Monthly Archives: October 2009

The Last Nova Scotian Pirate

If the economy doesn’t get better soon, this may just be the doctor‘s next job . After all, we already have pirates on Lake Erie.

The Last Nova Scotian Pirate

I used to be a farmer, and I made a living fine

I had a little stretch of land along the county line

But times were hard and though I tried, the money wasn’t there

And the bankers came and took my land and told me “fair is fair”

I looked for every kind of job, the answer always no

“Hire you now?” they’d always laugh, “we just let twenty go!”

The government, they promised me a measly little sum

But I’ve got too much pride to end up just another bum

Then I thought, who gives a damn if no job awaits?

I’m gonna be a PIRATE on the Northumberland Strait!

And it’s a heave-ho, hi-ho, comin’ down the plains

Stealin’ wheat and barley and all the other grains

It’s a ho-hey, hi-hey farmers bar yer doors

When ya see the Old Stan Rogers

  on Nova Scotia‘s mighty shores

Well, you’d think the local farmers would know that I’m at large

But just the other day I found an unprotected barge

I snuck up right behind them and they were none the wiser

I rammed their ship and sank it and I stole their fertilizer

A bridge inside of Canso spans a mighty river

Farmers cross in so much fear their stomachs are a’quiver

Cause they know that Captain Doctor‘s hidin’ in the bay

I’ll jump the bridge and knock them cold and sail off with their hay!

And it’s a heave-ho, hi-ho, comin’ down the plains

Stealin’ wheat and barley and all the other grains

It’s a ho-hey, hi-hey farmers bar yer doors

When ya see the Old Stan Rogers

  on Nova Scotia’s mighty shores

Well, Mountie Bob he chased me, he was always at my throat

He followed on the shoreline cause he didn’t own a boat

But cutbacks were a’comin’ and the Mountie lost his job

So now he’s sailing with us, and we call him Salty Bob

A swingin’ sword, a skull and bones and pleasant company

I never pay my income tax and screw the HST (SCREW IT!!)

Sailin down to Pictou, the terror of the seas

If you wanna reach the co-op, boy, you gotta get by me

Cause it’s a heave-ho, hi-ho, comin’ down the plains

Stealin’ wheat and barley and all the other grains

It’s a ho-hey, hi-hey farmers bar yer doors

When ya see the Old Stan Rogers

  on Nova Scotia’s mighty shores

Well, Pirate life’s appealing but you just don’t find it here,

I hear in North Alberta there’s a band of buccaneers

They roam the Athabasca from Smith to Fort McKay

And you’re gonna lose your Stetson if you have to pass their way!

Well, winter is a’comin’ and a chill is in the breeze

My Pirate days are over once the strait begins to freeze

I’ll be back in springtime, but now I have to go

I hear there’s lots of plunderin’ down in New Mexico!

Cause it’s a heave-ho, hi-ho, comin’ down the plains

Stealin’ wheat and barley and all the other grains

It’s a ho-hey, hi-hey farmers bar yer doors

When ya see the Old Stan Rogers

  on Nova Scotia’s mighty shores

Cause it’s a heave-ho, hi-ho, comin’ down the plains

Stealin’ wheat and barley and all the other grains

It’s a ho-hey, hi-hey farmers bar yer doors

When ya see the Old Stan Rogers

  on Nova Scotia’s mighty shores

Sung to The Last Saskatchewan Pirate

  by The Arrogant Worms

(and I strongly recommend you give The Last Saskatchewan Pirate a listen)

(Yes, the doctor is Proud to be Canadian.)

Will the State of the US Economy Finally Lead to Adoption of the Amero?

Reading this recent article in The Raw Story on how the United Nations Conference Is Calling For A New Global Currency got me thinking if the current state of the US Economy, which hasn’t seen it’s current level of debt in almost 65 years, will finally see the introduction of the amero.

The fact of the matter is that it might be just what the US needs to maintain its status as the global defacto currency standard. Consider the recent posterity potential index that measures the likelihood of economic transparency in the year 2020 for 30 developed countries which puts Canada, currently #7, at #6 with the Scandinavian countries of Norway, Sweden, Denmark, Finland, and Iceland and Switzerland rounding out the top 7. The US, which is currently #9 in the global prosperity index doesn’t even crack the top ten in 2020 at #12 and Mexico, which is currently #43, climbs up to #23. The Amero could certainly rival the Euro, especially when you consider that the combined population of North America is approximately 440 Million while the combined population of the countries who have adopted the Euro is only about 335 Million.

What do you think? Will it happen?

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What Relationships Do You Have With Your Suppliers?

One of the invited presentations at the MPower-hosted BPX exchange last week was Dr. Lloyd Rinehart‘s talk on “Relationship Management Systems for Internal Procurement Strategies“. In his talk, which was very good, Lloyd noted that there are multiple dimensions of corporate relationships today and that each relationship can be classified into one of seven different categories based on the amount of trust, interaction frequency, and commitment in the relationship.

The seven relationship categories that Dr. Rinehart has identified in his research are the following:

Relationship Type Trust Interaction Frequency Commitment Frequency
Non-Strategic Transactions Low Low Low > 15%
Administered Relationships Low High Low < 15%
Contractual Relationships Medium Medium Medium < 20%
Specialty Contract Relationships High Low Low < 10%
Partnerships High Low High > 10%
Joint Ventures Low High High > 10%
Alliances High High High < 20%

If you look closely, you can make a number of important striking observations from Dr. Rinehart’s research on this table alone.

  1. All of the common “relationships” that you encounter can be determined on three simple dimensions.
  2. Even though there are theoretically 27 different classifications one could make using a Low-Medium-High classification across each of the three dimensions, some combinations just don’t happen. For example, if trust is low, the interaction frequency is at one extreme (and high if the relationship is considered important) or the other.
  3. No one relationship type is clearly dominant. In an average organization, all types of relationships will be present and could be present in nearly equally quantities.
  4. The three most common type of relationships are contractual, alliances, and non-strategic transactions — which indicates that, at most companies, products will either be strategic (and strategically sourced through alliances and contractual relationships) or not (and then bought as commodities in transactional spot buys). (The question is, is this a result of sourcing and procurement systems, which tend to focus on one of the extremes, or the reason for their continued development?)

But what’s even more striking is that the best results, from a sourcing perspective, only come from two of the three most common relationship types. Can you guess which two?

And now I’m going to leave you hanging because Dr. Rinehart has agreed to do a couple of guest posts next months on the most effective relationship types and better negotiation practices. Stay tuned!

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Social Media May Increase Awareness, But Will It Increase Acumen?

In a recent article in Manufacturing & Logistics IT from i2 SCL contributors on Social Marketing & Supply Chain Management: The Next Consumer Data Challenge and Opportunity, the authors quote a recent Forrester Research report that states that three of four adults who go online in the US are leveraging social content on a regular basis and state that it’s a resounding yes that retailers and consumer product companies can leverage these tools and the demand signals they render to better run their supply chains.

I’m not sure I entirely agree. First of all, the concept of “social intelligence” is still much more nebulous than “business intelligence”, which is still quite nebulous and not always a successful endeavour (and, historically, BI projects are famous for low success rates, high costs, and time overruns). How can you leverage what you don’t understand?

Secondly, the social media marketplace is scattered. Some of your customers will be on MySpace, some on Facebook, some on Linked-in, some on Twitter, some on Ning, and some on dozens of other sites. Unless you can be everywhere, you could be missing a sizeable portion of your customer base. And even if you are, that’s still only 75% of on-line customers. What about the rest?

Thirdly, most users are quiet unless they have something to gripe about. So while you’ll likely have no problems getting feedback on everything your customers don’t like, you’ll likely have limited feedback on what they like and your surveys will be skewed. That doesn’t make for good decision making.

Any differing opinions?

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Chris Jacob Abraham on “The C-Shaped Recovery”

Today’s post is from Chris Jacob Abraham of IBM and blogmaster of @ Supply Chain Management.

Are you pat down with the “V” shaped recovery or perhaps the “U” shaped recovery? Or perhaps, you’re attuned to stair stepping model of recovery that is headed to the dungeon of doom (nefarious toothless grin on my face)?

As you might gather from the dates between the last post and this one, I’ve been so long in the dungeon of doom, it is so dark there, that I’ve made only the slightest efforts to surface albeit with a severe case of decompression. I am decompressing actively now and hopefully I don’t get an acute case of the bends.

I still maintain my bearish bias but in the dark corners of the dungeon, one doesn’t really know whether one is amongst many or accompanying the few that remain. The last two months have been a veritable siege on my sensibility and not to mention stability. In retrospect, this was to be expected as I was well aware that there is no end to the machinations of an administration (any administration) hell bent on righting a sinking ship. While the previous administration might have protested that the ship was not sinking but it was that the storm was raging, this administration notes that while the storm has passed, there are so many tropical paradises nearby that you’d do well to use this straw to get from here to there. The more articulate ones have even begun to say that getting wet is the point of sailing. Meanwhile, “Full steam ahead”.

This is no critique of this administration because no administration save a brazen one could create sensibility when it has been jettisoned wholesale (or as a serving of humble pie a moi — offer sensibility where it is lacking. My sensibility, I confess, was lacking because I didn’t recognize the true extent of the power of government but I’m young and can be forgiven my insistence on comeuppance — well, that’s my “cop out” apology sort of thing). And this administration, like those before it, are brazen dispensers of promises and promissory notes — a brazenness more banal than breathtaking, partly because it is so predictable. While uncertainty is a staple, even necessary, when it comes to the machinations of countless parties, second parties and third parties in a web of agreements, only the steadfastness of that nameless bureaucrat and his ilk can save our world — for obvious reason: in that his chief means — power, is balanced by his chief virtues — ignorance and stability. The bureaucrat is ignorant because he was never a party to nameless and faceless agreements and his career is a glorious hymn beginning “Don’t rock the boat, baby..”.

It must come a sigh of fresh air to a bureaucrat when a cursory sampling of the latest uproar on his table reads, “Extravagant bonuses at bailed out banks, unemployment and regulatory loopholes”. These are the bread and butter of a bureaucracy — incompetence, corruption, ad hoc rules, fly by night consultations and visitations — what bureaucrat is unfamiliar with those, these can be dealt with, even swiftly if the overlords in the political world so desired it. What a bureaucrat cannot deal with is “Value”.

To illustrate, chain a man to a treadmill with rules and regulations — now, that is an easy thing in and of itself. The cheery bureaucrat will write himself a bonus for this task and no doubt countless pages of regulation that no one other than his cousin the lawyer would ever read. Why a man would run on a treadmill of his own accord — that is a secret that a bureaucrat cannot ever hope to fathom? So what does he do in the face of the latest tumult, order more treadmills and more importantly, more chains.

But this is not a question of sensibility (there’s that bearishness creeping right back in). When the agents of the government go on offense, even in a haphazard way as is their wont, even style, you’d better take note. My pocketbook took a lot of hits because I insisted on reason — governments, as I have been educated, insist on a different kind of reason.

So how have our fearless bureaucrats sought to return us to health? “Get on into more debt, young man,” blares every program in some form or the other. Take a look:

  1. The stimulus (and all others to come) — borrow against future tax receipts but spend it today.
  2. Cash for clunkers — Destroy a working (polluting?) car and go into debt for a new one with a little help from us — save the earth, save on oil but tie this chain around your neck.
  3. Homebuyer’s credit — The first $8000 is on us, the next sum of an order 100 times our bait is on you — go into debt for the sake of cycling those homes through the market, er, no better time to buy a house.
  4. FDIC is broke — This program which operates through the fees collected from the participating banks is floating a plan to have its members pre-pay up to three years of future dues in order to resume its mission of finding, taking control and then reopening failing and failed banks.

And the list goes on and on… Which of these spell restraint, awareness of the system or something wise? If we were reckless getting to this point, the administration responds with another form of recklessness getting out. The constant is a yearning for the halcyon days of but a few years ago (which having lived through were anything but) and the method of madness is to get into debt. Draw me a fine distinction, if you will, between

(a) the worry free days of getting into debt during the housing bubble that has just revealed a chain of corruption, wheeling and dealing all the way from the mortgage officers right through Wall Street and into the books of government backed institutions such as Fannie Mae and Freddie Mac

(b) government enticing homebuyers with a credit and saddling them with homes the value of which they are certain would crater if they didn’t endeavor this way to get their citizenry into debt. Of course, if the home prices still declined, though at a lesser pace, we would revisit this same issue a few years later.

In an insane world, if a bunch of guys were determinedly pouring water into a sinking ship, they would be keelhauled without delay. However, in this sane world, determined guys can pour more water into a sinking ship by pointing out that only then would the ship’s pumps be fully utilized. Furthermore, this is widely praised as distinguished public service.

So what then of the recovery, “V”, “U”, “L”, “W”… twenty two letters to go? To me, this is a “C” shaped recovery i.e. “Consumer” shaped recovery. I’m in the least concerned about the shape of the recovery. I’m more concerned about the consumer, the customer — the true end point of every supply chain. From my vantage point, talk about the shape of the recovery treats the consumer as the animal that he is (as in the repository of the animal spirit) — to be whipped onto the next treadmill of consumption and debt until he collapses.

And this is my contribution to the masters of the supply chain universe — if you can, for a minute, get away from the forecasts of recovery, and the talk of priming the supply chain pump, long lead times, weak dollar and what have you, and ask yourself — how is my customer dealing with a drawdown in credit lines, loss of equity in his home, chopped liver in his 401K…? In looking at the coverage of the consumer and businesses, we have gone from “Things are terrible” to “Things are bad”. However, now, I note an impatience to getting to “Things are great” while I’m expecting a “Things are not so bad” followed by “Things are Ok” followed by “Things are not so bad” followed by “Things are Ok”. The policy actions of this administration and the next would set the direction of that cycle in motion and there is every evidence that we’re gearing up for more spending, more debt, pressure from creditor nations and so on.

So is there any evidence of a consumer recovery? Yes, there is some but it is by no means something that presages significant improvement and the petering out of some of the extant stimulus programs should impact consumer confidence negatively going forward. As it stands now, note the rebound from the all too widespread feeling that went along the lines of “The world is ending”:

Consumer Confidence from 1993 to 2008

There was a slight decline in September 2009 and as they note,

Consumer sentiment indices get way too much attention. The simple fact is that sentiment does not correlate strongly with consumer spending and thus has little predictive value. Consumer spending correlates more closely with income. Sentiment tends to reflect well known factors such as unemployment rates and gas prices more than it predicts future spending patterns.

Meanwhile, Romer: Impact of stimulus will wear off (Christian Romer is a top White House economist) notes,

A top White House economist says spending from the $787 billion economic stimulus has already had its biggest impact on economic growth and will likely not contribute to significant expansion next year.

But I thought the bulk of the stimulus effect would be felt in 2010 and not in 2009 — What’s the deuce here? As this CNN story notes from January 2009: Stimulus will take a while to work.

All in all, the legitimate infrastructure spending, which in its expanded form would include Obama’s ambitious plans to invest heavily in renewable energy sources, will most likely not start coming on line until the fourth quarter of the year and its full effect is at least 12 to 18 months away. In other words, the fiscal stimulus measures that the incoming Administration will be pushing through are more a 2010 story.

And as for numbers of jobs created, A look at the effect of stimulus on States notes

Economists on both sides of the debate agree that the actual number of jobs created by the stimulus package will likely never be known. Large swaths of stimulus money went to provide tax relief, extend unemployment benefits and provide fiscal relief to beleaguered state government budgets. These programs have largely indirect effects on employment.

Only about a third of the stimulus funds — some $275 billion — are going to grants, contracts and loans that will be tracked on The 30,000 jobs reported so far cover only direct contracts, which represent $16 billion of that total.

So what can one conclude from this sorry state of affairs? What can one say about the “C” in the “C” shaped recovery? In a post a little while back, I had noted that there will be many more stimulii in the pipeline and one can already see the trial balloons being floated for them.

However, there is another “C” in the “C” shaped recovery — the Corporation. That will be next.

Thanks, Chris!

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