Code of Conduct
Thursday, April 16, 2009
Business often moves at a different pace than the legal world. Through the course of negotiations, phone calls, and general conversations, business decisions are made but the contracts are still to be finalized. Many times, the parties go forward with a deal before they get any document signed. Sometimes, this is simply a case of poor contract maintenance. However, one of the parties may believe (mistakenly) that they have obtained an advantage by being able to terminate the “agreement” at any time; after all, they say, “we do not have a contract.” In other cases, one or both parties simply do not want to address a business issue that may scuttle the whole deal; so they move forward, hoping the matter will never come up. Whatever the reason, the absence of a written contract does not mean there is no enforceable contract. No matter how practical or strategic it may seem, such a situation can create dangerous consequences and is ripe for conflict. It is at this point of conflict that the all-important question is voiced: Is there a contract at all, and if so, what are its terms?
When these problems arise, they often end up in court. One such example involves a distributor for a manufacturer of grain dryers in Indiana. The two parties engaged in negotiations to establish an exclusive distributorship deal. The distributor would sell the manufacturer’s grain dryers in Indiana and the manufacturer would only sell its grain dryers through that particular distributor. After multiple negotiations and legal advisement, the parties prepared written proposals and drafts of the contractual obligations of the parties. However, a final contract was never executed by the parties. Despite this fact, the distributor acted as the manufacturer’s exclusive distributor for the next six years. Then on December 8, the distributor received a letter from the manufacturer stating that the manufacturer would terminate the exclusive relationship 30 days from December 1. On December 23, the distributor ordered 35 grain dryers. The manufacturer refused to supply the grain dryers claiming that no formal contract was ever executed and that it was free to terminate its obligations at-will.
The Court engaged in a very extensive analysis to determine whether a contract existed and to identify the terms of the contract. After thousands of dollars on attorneys’ fees, the Court found that even though the contract was unsigned, the parties’ six (6) year history constituted a “course of conduct” that supported the existence of a contractual relationship. The Court chose to enforce the terms of the last draft of the unsigned contract which included a provision that the contract could only be terminated upon thirty (30) days written notice to the other party. The result was that the manufacturer was liable to the distributor for the lost profits on the re-sale of the grain dryers. In another Indiana case, a 40-year distributor for a producer of snack foods was allowed to force the producer to continue to supply product for a reasonable period of time based solely upon the history of their business dealings.
As an additional ex
ample, a customer defaulted on its scheduled payments of $314,000 to its supplier. While the parties had exchanged forms at the beginning of their business dealings, the court could not find that a contract existed because of the differing terms in the documents (no winner in that “battle of the forms!”). However, based upon the parties’ “course of conduct,” the supplier was able to prevail.
It is not the specific outcomes of these cases that are important, but rather it is the fact that a contractual relationship can be created through the “course of conduct” of two parties. In short, if a buyer and a seller conduct business in a manner that recognizes the existence of a contract, a court can find a contract exists even if there is no written and signed contract (or even an exchange of drafts or forms) between the two parties. Ultimately, it is a court that has the final say. Not only does this situation lead to uncertainty and confusion in business transactions, it can be very costly and time consuming to have a contract dispute settled by a court. Each party must go the great lengths to put on the proof of their business dealings, and to refute the other party’s case. Regardless of the different assumptions made by both a buyer and seller, the outcome can be a very real and enforceable contractual relationship.
The bottom line is, Your Conduct Can Establish A Binding Contract Even Though You Do Not Have A Written Agreement. Nothing you or your attorney does can completely eliminate the risk of this “course of conduct” problem and subsequent litigation. However, to minimize this risk, the first step is to look closely at the way your company processes its contracts. Not only should there be a clear policy requiring written contracts, there needs to be a defined set of procedures for filing and maintenance of all company contracts. This system should include a central calendaring of the expiration dates and notice periods for the company’s agreements so that contracts are not allowed to inadvertently expire, leaving the business relationship to potentially be redefined by the parties’ future “course of conduct”. Do not let a judge write your contracts.
Contributed by Scott Leisz and Brandt Voight, members of the Bingham McHale Manufacturing Team
at 2:01 PM Link to this Article 0 Comments
When these problems arise, they often end up in court. One such example involves a distributor for a manufacturer of grain dryers in Indiana. The two parties engaged in negotiations to establish an exclusive distributorship deal. The distributor would sell the manufacturer’s grain dryers in Indiana and the manufacturer would only sell its grain dryers through that particular distributor. After multiple negotiations and legal advisement, the parties prepared written proposals and drafts of the contractual obligations of the parties. However, a final contract was never executed by the parties. Despite this fact, the distributor acted as the manufacturer’s exclusive distributor for the next six years. Then on December 8, the distributor received a letter from the manufacturer stating that the manufacturer would terminate the exclusive relationship 30 days from December 1. On December 23, the distributor ordered 35 grain dryers. The manufacturer refused to supply the grain dryers claiming that no formal contract was ever executed and that it was free to terminate its obligations at-will.
The Court engaged in a very extensive analysis to determine whether a contract existed and to identify the terms of the contract. After thousands of dollars on attorneys’ fees, the Court found that even though the contract was unsigned, the parties’ six (6) year history constituted a “course of conduct” that supported the existence of a contractual relationship. The Court chose to enforce the terms of the last draft of the unsigned contract which included a provision that the contract could only be terminated upon thirty (30) days written notice to the other party. The result was that the manufacturer was liable to the distributor for the lost profits on the re-sale of the grain dryers. In another Indiana case, a 40-year distributor for a producer of snack foods was allowed to force the producer to continue to supply product for a reasonable period of time based solely upon the history of their business dealings.
As an additional ex
ample, a customer defaulted on its scheduled payments of $314,000 to its supplier. While the parties had exchanged forms at the beginning of their business dealings, the court could not find that a contract existed because of the differing terms in the documents (no winner in that “battle of the forms!”). However, based upon the parties’ “course of conduct,” the supplier was able to prevail.
It is not the specific outcomes of these cases that are important, but rather it is the fact that a contractual relationship can be created through the “course of conduct” of two parties. In short, if a buyer and a seller conduct business in a manner that recognizes the existence of a contract, a court can find a contract exists even if there is no written and signed contract (or even an exchange of drafts or forms) between the two parties. Ultimately, it is a court that has the final say. Not only does this situation lead to uncertainty and confusion in business transactions, it can be very costly and time consuming to have a contract dispute settled by a court. Each party must go the great lengths to put on the proof of their business dealings, and to refute the other party’s case. Regardless of the different assumptions made by both a buyer and seller, the outcome can be a very real and enforceable contractual relationship.
The bottom line is, Your Conduct Can Establish A Binding Contract Even Though You Do Not Have A Written Agreement. Nothing you or your attorney does can completely eliminate the risk of this “course of conduct” problem and subsequent litigation. However, to minimize this risk, the first step is to look closely at the way your company processes its contracts. Not only should there be a clear policy requiring written contracts, there needs to be a defined set of procedures for filing and maintenance of all company contracts. This system should include a central calendaring of the expiration dates and notice periods for the company’s agreements so that contracts are not allowed to inadvertently expire, leaving the business relationship to potentially be redefined by the parties’ future “course of conduct”. Do not let a judge write your contracts.
Contributed by Scott Leisz and Brandt Voight, members of the Bingham McHale Manufacturing Team
at 2:01 PM Link to this Article
###
Economic Development Incentives: Not Just For Big Businesses Anymore
Most corporate executives are aware of economic development incentives. There are almost daily announcements in the news. What executives should know is that incentives are not just available for enormous developments and they can have major impacts for much smaller projects.
After reading about these project announcements and their associated incentives, an executive might wonder how to obtain them; moreover, what are the requirements to qualify? Incentives are available to most companies that are making a capital investment, creating new jobs or relocating operations.
Of course there has been some controversy with regards to the offering of incentives by state and local governments. The question has been posed as to the purpose and effectiveness of offering incentives; the quick answer is that incentives make good sense. Many states and local communities offer incentives in order to attract capital investment and create new jobs. States and communities must be competitive in order to win projects. Incentives can help level an uneven playing field.
For example, Company X wants to relocate to a new site and they have two viable options in different communities. Community A has a rural undeveloped site and an unskilled workforce. Community B has an established industrial park site but much higher taxes. Incentives can offset each disadvantage mentioned above: undeveloped land with infrastructure and development programs; unskilled workforce with training programs; higher taxes with tax credit and abatement programs. Aggressive states and communities will offer incentives to offset their disadvantages, thereby enabling them to better compete for projects.
Many times, incentives are tiebreakers that narrow several good sites to a final project site. Incentives, however, cannot turn an ill-fitted site for a project into a good one.
Two Questions
There are two questions that an executive should be concerned with when considering the incentives for a new project.
1. How can I be sure that the company is getting the best incentive deal?
2. How can I be sure that the company realizes the benefits of the incentives negotiated?
Question 1 – How can I be sure that the company is getting the best incentive deal?
There is no direct or easy answer to this question; however, an executive should be mindful of several factors. Firstly, is it a competitive situation? The most lucrative situation for incentives is if there are two or more site locations being considered. Communities are less motivated to offer incentives if there is no competition. Secondly, have the company’s goals, needs and desires been clearly declared to state and local community representatives? Each project is unique; the more that the state and local representatives know and understand, the better they will be able to tailor-assist with the project. Thirdly, consider that there are really three parts to managing a new project: real estate, operations, and incentives. Experts are handling the first two parts – if the executive has any questions about incentives, perhaps an expert should be consulted in this area.
Remember, the company gets one chance to get it right. States treat incentives as business negotiation tools. If a company does not ask for incentives or are not well-informed of the incentive possibilities, they will most likely not maximize their situation. Here is a real-life example. Company X stated that their project would include $100 million capital investment and create over 400 new jobs. It was a competitive situation and still yet, the company did not really understand how to compare and evaluate the incentive packages. The state that they wanted to relocate to had offered them non-refundable tax credits, training and other refundable tax credits.
The corporate executive decided to seek the advice of an established consultant. After some discussion, it became apparent that the non-refundable tax credits, though they are a good incentive, would have little meaning for the company as they had predicted no state corporate income tax liability for the first four years of operation. It also became clear that the training and other refundable tax credits that had been committed to their project were significantly less than those received by other similar sized projects. The consultant was able to help the company work with the state to restructure the incentive package so that it added more value to the project and Company X was able to locate to the preferred state.
Question 2: How can I be sure that the company realizes the benefits of the incentives negotiated?
An executive should be considerate of the time it takes to manage incentives. Many companies negotiate for incentives and use them to help guide where their project locates, but, unfortunately many companies do not actually receive the benefit of those incentives. The reasons are many and varied. Understand that negotiation is not a guarantee of incentives – applications still have to be submitted according to the rules and must meet all of the requirements set forth by the state or local authority.
Incentive applications can be lengthy and daunting and the continual monitoring can be cumbersome. Management of the incentives sometimes requires monthly and/or yearly reporting for the length of their term, which can be up to twenty years. Records are almost always required to be kept for years beyond the term of incentives. Incentive programs are not created equal or by one economic development body, therefore, they have different requirements, deadlines and monitoring responsibilities.
Another reason that incentives are left unclaimed is that there is a natural flux of people in and out of a company, which results in some instability for incentive maintenance. Also of note, is that the middle manager who will administer the incentives will have their core job to do plus this incentive management. Even though the executive may see the benefits of the incentives for the company, the middle manager will most likely not see any benefit from his/her efforts; only an increased workload. Also, keep in mind that it is not in the state or local authority’s best interest to make sure that all of the necessary paperwork is filed by the associated deadlines. In fact, from their point of view, it is better companies do not pursue the collection of incentives.
In order to be sure to take full advantage of incentives awarded, a company needs a dedicated and confident person on staff to take personal responsibility for incentives management. The actual time and cost of administering the incentive programs is significant. It may make sense for your company to hire a consultant that specializes in economic development. An experienced consultant should be able to manage the incentive process for a fraction of the time and cost a company may incur while attempting to manage incentives themselves.
By Jenny Massey
Senior Project Manager
Bingham EDA
at 1:59 PM Link to this Article 0 Comments
After reading about these project announcements and their associated incentives, an executive might wonder how to obtain them; moreover, what are the requirements to qualify? Incentives are available to most companies that are making a capital investment, creating new jobs or relocating operations.
Of course there has been some controversy with regards to the offering of incentives by state and local governments. The question has been posed as to the purpose and effectiveness of offering incentives; the quick answer is that incentives make good sense. Many states and local communities offer incentives in order to attract capital investment and create new jobs. States and communities must be competitive in order to win projects. Incentives can help level an uneven playing field.
For example, Company X wants to relocate to a new site and they have two viable options in different communities. Community A has a rural undeveloped site and an unskilled workforce. Community B has an established industrial park site but much higher taxes. Incentives can offset each disadvantage mentioned above: undeveloped land with infrastructure and development programs; unskilled workforce with training programs; higher taxes with tax credit and abatement programs. Aggressive states and communities will offer incentives to offset their disadvantages, thereby enabling them to better compete for projects.
Many times, incentives are tiebreakers that narrow several good sites to a final project site. Incentives, however, cannot turn an ill-fitted site for a project into a good one.
Two Questions
There are two questions that an executive should be concerned with when considering the incentives for a new project.
1. How can I be sure that the company is getting the best incentive deal?
2. How can I be sure that the company realizes the benefits of the incentives negotiated?
Question 1 – How can I be sure that the company is getting the best incentive deal?
There is no direct or easy answer to this question; however, an executive should be mindful of several factors. Firstly, is it a competitive situation? The most lucrative situation for incentives is if there are two or more site locations being considered. Communities are less motivated to offer incentives if there is no competition. Secondly, have the company’s goals, needs and desires been clearly declared to state and local community representatives? Each project is unique; the more that the state and local representatives know and understand, the better they will be able to tailor-assist with the project. Thirdly, consider that there are really three parts to managing a new project: real estate, operations, and incentives. Experts are handling the first two parts – if the executive has any questions about incentives, perhaps an expert should be consulted in this area.
Remember, the company gets one chance to get it right. States treat incentives as business negotiation tools. If a company does not ask for incentives or are not well-informed of the incentive possibilities, they will most likely not maximize their situation. Here is a real-life example. Company X stated that their project would include $100 million capital investment and create over 400 new jobs. It was a competitive situation and still yet, the company did not really understand how to compare and evaluate the incentive packages. The state that they wanted to relocate to had offered them non-refundable tax credits, training and other refundable tax credits.
The corporate executive decided to seek the advice of an established consultant. After some discussion, it became apparent that the non-refundable tax credits, though they are a good incentive, would have little meaning for the company as they had predicted no state corporate income tax liability for the first four years of operation. It also became clear that the training and other refundable tax credits that had been committed to their project were significantly less than those received by other similar sized projects. The consultant was able to help the company work with the state to restructure the incentive package so that it added more value to the project and Company X was able to locate to the preferred state.
Question 2: How can I be sure that the company realizes the benefits of the incentives negotiated?
An executive should be considerate of the time it takes to manage incentives. Many companies negotiate for incentives and use them to help guide where their project locates, but, unfortunately many companies do not actually receive the benefit of those incentives. The reasons are many and varied. Understand that negotiation is not a guarantee of incentives – applications still have to be submitted according to the rules and must meet all of the requirements set forth by the state or local authority.
Incentive applications can be lengthy and daunting and the continual monitoring can be cumbersome. Management of the incentives sometimes requires monthly and/or yearly reporting for the length of their term, which can be up to twenty years. Records are almost always required to be kept for years beyond the term of incentives. Incentive programs are not created equal or by one economic development body, therefore, they have different requirements, deadlines and monitoring responsibilities.
Another reason that incentives are left unclaimed is that there is a natural flux of people in and out of a company, which results in some instability for incentive maintenance. Also of note, is that the middle manager who will administer the incentives will have their core job to do plus this incentive management. Even though the executive may see the benefits of the incentives for the company, the middle manager will most likely not see any benefit from his/her efforts; only an increased workload. Also, keep in mind that it is not in the state or local authority’s best interest to make sure that all of the necessary paperwork is filed by the associated deadlines. In fact, from their point of view, it is better companies do not pursue the collection of incentives.
In order to be sure to take full advantage of incentives awarded, a company needs a dedicated and confident person on staff to take personal responsibility for incentives management. The actual time and cost of administering the incentive programs is significant. It may make sense for your company to hire a consultant that specializes in economic development. An experienced consultant should be able to manage the incentive process for a fraction of the time and cost a company may incur while attempting to manage incentives themselves.
By Jenny Massey
Senior Project Manager
Bingham EDA
at 1:59 PM Link to this Article
###
How'd They Do That? Developing a Supplier Scorecard and Performance Management Process
The Challenge
Lack of clarity around supplier performance (especially for suppliers of services related to clinical trials and other complex projects) made it impossible to identify the best suppliers with whom to create preferred relationships, to award specific projects to the most qualified supplier, or to work jointly with suppliers to improve performance.
Prior efforts over the course of a year failed to produce a viable scorecard or gain sufficient buy-in from business stakeholders to enable successful implementation. Meanwhile, previous investments in supplier relationship management (e.g., quarterly business reviews, annual executive summits, and the like) showed little return due to the lack of meaningful performance data.
The Solution
A structured scorecard, focused on the most critical measures of performance and value, combined with a comprehensive performance measurement and management process – one comprising clearly defined activities, and roles and responsibilities, for measuring both supplier and customer performance.
Diagnosing the Failure
▪ Because the scorecard included many dozens of metrics, the cost of gathering and analyzing supplier performance data was too high. In particular, busy clinical research staff who worked with suppliers claimed they did not have enough time to gather and report the data required to score suppliers.
▪ Not only did the scorecard include far too many metrics, they were not organized in natural or useful categories. Little thought had been given to how data would be used by individuals in contracting, project management, or senior management, and hence little attention had been paid to how best to structure and report supplier performance metrics.
▪ Consequently, it was difficult for anyone to make sense of the data that was (at least initially) collected.
▪ Moreover, in many cases, metrics were defined at too high a level of abstraction to be useful, e.g., “cycle time” or “contract adherence.”
▪ All of these flaws meant that senior management, who initially had requested supplier scorecards, did nothing with the results that began to be collected. Consequently, those who were being asked to shoulder the burden of increased measurement and reporting came to believe that it was a waste of their time to do so, and that since senior management didn’t care anyway, there would be no accountability for failing to comply. Testing this theory validated its correctness, at which point there was no incentive for busy people to take the time to gather data to enable scorecard reporting.
▪ Finally, despite useful thinking about supplier metrics, the project team spent very little time thinking about and defining the process (including specific roles and responsibilities for completing process steps and activities) associated with data gathering, analysis, reporting, and remediation or other actions suggested by performance data. This further undermined perceptions of the usefulness of data gathering and reporting (since no one had any idea how the data would be used), and left unaddressed issues of accountability for supplier performance measurement or management.
Background
The Strategic Sourcing Group at “MegaPharma,” a Fortune 500 pharmaceutical company, spent over a year trying to develop a scorecard to accurately assess their suppliers’ performance. Unfortunately, the initiative was a failure. Despite a great deal of good thinking and hard work, the cross-functional team who led the effort ended up producing an unwieldy scorecard that, within a few months of completion, was no longer used by anyone.
Approach
Vantage Partners partnered with MegaPharma to try again to develop a comprehensive, and consistent approach to supplier performance measurement and management. Working with a cross-functional team with representation from the Supplier Management Group in Strategic Sourcing, from clinical teams in all the therapeutic areas, from Finance, and from the Contracts group, Vantage first began by helping MegaPharma clarify the objectives for the overall performance management system in which the scorecard would be situated.
Overview of supplier performance management system objectives
▪ Gather and report data to enable effective selection of preferred suppliers
▪ Gather and report data to enable effective, and efficient, decision-making about project awards
▪ Solicit feedback from suppliers on how MegaPharma could improve its own operations, be a more desirable customer and business partner, and enable its suppliers to be more
effective
▪ Identify and diagnose performance problems, and do so as early as possible, in order to enable effective remediation
▪ Build stronger, more committed relationships with suppliers
By clarifying and explicitly articulating performance management objectives, MegaPharma was in a better position to prioritize across hundreds of potential metrics and focus on what was most important to measure. Moreover, clarifying when and how performance metrics would be used helped the team determine the frequency of measurement and reporting (e.g., monthly, quarterly, end of project, and so on) for various metrics. Through a series of workshops, Vantage helped the MegaPharma team to hone a list of over 200 different metrics to a subset of the most critical and actionable. Each metric was evaluated based on the time and effort it would take to gather and report data, compared to the expected benefit to supplier performance and relationships, and ultimately to driving improved clinical research performance.
A holistic, and structured approach to scorecard design
The MegaPharma-Vantage team developed a scorecard designed to provide a holistic view of supplier performance on individual projects, of the health of its overall relationships with suppliers, and of the total value delivered by those relationships. The scorecard was organized around four key dimensions: operational performance, financial value, strategic value, and relationship quality.
Each dimension of the scorecard comprised several categories of metrics, such as innovation (as an element of strategic value) or level of trust (as an element of relationship quality). These categories were further broken down into three to five sub-categories, each of which might in turn be composed of anywhere from approximately one to five discrete metrics. A common scorecard framework, along with broad and consistent performance categories, allowed simple, high-level reports to be created for senior management across different kinds of suppliers, while at the same time ensuring that individual metrics (which often varied for different kinds of suppliers) were defined at a meaningful level of specificity. In addition, each dimension of the scorecard included metrics against which suppliers were invited (and expected) to provide feedback to MegaPharma. Such two-way feedback was aimed at soliciting improvement opportunities from suppliers, at enabling more effective diagnosis of complex performance problems that were the result of how MegaPharma and its suppliers worked together (rather than a simple failure on the supplier’s part), and at building stronger relationships characterized by both accountability, and collaborative joint problem-solving.
Developing, and building buy-in to, a process for performance measurement and management
Recognizing that even the most carefully constructed metrics are useless without clearly defining how data will be gathered, analyzed, reported, and used, Vantage and MegaPharma developed a detailed process for performance measurement and management (a summary of the process is described below). To ensure that the process could actually be implemented, and that the wide range of stakeholders upon whom successful implementation would rely would support it, Vantage and the MegaPharma used a procedure called “blueprinting.” Over a series of about three months, the team iteratively developed and refined a series of drafts articulating, in concrete detail, specific activities and roles and responsibilities. Each iteration was reviewed with a broad cross-section of stakeholders who were asked for their concerns and suggestions, which were then incorporated into the next iteration of the blueprint draft.
Overview of supplier performance measurement and management process
Performance measurement and management activities occur at both the individual project level, and at the overall relationship level. The five activity streams that make up the supplier performance management process are:
1. Customize Scorecard — This activity occurs annually with each preferred supplier. The MegaPharma Supplier Relationship Manager (SRM) and the supplier’s relationship manager for MegaPharma review the standard supplier scorecard template, and jointly agree upon the specific metrics that will be used in light of the supplier’s specific capabilities, the projects the supplier will be working on, and the nature of the business arrangement with the supplier. (Note that some metrics are required for certain categories of suppliers, and some metrics are required across all suppliers.)
2. Gather Data — In this activity stream, three types of data are gathered in the following ways:
a. Objective, quantitative performance data about the supplier’s (and MegaPharma’s) performance on specific projects is captured from MegaPharma and supplier systems.
b. Subjective, project-level performance data (both quantitative and qualitative) is collected at regular intervals through surveys filled out by key stakeholders at MegaPharma and its suppliers.
c. Subjective data (both quantitative and qualitative) about overall supplier performance (not tied directly to specific projects), as well as data about relationship quality, is collected through periodic surveys filled out by key stakeholders at MegaPharma and its suppliers.
The MegaPharma and supplier relationship managers are responsible for managing the data collection process for both project-level and relationship-level performance information.
3. Analyze Performance — This activity occurs at two levels:
a. Project-level performance reports, focused on operational metrics, are created following the completion of each project (or every six months for those projects lasting longer than a year). Relationship managers and key team members from each project meet to develop project-specific remediation plans (if appropriate), and identify and document systemic improvement opportunities.
b. Reports on overall relationship quality (how well MegaPharma and its suppliers work together), and total value delivered by each supplier relationship, are created and jointly analyzed on a semi-annual basis by relationship managers and key executives on both sides.
4. Jointly Review Performance and Conduct Joint Planning — MegaPharma and supplier relationship managers meet quarterly to review cross-project operational performance. Semi-annually, they hold a strategic review and joint planning session to review overall relationship performance, develop corrective action plan(s) as needed, recognize and reward outstanding performance, capture and disseminate best practices, and identify and evaluate potential new value-generating opportunities for both MegaPharma and the supplier. Other stakeholders, in addition to the relationship managers, are involved in these meetings as appropriate (e.g. clinical research scientists, project managers, representatives from other functions at MegaPharma, etc.). After completion, the relationship managers communicate outcomes to the appropriate stakeholders in their respective organizations, oversee the execution of corrective action plans, and track progress on new opportunities.
5. Hold Supplier Portfolio Review Meeting — On an annual basis, a committee composed of senior executives at MegaPharma meets to review performance data and conduct comparative analysis of all preferred suppliers. Based on this analysis, the committee makes decisions to retain or replace specific suppliers on the preferred list, and develops long-range plans for the strategic use of suppliers, focused on new services or technologies they might provide, and also new business models that might be employed to structure arrangements with them. Finally, the committee evaluates internal improvement opportunities highlighted by the supplier performance measurement system.
Lessons Learned
▪ Don’t try to measure too much. Measurement is a costly activity, trying to measure too much is a recipe for non-compliance.
▪ Consider imperfect, subjective or qualitative metrics (e.g., using surveys) that (often) provide 80% of the insight, with only 20 % of the data collection cost, versus more objective metrics (e.g., extracting and aggregating data from various electronic systems).
▪ After iterative development and refinement of scorecard metrics, sanity test the entire scorecard. Will the benefits outweigh the costs? What needs to be further pruned to make the system practical?
▪ Define exactly how data will be used. If there is not a compelling reason to have a metric to enable solving complex problems or making important decisions, don’t bother measuring it. This requires constructively challenging senior management or others who would “like to see a report that shows…” Such inclinations must be subjected to respectful scrutiny. “What decisions would such information enable you to make more effectively? Why? What actions would you take or not take based on different reported values for such metrics?”
▪ Define metrics with maximum specificity, including the unit of measure, where data will come from, and any calculations that need to be performed on raw data to generate the metric. “Cycle time” is not a meaningful metric. “Number of days from contract signed to first patient recruited” is.
▪ Don’t focus only on defining metrics. Spend as much or more time defining the process, not only for how data will be gathered and analyzed, but also for how data will be used, internally and with suppliers, to identify, diagnose, and address performance problems and improvement opportunities.
▪ Involve key suppliers in defining metrics, as well as designing the performance measurement and management system. They are an excellent source of insight. Moreover, their commitment is critical to success, and they are much more likely to be committed if you consult with them on development, than if you simply subject them to what you’ve decided on.
▪ Define and utilize metrics that focus on the value your key suppliers are getting out of the relationship. If you can’t easily replace a supplier, and even more so, if you expect them to innovate in various ways (which requires some level of investment on their part) then you need to pay attention not only to the value you are realizing, but what your suppliers are getting of the relationship as well. Otherwise the value you realize will be short-lived.
▪ Invest in behavioral skills training for those who will be involved in supplier performance management. At the end of the day, as important as data measurement is, continually improving performance depends critically on the ability of individuals to communicate effectively in the face of disagreement, and to diagnose and solve complex problems together.
Vantage Partners, LLC
Article provided by PLM World
www.plmworld.org
at 1:56 PM Link to this Article 0 Comments
Lack of clarity around supplier performance (especially for suppliers of services related to clinical trials and other complex projects) made it impossible to identify the best suppliers with whom to create preferred relationships, to award specific projects to the most qualified supplier, or to work jointly with suppliers to improve performance.
Prior efforts over the course of a year failed to produce a viable scorecard or gain sufficient buy-in from business stakeholders to enable successful implementation. Meanwhile, previous investments in supplier relationship management (e.g., quarterly business reviews, annual executive summits, and the like) showed little return due to the lack of meaningful performance data.
The Solution
A structured scorecard, focused on the most critical measures of performance and value, combined with a comprehensive performance measurement and management process – one comprising clearly defined activities, and roles and responsibilities, for measuring both supplier and customer performance.
Diagnosing the Failure
▪ Because the scorecard included many dozens of metrics, the cost of gathering and analyzing supplier performance data was too high. In particular, busy clinical research staff who worked with suppliers claimed they did not have enough time to gather and report the data required to score suppliers.
▪ Not only did the scorecard include far too many metrics, they were not organized in natural or useful categories. Little thought had been given to how data would be used by individuals in contracting, project management, or senior management, and hence little attention had been paid to how best to structure and report supplier performance metrics.
▪ Consequently, it was difficult for anyone to make sense of the data that was (at least initially) collected.
▪ Moreover, in many cases, metrics were defined at too high a level of abstraction to be useful, e.g., “cycle time” or “contract adherence.”
▪ All of these flaws meant that senior management, who initially had requested supplier scorecards, did nothing with the results that began to be collected. Consequently, those who were being asked to shoulder the burden of increased measurement and reporting came to believe that it was a waste of their time to do so, and that since senior management didn’t care anyway, there would be no accountability for failing to comply. Testing this theory validated its correctness, at which point there was no incentive for busy people to take the time to gather data to enable scorecard reporting.
▪ Finally, despite useful thinking about supplier metrics, the project team spent very little time thinking about and defining the process (including specific roles and responsibilities for completing process steps and activities) associated with data gathering, analysis, reporting, and remediation or other actions suggested by performance data. This further undermined perceptions of the usefulness of data gathering and reporting (since no one had any idea how the data would be used), and left unaddressed issues of accountability for supplier performance measurement or management.
Background
The Strategic Sourcing Group at “MegaPharma,” a Fortune 500 pharmaceutical company, spent over a year trying to develop a scorecard to accurately assess their suppliers’ performance. Unfortunately, the initiative was a failure. Despite a great deal of good thinking and hard work, the cross-functional team who led the effort ended up producing an unwieldy scorecard that, within a few months of completion, was no longer used by anyone.
Approach
Vantage Partners partnered with MegaPharma to try again to develop a comprehensive, and consistent approach to supplier performance measurement and management. Working with a cross-functional team with representation from the Supplier Management Group in Strategic Sourcing, from clinical teams in all the therapeutic areas, from Finance, and from the Contracts group, Vantage first began by helping MegaPharma clarify the objectives for the overall performance management system in which the scorecard would be situated.
Overview of supplier performance management system objectives
▪ Gather and report data to enable effective selection of preferred suppliers
▪ Gather and report data to enable effective, and efficient, decision-making about project awards
▪ Solicit feedback from suppliers on how MegaPharma could improve its own operations, be a more desirable customer and business partner, and enable its suppliers to be more
effective
▪ Identify and diagnose performance problems, and do so as early as possible, in order to enable effective remediation
▪ Build stronger, more committed relationships with suppliers
By clarifying and explicitly articulating performance management objectives, MegaPharma was in a better position to prioritize across hundreds of potential metrics and focus on what was most important to measure. Moreover, clarifying when and how performance metrics would be used helped the team determine the frequency of measurement and reporting (e.g., monthly, quarterly, end of project, and so on) for various metrics. Through a series of workshops, Vantage helped the MegaPharma team to hone a list of over 200 different metrics to a subset of the most critical and actionable. Each metric was evaluated based on the time and effort it would take to gather and report data, compared to the expected benefit to supplier performance and relationships, and ultimately to driving improved clinical research performance.
A holistic, and structured approach to scorecard design
The MegaPharma-Vantage team developed a scorecard designed to provide a holistic view of supplier performance on individual projects, of the health of its overall relationships with suppliers, and of the total value delivered by those relationships. The scorecard was organized around four key dimensions: operational performance, financial value, strategic value, and relationship quality.
Each dimension of the scorecard comprised several categories of metrics, such as innovation (as an element of strategic value) or level of trust (as an element of relationship quality). These categories were further broken down into three to five sub-categories, each of which might in turn be composed of anywhere from approximately one to five discrete metrics. A common scorecard framework, along with broad and consistent performance categories, allowed simple, high-level reports to be created for senior management across different kinds of suppliers, while at the same time ensuring that individual metrics (which often varied for different kinds of suppliers) were defined at a meaningful level of specificity. In addition, each dimension of the scorecard included metrics against which suppliers were invited (and expected) to provide feedback to MegaPharma. Such two-way feedback was aimed at soliciting improvement opportunities from suppliers, at enabling more effective diagnosis of complex performance problems that were the result of how MegaPharma and its suppliers worked together (rather than a simple failure on the supplier’s part), and at building stronger relationships characterized by both accountability, and collaborative joint problem-solving.
Developing, and building buy-in to, a process for performance measurement and management
Recognizing that even the most carefully constructed metrics are useless without clearly defining how data will be gathered, analyzed, reported, and used, Vantage and MegaPharma developed a detailed process for performance measurement and management (a summary of the process is described below). To ensure that the process could actually be implemented, and that the wide range of stakeholders upon whom successful implementation would rely would support it, Vantage and the MegaPharma used a procedure called “blueprinting.” Over a series of about three months, the team iteratively developed and refined a series of drafts articulating, in concrete detail, specific activities and roles and responsibilities. Each iteration was reviewed with a broad cross-section of stakeholders who were asked for their concerns and suggestions, which were then incorporated into the next iteration of the blueprint draft.
Overview of supplier performance measurement and management process
Performance measurement and management activities occur at both the individual project level, and at the overall relationship level. The five activity streams that make up the supplier performance management process are:
1. Customize Scorecard — This activity occurs annually with each preferred supplier. The MegaPharma Supplier Relationship Manager (SRM) and the supplier’s relationship manager for MegaPharma review the standard supplier scorecard template, and jointly agree upon the specific metrics that will be used in light of the supplier’s specific capabilities, the projects the supplier will be working on, and the nature of the business arrangement with the supplier. (Note that some metrics are required for certain categories of suppliers, and some metrics are required across all suppliers.)
2. Gather Data — In this activity stream, three types of data are gathered in the following ways:
a. Objective, quantitative performance data about the supplier’s (and MegaPharma’s) performance on specific projects is captured from MegaPharma and supplier systems.
b. Subjective, project-level performance data (both quantitative and qualitative) is collected at regular intervals through surveys filled out by key stakeholders at MegaPharma and its suppliers.
c. Subjective data (both quantitative and qualitative) about overall supplier performance (not tied directly to specific projects), as well as data about relationship quality, is collected through periodic surveys filled out by key stakeholders at MegaPharma and its suppliers.
The MegaPharma and supplier relationship managers are responsible for managing the data collection process for both project-level and relationship-level performance information.
3. Analyze Performance — This activity occurs at two levels:
a. Project-level performance reports, focused on operational metrics, are created following the completion of each project (or every six months for those projects lasting longer than a year). Relationship managers and key team members from each project meet to develop project-specific remediation plans (if appropriate), and identify and document systemic improvement opportunities.
b. Reports on overall relationship quality (how well MegaPharma and its suppliers work together), and total value delivered by each supplier relationship, are created and jointly analyzed on a semi-annual basis by relationship managers and key executives on both sides.
4. Jointly Review Performance and Conduct Joint Planning — MegaPharma and supplier relationship managers meet quarterly to review cross-project operational performance. Semi-annually, they hold a strategic review and joint planning session to review overall relationship performance, develop corrective action plan(s) as needed, recognize and reward outstanding performance, capture and disseminate best practices, and identify and evaluate potential new value-generating opportunities for both MegaPharma and the supplier. Other stakeholders, in addition to the relationship managers, are involved in these meetings as appropriate (e.g. clinical research scientists, project managers, representatives from other functions at MegaPharma, etc.). After completion, the relationship managers communicate outcomes to the appropriate stakeholders in their respective organizations, oversee the execution of corrective action plans, and track progress on new opportunities.
5. Hold Supplier Portfolio Review Meeting — On an annual basis, a committee composed of senior executives at MegaPharma meets to review performance data and conduct comparative analysis of all preferred suppliers. Based on this analysis, the committee makes decisions to retain or replace specific suppliers on the preferred list, and develops long-range plans for the strategic use of suppliers, focused on new services or technologies they might provide, and also new business models that might be employed to structure arrangements with them. Finally, the committee evaluates internal improvement opportunities highlighted by the supplier performance measurement system.
Lessons Learned
▪ Don’t try to measure too much. Measurement is a costly activity, trying to measure too much is a recipe for non-compliance.
▪ Consider imperfect, subjective or qualitative metrics (e.g., using surveys) that (often) provide 80% of the insight, with only 20 % of the data collection cost, versus more objective metrics (e.g., extracting and aggregating data from various electronic systems).
▪ After iterative development and refinement of scorecard metrics, sanity test the entire scorecard. Will the benefits outweigh the costs? What needs to be further pruned to make the system practical?
▪ Define exactly how data will be used. If there is not a compelling reason to have a metric to enable solving complex problems or making important decisions, don’t bother measuring it. This requires constructively challenging senior management or others who would “like to see a report that shows…” Such inclinations must be subjected to respectful scrutiny. “What decisions would such information enable you to make more effectively? Why? What actions would you take or not take based on different reported values for such metrics?”
▪ Define metrics with maximum specificity, including the unit of measure, where data will come from, and any calculations that need to be performed on raw data to generate the metric. “Cycle time” is not a meaningful metric. “Number of days from contract signed to first patient recruited” is.
▪ Don’t focus only on defining metrics. Spend as much or more time defining the process, not only for how data will be gathered and analyzed, but also for how data will be used, internally and with suppliers, to identify, diagnose, and address performance problems and improvement opportunities.
▪ Involve key suppliers in defining metrics, as well as designing the performance measurement and management system. They are an excellent source of insight. Moreover, their commitment is critical to success, and they are much more likely to be committed if you consult with them on development, than if you simply subject them to what you’ve decided on.
▪ Define and utilize metrics that focus on the value your key suppliers are getting out of the relationship. If you can’t easily replace a supplier, and even more so, if you expect them to innovate in various ways (which requires some level of investment on their part) then you need to pay attention not only to the value you are realizing, but what your suppliers are getting of the relationship as well. Otherwise the value you realize will be short-lived.
▪ Invest in behavioral skills training for those who will be involved in supplier performance management. At the end of the day, as important as data measurement is, continually improving performance depends critically on the ability of individuals to communicate effectively in the face of disagreement, and to diagnose and solve complex problems together.
Vantage Partners, LLC
Article provided by PLM World
www.plmworld.org
at 1:56 PM Link to this Article
###
Playing To Win
I feel very blessed in our current economic environment, don’t you? No, seriously, I feel blessed because, like many of you, I have lived long enough to know that although we are living through what I term, “business unusual”, it does not necessarily follow that these are end times.
I feel blessed to have lived through the 1970’s with our blocks-long lines to fuel our cars, fuel oil shortages, and department stores with lighting so reduced I could not tell a green pair of socks from a black pair.
I feel blessed to have lived through the early 1980’s with a national economy that many perceived was “teetering on the brink” with double digit interest rates and both unemployment and inflation that was measured in the high teens.
Through the late 80’s I was blessed to live in a region of the country where bank failures became as common place as sunrise. Where entire fortunes were wiped out weekly, not by Ponzi schemes or other frauds, but by business owners like you and I having to justify loans to the FDIC and bank examiners rather than the local bank officer with whom we had dealt for years.
Then, those of us who had the tenacity, or maybe it was the temerity, to make it through the 1990’s arrived at the new millennium only to find that economics was becoming geopolitical in ways that most of us had not foreseen. The events of 9-11-2001 and those that have ensued have changed our world in ways few people would have predicted.
So here we are as a nation in 2009, still trying to hit stride in dealing with our global political, ideological, and military challenges and we have a global economic meltdown to add to the equation.
Someone once said that the only thing that never changes is that things will always change. Has our collective experience of the past forty or so years equipped us to deal with these changes? I would posit that they have and that it is incumbent on those of us who are perceived as leaders by our employees, clients, and neighbors to keep some perspective about what many see as the collapse of our world.
In 1997, I was blessed to have a senior level banking executive as a client. The gentleman had inherited a portfolio loaded to overflowing with challenges. To compound matters, he had taken the helm at a time when his bank’s brand had begun to be perceived as an “also ran”.
When I first started working with my banker client, I did not know whether he had been exceptionally courageous or extraordinarily stupid in signing on to lead this particular bank at this moment in time. Both of us had a professional reputation at stake in the correct answer to that question.
Our first meeting did nothing to clear up my doubts. Based on that meeting, it was my perception that the gentleman lacked the polish and skills necessary to steer the helm of a larger, regional bank; much less, one that was already headed for the rocks. My immediate instinct was to cut-and-run in order to not be connected with what appeared to be an inevitable train wreck.
Something different about this individual’s approach to problems made me have a change of heart and eventually taught me a great deal about handling adversity: He had the ability to see things about situations that others had missed entirely because they were so overwhelmed by the negatives. Instead of acknowledging the complexity of the several problems he had inherited, he would elevate the periscope of his mind’s eye and look beyond the immediate problems to the future potential that lay on the other side of the immediate adversity.
Leaders can benefit from this approach to adversity. And, if we benefit, we can help those around us and who depend upon us to benefit also.
To do this we have to know our purpose, stay focused on our vision, and continuously adjust, adapt, and fine tune our goals. Like a winning race car driver, we must begin with the end we want firmly fixed in our mind. Nothing that happens as we lap the track can be allowed to change our vision, our purpose for being in the race, or the end that we are in the race to achieve.
If we are not careful to keep our perspective, and by doing so to keep ourselves on track, we will find ourselves being sucked into the downward spiral of sound bites that some call news. We can allow ourselves to forget our seasoning and to begin to think that human nature has somehow changed and that things really are worse by spades than ever before.
Since 9-11-2001, I have observed a phenomenon among my own clients, a separation of sheep and goats so to speak. One group seems to have a clear “play to win” mentality while their counterparts appears to view decision making from a “play not to lose” perspective.
The first group tends to respond to adversity by fighting harder to win; the second group has to have help to see the necessity of fighting their natural inclination to tread water and in so doing to lose market share and viability in their marketplace. As a professional business coach and sales trainer, it has been my observation that through all of our past periods of economic challenge it is the leaders typified by the first group’s attributes that emerges on the other side of the adversity stronger and ready to prosper. The leaders with the “play not to lose” approach to challenging economies and business conditions tend to take years to recover from a setback if they emerge on the other side at all.
Let’s help each other keep some perspective. Let’s remember that it is OK to allow ourselves to be honest about our insecurities – we all have them. Even leaders are human. As leaders we have an absolute duty though to rise above those self-doubts and to see the opportunities that hold out the promise of tomorrow. We can be a critical part of the solution for ourselves, our companies, and our personnel, but only if we live up to our responsibility as leaders.
So, as we formulate our response to “business unusual”, let’s remember that we are not only leaders, but American leaders. As such, it should be part of our DNA to overcome adversity and to emerge stronger for the experience. This is our watch. We alone will be judged by our response to the challenges. Approach each day with the clarity of purpose that comes from having a well defined vision and a flexible game plan to reach our goals.
Paul Lushin
President, Lushin & Associates, Inc.
www.lushin.com
at 1:55 PM Link to this Article 0 Comments
I feel blessed to have lived through the 1970’s with our blocks-long lines to fuel our cars, fuel oil shortages, and department stores with lighting so reduced I could not tell a green pair of socks from a black pair.
I feel blessed to have lived through the early 1980’s with a national economy that many perceived was “teetering on the brink” with double digit interest rates and both unemployment and inflation that was measured in the high teens.
Through the late 80’s I was blessed to live in a region of the country where bank failures became as common place as sunrise. Where entire fortunes were wiped out weekly, not by Ponzi schemes or other frauds, but by business owners like you and I having to justify loans to the FDIC and bank examiners rather than the local bank officer with whom we had dealt for years.
Then, those of us who had the tenacity, or maybe it was the temerity, to make it through the 1990’s arrived at the new millennium only to find that economics was becoming geopolitical in ways that most of us had not foreseen. The events of 9-11-2001 and those that have ensued have changed our world in ways few people would have predicted.
So here we are as a nation in 2009, still trying to hit stride in dealing with our global political, ideological, and military challenges and we have a global economic meltdown to add to the equation.
Someone once said that the only thing that never changes is that things will always change. Has our collective experience of the past forty or so years equipped us to deal with these changes? I would posit that they have and that it is incumbent on those of us who are perceived as leaders by our employees, clients, and neighbors to keep some perspective about what many see as the collapse of our world.
In 1997, I was blessed to have a senior level banking executive as a client. The gentleman had inherited a portfolio loaded to overflowing with challenges. To compound matters, he had taken the helm at a time when his bank’s brand had begun to be perceived as an “also ran”.
When I first started working with my banker client, I did not know whether he had been exceptionally courageous or extraordinarily stupid in signing on to lead this particular bank at this moment in time. Both of us had a professional reputation at stake in the correct answer to that question.
Our first meeting did nothing to clear up my doubts. Based on that meeting, it was my perception that the gentleman lacked the polish and skills necessary to steer the helm of a larger, regional bank; much less, one that was already headed for the rocks. My immediate instinct was to cut-and-run in order to not be connected with what appeared to be an inevitable train wreck.
Something different about this individual’s approach to problems made me have a change of heart and eventually taught me a great deal about handling adversity: He had the ability to see things about situations that others had missed entirely because they were so overwhelmed by the negatives. Instead of acknowledging the complexity of the several problems he had inherited, he would elevate the periscope of his mind’s eye and look beyond the immediate problems to the future potential that lay on the other side of the immediate adversity.
Leaders can benefit from this approach to adversity. And, if we benefit, we can help those around us and who depend upon us to benefit also.
To do this we have to know our purpose, stay focused on our vision, and continuously adjust, adapt, and fine tune our goals. Like a winning race car driver, we must begin with the end we want firmly fixed in our mind. Nothing that happens as we lap the track can be allowed to change our vision, our purpose for being in the race, or the end that we are in the race to achieve.
If we are not careful to keep our perspective, and by doing so to keep ourselves on track, we will find ourselves being sucked into the downward spiral of sound bites that some call news. We can allow ourselves to forget our seasoning and to begin to think that human nature has somehow changed and that things really are worse by spades than ever before.
Since 9-11-2001, I have observed a phenomenon among my own clients, a separation of sheep and goats so to speak. One group seems to have a clear “play to win” mentality while their counterparts appears to view decision making from a “play not to lose” perspective.
The first group tends to respond to adversity by fighting harder to win; the second group has to have help to see the necessity of fighting their natural inclination to tread water and in so doing to lose market share and viability in their marketplace. As a professional business coach and sales trainer, it has been my observation that through all of our past periods of economic challenge it is the leaders typified by the first group’s attributes that emerges on the other side of the adversity stronger and ready to prosper. The leaders with the “play not to lose” approach to challenging economies and business conditions tend to take years to recover from a setback if they emerge on the other side at all.
Let’s help each other keep some perspective. Let’s remember that it is OK to allow ourselves to be honest about our insecurities – we all have them. Even leaders are human. As leaders we have an absolute duty though to rise above those self-doubts and to see the opportunities that hold out the promise of tomorrow. We can be a critical part of the solution for ourselves, our companies, and our personnel, but only if we live up to our responsibility as leaders.
So, as we formulate our response to “business unusual”, let’s remember that we are not only leaders, but American leaders. As such, it should be part of our DNA to overcome adversity and to emerge stronger for the experience. This is our watch. We alone will be judged by our response to the challenges. Approach each day with the clarity of purpose that comes from having a well defined vision and a flexible game plan to reach our goals.
Paul Lushin
President, Lushin & Associates, Inc.
www.lushin.com
at 1:55 PM Link to this Article
###
Geo-Targeted SEO
Search Engine Optimization, or SEO, is the latest buzz word in marketing. The bottom line is that being found in a search is going to be good for your business. But many have wondered: is it possible?
If you’re in manufacturing, you’ve likely discovered that you have what’s called a “competitive” keyword. That means there are millions of other companies out there fighting for the same audience in the search engines. So, what can you do? Well, maybe you don’t have the budget or expertise to float your website to the top of Google search results for a search string like, “Tool and Die.” But, what if you narrowed your target? How much tool and die work could you win right here in Indiana? In fact, if you really think about it, you don’t need to be the top search result for the Aussie searching “Tool and Die” on the other end of the planet.
There are three simple things you can start doing today to make sure you’re findable for Geo-targeted search—that is, a search like, “Indiana Tool and Die.”
First, make sure your website is indeed optimized as much as you possibly can. There are a wealth of articles available on this topic, so I won’t belabor the subject here. However, it is important to realize that the same optimization principals that move worldwide moguls to the top of every search are still vital to getting your site on top in Indiana.
Second, make sure your business appears on Google maps. This is a relatively simple process. Just visit www.google.com/local and type in your exact address. If the map places an anonymous marker at your location, but doesn’t know that it is indeed your business residing there, then you need to add your information. What’s more, if is provided but doesn’t include a link to your own website, be sure to update and add that valuable piece of data.
Finally, talk local on your website. No matter what, keywords are still the key. So, as a piggy-back to the first point, your site should not only include keywords relating to your service, but talk about your state, your region, your city, etc. You can start by including a full mailing address on your contact page. Earn bonus points if you link that address to the very Google map hyperlink that we just discussed. In addition, sprinkle “Indiana” throughout your “About Us” copy and anywhere else on the site that you can.
If you focus on winning business locally, you’ll be surprised how many procurement people, project managers, and other professionals with business to let will be searching for local vendors to fill their needs. Don’t you want to be found among them?
Nick Carter
President, Carter & Company
www.carterandcompanyllc.com
at 1:53 PM Link to this Article 0 Comments
If you’re in manufacturing, you’ve likely discovered that you have what’s called a “competitive” keyword. That means there are millions of other companies out there fighting for the same audience in the search engines. So, what can you do? Well, maybe you don’t have the budget or expertise to float your website to the top of Google search results for a search string like, “Tool and Die.” But, what if you narrowed your target? How much tool and die work could you win right here in Indiana? In fact, if you really think about it, you don’t need to be the top search result for the Aussie searching “Tool and Die” on the other end of the planet.
There are three simple things you can start doing today to make sure you’re findable for Geo-targeted search—that is, a search like, “Indiana Tool and Die.”
First, make sure your website is indeed optimized as much as you possibly can. There are a wealth of articles available on this topic, so I won’t belabor the subject here. However, it is important to realize that the same optimization principals that move worldwide moguls to the top of every search are still vital to getting your site on top in Indiana.
Second, make sure your business appears on Google maps. This is a relatively simple process. Just visit www.google.com/local and type in your exact address. If the map places an anonymous marker at your location, but doesn’t know that it is indeed your business residing there, then you need to add your information. What’s more, if is provided but doesn’t include a link to your own website, be sure to update and add that valuable piece of data.
Finally, talk local on your website. No matter what, keywords are still the key. So, as a piggy-back to the first point, your site should not only include keywords relating to your service, but talk about your state, your region, your city, etc. You can start by including a full mailing address on your contact page. Earn bonus points if you link that address to the very Google map hyperlink that we just discussed. In addition, sprinkle “Indiana” throughout your “About Us” copy and anywhere else on the site that you can.
If you focus on winning business locally, you’ll be surprised how many procurement people, project managers, and other professionals with business to let will be searching for local vendors to fill their needs. Don’t you want to be found among them?
Nick Carter
President, Carter & Company
www.carterandcompanyllc.com
at 1:53 PM Link to this Article
###
Search Engine Optimization, or SEO, is the latest buzz word in marketing. The bottom line is that being found in a search is going to be good for your business. But many have wondered: is it possible?
If you’re in manufacturing, you’ve likely discovered that you have what’s called a “competitive” keyword. That means there are millions of other companies out there fighting for the same audience in the search engines. So, what can you do? Well, maybe you don’t have the budget or expertise to float your website to the top of Google search results for a search string like, “Tool and Die.” But, what if you narrowed your target? How much tool and die work could you win right here in Indiana? In fact, if you really think about it, you don’t need to be the top search result for the Aussie searching “Tool and Die” on the other end of the planet.
There are three simple things you can start doing today to make sure you’re findable for Geo-targeted search—that is, a search like, “Indiana Tool and Die.”
First, make sure your website is indeed optimized as much as you possibly can. There are a wealth of articles available on this topic, so I won’t belabor the subject here. However, it is important to realize that the same optimization principals that move worldwide moguls to the top of every search are still vital to getting your site on top in Indiana.
Second, make sure your business appears on Google maps. This is a relatively simple process. Just visit www.google.com/local and type in your exact address. If the map places an anonymous marker at your location, but doesn’t know that it is indeed your business residing there, then you need to add your information. What’s more, if is provided but doesn’t include a link to your own website, be sure to update and add that valuable piece of data.
Finally, talk local on your website. No matter what, keywords are still the key. So, as a piggy-back to the first point, your site should not only include keywords relating to your service, but talk about your state, your region, your city, etc. You can start by including a full mailing address on your contact page. Earn bonus points if you link that address to the very Google map hyperlink that we just discussed. In addition, sprinkle “Indiana” throughout your “About Us” copy and anywhere else on the site that you can.
If you focus on winning business locally, you’ll be surprised how many procurement people, project managers, and other professionals with business to let will be searching for local vendors to fill their needs. Don’t you want to be found among them?
Nick Carter
President, Carter & Company
www.carterandcompanyllc.com
at 1:53 PM Link to this Article 0 Comments
If you’re in manufacturing, you’ve likely discovered that you have what’s called a “competitive” keyword. That means there are millions of other companies out there fighting for the same audience in the search engines. So, what can you do? Well, maybe you don’t have the budget or expertise to float your website to the top of Google search results for a search string like, “Tool and Die.” But, what if you narrowed your target? How much tool and die work could you win right here in Indiana? In fact, if you really think about it, you don’t need to be the top search result for the Aussie searching “Tool and Die” on the other end of the planet.
There are three simple things you can start doing today to make sure you’re findable for Geo-targeted search—that is, a search like, “Indiana Tool and Die.”
First, make sure your website is indeed optimized as much as you possibly can. There are a wealth of articles available on this topic, so I won’t belabor the subject here. However, it is important to realize that the same optimization principals that move worldwide moguls to the top of every search are still vital to getting your site on top in Indiana.
Second, make sure your business appears on Google maps. This is a relatively simple process. Just visit www.google.com/local and type in your exact address. If the map places an anonymous marker at your location, but doesn’t know that it is indeed your business residing there, then you need to add your information. What’s more, if is provided but doesn’t include a link to your own website, be sure to update and add that valuable piece of data.
Finally, talk local on your website. No matter what, keywords are still the key. So, as a piggy-back to the first point, your site should not only include keywords relating to your service, but talk about your state, your region, your city, etc. You can start by including a full mailing address on your contact page. Earn bonus points if you link that address to the very Google map hyperlink that we just discussed. In addition, sprinkle “Indiana” throughout your “About Us” copy and anywhere else on the site that you can.
If you focus on winning business locally, you’ll be surprised how many procurement people, project managers, and other professionals with business to let will be searching for local vendors to fill their needs. Don’t you want to be found among them?
Nick Carter
President, Carter & Company
www.carterandcompanyllc.com
at 1:53 PM Link to this Article
###
Hoosiers Helping Hoosiers
Years ago I heard a story. I can’t remember the names involved, or even who told it, but the lesson it conveyed is forever branded in my mind. The story went like this: A guy goes to New York on a business trip, checks into his hotel well into the night, and as he unpacks he realizes that he forgot a shirt for his 8:00 AM meeting the following morning. What can he do so late at night? His trip was lemons, but the idea it gave him was lemonade.
Our unfortunate traveler decided to start a catalog business selling premium quality merchandise to a targeted distribution that included only a few New York city blocks. The key to his idea is that his merchandise could be ordered any time of day just like ordering a pizza. His customers would have premium items delivered on demand exactly when they needed them: a value proposition entirely about saving time, not money.
So, how would he pull it all together? First, he went to Brooks Brothers, Godiva Chocolates, and Nike Sportswear to pitch his concept. They all agreed to be included in the catalog. Next, he approached FedEx about arranging delivery. Finally, since this was before the advent of the internet, he would need a call-center as well. He contracted with AT&T and the deal was done.
In this way a company of just one man was able to offer top of the line products with a sophisticated delivery team and an experienced call center. What’s more is that all parties involved benefited. That is outsourcing. Taking the best in class resources and adding them to your core competency to get the maximum in leveraged capital and time.
If you read the news today, you’ll likely get depressed. Markets are slumping and people are unemployed. Guess what? It’s not that bad. Even at 9% unemployment, we still have 91% of the people employed. Add to it the fact that typically 3-4% of the population are unemployable, you really have about 95% of the workers working.
I started my business in 1999. If I would have listened to most people’s opinions I never would have started my company. I would have been too damn afraid. But in the past ten years, I’ve learned one thing: without people helping me, I would never have gotten where I am today. Sometimes it’s friends that just want to help out. Sometimes it’s a vendor with a vested interest in seeing me succeed. Everyone, however, benefits from my success.
I often refer to these partners as my “dream team”. This dream team includes my accountant, my banker, my lawyer, my marketing company, my sales trainer, and the list goes on. I clearly believe in the concept of outsourcing. Outsourcing allows me to leverage the best available talent—experts in their field, mind you—at a price that is actually less than hiring the “joe average” employee. Add to the fact that I don’t have to train them, I pay for only what I use, I can fire them any time, I pay them monthly instead of weekly, they’re not on my 401K, I don’t have to supervise them; I really could go on and on…
So, what can you take from this? If Indiana is going tp thrive, it’s going to take our helping each other. We have plenty of brain power, work ethic, and a wealth of resources in this state. My hope is that we take more of a vested interest in each other. I believe Indiana can be the #1 State in the US for economic growth. Even as we think Global, I hope we really and truly ACT Local!
If you’re receiving this publication it’s because we targeted you. We want to do business with you. We want to share stories on how to make your business better and more profitable. And we’re targeting the movers and shakers. The executive-level people in our State that know how to get things done. So please take the time to read our publication. But, even more importantly, please share some of your stories with us. With your permission we will include them in the next issue.
If you read on, I know you’ll find some good ideas to help your business.
Dale Miller
Miller Consulting Group, Inc.
www.mcg-inc.net
at 1:50 PM Link to this Article 0 Comments
Our unfortunate traveler decided to start a catalog business selling premium quality merchandise to a targeted distribution that included only a few New York city blocks. The key to his idea is that his merchandise could be ordered any time of day just like ordering a pizza. His customers would have premium items delivered on demand exactly when they needed them: a value proposition entirely about saving time, not money.
So, how would he pull it all together? First, he went to Brooks Brothers, Godiva Chocolates, and Nike Sportswear to pitch his concept. They all agreed to be included in the catalog. Next, he approached FedEx about arranging delivery. Finally, since this was before the advent of the internet, he would need a call-center as well. He contracted with AT&T and the deal was done.
In this way a company of just one man was able to offer top of the line products with a sophisticated delivery team and an experienced call center. What’s more is that all parties involved benefited. That is outsourcing. Taking the best in class resources and adding them to your core competency to get the maximum in leveraged capital and time.
If you read the news today, you’ll likely get depressed. Markets are slumping and people are unemployed. Guess what? It’s not that bad. Even at 9% unemployment, we still have 91% of the people employed. Add to it the fact that typically 3-4% of the population are unemployable, you really have about 95% of the workers working.
I started my business in 1999. If I would have listened to most people’s opinions I never would have started my company. I would have been too damn afraid. But in the past ten years, I’ve learned one thing: without people helping me, I would never have gotten where I am today. Sometimes it’s friends that just want to help out. Sometimes it’s a vendor with a vested interest in seeing me succeed. Everyone, however, benefits from my success.
I often refer to these partners as my “dream team”. This dream team includes my accountant, my banker, my lawyer, my marketing company, my sales trainer, and the list goes on. I clearly believe in the concept of outsourcing. Outsourcing allows me to leverage the best available talent—experts in their field, mind you—at a price that is actually less than hiring the “joe average” employee. Add to the fact that I don’t have to train them, I pay for only what I use, I can fire them any time, I pay them monthly instead of weekly, they’re not on my 401K, I don’t have to supervise them; I really could go on and on…
So, what can you take from this? If Indiana is going tp thrive, it’s going to take our helping each other. We have plenty of brain power, work ethic, and a wealth of resources in this state. My hope is that we take more of a vested interest in each other. I believe Indiana can be the #1 State in the US for economic growth. Even as we think Global, I hope we really and truly ACT Local!
If you’re receiving this publication it’s because we targeted you. We want to do business with you. We want to share stories on how to make your business better and more profitable. And we’re targeting the movers and shakers. The executive-level people in our State that know how to get things done. So please take the time to read our publication. But, even more importantly, please share some of your stories with us. With your permission we will include them in the next issue.
If you read on, I know you’ll find some good ideas to help your business.
Dale Miller
Miller Consulting Group, Inc.
www.mcg-inc.net
at 1:50 PM Link to this Article
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H.R. Spotlight: Partial Plan Termination of your Employee Benefits
Today’s economic times are challenging both financially and emotionally. Most individuals and businesses are experiencing the adverse affects of the tightening credit market, reduction in product demands and the stock market’s downswing. Many employers are strategizing on how to increase efficiencies and cut costs. One cost cutting measure that is becoming more prevalent is a reduction in workforce. However, most employers aren’t aware of how this option can affect their qualified retirement plan.
If there is a large enough reduction in workforce due to layoffs, those affected could become fully vested in their balances. This phenomenon is known as a partial plan termination.
The IRS generally assumes that a partial plan termination occurs if an employer’s turnover rate is at least 20%. This is determined by dividing the number of eligible employees affected by the employer-initiated severance(s) during the plan year by the sum of eligible employees at the start of the plan year and those added during the plan year. Voluntary terminations during the plan year are disregarded for these purposes.
When considering a reduction in workforce, it is important to maintain proper records as to the reasons behind the reduction. These reductions may occur in waves throughout the plan year that could eventually exceed the 20% threshold and fully vest some of those participants previously distributed.
________________
by Pat Metallic, CEBS
Greenwalt Sponsel & Co.
www.gscocpa.com
at 1:48 PM Link to this Article 0 Comments
If there is a large enough reduction in workforce due to layoffs, those affected could become fully vested in their balances. This phenomenon is known as a partial plan termination.
The IRS generally assumes that a partial plan termination occurs if an employer’s turnover rate is at least 20%. This is determined by dividing the number of eligible employees affected by the employer-initiated severance(s) during the plan year by the sum of eligible employees at the start of the plan year and those added during the plan year. Voluntary terminations during the plan year are disregarded for these purposes.
When considering a reduction in workforce, it is important to maintain proper records as to the reasons behind the reduction. These reductions may occur in waves throughout the plan year that could eventually exceed the 20% threshold and fully vest some of those participants previously distributed.
________________
by Pat Metallic, CEBS
Greenwalt Sponsel & Co.
www.gscocpa.com
at 1:48 PM Link to this Article
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