break some paradigms

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Reframing Professional Societies(APICS and ISM)

OR:

“Let’s Go Out and Break Some Paradigms!”James D. Reeds

MS, C.P.M., CPCM, CFPIM, CIRM

PresidentISM Silicon Valley, Inc.

andAPICS Region 10 Staff

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For Your Consideration

Present Paradigms and Paradigm Shifts Scientific Management as a Mental Straight Jacket The Evolution of Supply and Contract Management

Thinking Slouching Toward the Future - The Need for

Breakthrough Thinking A New Model for Supply and Contract Managers The Way Forward Q&A

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Proposition

At the End of 2006, the Paradigms that have Guidedthe Professions of Supply Management and ContractManagement are Obsolete.

Symptoms:♦ Absence of a Cohesive, Articulate Strategy♦ Muddled Vision and Way Forward♦ Confusing, Contradictory Terminology♦ Empty Slogans and Dubious Marketing Campaigns♦ Bleeding Membership

Perception:♦ Out of Touch with the Now and Future Business

Environment

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ORIGIN Late 15th Cent.: Via Late Latin From Greek Paradeigma, FromParadeiknunai - Show Side by Side, From Para- beside + Deiknunai - toShow.

Paradigm

A Typical Example or Pattern of Something; aModel

A Worldview Underlying the Theories andMethodology of a Particular Scientific Subject

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Paradigm Shift

ORIGIN 1970s: term used in the writings of Thomas S. Kuhn (1922-96),philosopher of science.

A Fundamental Change in Approach orUnderlying Assumptions.

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Portable Radio - Paradigm 1922

WGY Schenectady, New York, 1922Portable Crystal

Radio

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“Portable Radio” - Paradigm 2006

Apple I-Pod Nano

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On the Currency and Certainty of Knowledge

“Fifteen hundred years ago everybody knew theearth was the center of the universe. Five hundredyears ago, everybody knew the earth was flat. Andfifteen minutes ago you knew that people were aloneon this planet. Imagine what you’ll know tomorrow.”

Tommy Lee Jones to Will Smith - “Men inBlack”

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Solving the Supply Management andContract Puzzle

In What environmentdoes SupplyManagement Operate?

How does SupplyManagement, ContractManagement andSupply ChainManagement Interact?

How do we make senseof it all?

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Supply and Contract Management Knowledge andProfessional Competencies

People♦ Where Can I find Quality Education and Training?

Companies♦ Where Can We find Competent People?

Schools♦ Where Does a Supply and/or Contract

Management Curriculum Fit? Governments

♦ Where Can We find Competent People? Nation States

♦ Elevate Supply and Contract Management as aStrategic and Competitive Asset?

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For Corporations: The Ghost of Freddy Taylorand Functional Silos

Find the One Best Way Choose Workers Based on

Task Specialization Match People to the Task

♦ “Do Not Think - Just Do”

Hire Managers to Plan andControl♦ Supervise, Reward and

Punish

Apply Labor Efficiency

Frederick Winslow Taylor(1856-1915)

The Father of Scientific Management

The Foundation of Industrial EngineeringTop-Down - Hierarchic Organizational StructuresReductionism

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For Corporations and Governments: TheConundrum of Compliaance

People

Process

Technology

Events

Operation

Modelling and Deployment

Strategy

Jurisdiction

Business Process & Rules

Industry Best Practice External Auditors

Policy Provisioning

Historical Data

CRO

ISV Apps

Reporting

Storage

Systems

RegulatorsNational GovernmentSuper-National Government

SocialEnvironment

Internal Events

External Events

Analysts

Internal Auditors

CompetitivePressures

Standards Orgs

Risk Analysts Network

ProcessModification

Sensors & Actuators

Deployment Tools

Stakeholders

CxOCxOCxO

Proj mgr, Implementers

Refined Business Process & Rules

Business Policy

Senior Leadership

CROCFO

Board of Directors Internal Processes

Harmonize Internal with External

Audit CommitteeCGO Internal Auditors

CEO

LOB execs

Bus Proc Owners

Op Apps

Business Process Execution

employees

Event Monitoring

Modeling Tools

Laws/Regulations

OpRisk Models

Taxonomies

Regulation Models

Process Execution Platforms

A Unified Framework for Governance, Risk and Compliance Must Support People, Process, and Technology.Source: Dr. Anthony Tarantino. IBM Governance, Risk and Compliance Center of Competence. ISM SiliconValley Dinner Presentation. October 19, 2006. Santa Clara, Ca. “Governance, Risk and Compliance (GRC)Introduction.”

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For Schools: Not Enough Degree Programs toMeet the Demand of Industry

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For Professional Societies: Refocus andRebranding

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NCMA Span of Professional Certifications

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A New ISM Certification to Reflect NewSkills

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APICS - New Certification and Rebranding

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APICS New South Wales

19Time

+S+Cx

Change+

Speed+

Complexity

1970 1980 1990 2000 2010

Stage 5Value NetworkManagement

Stage 4Value ChainManagement

Stage 3Supply ChainManagement

Stage 2ProcurementAnd ContractManagementStage 1

Purchasing andContract

Administration

The Evolution of Supply and Contract Management

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The Focus of Supply Management and Contract Management Behavior

The Burt-Lynch Model of SupplyManagement Evolution& Competitive Strategy

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Syste

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Pro

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1

2

3

4

5

+S+Cx

Change+

Speed+

Complexity

1970 1980 1990 2000 2010

Stage 5Value NetworkManagement

Stage 4Value ChainManagement

Stage 3Supply ChainManagement

Stage 2ProcurementAnd ContractManagement

Stage 1Purchasing

and ContractAdministration

Evolution and Focus: Supply and Contract Management Behaviors

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Systemic FocusStrategic FocusProcess

Focus

Proactive Behavior

● Risk Motivated● Lateral Thinker● Embrace Complexity● Future Orientation● Long-Term Perspective● Guidelines● Self-Directed● Portfolio/Program/Project ManagementOrganizational Structure● Process Bias● Collaborative Relationships● External/Extended-Enterprise Stance● Root Cause Problem Solutions● Prevention

Future

TransactionalFocus

ClericalFocus

Reactive Behavior

● Risk Averse● Linear Thinker● Routinized, Repetitive Actions● Historical Precedent● Short-Term Perspective● Policies & Procedures● Hierarchic OrganizationalStructure● Internal/Functional Bias (Silos)● Adversarial Relationships● Arms-Length Stance● Fire-Fighting● Expediting

Past

Behavior Orientations - Personal Mindsets

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TransactionalFocus

ClericalFocus

Reactive Behavior

Past

Behavior Orientations - Organizational Mindset

Functional Silos Frequent Functional

Reorganization Efficiency and Resource Utilization Optimization of Complexity Internal Metrics Hierarchic Control Structure “Garrison” Mentality

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Systemic FocusStrategic FocusProcess

Focus

Proactive Behavior

Future

Behavior Orientations - Organizational Mindset

Process Orientation Process Integration and Harmony System Effectiveness Flexibility Global Metrics Program/Project Teams Relationship and Alliance-Building Value Realized Amongst Chain and

Network Player Innovation

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Stage ONE - Clerical Behaviors

STAGE 1. Clerical Behavior VARIABLES Tactical Buying

Value Driver Timely Availability, Convenienc e

Financial Impact

Overhead-Cost Center

Integration Level & Functional Elements

No Internal Integration Purchas ing

Basis of Competitive Advantage

Do the Job

Performance Metrics Timeliness & Efficienc y

Performance Metrics

Nothing

Knowledge Thomas Directory Phone Book Rolodex

Supplier Relationships

Personal

Time Focus Isolated from Customer Environmental Not Considered

+S+Cx

Change+

Speed+

Complexity

1970 1980 1990 2000 2010

Stage 4Value ChainManagement

Stage 3Supply ChainManagement

Stage 2Procurementand ContractManagement

Stage 5Value NetworkManagement

1975

Stage 1Purchasing and

ContractAdministration

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Stage TWO - Transactional Behaviors

STAGE 2. Transactional Behavio r VARIABLES Transactional Bid-Based Buying

Value Driver Purchase Price

Financial Impact

Improve Bottom Line,

No Consideration of Revenue Impacts

Integration Level & Functional Elements

Low Internal Integration Procurement & Logistics

Basis of Competitive Advantage

Leverage Size of Buyer Power Dynamics Between Buyer & Seller

Performance Metrics

Low Component/Unit Cost On Time Delivery

Performance Metrics

Squeeze the Vendor Internet, Auction s

Knowledge e-Commerce “Should Cost” Analysis

Supplier Relationships

Adversarial & Transactional

Time Focus Reactive to Customer Environmental Added Cost Factor

+S+Cx

Change+

Speed+

Complexity

1970 1980 1990 2000 2010

Stage 4Value ChainManagement

Stage 3Supply ChainManagement

Stage 1Purchasing and

ContractAdministration

Stage 5Value NetworkManagement

1985

Stage 2Procurement and

ContractManagement

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Stage THREE - Process Oriented Behaviors

STAGE 3. Process Based Behavi o r VARIABLES Supply Chain Managemen t

Value Driver Quality Just In Time Total Cost of Ownership

Financial Impact

Improve Bottom Line Some Consideration of Revenue Impacts

Integration Level & Functional Elements

Partial Internal Integration Procurement, Logistics, Operations, Engineering

Basis of Competitive Advantage

Through-Put Global Impact

Performance Metrics

Coordination & Cost Develop Suppliers

Performance Metrics

Process Innovation Develop Requirements Near Defect Free Supply

Knowledge Understand Suppliers

Supplier Relationships

Transactional & Collaborative

Time Focus Responsive to Custom e r Environmental Considered As Part of T C O

+S+Cx

Change+

Speed+

Complexity

1970 1980 1990 2000 2010

Stage 4Value ChainManagement

Stage 2Procurementand ContractManagement

Stage 1Purchasing and

ContractAdministration

Stage 5Value NetworkManagement

1995

Stage 3Supply ChainManagement

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Stage Four - Strategic Behaviors

STAGE 4. Strategic Behavior VARIABLES Value Chain Management

Value Driver Innovation Top & Bottom Line Internal Integration

Financial Impact

Revenue & Bottom Line Impacts

Increase Share Holder Value Transform Innovation into Value

Integration Level & Functional Elements

Moderate Integration Internal & External Integration: Supply , R&D, Logistics, Operations, Engineering, Marketing, Customer Service

Basis of Competitive Advantage

Coordination & Synchronicity

Interconnectedness Relationships & Trus t

Performance Metrics

Speed, Effectiveness Monitor Supply Environmen t

Performance Metrics

Speed & Integration, Design Supply Base, Integrated Supply Strategy

Knowledge Understand Industries, Supply Base

Supplier Relationships

Transactional, Collaborative, & Alliance

Time Focus Pro-Active To Custom e r

Environmental Pro-Active as Market Differentiator for Custom e r

+S+Cx

Change+

Speed+

Complexity

1970 1980 1990 2000 2010

Stage 3Supply ChainManagement

Stage 2Procurementand ContractManagement

Stage 1Purchasing and

ContractAdministration

2006

Stage 4Value ChainManagement

Stage 5Value NetworkManagement

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Stage FIVE - Systemic Behaviors STAGE 5. Systemic Behavior VARIABLES Value Network Managemen t

Value Driver

Total Value Impact Innovation Costs Revenue Speed

Financial Impact

Present & Future Revenue Bottom Line impacts Supplier & Stakeholder Impact

Integration Level & Functional Elements

Full Internal & External Integration: Supply, Procurement, Logistics, Operations, Engineering, R&D, Sales, Marketing, Service, Customer’s Strategy

Basis of Competitive Advantage

Hyper-Competition Technology Hybridization Speed, Innovation, & Customization

Performance Metrics

Innovation, Synchronicity Synergy Monitor Customer Environment

Performance Metrics

New Processes, Systems Solutions

Leverage Supplier Technology

Knowledge Customer’s Future Needs Industry Trends Connectivity

Supplier Relationships

Multi-Dimensional Collaborative, Networked Vision & Values Bas e d

Time Focus Pre-Active with Custom e r

Environmental Pre-Active with Customer to Reengineer as Added Value

+S+Cx

Change+

Speed+

Complexity

1970 1980 1990 2000 2010

Stage 4Value ChainManagement

Stage 3Supply ChainManagement

Stage 2Procurementand ContractManagement

Stage 1Purchasing and

ContractAdministration

Stage 5Value NetworkManagement

2006

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Harmonization: Toward Relationship and AllianceManagement

CustomerRelationshipManagement

SupplierRelationshipManagement

1

CustomerRelationshipManagement

SupplierRelationshipManagement

2

Alliance andRelationshipManagement

3

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Toward Systems Simulation Capabilities

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Adopting a Process View of The Business andthe

Value Chain

Behavioral Processes

DecisionMaking Processes

CommunicationsProcesses

OrganizationalLearningProcesses

Change Processes Change ProcessesChange Processes

Work Process

Work Process

DecisionMaking

Processes

Communi-cations

Processes

OrganizationalLearning

Processes

TIME

Moving From Functional Silos to Process-Focused ProjectTeams

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Contact Information

Jim Reeds Address

♦ jaydr@mindspring.com

767 Santa Barbara Road,Berkeley, California 94705USA