Monthly Archives: December 2009

We Didn’t Start the Fire – Part II

In a recent (guest) post over on @ Risk, I quoted Billy Joel’s We Didn’t Start the Fire from his Storm Front album which was released as a single twenty years ago. I did so because each reference in two of the later verses represent significant potential risks to your supply chain that haven’t changed much in the last twenty years; since what your supply manager would be signing about today would more-or-less have the same underlying risks.

In honour of Billy Joel’s masterpiece, which chronicled headline events during the first forty years of his life (from 1949 to 1989), I have compiled a sequel that chronicles major events from the last twenty years (the nineties and the naughts). How many do you remember? And, equally interesting, can you identify the risks to your supply chain and your business that each represents(ed)?

We Didn’t Start the Fire – Part II

Buster Douglas, Gorbachev, Mandela, Berners Lee

Margaret Thatcher, Leonard Bernstein, Mary Robinson

Time Warner, Hubble Scope, Jim Henson, Germany

Windows, Strangeways Riot, Iraq’s Kuwait Invasion

IRA, Pan Am, KGB, Dead Sea Scrolls

Sonic, Exxon Valdez, Operation Desert Storm

Jeffrey Dahmer, Clarence Thomas, Magic Johnson, Michael Landon

Boris Yeltsin, Six in Birmingham, Pinatubo transforms

We didn’t start the fire

It was always burning

Since the world’s been turning

We didn’t start the fire

No we didn’t light it

But we tried to fight it

Roberta Bond, Noriega, Amy Fisher, Buttafuoco

Toronto Blue Jays win the Series, Jay Leno makes the grade

Jurassic Park, Bombay Bombings, Jean Chretian, Stephen Hawking

Janet Reno, Killari Quake, Waco Texas Raid

Bombay Riots, World Trade Center, David Koresh, id Software

Bill Clinton, Kim Campbell, North American Free Trade

We didn’t start the fire

It was always burning

Since the world’s been turning

We didn’t start the fire

No we didn’t light it

But we tried to fight it

Kremlin Accords, Northridge Earthquake, Channel Tunnel, OJ Simpson

George Forman, Richard Nixon, Jackie Kennedy

Kevin Mitnick, Asahara, Toy Story, Selena

Oklahoma, Hanshin Earthquake, Barrings Bank is history

Christopher Reeve, Saro-Wiwa, WTO, Windows 95

The Dow Jones hits a high, its Calvin and Hobbes’ demise

We didn’t start the fire

It was always burning

Since the world’s been turning

We didn’t start the fire

No we didn’t light it

But we tried to fight it

Steffi Graf, Deep Blue, Alanis, Whitewater

2Pac, Lijiang earthquake, Cyclone in Andhra Pradesh

LA Earthquake, MCI, Kyoto, Heaven’s Gate

Harry Potter, Tamil Tigers, Princess Di’s death

Morgan Stanley, Dolly’s Clone, Market Crash, Kyoto

The Confederation Bridge is raised and Hong Kong is returned

George Michael, AOL, Enter Google, Viagra

Disney, Auckland Blackouts, Lewinsky Scandal burns

We didn’t start the fire

It was always burning

Since the world’s been turning

We didn’t start the fire

No we didn’t light it

But we tried to fight it

The Euro’s here, Melissa spreads, Hugo Chavez, Woodstock’s rebirth

Bertand Piccard, Brian Jones, and 6 Billion roam the earth

Millenium, ILOVEYOU, Survivor, CSI

Mozambique Floods, Charles Schulz, John Paul apologized

Bastille Day Flare, ISS, AOL, Time Warner

Harold Shipmen, Dark Chernobyl, Keizo Obuchi dies

We didn’t start the fire

It was always burning

Since the world’s been turning

We didn’t start the fire

No we didn’t light it

But we tried to fight it

W. Bush, Robert Tools, End of Mir, Noah cloned

9-11, Anthrax, Afghanistan partakes

Nepal Massacre, Baltimore, Patriot Act, Enron folds

El Salvador, Peru, and Gujarat earthquakes

Giuliani, Shttleworth, Venus Williams, Serena

US Airways, Worldcom, No Child Left Behind

Martha Stewart, Northeast Blackout, Schwarzenegger, Sadam Hussein

Columbia, Hurricane Juan, Iraq Occupied

We didn’t start the fire

It was always burning

Since the world’s been turning

We didn’t start the fire

No we didn’t light it

But we tried to fight it

Ronald Reagan, Tony Blair, Lance Armstrong, Schumacher

Darfur Conflict, Nagaoka, Taiepi 101

Northern Bank, Nor’easter, Boxing Day Tsunami

SpaceShipOne, Beslan School, Euro Constitution

Camilla Bowles, Denis Radar, Andrew Stimpson, Stephen Colbert

Pope Benedict, Ahmadinejad, Chicago White Sox

Sumantran quake, CAFTA, Cronulla Riots flare

North Korea, YouTube, NHL season boxed

We didn’t start the fire

It was always burning

Since the world’s been turning

We didn’t start the fire

No we didn’t light it

But we tried to fight it

Warren Buffett, Stephen Harper, Tom Delay, Steve Irwin

Playstation III, Nintendo Wii, Hamas Elected

Estonia, Somalia, Harry Potter, Vladimir Putin

Virginia Tech, Chavez again, Zheng Xiaoyu Injected

We didn’t start the fire

It was always burning

Since the world’s been turning

We didn’t start the fire

No we didn’t light it

But we tried to fight it

Fidel Castro, Subprime Crisis, Lehman Brothers, Cyclone Nargis

Space X Falcon, One Hundred Oil, Large Hadron Collider

Michael Jackson, Obama, Walter Cronkite, Polanski

Tamil Tigers, Iran Protests, Australian Brushfires

Unemployment hits a high, H1N1 on the rise,

Pakistan erupts in war, I can’t take it anymore!

We didn’t start the fire

It was always burning

Since the world’s been turning

We didn’t start the fire

No we didn’t light it

But we tried to fight it

We didn’t start the fire

It was always burning

Since the world’s been turning

We didn’t start the fire

No we didn’t light it

But we tried to fight it

Green Your Packaging

Supply Chain Brain recently ran a decent article on 10 Steps to Green Packaging in the CPG Industry that had a few insights that are worth a closer look.

  1. Replenish
    Purchase raw materials from suppliers who employ sustainable resource management policies.
  2. Re-explore
    Use recyclable material.
  3. Reduce
    Use ergonomic design and optimization to minimize the use, and size, of packaging material.
  4. Replace
    Replace hazardous and harmful substances with eco-friendly materials.
  5. Reconsider
    Use renewable materials whenever possible.
  6. Review
    Inspect, monitor, and control waste in the packaging process.
  7. Recall
    Immediately recall harmful packaging and put processes in place to insure that harmful packaging does not get used again.
  8. Redeem
    Collaborate with retailers and collect reusable and recyclable packaging materials in exchange for discounts.
  9. Reinforce
    Set up a Centre of Excellence (COE) to disseminate environmental best practices throughout the organization.
  10. Register
    Sign up for carbon reduction commitment initiative and follow-through.

For more information on the 10Rs, as well as examples on how to achieve them, check out 10 Steps to Green Packaging in the CPG Industry.

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Could Escrow Accounts Return Us To Long Term Thinking?

Besides the fact that you’re probably as fed up as I am at the ridiculous compensation packages that many Executives are getting these days despite the fact that they are on their way out the door having just tanked the company, there’s also the fact that their focus on short term gain is hurting the company and your ability to do your job.

You want to switch to sustainable sources of supply, because you know that the long term savings (as energy, water, and carbon costs are all poised to go through the roof) will dwarf any short term savings you can negotiate, but because there are up-front investment and switching costs, you’re prevented from making the right choice.

You want to license that new strategic sourcing decision optimization platform because you know the 12%+ additional savings you can expect across the board on every event you run through it will give you an ROI of 10X to 20X within a year, but you can’t because an additional overhead cost will decrease EPS for the quarter, which will temporarily decrease the stock price, and, most importantly, impact your CPO’s and CEO’s Christmas bonus. Thus, even though you could probably double EPS and pump up the stock price within a year, you can’t make the right move.

And so on. And to be frank, it just stinks. We’ve made it too damn easy for fat-cats to get big rewards today for results that may or may not materialize tomorrow, and it just shouldn’t be that way. For instance, in Canada, shareholders are only now getting “say for pay” at most public companies — and all that right gives them is the right to tell the Board what they think should happen. The Board, once elected, can still do what it wants. And at many corporations, the shareholders only have two choices when it comes to electing the Board, vote for the nominees put forward, or abstain from the vote. But if even a single person votes for the Board, they Board is elected and, after allowing the shareholders to provide “input”, can still proceed to do whatever they want. Could you imagine if you were told “you can vote for Mr. X for President, or not, but if even one person in the whole United States of America votes for Mr. X, he’s President”. Scary, eh?

Anyway, a new proposal by Alex Edmans, Xavier Gabaix, Tomasz Sadzik, and Yuliy Sannikov (from Wharton, NYU, and U of C) on Dynamic Incentive Accounts could hold the answer to fixing some of these problems. According to the authors, if executive compensation packages were deposited into escrow accounts that vest over a two-to-five year period, with only a certain percentage allowed to be withdrawn each month, it could push executives to focus on the long-term. After all, if an Executive can’t access his Million-Dollar stock bonus for five years, he’ll be highly incented to make longer term decisions that will insure the stock price rises over the long term. And if the company were to grant more stock during a downturn, he’d be double-incented to turn the company around.

The authors also found that an increase in firm value must be accompanied by an increase in pay to keep the Executive motivated (and suggested a 6% pay increase for every 10% increase in firm value), but that’s perfectly acceptable (especially since it too will go into the escrow account). After all, if you increase profits by 20 Million, you should get a good chunk of change as a reward. It’s when you lead the company to a 20 Million loss that you shouldn’t get your bonus, and that’s what the real problem is. Now, the proposal has a bit of a downside in that they authors also found that an Executive’s base compensation would probably need to be increased 20% because of the longer vesting periods, and some of the packages out there are quite generous already, but this would still be okay if a good portion of the package was stock in the escrow account and the executive actually produced continued growth over a five year time frame.

Thoughts? Or am I the only crazy blogger who thinks this proposal makes sense?

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Spend Rappin’ (2nd Repost)

It’s Boxing Day! And you know what that means … at Sourcing Innovation, it’s Spend Rappin’ time!

  To the Tune of “Christmas Rappin'” by Kurtis Blow

Don’t you get me all that JIVE about code you used before I’s alive,
Cause this ain’t 1965 – ain’t even 1999!
Now I’m the guy named Lamoureux and Spend is one thing that I know.
So every year, just about this time, I celebrate it with a rhyme!

Gonna save it, gonna shave it, gonna make it good,
Gonna take it all down through your neighborhood.
Gonna wring it, gonna sling it till it’s understood.
My rap’s about to happen, like the knee you was slappin;
Or the toe you been tappin’ on a hunk of wood.
‘Bout a two fisted dude, with a friendly attitude
and a sack full of savings for the people on the block.
He’s an old grey beard, maybe looks kind of weird,
and if you ever seen him he could give you quite a shock.

Now people let me tell ya about last year
when the dude came slicing spend through here.
Well the wit was out, the gloves on the ground,
folks stayed to watch him cut it down.
The beat was thumping on the block,
and they were glued to just one spot,
as the master cubed at a solid pace,

got a taste of the waste thrown in your face.

And this old spend slayer laid down a heavy layer
of his slicing dicing rhythm to a tree-mapped beat.
And the guy with the database started to participate,
and I could sure appreciate the spend roll up neat.

We were all in the mood so we had a little brood,
not a sound did abound, as he plowed through the mound,
then I thought I heard a gasp as he sliced through the past,
and laid our mav’rick spend bare, as I flopped into a chair.
So I went to the attic where I thought about the static
that our last spending tool was programmed to always give.
And I threw up my arms at the industry yarns,
Just a trick, a nick, and I’d let the suckers in.

He was quick, he was sharp and always on the mark,
he had a lot of success on his chinny, chin, chin.
He avowed, he was proud of the savings he allowed
from the tip of the ‘burg he found the savings within.
He’s cool for a fool throwin’ out every rule
every hour of the day when the cold winds blow.
Though the beard was-a cleared, I still have never cheered
like I did in the storm when I was in the know.

I said you’re right, my spend’s a fright,
Can you stop for a drop before you have to go?
He said “Sure, Bill, if the wine is chilled
and I’ll stake a steak down at the Monaco”.
So we went out back and discussed the stack
of invoices that had all been over-paid
and every dollar spent off of the contract
and then we laid it all bare till we made the grade.

And before he went this fine old gent,
finding gifts went to sift through his spend reports.
From the top to the bottom he reached in and got ’em,
spend trends for me, and variances from torts.

And the higher-ups got presents too,
Banned suppliers and a stale contract.
A bloated pie ’bout as clear as the sky,
the best that money couldn’t buy.
Cause money could never ever buy the feelin,
the one that comes when there’s no concealin’
of your spend by a tool that’s new
and that’s what Strovink‘s does for you.

The dude ya read’s back at the keys,
up late till all’s where it should be.
But if he were right here tonight,
he’d say Truthful Spending and to all a good night!


For my new readers, this cheerful verse is the result of a sly comment by Eric over on e-Sourcing Forum back in 2007 on How Not to Get a Job.

P.S. Keep a sharp eye out for Eric’s next spend analysis series, which will debut here on Sourcing Innovation in January (2010). Although he’s been rather quiet since his series on Spend Analysis Meme Busting (I and II) last spring (2008), I’m happy to say that the recent flurry of activity in the space, particularly from the analyst community, has convinced him to take time away from coding and share his sorely needed wit and wisdom with us once again. (Those of you who have been around for a while might remember his groundbreaking and visionary series over on e-Sourcing Forum and here on Sourcing Innovation in 2006 and 2007, indexed below.)

e-Sourcing Forum

Sourcing Innovation

Christmas Rappin’

   by Curtis Blow mp3 on YouTube

(Since it’s difficult to find complete and well-formatted lyrics on the web.)

Don’t you get me all that JIVE about things you wrote before I’s alive,
Cause this ain’t 1823 – ain’t even 1970!
Now I’m the guy named Kurtis Blow and Christmas is one thing I know,
So every year, just about this time, I celebrate it with a rhyme!

Gonna shake it, gonna bake it, gonna make it good,
Gonna rock shock rock you through your neighborhood.
Gonna ring it, gonna sing it till it’s understood.
My rap’s about to happen, like the knee you was slappin;
Or the toe you been tappin’ on a hunk of wood.
‘Bout a red suited dude, with a friendly attitude
and a sleigh full of goodies for the people on the block.
Got a long white beard, maybe looks kind of weird,
and if you ever seen him he could give you quite a shock.

Now people let me tell ya about last year
when the dude came flying over here.
Well the hawk was out, the snow’s on the ground,
folks stayed in to party down.
The beat was thumping on the block,
and I was dancing in my sock,
and the drummer played at a solid pace,

and a taste of the base was in my face.

And the guitar player laid down a heavy layer
of the funky junky rhythm of the disco Beat.
And the guy with the 88 started to participate,
and I could sure appreciate it sound so sweet.

We were all in the mood so we had a little food,
and a joke, and a smoke, and a little bit of wine,
when I thought I heard a hoof on the top of the roof.
Could it be or was it me, I was feeling super fine.
So I went to the attic where I thought I heard the static
on a chance that the prance was somebody breaking in.
But the noise on the top was a reindeer clop,
Just a trick St. Nick, and I let the sucker in.

He was roly, he was poly and not the holy moly,
you got a lot of whiskers on your chinny, chin, chin.
He allowed, he was proud of the hairy little crowd
on the point of the door where the skin should’ve been.
Get’s cool for a fool throwin’ out every yule
for a day on the sleigh where the cold winds blow.
So the beard maybe cleared, but I never have a-cheered
’cause it’s warm in the storm when it’s ten below.

I said you’re right it’s cold tonight,
Can you stop for a drop before you go?
He said “Why not if the music’s hot
and I’ll chance a dance beneath the mistletoe”.
So he went downstairs and forgot his cares
and he rocked the spot and danced like a pro.
And every young girl tried to rock his world,
but he boogie oogie oogied till he had to go.

And before he went this fine old gent,
finding gifts went to sift through his big red bags.
In the top for the bottom he reached in and got ’em,
toys for the boys, and for the girls flat rag.

And the grown-ups got some presents too.
A new TV and a stere-u.
A new Seville ’bout as blue as the sky,
the best that money couldn’t buy.
Cause money could never ever buy the feelin,
the one that comes from not concealin’
the way you feel about your friends
and this is how the story ends.

The dude ya read’s back at the pole,
up north where everything is cold.
But if he were right here tonight,
he’d say Merry Christmas and to all a good night!

The Twelve Posts of Optimization

In the spirit of this month’s series on The Role of Optimization in Strategic Sourcing, which consisted primarily of:

I bring you the twelve days of optimization, which references some classic posts that you might want to review (again) to the tune of the twelve days of Christmas (as long as you can sing “optimization” really fast). Enjoy!

On the twelfth day of Optimization

my blogger gave to me:

4 Big Myths Exposed

Resources Online For Free

Supply Chain Networks

Expressive Bidding

Spend Analytics

The Way to Handle Freight

BoB’s Unique Talents

Five Questions Core

BoB’s Power Source

Packaging

Grand Challenges

and

Questions to Ask My Vendor

For those of you looking for “best-of” posts this holiday season, this is pretty much all you’re going to get.