Forum Program Update -
Livingstone, Pratt and Buelow to Present on CREM Value Chain
Ideally, each facility provides a valuable stream of services and investment appreciation from the date of its acquisition until its disposal. The three-part Tuesday T1 workshop, "Real Estate Value Chain," will chart how real estate assets deliver value over their life cycles. The program is moderated by Chuck Manula of Wyeth, and the presenters are Mert Livingstone, Johnson & Johnson Pharmaceuticals Group, Sandy Pratt, Oklahoma Department of Commerce and Darin Buelow, Deloitte Consulting, LLP.

To Cut Manufacturing Risk, Location and Supply Chain Loom Large
Risk management has achieved unprecedented attention lately because this recession was precipitated by the failure of investors to understand the risks of collateralized mortgage obligations (CMOs). Risk demands a price; higher risk requires a higher price. But CMOs were under-priced for their risk, and as a result financial institutions overloaded with them. Manufacturers too must measure their risk and make sure they are adequately compensated. Facility location and the supply chain are two keys to managing manufacturing risk. In "Incorporating Risk and Flexibility in Manufacturing Footprint Decisions," Martin Pergler says, "Sometimes this involves just output-mix adjustments at existing production facilities. Increasingly, however, companies are also considering more radical options such as delocalization to low-cost countries or fundamentally redefining relationships with suppliers." He identifies factor costs, the execution of planned changes, unforeseen events and geo-political issues, among others, as risk sources for manufacturers. He contends, "decision makers rarely take these [manufacturing strategy] uncertainties into account sufficiently while exploring the footprint options and deciding which is the best route to follow." Because the future can never be known for sure, the author recommends building enough flexibility into manufacturing footprint decisions to enable the plan to succeed even if some of the risks are misunderstood. He concludes, "Manufacturing footprint redesign is one of the largest-scale and largest-impact transformations that a manufacturer can undergo. Done well, it can find the best sweet spot for capacity and growth potential, cost, risk, flexibility, and competitive positioning. A tailored approach, bringing the best from a variety of operational, financial, and strategic decision making disciplines, is the key to doing it right."

Source: http://www.naiop-colorado.org/pdfs/pres_whitson_0608.pdf

Participate in IAMC's Online Business Networking
Stay "linked in" year-round with fellow IAMC members through IAMC's LinkedIn online business networking group, which is open exclusively to members. Once you join, you can post discussion items for group input and share your knowledge by answering others' questions.

Source: blog.linkedin.com

If you'd like to learn how to get the most value from LinkedIn, read "Fast Start Guide to Linkedin Success" by Randy Schrum.

To jump to the LinkedIn logon screen, click here.  Once logged on, go the top of the left-hand column and click on "groups." For more information on LinkedIn or the IAMC Group on LinkedIn, click here.

Find a Real Estate Job; Post an Opening; Post a Resume
Go to the IAMC Career Center to read about dozens of corporate real estate, economic development and real estate service provider jobs. Here's an example: Supervisor, Facilities Project Management for ITT Corp. The position description says the incumbent "Provides internal design engineering and project/construction management resources to facilitate the determination of customer requirements, manage project cost and schedule, estimate project cost, develop business cases, submit funding request documents, and lead project teams in the world-class execution of facilities capital and expense projects, including office renovations."

Planning for 2009-10? Avoid These Pitfalls

• Drafting a business plan and budget when the economy is on a smooth course is difficult enough. But planning during a recession requires special skills. In "Strategic planning: Three tips for 2009," the authors say, "Strategic-planning season has arrived for many companies, and it couldn't be more different than it has been in years past. ... Strategists, now facing the most profoundly uncertain times in their careers, are creating disaster scenarios that would have been unthinkable until recently and making the preservation of cash integral to their strategies."

Cash Preservation Strategies for CREM

• In large companies, corporate real estate may be the third or fourth largest expense and will be near the top of the CFO's list of places to look for cash savings. The IAMC Research article "How CREM Can Contribute to Corporate Cash Conservation" says, "'In larger companies, crisis can provide a burning platform to drive an enterprise-wide cost reduction initiative that exploits synergies across functions and product lines.' This seems to be less a statement of what's possible than a procedural recommendation that could apply to the CFO as well as other management areas including corporate real estate. In simple English it means this: Take advantage of the fear and uncertainty generated by the company's difficult circumstances to recommend and make high-value, politically difficult changes that would not be possible in normal times." The report also discusses tactical cash-saving and cash-generation tools, such as blend-and-extend for leases, space consolidation and sale-leasebacks.

Over-pressurizing Young Leaders Can Burn them Out

• In the salad days before the economy went south, companies carefully nurtured young leaders, gradually building their experience until they were ready for a major responsibility. Today, with budgets slashed, the development process is shorter, often with a big responsibility coming sooner. But a recent study warns that this may not be wise. In "Overwhelmed, Overloaded," Kerry Kosdrosky writes, "Previous research and common practice has suggested that the more challenging the on-the-job experience, the better. Not true, according to [Scott] DeRue's latest paper 'Developing Leaders via Experience.' Eventually, the value of a challenging job -- at least in terms of building leadership skills -- reaches a maximum point and begins to tail off."