Abe Eshkenazi, CSCP, CPA, CAE
APICS CEO

Last week, I had the opportunity to visit DuPont’s corporate headquarters in Wilmington, Delaware. The visit was hosted by Peter Murray, CIRM, global competency and development leader. We discussed with operations, supply chain, and business leaders the increasing visibility of supply chain and operations management within the company. Plus, we talked about how these changes influenced performance during the economic downturn and preparations for the upturn.

    The recession created intense focus on areas DuPont decision makers already had as objectives. DuPont Chief Executive Officer Ellen Kullman emphasized four directives—maximize cash, minimize capital spending, minimize costs, and address the goals of a project or product line to meet those objectives or redirect the resources to maximize the return. All this while maintaining top-quality service to customers, who were facing the same challenges.

    Many companies faced falling demand, and DuPont wasn’t unique. Therefore, achieving the directives meant increasing the pace of implementing best practices for operations and supply chain. All good ideas to be sure, but when you are a global company such as DuPont—which employs 55,000 people, encompasses 14 business units with diverse product lines, and operates in more than 70 countries—it could have proven to be too difficult a challenge.

    What we observed was quite the opposite—DuPont is experiencing success from implementing best practices. Using supply chain and operations best practices as transformational strategies, corporate leaders relied on supply chain knowledge built over several years.

    APICS education has played a role in this success. For example, more than 600 DuPont employees either have or are currently taking APICS classes, and 192 have earned APICS certifications with 17 people holding multiple certifications. This employer-endorsed education creates dual benefits for the organization. First, it helped identify and implement standardized processes across the business; second it created a core of people to leverage improvement projects and resources globally. Now and for the future, APICS education continues to help the organization “build the bench” of supply chain and operations professionals to sustain the gains and continue to improve DuPont performance.

    DuPont leaders with whom we spoke continued to emphasize the value and need for standard processes and practices, especially in a company with such diversity in products and global scope. Don Wirth, DuPont’s vice president of integrated supply chain, told me that in the past six months, leaders across the business units went from saying, “we are all different and need special processes,” to “we really are all the same and can make this happen.” This common view of supply chain transformation among business leaders and success to date with APICS education has helped employees gain a sense of empowerment and confidence within their roles, so much so that they feel they can take action to resolve problems before they became crises.

    The tools the company used to affect this paradigm shift aren’t foreign to anybody in the APICS community: sales and operations planning, lean, six sigma. The people we talked to feel assured that the organization has arisen “leaner and more capable,” and it will be able to sustain the gains made. More importantly, DuPont will be better prepared to take advantage of the economic rebound, which is already starting for several of DuPont’s business units.

The “new normal”

Our meeting with DuPont’s leaders continues to inspire my work back at APICS corporate offices in Chicago. It reinforces the messages that appear time after time in APICS curriculum, publications, conferences, and more—effective supply chain management is imperative to the business enterprise as a whole. DuPont’s efforts have increased visibility throughout the organization’s supply chain, and the business is better poised to operate successfully in the “new normal” of the economy.

    One of the interesting conversations we are having among APICS leaders and staff is about how our body of knowledge will change based on practitioner experiences over the last year. Everyone agrees the APICS body of knowledge has proven to be solid and the skills of APICS CPIM and APICS CSCP designees are invaluable in dealing with the economic downturn. Perhaps what has changed the most is the focus of operations and supply chain professionals. Corporations such as DuPont are reviewing on a daily basis the metrics and key indicators that drive their businesses. Supply chain managers are playing an increasingly strategic role bolstered by their extensive backgrounds in operations management.

    I left DuPont committed to visiting more of our corporate customers to discuss how APICS can better serve organizations. I invite you to share with me how APICS training has helped to make you an invaluable contributor to your companies, particularly during this downturn. Please send your stories to abe@apics.org.

Abe Eshkenazi, CSCP, CPA, CAE
APICS CEO

There’s no doubt that Chinese production and manufacturing are major forces in international business. Case in point: rare and valuable minerals. The September 1 edition of the New York Times featured an article titled “China Tightens Grip on Rare Minerals.” The author describes the complexity of producing rare earth elements, such as dysprosium and terbium, which are essential for the production of a variety of green energy technologies.

    “Even tighter limits on production and exports, part of the plan from the Ministry of Industry and Information Technology, would ensure China has the supply for its own technological and economic needs, and force more manufacturers to make their wares here in order to have access to the minerals,” the author reports.

    Even while the minerals are essential to green earth technology, their extraction imposes considerable damage on the local environment.

    According to the New York Times: “China dominates global rare earth production partly because of its willingness until now to tolerate highly polluting, low-cost mining.”

People, profit, planet

The New York Times article highlights the complexities associated with green product manufacturing. Leaders strive for business solutions that support sustainability, while enabling profits. In fact, the widely cited phrase “triple bottom line” is meant to encompass the idea of sustaining profit, planet, and people.

    While the previous example comes from China, there are professionals throughout the world who wrestle—or should be wrestling—with this expanded idea of sustainability. Because of their broad expertise, operations and supply chain management professionals provide a unique perspective to this new reality of doing business in the 21st century. During the World Café, held at APICS 2009 in Toronto, participants will explore what it means to operate a profitable and environmentally and socially responsible business now and in the future.

    This kind of forum is meant to not only inform attendees, but also encourage participation in the dialogue. The answers won’t be easy to obtain, but exploring ideas with peers and colleagues promises an engaging session that will keep the ideas coming even when attendees are back at the office.

Abe Eshkenazi, CSCP, CPA, CAE
APICS CEO

Earlier this summer, I was pleased to read a post on the APICS Certified in Production and Inventory Management (CPIM) listserv that described the experiences of an APICS CPIM designee in Saudi Arabia. This gentleman, Shaik Abdul Khadar, earned his APICS CPIM certification in 2003. He wrote, “The subject knowledge gave me great advantage with peers.” Initially, however, he doubted it was helping advance his career.

    Still, Khadar continued to champion the APICS CPIM body of knowledge throughout his company, and managers started to take notice. In his post, Khadar described how he assumed a coordinator position for a supply chain optimization project. As an added benefit, Khadar was able to add to his knowledge of production and inventory management. For example, he learned how to implement and use a balanced scorecard. The project was successful, and the company saw immediate benefits. Later, Khadar joined a strategy transformation program team for his company.

    In 2006, Khadar was promoted to the position of enterprise resources planning (ERP) project manager, and he led a successful ERP optimization project in his organization. In 2008, he was promoted again—this time to a senior management position—and became the head of planning in a division that includes supply chain planning, strategy management, and business process excellence. Khadar said his position requires him to be the sales and operations planning process owner, basic supply chain coordinator, and custodian for the business process excellence project.

    “Believe me, with many initiatives and challenges, the body of knowledge of CPIM is really helping me in my day-to-day job,” Khadar wrote. “I sincerely consider CPIM [to be] the foundation for my career.”

Bringing it home

Khadar’s story is meaningful and poignant, but I don’t think it’s unique. APICS certifications can serve as both a foundation for careers and a means for advancement. Take into account how Khadar concluded his post to the listserv: “Now we put CPIM as a highly desirable qualification for all supply chain positions, including master scheduler, material planner, supply chain specialist, and more.”

    Now is the time to explore what APICS certification can do for you. If you already are certified, consider advocating for others within your organization who could benefit from earning APICS certifications. In addition, the 2009 APICS International Conference & Expo, October 4–6 in Toronto, provides an excellent forum for gaining skills and staying relevant on the job. With six learning paths—lean; global supply chain; basics of operations management; demand management, forecasting, and sales and operations planning; professional advancement; and special interest topics—attendees are sure to gain valuable ideas.

    I’m grateful to Khadar for sharing his personal story. It’s a wonderful illustration of how APICS enriches career opportunities. I encourage all of the readers of APICS Operations Management Now to reflect on this idea.

Abe Eshkenazi, CSCP, CPA, CAE
APICS CEO

   Despite news that the U.S. economy is rebounding and job losses are slowing, a Wednesday headline in the Washington Post gives voice to the continued unease among workers: “A Recovery Only a Statistician Can Love.” Case in point: The U.S. Labor Department reported that business productivity has increased to an annual rate of 6.3 percent. (The annual average was 2.6 percent from 2000 to 2008.) The U.S. Bureau of Labor Statistics reported last week that unemployment actually dropped in June—after it had been increasing for months. However, the Washington Post’s Annys Shin writes the recovery’s “existence will be confirmed by statistics, but, over at least the next year, the benefits are unlikely to materialize in the form of higher wages or tax receipts or more jobs.”

   Consider the improving productivity rates we are seeing in many parts of the world affected by the global recession. Much of the increase has come from businesses cutting hours, while maintaining production and output. Therefore, workers are expected to do the same amount of work in less time, and company leaders are putting off hiring.

   Last week, in the New York Times article titled “Job Losses Slow, Signaling Momentum for a Recovery,” Economist Ian C. Shepherdson said, “Employers are no longer in a panic. The pressure they felt to get rid of workers in a hurry is diminishing. What we don’t see yet is enough momentum in the economy to convince companies to hire again.”

Operations Outlook

   So, what is the outlook for people in the APICS community specifically? APICS research reveals some interesting information. As part of the APICS Employment Outlook, data recently was gathered and analyzed by researchers at APICS and the University of North Carolina, Wilmington. Results show 47 percent of respondents with hiring responsibility indicate they anticipate hiring new employees within in the next 12 months, with 72 percent of those planning to hire within one or more of the following operational areas: execution and control of operations, purchasing and customer relationship management, quality, resource planning, and supply chain management.

   Further, survey respondents indicate that APICS CPIM designees get paid, on average, approximately 10 percent more than those without the designation. Similarly, APICS CSCP designees earn approximately 12 percent more than those without an APICS CSCP certification.

   Today, APICS is releasing its Supply Chain Manager Competency Model, which follows guidelines set by the Employment and Training Administration of the U.S. Department of Labor. The model will serve as a guide for individuals considering careers in supply chain management, professionals seeking advancement, and human resource managers hiring in this fast-growing field.

   This data analysis and the Supply Chain Manager Competency Model are just two examples of a wide variety of resources APICS offers to help supply chain and operations managers succeed. As you prepare to find your place in the economic recovery, I encourage you to investigate all the valuable resources APICS offers. As you wade through data and mixed messages, APICS is an important asset in helping you to determine how best to maximize your career potential.

Abe Eshkenazi, CSCP, CPA, CAE
APICS CEO

As the U.S. Senate debates an additional $2 billion measure to extend the wildly popular “cash-for-clunkers” program, car manufacturers consider what the July boost in automobile sales means for their short- and long-term planning.

“Cash for Clunkers” offers consumers up to $4,500 to trade in older cars and buy new, more fuel-efficient models.

In an August 3 Reuters article, AutoNation Chief Executive Officer Mike Jackson said the initiative was certain to drive sales to more than 10 million vehicles, with some experts estimating that number could reach 12 or 13 million. “This is the kind of buyer that comes to market once in a decade. They buy these things and keep them forever.” AutoNation is the largest automotive retailer in the United States.

An obvious challenge comes in the form of meeting the increase in demand, after automobile manufacturers cut production during the downturn. Wednesday’s Wall Street Journal reports that many dealers are running low on top-selling models, which include the Ford Focus, Honda Civic, and Toyota Prius. While a 65-day supply is considered by many car experts to be optimal, Toyota had only 13 days worth of Prius models, 34 days worth of Corollas, and 37 days worth of Camrys. Toyota spokespeople say the company will be able to meet demand.

“If Congress moves ahead and allocates more money for the trade-in plan, light inventories could hinder sales and damp the program’s impact until automobile makers are able to rush vehicles to dealerships,” write Alex Kellogg and Josh Mitchell in the Wall Street Journal article.

In related news, the Detroit Free Press reported Wednesday that General Motors (GM) leaders aim to get their new products to market faster than first scheduled. As the company emerges from bankruptcy, GM Chair Ed Whitacre said the move is an attempt to gain customers. “We have plans in place to improve our market share—that’s certainly our intent.”

Will it last?
Even if the U.S. government approves the additional $2 billion, the funds are expected to last only through September. That leaves the automobile manufacturers with some important production decisions to make.

Consider the definition of demand management and forecasting, which appears on the APICS Operations Management Body of Knowledge (OMBOK) Framework: “Demand management and forecasting is recognizing all demand for goods and services to support the marketplace. Demand is prioritized when supply is lacking. Proper demand management facilitates the planning and use of resources for positive and profitable results and may involve special marketing programs designed to increase or reduce demand in a relatively short time horizon.”

Car makers now face the kinds of challenges many manufacturers will confront as the world prepares for better economic times. Maintaining the delicate balance between production and inventory is not a job for amateurs, and company leaders have learned the true value of professionals capable of demand management and forecasting duties. Often, these experts can be identified by their credentials—Certified in Production and Inventory Management (CPIM).

Whether you are looking to enhance your job prospects or to lead your organization into the economic recovery, the APICS CPIM can be a fundamental step to improving your career. Now is the perfect time to launch yourself into your future.