In This ISSUE:

How Lean Do You Really Want To Be? How to Build a Cost-to-Serve Model Holiday Delivery Foul-ups Major Trends for the Next 3 to 5 Years Why Leadership Programs Fail Anticipating Employment in 2014

And in every issue: St. Louis in the News Upcoming Events New Members! Job Postings

Save the Dates!

Tue, Feb 25, 2014 State of the Economy – Ernie Goss

CPSM and CPSD CERTIFICATIONS -

REVIEW CLASSES!

GET INVOLVED

PRESIDENT’S MESSAGE

“Why keep Learning?”

Many of the ideas, tools, technology and business procedures that have served us well today will be obsolete in the future. It wasn’t long ago that computers were using punch cards and were housed in large rooms, calculators were big, bulky and did not do much more then the basics. Letters and phones were the communication vehicles of the day. Now look where we are, pocket size computers and laptops we take everywhere, instantaneously e-mailing and text messaging our ideas and doing business all over the globe. What will the next 10 years bring! We all will be required to learn a different skill and mindset then we have today. Change is happening far more quickly than in years past and will only continue to accelerate as the years go by. This is particularly true in technology fields in relation to business. I cannot stress how important and vital it is that you keep learning and keeping abreast of the latest in accounting, business and technology advances in our world today. This must be a fundamental part of your career planning and personal goal setting. To help in your search for up to date information ISM Saint Louis will bring speakers to the general meetings and seminars to provide the educational and professional learning we all need. Set aside the time now to attend the General meetings, seminars and web-seminars that your affiliate makes available to you and continue to learn, grow and expand your knowledge base, you will become an even greater asset to your company and be ready for all the opportunities the future may bring. Thank you, and KEEP ON LEARNING!

Patrick C. Williamson C.P.M.

BUYLines, February, 2014

How Lean Do You Really Want To Be?

By Tom McNamara and Erika Masillac

Just-in-time (JIT) deliveries, little to no inventory, outsourcing, sole sourcing — all of these “lean” concepts have been at the heart of operations management for years now. But more and more companies are starting to ask themselves a simple question. Just how lean do we really want to be? In answering that question, many are starting to rethink the way they manage their processes and supply chains. The first warning shot across the bow of lean, and a sign that supply chains might be overstretched, came in the form of the Severe Acute Respiratory Syndrome (SARS) outbreak in China in 2002-2003. While the epidemic caused some delivery delays and lost sales, for the most part manufacturing in the region went undisturbed, so companies continued looking for ways to keep their supply chain lean. Close to 10 years later, a series of unfortunate events began with an earthquake and tsunami hitting Japan in March of 2011. In contrast to the relatively subtle supply chain shifts which resulted from the SARS outbreak, this dual disaster caused many local automotive suppliers to completely shut down, resulting in worldwide shortages of vital components. In November of that same year, major flooding struck Thailand, throwing the supply chains of several high-tech companies into utter disarray. Seagate, a major provider of hard drives for PCs, said at the time that it would probably take two years to get its supply chain back to normal. Shortly thereafter, in 2012, a major explosion at a specialized chemical plant in Germany (Evonik Industries) resulted in global automotive supply chain disruptions and compromised manufacturing across the globe. A key lean trend is consolidating suppliers and doing away with redundancies. Although this certainly creates cost efficiencies, the main suppliers who are left quite often end up providing needed parts to many companies in the same industry. And if these companies are all depending on the same supplier, or only a few suppliers, unforeseen production problems or sudden shifts in demand can easily send ripples throughout multiple systems. In certain industries, say aerospace, these rare resource problems usually aren’t found within the larger tier one suppliers, but rather further out in the supply network with the tier two and tier three providers. At those tier levels, many suppliers are usually smaller and more focused companies that already have a difficult time adapting their operations to meet demand fluctuations. As proof of the challenges that many suppliers are facing, the Original Equipment Suppliers Association says that since 2008 alone, 57 U.S. manufacturers have either gone out of business or were taken over by another company. What all this means is that thanks to the combined trends of consolidating suppliers and reducing in-

house production capabilities (i.e. outsourcing), many companies have been caught with no “plan B” in the event of a disruption. As a result, some managers are taking another look at how they run their operations and re-evaluating their formerly ravenous appetite for lean.

One example of a company re-evaluating its options is Airbus’ development of their A350 wide-body aircraft. To pro-actively address lean supply issues, the company fundamentally changed its operations

and supplier management approaches. Unlike Boeing’s choices for its 787 Dreamliner, Airbus made a

conscious decision to try and keep more design and fabrication work “in-house” (initial reports stated that Boeing wanted to outsource as much as 70 percent of the work on the 787 versus 50 percent for Airbus A350). Airbus integrated key suppliers, giving them access to its internal network and systems, and the company engaged in better oversight, monitoring the activities of about 450 suppliers and subcontractors around the world. When a problem arose, the company didn’t hesitate to send out

scores of engineers and experts to give its supply chain partners help and guidance — the exact type of thing you would normally avoid when you outsource. It may have added to some short-term costs, and may not exactly align with lean priorities, but in this case, the improved quality of the long-term supplier relationships more than made up the difference. How Lean Do You Really Want To Be? While some companies are in no way abandoning lean concepts, many are starting to take a second look

at practices that were once considered lean “heresy” so that they can improve the resiliency of their supply chains. Having some buffer inventories of vital components or material on hand, or using multiple suppliers, might be good idea for a company that wants to protect itself from disruptions. Another option could be to bring more fabrication work in-house, or at least have the capacity to do so, in the event of an emergency. Regardless of the options, managers need to continually weigh the pros of a lean and efficient supply chain against the costs of building in redundancies and flexibility. Every decision requires trade-offs. Depending on your business, some higher costs might be worthwhile if the trade-off is the ability to provide higher levels of customer service and avoid lost sales, no matter which way the storm blows.

How to Build a Cost-to-Serve Model

By SupplyChainBrain Companies typically spread supply chain costs evenly across customers and products, but that results in some products and services subsidizing others, says Stan Aronow, director of supply chain research at Gartner. Aronow explains how cost-to-serve modeling can provide insights that lead to smarter and more profitable operating decisions. Cost-to-serve models basically enable companies to use activity-based accounting to better understand which products and customers cost more to produce or to serve so that smarter decisions can be made about managing those costs and/or associated pricing, says Aronow. “It is a yardstick that allows you to come in and ask whether you are doing business in a profitable way.” Companies typically begin building cost-to-serve models by setting targets that reflect their supply chain priorities, Aronow says. For some, this might be cost efficiency and for others customer responsiveness. “If you think about these two strategies and the metrics they would use, it is easy to see that costs would vary quite significantly, so having a model that gets into the details is a great way to set those targets.” A consumer packaged goods company, for example, might come up with a customer profit and loss model that looks at the complexity of different service requirements, he says. “In some cases, the CPG company will actually go to more complex customers and say, if we could deliver to you less frequently or perhaps with fewer pallet combinations and less custom work in the warehouse, we could give you some money back, either in trade promotions or discount pricing. There are a lot of opportunities for win/win negotiations, within the four walls and also with trading partners.” The end goal is to shift behaviors through insights into what true costs are, he says, and change management is as important to this process as building the model. “You need to start with a project manager who is experienced in change management and you also want finance people and subject matter experts involved. You absolutely want to have your head of supply chain and someone at the executive level stepping up to sponsor the program.” In addition to the right people, you have to have the right tools, Aronow says. “One of the problems companies have in building these models is getting their hands on the data to make a clean set of analytics.” He notes that most companies start modeling in Microsoft Excel but eventually move to a best-of-breed solution to accelerate time to value. “These solutions can help companies get the data they need and also have built in logic around how to allocate costs in different areas to customers and products,” he says.

Holiday Delivery Foul-up More the Fault of Retailers than Carriers, Study Finds

By: Kurt Salmon Widespread delays to Christmas deliveries made headlines over the holiday season. But while carriers like UPS and even FedEx were quick to apologize, a new study suggests they may be shouldering a disproportionate amount of the blame. Kurt Salmon found that the majority of delays experienced in their analysis of holiday shipping and delivery dates were the fault of retailers, not carriers. The study, which analyzed more than 175 orders placed on the last day that retailers guaranteed delivery by Christmas, found that 15 percent of orders did not reach their destination in time. Retailers were responsible for 56 percent of those delays, which accounted for 8 percent of overall shipments. While carriers contended with extremely high volume and severe weather issues, retailers’ shortcomings were largely due to internal processing errors or a failure to upgrade shipping. “Although the major carriers took some well deserved blame for late shipments, they were not the sole reason for missed deliveries,” said Al Sambar, partner and director of the Soft Lines practice at Kurt Salmon. “Several of the retailers trying to press latest possible delivery dates failed to get the parcels handed to the carriers in time for delivery. It’s a fiercely competitive time of year, but there is a big gap between being good and being great when it comes to fulfillment. Some brands were stunned by last-minute demand, and they simply didn’t have the systems in place to respond in time.” However, many retailers successfully planned and executed last-minute holiday shipping campaigns. In the Kurt Salmon study, the top five retailers that delivered orders placed on the latest ship dates were Zappos.com, Coach.com, Belk.com, UnderArmour.com and Sears.com. According to Debbie Fortnum, senior vice president of supply chain at Belk, “We expected the end of the holiday season would be more challenging from a fulfillment perspective because there was one less week between Thanksgiving and Christmas. But we were ready. We developed an integrated shipping plan, including volume expectations and timing, with our carrier partners that aligned with our promotional schedule. Our priority was delivering on our promise to shoppers, so careful preparation and coordination was key.” As retailers in 2014 look for ways to adjust their fulfillment strategies in order to minimize problems and capitalize on existing strengths, Sambar suggests the following best practices:

Update Forecasting: Some retailers may have been surprised by the uptick of online activity right before Christmas. Now that retailers are aware of the consumer expectation to order at the last minute, it’s important to adjust peak season forecasts to ensure seamless operations that account for a later influx of orders.

Align Promotional & Distribution Activity: It’s easy for the marketing department to send a promotional email to customers highlighting last-minute shipping deadlines without a sense of what’s happening in distribution centers. Create an aligned promotional plan, and communicate it across all departments to ensure it is achievable.

Use the Stores: Many retailers have already begun shipping from stores as it can shorten transit times. This is no simple task when stores are extremely busy with holiday activity, but retailers report tremendous benefits. We expect the use of this tactic will grow through 2014.

Major Trends Impacting Supply Chains for the Next 3 to 5 Years

By: SupplyChainBrain

Surveys conducted by McKinsey and Company indicate that supply chain management is becoming a higher priority in boardrooms at the same time the job is becoming more challenging and complex. McKinsey Principal Yogesh Malik identifies issues for supply chain managers to address now and trends to watch. Corporate executives are raising the priority of supply chain management and expecting it to deliver more than cost savings, says Malik. “Company leaders are looking at the supply chain not only as a tool to reduce costs but as a means to improve service levels and create competitive advantage,” he says. Malik cites a McKinsey survey of more than 600 companies that were asked about supply chain priorities looking three years back and five years forward. Cost only as a focus dropped by 20 percent, past vs. future, he says. However, when cost was coupled with service level or inventory, the priority increased by 20 percent. “That mirrors what we are hearing from companies,” Malik says. “Companies want a supply chain that gives both cost reductions and better service.” Another survey of 60-plus CEOs reflects how the importance of the supply chain is increasing in boardrooms, he says. “More than 90 percent of these CEOs said supply chain capabilities are critical or very critical to success.” At the same time supply chains are becoming increasingly complex, which makes the job of supply chain professionals more challenging and also more exciting, says Malik. Looking out three to five years, he says supply chain managers will “continue to do the great work they have been doing,” but they will have new issues to confront. “Companies will have to look at the number of supply chains they operate,” he says. “They can’t have a one-size-fits-all supply chain, nor can they have dozens of supply chains, so the key questions will be how to splinter supply chains, how many to have and how to design and manage those,” he says. Another challenge will be managing increasing supply chain risk. “Going forward, building a supply chain that not only is efficient, but also resilient will be very critical. Resiliency doesn’t come cheap but is essential for companies to be able to serve customers across regions with confidence.” Trends for supply chain managers to keep a watch on include climate change, says Malik. “The emphasis on sustainability will shift some customer needs and will drive providers to become more green in their operations,” he says. Another is big data. “With big data comes disruptive ways in which companies will look at patterns and that will impact how they want to manage the supply chain, so how big data evolves is something to keep an eye on.”

Why leadership-development programs fail

Sidestepping four common mistakes can help companies develop stronger and more capable

leaders, save time and money, and boost morale.

By Pierre Gurdjian, Thomas Halbeisen, and Kevin Lane

For years, organizations have lavished time and money on improving the capabilities of managers and on nurturing new leaders. US companies alone spend almost $14 billion annually on leadership development. Colleges and universities offer hundreds of degree courses on leadership, and the cost of customized leadership-development offerings from a top business school can reach $150,000 a person.

Moreover, when upward of 500 executives were asked to rank their top three human-capital priorities, leadership development was included as both a current and a future priority. Almost two-thirds of the respondents identified leadership development as their number-one concern. Only 7 percent of senior managers polled by a UK business school think that their companies develop global leaders effectively, and around 30 percent of US companies admit that they have failed to exploit their international business opportunities fully because they lack enough leaders with the right capabilities. We’ve talked with hundreds of chief executives about the struggle, observing both successful initiatives and ones that run into the sand. In the process, we’ve identified four of the most common mistakes. Here we explain some tips to overcome them. Together, they suggest ways for companies to get more from their leadership-development efforts—and ultimately their leaders—as these organizations face challenges ranging from the next demanding phase of globalization to disruptive technological change and continued macroeconomic uncertainty.

1. Overlooking context

Context is a critical component of successful leadership. A brilliant leader in one situation does not necessarily perform well in another. Academic studies have shown this, and our experience bears it out. The CEO of a large European services business we know had an outstanding record when markets were growing quickly, but he failed to provide clear direction or to impose financial discipline on the group’s business units during the most recent economic downturn. Instead, he continued to encourage innovation and new thinking—hallmarks of the culture that had previously brought success—until he was finally replaced for underperformance.

Too many training initiatives we come across rest on the assumption that one size fits all and that the same group of skills or style of leadership is appropriate regardless of strategy, organizational culture, or CEO mandate. In the earliest stages of planning a leadership initiative, companies should ask themselves a simple question: what, precisely, is this program for? If the answer is to support an acquisition-led growth strategy, for example, the company will probably need leaders brimming with ideas and capable of devising winning strategies for new or newly expanded business units. If the answer is to grow by capturing organic opportunities, the company will probably want people at the top who are good at nurturing internal talent.

Focusing on context inevitably means equipping leaders with a small number of competencies (two to three) that will make a significant difference to performance. Instead, what we often find is a long list of leadership standards, a complex web of dozens of competencies, and corporate-values statements. Each is usually summarized in a seemingly easy-to-remember way (such as the three Rs), and each on its own terms makes sense. In practice, however, what managers and employees often see is an “alphabet soup” of recommendations. We have found that when a company cuts through the noise to identify a small number of leadership capabilities essential for success in its business—such as high-quality decision making or stronger coaching skills—it achieves far better outcomes. In the case of a European retail bank that was anxious to improve its sales performance, the skill that mattered most (but was in shortest supply) was the ability to persuade and motivate peers without the formal authority of direct line management. This art of influencing others outside formal reporting lines runs counter to the rigid structures of many organizations. In this company, it was critical for the sales managers to persuade the IT department to change systems and working approaches that were burdening the sales organization’s managers, whose time was desperately needed to introduce important sales-acceleration measures. When managers were able to focus on changing the systems and working approaches, the bank’s productivity rose by 15 percent. Context is as important for groups and individuals as it is for organizations as a whole: the best programs explicitly tailor a “from–to” path for each participant. An Asian engineering and construction company, for example, was anticipating the need for a new cadre of skilled managers to run complex multiyear projects of $1 billion or more. To meet this challenge, it established a leadership factory to train 1,000 new leaders within three years. The company identified three important leadership transitions. The first took experts at tendering (then reactive and focused on meeting budget targets) and sought to turn them into business builders who proactively hunted out customers and thought more strategically about markets. The second took project executors who spent the bulk of their time on site dealing with day-to-day problems and turned them into project directors who could manage relationships with governments, joint-venture partners, and important customers. The third targeted support-function managers who narrowly focused on operational details and costs, and set out to transform them into leaders with a broader range of skills to identify—and deliver—more significant contributions to the business.

2. Decoupling reflection from real work

When it comes to planning the program’s curriculum, companies face a delicate balancing act. On the one hand, there is value in off-site programs (many in university-like settings) that offer participants time to step back and escape the pressing demands of a day job. On the other hand, even after very basic training sessions, adults typically retain just 10 percent of what they hear in classroom lectures, versus nearly two-thirds when they learn by doing. Furthermore, burgeoning leaders, no matter how talented, often struggle to transfer even their most powerful off-site experiences into changed behavior on the front line.

The answer sounds straightforward: tie leadership development to real on-the-job projects that have a business impact and improve learning. But it’s not easy to create opportunities that simultaneously address high-priority needs—say, accelerating a new-product launch, turning around a sales region, negotiating an external partnership, or developing a new digital-marketing strategy—and provide personal-development opportunities for the participants.

A medical-device company got this balance badly wrong when one of its employees, a participant in a leadership-development program, devoted long hours over several months to what he considered “real” work: creating a device to assist elderly people during a medical emergency. When he presented his assessment to the board, he was told that a full-time team had been working on exactly this challenge and that the directors would never consider a solution that was a by-product of a leadership-development program. Given the de-motivating effect of this message, the employee soon left the company. By contrast, one large international engineering and construction player built a multiyear leadership program that not only accelerated the personal-development paths of 300 midlevel leaders but also ensured that projects were delivered on time and on budget. Each participant chose a separate project: one business-unit leader, for instance, committed his team to developing new orders with a key client and to working on a new contract that would span more than one of the group’s business lines. These projects were linked to specified changes in individual behavior—for instance, overcoming inhibitions in dealing with senior clients or providing better coaching for subordinates. By the end of the program, the business-unit head was in advanced negotiations on three new opportunities involving two of the group’s business lines. Feedback demonstrated that he was now behaving like a group representative rather than someone defending the narrow interest of his own business unit. The ability to push training participants to reflect, while also giving them real work experiences to apply new approaches and hone their skills, is a valuable combination in emerging markets. There, the gap between urgent “must do” projects and the availability of capable leaders presents an enormous challenge. In such environments, companies should strive to make every major business project a leadership-development opportunity as well, and to integrate leadership-development components into the projects themselves.

3. Underestimating mind-sets

Becoming a more effective leader often requires changing behavior. But although most companies recognize that this also means adjusting underlying mind-sets, too often these organizations are reluctant to address the root causes of why leaders act the way they do. Doing so can be uncomfortable for participants, program trainers, mentors, and bosses—but if there isn’t a significant degree of discomfort, the chances are that the behavior won’t change. Just as a coach would view an athlete’s muscle pain as a proper response to training, leaders who are stretching themselves should also feel some discomfort as they struggle to reach new levels of leadership performance.

Identifying some of the deepest, “below the surface” thoughts, feelings, assumptions, and beliefs is usually a precondition of behavioral change—one too often shirked in development programs. Promoting the virtues of delegation and empowerment, for example, is fine in theory, but successful adoption is unlikely if the program participants have a clear “controlling” mind-set (I can’t lose my grip on the business; I’m personally accountable and only I should make the decisions). It’s true that some personality traits (such as extroversion or introversion) are difficult to shift, but people can change the way they see the world and their values. Take the professional-services business that wanted senior leaders to initiate more provocative and meaningful discussions with the firm’s senior clients. Once the trainers looked below the surface, they discovered that these leaders, though highly successful in their fields, were instinctively uncomfortable

and lacking in confidence when conversations moved beyond their narrow functional expertise. As soon as the leaders realized this, and went deeper to understand why, they were able to commit themselves to concrete steps that helped push them to change. A major European industrial company, meanwhile, initially met strong resistance after launching an initiative to delegate and decentralize responsibility for capital expenditures and resource allocation to the plant level. Once the issues were put on the table, it became clear that the business-unit leaders were genuinely concerned that the new policy would add to the already severe pressures they faced, that they did not trust their subordinates, and that they resented the idea of relinquishing control. Only when they were convinced that the new approach would actually save time and serve as a great learning opportunity for more junior managers—and when more open-minded colleagues and mentors helped challenge the “heroic” leadership model—did the original barriers start to come down and decentralization start to be implemented. Another company decided that difficult market conditions required its senior sales managers to get smarter about how they identified, valued, and negotiated potential deals. However, sending them on a routine finance course failed to prompt the necessary changes. The sales managers continued to enter into suboptimal and even uneconomic transactions because they had a deeply held mind-set that the only thing that mattered in their industry was market share, that revenue targets had to be met, and that failing to meet those targets would result in their losing face. This mind-set shifted only when the company set up a “control tower” for reflecting on the most critical deals, when peers who got the new message became involved in the coaching, and when the CEO offered direct feedback to participants (including personal calls to sales managers) applauding the new behavior.

4. Failing to measure results We frequently find that companies pay lip service to the importance of developing leadership skills but have no evidence to quantify the value of their investment. When businesses fail to track and measure changes in leadership performance over time, they increase the odds that improvement initiatives won’t be taken seriously.

Too often, any evaluation of leadership development begins and ends with participant feedback; the danger here is that trainers learn to game the system and deliver a syllabus that is more pleasing than challenging to participants. Yet targets can be set and their achievement monitored. Just as in any business-performance program, once that assessment is complete, leaders can learn from successes and failures over time and make the necessary adjustments. One approach is to assess the extent of behavioral change, perhaps through a 360 degree–feedback exercise at the beginning of a program and followed by another one after 6 to 12 months. Leaders can also use such tools to demonstrate their own commitment to real change for themselves and the organization. One CEO we know commissioned his own 360 degree–feedback exercise and published the results (good and bad) for all to see on the company intranet, along with a personal commitment to improve. Another approach is to monitor participants’ career development after the training. How many were appointed to more senior roles one to two years after the program? How many senior people in the organization went through leadership training? How many left the company? By analyzing recent

promotions at a global bank, for example, senior managers showed that candidates who had been through a leadership-development program were more successful than those who had not. Finally, try to monitor the business impact, especially when training is tied to breakthrough projects. Metrics might include cost savings and the number of new-store openings for a retail business, for example, or sales of new products if the program focused on the skills to build a new-product strategy. American Express quantifies the success of some of its leadership programs by comparing the average productivity of participants’ teams prior to and after a training program, yielding a simple measure of increased productivity. Similarly, a nonprofit we know recently sought to identify the revenue increase attributable to its leadership program by comparing one group that had received training with another that hadn’t. Companies can avoid the most common mistakes in leadership development and increase the odds of success by matching specific leadership skills and traits to the context at hand; embedding leadership development in real work; fearlessly investigating the mind-sets that underpin behavior; and monitoring the impact so as to make improvements over time.

Anticipating Employment in 2014

Recruiting trends will have a significant impact on your 2014 hiring, especially if you work in an industry where qualified candidates are scarce. Forecasting your labor needs for the upcoming year is a great way to see where you are and where you're going. New hiring trends will drive recruiters and staffing professionals to come up with new ways of attracting qualified candidates. Here are four hiring trends to look for: Mature Talent: The United States Census Bureau expects the number of people in the 55 to 64 age groups to grow to 40 million in 2014, meaning you will have to interact with mature talent as you look for qualified candidates, which will impact the way you recruit new employees. Tweak your advertisements to attract professionals from this age group. Young Talent Retention: You will also need to focus on retaining younger talent. Millennial workers are not just looking for jobs; they want interesting and challenging work. Give your young workers a challenge in order to keep them interested in working for you. Industry Specific Hiring Tends: For 2014, one of the biggest hiring trends in technology will be finding candidates skilled in smart manufacturing. Early implementers foresee a smart manufacturing model flexible enough to respond to global consumer demand and bring new innovations, along with other game changers. Smart manufacturing melds information, technology. and human ingenuity. It will change how products are invented, manufactured, shipped, and sold. Marketing Instead of Recruiting: 2014 will be the year that chief human resource officers make a strong move from recruitment to attraction. With changes in the talent pool, you will need to begin thinking about the long term...developing a strong employer brand that brings talented workers to you, starting to think like a marketer instead of a recruiter, defining your target audience, and developing a strategy to reach it.

Supply Chain in a SNAP SHOT

The January monthly Logistics Market Snapshot As always, included below are some selected encouraging statistics from this month's edition:

The construction market for domestic transportation infrastructure is expected to grow to $135.8 billion next year, a 5% increase over 2013.

More than 1.6 million TEU's of new ocean freight capacity are scheduled for delivery in 2014, possibly making 2014 a record-breaking year for capacity.

U.S. auto sales in 2013 rose 7.6% over the previous year to 15.6 million autos. Ford's U.S. sales totaled about 2.5 million vehicles, accounting for a 10.8% increase, the largest of any other automaker in 2013. Nissan and Chrysler increased sales more than 9% while sales for Toyota and General Motors rose 7.4% and 7.3%, respectively. U.S. auto sales are expected to rise to 16.5 million vehicles in 2014.

Intermodal rail traffic in December 2013 was 8% higher than in December 2012. Intermodal loadings have experienced year-over-year gains for 48 straight months, and for all of 2013, U.S. rail intermodal volume totaled a record-breaking 12.8 million containers and trailers, up 4.6% over 2012.

More than 1.6 million TEU's of new capacity are scheduled for delivery in the upcoming year, possibly making 2014 a record-breaking year for capacity.

The U.S. trade deficit decreased by 12.9% in November to $34.3 billion, the lowest trade deficit since October 2009.

Year-over-year, housing starts and building permits in November increased 29.6% and 7.9%, respectively.

St. Louis in the News Charter proposes merger with Time Warner Cable

St. Louis Business Journal Charter Communications said Monday that CEO Tom Rutledge sent a letter to Time Warner Cable proposing the two companies “immediately engage in discussions to conclude a merger agreement,” after attempting to negotiate with its takeover target for more than six months. Charter has offered to buy Time Warner Cable, the country’s second-largest cable provider behind Comcast, for $132.50 a share, Rutledge told Bloomberg on Monday. The offer values Time Warner Cable at more than $61 billion. Time Warner Cable executives have been said to be seeking an offer closer to $150 a share. Rutledge told Bloomberg he hoped the letter would spark shareholders to ask management and the board to “watch out for the interests of shareholders. “Because Time Warner Cable’s stock has run up on widespread shareholder endorsement of a deal to the point where the premium is already reflected in the share price, Time Warner Cable’s response led Charter to determine there is no genuine intent from Time Warner Cable’s management and Board of Directors to engage in a merger agreement, and that it is prudent to bring the matter to shareholders directly,” Charter officials said in a release Monday announcing the letter.

Schnucks names new CEO

Schnuck Markets Inc. has a new man at the top — but it’s still a family affair. CEO Scott Schnuck, 63, is passing the reins to younger brother Todd Schnuck, the company said Thursday. Todd Schnuck, 55, who has served as COO of the $2.6 billion grocery chain since 2009, will become president and CEO in March. Scott Schnuck will become chairman and will work with his younger brother through September to ensure a smooth transition. Older brother Craig Schnuck, 65, who was CEO for 17 years until 2006, will retire and become chairman emeritus. Scott Schnuck told the Business Journal that around 14 months or 15 months ago, he felt it was time for a change. “I put a strong mark on the company, but it’s a tough business,” he said. “I’m not sure about how much more I could accomplish, but I think the company was ready for new leadership and fresh leadership, and we took the (past) 14 months to get it done.” That included recruiting Anthony Hucker, 47, a former Aldi’s and Walmart executive, who joined Schnucks in September as chief strategy officer. Hucker will now assume the role of COO. The Schnuck family, which founded the grocery chain in 1939, has long prioritized succession planning. “We have an ongoing discussion as to how we’re going to lead our company over the years,” Todd Schnuck said. During his eight years as CEO, Scott Schnuck oversaw the introduction of new store prototypes. In 2009, Schnucks opened its 21,000-square-foot urban concept, Culinaria, in downtown St. Louis, as well as its 74,000-square-foot flagship store in Des Peres. Overall, the supermarket industry faces increasing competition from big box stores, including Walmart. In 2013, Schnucks faced a cyber security breach impacting an estimated 2.4 million credit cards.

SAVE the DATES! ISM STL Affiliate Meetings

Tue, Feb 25, 2014 State of the Economy – Ernie Goss

Tue, Mar 25, 2014 ISM Supply Management Month - CEO Tom Derry

MAY 5 – 7th ISM 2014, Las Vegas - Focus on YOU! Join thousands of your peers for ISM2014 and focus on topics that impact you the most, from career management, talent management and business acumen, to supply chain growth, global economic indicators, big data analytics and logistics. Visit www.ism.ws for the top 10 reasons to attend and be the first to see the 2014 learning tracks – developed with you in mind.

To REGISTER, visit our website! www.ismstlouis.org

GET CERTIFIED! CPSM Mod #1 – January 30 CPSM Mod #2 – March 27 CPSM Mod # 3 – May 29 CPM Bridge – May 30

Bachelor's Degree or higher required Must pass 3 exams: Foundation of Supply Management, Effective Supply Management

Performance & Leadership in Supply Management OR currently hold the C.P.M. designation & pass the Bridge Exam

3 years full-time, professional supply management experience Designation ensures a broad-based & multi-faceted understanding of the full spectrum of the

supply chain

CPSD – March 28

Must pass the CPSD' Exam. Must pass Exam 1 of the Certified Professional in Supply

Management (CPSM). Requirement is waived if the candidate holds a current C.P.M. or CPSM.

5 years professional supplier diversity or supply management experience OR 3 years of professional (non-clerical, non-support) supplier diversity or supply management experience IF the candidate has a bachelor's degree from a regionally accredited college or university (or international equivalent).

Designation is tailored to supply management professionals whose responsibilities include supplier diversity & who participate in the development of diverse supplier initiatives.

Job Postings

DIRECTOR OF PURCHASING CITY OF KIRKWOOD PURCHASING AGENT DUKE MFG

PROCUREMENT CONTRACT COORDINATOR ST LOUIS COUNTY GOVERNMENT

To view these listings, visit the jobs page.

WELCOME New Members!

Mark Macdonald Duke MFG Michael Klobe Express Scripts Jane T Hoffman Hussman Corp Todd D Larkin Express Scripts

Laura Tastad Maritz Scott Gray Mastercard Robby Gross Mastercard

Get involved! For Volunteer Opportunities Contact our BOARD!

In many survey's the membership have spoken of how much they like more pre-dinner sessions. Volunteering to teach a session helps to accomplish this. When you volunteer your time to teach a class or facilitate a workshop, you get a chance to polish your public speaking skills, and you get a nice credit to add to your résumé. Volunteering allows you to meet people who have similar interests. You may make new friends of the same professional background or a different one all together. Or you may make contacts that become important in the future. There are a variety of opportunities to get involved in our affiliate. Sharing your knowledge of purchasing or logistics topics is of vital importance to grow others in our field and the professional and personal rewards are abundant. If you have a passion for any aspect of purchasing please consider sharing that passion with the other members of your profession.

BOARD OF DIRECTORS

Patrick Williamson C.P.M. President Term: 2013-14 president@ismstlouis.org Melissa L. Orlando, CPSM, C.P.M. President Elect Term: 2013-14 presidentelect@ismstlouis.org Dawn Fadler, CPSM Vice President Term: 2013-14 vicepresident@ismstlouis.org Max Merz, CPSM, C.P.M. Director of Finance Term: 2012 -14 finance@ismstlouis.org

AFFILIATE DIRECTORS AND ADVISORS

Emily Green Director of Education Term 2013 – 2014 education@ismstlouis.org Christine Wojak Director of Marketing Term: 2012 -14 marketing@ismstlouis.org Patricia Greathouse Director of Membership Term: 2012 -14 members@ismstlouis.org Paula J. Matousek Director of Professional Development Term: 2011 - 14 pro-d@ismstlouis.org Kimberly R. Butts, CPSM, C.P.M. Affiliate Advisor advisor2@ismstlouis.org Larry Jackson, CPSM, C.P.M. Immediate Past President pastpresident@ismstlouis.org