APICS and Supply Chain Council Announce a Merger: Facts, Implications, and Observations

- May 1, 2014 10:02 AM
Categories: Commentary, Industry News, M&A | Tags: ,

The Facts

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APICS and The Supply Chain Council (SCC) have announced that they are merging. APICS (an acronym that previously stood for the American Production and Inventory Control Society) was founded back in 1957 and has over 38,000 members at over 10,000 companies. SCC was founded in 1996 and is much smaller, with roughly 500 corporate members. If all goes well, the board/member voting and legal proceedings should wrap up by August. The new entity name will remain APICS, but the APICS Foundation (a subset of APICS that “advances supply chain and operations management and innovation through research, educational programs and workforce development”) will be known as APICS Supply Chain Council (catchy, huh?). The firm will be headquartered in Chicago (SCC is in Houston) and is currently working on some combined membership plans for 2015.

The Implications

This is a merger that actually makes a lot of sense because the complementary nature of the two groups. APICS has a huge member base and a well institutionalized certification program for production / inventory management (CPIM) for managing operations inside the four walls – and a broader program for a Certified Supply Chain Professional (CSCP) that looks at broader supply chain issues. However, many practitioners do think that the APICS body of knowledge has simply not kept pace with many modern supply chain best practices. The knowledge is also managed at what I call the “document management” level versus the data management level that you see in SCC’s SCOR Model frameworks, which is a supply chain operations reference [process] model that drills down into supply chain processes and also cross-references to various related practices.

SCC is pretty much all about the SCOR model, from expanding it to licensing it to providing training and certification on it—and to benchmarking against it via a long-time partnership with SCC co-founder PRTM (now part of PwC). You can get a sense for SCC and SCOR in this presentation. SCC has done a good job encouraging its membership to volunteer for developing this IP, but perhaps the over-engagement has led SCOR to lose some of its mojo from the early to mid-2000s. There are many more providers, non-profits, SMBs, and chapter-only memberships in the mix, and I’d estimate only about three to four dozen Fortune 500 firms are really still actively involved in the corporate-level program. Still, the level of rigor in the IP and the strategic focus provide a welcome competency to breathe new value and relevance into APICS.

Some Observations

Although there’s clearly synergy present, it still needs to be utilized. The groups can certainly start by selling to each other’s members, but in my opinion the most advantageous thing to do would be to merge the IP. More specifically, I think it’s time to overhaul the structure of the APICS content and align it to the “DNA” of the SCOR model, although the SCOR model itself will also need to change to accommodate some of the body of knowledge that has been built over half a century. Engaging a membership that will be approaching 50,000 members won’t hurt either.

One area that the combined entity might want to flesh out and upgrade is in the area of procurement – and also in the area of IT support. Neither group does a great job here, and the former might be an area where ISM (Institute for Supply Management) could help out. ISM is a partner of APICS and actually has a lot in common with it in terms of re-vamped certifications, benchmarking partners, and the desire to move more strategically into the broader supply chain. With this latest move, we’ll have to see how ISM responds. There are certainly many possibilities and we’ll ask ISM leadership when we’re out at the annual conference in Las Vegas, so, stay tuned for that. ISM is also a research partner with Spend Matters with our ongoing “snap poll” studies. Shameless plug alert… the currently active poll, focused on supply chain financing, can be found here).

I’m actually  much closer to this story than you might think. As a lifelong supply chain student and practitioner, I used to be a card-carrying APICS member before I got into broader areas of ERP, PLM, supply chain optimization, strategic sourcing, and supply chain benchmarking. I left Arthur D. Little in 1999 to join AMR Research – both of which were also founding members of the Supply Chain Council. AMR poached a few top-notch ex-PRTM benchmarking folks and created a better supply chain benchmark (which unfortunately was left to die on the vine). That development process also yielded a KPI taxonomy called the “supply chain hierarchy of metrics” and an associated set of catalogued and cross-referenced practices/enablers. This “DNA” of a KPI taxonomy and practices taxonomy was eventually mapped to the SCOR process taxonomy and adopted natively into the SCOR model framework – a smart move.

I saw this architecture as the future and left AMR in 2004 to join The Hackett Group.  I basically wanted to create the corporate equivalent of the human genome project to divine the gene sequences of procurement processes and practices/capabilities/resources that empirically were proven to improve supply performance.  Yes, it’s a massively multi-variate problem, but a geeky supply dude needs to have his dreams, right?  More practically though, I went to help broaden Hackett’s efficiency-biased back-office performance benchmark into a much broader IP architecture that we could serve up to CPOs and their teams within Hackett’s membership based advisory program (where I served as an advisor until we grew large enough that I switched to do research full time).  I won’t bore you with all the details here, but, if you’re interested in this topic, I did analyze Hackett and other procurement benchmarkers in the market here, here, and here on Spend Matters PRO, which along with Spend Matters Plus, helps us keep bringing this research to you. We appreciate your ongoing support!

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