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Wednesday, August 20, 2014

After ISM Conference, Supply Professionals Must Make Engagement Last

If there is one word to describe the atmosphere at last week’s 98th Annual International Supply Management Conference in Dallas-Fort Worth, it is “engaged.” The pulse among procurement practitioners and supply management professionals was squarely on business expectations and the economy for the remainder of 2013 and beyond – for better or worse. Attendees used their time at the Institute for Supply Management (ISM) annual event to their fullest advantage.

Whether it was the capacity crowd at the opening keynote by Condoleezza Rice, the filled breakout rooms for education sessions, in the exhibit hall where suppliers and buyers made deals and solidified relationships, or simply the hallways and commons of the convention center at the Gaylord Texan Resort, there was a palpable energy and sense of engagement at the conference. More than 2,000 attendees (we are still awaiting the final attendance tally) from far and wide came to learn, network, share knowledge, and even conquer the Certified Professional in Supply Management (CPSM) exam. At a luncheon session, I sat next to a supply chain student who had ventured all the way from Brazil.

Steve Murphy, director of supply chain for Enogex, part of OGE Energy Corp., with whom I made acquaintances randomly – as is often what happens at these conferences – commented to me about the high quality of the education at this year’s event. I replied that there was barely a session where I saw more than one audience member leave midstream, and there wasn’t a whole lot of the phone or tablet playing one sees with a disengaged audience. That meant supply professionals attuned themselves to the speakers, absorbing as much knowledge, both the strategic and the practical, as they could.

But when it came time for them to make some noise, supply professions surely did. This year, ISM incorporated several instant digital straw polls on important hot-button topics, allowing audience members to text in responses on their mobile devices, and they let their thumbs do the talking. Their engagement underscored a tangible sense of proactive risk management on multiple fronts.

On reshoring, 575 attendees responded, with nearly 30 percent indicating that they anticipate having inventories and manufacturing close to home. In response to a related polling question, “instability and changing economies,” at 38 percent, and “long distances and lead times,” at 36 percent, were the top two responses. Tom Derry, president of ISM, said, “The move to reshoring is largely resulting from the risks that companies were exposed to in Japan and Thailand from natural disasters.”

ISM 2013 Annual Conference logo In another flash poll, on cybersecurity, 231 participants answered, with more than half noting that they have taken visible or behind-the-scenes precautions to cyberattacks. The responses from supply managers to ISM’s query about the top imminent threat to business, meanwhile, suggested frustration with Washington lawmakers: 38 percent cited higher taxes, while 52 percent said budget battles.

That last poll response occurred, live, during a rah-rah economic forecast presentation by prominent economist Bernard Baumohl, who backed up ISM manufacturing chair Bradley Holcomb’s positive 2013 manufacturing outlook by saying that the U.S. economy is now at a point where it is resilient enough to shrug off the federal sequester.

As James Martin, executive director of ISM-New York, told me outside the conference exhibit hall, “I think most supply chain managers are not sure where the economy is going, not sure what the most reliable data is. At this conference you can get that information.”

Supply professionals might feel a bit of relief with the upbeat predictions, but they know there’s still work ahead to be done.

Indeed, in spite of the positivity, Derry noted to me during a one-on-one interview that, in 2013, the procurement and supply discipline is at a critical juncture. Professionals at all levels are being relied upon to extract revenue and value at a time when innovation is not an option but a requirement. Derry called it “an inflection point” in the business and dubbed the discipline’s growth as “a remarkable transformation.”

With that comes unprecedented opportunity, according to Derry, a media and financial executive who has been at ISM’s top post for about nine months and can view the profession through a fresh lens. “Supply management has become a source of competitive advantage and a basis of competition. It is an opportunity for us to begin to elevate the stature and visibility of the profession,” Derry commented, while noting the ascendancies of Tim Cook at Apple and Sam Walsh at Rio Tinto.

“You will see us at ISM continue to drive the importance of the profession by demonstrating its value in ways that CEOs and CFOs, in particular, can understand,” Derry continued. “We’re making strategic contributions. It’s all about earnings per share and driving the top line.”

Last week, the industry descended on the Lone Star State, engaged each other, and came away reenergized. Now procurement and supply professionals will need to stay engaged with their internal stakeholders, in their supplier relations, and, most important, with the members of their C-suites if they are to be true stars of their organizations.

 

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