40 DAYS UNTIL US ELECTION

If you are an American Citizen:

  1. PLEASE REGISTER TO VOTE
  2. PLEASE VOTE

And hopefully step 2 helps you to:

3. PLEASE MAKE A CHANGE

SI cannot help you with your sourcing and supply chains now as long as there is an administration in charge that:

a) randomly closes borders
b) randomly levies tariffs
c) randomly angers and upsets its trading partners
d) fails to ensure adequate measures are in place to support essential workers needed for global trade
e) …

We have a situation where all of the risks and problems of low-cost country sourcing and third-world country sourcing are now home-country sourcing problems for all multi-nationals (as even EU-HQ’d multi-nationals typically rely heavily on the US) and the only advice that makes any sense is to:

* move sourcing / procurement out of the US
* move manufacturing / US out of the US except for that supporting the home US market (if you still have one)
* move distribution / fulfillment out of the US except for supporting the home US market (if you still have one)

and headquarter / CoE out of the EU or Canada that don’t do a) to d) listed above [or e) to zzz) not listed above] and then relocate actual sourcing / manufacturing  to locales with leadership that can handle

i) tough geopolitical situations
ii) tough epidemic/pandemic/natural disaster situations
iii) increased global business support through available manpower, infrastructure, and appetite
iv) tough local economic/political situations

which now means that
a) Mexico is off the table (since it welcomes Americans freely and has little pandemic control in place)
b) China is off the table for some categories (due to increasing technology bans around the world and detereorating relationships as a result of those bans and its hostage diplomacy)
c) Brazil might be off the table (due to inability to handle the pandemic, increasing unrest, and increasing violence / crime)
… and 3 of the 5 biggest countries you have depended on outside of the US for the last 3-4 decades are now high-risk too!

Which means your supply chains need to flip, and SI will be happy to walk you though how to do that once you have a stable economic landscape in which to rebuild (especially since it was telling you a decade ago to source not half a world away, but “close to home” for every locale you’re in), but with the unpredictability now at an all time high (especially with the US at risk of becoming an authoritarian government), there is no sure plan for anyone to recover.

So, again, if you are US citizen anywhere in the world, SI implores you to:

  1. PLEASE REGISTER TO VOTE
  2. PLEASE VOTE

so that maybe, just maybe, next year we can rebuild and do so in a way that is sustainable, equitable, balances what should have been done decades ago, and allows you to see the true power and beauty of a well designed supply chain.

However, just like a road needs to be paved over gravel and rocks and not swamp and leaves to be stable, a supply chain also needs a solid foundation as well — and right now the global environment (especially when you throw Brexit into the mix as well), is not giving it that.

So, until stability resumes, the only you thing you can count on is that you can’t count on anything and your most important Source-to-Pay and Supply Chain system is your Real-Time Risk Monitoring and Mitigation Command Center, preferably acquired from a risk-management vendor that tightly integrates with your S2C suite and supply chain suite and marries external risk indicators with organizational data and the wisdom of the network supply chain crowd to help you spot risks and necessary changes before it’s too late.

After all, thanks to the chaos created by the US over the past year, the name of the game is now reactive survival instead of strategic supply planning.

And since SI is all about strategic planning, development, and innovation to get us to the next level, until some stability returns, the best thing you can do is make sure one of your risk management command center integrations is a provider who provides you with daily insight on spotting and mitigating risks before they cause your bankruptcy.

In a few days, SI will either augment this post or create a new one with links to relevant providers you should be looking at if you aren’t already and content you should be reading.   But regular content on SI will not return until stability does.  No use planning a long term improvement project if you won’t be around to see it.

So again, if you are an American Citizen anywhere in the world:

  1. PLEASE REGISTER TO VOTE
  2. PLEASE VOTE

Thank you.  The modern world now depends on each and every one of you making the right choice!

Sustainable Supply Chains Sacrifice China! (Most of the Time.)

Last Friday we posted China is the Enemy because, especially where your supply chain is concerned, China has just demonstrated what SI has known for over a decade — it is the enemy. (This isn’t the only situation where China or the CCP is the enemy, but those are different rants. Note that we do NOT equate China or CCP with Chinese people. Most Chinese are NOT the enemy of your supply chain or democracy just like most Americans are NOT the enemy of intelligence and common sense.)

Long time readers will know that in the naughts, SI spent a lot of bandwidth telling your deaf ears that you should be investing heavily in nearshoring and home country sourcing because of the dangers of outsourcing in general, and, the dangers of oversourcing to a specific country, like China, in particular — which have finally become very apparent. It’s too bad it took a freakin’ pandemic to make clear how dangerous it is to outsource so many critical products and JIT materials to a country halfway around the globe, especially when such sourcing in bulk across the industry leads to the lack of capacity close to home due to factory closures and talent evaporation.

There’s a reason the doctor told you two weeks ago to remember the 80’s (and the early 80s in particular) … and that’s because that’s the last time most multi-national corporations in the Americas got outsourcing right … when they were near-sourcing to Mexico (who should build the wall just to keep Trump out, but that’s yet another rant for another day).

Let’s face it, some stuff just shouldn’t be sourced from home. Stuff that’s not critical, stuff that’s very expensive to make at home (but easily trucked across a single border) for various reasons (which can go beyond labour to energy costs if there are no affordable renewable sources nearby, transportation costs for raw or unprocessed materials are ridiculous otherwise, etc.), or stuff where most of the raw materials or necessary environmental conditions (for growing, mining, etc.) are just not present at, or near, home.

But when you consider a typical organization, how much stuff really falls into this category? First of all, you have to exclude any product for (re)sale that’s a primary profit line. Then you need to exclude any raw material or component critical to production unless you just can’t get it nearby. Then any product necessary for security or safety. And so on. At the end of the day, you don’t have much left, and if you’re doing the analysis right, you’re going to be left with:


  • raw materials and products just not available nearby (because you need certain growing conditions, large deposits of a mineral only found in certain geographies, etc.)
  • processed materials or chemicals where the raw materials are very expensive or dangerous to transport
  • products unique to a culture or region
  • novelty or other items not critical to your business

which (before the short-sighted wall-street loving common sense hating clueless and unskilled consultants of the late 80’s and early 90’s, like Steve Castle, put everything into the outsourcing bandwagon and blinged it out beyond belief) were the only products a company would outsource halfway around the world and still the only products a company should be sourcing from halfway around the world. Everything else should be near-sourced, and if really critical or the cost differential is small, home-sourced.

This also means that just shifting everything to another country in the BRIC, and India (which is ruled by a more open, transparent, and dependable democracy) in particular, is also NOT the answer. (They may not be the enemy, but they are still NOT the answer.)

So, unless you want your Supply Chain to completely collapse after the next global disaster, go back to basics, remember the smart outsourcing decision from the 80s, reopen those Mexican factories, and start near-sourcing again. And then, where you can, bring it back (close to) home.

Blame China Now!

Oh my God! They Killed Kenny For Real This Time!

Times have changed, the flu is getting worse
It wont respond to our meds, it just wants to make us hurt
Should we blame our government?
Or blame society?
Or should we blame scientists overseas?

No! Blame China NOW!
Blame China NOW!
They want to rule us all
Once all our countries fall!
Blame China NOW!
Blame China NOW!
We need to form a full assault!
It is all China’s fault!

Don’t blame Trump for his slow pace
He did not let this pandemic escape
China’s been planning this since two thousand and two
SARS was just a practice run to see what flus could do

Well, Blame China NOW!
Blame China NOW!
It seems everything’s gone wrong
since China came along
Blame China NOW!
Blame China NOW!
We know they don’t respect our lives anyway!

My grandma could have lived until she was one hundred and two
But she died coughing until her face turned a very deep blue
Should Covid be faulted?
Or the symptoms that couldn’t be halted?
Heck no!

Blame China NOW!
Blame China NOW!
With all their mutated avian flus,
somethings surely gonna get you!
Blame China NOW!
Shame on China NOW!

China must be stopped!
The comms must be stalled!
Global inclusion
must all be undone
We must blame them and cause a fuss
Before China blames all of us!

And to be 100% clear, when we say “China”, in this parody of “Blame Canada“, we specifically and unequivocally mean the CCP (Chinese Communist Party), not the country and not the average Chinese person.

Why?

Because, despite the recent propaganda that has been surfacing over the last few weeks in response to certain American leaders trying to shift the blame for their mounting death rate to China, when all this started, China tried to cover up the epidemic (before it became a full-on global pandemic) and flat out lied, including lying to the WHO who fell for it and issued this, now classic, tweet back in mid-January that stated there was no clear evidence of human-to-human transmission of the novel #coronavirus. This resulted in many of the world leaders discounting #coronoavirus and its potential impact and ignoring it until it was too late as #coronoavirus quickly spread unchecked to many of the major travel hubs and first world countries where travelers regularly visited, and returned from, China for business reasons.

CHINA is the ENEMY!

No evolution!
Sometimes it depresses me
The same old same old!
Oh we keep repeating history

The institution curses self-sufficiency
It´s my conviction
CHINA is the ENEMY!

A revolution is the solution

I won’t feel guilty
No matter what they´re telling me
I won’t feel dirty and buy into their misery
I won´t be shamed cause I’m begging you to break free
It fuels the soul and CHINA is the ENEMY!

A revolution is the solution

Home-Sourced is like gold
There is enough to go around
But then there´s greed and doesn´t greed bring disaster?

Give me a choice
Give me a chance to turn the key and find my voice
CHINA is the ENEMY!

A revolution is the solution

CHINA is the enemy!

Coronavirus/COVID-19 Response: Analytics Can Help Get You Through the Crisis

In the first stage of the pandemic, mines close, processors close, or other suppliers of critical raw materials become unavailable and your direct procurement becomes threatened, and you have to identify new sources of supply quickly to maintain supply assurance, while also making the best selection for the business to keep total of cost ownership acceptable and predictable (as a lower cost risky alternative could put you back in the same position in a few months). You need good analytics to make the right decision.

In the second stage of the pandemic, factories close, certain distribution channels become unstable, and distributor stockpiles run out and indirect goods become scarce and problematic across key categories. And you need to respond. Good analytics will again be key as you don’t want to be going back to market in three to six months, but you also need to keep costs down to insure you have the cash to deal with cost spikes in direct lines where supply unavailability significantly tips the supply/demand balance scale or where costly expedited logistics will be needed. You again need good analytics to make the right decision.

And unless you have a modern best-of-breed Source-to-Pay suite with great analytics embedded or a best-of-breed stand-alone analytics solution, you don’t have anywhere close to what you need. Just a few of the questions you will need to answer include:

  • How much am I paying now for a product, and how much should I pay based on today’s commodity pricing and currency volatility?
  • How do I understand the cost impact of supplier failure?
  • How do I understand the cost impact of raw material availability?
  • How do I identify outliers that might signify future issues or opportunities?

… along with dozens more. So how do you answer these questions? What technologies do you choose? Check out the doctor‘s CORONAVIRUS RESPONSE: Advanced Procurement Analytics — find the risks hiding in your data, prioritize and take action Pro piece over on Spend Matters. Even if you don’t have Pro access, the content in front of the paywall is still useful and might give you some ideas on where to start.