4. Does your organization have a process to identify new creative agencies? ____ Yes ____ No If Yes, and you are willing to share your creative agency sourcing process with other CAPS Research members (teleconference, web event, or one-on-one discussions), please provide the name and contact information for the appropriate person in your company. (This information will not be disclosed in our response summary.)
Financial Services Industry 2014 Supply Management Performance Benchmarking
November 2014
Benchmarking Team
CAPS Research
Gain insight into how financial services companies report their supply management group's ROI, and how they perceive their level of maturity across different activities ranging from supplier capability assessments to supply chain sustainability. This report includes key benchmarks and best practices specific to Managing Supplier Risks and Relationships, Influence and Value of the Supply Organization, and Organizational Design and Policy.
Safety in the Supply Chain
November 2014
Roberta J. Jennings
CAPS Research
Many organizations – especially those in construction/engineering, industrial manufacturing, and petroleum – have made safety a top priority within their company. They have experienced the benefits of well-defined, long-standing internal programs and initiatives that create safe working environments. The next step for many firms, however, is to drive safety throughout their supply chains. This report captures the highlights of a day-long CAPS Research Critical Issues event where procurement/supply management professionals discussed this important topic.
Budgeted Salary Increases for 2015
November 2014
John Gundersen
Emerson Process Management
Background: With inflationary concerns, rising interest rates and other potential impacts on consumer buying power, there are indications in some companies that employees feel they are falling behind in their salary levels. In the budget process for 2015 salaries, some companies made increases over 2014 levels to keep track with the growing economic pressures on their people. The purpose of this CPO Insights is to get a pulse on how many companies made salary increases in their budgets for 2015 and what drivers these companies use to make increases. Please respond to the following questions from John Gundersen, Director, Global Buyout Procurement, Emerson Process Management. Questions: 1. For 2015 salary budgeting, did your company increase salaries? ____ Yes ____ No If Yes, how did the 2015 increase compare to the previous year (2014)? ____ Increased ____ Decreased ____ Remained the Same 2. What are the specific drivers your company uses to establish salary increases? (Some examples might include merit/performance, cost-of-living/inflation, market competitive adjustments, equity over market, or a combination of these.) 3. How often are adjustments performed (e.g. annually, semiannually, or other)?
Sourcing Public Cloud Services
November 2014
Phil Carter
CAPS Research
Enterprises are increasingly interested in using public cloud services* due to the advantages these services may offer. Advantages include: avoiding capital investment in infrastructure, getting applications up and running faster, and rapidly adjusting IT resources to meet fluctuating and unpredictable business demands. (Note: The responses were compiled in April 2014.) Questions: 1. Does Supply Management at your company source (or help source) public cloud services? ____ Yes ____ No If you answered 'No', you are finished with this CPO Insights question set and can submit your responses by replying to this email. If you answered 'Yes', please answer the questions below. 2. On a scale of 1 to 5 (1= very immature/just getting started, 5 = very mature/lots of experience) how mature is your sourcing strategy for public cloud services? ___ 1 ___ 2 ___ 3 ___ 4 ___ 5 3. What are your three biggest challenges in sourcing public cloud services? 1. 2. 3. 4. Would your Subject Matter Expert on sourcing public cloud services be interested in discussing this topic with a group of SME sourcing professionals from other companies? ____ Yes ____ No If you answered 'Yes', please provide their name and contact information. (We will keep this information confidential.) * Public cloud services are dynamically allocated and delivered applications or units of computing power made available through the internet. These services are sold or leased by organizations that own the infrastructure and consist of sophisticated automation, provisioning, and virtualization technologies to decouple data and software from the servers and storage systems running them.
2014 DOE/NNSA Procurement Performance Benchmarking
October 2014
Benchmarking Team
CAPS Research
Survey that corresponds to the DOE/NNSA 2014 Procurement Performance Benchmarking Report.
Multi-Tier Supply Management
October 2014
Thomas Y. Choi, Ph.D.
CAPS Research
Dr. Choi’s remarks began with an overview of the current thinking around multi-tier supply management and some of its drawbacks. He showed how some companies are managing sub-tier suppliers retaining control over BOM or work requirements; considering supplier’s innovation potential; taking into account the environmental and social impact; and staying close to “touch-point” suppliers. He also discussed new ways to look at the multi-tier network structure that can help identify critical sub-tier suppliers using contractual and materials flow sociograms.
Emerging Global Supply Strategies (BPW 2014)
October 2014
Robert M. Monczka, Ph.D.
CAPS Research
Dr. Monczka began his presentation with CAPS Research findings about re-shoring, near-shoring, risk and emerging global supply strategies. He continues with how best-in-class companies are focusing on how customer, R&D, manufacturing and sourcing strategies are changing and where companies will locate these operations and source goods and services in the future. He included trends from previous years, maturity frameworks and observations/trends between insourcing and outsourcing. He also included data trends for low-cost country sourcing.
Global Economic Outlook
October 2014
Sara Johnson
IHS
Using data from IHS Economics practice, Ms. Johnson highlighted key trends and in-depth analysis of the current economic outlook. She demonstrated: a gradual acceleration in the global economy led by the United States; improving household finances, strengthening private investment, and reduced fiscal drag will support the US expansion; after stalling this spring, the Eurozone’s slow recovery will resume as the policy focus shifts from austerity to growth; a downturn in housing markets will restrain China’s growth; growth paths in emerging markets will depend on structural reforms that raise productivity and allocate capital more efficiently; and there is an abundance of geopolitical risks.
Corporate Supplier Sustainability
October 2014
Jay Joyce;Anne-Cecile Remont
Procter & Gamble Company
After a brief overview about P&G’s internal environmental sustainability efforts, the presenters turned toward the important topics of advancing environmental sustainability outside the company. Examples and strategies were shared about advancing sustainability through partnerships with specialty groups and other companies, as well as driving sustainability into the supply chain and P&G’s use of scorecards and third party audits to get supplier buy-in.
Skills and Experiences for Success in Procurement and Supply Chain
October 2014
Simon Revere;Geddings Roche
Korn/Ferry International
Using the Korn Ferry framework of the four dimensions of leadership and talent (competencies, experiences, traits, and motivators), the speakers demonstrated how best-in-class procurement executives share a specific trait of leadership characteristics. They also addressed how to differentiate performance from potential, and how to identify high-potential talent.
Global & NAFTA Supply Chain Trends
October 2014
William Villalon
APL Logistics, Ltd.
Mr. Villalon’s presentation provided data and trends to gain insights about various factors driving a shift in global supply chains; shifting trends in the NAFTA supply chain; several factors that have converged to place significant stress on the logistics network that underpin NAFTA / US supply chains; the implications for companies engaged in global sourcing; and key considerations for procurement and supply chain managers.
SnapShots 2014: Effective Collaboration for Supplier Innovation
October 2014
Benchmarking Team
CAPS Research
The most significant opportunities for driving innovation within the supply management organization include clearly established functional roles, early supplier engagement, developing and maintaining customer/supplier trust, supplier performance, and cost models that compensate suppliers for research and development costs. The report shows that the effectiveness of supplier innovation programs lags the relative importance of these programs. Two-thirds of the participants reported Supply Management is primarily responsible for championing supplier innovation. The appendices provide information on the benefits suppliers have received from innovation programs; a list of tools being utilized to managing supplier innovation projects; and practical information from 'lessons learned'.
Financial Services Industry Identification of Critical Activities and Supplier Risk Categories
September 2014
Benchmarking Team
CAPS Research
Based on a survey developed with input from a CAPS Research Industry Advisory Group, this short report identifies the functions and activities that are considered to be critical to financial services organizations. It also highlights respondents' supplier risks (information security, natural disaster, brand reputation, geopolitical, etc.) and whether or not these supplier risks are currently being managed or monitored. Contact the Benchmarking Team at CAPS Research (metrics@capsresearch.org) if you have any questions about this report, or are interested in receiving a comparative benchmarking report.
SnapShots 2014: Availability of Internet-Based Terms and Conditions for Current and Potential Suppliers
September 2014
Benchmarking Team
CAPS Research
For this report, Aerospace & Defense companies were asked about the industry’s use of the internet to post supplier standard Terms and Conditions. The majority of respondents reported they posted terms and conditions on their websites. Respondents also identified perceived benefits and shared their opinions regarding whether or not potential suppliers visit their website(s) in order to preview the standard terms and conditions. For a list of websites that reported their terms and conditions are made publically available, email metrics@capsresearch.org.
Chief Purchasing Officers' Mobility and Compensation: A 2014 Study of Fortune 500 Firms – Executive Report
September 2014
Phillip L. Carter, D.B.A.
CAPS Research
This study provides an analysis of the compensation and mobility patterns of Chief Purchasing/Procurement Officers for Fortune 500 sized companies. The research reports on the salary and bonus compensation for CPOs for 2014 and 2013 and the mobility patterns of individuals who achieved the CPO role. Demographic information on the CPOs is also presented in the report. Additionally the report compares the results from this study with the results of similar research published by CAPS Research in 2000 (based on 1999 data), 2002 (based on 2001 data) , and 2007 (based on 2006 data). This Executive Report is a condensed version of the larger Focus Study report. Other reports include a Focus Study report that provides the most comprehensive look at the study findings, and an Executive Brief, which lists the most salient points of the findings.
Chief Purchasing Officers' Mobility and Compensation: A 2014 Study of Fortune 500 Firms – Executive Overview
September 2014
Phillip L. Carter, D.B.A.
CAPS Research
This study provides an analysis of the compensation and mobility patterns of Chief Purchasing/Procurement Officers for Fortune 500 sized companies. The research reports on the salary and bonus compensation for CPOs for 2014 and 2013 and the mobility patterns of individuals who achieved the CPO role. Demographic information on the CPOs is also presented in the report. Additionally the report compares the results from this study with the results of similar research published by CAPS Research in 2000 (based on 1999 data), 2002 (based on 2001 data) , and 2007 (based on 2006 data). This report provides an overview of the project. Other reports (which may only be available to CAPS Research member companies) include the Focus Study, which is the most comprehensive look at the study, an Executive Report, a condensed version of the larger report, and an Executive Brief, which lists the most salient points of the findings.
Chief Purchasing Officers' Mobility and Compensation: A 2014 Study of Fortune 500 Firms
September 2014
Phillip L. Carter, D.B.A.
CAPS Research
This study provides an analysis of the compensation and mobility patterns of Chief Purchasing/Procurement Officers for Fortune 500 sized companies. The research reports on the salary and bonus compensation for CPOs for 2014 and 2013 and the mobility patterns of individuals who achieved the CPO role. Demographic information on the CPOs is also presented in the report. Additionally the report compares the results from this study with the results of similar research published by CAPS Research in 2000 (based on 1999 data), 2002 (based on 2001 data) , and 2007 (based on 2006 data). This Focus Study provides a detailed analysis of the study findings. Related documents include an Executive Report - a condensed version of the larger report and an Executive Brief that presents only the most salient points from the study.
Using Big Data for Supply Management Purposes
August 2014
Deborah Stanton
CAPS Research
Background: An increasing number of companies are collecting and using "big data" (see a definition below) as a strategic investment. Most examples and news stories about big data, however, are focused on downstream efforts related to forecasting consumer trends, new product development, custom selling/communications, etc. CAPS Research would like to find out how many companies are using big data within their supply management organization and how they are using it. "Big data" refers to data sets whose size is beyond the ability of traditional business-intelligence tools to analyze in a timely manner. "Big data" includes structured and unstructured data from multiple sources, often associated with individual transactions and events in the supply chain, that pour into data warehouses with great speed and volume. Specialized tools and specialized skills are needed to turn "big data" into useable business intelligence. Questions: 1.  Does your company now use "big data" to support supply management analysis and strategy formulation?            ____ Yes         ____ No If you answered 'No', please describe any plans over the next one to three years to start any "big data" projects to support supply management. If you answered 'No', you are finished with this CPO Insights question set and can submit your response by replying to this email now. Otherwise, please continue. 2.  Please describe how "big data" is used to support supply management at your company. 3.  Please estimate the number of FTEs which are devoted to supporting "big data" projects for supply management.       Data manager FTEs within supply management: ______       Data manager FTEs elsewhere in your company: ______       Data analysis FTEs within supply management: ______       Data analysis FTEs elsewhere in your company: ______ 4.  How would you rate the maturity level at your company of supply management’s application/use of big data? (1 = Just starting; 5 = Very mature)    ___ 1    ___ 2    ___ 3    ___ 4    ___ 5
Cross-Industry Metric Report July 2014 - Aerospace Industry
July 2014
Benchmarking Team
CAPS Research
This Aerospace & Defense Industry breakout report provides an industry-specific view of the Cross-Industry Report of Standard Benchmarks' Key Performance Indicators (KPIs). New metrics this year include a look at the industry's average Supply Management Return on Investment (ROI) which shows an average ROI of 318.5%, or a return of $3.19 for every $1 of supply management operating expense. Other KPIs show managed spend as a percent of total spend, managed spend per supply management employee, and the updated average operating expense per supply management employee. This industry-specific breakout report is only available to CAPS Research corporate members and benchmarking subscribers who also receive comparative reports that show their company-specific data alongside the aggregated data of their industry peers.
Cross-Industry Metric Report July 2014 - Chemical Manufacturing Industry
July 2014
Benchmarking Team
CAPS Research
This Chemical Manufacturing Industry breakout report provides an industry-specific view of the Cross-Industry Report of Standard Benchmarks' Key Performance Indicators (KPIs). New metrics this year include a look at the industry's average Supply Management Return on Investment (ROI) which shows an average ROI of 422.5%, or a return of $4.23 for every $1 of supply management operating expense. Other KPIs show managed spend as a percent of total spend, managed spend per supply management employee, and the updated average operating expense per supply management employee. This industry-specific breakout report is only available to CAPS Research corporate members and benchmarking subscribers who also receive comparative reports that show their company-specific data alongside the aggregated data of their industry peers.
Cross-Industry Metric Report July 2014 - DOE & NNSA Contractors
July 2014
Benchmarking Team
CAPS Research
This DOE & NNSA Contractors breakout report provides an industry-specific view of the Cross-Industry Report of Standard Benchmarks' Key Performance Indicators (KPIs). New metrics show managed spend as a percent of total spend, managed spend per supply management employee, and the updated average operating expense per supply management employee. This industry-specific breakout report is only available to CAPS Research corporate members and benchmarking subscribers who also receive comparative reports that show their company-specific data alongside the aggregated data of their industry peers.
Cross-Industry Metric Report July 2014 - Engineering & Construction Industry
July 2014
Benchmarking Team
CAPS Research
This Engineering & Construction Industry breakout report provides an industry-specific view of the Cross-Industry Report of Standard Benchmarks' Key performance Indicators (KPIs). New metrics for this industry sector include a look at managed spend as a percent of total spend, managed spend per supply management employee, and the updated average operating expense per supply management employee. This industry-specific breakout report is only available to CAPS Research corporate members and benchmarking subscribers who also receive comparative reports that show their company-specific data alongside the aggregated data of their industry peers.
Cross-Industry Metric Report July 2014 - Financial Services Industry
July 2014
Benchmarking Team
CAPS Research
This Financial Services Industry breakout report provides an industry-specific view of the Cross-Industry Report of Standard Benchmarks' Key Performance Indicators (KPIs). New metrics this year include a look at the industry's average Supply Management Return on Investment (ROI) which shows an average ROI of 1397.6%, or a return of $13.98 for every $1 of supply management operating expense. Other KPIs show managed spend as a percent of total spend managed spend per supply management employee, and the updated average operating expense per supply management employee. This industry-specific breakout report is only available to CAPS Research corporate members and benchmarking subscribers who also receive comparative reports that show their company-specific data alongside the aggregated data of their industry peers.
Cross-Industry Metric Report July 2014 - Industrial Manufacturing Industry
July 2014
Benchmarking Team
CAPS Research
This Industrial Manufacturing Industry breakout report provides an industry-specific view of the Cross-Industry Report of Standard Benchmarks' Key Performance Indicators (KPIs). New metrics this year include a look at the industry's average Supply Management Return on Investment (ROI) which shows an average ROI of 410.7%, or a return of $4.11 for ever $1 of supply management operating expense. Other KPIs show managed spend as a percent of total spend, managed spend per supply management employee, and the updated average operating expense per supply management employee. This industry-specific breakout report is only available to CAPS Research corporate members and benchmarking subscribers who also receive comparative reports that show their company-specific data alongside the aggregated data of their industry peers.
Cross-Industry Metric Report July 2014 - Petroleum Industry
July 2014
Benchmarking Team
CAPS Research
This Petroleum Industry breakout report provides an industry-specific view of the Cross-Industry Report of Standard Benchmarks' Key Performance Indicators (KPIs). New metrics this year include a look at the industry's average Supply Management Return on Investment (ROI) which shows an average ROI of 483.4%, or a return of $4.83 for every $1 of supply management operating expense. Other KPIs show managed spend as a percent of total spend, managed spend per supply management employee, and the updated average operating expense per supply management employee. This industry-specific breakout report is only available to CAPS Research corporate members and benchmarking subscribers who also receive comparative reports that show their company-specific data alongside the aggregated data of their industry peers.
Cross-Industry Metric Report July 2014 - Utilities Industry
July 2014
Benchmarking Team
CAPS Research
This Utilities Industry breakout report provides an industry-specific view of the Cross-Industry Report of Standard Benchmarks' Key Performance Indicators (KPIs). New metrics this year include a look at the industry's average Supply Management Return on Investment (ROI) which shows an average ROI of 425.4%, or a return of $4.25 for every $1 of supply management operating expense. Other KPIs show managed spend as a percent of total spend, managed spend per supply management employee, and the updated average operating expense per supply management employee. This industry-specific breakout report is only available to CAPS Research corporate members and benchmarking subscribers who also receive comparative reports that show their company-specific data alongside the aggregated data of their industry peers.
Cross-Industry Metric Report July 2014 - Other Manufacturing Industries
July 2014
Benchmarking Team
CAPS Research
This breakout report for Other Manufacturing Industries provides a more detailed view of the Cross-Industry Report of Standard Benchmarks' Key Performance Indicators (KPIs). New metrics this year include a look at the average Supply Management Return on Investment (ROI) which shows this group of companies reported an average ROI of 596.9%, or a return of $5.97 for every $1 of supply management operating expense. Other KPIs show managed spend as a percent of total spend, managed spend per supply management employee, and the updated average operating expense per supply management employee. This manufacturing-specific breakout report is only available to CAPS Research corporate members and benchmarking subscribers who also receive comparative reports that show their company-specific data alongside the aggregated data of their manufacturing peers.
Cross-Industry Metric Report July 2014 - Other Non-Manufacturing Industries
July 2014
Benchmarking Team
CAPS Research
This breakout report for Other Non-Manufacturing Industries provides a more detailed view of the Cross-Industry Report of Standard Benchmarks' Key Performance Indicators (KPIs). New metrics this year include a look at the average Supply Management Return on Investment (ROI) which shows this group of companies reported an average ROI of 614.3%, or a return of $6.14 for every $1 of supply management operating expense. Other KPIs show managed spend as a percent of total spend, managed spend per supply management employee, and the updated average operating expense per supply management employee. This non-manufacturing-specific breakout report is only available to CAPS Research corporate members and benchmarking subscribers who also receive comparative reports that show their company-specific data alongside the aggregated data of their non-manufacturing peers.
Engaging 2014 - Health Care Supply Chain Top Trends
July 2014
Eugene S. Schneller, Ph.D.
Arizona State University
The US health care delivery system is experiencing an unprecedented rate of change. New financial models, characterized by pay for performance, gainsharing and bundled payments bring forth important opportunity for knowledge of product impact on clinical performance and for product-related savings in the continuum of care. As improved product management and synchronization of products across service lines and settings of care become the standard for excellence in supply chain management, many of HSRC-ASU earlier-year trends are being accelerated in response.
Cross-Industry Metric Report July 2014
July 2014
Benchmarking Team
CAPS Research
This Cross-Industry Report of Standard Benchmarks provides information on twenty-one commonly referenced Key Performance Indicators (KPIs). New this year is a look at each industry's average Supply Management Return on Investment (ROI). For example, the metric report shows the ROI for Financial Services companies of 1,398% or a return of $13.98 for every $1 of supply management operating expense. ROI values are provided for six unique industry sectors. Other KPIs show the percent of total spend managed/controlled by the supply management organization, managed spend per supply management employee, the average operating expense per supply management employee, etc. In addition to this metric report, CAPS Research corporate members and benchmarking participants are provided corresponding industry-specific breakout reports. Member companies and benchmarking subscribers also receive comparative reports showing their data alongside industry-specific aggregated data.
Best Practices for Sourcing Pharmaceutical Benefits
June 2014
Roberta J. Jennings
CAPS Research
With escalating healthcare costs, pharmaceutical benefits management (PBM) has appeared on the radar screen of many organizations, and is a category ripe for opportunity, as many executives say they are striving to apply proven sourcing principles long used for materials and services to this unique, non-traditional spend area. With total U.S. pharmacy spending topping $325B in 2012, companies are seeking opportunities to effectively gain control of the pharmaceutical benefits spend area, optimize contract management, and gain data transparency, all while offering competitive employee benefits. This report highlights the key points and lessons from the presentations and discussions of a Critical Issues Partnership event “Best Practices of Sourcing Pharmaceutical Benefits" hosted by CAPS Research, a member company, and the Health Sector Supply Chain Research Consortium at Arizona State University.
Managing C-TPAT Programs and Activities
June 2014
Phil Carter
CAPS Research
The Customs-Trade Partnership Against Terrorism (C-TPAT) is a voluntary government-business initiative to build cooperative relationships that strengthen and improve overall international supply chain and U.S. border security. Many U.S. manufacturing companies participate in this program. However, resources are required to become certified, to keep certifications up-to-date and to work with supply chain partners to ensure that the requirements of C-TPAT are met. Tom Linton, CPO of Flextronics, would like information on how companies are managing their C-TPAT programs and activities. Please respond to the following questions. Questions: 1. What is your company's C-TPAT certification status? ___ Certified at Tier 1 ___ Certified at Tier 2 ___ Certified at Tier 3 ___ In process to become certified ___ Not working on certification If you indicated that your company is not working on certification, you are finished with this CPO Insights question set and can submit your response by replying to this email now. Otherwise, please continue. 2. Approximately how many years has your company been C-TPAT certified? ______ years certified 3. What executive office or function is responsible for overseeing C-TPAT in your organization? 4. Over the next three years, how do you expect responsibility for C-TPAT in your organization to change? 5. Approximately how many FTEs are assigned to managing C-TPAT? ______ FTEs assigned at the corporate level ______ FTEs assigned in your business units/divisions 6. Briefly describe the relationship among the C-TPAT personnel assigned to your organization’s business units/divisions and your corporate C-TPAT personnel. 7. What other supply chain security programs, if any, are C-TPAT management personnel responsible for managing? 8. Over the next three years, how do you expect the number of the number of FTE resources assigned to C-TPAT activities to change?
Measuring Supplier Diversity Program Performance 2014 - Industrial Manufacturing
June 2014
Benchmarking Team
CAPS Research
The Industrial Manufacturing Industry breakout report to the 2014 update to the highly acclaimed Supplier Diversity Performance Report is now available. Key metrics include the observations that more than 46 percent of the survey respondents reported an increase in their total number of diversity suppliers while 31 percent reported a decrease in their base of diversity suppliers. The remaining 23 percent reported that their total number of diversity suppliers did not change during the reporting period. In previous years the reports only focused on diversity spend as a percent of total spend. This year’s report also looks at diversity spend as a percent of spend that is managed and/or controlled by the supply management group. Some organizations refer to this as ‘sourceable spend’.
Measuring Supplier Diversity Program Performance 2014 - Diversified Foods and Beverages
June 2014
Benchmarking Team
CAPS Research
The Diversified Foods and Beverages Industry breakout report to the 2014 update to the highly acclaimed Supplier Diversity Performance Report is now available. Key metrics include the observations that more than 57 percent of the survey respondents reported an increase in their total number of diversity suppliers while 29 percent reported a decrease in their base of diversity suppliers. The remaining 14 percent reported that their total number of diversity suppliers did not change during the reporting period. In previous years the reports only focused on diversity spend as a percent of total spend. This year’s report also looks at diversity spend as a percent of spend that is managed and/or controlled by the supply management group. Some organizations refer to this as ‘sourceable spend’.
Measuring Supplier Diversity Program Performance 2014 - Engineering & Construction
June 2014
Benchmarking Team
CAPS Research
The Engineering and Construction Industry breakout report to the 2014 update to the highly acclaimed Supplier Diversity Performance Report is now available. Key metrics include the observations that more than 57 percent of the survey respondents reported an increase in their total number of diversity suppliers while 0 percent reported a decrease in their base of diversity suppliers. The remaining 43 percent reported that their total number of diversity suppliers did not change during the reporting period. In previous years the reports only focused on diversity spend as a percent of total spend. This year’s report also looks at diversity spend as a percent of spend that is managed and/or controlled by the supply management group. Some organizations refer to this as ‘sourceable spend’.
Measuring Supplier Diversity Program Performance 2014 - Financial Services
June 2014
Benchmarking Team
CAPS Research
The Industrial Manufacturing Industry breakout report to the 2014 update to the highly acclaimed Supplier Diversity Performance Report is now available. Key metrics include the observations that more than 12 percent of the survey respondents reported an increase in their total number of diversity suppliers while 75 percent reported a decrease in their base of diversity suppliers. The remaining 13 percent reported that their total number of diversity suppliers did not change during the reporting period. In previous years the reports only focused on diversity spend as a percent of total spend. This year’s report also looks at diversity spend as a percent of spend that is managed and/or controlled by the supply management group. Some organizations refer to this as ‘sourceable spend’.
Measuring Supplier Diversity Program Performance 2014 - Healthcare
June 2014
Benchmarking Team
CAPS Research
The Healthcare Industry breakout report to the 2014 update to the highly acclaimed Supplier Diversity Performance Report is now available. Key metrics include the observations that more than 62 percent of the survey respondents reported an increase in their total number of diversity suppliers while 25 percent reported a decrease in their base of diversity suppliers. The remaining 13 percent reported that their total number of diversity suppliers did not change during the reporting period. In previous years the reports only focused on diversity spend as a percent of total spend. This year’s report also looks at diversity spend as a percent of spend that is managed and/or controlled by the supply management group. Some organizations refer to this as ‘sourceable spend’.
Measuring Supplier Diversity Program Performance 2014 - Manufacturers
June 2014
Benchmarking Team
CAPS Research
The Manufacturers breakout report to the 2014 update to the highly acclaimed Supplier Diversity Performance Report is now available. Key metrics include the observations that more than 38 percent of the survey respondents reported an increase in their total number of diversity suppliers while 31 percent reported a decrease in their base of diversity suppliers. The remaining 31 percent reported that their total number of diversity suppliers did not change during the reporting period. In previous years the reports only focused on diversity spend as a percent of total spend. This year’s report also looks at diversity spend as a percent of spend that is managed and/or controlled by the supply management group. Some organizations refer to this as ‘sourceable spend’.
Measuring Supplier Diversity Program Performance 2014 - Non Manufacturers
June 2014
Benchmarking Team
CAPS Research
The Non Manufacturers breakout report to the 2014 update to the highly acclaimed Supplier Diversity Performance Report is now available. Key metrics include the observations that more than 43 percent of the survey respondents reported an increase in their total number of diversity suppliers while 25 percent reported a decrease in their base of diversity suppliers. The remaining 32 percent reported that their total number of diversity suppliers did not change during the reporting period. In previous years the reports only focused on diversity spend as a percent of total spend. This year’s report also looks at diversity spend as a percent of spend that is managed and/or controlled by the supply management group. Some organizations refer to this as ‘sourceable spend’.
Measuring Supplier Diversity Program Performance 2014 - Petroleum
June 2014
Benchmarking Team
CAPS Research
The Petroleum Industry breakout report to the 2014 update to the highly acclaimed Supplier Diversity Performance Report is now available. Key metrics include the observations that more than 71 percent of the survey respondents reported an increase in their total number of diversity suppliers while 29 percent reported a decrease in their base of diversity suppliers. In previous years the reports only focused on diversity spend as a percent of total spend. This year’s report also looks at diversity spend as a percent of spend that is managed and/or controlled by the supply management group. Some organizations refer to this as ‘sourceable spend’.
Measuring Supplier Diversity Program Performance 2014 - Utilities
June 2014
Benchmarking Team
CAPS Research
The Utilities Industry breakout report to the 2014 update to the highly acclaimed Supplier Diversity Performance Report is now available. Key metrics include the observations that more than 38 percent of the survey respondents reported an increase in their total number of diversity suppliers while 8 percent reported a decrease in their base of diversity suppliers. The remaining 54 percent reported that their total number of diversity suppliers did not change during the reporting period. In previous years the reports only focused on diversity spend as a percent of total spend. This year’s report also looks at diversity spend as a percent of spend that is managed and/or controlled by the supply management group. Some organizations refer to this as ‘sourceable spend’.
Measuring Supplier Diversity Program Performance 2014 - ISM Supplier Diversity Group
June 2014
Benchmarking Team
CAPS Research
The ISM Supplier Diversity Group breakout report to the 2014 update to the highly acclaimed Supplier Diversity Performance Report is now available. Key metrics include the observations that 50 percent of the survey respondents reported an increase in their total number of diversity suppliers while 28 percent reported a decrease in their base of diversity suppliers. The remaining 22 percent reported that their total number of diversity suppliers did not change during the reporting period. In previous years the reports only focused on diversity spend as a percent of total spend. This year’s report also looks at diversity spend as a percent of spend that is managed and/or controlled by the supply management group. Some organizations refer to this as ‘sourceable spend’.
Measuring Supplier Diversity Program Performance 2014
June 2014
Benchmarking Team
CAPS Research
The 2014 update to the highly acclaimed Supplier Diversity Performance Report is now available. Key metrics include the observations that more than 40 percent of the survey respondents reported an increase in their total number of diversity suppliers while 25 percent reported a decrease in their base of diversity suppliers. The remaining 34 percent reported that their total number of diversity suppliers did not change during the reporting period. In previous years the reports only focused on diversity spend as a percent of total spend. This year's report also looks at diversity spend as a percent of spend that is managed and/or controlled by the supply management group. Some organizations refer to this as 'sourceable spend'.
Measuring Supplier Diversity Program Performance - 2014
June 2014
Benchmarking Team
CAPS Research
Survey that corresponds to the Measuring Supplier Diversity Program Performance 2014 Report.
Procurement Practices of Chinese Companies (AERT 2014)
June 2014
Dr. JianQiang Hu
Fudan University
Using the findings from several research projects, Dr. Hu highlights the procurement practices of enterprises based in China, and that are doing business in China and globally. He highlights key insights around topics that include supplier selection, supplier assessment and incentives, information sharing and ERP systems, relationships with suppliers, risk management, the importance of procurement to the enterprise, purchasing personnel and training, global sourcing and social responsibility, and concludes with procurement trends and future directions.
Emerging Global Supply Strategies (AERT 2014)
June 2014
Phillip L. Carter, D.B.A.
CAPS Research
Dr. Carter uses research data to uncover the myths and realities about reshoring, offshoring and near-shoring. He arrives at the conclusion that the important question is not about whether or not to re-shore, but that companies should asking, “How are global manufacturing and sourcing strategies changing where we locate operations and source goods and services?” He then shares CAPS Research findings and insights about company and supply global trends and strategies, including multi-year trends and maturity models.
China’s Global and Economic Position
June 2014
Siew Loong Wong
APL Logistics, Ltd.
Mr. Wong details the position, strengths and vulnerabilities of China as a global economy, and provides an internal view of what economic activity is happening and where in the country. His observations include: (1) China will remain the world’s economy engine and become the No. 1 trading country; (2) China is striving for a more balanced economy; (3) as per estimation, China will move towards an unprecedented urbanization scenario in human history; (4) however, China’s urbanization will still follow today’s pattern, highly concentrated in the east with pockets in the west; and (5) there are tremendous logistics needs brought by China’s urbanization and improved purchasing power that will drive imports.
Procurement Practices of Chinese Companies - Overview
June 2014
Dr. JianQiang Hu;Dr. Qiying Hu
Fudan University
Very little research has been published on the purchasing practices of Chinese companies in China. In the Focus Study report researchers from Fudan University in Shanghai, China provide readers with information on Chinese business practices for supplier selection and qualification, supplier development, and supplier relationship management. Additionally the researchers discuss how Chinese companies organize their purchasing functions and the differences and similarities between Chinese firms and multi-national firms. For this project the researchers conducted extensive interviews at 11 Chinese companies, conducted a Roundtable at which purchasing managers discussed these issues, and also collected data on these issues using a survey distributed to Chinese companies. This document provides an overview of the project and includes an introduction to the project, the activities conducted to gather data and the goals the authors set out to achieve in their research. Other reports (which may only be available to CAPS Research member companies) include the Focus Study, which is the most comprehensive look at the research. The full Focus Study report is also available in Mandarin.
Managing Commodity Price Volatility and Risk – Executive Overview
June 2014
George A. Zsidisin, Ph.D., C.P.M.;Janet L. Hartley, Ph.D.;Lutz Kaufmann, Ph.D.;et al.
Virginia Commonwealth University;Bowling Green State University;WHU - Otto Beisheim School of Management
All organizations including those in the private sector, non-profit entities, and governmental agencies, are exposed to commodity price volatility and risk at some level. Risk exposure is either from direct raw materials and energy purchases or from risk upstream in their supply chains from commodities purchased by their suppliers. The purpose of this report is to disseminate findings from a study as to how firms identify, assess, and manage commodity price volatility associated with their direct purchases, as well as the risk of commodity price volatility in their upstream supply chains (e.g. supplier purchases). This document provides all an overview of the research project and includes an introduction to the project. Other reports (which may only be available to CAPS Research member companies) include a Focus Study report that provides the most comprehensive look at the research findings, lessons learned and observations; and an Executive Report that is a condensed version of the larger Focus Study report; and an Executive Brief which lists the most salient points of the research findings.
Managing Commodity Price Volatility and Risk – Executive Report
June 2014
George A. Zsidisin, Ph.D., C.P.M.;Janet L. Hartley, Ph.D.;Lutz Kaufmann, Ph.D.;et al.
Virginia Commonwealth University;Bowling Green State University;WHU - Otto Beisheim School of Management
All organizations including those in the private sector, non-profit entities, and governmental agencies, are exposed to risk from commodity price volatility. This risk exposure is either from direct raw materials and energy purchases or from purchases of commodities and energy by companies upstream in their supply chains. The purpose of this research was to identify how firms assess and manage commodity price risk associated with their direct purchases and purchases in their upstream supply chains. This Executive Report is a condensed version of the larger Focus Study report. Other reports (which may only be available to CAPS Research member companies) include a Focus Study report that provides the most comprehensive look at the research findings, lessons learned and observations, and an Executive Brief, which lists the most salient points of the research findings.
Procurement Practices of Chinese Companies
June 2014
Dr. JianQiang Hu;Dr. Qiying Hu
Fudan University
Very little research has been published on the purchasing practices of Chinese companies in China. In this report researchers from Fudan University in Shanghai, China provide readers with information on Chinese business practices for supplier selection and qualification, supplier development, and supplier relationship management. Additionally the researchers discuss how Chinese companies organize their purchasing functions and the differences and similarities between Chinese firms and multi-national firms. For this project the researchers conducted extensive interviews at 11 Chinese companies, conducted a Roundtable at which purchasing managers discussed these issues, and also collected data on these issues using a survey distributed to Chinese companies. This report is also available in Mandarin.
Managing Commodity Price Volatility and Risk
June 2014
George A. Zsidisin, Ph.D., C.P.M.;Janet L. Hartley, Ph.D.;Lutz Kaufmann, Ph.D.;et al.
Virginia Commonwealth University;Bowling Green State University;WHU - Otto Beisheim School of Management
All organizations including those in the private sector, non-profit entities, and governmental agencies, are exposed to risk from commodity price volatility. This risk exposure is either from direct raw materials and energy purchases or from purchases of commodities and energy by companies upstream in their supply chains. The purpose of this research was to identify how firms assess and manage commodity price risk associated with their direct purchases and purchases in their upstream supply chains. This Focus Study provides research findings, lessons learned and other insights. Related documents include an Executive Report - a condensed version of the larger report and an Executive Brief that presents only the most salient points from the research.
SnapShots 2014: Corporate/Commercial Payment Card Information - Aerospace and Defense Contracting
May 2014
Benchmarking Team
CAPS Research
This SnapShots breakout report summarizes information provided by Aerospace and Defense Contracting companies about their use of one or more of the following corporate/commercial payment cards: Purchasing/procurement cards, Travel & entertainment cards, and Commercial multi-cards. About 72% of the participants reported they use two payment card solution providers for all of their payment card requirements, and only a small percent reported having employees travel on business to countries or global regions that are not being supported by any of the organization's current payment card solutions providers. About 55% of the survey participants reported that payment card spend is decreasing, coincident to a decrease in maverick spend associated with payment cards. The report shows the percent of participants who receive less than/more than 100 basis points for each dollar spent. Survey data indicates no correlation between basis points awarded and total card spend. Overall, the participants reported they are satisfied with the overall program quality (6.18 on a 7.0 scale) of their payment card solutions provider(s).
SnapShots 2014: Corporate/Commercial Payment Card Information - DOE and NNSA Contractors
May 2014
Benchmarking Team
CAPS Research
This SnapShots breakout report summarizes information provided by DOE/NNSA contractors about their use of one or more of the following corporate/commercial payment cards: Purchasing/procurement cards, Travel & entertainment cards, and Commercial multi-cards. About 85% of the participants reported they use only one payment card solutions provider for all of their payment card requirements. The report shows the percent of participants who receive less than/more than 100 basis points for each dollar spent. Survey data indicates there is no correlation between basis points awarded and total card spend. Overall, the participants reported they are satisfied with the overall program quality (5.83 on a 7.0 scale) of their payment card solutions provider(s).
SnapShots 2014: Corporate/Commercial Payment Card Information - Financial Services
May 2014
Benchmarking Team
CAPS Research
This SnapShots breakout report summarizes information provided by Financial Services companies about their use of one or more of the following corporate/commercial payment cards: Purchasing/procurement cards, Travel & entertainment cards, and Commercial multi-cards. About 75% of the participants reported they use only one payment card solutions provider for all of their payment card requirements, and most of those organizations reported their card solutions provider is capable of supporting all of their global T&E requirements. About 70% of the survey participants reported overall payment card spend is increasing, and the maverick spend associated with payment cards is not changing. The report shows the percent of participants who receive less than/more than 100 basis points for each dollar spent. Survey data indicates there is no correlation between basis points awarded and total card spend. Overall, the participants reported they are satisfied with the overall program quality (5.25 on a 7.0 scale) of their payment card solutions provider(s).
SnapShots 2014: Corporate/Commercial Payment Card Information - Industrial Manufacturing
May 2014
Benchmarking Team
CAPS Research
This SnapShots breakout report summarizes information provided by Industrial Manufacturing Companies about their use of one or more of the following corporate/commercial payment cards: Purchasing/procurement cards, Travel & entertainment cards, and Commercial multi-cards. About 72% of the participants reported they use only one payment card solutions provider for all of their payment card requirements, and most of those organizations reported their card solutions provider is capable of supporting all of their global T&E requirements. About 60% of the survey participants reported overall payment card spend is increasing, and the maverick spend associated with payment cards is decreasing. The report shows the percent of participants who receive less than/more than 100 basis points for each dollar spent. Survey data indicates there is no correlation between basis points awarded and total card spend. Overall, the participants reported they are satisfied with the overall program quality (5.2 on a 7.0 scale) of their payment card solutions provider(s).
SnapShots 2014: Corporate/Commercial Payment Card Information - Manufacturers
May 2014
Benchmarking Team
CAPS Research
This SnapShots breakout report summarizes information provided by the discrete and process manufacturing companies about their use of one or more of the following corporate/commercial payment cards: Purchasing/procurement cards, Travel & entertainment cards, and Commercial multi-cards. Data shows that 50% of the participants reported they use only one payment card solutions provided for all of their payment card requirements, and most of those organizations reported their card solutions provider is capable of supporting all of their global T&E requirements. About 55% of these participants reported overall payment card spend is increasing, and the maverick spend associated with payment cards did not change. The report shows the percent of participants who receive less than/more than 100 basis points for each dollar spent. Survey data indicates there is no correlation between basis points awarded and total card spend. The participants reported they are satisfied with the overall quality (5.5 on a 7.0 scale) of their payment card solutions provider(s).
SnapShots 2014: Corporate/Commercial Payment Card Information - Non-Manufacturers
May 2014
Benchmarking Team
CAPS Research
This SnapShots breakout report summarizes information provided by the non-manufacturers about their use of one or more of the following corporate/commercial payment cards: Purchasing/procurement cards, Travel & entertainment cards, and Commercial multi-cards. About 72% of the non-manufacturers reported they use only one payment card solutions provider for all of their payment card requirements, and most of those organizations reported their card solutions provider is capable of supporting all of their global T&E requirements. Most of the non-manufacturers (60%) reported their overall payment card spend is increasing, but the maverick spend associated with payment cards is decreasing. The report shows the percent of participants who receive less than/more than 100 basis points for each dollar spent. Survey data indicates there is no correlation between basis points awarded and total card spend. Overall, the participants reported they are satisfied with the overall program quality (5.5 on a 7.0 scale) of their payment card solutions provider(s).
SnapShots 2014: Corporate/Commercial Payment Card Information - Petroleum Industry
May 2014
Benchmarking Team
CAPS Research
This SnapShots breakout report summarizes information provided by Petroleum Industry companies about their use of one or more of the following corporate/commercial payment cards: Purchasing/procurement cards, Travel & entertainment cards, and Commercial multi-cards. The majority of these companies (80%) reported they use only one payment card solutions provider for all of their payment card requirements, and most of those organizations reported their card solutions provider is capable of supporting all of their global T&E requirements. About 63% of the survey participants reported overall payment card spend is increasing, and the maverick spend associated with payment cards did not change. The report shows the percent of participants who receive less than/more than 100 basis points for each dollar spent. Survey data indicates there is no correlation between basis points awarded and total card spend. Overall, the participants reported they are satisfied with the overall program quality (5.2 on a 7.0 scale) of their payment card solutions provider(s).
SnapShots 2014: Corporate/Commercial Payment Card Information - Utilities
May 2014
Benchmarking Team
CAPS Research
This SnapShots breakout report summarizes information provided by the Utilities companies about their use of one or more of the following corporate/commercial payment cards: Purchasing/procurement cards, Travel & entertainment cards, and Commercial multi-cards. More than 90% of the participants reported they use only one payment card solutions provider for all of their payment card requirements, and all of the organizations reported their card solutions provider is capable of supporting all of their global T&E requirements. About 66% of the survey participants reported overall payment card spend is increasing, and the maverick spend associated with payment cards did not change. The report shows the percent of participants who receive less than/more than 100 basis points for each dollar spent. Survey data indicates there is no correlation between basis points awarded and total card spend. Overall, the participants reported they are satisfied with the overall program quality (5.6 on a 7.0 scale) of their payment card solutions provider(s).
SnapShots 2014: Corporate/Commercial Payment Card Information
May 2014
Benchmarking Team
CAPS Research
This SnapShots report summarizes information provided by more than 120 companies about their use of one or more of the following corporate/commercial payment cards: Purchasing/procurement cards, Travel & entertainment cards, and Commercial multi-cards. About 64% of the participants reported they use only one payment card solutions provider for all of their payment card requirements, and most of those organizations reported their card solutions provider is capable of supporting all of their global T&E requirements. About 57% of the survey participants reported overall payment card spend is increasing, and the maverick spend associated with payment cards is decreasing. The report shows the percent of participants who receive less than/more than 100 basis points for each dollar spent. Survey data indicates there is no correlation between basis points awarded and total card spend. Overall, the participants reported they are satisfied with the overall program quality (5.5 on a 7.0 scale) of their payment card solutions provider(s).
Digitally Integrating the Supply Base
May 2014
Roberta J. Jennings;Phillip L. Carter, D.B.A.
CAPS Research
Based on a Critical Issues event co-hosted by CAPS Research and a member company, this report is a summary of the discussion and presentations by sourcing professionals who spent the day exploring best practices and decision making concerning digital integration of suppliers. Topics captured from the day and summarized in this report include: Making the Business Case; Technology Tools; Survey results on the subject; Lessons Learned; Demonstrated Benefits; Known Challenges and Prerequisites to Success Implementation of Digital Integration. Brief overviews of each presentation are included.
SnapShots 2014: Supplier Performance Measurement Programs - Aerospace and Defense
May 2014
Benchmarking Team
CAPS Research
This Aerospace & Defense industry-specific breakout report corresponds to the Supplier Performance Measurement Programs benchmarking report published in March 2014. This breakout report provides an industry perspective of the tools, processes, and measures used by Aerospace & Defense companies to determine if their suppliers are aligned with their business goals and objectives. As noted in the larger report, supplier performance measurements can help to drive product and service improvements, cut costs, and moderate risk. This breakout report also provides information on how the industry participants rated the effectiveness of different supplier performance measures.
SnapShots 2014: Supplier Performance Measurement Programs - Engineering & Construction
May 2014
Benchmarking Team
CAPS Research
This Engineering & Construction industry-specific breakout report corresponds to the Supplier Performance Measurement Programs benchmarking report published in March 2014. This breakout report provides an industry perspective of the tools, processes, and measures used by Engineering & Construction companies to determine if their suppliers are aligned with their business goals and objectives. As noted in the larger report, supplier performance measurements can help to drive product and service improvements, cut costs, and moderate risk. This breakout report also provides information on how the industry participants rated the effectiveness of different supplier performance measures.
SnapShots 2014: Supplier Performance Measurement Programs - Financial Services
May 2014
Benchmarking Team
CAPS Research
This Financial Services industry-specific breakout report corresponds to the Supplier Performance Measurement Programs benchmarking report published in March 2014. This breakout report provides an industry perspective of the tools, processes, and measures used by Financial Services companies to determine if their suppliers are aligned with their business goals and objectives. As noted in the larger report, supplier performance measurements can help to drive product and service improvements, cut costs, and moderate risk. This breakout report also provides information on how the industry participants rated the effectiveness of different supplier performance measures.
SnapShots 2014: Supplier Performance Measurement Programs - Industrial Manufacturing
May 2014
Benchmarking Team
CAPS Research
This Industrial Manufacturing industry-specific breakout report corresponds to the Supplier Performance Measurement Programs benchmarking report published in March 2014. This breakout report provides an industry perspective of the tools, processes, and measures used by Industrial Manufacturing companies to determine if their suppliers are aligned with their business goals and objectives. As noted in the larger report, supplier performance measurements can help to drive product and service improvements, cut costs, and moderate risk. This breakout report also provides information on how the industry participants rated the effectiveness of different supplier performance measures.
SnapShots 2014: Supplier Performance Measurement Programs - Petroleum
May 2014
Benchmarking Team
CAPS Research
This Petroleum (Oil & Gas) industry-specific breakout report corresponds to the Supplier Performance Measurement Programs benchmarking report published in March 2014. This breakout report provides an industry perspective of the tools, processes, and measures used by petroleum companies to determine if their suppliers are aligned with their business goals and objectives. As noted in the larger report, supplier performance measurements can help to drive product and service improvements, cut costs, and moderate risk. This breakout report also provides information on how the industry participants rated the effectiveness of different supplier performance measures.
SnapShots 2014: Supplier Performance Measurement Programs - Semiconductor
May 2014
Benchmarking Team
CAPS Research
This Semiconductor manufacturing industry-specific breakout report corresponds to the Supplier Performance Measurement Programs benchmarking report published in March 2014. This breakout report provides an industry perspective of the tools, processes, and measures used by Semiconductor manufacturing companies to determine if their suppliers are aligned with their business goals and objectives. As noted in the larger report, supplier performance measurements can help to drive product and service improvements, cut costs, and moderate risk. This breakout report also provides information on how the industry participants rated the effectiveness of different supplier performance measures.
SnapShots 2014: Supplier Performance Measurement Programs - Utilities
May 2014
Benchmarking Team
CAPS Research
This Utilities industry-specific breakout report corresponds to the Supplier Performance Measurement Programs benchmarking report published in March 2014. This breakout report provides an industry perspective of the tools, processes, and measures used by Utilities companies to determine if their suppliers are aligned with their business goals and objectives. As noted in the larger report, supplier performance measurements can help to drive product and service improvements, cut costs, and moderate risk. This breakout report also provides information on how the industry participants rated the effectiveness of different supplier performance measures.
SnapShots 2014: Supplier Performance Measurement Programs - Manufacturers
May 2014
Benchmarking Team
CAPS Research
This breakout report corresponds to the Supplier Performance Measurement Programs benchmarking report published in March 2014. Rather than focus on one specific industry sector, this breakout report is a summary of data provided by all of the participating manufacturing-related companies who participated in the earlier report. This breakout report provides the manufacturers a perspective of the tools, processes, and measures used to determine if suppliers are aligned with their customers' business goals and objectives. As noted in the larger report, supplier performance measurements can help to drive product and service improvements, cut costs, and moderate risk. This breakout report also provides information on how manufacturing companies rated the effectiveness of different supplier performance measures.
SnapShots 2014: Supplier Performance Measurement Programs - Non-Manufacturing
May 2014
Benchmarking Team
CAPS Research
This breakout report corresponds to the Supplier Performance Measurement Programs benchmarking report published in March 2014. Rather than focus on one specific industry sector, this breakout report is a summary of data provided by all of the participating non-manufacturing companies who participated in the earlier report. This breakout report provides the non-manufacturers a perspective of the tools, processes, and measures used to determine if suppliers are aligned with their customers' business goals and objectives. As noted in the larger report, supplier performance measurements can help to drive product and service improvements, cut costs, and moderate risk. This breakout report also provides information on how non-manufacturing companies rated the effectiveness of different supplier performance measures.
Emerging Global Supply Strategies – Executive Overview
April 2014
Robert M. Monczka, Ph.D.;Phillip L. Carter, D.B.A.;William J. Markham;et al.
CAPS Research
What are the emerging global business and supply strategy trends? To answer this question, a major CAPS Research Initiative, Value Chain Strategies for a Changing Decade: Emerging Global Supply Strategies studied the strategies companies were implementing to respond to changing global conditions. Emerging company competitive strategies, outsourcing/insourcing, supplier location approaches and those supply strategies that further enable globalization were the focus. Fourteen companies across multiple industries participated in interviews and seven case examples were developed. E-survey responses from 100 companies also provided findings data. Four key company strategies to achieve worldwide competitiveness, growth and profits that directly impact global supply were identified. In addition, the research provides findings and insights about emerging outsourcing/insourcing strategies and possible changes to supplier locations and reasons why. Critical supply strategies to enhancing global competitiveness are also discussed. This document provides all an overview of the project. Other reports (which may only be available to CAPS Research member companies) include the Focus Study, which is the most comprehensive look at the research; an Executive Report, a condensed version of the larger report, and an Executive Brief, which lists the most salient points of the research findings.
Emerging Global Supply Strategies – Executive Report
April 2014
Robert M. Monczka, Ph.D.;Phillip L. Carter, D.B.A.;William J. Markham;et al.
CAPS Research
What are the emerging global business and supply strategy trends? To answer this question, a major CAPS Research Initiative, Value Chain Strategies for a Changing Decade: Emerging Global Supply Strategies studied the strategies companies were implementing to respond to changing global conditions. Emerging company competitive strategies, outsourcing/insourcing, supplier location approaches and those supply strategies that further enable globalization were the focus. Fourteen companies across multiple industries participated in interviews and seven case examples were developed. E-survey responses from 100 companies also provided findings data. Four key company strategies to achieve worldwide competitiveness, growth and profits that directly impact global supply were identified. In addition, the research provides findings and insights about emerging outsourcing/insourcing strategies and possible changes to supplier locations and reasons why. Critical supply strategies to enhancing global competitiveness are also discussed. This Executive Report provides for a high level condensed version of the research findings. The other documents in this series include an Executive Brief which lists the most salient points of the research findings and the Focus Study that provides the most comprehensive look at the research findings.
Best Practices for Managing Outsourced Manufacturing
April 2014
Roberta Jennings
CAPS Research
Based on a Critical Issues event co-hosted by CAPS Research and Intel Corporation, this report is a summary of the discussion and presentations by sourcing professionals who spent the day exploring best practices and decision making concerning outsourcing manufacturing and services. Topics captured from the day and summarized in this report include: Considering the Outsourcing Decision; Procurement's Role in Outsourcing; The Outsourcing Relationship; Multiple Outsourcing Models; Information Sharing and Visibility; and Measurements/Metrics. Brief overviews of each presentation are included.
Emerging Global Supply Strategies
April 2014
Robert M. Monczka, Ph.D.;Phillip L. Carter, D.B.A.;William J. Markham;et al.
CAPS Research
What are the emerging global business and supply strategy trends? To answer this question, a major CAPS Research Initiative, Value Chain Strategies for a Changing Decade: Emerging Global Supply Strategies studied the strategies companies were implementing to respond to changing global conditions. Emerging company competitive strategies, outsourcing/insourcing, supplier location approaches and those supply strategies that further enable globalization were the focus. Fourteen companies across multiple industries participated in interviews and seven case examples were developed. E-survey responses from 100 companies also provided findings data. Four key company strategies to achieve worldwide competitiveness, growth and profits that directly impact global supply were identified. In addition, the research provides findings and insights about emerging outsourcing/insourcing strategies and possible changes to supplier locations and reasons why. Critical supply strategies to enhancing global competitiveness are also discussed. The Focus Study provides the most comprehensive look at the research findings, conclusions, and provides executive guidance. The other documents in the series include an Executive Report, a condensed version of the larger report; and an Executive Brief, which lists the most salient points of the research findings.
Global Sourcing and Supply: Trends and Strategies
April 2014
Robert M. Monczka, Ph.D.
CAPS Research
Bob began by taking a look at what's happened in worldwide sourcing over the last ten years, and where companies find themselves as they look toward 2015 and beyond. Key points of discussion included the impact of growing global geopolitical uncertainty and the corresponding emerging company strategies to generate growth and profits. Bob detailed some of the important research results around insourcing and outsourcing, including the slowdown of outsourcing, the growth of insourcing, reasons for these changes, and a framework for assessing strategic options. He also included a snapshot of most popular sourcing countries, trends in supplier location changes, and the primary factors that are influencing decisions to change sourcing countries. Bob's presentation was based on a substantial project conducted by CAPS Research called "Value Chain Strategies for the Changing Decade: Emerging Global Supply Strategies," which included input from supply executives from numerous companies and industries.
Shaping the Strategic Business Model: A Case Study in Healthcare
April 2014
Jacklyn A. Sturm
Intel Corporation
Jackie began her presentation by explaining how supply chain fits into the overall business model at Intel, and the goals and drivers for the procurement organization. She also shared the journey Intel has recently undergone in piloting a new health care initiative in one of their geographic locations. She detailed the all-too-familiar soaring healthcare costs, and the opportunity these increased costs provide supply management to deliver even more value to the organization. By taking a closer look at the problem of health care costs in the U.S., understanding the market, and using enhanced data visibility and analysis, Intel was able to redesign and optimize the health care value chain in an innovative way that is based in a new structure of compensation.
The Global Economic Recovery Is on Track, But There Is No Shortage of Risks
April 2014
Nariman Behravesh
IHS
Dr. Behravesh provided a truly global snapshot of the economic drivers impacting world economies of the most important countries. He also addressed key trends and an outlook for the North American economy. Some of his key conclusions include: Overall global growth in 2014 will be better than 2013; the US energy boom is one of the bright spots, and there are other upside risks; Europe and Japan will do better, but not as well as the US; the recent sharp deceleration in the BRIC countries and other emerging markets is worrisome, and a return to the boom years of the 2000s is unlikely – but another crisis is also unlikely; low energy prices are a competitive "stimulus" for North America; other commodity prices are not a serious threat; inflation and interest rates will remain low for at least another year; and despite recent increases relative to emerging market currencies, the US dollar continues to provide a competitive advantage.
SnapShots 2014: Supplier Performance Measurement Programs
March 2014
Benchmarking Team
CAPS Research
The Supplier Performance Measurement Programs benchmarking report looks at the tools, processes, and measures used by companies to determine if their suppliers are aligned with their business goals and objectives. Supplier performance measurements can help to drive product and service improvements, cut costs, and moderate risk. Not unexpectedly, the majority of survey participants (70 percent) reported they have a formal supplier performance measurement program in place. About 85 percent of the companies that reported they do not yet have a supplier performance measurement program in place expect to have one within the next two years. Survey participants were asked to rate 13 different performance measures on a scale from 1 (not important) to 7 (very important). Four of the 13 performance measures - Quality, Delivery, Customer Satisfaction, and Service - averaged a score of 6 or higher.
Supply Strategy Implementation: Current State and Future Opportunities 2013
March 2014
Robert M. Monczka, Ph.D.;Kenneth J. Petersen, Ph.D.
CAPS Research;University of Tennessee
To achieve significant and successful transformation of supply management, companies need to assess how well they have implemented critical supply strategies. To assist in this effort, CAPS Research designed the Executive Assessment of Supply (EAS). This self-administered assessment lets companies determine the importance of various strategic strategies for their organization, the level of implementation and the results achieved. This report summarizes the results from these assessments based on responses from 74 supply organizations across 19 industries regarding 22 supply strategies and performance results. These results can help companies compare their strategic results with those achieved by other companies. Also companies can compare their recent results with the results of similar assessments completed in 2007, 2009, and 2011 to yield an even more comprehensive picture of implementation success and supply management performance.
Exchange Traded Commodities Risk Management Benchmarking Summary Report 2014
March 2014
Benchmarking Team
CAPS Research
Based on the results of the CAPS Research SnapShots Benchmarking survey titled 'Exchange Traded Commodities Risk Management', it appears that supply management organizations are not yet fully engaged in exchange-traded commodities risk. Less than one-third of the respondents answered 'yes' to the question, "Does your organization have an investment strategy that includes Exchange Traded Commodities?", and only about 25 percent of those who do not yet have an ETC investment risk strategy reported they expect to have one within the next two years. The companies who do currently have an investment strategy reported they also have a risk management program for their exchange-traded commodities that is centrally managed by their Procurement, Finance, or Treasury groups.
Strategic Supplier Development Programs and Activities Benchmarking Metric Report 2014
February 2014
Benchmarking Team
CAPS Research
Defined as the efforts of a company to increase the performance and/or capabilities of selected suppliers to meet the company's short-term and/or long-term supply needs, strategic supplier development is the focus of this new CAPS Research report created in partnership with a member company headquartered in Europe. The report examines the programs/processes organizations are using to enhance their supplier performance and/or capabilities. More specifically, it addresses the percent of participating organizations that have established policies and procedures in place to develop strategic suppliers, which development methods are currently being employed, and how companies execute their strategic supplier development projects. Almost 80% of participants reported that their organization has standard programs/procedures in place to support supplier development programs and activities, and these companies rated highly both the importance and effectiveness of their supplier development programs.
SnapShots 2014 - Digitally Integrating the Supply Base
February 2014
Benchmarking Team
CAPS Research
Companies have long depended on their supply base as a source for product and process innovations. Today's increasingly complex and rapidly changing business environment is requiring companies to determine if they can achieve a competitive advantage by developing a fully integrated and collaborative digital environment that will be shared across the enterprise and its suppliers. This report explores how some companies are addressing the challenges of digital integration. Slightly more one-half of the survey participants reported they have digital integration initiatives currently in process, and in most cases (65%) these initiatives are being driven by the Supply Management group and some combination of other departments (engineering, information technology, operations, etc.). The report highlights the scope and objectives of various digital integration initiatives; the strategies and tactics being used to protect sensitive information; digital integration methods, tools, and technologies; program incentives; and digital integration challenges.
DOE NNSA Contractors Benchmarking Metric Report 2013
February 2014
Benchmarking Team
CAPS Research
The DOE/NNSA (Department of Energy/National Nuclear Safety Administration) Contractors Benchmarking Metric Report 2013 contains key procurement performance measures including organizational structure, professional development, financial information, and supplier measures. Data was provided by 22 different DOE and NNSA laboratories (or sites). Key measures include training hours and costs, spend per procurement employee, operating costs per procurement employee, and supplier diversity goals and attainment. Other measures include procurement card usage and customer satisfaction surveys.
Environmental Sustainability across the Extended Value Chain
February 2014
Janet L. Hartley, Ph.D.;Phillip L. Carter, D.B.A.;Craig Carter, Ph.D.;et al.
CAPS Research
Are companies working effectively with their supply bases to meet their environmental sustainability challenges? A major CAPS Research initiative, Value Chain Strategies for the Changing Decade: Environmental Sustainability across the Extended Value Chain, studies how companies are approaching this activity. Environmental sustainability projects are categorized as product improvements, internal operational improvements, or joint buyer-supplier operational improvements. In-depth company interviews explore both the success factors and barriers that companies should consider when identifying and implementing environmental sustainability projects with their supply bases. The research also elaborates on supply management's role in environmental sustainability, internal organization related to topic, and engaging suppliers. This Focus Study provides the most comprehensive look at the research findings, conclusions, and recommended actions. The other documents in the series include an Executive Report, a condensed version of the larger report; a Case Analyses report, which includes 13 case studies from the firms interviewed; and an Executive Brief, which lists the most salient points of the research findings.
Environmental Sustainability across the Extended Value Chain – Executive Overview
February 2014
Phillip L. Carter, D.B.A.;Janet L. Hartley, Ph.D.;Craig Carter, Ph.D.;et al.
CAPS Research
Are companies working effectively with their supply bases to meet their environmental sustainability challenges? This Executive Overview provides a quick and comprehensive overview of a major research project exploring this topic. Based on in-depth company interviews, the Report summarizes research and case findings. Topics include both the success factors and barriers that companies should consider when identifying and implementing environmental sustainability projects in their supply bases, supply management's role in environmental sustainability, internal organization related to topic, and engaging suppliers. This document provides all an overview of the project and includes an Executive Summary of the research findings. Other reports (which may only be available to CAPS Research member companies) include the Focus Study, which is the most comprehensive look at the research; a Case Analyses report, which includes 13 case studies of the firms interviewed; an Executive Report, a condensed version of the larger report; and an Executive Brief, which provides a snapshot view of the research findings.
Environmental Sustainability across the Extended Value Chain – Executive Report
February 2014
Phillip L. Carter, D.B.A.;Janet L. Hartley, Ph.D.;Craig Carter, Ph.D.;et al.
CAPS Research
Are companies working effectively with their supply bases to meet their environmental sustainability challenges? This Executive Report provides a quick and comprehensive overview of a major research project exploring this topic. Based on in-depth company interviews, the Report summarizes research and case findings. Topics include both the success factors and barriers that companies should consider when identifying and implementing environmental sustainability projects in their supply bases, supply management's role in environmental sustainability, internal organization related to topic, and engaging suppliers. Value Chain Strategies for the Changing Decade: Environmental Sustainability across the Extended Value Chain — Executive Report summarizes the findings provided in larger Focus Study by the same name. Other documents in the series include a Case Analyses, detailing 13 company examples, and an Executive Brief that highlights the most salient points of the research.
Implementing Value Chain Environmental Sustainability – Case Study Findings
February 2014
Janet L. Hartley, Ph.D.;Phillip L. Carter, D.B.A.;Craig Carter, Ph.D.;et al.
CAPS Research
Using 13 real-life examples, Value Chain Strategies for the Changing Decade: Implementing Environmental Sustainability in the Value Chain — Case Study Findings, details how several large manufacturing firms have worked successfully with suppliers on environmental sustainability initiatives. The cases are categorized as: collaborative relationships with non-traditional value chain partners, switching to more environmentally sustainable alternatives, supply's role in waste reduction, managing environmental sustainability information within the value chain, and supplier relationship management. The report concludes with overall insights gleaned from the findings. This Case Analyses report complements a Focus Study, an Executive Report, and an Executive Brief, all based on the same research project.
Digitally Integrating the Supply Base 2014
January 2014
Phil Carter
CAPS Research
Background: In the manufacturing sector, Digital Integration is defined as "a fully integrated and collaborative environment founded on 3D product definition detailed and shared across the enterprise and suppliers to enable rapid, seamless, and affordable deployment of products from concept to disposal." However, digital integration is not limited to technical information or to manufacturing companies. For example, service sector companies also need to better integrate suppliers, large and small, into their services development processes. Digital integration of the supply chain can have several commercial and technical benefits including reduction of new product development lead times, cost reduction and risk mitigation. Please answer the following questions regarding digital integration. Questions: 1. Does your organization have initiatives underway to increase 'digital integration' within your supply base? ____ Yes ____ No If you answered 'No', you are finished with this CPO Insights question set and can submit your responses by replying to this email. If you answered 'Yes', briefly describe the scope and objectives of your digital integration initiatives: 2. Is the importance of your digital integration initiatives specific to the commercial side or technical side of your business? _______ Commercial _______ Technical _______ Both 3. Is your Supply Management group responsible for driving the organization's digital integration initiative? ____ Yes ____ No If you answered 'No', which group (engineering, information systems, etc.) has digital integration responsibilities? 4. What are your organization's biggest challenges in digitally integrating your supply base?
Investment Recovery Performance Metric Report 2013
December 2013
Benchmarking Team
CAPS Research
This report was developed in partnership with the Investment Recovery Association. In addition to the organizational information and operational benchmarks provided, there are a number of financial metrics related to the overall cost benefits of investment recovery programs as well as best practice implementation. One key metric shows that for every dollar of investment recovery operating expense, $27 is returned to the bottom line. Other benchmarks relate information about investment recovery services and processes, the effectiveness of program-related tools and technologies, and investment recovery staffing. Fifty-nine companies provided data for this report.
SnapShots 2013 - Non-Stock Material Management
December 2013
Benchmarking Team
CAPS Research
As companies become more efficient at maintaining inventories necessary for predictable operations some are focusing their attention on unique items that are not carried as part of their organization's normal inventory table. This short report provides information on the accounting and disposal methods the survey participants are using for non-stock materials and provides insight on the typical end-user for such material.
MRO Inventory Measures 2013
October 2013
Benchmarking Team
CAPS Research
This benchmarking report provides information on metrics specific to MRO (Maintenance, Repair, and Operations) products, and the dollar value of inventory being held to support the companies' Capital Projects. The survey was released to companies within the Petroleum industry sector and the Metals and Mining industry sector. The benchmarks focus on the dollar value of MRO inventories at the start and end of the reporting period, and the dollar value of MRO inventory consumed. The survey participants were also asked if they have an inventory category specifically for Capital Project-related equipment and products. This data was used to calculate the value of the inventory being held as a percent of the organizations' total CapEx spend. The survey corresponding to this report was developed in collaboration with a CAPS Research corporate member.
Managing a 'Strong Supplier' Relationship
October 2013
Benchmarking Team
CAPS Research
Strong supplier relationships occur when organizations become dependent on one or more unique suppliers because of the need for the suppliers' products/parts for market differentiation. A 'strong supplier' relationship might result in increased prices, market vulnerability, supply disruptions, quality issues, etc. This report looks at various strategies that companies might employ to minimize potential issues including acquisition, exclusive patents/licensing agreements, technology alliances, subsidizing other suppliers, use of alternative products/parts, and developing the capability to manufacture the products/parts in-house. The report also looks at different methods used to effectively manage 'strong supplier' relationships. The survey corresponding to this report was developed in collaboration with a CAPS Research corporate member.
Aerospace and Defense Industry Benchmarking Metric Report 2013
October 2013
Benchmarking Team
CAPS Research
The 2013 Aerospace and Defense Industry Benchmarking Metric Report provides an overview of the industry-specific survey and includes data for a number of new benchmarks. For example, this report shows the percent of organizations reporting an increase, decrease or no change in the number of active suppliers and the percentages of supply management professionals assigned to specific core functional areas (e.g., buyers, acquisition, management-level). Also new this year are key financial metrics including the supply management organizations Return on Investment (ROI).
Shared Services and Best Cost Resources
October 2013
John S. Gundersen CPSM
Emerson Process Management
Get an overview of Emerson's well-thought out plans and strategies behind their global and regional shared service centers and the reasons why certain cities/regions were selected, including insights about Emerson's project process, purchasing activities, transactional and tactical activities, with observations and challenges they face.
The Economic Outlook in an Uncertain World
October 2013
Lee McPheters, Ph.D.
Arizona State University
This presentation focuses on the macro and micro views and examples of the world and domestic economies. Topics include China and the Eurozone; determining if things are getting better, or worse; why we shouldn't expect a "Great Recovery"; unemployment and job creation; and the rate of recovery (yes, things are getting better, but slowly).
Driving Sustainability into the Supply Chain
October 2013
David Pulling
Sonoco Products Company
Get an inside look at Sonoco's commitment and strategy to take environmental sustainability beyond the four walls of their own organization and how they are driving it into their supply base.
Procurement - Driving Business Results
October 2013
Michael E. Slomke, C.P.M.
Honeywell International
In a thought-provoking and interactive session, Mike Slomke posed questions that include: What are the measures of procurement success? Who determines whether procurement is successful? Who influences these decisions? He provided insights about defining success, business results vs. priorities, how procurement can drive business results, speaking business language, and more.
Collaboration across the Extended Value Chain (BPW2013)
October 2013
Robert M. Monczka, Ph.D.
Arizona State University
Based on a CAPS Research project involving extensive interviews with supply management executives and expert analysis, Dr. Robert Monczka provided an overview of the Value Chain Collaboration (VCC) Research findings. Insights from the research highlighted best practices for value chain collaboration and how collaborating with suppliers can unlock additional value.
Geopolitical Realities, Trends, and Forces Shaping Your Company's Future
October 2013
James A. Crupi, Ph.D.
Strategic Leadership Solutions, Inc.
A compelling presentation about political, demographic, technology, and future trends and their probable impact on business. Specific topics included the social media revolution, resource scarcity, volatile global economic integration, and the new leadership paradigm.
Utilities Industry Benchmarking Metric Report 2013
September 2013
Benchmarking Team
CAPS Research
The 2013 Utilities Industry Metric Benchmarking Report provides an overview of the industry-specific survey and includes data for a number of new benchmarks. For example, this report shows how closely aligned are the percentages of actual supply management professionals assigned within core functional areas (planning, purchasing, and operations) to the planned assignments. Also new this year are key financial metrics including supply management operating expense as a percent of both total spend and managed/controlled spend, and supply management operating expense per supply management employee. The metric report includes demographic information about the utility companies participating in the survey and more than 35 benchmarks specific to supply management employees, financial information, and supplier data. Also included a list of the participants top three supply chain initiatives during the reporting period. All of the utilities companies that participated in the 2013 Utilities Industry Benchmarking Survey will receive this metric report as well as the follow-on summary report. CAPS Research corporate members and companies that subscribe to the benchmarking program will also receive individual comparative reports showing each company's performance alongside the aggregated data. It is important to remember that all data in each of the three unique reports are unattributed and will remain anonymous.
Outsourcing Manufacturing and Packaging
September 2013
Mark Copman
3M Company
Background: The Vice President, Sourcing Operations at 3M and his supply management team are giving renewed attention to the topic of outsourcing manufacturing and packaging. They would like to find out, at a strategic level, how other companies approach manufacturing outsourcing decisions. This includes questions of when, how and by whom outsourcing decisions are made. Also, once third parties have been engaged, what strategies have been found useful for maximizing value from the relationship. Please answer the following questions regarding contract manufacturing, including finished goods packaging. 1. At what stage in the new product development process do you conduct an analysis of whether to make the product internally or outsource it to a contract manufacturer? 2. On a year-over-year basis, approximately what overall average cost reduction percentage have you been able to achieve from your contract manufacturers? 3. What are your three most effective strategies for generating additional value (e.g. new growth and increased revenue streams) for your company from working with your contract manufacturers? 4. What are the three greatest risks associated with contracting manufacturing and how are you mitigating these risks? 5. What are the three most important skills that will be needed internally in your company over the next three years to successfully manage contract manufacturing?
Petroleum Industry Benchmarking Metric Report 2013 - Upstream Operations
September 2013
Benchmarking Team
CAPS Research
This Upstream Operations benchmarking report corresponds to the Petroleum Industry Metric Benchmarking Report published in August 2013. Upstream operations include drilling and excavation of oil-sands deposits, and operating oil and/or natural gas wells that recover and bring the crude oil and/or raw natural gas to the surface. Only those petroleum companies who reported their Upstream operations data are included in this breakout report.
Petroleum Industry Benchmarking Metric Report 2013 - Downstream Operations
September 2013
Benchmarking Team
CAPS Research
This Downstream Operations benchmarking report corresponds to the Petroleum Industry Metric Benchmarking Report published in August 2013. Downstream operations commonly refer to the refining of petroleum crude oil and the processing and purifying of raw natural gas as well as the marketing and distribution of products derived from crude oil and natural gas. Only those petroleum companies who reported their Downstream operations data are included in this breakout report.
Supply Chain Risk Management Metric Report 2013
September 2013
Benchmarking Team
CAPS Research
The 2013 Supply Chain Risk Management benchmarking report explores some risk management issues being faced by companies that rely on extended supply chains and specifically points out that although most of the survey participants (80%) reported they have good risk management visibility into their Critical Tier 1 supplier base, almost 95% of the participants reported they could not even identify their total number of Critical Tier 2 suppliers. Unfortunately, many companies have learned the hard way about the need to identify and assess risk for Critical Tier 2 (or deeper) suppliers after experiencing a major supply disruption caused by a risk event. The CAPS Research survey asked participants if they experienced business interruptions that were attributable to their Critical Tier or Tier 2 suppliers. About 36% of the survey participants reported they could attribute at least one business interruption to their Critical Tier 2 supply base.
Buy America Regulations Compliance within the Utilities Industry Benchmarking Metric Report 2013
September 2013
Benchmarking Team
CAPS Research
“Buy America” or “Buy American” requirements are federal laws and regulations generally applying to the use of steel, iron or manufactured products in federally funded public projects. The survey corresponding to this report was developed in collaboration with a major electric utility company who is a CAPS Research corporate sponsor. The report looks at the numbers of utility companies who have been asked by any federal agency to certify their compliance with Buy America regulations, and provides examples of how the utility companies have responded to requests from federal agencies to certify their compliance.
Petroleum Industry Metric Benchmarking Report 2013
September 2013
Benchmarking Team
CAPS Research
The 2013 Petroleum Industry Metric Benchmarking Report is the first of three reports designed for the petroleum (oil & gas) companies who participated in our Strategic Benchmarking Program as either a corporate sponsor, or a subscriber to the CAPS Research Benchmarking Programs. This Metric Report provides an overview of the survey results and includes new benchmarks which include total cost savings as a percent of supply management operating expenses (often referred to as the supply management group’s Return on Investment), and the percent of the supply management group’s managers and other employees with formal development plans and/or succession plans. This is the first of three reports being developed for the petroleum industry as part of the CAPS Research Strategic Benchmarking Program. The follow-on summary report provides a more detailed overview of the industry’s key benchmarks; and the individual comparative reports focus on each company’s data alongside the other participants. It is important to remember that all data in each of the three unique reports are unattributed and will remain anonymous.
Strategic Supply Performance Measurement in Japanese Companies
September 2013
Osamu (Sam) Uehara; CPSM; C.P.M.; MBA; JGA
CAPS Research Japan
How do supply organizations at Japanese firms execute performance measurements? CAPS Research Japan surveyed more than 100 firms, primarily manufacturing, and queried them about measurements related to cost, quality, delivery, information technology, education, social responsibility, and innovation. For each of those areas, this study details the factors that contribute to performance and what is measured; to what extent measurement programs are implemented, not implemented, and/or being considered; and to whom measurements are reported. The researchers conclude that while measurements may be prevalent at large firms, in general, there is still progress to be made regarding measurements specifically for the purchasing and supply function.
Collaboration across the Extended Value Chain – Executive Overview
August 2013
Phillip L. Carter, D.B.A.;Robert M. Monczka, Ph.D.;William J. Markham;et al.
CAPS Research
Collaboration across enterprises is a necessary and strategic response to the demands brought about by external mega-trends and changing business models. Collaboration can be employed to create strategic value in virtually any area of business activity, including cost, revenue, technology, quality, service level, new product development, and productivity improvements. Every organization — big and small — has opportunities to use collaboration to create value. Furthermore, beneficial collaboration opportunities can be found in all categories of the supply base and need not be reserved for only "strategic" suppliers or partners. Heretofore guidance about when to engage in collaboration and what is required to successfully develop and implement a collaboration strategy has been limited. This report presents best practices and a process to help guide companies develop successful collaborative relationships, from opportunity identification through implementation and wrap-up. This document provides all an overview of the project. Other reports (which may only be available to CAPS Research sponsoring companies) include the Focus Study, which is the most comprehensive look at the research; a Case Analyses report, which includes 10 case studies of the firms interviewed; an Executive Report, a condensed version of the larger report, and an Executive Brief, which lists the most salient points of the research findings.
Collaboration across the Extended Value Chain – Executive Report
August 2013
Phillip L. Carter, D.B.A.;Robert M. Monczka, Ph.D.;William J. Markham;et al.
CAPS Research
Collaboration across enterprises in the extended value chain is becoming a necessary and strategic response to the demands brought about by hypercompetitive markets and other external trends and changing business models. A major CAPS Research initiative, Value Chain Strategies for the Changing Decade: Collaboration across the Extended Value Chain, studies how successful firms are approaching and successfully implementing collaboration. The project included in-depth interviews with executives from ten leading companies along with an in-depth case study at each company. From the data collected in the study the authors have constructed a Value Chain Collaboration Process (VCCP) and have identified best practices for each step of the VCCP. The reports from this study also identify and discuss the critical enablers of collaboration success and the major obstacles to success. The researchers detail specific action steps successful firms and executive will need to take to make collaboration a successful value chain strategy. This document is a condensed but thorough version of the large research report, with findings, conclusions, and recommended actions. The other documents include the Focus Study, which is the most comprehensive look at the research; a Case Analyses report, which includes 10 case studies of the firms interviewed; and an Executive Brief, which lists the most salient points of the research findings.
Engaging 2013 - Health Care Supply Chain Top Trends
July 2013
Eugene S. Schneller, Ph.D.
Arizona State University
Over the last five years the Health Sector Supply Chain Research Consortium (HSRC-ASU) has annually published a Top Trends list for health care supply chain. Based on analysis of these five years of top trends, we have placed recurring themes within four top trend categories: Organizational Strategy, Collaboration and Trust, Health Care Reform & Regulation, and Information Technology and Data. Discussion of each trend is provided in this year's list.
Collaboration across the Extended Value Chain
July 2013
Robert M. Monczka, Ph.D.;Phillip L. Carter, D.B.A.;William J. Markham;et al.
CAPS Research
Collaboration across enterprises is a necessary and strategic response to the demands brought about by external mega-trends and changing business models. Collaboration can be employed to create strategic value in virtually any area of business activity, including cost, revenue, technology, quality, service level, new product development, and productivity improvements. Every organization — big and small — has opportunities to use collaboration to create value. Furthermore, beneficial collaboration opportunities can be found in all categories of the supply base and need not be reserved for only "strategic" suppliers or partners. Heretofore guidance about when to engage in collaboration and what is required to successfully develop and implement a collaboration strategy has been limited. This report presents best practices and a process to help guide companies develop successful collaborative relationships, from opportunity identification through implementation and wrap-up. This Focus Study provides the most comprehensive look at the research findings, conclusions, and recommended actions. The other documents include an Executive Report, a condensed version of the larger report; a Case Analyses report, which includes 10 case studies from the firms interviewed; and an Executive Brief, which lists the most salient points of the research findings.
Cross-Industry Metric Report July 2013
July 2013
Benchmarking Team
CAPS Research
The Cross-Industry Report of Standard Benchmarks published in July 2013 provides information on twenty commonly referenced supply management benchmarks including total spend as a percent of revenue, the percent of total spend managed/controlled by the supply management organization, average operating expense per supply management employee, cost reduction and avoidance metrics, etc. Information reporting the percent of companies within each industry sector that reported either an increase or decrease in the numbers of strategic and operational supply management employees is also reported. The Glossary of Terms provided to participants is attached. CAPS Research corporate sponsors and benchmarking participants are also provided industry-specific breakout reports that correspond to their organization's industry sector.
Cross-Industry Metric Report July 2013 - Aerospace and Defense
July 2013
Benchmarking Team
CAPS Research
This breakout report for the Aerospace & Defense industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2013. The industry-specific breakout report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, average operating expense per supply management employee, cost reduction and avoidance metrics, etc. The report also continues to provide trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2013 - Automotive and Transport
July 2013
Benchmarking Team
CAPS Research
This breakout report for the Automotive and Transport industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2013. The industry-specific breakout report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, average operating expense per supply management employee, cost reduction and avoidance metrics, etc. The report also continues to provide trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2013 - Chemical Industry
July 2013
Benchmarking Team
CAPS Research
This breakout report for the Chemicals Manufacturing industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2013. The industry-specific breakout report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, average operating expense per supply management employee, cost reduction and avoidance metrics, etc. The report also continues to provide trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2013 - DOE and NNSA Contractors
July 2013
Benchmarking Team
CAPS Research
This breakout report for the Department of Energy (DOE) and National Nuclear Security Administration (NNSA) contractors corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2013. The industry-specific breakout report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, average operating expense per supply management employee, cost reduction and avoidance metrics, etc. The report also continues to provide trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2013 - Engineering and Construction
July 2013
Benchmarking Team
CAPS Research
This breakout report for the Engineering and Construction industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2013. The industry-specific breakout report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, average operating expense per supply management employee, cost reduction and avoidance metrics, etc. The report also continues to provide trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2013 - Financial Services
July 2013
Benchmarking Team
CAPS Research
This breakout report for the Financial Services industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2013. The industry-specific breakout report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, average operating expense per supply management employee, cost reduction and avoidance metrics, etc. The report also continues to provide trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2013 - Industrial Manufacturing
July 2013
Benchmarking Team
CAPS Research
This breakout report for the Industrial Manufacturing industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2013. The industry-specific breakout report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, average operating expense per supply management employee, cost reduction and avoidance metrics, etc. The report also continues to provide trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2013 - Metals and Mining
July 2013
Benchmarking Team
CAPS Research
This breakout report for the Metals and Mining industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2013. The industry-specific breakout report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, average operating expense per supply management employee, cost reduction and avoidance metrics, etc. The report also continues to provide trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2013 - Petroleum
July 2013
Benchmarking Team
CAPS Research
This breakout report for the Petroleum (Oil and Gas) industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2013. The industry-specific breakout report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, average operating expense per supply management employee, cost reduction and avoidance metrics, etc. The report also continues to provide trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2013 - Utilities
July 2013
Benchmarking Team
CAPS Research
This breakout report for the Utilities industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2013. The industry-specific breakout report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, average operating expense per supply management employee, cost reduction and avoidance metrics, etc. The report also continues to provide trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2013 - Other Manufacturing Industries
July 2013
Benchmarking Team
CAPS Research
This breakout report includes data provided by manufacturing-related companies for whom a corresponding industry-specific breakout report has not been developed. This occurs when there are not sufficient responses from companies within a specified industry sector. Those companies are identified as being either manufacturers or non-manufacturers, and their data is grouped accordingly. This breakout report corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2013. The report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, average operating expense per supply management employee, cost reduction and avoidance metrics, etc.
Cross-Industry Metric Report July 2013 - Other Non-Manufacturing Industries
July 2013
Benchmarking Team
CAPS Research
This breakout report includes data provided by non-manufacturing companies for whom a corresponding industry-specific breakout report has not been developed. This occurs when there are not sufficient responses from companies within a specified industry sector. Those companies are identified as being either manufacturers or non-manufacturers, and their data is grouped accordingly. This breakout report corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2013. The report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, average operating expense per supply management employee, cost reduction and avoidance metrics, etc.
Driving Environmental Sustainability Into the Supply Base
July 2013
Craig Carter, Ph.D.
Arizona State University
Environmental sustainability principles are widely accepted and embraced in small and large organizations. While many companies have articulated and implemented an actionable "green" strategy for their organizations, most are challenged as they try to drive the principles of environmental sustainability into their supply base. Convincing suppliers to become more "green", to offer up "green" products and services and to propose joint supplier-buyer "green" projects quickly runs into the economic realities of the need for additional R&D investment and the imperative to meet cost reduction goals. This report highlights the key points and take-aways from the presentations and discussions of a Critical Issues event hosted by Sonoco Products Company and CAPS Research that addressed the challenges of "Driving Environmental Sustainability into the Supply Base."
SnapShots 2013 - Travel and Entertainment (T&E) Expense Management June Update
June 2013
Benchmarking Team
CAPS Research
This report is an update to an earlier version of the report that was published in May 2013. More companies are included, and the additional data provides better insight into how companies are managing the impact of increased travel demands to support a global marketplace and rising travel costs on their Travel and Entertainment (T&E) budgets. Since restricted T&E budgets might translate to restricted travel opportunities, many companies are starting to zero in on best practices for T&E expense management. This CAPS Research report provides information about the corporate travel operations and the steps being taken to minimize travel expense while maximizing travel opportunities. Not surprisingly, a majority of the survey participants (94%) reported they use an outsourced travel management company in lieu of employing an internal corporate travel department.
Implementing Value Chain Collaboration – Case Study Findings
June 2013
Robert M. Monczka, Ph.D.;Phillip L. Carter, D.B.A.;William J. Markham;et al.
CAPS Research
Collaboration across enterprises in the extended value chain is becoming a necessary and strategic response to the demands brought about by hypercompetitive markets and other external trends and changing business models. A major CAPS Research initiative, Value Chain Strategies for the Changing Decade: Collaboration across the Extended Value Chain, studies how successful firms are approaching and successfully implementing collaboration. The project included in-depth interviews with executives from ten leading companies along with an in-depth case study at each company. From the data collected in the study the authors have constructed a Value Chain Collaboration Process (VCCP) and have identified best practices for each step of the VCCP. The reports from this study also identify and discuss the critical enablers of collaboration success and the major obstacles to success. The researchers detail specific action steps successful firms and executive will need to take to make collaboration a successful value chain strategy. This document details ten case studies that illustrate successful collaborations. The background, case details, results and learnings are provided for each case. The other documents in this series on collaboration include: the Focus Study, the most comprehensive look at the research findings, conclusions, and recommended actions; an Executive Report, a condensed version of the larger report; and an Executive Brief, which lists the most salient points of the research findings.
SnapShots 2013 - Travel and Entertainment (T&E) Expense Management
May 2013
Benchmarking Team
CAPS Research
This report provides insight into how companies are managing the impact of increased travel demands to support a global marketplace and rising travel costs on their travel and entertainment (T&E) budgets. Since restricted T&E budgets might translate to restricted travel opportunities many companies are starting to zero in on best practices for T&E expense management. This CAPS Research report provides information about the corporate travel operations and the steps being taking to minimize travel expense while maximizing travel opportunities. Not surprisingly, a majority of the survey participants (95%) reported they use an outsourced travel management company in lieu of employing an internal corporate travel department. Nearly all of the participants (96%) have a formal T&E policy in place and that the T&E policies are enforced (3.7 on a 5.0 scale).
SnapShots 2013 - Supplier Quality Control Programs and Measures
May 2013
Benchmarking Team
CAPS Research
The SnapShots report titled "Supplier Quality Control Programs and Measures" is an extension of previous CAPS Research reports on supplier quality management. This report provides information about supplier quality audits, incoming material inspections, defective materials, and the use (and structure) of performance scorecards. The report shows that 15 percent of the survey population inspect all direct materials as they are received from their suppliers, and the balance (85 percent) reported they inspect, on average, 27 percent of the direct materials received. About three-fourths of the survey population reported they use scorecards or similar assessment tools to measure their suppliers (direct goods) performance. The top three measures are quality, delivery, and cost management.
Collaboration across the Extended Supply Chain (ERT2013)
April 2013
Robert M. Monczka, Ph.D.;William J. Markham
Arizona State University;CAPS Research
Drawing from the second in a series of new research efforts examining "Value Chain Strategies for the Changing Decade," the presenters provided an overview of Value Chain Collaboration (VCC) Research findings. After touching on macro trends and forces that are driving more collaboration, key questions intended to help companies better manage collaboration were posed and include: what is the importance of the collaborative effort? The purpose and motivation? Types of participants? How will it be implemented and by whom? What barriers and enablers exist? What will/should the results be? Using these questions as a framework, best practices collaboration strategies were shared from the companies that participated in the research.
Accelerating Transformation Strategies for Change
April 2013
Shelley Stewart, Jr.
DuPont
After providing a background about his work history and Dupont, Shelley Stewart unfolded his plan for change at Dupont. This plan includes his top sourcing and logistics priorities for the next 3-5 years; the drivers to focus on for transformational change (speed, agility, accountability, transparency, and collaboration); understanding and leveraging the distinction between adaptive leadership and technical leadership; the top 12 programs and initiatives for 2013; and a blue print for an initiative to accelerate value creation.
SnapShots 2013 - Supplier Selection and Qualification Strategies - Diversified Foods and Beverages
April 2013
Benchmark Team
CAPS Research
This breakout report for the Diversified Foods and Beverages Industry corresponds to the Supplier Selection and Qualification Strategies report published in March, 2013. Of the nine Diversified Foods and Beverages companies reporting, 100% reported they employ supplier qualification processes that include steps necessary to become a qualified supplier. Almost 90% of the participants have different supplier requirements for different commodities, products, and services. Appendix A to the breakout report lists the different supplier selection and qualification processes reported. This breakout report will not be posted on the CAPS Research public website.
SnapShots 2013 - Supplier Selection and Qualification Strategies - Aerospace and Defense
April 2013
Benchmark Team
CAPS Research
This breakout report for the Aerospace and Defense Industry corresponds to the Supplier Selection and Qualification Strategies report published in March, 2013. Of the 13 Aerospace and Defense companies reporting, 100% reported they employ supplier qualification processes that include steps necessary to become a qualified supplier. About 75% of the participants have different supplier requirements for different commodities, products, and services. Appendix A to the breakout report lists the different supplier selection and qualification processes reported. This breakout report will not be posted on the CAPS Research public website.
SnapShots 2013 - Supplier Selection and Qualification Strategies - Financial Services
April 2013
Benchmark Team
CAPS Research
This breakout report for the Financial Services Industry corresponds to the Supplier Selection and Qualification Strategies report that was published in March, 2013. Of the 14 Financial Services participants, more than 70% reported they employ supplier qualification processes that include steps necessary to become a qualified supplier. Eighty percent of those participants have different supplier requirements for different commodities, products and services. Appendix A to the breakout report lists the different supplier selection and qualification processes reported. CAPS Research corporate and benchmarking program sponsors have access to the breakout reports.
SnapShots 2013 - Supplier Selection and Qualification Strategies - Industrial Manufacturing
April 2013
Benchmark Team
CAPS Research
This breakout report for the Industrial Manufacturing Industry corresponds to the Supplier Selection and Qualification Strategies report that was published in March, 2013. Of the 17 Industrial Manufacturing participants, more than 90% reported they employ supplier qualification processes that include steps necessary to become a qualified supplier. Almost 70% of those participants have different supplier requirements for different commodities, products, and services. Appendix A to the breakout report lists the different supplier selection and qualification processes reported. CAPS Research corporate and benchmarking program sponsors have access to the breakout reports.
SnapShots 2013 - Supplier Selection and Qualification Strategies - Petroleum
April 2013
Benchmark Team
CAPS Research
This breakout report for the Petroleum (Oil & Gas) Industry corresponds to the Supplier Selection and Qualification Strategies report that was published in March, 2013. Of the 11 Petroleum participants, 100% reported they employ supplier qualification processes that include steps necessary to become a qualified supplier. Over 60% of participants have different supplier requirements for different commodities, products, and services. Appendix A to the breakout report lists the different supplier selection and qualification processes reported. CAPS Research corporate and benchmarking program sponsors have access to the breakout reports.
SnapShots 2013 - Supplier Selection and Qualification Strategies - Utilities
April 2013
Benchmark Team
CAPS Research
This breakout report for the Utilities Industry corresponds to the Supplier Selection and Qualification Strategies report that was published in March, 2013. Of the 17 Utilities that participated, almost 65% reported they employ supplier qualification processes that include steps necessary to become a qualified supplier. Of those participants, more than 70% reported they have different supplier requirements for different commodities, products, and services. Appendix A to the breakout report lists the different supplier selection and qualification processes reported. CAPS Research corporate and benchmarking program sponsors have access to the breakout reports.
SnapShots 2013 - Supplier Selection and Qualification Strategies
March 2013
Benchmarking Team
CAPS Research
This SnapShots survey resulted in 148 useable responses from companies representing 25 different industry sectors. A majority of the participants (87%) reported they employ supplier qualification processes that include steps necessary to become a qualified supplier, About 75% of the participants have different supplier requirements for different commodities, products, and services. Appendix A to the benchmarking report lists the different supplier selection and qualification processes reported. CAPS Research corporate and benchmarking program sponsors have access to the breakout reports: Aerospace & Defense, Financial Services, Industrial Manufacturing, Petroleum (Oil & Gas), and Utilities.
SnapShots 2013 - Working Capital Improvement
February 2013
Benchmarking Team
CAPS Research
Working Capital is a standard measure of a company's efficiency and short-term financial health. Supply management groups have a key role in identifying and sustaining their organization's working capital initiatives. A short CAPS Research survey asked participants about their organization's working capital improvement targets as well as related topics including supplier payment terms and prepayments. Of the 77 total responses representing 20 different industry sectors, approximately 70 percent of participating organizations indicated that they have annual performance targets for working capital improvement. More than 72 percent of the participants provided examples of practices/actions their organization has taken to improve working capital.
SnapShots 2013 - SAP Enterprise Resources Planning (ERP) Implementation
January 2013
Benchmarking Team
CAPS Research
Has your company implemented (or in the process of implementing) any SAP Enterprise Resource Planning software modules/applications? A survey asking this question was released to CAPS Research sponsors companies. The 38 responses represent 32 percent response rate. About 42 percent of the participating companies reported they have one single (global) instance of SAP implementation. About one-fourth of the participants reported they have either implemented, or are in the process of implementing at least one SAP module/application. The survey participants reported they are more likely to have implemented Catalog-based Requisitioning and Service Record Masters than the other applications listed in the survey.
DOE NNSA Contractors Benchmarking Metric Report 2012
January 2013
Benchmarking Team
CAPS Research
The DOE/NNSA (Department of Energy/National Nuclear Safety Administration) Contractors Benchmarking Metric Report 2012 contains key procurement performance measures including organizational structure, professional development, financial information, and supplier measures. Data was provided by 24 different DOE and NNSA laboratories (or sites). Key measures include training hours and costs, spend per procurement employee, operating costs per procurement employee, and supplier diversity goals and attainment. Other measures include procurement card usage and customer satisfaction surveys.
Supplier Environmental Sustainability Performance Report - 2012
January 2013
Benchmarking Team
CAPS Research
This is the fourth benchmark report developed for the Electric Utility Industry Sustainable Supply Chain Alliance that focuses on their suppliers' commitment to environmental sustainability. The 2012 metric report includes data provided by 273 different suppliers who were categorized as being manufacturers or non-manufacturers. The benchmark report looks at how key suppliers are addressing Policy & Environmental Management, Greenhouse Gas (GHG) Emissions, Energy Consumption, Water Consumption, Waste & Materials Management, and Innovation.
Managing Commodity Price and Supply Volatility
November 2012
Lutz Kaufmann, Ph.D.;Johan Rauer
WHU – Otto Beisheim School of Management
Just about every business organization acquires commodities in some form as part of its firm's operations. Commodities, such as metals (copper, steel, gold, lithium); agricultural products (sugar, wheat, corn, soybeans); and energy (oil, natural gas), can be sourced directly as raw materials that are part of a firm's products, indirectly as components of purchased items from suppliers, or as consumable energy as part of a firm's operations and overhead expenses. In many cases, the commodity may be two, three or more tiers down the supply chain. The prices and availability of the products/components may be greatly influenced by the price and availability swings of the commodities. Many firms face a significant challenge managing the price and availability volatility of these commodities, which can have detrimental effects on profitability, supply continuity, budgeting, and pricing of products to customers and consumers. This report addresses some of these concerns and is a summary of the presentations and discussions at the day-long Critical Issues Partnership Event hosted by Siemens AG and CAPS Research in Munich, Germany, October 25, 2012
Industrial Manufacturing Industry Benchmarking Metric Report 2012
November 2012
Benchmarking Team
CAPS Research
The Industrial Manufacturing Industry Benchmarking Report for 2012 includes key supply management performance metrics such as organizational structures, functional assignments, operating expense, spend per supply management employee, supplier rating systems/processes, and other supply management-related topics. The data shows that supply management organizations have oversight of 88 percent (average) of their company's total spend, of which 75 percent is for direct goods. All of the participants reported they have supply management employees located in North America, Mexico, and the Asia-Pacific region (China, Southeast Asia, etc.), and with only two exceptions, the procurement headcount in these three regions increased or did not change. Only two of the participants reported fewer supply management employees in North America. The survey results show that 75 percent of the participants reported their supply management organizations are actively engaged in hedging strategies, and the top commodities being hedged include energy, copper, steel, and other traded metals.
SnapShots 2012 - Measuring Accounts Payable Business Practices
November 2012
Benchmarking Team
CAPS Research
This report provides information about the percent of invoices that require three-way invoice matching, the use of evaluated receipts settlement, price tolerances, and payment exceptions for suppliers. We anticipated that most companies would employ three-way invoice matching, and all but one of the 79 survey participants reported doing so. Our data shows that mismatched invoices are usually held for 30 days on average, but the numbers of days held might be different for direct goods, indirect goods, and services. And a few of the participants reported they hold mismatched (unresolved) invoices for 120 days or longer. How often do those responsible for budgets receive notification of invoice mismatches? About 70 percent of the participants receive notification within a week's time. You will see in the report the percentage of companies who receive these reports daily, weekly, monthly, ad hoc, etc. If your company makes payment exceptions to suppliers whose invoice mismatches have not been resolved, you're not alone - about 30 percent of the survey population reported they do make payment exceptions.
A Japanese Study of Strategic Supply Continuity Planning
November 2012
Osamu (Sam) Uehara, CPSM, C.P.M., MBA, JGA
CAPS Research Japan
In 2011, Japan was hit with the most powerful earthquake it had faced in more than a century. The resulting tsunami, power failures, nuclear disaster, and utter destruction brought to light how critical business and supply continuity strategies are to this country and subsequently, the entire global business community. This report examines six aspects related to continuity: suppliers, alternatives, make-or-buy, logistics, inventory, and resilience. Based on survey data and interviews with executives, the report highlights elements of each aspect, shedding light on what strategies are most prevalent, which have gained traction since the 2011 disaster, and which are being considered for the future.
Identifying Accounts Payable Best Practices
October 2012
Eric Schomer
U.S. Steel
Background: U.S. Steel is deploying a new ERP system and is navigating through the efficiencies in their Accounts Payable process. The decision has been made to utilize three-way matches for the majority of invoicing which means that Purchase Orders, Receipts, and Invoices must match before the payment is affected. As the ERP system implementation process moves forward, U.S. Steel has noticed that it is taking longer to resolve Invoice Mismatch Holds which might be attributable to learning the new system. U.S. Steel is asking you to help define acceptable and/or 'best practice' metrics around invoice mismatch holds to help set internal goals and standards as the ERP system integration continues. Please answer the following questions. Questions: 1. Does your organization have procedures that require three-way invoice matching (Purchase Order/Goods Receipt/Invoice verification) before payment is made? ____ Yes ____ No a. If 'No', please briefly describe your organization's accounts payable process. b. If 'Yes', what percent of invoices require three-way matches before payment is authorized? Direct Goods ______% Indirect Goods ______% Services ______% c. If 'Yes', what is the allowable number of days that an invoice can be held to resolve the mismatch? Direct Goods ______ days Indirect Goods ______ days Services ______ days 2. Does your organization employ Evaluated Receipts Settlement (ERS) wherein a supplier does not issue invoices for goods, products, or services? ____ Yes ____ No If 'Yes', what are the top three purchased items/categories of spend for which invoices are not issued (e.g., travel, lodging, cell phones/mobile devices, etc)? 1. _________________ 2. _________________ 3. _________________ 3. How often do those responsible for different budgets receive activity reports or notification of invoice mismatches (hourly, daily, weekly, etc.)? 4. Has your organization set tolerances to notify those responsible for purchases of any differences in prices, quantity, or delivery? ____ Yes ____ No If 'Yes', is there a maximum number of tolerated events before remedial action is required? ____ Yes ____ No 5. Does your company make payment exceptions to any suppliers whose invoice mismatches have not been resolved? ____ Yes ____ No
The Future Role of Procurement Executives
October 2012
Heidi Hoffman
Korn/Ferry International
The increasing complexity of the supply executive role, the demands upon the profession, and changing trends all require a different skill set for supply leaders to be successful. Ms. Hoffman, after a brief review of the evolution of the procurement executive, discussed how to prepare for the future with a blueprint for success that addresses four key areas: emotional intelligence, change leadership, career motivation, and a broad perspective. Best-in-class procurement executives share a specific set of leadership characteristics in these key areas. She also shared the "70:20:10" developmental model that keeps leaders engaged, fulfilled, and growing, and wrapped up with the critical characteristic that is the number one predictor of success for procurement and other executives.
Snapshot of Consumer Spending Trends
October 2012
Andrew Gunnels
First Data Corporation
With more and more importance being placed on obtaining data and analyzing it correctly, Mr. Gunnels provided an interesting look at one the most important drivers of the U.S. economy – consumer spending trends. Drawing from the massive amount of data that his organization regularly collects, Mr. Gunnels gave a review of August consumer spending results, mid-September results, and a preview of the Holiday shopping season. As a procurement executive himself, he also provided some insights into how the data itself can help with purchasing decisions for the organization.
Managing Risk in the Extended Supply Chain
October 2012
Robert M. Monczka, Ph.D.
CAPS Research
Today's business models and strategies offer greater rewards, yet expose companies to greater risks. Events of the past several years demonstrate just how exposed companies have become to supply risk. Dr. Monczka provides an overview of the Value Chain Risk Management (VCRM) Research findings and discussed how managing risk effectively requires a process for "achieving acceptable levels of thoughtful and reasoned risks compared to competitive opportunities." After defining what Value Chain risk management is, he shared the traits of a composite "most advanced" company in terms of managing risk, along with a framework for managing supply risk. His presentation included several real-world examples from the 15 companies from various industries that participated in the VCRM Research.
The Impact of Social Media in Supply Management
August 2012
Larry C. Giunipero, Ph.D., CPSM, CPSD, C.P.M.;Diane. L. Denslow, MBA, MA, CBA
Florida State University;University of North Florida
While still relatively new as media tools, social media sites have become entrenched in the social fabric of modern life. This research study examines how such tools are being used for business versus personal activity and, specifically, how they are being used in the supply management field. The study includes an extensive literature review, and then combines data from three focus groups and a survey conducted on the topic. Researchers discuss what sites and venues are being used, the level of activity, uses in the workplace, benefits, impact on training, management controls, barriers to use, and potential future uses. The report also contains extensive examples of company policies regarding social media use, with sample language.
SnapShots 2012 - Measuring the Performance of Sub-Tier Suppliers
August 2012
Benchmarking Team
CAPS Research
Effective sub-tier supplier management programs require detailed insight into the sub-tier suppliers' performance, capacity, cost effectiveness, and risk tolerance. This report focuses on sub-tier supplier performance strategies being employed, and provides information on the percent of Tier 2 and Tier 3 suppliers for whom performance data is regularly measured. Not surprisingly, the survey participants reported they are more likely to regularly track the performance of their Tier 2 suppliers rather than the Tier 3 suppliers. The survey participants reported they are most concerned about their sub-tier suppliers abilities to respond to fluctuating demand (fulfillment, demand), supply disruptions (natural disasters, single source suppliers), and manufacturing process breakdowns (quality, design changes, etc.).
The Impact of Sequestration on Supply Management Organizations
August 2012
Phil Carter
CAPS Research
Background: Under the Budget Control Act of 2011, sequestration is the automatic reduction of spending by the United States Federal Government, to be triggered unless Congress acts in the next five months to avoid the reductions. If Congress does not act, approximately $110 billion in cuts kick in Jan. 2, hitting defense and domestic programs equally hard. Although certain programs are protected from the full impact of sequestration, spending reductions would occur largely across the board. Please answer the following questions. (Note that your answers are confidential and will not be attributed.) Questions: 1. Do you anticipate that your company revenue will be significantly affected if sequestration goes into effect in January 2013? ____ Yes ____ No ____ Not Sure 2. Has your supply management organization developed contingency plans that call for reduced spending (or other adjustments) if sequestration goes into effect? ____ Yes ____ No ____ Not Sure 3. Will sequestration impact on supply management headcount at your company? ____ Yes ____ No ____ Not Sure 4. Will sequestration impact the ability of your suppliers to supply you with goods and services? ____ Yes ____ No ____ Not Sure
Utilities Industry Benchmarking Metric Report 2012
August 2012
Benchmarking Team
CAPS Research
The Utilities Industry Benchmarking Metric Report updated in July 2012 includes key supply management measures that focus on organizational structure, as well as burdened and unburdened salaries per FTE supply management employee by area of operation and function. New to the 2012 report are metrics that take a detailed look at burdened rate as a percent of total FTE employee salaries by area of operation and supply management employee function. Other key metrics include managed spend, cost savings, and average procurement transaction value and number of line items.
Aerospace and Defense Industry Benchmarking Metric Report 2012
August 2012
Benchmarking Team
CAPS Research
The Aerospace and Defense Industry Benchmarking Metric Report for 2012 contains key supply management performance measures on topics including organizational structure, financial information, and supplier relationships. Included again this year is a matrix that looks at what is included in each of the participating Aerospace and Defense companies' supply management operating expense as well as a deeper look at spend for direct and indirect goods.
Current Fiscal Year Cost Savings Performance
August 2012
Tom Scheetz
Celanese Corporation
Background: Tom Scheetz, Vice President of Procurement at Celanese Corporation, and his management team have found the current Fiscal Year to be challenging and they are interested in learning how other CAPS Research sponsor companies are faring with regard to their Fiscal Year cost saving goals. For example: Are projected cost savings being realized? Have cost savings goals been adjusted to compensate for the difficult fiscal year? How have commodity prices impacted cost savings projections? Please answer the following questions. (Note that your answers are confidential and will not be attributed.) Questions: 1. As of June 30, 2012, how many months of your current Fiscal Year have been completed? ________ months of Fiscal Year completed as of June 30 2. Do you have hard cost savings (i.e., cost down) goals for your current Fiscal Year? ____ Yes ____ No If 'Yes', What percentage of hard cost savings goals have you realized YTD? ________ % What percentage of hard cost savings do you expect to accomplish by the end of your current fiscal year? ________ % 3. Do you have other cost savings goals (cost avoidances and other items) for your current fiscal year? ____ Yes ____ No If 'Yes', What percentage of other cost savings have you realized YTD? ________ % What percentage of your other cost savings do you expect to accomplish by the end of your current fiscal year? ________ % 4. Have you readjusted your year-end goals for hard cost savings or other cost savings? ____ Yes ____ No If 'Yes', please indicate how the goals have been adjusted. Hard cost savings goals Increase ________ % Decrease ________ % Other cost savings goals Increase ________ % Decrease ________ % 5. What are the top three challenges to meeting your cost savings goals for the current fiscal year? 1. 2. 3. 6. On a scale of 1 to 5 (1 = no impact, 5 = significant impact) please indicate how commodity prices and availability have impacted your cost savings projections. ___ 1 ___ 2 ___ 3 ___ 4 ___ 5
Cross-Industry Metric Report July 2012
July 2012
Benchmarking Team
CAPS Research
The Cross-Industry Report of Standard Benchmarks published in July 2012 provides information on twenty commonly referenced supply management benchmarks including total spend as a percent of revenue, the percent of total spend managed/controlled by the supply management organization, average operating expense per supply management employee, cost reduction and avoidance metrics, etc. New this year is information reporting the percent of companies within each industry sector that reported either an increase or decrease in the numbers of strategic and operational supply management employees. Also new, the Glossary of Terms provided to participants is attached. This Glossary can also be found on the public website. Industry-specific breakout reports are available on the Knowledge Central website.
Cross-Industry Metric Report July 2012 - Aerospace and Defense
July 2012
Benchmarking Team
CAPS Research
This breakout report for the Aerospace/Defense Industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2012. This report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, the percent of total spend managed/controlled by the supply management organization, average operating expense per supply management employee, cost reduction and avoidance metrics, purchase order cycle times, and average spend per supply management employee. New to this report is trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2012 - Chemical Manufacturing
July 2012
Benchmarking Team
CAPS Research
This breakout report for the Chemical Manufacturing Industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2012. This report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, the percent of total spend managed/controlled by the supply management organization, average operating expense per supply management employee, cost reduction and avoidance metrics, etc. purchase order cycle times, and average spend per supply management employee. New to this report is trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2012 - DOE and NNSA Contractors
July 2012
Benchmarking Team
CAPS Research
This breakout report for the DOE/NNSA Contractors corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2012. This report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, the percent of total spend managed/controlled by the supply management organization, average operating expense per supply management employee, cost reduction and avoidance metrics, etc. purchase order cycle times, and average spend per supply management employee. New to this report is trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2012 - Engineering and Construction
July 2012
Benchmarking Team
CAPS Research
This breakout report for the Engineering/Construction Industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2012. This report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, the percent of total spend managed/controlled by the supply management organization, average operating expense per supply management employee, cost reduction and avoidance metrics, purchase order cycle times, and average spend per supply management employee. New to this report is trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2012 - Financial Services
July 2012
Benchmarking Team
CAPS Research
This breakout report for the Financial Services Industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2012. This report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, the percent of total spend managed/controlled by the supply management organization, average operating expense per supply management employee, cost reduction and avoidance metrics, purchase order cycle times, and average spend per supply management employee. New to this report is trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2012 - Industrial Manufacturing
July 2012
Benchmarking Team
CAPS Research
This breakout report for the Industrial Manufacturing Industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2012. This report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, the percent of total spend managed/controlled by the supply management organization, average operating expense per supply management employee, cost reduction and avoidance metrics, purchase order cycle times, and average spend per supply management employee. New to this report is trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2012 - Metals and Mining
July 2012
Benchmarking Team
CAPS Research
This breakout report for the Metals/Mining Industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2012. This report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, the percent of total spend managed/controlled by the supply management organization, average operating expense per supply management employee, cost reduction and avoidance metrics, purchase order cycle times, and average spend per supply management employee. New to this report is trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2012 - Petroleum
July 2012
Benchmarking Team
CAPS Research
This breakout report for the Petroleum Industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2012. This report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, the percent of total spend managed/controlled by the supply management organization, average operating expense per supply management employee, cost reduction and avoidance metrics, purchase order cycle times, and average spend per supply management employee. New to this report is trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2012 - Pharmaceutical
July 2012
Benchmarking Team
CAPS Research
This breakout report for the Pharmaceutical Industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2012. This report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, the percent of total spend managed/controlled by the supply management organization, average operating expense per supply management employee, cost reduction and avoidance metrics, purchase order cycle times, and average spend per supply management employee. New to this report is trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2012 - Semiconductor
July 2012
Benchmarking Team
CAPS Research
This breakout report for the Semiconductor Industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2012. This report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, the percent of total spend managed/controlled by the supply management organization, average operating expense per supply management employee, cost reduction and avoidance metrics, purchase order cycle times, and average spend per supply management employee. New to this report is trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2012 - Transportation Services
July 2012
Benchmarking Team
CAPS Research
This breakout report for the Transportation Services Industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2012. This report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, the percent of total spend managed/controlled by the supply management organization, average operating expense per supply management employee, cost reduction and avoidance metrics, purchase order cycle times, and average spend per supply management employee. New to this report is trending data on the companies that are increasing or decreasing the number of supply management employees.
Cross-Industry Metric Report July 2012 - Utilities
July 2012
Benchmarking Team
CAPS Research
This breakout report for the Utilities Industry corresponds to the updated CAPS Research Cross-Industry Report of Standard Benchmarks published in July 2012. This report provides metric data on twenty standard supply management organization performance metrics including total spend as a percent of revenue, the percent of total spend managed/controlled by the supply management organization, average operating expense per supply management employee, cost reduction and avoidance metrics, purchase order cycle times, and average spend per supply management employee. New to this report is trending data on the companies that are increasing or decreasing the number of supply management employees.
Petroleum Industry Benchmarking Metric Report 2012
July 2012
Benchmarking Team
CAPS Research
The 2012 edition of the Petroleum Industry Benchmarking Report looks at key supply management performance measures including organizational structures, and numbers of supply management employees assigned to support strategic sourcing, transactional purchasing, etc. The report also includes metrics on supply management operating expenses, cost reduction and avoidance as a percent of spend, and savings attributed to value creation (defined as insightful initiatives including risk mitigation, revenue enhancement, and forward-looking innovations that enhance the worth, relevance or importance of a product, service, or system) and investment recovery operations.
Petroleum Industry Benchmarking Metric Report 2012 - Downstream
July 2012
Benchmarking Team
CAPS Research
Petroleum Industry Benchmarking Metric Report containing only Downstream operations.
Petroleum Industry Benchmarking Metric Report 2012 - Midstream
July 2012
Benchmarking Team
CAPS Research
Petroleum Industry Benchmarking Metric Report containing only Midstream operations.
Petroleum Industry Benchmarking Metric Report 2012 - Upstream
July 2012
Benchmarking Team
CAPS Research
Petroleum Industry Benchmarking Metric Report containing only Upstream operations.
Risk Management across the Extended Value Chain – Executive Overview
July 2012
Phillip L. Carter, D.B.A.;Robert M. Monczka, Ph.D.;William J. Markham;et al.
CAPS Research
A company's ability to manage risk effectively throughout its extended value chain has become a critical element of business success. A major CAPS Research initiative, Value Chain Strategies for the Changing Decade: Risk Management Across the Extended Value Chain, studies how successful firms are approaching risk management. The project included in-depth interviews with 15 leading companies, from various industries, and uncovers the critical relationship among strategic risk/reward decisions, value chain structural risk, and operational risk management. It also included a look at risk metrics and supply's risk scope, responsibilities, and integration in the process. The researchers detail the future vision of value chain risk management and the specific action steps successful firms and executive will need to take. There are several published reports associated with this project. This document provides all an overview of the project and includes an Executive Summary of the research findings. Other reports (which may only be available to CAPS Research sponsoring companies) include the Focus Study, which is the most comprehensive look at the research; a Case Analyses report, which includes 12 case studies of the firms interviewed; an Executive Report, a condensed version of the larger report; and an Executive Brief, which provides a snapshot view of the research findings.
Measuring the Performance of Sub-Tier Suppliers
July 2012
Vincent Hrenak
Raytheon Network Centric Systems
Background: Recent history suggests that many companies are not diligent about maintaining oversight of their sub-tier (Tier 2, Tier 3, etc.) suppliers. Since sub-tier suppliers support Tier 1 suppliers, a better appreciation for, and understanding of, sub-tier suppliers can help companies reduce costs, mitigate risk, and drive continuous improvement throughout the supply chain. An effective sub-tier supplier management program will require a company to have insight into their sub-tier suppliers' overall performance and management practices. The supply management teams at Raytheon's Network Centric Systems and Missile Systems are interested in learning more about practices for sub-tier supplier management. Questions: 1. Do you regularly measure or track your sub-tier suppliers' ...? Capacity/capacity utilization ____ Yes ____ No Cost effectiveness ____ Yes ____ No Quality performance ____ Yes ____ No Risk management ____ Yes ____ No Overall performance ____ Yes ____ No Other (please identify) _______________________ 2. What percent of Tier 2 and Tier 3 suppliers' performance do you regularly track? Tier 2: ________ % Tier 3: ________ % 3. Please identify the software or other tools you use to track your sub-tier suppliers’ performance. 4. Which of the following statements best describes the nature of your communication with your sub-tier suppliers? ___ Indirect - Communicate with sub-tier suppliers through our Tier 1 suppliers. ___ Infrequently - Communicate with sub-tier suppliers only when an issue arises or when requested to do so by a Tier 1 supplier. ___ Frequently - Communicate with sub-tier suppliers on a regular basis using telephone, face-to-face, email, etc. 5. Which of the following statements best describes the participation of Tier 1 suppliers in your meetings with sub-tier suppliers? ___ We ask the Tier 1 not to participate ___ We prefer the Tier 1 not to participate ___ We encourage the Tier 1 to participate ___ We require the Tier 1 to participate 6. Please rate each of the following sub-tier supplier risks in terms of the level of concern to your organization: ( 1 = not all concerned, 2 = slightly concerned, 3= moderately concerned, 4 = very concerned, 5 = extremely concerned) ___ Demand (fulfillment, forecasting, bullwhip) ___ Delay (excessive handling, transportation breakdowns) ___ Disruption (natural disasters, single source suppliers) ___ Inventory (demand/supply uncertainty, holding costs, obsolescence) ___ Manufacturing/Process breakdowns (quality, design changes, yields, product cost increases) ___ Physical plant (lack of capacity, cost of capacity) ___ Supply/Procurement (service quality) ___ System (integration, information, IT compatibility) ___ Sovereign (regional instability, government, intellectual property breaches) ___ Transportation (paperwork/scheduling, late deliveries, port delays) 7. Are you or others within your supply management team interested in discussing sub-tier supplier management with other CAPS Research sponsors? ____ Yes ____ No
Managing Spend for Temporary Labor
July 2012
David Wohler
Covidien
Background: Temporary labor provides the flexibility to address near and/or short-term demands for personnel of varying skills and abilities. Organizations acquire temporary labor (also called contract labor) from various channels such as hiring independent contractors, employing on-call personnel, and utilizing personnel provided by temporary employment agencies. David Wohler, Vice President of Global Sourcing at Covidien, and his team are interested in learning about your organization's temporary labor business model. Questions: 1. Does supply management have responsibility for your company's spend for temporary labor? ____ Yes ____ No If 'Yes', which temporary labor model below best describes your company's approach? ___ Master Supplier: One supplier fulfills your temporary labor requirements through a recruiting network that might include secondary providers. ___ Managed Services Supplier: One supplier bids positions out to multiple temporary labor providers that have your current rate cards (not-to-exceed rates for various labor categories). ___ Hybrid: Combination of models listed above (example: Master Supplier for light industrial workers and Managed Services Supplier for professional and technical personnel). ___ Other: Please describe below: 2. What are the top three criteria you used to select your current supplier(s) for temporary labor? 1. 2. 3. 3. Do you or your key temporary labor supplier(s) currently utilize a Vendor Management System (VMS) to manage temporary labor services (e.g., order fulfillment, consolidated billing, etc.)? ____ Yes ____ No If 'Yes', please briefly describe the top three efficiencies and productivity enhancements being realized by using the VMS. 1. 2. 3. 4. Which of the following temporary labor pricing models does your company typically use? ___ Markups (from previously established pay rates) to determine temporary labor bill rates. ___ Rate Cards for various temporary labor classifications. ___ Other: Please describe below: 5. Do you use different temporary labor models (sourcing/pricing) in different geographic regions? ____ Yes ____ No 6. What are the top three Key Performance Indicators (KPIs) that your organization regularly uses to measure the performance of your supplier(s) for temporary labor? 1. 2. 3.
Risk Management across the Extended Value Chain
June 2012
Robert M. Monczka, Ph.D.;Phillip L. Carter, D.B.A.;William J. Markham;et al.
CAPS Research
A company's ability to manage risk effectively throughout its extended value chain has become a critical element of business success. A major CAPS Research initiative, Value Chain Strategies for the Changing Decade: Risk Management Across the Extended Value Chain, studies how successful firms are approaching risk management. The project included in-depth interviews with 15 leading companies, from various industries, and uncovers the critical relationship among strategic risk/reward decisions, value chain structural risk, and operational risk management. It also included a look at risk metrics and supply's risk scope, responsibilities, and integration in the process. The researchers detail the future vision of value chain risk management and the specific action steps successful firms and executive will need to take. CAPS Research presents four documents related to the risk management initiative. This Focus Study provides the most comprehensive look at the research findings, conclusions, and recommended actions. The other documents include an Executive Report, a condensed version of the larger report; a Case Analyses report, which includes 12 case studies of the firms interviewed; and an Executive Brief, which lists the most salient points of the research findings.
Implementing Value Chain Risk Management – Case Study Findings
June 2012
Robert M. Monczka, Ph.D.;Phillip L. Carter, D.B.A.;William J. Markham;et al.
CAPS Research
A company's ability to manage risk effectively throughout its extended value chain has become a critical element of business success. A major CAPS Research initiative, Value Chain Strategies for the Changing Decade: Risk Management Across the Extended Value Chain, studies how successful firms are approaching risk management. The project included in-depth interviews with 15 leading companies, from various industries, and uncovers the critical relationship among strategic risk/reward decisions, value chain structural risk, and operational risk management. It also included a look at risk metrics and supply's risk scope, responsibilities, and integration in the process. The researchers detail the future vision of value chain risk management and the specific action steps successful firms and executive will need to take. CAPS Research presents four documents related to the risk management initiative. This document details 12 case studies of critical issues and strategies employed as firms approach value chain risk management; background, approach, and results are provided for each firm case studied. The other documents include the Focus Study, the most comprehensive look at the research findings, conclusions, and recommended actions; an Executive Report, a condensed version of the larger report; and an Executive Brief, which lists the most salient points of the research findings.
Risk Management across the Extended Value Chain – Executive Report
June 2012
Phillip L. Carter, D.B.A.;Robert M. Monczka, Ph.D.;William J. Markham;et al.
CAPS Research
A company's ability to manage risk effectively throughout its extended value chain has become a critical element of business success. A major CAPS Research initiative, Value Chain Strategies for the Changing Decade: Risk Management Across the Extended Value Chain, studies how successful firms are approaching risk management. The project included in-depth interviews with 15 leading companies, from various industries, and uncovers the critical relationship among strategic risk/reward decisions, value chain structural risk, and operational risk management. It also included a look at risk metrics and supply's risk scope, responsibilities, and integration in the process. The researchers detail the future vision of value chain risk management and the specific action steps successful firms and executive will need to take. CAPS Research presents four documents related to the risk management initiative. This document is a condensed but thorough version of the large research report, with findings, conclusions, and recommended actions. The other documents include the Focus Study, which is the most comprehensive look at the research; a Case Analyses report, which includes 12 case studies of the firms interviewed; and an Executive Brief, which lists the most salient points of the research findings.
SnapShots 2012 - Managing Your Organization's After-the-Fact Purchase Order Spend
June 2012
Benchmarking Team
CAPS Research
After-the-Fact Purchase Orders are often required to close out purchases that have occurred outside the organization's established policies and/or procedures. These purchases are often referred to as rogue spend, maverick spend, or unplanned purchases. This 'SnapShots' benchmarking report provides information on the percent of purchase orders created after goods or services were received; the percent of total spend attributable to rogue/maverick spend; and whether or not the numbers of after-the-fact purchase orders are increasing or decreasing.
Measuring Supplier Diversity Program Performance Metric Report June 2012
June 2012
Benchmarking Team
CAPS Research
This report provides updated information on the diversity spend metrics report published in March 2012. Key metrics include diversity spend as a percent of total spend, the percentage of diversity contracts awarded competitively or as either sole-source awards or single-source awards, and the average numbers of suppliers aligned to commonly referenced socioeconomic categories. About 50 percent of the survey participants reported an increase in their numbers of diversity suppliers during the reporting period, and 72 percent reported they anticipate an increase in supplier diversity spend over the next two years.
Managing Advertising Spend
June 2012
Phil Carter
CAPS Research
Background: Several CPOs from CAPS Research sponsoring companies have questions about how other companies are managing advertising spend. You can help them out by responding to the following questions. Questions: 1. Does your purchasing/supply management group have shared responsibility for your company's advertising spend? ____ Yes ____ No a. If 'Yes', what percent of the total spend for advertising spend do you have shared responsibility for? ________ % shared responsibility of total advertising spend b. If 'No', what function/department is responsible for managing advertising spend at your company? 2. What percent of your advertising spend is competitively sourced? ________ % competitively sourced 3. What function/department selects which advertising agencies/firms will be invited to respond to RFPs/RFQs/RFBs? 4. Which of the following best describes how you contract for advertising spend? ___ a. We typically have separate contracts for different advertising requirements (e.g., creative, production, media buy, etc.) ___ b. We typically bundle all services into one contract. ___ c. We do a mix of separate and bundled contracts. 5. Which of the following pricing structures are typically used in your advertising contracts? (check all that apply) ___ a. Hourly rates ___ b. Fixed rates ___ c. Commissions ___ d. Up-front payments ___ e. Tiered rates ___ f. Other (please specify) 6. Would you or your advertising category manager be willing to discuss this topic with CAPS Research and some of our other corporate sponsors? ____ Yes ____ No
Social Responsibility Audits for Suppliers
June 2012
Phil Carter
CAPS Research
Background: We would like to know about your company's policies and procedures for auditing your suppliers' commitment to social responsibility. Broadly defined, social responsibility is conducting business ethically and with sensitivity for community, social, cultural, diversity and environmental issues. A social responsibility audit is a formal process of reviewing a supplier's compliance with your policies and procedures concerning social responsibility. Please answer the following questions. Questions: 1. Does your company have a supplier code of conduct or other policy statement that requires suppliers to provide you information about their policies, procedures, processes and outcomes with respect to social responsibility? ____ Yes ____ No (If 'No', do not continue.) 2. Do you audit your suppliers to ensure they are in compliance with the social responsibility performance expectations addressed in your supplier code of conduct? ____ Yes ____ No (If No, please go to Question 6 below.) 3. What percent of your suppliers are audited for social responsibility compliance and how often are the audits conducted? % Audited Audit Frequency (months) Direct Materials _________% _______________ Indirect Goods _________% _______________ Services _________% _______________ 4. When performing social responsibility audits, do you use internal resources and/or external auditors? Internal Resources ___ None ___ Some ___ Mostly ___ Only External Auditors ___ None ___ Some ___ Mostly ___ Only 5. Are you willing to share your supplier social responsibility policies with other CAPS Research sponsor companies? ____ Yes ____ No 6. If your company does not regularly perform supplier social responsibility audits, how do you assess or monitor your suppliers' compliance with your supplier code of conduct or related policies?
A Blueprint for Procurement/Supply Executive Success
June 2012
Diana Chan
Korn/Ferry International
The increasing complexity of the procurement leader's role, the demands upon the profession, and changing trends all require a new skill set for procurement/supply executives to be successful. Ms. Chan, after a brief review of the evolution of the procurement executive, discussed how to prepare for the future with a blueprint for success that addresses four key areas: emotional intelligence, change leadership, career motivation, and a broad perspective. Best-in-class procurement executives share a specific set of leadership characteristics in these key areas. She also shared the "70:20:10" developmental model that keeps leaders engaged, fulfilled, and growing, and wrapped up with the critical characteristic that is the number one predictor of success for procurement and other executives.
Managing Risk across the Extended Supply Chain
June 2012
Phillip L. Carter, D.B.A.
CAPS Research
Today's business models and strategies offer greater rewards, yet expose companies to greater risks. Managing risk effectively requires a process for "achieving acceptable levels of thoughtful and reasoned risks compared to competitive opportunities." Dr. Carter presented an overview of the findings and observations from the Value Chain Risk Management (VCRM) research project, the first in a series of research efforts examining "Value Chain Strategies for the Changing Decade." The research is intended to help companies better manage supply risk by answering key questions, which Dr. Carter covered. The presentation and slides covered current best practices, including the traits of a composite "most advanced" company at managing risk, an executive action plan for Value Chain Risk Management, and a snapshot of what the future holds for supply risk management.
Doing Business with Minority Suppliers in China and Asia Pacific
June 2012
Lou Zhou
IBM China/Hong Kong
Supplier diversity is a new concept in China that is not widely accepted, and possibly misunderstood. Mr. Zhou set the foundation for his presentation using IBM's efforts in China and AP for a compelling discussion about how best to promote the concepts and practices of supplier diversity in China. Citing joint research IBM conducted with Fudan University, Mr. Zhou highlighted the specific business cases of IBM's diversity supplier development, the MSD China program, plus explained the five key aspects of IBM's internal policy on developing global supplier diversity efforts and programs.
Procurement Management Practices
June 2012
Kong Xiaoqiang
Sinopec Group
As the fourth largest company in the world, Sinopec procurement faces some unique challenges and opportunities in its procurement division. Mr. Kong provided an overview of how Sinopec's Materials Supply Management System is structured, organized, and managed, with insights into departmental functions and centralized procurement. As a result of creating a centralized procurement organization, Sinopec has built a more strategic, long-term procurement focus resulting in stronger relationships with key suppliers and joint R&D efforts. Mr. Kong also shared insights into their Supplier Relationship Management strategies, the particular challenges to sourcing in China, and their substantive e-procurement system.
Ethics and Compliance in China
June 2012
Philippe Tchen
Alcoa
Complying with ethical standards and guidelines is a universal concern and Mr. Tchen focused on the particular challenges and opportunities of doing so in China. He began by setting the context for discussion around the differences between Western business culture and Chinese business culture and the implications the differences have on expectations for common business practices. Mr. Tchen then presented issues around ethics in particular to procurement, risk assessments, and how to deal with these risks, including specific procedures and controls that can be applied.
Reporting Supply Management Risk Metrics
May 2012
Phil Carter
CAPS Research
Background: The topic of supply management risk is receiving increased management attention. However, recent research indicates that few companies have good metrics that help them manage supply/supply chain risks. CAPS Research would like to know if our CPOs are using supply/supply chain risk metrics, and, if so, which metrics are most important. Please respond to the following questions. Questions: 1. Do you have metrics that you review/report regularly concerning supply/supply chain risks? ____ Yes ____ No 2. If yes, what are the three most important supply/supply chain risk metrics that you review/report on a regular basis? (1) ______________________________________ (2) ______________________________________ (3) ______________________________________ 3. How often (and to whom) do you review/report each of the metrics identified in Question 2? Frequency Reported To (1) ___________ _______________ (2) ___________ _______________ (3) ___________ _______________ 4. Generally, how satisfied are you with each of the metrics identified in Question 2? (1) (2) (3) ____ 1 ____ 1 ____ 1 highly dissatisfied ____ 2 ____ 2 ____ 2 dissatisfied ____ 3 ____ 3 ____ 3 neutral ____ 4 ____ 4 ____ 4 satisfied ____ 5 ____ 5 ____ 5 highly satisfied 5. What risk metric(s) would you like to have that you do not now have? 6. What are the major challenges to developing the metric(s)?
SnapShots 2012 - Corporate Credit Card Spend Limits - Aerospace and Defense
May 2012
Benchmarking Team
CAPS Research
This breakout report for Aerospace/Defense companies corresponds to the Corporate Credit Card Spend Limits Metric Report. Details include the percent of Aerospace/Defense companies that currently use corporate credit cards; the spend limits per transaction and per month; and the percent of corporate credit card spend (estimated) for direct, indirect, and services purchases. This report also includes data about the use of corporate credit cards (increasing, decreasing or staying the same) and the tools being used to monitor credit card usage.
SnapShots 2012 - Corporate Credit Card Spend Limits - Financial Services
May 2012
Benchmarking Team
CAPS Research
This breakout report for Financial Services companies corresponds to the Corporate Credit Card Spend Limits Metric Report. Details include the percent of Financial Services companies that currently use corporate credit cards; the spend limits per transaction and per month; and the percent of corporate credit card spend (estimated) for direct, indirect, and services purchases. This report also includes data about the use of corporate credit cards (increasing, decreasing or staying the same) and the tools being used to monitor credit card usage.
SnapShots 2012 - Corporate Credit Card Spend Limits - Industrial Manufacturing
May 2012
Benchmarking Team
CAPS Research
This breakout report for Industrial Manufacturing companies corresponds to the Corporate Credit Card Spend Limits Metric Report. Details include the percent of Industrial Manufacturing companies that currently use corporate credit cards; the spend limits per transaction and per month; and the percent of corporate credit card spend (estimated) for direct, indirect, and services purchases. This report also includes data about the use of corporate credit cards (increasing, decreasing or staying the same) and the tools being used to monitor credit card usage.
SnapShots 2012 - Corporate Credit Card Spend Limits - Utilities
May 2012
Benchmarking Team
CAPS Research
This breakout report for Utility companies corresponds to the Corporate Credit Card Spend Limits Metric Report. Details include the percent of Utility companies that currently use corporate credit cards; the spend limits per transaction and per month; and the percent of corporate credit card spend (estimated) for direct, indirect, and services purchases. This report also includes data about the use of corporate credit cards (increasing, decreasing or staying the same) and the tools being used to monitor credit card usage.
Supply's Organizational Roles and Responsibilities 2011
May 2012
P. Fraser Johnson, Ph.D.;Michiel R. Leenders, D.B.A.
The University of Western Ontario
Based on responses from 249 manufacturing and services firms, this study provides a snapshot of how large North American supply organizations are structured and their responsibilities, resources, and leadership. Its 12 research questions are focused on organizational structure, reporting line, acquisition categories and supply chain responsibilities, staffing levels, supply objectives, involvement in major corporate activities, team usage, CPO title and background, environmental issues, social issues, risk management, and future innovations. The study is also a unique look over the past decades, because it is an update of similar studies on the same topic, by the same authors, conducted in 1987, 1995, and 2003.
Managing Legal Services Spend
May 2012
Jacklyn Sturm
Intel Corporation
Background: Intel Corporation would like to learn from other companies regarding the experiences of Supply Management in partnering with the Legal Department to manage legal services spend. For the purposes of this CPO Insights, management of legal services spend is defined to include sourcing, contract negotiation and approval, and supplier management activities. Please respond to the following questions. Questions: 1. Which department or group within your company (e.g. purchasing, legal, finance, etc.) is responsible for management of legal services spend for each of the following legal services? Legal Service Departments/Groups that manage the spend for this service E-discovery ______________________________________ Patents ______________________________________ Compliance ______________________________________ Research ______________________________________ Litigation ______________________________________ 2. Which of the following statements best describes the involvement of Supply Management in management of legal services spend for each of the following spend areas. Legal Service Level of Supply Management Involvement E-discovery ___ No involvement ___ Limited involvement ___ Full involvement Patents ___ No involvement ___ Limited involvement ___ Full involvement Compliance ___ No involvement ___ Limited involvement ___ Full involvement Research ___ No involvement ___ Limited involvement ___ Full involvement Litigation ___ No involvement ___ Limited involvement ___ Full involvement 3. Please identify the top two or three challenges at your company in creating a partnership between Supply Management and the legal department for management of legal services spend. 4. If Supply Management at your company is partnering with the legal department for management legal services spend, please identify the top two or three benefits supply management is providing. 5. If Supply Management at your company has a partnership with the legal department for management of legal services spend, how successful is the partnership? ____ a. does not meet our goals ____ b. meets few of our goals ____ c. meets some of our goals ____ d. meets most of our goals ____ e. meets all of our goals
SnapShots 2012 - Corporate Credit Card Spend Limits Metric Report
April 2012
Benchmarking Team
CAPS Research
The Corporate Credit Card Benchmarking Report summarizes data collected from 164 companies on the topic of corporate credit cards. Details include the percent of companies that currently use corporate credit cards; the spend limits per transaction and per month; and the percent of corporate credit card spend (estimated) for direct, indirect, and services purchases. This report also includes data about the use of corporate credit cards (increasing, decreasing or staying the same) and the tools being used to monitor credit card usage.
SnapShots 2012 - Corporate Credit Card Spend Limits and Authorization Summary Report
April 2012
Benchmarking Team
CAPS Research
The Corporate Credit Card Spend Limits and Authorization Summary Report details the results of a recent CAPS Research SnapShots Benchmarking Survey titled "Corporate Credit Card Spend Limits". As the title implies, the survey focuses on questions about corporate credit card usage and spend limitations. Participants were asked to select the methods or tools being used to ensure that cardholders are in compliance with their respective company's policies and procedures.
A Blueprint to Future CPO Success
April 2012
Heidi Hoffman
Korn/Ferry International
The increasing complexity of the CPO role, the demands upon the profession, and changing trends all require a different skill set for CPOs to be successful. Ms. Hoffman, after a brief review of the evolution of the procurement executive, discussed how to prepare for the future with a blueprint for CPO success that addresses four key areas: emotional intelligence, change leadership, career motivation, and a broad perspective. Best-in-class procurement executives share a specific set of leadership characteristics in these key areas. She also shared the "70:20:10" developmental model that keeps leaders engaged, fulfilled, and growing, and wrapped up with the critical characteristic that is the number one predictor of success for procurement and other executives.
Supply Risk in an Uncertain World: Managing Risk across the Extended Value Chain
April 2012
Robert M. Monczka, Ph.D.;William J. Markham
Arizona State University;CAPS Research
Today's business models and strategies offer greater rewards, yet expose companies to greater risks. Managing risk effectively requires a process for "achieving acceptable levels of thoughtful and reasoned risks compared to competitive opportunities." Dr. Robert Monczka and Mr. William Markham presented an overview of the findings and observations from the Value Chain Risk Management (VCRM) research project, the first in a series of research efforts examining "Value Chain Strategies for the Changing Decade." The research is intended to help companies better manage supply risk by answering key questions, which Monczka and Markham covered. The presentation and slides also covered the traits of a composite "most advanced" company at managing risk, a global risk monitoring tool, a framework for managing supply risk, and a snapshot of what the future holds for supply risk management.
Purchases 2020: An Approach for "Forward Thinking" Procurement Organizations
April 2012
Rick Hughes
The Procter & Gamble Company
Procter & Gamble recently embarked on a journey to understand what the procurement organization and global business environment would like in the year 2020. Mr. Hughes presentation highlighted the reasons why they tackled this project, the impact of their findings, and some early results. He detailed how P&G designed and implemented a progressive model for creating broad organization engagement. The presentation also provided important insights into what the norms and expectations of the business environment will be in 2020, along with P&G's response in focusing on four key areas that build the foundation of their efforts: talent; tools and technology; structure; and innovation and collaboration.
Managing a Global Supply Chain
April 2012
David Hammerle
Bechtel Corporation
In a business environment of global uncertainty that is driven by world events, fractured supply chains, market uncertainty, increased regulation of import/export activity, quality challenges, and many more, it is critical that organizations have a firm grasp on active management of their global supply chain. Mr. Hammerle's presentation addressed these challenges and the ways his organization is overcoming them. Some of the solutions he provided include in-depth watch programs to identify trends early on, global deployment of resources, strong audit and review programs, strong supplier relationships, developing tools for knowledge capture, plus more.
Implementing Electronic Invoicing
April 2012
Phil Carter
CAPS Research
Background: Several companies are now requiring or planning to require "touchless", electronic invoices from their suppliers. The following questions ask about the implementation of "touchless", electronic invoices at your company. "Touchless" electronic invoicing is defined as invoices sent from suppliers via the web or dedicated connection that are read and interpreted directly by your ERP or other IS system. No manual intervention (e.g. copying, scanning, rekeying) is required. Please respond to the following questions. Questions: 1. Has your organization implemented automated or 'touchless' invoicing systems? ____ Yes ____ No If 'No', do you expect to adopt automated invoicing within the next year? ____ Yes ____ No 2. If 'Yes' does your organization accept automated invoices from suppliers? ____ Yes ____ No If 'Yes', approximately what percent of total invoices received are automated? _________ % 3. Have you experienced (or do you anticipate) any pushback from suppliers as you move(d) to automated invoices as part of your purchase order process? 4. Do you have any 'lessons learned' or best practices specific to automated invoicing that you can share? 5. Would you or another executive on your team be interested in participating in an interactive web event on this topic? ____ Yes ____ No
Financial Distress of Suppliers: Causes, Management, and Consequences
April 2012
Christoph Bode;Stephan M. Wagner
Swiss Federal Institute of Technology Zurich
With the turbulent economic climate that began with the 2008 financial crises, financially distressed companies have been more prevalent in many supply chains. This focus study examined several case companies to understand how firms are managing those suppliers. It explores how they scan, interpret, and react to information about their suppliers, and how they "learn" from past experiences with financially distressed supply chain partners. The study authors also provide recommendations for buying firms as they try to manage or mitigate this risk factor.
Maintaining a Talented Workforce in the Supply Management Organization Metric Report 2012
March 2012
Benchmarking Team
CAPS Research
Maintaining a Talented Workforce in the Supply Management Organization offers a primer on whether or not organizations experienced a 'talent shortage' in the pool of qualified applicants for supply management-related job openings in the last two years. As the economy improves and companies focus on streamlining their supply management operations, some organizations are re-evaluating how best to address actual or perceived talent shortages, and how outsourcing and technology will impact supply management's workforce. The benchmark report delves into whether or not participating organizations were able to fill all the open positions, if they exceeded salary guidelines to hire qualified candidates and the difficulties of trying to fill job vacancies in different supply management functional areas. This research offers insight to enable the management of talent trends in supply management.
Talent Management Twenty Twelve - A Benchmarking Perspective Summary Report 2012
March 2012
Benchmarking Team
CAPS Research
This is the summary report that corresponds to the 2012 metric report titled Maintaining a Talented Workforce in the Supply Management Organization. Highlights of this report includes comparisons of the 2009 and 2012 Talent Management benchmarking reports.
The Role of Social Media in Supply Management
March 2012
Phil Carter
CAPS Research
Background: Recent research indicates that Supply Management organizations are taking more interest in using social media (e.g., Facebook, LinkedIn, YouTube, Twitter, blogs, etc.) as tools for supply market research, supplier research, sourcing, recruiting and other related activities. Please answer the following questions about the use of social media in your Supply Management organization. Questions: 1. Do your Supply Management associates use social media for work-related activities? ____ Yes ____ No 2. If 'Yes', please identify which social media tools your Supply Management people are using, and explain how they are used. 3. What are the biggest challenges/risks you have experienced with using social media? 4. What are the biggest benefits you have experienced with using social media? 5. Do you anticipate that your use of social media will increase during the next two years? ____ Yes ____ No If 'Yes', in what ways?
Measuring Supplier Diversity Program Performance Metric Report 2012
March 2012
Benchmarking Team
CAPS Research
This report provides updated information on diversity spend metrics (including diversity goals and attainment); the percentage of diversity contracts awarded competitively or were either sole-source awards or single-source awards, and the average numbers of suppliers aligned to commonly referenced socioeconomic categories. Small business, in general, account for about 24 percent of an organization's supplier base. About 72 percent of the survey participants report they expect to see an increase in supplier diversity spend over the next two years. Furthermore, almost 50 percent of participants have seen an increase in their numbers of diverse suppliers during the reporting period.
Investment Recovery Performance Benchmarking Summary Report 2012
March 2012
Benchmarking Team
CAPS Research
This summary report details the best practices identified by the Investment Recovery Association. The report also looks at important cost benefits, including one that observes that for each dollar spent to maintain an organization's investment recovery function, on average $34 is returned to that organization.
Use of Product and Service Classification Systems
March 2012
Vincent Hrenak
Raytheon Network Centric Systems
Background: Raytheon would like to know how CAPS Research sponsor organizations use commodity codes in supply chain management. Commodity codes are used for classifying purchased goods and services into categories. These codes are useful for spend analysis and product discovery and can be implemented into e-purchasing systems. Please answer the following questions about the use of commodity codes at your organization. Questions: 1. Which statement best describes your organization's use of commodity codes? ____ We use the same commodity codes within all (or most) of our business units. ____ We use different commodity codes in different business units. ____ We do NOT use commodity codes. (Please answer question 6) 2. Please indicate which commodity code systems are used in your organization. ____ UNSPSC (United Nations Standard Products and Services Code) ____ SIC (Standard Industry Classification) Codes ____ NAICS (North American Industry Classification System) Codes ____ eCl@ss (Cross-industry product data standard for classification and description) ____ Proprietary or custom code system ____ Other product/service classification system (please identify below): 3. Within your organization, which business function is responsible for assigning commodity codes to new part numbers/products/services? 4. Please rank the top five benefits to your organization from using commodity codes. (1 to 5 with 1= most important) ____ spend analysis ____ enable buyers to search, analyze and perform strategic sourcing ____ help in optimizing the supply base ____ identify spend by supplier for negotiation leverage ____ promote process implementation and maintenance across the organization ____ enables compliance and control (authorization, expenditures, audits, spending limits) ____ assists in part data synchronization from design to supplier to manufacturing ____ assist in product awareness for new product design ____ other (please describe below): 5. Overall, how satisfied are you with your commodity code system(s)? Very Dissatisfied ----------------- Neutral ------------------- Very Satisfied ___ 1 ___ 2 ___ 3 ___ 4 ___ 5 ___ 6 ___ 7 6. If your organization does NOT use commodity codes, please briefly explain why.
Managing Commodity Pricing and Availability Volatility
March 2012
George A. Zsidisin, Ph.D., C.P.M.
Bowling Green State University
Just about every business organization acquires commodities in some form as part of its firm's operations. Commodities such as metals, energy, and agricultural products can be sourced directly as raw materials that are part of a firm's products, indirectly as components of purchased items from suppliers, or as consumable energy as part of a firm's operations and overhead expenses. This report details some of the critical issues that face professionals as they manage price volatility to reduce the detrimental effects on profitability, supply continuity, budgeting, and pricing of products to customers and consumers. A key theme addresses commodity price movements and how they can be managed. In addition, four company case examples are provided.
Managing Your Maverick Spend
February 2012
Phil Carter
CAPS Research
Background: 'Maverick' or 'unapproved' spend is defined as the purchase of goods and services outside of the standard policies and procedures established for the company. This question set refers only to spend that is managed or controlled by the purchasing/supply management group. Please respond to the following questions on how your organization manages maverick spend. Questions: 1. Does your organization measure maverick spend? ____ Yes ____ No If 'Yes', how often are these spend metrics reviewed? ____Monthly ____Quarterly ____Annually ____Other 2. Does your organization track the total number of unapproved transactions as a percent of total transactions? ____ Yes ____ No If 'Yes', what is your performance target or goal (e.g. 2% unapproved transactions) 3. Does your organization track the unapproved spend as a percent of total spend? ____ Yes ____ No If 'Yes', what is your performance target or goal? (e.g., 1% unapproved spend) 4. If your organization has other metrics for maverick spend, please list here. 5. Does your organization require corrective action for unapproved purchases that exceed an established dollar threshold? ____ Yes ____ No If 'Yes' what is the dollar amount of that threshold? $_________________ What are typical "corrective actions"? 6. Which of the following maverick spend management activities does your organization engage in? (check all that apply) ____a. We report maverick spend performance to C-level executives. ____b. We provide reports on maverick spend performance through company-wide communications (newsletters, intranet, etc.) ____c. We have headcount specifically responsible for controlling/reducing maverick spend. ____d. Other: ___________________________________________
Encouraging Your Suppliers to Provide Superior Performance
February 2012
Phil Carter
CAPS Research
Background: Supplier incentive programs are often based on contract language that rewards suppliers for exceeding performance goals and penalizes them if performance goals are not met. However, in today's complex world contract language is often inadequate for incentivizing suppliers to give their best effort on behalf of your company. The following questions ask about what you are doing to incentivize suppliers to provide superior performance. Questions: What incentives have been most successful for encouraging: 1. suppliers to provide superior performance? 2. suppliers to give you preferential treatment (e.g. in times of supply constraints)? 3. suppliers to bring you ideas for product/process/service innovation? 4. suppliers to bring you ideas for process improvements? 5. your supply management team to create effective supplier relationships?
Collaborating with Your Value Chain Partners
January 2012
Phil Carter
CAPS Research
Background: As value chains have become more complex and complicated, successful collaboration with value chain partners (suppliers, contract manufacturers, ODMs, customers, joint venture partners, etc.) has become more important. Several CAPS Research sponsor companies are interested in what strategies, processes and policies companies have been developed, or are being developed, to enhance their collaboration with value chain partners. To help in this understanding please respond to the following questions. Questions: 1. Have you implemented new approaches to collaboration with supply chain partners within the past two years?            ____ Yes         ____ No If 'Yes', what are some of the most important features of the new approaches? 2. If you answered 'No' to Q1 above, what aspects of your current approaches to collaboration do you feel contribute most to their success? 3. If you answered 'No' to Q1 above, do you anticipate any significant changes to your value chain collaboration strategies during the next year or two?            ____ Yes         ____ No If 'Yes', please summarize the anticipated changes.
SnapShots 2012 - Commodities Risk Management
January 2012
Benchmarking Team
CAPS Research
Companies that participated in the recent CAPS Research survey titled "Commodities Risk Management" were asked to report how well they are managing the risks associated with commodities and raw materials that are experiencing volatile pricing and availability. Specifically, the survey population was asked to respond to six statements ranging from their ability to identify commodities with volatile prices and availability that might have a significant impact on product and profit plans, to being generally satisfied with their own efforts to manage risk around commodity prices and availability. Thirty-five companies representing 12 different industry sectors provided responses to the survey.
DOE NNSA Contractors Benchmarking Metric Report 2011
January 2012
Benchmarking Team
CAPS Research
The DOE/NNSA Contractors Benchmarking Metric Report 2011 contains key procurement performance measures including organizational structure, professional development, financial information, and supplier measures. Key measures include training hours and costs, spend per procurement employee, operating costs per procurement employee, and supplier diversity goals and attainment. New this year are measures on procurement card usage and customer satisfaction surveys.
Purchasing Surety Bonds as a Risk Mitigation Strategy
January 2012
David Wohler
Covidien
Background Virtually all public-funded construction work in the U.S.A. is accomplished by private sector firms. This work generally is awarded to the lowest responsive bidder through the open competitive sealed bid system. Surety bonds play a critical role in making the system work. In today's challenging economic climate, bonds can play a role in corporate risk mitigation strategies beyond typical construction projects, such as major engineered-to-order capital equipment. The Bid Bond is intended to keep frivolous bidders out of the bidding process by assuring that the successful bidder will enter into the contract and provide the required performance and payment bonds. If the lowest bidder fails to honor these commitments, the owner is protected, up to the amount of the bid bond, usually for the difference between the low bid and the next higher responsive bid. The Performance Bond secures the contractor's promise to perform the contract in accordance with its terms and conditions, at the agreed upon price, and within the time allowed. The Payment Bond protects certain laborers, material suppliers and subcontractors against nonpayment. Since mechanic's liens cannot be placed against public property, the payment bond may be the only protection these claimants have if they are not paid for the goods and services they provide to the project. Please answer the following questions about your company's use of surety bonds. Questions: 1.  Do you purchase surety bonds as a part of your risk mitigation strategy?            ____ Yes         ____ No 2.  If yes, what type of bonds do you request from suppliers?            ____ Bid       ____ Performance       ____ Payment 3.  If yes, what type of projects do you use bonds to mitigate risk?            ______ Construction         ______ Capital Equipment 4.  What challenges or drawbacks have you encountered using bonds as a risk mitigating strategy? 5.  Do you think requesting surety bonds results in less risk for your company?            ____ Yes         ____ No
Supplier Environmental Sustainability Performance Report - 2011
January 2012
Benchmarking Team
CAPS Research
This is the third benchmark report developed for the Electric Utility Industry Sustainable Supply Chain Alliance that focuses on their suppliers' commitment to environmental sustainability. The 2011 metric report includes data provided by 292 different suppliers who were categorized as being manufacturers or non-manufacturers. The benchmark report looks at how key suppliers are addressing Policy & Environmental Management, Greenhouse Gas (GHG) Emissions, Energy Consumption, Water Consumption, Waste & Materials Management, and Innovation.
Risk Management for Commodities with Volatile Price and Availability
December 2011
Phil Carter
CAPS Research
Background: CAPS Research is interested in how companies are managing the risk associated with commodities and raw materials that are experiencing volatile pricing and availability. Example commodities include, but are not limited to, rare earth minerals, metals, petroleum and agricultural commodities. Although your company may not purchase these commodities directly, you may be buying products/parts/components that consume the commodities one, two or more tiers up the supply chain. By answering the questions below, you can help CAPS Research better understand how companies are addressing the current fluctuations in commodity prices and availability and the risks posed to product and profit plans. On a scale of 1 to 7 (1 = Strongly Disagree and 7 = Strongly Agree) please indicate how your company is addressing the challenges of risk management for commodities with significant price and availability volatility: Questions: 1. We have identified commodities with volatile prices and/or availability that may have a significant impact on our product and profit plans. __ 1 __ 2 __ 3 __ 4 __ 5 __ 6 __ 7 __ N/A a. We purchase these commodities directly for input into our manufacturing process. __ 1 __ 2 __ 3 __ 4 __ 5 __ 6 __ 7 __ N/A b. We purchase products, parts and components that consume these commodities. __ 1 __ 2 __ 3 __ 4 __ 5 __ 6 __ 7 __ N/A 2. We have an effective commodity risk management program/process in place with clearly defined procedures and goals to manage the impact of volatile commodity prices and availability on product and profit plans. __ 1 __ 2 __ 3 __ 4 __ 5 __ 6 __ 7 __ N/A 3. We regularly employ external sources of information to track commodity availability and pricing trends. __ 1 __ 2 __ 3 __ 4 __ 5 __ 6 __ 7 __ N/A 4. We have cost models in place to forecast the impact of changing commodity prices on the total component cost and/or to the total cost of our finished goods/products (e.g., the cost of copper in a printed circuit board or the cost of sugar in food products), or on our operating costs. __ 1 __ 2 __ 3 __ 4 __ 5 __ 6 __ 7 __ N/A 5. We have sourcing strategies in place to mitigate short term shortages of key commodities or to take advantage of short term over-supply of key commodities. __ 1 __ 2 __ 3 __ 4 __ 5 __ 6 __ 7 __ N/A 6. We are generally satisfied with our efforts to manage risk around commodity price and availability volatility. __ 1 __ 2 __ 3 __ 4 __ 5 __ 6 __ 7 __ N/A
Cross-Industry Metric Report December 2011
December 2011
Benchmarking Team
CAPS Research
The updated CAPS Research Cross-Industry Report of Standard Benchmarks published in December 2011 provides twenty standard supply management organization performance metrics across 11 different industry sectors, This highly regarded report includes popular key performance indicators including total spend as a percent of revenue and the percent of total spend managed/controlled by the supply management organization, average operating expense per supply management employee, cost reduction and avoidance metrics, purchase order cycle times, and average total spend per supply management employee.
SnapShots 2011 - Capital Equipment Sourcing and Procurement
December 2011
Benchmarking Team
CAPS Research
Companies that participated in the recent CAPS Research survey titled "Capital Equipment Sourcing and Procurement" were asked to provide their total spend for Capital Equipment and a breakout of the spend for Capital Equipment sourced from low-cost countries. CAPS Research asked if there is an expectation that Capital Equipment spend, including Capital Equipment being sourced from low-cost countries would increase, decrease, or not change. The survey results imply that more than half of the survey participants have not sourced Capital Equipment from low-cost countries and do not anticipate doing so in the near future. But overall, half the companies indicated they expect a 37 percent increase in Capital Equipment spend during the next two years.
Indirect Spend Risk Management Strategies
November 2011
Phil Carter
CAPS Research
Background: Much of the recent emphasis on risk management has been on direct material suppliers. However, for many companies, spend for indirect goods and services is the majority of total spend. Companies are starting to focus attention on indirect spend risk management strategies as a means to reduce the risk of supply interruption. The following questions ask about the management of risk for indirect spend at your organization. Questions: 1. Does your organization currently employ risk management strategies for your indirect spend suppliers? ____ Yes ____ No 2. If 'Yes', how far up the supply chain do you typically monitor/manage supplier risk for indirect spend?? Tier 1 Suppliers ____ Yes ____ No Tier 2 Suppliers ____ Yes ____ No Tier 3 Suppliers ____ Yes ____ No 3. Do you primarily rely on Tier 1 suppliers to manage risk with Tier 2 suppliers? ____ Yes ____ No 4. What conditions or situations would cause your organization to implement risk management strategies beyond Tier 1 suppliers? 5. What are one or two important risk management strategies that your organization employs for indirect spend? 6. Do your organization's risk management strategies differ for service providers versus indirect goods suppliers? ____ Yes ____ No 7. If 'Yes', what are the most important differences?
Pushing Green: Driving Sustainability in Supply Management and throughout the Supply Chain
November 2011
Roberta J. Jennings
CAPS Research
Supply management professionals are uniquely positioned to influence a firm's environmental sustainability efforts and also the performance of supply base partners in this area. Many recognize the altruistic and commercial benefits of such a program, but struggle with the details of appropriate expectations, implementation, and execution. This report details some of the critical issues that face professionals as they strive to implement environmental sustainability standards in their own practices and in the supply base. Themes include: establishing standards and metrics, supplier communications, and executing this strategy within the context or other organizational goals. In addition, company case examples and external resources are provided.
Purchasing Consortiums As a Viable Sourcing Strategy
November 2011
Phil Carter
CAPS Research
Background: There is no doubt that the use of consortiums (consortia) to drive greater savings on the purchase of various goods and services has evolved over the past few years. In today's economy, organizations are still challenged to find savings, and there are indications that companies are again turning towards consortiums to help squeeze out additional savings. Simply defined, a purchasing consortium is two or more organizations that join together for the purpose of combining their individual requirements for purchased materials, services, and capital goods to leverage more value-added pricing, service, and technology from their external suppliers than could be obtained if each firm purchased goods and services alone. Please answer the following questions about your company's use of consortiums to purchase goods and services. Questions: 1. Do your sourcing strategies include the use consortiums to purchase goods and/or services? ____ Yes ____ No 2. If 'Yes' do you anticipate that the total spend with consortiums during the next year will increase, not change, or decrease? ____ Increase ____ Not Change ____ Decrease 3. If 'Yes' can you identify the name(s) of the consortiums currently being used, and provide a short list of the key commodities (or spend categories) being sourced through the consortiums? Consortium Names: Commodities/Categories of Spend: 4. Do you believe that including consortiums as part of your sourcing strategies has resulted in increased savings? ____ Yes ____ No 5. Do you have any comments about the effectiveness of consortiums as a viable sourcing strategy?
Supply Chain and Revenue Cycle Integration: Asset Management in U.S. Hospital Systems
November 2011
Cody Anderson, MBA/MHSM;Kyle Clifton, MBA/MHSM;Bushra Rahman, MBA, MHSM;Eugene Schneller, PhD;Kelley Blair;Derek Paterson;Karen Peterson
Arizona State University;Craneware
As healthcare reform continues to place an emphasis on margin management within provider organizations, creating synergy between the supply chain and revenue cycle has increased in importance. In most provider organizations supply chain management (SCM) and revenue cycle operations function in silos, occasionally responding to anecdotal evidence to make improvements in the processes linking the two areas. Hospitals and health care systems that become proficient in managing the revenue environment achieve strategic advantage by reaching their financial goals and assuring a stream of revenues to support their clinical efforts. Inventory constitutes an important asset for American hospitals. As clinical inventory is utilized for patient care, much of it has the potential to be transformed into revenue through direct billing to third party payors and patients themselves. While the supply chain function has not traditionally been perceived as extending to revenue capture, it is increasingly clear that a linkage between supply chain and those aspects of the hospital that recover money for products used is indispensible for accurate, efficient and consistent cost recovery .
SnapShots 2011 - Global Supplier Quality Assurance (SQA) Program Support
October 2011
Benchmarking Team
CAPS Research
This CAPS Research benchmarking report on Global Supplier Quality Assurance (SQA) Program Support indicates that 23 percent of the participating companies' supply management employees are assigned to support SQA programs that focus on Advanced Quality (advanced product quality planning initiatives), Supplier Quality (product quality goals and continual improvement), and Supplier Development (creating and maintaining a network of competent suppliers). Based on data provided by the survey participants, one-half of the SQA employees support ongoing Supplier Quality programs. Organizationally, the employees who support Supplier Development initiatives are more likely to be assigned to the organization's supply management group than are those SQA employees who support either Advanced Quality or Supplier Quality initiatives.
Supply Management Operating Expenses for the Next Fiscal Year
October 2011
Phil Carter
CAPS Research
Background: In these uncertain economic times, many companies are carefully reviewing their budgeted expenses for internal operations. At CAPS Research, we define supply management operating expenses as total salaries and other payroll-related expenses, non-allocated expenses (controllable expenses such as travel, training, materials, and supplies), business systems and IT infrastructure, and other allocated expenses. Questions: 1. For your next fiscal year, how do you expect the budget for your organization's supply management operating expense to change? ________% Decrease ___ No Change ________% Increase 2. In what category of expense do you expect to see the biggest change (e.g., salaries, benefits, travel, training, etc)?
SnapShots 2011 - Business Gifts and Entertainment Policies
October 2011
Benchmarking Team
CAPS Research
The first question on the survey that corresponds to this SnapShots report asked, "Does your organization have written policies that identify, eliminate, or reduce inappropriate influences on the supply process that are specific to the acceptance of gifts and/or entertainment?" Not surprisingly, 98 percent of the survey population (136 out of 140 responses) said ‘Yes’ meaning that policies on accepting business gifts and/or entertainment are in place. But 38 percent of those who reported also said they do not place a dollar limit on gifts or entertainment. The report shows the average limit for gifts is $84, and the average limit for entertainment is $152. About 40 percent of the companies who allow their supply management employees to accept gifts do not require the employees to report the gifts or entertainment; and 68 percent of those who allow their supply management employees to accept entertainment do not require the supplier (or potential supplier) to attend the same event.
Supply Strategy Implementation: Current State and Future Opportunities 2011
October 2011
Robert M. Monczka, Ph.D;Kenneth J. Petersen, Ph.D.
CAPS Research;University of Tennessee
To achieve significant and successful transformation of supply management, companies need to assess how well they have implemented critical supply strategies. To assist in this effort, CAPS Research designed the Executive Assessment of Supply (EAS). This self-administered assessment lets companies determine the importance of various strategic strategies for their organization, the level of implementation and the results achieved. This report summarizes the results from these assessments based on responses from 119 supply organizations across 25 industries regarding 22 supply strategies and performance results. These results can help companies compare their strategic results with those achieved by other companies. Also companies can compare their recent results with the results of similar assessments completed in 2007 and 2009 to yield an even more comprehensive picture of implementation success and supply management performance.
Plans to Re-shore Offshored Materials and Services Spend to the USA
October 2011
Tim Fiore
CAPS Research
Background: During the recent CAPS Research Board of Trustees meeting some board members reported that there are signs that US-based operations are considering bringing back to the USA ("re-shoring") some of the materials and services that were earlier offshored. Several factors are possibly influencing this, including business risk (e.g. the impact from the Japan earthquake), currency fluctuations and the desire to employ more workers in the USA. Please answer the following questions about your company's "re-shoring" plans for your US-based operations only. Questions: 1. Do you currently offshore significant amounts of materials or services? Yes or No If 'Yes', approximately what percent of your Materials spend is offshored? _________% approximately what percent of your Services spend is offshored? _________% 2. During the next 12 months, approximately what percent of currently offshored Materials spend do you expect to "re-shore"? _________% approximately what percent of currently offshored Services spend do you expect to "re-shore"? _________% 3. What are the key reasons for doing this? (Indicate all that apply) a. Better total cost in USA b. Reduce risk of supply interruption c. Reduce risk of unfavorable currency fluctuation d. Reduce risk of unfavorable government regulations/taxes/etc. e. Bring jobs back to the USA f. Other (please specify below)
Value for Money (VFM): Supply Chain Strategies and Potential Contributions
October 2011
Bushra Rahman,MBA,MHSM;Eugene Schneller, PhD;Natalia Wilson, MD,MPH
Arizona State University
As the U.S. health care system is challenged by changes brought about by health care reform and the difficult economic climate, achievement of "value for money (VFM)" has become an increasingly important concept depicting a health care system that seeks to achieve maximum benefit and quality for the funds it expends for both clinical and administrative services. This white paper, based on the HSRC-ASU 2011 Dissemination Conference, discusses six factors pertaining to achieving value for money.
Difficulty of Finding Qualified Supply Management Candidates
September 2011
Phil Carter
CAPS Research
Background: Despite the high unemployment rate in the U.S., several companies have recently reported experiencing skills shortages across various disciplines. According to the Wall Street Journal, as recent as August of this year, about one-third of companies surveyed reported having few or no qualified applicants for job openings. Please answer the following questions about your company’s ability to fill open supply management positions with qualified candidates. Questions: 1. Do you currently have open positions for which there is a shortage of qualified applicants? Yes or No 2. Has finding qualified applicants become more or less difficult over the past 12 months? More Difficult No Change Less Difficult 3. Do you anticipate that it will be more difficult or less difficult to find qualified job applicants during the next 12 months? More Difficult No Change Less Difficult 4. How difficult is it currently to find qualified applicants in each of the following geographical regions? (Indicate the difficulty as follows: Very Difficult, Somewhat Difficult, Not Difficult, Not Applicable) USA: China: India: Southeast Asia: Western Europe: Eastern Europe: Other Regions (list):
Economic Update and Outlook - Brighter Skies Ahead
September 2011
Lee McPheters, Ph.D.
Arizona State University
After experiencing a strong upswing in the economy earlier this year, the forecast has turned negative, fueled by the downgrade of the U.S. credit rating and especially by the financial woes and concerns of other countries and their banking communities. A second recession is becoming more likely – one in three chances, in fact, according to McPheters. Consumers, normally the driving force for economic recovery, are still cautious and are not spending and investing to the degree needed for stronger growth. It will be a long road to recovery.
Supply Management Strategies for Success in the New Economy (BPW 2011)
September 2011
Robert M. Monczka, Ph.D.;Phillip L. Carter, D.B.A.
CAPS Research
This presentation provides an overview of megatrends, such as demographics, shifting global sourcing and production locations, changing technologies, and economic-political developments that are changing the world. The presentation emphasizes that companies must, for long term success, adapt their value chain strategies to the new circumstances created by the mega-trends. Based on research conducted by CAPS Research over the past few years, the researchers identify specific value chain strategies that will be critical for companies to develop in order to cope with the external trends and business model changes. The trends include: (1) value focused supply and category strategies, (2) risk management, (3) "green" supply, (4) supplier innovation, (5) extended global supplier networks, (6) metrics and measurement systems, (7) supply chain analytics, and (8) talent management. The researchers stress that companies will need to devote resources to develop and execute these strategies at a high level if they are to be competitive in the decade ahead. Finally the presentation discusses some of the actions companies must take to ensure that the new supply chain strategies are fully aligned with the business model of the company and its overall competitive strategies.
"Green" Supply Chain at Intel
September 2011
Jeff Selvala
Intel Corporation
Intel's commitment to create a green/sustainable supply chain fall under the company's larger corporate responsibility program focus on the three areas of environmental, social and governance. Selvala's presentation showed how creating a green supply chain is good for business. It addresses risk management concerns, improves the company's management effectiveness and supports growth and returns on capital. Pursuing green supply along with other corporate responsibility programs is linked to long-term contribution to shareholder value. Intel's green efforts center around 1) reducing and recycling waste; 2) using green buildings; 3) water conservation; 4) energy conservation; and 5) green power initiatives. Selvala's discussion also included specifics of measuring Intel's carbon footprint and its policy on the use of conflict minerals.
Whirlpool Innovation
September 2011
Brian Smith, CPIM
Whirlpool Corporation
Within any organization, there are certain "rules" about leveraging innovation as a competitive advantage. At Whirlpool, these rules include 1) innovation must come from everyone; 2) tap the best thinking in the world; 3) expect investment up-front without immediate payoff; and 4) big change requires a massive scalable approach over time. After an overview of Whirlpool's legacy of creating new ideas and ways of doing business, Smith discussed a tool critical to their innovation process – Material Value Teams (MVT). Whirlpool's MVT are cross functional teams in GPO that 1) formalize cross functional collaboration at the part/commodity level; 2) improve their delivery on cost, quality, speed and innovation; 3) leverage their global resources and supply base; and 4) drive out complexity at the part and supply base level. Smith detailed how MVTs drive cross functional connectivity and accountability.
Value Chain Resiliency Management and Japan Incident Response
September 2011
John O'Connor
Cisco Systems, Inc.
Cisco is undoubtedly one of the best companies at managing risk and resiliency of its value chain. The recent crisis in Japan, and specifically Cisco's response, certainly made that clear. O'Connor's remarks started with an overview of their resiliency management plan followed by a fascinating Japan incident response case study that included their challenges with Japanese sub-tier suppliers. He concluded with lessons learned from the experience, which included 1) complete/accurate business continuity planning data is the platform for any effective response; 2) having and using your "Playbooks" is essential; 3) sub-tier risk visibility and mitigation is an Achilles Heel for many industries; and 4) internal/external communications must be ready quickly.
Pursuing Value with Innovative Supply Networks
September 2011
Lisa Haley
Fluor Corporation
This presentation highlighted Fluor's success stories in finding value and driving innovation throughout its extended global supply networks. To create this value, Fluor focuses on three major efforts: 1) create new strategies to adapt to today's changing global marketplace; 2) early engagement to encourage innovation from suppliers; and 3) target emerging markets to embrace cost competitiveness. Haley also discussed how Fluor maximizes the value its supply base through a supplier selection process that weighs risk mitigation and strategic impact. Discussion also included low cost country and local sourcing, its sourcing capabilities in China and Fluor's supplier pre-qualification program.
Reporting Environmental Sustainability Metrics Using Supplier Scorecards
September 2011
Phil Carter
CAPS Research
Background: A recent Carbon Disclosure Project (CDP) report suggests that the importance of carbon management at the supplier level will triple over the next 5 years, and large companies may adjust their supply base according to carbon management criteria. Please answer the following questions about your use of supplier environmental sustainability metrics. Questions: 1. Does your organization utilize a supplier scorecard that asks for supplier's environmental sustainability metrics? Yes or No 2. If 'No', do you anticipate that you will ask for information about carbon management from your suppliers within the next two years? 3. If 'Yes' to Question 1 above, for which of the following topics are metrics collected on your supplier scorecard? a. Direct and/or Indirect Greenhouse Gas (GHG) emissions b. Energy consumption c. Water consumption d. Water discharge e. Waste and materials management f. Innovative and collaborative efforts on improving sustainability outcomes g. Other (list here) 4. If 'Yes' to Question 1 above, what is the weight assigned to the environmental sustainability performance metrics (if any)? Weight : ________ %
Services Outsourcing and Bridge Transfer: A Social Network Perspective
August 2011
Mei Li, Ph.D.
Lehigh University and CAPS Research
This report focuses on outsourced services successes and failures, and the factors that contributed to each. The research helps to pinpoint some of the causes of services outsourcing failures and sheds light on how to better manage services outsourcing. Since outsourcing is typically defined as the conscious choice of replacing internal functions with the use of external agents to perform one or more production or services activities, it would seem that services outsourcing should be similar to manufacturing outsourcing. The author points out there are fundamental differences underlying the two types of outsourcing arrangements and suggests that companies take different management approaches when managing the outsourcing of different types of services based on the degree of customer interactions.
Trends in Supplier Auditing Practices
August 2011
Phil Carter
CAPS Research
Background: Several companies have recently reported that they are increasing the numbers of supplier audits. For example, one automobile manufacturer reported doubling the number supplier audits during the past year. In this case, the company used a third-party organization to evaluate their suppliers' ethical and sustainability policies. In another example, a pharmaceutical company reported increasing the number of external audits to help gauge their suppliers' accomplishments against quality, safety and social responsibility goals. Questions: 1. During the past year did your supply management group increase the number of supplier audits? Yes or No If 'Yes', by how much did the number increase (e.g. 50%, 100%, etc.)? If 'No', do you plan on increasing the numbers of supplier audits during the next year and if so, by how much? 2. Do you anticipate the number of supplier audits on the following topics will increase or decrease during the next year? - Risk Management (e.g., business continuity plans): Increase or Decrease - Quality Compliance (e.g., certification to a ISO or Total Quality Program: Increase or Decrease - Compliance to various Government Rules and Regulations (e.g., Foreign Corrupt Business Act): Increase or Decrease - Environmental Sustainability: Increase or Decrease - Second Tier Supplier Diversity: Increase or Decrease - Fair Labor Practices: Increase or Decrease - Other: (List here) 3. Estimate the percent of your supplier audits conducted by: (Note: Total should equal 100%.) - Suppliers (i.e. self-audits) ______% - Your team or another group internal to your company ______% - Third-party organizations, contractors, or consultants ______%
SnapShots 2011 - Conflict Minerals Reporting Requirements
August 2011
Benchmarking team
CAPS Research
This benchmarking report summarizes information provided in response to a CAPS Research SnapShots survey that asked supply management organizations how they are addressing recent legislation (Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010) that requires publicly traded manufacturing companies to submit a new annual report on their use of 'conflict minerals' necessary for product functionality and/or production. Although less than one-fourth of the survey participants reported that their organizations have policies/procedures in place, the large majority plan to implement policies and/or procedures within the next year. More than 60 percent of the participants reported their current minerals sourcing strategies will have to be changed to ensure their products or manufacturing processes can be certified to be conflict-free.
Aerospace and Defense Industry Benchmarking Metric Report 2011
August 2011
Benchmarking Team
CAPS Research
The Aerospace and Defense Industry Benchmarking Metric Report for 2011 contains key supply management performance measures on topics including organizational structure, financial information, and supplier relationships. New this year is a matrix that looks at what is included in each of the participating Aerospace and Defense companies' supply management operating expense as well as a deeper look at spend for direct and indirect goods.
Petroleum Industry Benchmarking Metric Report 2011
August 2011
Benchmarking Team
CAPS Research
The 2011 edition of the Petroleum Industry Benchmarking Metric Report includes key supply management performance measures that focus on organizational structures, functional assignments (e.g., strategic sourcing, transactional purchasing, etc.), training spend, supply management operating expenses, cost reduction and avoidance, investment recovery, and value creation. Supplier-related metrics indicate a reduction in the overall numbers of suppliers. More than 50% of the survey participants reported they have reduced the numbers of suppliers. About 20% reported there was no change in the base of suppliers, and the remaining 30% reported an increase. Overall, the report shows an 8% reduction in the total numbers of suppliers. In addition to the overall industry report, breakout reports are provided for Integrated, Upstream, Downstream, and Midstream operations.
Talent Development for Successful Supply Management
August 2011
Roberta J. Jennings
CAPS Research
Many firms face a multi-faceted and complex dilemma with regard to talent management. A significant percentage of the workforce is of retirement age, so organizations must capture the institutional knowledge these individuals possess, while at the same time onboarding new talent, from a new generation of workers with unique work styles and goals. At the same time, there is a continual challenge to "level-up" supply management talent to meet the more strategic demands of the function. Hence, robust talent management programs are vital for competitive advantage. This report, which is a summary of the discussions at a CAPS Research Critical Issues Partnership program, addresses the following areas: talent assessment practices and methods; talent development strategies; retention challenges; global considerations; and generational issues.
SnapShots 2011 - Supply Management Organizational Governance
August 2011
Benchmarking Team
CAPS Research
This benchmarking report summarizes the responses to a CAPS Research SnapShots benchmarking survey that asked participants about their governance structures (centralized, decentralized, or hybrid) and use of procurement-related Supply Management Councils or committees. The short, eight-question survey asked those who reported if they have established a Supply Management Council, and if they have adopted a charter or governance document that spells out the council’s authority and functions.
The Role of the CPO in Mergers and Acquisitions
July 2011
Phil Carter
CAPS Research
Background: In today's rapidly changing global economy mergers and acquisitions are a common part of business life. Supply management organizations often play a key role in vetting and generating the value creation envisioned from the merger/acquisition. The following questions are specific to the CPO's role when a merger or acquisition is being contemplated or is being executed. Questions: 1. What specific responsibilities do you have as CPO when your company is considering a merger with or acquisition of another company? 2. What specific responsibilities do you have as CPO when your company is executing a merger with or acquisition of another company?
SnapShots 2011 - How Organizations Manage Legal Services in Support of U.S. Patent Applications
July 2011
Benchmarking Team
CAPS Research
This benchmarking report summarizes the responses to a CAPS Research SnapShots benchmarking survey that asked for information on the numbers of U.S. Patent Applications filed during the past two years, and who is generally responsible for managing the preparation and prosecution of U.S. Patent Applications. Also reported is the percent of patent applications that were filed first as a U.S. Patent Application or under the Patent Cooperating Treaty (PCT) guidelines; and whether in-house or outside council was used to prepare patent applications. A key take-away from this report is the average cost (as reported) for outside counsel to prepare and file a U.S. Patent Application.
Formal Processes for Supplier Development
July 2011
Marcos Saraiva
Vale S.A.
Background: There is no 'one size fits all' approach to supplier development. Supply management leaders understand that the concept of effective supplier development includes different approaches to satisfy demands for new or improved products, cost reduction, product quality, penetration of new markets, etc. The end result of an effective supplier development program should also consider the value being provided. One of our corporate sponsors, Vale S.A., has asked that you provide some information about your supplier development program. Questions: 1. Does your company have an established formal process to develop new suppliers? Yes or No 2. If yes, please provide a short overview of your supplier development process. 3. If no, please provide a short description of your informal processes used to develop new suppliers. 4. If you have supply management professionals on your leadership team who are primarily responsible for supplier development initiatives, is it likely that you and/or one of them would participate in a day-long Critical Issues conference that focuses on supplier development methodologies?
Managing Supplier Quality Performance
June 2011
Mark Ensign
Sonoco Products Company
Questions: 1. Which functional group(s) within your organization owns the responsibility for leading and managing Supplier Quality? 2. What are the most important methods you use to hold your suppliers accountable for their quality performance, and how effective are these methods? 3. Are you willing to participate in a one-on-one benchmarking discussion with Sonoco Products, Inc. on the topic of Supplier Quality?
Supplier Relationship Management: An Implementation Framework
June 2011
Robert M. Monczka, Ph.D.;Thomas Y. Choi, Ph.D.;Yusoon Kim, Ph.D.;Casey P. McDowell
CAPS Research;Arizona State University;Georgia Southern University;CPM International L.L.C.
Leading firms hold the strong belief that improving supplier relationships will lead to improvement of buying (and selling) company performance, be it at the operations level or overall firm level in technology or innovation breakthroughs. This focus study examines the integrated approach that is required to optimize supplier relationships. Five key work streams are detailed (supply base rationalization with purchase family/supplier segmentation; supplier management; relationship management; buyer/supplier development; supplier performance measurement and management) and several case studies are presented. The study also highlights the significant resource commitment, infrastructure investment, stakeholder education, executive support, and patience required for the most effective supplier management environment.
Measuring the Effectiveness and Value of ePayment Solutions Summary Report 2011
June 2011
Benchmarking Team
CAPS Research
In response to a recent CAPS Research survey that focused on "Measuring the Effectiveness and Value of ePayment Solutions" the participants reported that they were adopting e-payment solutions or systems for different reasons. In addition to cost reduction, reference was made to a number of other benefits, including improved customer service, improved working capital, increased operational efficiencies and cycle times, processing efficiencies and enhanced compliance to organizational policies and procedures. And, as noted in this survey, only a few companies that participated in the survey reported they will not employ an e-payment capability within the next two years. Most larger, multibillion-dollar companies are finding that the benefits of e-payment solutions to pay suppliers far exceed the risks.
Supply Assurance - Moving Beyond Low Cost Considerations
June 2011
William Ng
Royal Dutch Shell plc
Driven by a variety of factors, the supply reliability of essential materials for Shell’s day-to-day operations have been greatly threatened, causing a reevaluation of the company's contracting strategy and measures designed to mitigate such supply risks. The reevaluation led to the creation of a systematic approach for handling such risks and the creation of a comprehensive supply assurance plan for all essential materials.
Developing a High-Performing Team - Pfizer Inc
June 2011
Lisa Becker
Pfizer, Inc.
With a strong global procurement and operations presence in the Asia Pacific region, Pfizer is committed to developing high-performing teams in a manner that addresses the culturally complex nuances of regional markets and supply-bases. Pfizer's strategy includes establishing a framework for growth, being focused and patient when recruiting, creating learning environments, and involving key stakeholders including suppliers.
Research Based Supply/Value Management Strategies for Success in the New Economy
June 2011
Phillip L. Carter, D.B.A.
CAPS Research
Megatrends such as demographic changes, shifting global sourcing and production locations, changing technologies, and economic-political developments, are changing the world. This presentation identified some mega-trends that will have particular importance for supply/value chain strategies. Additionally the presentation identified several specific supply/value chain strategies that companies will have to invest in over the next few years to achieve competitive success. These strategies include value focused supply, innovation from the supply base, global supply networks, risk management, green supply strategies, supply chain analytics, and talent management.
Utilities Industry Benchmarking Metric Report 2011
May 2011
Benchmarking Team
CAPS Research
The Utilities Industry Benchmarking Metric Report updated in May 2011 includes key supply management performance measures that focus on organizational structure, and fully burdened salary rates by area of operation and function. Other key metrics include managed spend, cost savings reported, and numbers of suppliers. New to the 2011 report are metrics that take a detailed look at inventory turn rates with breakouts for material that is specific to Transmission, Distribution and Generation. This year's report also looks at the average dollar value of procurement transactions that were manually released vs. automated.
Resources Utilized to Comply with the Foreign Corrupt Practices Act
May 2011
Phil Carter
CAPS Research
Background: The Foreign Corrupt Practices Act (FCPA) is a United States Federal law known for its two main provisions, one that addresses bribery of foreign officials and the other addresses accounting transparency requirements under the Security Exchange Act (SEA) of 1934. We are inquiring about the time and resources that you and your supply management leadership team expend on FCPA compliance. Questions: 1. What is the role of your supply management organization in ensuring your company's compliance with the FCPA? 2. What percentage of your time (approximately) is devoted to ensuring that your company complies with FCPA regulations? 3. What percentage of your supply management organization's professional resources (approximately) is devoted to ensuring your company complies with the FCPA regulations?
Integrating Green Initiatives into Supply Management
May 2011
Phil Carter
CAPS Research
Questions: 1. Have you effectively implemented "green" requirements into your policies and processes in supply management? Yes or No. 2. If yes, what are some of the highlights of your "green" policies and processes in supply management? 3. If no, what challenges do you have in implementing "green" policies and processes in supply management?
Supply/Value Chain Management Strategies for Success in the Changing Decade
April 2011
Robert M. Monczka, Ph.D.;Phillip L. Carter, D.B.A.
CAPS Research
Megatrends such as demographic changes, shifting global sourcing and production locations, changing technologies, and economic-political developments, are changing the world. This presentation identified some mega-trends that will have particular importance for supply/value chain strategies. Additionally the presentation identified several specific supply/value chain strategies that companies will have to invest in over the next few years to achieve competitive success. These strategies include value focused supply, innovation from the supply base, global supply networks, risk management, green supply strategies, supply chain analytics, and talent management.
Global Challenges Call for Global Leadership
April 2011
Angel Cabrera, Ph.D.
Thunderbird School of Global Management
Are global integration and trade on the decline because of the great recession? Not according to Dr. Cabrera. The global economy continues to grow and generate opportunities, as well as significant challenges, for businesses and economies. In China and India over one billion people don't own cell phones and over two billion don't have Internet access (compared to 23 million and 69 million respectively in the U.S.). Global trade is shifting east to China and stagnating in North America, while future population growth will come from developing countries and create tremendous challenges around the three Fs: Finance, Food and Fuel. As many CPOs shift to global sourcing as a supply strategy, how do they tackle the enormity of these trends? Click to read Dr. Cabrera's suggested solutions.
Open Innovation with the Supply Base
April 2011
Phil Carter
CAPS Research
Background: Procter & Gamble has extolled the virtues of open innovation with its supply base and has implemented this concept through its 'Connect and Develop' program. P&G set a goal that 50% of new initiatives involve at least one external partner. An excerpt from the March 2006 Harvard Business Review article that focuses on P&G's development of its 'Connect and Develop' initiative can be found here: http://hbswk.hbs.edu/archive/5258.html. Questions: 1. On a scale of 1 to 7, with 1 being very closed and 7 being very open, where would you place your organization's current implementation of open innovation? 2. On a scale of 1 to 7, with 1 being very closed and 7 being very open, where do you expect your organization's implementation of open innovation to be three years from now? 3. What are the major reasons for changing or not changing your approach to obtaining innovation from your supply base?
Investment in Risk Management Resources Considering Recent World Events
April 2011
Phil Carter
CAPS Research
Question: 1. First the great recession, then unrest in the mid-East and now the Japan earthquake and Tsunami -- all of these events reminds us of the inherent risks in our supply chains. Do you expect the resources that you will be putting into supplier and supply chain risk management in the next 2-3 years will increase, decrease, or stay the same? Increase resources (please explain) Decrease resources (please explain) No Change (please explain)
Investment Recovery Metric Report 2011
April 2011
Benchmarking Team
CAPS Research
This report was developed in partnership with the Investment Recovery Association. In addition to the organizational information and operational benchmarks provided, there are a number of financial metrics related to the overall cost benefits of investment recovery programs as well as best practice implementation. One key metric shows that for every dollar of investment recovery operating expense, $34 is returned to the bottom line. Other benchmarks relate information about investment recovery services and processes, the effectiveness of program-related tools and technologies, and investment recovery staffing. Fifty-six companies provided data for this report.
Expected Use of Analytics for Improving Supply Chain Performance
March 2011
Phil Carter
CAPS Research
Question: 1. One can define analytics as the study of supply and supply chain data using statistical analysis and modeling in order to discover and understand historical patterns with the purpose of improving supply/supply chain performance in the future. Using the definition above, do you expect to significantly increase the use of analytics in supply/supply chain management over the next two to three years? If yes, what opportunities do you see? If no, why not?
SnapShots 2011 - Master Agreements - Approval and Authority
March 2011
Benchmarking Team
CAPS Research
Contracts that are used to purchase goods and/or services on a recurring basis are commonly known as Master Agreements which are often used to establish basic terms and conditions that can be later referenced in individual purchase orders, work orders, etc. About 98% of the survey population reported they employ Master Agreements. Benchmarks include the percent of Master Agreements (reported) that are managed as stand-alone documents and the percent of related purchasing documents that are managed as stand-alone documents; the average maximum dollar values of small, mid-size, and large Master Agreements; and the percent of Master Agreements assigned a total dollar value equal to their potential value when approved as well as the percent assigned a value of zero dollars when approved.
Anticipated Changes to Sourcing Strategies in China
March 2011
Phil Carter
CAPS Research
Question: 1. Are you contemplating changes to your China sourcing strategies as a result of increased labor and/or other costs in China? If yes, what kind of changes are you considering? If no, why not?
Innovation Sourcing: Contributing to Company Competitiveness
March 2011
Robert M. Monczka, Ph.D.;Phillip L. Carter, D.B.A.;Thomas V. Scannell, Ph.D.;Joseph R. Carter, D.B.A., CPSM, C.P.M.
CAPS Research;Western Michigan University;Arizona State University
Innovation of products, services and business models is increasingly identified as an important strategy to achieve competitive advantage. Some firms have realized the potential of capitalizing on external sources for that innovation. In this focus study, CAPS Research examines the strategies and approaches that are in place at a number of companies to collaborate with suppliers on innovation. It addresses how these can be used and the specific role supply management plays in the process. The primary source of data is in-depth interviews with over 70 key executives at five leading global companies, eight of their SBUs and their suppliers. This report complements the 2010 CAPS Research Focus Study, "Implementing Supplier Innovation: Case Study Findings."
Plans to Add Supply Management Employees During 2011
February 2011
Phil Carter
CAPS Research
1. With the strengthening of the global economy and improvement in corporate revenues and profits, do you anticipate adding people in Supply Management during 2011? If yes, how many do you plan on adding in each of the following categories? * Entry Level * Experienced Buyers * Buyers with special commodity expertise * Managers * Directors * Other If no, why not?
Supplier Quality and Delivery Performance Benchmarking Metric Report 2011
February 2011
Benchmarking Team
CAPS Research
This metric report provides a summary look at how manufacturing-related companies reported they measure the performance of direct materials suppliers in terms of quality, delivery, cost management, and technical support. All of the survey participants (100%) reported they use periodic performance scorecards or assessments to measure quality. Approximately 75% of survey participants reported they calculate PPM (parts per million) defects to measure quality, but only 13% reported they calculate PPM delivery performance.
Effects of Middle East Unrest upon Supply Management
February 2011
Phil Carter
CAPS Research
Question: 1. Is the current unrest in Egypt and elsewhere in the Middle East causing you to change your supply management business plans? (Yes, No, Don't Know, Not Applicable) If 'Yes', briefly describe the most important changes:
Reporting Cost Savings
January 2011
Benchmarking Team
CAPS Research
This report focuses on the top three "baselines" that organizations use to calculate (or project) cost savings, and shows how different organizations set their annual savings targets. Approximately 96% of survey participants reported they measure and track savings attributable to cost reduction. Fewer companies (70% of the survey participants) also measure and track cost avoidance. Not unexpectedly, a majority of the survey participants reported that most of their cost savings for direct and indirect goods are attributable to cost reduction rather than cost avoidance. But there isn't much of a difference between cost reduction and cost avoidance savings reported for capital goods spend. If you want to know who (organizationally) is responsible for setting savings targets and how often these savings targets are reviewed, then you should look at the data provided by the 75 different organizations who responded to the corresponding survey.
Successful Capital Projects in Uncertain Times
January 2011
Bryan Ashenbaum, Ph.D.
Miami University
Sourcing for capital projects presents both great opportunities and challenges for a company. Such projects are inherently complex, require long-term vision and commitment, and can be affected by several "macro" factors. However, when engineering and sourcing teams' goals are synchronized and collaboration is effective and robust, great value can be delivered through the project. This report, based on a Critical Issues Partnership program, summarizes the main challenges and some key successful strategies for sourcing capital projects, particularly in an uncertain economy. Topics include managing uncertainty, building competencies, metrics/KPIs, contract issues, and early sourcing involvement.
SnapShots 2011 - Measuring Supplier Diversity Program (Tier 2) Effectiveness
January 2011
Benchmarking Team
CAPS Research
CAPS Research was recently asked to provide information specific to Tier 2 supplier diversity spend programs that either require or encourage Tier 1 suppliers to set diversity spend goals. CAPS Research was also tasked to find out whether or not companies who have initiated Tier 2 supplier diversity spend programs include in their procurement agreements (contracts, service level agreements, etc.) language specific to diversity spend as well as performance clauses in procurement agreements that stipulate penalties or other actions when a Tier 1 supplier's performance does not meet agreed-upon levels.
Maintaining a Global Supplier Management System
December 2010
Keith Weber;Charles Zheng
3M Company
3M Company is trying to determine how best to create and maintain a Global Supplier Management system (GSM) that provides updated profiles of their suppliers as well as information on the suppliers' parent/child relationships. 3M wants to ensure they have the ability to negotiate on a global basis to arrive at decisions that are best for 3M. The company wants to ensure the GSM provides detailed information such as the history of spend and trending data by different commodities. Questions: 1. Do you use a Global Supplier Management System (GSM) to help manage your supply base? (Yes or No) If 'Yes' please continue: 2. How do you identify corporate parent/child relationships with suppliers in your GSM system? 3. Do you establish these relationships during the initial supplier set-up process? (Yes or No) If 'No', when do you identify the relationships? 4. Do you identify the parent/child relationships for all suppliers? (Yes or No) If 'No', what criteria are used to select the suppliers for which the relationships are identified? 5. What is the primary tool or application used for your GSM system (e.g., hosted solutions, 3rd party providers, ERP system, etc)? 6. Do you regularly update or validate the data? (Yes or No) If 'Yes', how often is the data refreshed?
Electric Utility Environmental Performance Evaluation Benchmarking Metric Report 2010
December 2010
Benchmarking Team
CAPS Research
This report provides a look at how 11 electric utility companies reported their environmental sustainability efforts and includes metrics on Policy & Environmental Management, Greenhouse Gas (GHG) Emissions, Air Emissions, Energy Consumption, Water Use, Waste & Materials Management, and Innovation. Additionally, the report includes information on a broad range of innovative imperatives ranging from environmental education programs for suppliers and employees to the percent of participating companies who have implemented various business practices to reduce their carbon footprints.
Cross-Industry Metric Report November 2010
November 2010
Benchmarking Team
CAPS Research
The updated CAPS Research Cross-Industry Metric Report published in November 2010 provides standard key performance indicators across 18 industries. This highly regarded report includes popular key performance indicators like training spend, diversity spend, total spend as a percent of revenue, supply management organization operating costs, purchase order cycle times, and employee retention.
Executing Invoice-Only or Purchase Order Transactions for Indirect Spend
November 2010
Craig McMonigle
Hallmark Cards, Inc.
Craig McMonigle and his team at Hallmark are investigating methods to increase the level of Indirect Spend Transactions executed through defined Purchase Order processes and/or applications (examples: Ariba, SAP SRM) to minimize the number of invoice-only payment requests. Hallmark wants to better classify their indirect spend reporting and improve upon the payment processes. You can help the company achieve their objectives by responding to the following questions: Questions: 1. What percent of your Indirect Spend is managed as invoice-only (non-PO Invoice Payment Requests)? 2. What are your requirements for executing invoice-only transactions? 3. Has your organization been successful in executing Indirect Spend Purchase Order Transactions for professional services (e.g., advertising, HR services, computer/IT services, real estate, royalties, etc.)? If 'yes' please give examples of the professional services being managed through a defined Purchase Order process.
Utilizing POs to Streamline Sourcing of Goods and Services
October 2010
Graham Leary;Brett Mauser
Winn-Dixie Stores, Inc.
Winn-Dixie Stores, Inc. is working on a process to reduce the volume of contracts that require executive approval and legal review. Winn-Dixie's initial approach includes balancing spend and risk, and developing a framework for purchasing managers to utilize that does not require full legal review of each project. To help us accomplish our goal of streamlining the purchasing process, the leadership team at Winn-Dixie would like to know more about your criteria to determine when spend should require a formal contract and/or master service agreement in lieu of a purchase order. Questions: 1. Please define your organization's criteria for using Purchase Orders (spot purchases, one-time purchases, dollar value, etc.). 2. Please define your organization's criteria for using Master Service Agreements (usually stipulates the basis of the services being performed). 3. Please define your organization's criteria for using Other Contracts (scope is beyond that authorized for purchase order, dollar value, period of performance, etc.). 4. What criteria (value, commodity or service, length of contract, etc.) is used to determine which contracts or purchase orders require executive approval and/or legal review? 5. What tools, methods, or other processes (automated systems, checklists, etc.) are in place that directs your buyers to select the correct procurement mechanism for a purchase order or contract? 6. Does your organization utilize different source selection methods (Requests for Quotations, Invitation for Bids, Request for Proposals, etc.) for different types of contracts and/or purchase orders? Please define.
Supplier Financial and Operational Risk Management
October 2010
Phillip L. Carter, D.B.A.;Larry C. Giunipero, Ph.D., CPSM, C.P.M.
CAPS Research;Florida State University
In recent years, many leading-edge companies have taken a pro-active approach to implement risk management programs. This focus study examines best practices related to supplier risk management, in particular when firms engage third-party service providers (3PRs) to assist them. The report includes sections on the supplier risk management process, financial data analysis, third-party risk management companies, and multiple (anonymous) case studies. It also includes an appendix of various third-party risk management services available.
Supplier Environmental Sustainability Performance Report - 2010
September 2010
Benchmarking Team
CAPS Research
This is the second benchmark report developed for the Electric Utility Industry Sustainable Supply Chain Alliance that focuses on their suppliers' commitment to environmental sustainability. The 2010 metric report includes data provided by 326 different suppliers who were categorized as being manufacturers or non-manufacturers. The benchmark report looks at how key suppliers are addressing Policy & Environmental Management, Greenhouse Gas (GHG) Emissions, Air Emissions, Energy Consumption, Water Use, Waste & Materials Management, and Innovation. The report also highlights specific topics about the collaborative efforts between the utilities and suppliers to reduce environmental impacts.
Long Road to Recovery (BPW 2010)
September 2010
Lee McPheters, Ph.D.
Arizona State University
Arizona State University economist Lee McPheters, Ph.D., shares his insights into the current economic situation, claiming that chatter about a "double-dip recession" isn't accurate; instead factors indicate the country is just in "slow growth" mode. He credits this sluggish pace to that fact that nothing substantial is driving the economy. Ideally, consumers would be the driving force, but they're just not spending and investing to the degree needed for stronger growth. McPheters identifies and discusses many of the hurdles to recovery, including: credit markets, the consumer market, labor markets, housing markets, commercial real estate, federal deficit, and a skeptical public. His forecast, as of September 2010, is for employment growth to be negative through 2010, but turn slightly positive in 2011. Real GDP growth will be 2.5 percent in both 2010 and 2011.
Value Focused Supply: Linking Supply to Competitive Business Strategies (BPW 2010)
September 2010
Robert M. Monczka, Ph.D.
CAPS Research
Value Focused Supply (VFS) strategies will provide the next breakthrough opportunity for companies to create and capture value from their most strategic purchases. These VFS strategies go far beyond the price/cost reduction of traditional competitive sourcing. Already, leading companies are clearly demonstrating the power of this more comprehensive approach. Senior executives who lead their companies to be among the first to systematically apply VFS across the supply network will have opportunities to protect and create significant competitive advantages. Insights were provided, at the CAPS Executive Roundtable, about Value Focused Supply strategies firms have implemented and key enablers.
Transformation - A Leader's Story
September 2010
Deborah Stanton
MasterCard Worldwide
Upon joining MasterCard Worldwide as its chief purchasing officer, Deborah Stanton recognized the need for a transformation. In this presentation, she details the journey that she led to create a global supply chain team, including strategic category management, organizational structure, the scope of the team's role, processes, tools, metrics, and how it demonstrated value. Most importantly, Stanton candidly discusses the challenges and tactics around gaining executive support, effecting change within team members, and leading individuals through the change management process.
Creating Value in the New Economy - Dell
September 2010
Michael Tayter;Robert Bernard
Dell Computer Corporation
Dell executives detail several procurement and sourcing activities that are in place to support the larger enterprise strategies. These include design-to-value techniques applied to products; should-be cost modeling to develop accurate targets and fact-based negotiations; analytical approaches to sourcing; and developing world-class talent through a procurement academy.
Integrated Facilities Management (IFM) Sourcing Initiative
September 2010
Allen Ware
Intel Corporation
Intel describes the thought processes and actions behind its integrated facilities management (IFM) sourcing initiative. After assessing its facilities footprint and their lifecycle, it became apparent that there was a savings opportunity associated with integration and supplier consolidation. This presentation outlines the specifics value drivers, the anticipated savings information, the importance of governance over the new supplier model/relationship, and key success factors.
Accelerating Innovation through Effective Supplier Collaboration (BPW 2010)
September 2010
Robert M. Monczka, Ph.D.;Joseph R. Carter, D.B.A.
CAPS Research;Arizona State University
There is an increasing corporate focus on innovation, especially around involving the supply base. This report focuses on: (1) the strategies and approaches companies can use to identify, select and effectively collaborate with suppliers and supplier groups to accelerate innovation and (2) the specific role that supply management can play in accelerating innovation of product, service and process development. Results are based on learnings from in-depth field research with seven leading companies. The report provides guidelines for firms to begin and/or enhance their approaches to supplier innovation in order to enhance their competitive performance.
Repositioning Supply Chain in Health Care Systems
September 2010
Bushra Rahman, MBA, MHSM;Eugene Schneller, PhD;Natalia Wilson, MD, MPH;Howard Zuckerman, PhD
Arizona State University
Supply chain strategies and operational resources have been demonstrated to be relevant to an organization realizing its competitive capability. For individual hospitals, and the health care systems in which they reside, supplies, which constitute the second largest cost after labor, have generally been managed at a local level with a strong focus on transactions associated with order fulfillment. Systems are increasingly recognizing the value that supply chain management can bring to their organizations and have moved to reposition the supply chain function at a strategic level in the organization.
Globalization: A Smarter Supply Chain for the Future
September 2010
Roberta J. Jennings
CAPS Research
Globalization is a strategic imperative that is recognized as critical for growth and performance sustainability, but achieving such a model can be complex. This report, a synopsis of the main themes and insights from a CAPS Research Critical Issues program on the topic, defines globalization, identifies the challenges common to many firms, discusses how firms are trying to optimize the balance between centralized control and local autonomy, and highlights the struggle to place appropriate human resources in a global supply organization. The report also includes key points about sustainability, ethics, and laws/regulations that impact the organization and its supply network. A case study from IBM, co-sponsor of the event, is also provided, describing its journey to become a globally integrated enterprise.
Petroleum Industry Benchmarking Metric Report 2010
August 2010
Benchmarking Team
CAPS Research
The Petroleum Industry Benchmarking Metric Report updated in August 2010 includes key supply management performance measures that focus on organizational structures, functional assignments (e.g., strategic sourcing, transactional purchasing, etc.), training spend, supply management operating expenses, cost reduction and avoidance, and value creation. Supplier-related metrics show a four percent decrease in the in the overall supplier base during the reporting period. About 55 percent of the participants reported a decrease in the numbers of suppliers and 27 percent reported an increase. The remainder (18 percent) reported no change in their supplier base. In addition to the overall industry report, breakout reports are provided for Integrated, Upstream, and Downstream operations.
Value Focused Supply: Linking Supply to Competitive Business Strategies
August 2010
Robert M. Monczka, Ph.D.;John D. Blascovich;William J. Markham;Leslie M. Parker;Thomas H. Slaight
CAPS Research;A.T. Kearney, Inc.
CEOs are raising their expectations for supply to include results well beyond just saving money on external expenditures. Value Focused Supply (VFS) is an approach for creating and implementing longer-term strategies for key purchase categories and the related suppliers that create value beyond cost savings. This report defines VFS, provides examples of VFS strategies, provides a framework for implementing VFS, discusses issues for enabling VFS, and includes several company case studies across various industries.
Pharmaceutical Industry Benchmarking Metric Report 2010 - Emerging Markets
August 2010
Benchmarking Team
CAPS Research
This first in a series of five new pharmaceutical industry benchmarking reports focuses on "Emerging Markets." For this report, emerging markets are defined as geographic regions in which pharmaceutical manufacturers do not currently have a supply management organizational presence. About 46% of the survey participants reported they do have supply management organizations physically located in some emerging market regions. One-half of the survey participants who do not yet have supply management professionals physically located in these regions reported they anticipate doing so within the next three years. Overall, 80% of the participants reported that during the next three years they expect growth within supply management organizations located in the emerging market regions.
Supply Chain Fraud Prevention and Detection
August 2010
Jeff McLaughlin
Texas Instruments Incorporated
Texas Instruments (TI) is interested in learning more about your fraud prevention and detection programs and would like to use the CPO Insights platform to share information on best practices pertaining to activities that prevent fraud within the supply chain, outsourcing fraud prevention programs, program effectiveness, etc. In order to promote information sharing, TI will also respond to the following set of questions. Questions: 1. Please summarize your company's supply chain fraud prevention activities as they relate to supplier sourcing and setup, purchasing, payment, facilities, logistics, etc. 2. Did you outsource the creation of your fraud prevention and detection program, or do you use any outside firm(s) for any components of this program? 3. How do you measure the impact/effectiveness of your fraud prevention and detection program? 4. What areas did you focus on for fraud detection and prevention and how did you determine these? 5. What mechanisms or techniques have been effective in your company for preventing or detecting fraud? 6. Do you conduct fraud and/or ethics training on a periodic basis? If so, what populations within your company are trained and do you train your supply base? What is the frequency?
SnapShots 2010 - Insurance Requirements and Certificates for Suppliers
July 2010
Benchmarking Team
CAPS Research
There were 149 useable responses to the SnapShots survey on Insurance Requirements and Certificates for Suppliers. Of those responses, 34% were from the Manufacturing sector and 66% were Non-Manufacturing. A very large percentage of companies from both sectors (86% and 98%, respectively) required suppliers to maintain insurance in addition to the requirements prescribed by the state or nation where work is being performed. Seventy-six percent of Manufacturers and 93% of Non-Manufacturers require suppliers to provide copies of their certificate(s) of insurance. Of those companies that do not require suppliers to provide copies of the certificates of insurance, 71% of Manufacturers and 66% of Non-Manufacturers have standard contract terms requiring suppliers to certify that they have coverage consistent with insurance requirements and that they will maintain that coverage for the contract performance period.
Accelerating Supplier Innovation
July 2010
Jeff McLaughlin
Texas Instruments Incorporated
As a manufacturing company, Texas Instruments has historically reached out to their suppliers for continuous improvement initiatives, but would like to do a better job actively collaborating with their suppliers to tap their innovation and creativity. They are interested in learning more about the programs, tactics, and measurements you have implemented that encourage your suppliers to be innovative and collaborative, and the impact of these initiatives on your products and/or services. Questions: 1. Does your organization have a formal program to accelerate supplier innovation? (Yes or No) 2. What are the key features of the program? 3. How do you measure the impact of supplier innovation? (e.g., number of ideas adopted, dollar impact, etc.) 4. How do suppliers benefit from their contributions? (e.g., market share, supplier recognition, scorecard multiplier, increased revenues, etc.) 5. What are the most important lessons learned? 6. Are there things you could do to make the program(s) more effective? 7. How do you balance the need for continuous cost reductions/efficiency with the need for supplier innovation?
Industrial Manufacturing Industry Benchmarking Metric Report 2010
July 2010
Benchmarking Team
CAPS Research
The Industrial Manufacturing Industry Benchmarking Metric Report 2010 contains key supply management performance measures including organizational structure, professional development, financial information and supplier relationships and alliances. Also included are metrics concerning supply management operating expense and total managed spend relating to eleven different global regions. In addition, key metrics are reported on thirteen performance measures relating to supplier rating systems/processes.
Internal Customer Satisfaction Metrics
June 2010
Jan Frye
U.S. Department of Veterans Affairs
The Department of Veterans Affairs (Veterans Administration) is the second largest Federal Cabinet level agency. It maintains one of the largest and most complex health care systems in the world and has purchasing authority for $114 billion (FY 2010) worth of pharmaceuticals, medical supplies and equipment, IT equipment, and other critical patient and veterans care items used in 156 major medical centers, 800+ clinics, more than 100 cemeteries, and 57 regional offices. The Veterans Administration is studying how best to implement internal and external customer metrics in an effort to improve their acquisition and logistics performance and is asking the CPO community for feedback on what, in each CPO's experience, is the right mix of internal customer satisfaction metrics and at what level should the bar be set for each. An earlier CPO Insights survey asked about the formal processes for determining internal customer satisfaction with the supply management organization's services, and this short set of questions builds off of those responses. Specifically, the Veterans Administration would like information on the following: Questions: 1. Has your organization implemented programs or developed scorecards to track internal customer satisfaction? (Yes or No) 2. If you answered 'No' to question 1 (above), do you plan on implementing such a program or scorecard within the next two years? (Yes or No) 3. What are the top five internal customer satisfaction metrics that are most important to you and your supply management organization? (e.g., quality, on-time delivery, cost savings, inventory, responsiveness, etc.)? 4. In terms of your internal customer satisfaction metrics, what are your performance goals (e.g., on-time delivery = 90% or higher) for each metric that you specified in Question 3 (above)? 5. How often do you ask your internal customers to rate your supply management organization (e.g., annually, bi-annual, etc.)? 6. Would you be willing to participate in a teleconference to discuss your internal customer satisfaction programs or scorecards in more detail? (Yes or No)
Implementing Supplier Innovation: Case Study Findings
June 2010
Robert M. Monczka, Ph.D.;Phillip L. Carter, D.B.A.;Thomas V. Scannell, Ph.D.;Joseph R. Carter, D.B.A., CPSM, C.P.M.
CAPS Research;Western Michigan University;Arizona State University
Firms are always striving to find that innovative strategy element that will make the difference for their product or service. History shows us that important innovations can come from within a company, from an external source, or through a joint development. This focus study examines one of these avenues: how leading companies and their suppliers are engaging in supplier innovation. Firms have not yet fully established how they will most effectively leverage external supplier capabilities to accelerate innovation to the benefit of both buyers and suppliers. Innovation sourcing requires aligned and linked customer-driven strategies between senior company executives, supply and strategic suppliers, which are in early development at most firms. This report, uses case study examples to illustrate the strategic approaches, barriers to success, enablers and overall critical issues. It is a companion study to the 2011 CAPS report, "Innovation Sourcing: Contributing to Company Competitiveness."
Assessing Supplier Financial Strength and Dependency Metric Report 2010
June 2010
Benchmarking Team
CAPS Research
The report, "Assessing Supplier Financial Strength and Dependency" brings into focus the need for companies to spot weaknesses within their supply base and act quickly to avoid disruptions caused by supplier vulnerabilities. The benchmarking report provides an overview of how organizations assess the risk tolerance of their suppliers by measuring and evaluating the financial health, organizational stability, and customer-dependency of these suppliers.
Supply Base Risk Management at 3M
June 2010
Charles Zheng
3M
Supply base risk management at 3M is broader than simply financial risk management. This presentation talks to risk identification, evaluation, mitigation and monitoring strategies at 3M.
Talent Management: Recruiting and Retaining a Diverse Global Workforce
June 2010
Ling Ling Lee
Intel Corporation
Intel is a globally integrated company operating in numerous venues world wide. This presentation talks about Intel's challenges, strategies and best-practices in recruiting and retaining a globally competent and diverse workforce.
LG Electronics Global Procurement Transformation: New Frontiers for Global Innovation
June 2010
Jason Choi
LG Electronics
LG Electronics won the 2010 R. Gene Richter Award for innovation and transformation in supply management. This presentation documents their route from a highly autonomous and decentralized procurement organization into one that is center-led and the resulting savings and accomplishments.
Strategies in the Face of the Global Financial Crisis
June 2010
Joseph Maher
Li & Fung Ltd.
China has historically been viewed as a vital low-cost opportunity for services and materials, causing many global companies to establish sourcing operations there in recent years. However, with the turn of the economy, tightening credit, and a rise in protectionism, many Chinese manufacturers are seeing fewer export orders, resulting in decreased production. Li & Fung details some of the strategies that Chinese companies can employ to cope with the financial crisis, and explains why sourcing from China is still an attractive option, particularly if a firm is also selling in that region.
Teradyne Supply Chain Financial Viability Analysis
June 2010
Scott Cameron
Teradyne
Assessing the financial health of supply chain partners is always a good idea, but with the recent economic crisis, this activity has come to the forefront for many organizations. This Teradyne presentation details a model the company uses that combines interpreting key financial ratios and placing suppliers into a risk matrix, based on leverage and profitability. It also discusses the challenges in obtaining accurate data, what actions the firm takes with at-risk suppliers, and "lessons learned."
Enhancing Procurement's Value Proposition
June 2010
Kinnar Ghiya
Microsoft Corporation
In an uncertain and tight economy, executives are looking at every aspect of their business to provide more value. For purchasing and supply management, that means delivering more than price reductions on inbound materials or services. This Microsoft presentation details some of the areas in which its global purchasing group is attempting to enhance its value proposition, such as: cost management, reducing risk, reducing time-to-market, enhancing the Microsoft brand, and facilitating revenue. Microsoft describes various attributes and activities that signify this changing role of procurement.
Championing Environmental Supply Management Initiatives: The Importance of Influence Tactics, Company Climate and Individual Values
May 2010
Thomas R. Gattiker, Ph.D.;Craig R. Carter, Ph.D.;Wendy L. Tate, Ph.D.;Xiaowen Huang, Ph.D.
Boise State University;University of Nevada;University of Tennessee;Miami University of Ohio
This research investigated how supply management sustainability initiatives take root within a company and what factors determine buy-in from key players. The study examined the role that influence tactics, organizational climate, and personal values each play as managers try to gain commitment for environmental initiatives. The researchers found that creating company and departmental climates that are friendly toward environmental innovation, the use of legitimating (appealing to rules, regulations and positional power), and taking time to learn something about the values of the target individuals all increase the likelihood the project champion will be successful. The report provides steps to help supply managers effectively champion sustainable supply management practices and to create an environment in which sustainability will be successful throughout the company.
Long Road to Recovery
April 2010
Lee McPheters, Ph.D.
Arizona State University
Well-known Arizona State University economist Lee McPheters, Ph.D., shares his insights into the current economic situation, arguing that it will be a long road to recovery although many statistics indicate that the recession is over. McPheters identifies and discusses many of the hurdles to recovery, including: credit markets, the consumer market, labor markets, housing markets, commercial real estate, federal deficit, and a skeptical public. He addresses why each is an issue. McPheters says 2010 is "still ugly" and 2011 will be "homely." Unemployment will remain near 10 percent, and the consumer will be key as confidence will surge when job growth returns.
Value Focused Supply: Linking Supply to Competitive Business Strategies (ERT 2010)
April 2010
Robert M. Monczka, Ph.D.;John D. Blascovich;William J. Markham;Thomas H. Slaight;Leslie M. Parker
CAPS Research;A.T. Kearney, Inc.
Value Focused Supply (VFS) strategies will provide the next breakthrough opportunity for companies to create and capture value from their most strategic purchases. These VFS strategies go far beyond the price/cost reduction of traditional competitive sourcing. Already, leading companies are clearly demonstrating the power of this more comprehensive approach. Senior executives who lead their companies to be among the first to systematically apply VFS across the supply network will have opportunities to protect and create significant competitive advantages. Insights were provided, at the CAPS Executive Roundtable, about Value Focused Supply strategies firms have implemented and key enablers.
Effective Supply Chain Strategies in a Tough Economy - U.S. Postal Service
April 2010
Susan Brownell
U.S. Postal Service
The vice president of supply management for the United States Postal Service (USPS) outlines some of the unique challenges that their organization faces due to its Universal Service Obligation and the "great recession." The USPS had significant profitability decline between 2006 and 2009, due to the recession, an increase in delivery points, rising labor costs, and other factors. This presentation details two cost reduction initiatives meant to help restore profitability. First, USPS's "rapid renegotiation" initiative was a top-down, aggressive push to renegotiate supplier contracts that resulted in more than $1 billion in cost reductions. This included reductions on 556 contracts, or 81 percent of the original target. The second initiative, "demand management" addressed maverick spending and non-compliance purchasing. District purchasing positions were replaced with purchasing shared services centers that leveraged knowledge management, category teams, and a new electronic buying system. USPS has realized an estimated $19.8 million savings in the first two years.
Accelerating Innovation through Effective Supplier Collaboration (ERT 2010)
April 2010
Robert M. Monczka, Ph.D.;Phillip L. Carter, D.B.A.;Joseph R. Carter, D.B.A., CPSM.;Thomas V. Scannell, Ph.D.
CAPS Research;Arizona State University;Western Michigan University
There is an increasing corporate focus on innovation, especially around involving the supply base. This report focuses on: (1) the strategies and approaches companies can use to identify, select and effectively collaborate with suppliers and supplier groups to accelerate innovation and (2) the specific role that supply management can play in accelerating innovation of product, service and process development. Results are based on learnings from in-depth field research with seven leading companies. The report provides guidelines for firms to begin and/or enhance their approaches to supplier innovation in order to enhance their competitive performance.
International Payment Terms
April 2010
Lisa Martin;Sam Dowell
Pfizer Inc.
Background: In an earlier CAPS Research survey on payment terms and discounts for early payments, 74 percent of the participants reported their payment terms were either 30 days (42% of participants) or 45 days (32% of participants). Almost 90% of the survey participants reported their organizations receive discounts for early payment. But since this report does not differentiate between domestic and international operations, Pfizer Inc. would like to know if your organization has established different payment terms for your domestic and international suppliers and whether or not your company offers accelerated invoice payment terms in return for discounts. Questions: 1. What are your procurement organization's default payment terms (number of days) for each of the following regions? a. United States and Canada b. Europe Middle East, and Africa (EMEA) c. Asia Pacific (less China) d. China 2. During the last two years have you either extended or reduced payment terms for suppliers located in the following regions? Region Extended Reduced No Change a. United States and Canada b. Europe Middle East, and Africa (EMEA) c. Asia Pacific (less China) d. China 3. Do your payment terms vary by commodity or category of spend (e.g., indirect spend versus direct materials)? (Yes or No) If 'Yes' please briefly explain your practice for each of the regions listed above. 4. How frequently do you offer accelerated invoice payments in return for cash discounts? (Please indicate one of the following choices.) 100 % (always) 75 % 50 % 25 % 0 % (never) 5. If accelerated invoice payments are more frequent in some global regions or spend categories than others, please briefly explain your practice.
SnapShots 2010 - Measuring and Monitoring Supplier Risk 2010
April 2010
Benchmarking Team
CAPS Research
There were 197 useable responses to this SnapShots survey on Measuring and Monitoring Supplier Risk. Given the fact that 99% of the survey population reported they regularly measure and/or monitor specific risk characteristics of their suppliers does indicate there is still a high level of interest in the topic of supplier risk management. More than two-thirds of the participants reported the importance of measuring and/or monitoring risk as being either Very Important or Extremely Important. Financial risk was the supplier risk characteristic most commonly referenced followed closely by operational risk and supply chain risk. The SnapShot report also lists other risk assessment areas that are being regularly measured and/or monitored, and includes a comprehensive list of third-party risk assessment reports/tools currently being used to measure supplier risk.
Pharmaceutical Supply Chain in China: Challenges and Opportunities
March 2010
JianQiang Hu, Ph.D.;Yue Dai, Ph.D.;Kevin Gu, Ph.D.
Fudan University;Jointown Pharmaceutical Group Co.
As with many other aspects of China, the pharmaceutical industry has rapidly evolved in the last decade. Though still in its early stages of development, it is a large, complex, multi-layered structure that has fragmentation, coordination, and information-sharing challenges. This focus study examines the issues and potential within China's pharmaceutical supply chain. The study is based on visits and interviews with 18 companies in China and includes information about production, quality control, research and development, outsourcing, exportation, the foreign investment environment, and the new healthcare reform plan in China.
SnapShots 2010 - Collaborative and Independent Innovation
February 2010
Benchmarking Team
CAPS Research
This latest SnapShots report focuses on innovation strategies which are defined as being either "Collaborative" (using internal ideas, but actively seeking external sources of innovation) or "Independent" (innovation is generated internally, and intellectual property is closely guarded). Results indicate there is not a significant difference between manufacturers and non-manufacturers regarding their current innovation strategies. However, in three years time 36% of the manufacturers expect their innovation strategies to be mostly or strongly collaborative and 46% of non-manufacturers reported their innovation strategies will be mostly or strongly collaborative.
Implementing New Compliance Requirements for Customs Brokers
January 2010
Keith Weber;Charles Zheng
3M Company
With all the changes in regulations and compliance requirements to the Foreign Corrupt Practices Act (FCPA), we at 3M are looking for your insights on how your company is handling these changes and the resulting compliance requirements for your customs brokers. Questions: 1. What is your company's approach to implementing new FCPA compliance requirements for your customs brokers? For example, - Have you added (or in the process of adding) new language to your customs brokers' contracts to reflect these changes? - Or, are you maintaining the status quo with regards to changing contract language? - Or, are you taking some other approach than changing contract language? Please elaborate. 2. (Optional) If you have added new compliance language to your contracts with customs brokers, could you please share this language with us? If YES, please include below this question, or as an attachment. 3. If you have added (or in the process of adding) any new compliance language to your contracts with your customs brokers, what kinds of resistance (if any) have you had from them? 4. Are you auditing your customs brokers' compliance to the FCPA? If YES, what type of auditing are you performing?
DOE NNSA Contractors 2009 Procurement Performance Benchmarking Report
December 2009
Benchmarking Team
CAPS Research
This report contains benchmarks on professional development, financial information, supplier development and eProcurement specific to Department of Energy and National Nuclear Security Administration (DOE/NNSA) Contractors. The report includes information on the impact of American Reinvestment & Recovery Act (ARRA) funding. One of the strengths of the DOE/NNSA contractors is their commitment to diversity spend.
SnapShots 2009 - Sourcing in China
December 2009
Benchmarking Team
CAPS Research
The SnapShots questions about locating sourcing/procurement groups or organizations in China showed mixed results. About half of the survey participants indicated that they did have a sourcing/procurement group located in China and about 56% of those participants reported increasing the number of employees assigned to that group. These participants also reported that during the last two years this sourcing/procurement group has assumed more authority (47%) or had no change (44%) to their regional procurement activities. The regional sourcing/procurement organization did not experience a measurable loss in productivity as a result of sourcing/procurement employee turnover. The other half of the survey participants reported they do not have a sourcing/procurement organization located in China and a clear majority (94%) of these participants indicated that they had no plans to locate a regional sourcing/procurement group in China within the next two years.
Supply Strategy Implementation: Current State and Future Opportunities 2009
December 2009
Robert M. Monczka, Ph.D;Kenneth J. Petersen, Ph.D.
CAPS Research;Colorado State University
To achieve significant and successful transformation of supply management, companies need to assess how well they have implemented critical supply strategies. To assist in this effort, CAPS Research designed the Executive Assessment of Supply (EAS). This self-administered assessment lets companies determine the importance of various strategic strategies for their organization, the level of implementation and the results achieved. This report summarizes the results from these assessments based on responses from 130 supply organizations across 26 industries. These results can help companies compare their strategic results with those achieved by other companies. Also companies can compare their recent results with the results of similar assessments completed in 2007 to yield an even more comprehensive picture of implementation success and supply management performance.
Supply Management Talent Development and Retention Benchmarking Metric Report 2009
December 2009
Benchmarking Team
CAPS Research
The Supply Management Talent Development and Retention Benchmarking Metric Report published in November 2009 includes information and metric data pertinent to recruitment, development, retention, evaluation, compensation, and advancement of supply management employees. The benchmarking report is comprised of data provided by 260 participants. There are three breakout reports that include information provided by companies with revenue less than $500 million; companies with revenue greater than $500 million and less than $5 billion; and companies with revenue exceeding $5 billion. CAPS Research partnered with the Fisher College of Business and Rutgers Business School to develop this report and corresponding survey that measures key supply management talent development and retention strategies.
Challenges in Moving Operations to Mexico
December 2009
Randy Christoffersen
Nilfisk-Advance, Inc.
We at Nilfisk-Advance would like to learn from any experiences you may have had regarding the challenges faced when moving a series of major manufacturing lines from the U.S. to Mexico. Questions: 1. What have been the biggest challenges in moving the products from the U.S. to Mexico from a procurement perspective? 2. What suggestions do you have to overcome the challenges in #1? 3. What issues have you had in Mexico with utilizing Asian sources in Mexico from a duty perspective? How have you overcome them? 4. What other major "lessons learned" can you share from your experiences?
SnapShots 2009 - Use of Reverse Auctions
November 2009
Benchmarking Team
CAPS Research
The SnapShots questions about the use or reverse auctions as part of the organization's sourcing strategy indicates there are mixed feelings within the survey population about the value of reverse auction tools. One-half of the survey participants reported that reverse auction tools are part of their sourcing strategy, and about 46 percent reported an increase in spend using these tools during the last two years. All of the companies who reported they are now using reverse auctions stated they are planning to continue to use reverse auction tools for (at least) the next two years. The other half of the survey participants reported they are not using reverse auction tools. A clear majority (71 percent) of those who reported they do not currently use reverse auctions reported they are not planning on doing so within the next two years.
Cross-Industry Metric Report November 2009
November 2009
Benchmarking Team
CAPS Research
The updated CAPS Research Cross-Industry Metric report published in November 2009 provides standard key performance indicators across 20 industries. This highly regarded report includes key performance indicators for different industry sectors including purchasing operating expense, training spend, diversity spend, and total spend as a percent of revenue. New information on supply management organization operating costs, purchase order cycle times, and employee retention were added to the 2009 report. New Industries added to this updated report include: Automotive & Transport, Consumer Product Manufacturers, Health Care Services, Retail and Telecommunications Services.
Supporting Global Contract Template Development, Maintenance and Standardization
November 2009
Mitch Adamek;Diana Stapleton
PepsiCo, Inc.
We at PepsiCo are interested in learning about the organization of, and/or, roles that support contract template development, maintenance and standardization. We also are interested to know how successful you have been in developing standardized global contract templates. Note: This is a follow-up question to Question # 110 on "Using Standard Contract Templates in Various Regions of the World." Questions: 1. Do you have attorneys dedicated to the procurement contract template development and maintenance process? Please elaborate. 2. Do you have a group that is in either procurement and/or legal that is responsible for standardizing contract templates globally? Please elaborate. 3. How successful have you been in developing standardized global contract templates? Benefits? Barriers?
SnapShots 2009 - Use of Social Networking
October 2009
Benchmarking Team
CAPS Research
As the use of social networking tools continue to migrate into the professional work environment, we want to better understand which social networking sites are being used for different business practices. Based on the SnapShots survey results, there is a 10% difference between those who responded "Yes" to the question about using social networking for business practices (45%) and those who responded "No" (55%). Of those who responded "Yes", about two-thirds reported that LinkedIn' is the networking tool most frequently used. About one-third of the participants reported they use either "Facebook" or "Twitter". More than half (55 %) of the participants use social networking for Human Resources communications, and 41% reported using social networking for sales/marketing.
Employing and Managing the Supplier Auditing Process
October 2009
Thomas Nash;Susan Holtham
Ministry Health Care
Ministry Health Care would like to know how other companies employ and manage their supplier auditing process, and hence we have the following questions: Questions: 1. Does your company have a formal supplier auditing process to ensure major suppliers are conducting business with your company appropriately and abiding by the contracts you have with them? Some examples: - They are following your general expectations of suppliers; - Their documentation is in order; - Agreed to terms and conditions are met; - Agreed to pricing and rate calculations are being followed; - On-time delivery performance meets standards; - Quality meets specifications; - Other audit areas or metrics for suppliers If so, please elaborate. 2. What type of supplier auditing does your company primarily focus upon (e.g. Accounts payable? Invoice error auditing? Supplier compliance auditing? Other audit focuses?) 3. Is your supplier audit process insourced (your company conducts the audits themselves) or outsourced (you hire an outside third party to conduct the audits)? How did you decide on whether to insource or outsource your supplier auditing process? 4. How does your company measure the success of your supplier auditing process?
Snapshots 2009 - Payment Terms
October 2009
Benchmarking Team
CAPS Research
The changing economy continues to challenge organizations to better manage their supply chains and take better use of eTools to track order information or as procure-to-pay programs. The SnapShots survey participants were asked about their typical (or default) payment terms; whether or not they receive discounts for early payments; and their general use of eTools for order tracking or procure-to-pay programs. About three-fourths of the survey population reported their typical payment terms were either 30 days (42%) or 45 days (32%), respectively. About 14% of the survey population reported 60-day payment terms. The remaining 12% reported payment terms ranging from 15 days (1.5%) to 90 days (4.5%). Almost 90% reported their organizations do receive discounts for paying early; and 83% reported they employ eTools for their Procure-to-Pay programs or other solutions that track order information.
Managing Supplier-Generated Cost Reduction Programs
October 2009
Mike Slomke
Honeywell Automation and Control Solutions
Honeywell has a set of questions regarding supplier-generated cost reduction programs. These are programs that solicit cost reduction ideas from suppliers. Questions: 1. Do you have (or have you had) a program to solicit cost reduction ideas from your supply base? 2. If so, how does your program work? (Brief description) 3. How do you select the suppliers to participate in the program? 4. How do you prioritize the ideas for implementation? 5. Do you share the benefits from these ideas with the suppliers? If so, how are they shared? 6. What do you believe are the critical success factors to make this program effective? 7. What pitfalls should be avoided?
Mining Metals Industry Benchmarking Metric Report 2009
October 2009
Benchmarking Team
CAPS Research
The Mining Metals Industry Benchmarking Metric Report 2009 contains key supply management performance measures including organizational structure, professional development, financial information and supplier relationships and alliances. It's interesting to note the reversal in the average percent of supply management organizational recruiting: seventy-one percent internal, and twenty-nine percent external in this report, and twenty-seven percent internal, seventy-three percent external, in the previous report. The average percent of external recruiting that was word-of-mouth was fifty percent in this report, and only one percent in the previous report. Also included in this report are metrics regarding inventory and asset disposal programs.
Supplier Risk Analysis at Intel
October 2009
Sandy Gauthier
Intel Corporation
Intel begins this presentation with an overview of the 'Big Picture' of Supplier Rationalization, outlining the effects of this recession on not just market contraction but also on cash liquidity. Several examples were provided showing clues that a supplier was in trouble. Intel went on to detail their process of supplier risk assessment which includes an ongoing supplier risk monitoring process. After suppliers are assessed, those to be monitored more closely are classified as Critical or Non-Critical. The Critical suppliers are given immediate focus while the Non-Critical suppliers have a developed contingency plan.
Fluor's Approach to Developing Talent in Difficult Times
October 2009
Jay Pendergrass
Fluor Corporation
In this presentation, Fluor begins with an overview of the company and their multiple industries as well as an overview of Procurement at Fluor. Fluor has both a Global Talent Management strategy and a Procurement People Development strategy. Emphasizing that talent management cannot be ignored during the downturn, Fluor states that there is an impending resource shortage among professional staff. Challenges in talent management are outlined as well as strategies that have been employed.
Talent Management Case Study at L-3
October 2009
Skip Handley
L-3 Communications
In this presentation, L-3 begins with an overview of the company and segments served. The presentation outlines the top three talent management challenges, including development and retention of the workforce. It follows with the strategies L-3 has employed to address these challenges. L-3 has developed a tool to measure the maturity curves of employees from an Order Placer up. These tools have been used to assess the maturity curve of procurement in general.
Resourcing in the New Economy at Amgen
October 2009
Jan Meier
Amgen Inc.
Amgen, a pioneer in the biotechnologies industry, has two main areas of focus for sourcing in the new economy: transforming their procurement organization into a global strategic sourcing organization, and realigning the focus of the sourcing organization to meet the needs of internal business partners and suppliers. This presentation details the vision of Amgen's Global Strategic Sourcing Organization and the process of shifting from a tactical to a strategic organization.
Competitive Advantage Through Partnerships at General Mills
October 2009
Diego Osuna
General Mills, Inc.
At General Mills, the world's sixth largest food company, sourcing has evolved into a "multi-disciplinary process." Part of this evolution was the realization that internal partnerships, especially between supply chain and marketing, were necessary to create new opportunities with suppliers. This presentation details General Mills' seven steps to creating and maintaining sustainable internal partnerships.
Supplier Risk Management at Northrop Grumman
October 2009
Brian Massey
Northrop Grumman Aerospace Systems
Northrop Grumman reviewed the typical categories of supplier risk, (product, financial, managerial and other), and their risk management system (RMS). The RMS should cut across various programs to manage risk and allow management and others in the company to sort across attributes. Supplier scorecards are very important, along with communications with suppliers (both international and domestic) to review financials. As financial risk is increased, be prepared to act quickly to retrieve tools, WIP, material, and data before other creditors. It's crucial to be pro-active and look for opportunities to understand and assist your suppliers.
Global Talent Issues at 3M
October 2009
Wolf Bartel
3M Company
3M Company presents a corporate overview, lists their biggest challenges, and provides strategies employed, successes, lessons learned and the future outlook for their organization regarding global talent issues. Challenges include continuous selling of the value proposition of the center-led organization, and a higher turnover in developing countries. Strategies employed include workload planning, succession planning, gap analysis, recruitment, employee engagement, corporate reputation, support and validation. Biggest successes have come in gap analysis and engagement. Some lessons learned include: start in one area and sustain the activity, monitor and adapt your approach and include on the job experience - not just class time, and supervisor and employees work on strengths to show accountability. 3M's future outlook includes keeping employees engaged, continue to compete for new graduates, set a new direction and adapt as necessary.
A Resilient Business in Challenging Times - Rolls-Royce
October 2009
Kathi Bridgewater
Rolls-Royce Corporation
Rolls-Royce begins this presentation by illustrating the different messages that were given to suppliers in 2008 and 2009. Rolls-Royce has been pursuing a holistic transformation process that is illustrated in this presentation. They address four global markets. They are investing for growth with a consistent approach which creates many opportunities for the supply chain. The presentation illustrates how they are managing the downturn and preparing for the upturn.
Value Creation in Today's Economy at General Mills
October 2009
Hadrian D'Souza
General Mills, Inc.
General Mills' method of value creation in today's economy is using their "Spend Smart" program. Dramatic raw material inflation brought about a change in their business model and has demanded more and faster savings. General Mills uses holistic margin management (HMM), maximizing the value of a product or service. HMM identifies and eliminates hidden 'waste' in their products and processes. The Spend Smart program delivers value through people, process and technology. Case studies of ShipSmart, PrintSmart, TravelSmart, and StaffSmart are provided. SpendSmart delivers value by leveraging competition, volume aggregation and cash cycles.
Economic Update and Outlook - Recovery or Relapse?
October 2009
Lee McPheters, Ph.D.
Arizona State University
A leading economist from Arizona State University gives an in-depth look at the current state of the U.S. economy and his outlook for 2010. Lee McPheters says that (as of Fall, 2009) most economists consider the recession over, although public opinion is not as optimistic. Due to the fact that the job market, 401K revenues, housing values, and GDP are all still weak compared to their highs, but better off than "rock bottom," many liken it to "drowning in 20 feet of water as opposed to drowning in 30 feet of water." His presentation details why consumer spending is vital to a recovery, which regions have been hardest hit by the recession, how the recession compares to other historically tough economic times, and why many government programs (change in banking regulations, stimulus packages, etc.) will not be able to single-handedly create a turnaround. Overall, his forecast says that Real GDP will be 2.5% in 2010 and housing starts will rebound, but unemployment may hit 10 percent before it starts an upturn.
Supply Management Strategies for Superior Results in Turbulent Times
October 2009
Phillip L. Carter, D.B.A.;Robert M. Monczka, Ph.D.;Joseph R. Carter, D.B.A., C.P.M.
CAPS Research
With the economic downturn of 2008 came new strategies for businesses and they struggled to maintain margins, reduce purchase costs, leverage suppliers for more value, and mitigate risks that threatened supply continuity. In this presentation, researchers from CAPS Research detail some of the prevalent supply strategies that were put into place (or ramped up) during this time. Researchers detail the most aggressive strategies used by firms deemed "in crisis," such as a focus on short-term cost cutting with immediate administrative reductions; aggressive re-negotiations with suppliers; and unprecedented C-level scrutiny of practices. Those firms struggling with the economy but not deemed "in-crisis" took the opportunity to capitalize on declining raw material and labor prices and establish a positive position in the supply market. Most all firms also took steps such as preserving cash, reviewing payment terms, analyzing and mitigating supplier and operational risk, and determined supply strategies that would be responsive during the eventual upturn.
Managing the Excessive Consumption of Non-Work Related MRO Items
September 2009
Jean Letendre
Hydro-Québec
At Hydro-Québec, we make available to our employees a range of items to ensure the long-term operability of our power system. Like other organizations, we are particularly concerned about the high consumption of attractive MRO (Indirect) items (e.g., hand-held power tools, gloves, boots and finishing hardware). Basically, we are looking for some operating insights that would enable us to limit the excessive (non-work related) consumption of these items. Questions: 1. Can you identify some of the more attractive MRO items whose consumption within your organization you deem to be excessive and identify whether these items are kept in stock or purchased directly from suppliers via, for example, a blanket PO or P-Card? Please provide details. 2. What processes, policies and procedures have you implemented to ensure proper management of these items? How do you control their non-work related use? 3. How have these changes been received, i.e., what has been the degree of acceptance? 4. What results have you obtained so far?
Planning for a Possible Swine Flu Pandemic
September 2009
Terry Kiefl
NAV CANADA
NAV CANADA would like to know what is being done to safeguard your Supply Management function in the face of a possible swine flu pandemic this fall. Questions: 1. Do you have an enterprise-wide continuity plan for a possible swine flu pandemic? If YES, please elaborate. 2. If YES, what is Supply Management's role in this plan and how are you proceeding to best ensure the continuance of efficient internal operations? 3. What steps are you taking to ensure the continuity of supply from your critical supply base?
Supply Chain Alliance Supplier Environmental Performance Evaluation Benchmarking Metric Report 2009
September 2009
Benchmarking Team
CAPS Research
This report was developed for the Electric Utility Industry Sustainable Supply Chain Alliance as the baseline report of their suppliers' focus on climate change and environmental sustainability. The metric report includes data provided to CAPS Research by the utility companies' suppliers who were nominated to participate in the survey. The 240 different suppliers were categorized as being manufacturers, services providers, or distributors. The metric report provides benchmarks relative to how these communities of suppliers are addressing Policy & Environmental Management; Greenhouse Gas (GHG) Emissions; Air Emissions; Energy Consumption; Water Use; Waste & Materials Management; and Innovation. The report also summarizes a list of specific topics about collaborative efforts to reduce environmental impacts.
Publishing Purchase Order Terms and Conditions on Website
August 2009
Lisa Martin;Brian Keenan
Pfizer Inc.
Pfizer would like to know whether you use your website to communicate purchase order terms and conditions to your suppliers. Questions: 1. Does your company publish its purchase order terms and conditions on your company's website in lieu of providing a copy with every PO? Note: assume the PO would have the appropriate clause referencing the supplier to your website. 2. If your company publishes its terms and conditions on its website, how do you refer suppliers to the terms and conditions? Please provide the wording or clause that appears on the PO. 3. If your terms and conditions are published on your company website, do you still mail them to the supplier with each PO?
Supply Management Shared Services Centers Benchmarking Metric Report 2009
August 2009
Benchmarking Team
CAPS Research
The operational impact of employing a Supply Management Shared Services Center (SMSSC) may result in achieving a desired level of effectiveness at the lowest operational costs through consolidation. As in the 2007 report, this report addresses standardized processes, organizational structure, and SMSSC quality metrics. New for 2009 is a metric on auditing cost-type contracts. Note the increase from the 2007 to 2009 report in the percent of organizations indicating the following functional activities are included in the SMSSC: accounts payable, IT systems, material & supplier data management, purchasing policy compliance, risk management, strategic planning, and travel.
Semiconductor Industry Benchmarking Metric Report 2009
August 2009
Benchmarking Team
CAPS Research
The Semiconductor Industry Benchmarking Metric Report 2009 contains key supply management performance measures including organization structure, professional development, financial information and supplier relationships and alliances. Unique to this report is geographical area breakout information. New for 2009 is the percent of organizations in which supply management employees have increased, decreased, or did not change, during the past two years in the following regions: Asia Pacific, China, Europe/Middle East/Africa, India, Japan, and North America.
Investment Recovery Performance Benchmarking Summary Report 2009
August 2009
Benchmarking Team
CAPS Research
In addition to operational benchmarks and organizational information, there are a number of financial metrics related to the overall cost benefits of investment recovery programs included in the CAPS Research Investment Recovery 2009 Supply Management Benchmarking Report. Key performance indicators (KPIs) include total cost benefit dollars to operating expense dollars, best practices, investment recovery services and processes, program-related tools and technologies, and professional investment recovery program staffing. One clear advantage of an effective Investment Recovery program is the cost benefit. The CAPS Research 2009 Investment Recovery Performance Report shows that for every dollar spent on Investment Recovery, $31 was returned to the bottom line.
Managing Technical Documentation for Purchased Finished Goods
August 2009
Keith Weber;Elizabeth Miller
3M Company
3M would like to know how you manage technical documentation for Purchased Finished Goods (PFG) for both Private Label (where the supplier owns the design) and Contract Manufacturing (where 3M owns the design). Questions: 1. Do you have a dedicated resource for technical documentation for PFG? If so, what function manages this resource? 2. Do you have written processes for technical documentation? If so, is the process effective? Please elaborate. 3. What does your technical documentation (data package) consist of? 4. What is your revision control process? How do you communicate changes internally and to the supplier? 5. How do you store your documents and who has access? 6. Do you audit your process and/or technical documentation to ensure accuracy?
Low-Cost Country Sourcing and Procurement Activities Benchmarking Metric Report 2009
August 2009
Benchmarking Team
CAPS Research
The Low-Cost Country Sourcing and Procurement Activities Benchmarking Metric Report 2009 contains key metrics on supply management employees and suppliers located in low-cost countries and in other than low-cost countries. The report also focuses on spend for direct and indirect goods in low-cost and other than low-cost countries. Companies from the Aerospace & Defense, Automotive & Transport, Consumer Products Manufacturing, and Industrial Manufacturing industries provided data for this report.
Petroleum Industry Benchmarking Metric Report 2009
July 2009
Benchmarking Team
CAPS Research
The Petroleum Industry Benchmarking Metric Report 2009 contains key supply management performance measures including organizational structure, professional development, financial information, and supplier relationships. The report includes breakout reports for Integrated, Upstream, and Downstream operations.
Models and Policies for Providing Space to External Suppliers
July 2009
Jim Ward
Eli Lilly and Company
Eli Lilly would like to know how your organization deals with providing space to suppliers and service providers who are not employees of the firm. Questions: 1. Do you allow suppliers to occupy space inside your company's facilities? If YES, please continue. If NO, you need not continue. 2. Do you have a model or formula for charging (or receiving price reductions) from suppliers who use your company's space? If YES please describe your model or formula and provide examples if available? 3. How does your model or formula differentiate based on the type of space needed (office, labs, shops), duration (2 months vs. 2 years), frequency (8 hours a day 5 days a week vs. 3 hours every other week), or type of contract worker (staff augmentation vs. statement of work consultants vs. outsourced service providers)? 4. List the amenities that are available to suppliers (parking, phones, computers, cell phone/blackberry, or remote system access). 5. Do you have a governance committee or policy for deciding what supplier gets space inside your facilities? If yes, please describe it. 6. Are you considering any changes to your model, governance committee, or policies?
Supply Management: Strategies for Superior Results in Turbulent Times
June 2009
CAPS Research Team
CAPS Research
This report summarizes presentations and discussions from the 2009 CAPS Research International Executive Roundtable. The 2009 Roundtable was held during the most challenging economic climate of the past quarter century. Roundtable participants discussed and reviewed the current macro economic conditions and trends and the impact on their firms, supply management and supply bases. Roundtable breakout sessions provided an opportunity for participants to hear specific company experiences, as well as exchange information with peers about their situations, challenges and strategies during these turbulent economic times. Additional observations and insights are provided with the summaries.
The Role of Optimization in Strategic Sourcing
June 2009
Larry C. Giunipero, Ph.D.;Phillip L. Carter, D.B.A.
Florida State University;CAPS Research
Sourcing optimization is a process that can be used to simultaneously analyze large numbers of supplier and business rules or scenarios to identify sourcing solutions that can lead to significant cost savings. This report explains how optimization uses a combination of mathematical models, specialized computer software and computer hardware to find the optimal sourcing solutions. The report is based on case studies with actual users of optimization and providers of optimization services. The report includes case studies of several applications of the process to actual buying situations along with the advantages and challenges of using optimization.
Using Standard Contract Templates in Various Regions of the World
June 2009
Marc Ensign
Sonoco Products Company
The use of standard contract templates is becoming prevalent for most advanced supply management organizations. Western law and historical precedent make contract templates fairly uniform within the US, Canada and Europe. However, we are finding their use is more challenging in the Asia Pacific Region. We would appreciate getting some feedback from you on your experiences with their use around the world and especially in the Asia Pacific Region. Questions: 1. Do you use standard contract templates today? If yes, for what countries or regions? If no, please skip to Question #4. 2. What percentage of the time do you find that your contract templates provide a workable solution for you and your suppliers? In what countries or regions do you find them generally unworkable? 3. If you use contract templates for the Asia Pacific Region, are you finding their use and effectiveness to be similar to that of the US? Please elaborate. 4. Would you be willing to have a telecom benchmark discussion on the use of contract templates for Asia Pacific? If yes, please include contact information here.
Utilities Industry Benchmarking Metric Report 2009
June 2009
Benchmarking Team
CAPS Research
The Utilities Industry Benchmarking Metric Report for 2009 contains key supply management performance measures specific to the utilities industry on topics including organizational structure, professional development, financial information, and supplier relationships. New this year are benchmarks providing supply management operating expense per supply management employee in multiple categories and functions; percent of organizations that use external supply management consultants; and pCard spend and Outsourcing information.
Investment Recovery Metric Report 2009
June 2009
Benchmarking Team
CAPS Research
This report is sponsored by the Investment Recovery Association. In addition to the operational benchmarks and organizational information provided, there are a number of financial metrics related to the overall cost benefits of investment recovery programs. Key performance indicators (KPIs) include total cost benefit dollars to operating expense dollars, best practices, investment recovery services and processes, program-related tools and technologies, and professional investment recovery program staffing. The report also includes a list of the 66 companies who provided data for this study.
IBM Procurement - Global Procurement Transformation Overview
June 2009
Dan Meng Zhang
IBM
This presentation describes IBM's global procurement transformation over the past 15 years and the results achieved. Today IBM's purchasing and supply is organized into global sourcing and three Global Procurement Centers. The Procurement centers are strategically located around the world and are structured to achieve speed, efficiency, consistency, consolidation, and cost reduction in the processing of purchasing transactions.
Supply Management and Asia - Has Anything Changed?
June 2009
Tim Fiore
Terex Corporation
Terex's response to the current economic environment has been to focus on customers, generate internal cash, continue more focused internal improvement initiatives, and right-sizing business for anticipated demand. Actions have been identified for both developing and developed markets. Supply Management professionals within Terex are looking to redesign the supply chain, increase competition, and assess leadership to assist in recovery.
Enhancing Procurement Value in Difficult Economic Times
June 2009
Kinnar Ghiya
Microsoft Corporation
A high level overview of Microsoft's purchasing organization and strategy in Asia.
Chinese Pharmaceutical Supply Chain: Challenges and Opportunities
June 2009
J.Q.Ju;Yue Dai;Kevin Gu;Ye Tae
Fudan University;Jointown Pharmaceutical Group Co.
Research by Fudan University presents a unique picture of the pharmaceutical supply chain in China. An overview of the marketplace for ethical and traditional Chinese medicine is first presented. This is followed by a discussion of some key issues the in the supply chain, including the use of information systems, quality control systems, risks and risk management, research and development spending, export, and finally some unique aspects of the pharmaceutical supply chain in China. The presentation finishes with an overview of the new healthcare reform initiative in China and its impact on companies in the pharmaceutical supply chain.
The 2008 Aftermath in China - Crisis and Opportunities in a Tough Economic Climate
June 2009
Jessica Mahre
A.T. Kearney, Inc.
China exports and real estate values have been negatively impacted by the global economy downturn, resulting in a decline in GNP growth and a growth in unemployment. China has responded with an aggressive stimulus package focusing on increasing the domestic spend and export demand. The result of the stimulus on the economy and Chinese suppliers is discussed in detail.
China Update - APL Logistics
June 2009
Paul Man
APL Logistics, Ltd.
This presentation starts with a comprehensive overview of the trends and current conditions in the Chinese economy. It next describes some economy policy changes and stimulus efforts by the Chinese government to strengthen the economy and keep it growing during the current global slowdown. An overview of China trade centers with statistics on trade are provided. Next the presentation drills down into the fast growing logistics marketplace in China and covers some new infrastructure development. The presentation finishes with some logistics case studies.
Discount Payment Terms - Their Use in Negotiation and Managing Working Capital
May 2009
Farryn Melton
Amgen Inc.
At Amgen we are interested in learning about your use of discount payment terms in supplier negotiations and the roles that Finance and Sourcing play in determining acceptable discount payment rates and terms. In addition we are interested to know if Finance uses discount payment terms as a way to manage the firm's working capital needs and, if so, the consequences of this activity. Questions: 1. What role does sourcing play in cash management? 2. Are you using discount payment terms as a savings lever in your supplier negotiations? If not, why? If so, how? 3. How are acceptable payment terms, including discount terms, determined? Does Finance determine payment term options for Sourcing to use in supplier negotiations? What criteria are used to evaluate acceptability of payment terms? 4. Does Finance use discount payment terms as a vehicle to manage working capital? If so, do you have a mechanism to turn on or off payment of invoices within discount terms depending on the working capital needs of the business? If so, how does Sourcing explain the turning-off of discount terms to its business partners, given that they may be counting on those discounts?
Front-End Loading: Supply Management and New Product Development in Japan
April 2009
CAPS Research Japan Group
CAPS Research Japan Group
Front-end loading is taking a proactive approach to examining a product's concept and value as well as developing a business strategy early in the development process. From a supply management point-of-view, this translates to early participation in concept, design, and implementation, including involving resources and suppliers at the earliest possible juncture to ensure costs, processes, and materials are compatible with a successful outcome. This focus study, from the CAPS Research Japan Group, defines front-end loading and analyzes results of several past surveys about early supplier involvement and supply's involvement in new product development. It also provides several case studies from various industry groups and details the level of supply management involvement in processes for each. The authors highlight the connection between early involvement in new product development and expanded roles for those in the supply management field.
Supplier Risk Management - Sonoco
April 2009
Marc Ensign
Sonoco Products Company
Sonoco, a global packaging company, shares their methods to identify and manage supplier risk. Their processes include training personnel in bankruptcy law, supplier evaluations, shoring up contract language, and identifying supplier financial risk. Their model identifies key supplier evaluation components in determining potential financial risks.
Supply Chain Strategy: Consistent Approach During Challenging Times
April 2009
Beverly Gaskin
Rolls-Royce plc
In this presentation Rolls-Royce describes how the current economic down turn has changed their marketplace and supply strategies. Five key strategies for managing the supply chain in the current economic environment are discussed. Next, the presentation discusses how Rolls-Royce is preparing for the upturn by investing in key infrastructure and continuing to execute six key work streams. Collaboration and transparency with suppliers on achieving cost improvements is essential to success at Rolls-Royce.
JCPenney Procurement's Approach to Current Economic Trends
April 2009
Bruce Kilkowski
JCPenney
JCPenny Procurement sources all non-merchandized good and services. The key supply management themes in 2009 are: (1) Value Add, (2) Operational Excellence, (3) Talent Management and Leadership, (4) Customer Service, (5) Sustainability, (6) Risk Management, and (7) Leverage Technology. Results are discussed for sourcing: Publication Papers, Bunker Fuel, Store Fixtures, and Utilities.
Supporting the Business During Turbulent Times
April 2009
Leo Lonergan
Chevron
There are many pressures associated with the current economic challenges and Chevron procurement is active both tactically and strategically. Leveraging category and market intelligence, applying functional processes and tools, managing supplier risk and addressing internal costs are tactical approaches being addressed. Strategic challenges are focused on people, partnerships and performance.
Supply Management: Strategies for Superior Results in Turbulent Times at Hilton
April 2009
Anthony S. Nieves
Hilton Hotels Corporation
Hilton Hotels Corporation strategies include a corporate transformation, strategic cost management and global resource integration. The transformation process was led from the top, with total involvement of the organization. Global functions were consolidated and a cross-functional processes were designed. Collaboration with suppliers provided cost savings and improved communications. Hilton's best in the industry procurement system helps to measure compliance and confirm benefits are being realized.
The Economic Impact on IBM
April 2009
Dan Rooker
IBM Corporation
IBM has transformed from a primary provider of computer hardware and software to a leader in computer services. The economic impact of the changing environment brought immediate internal spending controls to IBM. This presentation identifies sourcing initiatives in the current economic down turn. It also highlights the opportunities for Integrated Supply Chain in the current economy and for the upturn.
The Capital Project Supply Chain in Today's Economic Environment
April 2009
Jim Scotti
Fluor Corporation
Fluor Corporation's capital project supply chain continues to adapt to market changes. The presentation describes how the changes in market power has changed the traditional model of engineering, procurement and construction (EPC). Fluor Procurement begins a project with strategic sourcing, followed by engineering, procurement and construction (PEpC). With the decline in raw material costs, procurement is taking advantage of the anticipated "low cost window of opportunity".
Supply Chain Success in Today's Economic Times
April 2009
Vincent J. Hrenak
Raytheon Network Centric Systems
This presentation reviews the lessons learned for supply chain success during the current economic times and shares a case study on supplier risk. It emphasizes that extraordinary times require extraordinary action - not business as usual. Supplier relationships may change dramatically as their capacity changes. The presentation demonstrates that in an integrated supply chain approach there is a need to collaborate with leaders of all functions to manage supplier risk. Raytheon's supplier risk strategy is illustrated in the presentation.
The Role of Supply Chain in Turbulent Times
April 2009
Tim Coats
General Mills, Inc.
General Mills shares their holistic margin management process as a new approach to accelerate competitiveness. General Mills shares methods used to identify and eliminate waste, and capture savings and their reinvestment strategies for brand name building. The AD-MAT (Advantage Materials) process is shared as their vision to amplify competitive advantage in key raw material sourcing and supply chain management.
Market Softness - Strategies and Challenges at Amgen
April 2009
Farryn Melton
Amgen Inc.
Amgen, Inc. is a leader in the biotech industry. The "seismic shift" in macro economic environment conditions in the last 6-8 months as well as the fact that the biotech industry is becoming increasingly competitive and regulated has resulted in a need for Amgen to reevaluate their supply base. This presentation explains how Amgen uses one 2x2 matrix to evaluate suppliers and maximize benefits from current planned initiatives and another 2x2 matrix to measure supplier saliency and financial health. The presentation includes an example using Amgen's fleet suppliers.
One Schneider Electric
April 2009
Jeff Wood
Schneider Electric
Supply strategies for Schneider Electric are undergoing transformation in response to 2008-2009 economic conditions. Their mission is to build a sustainable supply chain with a unified team, process, and supply base. Tactics include simplifying commodity management, integration of their upstream supply chain and deployment of global processes. Strategies for cost containment, risk management, and talent management are presented.
Perspectives of a Small-Cap Consumer Company on the Consequences of the Turbulence in the Financial Markets
April 2009
Jason Berg
AMERCO
The principal financial officer of a small-cap consumer company offers his perspective on the current economic climate, what indicators his firm analyzes for signs of a recovery, and expectations for the future. Jason Berg relates current statistics, such as existing home sales, employment, and credit market debt to his firm's situation as one that caters to the do-it-yourself mover. Berg says that one big indicator for recovery will be the health of the securitization market; once bad assets are cleared out, there will be room for more transactions in the market again. His expectations for the future include: common sense and due diligence return; mortgage refinancing activity increases, lower energy costs, a slowed but not stagnant economy, and recovery to come sometime in 2010.
Are Grey Skies Gonna Clear Up? Economic Outlook 2009-2010
April 2009
Lee McPheters, Ph.D.
Arizona State University
Lee McPheters, Ph.D., provides an overview of today's current economic situation and offers some insights into the global economy, the recession, and consumer confidence. The two biggest questions most CPOs have are: how long will the recession last and how "deep" will it be? This will be the longest post-war recession - nearly twice as long as any previous recession - but when compared to the magnitude of the Great Depression, the current period doesn't even come close. One survey shows 92 percent of "Blue Chip" economists believe the recession will end by the fourth quarter of 2009, although it will be the second quarter of 2010 before unemployment peaks. Recovery factors include: population growth, pent-up demand spending, government policies, and eventually higher prices and taxes. This presentation offers many charts and statistics from various sources.
Aerospace and Defense Industry Benchmarking Metric Report 2009
April 2009
Benchmarking Team
CAPS Research
The Aerospace and Defense Industry Benchmarking Metric Report for 2009 contains key supply management performance measures on topics including organizational structure, professional development, financial information and supplier relationships. New this year is the focus on measuring the importance of various initiatives and programs as well as the implementation status of these initiatives and programs. Survey participants reported the importance (high, medium or low) of 32 different initiatives and programs as well as the status implementation throughout the organization. These initiatives and programs range from employing 'balanced scorecards' to the 'unique identification (UID)' of tangible items. Understanding the relationship between importance and implementation can help determine which initiatives and programs can be considered as being best practices within the Aerospace and Defense industry sector.
Best Practices for Structuring and Managing a Procure-to-Pay Process
April 2009
Farryn Melton;Suman Sarkar
Amgen Inc.
At Amgen we are interested in learning best practices for how a Procure-to-Pay process should be structured, managed, and the role that Sourcing plays (or does not play) in its governance and day-to-day operations. ("Procure-to-Pay" refers to processes and tools for requisitioning, approvals, issuing of purchase orders, invoicing and payment.) Questions: 1. Who manages the Procure-to-Pay process in your organization (Accounting, Sourcing etc.)? Is the end-to-end process managed by one function or are different components managed by different functions (e.g. Sourcing manages the Procure functions and Accounting manages the Pay functions)? 2. If Sourcing is not responsible for the Procure functions in your organization, what is the role of Sourcing in the Procure-to-Pay process? 3. Have you (or are contemplating) outsourced or created a Shared Services organization to manage a part of, or the entire end-to-end Procure-to-Pay process? If yes, what has been your experience and benefits from the effort? 4. Have you otherwise optimized the Procure-to-Pay process (e.g. reengineered the process for cost, cycle times, resources etc.)? If yes, what are the sources of benefits and how did you achieve them?
Supply Chain Integration: Challenges and Good Practices
March 2009
Phillip L. Carter, D.B.A.;Robert M. Monczka, Ph.D.;Gary L. Ragatz, Ph.D.;Pete L. Jennings
Arizona State University;Michigan State University;CAPS Research
Competitive challenges of the last decade have a strong direct effect on supply chain strategy and integration. This report focuses on two key issues - alignment and linkage (both inside an organization and across organizations) and how supply chain management must support the broader enterprise strategy. The research identifies four critical supply strategy areas (providing "winning" strategies for each area); key supply chain execution processes; supply chain enablers; and 14 challenges organizations must meet to achieve true supply chain integration. The report includes illustrative practices from case studies and industry analyses for five sectors, detailing competitive forces and supply chain integration's critical role.
Controlling Maverick Spend
March 2009
Jean Letendre;Jocelyn Daneau
Hydro-Québec
At Hydro-Québec, except for emergencies, the acquisition of goods and services valued at $2,000 or more is centralized in one administrative unit. All acquisition procedures are governed by a corporate policy. Nevertheless, every year, the Acquisition unit must deal with situations that deviate from established procedures (e.g., internal clients who negotiate acquisitions directly with suppliers, a practice known as maverick buying). Questions: 1. Do your acquisitions of goods and services have to go through a specialized acquisition unit? If so, starting at what amount? Is this unit centralized? Please provide details. (Note: Please exclude the acquisition of professional services in your responses.) 2. Do you have a procedure that makes it possible to override (i.e., deviate from) the formal acquisition process? If so, please describe its provisions and how it works. Who in your organization can authorize such a deviation (exemption)? Based on what amount? 3. What control mechanisms have you put in place to identify situations that do not comply with the company's formal acquisition process? Are there consequences? Please elaborate on this.
Strategies for Leveraging Cost Savings from Current Softness in Supply Markets
February 2009
Farryn Melton;Suman Sarkar
Amgen Inc.
At Amgen, we are interested in what actions your supply management team is taking to leverage cost savings from the current softness in your supply markets. In addition, please share with us the categories or supply markets you believe have the greatest opportunities for leveraging cost savings. Questions: 1. What actions have you taken or plan to take in the next few months to leverage cost savings from the current softness in your key supply markets? 2. Are you planning to renegotiate existing (still-in-force) agreements with your suppliers? If yes, how are your incumbent suppliers responding to your requests? If no, what is your supply strategy going to be when current contracts expire? 3. How are you validating that you are not leaving money on the table in current contract negotiations/renegotiations where there are no obvious benchmarks? 4. What specific supply categories or supply markets do you think have the highest leveraging opportunity for cost savings over the next 6 to 12 months? (Please do not identify any specific suppliers in your response.)
Flow of Documents Related to Engineering and Construction Services
January 2009
Keith Weber;Charles Zheng
3M Company
At 3M, when Sourcing Operations works with engineering and construction projects, we require certain documentation to support a project. Currently, paper-based timesheets, purchase order changes, invoices, etc. in most cases, are sent directly to the projects' engineers. This flow to the project engineers delays the payment of invoices and leads to the inaccurate tracking of project costs. While our ultimate goal is to receive all procure-to-pay transactions electronically, in the meantime, having these documents sent directly to Purchasing or Accounts Payable would reduce payment cycle time and result in more accurate tracking of project costs. We need your insight on how this is handled within your business. Questions: 1. Are purchase order changes, invoices and timesheets related to engineering and construction services sent directly to Accounts Payable for processing, or are they reviewed first by Procurement or Engineering prior to being sent to Accounts Payable? 2. If yes to Question 1, are any of these documents received electronically? Please elaborate. 3. If no to Question 1, what are the key barriers to having these documents sent directly to Accounts Payable? 4. If these purchase order changes, invoices and timesheets are not sent directly to Accounts Payable, what is their flow? 5. If you keep these documents, how and where are they kept and for how long? Centrally? Scanned? File Cabinet?
Non-Monetary Recognitions and Rewards for Outstanding Employee Performance
January 2009
Susan Brownell; Pete Dolder
U.S. Postal Service
Background: Recognitions and rewards for employees play important roles in the retention of talented individuals and usually involve the expenditure of discretionary funds. We all are facing very difficult economic times, and as a result, need to carefully manage our discretionary expenses. The United States Postal Service's Supply Management organization is seeking insights from other CPOs into forms of non-monetary recognitions and rewards that organizations are using and have found to be effective. Your response to the questions listed below is greatly appreciated. Questions: 1. What non-monetary forms of recognition do you use to reward employees (individuals and/or teams) for outstanding performance? If none, please go to Question 4. 2. How have your employees responded to these non-monetary recognitions and rewards? Please elaborate. 3. Have you experienced any difficulties in using these non-monetary forms of recognitions and rewards? If so, please elaborate. 4. If you currently do not have any non-monetary forms of recognition and rewards, what programs or ideas would you consider?
Improving Contract Management, Execution and Control
December 2008
John O'Dwyer
Celanese Corporation
Celanese has seen tremendous growth over the past 5 years. One area that is feeling growing pains is contract management (procurement, sales, legal). The issues surrounding ideal and "perfect" contracts are ever increasing and complex. Some of these issues are: Risk management, Sarbanes Oxley requirements, internal and external audits, centralized repositories, language translations, derivative accounting reporting and treatment, legal issues and concerns, standardized templates... and the list goes on. We shall appreciate your sharing your insights and best practices on this topic by responding to the following questions: Questions: 1. What initiatives has your company taken (or is considering taking in the coming year) to improve contract management, execution and control? 2. Have you installed a centralized corporate "shared services" or a "center of excellence" team to manage and control contracts? If so, please elaborate. To whom does/will this team report? What functions are represented on the team? 3. Have you, or are you considering installing software systems to aid in an initiative to centrally file, communicate, negotiate, sort, escalate, route for signatures, capture cycle time metrics, and send reminders, on all or multiple contact types? If yes to any of these activities, please elaborate. 4. If you have, or are considering such software, are/will you integrate the "paper portion" of contract management with your purchasing/sales transaction processing systems? 5. Are sales contracts included (or to be included) in the system or just procurement contracts? Do M & A, site services, real estate, and compensation contracts also fall under this umbrella?
Supply Management's Strategic Role in Environmental Practices
December 2008
Thomas F. Gattiker, Ph.D.;Wendy Tate, Ph.D.;Craig R. Carter, Ph.D.
Boise State University;University of Tennessee;University of Nevada
Most companies realize that environmental sustainability performance is a critical issue. Fortunately, the supply management function has the opportunity to engage heavily in these programs, but many professionals are unsure of what their role might be for strategic contribution. This study, based on a series of focus group interviews provides guidance for those wanting to implement environmental practices within their organizations and supply management strategies. It discusses the business case requirements; top management support requirements; the complexity of defining "success" in this area; the need for standard definitions; barriers such as costs, metrics, and resources; the supply base's role in new technologies; and the overall expanded role of supply management.
Dealing With the Challenges of the Current Economic Environment
November 2008
Jim Scotti
Fluor Corporation
It may be an understatement to say that these are challenging economic times. This environment may require you, as a CPO, to alter some of your short and long-term supply management strategies...more for some of you, less for others, and perhaps none for a very few. In the spirit of professional collaboration, I encourage you to please take a few minutes to respond to the questions that follow in appropriate detail. (Remember, these responses will be shared with all 140+ CAPS Research CPOs, including you.) Questions: 1. What extra-ordinary measures are you taking (or will be taking soon) within your supply management organization in response to current economic conditions? (e.g., Workforce right-sizing? More communication with internal customers? Hedging? Cost-cutting? Morale building? Other?) If it is 'business as usual' please indicate 'BAU' and comment. 2. What extra-ordinary measures are you taking (or will be taking soon) within your supply base in response to current economic conditions? (e.g., Helping with supplier liquidity? Reviewing supplier risk profiles? Reviewing sourcing strategies? Joint cost reduction projects? Supply base rationalization? Other?) Please elaborate. If it is 'business as usual' please indicate 'BAU' and comment. 3. What extra-ordinary measures are members of your supply base taking (or will be taking soon) with your company in response to current economic conditions? (e.g., Allocation? Price re-negotiation? Longer/shorter lead times? Seeking changes in A/P terms? Other?) Please elaborate. If it is 'business as usual' please indicate 'BAU' and comment. 4. What extra-ordinary measures are being asked of you by your senior management and internal customers in response to current economic conditions? (e.g., Cash generation? New cost-savings targets? Headcount rationalization? Building/reducing inventories? Re-negotiating agreements? Delay capital project expenditures? Other?) Please elaborate? If it is 'business as usual' please indicate 'BAU' and comment. 5. What (if any) purchasing and supply management initiatives are you expediting, putting on hold, or abandoning due to current economic conditions?
"Green" Corporate Strategies: Issues and Implementation From the Supply Management Perspective
November 2008
Bryan Ashenbaum, Ph.D.
The Richard T. Farmer School of Business, Miami University
Sustainability and "green" business practices have become the hot topic in today's business climate. Yet, many firms are struggling to uncover what "green" and "sustainable" actually mean in terms of their operations and objectives. Can businesses simultaneously pursue green practices while boosting the bottom line? Can they afford not to? To what extent are consumer and political forces shaping their approach? A group of supply executives attending a CAPS Research Critical Issues conference on this topic discussed a framework for the way in which companies will address green issues from a supply management perspective. This report delves into some of the definitions used, the drivers for such initiatives, the business case for green, and recommendations for establishing internal and external strategies. It also includes a case study from The Auto Club Group and several Internet resources for further information.
Sources of Compensation Benchmarks for Procurement and Logistics Positions
November 2008
Jeff McLaughlin;Maggie Fischer
Texas Instruments, Incorporated
We at Texas Instruments are interested in finding sources of benchmarks for compensation and/or salaries for procurement and logistics positions. We especially are interested in sources and surveys whose benchmarks are not the result of self reporting of compensation by individuals, but result from actual data gathered anonymously from companies. (Note: We have reviewed compensation benchmarks available from ISM and CAPS Research, and they all result from self-reported data from individuals.) If you have sources or know of surveys for such non-self reporting based benchmarks, we would appreciate you sharing these sources and survey names/authors (not the benchmarks themselves) with us. Questions: 1. What sources or surveys does your organization utilize to determine what the market is paying for procurement and logistics positions? 2. Are these compensation benchmarks the result of self reporting by individuals or from anonymous company submissions of data to these sources or surveys? 3. How well do these sources or surveys meet your needs in providing useful compensation benchmarks for procurement and logistics positions?
Cross-Industry Metric Report October 2008
October 2008
Benchmarking Team
CAPS Research
Cross-Industry Reports include key performance indicators from different industry groups. The survey process is relatively constant, ensuring that the KPIs can be measured year-over-year.
Process Guide for Supply Management Environmental Sustainability
October 2008
James Hershauer
Arizona State University
Many firms are seeking universally accepted models for environmental sustainability programs. Unfortunately, few exist. As an immediate aid to supply managers and as a precursor to creating industry-specific benchmarks for environmental sustainability, this brief guide to initiating a program for supply management environmental sustainability can serve as a starting point. It is the result of various interviews and in-depth discussions with supply management executives from CAPS Research sponsoring companies and other thought leaders. The report covers five major stages in the environmentally sustainable program creation process, from defining the topic to running a pilot program.
Determining Fuel Surcharges in the Procurement of Air Transportation Services
October 2008
Louis Bacigalupo
Motorola, Inc.
Background: We at Motorola are looking for your help to answer the following questions regarding fuel surcharges. In particular, we are interested in learning from those companies that procure global heavy weight air transportation services with significant spend. Questions: 1. For contracted heavy weight air service, does your company follow a global, regional, or site level fuel surcharge index? 2. What type of fuel surcharge index do you use? (If an industry standard index is used, please advise which one. If a logistics service provider index is used, please advise how you ensure fuel is held neutral and no margin is made. If your company created its own index, please advise how it was it derived.) 3. If an index is not used, do you follow a pass-thru method? If so, please advise how freight bills are audited. 4. If another method is used, please elaborate.
Interactive Strategy Session on Global Sourcing in Inflationary Times
October 2008
Joseph Carter;Casey McDowell
CAPS Research
Firms of all sizes have entered the arena of global supply management in vast numbers. As a result, global sourcing has emerged as a critical component of corporate strategy aimed at reducing costs, raising product quality, increasing operational flexibility, and improving designs. It makes sense to exchange ideas, insights and information that can identify in a total cost framework the foundations for managing global sourcing in a strategic and effective way. This presentation reports the findings from the October 6, 2008 interactive strategy session which discussed the strategic importance of global supply, described procedural and managerial issues of concern in global procurement, examined the transportation/distribution implications of global markets, delineated the operational differences of buying from global sources and examined the impact of foreign currency exchange rate considerations on global sourcing.
Interactive Strategy Session on Environmental Sustainability
October 2008
Phil Carter;Rick Boyle
CAPS Research
Whether it is due to regulatory, customer, investor, or internal forces, most companies realize that environmental sustainability has become a critical business issue. Supply management has the opportunity to strategically engage in environmental initiatives, projects, and programs, and importantly, guide and influence the environmental performance of the supply base. However, environmental strategies for supply management are incomplete and their development is beset by many unknowns and conflicting information. This presentation reports the findings from the October 6, 2008 interactive strategy session that undertook the task of identifying the foundations for effective supply management environmental sustainability strategies.
Interactive Strategy Session on Innovation from the Supply Base
October 2008
Robert Monczka;Debbie Maciejewski
CAPS Research
Firms will increasingly compete on their ability to innovate as outsourcing and globalization leads to a more competitive playing field across industries. Products, technologies, business processes, and other areas require ongoing and breakthrough innovations. An increasingly important source of innovation is the supply base. However, firms have not fully established their supply strategies to acquire, evaluate, implement and commercialize innovation. Issues of supply focus, IP ownership risk/reward sharing, trust, supplier capability and so forth frequently limit the acquisition and development of innovation from the supply base. This presentation reports the findings from the October 6, 2008 interactive strategy session which discussed how to most effectively work with suppliers to accelerate and acquire innovations at any stage in the product or service life cycle, in ways equitable to all parties. In addition, the strategic and operational supply processes to achieve supplier innovation were also identified and discussed.
Managing Human Capital and Workforce Issues
October 2008
Patrick Egan
Pfizer
Pfizer, the world's largest pharmaceutical products company, believes that "talent makes or breaks an organization, a strategy, or a negotiation" and has applied this belief in developing their Worldwide Procurement Organization. Pfizer's Worldwide Procurement Organization covers all areas of the company at the global level by employing centralized category management teams that are responsible for that category on a global basis. Pfizer is constantly recruiting new talent for category management teams, while managing and developing current talent as the organization evolves. This presentation addresses the strategies that Pfizer currently uses to acquire, manage and develop talent as well as strategies for the future.
Taking Your Company 'Green' and the Supply Chain's Role
October 2008
Brian McNally
The Auto Club Group (AAA)
The Auto Club Group defines 'Green' at both the micro and macro levels. Its sustainability program was designed to include supplier end product scorecards with appropriate metrics. The ACG used the U.S. EPA Guidelines in developing these metrics. Scorecards are used to help judge progress toward becoming a 'green' company and as input to sourcing decisions. The ACG journey to 'green' is a top-down initiative from the CEO with Supply Management playing a leadership role.
A Perspective on Supply Management Transformations
October 2008
Tim Fiore
Terex Corporation
Supply management has undergone transformation over the decades, driven by a focus on more strategic issues. In addition, individual supply organizations often must go through a transformation in order to develop a more appropriate structure, to adapt to new economic conditions, to support a changing business model, or changes in the competitive landscape. The supply leader is imperative to this process, and he or she must understand operational realities, have the courage required for change, know how to demonstrate change to others, be able to chart a roadmap, and ensure the proper team is in place to deploy a transformation.
Managing Organizational Change
October 2008
Gerry Keim
Arizona State University
All organizations experience change and transformation at some time. Dr. Keim's presentation details some of the key elements required to manage change successfully including: the importance of measurements to understand your current state; the vital relationship among metrics, rewards, and incentives for employees; the selection of appropriate talent to realize change; and the best leadership style to effect positive, lasting change. Leaders managing change need to focus on strategy, as opposed to operational effectiveness.
Accelerating Global Low Cost Country Sourcing at Nilfisk-Advance
October 2008
Randy Christoffersen
Nilfisk-Advance
Nilfisk-Advance's low cost country sourcing strategy is a cross-functional initiative that targets cost savings. This TCO initiative spans their U.S., European and China plant sites. Nilfisk-Advance strategies use a supplier change checklist and a TCO model. To achieve these changes, dedicated procurement resources are required, communication is key, and effective project management is critical.
Annual Sourcing Effectiveness Planning and Commodity Market Guidance/Hedging Program at ITT
October 2008
Pete Gabriel
ITT
ITT Corporation's cost reduction strategies include annual sourcing effectiveness planning and commodity market guidance/hedging programs. This presentation includes an ITT global strategic sourcing overview and ITT's annual sourcing effectiveness planning process (ASEP). The ASEP includes a commodity guidance process used to establish a baseline for material cost. The plan establishes savings goals and identifies planned savings targets. Performance measurements with monthly metrics are also included in the process. You may also view ITT's base metal hedging program. The hedging program team includes the Corporate Treasurer, Corporate Controller and Global Strategic Sourcing. The team reviews commodity exposures, market forecasts, internal guidance and hedging recommendations for financial gain or loss to ITT sites.
Enterprise-Wide Shared Services Centers Benchmarking Metric Report 2008
September 2008
Benchmarking Team
CAPS Research
This report provides a cross-industry snapshot of the popularity of enterprise-wide Shared Services Centers, the functions being performed within the Shared Services Center, and the level of executive who has overall management responsibility for each center's operations.
Establishing Aggressive yet Achievable Goals for Cost Reduction or Cost Savings
September 2008
Tim Harden;John Ferris
AT&T Services, Inc.
An important part of procurement professionals' performance evaluation process is to compare their achieved cost reduction/savings results against specified targets/goals. These targets/goals should strike a balance between being aggressive yet achievable. We at AT&T wish to learn best practices for establishing these cost reduction/savings targets/goals. Over the years, we have tried different methodologies such as "bottoms up" (targets/goals proposed or set by individuals or group), "top down" (set by management), some combination of the two where targets/goals are "negotiated", or some other process, etc. We are interested in any input from our CPO peers on best in class methodologies for establishing these targets/goals. Questions: 1. How does your organization establish aggressive but achievable cost reduction/savings targets/goals for your procurement professionals? Why have you chosen this methodology? Who participates in this process? 2. In determining these targets/goals, do you differentiate between mature products/services and new products/services? If so, how? 3. Do you utilize historical data and/or current budget data? If so, how? 4. Does the size of the spend, for which an individual or group is responsible, play a role in setting targets/goals? If so, how? 5. Are there other variables or factors you consider when setting targets/goals? Please elaborate. 6. What overall advice do you have for us concerning the target/goal setting and the follow-up-with-actuals process?
Lean Supply Chain Strategies and Implementation
September 2008
George A. Zsidisin, Ph.D., C.P.M.
Bowling Green State University
Lean practices are used by many organizations who are trying to optimize the efficiency in their supply chains and eliminate non-value-adding activities and costs. Two case studies, from Raytheon and General Mills, are presented with regard to the lean practices that exist within their firms, as well as how those practices are beginning to evolve in their respective supply chains. In addition, this report examines the role of metrics in creating lean supply chains, and describe some of the obstacles as well as successes that firms obtain in their journey toward creating lean supply chains.
Purchasing Cards Best Practices - Policies, Usage and Cost Savings Experience
August 2008
Scott Frohme;Patrick White
Constellation Energy Group, Inc.
We at Constellation are in the process of rolling out a new procurement card to employees. In conjunction with the new card we are updating our P-card usage policy and are looking for best practices surrounding the communication of the policy to current and potential P-card holders. If your organization has implemented a P-card policy, your insight would be appreciated. Questions: 1. If your organization uses P-cards, what is your policy for their use? (For example, who gets them? Spend limits? Categories able to purchase? Consequences of misuse, etc?) If you do not use p-cards, please describe briefly why they are not used or not appropriate for your organization. 2. What percentage of your organization's total annual spend is on your procurement cards versus non-PO spend? 3. How is your P-card policy communicated to users to ensure their understanding of the breadth and limits of appropriate use without listing all possible purchase categories? 4. What has been your estimated cost savings/costs avoided from p-card usage? (Hard $ savings by reducing PO's and/or soft savings from shortened lead times, delegation of spend authority to card holders, cost control, etc.) 5. What advice/insights can you share with us to assure a successful launch of our P-card rollout?
Petroleum Industry 2008 Supply Management Organization Benchmarking Report
August 2008
Benchmarking Team
CAPS Research
The Petroleum Industry Benchmarking Metric Report 2008 contains key supply management performance measures including organizational structure, professional development, financial information, and supplier relationships and alliances. Breakouts were provided for Integrated, Upstream, and Downstream organizations.
Telecommunications Services Industry Benchmarking Metric Report 2008
August 2008
Benchmarking Team
CAPS Research
The Telecommunications Services Industry Benchmarking Metric Report 2008 contains key supply management measures including organizational structure, professional development, financial information and supplier relationships and alliances.
Best Practice for a Buyer-Single Source Global Supplier Interface
August 2008
Jonathan Clark
NCR Corporation
Some companies with multiple manufacturing locations have a single global suppler that supplies all their global manufacturing sites for one or more categories. We at NCR would appreciate your insights on how best to establish the buyer-supplier interface for this "single source-multiple facility" scenario. Questions: 1. Does your company have at least one single source "global supplier" that supplies all of your requirements for one or more categories to all of your global (or multiple) facilities? If YES, please continue. If you do not have any single source global suppliers, as defined above, please skip to Question #4. 2. Do you manage the orders to your Global Supplier(s) with a single Global Buyer(s) or does each facility/manufacturing site have a Local Buyer that places orders with the Global Supplier? 3. Please elaborate on the rational for the approach you take as defined by your answer to Question #2. 4. What advice or insights could you share that would help us decide which approach to take? Finally any feedback on the pros/cons of either method would be appreciated.
Industrial Manufacturing Industry Benchmarking Metric Report 2008
August 2008
Benchmarking Team
CAPS Research
The Industrial Manufacturing Industry Benchmarking Metric Report 2008 contains key supply management performance measures including organizational structure, professional development, financial information and supplier relationships and alliances.
Developing and Managing an Enterprise Risk Management and Mitigation Process
July 2008
John Gundersen
Newmont Mining Corporation
We are in the process of establishing an Enterprise Risk Management/Mitigation focus group at Newmont Gold. We already have a comprehensive list of risk items such as mine safety, environmental impacts, economic, political, extreme supply/customer market volatility, strategic category shortages, etc., which we continue to monitor. Our newly formed team is looking at 10K type risks, i.e., those that are binary in nature -- "without this, or if this occurs, we are essentially out of business" types of risk issues. 1. Does your company have a similar focus on these or other risk issues? Please elaborate. 2. Do you have other risk items (than those mentioned above)? Please elaborate. 3. How are these risks addressed/mitigated, by whom, and how often? Please elaborate. 4. Is Supply Chain Management/Procurement involved in your Enterprise Risk Management/Mitigation process? If yes, what level of attention is this given and to whom do you report...CEO, Board of Directors etc.? 5. What advice do you have for us that would aid us in developing best practices for our Enterprise Risk Management/Mitigation initiative?
Financial Services Industry Benchmarking Metric Report 2008
July 2008
Benchmarking Team
CAPS Research
The Financial Services Industry Benchmarking Metric Report 2008 contains key supply management performance measures including organizational structure, professional development, financial information, and supplier relationships and alliances.
Defining, Calculating and Targeting Procurement Savings for Total Spend
June 2008
Jan Yagi;Diane Lin
Starbucks Corporation
At Starbucks we are interested in how other procurement organizations document and report "procurement savings". In addition, we would like to know how spend that is not under the control of procurement is managed and who is responsible for it. Finally, we would appreciate you providing benchmark estimates of your targets for procurement savings (as a % of spend) over the next few years. Questions: 1. For your documentation and reporting of "procurement savings", how do you define "spend"? (Any specific inclusions/exclusions?) 2. How do you define "procurement savings"? (Any specific inclusions/exclusions such as costs avoided?) 3. What is your formula for calculating "procurement savings"? 4. Are "procurement savings" (targets/actuals) included in your company's overall financial performance targets and reports? If yes, how/by whom, are these targets set? 5. Approximately what percent of your company's total spend is managed by your procurement organization? 6. If your response to Question 5 is less than 100%, are there procurement savings targets for spend that is not managed by procurement? (Please provide a few examples of these spend categories.) If yes, what accountability does your procurement organization have for meeting these targets? If there is no responsibility by procurement, who is responsible for this spend's management? 7. Approximately, what are your procurement savings targets, as a % of spend (as you defined spend and savings above in Questions 1 and 2), by year, for 2008-2011? 2008: 2009: 2010: 2011:
Engineering Construction Industry Equipment Material Procurement Performance Metric Report 2008
June 2008
Benchmarking Team
CAPS Research
The Engineering Construction Industry Metric Report 2008 contains key supply management performance measures including organizational structure, professional development, financial information, and supplier relationships and alliances.
Best Practices for Developing a Managed Meetings Program
June 2008
Susan Brownell;Barbara Comp
U.S. Postal Service
The US Postal Service holds hundreds of meetings each year without a formal Managed Meetings Program (MMP) in place. Although the Postal Service does have some internal guidelines related to meetings, there is no written policy. With an approximate annual meeting spend of $20 million it is necessary to establish specific criteria for meetings to ensure consistency, reduce risk to the Postal Service, and control meeting-related costs. In order to present a valid business case to upper management, we would like to benchmark with other organizations to gain insight on how they control and report spend and who has authority to plan and source meetings. The results of this survey will assist us in developing the program and obtain upper management support for a formal MMP. Questions: 1. Does your organization control, track and report spend on meetings as a separate spend category? If YES, please elaborate. If NO, to what account(s) are meeting costs assigned? 2. Has your organization implemented a formal Managed Meetings Program (MMP) with a written policy? If YES, briefly elaborate on its structure and identify the internal group(s) that manage the Program? (If NO formal MMP is in place, please respond to the following questions on your experiences with a more informal meeting management process.) 3. In your organization, what function(s) does the actual logistical planning and supplier sourcing (not meeting content, agenda, or attendees) for meetings (meeting rooms, hotel rooms, transportation, etc)? 4. Does your organization include all associated costs when planning meetings or conferences? For example, are hard costs such as airfare, per diem, and ground transportation costs taken into consideration? What about soft costs such as travel fatigue or out-of-office-caused reduction in work productivity? What costs are included? 5. Does your MMP's policy classify meetings by size, length, attendees, purpose, managerial levels or other categories that result in decision rules for holding meetings? Example: If there are to be less than 50 attendees then the maximum spend can be $xxxxx. If spend were to be > $xxxxx, then the meeting must be held at a company owned facility. Please elaborate, and, if available, please attach examples of your written meeting policy and forms or templates you use for setting meeting criteria and "if-then" decision rules for meetings. 6. How do you ensure compliance to your MMP, or more informal meeting policy? 7. For your firm, to what extent is e-communications (e.g. e-mail, teleconferencing, groupware, web-based meeting solutions, virtual employees, etc.) having an effect on the number of physical face-to-face meetings, their efficiency/effectiveness, and their cost? What, in your opinion, will be the effect of e-communication on them in 2018?
Pharmaceutical Industry Benchmarking Metric Report 2008
June 2008
Benchmarking Team
CAPS Research
The Pharmaceutical Industry Benchmarking Metric Report 2008 contains key supply management performance measures including organizational structure, professional development, financial information and supplier relationships and alliances.
Finding and Keeping China's Best Talent
June 2008
Andrew Grant
McKinsey & Company
QUESTIONS ANSWERED IN THIS PRESENTATION: * Why is talent an issue? * What are the underlying talent market dynamics? * What can you do to attract and keep China's best talent? ALTERNATIVE STRATEGIES: * Keeping what you have...retention of current talent: ** S-curve compensation ** Stress opportunities versus compensation ** Long term incentives ** Unlocking the potential of women * Re-wiring the fundamental approach: ** "60% ready" solutions ** University Partnerships ** "Tailored to China" solutions ** Environment matters * Re-tooling your talent engine to manage increased scale and complexity: ** Hot-housing ** Creating the "pre" pathway ** Higher velocity apprenticeship pathways Note: Presentation includes several photos to make a point.
Logistics in China
June 2008
Paul Man
APL Logistics
This presentation by APL Logistics contains an excellent and highly detailed report on the current and forecasted economics and demographics of China followed by a comprehensive description of China's current logistical networks (rail, roads, ports), those that are under development, and the logistical challenges facing its 1.3 billion citizens . (One interesting component of the presentation covers China's preparation for the 2008 Olympics to ameliorate air pollution and traffic congestion.)
IBM Procurement - Global Procurement Centers Overview
June 2008
Dan Meng Zhang
IBM
This presentation covers the following topics: * Global Procurement Centers role in a Globally Integrated Enterprise * What are IBM Global Procurement Centers (GPC) * What do GPC's do? At a glance * Procurement Centers - Location and Country Coverage * Procurement Center Chronology * Procurement Center Evolution * China Procurement Center * India Procurement Center * Hungary Procurement Center * Global Procurement Business Case - HCC Vs LCC * Current Headcount in the Procurement Centers * Center Key Performance Indicators * Procurement Center Productivity & Innovation Strategy Status * 2008 Projections WHAT ARE IBM'S GPC'S? Serve as dedicated Delivery Centers catering to back end source to pay delivery solutions for IBM and our external Business Transformation Outsourcing clients. WHAT DO THESE GPC'S DO? * House multiple procurement competencies * Procurement Operations (PO transactions, Supplier Set up, post PO support) * Customer Care (Call Center, Procurement, Application Support, Account Payables Help Desk) * Tactical Sourcing (Source Selection/Fair value, contract administration and maintenance, SOW etc.) * Sourcing Hub (Strategic Sourcing, supplier relationship management, catalog management, market intelligence, cost reductions) IN ADDITION, THEY: * Are strategically located for cost, efficiency and speed of execution * Serve as a specialized procurement Global Call Center
Cargill Procurement Overview
June 2008
Weicheng Wang
Cargill Investments (China) Ltd.
This presentation focuses upon Cargill's China Procurement Initiatives: * Strategic Sourcing ** Spend Analyze ** 9 Step Sourcing Model * Effective Implementation ** Financial Impact ** Challenge & Actions * Organization Alignment ** Global Organization Structure ** China Procurement Structure ** Definition on Role & Responsibility of Procurement Participants Nine Step Strategic Sourcing Model (Details of each step provided): 1. Opportunity Analysis, Spend Analysis 2. Category Analysis / Deep Dive 3. Develop Strategy 4. Screen Suppliers / RFI 5. Bidding Event / RFx (RFP, RFQ, etc.) 6. Negotiate and Award 7. Contract 8. Implementation 9. External Relationship Management Challenges to Effective Implementation of our Initiatives: * Supplier Management: Highly fragmented spend results in suboptimal leverage and bloated supplier base. * Compliance: Lack of visibility to category spend makes compliance virtually impossible. Actions to Meet these Challenges: * Standardize Procure to Pay Procedure / Process * Integrate Procedure / Process into ERP System The remainder of the presentation provides an overview of Cargill-China's organization structure and their Best Cost Country sourcing model.
Physician Preference Item Management: Buffering and Bridging Strategies
June 2008
Eugene Schneller, Ph.D.;Natalia Wilson, MD,MPH
Arizona State University
While many hospitals and integrated delivery network systems employ value analysis strategies to determine and agree upon equivalencies for physician preference items (PPIs), success in standardization, controlling costs, and overall management of PPIs (PPIM) remains very difficult. Case studies from four best practice hospital systems, HCA-West Florida, Nebraska Orthopaedic Hospital, Resource Optimization and Innovation (ROi)/Sisters of Mercy Health System, and New York-Presbyterian Hospital, reveal innovative approaches to PPIM by the respective hospitals through use of buffering and bridging strategies.
Best Practices for Outsourcing the Sourcing of Indirect Spend
May 2008
Michael Sherman
Ahold USA
We are outsourcing large portions of the sourcing of our indirect spend and want to learn from others who have done similar activities. These indirect goods were managed previously by our internal sourcing professionals who managed sourcing engagements for the users, or stakeholders, of the individual categories. With our new arrangement, an external sourcing professional will manage this engagement. Please help us as we go forward with this outsourcing strategy by responding to the following questions. Questions: 1. Have you outsourced the sourcing of some or all of your indirect spend to a third party? If YES, what percent of your indirect spend is outsourced to a third party? If NO/NONE, you need not continue.) 2. How did your firm decide what indirect spend categories to outsource to a third party and what not to outsource? For example, the category is strategic/non-strategic; internal professionals have inadequate/adequate sourcing knowledge of the category; price and service leverage is gained/not gained by outsourcing; other deciding factors? Please elaborate. 3. What factors did you use to determine if a category was "strategic" or not. Are there examples of this work that you would be willing to share with us? Please elaborate. 4. What type of organization do you maintain within your firm to manage the third party? How many FTE people do you have dedicated to this managerial function? Briefly, what are their responsibilities and titles? 5. How is your third party provider organized to service your company? For example, have they placed resources (people, inventory, etc.) within your firm? If so, please elaborate. 6. Does the third party use a group of centralized resources or just local resources with your firm? 7. What measures define success for the work that is done by the third party?
Strategies for Managing the Prices of Gold and other Precious Metals
April 2008
Jeff McLaughlin
Texas Instruments, Incorporated
With gold prices passing the $900 mark, Texas Instruments is looking for insights into how other companies manage the prices of gold and other precious metals. Questions: 1. How do you manage your direct procurement of gold and other precious metals (palladium, silver, copper) to minimize price increases? Please elaborate. (If precious metals are not categories you or your suppliers consume in significant amounts, please skip to Question #3.) 2. How do you manage your suppliers' prices where gold and other precious metals are a significant component of their production costs? Please elaborate. 3. If precious metals are categories you or your suppliers do not consume in significant amounts, are there other market-driven categories (with volatile prices) that you must manage to minimize price increases? If yes, please identify the category(ies), and elaborate as to how they are managed.
Extent of and Experiences with Centers of Excellence (COEs)
April 2008
Frank Boyer;Patrick Murzyn
EDS
Many companies ask their supply management professionals to perform every phase of category management and other sourcing and supply management activities for their specific category or supported business unit. Although one professional can learn to be effective at ANY activity from supply market analysis through e-sourcing, negotiation, implementation and supplier management, it is unlikely that they are effective at ALL of them. To overcome this deficiency, some procurement organizations have created Centers of Excellence (COEs). Questions: 1. Have you implemented, or are you considering creating, Centers of Excellence (COEs), defined as: Pools of experts providing specific functional execution in support of business owners across multiple categories or business units) around any of the following Supply Management competencies or capabilities? If YES, please respond to Questions 2 - 12. 2. Spend Analysis: If YES, please briefly elaborate. 3. Supplier Market Intelligence: If YES, please briefly elaborate. 4. eSourcing (executing eRFx's and reverse auctions): If YES, please briefly elaborate. 5. Negotiations teams to support category/sourcing experts in negotiating optimal deals: If YES, please briefly elaborate. 6. New supplier/contract implementation: If YES, please briefly elaborate. 7. Catalog operation and item/master data management: If YES, please briefly elaborate. 8. Savings Forecasting/Tracking: If YES, please briefly elaborate. 9. Call center/ticket management to handle level-1 and level-2 support for any all questions, incidents or issues that come up from the client or supplier base: If YES, please briefly elaborate. 10. For any COEs that you have created, have the teams been partially or entirely virtual (team members located wherever they are and report to a COE leader)? or physically centralized (team members doing one function are all located at the same site)? or off-shored (team members doing some of the function from lower labor cost countries)? 11. Other. COEs, not indicated above, you have created or are planning to create: If YES, please briefly elaborate. 12. In general, what has been your overall experience with COEs?
Measuring Purchasing Effectiveness
March 2008
Roberta J. Duffy
CAPS Research
As supply executives try to optimize their organizations and drive more value to the company, they're looking for ways to measure performance, contribution, efficiency, and effectiveness. These measures not only help them assess a current state but provide a context on which to make improvements. This Critical Issues Report, based on a 2007 event in Madrid, discusses several aspects of measurement systems and models, including: what is appropriate to measure, how are measures constructed, what metrics are important, how can measurements be used to drive improvement, can measures impact forecasting, and what are general lessons companies have learned? The Report also includes case examples from three firms.
Best Practices for Electronic Invoicing
March 2008
Lisa Martin;Brian Keenan
Pfizer Inc.
Electronic invoicing is the delivery of invoices, most likely over the internet, to a customer's accounts payable department in an electronic format. In addition to the elimination of mountains of paper, A/P professionals like electronic invoicing because: - It eliminates mistakes due to re-keyed information. - Eliminates delays due to any issues with the postal service. - The ability to use automated workflow to route invoices for approval. - It reduces costs and manual transaction processing. In light of the increasing volume of companies embracing multiple solutions and approaches for electronic invoicing, we at Pfizer propose the following questions in order to gain some insights into best practices: Questions: 1. Does your company currently utilize an outsourced electronic invoicing solution either through a single supplier or multiple suppliers? Please respond according to your current electronic invoicing situation: - If your company does not use electronic invoicing, you need not continue. - If a single supplier is used, please answer questions 3-7. - If multiple suppliers of electronic invoicing are used, please continue with questions 2-7. 2. If your company has more than one e-invoicing provider, how do you divide your suppliers (that e-invoice your company) across multiple providers? What criteria are used? 3. How many electronic invoicing solutions suppliers do you have? 4. Is your electronic invoicing global, regional, or local in scope? 5. Can you describe your current pricing structure (not actual pricing) -- is it a flat fee, cost per invoice, some mix of base fee and cost per invoice, etc.? 6. What is your company's policy on suppliers' compliance to your electronic invoicing process and how do you track and enforce this compliance? 7. In general, what has been your overall experience with electronic invoicing (savings, data quality, supplier compliance)?
Extending an Innovation Culture Across the Supply Chain
March 2008
Michael Thieneman
Whirlpool Corporation
This keynote presentation focused on Whirlpool's formal innovation process that involves everybody in the firm and extends to their suppliers. Whirlpool's definition of innovation is: - Unique and compelling solutions valued by our customers and aligned to our brands; - Creates competitive advantage and/or is a part of a sustainable migration path; - Creates differentiated shareholder value. Next, the journey towards a formal innovation initiative is outlined, beginning with a launch meeting of 20 high-level executives in 2000, followed by the level of resources committed to the initiative (2000-2006), the creation of "I-Mentors", the development of a management system to sustain the innovative momentum, the formation of a Global Innovation Council, a system to track progress, and tools to facilitate innovation. In 2005 Whirlpool's innovation initiative began to show payback, and case studies of innovations in their appliance line are outlined, including "Eggo" a countertop washing machine shaped like an egg. Next, Whirlpool's engagement of their key suppliers in innovation is presented. They target only the most innovative suppliers, train them ion their processes, and give them homework assignments to develop innovative solutions to real problems. To date, over 100 suppliers have been trained and they have produced over 160 innovations. Finally, "Lessons Learned" are presented.
Enabling Innovation in a High Performing Procurement Organization
March 2008
Harlen Pyle;Jose Morales
Accenture, Inc.
Representatives from Accenture were invited to present an overview of their findings regarding innovation in their client organizations. Extensive definitions of innovation are presented including one by Peter Drucker ("Change that produces a new dimension of performance") a dictionary definition ("A new idea, method, or device") and a 4 stage model by AMR Research that defines procurement innovation. Next is a 2-dimensional model that identifies nearly 30 strategic initiatives developed from the 1980's to the present that procurement can contribute to firm-wide innovation, including reverse auctions, green procurement, strategic sourcing process, early supplier involvement, outsourcing, supplier development, and others. Several case examples are provided, including innovation via green procurement, an oil field services company's innovation strategy, and a global bank's use of outsourcing to upgrade its procurement functions. Included are additional models for implementing an innovative culture into an organization are and strategies for involving the supply base in innovation through supplier development initiatives. The presentation ends with a list of "Next Steps: Where Do You Begin"?
Enabling Business Growth - Acquisition Integrations
March 2008
Mike Slomke
Honeywell
Honeywell's strategy for the successful integration of their acquisitions into their Automation and Controls Solution's SBU is presented. Emphasis is placed on the goals and strategy for the integration of procurement functions with acquired entities. "Acquisition Integrations" (the goal is to broaden product and service offerings through acquisitions) is one of six major strategies that Honeywell's procurement group focuses upon to create value by growing revenue, earnings and cash. Management's primary expectations from the procurement group regarding the integration of new acquisitions are: * Material savings (direct, indirect) * Continuity of supply * Working capital improvements * Headcount synergies * Organizational integration and fictionalization Other examples of procurement opportunities from AI are provided, including: * Standardization of contracts * Access to new talent and procurement processes * Supply base consolidation * Price and process benchmarking Next, is Honeywell's model of the six dimensions of procurement integration followed by a model of AI complexity (less difficult to more difficult) in the supply base, systems, spend, sourcing organization, business unit integration, and production footprint. Finally, the presentation ends with a list of 16 "lessons learned."
Acquisition and Transformation - GE Aviation
March 2008
Mike Taylor
GE Aviation
This presentation covers GE Aviation's strategy for the successful integration/transformation of their acquisitions into the parent company. Emphasis is placed on the strategy for the integration of procurement functions from acquired operations. GE's world class supply chain focuses on four areas: Sourcing, Cost Reduction, Process Improvement, and Talent Management, all of which are considered in acquisition integration and transformation. Take-aways/conclusions cited are: * Every acquisition is different with regards to expectations/benefits, company culture, integration leadership, and products/markets; * Every acquisition is the same in regards to the shareholders' expected benefits...1+1=3; * Endorse the change; * Transformation is essential for growth today, it occurs in many ways, and leaders of the transformation must be change agents, and have these traits: have an external focus, be a clear thinker, have an imagination, have courage, be an inclusive leader, and a confident expert.
Supply Collaboration - U.S. Postal Service
March 2008
Susan Brownell
U.S. Postal Service
This presentation covers the United States Postal Service's initiative for collaborating with both internal clients and suppliers to achieve cost savings. A framework is presented for implementing this initiative and the following two case studies present a sampling of the four that are covered in the presentation: Use of Advanced Sourcing Technology for Terminal Handling Services: * Used CombineNet combinatorial optimization software to source 65 THS sites, evaluating over 2,500 bids * Collaborated with business partners and field representatives from each of the USPS Areas * Allowed site bundling to gain visibility into supplier "sweet" spots * Held 2 rounds of on-line bidding and conducted negotiations. * Result: 10.7%, a $70M savings over 6 years compared to historical pricing * Increased small business impact Collaborative Design of Flats Sequencing System: * Integrated team: Engineering, Purchasing, Logistics, Operations, Facilities and Suppliers * Iterative design & development process-simulation, prototype, pre-production, and production * Performance-based requirements: Continual refinements based on cost/benefit/risk analysis * Direct engagement of subs * Spare parts analysis * Value Engineering * Result: >$100M savings
Sustainability: A Role for Strategic Sourcing?
March 2008
Scott Montgomery
Cargill, Inc.
This presentation details Cargill's strategies for environmental sustainability as well as their overall social responsibilities as a food producer. Cargill defines sustainable agriculture as follows: Sustainable agriculture will meet the needs of the present while improving the ability of future generations to meet their own needs by: * Increasing productivity to meet future nutritional needs while decreasing impacts on the environment * Improving human health through access to safe, nutritious food * Improving the social and economic well being of agricultural communities Included in the presentation are their suppliers' extensive responsibilities towards the environment. Further, the role of sustainability in their strategic sourcing process is outlined. Included in this outline are the assigned roles, qualifications for these roles, and responsibilities for Cargill's: * Supplier Relationship Managers * Subject Matter Experts * Business/Functional Stakeholders
Innovation that Matters...for Companies and the World - An IBM Viewpoint
March 2008
Kathy Fuller
IBM Corporation
This keynote presentation discusses IBM's rigorous process for continuous innovation. Described are their on-line "ThinkPlace," an electronic suggestion box and their annual "lnnovationJam", a world wide innovation event. Here are the attributes of "ThinkPlace": * Demonstrates that every IBMer can be an innovator * Surfaces innovative solutions to specific challenges * Open, collaborative global forum * Creates a culture in which collaboration and interaction across silos is essential for innovation * Rewards innovators and innovative ideas in tangible, visible ways * Facilitates exchange of "smaller" ideas Innovation-Jam 2006: * A 72-hour "jam" session - there were 150,000 participants in 104 countries * 46,000 ideas contributed * $100M investment needed to bring 10 innovative ideas to reality, as follows: * Near-term: ** Smart Healthcare Payment Systems ** Simplified Business Engines ** Real-time translation Services * Mid-range:: ** Intelligent Utility Networks ** 3D Internet ** "Digital Me" ** Branchless Banking for the Masses ** Integrated Mass Transit Information System * Blue-sky: ** Electronic Health Record System ** "Big Green" Innovations Finally, the presentation covers IBM's supplier collaboration initiatives, providing examples of telecommunication innovation with a Canadian firm, and logistics network optimization in Europe.
Supplier Relationships - Rolls-Royce
March 2008
Beverly Gaskin
Rolls-Royce plc
This presentation describes the processes that Rolls-Royce developed and used to move from adversarial relationships with their suppliers to one that embraces cooperation and collaboration. Included are their seven principles for best practices in sustaining strong ties with the supply base, as follows: * High performance is critical to sustain relationships * Mutual respect and benefits are the foundation of all supply chain relationships * Joint innovation and improvement achieve more than individuals working alone * Clarity of purpose and transparency of process are essential if we are to successfully work together * We will have the right people empowered to do the job - and doing it * Two-way quality communication that meets the needs of both parties is fundamental to effectiveness * Short-term or opportunistic actions that hurt either party are counter-productive to the health of our key relationships In addition, Rolls-Royce aspires to be their suppliers' favorite customer by: * Being the best customer their suppliers deal with * Creating a more supplier-focused organization that can develop strategies and plan and execute them jointly with suppliers * Working closely with suppliers to achieve the change suppliers and Rolls Royce want to see. Finally, future requirements for customer-supplier success are noted: * Less complex organization and supplier interfaces * Developing and deploying clear commodity and supplier strategies enabling earlier supplier involvement * Improving skill set of purchasing professionals * IT improvements - global supplier portal developed and being deployed * Measuring performance by Total Cost * Engaging with suppliers, recognizing their needs and the value of strong relationships * Healthy dose of respect for one another
General Mills' Sustainability
March 2008
Dave Sorensen
General Mills, Inc.
This presentation outlines General Mill's strategies for environmental sustainability. An extensive definition is given for sustainability as well as specific activities performed by them and their suppliers and major customers. First, the presentation outlines what sustainability means to General Mills: * Going beyond compliance with applicable environmental requirements and delivering sustainable business value. * Minimize any potential adverse environmental impacts associated with operations through: ** Reduction of water and energy use ** Control of air emissions and wastewater discharges ** Proper management of potentially hazardous materials ** Minimization of solid and hazardous waste generation ** Prevention of spills or releases * Encourage supplier social responsibility on labor laws and environment ** Statements included in Terms and Conditions ** Labor Law Commitment Letters ** Environmental Champions Supplier Sustainability Program * Provide Sustainability Leadership to major customers and industry associations such as: ** Wal-Mart ** Grocery Manufacturers Association ** Suppliers General Mills has a long History of Sustainable Activities: (Reduce, Reuse, Recycle) Here are the additional steps taken since 2002 to elevate General Mill's sustainability focus: * Created Corporate Sustainability Officer. * Researched GM's use of raw materials, energy consumption, impact on air and water from manufacturing, materials used in packaging. * Benchmarked current sustainable development programs in food and other manufacturing industries. * Advanced GM research knowledge base for developing sustainable products and packaging. * Improved plant operations reporting of continuous improvement to minimize environmental footprint. * Established WWS program with major suppliers to understand their commitment and performance of their respective energy management systems. * Surveyed and received Supplier Commitment Letters on their Labor Standards Compliance. * Created an internal Online Sustainability Development University for GM employees for better understanding of sustainability in the food industry. * Included Statements on Labor Standards and the Environment in GM's Purchase Order Terms and Conditions. Next, examples of specific environmental sustainability actions are presented, followed by a description of their Supplier Sustainability Program.
Third-Party Risk Management
March 2008
James Ward
Eli Lilly and Company
This presentation explains Lilly's formal process for identifying, assessing, mitigating and managing the potential risk of third parties (suppliers). A step-by-step process of this initiative and their time frame for full implementation is shown. The process' steps are: * Identify potential risk associated with a supplier * Assess the probability of the risk occurring and its impact: ** What would the impact be if the event did occur? ** What is the probability of occurrence? ** What mitigating factors are already in place? ** What is the overall score for each criteria? * Accept the risk or mitigate the risk ** All mitigation plans consist of: *** Description of risk *** Priority rating *** Proposed solution *** Solution owner *** Timeline * Communicate to stakeholders: ** All decisions to accept or mitigate risk are communicated to: *** Line management *** Support functions *** Third-Party Governance team *** The Board of Directors
Expenditure Approval Processes and Cycle Times
February 2008
Terry Kiefl
NAV CANADA
NAV CANADA is interested in streamlining its administrative processes. Currently we are focusing on the steps and cycle time pertaining to the approval process for expenditures for capital goods and operating dollars. For NAV CANADA we currently require initial approvals of expenditures by the responsible party and by our finance group. This is followed by an additional required approval prior to our ultimate commitment to a contract with a supplier. To us this last approval step seems to be redundant. Thus, we are very interested in understanding best practices around reducing non-value added steps and cycle time for the approval process. Questions: 1. Briefly, what is your approval process(es), including steps, internal functions or organizational units involved, and average cycle time(s)? (If available, please attach a flow chart or other document that describes your approval process(es).) 2. Are there different processes for different dollar amounts? Please elaborate. 3. Does your firm have a separate signing authority for the contract after securing the initial approval(s) for expenditures? Please elaborate. 4. What is the highest dollar value that can be signed by your contracting function?
Inventory Verification and Management Processes
January 2008
Jim McQueeney;Jake James
Gulfstream Aerospace Corp.
Gulfstream Aerospace is always engaged in continuous improvement initiatives. They are currently interested in obtaining information from other CAPS Research CPOs on best practices in regards to verification and management of inventories. 1. How do you formally classify your inventories of parts (or items, components, categories, or commodities)? ABC Classification? Pareto 80-20 classification? Other classifications? Please elaborate, including your classification break points for A, B, and C categories, or other classification methods, (e.g., A items are 10% of items, but account for 60% of the total value of inventory of items; B's are 40% of items, 30% of value; C's are 50% of items, and 10% of value.) 2. If you classify, for inventory management purposes, how do you assign a part to a classification? For example, by individual part value? By total value of the inventory of the part? By ship-set quantity and dollar value? By degree of criticality of the part to sustain production? Other or some combination? If you do not classify, please indicate here, and please continue with Question # 3. 3. Do you conduct a complete physical inventory count, or do you perform cycle-counts? Please elaborate on the methodology used, including if the activity is outsourced or done internally? 4. Do you have an electronic cycle-counting system? If so, please elaborate on its value. 5. Do you conduct "blind" counts? 6. Do you use "eye-balling", scales, or other methods to count large quantities? If so, which method(s) and for what quantity and/or dollar thresholds?
An Investigation of Supplier Development and Its Role in New Product Development
January 2008
Daniel R. Krause;Stephan M. Wagner
Queen's University Belfast;WHU - Otto Beisheim School of Management
New product development is one area in which firms look to gain competitive advantage. Engaging in innovative activities to produce new products or upgrade existing ones can differentiate a firm from its competitors and/or increase profit margins. Suppliers can be involved at the stages of concept, design, prototyping, process development, and product release. This research examines German industrial firms' new product development processes, the importance of suppliers in these processes, and how organizations try to influence supplier performance. It compares buying firms' efforts to influence supplier performance through supplier development efforts during the new product development process.
Warranty Tracking Processes
January 2008
Patty Toenies
Xcel Energy Inc.
Xcel Energy's Supply Chain department is continuously focusing on providing value to their internal customers through the entire plan-to-pay cycle. One area they have identified as a potentially large value adder is warranty tracking. (For Xcel Energy this means tracking warranties for turbines, generators, boilers, maintenance services on all of these pieces of equipment, and other capital equipment.) Xcel would like to know if your organization currently tracks warranties resulting from your contracts with suppliers through either a manual process or by utilizing specific software or other applications. 1. Does your company have a formal system or process for tracking warranties? If YES, please continue. If NO, please go to Questions 5 and 6. 2. What metrics do you track? (e.g., warranty start date, warranty end date, number of times warranty is utilized, cost of the warranty, costs of having an expired warranty, savings from utilizing the warranty, etc.) 3. How do you track warranties? Do you use a warranty tracking system provided by an outside software supplier or do you use general purpose software programs such as spreadsheets or databases? If you use a system provided by an outside software supplier, who is the supplier? 4. Who (or what function?) inputs the data to your warranty tracking system? 5. Do you have a formal or informal process (manual or automated) to periodically review warranty expiration dates? If NO, how do you keep track of warranties that are still in force or have expired? 6. Do you have any further INSIGHTS regarding warranty tracking?
Shared Services Centers Benchmarking Metric Report 2007
December 2007
Benchmarking Team
CAPS Research
The operational impact of employing a Supply Management Shared Services Center (SMSSC) may result in achieving a desired level effectiveness at the lowest operational costs through consolidation. This report looks at standardized processes, organizational structure and SMSSC quality metrics.
The Supply Manager's Role in Corporate Social Responsibility Among Japanese Companies
December 2007
CAPS Research - Japan
CAPS Research
This research report examines to what extent Japanese companies, and specifically supply managers, are engaged in corporate social responsibility activities. CAPS Research Japan, authors of the study, based its work on the Institute for Supply Management (ISM)'s concepts and research of corporate social responsibility, which includes seven main focus areas: community, diversity, environment, ethics, financial responsibility, human rights, and safety. Data includes the level of activity in each area, a comparison between ISM's study results and Japanese study results, and a discussion of social responsibility's integration into company culture.
Policies Limiting the Length of Assignment of Contract Labor Personnel
December 2007
Mark White
United Space Alliance, LLC
In the wake of the Vizcaino v. Microsoft case, some companies developed policies limiting the length of assignment of contract labor. These term limits were viewed as a way to protect against the "common law employee" scenario that led to the retro-active benefit claims under Microsoft's retirement and welfare plans. We at United Space Alliance are interested in an exchange of information regarding the length of assignments for contract labor personnel. Please comment on the following questions: 1. Do you differentiate between contract labor agreements (services obtained through staffing agencies to augment in-house capabilities necessary to fulfill or meet temporary workload conditions and perform under the direction and supervision of the company) and professional service agreements (services obtained under an agreement or contract containing a Statement of Work, or SOW, and performed under the direction and supervision of the contractor)? 2. Do you limit the duration that contract labor personnel are permitted to work for your organization? If so, what is the limit? 3. Do you limit the duration employees are permitted to work on a professional services agreement? If so, what is the limit? 4. Do your agreements with the contract personnel state they are not employees of the company, but are employed by the third party staffing agency? 5. Are contract labor personnel required to sign a form in which they expressly waive any right to participate in any company benefit plans, policies and programs of the company? If appropriate, please attach a sanitized copy of your form. 6. Do you have any further experiences, references to past litigation in this area, or suggestions concerning contract labor agreements and policies?
Creating A Procurement Shared Services Center
December 2007
Anna E. Flynn, Ph.D.
Thunderbird School of Global Management
This paper discusses various approaches to structuring a procurement shared services center to better manage some or all of an organization's spend. It addresses the questions of: what is the value proposition for a shared services model (costs and benefits); what organizational models are being used; and what are the challenges when designing, developing, and maintaining a shared services procurement organization. Based on a CAPS Research event at The Boeing Company Inc., it includes three case studies.
eSourcing and eProcurement Benchmarking Metric Report 2007
November 2007
Benchmarking Team
CAPS Research
A comprehensive look at how different organizations use eSourcing and eProcurement tools and technologies including the amount of associated spend. The report references eReverse Auctions, eMarketplaces/Exchanges, eRFx tools and Supplier Portals. The report also includes a Manufacturing/Non Manufacturing comparative of eSourcing and eProcurement tools.
Supplier Diversity Programs Benchmarking Metric Report 2007
November 2007
Benchmarking Team
CAPS Research
A comprehensive look at trends and directions in supplier diversity programs. The report includes benchmarking data on supplier diversity program goals and awards; policies, procedures and expectations; outreach events; and which tools and technologies are being used to help identify and qualify new diversity suppliers.
Developing a Total Cost of Ownership Platform
November 2007
Marc Ensign
Sonoco Products Company
Sonoco is interested in developing a formal Total Cost of Ownership (TCO*) platform which would become a routine part of their sourcing decision-making process. This platform would formalize the inclusion of lifecycle cost implications (such as expected poor quality costs, value of supplier support and services, total logistics costs, inventory holding costs, etc.) in the procurement and consumption of goods and services. Their questions relate to experiences you may already have had in this area that would help guide our development of a TCO platform. * TCO defined: The combination of the purchase price of a good or service and additional costs, direct and indirect, incurred before, during or after product or service delivery. Costs are often grouped into pre-transaction, transaction and post-transaction costs, or into acquisition price and in-house costs. 1. Does your company have a formal Total Cost of Ownership (TCO) platform or program? If YES, what cost components (direct, indirect, hard and soft costs) do you include in your TCO platform? (If NO, why has one not been developed?) 2. Who/what function leads the TCO initiative within your company? What other functions are involved? 3. How long have you had your TCO initiative in place, and what drove the need for its development? 4. As a result of using your TCO methodology, what changes have you seen in the types or amounts (%) of typical cost savings that have been realized by your procurement/supply management group? 5. If you were to start your TCO initiative over again, what, if anything, would you do differently? 6. If the answer to Question 1 is YES, are you willing to participate in a more detailed benchmarking discussion?
Obtaining Consideration for Late Delivery
October 2007
Susan Brownell;Mark Travers
United States Postal Service
The Mail Equipment Portfolio and Automation Category Management Center of the United States Postal Service's Supply Management organization seeks industry feedback on the following questions concerning practices for obtaining monetary or in-kind consideration for late supplier delivery. Consideration, as defined in this context, is something of value received from the supplier in lieu of the purchaser terminating the contract for breach. A planned outcome of this activity is the standardization of the aspects and factors that should be considered by the Postal Service in negotiating consideration for late delivery. 1. Does late delivery occur frequently within your supply chain and industry area, and do you consider it a significant problem for your operations? 2. Does your organization have established guidelines or contracting procedures for seeking consideration from suppliers for late delivery? If yes, please briefly describe the guidelines or procedures. If no, explain why you haven't implemented this practice (e.g., costs outweigh benefits). 3. Does your firm extract monetary or other in-kind consideration for late delivery, or both? If in-kind, please describe the types of consideration accepted.
Cross-Industry Metric Report October 2007
October 2007
Benchmarking Team
CAPS Research
Cross-Industry Reports include key performance indicators from different industry groups. The survey process is relatively constant, ensuring that the KPIs can be measured year-over-year.
Succeeding in a Dynamic World: Supply Management in the Decade Ahead
October 2007
CAPS Research;A.T. Kearney, Inc.
CAPS Research;A.T. Kearney, Inc.
What could change in the decade ahead and how might those changes affect the future of supply management? CAPS Research, A.T. Kearney, and the Institute for Supply Management (ISM) have just released a research study entitled "Succeeding in a Dynamic World: Supply Management in the Decade Ahead" that provides some answers. The study found that over the next ten years, business will be buffeted by strong forces of change including globalization, new demographics, natural resource constraints, heightened environment concerns, shifting consumption patterns, regulation and activism, technology and innovation, and the possibility of high-impact disruptive events. Business models and strategies will change as companies pursue new revenue streams, further squeeze costs, lean-out their asset base, and reshape their capital structures to meet the opportunities and threats that lie ahead. In turn, CEOs will ask supply to take on a broader, more strategic mission, to embrace a more comprehensive set of goals, and to deliver a higher level of performance. Supply management will be expected to deliver more innovation from suppliers, contribute more broadly to revenue generation, anticipate and monitor supply risk to ensure business continuity and sustainability, and expand the breadth and impact of cost management efforts. The study concluded that success will be based on how well supply executives plan and execute in seven critical areas: (1) developing forward-looking category strategies, (2) engaging, developing and managing key suppliers, (3) designing and operating multiple supply networks, (4) leveraging technology enablers, (5) collaborating internally and externally, (6) attracting and retaining supply management talent, and (7) managing and enabling the future supply organization globally.
Pfizer's Transformation
September 2007
Thomas Donatelli;Philip Presti
Pfizer Inc
Pfizer, the pharmaceutical giant, uses this presentation to discuss their transformation of the procurement role. Due to both internal and external forces, new CEO Jeff Kindler outlined a new vision for a global One Pfizer, which required a shift in thinking to worldwide procurement (WWP). WWP was developed to streamline operations in order to help transform the business. Through the use of several spend management and sourcing strategies, they are able to attain global sourcing effectiveness. They also look to non-traditional areas for value savings, such as legal and marketing. This great transformation is gaining traction throughout the world, and is working to optimize all processes and systems. The tool that helps them do this is the Ariba Suite for e-sourcing and reverse auctions. The presentation concludes with Pfizer's key success strategies.
Rolls-Royce Supplier Relationships - The Journey
September 2007
Kathi Bridgewater
Rolls-Royce Corporation
In this presentation, Rolls-Royce discusses the importance of supplier relationship management. Because of issues such as a lack of trust and inconsistent capabilities, Rolls-Royce created the Working Relationships Program in 2004 to mitigate these problems. Although not all of the problems are solved, they have identified their vision and value proposition, which should set them up for future success. The presentation then provides specific focus examples, such as the technical interface workstream, working relationship deliverables, and training courses.
Managing Supplier Relationships at Merck
September 2007
Mike Cargiulo
Merck & Co., Inc.
This presentation begins with a background of Merck in the medical research and pharmaceutical industry. The vision of their global procurement is, "Challenge internally & optimize externally to deliver breakthrough business solutions that enable Merck to Win." They do this through a five step procurement process. The fifth stage includes supplier value management, which drives increased value from selected suppliers. This is one of the most important stages, so Merck created the SVM Program which has, among other things, performance metrics in the form of a scorecard for suppliers. Merck also segments their suppliers into groups such as Select, Key, and Strategic. The presentation discusses the supplier scorecard further with visuals, and concludes with a list of benefits of the SVM Program.
Strategic Sourcing Plan at Intel
September 2007
Kinnar Ghiya
Intel Corporation
In this presentation, Intel begins with a background of the presenter and the company. Intel's procurement organization is responsible for all direct and indirect materials / services that support Intel Products, functions and employees. Materials sourcing is based on cost, quality, availability, and technology. Intel's strategic sourcing process is considered a long-term goal, with a range of approximately three years. The SSP process is a closed-loop system that includes the global source teams. The presentation includes blank example slides that could only be obtained at the original presentation at the Best Practices Workshop 2007.
Capital Sourcing Wizard: Technology Enabling Through Collaboration
September 2007
Martha Currea
General Mills
General Mills begins this presentation by sharing the importance of capital sourcing. Capital sourcing's mission is to partner with engineering to mitigate risks and optimize the total value. General Mills found that the best way to allow this collaboration is with the use of the Capital Sourcing Wizard. The wizard helps influence engineering sourcing, as well as encourages collaboration between sourcing, engineering, and legal. The presentation concludes with a visual demo of the Capital Sourcing Wizard.
Attracting, Developing & Retaining Talent
September 2007
Marc Ensign
Sonoco
In this presentation, Sonoco begins by giving an overview of their company in the packaging industry. The presentation then gives an introduction to why it talent retention is an important topic. By the year 2020, there will be one person entering the workforce for every two leaving. This means that the changing demographics are beginning to cause a shortage of skilled labor. At Sonoco, Talent Management consists of sourcing, selecting, developing, and retaining. Sourcing can be externally focused or internally focused and emphasizes a relationship development with competent labor sources such as universities. Selecting consists of recruiting through a formalized HR interview process. Developing is done through new employee training, quarterly talent evaluation, and annual training. Finally, retention is ensured by an employee-focused culture and operating style, a focused rewards program, and an employee satisfaction team.
Responding to Market Change at Intel
September 2007
Judy Wente
Intel Corporation
Intel begins this presentation by looking at the S-curve that can be seen both in the computer industry and in Intel's revenue. The important part of the S-curve is its inflection point, because it marks the moment when an organization has reached its limits of adaptation. To give an example, they show two companies: one who adapted and took the business in a different direction when they saw this, and another that stood firm. Not surprisingly, the more flexible business has grown, while the firm business lost its revenue and was eventually broken up and sold off in parts. This made Intel decide to actively seek out new ideas. Through a thorough look at the factors in purchasing, they realized that due to bureaucracy, an expanding scope, and a loss of clear definition, the problem was internal. They responded immediately, reducing the size of the organization by approximately 30%. Of course, this created new challenges that needed to be dealt with. Over the next three years, there are five key strategies that have been the basis for action. Although they have made good steps, they still have a long way to go.
10X Executive Assessment - Application and Supply Transformations
September 2007
Robert M. Monczka, Ph.D.;Kenneth J. Petersen, Ph.D.
CAPS Research;Colorado State University
Preliminary insights from the 110 assessments completed by companies using 10X Executive Assessment tool. The presentation included a side-by-side live demonstration and explanation of the 10X Executive Assessment tool and discussion of the possible applications of the tool within companies.
China Export VAT Rebate Reduction - Strategies for Price Increase Mitigation
September 2007
Keith Weber;Charles Zheng
3M
China reduced its export VAT rebate on 2,831 export commodities effective July 1, 07. The rebate reduction ranged from 2%-13%. The commodities impacted represent 37% of total harmonized codes. We have already received price increase requests from several Chinese suppliers because of this policy change. We would like to know how other companies are dealing with this policy change and the best practices to mitigate the potential price increase from Chinese suppliers. 1. Have you already received price increase requests from your Chinese suppliers due to this policy change? 2. What are the key mitigation strategies you are implementing (or plan to implement) to push back these price increases? 3. Which internal functional area(s) (e.g. Finance, Tax, Legal, Manufacturing) you are working closely with to develop and implement your mitigation strategies? 4. Do you have a focal point person/team to coordinate and assess the impact of the change in VAT rebates and develop mitigation strategies, OR does each commodity team deal with the changes separately? 5. How do you rate the effectiveness of your mitigation strategies so far (please rate 1-5, where 5 is the most effective). 6. As China continues to curb its growing trade surplus, more policies might be forthcoming that will increase export prices. What is the process you have in place to deal with these potential policy changes from China? 7. As supply chain and source of supplies for many companies become more global, what is the intelligence process you have in place to forecast/predict policy changes from different countries on a global basis?
Cell Phone Cost Challenges and Policies for International Calls
September 2007
William Antonace
Celanese Corporation
International travelers are using their US cell phones while abroad. The roaming charges for calls back to the US are between 50 cents and several dollars per minute compared to 5 cents per minute within the US. When in the US, cell phone users calling abroad also have to pay significant international charges. Celanese would be interested in an exchange of practical experiences, best practices, problems and issues with solutions and other thoughts and ideas. Here are a few approaches to managing international cell phone usage. 1. Calls from abroad while in hotels: Use calling cards; send e-mails back home and ask for callback on a land line (costs: < 10 cents/minute); or Vonage / Skye phones over internet. 2. Calls from abroad not from hotels or office: Use local cell phones; or use local SIM-Chips in US cell phones (Note: Most US cell phone providers do not allow and/or block the usage of other network providers' SIM chips.) Estimated cost is 10-20 cents/minute. 3. International calls from within the US: Calls rerouted through home PBX. Cost: Landline charges + US cell phone cost; or VOIP calling from Blackberry or similar devise. Cost: Several cents per minute plus some quality issues. 4. Do you have any further insights, experiences or recommendations for managing the cost of international cell phone usage?
Achieving World-Class Supply Chain Collaboration: Managing the Transformation
August 2007
Stanley E. Fawcett, Ph.D.;Gregory M. Magnon, Ph.D.;Jeffrey A. Ogden, Ph.D.
Brigham Young University;Seattle University;Air Force Institute of Technology
As firms examine their supply chain management models for ways to be more competitive, the nature of the discussion often turns toward collaboration. The authors of this study define supply chain management as "the collaborative process and project management to meet the needs of end-customer efficiently and effectively." However, despite efforts by firms to work toward this goal, this research suggests that few are fully able to grasp the nature of collaboration and what it takes to achieve a true collaborative capability. This study details how proactively firms are engaged in supply chain collaboration; the drivers for it; how well firms balance the driving and resisting forces of achieving higher levels of creative collaboration; and whether or not a roadmap can be developed to manage the transformation to true collaborative supply chains that can be competitive. Note: This Focus Study was slightly modified in March 2008 to amend some minor data points, which did not affect the overall conclusions and themes of the work. Please disregard any version you may have downloaded in 2007.
Mining Metals Industry Benchmarking Metric Report 2007
August 2007
Benchmarking Team
CAPS Research
The Mining Metals Industry Benchmarking Metric Report 2007 contains key supply management performance measures including organizational structure, professional development, financial information and supplier relationships and alliances.
Formal Processes for Determining Internal Customer/Client Satisfaction with Supply Management's Services
July 2007
Marc Ensign
Sonoco Products Company
One of Sonoco's Supply Management's key initiatives is to improve communications both internally and externally across the company. They have formed a team to develop an internal customer/client satisfaction survey to be used on a regular basis to assess how our various business units feel Supply Management is/is not supporting their needs. 1. Does your company have a formal process which allows your internal customers/clients to periodically evaluate your supply management organization's performance? If NO, please go to Question #5. If YES, will you please share your process with us? (In addition, if appropriate, I would especially appreciate it if you could attach a (sanitized) copy of your assessment tool or survey instrument to your response.) 2. For your process, what are the key criteria that you are using to determine internal customer/client satisfaction (e.g., productivity, delivery; quality; cost savings, responsiveness, etc?) 3. Which internal customers/clients routinely assess your performance? Individual users of your services? Plant Managers? General Managers? Others? Do you use the same process to get feedback from each of these levels in your company? 4. If you have an internal customer/client satisfaction gathering process would you be interested in discussing your process through a conference call? If yes, please provide contact information. 5. If you do not have a formal survey process, why? What process, if any, are you using to measure your performance?
E-Tool Optimization
July 2007
Roberta J. Duffy
CAPS Research
If the big question from the last decade was: What are e-tools and what are their features? Then, the question facing supply management professionals today might be best summarized as: How do we ensure we're getting the most out of the e-tools available? When you couple the multiple uses for e-tools with varying agendas that each segment of the business might have, the supply management professional must set some priorities about using e-tools and the resources they require. This report, based on a CAPS Research Critical Issues Partnership event co-sponsored by Philips Lighting Company, examines the drivers and value proposition for e-tool initiatives; examples of the most common tools being employed; setting priorities for e-tool projects; and lessons learned from e-tool implementations.
Strategic Sourcing: Lessons from Outside Healthcare
July 2007
Eugene S. Schneller, Ph.D.;Christopher Sundaresan, M.D., MHSM, MBA;Natalia Wilson, M.D., MPH
Arizona State University
The aim of this paper is to provide a tool to help determine a sourcing strategy for health care delivery organizations (HDO) based on the organization’s goals, mission, role in the community and the structure and resources within the organization. We will discuss and define strategic sourcing, mention the advancement within strategic sourcing in various industries with a view towards implementation in the healthcare industry and list the unique features of the health care supply chain that have to be considered during implementation. We will conclude with two activities that will help organizations improve the sourcing process: (1) scenario analysis of different approaches towards supply chain management and (2) an assessment of where your organization is in relation to best practices in strategic sourcing.
Outsourcing Dependency
June 2007
George Zhu
Brocade Communication Systems, Inc.
Brocade begins this presentation with a definition of outsourcing. They then discuss the many differences between outsourcing and purchasing. Many facets of a business can be outsourced, such as human relations, manufacturing, and logistics. Within the Electronics Manufacturing Services (EMS) industry, many well-known brands utilize EMS outsourcers. The presentation includes a list of the top 10 EMS outsourcing companies, as well as the drivers for outsourcing. A list of the potential benefits and issues from outsourcing is also included. One of the biggest outsourcing issues is dependency. If you are dependent on the EMS company, you will be at a disadvantage. To further explain dependency, Brocade uses Transaction Cost Economics (TCE). TCE is based on the cost of using the price mechanism, which helps analyze transaction uncertainty, frequency, and asset specificity. The presentation concludes with a case study of an anonymous company.
Sourcing Opportunities - Industrial Clusters in China
June 2007
Joe Maher
Li & Fung Limited
The presentation discusses the use of industrial clusters by Li & Fung of China as a source of competitive advantage for their trading company. Industrial clusters are geographic concentrations of interconnected enterprises in a particular field that share related production inputs, specialized labor pools, distribution and communication channels, and network association. An example of a textile and garment industrial cluster is provided. The impact of this new textile and apparel regime on sourcing in China is discussed.
The Human Factors in Managing China Supply Chain
June 2007
Kevin Hou;Tony Wai
Nokia (China) Investment Co. Ltd;SCMC Ltd.
Nokia uses this presentation to discuss the importance of the human relationship in managing a supply chain. This concept is hard to understand by people outside of China. However, because a supply chain is managed and operated by a supplier, and thus has exposure to human error, this is very important. Through openness and trust, as well as ownership and accountability, the errors can be mitigated. Currently in China, there is a massive urbanization taking place, and as a result there is an imbalanced wealth distribution. The presentation then discusses how to deal with certain people in the supply chain, consisting of authorities, suppliers, employees, and corporate peers. One of the biggest problems with local suppliers is a lack of reliability. A "yes" does not always mean yes, and they have no accountability for their products. That's why it is important to work with the suppliers, as well as always have a backup supplier. Some other issues specific to China are fabrication of the truth, lack of a sense of law and penalty, and loopholes in regulations. However, with team work and cooperation, you can build trust with your suppliers to improve this.
How to Implement TPS in China
June 2007
Susan Wei
VOLVO Construction Equipment (China)., Ltd.
This presentation begins by discussing Volvo's supplier development process. The development process consists of quality development and improvement. Supplier improvement uses 10 tools that result in a Supplier Evaluation Model. The presentation then discusses the steps required to implement TPS in suppliers.
Best Practices for Hiring Staff in Advance of Actual Need
June 2007
Marc Ensign
Sonoco Products Company
This set of questions and responses focuses on best practices relating to hiring employees in advance of their actual need. CPOs shared their experience in this area including where to find resources, how to determine how many people to hire in advance of the actual needs, how to justify advanced hiring, etc. Questions: 1. Do you have experience doing this type of hiring in advance of need? 2. Did you use a ratio of any sort to determine how many people you should add to the organization in advance of an opening? How long in advance of the need did you hire additional people? 3. In your process, what did you have these "spare" people do while waiting for a regular position to open? For example, had them work in a specific low-dollar or low coverage spend category? Training? Shadow an experienced person? 4. How did you justify this hiring rationale, and did you find the results matched the expectation? 5. Are there other innovative methods you have used to fill your people hiring pipeline?
Utilities Industry Benchmarking Metric Report 2007
June 2007
Benchmarking Team
CAPS Research
The Utilities Industry Benchmarking Metric Report 2007 contains key supply management performance measures including organizational structure, professional development, financial information and supplier relationships and alliances.
Best Practices for Sourcing Low-Tech Services for Facilities across the Nation
May 2007
Susan Brownell;Viney Kaul
U.S. Postal Service
The U.S. Postal Service is interested identifying best practices for outsourcing services such as janitorial, landscape maintenance, and snow removal for small, medium and large facilities that are, as is the USPS, spread across the nation. In addition, they would specifically appreciate your insights on how best to evaluate the effectiveness of different types of snow removal practices. Finally, what, in your experience, is the pricing method/structure that results in lowest total cost for this service? Questions: 1. How does your company contract for such services as janitorial, landscape maintenance, and snow removal when you have multiple facilities that are located across the nation? National contracts? Regional contracts? Local contracts? A mix, depending on what variables? Please briefly elaborate on the process used to identify and award these contracts. (e.g., bidding event, reverse auction, single source for leverage, long term contract, etc.) Janitorial? Landscape Maintenance? Snow Removal? 2. With regards to snow removal services, how do you evaluate the effectiveness of different snow removal practices? Briefly, what, in your situation, are these different practices? 3. Continuing with snow removal services, in your experience, what pricing method results in lowest total cost for this service? Examples: Annual or seasonal fixed price? Fixed base plus variable price per removal? Pay strictly on a per activity basis with a negotiated hourly rate? Some other pricing method? Please elaborate.
Diversified Foods and Beverages Industry Benchmarking Metric Report 2007
May 2007
Benchmarking Team
CAPS Research
The Diversified Foods and Beverages Industry Benchmarking Metric Report 2007 contains key supply management performance measures including organizational structure, professional development, financial information, technology and supplier relationships and alliances.
Chief Purchasing Officers' Mobility Compensation Benchmarks and Demographics: A Study of Fortune 500 Firms
May 2007
Thomas E. Hendrick, Ph.D.;John Ni
Arizona State University
To track mobility, the authors examined careers, functional experiences and educational paths that CPOs have taken to get to their current positions. Demographics and compensation information was collected to analyze salary, bonus and benefit trends. The focus study shows that, in 2006, the average CPO's salary (inclusive of bonuses and benefits) was $380,818; average age was 49; average tenure in current position was 2.81 years. This focus study also provides career paths of 12 individuals, detailing position and tenure.
Talent Development for Purchasing Professionals - Procter and Gamble
March 2007
Rick Hughes
The Procter & Gamble Company
This presentation addresses Procter and Gamble's approach to talent management and development. Separate sections of the presentation address P&G's talent development approach, competency areas, skill mastery system, and recruiting talent system.
Supply Management in the Decade Ahead
March 2007
Phillip L. Carter, D.B.A.;Robert M. Monczka, Ph.D.;Joseph R. Carter, D.B.A., C.P.M.;Thomas H. Slaight
CAPS Research;Arizona State University;A.T. Kearney, Inc.
CAPS Research, A.T. Kearney and the Institute of Supply Management have once again explored the future direction of supply management. The objective of the research was to find answers to these questions: (1) What external forces will have the greatest effect on business over the next ten years? (2) How will business models change as a result of these forces? (3) How will the mission, goals, performance expectations and strategies for supply management change to support these new business models? More than 260 companies from North America, Europe, Latin America and Asia/Pacific participated in the 2007 research. About two-thirds of the participating companies came from manufacturing industries, while the rest were from service industries. This presentation distills the main findings and recommendations of the research.
Global Integration of Procurement
March 2007
Louis R. Ferretti
IBM
Global integration of procurement is a new, critical way to do business at IBM. The deepening of global trade, capital and information flows, enabled by a "flat world," is changing where and how business value is created. This is driven by the core principle of global integration, which is shaped by three forces: economics, expertise, and open business environments. As part of implementing a globally integrated business model, IBM has been on a transformation journey to turn their supply chain business operations into strategic competitive advantage. Since 1993, IBM procurement has reinvented itself to increase its impact and relevance to IBM as a business. They executed their transformation in multiple phases -- foundation, transforming the enterprise, e-business, and on demand business. IBM also established a framework for gaining procurement results; they applied a strategic sourcing methodology to all of their indirect and direct spend; their global sourcing councils develop comprehensive strategies and supplier relationships for each category; they deployed strategic Global Sourcing Councils as the core of their business design; their Commodity Councils are now global in scope; they deployed one common procurement process worldwide; and they established Global Sourcing Priorities. They also established Client Services Procurement Support Model to integrate with clients to enhance value and to interface with procurement to leverage breadth. IBM also has consolidated a portfolio of activities into three low cost, efficient procurement centers to support their global requirements. This report presents the lessons learned during the process and their future plans.
Supplier Management
March 2007
Robert M. Monczka, Ph.D.
CAPS Research;Arizona State University
Establishing supplier management for value creation typically requires a broad supply and integrated transformation to succeed, and requires (1) Executive Vision and Leadership, (2) Strategies and Processes, (3) E-Systems and Measurement, and (4) Relationships. Overall working relationships with suppliers can and need to be improved for waste reduction and opportunity identification. Further, supplier management requires an understandable vision and integrated strategy elements to establish a preferred "customer-of-choice" position and maximize value contribution from suppliers.
Goodrich Supplier Management
March 2007
Bobbie Sansevero
Goodrich Corporation
Goodrich Corporation is one of the largest worldwide aerospace and defense suppliers with broad product portfolio and balanced business mix. As part of the efforts toward Operational Excellence, they have been pursuing excellence in Supply Chain Management as Goodrich sourcing efforts have been growing in low cost countries. They are leveraging the supply chain across the enterprise using best practices, global business processes, supplier metrics, and SCM tools. Supplier Selection Matrix (SSM) has been also used, which is a tool within the supplier selection process. Assigning a numeric value to all suppliers within a quote package allows a side by side comparison using standard criteria. Their task is to develop Supply Chain Management as a core competency and to link supplier development with continuous improvement (CI). The tools they use for supplier development includes Supplier Watch List, Supplier Rating Matrix, and Customer Satisfaction Summary. They are driving CI into the supply chain by developing their supply chain strategy and by supporting suppliers with urgent needs. In doing so, they follow four phases; in Phase I, they perform an internal supplier assessment, in Phase II, perform supplier initial assessment at their business, in Phase III, understand suppliers' continuous improvement ability, and in Phase IV, establish a game plan with each key supplier. On-going lean assessment is carried out using an on-going Supply Chain Excellence Assessment Matrix. A future supply chain CI development roadmap is also presented.
Celanese Supplier Management
March 2007
Tim Fiore
Celanese
Celanese is an integrated global producer of value-added industrial chemicals and has #1 or #2 market positions worldwide in products comprising the majority of its sales. They believe that effective supplier management will allow the company lower labor costs and less use of management's time. The main approaches to making it work include; economic incentives for both companies, growth profile for suppliers, willingness to try non traditional approaches, compatible management structures, establishing a management process that surfaces issues early, and cements the relationships at all levels. This report discusses the process and results, especially in areas of annual cost and management time. It introduces also the current status in operations and performance of the company.
Alltel Supply Chain
March 2007
Scott T. Searls
Alltel
Alltel is the largest regional mobile phone company in America, and the fifth largest mobile phone company overall. Most of what they buy is not strategic in that it does not create a true technical, cost, service-effecting or competitive differential and, in addition they have a choice of supplies. Most of the suppliers they use are not strategic. Supplier Relationships only have value to the degree they create a differential advantage. So, leverage requires focus and discipline. They initiated their preferred "Leadership" approaches, which are (1) measure total cost by product against revenue, (2) use full-stream measurements, (3) cluster natural & related indicators, (4) predict when things and impact will happen, and (5) source at the source. This report discusses more details for each of the leadership approaches.
Measuring and Evaluating Advertising Media and Media Production Spend Effectiveness Using 3rd Party Auditors
March 2007
Sebastian Musendo
South African Breweries Ltd.
This set of questions and responses are centered around measurement and evaluation of advertising spend by third party media auditors. CPOs exchanged practices in their respective companies on the role of procurement and key performance indicators of an advertising campaign over time. 1. Does your firm utilize 3rd party advertising media/media production auditors? If no, please skip to Questions 4 & 5. If yes, is your procurement organization involved in sourcing this auditing service(s)? Please elaborate. If no, what function in your firm does the sourcing of this service and why? 2. What role should procurement play in media auditing? 3. How can procurement maximize the value from media auditors? 4. In your opinion and experience what are the KPI's (key performance indicators) of an advertising campaign over time (say 2-3 years)? 5. Any further insights that you can share with us on this topic?
Supply Leadership Changes
March 2007
P. Fraser Johnson, Ph.D.;Michiel R. Leenders, D.B.A.
The University of Western Ontario
Few decisions that affect the success of supply in an organization have more impact than the decisions regarding who will be the CPO and to whom he or she will report. These decisions are the focus of this Phase 3 CAPS report on supply leadership changes. A total of 30 North American and European companies participated in this case-based research. The study found that CPO and reporting lines changed frequently. Centralization was the most common driver of the establishment of the CPO. The report summarizes the origin, experience, and background of the CPO's.
Best Cost/Price Management Practices for Commodities with Volatile Prices
February 2007
Vic Venettozzi
LORD Corporation
This set of questions is centered around commodities with volatile market prices such as solvent materials. CPOs and managers from various companies exchanged insights on the cost/price management approaches for these materials. 1. In addition to forward buying for these price-volatile commodities, what other sourcing and/or contracting methods are in use by your company? Please elaborate, including the identification of the price-volatile commodity(s) related to your response. 2. Do you use indexes to manage changes in pricing over time within your contracts? 3. Do you use composite formulas (cost models) to drive pricing within your contracts? 4. Have you engaged in any parallel hedging to offset or stabilize price for any of these materials? 5. What other sourcing or contract methods are you using to stay ahead of the market, predict price, availability, etc?
Establishing and Managing International Purchasing Organizations
February 2007
Steve Kranz;Shelley Stewart
Tyco International Ltd.
International Purchasing Organizations (IPO's) have been used widely and successfully in many organizations for several years. CPO's exchanged their experiences with IPO's and how they utilize them to improve purchasing performance. Roles, responsibilities, and organization of IPO's is also discussed. 1. Do you have any experience with IPOs in your company? If NO, please go to question #7. 2. What are the primary roles and responsibilities of your IPO(s) group? 3. Is your IPO(s) group structure based on Commodities? Markets? Regions? Countries? Other? Some combination? 4. How do other functional organizations (e.g., engineering, quality, finance) interact with your IPO(s) group? 5. How does the central/domestic procurement organization engage the IPO group when there is a sourcing project? 6. What is considered a typical IPO group/organizational structure, and how is the IPO group linked organizationally to the central/domestic procurement group? 7. Do you have any further INSIGHTS on this topic?
Business and Supply Chain Continuity
January 2007
George A. Zsidisin, Ph.D., C.P.M.
Michigan State University
Supply disruptions, such as those that resulted from 9/11 and Hurricane Katrina or that may result from market shortages, is one form of supply chain risk. The management of this risk has become an important activity, and has become even more important with the focus on lean processes and lean supply chains. This report examines the risk of supply disruptions and the ways firms manage this risk through business and supply chain continuity planning. Insights gained from the facilitated roundtable discussion and two case study examples are provided.
Operational Excellence in Procurement
December 2006
Roberta J. Duffy
CAPS Research
This Report examines the ways in which procurement and transaction activities can be optimized across a broad spectrum of operational activities and organizational structures. Some of the common approaches include improving data gathering and analysis, a separation of strategic versus tactical responsibilities, implementing e-procurement or automation systems, and effecting organizational structure changes to optimize workflow. The Report includes case studies that focus on the best practices at three large global firms.
Incentivising/Motivating/Measuring Buyers Procuring Capital Equipment from Sole Source Suppliers
November 2006
Daniel Helmig
Qimonda AG
CPO's exchanged their experience and knowledge as to the incentives used to motivate buyers to optimize TCO in non-repetitive procurement of specialized, technical (e.g., semiconductor) equipment from 'sole source' suppliers with monopolistic tendencies/behaviors. Advice on how to best measure a buyers' performance in this specialized procurement environment that lacks competition among suppliers is also discussed. 1. Referring to the background statement above, what incentives do you recommend be used to motivate buyers to optimize TCO of the non-repetitive procurement of specialized technical equipment from a monopolistic supply market? 2. Referring to the background statement above, how should you measure buyers' procurement performance against incentives in this monopolistic supply market? 3. Any further INSIGHTS on this topic?
Effective Global Sourcing and Supply for Superior Results
November 2006
Robert M. Monczka, Ph.D.;Robert J. Trent, Ph.D.;Kenneth J. Petersen, Ph.D.
Arizona State University;Lehigh University;Colorado State University
This study reports on the critical factors, benefits, progress, problems, strategy approaches, best practices, lessons learned, and results from the development of global sourcing and supply practices and strategies. It identifies the features and characteristics of organizations that excel in integrated global sourcing and supply. The study includes case examples from large global firms and addresses the growth of sourcing in emerging markets, such as China and India.
Supply Chain Metrics and Benchmarking: Establishing the Foundation for Knowledge Sharing and Performance Improvement across the Health Sector Industry
November 2006
Vicki Smith-Daniels;Julie Smith David;Stacey Whitecotton;Eugene Schneller;
Arizona State University
Despite the recognized importance of managing the supply chain, considerable improvements need to be made across the health sector. While there are various definitions of supply chain management used in the health sector, this study considers all parties involved in sourcing, contracting, ordering, and delivering products and services including acute care providers, group purchasing organizations (GPOs), distributors, third-party logistics providers (3PL)s, and e-commerce solutions. This is a comprehensive study including the firm-level internal processes as well as inter-firm processes such as order fulfillment, supplier evaluation, and customer service. To keep the study focused, manufacturers, payers, and the patient are excluded as participants with the goal of considering them later in a follow-up study. Collaborative partnerships with manufacturers, however, will be included in the study by having GPOs, distributors, 3PLs, e-commerce solutions, and acute care providers identify the metrics used to evaluate these partnerships, and to identify the collaborative practices that lead to supply chain success.
Percentage of Annual Spend that is Sourced Competitively vs. Non-Competitively
November 2006
Terry Kiefl;Michael Sheedy
NAV CANADA
In this set of questions and responses, CPOs exchanged the percentage of competitive sourcing versus non-competitive sourcing used in their respective companies. Question #68 submitted by NAV CANADA 1. Approximately what percent of your annual spend is sourced through a formal competitive process, i.e., suppliers compete for the business? 2. Approximately what percent of your annual spend is sourced without competition i.e., supplier(s) is/are chosen without going through a formal competitive process? Note: The percentages reported in Questions 1 and 2 should sum to 100%. 3. For the percentage reported in Question 2, approximately what percent is sourced without a formal competitive process where there is an adequate pool of qualified suppliers? 4. For the percentage reported in Question 2, approximately what percent is 'sole' sourced from a pool of a single qualified supplier? Note: The percentages reported in Questions 3 and 4 should sum to the percentage reported in Question 2. 5. Do you have any further INSIGHTS or comments on this topic?
Designing, Developing, and Managing Intra-Firm Commodity Councils
October 2006
Garry Baddock;Javier Ramirez
Unisys Corporation
This set of questions and responses are centered around designing, developing and managing intra-firm commodity councils where a small group of company-wide users of a particular commodity were brought together (either physically or virtually) to discuss ideas and issues relating to the commodity. 1. Does your organization have Commodity Councils (or something similar)? 2. What commodities (goods and services categories) have you targeted for Commodity Councils and why were they chosen? 3. What is the makeup of a typical CC? e.g., are they cross-functional? What level(s) in the organization? Do participants rotate, or are these semi-permanent assignments? Are there local, regional, global participants? 4. What activities comprise the 'focus' for the council e.g. cost savings opportunities, supply-base rationalization, supplier evaluation, process improvements, etc? 5. Who manages/facilitates your CCs and how often do they meet? Face-to-face, virtual? 6. Do members have authority to make decisions or only make recommendations regarding the commodity? 7. How does the CC communicate to others? E.g. strategy recommendations, white papers, market data, benchmark data, etc. 8. What are the key factors that have made them successful (or caused them to be unsuccessful)? Have they produced hard dollar savings, cost avoidance or other business improvement? 9. Do you have any INSIGHTS regarding Commodity Councils? Please elaborate.
Strategic Sourcing Professionals' Workload, Approved Ways to Buy and Purchase Order Use
October 2006
Joseph Martinez;Tom Kepper
Wachovia Corporation
The process for assigning work to strategic sourcing professionals and personnel engaged in tactical procurement roles is likely to be different for different companies. CPO's exchanged their experiences with the process. Firm's "approved ways to buy" and the extent to which PURCHASE ORDERS are used as a "way to buy" are also discussed. 1. How does your organization differentiate between (or assign) sourcing activities to your strategic sourcing team versus personnel engaged in tactical procurement roles? What criteria are used to differentiate strategic versus tactical sourcing activities? 2. What is the average number of CONTRACTS managed per strategic sourcing professional within your organization. What is the average annual total dollar value of these contracts? 3. Please list the primary "approved ways to buy" within your corporate structure (Contracts, POs, P-cards, Travel & Entertainment cards, check requests, others). 4. For all of the "ways to buy", what is the percentage of overall corporate spend that is processed via PURCHASE ORDERS?
Purchasing and Supply Management Transformation
October 2006
Bryan Ashenbaum, Ph.D.;Robert M. Monczka, Ph.D.
CAPS Research
Purchasing and supply management (PSM) departments are under constant pressure to reduce costs and improve performance. A focus on continuous improvement and efficiency gains has given way to a focus on fundamental step changes that truly transform the manner in which PSM achieves its goals. However, most organizations have not clearly defined what it means to truly transform PSM. This CAPS critical issue report attempts to delineate continuous versus transformative change and highlights different PSM transformation strategies.
ACG Procurement Transformation - A Case for Change
September 2006
Brian McNally
The Auto Club Group (AAA)
This presentation is about the Auto Club Group (ACG) procurement transformation. At the center of this procurement is the CPO as a driver and facilitator of the changes in procurement operations. Their mission is to transform the ACG's procurement operations into an enterprise-wide core competence. This material shows a platform created to enable the organization to achieve their objectives by leveraging a best-in-class procurement and strategic sourcing methods.
Sourcing Transformation at Imation
September 2006
Randy Christoffersen
Imation Corp.
Imation Corp. is a leading global developer, manufacturer and supplier of removable data storage media. This company has been implementing transformation of sourcing by gathering extensive feedback from current Sourcing employees and key stakeholders, identifying strengths and weaknesses of the current organization and past approaches, and launching a "100 Day Plan" to capitalize on current strengths and close identified gaps. They also have plans to communicate the 100 day plan across the organization and put in place a management approach and structure to sustain the gains and continue to drive improvement year-on-year. This presentation discusses the results of the 100 day plan, future plans, and their lessons learned.
High Performance Strategies for Rationalized Supply Base
September 2006
Robert M. Monczka, Ph.D.;Thomas Y. Choi, Ph.D.
CAPS Research;Arizona State University
To rationalize the supply base is one of the strategies firms are actively employing to generate great benefits for both buyer and supplier. What are the strategies, practices and behaviors firms have used to establish rationalized supply bases?; How have firms forged deep supplier relationships in rationalized supply bases?; and What have been the benefits and investments required? These questions are major drivers behind this presentation.
Global Performance Solutions
September 2006
Patti Whitehouse
Merck & Company, Inc.
Supplier value management (SVM) at Merck is defined as a process to establish and optimize value delivery from supplier relationships. Operationally, the program involves performance measurement and continuous improvement, and strategically, it requires collaborations that yield greater value from and to the supply base. The focus of the SVM program is also on bringing leaders together with a process that aligns interests and drives results for all parties concerned. This material discusses, goals and objectives, program design, implementation plan and progress, results, lessons learned, and future plans.
IBM Supply Chain
September 2006
John Dischinger
IBM
IBM has focused on how to develop competent and reliable workforce, each one with the required global skills. This came from a realization that in a business that is increasingly labor-based, we need to optimize our human resources. The solution they are pursuing is taking advantage of the expertise of their resources in a way that benefits their customers, allows rapid response to client requests, allows them to manage the cost of any project more effectively, plus provides career and skill enhancing opportunities for their employees. The strategy has been implemented in three directions at the same time. At the enterprise-level, they implement Workforce Management Initiative (WMI) Strategy; at the operational level, Integrated Supply Chain; and at the functional level, Global Procurement function. For each initiative, the presentation discusses process, lessons learned and summary observations.
Elements of RFIs for International Low Cost Country Suppliers
September 2006
Marc Ensign
Sonoco Products Company
Low Cost Country Sourcing is a practice that many companies have adopted and are exercising. They recognize the RFI process for international sourcing applications can be considerably different from a purely domestic sourcing initiative. In their responses to CPO Insights questions (see below), seven CPO's exchanged their experiences with international/LCCS RFI's and how they exercise the process differently from domestic RFI's. 1. Are your RFIs written only in English and/or in the local language(s)? Do you require responses to be only in English? 2. What questions do you add in international/LCCS RFIs that are not necessary for domestic RFIs? 3. What questions do you exclude from international/LCCS RFIs that are necessary for domestic RFIs? 4. How do you identify the targeted LCCS' to invite to respond to an RFI? 5. What kind of response rate and level-of-detail do you generally experience with international/LCCS RFI's? 6. Have you used a traditional paper or an electronic (eRFx and/or email) RFI process? Do you feel that the RFI process has had an impact on the level of participation and quality of the responses?
Software for Managing Dollar Approval Levels and Digital Signatures
August 2006
Michael Huber;Andy Clarke
Microsoft Corporation
Companies are increasingly interested in "approval limits" software technologies that is software that supports a process for managing the dollar limits assigned to individuals in a company for specific things that require dollar limit approvals. In addition, whether companies offer full suite capabilities in the digital signature space does interest many companies. 1. Do you have any knowledge of, and/or experience with commercially available software that supports approval limits requirements? 2. Do you know of, and/or do you have experience with companies that offer full suite capabilities in the digital signature space? 3. Do you have any additional INSIGHTS on this topic?
Competitive Bidding Policies
August 2006
Robert Vaio
Hess Corporation
This set of questions and answers centered common practices around competitive bidding policies. 1. Does your company have a formal competitive bidding policy? 2. Does your policy have differing threshold dollar amounts for various commodities or services? 3. Does your policy have differing threshold dollar amounts for different types of bids, i.e. - verbal, written, sealed, reverse auction, etc.? 4. Have you established exceptions to your competitive bidding policy requirement? 5. What process did your company utilize to establish these threshold dollar amounts and policy exceptions? 6. Are you considering changing the threshold amounts or policy exceptions? 7. Are there any other major factors, other than dollar value, contract type, or type of good or service, that impact your decision of when and how to competitively bid? 8. Is your company contemplating the development of a formal competitive bidding policy? If so, what threshold amounts do you anticipate using? And what policy exceptions do you expect to include?
Use of Price Indices in Price Revision Clauses of Contracts with Services Suppliers
July 2006
Maureen Merkle;Ed Hensley
AT&T Services, Inc.
Often times organizations negotiate price revision clauses in their contracts with suppliers, which may want to use the Consumer Price Index or similar government indices, for service type agreements (e.g., consulting, maintenance, etc.). CPO's exchanged their experiences with this issue. 1. Does your company use these government-provided indices? If YES, how do you structure their use, e.g. , what would the language be for a typical price revision clause? (Note: Rather than keying in the language here, you may wish to send it as an attachment.) 2. What other indices (e.g., non-governmental) have you found to be more useful, and in what situations? 3. Have you experienced a positive or negative result from the use of these types of indices in price revision clauses? 4. Do you have any further INSIGHTS on the subject of the use of indices in price revision clauses? 5. Would you like to benchmark in more detail with other CAPS' CPOs on this topic?
Current Policies and Practices Regarding Payment Terms to Suppliers
July 2006
Jim Hart
Rockwell Automation
This set of questions and responses are centered around payment terms to suppliers. CPOs exchanged their companies' current policies and practices on payment terms used, differences in payment terms for different categories of procurements and explored the possibility of asking suppliers for a discount. 1. In general, what are your current payment terms for your United States-based suppliers? 2. Are payment terms different for suppliers of direct materials vs. indirect materials vs. services vs. capital goods? If YES, please elaborate and, if available, provide a "sanitized" (not revealing the name of the supplier) example or two. 3. Are there other factors (other than the four categories of spend listed in Question #2) that result in having different payment terms to suppliers? 4. Are any of your payment terms based on suppliers' performance? Examples: On time delivery; short lead times; meeting quality standards. 5. Do you ask your suppliers for, and generally get, a discount if you pay earlier than the agreed-upon or contracted payment terms? 6. Have you changed your payment terms in the past one-two years? If YES, what were the major changes, and what was the reaction from your supplier base? (Generally positive, neutral, negative, mixed?) 7. Do you have any further INSIGHTS for Rockwell Automation on the subject of payment terms to suppliers? 8. Would you like to benchmark in more detail with Rockwell Automation or other CAPS' CPOs on this topic?
Setting and Managing Transfer Prices for Goods and Services Between Divisions Within Your Firm
June 2006
Hans-Joachim Lumbe;Carl Oberland
Siemens AG
This set of discussion was centered around company practices in transfer prices among divisions for internal usage as well as for selling to outside customers. Questions: 1. Does your company have inter-divisional purchases and sales? If NO, you need not continue with Question Set #60 unless you have transfer pricing experience while employed by another firm. 2. Approximately what percent of the inter-divisional purchases are for internal use and what percentage is for bundling into an ultimate sale to an end customer? 3. How does your firm manage interdivisional pricing for internal use purchases? Divisions price to each other at a transfer price level that * seek to achieve normal sales margins for their division * results in a slightly lower margin * results in significantly lower margins * covers the product/service cost plus a slight markup to cover G&A expense * is at or below cost (perhaps) in order to be competitive with outside suppliers * other 4. How does your firm manage inter-divisional pricing for products and services bundled and sold to end customers? (See examples that follow) Divisions price to each other at a transfer price levels that: * seek to achieve normal sales margins for their division * results in a slightly lower margin * results in significantly lower margins * covers the product/service cost plus a slight markup to cover G&A expense * are at or below cost in order (perhaps) to make a bundled customer solution competitive * other 5. In general, have your firm's transfer prices for bundled products and services sold to end customers been priced competitively? If YES, please elaborate on the process used to generate this competitive transfer pricing from sister divisions and the resulting benefits. If NO, please elaborate on the impact this non-competitive transfer pricing has had on final products'/services' competitiveness and/or winning or losing the business for bundled customer solutions. 6. Do you have any additional INSIGHTS on the issue of transfer pricing policy and management?
SAP Capability for Handling Consignment Inventory and Subcontracting that Satisfies Finance's Rules
June 2006
Stephanie Smart
Kodak
This set of questions and responses explored SAP capability for handling consignment inventory and subcontracting that satisfies Finance's rules. The majority of the CPO responses indicated that there was not an existing feature in SAP that could handle both requirements (consignment and subcontracting) simultaneously. Problem Statement: At Kodak we often provide specific chemical components we manufacture internally to some of our suppliers for them to incorporate into the products we buy from them. In parallel, our purchasing strategy drives us to implement Consignment Inventory practices whenever a lean supply chain is not possible. The association of subcontracting (a component) and buying on consignment (the final product), from our experience, is not a recognized process with SAP. In addition, the alternative of selling the component to our supplier is prohibited by our finance organization. Questions: 1. Have you found process combinations (a solution) within SAP that responds to this situation? 2. Does your company have the ability to sell a component and buy back a product (which integrates this component) and at the same time comply with all United States financial/accounting rules? 3. Do you have any INSIGHTS on this issue?
Commodity Management Benchmarking - Best Practice - Networking
June 2006
Alfred Chan
Mattel, Inc.
Mattel used this presentation to create discussion on the need or interest to improve commodity management via CAPS hosted benchmarking study, best practice sharing, or informal networking amongst CAPS members. They discuss four main commodity areas focused in their supply chain: Resin and Pigments, Packaging, Electronics, Soft Goods, and Material Coding Structure and BOM.
Opportunities and Challenges - Sourcing In China
June 2006
Larry Ford
Bechtel Corporation
Bechtel, a global leader in engineering, procurement, and construction, uses this presentation to discuss its current work on sourcing in China. With rising prices and constraints throughout the supply chain, they decided to utilize China for sourcing to capitalize on lower cost labor and faster time to market. Between 2004 and 2006, they have chosen to increase their export spend with China, in addition to their in country spend. They face many challenges in China, including communications, different cultural issues, and an overheating Chinese economy. Finally, the presentation concludes with a structural steel example.
The Notebook Computer Supply Chain - Linking Digital and Personal Networks
June 2006
William Foster, Ph.D.
Institute for Next Generation Internet
In this presentation, the Institute for Next Generation Internet discusses why it chose Shanghai to produce its notebook computers. Shanghai was not chosen because of its cheap labor or better information technology, but rather because of the value of clustering. A cluster of Taiwanese firms moved from Taiwan to Shanghai. They chose not to go into Hong Kong because the government did not do a good job of driving IT innovation in PRC. ODM's have good profits and innovative technology, which makes them a good choice for notebook production. In making this decision, the company looked to the comparison of Boston and Silicon Valley, and why one failed while the other flourished. The presentation concludes with further lessons and a summary of the presentation.
An Overview of an International Purchasing Office
June 2006
Edward Pi
Eastman Kodak Company
Kodak presents its use of an international purchasing office. With more than half of Kodak's revenue coming from outside the U.S., it is important that they think globally. Kodak has three main requirements for suppliers: double digital productivity yearly, quality of 300 DPPM, and 98% on time delivery. The presentation then discusses their GARP Team, located in the Asia-Pacific region. This team is responsible for 33% of worldwide spend. The presentation concludes with a case study of GARP's strategic cost management.
Asia Pacific International Purchasing Office
June 2006
Robert Kenney;Robert Dixon
Teradyne, Inc.
This presentation deals with Teradyne Corp.'s development of an International Purchasing Office (IPO), strategy during 2005. IPO's were created in Pudong and Suzhow China with a regional headquarters in Singapore. The presentation speaks to the high level responsibilities assigned to the IPO's, founding principals, operation policies and startup strategies. The talent management retention placed upon IPO employees hired for the IPO's is discussed. The supplier relationship strategies implemented by the IPO's is also presented.
Overview of Supply Chain Practices In Northeast Asia, China, Japan, Korea 2003-2006
June 2006
Anh Byungil
Volvo Construction Equipment
In this presentation, Volvo gives an overview of their supply chain practices in China, Japan, and Korea from 2003 to 2006. The presentation includes with a company background, including industry information and corporate mission statement. They also introduce their construction equipment section of their business, which is a $72 billion industry in the U.S., of which Volvo has a 6% share. The presentation then goes into Volvo's Asian business area, which required a restructuring of operations due to mergers and acquisitions. Volvo's goal was to create a global supply chain operations through cross-functional teams, co-location, and transparency. The presentation then gives many visual examples. Many Asian relationships are difficult because they have roots in Confucian Theory, which must be understood by all because it greatly affects the negotiation process. The presentation concludes with an example of PINS in China.
Use of Frame Agreements in Industrial Turnkey Projects
June 2006
Francisco Diaz-Andreu
Repsol YPF
Frame Agreements are also known as "Multi -Purchase Agreements (MPA)", "Master Agreements", "Global Purchase Agreements", "and Long Term Agreements", etc. Frame Agreements is referred to a general contract that will contain a price list, discounts, terms and conditions, delivery time commitments, supplier development issues, etc. Frame Agreements set forth general commercial and technical conditions which are used as a reference or frame under which a specific order's agreement is created. These agreements generally have long term duration and help to create stable relationships with suppliers. When major industrial projects are undertaken, the investment (and associated risk) is much larger than that of day to day operations and maintenance. So the main question is whether or not to apply these frame agreements for these major projects. This issue is especially important for turnkey projects, which is an approach often used by EPC (Engineering, Procurement and Construction). CPO's exchanged their experiences with frame agreements. Types, procedure, and implementation process of such agreements are also discussed. 1. Do you use Frame Agreements for projects? 2. Do you use Frame Agreements for turnkey projects? 3. What percentage represents in the total purchased amount of the project? 4. What types of agreements are more commonly used? (For example, Commercial Agreements, Preferred Supplier Agreements or Exclusive Supplier Agreements) 5. What procedure is followed from a confidentiality point of view? (In other words, do suppliers and/or engineering contractors get to see the final discounts you have negotiated? 6. What procedure is followed from a guarantee point of view? (In other words, do engineering contractors maintain the operating guarantee of the plant? 7. How is it carried out from an administrative point of view? (For example, do engineering contractors evaluate bids, send purchase orders, etc?) 8. Do you have any further INSIGHTS on the use of Frame Agreements for turnkey industrial project?
Measuring Cost Reduction as a Percent of Penetrable vs. Non-Penetrable Spend
May 2006
Jonathan Clark;Brett Mauser
NCR Corporation
At NCR, they routinely measure and report "cost reduction as a percent of TOTAL spend" as a key productivity metric used to measure and track procurement performance. In order to do so more accurately, beginning in 2006, they have started measuring cost reduction as a percent of "Penetrable" spend. Penetrable Spend, they propose, is spend that they can negotiate with their suppliers with a reasonable likelihood of generating meaningful cost reductions. In contrast, a definition of "Non-Penetrable" spend might be: * that spend with suppliers who have such strong market power (monopoly/oligopoly, highly differentiated products, demand exceeds supply, no substitutes in short run, etc) that pricing and associated T & Cs are virtually not negotiable; * attempting to negotiate cost savings with a supplier would not be cost effective due to relative non-strategic nature and/or low dollar spend on the commodity; * spend that is initiated and managed outside of the procurement organization due to reluctance of internal functions to use procurement's services . In responding to CPO Insights questions (see below), eight CPO's exchanged their opinions such as how they measure cost reductions or cost savings as a percent of spend, how they classify spend in their organization, and what strategies they use for this purpose. 1. Do you routinely measure and report COST REDUCTIONS as a percent of TOTAL spend? 2. Do you routinely measure and report COST REDUCTIONS as a percent of PENETRABLE spend (see proposed definition above)? 3. For performance reporting purposes, how do you classify spend that you are not able to touch due to organizational issues? Examples: HR's spend on benefits; legal's spend on legal services; marketing's spend on advertising. 4. For performance reporting purposes, how do you classify spend that is under contract? (Penetrable, Non-penetrable, other classification). 5. How would you define penetrable and non-penetrable spend? 6. If you measure both total spend and penetrable spend, approximately what percent is penetrable spend of total spend? Has this percentage been growing, lessening, or been stable? 7. What strategies have you used to change non-penetrable spend into penetrable spend? 8. How do you define COST SAVINGS when reporting this metric of procurement's performance? 9. Do you have any further INSIGHTS on this topic?
Moving a Supply Chain Organization into a Shared Services Model
May 2006
Tanya Penny;Robert Koechlin
Verizon Communications Inc.
Supply chain organizations do serve multiple and diversely different business units in an organization. In this regard, Central Shared Services Models may apply in this function. In their responses to CPO Insights questions (see below), two CPO's exchanged their experiences with such a shared services model. Strategies, guidance, and practices for moving a supply chain organization towards a shared services model that provides procurement services to their firm's diverse SBUs are shared. 1. How is the structure of the organization determined relative to procurement's functionalities, i.e. sourcing, operations, internal customer- facing- interface activities (such as capturing requirements, agreeing on metrics, reviewing schedules, adjustments, and so on)? 2. What methodology is used to determine what commodities/services are to be leveraged centrally as opposed to local or regional (decentralized) approaches to sourcing? 3. What cost allocation methodology is used to assign fully loaded supply chain costs to the various SBUs being served and what process is used to reach agreement on these funding levels? 4. How are disputes between funding level and service level tradeoffs handled to minimize negative internal negotiations? 5. Do you have any further INSIGHTS on this topic?
Compensation Models for Suppliers of Goods and Services Recommendations
April 2006
Melinda Simmons;Andrea Bellis
R.J. Reynolds Tobacco Company
This set of questions and answers are centered around compensation models for suppliers of Goods and Services that are considered intellectual property (patents, copyrights, etc.). Topics include criteria for compensation, evaluation method and source of benchmark information, etc. Besides intellectual property cases, compensation for "creative-goods" and "ordinary-goods" were also discussed. 1. What criteria do you use to ensure fair compensation to suppliers who provide goods and services that are considered to be intellectual property (patents, copyrights, etc.)? For example, do you benchmark their costs in any way and/or do you have a consistent evaluation method for determining their compensation? 2. If you do use benchmarks and/or a consistent evaluation method for goods and services that are considered to be intellectual property, what are the information sources for these benchmarks? What factors are included in your evaluation method? 3. How do you fairly compensate suppliers that make creative-goods recommendations for promotional materials when these materials are not deemed to be intellectual property? 4. How do you determine fair compensation to suppliers that make ordinary-goods recommendations for promotional materials? For example, do you always bid out such items in order to obtain the best price, or do you make some sort of concession to these suppliers (e.g., one-time payment, granting the first order) to compensate them for their effort, even if that item could be obtained from numerous other sources? 5. Do you have any further INSIGHTS regarding the utilization of suppliers that make goods and services recommendations?
Global 3rd Party Fulfillment Management Services
April 2006
Keith Weber;Charles Zheng
3M Company
3rd party involvement with business operations has been increasing in many companies for various reasons. CPO's exchanged their experiences and insights with 3rd party fulfillment service providers of global printed literature and sample service. Program, processes, systems, and utility of the fulfillment services are also discussed. 1. Does your company have a global sample and printed literature fulfillment program in place managed by a third party service provider? 2. How does this service provide management of fulfillment services globally, i.e., do they have their own facilities globally or they use local partners in other countries? 3. How does the order system/process work in your global fulfillment program? For example, is it a global (centralized) order or local (decentralized) system/process? 4. Does your fulfillment program allow you to view inventory and pricing globally? If not, how do you gain visibility of inventory and pricing? 5. What other information is visible in your global fulfillment program? 6. Do you have any suggestions on who are the leading global sample and printed literature fulfillment service providers? 7. Do you have any further INSIGHTS on the use of 3rd party fulfillment service providers?
Delphi Supply Management Strategy
April 2006
R. David Nelson, C.P.M.
Delphi
This report is about Supply Management Strategy at Delphi. Delphi is a world leader in mobile electronics and transportation components and systems technology. Strategic intent regarding global supply management is to achieve competitive advantage through extended value stream excellence. There are ten elements that are critical in achieving their strategic goals related to supply management; current processes & current team, strategic sourcing, cost management, supplier development, new model launch, systems infrastructure, quality improvement, people development, supplier relationships, and communication. It needs all ten elements to work in an integrated way to deliver results. How each of the elements can work for this purpose and which tools can be used are discussed in detail.
BP Integrated Supply Chain Management
April 2006
Tom Ceynow
BP America Inc.
BP is of one of the world's largest energy companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemical products for everyday items. Unlike most commodity businesses, the oil and gas industry has unique demand characteristics and their challenge is to provide the greatest lifecycle value from the demand their businesses generate. In this specific industry, suppliers have an important role to meet business requirements. Sector strategies determine the optimum approach to manage the demand/supply activity to create highest value. Sector teams are internal cross-functional teams that maintain a deep working knowledge of key market sectors. At BP, Supplier Performance Management (SPM) is defined as ‘the formal process by which we gain assurance that our contractors' performance is meeting or exceeding our stated expectations and goals.' SPM is, thus, a critical process that facilitates and enables the delivery of value from their key suppliers and contractors. They want distinctive relationships that are based upon performance, market reality and technology development. Key elements of SPM include organization, measurement and, process improvement. BP also launched a new initiative, called Purchase to Pay (P2P), which is a global project to implement a common process and standard system for purchasing goods and services from their suppliers. They expect BP's business units, outsource providers and their suppliers all to benefit from P2P. How it will work is presented.
Raytheon Integrated Supply Chain Management
April 2006
Vincent J. Hrenak
Raytheon Network Centric Systems
Integrated Supply Chain (ISC) is defined at Raytheon as a process which creates the best value stream through alignment of Raytheon capabilities with their suppliers' and partners' capabilities. ISC is a cross-functional, cross-enterprise process. The four vital principles guiding ISC are: 1. alignment among all ISC process members, 2. cooperative relationships based on trust among all stakeholders, 3. can-do attitudes from all ISC members and 4. adherence to process discipline.
Integrated Supply Chain Management at Temple Inland
April 2006
Terry Sueltman
Temple-Inland Inc.
Temple-Inland is a major manufacturer of corrugated packaging and forest products with a diversified financial services operation. This Presentation is an overview of the strategic sourcing process at Temple - Inland, along with an overview of the supply chain management system.
Honeywell Global Sourcing
April 2006
Bill Ramsey
Honeywell
Honeywell has sourced from India and recent observations reveal common misperceptions about supply chains in India. India provides competitive manufacturing advantage. Indian suppliers have been establishing warehouses, working with third party logistics providers to manage inventory near customer locations in Europe and the USA. Large Indian suppliers are financially healthy and are investing to expand capability and capacity. Also the company found all major materials are available locally. However, Indian suppliers have higher packaging costs due to sea worthy packaging requirements and shipping costs higher due to sea freight from India to Europe. As such, challenges exist in a longer supply chain, but can be accommodated. All things considered, sourcing decisions must be based on total landed cost model.
Volvo Global Sourcing
April 2006
Rolando Saavedra
Volvo Construction Equipment
Volvo Group is one of the world's leading suppliers of transport solutions for commercial use. Construction equipment (CE) is a part of Volvo group. This CE industry is characterized by few global players, several international specialist companies, and smaller companies often with single product and regionally focused. Mergers and Acquisitions of Volvo CE and changes in scope (local to regional to global) generated new problems for the Supply Chain Management Function, requiring a restructuring starting with Asian Operations. For World Class Supply Management, the company has emphasized cross-functional supplier development teams, co-located suppliers, strategic supplier management and supply chain transparency. They also have an implementation framework and principles for global supply chain operations, which consists of 6 categories such as people, processes, practices, organization, business objectives, and spend, and the integrative and interactive plays among the six elements are desired in this framework. Examples of how to execute each element are provided. Chinese market sourcing experience, including reflections on working in China, is also presented.
Fluor Global Sourcing
April 2006
Jim Scotti
Fluor Enterprises, Inc.
Fluor Corporation is one of the world's largest, publicly owned engineering, procurement, construction, and maintenance services companies with its business broadly diversified across energy, industrial, and government markets. When it comes to supplier integration, the company has moved away from traditional procurement that focused only on competitive bidding, dubbed "3 bids and a cloud of dust." As a result, suppliers were not strategic partners and took less risk in contract terms. Now, Fluor's method of procurement utilizes supply market knowledge, positive leverage relationships, and pursues win-win strategies. This new model brings better buyer-supplier integration and the ability for Fluor to influence the cost of a project. Bringing key suppliers in at the beginning of a project is essential to success.
SCM Strategic Focus at Newmont
April 2006
Wayne W. Murdy
Newmont Mining Corporation
Newmont, as the world's leading gold company, wants to be the world's most trusted, respected and valued natural resource company. The company has shifted its business focus from a decentralized structure to a collaborative, strategically-focused program. Newmont now has a centrally-led SCM organization with emphasis on high-risk, high value goods, service initiatives executed by cross-functional teams and transactional efficiencies achieved through core capabilities and enablement. They believe organizational changes alone do not guarantee results, but that strategy plus execution is key to success. Category councils provides strategic direction for decision-making and implementation for each primary category.
TCO Adding Value to the Supply Chain
April 2006
Lisa M. Ellram, Ph.D., C.P.M.;Wendy Tate
Arizona State University
TCO can be defined as a philosophy for understanding all supply chain related costs of doing business with a particular supplier for a particular good/service. TCO includes: cost of acquisition, use/administration, maintenance and disposal. TCO provides a comprehensive view about the customer value proposition for the service, good or process that is being analyzed. TCO does not fit every situation partly because of many variations on the depth and breadth of TCO analysis. Also, TCO still tends to be fairly "unique" and labor intense. However, TCO is still a valuable mindset because it balances cost drivers with customer value.
Newmont Mining Total Cost of Ownership
April 2006
John S. Gundersen, C.P.M.
Newmont Mining Corporation
As part of their category management strategy, Newmont uses TCO, to understand their costs, analyze their spend and highlight high value opportunities. The focus on TCO is appropriate given that Newmont typically experiences a 20/80 or 30/70 split between acquisition costs/operating costs over the useful life of a major piece of equipment. There are two separate and distinct parts to the TCO model: Acquisition Cost Elements (which is externally focused) and Operating Cost Elements (which is internally focused). Both parts are key inputs into bid evaluations. TCO models are used to support fact based decision making during sourcing events and continuous improvement after contracts are awarded.
Shell Total Cost of Ownership
April 2006
Vince Messimer
Shell Lubricants
Shell Lubricants is a global leader in the lubricants industry, manufacturing and marketing a range of lubricant products. Shell Lubricants has translated TCO into an approach called "Contract Excellence". The challenges to this approach are: (1) discovering supplier preferences for contract variations and their pricing for holding risks, (2) developing pricing structures and contract provisions that optimally address Shell's cost drivers and desired risk tolerance, and (3) structuring an approach to drive broad organizational change. To meet these challenges requires: (1) a clearly defined scope, cost drivers and risk drivers, (2) Shell's opinion on future market movements for cost drivers and risk drivers, (3) a three-phase tender structure to discover supplier risk preferences and costs, (4) cost and risk variations translated into contract pricing, and (5) contracts signed and archived in global contract repository for visibility across the organization. An example that illustrates this approach is provided in this report.
Schneider Electric Total Cost of Ownership
April 2006
Jeff Wood
Schneider Electric
Schneider Electric is the world leader in automation and electricity management. The company has strived to optimize total cost in the context of customer service, which requires an understanding of the extended value stream. To do this Schneider Electric developed IDOV (Identify-Design-Optimize-Verify). The key points of Identify include customer driven KPI's, clear, quantitative objectives, and robust metrics. In design the key elements are systematic scorecard, gap analysis, and resource analysis. Optimize includes understanding of their cost to serve, extended value stream map, and continuous Improvement. Verify is still in process. Details of each phase are discussed in the report.
Defining Cost Reduction and Avoidance
March 2006
Bryan Ashenbaum
CAPS Research
Cost reductions tend to come in two broad categories: "hard" year-on-year cost savings and "soft" cost avoidance, which many firms do not realize as a real savings. This report attempts to establish working definitions for these categories. It explores the key issues and problems faced by companies as they seek to properly assess their cost reduction efforts and to apply them to their bottom lines. Extensive real world examples and case studies of cost reduction efforts are provided as best practice examples for purchasing and supply managers.
Technology and Organizational Factors in the Notebook Industry Supply Chain
March 2006
William Foster;Zhang Cheng;Jason Dedrick;Kenneth L. Kraemer
Fudan University;The Personal Computing Industry Center, UC Irvine
Despite the limited use of IT in the operations among Original Design Manufacturers (ODM) and their suppliers in the notebook industry in China, the Greater China supply chain works fairly well. A major reason is its organization and interpersonal relationships. The industry is a dense network of mainly small- and medium-sized firms headquartered in Taipei with manufacturing and supply clustered in the Shanghai area of China. The CEOs of these firms are plugged into a network of personal relationships (quanxi). Through constant communication with its ODM customers and fellow suppliers, the Taiwanese business network begins to resemble a human neural network that matches supply and demand without keeping a lot of inventory in the system. As scale and complexity in this industry increase, there is greater need for formalization and IT systems to deal with these changes. But there is concern that this will undermine the personal relationships that support the Taiwanese business network. This study is relevant to U.S. purchasing managers inside and outside the notebook industry because it provides insights into the relationship between digital supply chains and Chinese business networks. It also raises the issue of the business risk associated with dependence on the Greater china supply chain.
Creative Pricing Strategies for Outsourced Facilities and Maintenance Services
March 2006
Brad Holcomb
Royal Group Technologies Ltd
This set of questions and responses are centered around creative pricing strategies and structures for outsourced facilities and maintenance services. Creative pricing refers to pricing strategies or structures other than having suppliers bill at an hourly rates. CPOs exchanged their company practices, benefits and insights in this area. 1. In the area of facilities project management services, for those who have outsourced this service, does your organization utilize any type of "creative" pricing strategies or structures other than having their supplier bill at an hourly rate? 2. Please briefly describe the pricing strategies or structures you use that are beyond simply having your supplier bill you at an hourly rate (If available, please attach a sanitized document that describes your strategy/structure for this situation.) 3. What are the benefits of your "creative" pricing strategy/structure? (e.g., reduced cost; better service, etc.) 4. Do you have any further INSIGHTS on pricing strategies/structures for these kinds of outsourced services?
Variable (Incentive Based) Compensation Programs for Commodity Managers
February 2006
Jonathan Clark
NCR Corporation
This discussion is centered around incentive based compensation programs for commodity managers. CPOs exchanged their companies' implementation details of compensation structure for their commodity managers as well as definition of cost reductions. 1. Does your purchasing/supply management organization have a formal incentive (bonus) program for its commodity managers based upon cost reduction performance versus planned cost reduction goals? In other words do you have a bonus program that is procurement-specific to some extent as opposed to being driven entirely on company performance? 2. Why have you not implemented such an incentive compensation program targeting commodity managers' cost reduction performance against goals? 3. Briefly, please provide an overview of your cost reduction incentive compensation program for your commodity managers. (e.g., How is it structured? How long has it been in place? Does the program apply to the commodity managers' team (or direct reports) as well? Are these goals set by top management alone, or jointly with the commodity managers? ) 4. Approximately, on average, what percent of commodity managers' total compensation (excluding benefits) comes from achieving their cost reduction goals? If only partial fulfillment of cost reduction goals is achieved, do they receive a lesser bonus or no bonus at all? Alternatively, if a commodity manager exceeds his or her goals, does their incentive compensation increase? Describe the scale or mechanism used to adjust your payout. Do you (or would you) set your commodity managers' bonus plan goals based on a negotiated plan or is it based on prior year results (plus some % increase)? 5. How are cost reductions defined in your organization? (e.g., Previous price vs. current price? Price increase avoidance? Total Cost reduction? Inflation/deflation price adjustments considered? Other (please briefly describe)? 6. Do you have any further INSIGHTS on this topic?
Designing the Supply Chain for Production and Aftermarket Needs
February 2006
Bryan Ashenbaum
Arizona State University
Manufacturers of equipment and machinery face a dual challenge in determining their optimal supply chain structure. Such companies must ensure the timely delivery of high-quality parts and material to their factories for current model production, while simultaneously maintaining an appropriate flow of aftermarket service parts for current and older models. As supply chains become increasingly global in nature, the ability to successfully meet these two challenges becomes even more crucial. In particular, the appropriate supply chain configuration for aftermarket parts and services has become a key concern of many manufacturers. This report explores the key issues and problems involved in the management and design of aftermarket supply chains, and discusses how to successfully integrate aftermarket and production supply chains. Case studies of four different firms and their approaches to these issues are included.
Strategic Supply Management at Japanese Companies
February 2006
Supply Management Research Group, Japan
Supply Management Research Group, Japan
This report discusses strategic supply management in Japanese companies. It includes evolution of the purchasing function in Japanese companies, challenging issues in the shift to strategic purchasing, and perspective on strategic purchasing.
Measuring and Benchmarking Total Supply Chain Costs
February 2006
Maureen Merkle
SBC Services, Inc.
This set of questions and responses are centered around how to measure "Total Supply Chain Costs", what components were routinely measured and the information sources for benchmarks. 1. What financial performance metric(s) do you use (or recommend using) to measure TOTAL SUPPLY CHAIN COST (TSCC)? 2. What components (links) of your supply chain are routinely measured? (Examples: Product design/development, purchased materials and services, depreciation of capital, inventories (of materials, work in process, finished goods), manufacturing, scrap/rework, warehousing, distribution, recycle/investment recovery.) 3. What information sources (reports) for benchmarks do you use to compare your TSCC against other firms' TSCC? 4. Do you have a formula you use to measure TSCC? 5. What difficulties and/or successes have you had in measuring TSCC? 6. Do you have any further INSIGHTS regarding the measurement and benchmarking of TSCC?
Enforcing Suppliers' Liability for Total Price and Value-added Costs Caused by Defective Components
January 2006
Vic Venettozzi
LORD Corporation
Enforcing suppliers' liability for the purchase price and value-added costs caused by defective sub-assembly component has been a critical issue especially in such industries that involve high-level value-added manufacturing process. CPO's discuss policies to make suppliers responsible for the total costs, negotiation processes used to resolve such issues, and a process on reimbursement of those costs. 1. Has your company been successful in enforcing a policy that makes suppliers responsible for the purchase price of a defective sub-assembly component plus 100% of the value-add (cost) when the defe