Monthly Archives: November 2011

Forget Mexico. Canada Will Take Your US Shipping Business!

A recent article in American Shipper quoted the head of the largest container port in the U.S. who said that the U.S. [is] at fault for Canada diversion. According to Geraldine Knatz, Executive Director of the Port of Los Angeles, Canada’s investment (of over 4 Billion) in its western ports to capture more Asian trade is smart policy and there should be a U.S. government inquiry into cargo diversion to the North that focusses on domestic impediments to U.S. port competitiveness.

This is one case where the doctor has to disagree. See, up North, we’re quite happy to take your shipping business. And what you need to understand is that Vancouver is only 200 km (that’s 125 miles for you metric-phobes) from Seattle, only 500 km from Portland, and less than 700 km from Spokane. And it’s a mere 2000 km from Los Angeles. Smart Logistics can get your shipment there by truck in two days even with driving limits if you team-up drivers or have them switch off at mid-points. And while Chicago might be 3500 km away, with an infrastructure that supports intermodal transport (including rail), it doesn’t take long to get your cargo to Chicago either. (As per the article, Canada’s value proposition is that can trim at least two days off the transit time from North Asia to U.S. destinations, with competitive intermodal rail service. The new port at Prince Rupert was designed to transfer all containers at the dock to Canadian National Trains which can reach Chicago in 100 hours!)

And if you’re shipping to the east, Halifax to Boston is only 1100 km — and the Port of Halifax, in the world’s second largest natural harbour, is undergoing continual expansion (and now has direct routes from Vietnam) — with two new super post-panamax cranes coming in 2012 (along with the Disney Cruise Line). In addition, to meet your air cargo requirements, the main runway at international award winning Halifax Stanfield International Airport is being extended. (Link)

We’re ready for your business! And we can handle way more than 7%. So send your business up North. We’ll take it — and save you money too.

Remember, You Can’t Control the Clouds!

Even though futurists have been predicting weather control for well over half a century, and even though the US Government tried to control the weather for over 20 years (primarily with respect to storm prevention), the reality is that we still can not control the weather, or the clouds.

Thus, the clouds, which are not fluffy magic boxes and not omniscient magic mirrors, and which are, in fact, filled with hail despite your sweet fluffy dreams to the contrary, are perfect metaphors for the new breed of virtual hosting solutions being offered by countless vendors.

As per a recent Ponemon Institute study, as summarized by this recent CFO article on Cloud Control, a significant majority of 127 cloud-computing service providers surveyed believe it is their customers’ responsibility to secure the cloud, not theirs!

When Bruce Lynne, managing partner of Financial Executives Consulting Group, said Cloud is just a fancy word for outsourcing, he was right and, as a smart CFO knows, when a company outsources, it sheds work, not responsibility. And the Cloud is inherently insecure. Heck, even Amazon has “no liability … for any unauthorized access or use, corruption, deletion, destruction or loss of any of Your Content or Applications”.

And private clouds are no more secure than public clouds, because your data is still on a virtualized platform and this means that when a hacker accesses one server, he accesses them all! Almost instantaneously!

Plus, you have no idea how long your data hangs around if the service doesn’t fail. 90 days? 1 year? For as long as the service exists? Maybe the provider deletes your archived e-mails after 90 days as per the contract and your corporate data retention policies. Maybe the provider doesn’t. And you might not find out until you get sued and have to turn over 3 year old e-mails that weren’t supposed to be kept. And more importantly, how quickly can the provider retrieve all of your corporate e-mails for the past 90 days from the 10,000 employee data store that you have to turn over for discovery?

And then there’s the problem that it doesn’t matter how secure you are or how secure the provider is if even one of the cloud provider’s customers is insecure. Remember, it only takes one hacker to penetrate one server and … boom … game over.

CBTM #3: Help!!! Recruiting Next Practices Needed!

Today’s guest post is from Anne Kohler of The MPower Group, co-founder and COO.

We have been hearing about Sourcing / Supply Chain organizations which are looking for up to 400 people. How does any company find themselves in a situation where they need that many people all at once? I guess one could blame an ill managed recruiting function but I suspect that the entire Talent Management program (if there is one?) is broken. As noted in our last post, Talent Management has five phases, all of which must be integrated and treated individually and collectively as a system in order to be effective. We advocate that a talent management program MUST be competency based (“CBTM”) to be sustainable and must cover ALL phases of an employee’s journey through a company. In addition, each of these phases must be supported by:

  • A clear understanding of the role the Sourcing / Supply Chain organization will play for the company
  • A definition of the Intended Consequences the Sourcing / Supply Chain function is trying to achieve for its customers / internal business partners
  • Clear goals and objectives for the group which are tied back to corporate goals
  • A clearly defined competency model to support the defined role, intended consequences and goals of the organization

Let’s begin with the first phase which is Recruiting. Keep in mind that having a strong recruiting function is absolutely useless unless you can retain and grow the talent you bring in. This is why CBTM MUST be viewed as a system. Any weak link in that system can find your best people returning to the job market out of frustration. Think about a high potential that is told they are an asset of the organization only to find themselves in a position where they are given little to no training or development, no clear goals or metrics, no career development support or no clear path for advancement. Some asset!! How long do you think that “high potential” is going to stick around? Keep in mind, bringing new people into an organization can be a VERY expensive proposition if they end up leaving in a short time. For recruiting to yield a positive return on investment, the other phases of CBTM must be in place to ensure employee retention.

Some organizations are constantly trying to “find” the right people. In many cases this is because:

  • they didn’t define the right requirements (competencies) up front
  • the defined requirements were not tied back to actual needs
  • they did a poor job marketing (selling) the position and / or the company
  • they found the right people but couldn’t keep them
  • the screening process was conducted by individuals that did not have subject matter expertise (HR perhaps)
  • candidates were not a good culture fit for the company

Constantly trying to find the right people is expensive, as is on-boarding and training new hires. Here are a few Next Practice tips to strengthen your recruiting practices:

  • Understand the role you are expecting your Sourcing / Supply Chain organization to play — Tactical executor? Strategic business partner? Change agent? The role (whatever it is) will determine the competencies required and those MUST be defined
  • Clearly defined requirements that are tied to customer needs / intended consequences and are supported by required competencies
  • A marketing plan that allows you to present your company in the best way to attract the best candidates
  • A screening process that ensures the right functional and cultural fit
  • A rotational program for new hires that may be high potentials but who do not yet know where they fit
  • A process that closely matches candidate competencies with the open position — putting a high-powered Sourcing professional in a tactical buying position will do nothing but frustrate everyone involved (and vice versa) and cause the employee to leave
  • An on-boarding process that gets the new hire off to a strong start
  • Ensuring the other phases of CBTM are in place and being utilized

If you are interested in getting involved or would like to follow this topic further, here are a series of critical activities coming up:

  • Release of the results of the Executive Forum we just facilitated at the IACCM Global Forum for Contracting & Commercial Excellence on Talent Management.
  • A major research project to not identify the problem one more time but to identify Next Practices to solve the problems.
  • A webinar with IACCM on CBTM.
  • A White Paper to focus on Next Practices in CBTM.

Please contact Crystal Jones at crystalj <at> thempowergroup <dot> com for more information.

What Determines Best in Class in Energy Management?

Energy prices are going up. Energy consumables (oil, natural gas, and coal) are going down. Electric vehicles are still not an option for major forms of supply chain transportation (plane, train, and tractor trailer). And they need to be charged from a grid that is probably not set up to handle large quantities of renewable energy, as production is not constant (as winds come and go, tides ebb, and clouds mess with direct sunlight) and grids require constant power levels (or they overload and blow — and even though the sky lights up a beautiful shade of blue when it happens at night, it’s a pretty sight you really don’t want to see).

As a result, energy conservation, which starts with energy management, is becoming more important by the day — especially when supply management needs to keep costs down (which are starting to skyrocket in manufacturing plants and data centers), be socially and environmentally responsible, and deal with (impending) carbon legislation. For some organizations, that’s easier said than done and they need a roadmap from an external expert. The goal of this post is not to provide that, but to define what best-in-class in energy management is and key capabilities required to get there.

According to a recent Aberdeen study on Energy Intelligence, best-in-in class is defined by:

  • High Operating Equipment Effectiveness (91%+)
  • Aggressive, continual, reduction in energy consumption
  • Aggressive, continual, improvement in operating margins

And, in particular, best-in-class organizations exceed their energy consumption and operating margin goals by 20% or more.

To this I’d add:

  • aggressive, continual, movement to renewable sources
  • continual shift to low-energy technologies and process

Let’s face it. High OEEE is good, but if the equipment being used is an energy hog, 90% efficiency is still bad if there is an alternative piece of equipment that only uses half the electricity at 88% efficiency. And energy reduction is good, but moving to renewable sources is better. No coal is better than less coal.

So what are they key capabilities you require to become best-in-class in energy management?

According to the Aberdeen report,

  • accessible real-time and historical energy data,
  • standardized energy management processes across the enterprise, and
  • metrics to benchmark the performance of the energy program across different plants.

This is a good start, but your energy management expert in supply management also needs

  • a solid data analysis tool to analyze the cost and usage data,
  • a strategic-sourcing decision optimization solution that can handle energy models in all their complexity to allow the analyst to optimize the buy in a manner that balances cost with sustainability and risk management goals and provides the most value to the organization, and
  • a supply chain visibility solution that allows an analyst to monitor the energy usage across different plants in near-real time to find usage patterns that are problematic or appropriate for optimization.

If an analyst had all these capabilities, there’s a good chance the organization would be on its way to becoming a best-in-class energy manager. Unless you think these capabilities are not sufficient and they also need a few SCRAPS. Thoughts?

… Then I Take Purchasing

Inspired by the great Leonard Cohen‘s First We Take Manhattan:

… Then I Take Purchasing

They sentenced me to thirty years of boredom
For trying to change the system from within
I’m coming now, I’m coming to reward them
First I take Corp’rate Finance, then I take Purchasing

I’m guided by a signal in the heavens
I’m guided by this birthmark on my skin
I’m guided by the beauty of my weapon
First I take Corp’rate Finance, then I take Purchasing

I do not like to live beside you, baby
I fear your body and your spirit and your clothes
But you see that line there moving through the station?
I told you, I told you, told you, I was one of those

Ah you loved me as a loser, but now you’re worried that I just might win
You know the way to stop me, but you don’t have the discipline
How many nights I prayed for this, to let my work begin
First I take Corp’rate Finance, then I take Purchasing

I don’t like your fashion business mister
And I don’t like the tainted money you take in
I don’t like what happened to my sister
First I take Corp’rate Finance, then I take Purchasing

I do not like to live beside you, baby …

And I thank you for those items that you sent me
The monkey and the plywood violin
I practiced every night, now I’m ready
First I take Corp’rate Finance, then I take Purchasing

I am guided

Ah remember me, I used to live for content
Remember me, I brought your traffic in
Well it’s Veteran’s Day and everybody’s wounded
First I take Corp’rate Finance, then I take Purchasing