ISM_Magazine_JuneJuly_2015

JUNE | JULY 2015
Vol.26 No.5 $15.00
First
PUTTING PEOPLE
Bradley J. Holcomb, CPSM, CPSD,
2015 J. Shipman Gold Medal
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ISM June | July 2015 1
26
12 Manufacturing
The latest PMI®
and
manufacturing indexes.
13 Non-Manufacturing
The latest NMI®
and non-
manufacturing indicators.
14 Global Business
Trends
International news items
and indicators, plus a market
trends report.
Report On Business®
Features
COVER STORY
16 Putting People
First
Bradley J. Holcomb, the
2015 J. Shipman Gold
Medal Award winner,
measures his career by
the success of those he
has mentored and guided.
By Mary Siegfried
22 Supply Management’s
Rising Stars
Meet the eight extraordinary students
who are this year’s recipients of the R.
Gene Richter Scholarship Awards.
26 ISM Mastery Model™
— Put
Your Future First
Build your next generation of talent, and
strengthen your core team with the ISM
Mastery Model™
.
By Cecilia Mendoza and John Yuva
22
16
CoverphotobySergioDabdoub
01-03 TOC June_July15.indd 1 5/19/15 2:20 PM

ISM June | July 20152
4 In This Issue
Passion for Procurement
By John Yuva
8 Career ROI
A Career Path in Demand
By Jason Breault
10 Critical Skills
Is There a Gorilla in Your Midst?
By Stephanie Kessler Thayer
30 CAPS Research
A Tool to Monitor Supply Chain Risk
By CAPS Research Team
32 Tapping Into …
Building a Future Talent Pool
By Jerrett J. Chambers
Departments
6 Just in Time
News, notes and quotes — just when you
need them.
34 NewsLine
ISM®
member and volunteer news.
36 Point to Point
Focus on supply chain logistics.
Columns
ISM®
Publishing Staff
Thomas W. Derry
Chief Executive Officer
Tony Conant
Chief Operating Officer
Advertising
Kelly Rich
Account Manager
krich@instituteforsupplymanagement.org
Editorial
John Yuva
Managing Editor
jyuva@instituteforsupplymanagement.org
Lisa Arnseth Mary Siegfried
Senior Writer Senior Writer
Lisa Wolters-Broder
Senior Copy Editor/Staff Writer
Kristina M. Cahill
ROB Media Relations
Production & Design
James Cain
Art Director
Inside Supply Management®
(ISSN #1538-733X) is published 9 times a year (January/
February, March, April, May, June/July, August, September, October, November/December)
by the Institute for Supply Management,®
2055 E. Centennial Circle, Tempe, Arizona 85284.
Telephone: 480/752-6276, extension 3071 (Editorial), extension 3043 (Advertising). Copy-
right ©2015 by the Institute for Supply Management®
. All rights reserved. ISM®
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their total fee. This fee is non-deductible from membership dues. Subscriptions to university
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are solely responsible for their accuracy
and content. Opinions expressed in the articles and materials published herein do not reflect
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unless it is expressly stated that such opinions have been formally ad-
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the advertiser nor the products or services advertised. Publisher assumes no responsibility
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01-03 TOC June_July15.indd 2 5/19/15 2:20 PM

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In this Issue
from the managing editor By John Yuva
Editor
D
id you have an opportunity to attend ISM2015 this year? There were
many great sessions, several of which were blogged by our editorial
team at http://magazine.ism.ws. The keynote sessions with Dr. Robert
Gates, former U.S. Secretary of Defense, and Sallie Krawcheck,
owner of Ellevate, were particularly insightful.
Among Gates’ remarks surrounding international issues, military capa-
bilities and investment, and the upcoming presidential campaign was his
optimism for the future. “The thing that makes me feel the most optimistic
about this country is the extraordinary quality of our young people,” says
Gates. “They are smart and they care about a lot of things.”
This outlook bodes well for the procurement and supply management
profession, where an inﬂux of millennials are gracing the doorsteps of many
companies. And it’s no surprise to hear Gates tout the younger generation’s
commitment to causes and ideals. It’s particularly important for companies to
embrace such attributes with increased regulations around corporate social
responsibility and community stewardship.
Krawcheck delivered an empowering speech with key messages for
attracting and retaining millennials and women in their organizations. “The
power of diversity is diversity,” says Krawcheck. Without differing opinions
and viewpoints, companies are limiting their ability to innovate. And that
limitation is having an impact on talent attraction and retention.
Speaking of talent, it’s a common storyline from seasoned supply man-
agement practitioners — few entered the profession intentionally, with many
ﬁnding their passion for procurement by happenstance. However, millennials
are making the conscious decision to choose supply management and supply
chain as their career of choice. And better yet, they’re giving back to the pro-
fession at an early age.
I had the pleasure of meeting several winners of the “30-Under-30 Rising
Supply Chain Stars” program, including megawatt winner Katy Conrad
Maynor. These young professionals have accomplished amazing things in
such a short time. It’s impressive and should be commended. What struck a
chord, however, is how many are serving as mentors for others entering the
profession. It goes to show that regardless of your tenure in supply manage-
ment, you can make a difference. While we may not all become J. Shipman
Gold Medal winners, we can embody the spirit and dedication of the award
and make a difference in the lives of others. ISM
PassionforProcurement
During ISM2015, a repeating message was the value of young profes-
sionals and their commitment to the profession.
Jami Bliss, CPSM
Teva Pharmaceuticals
Joe Cavinato, Ph.D.
Thunderbird School of
Global Management
Bill Dempsey
Molson Coors
Ric Freeman, C.P.M.
Tempur Sealy International
Todd Genovese
Home Depot
Jerry Miller, CPSM, CPSD
Capital One Services
Tom Mulherin
JDA Software Group
Brian Schulties, C.P.M.
Prysmian Group
Joel Sutherland
University of San Diego
Ron Wilson, CPSM, C.P.M.
Wilbur Curtis Company
ISM®
Editorial
Advisory Board
04-05 Editor June_July15.indd 4 5/19/15 2:22 PM

Don’t just succeed
in supply chain, master it.
A path to mastery designed just for you
When it comes to mastery, one size does not ﬁt all. Achieve professional excellence with the
ISM Mastery Model™
, a personalized curriculum designed to propel your career in supply man-
agement. Use the 16 competencies and 69 sub-competencies to discover your key knowledge
gaps.Then, choose the right ISM programs to cultivate a strategic learning path that will reﬁne
your supply management skills.
Visit www.instituteforsupplymanagement.org to access the ISM Mastery Model™
.
04-05 Editor June_July15.indd 5 5/19/15 10:25 AM

Just in Time
news, notes & quotes — just when you need them
W
hen assessing areas of risk facing their depart-
ments, 45 percent of CPOs say supplier risk is a
top concern, according to a new survey by Consero
Group (http://consero.com) as part of its 2015 Global Procurement & Strategic
Sourcing Data Survey.
In addition, 64 percent don’t believe they have enough access to necessary
resources to manage their operations effectively. And 72 percent don’t see a
sufficient pool of trained procurement talent available to support their hiring
needs. Additional findings Include:
• Cost reduction is their top priority. Forty percent of CPOs say it’s their top
priority for 2015.
• Metrics drive the wrong behavior. Sixty-three percent think certain
metrics used to evaluate procurement drive the wrong behavior in their
organizations.
• Sustainability programs are working. Forty-nine percent say they’ve
achieved tangible cost reductions through sustainability programs, up from
33 percent in 2014.
P
rocurement’s Key Priorities in 2015: Harnessing Big Data and Renewing
Training Programs to Promote Enterprise Agility, a new study from The
Hackett Group, finds that, for 2015, the top priority of procurement
organizations is to become a trusted adviser in support of improved enterprise
agility. But it’s also one of several areas where procurement organizations
currently have a low ability to meet their own objectives.
The study recommends procurement organizations invest in new capa-
bilities, particularly in the areas of talent management and analytics/big data.
While most have already implemented basic reporting and data access capa-
bilities, their use of next-generation analytics, such as multidimensional anal-
ysis, remains limited. Only a few are using sophisticated techniques such as
predictive modeling, risk analysis and data mining — meaning there’s more
room for growth for everyone in these areas.
A complimentary version of the study is available at www.thehackettgroup.
com/research/2015/pr/keyissuespr15.
Your Suppliers Still Put You
at Risk
Procurement as a Trusted Adviser
“You miss 100 percent of shots you don’t take.”
Wayne Gretzky
Hockey Player/Coach
CommOddities
Crab
Tell me about crab, the com-
modity … Prices rise or fall with
the tides of supply and demand
to meet a consumer appetite of
1.5 million tons per year. Crab
comprises one-fifth of all sea
creatures caught worldwide.
Where does it come from? The
“spiders of the sea” are found
and netted almost everywhere
in the ocean, by every country.
What’s it used for? Food — with
the Japanese Blue Crab the most
popular dinner-plate fare.
And that’s a fact. Sometimes a
crab really isn’t a crab: Hermit
crabs, king crabs, porcelain
crabs, horseshoe crabs and crab
lice aren’t actually crabs despite
their claim to the name. Hardy
crab species can live in smoking
volcanic vents thousands of feet
below the surface and under
Antarctic ice. One species even
lives on land and
climbs trees
( p l e a s a n t
dreams).
June | July 2015
ysis, remains limited. Only a few are using sophisticated techniques such as
com/research/2015/pr/keyissuespr15.
Antarctic ice. One species even
lives on land and
climbs trees
( p l e a s a n t
06-07 JIT_June15.indd 6 5/19/15 10:25 AM

7
ODE TO A PURCHASING
AGENT
The fellow stood at the
golden gate
His head was bent and low,
He meekly asked the
man of fate
The way that he should go.
“What have you done,”
St. Peter asked,
“To gain admittance here?”
“I’ve been a purchasing
agent,” he said,
“For many and many a year.”
St. Peter opened wide
the door
And gently pressed the bell,
“Go right in and choose your
harp,” he said,
“You’ve had your share
of hell.”
—Doug Boone,
Southwestern
Purchasing Agent,
December 1965
Warehouses: essential evil?
New York: Warehouses are a headache but we can’t live without
them.
So said E. Ralph Sims Jr., general manager of E. Ralph Sims
Jr. & Associates, management consultants. After all, Sims noted,
warehousing is “a reflection of management’s ability to schedule
materials.” Sims went on to point out how automation can aid in
the solution of some warehousing problems. Potential sources of high
expense can be located by simulation, for example. … When the time comes
to take the material off the shelf, the computer helps by separating full-pallet from
odd-pallet shipments.
— Purchasing Week, December 5, 1966
We read of corporate success stories, also of great technological and scientific improve-
ments. I believe that the purchasing profession has a very important role to play in this era
of challenge, providing we can qualify ourselves and take an active part in leading the way
along these avenues of economic advancement.
— Donald L. Harwood, President, P.A.A. of Chicago, The Bulletin of the National Association
of Purchasing Agents, September 14, 1960
U.S. buyers see Red
Washington: Don’t look now. But the platinum, palladium, rhodium, or chromium
you’re using may well be carrying a “made in Russia” stamp.
Sparked by Free World shortages—and in some cases by lower prices—
American industry has been turning more and more to Communist lands to
meet its import needs. In the past six years, while Free World nations have
hiked their sales to American buyers by a respectable 68%, the Reds have scored
an 87% gain.
— Purchasing Week, September 5, 1966
Management Views the Credibility Gap
Mr. R V. Hansberger, president, Boise Cascade Corporation … stated the changes which
have occurred in this country in the last decade or so threaten to change the entire image
of America as the world leader whose success has become a hallmark for future history.
… The other reason for bringing this subject to purchasing men, he explained, is because
they are leaders in the business community, knowing the inner workings of free and private
enterprise—and private enterprise is the only group left to concern itself with credibility
gaps. Purchasing people, he said, are well qualified to take on the awesome problems as
any group in our society today.
— The Bulletin of the National Association of Purchasing Agents, June 19, 1968
Another local association has strengthened its relationship with a neighboring university
by working out a specific co-operative agreement.
We are always glad to hear evidence of the development of good working arrangements
between N.A.P.A. affiliated associations and universities. It is through such arrangements
that good purchasing education can be established on a permanent basis.
— The Bulletin of the National Association of Purchasing Agents, May 15, 1963
A Moment in Time
The 1960s
U.S. buyers see Red
Washington:
meet its import needs. In the past six years, while Free World nations have
hiked their sales to American buyers by a respectable 68%, the Reds have scored
06-07 JIT_June15.indd 7 5/19/15 2:23 PM

Career ROI
the path to leadership
A
s you move upwards
along your career path
in supply management,
it can help to look for a
niche that needs to be filled, and
position yourself as the one who
can best fill it. There are always
those areas where more supply
management expertise is needed
— such as demand planning.
As a supply chain recruiter
for the past nine years, I’ve seen
trends come and go. When I first
started out, people I trusted said I
should be recruiting in the area of
international logistics. It seemed
that everyone was outsourcing
production to places like China. We
saw many universities expanding
their language-major offerings to
include Chinese. This was a great
path to getting high-level exposure
earlier than usual. However, the
need for this skill set has leveled
off.
There are other trends like
this that were hot and then not.
However, when it comes to an area
of supply management that allows
a newer graduate or practitioner to
gain exposure and open doors early
in their career, a good place to start
is in demand planning.
What Is Demand Planning?
The ISM Glossary of Key
Supply Management Terms (www.
instituteforsupplymanagement.
org/glossary) defines demand plan-
ning as “the function of identifying
demands for products and ser-
vices to support the marketplace.
Demand planning encompasses
the activities of forecasting, order
planning and determining outside
warehouse requirements, produc-
tion balancing and spare parts.”
And the Glossary defines the
area of demand management as
“(1) the proactive compilation
of requirements’ information
regarding demand (i.e., customers,
sales, marketing, finance) and the
firm’s capabilities from the supply
side (i.e., supply, operations and
logistics management); (2) the
development of a consensus
regarding the ability to match the
requirements and capabilities; and
(3) the agreement upon a synthe-
sized plan that can most effectively
meet the customer requirements
within the constraints imposed by
supply chain capabilities.”
How the Great Recession
Helped
My eyes really opened to this
new niche in the 2009 to 2010
time frame. In the run up to the
Great Recession, many compa-
nies became fat, dumb and happy.
As they kept making things, con-
sumers kept buying them and
everyone thought this was the
new norm. Then the recession hit.
When everyone awoke from their
recessionary hangovers, compa-
nies quickly realized looking into
the future required greater respon-
sibility. Cash was king again, with
the forecast serving as the leading
indicator of a good cash posi-
tion. Therefore, demand planners
gained a more prominent role in
companies.
Surprisingly, few companies at
the time had a strong demand plan-
ning process in place. These com-
panies realized that they missed
signs that others hadn’t. To remedy
this, they built up demand planning
teams — offering much better job
A Career Path in Demand
Supply management trends may come and go, but there’s one
area where your talent will always be indispensable — and
that offers room for growth.
By Jason Breault
08-09 Career ROI June15.indd 8 5/19/15 10:25 AM

security than other areas of supply
management.
Ten-plus years ago, forecasting
was all about number-crunching.
One person with really strong
analytical skills would analyze
data from various areas. He or
she was often stereotyped as
an introvert, with limited people
skills. Somebody else would then
take that output to drive business
decisions.
That has all changed. Now
demand planners are expected to
have those same analytical skills
as well as the soft skills to help
drive business decisions — lever-
aging both the left and right brain.
Whereas a forecast analyst in the
past primarily looked at historical
data, a demand planner is now
expected to work cross-function-
ally with sales, marketing, product
development, ﬁnance and other
parts of the supply chain. And, in
some instances, work with cus-
tomers. In some industries, this
might be weekly interactions or a
monthly cycle in others. Regardless,
the exposure within the organization
is tremendous when compared to
the roles in other parts of the supply
chain that are more siloed.
Big Data’s Effect on Future
Demand Planning
Two years ago, I attended a
roundtable at the Massachusetts
Institute of Technology that
included 50 executives from 25
companies. In each case, there
were supply chain executives
and their highest-ranked human-
resources representative who
directly supported the function.
Topics included talent acquisition,
development and retention. During
one of the discussions, concerns for
the future came up. Many compa-
nies shared their concern about a
lack of promotable supply chain
talent with solid analytical and
presentation skills. Sound familiar?
Two years later, I better under-
stand their concern. With the
advent of big data, more parts of
the supply chain and the organiza-
tion have access to huge data sets
that they’re trying to make sense of.
Similar to the evolution from
forecasting to demand planning,
many other parts of supply chain
now have individuals with strong
analytical skills, but who lack pre-
sentation skills. So, where are they
pulling much of their talent from?
You guessed it. Fifty percent of the
demand planning roles we recruited
in 2014 were open because the com-
panyhadpromotedthedemandplan-
ners to another part of the business.
Demand planning as a career
is ever-evolving. We’re even seeing
more and more vice-president-level
roles in this area. Whether you
aspire to make a lifetime commit-
ment to a career in demand plan-
ning, or simply use it as a stepping
stone along your supply manage-
ment career path, after nine years
of recruiting in this space — and
seeing the constant ups and downs
in other parts of supply chain — I
remain convinced that this is the
best place to propel your supply
management career forward. ISM
Jason Breault is managing director and
supply chain recruiter for LifeWork Search
in Westport, Massachusetts.
We’re waiting for your story.
Your magazine. Your knowledge. Your stories.
Contact JohnYuva, managing editor of Inside Supply Management®
800/888-6276, extension 3021 or jyuva@instituteforsupplymanagement.org
08-09 Career ROI June15.indd 9 5/19/15 10:25 AM

10 ISM June | July 2015
A
s part of a 2013 Harvard
Medical School study,
a team of radiologists
scrutinized an X-ray of
a lung, poring over details, even-
tually giving the lung a clean bill
of health. The doctors were cor-
rect: The X-ray showed a healthy
lung. However, for this study, an
image of a cartoon gorilla the size
of a matchbook — visible to the
naked eye — was added to the
X-ray. Even as they scrutinized
nooks and crannies of the image,
seeking out known abnormalities,
83 percent noted nothing out of
the ordinary. Due to “inattentional
blindness,” they simply missed the
gorilla because they were looking
for something else.
Databases and enterprise
resource planning (ERP) systems
house invaluable business data that
supply management practitioners
use to inform purchase orders,
requisitions, forecasts and more.
The maintenance of these data
is extremely important for daily
operations, as data are especially
vulnerable when shifting from one
system to another. What goes
unnoticed can have a tremendous
effect on the department and the
company at large. Incongruities,
much like the gorilla, are often
unseen — missed completely
because experts in supply chain
often know exactly what they’re
searching for, and are not actively
seeking new interpretations of the
data.
An Accurate, Effective
Review Process
So, how do you determine if
there is an opportunity for better
efficiency and/or accuracy in your
data? First, consider which reports
and data sets you use frequently
and where the data are pulled from.
Review reports critically, seeking
outliers and abnormalities, and
identify precisely how each report
is used within the company.
As this is a small-scale internal
audit, break the system down into
pieces that make the most sense
for the operation. The best way to
do this may be to sort by supplier
or item type. Begin the review pro-
cess from a high level and note the
number of items in each category.
Compare common reports run
within the department to confirm
all necessary data are captured
based on the aggregate list. If the
number of records is significantly
different, dive deeper and compare
more thoroughly to identify, and
potentially close, the gap.
Over the past decade, many
companies underwent mergers
and acquisitions — events that
have likely affected data within
the system. Thus, it is wise to con-
firm which primary and secondary
supplier is listed for each item, and
verify active business.
Here’s a fictional example:
Acme Corp. was purchased by
Beta Inc. in 2009. Both were sep-
arate suppliers to your company
prior to this acquisition, so the
database had items listed as one
supplier or the other. When Acme
was absorbed by Beta in 2009, a
problem arose because items Acme
supplied were not updated to show
Beta as the supplier within the sup-
plier’s database. Since then, as Beta
Critical Skills
fine-tuning your fundamentals
Is There a Gorilla in Your Midst?
By taking time to closely analyze and validate data, it’s possible to
uncover supplier risks and opportunities that may have been hiding
in plain sight.
By Stephanie Kessler Thayer
10-11 Critical Skills June_July15.indd 10 5/19/15 2:24 PM

Inc. receives forecasts, or when the
internal supply chain team reviews
net requirements for Beta, items
listed with Acme products do not
populate, leaving out potentially
valuable information.
To identify incongruities with
suppliers within the system, start
with the sorted supplier list and
cross-reference it with two to three
years of historical accounting or
purchase-order data to confirm
the existence of the majority of the
companies on the list. Performing
a v-lookup in Excel is an efficient
way to compare the data — though
it seeks exact matches. A supplier
may have been listed as “Alpha Inc”
and “Alpha Inc.” within the system,
and the formula will note them as
different companies because of
the inconsistency with the period
after “Inc.” In such cases, a manual
review may identify inconsisten-
cies otherwise missed. A member
of the procurement team is the
best person to perform this task,
because he or she will have knowl-
edge of the current supply base
and any recent changes as they
scrub the supplier section of the
database.
This is an opportunity to val-
idate or update supplier data
pending team approval. This effort
should add value to your reporting,
as it offers a more complete list of
forecast items for a supplier, may
improve the relationship with the
supplier and may potentially create
volume discounts should the fore-
cast quantity increase.
Using the list of suppliers
without recent interactions,
cross-reference active items within
the system marked as supplied by
that supplier. Next, confirm the
primary supplier for each item or
category, and verify price and lead
time with the supplier of note. To
perform the update, most systems
allow bulk uploads, or data rewrites
using Excel, in lieu of manually
updating hundreds or thousands
of lines.
An important note: It’s best to
export and save the original data
from the system prior to the upload,
as some ERP systems require dele-
tion and re-creation of sets rather
than a simple rewrite. The saved
export of the data will not only
inform the template for the bulk
upload, but also in the event that
there is a problem and the data
needs to be restored, the data are
available and uncorrupted.
Using the Best Possible
Forecasting Method
There are many forecast
methods available, including net
requirement, forecast versus
usage, and others, and it is
important to know which is used,
how it is used in the company and
why it was selected. Because spe-
cific algorithms are used within the
system to create forecasts, you
should know how to set parame-
ters manually for individual items
and classes to solve for and resolve
discontinuity in the future.
As part of your review of fore-
casting information and methods,
take time to examine actual versus
forecast data to verify the most
accurate forecast is used going for-
ward. Purchasing teams often need
to make educated estimates based
on historical usage, seasonality,
marketing initiatives, and cost spikes
in materials and finished goods. By
knowing which factors inform pur-
chasing decisions, the team can rec-
ognize if the forecasts are realistic,
adjust as needed for future demand
and justify decisions to leadership in
case an anomaly occurs.
A few years ago, a Fortune 500
company suffered from inaccurate
forecasts each month. This resulted
in production planning issues, back
orders and, ultimately, lost sales.
After years of ongoing issues, the
team searched for explanation
for the errors and found that the
common — though flawed — net
requirement forecasting method
considered planned work orders,
finished goods, raw materials and
current inventory when creating
estimates 120 days out. Though
this forecast held some value, the
historical data were only available
from the current fiscal year and,
unfortunately, were not pulling
accurate sales data. There was
also a forecast versus usage report
that offered a forecast number for
12 months as well as usage from
the trailing 12 months of actual
sales — this report did not consider
inventory, but did allow for greater
purchasing power.
The supply management team
saw value in both reports and
implemented a hybrid forecasting
method. This new forecasting
method allowed them to plan accu-
rately for sales increases, correct
production issues and improve
supplier relationships. Following
this success, other areas of the
business soon adopted the hybrid
forecasting method.
If you’re ready to find your
company’s hidden gorilla, it will
take time to do it correctly. Given
the analytical nature of a validation
project, it can be benchmarked and
completed by one person or broken
into sections for different individ-
uals to manage over time when
there are seasonal lulls in regular
workloads. As with any project,
maintain excellent communica-
tion with the team at large, gather
input and consider multiple courses
of action prior to making an enter-
prisewide decision. With careful
and thorough attention to detail,
this exercise will prove that risks
and potential areas of opportunity
can be found right in plain sight. ISM
Stephanie Kessler Thayer is spe-
cial projects manager for Carr Lane
Manufacturing in St. Louis.
10-11 Critical Skills June_July15.indd 11 5/19/15 10:26 AM

ISM
®
manufacturing Analysis by Bradley J. Holcomb, CPSM, CPSD, chair of
the Institute for Supply Management®
Manufacturing
Business Survey Committee.
Manufacturing at a Glance
INDEX
Apr
Index
Mar
Index
% Point
Change
Direction
Rate of
Change
Trend*
(months)
PMI®
51.5 51.5 0.0 Growing Same 28
New Orders 53.5 51.8 +1.7 Growing Faster 29
Production 56.0 53.8 +2.2 Growing Faster 32
Employment 48.3 50.0 -1.7 Contracting From Unchanged 1
Supplier Deliveries 50.1 50.5 -0.4 Slowing Slower 23
Inventories 49.5 51.5 -2.0 Contracting From Growing 1
Customers’ Inventories 44.0 45.5 -1.5 Too Low Faster 5
Prices 40.5 39.0 +1.5 Decreasing Slower 6
Backlog of Orders 49.5 49.5 0.0 Contracting Same 2
Exports 51.5 47.5 +4.0 Growing From Contracting 1
Imports 54.0 52.5 +1.5 Growing Faster 27
Overall Economy Growing Same 71
Manufacturing Sector Growing Same 28
PMI
®
at 51.5%
PMI®
Manufacturing expanded in April as the PMI®
registered 51.5 percent, indicating growth
in manufacturing for the 28th consecutive
month. A reading above 50 percent indicates
that the manufacturing economy is generally
expanding; below 50 percent indicates that it
is generally contracting. A PMI®
in excess of
43.1 percent, over a period of time, generally indicates an expansion of the overall economy.
Therefore, the April PMI®
indicates growth for the 71st consecutive month in the overall economy.
E
conomic activity in the
manufacturing sector
expanded in April for the
28th consecutive month, and the
overall economy grew for the
71st consecutive month, say the
nation’s supply executives in the
latest Manufacturing ISM®
Report
On Business®
.
The April PMI®
registered 51.5
percent, the same reading as in
March. The New Orders Index reg-
istered 53.5 percent, an increase
of 1.7 percentage points from the
reading of 51.8 percent in March.
The Production Index registered
56 percent, 2.2 percentage points
above the March reading of 53.8
percent. The Employment Index
registered 48.3 percent, 1.7 per-
centage points below the March
reading of 50 percent, reflecting
contracting employment levels
from March. While the March and
April PMI®
were equal, both reg-
istering 51.5 percent, 15 of the 18
manufacturing industries reported
growth in April while only 10 indus-
tries reported growth in March,
indicating a broader distribution
of growth in April among the 18
industries.
The 15 industries reporting
growth in April — listed in order
— are: Nonmetallic Mineral
Products; Plastics & Rubber
Products; Wood Products;
Printing & Related Support
Activities; Furniture & Related
Products; Fabricated Metal
Products; Food, Beverage
& Tobacco Products; Paper
P r o d u c t s ; Mi s c e llan e o u s
Manufacturing‡; Machinery;
Transportation Equipment; Textile
Mills; Electrical Equipment,
Appliances & Components;
Chemical Products; and Primary
Metals. ISM
New Orders and Production Growing; Employment and Inventories Contracting;
Supplier Deliveries Slowing
PMI
51.5%
43.1% = Overall Economy
Breakeven Line
50% = Manufacturing Economy
Breakeven Line
201520142013
Commodities Reported
Commodities Up in Price: The only commodity listed up in price for the month of April is Freight.
Commodities Down in Price: Aluminum (5); Carbon Steel (4); Crude Oil; Nickel (4); Plastic
Resin (5); Polypropylene Resin; Scrap Steel (5); Stainless Steel (6); Steel (5); Steel – Cold
Rolled (2); and Steel – Hot Rolled (6).
Commodities in Short Supply: There were no commodities listed in short supply for the
month of April.
‡MiscellaneousManufacturing(productssuchasmedicalequipment
and supplies, jewelry, sporting goods, toys and office supplies).
April 2015
Note: The number of
consecutive months the
commodity is listed is
indicated after each item.
*Reported as both up
and down in price.
*Number of months moving in current direction.
Manufacturing ISM®
data is seasonally adjusted for the New Orders, Production, Employment and Supplier Deliveries Indexes.
12-13 ROB_June15.indd 12 4/29/15 9:30 AM

ISM
®
non-manufacturingAnalysis by Anthony Nieves, CPSM, C.P.M., CFPM,
chair of the Institute for Supply Management®
Non-Manufacturing Business Survey Committee.
Non-Manufacturing at a Glance
INDEX
Apr
Index
Mar
Index
% Point
Change
Direction
Rate of
Change
Trend*
(months)
NMI®
57.8 56.5 +1.3 Growing Faster 63
Business Activity 61.6 57.5 +4.1 Growing Faster 69
New Orders 59.2 57.8 +1.4 Growing Faster 69
Employment 56.7 56.6 +0.1 Growing Faster 14
Supplier Deliveries 53.5 54.0 -0.5 Slowing Slower 6
Inventories 51.0 49.5 +1.5 Growing From Contracting 1
Prices 50.1 52.4 -2.3 Increasing Slower 2
Backlog of Orders 54.5 53.5 +1.0 Growing Faster 3
New Export Orders 48.5 59.0 -10.5 Contracting From Growing 1
Imports 51.5 55.5 -4.0 Growing Slower 3
Inventory Sentiment 59.5 61.0 -1.5 Too High Slower 215
Overall Economy Growing Slower 69
Non-Manufacturing Sector Growing Slower 63
NMI
®
at 57.8%
NMI®
In April, the NMI®
registered 57.8 percent. An
NMI®
in excess of 48.7 percent, over a period
of time, generally indicates an expansion of
the overall economy. Therefore, the April
NMI®
indicates growth for the 69th consecu-
tive month in the overall economy, and indi-
cates expansion in the non-manufacturing
sector for the 63rd consecutive month. The past relationship between the NMI®
and the overall
economy indicates that the NMI®
for April (57.8 percent) corresponds to a 3.9 percent increase
in real gross domestic product (GDP) on an annualized basis.
E
conomic activity in the
non-manufacturing sector
grew in April for the 63rd
consecutive month, say the
nation’s purchasing and supply
executives in the latest Non-
Manufacturing ISM®
Report On
Business®
.
The NMI®
registered 57.8 per-
cent in April, 1.3 percentage
points higher than the March
reading of 56.5 percent. This rep-
resents continued growth in the
non-manufacturing sector. The
Non-Manufacturing Business
Activity Index increased substan-
tially to 61.6 percent, which is 4.1
percentage points higher than the
March reading of 57.5 percent,
reflecting growth for the 69th
consecutive month at a faster
rate. The New Orders Index regis-
tered 59.2 percent, 1.4 percentage
points higher than the reading of
57.8 percent registered in March.
The Prices Index decreased 2.3
percentage points from the March
reading of 52.4 percent to 50.1 per-
cent, indicating prices increased in
April for the second consecutive
month, but at a slower rate.
The 14 non-manufacturing
industries reporting growth in
April — listed in order — are:
Arts, Entertainment & Recreation;
Real Estate, Rental & Leasing;
Management of Companies &
Support Services; Transportation
& Warehousing; Wholesale Trade;
Finance & Insurance; Utilities;
Health Care & Social Assistance;
Agriculture, Forestry, Fishing &
Hunting; Public Administration;
Retail Trade; Accommodation &
Food Services; Construction; and
Educational Services. ISM
Business Activity Index at 61.6%; New Orders Index at 59.2%; Employment Index
at 56.7%
NMI (Non-Manufacturing)
57.8%
201520142013
48.7% = Non-Manufacturing Economy
Breakeven Line
Commodities Reported
Commodities Up in Price: Beef (6); Chicken (2); #1 Diesel Fuel (4); #2 Diesel Fuel*;
Fuel (3); Gasoline* (4); IV Solutions; and Paper (2).
Commodities Down in Price: Dairy (3); #2 Diesel Fuel*; Gasoline*; Medical Supplies;
Monitors; Pork; Services Labor; and Steel Products.
Commodities in Short Supply: Medical IV Solutions (16); Pharmacy Drugs (2);
and Services Labor (3).
April 2015
Note: The number of
consecutive months the
commodity is listed is
indicated after each item.
*Reported as both up
and down in price.
*Number of months moving in current direction.
Non-Manufacturing ISM®
data is seasonally adjusted for the Business Activity, New Orders, Prices and Employment Indexes.
✣Other Services (services such as Equipment Machinery Repair-
ing; Promoting or Administering Religious Activities; Grantmaking;
Advocacy; and Providing Dry-Cleaning Laundry Services, Person-
al Care Services, Death Care Services, Pet Care Services, Photofin-
ishing Services, Temporary Parking Services and Dating Services).
12-13 ROB_June15.indd 13 4/29/15 9:30 AM

Global Trends
news in a changing world
Private companies are upbeat
about the economy, their
growth prospects and hiring,
according to PwC’s latestaccording to PwC’s latest
Trendsetter BarometerTrendsetter Barometer. The. The
report finds 63 percent ofreport finds 63 percent of
companies plan to add full-companies plan to add full-
time employees this year, 86time employees this year, 86
percent indicate they antici-percent indicate they antici-
pate positive revenue growthpate positive revenue growth
and nearly three-quartersand nearly three-quarters
intend to increase operationalintend to increase operational
expenses in areas such as tech-expenses in areas such as tech-
nology, new products and ser-nology, new products and ser-
vices, and facilities expansion.vices, and facilities expansion.
”Private companies’ agility”Private companies’ agility
in responding quickly to cus-in responding quickly to cus-
tomers’ changing demands,tomers’ changing demands,
coupled with the ability tocoupled with the ability to
make long-term investmentsmake long-term investments
and weather short-termand weather short-term
economic downturns, haseconomic downturns, has
generally led to stronger per-generally led to stronger per-
formances and higher growth,”formances and higher growth,”
says Ken Esch, PwC partner.says Ken Esch, PwC partner.
Respondents admit they are
concerned about the lack ofconcerned about the lack of
qualified workers and growingqualified workers and growing
wage pressure. Technologywage pressure. Technology
and engineering professionalsand engineering professionals
remain in highest demand.
A majority of consumers in
Canada believe brands and
companies should be environ-companies should be environ-
mentally responsible, reflectingmentally responsible, reflecting
the view of consumers world-the view of consumers world-
wide. A survey by GfK, whichwide. A survey by GfK, which
interviewed 28,000 people in 23interviewed 28,000 people in 23
countries, notes that 76 percentcountries, notes that 76 percent
of consumers worldwide agreeof consumers worldwide agree
that companies need to bethat companies need to be
environmentally responsible.environmentally responsible.
“Worldwide, only 6 percent“Worldwide, only 6 percent
believe that brands don’t have
to be environmentally respon-
sible and 11 percent indicate
they buy products and ser-
vices that don’t appeal to theirvices that don’t appeal to their
beliefs,” the study finds. Fifty-
five percent of Canadians alsofive percent of Canadians also
say they only buy products andsay they only buy products and
services that appeal to theirservices that appeal to their
beliefs, values or ideals, andbeliefs, values or ideals, and
53 percent say they feel guilty53 percent say they feel guilty
when they do something thatwhen they do something that
is not environmentallis not environmentally friendly.
Labor disruptions, political
instability and human-rights
issues are among the reasons
companies should carefully
examine their supply chains.
The Global Supply ChainThe Global Supply Chain
Intelligence report by BSIreport by BSI
Supply Chain Solutions warnsSupply Chain Solutions warns
companies, particularly thosecompanies, particularly those
in the apparel trade, to scru-in the apparel trade, to scru-
tinize their supply chains. Ittinize their supply chains. It
notes that Haiti, for example,notes that Haiti, for example,
reportedly has 29 percent ofreportedly has 29 percent of
all children between the agesall children between the ages
of 5 and 14 working in slave-of 5 and 14 working in slave-
like conditions. “Companieslike conditions. “Companies
are facing an increasingly wideare facing an increasingly wide
range of challenges in theirrange of challenges in their
supply chains, from human-supply chains, from human-
right issues to natural disas-right issues to natural disas-
ters,” says Shereen Abuzobaa,ters,” says Shereen Abuzobaa,
commercial director at BSI.commercial director at BSI.
Such complexity creates “blackSuch complexity creates “black
holes of risk” for organizations,holes of risk” for organizations,
which can affect both thewhich can affect both the
bottom line and a company’sbottom line and a company’s
reputation, she adds. Otherreputation, she adds. Other
risks affecting supply chainsrisks affecting supply chains
last year include port conges-last year include port conges-
tion, strikes, cargo theft and
natural disasters.
Resources
Information in this report
was gathered from the
following sources.
BSI Supply Chain Solutions
www.bsigroup.com
GfK
www.gfk.com
PwC
www.pwc.com/US
Reportlinker
www.reportlinker.com
SAP
www.sap.com
US
United States
CA
Canada
HT
Haiti
14-15 Global June_July15.indd 14 5/19/15 10:26 AM

Business growth in both the manufacturing and non-manufac-
turing sectors is expected to continue through the remainder of
2015, according to the Spring 2015 Semiannual Economic Forecast.
Fourteen of the 18 industries in the manufacturing sector, and 13
of the 18 in the non-manufacturing sector, expect to see growth
in revenues throughout 2015.
Manufacturing
Overall revenue growth is expected to be 3.5 percent, a “mean-
ingful” decrease of 2.1 percent from December 2014 when the survey
predicted 5.6 percent for 2015. Fifty-five percent of respondents pre-
dict revenue growth at 9 percent, 16 percent expect an 8.9 percent
decline and 29 percent foresee no change in revenue.
Some highlights from the semiannual forecast include:
• Operating rate is at 79.5 percent of normal capacity.
• Production capacity is expected to increase 3.4 percent.
• Prices are expected to decrease a total of 0.9 percent.
• Employment is expected to increase 0.7 percent during the
remainder of the year.
Non-manufacturing
Revenue growth is expected to increase 2.9 percent for 2015, less
than the 10 percent increase forecast in December 2014. Despite
a “cooling off” in the rate of growth, the sector will continue on a
growth path throughout the year.
Some highlights from the semiannual forecast include:
• Operating rate is at 86 percent of normal capacity.
• Capital expenditures are expected to increase 1.5 percent.
• Employment is expected to increase 2 percent.
• Prices are expected to decrease 0.4 percentage points for the
rest of 2015.
The complete Spring 2015 Semiannual Economic Forecast,
released May 6, 2015, can be found at www.instituteforsupply
management.org. ISM
Bradley J. Holcomb, CPSM, CPSD, is chair of the Institute
for Supply Management®
Manufacturing Business Survey
Committee. Anthony S. Nieves, CPSM, C.P.M., A.P.P.,
CFPM, is chair of the Institute for Supply Management®
Non-Manufacturing Business Survey Committee.
Business Growth Expected
to Continue Through 2015
High-performing companies
that use talent to drive bot-
tom-line growth share several
key characteristics, includingkey characteristics, including
an emphasis on training andan emphasis on training and
mentoring. A global studymentoring. A global study
from Oxford Economics withfrom Oxford Economics with
support from SAP,support from SAP, WorkforceWorkforce
20202020, says more than half of, says more than half of
the high-performing companiesthe high-performing companies
offer supplemental trainingoffer supplemental training
programs as an employee ben-programs as an employee ben-
efit. They also are 16 percentefit. They also are 16 percent
more likely to have a formalmore likely to have a formal
mentoring program than under-mentoring program than under-
performing companies, theperforming companies, the
study notes. “The study resultsstudy notes. “The study results
demonstrate a clear divisiondemonstrate a clear division
between those who are posi-between those who are posi-
tioning their companies for thetioning their companies for the
future of work and those whofuture of work and those who
are not,” says Edward Cone ofare not,” says Edward Cone of
Oxford Economics. The study
finds other high-performing
companies also reward talent
on merit instead of tenure,
and they understand and planand they understand and plan
for the demographics of the
future workplace.
China’s air transport and air-
port industry continues to
grow, driven largely by tour-
ists’ leisure demand, and a
small uptick in exports ofsmall uptick in exports of
both cargo and mail. Last year,both cargo and mail. Last year,
China’s total passenger turn-China’s total passenger turn-
over increased 11.6 percentover increased 11.6 percent
and its cargo and mail turn-and its cargo and mail turn-
over increased 8.8 percent,over increased 8.8 percent,
according to Reportlinker’saccording to Reportlinker’s
China Air Transport andChina Air Transport and
Airport IndustryAirport Industry Report. “To
improve performance, the air-improve performance, the air-
lines in China have sought tolines in China have sought to
make progress in two aspectsmake progress in two aspects
since 2013 — accelerating the
opening up of international andopening up of international and
regional routes, and expandingregional routes, and expanding
its low-cost aviation industry,”its low-cost aviation industry,”
the report says. In 2014, Airthe report says. In 2014, Air
China added 12 new routes andChina added 12 new routes and
China Southern Airlines addedChina Southern Airlines added
nine new international routes.nine new international routes.
Influences on the industry areInfluences on the industry are
slower economic growth bothslower economic growth both
in China and globally, and high-in China and globally, and high-
speed rail. Chinese airlines alsospeed rail. Chinese airlines also
suffered exchange losses duesuffered exchange losses due
to the yuan’s depreciationto the yuan’s depreciation
against the U.S. dollar.. dollar.
DE
Germany
CN
China
14-15 Global June_July15.indd 15 5/19/15 10:26 AM

The 2015 Institute for Supply Management®
— Michigan State University Awards for
Excellence in Supply Management and the R. Gene Richter Scholarship Program would
not have been possible without the generous support of our sponsors. ISM®
is grateful
for their continued support.
Thank You
Sponsor
16-17 June_July15 Sponsor.indd 16 5/19/15 10:26 AM

www.ism.ws 17
T
his 10-page special section features two
prestigious programs presented by ISM®
— the J. Shipman Gold Medal Award and
the R. Gene Richter Scholarship Awards. These
awardswerepresentedatISM2015,heldMay3-6,
2015, in Phoenix.
OnMonday,May4,aspecialdinnerwasheldto
recognize the winners of the Institute for Supply
Management®
— Michigan State University
AwardsforExcellenceinSupplyManagement.Also
recognized at that event were the winners of the
2015 scholarships, awarded by the R. Gene and
Nancy D. Richter Foundation and the ISM R. Gene
Richter Scholarship Fund. The R. Gene Richter
ScholarshipProgramwasestablishedin2004and
named in memory of R. Gene Richter, who was a
galvanizing force in the field of procurement. The
next year, the R. Gene and Nancy D. Richter Foun-
dation partnered with ISM to expand the Founda-
tion’sscholarshipprogramintothelargestnational
scholarshipprograminthefieldofsupplymanage-
ment. With the goal to establish the ability to pro-
vide for the funding of scholarships on an ongoing
basis,theISMR.GeneRichterScholarshipProgram
Fundwasestablishedin2008.ThefundatISMhas
a goal to grow the principal to US$2 million. The
proceeds from this fund will provide a portion of
the scholarships for future Richter scholars.
OnTuesday,May5,ISMawardedtheJ.Shipman
Gold Medal Award at a special luncheon. This
award honors a single individual for a lifetime of
contributions to the profession. The award was
created by the Purchasing Management Associa-
tionofNewYorkin1931,andispresentedtothose
individuals whose modest, unselfish, sincere and
persistent efforts have aided the advancement of
thesupplymanagementfield.Thosechosenforthe
award have also assisted and guided members of
the supply management profession in their
endeavors.
Beginning on the next page, we are pleased to
provide an in-depth article on this year’s Shipman
Award winner, Bradley J. Holcomb, CPSM, CPSD,
followed by synopses of the exceptional achieve-
mentsattainedbytheeightstudentswhoreceived
2015 Richter Scholarships.
Recognizing the 2015 J. Shipman Award
Winner and Tomorrow’s Leaders
16-17 June_July15 Sponsor.indd 17 5/19/15 10:26 AM

Putting People
First
t was 2011, and Bradley J. Holcomb was wrapping up a successful
35-year career in which he held positions in manufacturing, marketing
and sales — eventually finding his passion in procurement and supply
management. That passion took him on a journey to various compa-
nies, always with the mission to build or transform the supply chain
function to a high-performing, respected organization.
But as Holcomb, CPSM, CPSD, reflected on his career, he realized he had
some unfinished business. He wanted to say thank you and share his success
with his first boss and mentor at Eastman Kodak Company, where he started
his career in 1976. It was important to Holcomb, the ISM®
2015 J. Shipman Gold
Medal Award winner, because a hallmark of his career has been mentoring young
professionals — and his first boss was the inspiration.
“I realized that Paul Kruggel was the first and most genuine mentor I ever
had,” Holcomb says. “I didn’t really know it at the time, but as I began guiding
and mentoring others, the importance of what he did really struck me.” Holcomb
located the 81-year-old Kruggel and flew to Rochester, New York, to take him
to lunch and thank him. “I hadn’t seen him for 25 or 30 years, but we picked up
like it was yesterday.”
Finding Joy in Mentoring
Holcomb says he’s fashioned his mentoring style after his former boss. “Paul
would tell you that his calling was to bring young talent into the company, groom
and grow them, and then send them off to other departments in the company,”
Holcomb says. “He was very comfortable in that role. There were vice presidents
and senior vice presidents at Kodak who all had come through his door. He was
completely and totally unselfish.”
Bradley J. Holcomb, the 2015 J. Shipman Gold Medal Award
winner, measures his career by the success of those he has mentored
and guided.
I PhotobySergioDabdoub
By Mary Siegfried
JUNE | JULY
COVER STORY
18-21 Shipman Winner June/July15.indd 18 5/19/15 10:27 AM

Holcomb, who was honored at
ISM2015 in Phoenix on May 5, 2015,
is chair of the ISM Manufacturing
Business Survey Committee and, after
a 20-year career at Eastman Kodak,
held executive-level supply manage-
ment positions in companies ranging
from Praxair to Dean Foods. Although
he talks with pride about his supply
management career — often building
departments from the ground up — he
clearly measures success in terms of
the college students, young profes-
sionals and up-and-coming leaders
he’s mentored and guided through
their careers.
He says he’s experienced “abso-
lute joy” in mentoring many young
colleagues as well as several Richter
Scholars over the years. “It keeps me
connected with young people, and
that is terribly important because
they’re the vitality and future of our
profession. It’s important to help them
realize their highest and best poten-
tial,” he explains.
Understanding the Servant
Role
He encourages other supply
management professionals to get
involved with mentoring. “For those
people who have succeeded in our
profession, I’m just saying it’s time
to give back. Many do, of course, but
everyone can. It should come natu-
rally,” he says.
Giving back is something
Holcomb says comes naturally to him.
Maybe that’s why he found his niche
in supply management. “We really
have to appreciate our role and under-
stand that we are servants,” he says
about the profession. “I’ve always
believed that my organization was a
service organization to other depart-
ments. Procurement is positioned to
help every other department achieve
the best value for their purchasing
dollars and to help them align with
the very best suppliers and partners.”
Holcomb, with a bachelor’s and
two master’s degrees in engineering,
was introduced to procurement when
he was asked to re-engineer Kodak’s
global procurement organization in
1994. Kodak was going through major
changes at the time as the last of the
“home-grown” CEOs left and a new
CEO was brought in from Motorola,
the same company from which both of
Holcomb’s parents had retired.
“My mentor at the time picked
me to lead that effort and globalize
procurement at Kodak,” he recalls.
There were 13 independent procure-
ment organizations around the com-
pany, spread across the United States,
Europe, Canada, Australia and Brazil.
“And each was doing its own thing,
never talking to each other, but we
changed all of that together,” he adds.
Building a Procurement
Organization
Holcomb brought the procure-
ment leaders together in Rochester
where they “huddled together literally
for a month to create new processes
for the new global organization.”
He then continued to help lead the
department as the director of supplier
relationship management.
During the redesign of the depart-
ment, Holcomb says he relied on his
engineering background as the group
worked to re-engineer people, orga-
nizations, systems and processes.
They focused on four key processes:
strategic planning, strategic sourcing,
supplier relationship management
and tactical processes.
The first key step was strategic
planning, he explains, because Kodak
had a long-standing corporate stra-
tegic-planning process. “We plugged
into that process and built a module
that flowed and fit into the broader
strategic-planning process of the
company,” he explains. By aligning
the new procurement organization
strategically with the overall company,
the newly redesigned department was
given a seat at the executive table
from the outset.
“I did that for two years, we saved
the company a ton of money and I fell
in love with the profession,” he says.
Learning From the Best
That love of the profession
became a springboard for a supply
management career that spanned 15
years and five companies as Holcomb
continued to re-engineer supply chain
organizations. He left Kodak in 1996
when he was offered the position of
vice president, global procurement, at
Praxair Inc. in Danbury, Connecticut.
Holcomb was tasked with trans-
forming an “old-school purchasing
shop into a modern sourcing and
supply management organization.”
Although excited about the chal-
lenge, he admits he was apprehen-
sive because “this was my first time
swimming out to open waters.”
So he did what many young,
rising supply chain professionals did
in the mid- to late 1990s — he sought
guidance from R. Gene Richter, who
had transformed the procurement
organization at IBM.
“My boss at Kodak had intro-
duced me to Gene Richter earlier,
and I called him, explained that I was
new at Praxair and could really use his
help,” Holcomb says. “He invited me
and three of my managers to his office
in Somers, New York, and — this is
so Gene — he took us into his confer-
ence room, brought in several of his
managers and we all spent eight hours
together connecting. I was totally
blown away.”
He says he learned some new
things and also found he was
moving his procurement organiza-
tion in the right direction. “But to
get that affirmed by Gene Richter
was amazing,” he notes. It’s only fit-
ting that Holcomb has volunteered
to mentor six Richter scholars, and
takes calls from several other Richter
scholars who need advice or someone
to bounce ideas off of.
Putting People
First
18-21 Shipman Winner June/July15.indd 20 5/19/15 2:25 PM

Developing a Supplier
Strategy
It was at Praxair that Holcomb
realized a key to success in building
or transforming a procurement orga-
nization was developing strong peer
relationships. “The most important
relationships are not those above or
below your level, but with peers with
whom you don’t have a reporting
relationship,” he notes. “Those are
the people you have to work with.
You need to immediately show them
respect by listening to them as cli-
ents or future clients.”
Throughout his career, Holcomb
said developing a vision for both
his staff and the supply base was
essential. He recalls how important
it was to share his vision with the
supply base at Houston-based
Waste Management when he joined
as CPO in 2000.
“Suppliers are companies, but
they also are made up of people, just
like our people,” he explains. “And
we need to have suppliers that are
better at what they do than we are.
Suppliers should be companies that
don’t just make products or provide
services, but ones that have deep
RD and are always innovating. And
I want to bring their whole company
to the table.”
After just three months into
his new job at Waste Management,
Holcomb called together the top 75
suppliers to explain that his new
organization was centralizing oper-
ations. “I told them we would be
picking only the best of the best.
Then I asked them to look to their left
and right, before saying that at next
year’s meeting those two people
would probably not be there.”
Holcomb says some complacent
suppliers thought they would out-
last him, but they didn’t. “And those
suppliers that won on their merits
received three times the volume
of business. My vision has always
been to build an extraordinary
supply base, picking the very best
suppliers upfront, and then making
them better for us through a disci-
plined supplier performance man-
agement process.”
It’s All About People
His vision for his own procure-
ment staff is a simple one. “My
secret is surrounding myself with
people who are exceptionally good
at what they do,” he says. “I goal
them up and get out of their way.
My job then becomes providing
air cover — something that comes
from my years in the Air Force. I
then deal with the other executives,
departments and budgets so my
people don’t get bogged down in
such things as office politics.”
His four years in the U.S. Air
Force in the late 1960s and early
1970s, when the Vietnam War was
raging, were a time of great personal
development for Holcomb. It’s a time
in which he takes great pride. The
18-year-old Holcomb was trained as
an electronics technician, helping
maintain a fleet of F-111 aircraft in
the United States and in the U.K.
“I learned new skills and a disci-
plined way of living,” he says. “I never
thought I could care so much about
spit-shining my shoes and creasing
my pants. The military was an oppor-
tunity to serve, but helped me to grow
up. I was offered the GI Bill, allowing
me go to college and get two engi-
neering degrees paid for.”
Because of his military experi-
ence, Holcomb says he has always
given strong consideration to job
applicants who have a military back-
ground. “At Waste Management, I
hired a ‘bird colonel’ for a key pro-
curement position,” he recalls.
“I remember thinking, ‘I used to
salute guys like that.’ But I found that
people with a military background fit
perfectly into supply management
because both require a disciplined
way of thinking and attention to
details.”
Because of his commitment to
and investment in the supply man-
agement teams he has assembled
over the years, Holcomb has been
asked what he looks for in job can-
didates. The answer, he admits, is
very simple.
“The first thing I look for is
whether he or she is a nice person.
I ask, ‘Is this a person I would enjoy
working with? Would my team enjoy
working with him or her?’ It’s hard
to put a definition around it, but
you know it almost immediately,”
he says.
Once that key factor is evident,
Holcomb evaluates the candidate’s
skills such as negotiating, project
management and time manage-
ment. “I pick the best of the best
people and they stick with me. Some
have been with me at two or even
three companies,” he adds. “There
are directors, vice presidents and
senior vice presidents who have all
come through my door — much like
I came through Paul Kruggel’s door
all those years ago.” ISM
Mary Siegfried is a senior writer for Inside
Supply Management®
.
Bradley J. Holcomb, 2015 J. Shipman
Gold Medal Award winner, says he was
“proud and humbled” as he accepted the
award at ISM2015 in Phoenix.
PhotobySergioDabdoub

T
he R. Gene Richter Scholarship
Program is a partnership between
ISM®
and the R. Gene and Nancy D.
Richter Foundation. It is viewed as
the most esteemed scholarship program for
exceptional students in supply management
in the United States. Established in 2004, this
exclusive award honors students who have
outstanding GPAs, are actively engaged in
professional extracurricular activities and are
passionate about the profession of supply
management. The 2015 winners are no excep-
tion. Each of the eight recipients has proved
strong commitment and dedication to the field,
and has worked hard to achieve tremendous
accomplishments.
The award provides recipients with up to
US$5,000 of tuition funding, and the oppor-
tunity to work with a previous Richter schol-
arship recipient as a junior mentor, as well as
an executive senior mentor. They also receive
complimentary attendance at the ISM Annual
Conference. ISM and the Richter Foundation
are pleased to recognize these eight students
as the 2015 R. Gene Richter Scholars:
Matt Christiansen
A junior at Duquesne University majoring
in supply chain management, and double
minoring in information systems management
and sales, Matthew Christiansen has a cumu-
lative GPA of 3.81 and will graduate in May
2016.
Christiansen, a member of the ISM—
Pittsburgh, Inc., affiliate, is currently presi-
dent of the Duquesne Supply Chain Council,
a student organization with 60 members that
provides a number of networking opportunities
connecting students to experts in the field.
Christiansen has completed internships at
United States Steel Corporation and Curtiss-
Wright, where he has developed cost savings
models and completed entire sourcing projects
from beginning to end, including researching
the industry, developing RFPs, communicating
with buyers, analyzing bids and negotiating
with suppliers. Christiansen began his third
internship at E.L. DuPont de Nemours and
Company in May 2015.
Christiansen is certified as a Lean Six
Sigma Yellow Belt and has been the recip-
ient of several supply chain scholarships.
After working full-time for several years,
Christiansen has his sights set on attaining
graduate-level education.
Christiansen’s executive mentor is Shelley
Stewart, Jr., CPSM, chief procurement officer
and vice president of sourcing at DuPont. His
junior mentor is 2013 Richter scholar Daniel
Dodell, a business analyst at McKinsey Co.
Meet the eight extraordinary students who are this year’s
recipients of the R. Gene Richter Scholarship Awards.
STARS
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Kevin Cronin
Kevin Cronin is a junior at
Michigan State University with a
major in supply chain management.
Cronin currently holds a 3.85 GPA
and will graduate in May 2016.
Cronin is actively engaged
in supply chain through exten-
sive participation in the Michigan
State University Supply Chain
Management Association (SCMA).
Within this association, he facili-
tated a supply management career
fair that featured 128 companies and
was attended by over 700 students,
making it the largest student-run fair
on campus. “I have grown more from
this experience than any other that
I have had in college,” Cronin says
of SCMA.
In addition to his time with
SCMA, Cronin has also spent time
interning with AbbVie Inc., where he
realized his passion for the pharma-
ceutical industry. He plans to return
and intern with the company again
this summer.
Upon graduation, Cronin hopes
to join AbbVie Inc. for long-term
employment before pursuing his
graduate degree.
Cronin’s executive mentor is
David Natoff, head of procure to
pay for Google. His junior mentor is
2013 Richter scholar Hanna Downs,
a buyer at General Motors Company.
Shahan Din
Shahan Din is a junior at
University of South Carolina (USC)
with a double major in global supply
chain operations management and
international business, with a minor
in Spanish. Din currently holds a
cumulative 3.95 GPA.
Din was introduced to the field
of supply management by his senior
mentor and realized that the work
suited his personality perfectly. “I
love the idea of providing continuous
PhotobySergioDabdoub
2015 Richter Scholar
Winners
Back row (left to right):
Shahan Din, University of
South Carolina; Samuel
Setiawan, Michigan State
University; Erika Mionis,
Arizona State University;
Kevin Cronin, Michigan State
University; Matt Christiansen,
Duquesne University.
Front row (left to right):
Marchela Stancheva, Rutgers
University; Jenna Fischer,
The Pennsylvania State
University; Emily Socha,
Bryant University.
22-25 Richter June/July15.indd 23 5/19/15 10:27 AM

improvement for a company,” Din
says. “You can always find areas that
need to be made better, and you’ll
never hit a wall.”
Driven to help others, Din founded
the USC Food Recovery Network,
which distributes leftover food from
the university to local homeless shel-
ters and food banks. This effort takes a
lot of strategic planning, ranging from
logistics to sourcing and many other
aspects of the supply management
field.
Din will be interning with Amazon
this summer to receive experience in
another area of supply management.
His future plans are to continue to gain
experience in different industries and
see where he fits best. Din plans to
receive his MBA once he has sufficient
full-time work experience.
Din’s executive mentor is
Christopher J. Ledger, head of
global sourcing and procurement for
LinkedIn. His junior mentor is 2013
Richter scholar Mackenzie Mylod, a
fulfillment professional at IBM.
Jenna Fischer
A junior in the Schreyer Honors
College at The Pennsylvania State
University, Jenna Fischer is majoring
in supply chain management and
minoring in Spanish, with a cumula-
tive GPA of 3.8.
She is actively involved in the
Council of Supply Chain Management
Professionals and serves as vice
president of student recruiting after
holding a number of leadership
positions in the group. She is also a
member of the Sapphire Leadership
Program, participating in professional
development workshops and net-
works with experts in the field.
After a Johnson Johnson
commercial and business services
procurement co-op, Fischer learned
that working with different teams is
an exciting part of supply manage-
ment. “Just in procurement alone, I
worked with partners in marketing
and finance, and worked with various
different suppliers,” she says. “It
brings all of the different interests of
the company together in an attempt
to make everyone happy.”
Fischer’s future plans include
taking part in a rotational program
to see which area of supply chain
she best fits, before moving on to
obtain an MBA after several years of
experience.
Fischer’s executive mentor is
Kristen Gorman, vice president, pro-
curement at Northern Trust Bank. Her
junior mentor is 2013 Richter scholar
Chelsea Miller, a supply chain coordi-
nator at ConocoPhillips.
Erika Mionis
Erika Mionis is a junior at the
Barrett Honors College at Arizona
State University, double majoring
finance, with a certificate in interna-
tional business. Moinis will graduate
in May 2016 with a cumulative GPA
of 4.0.
Mionis is highly active in all
things supply chain, including various
internships and association mem-
berships. Her largest involvement
is in the Supply Chain Management
Association (SCMA) at Arizona State
University, where she will become
president next year, after holding
various leadership positions.
The most satisfying aspect of this
club for Mionis is the ability to plan
career fairs, which connect hundreds
of companies to hundreds of students.
“It’s very rewarding to create that
vehicle for my peers to get interviews
for internships and full-time careers,”
she says.
Following a logistics internship at
General Mills, where she led her team
in implementing a new process that
would reduce the plant’s shipment
errors by over 60 percent, she knew
supply management was the right
career choice. “I learned that even the
most talented team will not perform
well if the individual skills of the mem-
bers are not called upon and utilized
effectively,” she says.
Mionis will expand her profes-
sional experience when she begins a
supply chain internship for Starbucks
this June in Seattle. After graduation,
she plans to enter the workforce to
gain several years of experience
before pursuing an MBA.
Mionis’ executive mentor is
Mercedes Romero, vice president of
procurement for Diageo. Her junior
mentor is 2013 Richter scholar Beth
Albers, a purchasing specialist at
Bechtel.
Samuel Setiawan
Samuel Setiawan is a senior at
Michigan State University, majoring
minoring in information technology,
with a cumulative GPA of 4.0. He will
graduate in December 2015. He chose
the profession of supply management
after counsel from professors, family
and friends, and his choice was solid-
ified after previous Richter scholars
provided additional inspiration.
Setiawan has maintained a
number of jobs and internships
throughout college, including a global
sourcing internship at Owens Corning
Roofing and Asphalt. At Owens
Corning, he worked with a team to
help identify more than US$328,000
in cost savings through various value
creation initiatives, which included
revamping the organization’s rail-car
optimizer tool to include linear pro-
gramming principles to make pro-
cesses easier and more powerful.
As a member of Supply Chain
Management Association, Setiawan is
involved in teaching elementary-level
students the basics of the supply chain
profession and why it is important.
“Lots of people don’t think about
supply chain until they’re already in
college, so it’s a good way to have
people start thinking about it, while
also giving back to the community,”
he says.
Setiawan plans to enter the work-
force upon graduation and pursue an
STARS
SUPPLY MANAGEMENT’S
RISING
22-25 Richter June/July15.indd 24 5/19/15 2:26 PM

MBA after a few years of profes-
sional experience.
Setiawan’s executive mentor
is Beverly Gaskin, CPSM, exec-
utive director, GM Powertrain at
General Motors Company. His junior
mentor is 2013 Richter scholar Tyler
Morrison, production supervisor at
Whirlpool Corporation.
Emily Socha
Emily Socha is a junior at
Bryant University, double majoring
in global supply chain manage-
ment and applied analytics. With a
cumulative GPA of 3.92, Socha will
graduate in May 2016. Socha chose
a career in supply to turn her natural
tendency of analyzing how different
firms can maximize productivity
into a full-time job. “Supply chain
is a profession that touches every
aspect of a business,” she says. “A
chain is only as strong as its weakest
link and I want to use my innovative,
problem-solving and interpersonal
skills to make sure each link is cre-
ating win-win scenarios to maximize
value for all parties involved.”
During her internships at United
Technologies Aerospace Systems
for the past two summers, Socha
has taken the lead on several dif-
ferent projects, where she became
immersed in the entire procurement
process and worked with suppliers
every single day. Socha is a member
of ISM—Rhode Island, Inc., and is
currently working with other stu-
dents to develop an ISM affiliate
at Bryant University. She has been
instrumental in the development of
the first networking conference at
Bryant University that will connect
industry experts with students who
are interested in exploring this field.
After graduation, Socha’s goal
is to pursue professional experi-
ence in a strategic sourcing role
for a company that values ethical
decision-making and embraces
technology and globalization as a
catalyst for change.
Socha’s executive mentor is
Maria Lindenberg, chief procure-
ment officer at Chevron Corporation.
Her junior mentor is 2013 Richter
scholar Caitlyn McCarthy, who
works for Polaris Industries as an
associate ODP.
Marchela Stancheva
Marchela Stancheva is a junior
in the Rutgers Newark Honors
College at Rutgers University,
studying supply chain management
with a 4.0 GPA.
A recent immigrant to the United
States from Bulgaria, Stancheva was
initially drawn to studies in supply
management after learning about
the problem-solving aspect of the
field at a career open house.
In addition to becoming a U.S.
citizen, learning to speak English
and pursuing her college career,
Stancheva co-founded and is pres-
ident of the Business Association
for Supply Expertise (BASE). BASE
is a student organization that was
formed to address the needs defined
by the corporate world. The orga-
nization works closely with Fortune
500 companies to ensure that stu-
dents develop problem-solving skills
by using essential tools.
“My goal was to pursue my own
continuous growth, as the supply
chain field is constantly evolving,”
Stancheva says of BASE. “I also
wished to aid the numerous other
students at the Rutgers Business
School who seek to develop their
skills and grow professionally.”
Stancheva plans to attend grad-
uate school after gaining profes-
sional experience.
Stancheva’s executive mentor
is Paula Wittbrodt, vice president,
global packaging and global supplier
relations for the Estee Lauder Group.
Her junior mentor is 2013 Richter
scholar Richard Westbrook, a supply
chain analyst at 3M. ISM
R. Gene Richter Scholarship
Selection Committee
Joseph C. Black, Jr.
Vice President Procurement
Chief Procurement Officer
Procurement, Real Estate Security
Aetna Inc.
David Depkon
Vice President, Supply
Management Operations
Hilton Worldwide
Clive R. Heal, CPSM
Supplier Relationship Center,
Team Leader, Global Pharma
Procurement — Strategy
Realization and Operations
Roche
Holly LaCroix Johnson
ISM R. Gene Richter
Scholarship Contact
Sandy Lukasik
Executive Director
R. Gene Richter Scholarship
Program
R. Gene and Nancy D.
Richter Foundation
Jim Pazzanese
Vice President, Supply
Management
Sodexo
Cathy A. Rodgers
Vice President, IBM Global
Engagement Office
IBM
Claretta A. Strickland, C.P.M.
Printing Personal Systems
Group
Central Direct Procurement
Services
Hewlett-Packard
22-25 Richter June/July15.indd 25 5/19/15 10:28 AM

Build your next generation of talent
and strengthen your core team with the
.
26-29 Mastery Model.indd 26 5/19/15 10:28 AM

T
here’s no doubt that a supply chain talent
gap exists. As baby boomers continue
exiting the workforce, the supply chain
talent gap remains a top concern for
many. New professionals must be recruited, but also
retained. This requires ongoing training and develop-
ment — an area often considered low-hanging fruit
when budgets are slashed.
Beyond the talent gap lies the need for three
generations to learn from each other. Boomers and
Generation X must learn to adapt to the work styles
and behaviors of millennials, just as millennials can
learn the idiosyncrasies of a company from more
seasoned employees.
And regardless of generation or career level,
professional development is critical to companies
remaining competitive in the marketplace. Supply
management is a profession where skills cross var-
ious business functions, from legal, to engineering,
to technology. Learning new skills is imperative to
career advancement as is the method of expanding
one’s knowledge.
However, the work/life balance conundrum can
impose restrictions on time and energy, creating a
challenging environment for achieving professional
development goals. This is where competency-based
learning shines, especially for procurement and
supply management practitioners.
Next Stage of Competency Learning
Competency-based learning is not a new con-
cept. It has, in fact, been around since the 1960s. Only
recently, however, has it received significant media
and public attention. Whether it’s in the academic
arena or corporate world, this method of learning
cuts to the heart of the strengths and areas of oppor-
tunities for individual practitioners.
Institute for Supply Management®
(ISM®
) is no
stranger to competency education. It has been the
leader in the field, certifying professional compe-
tency for 40 years as part of its certification program.
However, in March 2014, Thomas W. Derry, CEO for
ISM, pursued his strategic vision of a competen-
cy-based learning model — which launched this year
as the ISM Mastery Model™
. “Our value proposition is
to create a standard for the profession,” says Derry.
“It’s a starting point for companies to use the tool
and modify it for their needs.”
By Cecilia Mendoza and John Yuva

Put Your Future First
Business Acumen
Category Management
Corporate Social
Responsibility
Cost Price
Management
Financial Analysis
Legal
Logistics Management
Negotiation
Project Management
Quality Management
Risk
Sales Operations
Management
Sourcing
Supplier Relationship
Management
Supply Chain Planning
Systems Capabilities
Technology
A Model to Master
Comprising 16 competencies and
69 sub-competencies, the ISM Mastery
Model™
serves the profession regard-
less of membership in ISM and provides
competency-based training throughout
a practitioner’s career — and at no cost
to practitioners or their companies. See
the full listing of the competencies to
the left.
The model is structured with 16
main competencies defined on a gen-
eral level and 69 sub-competencies
described across four career levels —
Essentials, Experienced, Leadership
and Executive. Examples of the com-
petencies include business acumen,
cost and price management, financial
analysis, systems capabilities and tech-
nology, category management, supplier
relationship management and logistics
management.
Beneath each competency are cor-
responding sub-competencies with
descriptions of skills attributes across
the career levels. Depending on your
career level, there are competency
expectations. For example, a sub-com-
petency under business acumen is
change management/transformation.
The difference in capabilities between
Experienced and Leadership are as
follows.
Experienced: Involved in the pro-
cess of change and its impact. Provides
plans for change and is proficient with
applying change strategies to day-
to-day work activity. Grasps the change
management process.
Leadership: Encourages all to par-
ticipate in the transformation. Provides
clear plans for change; advocates imple-
mentation. Serves as a primary change
agent in fulfillment of business objec-
tives. Constructs the change strategy
and effectively communicates its
impact.
In this example, the different skills
attributes between Experienced and
Leadership are obvious. An Experienced
practitioner participates in the process
and applies change strategies into his
or her workflow, compared to a prac-
titioner in Leadership who is actively
engaged in the change strategy and
its execution. As practitioners prog-
ress through the model and advance
in their career, strengths and capabil-
ities increase from what may begin as
a basic understanding and recognition
of a competency to involvement with
strategy development and cross-func-
tional collaboration.
Jim Fleming, manager for edu-
cation at ISM, and who brings more
than 30 years of supply management
experience working at Intel, served as
a contributor in the development of
the ISM Mastery Model™
. “Reflecting
on the process, I realized not only the
breadth of the competencies but also
the depth,” says Fleming. “Looking
at each from the lens of the executive
through entry-level employee, the com-
plexities of the profession became ever
more apparent. The need for strong
alignment throughout the organization
in order to succeed also became clear.”
Competency and a Competitive
Advantage
What separates the ISM Mastery
Model™
from other competency models
is the inclusion of content/product map-
ping. Once practitioners assess their
areas for growth, resources are avail-
able to achieve proficiency. Through
informal discussions with multiple
practitioners, a common theme was
evident. Practitioners underscored
alignment of product offerings at the
various career levels. Currently, there
are 350 products mapped back to the
model, including podcasts, seminars,
workbooks and online courses. Future
products include articles from Inside
Supply Management®
and digital
newsletters.
Crafting the ISM Mastery Model™
was possible using internal ISM
resources such as the Certified
Professional in Supply Management®

(CPSM®
) certification and data from
job roles, along with the commit-
ment and feedback of more than two
dozen practitioners from various
industry sectors and career levels.
Dave Castro, sourcing manager
for Republic Services, and content
contributor to the ISM Mastery
Model™
, says the model serves as a
resource and guide for supply man-
agement professionals to progress
in their career. “Required skill sets
change over time and competencies
will change based on this dynamic,”
says Castro. “For example, data ana-
lytics is important now because pro-
curement professionals have much
more access to data, sometimes
from many disparate sources.”
To ensure that the profession
remains a critical part of a high-per-
forming organization, Nik Hiremath,
ISM Board member and contributor
to the ISM Mastery Model™
, says that
it is imperative that we continue to
evaluate our competencies to be
certain that they are suited to the
challenges at hand as well as those
we anticipate.
“Our competencies must be
well-balanced between technical
and specialized knowledge, and
broader business acumen and
emotional intelligence, to engage
effectively in collaboration with our
stakeholders and external partners,”
says Hiremath. “Like other profes-
sions, our competencies and their
mastery should be dependent upon
the role the associate has and the
span of influence and control they
are responsible for.”
Training and development is a
necessary expenditure. Now more
than ever, it is time to build your
next generation of talent. The ISM
Mastery Model™
can help elevate
the knowledge and skills of pro-
curement and supply management
practitioners today to prepare them
for tomorrow. What the ISM Mastery
Model™
does best is target specifi-
cally the skill gaps that exist, enabling
employees to take newly learned
knowledge and immediately apply
it within the company. ISM
Cecilia Mendoza is director of education
and training, and John Yuva is director of
publications for ISM.
Business Case for TD
On paper, training and development may
appear as low-hanging fruit with few conse-
quences when budgets need to be cut. However,
that assessment couldn’t be further from the truth.
According to an article published in August 2014
by Supply Chain 24/7 entitled Supply Chain Talent
Is a Growing Gap for Leaders and the Impact Is
Enormous, 60 percent of companies have open
positions and 15 percent of the planning posi-
tions are open for an average of five months.
Those vacancies account for costs that are never
recouped.
Consider it the total cost of talent. According
to the Association for Talent Development (ATD),
the average learning expenditure per employee
in 2013 was US$1,208. Without the necessary
training and knowledge, supply chain leaders
must answer these questions and quantify the
costs associated with them.
What is an organization’s cost or impact for:
• A large contract with a poor or missing indem-
nification clause, and the potential for a lawsuit?
• A critical supplier that has filed for bankruptcy?
• A supplier using child labor to produce your
product overseas?
• A third-party supplier improperly disposing of
your hazardous material?
• Insufficient inventory levels that shut down pro-
duction during a peak sales period?
• Intellectual property leaked to your competitor
by a key customer or supplier?
Lara Nichols, senior vice president, procure-
ment at National Financial Partners, was instru-
mental in the development of the ISM Mastery
Model™
. As an advocate for the method of compe-
tency-based learning, she understands the chal-
lenges of attracting and retaining talent. With three
distinct generations working alongside each other,
Nichols advises companies to do the following
when establishing a talent strategy:
1) Recruit, even from disciplines outside of
supply chain.
2) Engage new hires and existing employees in
cross-functional development.
3) Invest in training and development, regard-
less of whether it’s developed internally or
adapted from external sources.
4) Implement a succession planning strategy.
5) Develop business processes with a talent
development mind-set.
6) Establish rewards and recognition programs
that are tailored for various groups.
7) Leverage your human-resources partner to
assist with decision-making.
8) Encourage mentoring programs.
“By following many of these steps, you’ll build loy-
alty enterprisewide and within your team,” Nichols
explains. “As supply management practitioners, we
must think of talent acquisition and strategy in the
same vein as the procurement of goods.”
26-29 Mastery Model.indd 29 5/19/15 2:27 PM

CAPS Research
sharing knowledge and best practices
A
company’s ability to
manage risk effec-
tively throughout its
extended supply chain
has become a critical element of
business success. In response,
CAPS Research recently conducted
a study of 15 leading companies
to discover how they approach risk
management along their extended
supply chains. CAPS conducted a
series of in-depth interviews with
each company to gain insights into
their strategies, approaches and
tools. This column focuses on one
company’s use of a risk monitoring
tool.
Designing the Right Tool
for the Job
Several years ago, Brigham
(a fictitious name for one of the
world’s largest designers and pro-
ducers of electronic equipment)
concluded that its risk tools were
not up to the task of supporting
the business going forward. A
number of factors led to this reali-
zation, including its expansion into
emerging markets under a “source
where you sell” strategy, high sin-
gle-source exposure and external
threats to supply continuity,
including possible disruptions of
natural gas supplies from Russia.
Previously, Brigham used various
approaches, many of which offered
only cursory looks at risk and did
not allow for comparisons of risks
across units.
Brigham began a search for a
comprehensive risk management
tool that could be used consistently
across its units. It looked for third-
party tools and determined that
none met its needs, so it began
to develop an in-house tool. It
launched that tool, the supplier
global risk monitoring tool (GRMT),
a few years ago.
The GRMT provides risk vis-
ibility across many dimensions,
including site, commodity, country,
logistic hub, transportation, energy
cost and labor. It combines several
types of data:
• Market intelligence, combining
Brigham’s own internal insights
with those of third-party experts
• Views about risk areas from
internal subject-matter experts
who answer structured ques-
tions across various topic areas;
a sophisticated scoring algo-
rithm moved the risk assessment
from a subjective, qualitative
exercise to one that is rigorous
and objective.
• Metrics from a database of
ratios and risks about suppliers,
including Brigham’s supplier
financial risk indicator (FRI)
scores, which are updated four
times a year
• Alerts for anything that might
change the level of risk, such
as a strike in a port or factors
affecting rare earth metals;
Brigham uses a third party that
performs sweeps of the external
environment every two hours
for specific countries, suppliers,
commodities and other aspects
for which Brigham has specified
an alert interest.
Ranking All of the Risk
Factors
Using this data, the GRMT
provides risk ratings by site,
hub, country and commodity. It
assesses a variety of risks and
combines them into an overall risk
assessment on a high, medium
or low basis by supplier and sup-
plier site. Input factors include
sole/single-source designations,
geographic/country risk and sub-
ject-matter-expert assessments of
the supplier, including:
• Supplier financial health per
Dunn Bradstreet data
• Dollars committed to the supplier
• Three- and 12-month delivery
and quality performance
A Tool to Monitor Supply
Chain Risk
By CAPS Research Team
A CAPS Research case study offers a look into one company’s
in-house risk monitoring tool.
30-31 Caps June15.indd 30 5/19/15 2:28 PM

• Qualitative delivery and quality
performance index
• Supplier dependency on the
buying company
• Sole/single-sourcing risk
• Domestic or nondomestic supplier
mix (being a nondomestic supplier
increases the risk score).
The factors included in the
risk tool are scored and weighted
(weightings are developed by a
cross-functional team) to arrive at a
composite risk score. If the GRMT
flags a high-risk situation, mitigation
plans are required.
Ability to Drill Down Risk
Data
The GRMT system has the capa-
bility to go back three levels into the
supply chain. It maps out which part
numbers are coming from which
suppliers and specific geographic
locations. This keeps Brigham aware
of supplier issues — in some cases,
even before the supplier knows
about them.
Not all suppliers at Brigham
are evaluated from a risk perspec-
tive; suppliers are stratified as to
the level of attention they receive.
Basic component suppliers that are
easily replaced are not monitored
with this approach. Suppliers of
systems/sub-systems or complex
components receive significant
attention, while subcontractors
receive the greatest attention. This
tool and the scores it produces are
used companywide.
The tool can be used to gather
information upfront during the
sourcing process and also in the
supply chain, during ongoing assess-
ments and during crisis manage-
ment. One of the ways Brigham uses
GRMT is to look at location-based
risks in order to suggest alternative
sites where appropriate.
The highly visual tool shows
the risk type and level in a graph-
ical format. It also provides rankings
and has query capabilities that allow
Brigham to drill down to understand,
for example, why a supplier’s rating
has changed.
While the GRMT addresses only
first-tier suppliers, Brigham also has
a critical parts management tool
(CPMT) used by supply manage-
ment to capture commitments from
second-tier through second+n-tier
suppliers. With CPMT, Brigham gains
visibility into component and com-
modity commitments up the supply
chain and advanced notice of any
impending demand/supply imbal-
ances, which can then be effectively
and unobtrusively managed.
Looking ahead, Brigham hopes
to link late shipment/quality metrics
into the GRMT tool. Ultimately, it
wants to have a control-tower-style
view of the supply chain, and it con-
tinues to build tools to get better
supply chain visibility.
The information in this column
was excerpted from the CAPS
Research study Risk Management
Across the Extended Value Chain,
part of the ongoing series, Value
Chain Strategies for the Changing
Decade. For the full report and case
studies, visit www.capsresearch.
org, or call +1 480.752.2277. ISM
Supply/Management
Apple Inc. has the following job opportunities in Cupertino, CA:
Materials Program Manager (Req#9LNUCP).
Work w/ Eng Ops to drive Materials planning procurement for dev builds. Travel req’d 15%.
Supply Demand Planner (Req#9AJ34Q )
Crte wrld-wide demand view for pgrm fixtures elmnts for future qrtrs.
Strategic Sourcing Manager (Req#9BNVYC).
Respon for strategic commodity mgmt., including analysis coordination of sourcing sup chain
mgmt. Travel req 25%.
Apple Inc. has the following job opportunities in Austin, TX:
Supply Demand Planner (Req#9CWVJ5)
Analyze forecasted demand, inventory sales to mng dly, wkly, qrtly supply plns.
Refer to Req# mail resume to Apple Inc., ATTN: L.M., 1 Infinite Loop 104-1GM, Cupertino, CA 95014.
Apple is an EOE/AA m/f/disability/vets.
30-31 Caps June15.indd 31 5/19/15 2:29 PM

Tapping Into
supply management issues and trends
R
otating high-potential
supply management
employees through var-
ious business units to
give them a wide range of experi-
ence is one way to develop a deep
bench of future talent in a supply
chain organization. It’s also the
foundation of B/E Aerospace’s
supply chain rotation program —
an on-the-job training program that
converts participants’ potential into
performance, placing them in real-
world business situations to test
and grow their adaptability.
The program came about as
B/E Aerospace, a global manu-
facturer of aircraft interior prod-
ucts based in Wellington, Florida,
expanded over the years through
an acquisition growth strategy.
In 2007, the company was expe-
riencing an accelerated growth
phase — and the challenges that
accompany it. Richard Wize, CPO,
who retired in March 2015, realized
the need to leverage growth and
cost-reduction objectives by imple-
menting commodity management
and low-cost-country sourcing.
To achieve those objectives,
Wize knew the organization
needed to first acquire and
retain talented supply man-
agers capable of executing the
supply management strategy.
Once a strategic supply chain
team was assembled,
it tackled initiatives
such as establishing
offices in low-cost
countries and creating
an enterprise sourcing
council. The council
brings together supply
managers from the var-
ious businesses within
B/E to discuss issues
and formulate action plans.
While the team made signif-
icant strides as it evolved into a
more strategically focused organi-
zation, Wize also wanted to build a
future talent pool. As a veteran of
General Electric, which uses lead-
ership development programs, he
knew hiring external high-potential
employees and embedding them
into a business unit is an effec-
tive talent-building tool. Rotating
employees through multiple busi-
nesses offers them the opportunity
to professionally mature within the
company. The participants often
demonstrate a high standard of
performance that their peers can
model, and which management can
then use to benchmark and escalate
performance standards.
Creating a Future Talent
Pool
After consulting with B/E
Aerospace’s global talent man-
agement team, the supply chain
rotation program was developed.
It’s a two-year program in which
high-potential individuals rotate
through three assignments in sep-
arate areas of the business, each
with different areas of focus. The
assignments vary depending on the
needs of the business units and the
special skills and interests of the
program participant.
For example, I was assigned
to develop an action plan for the
seating aftermarket’s repair/spare
Building a Future Talent Pool
B/E Aerospace’s supply chain rotation program offers a case study
on how to groom your own company’s future leaders through a
variety of experiences and a solid leadership foundation.
By Jerrett J. Chambers
32-33 Tapping Into June15.indd 32 5/19/15 10:29 AM

ISM_Magazine_JuneJuly_2015

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