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An Affiliate of
92 Years Old and still counting!
January 2013 Volume 21, Issue 8
Communiqué Newsletter of NAPM-Indianapolis, Inc. Established in 1917
Inside This
Issue:
Letter From
the Board
1-2
Letter from ISM 3
5 Reasons Why
You Need to
4-6
US Imports in
2012
7
Supplier Evalua-
tion Checklist:
A Must Have
8-9
Six factors that
separate supply
chain leaders
from laggards
10
The Realities of
Reverse Logis-
tics
11
Upcoming
CPSM Certifica-
tion Details
12
ISM Term of the
Month
13
New Member 13
ISM-Central
Indiana, Inc.
Calendar of
Events
14-16
Another year has come and gone! Happy 2013 to everyone!! The
key question before we make goals and plans for the New Year is did
we obtain our 2012 goals? Did we broaden our network? Did we de-
velop professionally? Did we increase our business and supply chain
acumen? If not, each New Year provides us with the promise of
greater potential growth and development. We have to make a deci-
sion to make clear and concise goals and pursue them with all effort
and vigor.
The National Association of Purchasing Management – Inc. (NAPM) –
Indianapolis is a great vehicle to pursue our professional, educational,
networking and social goals. We have Supply Chain Professionals at
all levels of their careers. There are hundreds of years of knowledge
and practical experience within our affiliate. We have members work-
ing at Fortune 500 companies along with mid and small businesses. It
is through this organization that you can achieve certification in Sup-
ply Management which gives an individual a great breath of knowl-
edge about our profession. Our certifications are nationally recognized
and it displays an individual’s determination and effort to continue
their education. NAPM – Indianapolis promotes lifelong learning for
Supply Management professionals through seminars, training, educa-
tional courses and professional development meetings.
The first half of our 2012/2013 season provided a wonderful slate of
professional development meetings. We have discussed a variety of
subjects including risk management, sustainability and strategic sourc-
ing presented by seasoned professionals in the respective fields. We
are excited about our upcoming meetings for 2013. They will combine
interesting venues with provocative speakers and presentations. It will
also include our annual golf outing.
Page 2
So make a decision today to become more involved with our local
affiliate. We have received great response from our monthly seg-
ment at our professional development meetings entitled “Getting to
Know You”. It provides our membership with the opportunity to
give a five to seven minute presentation about themselves and their
job function in Supply Chain. The opportunities to volunteer on
various committees and special projects are endless. We definitely
need your participation and enthusiasm to have a viable and produc-
tive affiliate.
Since the new year is a time for change, The Board of Directors
wanted to inform you of an upcoming name change for the National
Association of Purchasing Management Inc. – Indianapolis (NAPM-
I). The new name of our organization will be the Institute for Supply
Management – Central Indiana. This aligns our local organization
name with the national organization which changed their name some
time ago. It gives us a consistent brand for individuals that are fa-
miliar with the national organization or have moved from other ar-
eas. This change has been adopted by other affiliates around the
country. The name change also provides the opportunity to reach
additional Sourcing and Supply Chain professionals. This will be a
beneficial change for our affiliate. It was also the goal of the local
Board to expand our name from Indianapolis to Central Indiana be-
cause of the expanded distance of our members. It allows us greater
avenues to reach potential members in Columbus, Fort Wayne,
Evansville, Bloomington and surrounding areas.
During our recent economic times, ISM has lost some of our affili-
ates in the state. We want to provide access to educational, profes-
sional and networking resources for Supply Chain professionals in
the Central Indiana area. Our Board of Directors will be explaining
more about our name change in future meetings and correspondence.
We look forward to a great 2013!
Ronald Wright
National Association of Purchasing Management Inc. - Indianapolis
Membership Director
President
Megan Mills President@napm-
indianapolis.org
Vice-President
Stacie Neuhaus, C.P.M.
VP@napm-
indianapolis.org
Treasurer
Erica Voetsch, CPSM Treasurer@napm-
indianapolis.org
Director of Programs
Patrick Carroll, CPSM Programs@napm-
indianapolis.org
Director of Education
Michelle Moore Education@napm-
indianapolis.org
Director of Communications
Dan Levine Communications@napm-
indianapolis.org
Director of Membership
Ron Wright, C.P.M. Membership@napm-
indianapolis.org
Director of Excellence
Mira Pike Excellence@napm-
indianapolis.org
Secretary
David Mumper Secretary@napm-
indianapolis.org
Past President
Lea Anne Fuchs, C.P.M., CFSP PastPresident@napm-
indianapolis.org
Office Manager
Wendy Bayley
317-889-9225 CustomerService@napm-
indianapolis.org
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Page 3
Dear LeaAnne,
Congratulations! I am pleased to inform you that the ISM Board of Directors ap-
proved your affiliate’s name change to ISM―Central Indiana, Inc., at its board
meeting on January 10, 2013. Along with the approval of your ISM―Central Indiana
name is formal approval of your affiliate bylaws submitted as part of the name
change process.
Attached is the signed copy of the ISM Affiliated Association Agreement for your
affiliate records.
Also attached is your new affiliate logo in various formats. This is the only
ISM―Central Indiana logo you may use on your affiliate’s letterhead, documents,
promotional items and website. Please review the ISM Logo Usage Guidelines for
using this logo.
If your affiliate’s website has a new URL, please provide it to Linda Thomas
([email protected]) so we can update your affiliate’s link/URL from the ISM website.
You can now mail the name change application to your state and provide us with a
copy of your updated articles of incorporation as soon as you receive it. Also, be sure to notify the IRS that you changed your name. Please refer to the IRS
publication: Understanding Your EIN for instructions on page 30.
To assist you with the transition to your new name, ISM Affiliate Support developed
a checklist of tasks of What to Do After the ISM Board Approves Affiliate Name
Change. We believe this document will be a helpful guide through the transition.
Please note that affiliates approved to use the ISM—Affiliate Name, Inc. are required
to submit a new 3-Year Business Plan to ISM every three years. To that end,
ISM―Central Indiana will need to submit an updated 3-year business plan in Janu-
ary 2016. Although a reminder will be emailed, we suggest that you retain this letter
for your records and inform future presidents of this requirement.
Again, congratulations. We sincerely appreciate the time and effort your affiliate put
forth during the name change process.
Best Regards,
Jan Miller
Institute for Supply Management™ Vice President, Affiliate Support
Page 4
5 Reasons Why You Need to Know Your Supplier's
Supplier Better visibility to your Tier 1 and Tier 2 suppliers can help reduce sup-
ply chain risk.
Siddharth Taparia, senior director of portfolio and strategic marketing, SAP
Jan 10, 2013
Multi-tier supply chain visibility is no longer just a pipedream -- market leaders
in every industry segment have visibility not just into their important tier 1
suppliers, but at least a limited cross-section of their tier 2 and tier 3 suppliers
as well. This article will discuss why organizations, especially those who out-
source manufacturing operations, can improve operational capabilities with
better connectivity with and visibility into all tiers of their suppliers in the busi-
ness network.
Outsourcing is increasingly becoming a key strategy to lower costs, reduce
capital assets and get products to market more efficiently than the competi-
tion. According to IHS Isuppli, the total electronic contract manufacturing
market continues to hold in 2012, after posting a solid growth in 2011. Indus-
tries such as pharmaceuticals are leaning towards outsourcing clinical trials and
manufacturing.
But at the same time, outsourcing has led to increased complexity and less
visibility and control over the manufacturing process -- as the key planning and
execution data resides outside the four walls of the enterprise. Electronic con-
nectivity with suppliers alleviates this issue by providing critical visibility and
control that OEMs need. But why not just connect with the first tier of your
supply base and then let them manage their suppliers?
Below are five key reasons why manufacturers need multi-tier connectivity:
Well-coordinated Product Launch and Wind-down
Two critical areas of focus in certain industries such as consumer products
and technology are product launch and product retirement. In industries such
as high technology where products have short lifecycles, most profits are
made in the early weeks of the product launch before competition moves in. Coordination within the supply base is critical for ensuring that the production
ramp-up goes smoothly (and is cost effective) in preparation for a product
launch.
Similarly potential write-off liability can rapidly accumulate in fast-moving
industries if wind-down is not planned well. Multi-tier supplier connec-
tivity provides the foundation for an OEM to coordinate closely with
key suppliers (whatever tier they are at) and successfully execute these
two product lifecycle stages for every product in a repeatable and pre-
dictable manner.
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Page 5
Better Day-to-day Coordination of Activities to Improve Key Oper-
ating Metrics
During on-going production, OEMs want ongoing visibility into availability of
key components to ensure smooth production. Some of these components may be in short supply (such as flash chips in the high technology industry that
may be coming from lower tier suppliers, or some automotive components
being supplied in 2011 from plants in areas affected by the Japanese tsunami),
or may be under allocation, so visibility is often very critical.
Multi-tier visibility provides OEM visibility into such components and enables
them to proactively identify imbalances, errors and shortages and address
them. It also alleviates the need for expensive shipment methods to meet de-
livery dates.
Finally, due to better coordination, cash-conversion metrics improve. Accord-
ing to analyst firm Aberdeen Group (see Table 1), by taking advantage of B2B
collaboration, best-in-class companies show significantly better operational
performance.
Better Plan Quality
One of the biggest challenges in fast-moving industries is that the planning cy-
cles of various constituents are misaligned and starved for information, so the
planning cycle takes a lot longer than the execution cycle of flow of actual
products from contract manufacturer to the consumer retail point. Multi-tier
connectivity can accelerate the velocity of information flow, which not only
improves the quality of information used in the planning process, but also re-
duces the overall planning cycle time across the supply chain.
Better Supplier Performance Tracking and Metrics
In order to measure the performance of key suppliers (irrespective of what
tiers they belong to), OEMs need to be connected to them so they can get
better quality of data that is always current. By tapping into events as they
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Page 6
occur (due to connectivity within the supply chain), they can measure not
only ongoing performance metrics but other information such as supplier’s
flexibility and effectiveness in executing against electronic signals (vs. phone
calls) so that cost of processing within a supply chain can be reduced. Better
supplier performance information also allows them to improve their sourc-
ing process.
Reduced Supply Chain Risk
A recent McKinsey report identified that reducing supply risk is one of the
top priorities of industry executives. By improving visibility into a supplier’s
delivery plans, shipments and status changes, organizations can more closely
coordinate their activities with a supplier. This enables them to improve
predictability, proactively address issues and have more time to react faster
to any surprises.
In its research report on the top 25 supply chains of 2012, analyst firm Gart-
ner came to a similar conclusion: “Beyond absolute financial performance,
the ability of a company to consistently post industry-leading results year
after year, despite demand and supply disruptions, is an indicator of resil-
iency.”
Better visibility into and coordination with suppliers and using it to proac-
tively take actions, as well as better communication of demand/changes to
suppliers, can enable organizations to get closer to their goals of operational
and innovation excellence. Figure 1 shows the hierarchy of supply chain and
innovation metrics in an organization. Multi-tier supply chain connectivity
that leverages a business metwork can significantly improve these metrics
for any organization.
Combined with a business network, multi-tier supply chain visibility is
one of those capabilities that can enable an organization to reduce
costs by achieving operational and innovation excellence, reduce sup-
ply risk and improve profitability from newly introduced products – all
sources of competitive advantage in any industry.
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Page 7
U.S. Imports in 2012 Increase 1.2 Percent Over 2011 Supply Chain Brain, By: Zepol January 14, 2013
U.S. vessel imports rose a slight 1.2 percent in 2012 over the year before. This
was a total of over 17.6 million TEUs imported, or roughly 200,000 more contain-
ers than in 2011. Slow and steady growth seems to be the consistent pattern for
the year as import volume still has not returned to 2007 or 2008 levels. Zepol has
seen a large spike from 2009 to 2010 and then a plateau-like trend for the past
three years, although 2012 was an especially unique year for U.S. imports.
“In the past 12 months there have been strikes at the ports, hurricanes, and shifts
in manufacturing. Not to mention that in a post-recession economy, U.S. compa-
nies are running their businesses much more conservatively.” says Paul Rasmussen,
U.S. trade expert and CEO of Zepol Corp. “It’s no wonder that 2012 imports
were less than dramatic and certainly not back to the massive consumption seen in
2007.”
A Closer Look at U.S. Imports for 2012:
1. What countries does the United States import the most from? – U.S.
imports from Asia increased 0.2% from 2011, but it’s nowhere near the increase
seen from Europe which rose 6.4% in 2012. China, the leading exporter to the
United States decreased in TEU exports for the second consecutive year by 0.4%.
Although, South Korea, the second-largest exporting country, increased 1.2%. Ja-
pan and Germany, the third- and fourth-largest exporting countries to the United
States, also had some significant growth in 2012, rising by 2.2% and 8.7%, respec-
tively.
2. What were the top U.S. ports in 2012? – The Ports of Los Angeles and
Long Beach are the busiest ports in the country and both have posted slight de-
creases from 2011 by 0.7% and 2.3%. On the other hand, the Port of Newark/
New York, the nation’s third-largest port, increased in 2012 by 1.6%. Notable in-
creases in traffic were also seen from the Port of Norfolk, Virginia by 10.3% and
the Port of Charleston, South Carolina by 7.4%.
3. Which carriers brought in the most goods? – As for the ships that carry
all these goods to the United States, Maersk Line was the top carrier again for
2012 and increased in TEUs from 2011 by 7.9%. Mediterranean Shipping Company
was the second largest carrier in 2012 and rose a slight 0.6% from 2011. APL Co.
ranked third and had a solid increase in TEU imports by 5.1%.
Zepol's data is derived from bills of lading entered into U.S. Customs and Border
Protection's Automated Commercial Environment. This information represents
the number of house manifests entered by importers of waterborne vessel goods.
This is the earliest indicator for trade data available for the previous month’s im-
port activity. The data excludes shipments from empty containers, excludes ship-
ments labeled as freight remaining on board, and may contain other data anoma-
lies.
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Page 8
Supplier Evaluation Checklist: A Must Have Posted on January 3, 2013by Daniel in Procurement Process
Supplier models over the years.
Adversarial Model:
Prior to the 1960’s, the relationship between buyer and supplier was pretty
negative: suppliers were not trusted, communication was very formal and
limited, information between buyer and supplier was not shared openly,
and negotiations between buyer and supplier had a “win-lose” approach.
Partnership Model:
Eventually the buyer/supplier relationship started to emphasize on quality in
addition to price. Companies also started to buy large orders to get a dis-
counted price, but they ended up building a backlog of inventory - this
model can be called the Economic Order Quantity Model. Although large
inventories may be justifiable for some, the overall cost of this process was
expensive. This led to the concept of “Just-In-Time” manufacturing, where
only what was needed was purchased when needed. Things like quality and
safety also became more regulated. All these factors emphasized the need
for a close partnership between buyers and suppliers – i.e. The Partnership
Model.
Supplier Evaluation Checklist
To function in this environment, a company’s suppliers should be its closest
partners and they can play a major role in the company’s competitive ad-
vantage. Therefore, maintaining some basic evaluation criteria and encour-
aging effective communication and transparency is important between
buyer and supplier. According to this post by Supply Chain Management
professor Dr. Robert Handfield, the four most basic supplier evaluation
categories that every checklist should have are:
1. Quality
2. Delivery
3. Cost
4. Service
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Page 9
You can see that depending on the weight (or importance) you place on a
category, the bigger its impact on the overall rating. If you’d like us to email
you a supplier checklist template spreadsheet, Let us know. Now you can
create your own supplier evaluation checklist, and evaluate your suppliers
better. Remember, keeping open communication and transparency can also
go a long way in turning your suppliers into strong strategic partners.
Phoe: 317-889-9225
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Page 10
Six factors that separate supply chain leaders from
laggards Supplychainstandard.com January 7, 2013
PwC has identified six factors that set the leaders apart from the laggards in
a new survey that highlights the need to actively manage supply chains to
transform vulnerabilities into a competitive advantage.
Gordon Colborn, partner, PwC Consulting said: "We are seeing the best
companies investing in next-generation supply chain capabilities that en-
hance profitability, but still meet the needs of individual customers. Respon-
sive supply-chain configurations not only drive performance, but allow com-
panies to serve their customers seamlessly in turbulent market conditions."
The six factors identified by PwC are:
* Supply chain leaders deliver both better than average financial results and
customer responsiveness. Leaders enjoy a 2X profitability advantage as
compared to laggards, and a 17-point on-time delivery percentage advan-
tage. It starts with recognition of the supply chain as a strategic asset, but
less than half of survey respondents say their companies view the supply
chain as a strategic asset.
* 83 per cent of leaders tailor their supply chains to meet the needs of dif-
ferent customer segments. Laggards are more apt to take a 'one-size-fits-all'
approach with fewer supply chain configurations.
* Leaders often outsource production and delivery, but retain global con-
trol over core strategic functions such as new product development, sales
and operations planning (S&OP) and procurement.
* Interest in next- generation technologies and sustainability is growing.
More than half of survey respondents said they are implementing or plan to
implement new tools for process automation or transparency. More than
two-thirds think sustainability will play a more prominent role in supply
chains in the future.
* Supply chain leaders in both mature and emerging markets invest heavily
in advanced capabilities that differentiate them from their competitors.
* Leaders focus on best-in-class delivery, cost and flexibility to meet in-
creasingly demanding customer requirements. The two factors that create
the highest value are maximizing delivery performance and minimizing sup-
ply chain cost.
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Page 11
The Realities of Reverse Logistics Supplychainbrain.com January 7, 2013
Irv Grossman, vice president of the Supply Chain Operations Practice of
Chainalytics, offers guidance on how companies can stop thinking of re-
verse logistics as an inevitable burden, and begin approaching it strategically.
Many companies continue to view reverse logistics as an “inevitability,” says
Grossman. What they should be doing is taking a strategic approach to this
critical link in the supply chain. He advises businesses to identify where the
process went wrong – was it the product itself, the size, the color or possi-
bly a bad customer experience? Such an approach offers “an opportunity to
mine the data, learn and provide a better customer experience,” he says.
New technology and developments in electronic commerce can help. They
generate a substantial amount of information that can be used to improve
the fulfillment experience. A full understanding of the social media phe-
nomenon can be especially helpful in divining customer trends and prefer-
ences.
Companies can reduce the volume of returns somewhat by engaging in
such techniques as including a toll-free number in the original packaging, to
provide customer help up front. They can also tighten policies in order to
avoid fraud. (Or, for that matter, loosen them to win more customers.)
Again, the key is accessing the data and making optimal use of it. In some
cases the retailer will relay data to the original design manufacturer, to re-
solve potential issues far up from the chain. That approach can be especially
valuable at a time when product lifecycles are shrinking drastically. “You
have to see the information early, and get it at the point of contact,”
Grossman says.
The drive for sustainability and green supply chains is becoming an increas-
ingly important aspect of reverse logistics. Grossman cites a United Na-
tions statistic that some 50 million tons of electronic waste are created
every year. According to the Environmental Protection Agency, just 8 per-
cent of high-tech devices are making their way back through the sustainabil-
ity cycle. Grossman says companies must work harder to improve that re-
cord, in part through the “de-manufacturing” of items and the extraction of
rare earth materials, which can be otherwise difficult or expensive to ob-
tain.
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Page 12
Phoe: 317-889-9225
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WOULD YOU LIKE TO EARN YOUR CREDENTIALS?
No Degree? Working Towards It?
Prove you have broad-based knowledge in all the major components of supply manage-
ment. ISM's newest credential, Certified in Supply Management™ (CSM™), was developed
to allow practitioners a way to demonstrate knowledge in supply management, regardless
of whether they have a college degree. It validates your supply management body of
knowledge and skills in areas such as finance, supplier relationship management, organiza-
tional global strategy and risk compliance.
Degree?
Transform yourself and make the move to gain supply management's most prestigious des-
ignation. ISM launched the Certified Professional in Supply Management® (CPSM®) program
in May 2008. The CPSM® is the credential that surpasses the demands of the international
marketplace with multi-faceted skills in areas such as finance, supplier relationship man-
agement, organizational global strategy and risk compliance.
CERTIFICATION REVIEW CLASSES
Module 1: Foundation of Supply Management
Jan. 19th -- 8:00 am - 5:00 pm.
Module 2: Effective Supply Management Performance
Mar. 16th -- 8:00 am - 5:00 pm.
Module 3: Leadership in Supply Management
Apr. 20th -- 8:00 am - 5:00 pm.
Location: Clarion Inn & Suites, NW
Facilitated by: Russ Morey Please purchase the study guide through ISM.
Cost: per Module Members $200 Non-Members $300
Cost: All three modules if paid prior to Jan. 19th.
Members $500 Non-Members $750
NAPM-Indianapol is MEMBERS HIP
September, 2009
270
Building a Powerful Profession:
One Member at a T ime
Social Media in the Supply Chain
Page 13 Volume 21, Issue 8
ISM Membership
38,996
Number of CPSM®s
5,211
Number of CPSD®s
253
ISM-Central Indiana
Membership
224
New Members of our Affiliate
Please welcome the following new members of ISM-Central Indiana, Inc.
Name Company
Chris Durnil Bowen Engineering Corporation
The Board of ISM-Central Indiana would like to express a warm welcome to each of our new mem-
bers. Please let us know how we can better serve you by answering any questions you may have.
ISM Terms of the Month:
Collaborative value chain (CVC) — The Internet-based processes and technical frame-
work for communicating, collaborating, and transacting business with your customers and
suppliers.
Consortium market — A market set up by a consortium of supply managers or suppliers
who often want it to become a public market once it is well established.
Join us on Linked-In and NETWORK, NETWORK, NETWORK with your colleagues.
http://www.linkedin.com/groups?about=&gid=1817281&report%2Esuccess=r3Tayp0nRRro3Er8iWS8vO-u_mFd11ndGIOEdAI27ES3KgpplepkOcIgotS3mJWzXqb2u21wqjDJwM
Page 14
Registration & Networking—5:30 PM
Dinner—6:00 PM
“FREE” for Members $40 for Guests $20 for Students
Prior to Monday, Jan 14th.
PDM Location:
Maggiano’s 3550 E 86th Street
Indianapolis, IN 46240
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Page 15
ISM-Central Indiana, Inc. Monthly Calendar
DATE DAY TIME EVENT
1/17/2013 Thursday 5:30-8:00 PDM
Speaker Mike Hicks
Economic Outlook for Indiana in 2013
Location Maggianos, Keystone at Crossing
2/21/2013 Thursday 5:30-8:00 PDM
Speaker Joe Arruda
Health Care cost and the Supply Chain
Location TBD
All reservations must be received and paid prior to the Tues-
day before the PDM. No meal guarantee for reservations af-
ter this date or unpaid reservations. No price guarantee after
this date. All cancellations must be made 48 hours in advance
for a refund consideration.
Please remember that if your plans change and you cannot make an
event, you must contact the Office Manager, Wendy Bayley (317-889-
9225 or [email protected]), to cancel your res-
ervation. You cannot cancel a reservation on-line.
Members - Free.
Early Bird Specials: Academic Members - $30 if paid prior to Tuesday, Oct 23rd.,
fee then increases to $35. Students - $20 if paid prior to Tuesday, Oct 23rd., fee then in-
creases to $25. Non-Members $40 if paid prior to Tuesday, Oct 23rd, fee then
increases to $45.
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Page 16
ISM-Central Indiana, Inc. 2012-2013
January 17, 2013
Thurs-day
5:30 pm
PDM – Economic Outlook For 2013 – Mike Hicks – Maggianos, Keystone at The Crossing – Earn 1 CEH
January 19, 2013
Satur-day
8:00 am
Certification Review Classes – Foundation of Supply Management – University of Indianapolis – Earn 16 CEH’s
February 21,
2013
Thurs-
day
5:30
pm
PDM – Health Care Cost & The Supply Chain – Joe
Arruda – Indianapolis Zoo – Earn 1 CEH
March 21, 2013
Thurs-day
5:30 pm
PDM – Extended Supply Chain Management – Tech-nology Tools To Survive The Unforeseen – Don Jour-ney – Piper’s Grand Manor, Greenwood, Earn 1 CEH
March 16, 2013
Satur-day
8:00 am
Certification Review Classes – Effective Supply Man-agement Performance –University of Indianapolis – Earn 16 CEH’s
April 18, 2013 Thurs-day
5:30 pm
PDM – Venture Capital & The Supply Chain – Matt Neff – NCAA Hall of Champions – Earn 1 CEH
April 20, 2013 Satur-day
8:00 am
Certification Review Classes – Leadership in Supply Management –University of Indianapolis – Earn 16 CEH’s
May 16, 2013 Thurs-
day
5:30
pm
PDM – President’s Night & A Supply Chain Manage-
ment Guide To Business Continuity – Jazz Kitchen, Broad Ripple – Earn 1 CEH
May 2013 Thurs-day
12 Noon
Golf Outing
Phoe: 317-889-9225
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