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Institute for Supply Management (ISM)


The Institute for Supply Management (ISM) is a professional association for supply management and purchasing professionals. Established in the United States, ISM aims to improve business practices through research and education in supply management. It also produces the ISM Manufacturing Index, a key economic indicator often used to assess the economy’s health.


Institute for Supply Management (ISM): Institute: /ˈɪns.tɪ.tjuːt/For: /fɔːr/Supply: /səˈplaɪ/Management: /ˈmæn.ɪdʒ.mənt/ISM: /ˈaɪ.ɛs.ɛm/

Key Takeaways

Key Takeaways about Institute for Supply Management (ISM)

  1. Professional Development: The Institute for Supply Management (ISM) is renowned for fostering professional development in the field of procurement and supply management. It provides a balanced mix of education, research, and certification opportunities, thereby playing a crucial role in helping procurement and supply management professionals enhance their skills and efficiency.
  2. Certification and Training: ISM is known for its certification programs, the most prominent being the Certified Professional in Supply Management (CPSM) and Certified Professional in Supplier Diversity (CPSD). These globally recognized certifications serve to establish the competence of supply management professionals and offer a benchmark for industry standards.
  3. Leadership in the industry: ISM focuses on providing leadership and valuable insights in the supply management industry. It plays a leading role in promoting best practices, industry standards, and pioneering concepts through its comprehensive research and publishing initiatives, along with hosting networking events and conferences.


The Institute for Supply Management (ISM) is a highly influential body in the world of business and finance due to its role in providing critical economic data, offering professional development opportunities, and fostering advanced supply chain management practices. Its importance stems from the monthly release of the ISM Manufacturing Index and the ISM Non-Manufacturing Index, which offer valuable insight into the economic health of the manufacturing and non-manufacturing sectors, respectively, acting as significant indicators of overall economic trends. Furthermore, the resources and education provided by the ISM help to create a standard of excellence within the supply chain profession, contributing to efficiency and productivity across industries. Thus, the ISM significantly impacts businesses, financial markets, and economic policy globally.


The Institute for Supply Management (ISM) serves a vital purpose in the business and financial world as a non-profit professional association for supply management and purchasing professionals. Established in 1915, its core goal is to enhance the value and performance of procurement and supply chain management practitioners and their organizations globally. This means it is a key resource for those in the supply management field, as it provides valuable opportunities for professional development, research, and standards of excellence.The ISM is used to provide a benchmark for economic indicators, which can potentially influence business and investment decisions on a global scale. The organization publishes a monthly report, the ISM Manufacturing Report, which is a significant indicator of the economic health of the U.S. manufacturing sector. It includes the Purchasing Managers’ Index (PMI), a weighted average of new orders, production, employment, supplier deliveries, and inventories. This index and the report as a whole are regarded as reliable near-term economic barometers, as they provide timely information that’s highly valued by economists, investors, and analysts for economic forecasting.


1. Manufacturing Sector: One of the main real-world examples of the Institute for Supply Management (ISM) is its role in providing up-to-date and critical data for the manufacturing sector. ISM releases a monthly report called the Manufacturing Purchasing Managers’ Index (PMI), which includes data collected from manufacturing supply executives about production, new orders, supplier deliveries, inventories, and employment. For example, in 2020, many economists eagerly awaited the ISM’s report to understand the economic impact of the COVID-19 pandemic on the manufacturing sector.2. Service Sector: Another important ISM report, the Non-Manufacturing Purchasing Managers’ Index (NMI), reflects data from the service sector. Real-world businesses providing healthcare, education, finance, agriculture, construction, and other non-manufacturing services rely upon this report for critical insights about business activity, new orders, supplier deliveries, inventories, and employment. 3. Strategic Decision Making: ISM plays a crucial role in real-world application for Supply Chain Managers or Operations Managers. For example, a national retail corporation will closely monitor ISM reports to analyze supplier deliveries and inventories, which would accordingly define their procurement strategies and decisions on how much inventory to hold or when to place orders, maximizing their efficiency and reducing costs.

Frequently Asked Questions(FAQ)

What is the Institute for Supply Management (ISM)?

The Institute for Supply Management (ISM) is a not-for-profit professional association for supply management and purchasing professionals. It was first established in 1915 and is one of the most recognized organizations in its field, providing its members with education, research, and certifications.

What does the ISM do?

ISM offers resources like educational programs, research reports, and certification opportunities in the field of supply management. It also conducts surveys and publishes indexes including the Purchasing Managers’ Index (PMI) which is considered a critical economic indicator.

Can anyone join the ISM?

While ISM serves professionals in the field of supply management and procurement predominantly, anyone interested in the field can join. It can be beneficial for students, academics, or business professionals who are involved in supply chain operations.

What is the Purchasing Manager’s Index (PMI)?

PMI is a monthly survey conducted by the ISM which provides information about manufacturing activities in the economy. PMI above 50 typically indicates an expansion of the manufacturing sector while a PMI below 50 indicates a contraction.

Why is the ISM PMI considered an important economic indicator?

The ISM PMI is considered a leading economic indicator as it provides insights into the health of the manufacturing sector, which plays a crucial role in the overall economy. PMI is watched closely by investors and policymakers to understand economic trends and make forecasts.

What is the Certified Professional in Supply Management (CPSM) certification?

CPSM is a professional certification offered by the ISM for professionals in the supply management field. It validates the knowledge, skills, and abilities of individuals in procurement and supply management and is globally recognized.

How can the ISM benefit my business?

ISM can provide up-to-date industry data, insights, and trends which can help improve your business decisions. Furthermore, utilizing their professional development and certification programs can enhance the skills of your supply management team.

Does ISM provide networking opportunities?

Yes, ISM provides numerous networking opportunities through its conferences, seminars, and member communities. These platforms build connections with professionals across the globe, enabling the sharing of knowledge and best practices in supply management.

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