Monthly Archives: December 2012

CASSH starts with Canada!

Wall Street is about to go gonzo again and you can …

Blame Canada! Blame Canada!

With all our beady little eyes
And flapping heads so full of lies

Blame Canada! Blame Canada!

Time to form a full assault
It’s all Canada’s fault!

Yes, it’s all our fault. Because of our strong risk aversion and sound fiscal and financial management policies (with the exception of any policy Harper wants to implement), we are emerging from the global financial crisis in a comparatively healthy state. We don’t have a fiscal cliff, a systemic debt crisis, grossly unbalanced budgets or high levels of unemployment. We tend to make good policy decisions (with the aforementioned example) and, as per this recent article on CNN, we have hidden value.

And, like the other CASSH countries (Australia, Singapore, Switzerland, and Hong Kong), we’re looking at a 3% increase in GDP in 2013, compared to the 2% expected in the United States and Japan and the 1% in the EuroZone. We’re becoming the GDP leaders of the developed world! We’re stealing your thunder! (That’s right, you’ve been ThunderStruck.)

So what does this mean? For those of you South of the border, it’s time to take a closer look at your northern neighbour for investments of all kinds. Need a new R&D lab? Put it here! (And maybe even save some tax dollars while you’re at it. You can save Millions in taxes with SR&ED if you qualify, for example.) Need a new high tech manufacturing facility? Put it here! (And in addition to our productivity gains, take advantage of our highly educated workforce – our University completion rate is over 25%, meaning over 1/4th of the population between 25 and 64 has a degree.) Need a new corporate headquarters? Put it here! (Our banks won’t go bankrupt and take your cash with them!)

And, again, you can:

Blame Canada! Blame Canada!
It seems that everything’s gone wrong
Since Canada came along

Blame Canada!
Blame Canada!
We’re not even a real country anyway

:-;

Wrong on So Many Levels

Editor’s Note: Today’s guest post is from Dick Locke. Dick, who has delivered seminars to over 100 companies across the globe, is a seasoned expert on International Sourcing and Procurement who wrote the book. (Here is the link to his archived posts.)

The fire that killed 112 Bangladeshi garment workers has brought out some appalling purchasing practices that seem rampant in the garment industry. And this is the second such fire in three months. The previous fire killed more than 300 people in Pakistan.
The New York Times has had several articles on the issue. Here are some quotes. This picture is wrong on so many levels.

From one article:

        

“… mounds of flammable yarn and fabric were illegally stored on the ground floor near electrical generators. Had the fabric been stored in an enclosed, fireproof room, as required by law, the fire could have been contained and the workers could have escaped.”

“After the fire, Walmart, Sears and other retailers made the same startling admission: They say they did not know that Tazreen Fashions was making their clothing.”

“Much of the factory’s business came through opaque networks of subcontracts with suppliers or local buying houses.”

“The factory’s owner, Delowar Hossain, said his managers arranged work through local middlemen. ‘We don’t know the buyers’, Mr. Hossain said in an interview. ‘The local man is important. The buyer – I don’t care’.”

“The Bangladeshi government has started inspecting the country’s 4,500 garment factories; it has already found fire code violations in almost a third of the hundreds it has examined.”

From another article:

        

“Sridevi Kalavakolanu, a Walmart director of ethical sourcing, along with an official from another major apparel retailer, noted that the proposed improvements in electrical and fire safety would involve as many as 4,500 factories and would be ‘in most cases’ a ‘very extensive and costly modification’.

‘It is not financially feasible for the brands to make such investments’, the minutes said”.

Folks, this is so basic. You need to know your suppliers personally, wherever in the world they may be. You also need to know where your products are being built. It’s time to bring garment purchasing into the modern world. If you can’t afford to have your own people in the suppliers’ country, you can’t afford to buy there.

Thanks, Dick.

Let’s be Clear. Logistics Services and Logistics Technology Services Are NOT the Same!

And while the technology they use is important, the initial focus should be on the logistics services and whether the logistics services they offer are sufficient enough for the provider to even be under consideration.

Recently, I came across the headline that offered 5 Essential Technology Questions to Ask Any Logistics Service Provider and, as logistics services are not the same as logistics technology services, I assumed it would focus on judging the logistics provider’s general level of technical competence online and off, but the questions were entirely oriented around the technology solution used by the provider. While a good solution is good, because you need visibility, integration, etc., the first thing you need is to get your goods delivered. The second thing you need is sustainability. Then you need technology – and if the provider is deficient, there’s always the possibility that you can provide the technology. In other words, while the questions were good, I think they were off track. Here were the questions:

  1. What does visibility really mean to the provider?
  2. Can they customize their tools to meet your needs?
  3. What process integration options do they offer?
  4. How many current providers are integrated with their technology?
  5. How mature is their system availability process?

These are important, but I’d start with:

  1. What technology do they use to manage their fulfillment operations?
  2. How sophisticated is the schedule capability? Can it handle last-minute shipment changes?
  3. How much visibility can they give you into their schedules, capacity, and your shipments?
  4. Is the integration format standard and supported by your systems, or will you need some custom integration work?
  5. What is their ability to support their system, or yours if their system does not have the requisite visibility?

    Basically, you want to know that:

    1. They are using a fairly modern tool and have a firm, efficient grasp on their operations.
    2. They can handle dynamic schedules and expedited shipments when needed.
    3. You can get the visibility you need, even if someone has to do some development work.
    4. The integration can be accomplished efficiently and effectively.
    5. They, and you, are not dependent on a third party to manage, support, and query the system.

    A logistics services provider is not going to be an expert in software and systems. That’s not their core strength, so you shouldn’t be asking them questions like they are. That being said, you should make sure they are technologically literate and able to make use of appropriate technology. Find the balance, or you might end up eliminating some potentially great partners.

Looking for a Value Generation Opportunity?

Then consider starting out with the five C’s of opportunity identification (for would-be innovators), as outlined by Scott Anthony on the HBR blogs.

  • Circumstance
    The specific problems a stakeholder cares about and the way they assess solutions is very circumstance contingent. For example, when beginning a new advertising campaign, Marketing is clearly interested in who can create the campaign most likely to convince a customer to part with dollars and not how much the invoice for the materials will be. However, the marketing assistant charged with obtaining 10,000 flyers and 100 posters for an upcoming conference will likely be much more cost conscious as she will likely be questioned by the CFO otherwise.
  • Context
    Ask a stakeholder to report what they did in the past and you are likely to get something that bears only a loose resemblance to reality. Ask a stakeholder to describe what they will do in the future and you are going to get guesses that are less than accurate. Most people have no conscious memory of how they do routine tasks or any real idea of how they will accomplish a (new) task in the future. If you really want to understand how something is done, you need to watch as it is being done. And if you want to get a good feeling as to what kind of solution will please the stakeholder, watch as they try to solve the problem. Get some insight into how they think! How is Operations managing their temp labour contracts?
  • Contraints
    One of the time-tested paths to growth is to develop an innovative means around a barrier constraining consumption. If your e-Sourcing platform is not being used outside of your core buying team, then it is probably too cumbersome, too incomprehensible, or too demanding. As the author notes, understanding why a customer doesn’t consume is critical. Something new typically isn’t enough. And simply replacing Big Vendor Product X with Big Vendor Product Y isn’t guaranteed to solve the problem if Big Vendor Product Y is also missing critical path function Z.
  • Compensating Behaviours
    One of the biggest challenges facing the would-be innovator is determining whether a job is important enough to consider targeting. One clear sign is a stakeholder spending money trying to solve a problem. Another clear sign is they are trying to use a product in an unintended way to try and solve a problem. Unfortunately, if the tool is a spreadsheet (and they are misusing it horribly), it probably means they aren’t willing to spend money, at least in Supply Management – so don’t get your hopes up!
  • Criteria
    Stakeholders look at jobs through functional, emotional, and social lenses. Quality is a relative term; you can only determine if a solution is good by first understanding the criteria that matter to a particular stakeholder. If they care only about new market acquisition, a cost discussion is a losing battle. Only about innovation, a strategy to extend the longevity of the current product is a losing battle.