SOURCEsupp l y c h a i n

Karen S. Hatke, Freelance Writer Dan VerDuin, a Krannert undergraduate student majoring in Operations, may not know it right now, but he likely will be a “survivor.” What makes him a survivor? Dan will complete his second summer internship with ArcelorMittal in 2012. What he perhaps is doing instinctively in order to learn more about his field of choice in the real world will be seen as an asset by prospective employers and will enhance his survival in a tight job market. Dan was unable to attend the 2012 annual spring conference presented by Krannert’s Global Supply Chain Management Initiative (GSCMI), but one of the biggest take-aways from it was that speaker after speaker, from well known companies like Coca Cola, Caterpillar, and Boeing, affirmed his proactive choice of an internship instead of taking summers off or working in a temporary job unrelated to his career goals. Dedicated to their mission to regularly bring academia and industry together on the Purdue campus, GSCMI once again assembled representatives from some of the most successful and respected organizations around the world for this year’s spring conference on April 20, this time to share their lessons learned in the quest for flexibility in the global supply chain in an economy that is definitely a survival of the fittest. A great deal of time was spent talking about being prepared for the “known unknowns” and hopefully the “unknown unknowns” that can and do affect their operations. Innovation, planning, preparedness, and adaptability were mentioned often to describe companies that survive the worst, and these companies seek out employees who embrace the mindset of flexibility. Industry experts agree that a crisis is looming from the impending retirement of a projected 50% of the U.S. management and skilled labor force in the next decade. On-the-job training is absolutely essential in this passing on of the practical applied knowledge of an entire generation, but “no amount of training or retraining can fix a poor fit,” insists John Gerrard, Talent Acquisition Division Manager for ArcelorMittal. Many of the speakers echoed Mr. Gerrard’s supposition and stressed that it is more important than ever that applicants bring a “total package” to the table, consisting of not only a degree but evidence of hands-on internships, examples of their leadership and decision-making skills, and a realistic sense of a good “fit” for them. Gary Bear, Procurement Manager for Caterpillar, likes to see motivation in his employees, and literally wants to hire someone who is after his job or more and shows that desire. “I believe in having ‘bench’ strength on my team at all times,” he said, “and I want to know they will step up to plate when called to do so.” Ed Rounsaville, General Manager of GencoATC, promotes flexibility not only in his supply chain but with his employees (or teammates as Genco calls them) as well. “I look for individuals who not only have the potential to excel in their positions, but who can challenge the person next to them to excel, in other words, a leader.” Jeanette Ramos, Vice President of Supply Chain Management for Boeing Commercial Airplanes, discussed the complexity of Boeing’s supply chain with the millions of parts required for the production of one airplane and managing over 172,000 employees worldwide. As a supply chain manager, she scours the globe for the best products, technology, and talent. “In our complex and fiercely competitive field, I look for tenacious and courageous people who want to learn the breadth of what Boeing does so that they can compete globally along with the company.”A variety of unique approaches to finding and keeping good employees are out there, but the bottom line from the 2012 spring conference is that companies worldwide are wanting to find and keep the best and the brightest at every job level. First-time conference attendee Hal Rains, who is the operations manager for Aero Engine Controls in Indianapolis, was pleased with the content, the speakers, and the GSCMI organization. “I especially liked hearing how these established successful companies relate new hires to supply chain flexibility,” he said, “The home office of Aero is in the United Kingdom. As my organization in Indiana expands, it will be helpful information to grow my supply chain team.”And what does Krannert student Dan think about his internship with ArcelorMittal? “I liked being exposed to the technical aspects of the steel industry last summer and gladly accepted this second year opportunity.” If ArcelorMittal offers him a position after graduation, Dan understands that they encourage their employees to pursue graduate education while working, which is exciting to him. “They are such a large company,” he adds, “the largest steel manufacturer in the world in fact, so there would be a ‘ton’ of room for advancement.”

Flexibility in the Global Supply ChainSurvival of the Fittest

Coca-Cola RefreshmentsSean MaroneyBy Tony Fisher, MBA 2012Krannert Graduate students, faculty, staff, alumni and other industry professionals were privileged to hear from Sean Maroney, Vice President of Product Supply for Coca-Cola Refreshments at the 2011/2012 Global Supply Chain Conference. The theme of the conference was on flexibility within the supply chain. As such, Mr. Maroney gave an engaging presentation on flexibility in Coca-Cola Refreshments Direct Store Delivery Supply Chain. Coca-Cola Refreshments is a vertically integrated company that serves a multitude of customers with a large variety of SKU’s. This complexity makes it that much more important for Coca-Cola Refreshments to be as efficient and flexible within their operations in order to positively service their

customers. The Coca-Cola Company is the world’s largest beverage company with more than 500 sparkling and still brands, and their products served are consumed at an astonishing average of 1.7 billion times per day. Their distribution system is the largest in the beverage industry with operations in over 200 countries. Their approach to flexibility is multi-faceted, but key elements are being able to quickly respond to demand fluctuations by their short lead times as well market segmentation to ensure they know the characteristics of their retail customer and of the brands and packages they sell, and forecast accordingly. Mr. Maroney closed his presentation on the importance in sustainability initiatives within a supply chain. For Coca-Cola Refreshments they’ve accomplished this in many ways, from a 94% recycling rate, diverting 250 million pounds

of waste from landfills, to their vending machines being 50% more efficient and having 600+ hybrid electric delivery trucks, the largest fleet of its kind in North America.

2012 Global Supply Chain Management Conference

CaterpillarGary BearGary Bear, Procurement Manager at Caterpillar, introduced Caterpil-lar’s work philosophy during the spring conference. As their work philosophy states, in order to maintain a positive working environ-ment, all employees must work together. Proper employee interac-tion is paramount; therefore, hiring appropriately suited employees is vital. Caterpillar promotes advancement within their employees. They consider, “What will this person become over their career?” Not only do they see the current potential in an individual, but they also aid in cultivating even greater success in their employees. A coachable, humble yet confident leader will start on solid footing towards achieving their full capacity. Caterpillar’s dedication to hir-ing, creating, and empowering exceptional employees has indeed fostered and enhanced a positive working environment for the company.

Caterpillar Gary SmithGary Smith, Supply Chain Manager for Caterpillar, discussed the vital role of flexibility in order to meet the needs of customers in an expanding global environment. A word from the Chairman and CEO, Doug Oberhelman, depicted Caterpillar’s role in the global market, “We make sustainable progress possible. Around the world, every day, our machines are building the world’s infrastructure…” In order to make such “sustainable progress” a reality, Caterpillar’s flexibility with regard to response time to changes and disruptions has been key. Changes may include demand, mix, or customer changes; and disruptions encompass both man-made and natural disrup-tions. Fundamental supply change challenges must be overcome to achieve success. Supply chain flexibility relies heavily on both internal and external means. Planning ahead, communication, and visibility are crucial to achieving flexibility. Serving customers in more than 180 countries around the globe, over half of Caterpil-lar’s sales are outside of the U.S. causing their global impact to be phenomenal. As a result of Caterpillar’s flexibility, a history of progress is evident throughout their broad range of products and industries making them the recognized leader in the markets they serve around the world.

ConexusDavid HoltBy Diane Gonzales, MBA 2012In his VP of Operations and Business Development role with Conex-us, David Holt drives the logistics agenda and developed, recruited and led the formation of the Conexus Indiana Logistics Council Executive Committee, a forum of prominent logistics executives, throughout the state of Indiana. Under his guidance and leadership, Holt developed Phase I: A Plan for Indiana’s Logistics Future, ensur-ing that those things necessary for Indiana’s transportation network are in place to enhance the environment for companies to grow their business, create a more attractive business environment to locate in Indiana, and create high paying jobs for Hoosiers. Holt talked about Indiana’s advantages in the logistics sectors. He then enounced the key aspects regarding infrastructure, public policy, and workforce development that the Logistics Council has completed and is currently working on. The infrastructure goals include 2 or 3 large intermodal/multimodal facilities for Indiana, construction and redesign of key locks, a plan to attract air freight business, and completion of key infrastructure projects in bottle-neck regions.With the workforce readiness being the major threat to the future of Indiana’s largest economic sector, workforce development was identified as the top strategic priority by Conexus Indiana Executive Committee. Holt believes that too many employers still embrace today an outdated model of worker training – the results from a recent Conexus statewide employer survey show that 53% of the employers agree that a majority of their staff need more training. The approach suggested by Conexus involves a connection between the industry and academia, an intense marketing of these programs to prospective employees, and building a robust pipeline of qualified applicants-this way the in-house training costs are lessened, overall workforce quality increases, and common standards are set.

GencoATCEd Rounsaville By David McDairmant, MBA 2012GencoATC provides Third Party Logistics for its customers. Ed Rounsaville works at the Plainfield site outside of Indianapolis, which provides services for a client in the medical device industry, Becton-Dickinson. While the medical device industry is generally stable, the nature of the devices sold by Becton-Dickinson leaves the company exposed to large spikes in demand. Many of its products are used during natural disasters, such as the earthquake in Haiti, so GencoATC must be prepared to ramp up shipping throughput practically overnight.Mr. Rounsaville spoke about many of the initiatives and people management practices that GencoATC uses to maintain flexibility and improve its efficiency. The company recently implemented lean

principles in the warehouse in Plainfield. It places an emphasis on leadership, not just in management, but also in job performance. It tries to hire people not only who can be productive themselves, but will help others around them become more productive as well. The improvements have enabled the site to drive down costs while providing the highest level of service for Becton-Dickinson.

WiproChris Gordon By David McDairmant, MBA 2012Chris Gordon spoke about the complexity of managing world-wide supply chains and specifically the management of data. Data regarding customers, demand, supply, manufacturing, and logistics all plays a part in managing the global supply chain. Wipro specializes in implementing information systems which begin by bringing visibility

to the business. Once the data is visible, it can then be used to collaborate world-wide and across segments. Finally, once a company is working collaboratively, the system can be optimized so that waste is eliminated and service levels are improved. Mr. Gordon then spoke about a case study involving an electronics company that is using Wipro services to prepare their supply chain for natural disasters. Supply chains tend to rely on a single communications channel, which are often interrupted in natural disasters. The work is concentrated on preparing and deploying alternate channels of communication so that a business can continue to operate if communications break down. This allows a business to react quickly in disasters so as to minimize damage and continue to provide products and services to customers.

BoeingJennette E. RamosBy Jessica Rush,MBA Candidate 2013Jenette E. Ramos, vice president of Supply Chain Management spoke openly about Managing a Dynamic Global Supply Chain for her company Boeing during this year’s DCCME spring conference. With customers spanning over more than 90 countries, Ramos communicated the importance of global partnerships worldwide in the areas of technology, service, and manufacturing. Last year alone, Boeing made total revenue of $68.7 billion, with ap-proximately 70% historically from customers outside of the United States. This figure shows the importance of research and design with a global mindset. To continue a reasonable lead in supply chain among competitors, Ramos defined Boeing’s mission as: “Supplier Management leads the development and continuous improvement of an extended supply chain that creates a sustainable competitive advantage.” Boeing’s goals are strategic: to optimize their supply chain throughout their lifecycle of their products, to show continuous improvement, and to use a similar process and tool throughout the cycle. Because of this dependable and constant method, suppliers prefer Boeing to their competitors.In the future, Boeing would like to take their supplier relationships to the next level. When possible, Boeing wants to build solid verti-cal integration partnerships, in doing this, it would create a more streamline process invisible to the outside consumer.

Arcelor-Mittal John GerrardBy Jennifer Evemeyer,MBA Class of 2013John Gerrard, division manager of talent acquisition at Arcelor-Mittal spoke during the education panel on the keys to being a successful interview candidate. Arcelor Mittal, the world’s largest steel company, has thrived in an industry marked by bankruptcy and dramatic industry consolidation in the past decade. Steel pro-duced by ArcelorMittal is being used in some of the world’s biggest projects- it’s in almost every car and produces the beams for the new World Trade Center towers in New York. Being number one in the world, however, couldn’t be possible without the right workers, Mr. Gerrard acknowledges. “Invest in the front end. You can have the best equipment in the world, but if you don’t have the people to back it up, you won’t be able to succeed”, says Mr. Gerrard, who designed and manages the company’s Campus Partnership Program. The program partners with 11 major universities- Purdue being one of the original four.

FLEXIBILITY IN THE GLOBAL SUPPLY CHAIN

2012 Global Supply Chain Management Conference

403 W. State StreetWest Lafayette, IN 47907765-494-2860www.gscmi.org

“I always enjoy attending the conference. I find it tremendously beneficial to have a forum that brings together industry, academia, and the leaders of tomorrow. It’s fertile ground for great conversation around the future of Supply Chain.”Sean MaroneyVice President – Field OperationsCoca-Cola

“It was really a pleasure to be part of a rich and varied program during the recent Krannert GSCMI Spring conference. The pre-sentations were very informative and exceptionally well done. The event also provided the opportunity to connect with a colleague whose firm could be positioned to assist AreclorMittal with a critical outreach and recruiting effort”John D. GerrardDivision Manager, Talent AcquisitionArcelorMittal USA

“I have been an attendee at the Global Supply Chain Conference for two or three years. It is a great opportunity to network with people from other businesses that share the same Supply Chain challenges.”Gary W. BearLEC Procurement ManagerCaterpillar Inc.

“The Purdue University community of students, faculty and businesses are taking action to lead in the area of Supplier Management academics and best practices. We appreciate the opportunity to participate in the Global Supply Chain Initiative Conference!”Jenette RamosVice President, Supply Chain ManagementBoeing Commercial Airplanes

“The 2012 Global Supply Chain Management Conference was a great opportunity for logistics business leaders, students and educators to gather together to discuss present trends, the needs of the workforce and innovation that are happening in the logistics industry. It is great to have an educational establishment, with Purdue’s reputation, step up and ensure that the issues of importance to the industry are being addressed.”David HoltVice President, Operations & Business DevelopmentConexus Indiana