Daily Archives: June 24, 2011

The Best Argument for Making Your Data Available Online 24/7

If your data isn’t immediately accessible online, either behind your firewall or behind someone else’s firewall or in the cloud, when your employees need it, then they are going to download it to their machines. If their machine is a laptop, and the data is not securely encrypted, and the laptop is stolen, then, as per this ZoneAlarm Blog Entry from earlier this year, it could cost your organization 1 Million (or more). (And even if the data is encrypted, and it’s valuable enough, someone will invest the time in breaking the encryption.)

But if your data is always available, and, better yet, the applications that do the processing reside on the servers the data is on, then your employees and contractors won’t need to download it to their laptops to process it. And you can even implement safeguards to prevent such. Then, when the laptop gets stolen, your loss will be the replacement cost and a minimal lost productivity cost (as you can replace it in hours), which will max out at a few thousand. Compare this to the situation where you have data breaches, IP loss, and forensics and investigation costs which can be 10, 100, or even 1000 times the replacement and lost productivity costs.

So encrypt your data, put it on a VPN behind a firewall, and make it available 24/7. It will be much cheaper, and safer, than having it unencrpyted on your employees’ laptops which will, inevitably, get stolen despite their best efforts to protect them.

Four Good and One Bad Suggestion For Preparing Your Supply Chain for Volatility

A recent article over on ChiefExecutive.net on Volatility: Predictions and Prescriptions presented five suggestions for dealing with the current market volatility that guarantees both minor and massive disruptions will continue to occur on a global scale, impacting your supply chain(s) to various degrees as they occur. Four of them were quite good. One wasn’t. Since it is important for a supply management organization to face the reality of increased volatility and plan for it to mitigate its risk, this post will review the suggestions presented in the article. Disruptions are going to happen. The only unknown is how bad the disruption will be. Since a disruption is always worse for an unprepared organization, it’s important that an organization do everything it can to be prepared.

The organization should start by:

  1. Expecting Disruptions
    They’re going to happen. Some you will predict. Some you won’t. The more flexible the organization is, the more capable it will be in dealing with the disruption. Plus, an organization that expects to be disrupted won’t be shocked by a disruption and won’t have the additional disruption of having to deal with the emotional impact of not being prepared for the initial disruption.
  2. Feeling the Malaise
    An organization that expects disruptions will, at first, feel uneasy and weary knowing that at least some of its best laid plans will come to ruin. But once the organization gets used to the feeling, and begins to savor it, the preparedness will save the organization in its hour of need because the disruption won’t seem so bad.

The the organization should take heed of the following four suggestions:

  1. Simulate Scenarios
    Once the organization expects disruptions, it can “game plan” how to deal with them. It can identify the different kinds of disruptions that can occur and scope out a sequence of responses to each. And although some disruptions can never be anticipated and “game planned”, if similar disruptions have been addressed, the organization will have a starting plan that should be workable with only a few minor tweaks.
  2. Diversify Geographies
    Many disruptions, such as natural disasters and political turmoil, are localized to a region or a country. A supply chain that multi-sources key products and services from different regions and countries should be in better shape to withstand a shock of a product no longer being available from a supplier in a certain region due to a natural disaster or political disturbance.
  3. Diversify Products and Services
    Not only should geographies be diversified, but so should raw materials, products, and services when applicable. Although the former will often be hard to diversify, as certain raw materials will not be substitutable, services are very easy to diversify and should be.
  4. Deleverage Balance Sheets
    While a leveraged supply chain can generate great returns in good markets, it can be downright risky in bad markets. In a volatile market, it is often safer to sacrifice some ROE in return for safer debt/equity ratios (or inventory/equity) over the longer term.

However, the organization should not listen to the fifth and final suggestion, which is downright destructive:

  1. Enable Rapid Downsizing
    Supply Management is getting more knowledge-intensive by the day and we’re in a serious talent crunch. The last thing you do is get rid of good people, especially those that can often generate savings of 10 to 100 times their annual salary on a single buy. While high fixed costs can be dangerous in times of reduced cash flow, it is much better to get rid of assets (and rent them back if you need to) then to get rid of good people.