North American Channel Strategy Operating Model Change

May 2015

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Why Is This Change Happening

Objective: Build a North America channel to market that meets the needs of end-customers and the companies in which they work Brings APICS to more supply chain professionals

and companies, fulfill unmet market potential Recognizes, encourages channel partner market

success Provides purchasing flexibility to the end-customers

buying APICS products and services Simplifies and globally standardizes business

(channel) models

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Development of Structure Recommendations/Expected ImpactImplement a tiered channel structure based on behavioral and financial performance:

– Expected Impact: Tier structure will incentivize high performing chapters to do more and motivate underperforming chapters to improve.

Implement new channels:. Training organizations or consulting firms.

– Expected Impact: New channel partners will expand coverage, give companies alternative ways to buy and provide (healthy) competition in the marketplace.

Allow APICS qualified instructors to affiliate with multiple channels

– Expected Impact: Instructors affiliating with multiple channels increases access and allows all channels to use APICS qualified instructors to deliver training.

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NA Channel: Why Change and What is Changing

Current APICS

Chapters

LLCs & Consulting

Firms

Premier Channel Partner

Channel Partner

Premier NFP Channel Partner

NFP Channel Partner

NFP Network Partner

• Premier price discounts

• Membership sales commission

• Price discounts• Membership

sales commission

• Premier price discounts• Membership rebates• Sales assistance (DBDM)

• Price discounts• Membership rebates• Sales assistance (DBDM)

• No price discounts• Membership

rebates• Sales assistance

(DBDM)

Qualified Instructo

rs

Channel Partner

Organization (For Profits)

Local Channel Partners

(Chapters)

Focused on engaging through

members

Focused on sales & delivery

If we can improve access to

APICS products and

services

Then we will better serve the needs of more supply

chain professionals

And we will be better at

achieving our APICS vision and mission

Chapters are, and will continue to be, an important channel. However to grow the pie, we must add additional channels to allow end-customers to purchase our products and services.

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Implementation Plan DevelopmentOct 2014 – Jun 2015

Operating Model DevelopmentJul – Oct 2014

Strategy Formulation

Jan – July 2014Situation Analysis

Oct – Dec 2013

APICS Strategic Plan Approach & Current Project Status

Economic & Financial Modeling - Ongoing

Oct-Dec 2013 October 2014

Detailed Q1/Q2 2015

DesignOctober/November

DevelopNovember

ExecuteJanuary –June 2015 and

beyond

CommunicateNovember/December

Implementation Plan Development

Today

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Implementation Team Formed and Supportive

Deliverables: “Heat map” for chapter

placement in tiers completed

Communications and feedback with Chapters conducted

Change Plan and Launch Schedule completed

Change Management training conducted for Implementation team

• Continue communications• Continue resistance

mitigation• Continue to transfer

ownership to District Managers and Chapters

• Start recruiting for-profit channel partners

Team Role

Abe Eshkenazi APICS CEO and project Sponsor

Jason Wheeler Past BOD/Master Instructor

Karen Schiebout District Manager/Chair of DMC

Mark Christensen District Manager

Stacy Gigger District Manager

Jesus Campos District Manager

Steve Rudnicki District Manager

Dave Jankowski District Manager

Joost Vles District Manager

Humphrey Vernaus District Manager

Keith Johnson District Manager

Erica Dickson Board of Directors/Chapter Member

Leann Goettel APICS Staff (District Channel Manager)

Joan Wallner APICS Staff (District Channel Manager)

Tawana Collins APICS Staff (District Channel Manager)

Jim Pavletich APICS Staff (Membership EVP)

Derinda Ehrlich APICS Staff (Channel EVP )/Master Instructor

Henri Wingfield APICS Staff (Channel Services Director)

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2015 Chapter Status Results

*Note: The Heat Map above may contain chapters that have closed or are slated to close.

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2015 Chapter Status Results by District

District Premier Partners

Channel Partners

Network Partners

Total Chapter

Canadian 2 11   13Great Lakes 4 14 2 20Heartland 1 15 4 20Mid Atlantic 3 21 3 27Northeast*   25 1 26

Pacific Western* 2 10 5 17Southeast 3 27 8 38

Southwest 3 12   15

Terra Grande 5 16 3 24

Total 23 151 26 200

*Note: Chapters that closed or are slated to close have been removed from above table summary.

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Frequently Asked Questions

What Is Expected of Chapters Designated PremierAffirm Acceptance of Premier Designation

Provide a Forecast for Financial Performance

Maintain Channel Partners StandardsConfirm APICS provided Financial Data

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Frequently Asked Questions

How does a Local Channel Partner (LCP) Achieve Premier? Financial and Behavioral Performance

evaluated on an Annual basis. Chapter and APICS Establish Targets Performance reviewed against targets Targets reviewed against actual activity Status change/decision reported

Being Premier is a calculation, not a judgement. The amount of reporting is not anticipated to be a burden.

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Frequently Asked Questions

What Services Do Networking Chapters provide

• Membership Services

• Networking Services

• Can sell classes, opportunistically.

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Brainshark Presentations

Five brief recorded presentations detailing program available on CBOX - http://www.apics.org/sites/cbox/corporate/from-apics-corporate

North American Channel Strategy

• Initial change introduction

• Second communication with more details 

• Rollout timing

• Frequently Asked Questions

• Communication #5

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Next StepsContinue to focus on objective: Bring APICS to more supply chain professionals and the companies that employ them.

North American Chapters Further deploy 3-level structure to NA Local Channel Partners (Chapters) Continue roll-out with implementation team District Managers engage in level setting dialogue with chapters Milestones/Timeline

• Roll-out status changes and expectations/benefits through 2015• Communicate 2016 product price changes Q2-2015• Implement new pricing (all chapters premier) Jan 2016• Implement new 3 level pricing July 2016

Channel Partner (for-profit) Organizations (CPO) Proactively recruit partners per strategic criteria Milestones/Timeline

• Target CPO candidates Q2-2015• Recruit new Channel Partner Organizations Q3/Q4-2015 and

beyond

Thank You