Daily Archives: January 12, 2010

It’s the Year of the Tiger … and China is Going to ROAR!

In 2008, according to the World Bank, China had a GDP of approximately 4.326 Trillion. Given that China projected growth of 8% in 2009, that puts them at about 4.672 Trillion for 2009. Continuing this trend, as China is projecting similar growth for 2010, that puts them at a GDP of about 5.046 Trillion this year. Meanwhile, Japan, which clocked in at 4.909 Trillion in 2008, just downgraded its projected growth to 1.3% for 2009, putting it at 4.973 Trillion for the year. As its economic outlook is not looking up, holding steady, this puts Japan at an estimated GDP of 5.023 Trillion for 2010. What does this mean? This will likely be the year that the Tiger ROARS and China becomes the 2nd largest producer of GDP in the world.

So what should you do besides learn Mandarin, if you haven’t already? (You can even start for free at sites like Chinese-Tools.com.) Good Question! While I still adamantly believe that you should not be importing goods from China that you can produce closer to home — as there’s nothing lean about an 8,000 mile supply chain — that doesn’t mean that you shouldn’t be producing in China for the Chinese market. Or that you shouldn’t be tapping the collective knowledge of the almost two million geniuses that live in the country.

But where do you start with the world’s fastest-growing economy? I’m not sure, but a recent article from Knowledge@Wharton on The Road to China that interviewed Harbir Singh, Saikat Chaudhuri, and Lawton Burns on their recent trips to China provided some fresh insights that are worth a second thought.

The economy is barreling ahead in high gear in major cities like Shanghai and Beijing which have literally transformed over the last decade. They have a strong infrastructure, a very strong manufacturing-based economy (as they are the manufacturing hub of the world), and are investing a lot of money to set up firms and an ecosystem to foster innovation. They’re trying very hard to move up the global value chain very fast. Plus, a lot of overseas Chinese are now returning to China — junior people as well as senior people.

However, they’re still a big country with a huge population which collectively has many different types of people with varied interests. As a result, where China is concerned, it’s still about managing diversity. It’s about meeting the aspirations of those people and managing the differences, as much as its promoting some uniformity in a standard of living.

In other words, you probably have to start by diving in head first because there’s so much happening, so fast, that it’s hard to really wrap your head around it all unless you’re immersed in it. But check out the article. Although it’s five pages, it is quite interesting.

Share This on Linked In

Is it Time for a New Renaissance in the Supply Chain?

The Renaissance was a cultural movement that encompassed a resurgence of learning based on classical sources and a gradual, but widespread, educational reform. It was also known for the humanist method of study, which focussed on the study of grammar, rhetoric, moral philosophy, poetry, and history by Latin and Greek literary authors, the development of techniques to render perspective and light in a natural way, and a scientific revolution that began with the likes of Leonardo da Vinci who intermixed art and science in remarkable ways.

After reading a recent article on Supply Chain 2010 in the Supply Chain Management Review which noted that a “Renaissance” education is needed, I’m wondering if it’s not high time we brought a new renaissance to supply chain. I’m not saying we should dig out the dusty Latin and Greek texts (after all, how many of us could read them? I know a few Greek roots and could probably refresh myself on grade school Latin if I had to but beyond that …), just that we should look back a few decades to when growth was slow and steady, the market didn’t change overnight, and crashes didn’t come faster than we could log them. The Old Normal Is Coming Back, and it wouldn’t be a bad idea if we knew how to deal with it … especially those of us who weren’t working in the real world 20 years ago.

We have a rapidly expanding discipline. Sourcing, Procurement, Contract Management, Global Trade Management, Compliance Management, Green, Sustainability, Logistics Management, 3PLs, Asset Management, Supply Chain Finance, Inventory Management, Warehouse Management, Demand Driven Forecasting, Marketplaces, Supply Market Insight, Warranty and Returns Management, Service Management, IP Management, Talent Management, Supplier Information Management, Supplier Performance Management, Negotiation Management, and dozens of other self-contained disciplines that are impacting every aspect of the supply chain. In addition to having deep expertise in one of these areas to differentiate yourself and offer value above and beyond your peers (to ensure you keep your job in these lean and mean times), you also have to be reasonably well versed in each of these other areas to understand your role, where it fits in your organization’s supply chain(s), and where you fit on the cross functional teams. You literally have to be a jack of all trades and master of one.

We have technology platforms proliferating even more rapidly on a wide array of deployment options that leave even experienced IT pros dizzy. Traditional installed, single-instance ASP, multi-tenant SaaS, single-tenant Cloud, multi-tenant Cloud, Virtual Beowulf Clusters, and so on.

And it’s finally being recognized that not only is Supply Chain the core of the business, with the ability to contribute much more to the bottom line in a slow-growth (or flat) economy than sales and marketing ever will (as every dollar saved is equal to between 5 and 20 dollars of additional revenue as far as the bottom line is concerned), but an opportunity for revenue generation. Robert Rudzki (Beat the Odds: Avoid Corporate Death and Build a Resilient Enterprise) and David Jacoby (Guide to Supply Chain Management: How Getting it Right Boosts Corporate Performance) have written entire books about how the supply chain can boost your revenue and corporate performance.

And that’s just the tip of the iceberg. The experts are realizing that Supply Chain Process is Art and Science, that Collaboration Innovation is required for success, that we’re in for energy and water shortages if we don’t revolutionize our supply chains, that the 106 steps discrete steps to global trade are only going to multiply as more and more environmental and security regulations come into play (as we try to figure out how to truly trade across global boundaries), and that inefficiencies are costing the global supply chain hundreds of Billions of dollars each year.

When you try to achieve a coherence, you realize that we need a way to render global supply chain perspectives in comprehensible ways, a more humanist approach that links the man with the machine — which is extremely unlikely to acquire the true intelligence we have in our lifetimes, that integrates the morals of sustainability and responsibility into everything we do, that uncovers the poetry of an optimized supply chain, that outlines a philosophy for how an ideal supply chain should flow, and that scientifically revolutionizes how we produce and consume throughout the chain. And if that’s not a Modern Renaissance, I don’t know what is!

Share This on Linked In