Category Archives: Uncategorized

Millenials Rule the Workforce

 

Millenials Take over the Workforce

While watching the news this morning, I saw a story based on Pew Research that the Millennials now make up the largest part of the US workforce. The children of Baby Boomers and Gen Xers, the millennial generation were born 1981-1997 with approximately 1/3 of US workers (53.5 million workers) belonging to that generation.

The shift to a new generation provides both opportunities and challenges. As employers, we need to recognize this generation has a very different outlook on work life balance. They tend to prioritize things differently than previous generations. In fact, the CNN report this morning mentioned Millennials preferred midsize companies to larger companies and will opt for lower salaries in an organization that’s fun to work in over a rigid firm with a defined structure. This is the first generation to have a true freelance, independent attitude rejecting the traditional 9-to-5-employment structure. As a group, Millennials tend to reject career path planning and enjoy the flexibility to move from company to company. Another article I read predicts that Millennials will experience over 25 jobs in a lifetime.

The implication for those of us who are locked into the corporate mindset is that we will have to change the way we and our companies operate to attract the best talent. It’s time to start making adjustments to our employment plans, companies and work environments if we are to attract, retain and grow supply chain and operations talent. The stronger implication is that rigid corporate structures will have the modified to accommodate the group that now makes up the largest portion of the work force. Especially if we want to attract Millenials to manufacturing, especially in purchasing and supply chain.

Change is always hard, but necessary, if our companies are to survive.

Welcome, Millennials, time for us to pass the torch.

Congratulations on your 100th, ISM

ism-conf-2015

Milestone for Supply Management

Today I’m dedicating my blog to the Institute for Supply Management, a group that I have been a member of for over 40 years. Next week at the ISM2015 Conference, the organization will celebrate its 100 year anniversary of serving purchasing and supply management practitioners and their organizations.

The backbone of the organization is the large volunteer group that supports the organization. These volunteers have recruited, educated, and supported the organization with countless hours throughout their careers with many continuing into their retirement. These active volunteers come from all career levels from student through CPO. When I first joined as an entry-level buyer, it was the volunteers of the Central NY PMA who helped me find the right educational events and are the reason I continued my membership as my career took me from central NY to Watertown NY, then to Cleveland and to Detroit and to the opportunity to be an ISM employee for 3 years. The networking and volunteer experience helped me develop leadership and presentation skills that enhance the skills learned through my work experience. I am extremely grateful and owe these volunteers a lot.

As an organization, ISM has provided educational programs, certification programs, conferences, seminars, research and practices that drive the organization and the profession forward. In the last 10 years especially, the profession has experienced rapid growth, technology change, process change and integration into larger supply chains. The Institute for Supply Management has always been at the forefront of these changes, providing global reach with local touch through the volunteers and affiliates to the profession moving forward.

As I look to future, the role of the ISM will no doubt change with technology, business practice and talent changes in a rapidly changing environment. The organization faces stiffer competition than ever with many new entrants into the education and certification association space and the membership growing globally as supply chains become more integrated.

I’m looking forward to seeing ISM strategically move to serve the future needs of its members and their companies. Congratulations, ISM on 100 years and

I’ll see you at ISM2015 in Phoenix next week!

Earth Day: Does your company make the grade?

 

New-Life

On this Earth Day, it is appropriate to dedicate this blog to sustainability. There is no doubt now that sustainability will be a performance indicator for future investors in companies and it’s interesting to read corporate reports dedicated to green , sustainable priorities. While many corporations give lip service to sustainability, unfortunately, when it comes to funding such efforts many companies fall short. Fortunately, more companies are making the investment, like these that warrant mention:

  • Alcoa’s executive compensation is tied to safety and environmental leadership, which includes greenhouse gas emissions.
  • GE uses it in resources department to integrate sustainability into the company’s culture.
  • Coca-Cola has committed to reduce water use by 25% and hired an external audit firm to monitor these results.
  • At its shareholder meeting, Starbucks CEO Howard Schultz discussed the company’s efforts to work with suppliers and local communities investing in sustainable farming and ethical sourcing.
  • Dell integrates recycle materials in its product and packaging and considers end-of-life recycling.

All are examples of leadership in sustainability that starts in the board room and becomes part of a company’s DNA.

Since sustainability is becoming important to investors, many firms are measuring corporate sustainability and ranking them according to their criteria. One notable firm is the Toronto-based Corporate Knights, who publish a list of the top 100 most sustainable companies.

For sustainability to be effective, there must be a deliberate strategy, commissioned by the Board of Directors, mandated by the CEO and driven to be part of the culture.

Is sustainability part of your company’s DNA?

Capturing Innovation – More Than a Concept

Everybody talks about capturing supplier innovation, but rarely is it a reality in many companies. An article in CEO magazine inspired this blog, and a post by Dave Henshall just this morning spurred this last minute mention before posting; both are worth your time for further reading. Just as CEOs have to create the conditions for innovation in a company, purchasing and supply chain leaders must create the conditions to drive and capture innovation from suppliers. Our companies’ futures depend on it.

In my career, I have been able to capture innovation multiple times. One occasion, driven by a problem, had a profound impact on my thinking. Vlasic Foods had just purchased a BBQ sauce product from General Foods. When tamper-evidence became a requirement, it was a challenge for food and consumer products, and for us the efficiency of the equipment applying shrink bands was no greater than 68%. We purchased the closures for this product from Brown-Forman, a leading manufacturer of spirits. When discussing the problem with the closure supplier, they offered to help by inviting our team to visit their plant in Louisville, where their engineers analyzed our shrink band and advised us that it was size too small to fit on the jar. They further showed us equipment that they had innovated for their own product to score and glue the band on the jar. By early the next week, we ordered the right size band, received new equipment from the supplier and our efficiency became greater than 92%. This would have taken our company several months and many dollars to resolve without supplier innovation.

The story is only important if we understand what drives supplier innovation. In this case there was total trust between the companies, a supplier relationship that was strong and growing. The personal styles of the management were similar and there was an open discussion about the issues. In addition to these factors, the Vlasic operations and engineering teams were open and accepting to the ideas.

This is only one example of many, but I think it is important to understand the motivation and conditions for innovation will be required for survival in the future. Innovation is a process that needs to be deliberate, managed and focused with the right mindset and attitude.

Is your company ready to make innovation a reality?

Slavery in your Supply Chain-Do you know?

Last week I read a very interesting article in the New York Times that detailed how an investigation by the Associated Press prompted the emergency rescue of over 300 Slaves. The astonishing thing is that the article reported the “men from Burma were among hundreds of migrant workers who have been lured or tricked into leaving their countries and forced into catching fish for consumers around the world including the United States.” Much of the fish caught by the enslaved men was tracked by satellite and traced to some of America’s largest supermarkets and retailers.

Forced labor and slavery is big business. Of the 35 million people estimated by the Global Slavery Index to be enslaved worldwide, the majority are victims of exploitation in private sector activities, such as manufacturing, construction and agriculture. The illicit profit estimated by the International Labor Organization is $150 billion per year.

Many companies are adopting risk strategies, but I don’t believe that companies go far enough. When I speak to groups of supply chain professionals about risk management, I always ask how many of the audience members have a risk management strategy. It’s not surprising that all hands raise to affirm they have a risk strategy. The second question I ask is how many people manage the supply chain beyond the tier one or primary suppliers. Most of the hands go down because companies rarely manage the entire supply chain. From my experience working with hundreds of companies around the world, rarely can you find a map of the supply chain end-to-end.

News headlines are further evidence that companies need a strong handle on the supply chain. When toy companies have been accused of buying from suppliers that lack ethics and abuse employees, and garment retailers have suppliers whose factories collapsed killing hundreds of workers, the brand names who sell these products scramble to issue statements that they were unaware of the problems and promise to tighten their policies. Have they been successful? How do they know?

My advice is that every supply chain should be mapped and the complete supply chain should be audited. This is the advice I gave in 1998 in the book “Transform your Supply Chain; Releasing value in Business” and the advice remains sound in 2015. An excellent tool for audit is the Supplier Risk Index (SRI), an online resource developed by Ethisphere and the Institute for Supply Management® (ISM) for organizations to survey the practices among their suppliers and their supplier’s suppliers.

Of course, Supplier Visits are essential wherever your supplier is located. Learning to ask the right questions, meeting with the right people and being observant to identify their suppliers can help put the supply chain puzzle together.

Do you really know if slavery is part of your supply chain?

What have you done for them lately?

I worked with a food industry client whose team was dedicated, hard working, and focused on their mission to reduce costs and deliver value. It was extremely competitive industry and the media reported that competitors were doing poorly based on price increases on commodities and raw materials. When this client reported a 57% increase in profit with a 9% increase in sales for the quarter, it became obvious to all that the procurement team was driving the results.

When I had a conversation with the CEO about providing a reward and recognition for this hard working team, he was astonished that I would ask what he planned to do for the team. Admitting he’d not thought of holding an event to reward and recognize the entire team, he was willing to try. He decided to host a dinner at the city’s finest restaurant. He invited all of the purchasing employees and their significant others and arranged a limo pickup for each. The CEO provided a nice gift for both the employees and their guests and thanked the guests for their sacrifice for the company to achieve this milestone. Needless to say, this recognition was the talk of the company for a long time. The team continued to excel and later the CEO acknowledged that this low cost activity provided many benefits long after the event occurred.

When economic and business conditions deteriorate, many companies cut employee reward activities when they are needed most. Low cost events can pull the team together and focus them on a shared vision and mission. While most companies acknowledge teambuilding as a key to organization development, they fail to see how a reward event can drive:

• Goal alignment
• Interpersonal relationships
• Role clarification
• Improved problem solving skills
• Sense of purpose

I think every leader should budget and plan for team events globally. These do not need to be elaborate nor expensive to be effective. The ability to have fun, get to know others in a non-work/political setting, and build understanding and trust go a long way to improving team performance and team dynamics. Don’t wait for a formal meeting or strategy session to do some teambuilding, although that is what many firms do. With finding and retaining talent a challenge, don’t forget the importance of a feeling of belonging to a team and company.

Looking for ideas for team activities? Here’s a good list I read recently “5 Team Building Activities That Don’t Suck”, January 2, 2015 — Posted By Kim Tracy Prince. And, here’s a list of fun events I’ve seen:

1. Whirly Ball
2. Bocce ball
3. Paint Ball
4. Picnic in the parking lot on a work day
5. Bowling
6. Attend a sports event

Casey Stengel said: “Gettin’ good players is easy. Gettin’ ’em to play together is the hard part.”

What will you do for your team?

Will the Heinz and Kraft merger impact your supply chain?

 

The food industry has been consolidating for the last decade with a big impact on its supply chain. Traditionally, the supply chain has been a combination of small suppliers producing ingredients that are combined by the manufacturers and then sold to food service and retail distribution channels. In my opinion, consolidation, regulation, increased cost of doing business, demand for additional inspection, demand for longer payment terms, just in time production systems and drive for lower cost has driven many suppliers out of the business.

Consolidation has also caused issues for the industry leaders since there are fewer suppliers, reduction of capacity, increased risk and increased costs and fewer choices for key ingredients. Many of the key ingredients and specialty packaging solutions come from only one or two suppliers. As companies like Heinz and Kraft merge and focus on homogenizing specifications and the supply base, it is essential that attention remains on maintaining a strong supply chain that can deliver in the ever-increasing demands of the industry.

For the suppliers in the industry, it will be essential that they maintain a healthy bottom line, innovate new products, remain lean and align with strategic partners both up and down-stream in the supply chain. The ability to continuously improve, remove risk and compete will be an essential factor in the ability to survive in an age of massive industry consolidation.

No one can predict the future, but understanding the ever changing environment will be the key to survive and thrive.

Will your strategic supplier get “voted off the island?”