May 2012
Fiat proposes CNH farm business mergerFiat Industrial is looking to form a merger with the U.S.-based farm and construction vehicle business CNH, which would shift the company's capital center to the United States, dropping the Fiat name.

Sergio Marchionne, Fiat Industrial chairman, recently called for the full merger, but also cautioned that it would not be a precursor to a merger between the companies' auto businesses, which are in a three-year partnership, according to Bloomberg Businessweek.

Following a possible deal between Fiat Industrial and CNH, the combined company's shares would be traded on the New York Stock Exchange and have a secondary listing in Europe, the source stated.

"The plan to leave the country has been going on for a while, while we continue to cling to Fiat," said Giorgio Airaudo of the FIOM union. "A marriage cannot be one-sided. The car business is of national interest, and for that reason we need transparency."

Despite Fiat Industrial giving up the Fiat name if the merger is completed, Marchionne has informed employees that the operational structure of the business would not change, according to Bloomberg.

Fiat also recently announced that it will not buy a stake in Mazda Motor, but is planning to move forward with plans to increase its stake in Chrysler to more than 60 percent, Reuters reported.
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No, I’m not referring to what is around many Americans mid-sections. One thing most people don’t plan for is being stuck on the side of the road with a flat tire. It usually ruins your day. It used to be that any time this happened you would pop open the trunk, take out the spare tire, jack, and tools and get to work replacing it. If you paid attention when your Dad (or Mom) taught you had to do this right you could be back on the road in 10 minutes. Years ago many car manufacturers did away with full size spares as being unnecessary and provided smaller, “doughnut” spares instead. Over 5 years ago, many sports models like the Chevy Corvette, Dodge Viper, and Porsche Boxter stopped providing spares all together. Well now, there has been a growing trend of car manufacturers to drop the spare as well. According to AA Mid-Atlantic, about one in eight of every new vehicle had no spare included. Instead, they offered a can of tire sealant and an air compressor. Manufacturers are doing this for a number of reasons. First, they are able to reduce direct costs for the spare tire, jack, and tools required to replace it. Second, by removing those items they are able to offer more storage space to drivers. Thirdly, those tools can way over 40 pounds. Removing them can make a difference with improving the vehicles miles per gallon. This helps car manufacturers meet ever tightening federal fuel efficiency standards. AAA warns that not having a spare can cause issues however. The sealants lose effectiveness over time or may not work at all if there is sidewall damage on the tire. They advise new car buyers to ask about the spare before purchasing a car or negotiate having it included if it doesn’t come standard. They also advise to regularly check the spare to ensure it is properly inflated and in good condition. But honestly, who actually does that? I don’t know a single person that checks their spare on a regular basis. I bet most don’t even know if they have one or would actually change it themselves if they did. Best case scenario you know how and the spare is in good working order - do you really want to risk life and limb to change it on the side of the New Jersey Turnpike? I don’t think so. Especially nowadays where most new cars come with bumper to bumper warranties with 24 hour roadside assistance (if not negotiate to get it), it might be better to take the additional storage room and better gas mileage. If you drive in the middle of nowhere frequently, where help is far or non-existent, then it is probably worth it to have a nice spare available. But you also should then ask yourself – why am I driving in the middle of nowhere?
Maine wind industry group promoting supply chain capabilitiesThe Maine Wind Industry Initiative will organize a Maine Wind Industry Pavilion at WINDPOWER, which takes place from June 3-6 in Atlanta.

The group is planning to further advance Maine's wind energy supply chain products and professional service business at the event.

"Maine continues to demonstrate high-caliber wind energy capabilities at national and international conventions and has become a serious wind power supply chain resource," said Paul Williamson, MWII director and industry coordinator . "In fact, Maine has been chosen as the location for the AWEA Regional Wind Energy Summit-New England and we are preparing to launch an online wind energy ME supply chain product and business locator."

Maine's windpower capabilities have been developed and promoted in a number of sectors, which include construction, engineering, composite technologies, steel fabrication, precision manufacturing and marine trades.

The Maine Wind Industry Pavilion will also host a reception with a book signing by the author of the first Wind Technician AS college textbook that is focused on wind turbine maintenance for the United States.

Wind turbine test installations will begin in the Gulf of Maine next year, following a delay because of permits still pending for the site, which are expected to be approved in the next two to three months, according to the Free Press.
Supply chain struggles for AppleApple's Asian supply chain is struggling to meet demand for the company's next series of products, which is planned to be released soon.

According to the Taiwanese industry publication DigiTimes' unnamed sources, suppliers are having difficulties meeting demand for the production of more Apple products as a result of not being able to find enough workers to make components.

The new MacBooks are expected to debut this summer, but the demand far outweighs the supply.

The source also said MacBook shipments could total between 16.24 million and 19.2 million this year, which is between a 30 and 50 percent increase from last year.

According to RBC Capital Markets, there was an outperform rating on the Cupertino company's stock, and within a year shares could reach a $700 price target.

Chinese regulators recently approved Apple's iPad 3, which opens up the possibility for the company to launch the latest version of its tablet in the huge Chinese market.
EP Energy acquired by Apollo Global ManagementOil and gas company EP Energy was recently acquired by investment funds affiliated with Apollo Global Management, Riverstone Holdings, Access Industries and Korea National Oil Corporation for an estimated $7.15 billion.

EP Energy has operations that include programs in southern Texas, Louisiana and Utah. The recent acquisition comes after the company saw first quarter production volumes up 11 percent year-over-year.

"We are excited about our partnership with Apollo, Riverstone, and our other investors, which we believe will enhance the value of EP Energy and extend our performance track record," said Brent Smolik, president and CEO of EP. "We will continue to focus on large acreage positions with low-risk, repeatable drilling opportunities that generate strong financial returns. "

EP will continue its operations in Houston, where it employs more than 1,000 people.

Colorado-based Grid Petroleum Corporation recently announced that it has acquired a 10 percent working interest in the Garcia #3 well, which will soon be drilled.
Hospital searches for partnerThe University of Louisville Hospital is looking to partner with another hospital and expand its patient base, according to a consultant's report released recently.

The Courier-Journal reported that even if the hospital improves its operations and business strategy, a partner will still be needed to handle the daily operations of the medical facility.

Consultants from Dixon Hughes Goodman from Hudson, Ohio, recently advised the hospitals ad hoc committee, which was formed to oversee an operational review of the hospital with a focus on boosting financial stability.

The committee voted unanimously to accept the report, which will be sent to the board of the University Medical Center, the nonprofit organization that runs the hospital.

Under the consultant's recommendations regarding supply chain, its labor force and revenue cycle, the hospital could possibly save more than $8.5 million in 2013 and $17.5 million in 2014.

A recent post on Healthcare Matters' website compared the healthcare and airline industries, arguing that line airlines, healthcare providers benefit from working with as few vendors as possible to streamline supply chains while standardizing operations.
Dell completes acquisition of Wyse Technology Dell recently announced it completed its acquisition of Wyse Technology, which is a global leader in cloud client computing.

The acquisition gives Dell the ability to offer its customers new end-to-end IT solutions. The computer company has made significant strategic investments over the past three years to expand its enterprise technology and services capabilities.

"We're excited to officially welcome Wyse to Dell and help extend its industry-leading efforts to a broader range of customers and partners," said Jeff Clarke, Dell vice chairman and president, Global Operations and End User Computing Solutions. "We believe the Dell Wyse capabilities, combined with our previous desktop virtualization offerings and the strength of the Dell enterprise portfolio, provides the most comprehensive and competitive DVS solution available today."

Dell is planning to preserve Wyse's channel offerings and all of the company's channel partners will be made eligible for Dell's PartnerDirect Program.

According to Bloomberg, Dell is also in advanced discussions to acquire Quest Software, which has a market value of more than $2 billion. Dell's acquisitions come after revenue was down in the first quarter of 2012.
Device tax not a windfall, lobby saysLetters from hospitals and group purchasing organizations that pleaded with the IRS to ensure device makers pay for their share of the cost of health reform were recently answered by a medical imaging original equipment manufacturer trade lobby.

The lobby said that an excise tax planned to be implemented next year would not be a windfall for the industry.

"Only in Washington could paying a $30 billion tax over the next 10 years be viewed as a windfall opportunity, but that's exactly the false claim being made," Gail Rodriguez, executive director of the Medical Imaging & Technology Alliance, said in a statement. "MITA continues to oppose the device tax precisely because we believe it creates strong headwinds against an important sector of the U.S. economy."

A 2.3 percent excise tax on device companies was mandated by the Affordable Care Act, which is set to be implemented in 2013. Some say the tax will benefit the device makers because it can be deducted from income and the costs can be passed along to consumers, DOTMed News reported. The tax was expected to raise $20 billion, but manufacturers now believe the true cost is an estimated $30 billion.

IBISWorld reported that the healthcare industry increased at an average annual rate of 2.7 percent to reach $677.3 billion in 2011, and this number could top $850 billion by 2015.
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In the professional world, sourcing and negotiations are part of my job, but I tend to take these two tasks and apply them to my personal world.  I find myself more and more sourcing and negotiating things for my house, looking for the best deals for clothes and shoes, food shopping, and even look for ways to save when it comes to my health.  I recently read two articles on that outline some helpful savings tips for reducing your medical expenses.

Reviewing your health care providers in-network and out of network coverage can be daunting but it can also be helpful.  Obviously, using in-network is going to save you money; however be mindful of your visits to the GP and specialists.  The number of visits you make can add up when it comes to your co-pay and out of pocket costs.  Don't be afraid to ask questions about why you are seeing a specialist, or going to a GP for multiple follow ups. See what steps you can take to reduce your trips to the doctor's office.  One article suggests using home testing kits instead on ongoing visits.  For example, at-home glucose kits can range from $20-$130 which can be less than multiple visits to the doctor's office in the long run.  If you are doing physical therapy, the article suggests working with your therapist to put together a home exercise program that would relieve you from multiple trips to the office for a workout.  In this case, you need to be motivated.  Having the therapist put together a plan and then not following it will only result in more problems.  Lastly, when going to the doctor's office don't be afraid to ask them what the price would be if you pay cash.  Doctors may be willing to reduce their price if you pay cash.  This negotiation tactic will work in many other scenarios as long as you don't forget to ask.  

Another example for savings on medical expenses is transitioning to generic medications when possible.  It's important to check with your doctor when looking at generics, but also its important to see what prescriptions will be covered under your insurance provider.  Don't forget about mail order for things like your medications and prescription eye wear.  Purchasing these items in bulk can result in significant cost savings.  The article also points out that you can source your prescriptions through websites such as which allows you to find the lowest cost prescription drugs at local and online retailers.

There is a few more cost savings tips in the two articles; however I believe the best savings strategy for medical expenses is to make sure you are taking care of yourself.  Taking the first step of eating right and exercising can go a long way in reducing your medical costs.
Canadian railway workers go on strikeWorkers at the Canadian Pacific Railway recently walked off the job, starting a strike that could have a detrimental impact on several industries.

Canadian Pacific accounts for close to 40 percent of Canada's rail activity. According to Bob Ballatyne, president of the Canadian Industrial Transportation Association, anything more than a few days is going to have a huge impact on Canadian supply systems, according to CBC News.

Among the industries expected to be affected by the strike are coal mines, farms, auto manufacturing plants and possibly Canadian Tire.

"We are actively working to mitigate any impact to our operations through alternative shipment methods," Chrysler Canada spokeswoman Lou Ann Gosselin wrote in an email to CBC.

Fadi Chamoun, a research analyst at BMO Capital Market in Toronto, recently reported that the Canadian Pacific Railway, which had revenue of $5.2 billion last year, could possibly see $13 million a day in lost or delayed revenue, according to the news source.

The Canadian Labor Minister Lisa Raitt recently introduced legislation to end the strike. CP is Canada's second-largest railroad behind Canadian National Railway Company.
Supply Chain Managers are facing unprecedented pressure from consumer and activist groups to increase transparency regarding the sustainability, ethics, and fair labor standards of their low cost country suppliers.  The high profile story of Apple's Chinese supplier FoxConn and their factories' labor conditions have led many to investigate how labor conditions come to be harsh or unfair and what can be done to avoid it.  Some resources that supply managers can utilize while looking into low cost country suppliers and labor include the Fair Labor Association, The Workers Rights Consortium, and The Ethical Trading Initiative.

The Fair Labor Association (FLA) is an association of businesses, universities, and nonprofits which advise, investigate, and promote fair labor standards in factories, farms, and other labor-intensive businesses.  The FLA was thrust into the spotlight for launching the investigation into  conditions at the FoxConn factories that supply and assemble many popular Apple products.  They released their much anticipated report on FoxConn at the end of March 2012 after interviewing over 35,000 workers.

The Workers Rights Consortium is an independent labor right monitoring organization focused on apparel.  They are currently working to develop an approved supplier list which universities can use to avoid sweatshop labor for university-branded apparel.

The Ethical Trading Initiative (ETI) is an alliance of companies, trade unions and voluntary organizations. They provide ethical trade toolkits and other resources to organizations looking to trade ethically.  Based on ETI's definition, ethical trade means that retailers and their suppliers take responsibility for improving the working conditions of the people who make the products they sell. Corporations that are members of the ETI utilize labor from poor and vulnerable workers, homeworkers, and developing countries in an ethical manner based on the ETI code of conduct.

Supply Chain Ethics and Sustainability is an important issue for supply chain managers.  Any sourcing initiative that utilizes low cost country suppliers should take ethics and supplier labor practices into consideration.
$2 billion mark in supply chain savings passedGlobal Healthcare Exchange, which is a company that helps to lower the cost of doing business in healthcare by constructing better supply chain management, recently passed the $2 billion mark in supply chain savings among its North American customers.

GHX trading partner's savings have been tracked since January 2010 as part of a strategic goal of reducing healthcare costs by $5 billion over the course of five years.

"This is an important milestone for the healthcare industry," said Bruce Johnson, president and CEO of GHX. "Our industry continues to face incredible scrutiny and we need to work together to aggressively cut costs from our healthcare system. GHX is working with members of our GHX Global Network in the U.S. and Canada to provide a catalyst to driving more than $46 billion in electronic dollar volume through the GHX Exchange in 2012."

GHX has been an extremely influential company in the healthcare supply chain, accumulating more than 24,600 acute and non-acute care provider organizations and 10,900 medical-surgical supplier divisions in the United States, Canada and Europe.

On its website, GHX lists 10 ways for healthcare organizations to save on supply chain expenses. One tip is to centralize purchasing, another is to consider both the cost and efficacy of supplies used in the healthcare environment.
Airline industry as model for healthcare supply chainAccording to a recent post on Healthcare Matters' website, the airline industry is proving what the phrase "last in wins" means when referring to supply chains - and this could be relevant to healthcare.

Older airlines are at an extreme disadvantage compared with newcomers because they have the added expense and responsibility of managing maintenance and repair for multiple types of models of various aircrafts they required over time.

Each aircraft model has its own replacement part program, which requires a different set of maintenance and engineering skills, which from a supply chain perspective can be a disaster to manage. The different parts requiring different sets of maintenance and engineering skills is the reason that some airlines have filed for bankruptcy multiple times in the industry. New airlines have flown into the industry with a new and improved business model that optimizes load capacity while minimizing supply chain expense.

This is similar to the situation in healthcare, the article said, because medical care providers are also looking to work with as few vendors as possible to standardize sourcing and quality of care. Furthermore, the healthcare industry may be moving toward a model in which those who are willing to pay a premium for care might in effect subsidize the care of other patients, similar to the way first-class passengers offset costs for those in coach.
Supply chain improvements targeted by PinnaclePinnacle Food Group LLC, which is a producer, marketer and distributor of high-quality branded food products, recently announced plans to continue improving the efficiency of its supply chain by downsizing its Vlasic pickle production into one plant in Imlay City, Michigan.

Another pickle production plant that is affiliated with Pinnacle - in Millsboro, Delaware - will stop production around the end of the year.

"It is never an easy decision to close a plant," said Tony Fernandez, executive vice president and chief supply chain officer of Pinnacle. "We came to this conclusion only after a detailed analysis of all potential options, which determined that the Imlay City plant is the most viable choice for the long term. The employees in Millsboro have been a valued part of our business and their dedication and contributions to the company are appreciated."

All employees who were employed at the Millsboro plant will have the opportunity to apply for open positions at other Pinnacle facilities during the transition. The company is also offering professional career support services.

Reporting on the plant closing, local news source the News Journal said that Millsboro was chosen as the location for the plant in part because the salt content of the Indian River matched the pickle brine, enabling easy discharge.

BYOD is an idea that management sees as a savings opportunity: the mobility budget can potentially be removed altogether, taking ownership and liability away from the company and placing it on the user.

Ideally what would happen is the user would pay for their own device and plan, but that almost never happens because if employees feel that if they are expected to use the device for work then the company should pay for it.  Instead, stipend or reimbursement programs are setup.  Stipends are determined based on what’s reasonable to cover the user’s costs.  The problem is: who determines what’s reasonable and who enforces it?  Also, individual user costs are almost always higher than when spend is aggregated, leveraged and optimized as part of a group plan, so costs net neutral or stipends can become even more expensive than company liable plans.  In addition, a certain level of control may be sacrificed because monitoring compliance with reasonable stipends, appropriate plans, features, and usage can become far more difficult to manage than when users are under a corporate liable plan.  Further, support does not go away and can be even more cumbersome to manage if the BYOD program allows for significant variety in devices and plans.

BYOD can only be an effective way to reduce costs if it’s implemented carefully under a strict policy that is managed closely and carefully.  There is also potential to reduce future costs by eliminating device purchases from the corporate budget.  While reaping the potential financial benefits of BYOD, the company can also leverage the policy to mitigate liability for what users do with their phones for personal use, whether it involve harassment or accidents related to inappropriate use.

Tips include:

·         Stipend capping:  identify a reasonable monthly stipend that will cover all users or a stipend that will accommodate various tiers of users.  For example, sales may need a larger stipend because they are on the road and consume more voice and data.  Employees who travel internationally may need a different stipend than administrative employees may need, etc.

·         Device restriction: If the company is paying for devices, restrictions may be placed on company supported and reimbursed devices.  Or, stipends may be capped to a dollar value and a given interval (once per year or every two years).

·         Support structure:  A decision needs to be made about who gets support and what level of support they get before deploying BYOD.  Various user groups may get different levels of support depending on their role in the organization. 

·         Access and security: In order to effectively onboard users, a security and access policy must be implemented that suits the culture of the organization.  Selecting to require users to password protect their entire device may not be as acceptable to the user base as using applications that allow the user to have a separate virtual device for personal and company use.  In the same way, read only access may be ok for some organizations, but others will require the ability to manipulate and upload files from their mobile device.

·         Compliance:  Management is key to rolling out BYOD.  Creating the policy is the first step, but the user base should be audited at least twice a year to ensure compliance from a device, plan, and stipend standpoint.  Mobile Device Management (MDM) will assist organizations in tracking their policies and users.
Samsung is releasing the Galaxy S3, the latest Android smartphone, today to 28 European and Middle Eastern countries who have pre-orders.  The US Market should see the Galaxy S3 in the summer of 2012.  Samsung boasts 9 million pre-orders worldwide in anticipation of the new release.  The Galaxy S3 is designed to compete with Apple's iPhone and features
  • a 4.8" Super AMOLED (larger than iPhone 3.5") touchscreen
  • 8MP rear facing camera
  • 1.9MP forward facing camera
  • Android 4.0 Ice Cream Sandwich
  • dual core processor powered by Exynos Quad 1.4GHz quad-core
  • 1 GB of RAM
  • 16/32/64 GB of internal storage (expandable up to 32GB)
  • Li-Ion 2050mAh battery
Although Samsung plans to fulfill all its white Galaxy S3 pre-orders by launch dates, rumor has leaked that there are delays on the marble white and pebble blue versions due to "manufacturing issues."  The delay is anticipated to extend the marble white and pebble blue launch by 2-4 weeks.  Irregularities during the hyper-glazing of the pebble blue has produced a "blotchy" finish on the plastic casing.  Over 600,000 cases have been disposed.  The good news is that the irregularities have been resolved and a new production run is underway.

Pearson acquires GlobalEnglish Pearson, one of the world's leading learning resources companies, recently announced that it has acquired GlobalEnglish for $90 million in cash.

GlobalEnglish was founded in 1997 in California and provides cloud-based, on-demand business English learning software. The company serves more than 450 corporate customers, which include 20 percent of Forbes' Global 2000 companies.

"This transaction is a wonderful endorsement of the value of GlobalEnglish's unique focus on enabling the productivity and high performance of global professionals with innovative, cloud-based business English software," said John Fallon, chief executive of Pearson's International Education business. "GlobalEnglish's solutions are perfectly aligned with Pearson's dedication to digital transformation and international expansion, and a strong complement to Pearson's existing portfolio of offerings."

The transaction is subject to approval by GlobalEnglish's shareholders, but it supports Pearson's efforts to become a bigger player in the market for business English products. The market is substantial, with an estimated 2 billion people worldwide learning English.

Through its foundation, Pearson also recently launched an interactive portal, which provides direct access to data sets to support The Organization for Economic Co-operation and Development's Skills Strategy. This is an initiative to help countries develop and supply skilled workers to improve economic conditions globally.
Top tips for preparing a merger or acquisitionWith tight credit and cost pressures driving merger and acquisition activity, according to a recent Canadean report, an expert recently gave tips on M&As that could be helpful to a company that is starting to think about future plans.

Brian Mazar, CEO of American Fortune Mergers and Acquisitions, gave his tips on what owners should consider before engaging in a merger or acquisition.

“Owners should be aware of the inherent conflict that arises with running a business and preparing it for sale,” Mazar said. “Many businesses are run with the objective of minimizing tax liabilities. Unfortunately, the same techniques and accounting practices that minimize taxes also minimize the value of a business.”

According to Mazar, the best time to sell a business is when the business is performing well and future projections are showing positive numbers. The CEO recommended standardizing and documenting all company procedures, eliminating liabilities or liens, and resolving any outstanding litigation that might be pending.

IBM recently completed its acquisition of Varicent Software, which is an analytics provider, in an attempt to enhance the company's smarteranalytics capabilities and possibly reduce costs by creating a more data-driven workforce.
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If you have been in a Home Depot store in the last few months, you may have noticed a bright blue button flashing at you as you try to complete your transaction. Paypal has partnered with the home improvement giant, and has begun rolling out this new payment option at an amazing rate; already there are over 2,000 stores participating in less than 6 months! It is an interesting situation that has placed Paypal into the realm of in-person, retail payment solutions, one whose future may or may not depend on the consumer's inclination to use it.

Where is the motivation?

It is clear when looking from Home Depot's perspective. Credit card processing fees have always been a significant cost for any retailer, while providing no concrete gaurentee of payment. After all, it only takes a single employee forgetting a signature, or a dishonest patron's "dissatisfaction" with the transaction to have the money recovered from the merchant. Real monetary costs are incurred for a chargeback occuring, even if it is ruled in the merchant's favor! With all of the existing and potential costs, it is no wonder that retailers are jumping at an alternative, usable means of payment that will not only protect them from their own customers, but also gives them repreive from the fees being charged by the banks, card associations, and processors. But is this new payment alternative a reality in Paypal? Paypal is certainly less expensive for a merchant to accept. Where processing fees for typical credit card transactions are based on percentages, which fluctuate based on volume, Paypal entices merchants by charging only a flat transaction fee, allowing large volume retailers like Home Depot to significantly reduce their costs.

Will people actually use it?

One concern that consumer's have is transaction security. Visa has implied PayPal’s system poses security risks, and that identity thieves could potentially see a paying customer’s account number as they enter it in at a payment terminal. The arguement is made that while card transactions have a many failsafes to protect consumers (hence the expensive fees!)with only an account ID and password, there is little to stop a fraudlulent activity if that inforamtion is compromised. Controlling the ability for this information to be compromised has proven difficult, due to Paypal's integration with a multitude of websites which may or may not have the same security validations that Paypal's internal site boasts. Consumers have very little motivation, since the process is not any more simple than swiping their credit card. Paypal accounts need to be funded, similar to a debit card requiring money in a bank account. In a recent trip to Home Depot, the cashier advised me that he had not seen a single person paying in this manner. He blamed not only a complicated process, but a lack of consumer interest for the lack of the programs use in that peticular store.

Whether or not Paypal will continue to grow it's retail market share has yet to be seen, but one thing is for sure: The need for an alternative form of payment has been a long time coming...
The Association for Operations Management (APICS) recently posted a review of Managing Indirect Spend: Enhancing Profitability Through Strategic Sourcing, published in 2011 by John Wiley & Sons, and listed the text as a "Common-Sense Advancement" resource. 
"To run a business you need supplies, insurance, an accounting department, a marketing department, telecommunication services, and a variety of other items not directly related to creating your product or service. Collectively, these types of expenses are referred to as “indirect spend.” Indirect spend can be considered any spending an organization does that is not tied directly to a finished product or service. It can be substantial—as high as 40 percent, according to authors Joe Payne and William R. Dorn Jr."
The reviewer, Karl M. Kapp, EdD, CFPIM, CIRM, also provides a brief description of each of the book's four sections.  He specifically highlights the chapter on what not to do in the first section as a great asset to the text.

He concludes:
"This text provides a comprehensive look at indirect spend. The application of the suggested tools and techniques can help an organization effectively manage indirect spend and streamline supplier relationships."
 For more information about Managing Indirect Spend, visit
Survey released on procurement strategies in food and beverage industryThe "Global Food and Beverage Survey 2012-2013: Market Trends, Buyer Spend and Procurement Strategies in the Global Food and Beverage Industry" report was recently released by Canadean, showing the progress the industry has made over the past year, and providing insight into what the future may hold.

The report provides data and analysis on spending outlooks, budgets, supplier selection criteria, business challenges and investment opportunities related to food and beverage procurement.

According to the report, executives from the global food and beverage industry are expecting a jump in the levels of consolidation. Forty-six percent of respondents reported that they are anticipating there would be a significant increase in merger and acquisition activity over the next 12 months.

Mergers and acquisitions are expected to increase as a result of the lack of credit available, increasing cost pressures and creating liquidity problems at smaller companies. M&A activity could also be spurred by the desire of companies to achieve greater efficiency in the realm of procurement by scaling up.

The Global Packing Industry Survey was also recently released, showing budgets are set to increase by 11.5 percent this year.
Procurement a good choice to lead IC initiatives A panel of speakers recently came together for a webinar that was hosted by the Human Capital Institute, highlighting independent contractor engagement and management issues.

The panelists agreed that HR, legal and procurement were the best fits to drive the most value from IC management, if they are working together.

According to the "Contingent Workforce Management: The Next-Generation Guidebook to Managing the Modern Contingent Workforce Umbrella" study, contingent workforce management in today's economic environment deals with a complex set of sub-components that are beyond traditional temporary labor. Furthermore, more businesses are relying on independent contractors to undertake projects, according to a blog written by one of the webinar panelists, Christopher Dwyer of Global Supply Management.

According Dwyer, procurement-led contingent workforce management programs are 64 percent more likely to extend in a high visibility way across an enterprise, and 30 percent more likely to outsource management of contingent labor duties to third-party solutions.

A new mobile workforce management software called Smart Collaboration was recently introduced, taking a step into social networking, which allows users to find resources in their field and automatically connects them to people with needed expertise, which could streamline the contracting process.
Joe Payne and William Dorn of sourcing firm Source One will be presenting:
"Getting the Most out of Strategic Sourcing" for Next Level Purchasing's members and guests this morning at 11:30 AM EST.  It's not too late to sign up for this free webinar.

This presentation will focus primarily on the reasons why you should be tracking your sourcing initiatives beyond the RFP.  It will outline the required reporting activities  (with examples) and explain how tracking and reporting not only ensures cost savings are achieved, but also helps to increase the perceived value of procurement within your organizational structure.

Learn More or Register for Free
Colleges could cut costs to reduce student debt burdenJust in time for graduation season, the nation's unemployment rate is decreasing significantly, making it somewhat easier for recent college graduates to start a career in their field of study.

In addition to the job market looking better for college graduates this year as opposed to the last few years, recent graduates are also facing a hefty amount of student loan debt, which could cause economic hardship.

A recent survey conducted by the Pew Research Center revealed that 94 percent of parents expect their child to go to college, but 57 percent of Americans say colleges fail to provide students with good value for the money they spent and 75 percent of the public believes college is too expensive for most Americans to afford.

Given this context, the Philadelphia Inquirer recently ran an editorial calling on colleges to cut costs to reduce tuition. It singled out High Point University in North Carolina as a school that could eliminate some expenses, such as the free ice cream available from a truck that drives around campus.

Despite criticizing High Point, the editorial acknowledged that reduced support at the state and federal levels have made it difficult for many colleges to operate. However, given the current economic climate, the newspaper said that colleges and universities have to take a hard look at where they can cut costs and make the adjustments necessary to remain viable.
Randa acquires Swank Randa Accessories Leather Goods LLC, which makes and distributes lifestyle accessories, recently completed its acquisition of Swank Inc., a leading designer of men's and women's belts, leather accessories, jewelry and suspenders.

The acquisition was bought at $10 a share, which is estimated to mean a $57.3 million total purchase of the company.

"We are very pleased that Swank is joining our family of companies," said Jeffrey Spiegel, CEO of Randa. "The strategic benefits of this combination are clear and we are happy to have provided terms that were financially attractive for Swank's stockholders. Randa continues to invest in the future of our company, our associates, and our retail and brand partners."

Spiegel added that the acquisition gives "additional classifications, points-of-sale, brands and scale" to the growing brand of Randa. The acquisition appears to be another move toward supply chain optimization for Randa, which began as a neckwear company and now distributes fashion and lifestyle products worldwide.

Swank stockholders who hold stock certificates will receive letters that will instruct them on how to send their shares to American Stock Transfer & Trust Company.

Swank recently reported its financial results for the three months ending in March, showing an increase of 8.9 percent in sales.
Corn sales increase while soybeans declineDomestic corn sales rose for the third straight day on May 16, after the U.S. government reported sales to China, which is the world's largest hog producer.

The climb in corn sales is a sign of increased demand for the grain in livestock feed. U.S. exporters sold 900,000 metric tons of corn to China, which included 660,000 tons that were previously reported as being sold to unknown destinations, Bloomberg reported, citing U.S. Department of Agriculture information.

“The China corn-sale announcement is positive because it shows they are willing to buy on weakness,” Jim Riley, a grain broker for the Linn Group in Chicago, said in a telephone interview with Bloomberg. “With a big crop on the horizon, we will need to see more buying from China.”

The United States was the largest producer and exporter of corn last year, in addition to soybeans, which declined in sales.

Shares of wheat also climbed on the 16th, according to CNN.
Pharmaceutical companies prepare as Plavix, other blockbuster drugs lose patent protectionIn yet another major loss for a pharmaceutical giant, the blockbuster drug Plavix is set to lose patent protection this year.

Plavix, which Bristol-Myers Squibb sells in the U.S. through an agreement with Sanofi-Aventis, is one of the most popular drugs in the world. Since first hitting pharmacy shelves in 1997, Plavix has become one of the most prescribed and utilized medical therapies in cardiovascular health.

The drug helps prevent blood clots that could potentially lead to heart attack and stroke in at-risk patients, Steven Nissen, the chairman of the Cleveland Clinic's cardiovascular medicine department, said in an interview with The New York Times. He added that when used in conjunction with aspirin, Plavix was significantly reducing the incidence of such potentially fatal cardiac events.

The drug manufacturing sector has been upended over the past few years, as other lucrative prescription medications also lost patent protection and large biotechnology firms went on acquisition sprees. On Thursday, the pharmaceutical intellectual property rules that had formerly prevented Plavix from being sold in generic form will expire, and experts said the repercussions would be felt throughout the healthcare sector.

In anticipation of the likely drop in sales, Bristol-Myers Squibb said it would not actively promote Plavix. Though the loss of patent protection is a blow to the pharmaceutical giant's revenue, it will ultimately benefit consumers as lower-priced generic versions of the medicine are produced.

Bristol-Myers Squibb and other biotechnology companies are reeling from such losses. Pfizer, the largest such U.S. business, has struggled to drive sales of Lipitor since the drug lost patent protection last year. In 2012, the pharmaceutical industry is set to lose a total of $38.5 billion because of the expiration of such non-competition provisions.

Companies have mulled a number of varying responses to the loss of patent protection, though none have emerged as a clear winner. Pfizer, for instance, has slashed its research and development and implemented ambitious cost reduction initiatives, campaigns that have thus far pleased shareholders. However, the company's pipeline has lagged as a result, and analysts have questioned whether such decisions would prove prescient or ill conceived over the long-term.

The loss of the sole rights to Plavis will likely have an outsized impact on Bristol-Myers Squibb. According to the company, sales of the drug hit $7.1 billion in 2011, a figure representing approximately 35 percent of total revenue. Over the course of its lifetime, Plavix has generated nearly $43 billion in sales.

Regulators have thus far given seven pharmaceutical companies the authority to manufacture and sell a generic form of Plavix, according to the Times. Companies across the globe actively work to prepare for the expiration of patent protections, as the pharma supply chain is circuitous and laden with complex safety rules. Uday Baldota, a Sun Pharmaceutical Industries spokesperson, asserted the firm often spends between seven and eight years readying for the introduction of a new medication.

Underscoring how careful logistics and business planning ultimately pays off, a generic version of Plavix is set to hit the U.S. market Friday, a mere 24 hours after Bristol-Myers Squibb officially loses its stranglehold on the drug.

Royal Dutch Shell sees higher natural gas prices Officials at a major global oil company reckon natural gas prices will rise over the next few years.

The Financial Times reports Royal Dutch Shell projects natural gas prices in the U.S. will roughly double by 2015. The price of the hydrocarbon has fallen precipitously over the past year, thanks in large part to a surge in hydraulic fracturing, more commonly known as fracking. A jump in the number of fracking wells throughout the nation has fueled supplies, driving down prices.

However, Royal Dutch Shell officials are betting demand for natural gas will surge over the course of the decade, especially as the fossil fuel replaces coal as the primary U.S. energy source. What's more, Royal Dutch Shell chief executive Peter Voser asserted that producers would likely curtail production because of the historically low prices. Such a move would support cost savings plans and bolster demand.

Voser said Shell is eyeing a price of between $4 and $6 per million British thermal units for 2014-2015, according to the news provider. Natural gas prices currently hover around $2.50.

The surge in fracking has quickly allowed the U.S. to become the world's largest producer of natural gas.


As a continuation of our last SEO blog, Bill Dorn and I will discuss ways to generate more views to your website with the use of search engine optimization. SEO is an ongoing process that may sometimes be complex and take time. Every business site should aim to incorporate search engine optimization as part of their growth strategies. While most consultants and individuals will tell you the most effective SEO strategy is to produce relevant content and get lots of links to your site, this blog will shed the light on some other very important techniques used to generate effective SEO, or will help you understand what an SEO contractor should actually be doing for you. In order to get the most out of each step, this blog will focus on four very important techniques, while I will add to the list with additional tips and techniques within the next few weeks.

Quality information. Google has taken the lead and all other search engines are following, they want to see relevant high-quality information on websites.  In an attempt to cut down on garbage and spam websites, they have recently increased the importance of high-quality content in their ranking mechanisms. If you do not have time to provide users with high quality information, it may be beneficial to hire web content writers to provide articles and blogs, however be careful of plagiarism (  Search engines penalize you heavily for having duplicate content on your site.

Updated content  Another component of having quality information is having current and frequently updated information.  This shows search engines that your site has not been abandoned.  If you have a site that is highly static in its information, think about adding a blog or news section that you update periodically.

Keywords are Key.  One word explains it all. It is important to carefully select keywords that relate to the content you which to establish. Make sure that those keywords are used frequently within the pages and content of your website.  The frequency of the keyword usage (in comparison to the total page content and page content) has a large bearing on your ranking in topic searches on search engines.  Use keyword and keyword phrases frequently, but make sure the site is still readable by a human.  Also, don’t forget to have meta-tags that match the page you are on, we will talk about them in the next blog post in this series... 

Start a blog or participate in other blogs:  Blogs are an ideal place for new and unique content that also gives users the ability to join in on the conversation. Reading and commenting on other blogs can also increase exposure. One tip on blog SEO  is to have a focused industry or themed site. If you build a blog site with several pages of content on the same theme, this will increase your chances of ranking and ability to be viewed as an authority on this topic. 

All companies strive to bring more traffic to their sites which in hopes will bring more business. There are several important ways to generate more views to your website with the use of SEO. The above techniques are some of the most basic and  quickest ways to implement into your existing web designs. These techniques above will help to optimize and enhance your site from search engines. It is important to remember that if you are not able to dedicate enough time and effort to incorporate these techniques and work through any problems you may encounter, it would be wise to reach out to consultants who are able to devote additional time and knowledge. The next part of the series will focus on several other tips used to get the most out of SEO.

Delta purchases Trainer oil refineryDelta Air Lines recently announced it is taking steps to purchase the ConocoPhillips oil refinery in Trainer, Pennsylvania, for $150 million.

Delta, which is the nation's second-largest commercial airline, is hoping to secure a steady source of discounted jet fuel in an effort to improve spend management and reduce its fuel expenses by $300 million a year, according to the Philadelphia Inquirer.

The airline spent an estimated $11.8 billion on jet fuel in 2011, which was 36 percent of its operating expenses, making a more affordable source of fuel a necessity for the company, the newspaper stated.

“Acquiring the Trainer refinery is an innovative approach to managing our largest expense,” said Richard Anderson, Delta’s CEO.

Anderson added that the refinery price was the equivalent to one wide-body aircraft, the Inquirer noted. The deal was announced following the closing of the stock markets. Delaware County, where the facility is located, has been reeling due to challenges facing the local refining industry, and so officials were pleased to hear of Delta's decision.

According to Delta, more than 160 million passengers fly with the company every year. It was named the domestic Airline of the Year by Travel Weekly magazine.
Tech companies purchase wireless patents Nvidia Corporation and Intellectual Ventures recently acquired close to 500 wireless communication patents in a joint business decision, which is expected to push Nvidia beyond personal computers.

The patents were purchased from IPWireless and include technology for advanced wireless technology, which is known as 4G Long Term Evolution, according to the Wall Street Journal.

Financial terms weren't disclosed in the deal, but both companies will split ownership of the patents, allowing cost savings and an increase in revenue, if successful.

Nvidia is known for chips graphics processing units, which generate visual effects in PC videogames, the source stated. The company made a significant move by teaming up with Intellectual Ventures in an effort to move beyond PCs and into supplying technology for mobile devices such as smartphones and tablets with its mobile processor called Tegra.

According to a recent wireless survey cited by Ars Technica, 91 percent of Americans use cell phones, which would put Nvidian in a great market for profitability. This might be especially true considering LTE technology is becoming more popular in the United States among carriers attempting to build out their networks in the upcoming years, according to the WSJ.
Once unheard of on college campuses, cost reduction initiatives increasingly commonplace The growing burden of student debt in the U.S. is prompting many universities to scrutinize cost savings initiatives and spending projects, The New York Times reports.

The financial and housing crises that sparked the most recent recession underscored how bubbles can impose far-reaching economic consequences. The U.S. has experienced only tepid economic growth in the wake of the worst economic contraction since the Great Depression, and cash-strapped states are still struggling to remain solvent as they contend with a drop in tax revenue and moderate GDP expansion.

Federal and state lawmakers have therefore championed an array of cost reduction initiatives in an effort to reign in what some officials have dubbed "runaway spending." Runaway or not – and there are most certainly examples of fiscal mismanagement at the government level throughout the U.S. – some of those campaigns have affected publicly funded universities.

E. Gordon Gee, the president of the Ohio State University, is a veteran of academia, and he is warning about the potential dangers associated with the precipitous uptick in higher education costs. Certain state governments have cut funding to their flagship universities by more than 20 percent over the past few years. While they often reduced money tp nearly all government-backed organizations, the effects of such cutbacks could be dire to the nation's education system, experts warn.

U.S. student debt has jumped to more than $1 trillion, and that has prompted a number of economists to study whether such an exceedingly high debt burden could potentially hamper a sustained recovery. While many schools contend they have little choice but to offset the reduction in funding onto prospective and current students, Gee noted such a strategy is doomed to fail.

"The notion that universities can do business the very same way has to stop," he said.

Gee has a unique perspective on the subject, owing to his long career as a school administrator. He currently chairs a commission studying the growing burden of student debt.

Universities and nonprofit schools are increasingly behaving like businesses as they look toward a future where their ability to simply raise tuition no longer exists. Even now, experts contend, mounting debt loads are preventing many students from pursuing a college degree at certain institutions, especially if they could potentially get a better deal at another school.

Universities are mulling layoffs, privatizing certain divisions and increasing private fundraising, among other solutions, but some experts warn unless they move quickly, the next major bubble in the U.S. could be higher education.

Philips chief looks for extra savingsRoyal Philips Electronics, the world's largest lighting company, is pursuing a cost reduction program  to make sure the business is prepared for the future.

The reduction will be in addition to a $1 billion savings program that was started last year, according to Bloomberg. To achieve the proposed reductions, the company will reconsider infrastructure, IT and real estate spending at its Dutch headquarters.

“We need to make sure the way we work is suitable for the 21st century,” CEO Frans van Houten said in a presentation at an investor day in Boston. “We will continue to look at additional cost-savings opportunities.”

Houten recently set a 4 to 6 percent target for sales growth by 2013, pending gross domestic product increases at 3 to 4 percent in the next few years. The company has a 2013 goal of earnings of 10 to 12 percent, prior to interest, taxes and amortization, Bloomberg reported.

At the end of the first quarter of 2012, the profitability of the company was at 9.8 percent. Houten stated that the company still has a long way to go to accomplish the 2013 goals.

Philips recently announced a healthy profit that was spurred by sales and gains from assets, which sent shares higher in the market, The Wall Street Journal reported.
May 18, 2012 will be the day a few visionaries will remember as the day they became millionaires - or even billionaires - with Facebook’s debut on the Nasdaq Stock Market. The facts are that Facebook is expected to raise approximately $10 billion to value the company initially at $78 to $96 billion based on a midpoint stock price of $31 (from a range of 28 to $35 a share), this event will make Facebook the biggest company to go public in history. Anticipation to Facebook’s IPO is such that is already causing arbitrage from some analysts, who are valuing shares as high as $46. The truth of the matter is that Facebook's IPO is expected to surpass the precedent set by today's titans Google and Amazon IPOs.

Despite the buzz, the fact is that Facebook’s IPO is relevant in many contexts, from the historical stand point to the financial environment to the practical and ordinary lives of its – so far – 900 million users (myself included). Among the many domains where Facebook’s IPO will have an impact there are four of greater importance that I would like to point out.

Financially, this public offering represents a major come back opportunity to the investors and venture capitalists who seven years ago made Facebook possible by injecting the start-up cash the company needed. Firms Greylock Partners and Meritech capital investments on Facebook will be worth over $1 billion each, and for Accel Partners, their initial investment of $12.7 million will be worth well over $6 billion after the IPO. In addition to this, Facebook’s IPO represent a much more solid opportunity to smaller companies that throughout adding value to the social network can generate steady income and economies of scale via Facebook; a good example of this is Instagram recent acquisition for about $1 billion.

Socially, Facebook has proven to be a tool for the masses; what started as an online directory of Harvard students is now one of the most powerful connectivity tools available in the world, which has served to reunite people, organize flash mobs and orchestrate social revolts against governments and dictatorships. As Facebook builds up its value and its technological platform by adding features to the site, creating ventures and improving its user base, the company will continue to exponentially grow in social and political power.

Technologically speaking, today Facebook is responsible for over 50% of the virtual communication content worldwide (e-mail accounts for about 15% only), and along with over 100 billion “user” connections, Facebook represents the largest data base ever created by a single organization. Facebook’s infrastructure not only allows anticipating trends and market behaviors but also provides the resources to manipulate seasonality and map the human global network. With this power, Facebook becomes not only the source of information, but its broker. Think about what this means in the stock market; in a place where reality is based on expectations and with Facebook being both the repository of public perception and the tool where public opinion is created, Facebook could potentially use some of its build-in tools and algorithms to forecast the value of their own stock.

Finally, in the Business environment, once again and as always information is power and it’s more sellable than ever. Between Facebook users “comments” and “likes” to different items, products and services, the company has approximately two trillion pieces of marketable content. Companies both large and small can use this information to advertise better, redefine their customer base and listen to what people like and how they like it. For any given company, Facebook is not a sample of the population to conduct a survey, is the market itself concentrated in a single place of easy access. To this, the capacity of Facebook to share and sell this information becomes one of its greatest assets; I’m sure that all sort of businesses will happily pay a dollar or two to gain access to their target market if it means more and steadier sells. Needless to say, an asset of this magnitude will reflect its value on Facebook’s share price.

Personally, I believe Facebook fits the best definition of the “For the people, by the people” company. It’s a company that feeds on itself, that grows and evolves organically and that can potentially last for as long as society allows it to. Facebook’s IPO represents more than the trading value of the stock; as a public company, Facebook stakeholders are the shareholders, who will dictate not only the contents and new trends of the company, but its market value, its share price and ultimately its fate (nevertheless, with over 55% voting power, this is all contingent upon what Mr. Zuckerberg will permit).
The authors of “The Procurement Game Plan,” Charles Dominick and Soheila Lunney, were recent interviewed by Buyers Meeting Point in a featured publication spotlight. When asked what industry books the authors would recommend, Dominick, President and CPO of Next Level Purchasing, stated:

“I enjoyed ‘Managing Indirect Spend’ by Joe Payne and William Dorn because it is written in a real world way, something that is sorely missing in procurement books.”
With similar a similar goal as the authors of Managing Indirect Spend: Enhancing Profitability Through Strategic Sourcing, Dominick and Lunney developed “The Procurement Game Plan” as a resource of best practices and an instructional tool on how to implement them.

Charles Dominick will host Joe Payne and William Dorn as leaders of an upcoming webinar entitled “Getting the Most from Strategic Sourcing” available through Next Level Purchasing on May 22, 2012 at 11:30 a.m. EST.

To register for Getting the Most from Strategic Sourcing:

If you're already an NLPA member: Log in to the members' area at and navigate to the "Webinars" tab. There you'll find a registration link, be sure to enter a valid email address as attendance details will be sent to you by email.

If you're not yet an NLPA member: Sign up for your free membership in the Next Level Purchasing Association at After doing so, you'll receive an email with information about how to log in. After logging in, navigate to the "Webinars" tab. There you'll find a registration link, be sure to enter a valid email address as attendance details will be sent to you by email.
Focusing on cost savings, small employers in Massachusetts cut back on healthcare offerings Increasingly concerned about cost savings initiatives, small employers in Massachusetts are requiring employees to pay a greater share of healthcare fees, a new analysis reveals.

The Boston Globe reports small businesses are increasingly offering health insurance plans to employees that carry higher out-of-pocket expenses. Employees of such companies are more likely to pay more money for doctor's visits, diagnostic tests and other medical services, according to a study conducted by the Division of Healthcare, Finance and Policy.

According to the group's calculations, 27 percent of the people in the Bay State who acquired insurance through the small group market had some of the highest deductibles and copayments of all insured people. That figure represents a marked climb from 2008, when only 2 percent of people qualified as such.

The organization's study warned, moreover, of the dangers of such a business tactic. Researchers said offsetting costs onto employees would likely not "be viable for much longer." Massachusetts' laws require health insurance policies to cover a wide swath of benefits without charging too much, and the study said small businesses are quickly approaching the minimum coverage threshold.

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What is the world coming to when parents are worried about their child’s self-esteem because of an entertainment application…that they are probably paying for? I have seen numerous news reports online and on TV where parents are getting upset about the “Ugly Meter” application and state their child is being made fun of or having negative experiences as a result. The “Ugly Meter” is a facial feature recognition application that assesses your looks on a scale from 1-10 and then provides some comments based on the number result; 1 being ugly and 10 good looking. Users can then upload the result to Facebook to share with friends.

Let’s look at this again…the app is meant for entertainment not government quality facial recognition technology used for security checks, the app needs to be purchased, the result needs to be published, and a child has a smartphone.

I have a few questions and suggestions for the parents that have these concerns:

  • Put some parental control on the devices you give to your child…block downloads.
  • If your child is using Facebook then they know their friends will see their profile. If they are willing to upload the results of the “Ugly” test then they should be prepared for consequences.
  • If your child uses the “Fat Booth” are they going to have an obesity complex?
  • Why does your child of 8 or 10 or 12 have a smartphone?
My final recommendation would be to tell your child that beauty is in the eye of the beholder or to run the test again on the same or different picture until they get the 10 they are looking for.
U.S. farmers dreaming of record corn cropU.S. farmers are eyeing a record corn crop this year, NPR reports.

Though the 2012 corn harvest is still in its development phase, farmers across the nation are hoping for a bumper crop this year. Favorable weather conditions, including a mild spring and precipitous uptick in planting have helped fuel prospects about this fall's harvest, according to the news provider.

According to new data, the Great Depression was the last time farmers planted as heavily as they did this year. Agricultural technologies have significantly improved since then, further bolstering hopes of a record yield. Bill Couser, a farmer in Nevada, Iowa, told NPR the signs of a healthy corn harvest are mounting.

"This corn crop will knock your socks off, if all the stars line up and the good Lord gives us that blessing," he said. "You can just start seeing everything kinda poppin' up through."

A robust harvest would bring a windfall to U.S. farmers, as global demand for the grain has soared over the past decade. U.S. subsidies supporting the domestic ethanol industry have further supported the spike in corn prices, experts assert. Still, a jump in U.S.-produced corn could have a significant impact on prices.

In an effort to earn a piece of what could be record earnings, farmers have increased their planting at twice the rate of an average year. According to NPR, more than half of the U.S. crop this year is already planted, a move that carries risks but could prove profitable over the course of 2012, noted Paul Bertels, an economist with the National Corn Growers Association.

"The sooner you get the crop in – provided you don't have a cold snap – you'll actually get that plant through pollination before the real heat of the summer," he said.

Some farmers have had to scrap cost savings plans as they increased corn planting. While they are bullish on this year's harvest, a marked jump in supplies could satiate demand, ultimately driving prices lower. Couser and other farmers are aware of such risks, but for many, the allure of record profits eclipses their worries.

Experts are largely optimistic, though, in this year's bumper crop. A number of agriculture economists affirm that even if a record harvest were to cause prices to fall, the revenue generated through excess inventory would mitigate such effects. What's more, worldwide demand for food is only going to continue to climb as nations such as Brazil, Russia, India and China (BRIC), along with other developing regions of the globe, experience rapid population growth.

More importantly, a drop in corn prices by $1 per bushel would afford businesses and other nations increased purchasing power. Food companies have struggled to contend with soaring raw materials costs over the past few years, according to industry analysts, and falling corn prices would bolster profitability.

While food giants such as Kraft have had to implement cost reduction initiatives as they pursued earnings growth, a fall in direct material costs would benefit their overall business strategy.

On the Chicago Board of Trade on Thursday, corn futures for July delivery fell 3.25 percent to $5.87 per bushel. Prices have flirted with record levels over the course of the past year. As recently as the mid-2000s, corn prices hovered between $2 and $3 per bushel, underscoring how demand and prices have soared.

India’s Committee on Health and Family Welfare released a 78 page report revealing an 18 month investigation’s findings that support a collusive nexus among pharmaceutical companies, the Central Drugs Standard Control Organisation (CDSCO), and independent medical experts.

The report illuminates the collusive relationship in the stated parties as a means to bypass expensive and time consuming tests to push drugs into the market.  During the review of 39 randomly selected drugs, 11 drugs were approved prior to performing the mandatory Phase III trials.  Phase III trials serve as a final test of the proposed drugs among different ethnicities living in India.  The trials determine if ethnic variances will alter the drug’s metabolism, efficacy, and safety during administration. 

Drug manufacturers maintain that the safety trials are not necessary if the drugs were approved in its home country.  India’s Health Ministry stated that the head of CDSCO has the authority to approve drugs prior to trial completion in “public interest”. 

The Committee also found that files for three drugs under scrutiny mysteriously disappeared and recommendations from independent medical experts were almost identical.

The report recommends that the government re-examines certain drugs that were approved, investigate violations of Indian laws, and prosecute officials involved.  

This report has exposed loopholes that emerged in India’s rapidly growing pharmaceutical industry.  India is the world’s fourth largest pharmaceutical volume distributor grossing over $12 Billion annually.  The industry is growing 10% every year with investors attracted to this emerging market.  India boosts 10,500 drug manufacturers and services the outsourced clinical research market.

In light of this report’s findings for this emerging giant in the pharmaceutical industry, it is imperative that drug effectively and safety is not compromised to boost cost savings, high profit margins, and a shortened timeline.  India’s primary pharmaceutical market is domestic and its export market makes up roughly 41% of sales.  The prematurely approved drugs are distributed world-wide under international labels.  The immediate ramifications of bypassing Phase III clinical trials may result in domestic troubles, but the domino effect of unexpected ethnic reactions to the drugs may recourse in unforeseen epidemics.

Finding cost savings by cutting out critical processes for ensuring safety and affectivity leads to short term results with long term repercussions that may eventually cost more in money, time, and human life.  Sourcing and process strategies must adhere to ethical standards in order to prove its overall program success.
GlaxoSmithKline eyes hostile takeover of Human Genome Sciences In an effort shore up its pharma supply chain, GlaxoSmithKline is eyeing a hostile takeover of a major pharmaceutical player.

GlaxoSmithKline is set to appeal directly to shareholders of Human Genome Sciences this week as it moves toward a $2.59 billion takeover of the company. Human Genome Sciences rejected the British pharmaceutical giant's proposed acquisition last month, but that has not stopped the company from continuing to pursue the deal.

The New York Times DealBook reports GlaxoSmithKline is willing to pay a hefty premium for the company: its offer of $13 per share is 81 percent higher than the April 18 closing price of Human Genome Sciences' shares. GlaxoSmithKline first announced its buyout on April 19.

In a statement, GlaxoSmithKline said it "continues to believe it has made a full and fair offer which is in the interest of shareholders of both companies." There has been a jump in merger and acquisition activity within the pharmaceutical sector over the past few months. Companies such as Pfizer have streamlined research and development in an effort to implement cost savings campaigns, and they are endeavoring to fuel their product pipelines through such deals.

Disney touts Even a massive and embarrassing flop could not stop profits from climbing in the Walt Disney Company's most recent fiscal quarter.

Walt Disney said this week its earnings swelled in its second fiscal quarter this year. The company posted a double-digit jump in net income from the second quarter of 2011. Investors were bracing for the financial impact from the high budget film "John Carter," which sputtered at the global box office.

Net income increased to $1.14 billion, the company added. Bob Iger, the media giant's chairman and chief executive, said in a statement the company's robust earnings growth underscored the strength of its underlying business model.

"With 18 percent adjusted growth in earnings per share, we're pleased with out second quarter performance," Iger noted. "We're incredibly optimistic about our future, given the strength of our core brands, Disney, Pixar, Marvel, ESPN and ABC, and our extraordinary ability to grow franchises across our businesses, such as "'The Avengers,'" which shattered domestic box office records with a $207.1 million opening weekend for a global performance of more than $702 million to date."

"John Carter" was a colossal failure for the Mouse House, as it took a reported $200 million loss on the film. Executives had hoped the movie, which cost an estimated $250 million to make, would launch yet another profitable franchise. Though "John Carter" underperformed, Disney said growth in a number of divisions more than offset weaker activity in certain segments.

Its theme parks were a popular destination for travelers in the first three months of this year, Disney said, with profit soaring 53 percent. Bloomberg reports sales beat analysts' expectations, growing 6.1 percent to $9.63 billion. Disney's adherence to cost savings initiatives also fueled earnings growth.

Rich Greenfield, an analyst at BTIG Research, told the news provider the immense success of The Avengers would have a significant impact on the company's future growth. He said having such a popular franchise – the film has grossed more than $700 million across the globe in only two weeks of release - would not only drive growth in its film arm.

"Having something like "The Avengers, though, really goes a long way," Greenfield said in an interview with the news provider. "These are things that you can leverage through the Disney channels. These are things you can leverage through the parks. These are things you can leverage on the broadcast network."