Monthly Archives: April 2011

You Don’t Have To Be Big To Be Sustainable

It’s nice to see a big publication like Inc. address the issue of sustainability in supply chains. It’s even nicer when it says that smaller supply chains without the financial means to make an aggressive push towards sustainability can still take gradual steps to be more socially, economically, and environmentally responsible, as it did in a recent article that addressed How to Build Sustainability Into Your Supply Chain.

Going after the low-hanging frutit of transportation and sourcing efficiency is a big step. Transportation is among the most unsustainable processes in an average supply chain as there are no viable long-distance shipping options that don’t rely on fossil fuels. While plants can be powered by wind, hydro, and solar energy, trucks, planes, and trains still require fossil fuelds. Thus, minimizing shiping distance, and the need for shipping in the first place, takes a lot of waste out of the operation and makes it sustainable.

Another easy step, as the article points out, is to minimize waste. Many manufacturing by-products can be reused or recycled, and can often even be resold to companies that can reuse or recyle them, turning (the) cost (of waste disposal) into profit.

Yet another easy step, not pointed out in the article, is to install timers and motion sensors and automatically turn off lights, heat, cooling, etc. when it’s not needed. A considerable amount of your energy is wasted heating and cooling space that no one is using.

Even if you can’t transform your operation overnight, you can still green it considerably taking baby steps.

Tompkins Associates and the Next Generation Supply Chain, Part I

About the same time that CAPS Research and A.T. Kearney were releasing their study on “Value Focussed Supply: Linking Supply to Competitive Business Strategies” (which was discussed extensively on SI in VFS: Will Yet Another Acronym Solve Our Woes?, VFS Enablers: Competitive Enablers in a New Wrapper, VFS: Accident or Planned?, VFS Level 1: Eliminate Value Leakage Part I and Part II, VFS Level 2: Increase Current Value, VFS Level 3: Create Tomorrow’s Value, VFS Level 4: Stretch for Added Value, and VFS: Are You Ready) and not long after Dalip Raheja of The MPower Group (TMG) declared the need for Next (Supply Chain) Practices in his much debated post on how Strategic Sourcing is Dead (which was followed by his declaration that The Sourcing Emperor Has No Clothes, his contribution to the Strategic Sourcing Debate in Part IV, and his invitation to The Wake for Strategic Sourcing), Tompkins Associates quietly released a 41-page white paper on “Leveraging the Supply Chain for Increased Shareholder Value” that declared the need for a new Supply Chain Value Creation Framework and a renewed focus on business value in the supply chain. Stating that the supply chain needed to move away from a cost focus to a focus on value, Tompkins Associates defind three objectives for the supply chain — profitable growth, margin improvement, and capital efficiency — and went on to describe the actions that a modern supply chain could take to achieve these goals … actions that aligned nicely with the CAPS and AT Kearney Value Focussed Supply paradigm and echoed the need for Next Practices and Next Generation Sourcing.

The importance of supply chains and their effectiveness, or lack thereof, has never been more apparent. A single supply chain disruption can cripple, and even bankrupt, your business, and a single failure in quality control can turn into a PR nightmare overnight with effects just as deadly. But even worse, lack of value creation on a daily basis will slowly eat away at profitablity and the life blood of the company.

But this doesn’t have to be the case as good supply chains drive value, which ultimately reaches shareholders and investors. It is the supply chain mega process, Plan – Buy – Make – Move – Store – Sell – Return, that comprises the core operations of most businesses, and the four supply chain information flows — Materials/Product, Information, Cash, and Work Flow — that determine the effectiveness and efficiency of overall business operations. Thus, a well oiled supply chain greases the rest of the business and an efficient and profitable supply chain lays the foundation for an efficient and profitable business.

A supply chain that uses a Value Creation Framework, such as the one presented by Tompkins Associates in their white paper, and that focusses on Profitable Growth, Margin Improvement, and Capital Efficiency can deliver significant and lasting value to the business simply by adopting and executing on value enabling actions. The whitepaper outlines six primary types of value enabling actions and then dives deep into implementation strategies that your organization can use to create value in the supply chain. The next four posts will discuss some of these actions at a high level and outline why Tompkins Associates’ white paper on “Leveraging the Supply Chain for Increased Shareholder Value” should definitely be on your reading list as you outline your Next Generation Sourcing strategy.

You Know Your Country is Falling Behind On Sustainability When …

The dirtiest country, energy wise, on the planet will almost equal you in Wind Energy Production per capita within five years. Sustainability is a big part of China’s new five year plan, and the goal is to increase wind energy production to 90 Gigawatts (GW) of power by 2016 from current production level of 40 GW. (Source: “The Next Five Years” SupplyChains.com) Currently, the US, the world leader in wind power production, produces a meare 35 GW of electricity from wind.

But more important is China’s commitment to reduce energy intensity per unit of GDP by 16%, cut carbon intensity per unit of GDP by 17%, and have non fossil fuels increase to 11.4% of primary energy mix by 2015. For a country that currently relies on dirty coal (whch is 70% of the energy mix), this is an aggressive goal. And even more aggressive are its 2020 goals of reducing carbon intensity per unit of GDP by 40% and increasing sustainable energy production to 15%. Considering that China tends to accomplish tasks it puts its minds to, this is an impressive start to a sustainability effort, which it has been in dire need of.

That’s Right Ariba, CombineNet, Emptoris, Hubwoo, Oracle, and SAP — I Called You Out!

To get right to the point, as far as I’m concerned, unless you have something to hide, there’s no reason not to give SI a demo of your publicly available solution. Because, despite what you may think, or what some misinformed individual might have told you,

  • I’m not going to steal your IP.
    Unless you show me the code, there’s no way I could steal anything. (And since I only need to see the application working to do a review, there’s no reason I’d ever need to see under the hood.)
  • I’m not going to expose your secrets.
    While I’m always interested in what’s coming down the pipe, for the purposes of a product review, I only care about what you have now — (about to be) released in(to) the public domain. There’s not much secret there — and while I may ask about company performance, plans, etc., if they’re still hush-hush, you don’t have to tell me.
  • I’m not biased against you.
    I might think a few select individuals who (used to) work for you aren’t very bright, but I know that one bad apple doesn’t spoil the bunch and even if I think that your marketing or communications team could use an upgrade, I know that these aren’t the people building or deploying the product in your customer sites. Thus, any personal opinions I have about a few marketing or communications people aren’t going to affect my analysis of the product and delivery.
  • I’m not going to give you a bad review
    unless you give me a PowerPoint demo. If you don’t believe me, look through the hundred plus reviews I’ve done over the last four and half years and try to find one bad product review. While it is true that not all of them are glowing, it’s also true that in each and every review I looked for the positives and the differentiators and did my best to give a fair and balanced review to anyone who took the time to give me a demo.  SI’s #1 goal is to inform its readers, and nothing informs them more than a fair, open, review of your solution (that’s totally free to you).
  • It is in your best interest.
    Even if you are an 800lb gorilla, this doesn’t mean that every buyer is going to associate you with best-of-breed in the application category they are looking for or going to invite you to the table without reading some objective analysis. While it’s true you don’t need the exposure as much as a number of other mid-size and smaller vendors in the space need it, and that it’s unlikely I’m going to get a call from you along the lines of “thanks to your post I just got a six figure deal I wouldn’t have known about otherwise as we’d never have been invited to the table or thought to call this company who reached out to us” (and, yes, I have gotten calls and e-mails like this), every product review post contributes to the snowball effect. The more blogs you’re reviewed on, the more likely it is that the larger mid-market companies you want so badly (as the top tier is getting crowded) are going to put you on a short-list.

If you decide to change your mind and give me a demo, I’ll make myself available to the best of my ability through the end of May. It’s up to you.  Just remember that for every company that won’t give SI a demo, there are dozens that will. (So many, in fact, that if I put out an open call, I can get more requests in a short time than I can handle because a fair review takes a significant investment of time on my part.) Plus, I always have something to write about, and, in the worst case scenario, if asked, I can always recommend your competition instead. Your call.