Supply Chain Council to Merge with APICS

Two renowned supply chain-centric organizations––APICS, a professional organization for supply chain operations management and provider of research, education, and certification programs focused on elevating supply chain excellence, innovation, and resilience, and the Supply Chain Council, a global, non-profit management organization focused on helping its membership make significant supply chain process improvements, are set to merge.

APICS and SCC officials said that their respective boards of directors have formally approved an agreement under which SCC would merge with APICS upon ratification by SCC member vote.

APICS told LM that the SCC member vote will take place between May 19 and May 30, and upon affirmation by SCC voting members, APICS will file the required legal documents, with the expectation that the merger will be complete by July. The joint organization will be known as APICS and the APICS Foundation will be called APICS Supply Chain Council, with the SCC brand being maintained and leveraged post-merger, according to APICS.

The organizations said that this merger brings together two industry leaders with complimentary offerings to “create the premier global provider of supply chain research, education, and certification programs and offer a single source solution for individuals and corporations that want to evaluate and augment their supply chains.

APICS CEO Abe Eshkenazi said in an interview that there were multiple drivers behind this merger.

“APICS and SCC have collaborated on a number of occasions in the past, during which time our organizations got to know each other and understand the possibilities that could be created by unification,” he explained. “This merger not only brings our organizations closer, but also unites us with an important purpose”––advancing supply chain performance and developing supply chain talent.”

Corporations, said Eshkenazi, want to know that professional standards are aligned with corporate supply chain competencies and innovation, and the combination facilitates this alignment.  And he said that with this merger comes significant market opportunity, noting that as this market has matured, companies, and APICS’ customers, are looking for a single source for their supply chain education, training and certification programs.

“Both SCC and APICS realized that the ability to distinctly serve our members, customers, companies and partners through a single-source solution that combined our highly complementary products was the best option, he said, noting that “this was the driving force behind our merger.”

One of the primary reasons cited by Eshkenazi for combining the two organizations was the increased benefits a joint organization would bring to both APICS and SCC members, explaining that while APICS has individual members and SCC has corporate members, there are benefits for both types—with greater access to resources, and more opportunities to learn and network serving as some of the key benefits.

When asked to offer up some examples of how this merger will provide an improved portfolio of products to elevate supply chain performance and develop supply chain talent, Eshkenazi said that SCC SCOR (the Supply Chain Operations Reference-model, the supply chain management community’s most widely accepted framework for evaluating and comparing supply chain activities and performance) is already an important element in the APICS certification programs, with closer integration and further enhancements anticipated as a result of this combination.

“APICS powerful network and global presence will enable greater access to SCC’s SCOR-P and other training programs, and trained professionals who can use SCOR frameworks to implement improved supply chain processes,” he said. “Ultimately, this will elevate global supply chain performance. SCC’s strong corporate relationships with supply chain leaders will increase access to key decision makers who champion supply chain training programs, leading to more opportunities to educate and certify supply chain professionals.

This merger takes two industry leaders and joins them together to offer best-in-class research, education, training and certification for the supply chain industry – it’s a huge opportunity for existing and new members and customers, added Eshkenazi.

When the merger is made official, Eshkenazi will continue to serve as CEO of APICS and SCC Executive Director Joseph Francis will serve as executive director of the APICS Foundation. And through the end of 2014, APICS and SCC said that there will be an expanded, transitional Board of Directors with board members from each organization’s Board.

“This agreement reflects our ongoing efforts to ensure that SCC’s and APICS’ content and capabilities remain at the forefront of our industry, providing our members, customers and the supply chain community at large the most up-to-date, relevant and complete body of knowledge in supply chain and operations management,” said Jason Wheeler, chair of the APICS board of directors, in a statement.

The boards of directors of both APICS and Supply Chain Council have approved an agreement under which Supply Chain Council (SCC) will merge with APICS upon ratification by SCC member vote.

The APICS Board vote was conducted at the meeting on April 25. They expect the transaction to be complete in mid-July.

Answers to frequently asked questions:

Why do APICS and SCC want to merge?
Independently regarded as leaders, the combination creates the premier global organization focused on supply chain performance and talent development. The strategic rationale is compelling and will lead to greater opportunities for members, customers, partners and employees.

Why does this deal make business sense?
While we are in the same space, we see ample opportunities for growth. Our customer bases and products are complementary and will enable us – and our partners – to deepen our relationships with our customers by providing more high-quality products and services.

Which organization initiated the talks?
It was mutual—-APICS and SCC have collaborated on a number of occasions. This brings our organizations much closer and unites us with an important purpose – to advance supply chain performance and develop supply chain talent.

Why merge now?
Corporations want to know that professional standards are aligned with corporate supply chain competencies and innovation, and the combination facilitates this alignment. We also see significant market opportunity. As this market has matured, companies –and our customers - are looking for a single source for their supply chain education, training and certification programs.

Have the risks been carefully considered? What could go wrong?
We’ve done significant financial and legal due diligence including the evaluation of financial pro formas, intellectual property and contracts. Unlike many mergers of publicly traded companies, this merger doesn’t involve buying shares or assuming debt. The intellectual property, client relationships, and the handful of full-time staff will be absorbed into APICS’s operations. The merger will leverage each core competency of the combined organization to serve members, customers, partners and the supply chain community at large.

What steps are being taken to ensure the success of the merger?
We have a strong commitment from the Boards of both organizations, and our executive team has integration experience. Work was done up front to ensure capacity, compatibility and alignment with corporate strategy. We have an integration strategy and our integration task force team will follow best practices and provide transparency throughout the process.

Is this a merger or an acquisition? Which company is doing the acquiring?
This transaction can be described as a merger or combination that allows our organizations to come together to meet the total supply chain development needs of individuals and companies.

What has occurred and what’s next?
On April 13 the SCC Board approved the merger. On April 25 the APICS Board approved the merger, setting into action the SCC member vote. Following an affirmative SCC member vote, legal documents will be filed. An integration task force will execute the integration strategy that was created as part of the due diligence process.

What are the next steps in the unification process?
The merger needs to be ratified by the SCC members. The voting window opens on May 19 and closes on May 30.

When will the merger be done?
The legal filings will be complete mid-July.

Which organization will have the majority of the seats on the new board of directors?
Through the end of the year, there will be an expanded, transitional Board with members from each organization. In January, as Board members naturally roll off, the Board will have twelve directors responsible for the combined entity. Officers and committee leaders will be chosen in compliance with the bylaws.

Which company’s executives are filling most of the executive roles?
We anticipate few changes in executive leadership as our organizations come together.
Abe Eshkenazi will remain the CEO of APICS. Joe Francis, who is currently the executive director of SCC, will become the executive director of the APICS Foundation. Sharon Rice will continue to serve as executive vice president of APICS and support APICS and the APICS Foundation.

Where will the organization be headquartered?
Chicago.

What will happen to the SCC office in Houston?
There are no plans at the present.

What will be the name of the combined organization?
APICS name will remain the same. The APICS Foundation will be called APICS Supply Chain Council post-merger. We will ensure to maintain and leverage the SCC brand.

Will there be a new name and brand?
The APICS brand will remain the same.

How is the membership treated?
Today APICS has individual members and SCC company memberships. While APICS has individual members and SCC has corporate members, we see benefits for both types of members—greater access to resources, more opportunities to learn and network are some of the key benefits.

Do the SCOR certified trainers remain?
Yes, SCC qualified instructors will remain the same and we see opportunities for instructors to learn how to train on additional products.

What is the benefit for SCC members, why should they vote: yes?
While APICS has individual members and SCC has corporate members, we see benefits for both types of members—greater access to resources, more opportunities to learn and network are some of the key benefits.

Is every employee of a SCC member company now an APICS member with the APICS membership rights?
No. There is no change to the SCC or APICS membership programs for the balance of the year. We are working on a combined membership strategy now.

How will the integration take place? What will be integrated?
An integration task force will examine the areas of our business highlighted in the integration strategy prepared as part of the due diligence. The committee will be comprised of volunteers and staff from both APICS and SCC and will evaluate recommendations and help with the integration.

How will cost savings be captured? Will there be layoffs?
The point of this merger isn’t primarily to create cost-savings—nonprofit mergers are often different from mergers of publicly traded companies in this respect. We anticipate some natural efficiencies as activities are combined, economies of scale are achieved and activities that were outsourced are brought in-house. APICS and SCC are highly complementary organizations that together create a strong platform for growth. The combined entity will need people to realize its potential. SCC has a small, but very talented full-time staff, we don’t anticipate redundancies and want to ensure ample resources.

How will members be impacted?
While APICS has individual members and SCC has corporate members, we see benefits for both types of members—greater access to resources, more opportunities to learn and network are some of the key benefits.

How will chapters be impacted?
Both APICS and SCC have chapters, but they are very different. APICS chapters and student chapters are located throughout North America and offer local instructor-led certification review courses, professional development training and peer-to-peer networking opportunities. We anticipate that the APICS North American chapters will have more opportunities to sell and deliver courseware and training. SCC has nine chapters that cover large geographic regions (Australia & New Zealand, Europe, Latin America, Middle East, North America, South East Asia, Southern Africa, Greater China and Japan). These chapters represent members’ interests and offer local/regional events. Together we are exploring how to maximize them as we unite.

How will volunteers be impacted?
Volunteers are the heart and soul of both organizations! We will continue to greatly value the dedication of our committed volunteers and expect to expand the ways in which they can serve our organization.

How will APICS partners and SCC sales affiliates be impacted?
We anticipate that partners will have more products and services to sell and deliver in the future.

Will instructors be impacted?
One of the biggest opportunities coming from the unification is to expand the base of instructors qualified to teach SCC courses. We see opportunities for instructors to learn how to train on additional products.

Is this good for our customers?
We believe that it is good for all of our customers – individual customers and corporate customers alike because it will improve our ability to develop and deliver the research, education, training and certification programs today’s supply chain professionals and their employers require. Throughout the integration we continue to be focused on ensuring that we provide all of our customers with the distinctive customer service they have come to expect.

How will it impact our designees?
There is no change for our designees and no changes are planned for our current programs other than the usual work of the committees to ensure that our body of knowledge and certification programs are up-to-date and aligned with current standards and practices. However, we do anticipate creating new opportunities for our designees to expand their knowledge and increase their value to their corporate employers.

How does this improve the industry?
It provides greater resources, creating a stronger proponent for supply chain innovation and research. It also ensures the long-term viability and relevance of SCOR frameworks and training programs, and a tighter integration between SCOR and the APICS certifications.