Monthly Archives: March 2014

Top 12 Challenges Facing India in the Decades Ahead – 01 – Politics & Democratic Complacency

A democracy on its own is not the solution to any of the aforementioned problems. China had many of these problems and solved most of them as a single-party socialist state and Russia as a Federal semi-presidential constitutional republic. Even monarchies, under a benevolent ruler, can solve most of the aforementioned problems. Egypt flourished for centuries as an absolute monarchy, and recent evidence suggests that many of its citizens were much better off than Hollywood would lead us to believe (and that the pyramids were not built by slaves but by farmers who were employed as workers during the off-season).

Like every form of government, democracy has advantages and disadvantages — with a major disadvantage being that a majority of the representatives have to agree before a law can be made or an action can be taken. And when you have a country with six recognized national parties and forty-seven recognized state parties (and approximately twenty more unrecognized state parties), this can be an enormous challenge. After all, the United States couldn’t even keep its government running last fall and it is effectively a two-party system!

Then there is the apparent unwillingness to challenge the status quo, focus on controversial or taboo issues that a country as progressive, modern, and rich as India shouldn’t still be dealing with (such as dalit, a lack of access to modern sanitation for the 55% of households that still practice open defecation, extreme poverty for the 33% of the population below the official poverty line and the 36% of the population that are not much better off, wide-spread under-nourishment and low life expectancies, and so on), or even take on industry (as noted by Dreze and Sen in An Uncertain Glory when they noted that the Finance Minister of India backed off from his proposal to introduce a small excise duty on gold and precious metals used for jewelry when jewellers and other influential people whose interests were effected responded with massive protests). If India wants to become a real first-world country, then it has to be willing to tackle the tough issues, make the tough decisions, and move forward. Populism does not progress make.

Not only does India have the challenge of having to deal with six recognized national parties and forty-seven recognized state parties (and approximately twenty more unrecognized state parties) across thirty-five states and territories, but it also has to deal with the fact that its constitution promotes local control. In some respects, the federal government faces the same challenges as the EU when it tries to standardize trade laws, for example, as India’s constitution (which is the longest constitution in the world at over 117,000 words) allows complete local autonomy in key arenas, with “schedules” (or lists) for the central government, states, and both to share.

And, as noted in William Antholis’ book on Inside Out India and China, India’s centralization effort led to the creation of a dark-side in the central government’s efforts to appease the different states and territories that threatened secession in the early days of the union. In particular, the end result was an elaborate system of license requirements and regulations, as well as carefully crafted spoils and quotas to placate different communities. This “License Raj” has helped to stifle the economy and led to massive local mismanagement and corruption at all levels — mismanagement and corruption that has to be addressed for India to prosper.

Again, a democracy on its own is not the solution to any of the aforementioned problems. There needs to be a willingness to accept the problem, address the problem, and work together towards a solution for the common good, regardless of the consequences, for any progress to be made. Until India politicians accept, and embrace this, en masse, progress will (continue to) be slow — and may not even materialize at all in some of the backwater states and territories (which would be happy just to obtain the quality of life promised by an Amish Paradise).

The New Supply Chain Manager – Global and Local

Supply Chain Digital recently published an interesting piece on three core trends impacting UK supply chain skills in 2014 where they noted that, even across the Atlantic, globalization is taking a new spin.

According to the article, complex supply networks are now deployed to offset inventory risk, balancing low production costs of far away places with short-lead time replenishment from factories closer to market. This allows for an initial order to be made in the Far East and then supplemented by more local sources if sales demand. This allows the buyer to balance cost vs. lead time / stock out / quality risk and indicates that, like the US, the UK is now focussing more on total cost of ownership and optimizing the total supply chain cost and not just the landed cost (even though the transportation costs from Eastern Europe and parts of Asia are much less for them then the transportation costs their North American counterparts need to bear). It’s a good sign, and SI has always maintained that the right sourcing methodology is best-cost country sourcing, and that often means, when the full life-cycle cost (and risk) is analyzed, home-country sourcing is the way to go.

The need to be local is further emphasized by the evolving purchase patterns of the local consumer. E-commerce is being widely adopted and the Amazon effect is taking hold. Consumers want to shop at home, get the goods delivered to their homes, and if something is broken, return the goods from their homes. This is forcing retailers and distributors to adapt to complex and challenging operating models as they need to not only manage the home-delivery process but the home-return process, often getting products back to the factory from which they came for repair, refurbishment, or recycling (as strict laws in the EU, such as RoHS and WEEE, often prevent outright disposal of anything with electronic components).

Finally, it all comes together in the last trend which revolves around the need for a broader skill-set to manage the broad nature of today’s Supply Management initiatives — initiates that are hugely complex in nature and require Supply Management professionals to know how to manage suppliers, production facilities and freight movements across a multitude of countries and time-zones. It’s not easy, but it can be fun!

15 Years Ago Today, The Internet Rocket Begins to Run Out of Fuel

15 Years Ago today, the Dow Jones Industrial Average closes above the 10,000 mark for the first time during the height of the Internet boom. It was the beginning of the end, which started a year later after the NASDAQ peaked at an all-time high of 4,048.62 on March 10, 2000. It was all downhill in the dot-com bust from that point on. But what can you expect from a frenzy that results in an online property spending $188 Million in a mere six months in an attempt to create a global online fashion store?

The lesson here is that if something looks too good to be true, it’s probably too good to last. If a supplier is significantly undercutting the market in their bid to win your business, it’s a desperation move and cutting prices to levels that are barely at, or below, cost is not going to improve the supplier’s financial viability. If your newly launched product is commanding a considerably larger share of the market than you expected, the market was probably a blue ocean and your lead will only last until a rival launches a similar product with new features and more marketing dollars behind it. If everything has been going smooth in your supply chain for the last year, given the current rate of supply chain disruptions and the ever increasing frequency of black swan attacks, your luck is probably about to run out. So be prepared for the unexpected. It’s bound to happen eventually, and likely sooner than you think!

The (Board) Gamer’s Guide to Supply Management Part III: Star Trek Catan

Space, the final frontier. These are the voyages of the interstellar supply fleet. Their interstellar mission: to find new sources of raw materials, to build new outposts and new star-bases, to build new supply routes where no supply routes existed before!

So, it’s been a while and you’ve progressed to the point where you’re now Master of Catan. Always the first to build outposts, transform them into cities, build new supply routes connecting them, and amass the largest armies to protect those supply routes, you think you’re a master of supply as you deftly conquer the ports to secure the trade advantage, always outsmart the pirate, and never allow your rivals to secure a longer route. Maybe you are the Master of the lonely isle of Catan, but are you ready to supply the final frontier?

In Star Trek Catan, you’re settling the final frontier – space. You are a merchant selected by the Federation to build supply outposts to supply the different federation members. Instead of building roads, you are building starships; instead of building settlements, you are building outposts; and instead of building up those settlements into cities, you are building those outposts up into star-bases. Just like roads, settlements, and cities required resources that could only be collected from regions that neighboured your existing settlements and cities, starships, outposts, and star-bases require resources that can only be collected from nearby planets. (Wood and brick are replaced by dilithium and tritanium, and sheep, wheat, and ore are replaced by food, water, and oxygen.) You still have development cards, but instead of soldiers that build your army, there are star-fleet interventions that augment your security, and the progress and “victory point” cards have been appropriately updated as well. But the biggest difference is the introduction of support cards. In regular Catan, all you could do was build, trade, or play a development card. In Star Trek Catan, you always have one support card which gives you a unique advantage and the choice of when to play it (which is important as any given support card can only be used twice).

The support cards, which are, of course, modelled after original Star Trek characters, give you special abilities on your turn or in certain circumstances. Eight of the abilities can only be activated on your turn:

  • Uhura:Forced Trade You have the upper hand and can force up to two players to give you a resource type you desire in exchange for a resource type you do not.
  • Scott:Starship Building Miracle When building a starship, you may replace 1 dilithium or 1 tritanium with any resource of your choice.
  • Sulu:New Heading You may move any starship on the board at the end of one of your supply routes to the end of another one of your supply routes.
  • McCoy:Development Specialist When buying a development card, one resource of your choice can be replaced with another resource of your choice.
  • Chekov:Klingon Decoy Move the Klingons to the asteroid field and take 1 resource of the type produced by the planet the Klingons left.
  • Rand:Free Trading Outpost Receive one resource of your choice and perform one or more border trades with that resource type at the 2:1 trading outpost for that resource type.
  • Chapel:Liberate a Resource On your turn, after the production roll, take one resource of your choice from a rival with more victory points than you.
  • Sarek:Swords to Plowshares You may discard one Starfleet Intervenes card to build an outpost for the same cost as a starship.

The final two abilities are activated on production rolls:

  • Spock:Resource Compensation On any non-“7” production roll where you receive no resources, you still get to take one resource of your choice.
  • Kirk:Protection from Klingons When a “7” is rolled, if you have more than 7 resources, you may use this ability to prevent resource loss or, if you have 7 or less resources, to take a resource of your choice.

These abilities, which encapsulate some of the different skills deft supply managers may possess, can completely change the game dynamics. Think you’ve done a good job acquiring a monopoly on water or air? Think again. An opponent with the Spock or Uhura support card can still acquire those resources from you or the main supply. Or use Scott or McCoy to substitute another resource for that resource. And it changes the dynamic for you too! Once you’ve deftly placed those star-bases and are acquiring resources faster than you can build, if you can secure it, you can use Kirk’s special ability to keep those Klingons away and achieve victory even faster.

And if you play your cards right, you’ll always score two (of the needed 10) victory points for the Longest Supply Route.

Could there be a better game for a budding Supply Manager to cut his teeth on as he takes up the art of strategic board-gaming to refine his supply mastery skills? the doctor, who believes we should all be preparing for Extra-Planetary Supply Management, thinks not!

The original Board Gamer’s Guide series:
Part    I: Ticket to Ride
Part   II: The Settlers of Catan
Part  III: Munchkin
Part  IV: Castle Panic
Part   V: Small World
Part  VI: Zombie Dice, Tsuro, and Get Bit!

… and the new Board Gamer’s Guide series:
Part  VII: Upon a Salty Ocean
Part VIII: Agricola
Part    IX: Small World Part 2
Part     X: All Creatures Big and Small
Part    XI: Agricola Part II-A
Part   XII: Agricola Part II-B

Want Lean Success? Get Lean With Your Lean!

Inbound Logistics recently published a short article on How to Deploy a Successful Improvement Program that chronicled the advice of APL Logistics’, who saved 30M through continuous improvement initiatives, foremast Lean/Six Sigma/JDI professional that had some really good advice.

To summarize, the article outlined a five-step method for deploying a successful improvement program.

  1. Choose One Quality Discipline and Focus On It
  2. Choose And Deploy Your Preferred Training Model
  3. Select the Right Members For Your Project Teams
  4. Choose the Right First Projects
  5. Continuously Improve Your Odds of Program Success

Two of these tips in particularly are especially poignant. In particular, tip #1 and tip #4. The secret to success is focus, focus, focus. Don’t try to adopt too many initiatives at once and don’t try to take on too many projects at once. Just like too many cooks spoil the broth, too many initiatives spoil the effort.

Lean projects, like any other type of improvement project, take effort to accomplish, and there is only so much effort that can be applied to any project. Thus, undertaking multiple types of improvement initiatives splits the effort that can be applied to each, and reduces the chances of success.

Similarly, undertaking multiple projects simultaneously reduces the effort that can be applied to each project, and extends the amount of time required to complete it. If a project takes too long, the chances of it being cancelled before it is completed increase, and, thus, the chances of failure.

When a new effort is undertaken, success often depends on a quick win, and a quick win depends on selecting a project that can be completed in the effort available — and focussing all of the effort available to make it a success. This means that the last thing you should do is start a second effort half-way through the first in an attempt to duplicate a success you do not yet have. Get one success, then start another project. Get another success, start a third project. Once you have a pattern of success under your belt, you’ll get more support (in the way of effort available) and then you can start multiple projects. Until then, get lean with your lean initiative.