CIRM Identifying and Creating Demand--Defining Boundaries And Maintaining Balance In The I&CD Body of Knowledge

APICS Website: http://www.apics.org

By

James D. Reeds

CFPIM, CIRM, C.P.M., CPCM

Member, APICS I&CD Committee

Adjunct Associate Professor

Golden Gate University

San Francisco, California

And

Research Associate

Henley Management College

Henley-on-Thames,

Oxfordshire, England

ABSTRACT

In his book, The Fifth Discipline: The Art and Practice of the Learning Organization, author Peter Senge introduced the concept of "Creative Tension." Senge defined Creative Tension as "…the gap between vision and current reality…the gap is the source of creative energy."(1) This presentation will describe the pressures associated with the concept of Creative Tension, and how they help to define the CIRM Identifying and Creating Demand Body of Knowledge. This presentation will also suggest how Creative Tension helps to ensure a proper balance between the Body of Knowledge as it exists in current APICS CIRM teaching materials, but also the challenges posed to Committee members in identifying, and incorporating new trends and changes in the boundaries of the Identifying and Creating Demand Body of Knowledge.

LOOKING BACK

Looking back on the beginning of the last decade, it was a fertile time to offer up views of what the future--at least the next decade-- would bring. When Peter Senge published his seminal work in 1990, entitled The Fifth Discipline: The Art and Practice of the Learning Organization, he introduced a framework destined to challenge our thinking about both our notions of what defined the modern organization in the last decade of out century, and our personal relationship to it. The Learning Organization's focus was to foster the development of not just new capacities, but of fundamental shifts of mind, individually and collectively. "Sustained commitment to the precepts of the Learning Organization… introduce changes which are significant and enduring." (2) The elements of the Learning Organization were: (1) Aspiration: The capacity of individuals in an organization to orient themselves toward what they truly care about, and to embrace change because they truly want to--not because they need to; (2) Reflection and Conversation: To "Think" and discuss collegially about the assumptions and patterns of organizational and individual behavior; (3) Conceptualization: an ability to see larger systems and forces at play (4) New Awareness and Sensibilities: Over time, to become proficient in "Systems Thinking"--the realization that there are underlying structures which drive both individual and group behavior; (5) New Attitudes and Beliefs: the shift of new awareness and sensibility to that of deeply-held attitudes and beliefs. "To understand a group's culture, one must attempt to get at its shared basic assumptions and one must understand the learning process by which such basic assumptions come to be."(3)

Another prescient article by Peter F. Drucker appeared in 1990 in the Harvard Business Review, entitled " The Emerging Theory of Manufacturing." (4) Drucker envisioned the "prototypical factory of 1999," and prophesized four key characteristics which would distance it from earlier organizational models which rested on the thinking of Scientific Management, or "The One Best Way." These elements were: Statistical Quality Control, a "New Manufacturing Accounting," the "'flotilla' organization," and "Systems Design." Drucker saw SQC (or, as others would expand as "Total Quality Thinking"), as a liberating social force which would place responsibility and authority for the quality of work done once again in the hands of the front-line worker, and not with a managerial--supervisory class whose objectives were to "plan, staff, control, punish, and reward." In considering a need for a "New Management Accounting," Drucker called for nothing less than a reconsideration of how a manufacturing organization's performance was measured. No longer would an almost singular emphasis upon labor variance reporting suffice for organizations in which the major element of the cost of goods sold was the cost of material. In suggesting a naval analogy which compared the rigidity and inflexible nature of decision-making inherent in that of the command of a battleship, with that of flexibility and agility of a flotilla, Drucker was pointing the way forward toward the twin concepts of the flattened organization and "Lean Thinking." Finally, as with Peter Senge, Drucker envisioned a critical need to acquire a view of how the organization functioned, not merely in terms of task-oriented behavior, but also of processes. Further, this process view was not limited to the boundaries of a particular enterprise, but rather to an appreciation of how the process view enfolded the operations and resources of the many tiers of suppliers and customers-- a preview of what we know today as Supply Chain Management. "Producing does not stop when the product leaves the factory. Distribution and service are integral parts of the process…. it will require very different management and very different managers." (5)

APICS INTO THE 21st CENTURY

Just as it is useful to look back on two authors who evidenced a "prescient " grasp of the challenges and demands upon business enterprises and individuals who work in them, it is also useful to recall the APICS vision of the future, circa 1988, in the days before CIRM. In this way, we can better understand today's challenges in both defining, and maintaining the CIRM Body of Knowledge.

In 1988, APICS released a report by the APICS Long Range Committee, entitled "APICS Into The 21st Century." (6) This ambitious undertaking undertook the Herculean task of assessing the following major trends and conditions which would define the nature and organization of APICS: (1) General Long-Term U.S. Societal Trends; (2) Technology Trends; (3) Educational Trends; (4) Trends in Labor Force and Work; (5) Management Trends; (6) Trends in Values and Concerns; (7) Family Trends and (8) Institutional Trends. As we learn in examining the nature of demand and in the forecasting of demand, "forecasts are always wrong." Yet, it is surprising how profound in its grasp of the amount, the speed, and effect of change embodied in this report its writers revealed. I will highlight only a few of the Report's visions to make this point: (7)

 

 

 

 

 

 

 

 

 

It is against this backdrop of such thinkers as Senge and Drucker, and also the "futurists" in APICS of a decade ago that set the tone for how we view CIRM today. The underpinnings of CIRM, or "Certified in Integrated Resource Management," philosophy were-- and remain--rooted in Senge's "Learning Organization, in Drucker's "Post--Modern Factory of 1999," and with the elements of the APICS Long Range Planning Committee so "long ago" in the late 1980s. From this collective vision of their future (our today and immediate future), CIRM received its charter:

[CIRM] is a comprehensive program designed to develop managerial and leadership skills. It integrates an individual's understanding of organisational resources such as information technology, materials, human resources, quality, production and supporting equipment, facilities, and capital to clarify the interrelationships between business functions and meet organizational goals. Within the CIRM program, candidates develop their fullest potential and solve a wide range of business problems across the enterprise--spurring future innovation and discovery for individuals and their organizations. (8)

Although there has been some realignment in the content of the CIRM examination modules since its inception in the early 1990s, and course delivery has been improved, the perspective of the CIRM program has remained true to its origins. It is interesting to now focus our attention on present--day challenges and then on the ever--unfolding future. Specifically, let us examine the current state of one module, Identifying and Creating Demand [I&CD].

CIRM IDENTIFYING AND CREATING DEMAND [I&CD]

In its first incarnation, CIRM I&CD was an amalgam of an examination of the study of the disciplines of Marketing, Sales, Customer Service, and Field Service. In retrospect, the early Body of Knowledge had an overwhelming bias toward Field Service, with somewhat lesser emphasis on traditional Marketing and Sales disciplines. This was corrected in an overall realignment of CIRM course content and emphasis, beginning some three years ago. In today's I&CD Body of Knowledge, we now emphasize an understanding of customer demand, specifically: Demand: The Statement of the Needs in the Marketplace; Identifying Demand: The Starting Point for Creating the Enterprise Strategy and Creating Demand: The Strategies Used to Gain Customers for the Enterprise’s Products or Services. Stated as a model, enterprise relationships, both internal and external are represented in Figure 1. The I&CD Model.

 

 

Figure 1. The CIRM I&CD Model

As noted in the 1999 Exam Content Manual: "Identifying demand is the starting point for creating the enterprise strategy. Both long-term business planning and short-term resource scheduling depend upon customer demand information being available to management. Gaining a clear sense of market and customer trends in demand is initially critical. The degree of accuracy of this information will have a significant impact on the structure of the organization, the resources employed, and the level of success in achieving enterprise objectives. Creating demand addresses the strategies and tactics employed to capture customers for the enterprise’s products."(9)

It is the understanding of these customer--oriented demand forces which set in motion all that follows within the CIRM Body of Knowledge. As such, the heart of the CIRM philosophy--Integration-- seeks to "balance" the forces of customer demand, product and service design, and product and service delivery. Figure 2. The CIRM Integration Balance illustrates this point.

 

Figure 2. The CIRM Integration Balance

In today's definition of the CIRM I&CD Body of Knowledge, the curriculum that has evolved is comprised of the following major themes. (The percentages that appear refer to the relative weight that each section should have on a typical CIRM I&CD examination):(10)

(a) Business Planning and Customer Demand (15%)

The business plan provides a framework for analyzing demand as it relates to company objectives, competitive pressures, and potential customers. In addition, it incorporates an assessment of key economic, sociopolitical, and technological issues.

(b) Marketing (39%)

The marketing function is responsible for analyzing economic, demographic, and technical data to determine the potential level of business for customer groups and products. Once developed, marketing creates the mechanisms to price, promote, and position the product in the market.

(c) Sales (23%)

Once the market has been identified and prepared for the product by marketing, sales identifies specific matches between customers and products. These sales opportunities are cultivated until a buying transaction is arranged that is acceptable to both parties.

(d) Customer Ordering and Service (10%)

The quality and consistency of order processing and service has significant impact on customer perception, efficiency of the enterprise, and success of the product.

(e) Performance Measurement (13%)

Appropriate performance measures can effectively guide desired behavior in marketing and sales. They can also visibly align demand generation and fulfillment activities with enterprise objectives.

Thus, in the present I&CD Body of Knowledge, there is a content bias toward the disciplines of Marketing and Sales, and a lesser emphasis on knowledge regarding business strategy, customer service, and performance measures.

DEFINING THE BOUNDARIES OF THE I&CD BODY OF KNOWLEDGE

As with any other module of either CPIM or CIRM, the "formal" boundaries of the Body of Knowledge are drawn by the literature from which the Exam Content manual, and hence, the examination questions are derived. Thus, any primary and/or secondary references developed by the I&CD Test Committee are intimately tied to the test generation process, and hence, the certification examinations themselves. For Identifying and Creating Demand, these references are: (1) The APICS CIRM Identifying and Creating Demand Reprints (1997); (2) The APICS Dictionary--9th Edition (1998); (3) DALRYMPLE Douglas., and William CRON, Sales Management: Concepts and Cases, Sixth edition. John Wiley & Sons. New York. 1997; (4) KOTLER, Philip. Marketing Management: Analysis, Planning, Implementation and Control. Ninth Edition. Prentice-Hall. Upper Saddle River, N.J. 1997 and (6) Harvard Business Review Readings in Identifying and Creating Demand, 1997. This relationship is represented in Figure 3., Establishing The Boundaries of the Body of Knowledge.

 

Fig. 3., Establishing The Boundaries of the Body of Knowledge

 

 

BOUNDARIES AND BALANCE--THE CHALLENGES AND CREATIVE TENSION IN MAINTAING A RELEVANT BODY OF KNOWLEDGE

 

The challenge of keeping apace of the changes and developing trends in the Body of Knowledge are not limited to only Identifying and Creating Demand, but applies to all other examination modules as well. This is especially true of CIRM-based knowledge. Tension is created when the pace of such shifts in the boundaries of the Body of Knowledge does not keep up with the content of the examination. The ultimate danger is this: if the Body of Knowledge does not accurately reflect the most current trends in academic research and industry practice, the information against which APICS bases its certification examinations runs the risk of being perceived as obsolescent. In other words, we will prepare the CIRM candidate for the world as it existed in 1994! So we must, therefore, constantly scan the literature, not only in the above-mentioned sources, but also from additional sources as well, many of which lies outside the educational materials referenced by APICS.

Such sources are many and varied, but the following represent a sample of literature which when considered collectively, serve as markers for the ever-moving Body of Knowledge. (1) The APICS Education And Research Foundation (E&R); (2) The Sloan Management Review; (3) The California Management Review; (4) The Proceedings of other professional societies and academic institutions, and increasingly (5) sources available on the Internet.

The APICS Education and Research Foundation (E&R) can be a rich source of funded studies and research. However, to tailor specific materials for The I&CD Body of Knowledge, case studies would need to be specified and commissioned. The organization exhibits a fair balance between academic applied research and applied studies from industry members and practitioners. Its great strength is an existent group of scholars and practitioners who are intimately familiar with APICS and its educational goals and objectives.

In addition to sources from the Harvard Business Review, we should examine articles which originate from other like sources, namely the Sloan Management Review and the California Management Review. Both are readable, and when combined with the Harvard Business Review, not a quarter can pass without at least one or more relevant articles relevant to the Body of Knowledge.

In keeping with the spirit of CIRM itself, we should entertain research and other appropriate education materials from other learned professional societies. For example, the National Association of Purchasing Management (NAPM) has its own equivalent body to the APICS E&R Foundation. The Center For Advanced Purchasing Management (CAPS) is very proactive in providing a forum for both academics and practitioners to discuss current research needs and the needs of industry. For example, in March of 1998, NAPM sponsored its first North American Research Symposium on Purchasing and Supply Management in Atlanta, Georgia. Of particular interest was a paper delivered by Dr. Jagdish N. Sheth of Emory University. Entitled "Becoming a World Class Customer," it was an example of the very thinking those of us on a CIRM Committee must constantly seek to bring within the BOK "boundary."

Increasingly, awareness of the boundaries and content of the Body of Knowledge will also become defined by non--traditional sources, such as those found on the Internet. Literally every key concept in Identifying and Creating Demand can be expanded upon through the access to research found on the Internet.

CONCLUSION

There is a constant challenge posed to all members of a CIRM Committee: to continually "measure" and define the Body of Knowledge for their examination, and to seek out the trends and changes in that knowledge. This requires a continuous scanning of literature, research, textbook publishing, and more frequently, engaging the power of the Internet as a research tool. Further, the validation of such changes in thinking require not a little work and energy, and also, dearly sought--after face--to-face collaboration between the Committee members. All of this must be accomplished within the all--too--apparent limitations on travel budgets, conflicts with work and family activities, and an overwhelming desire to serve as an APICS volunteer. It is a true measure of the practice of what Peter Senge termed, "Creative Tension:" A constant awareness of present--day Body of Knowledge content, and the way forward it must take to remain "fresh" and relevant is perhaps our most valuable contribution to APICS. We must feel compelled to not only continuously improve and refine traditional Body of Knowledge resources, but to seek out additional important resources from other professional societies, academic researchers, and practitioners. Above all else, our daily challenge is to practice and apply "CIRM thinking" in our committee's work.

ENDNOTES

[1] SENGE, Peter. The Fifth Discipline: The Art and Practice of the Learning Organization. Doubleday. New York. 1990. pp. 150--159.

[2] SENGE, Peter M., Charlotte Roberts, Richard B. ROSS, Bryan J. SMITH and Art KLEINER, The Fifth Discipline Fieldbook: Strategies and Tools For Building an Learning Organization. Doubleday. New York. 1994. p. 18.

[3] SCHEIN, Edgar H. Organizational Culture and Leadership. Second Edition. Jossey-Bass. San Francisco, CA. 1992. p. 26.

[4] DRUCKER, Peter F. "The Emerging Theory of Manufacturing." Harvard Business Review. May--June 1990.

[5] Ibid.

[6] APICS Long Range Planning Committee Report, "APICS Into the 21st Century," Falls Church, VA. October, 1988.

[7] Ibid. pp. 3--25.

[8] WAIGH, Martin and Karen SCHNEIDER, "CIRM--The Purpose of the Program." 1999 CIRM Exam Content Manual. APICS. Alexandria, VA. 1998. P. v.

[9] Ibid. p. 11.

[10] Ibid. pp. 12--13.