Geopolitical Damnation 32: Political Unrest / Riots

It’s not just unexpected labour strikes that can throw a wrench into your best laid plans, but political unrest as well, both on the public side and the government side.

Political unrest on the public side can lead to widespread walkouts across the public and private sectors, including unauthorized strikes where unions are involved and unauthorized on-the-job walkouts in the private sector where unions are not present, and shut down the better portion of a city, state, or even a country. It’s like a port strike coupled with a driver strike coupled with a warehouse worker strike coupled with a retail sales outlet strike as your entire supply chain inbound and outbound in that city, state, or country is brought to a screeching halt. And this might be the best outcome as a result of widespread unrest.

If the people really get upset, they might not settle for walk-outs and instead decide that they are going to full-scale riot, which will, of course, result in looting, destruction of property, and possibly even terrorist-like actions that result in burning and destruction of entire facilities. So, not only might your supply chain come to a screeching halt literally overnight, but your inventory might be stolen, your production line destroyed, and your building burnt to the ground.

While political unrest on the public side can get quite bad, especially if your facility gets destroyed, political unrest on the government side can be even worse. If, all of a sudden, a government agent takes a strong dislike to your country of origin or your company, every one of your shipments can be held up at the border, any items that appear to be in violation of a directive (such as REACH, WEEE, or a country equivalent) seized until appropriate tests are conducted, each drum or container of a perishable food item at risk of contamination opened for inspection or confirmation (forcing an entire shipment to be destroyed), and each item deemed to be misclassified under the countries HS code held until you pay the maximum fine. And this is again the better outcome.

Your company can be put on a denied parties list and all imports blocked. Your country can be put under embargo for one or more categories of goods that your company produces, also blocking all imports. Your company can be suspected of engaging in, or doing business with companies that engage in, illegal activities and all of your operations in the country effectively shut down when your bank accounts are frozen, all of your files and servers confiscated, and your inventory seized. A government (agent) that has it out for you — possibly even because of the country your HQ is in, the country you are importing from, or the country you are exporting to — can effectively shut your entire operation down seemingly overnight with almost no notice whatsoever.

Political unrest is a very bad thing, and a very deadly damnation when it rises up to consume your supply chain operation whole.

Gettin’ Sigi With It

Those of you joining the doctor at Emirates Stadium today at the Trade Extensions European Practitioners Conference on Managing the Future will know that today is the day we all Get Sigi with it!

Gettin’ Sigi With It!
To the tune of Gettin’ Jiggy With It.

Bring it.
Unh, unh, unh, unh
Hoo cah cah
Hah hah, hah hah

Bicka bicka bow bow bow,
Bicka bow bow bump bump
What, what, what, what
Hah hah hah hah

On your mark ready set let’s go
Sourcing pro I know you know
They went psycho when his new book hit
Just can’t sit
Gotta get Sigi wit’ it

Ooh that’s it
Now Procurement pro come nigh
Sourcing Mojo all up in my eye
You gotta new ride with alotta stuff in it
Give it to your friend let’s spin

Everybody lookin’ at him
Glancin’ the kid
Wishin’ they was dancin’ a jig
Here with that handsome kid
Ciga-cigar right from Cuba-Cuba
He just bite it
It’s for the look he don’t light it

IGsay the an-may on the rand-gay and-stay
List’nin’ to Sigi make it feel like foreplay
Yo his cred-dee-o is Infinite
Ha ha
Big Sigi style’s all in it
Gettin’ Sigi Wit It

Na na na na na na na nana
Na na na na nana
Gettin’ Sigi wit it

What you wanna tread with the kid
Watch your step you might fall
Trying to do what he did
Sourcer-unh sourcer-unh sourcer come closer
In the middle of the room with the rub-a-dub, unh

No love for the cynics, the cynics
Mad cause he bled savings from the bankers
See him on the fifty yard line with the traders
Met Stamper, he told him he’s the greatest

We got the fever for the flavor of a crowd pleaser
Blogger spin another
From the Mojo prince
His highness
His mad skillz bring you riches

South to the west to the east to the north
Take his plans and watch ‘em go off a go off
Ah yes yes y’all ya don’t stop
In the winter or the (summertime)
He makes it hot
Gettin’ Sigi wit ‘it

Na na na na na na na nana
Na na na na nana
Gettin’ Sigi wit it

Guaranteed savings if you need a lift
Who’s the kid in the mist
Who else Sigi Osagie
Livin’ that life some consider a myth

Save from South A. to the UK
Finance used to tease him
Give it to him now nice and easy
Since he moved up like George and Wheezy

Save to the maximum I be askin’ ‘em
Would you like to bounce with the brother that’s platinum
Never see Sig attackin’ ‘em
Rather play ball with Locke and um,
Flatten ‘em

You thought he skim’d a schill
But he didn’t
Trust the blogger in your life, he hittin’
Hittin’ hard a piledriver with a ribbon
Crib for his bros on the outskirts of Surrey
Savings troupe for you and me
Don’t be waylaid
Go get Sigi wit it

Na na na na na na na nana
Na na na na nana
Gettin’ Sigi wit it

Economic Damnation 3: (Un)Employment Rate

You’re probably asking why this is a Procurement damnation because, on the surface, it doesn’t appear to have anything to do with Procurement. And it’s a good question, because, on the surface, it has to do with the health of the overall economy, and nothing to do with the supply and demand (im)balances that drive day to day Procurement decisions, especially for those organizations still using the Kraljic (Portfolio) Purchasing Methodology.

And from that perspective, you would be right. But here’s the thing. The employment rate is related to the overall health of the economy and the amount of disposable income in the economy. The amount of overall disposable income combined with views on acceptable (consumer) debt levels determines how much consumers have to, and will, spend. The amount of spend determines overall demand for unnecessary and necessary products alike. (Yes, people need to eat and will always spend on food, as long as they can afford to, but if money is tight, “essentials” gets redefined to low-cost basic essentials and high-end food products like prepared meals, imported fruits and vegetables, and lobster are off the menu.) This, of course, determines demand, and demand determines not only your volume leverage in negotiation, but the overall profitability and health of the business, and, thus your overall budget. (Remember, no sale, no store.)

And even if you are in B2B sales, because you supply office supplies, MRO, technology, or equipment, you still depend on consumer spend because if consumers aren’t buying from your customers, your customers aren’t buying from you.

But that’s just one side of the equation. The other side is the talent side. If employment is high, people are buying, but talent, which you so desperately need to take your Procurement organization to the next level, is scarce, and your only option is to hire them away from a rival. This means a big bump in expected salary and lots of perks (and training, so bring that budget back or else) to get them to stay.

In other words, there is no good (un)employment situation for you because either unemployment is rising, which means falling demand and reduced leverage in negotiations and operating funds, or unemployment is falling, which means a lack of available talent and more funds dedicated to talent to keep the talent base you have.

In other words, the eternal damnation of (un)employment rate is not restricted to governments and economists. It affects Procurement quite heavily too.

Technological Damnation 91: Proprietary Madness Continued

Can I play with madness?
The prophet stared at his crystal ball
Can I play with madness?
There’s no vision there at all
  Dickinson, Harris, & Smith, 1988

And, as a result, big companies have decided to create their own vision, separate from everyone else’s, and thrust their own visions of damnation upon us. Locking us into technology platforms that we just can’t get out of.

Proprietary designs. Proprietary protocols. Proprietary APIs. All designed to lock you in and keep you in chains.

All the big companies in the tech space at large have done it. Adobe. Apple. Google. IBM. Microsoft. Etc. And now some, like Microsoft, are taking it further than we ever thought possible. Earlier this year, Microsoft decided to go beyond automatic updates to automatic OS upgrades without the user’s permissions. (Which, of course, bricked a number of machines due to problems with drivers and underlying hardware incompatibility.) Now, they’ve supposedly backtracked on this, but it seems that those who have been upgraded, or choose to upgrade, to Windows 10 will have updates forced upon them with no ability to choose or defer, meaning their machines could be bricked at anytime! Ouch! (And that’s why the doctor does not use Windows.)

But they didn’t start the fire. (Although it appears they did a lot of research in choosing the best accelerants.) Pretty much every big tech company has forced proprietary designs (that restrict upgrades to other products provided by the same company or authorized partners), protocols (for interfacing), or APIs (for developing) upon us and still does.

And it’s not limited to the tech space at large and underlying operating systems. In our space, we have proprietary networks, like Ariba, that mandates its hosted P2P tool users also use the Ariba network for all connectivity with suppliers, even in cases where suppliers are connected to other networks that then connect to Ariba’s in the same transaction stream (Source: SpendMatters). (And since suppliers have to pay to use the Ariba Network, this puts a heavy price tag on purchases through the network as opposed to a network where the buyer pays a flat fee and the supplier doesn’t, because the supplier is just going to increase their prices to cover this cost.) And to make matters worse, as Ariba starts to lose prominence in the traditional analyst rankings, it’s stepping up its efforts with the smaller tier firms who, probably lacking the manpower to do the in-depth analysis the larger firms are capable of, are giving it rave reviews on the plus side with very little mention of the weaknesses on the negative side. Case in point: this recent review by Ovum which called Ariba the “largest supplier network”, listed four strengths, and only one weakness. SI has to wholeheartedly agree with Spend Matter’s review of Ovum’s analysis here — the coverage of the weaknesses was not thorough or fair and while SI does not have insight into Ariba’s network statistics beyond what they publish, SI does know that Basware’s volume is on par with Ariba’s published numbers. While Basware may not be a household name in North America, they are probably the biggest and most established network player in Europe in this space and one of the oldest (as the company turned 30 this year).

To make matters worse, there’s not a lot of open standards in our space. You could say that we have cXML, which a number of PunchOut sites are based on, but do we? While it is open and free for use without restrictions apart from restrictions relating to publications of modifications and naming, this protocol was not only created by Ariba in 1999 but is still controlled by Ariba. They could change it at any time, force all sites on the Ariba network to update at that time, and offer very little documentation or guidance as to how anyone outside of that network will go about doing that and, more importantly, support multiple versions simultaneously (for those in the network and those not), which would be a major IT headache. Even worse, they could decide to replace it with cXML 2.0, keep that version proprietary, and create a dichotomy where only those in the network have 2.0 and those don’t.

There is no completely free, non-proprietary, fully open-source standard in our space, and no guarantees. Proprietary Madness is a damnation that is going to haunt us for years to come.