Monthly Archives: May 2014

What are the Retail Keys to Success?

Retail is hard. Really hard. Razor thin margins. Demanding customers. Unpredictable trends. Unreliable carriers. Financially unstable suppliers. The list goes on. But there are steps a retailer can take to make sure their odds are better than their competitors. Specifically, they can take steps to strengthen their supply chain — and a recent article over on Supply Chain Digital on untangling the retail supply chain with real-time analytics outlines four steps a retailer can take to strengthen their supply chain.

1. Obtain an end-to-end transparent view of the supply chain across both traditional and online business units.

You can’t run brick-and-mortar and online stores as separate business units. They are one brand and your customer expects one experience. If it’s in the warehouse, it needs to be available to customers who frequent your store as well as to customers who visit your online storefront. Moreover, pricing needs to be comparable. If you charge significantly less online than in the store for the same product, then why should your customer come to your store? Especially if you’re offering free shipping to build your online presence?

2. Implement the capability to identify bottlenecks and problems in real-time and the agility to take corrective action before the customer experience is impacted.

Your end-to-end view needs to go beyond simply identifying inventory levels across the organization, but expected delivery dates, ship dates, and late shipments / deliveries that will increase stock-outs and impact your ability to serve your customers.

3. Integrate once diverse and siloed sources of data across the business units to offer coordinated and quality service levels for the omni-channel shopper.

You need to not only offer superior service, but service your online customers in your stores and your store customers online, because, online or offline, you’re one organization, one brand, and you need to offer one consistent quality of service to maintain that brand.

4. Leverage historical data to set baselines and then analyze data against those baselines on a regular basis to make more reliable and timely predictions and better manage the business.

Past purchase patterns are just that — past purchase patterns. As tastes and trends change, so do purchase patterns — and the sooner new patterns are detected, the sooner inventory levels can be modified to prevent stock-outs of popular items and expensive over-stocks of items in disfavour.

It’s not a complete list of actions retailers can take, but it is a good starting list.

10 Mistakes You Make When You Try To Build a Private Cloud

VentureBeat recently ran a great article on 5 Mistakes You’re Making When You Try to Build a Private Cloud that did a great job of covering 5 mistakes you make, but why stop there? SI can easily come up with 10 mistakes, more if it gives the issue a second thought. So, since some of you still don’t believe that The Cloud is Filled with Hail, let’s review the VentureBeat 5 and throw 5 more into the mix to see if that’s enough to convince you that The Cloud is Not a Magic Mirror — especially when you take a do-it-yourself approach!

VentureBeat’s 5 Mistakes of a Private Cloud are:

1. You believe the cloud will solve all your problems.

With so many vendors touting it, you believe that a cloud must be the answer, so why not control your own? There are a host of reasons, including those that will be discussed in response to the other wrong assumptions, but the most important thing to remember is that not all applications are good candidates for the cloud. Applications that are intermittent, that run full tilt, or that spike unexpectedly are not always good cloud candidates — public or private.

2. You think everyone will automatically love the idea.

You keep hearing that clouds bring agility, adaptability, and actionable data — so you think that you can convince everyone else to fall in love with the cloud too because you believe that these are reasons to fall in love with the cloud. A cloud is as adaptable as the software that drives it, as actionable as the data you can get into it, and as agile as your organization — if it takes 3 months to get a product to market using the best processes you can come up with, it takes 3 months to get that product to market — cloud or no cloud.

3. You think it’s cool.

Clouds aren’t cool (although the rain they bring may cool you off). And unless you are in the business of selling “cool” technology (i.e. private clouds to suckers who buy private clouds), the last thing you should be basing a business decision on is the “cool” factor. You buy technology to solve your problems, not because it’s cool.

4. You think you will succeed in boiling the ocean.

A private cloud is a huge IT project similar to trying to replace 3 ERPs across your global organization that have been entrenched for 10 years across 3 continents in one fell swoop while trying to add 4 modules you never had before. It’s like trying to boil the ocean with a single giant magnifying glass — brave, maybe even visionary, but ultimately stupid.

5. You think your plan will fit the organization.

The typical private cloud relies on converged infrastructure (CI) stacks which break down the typical organization walls of application teams, server teams, network teams, and storage teams. How many Global 3000 organizations have one single version of the truth across the enterprise? Maybe the few dozen organizations that successfully achieved enterprise wide deployments of SAP and Oracle?

That’s just the beginning. Here are 5 more mistakes courtesy of SI:

6. You think a private cloud will be cheaper than a public cloud.

You might think that a cloud is a fluffy magic box that can be obtained with a handful of magic beans that you can get by trading a simple cow, but that’s about as far from reality as you can get. Clouds require hardware, software, dedicated network connectivity, and power. Lots of power. You will need backup generators in addition to a wall of UPS units (to keep the machines humming until the generators kick in), multiple fibre connections, racks of machines and storage area networks, and a lot of specialized software. And, instead of sharing the cost, you get to pay for it all — as well as the staff to build it and maintain it 100% — 24/7/365.

7. You think all modern technology was built for the cloud.

A lot of software is, but not all — and chances are that a lot of the software you are using, even if still under maintenance, was not built for the cloud. So, you’ll have to update your current software and migrate your current data stores while you are at it.

8. You think it is the best way to interact with your trading partners and the private clouds you wrongly assume they have.

The cloud is connective, but only if it is shared. Otherwise, it’s just one massive local area network that needs to talk with other massive local area networks used by your trading partners. Clouds don’t create connectivity – data interchange standards do, and you don’t need clouds for that!

9. You think you can secure it better than the experts.

Hi Ho, Hi Ho.
It’s off to work we go!
We block the ports and tune the firewall
In our ‘Net the whole day through
We block the ports and tune the firewall
It’s what we like to do
It ain’t no trick
To lock down quick
If ya block the port
With a sniffer on a ‘NIC
In the ‘Net …

And you can block every port, patch every firewall, and sniff every ‘NIC, but the reality is, your network is only as secure as the weakest link — which is probably the software you’re using and the ports you need to have open. Which you don’t know how to protect because your IT staff is struggling to patch your firewall, scan the ports, and upgrade SSL before the heartbleed bug bleeds you dry of your corporate secrets. When it comes to security, you need true security experts — and you’re not going to have them in house.

10. You think the cloud can actually be secured.

The only way to truly secure a network is to unplug it. So if you think you have a hope in Hades of securing your private cloud …

All The World’s A Stage … and 115 Years Ago Today, the First Hague Conference Tried to Set the Rules of Performance.

One hundred and fifteen years ago today, the First International Peace Conference was held at The Hague in the Netherlands. The goal of the peace conference was to negotiate disarmament, the laws of war, and war crimes and, if possible, to create a binding international court for compulsory arbitration to settle international disputes — an establishment considered necessary to replace the institution of war. While most of the countries present favoured the process for binding international arbitration — including the United States, Britain, Russia, and China, a few countries — including Germany — vetoed it.

However, in addition to the creation of three primary treaties, ratified by all major powers, namely:

  • Convention for the Pacific Settlement of International Disputes
  • Convention with respect to the Laws and Customs of War on Land
  • Convention for the Adaptation to Maritime Warfare of the Principles of the Geneva Convention

and three declarations, ratified by all major powers except the United States (and Great Britain with respect to the first declaration):

  • Declaration concerning the Prohibition of the Discharge of Projectiles and Explosive from Balloons or by Other New Analogous Methods
  • Declaration concerning the Prohibition of the Use of Projectiles with the Sole Object to Spread Asphyxiating Poisonous Gases
  • Declaration concerning the Prohibition of the Use of Bullets which can Easily Expand or Change their Form inside the Human Body

it did manage to establish a voluntary forum for arbitration, the Permanent Court of Arbitration (PCA), which is typically overshadowed by the International Court of Justice that replaced its sister court, the Permanent Court of International Justice that was formed in 1922.

The PCA is important, even though you’ve probably never heard of it, because it is the court that administers cases that arise out of international treaties (including bilateral and multilateral investment treaties) that span a wide range of legal issues, including maritime boundaries, international investment, and matters concerning international and regional trade. While your company will likely never end up in the courtroom, your government likely will, and the decisions might change what your country is, and thus what you are, allowed to do — and might be the entire reason laws change overnight (which will happen if a maritime boundary is rezoned and you are fishery, for example).

Of course, if you are a big multinational, the PCA might be the registry for your government arbitration that is being conducted under UNCITRAL arbitration rules.

(For example, the PCA recently held a hearing between Bilcon of Delaware et al v. Government of Canada on an arbitration claim about the need for Canada and its subnational governments to fairly administer and follow their environmental and investment laws and regulations to ensure a high standard of environmental protection that arose out of unfair, arbitrary, and discriminatory application of certain government measures relating to the permitting of a basalt quarry and marine terminal at Whites Points in Digby County, Nova Scotia because the type of environmental assessment that the Investors were required to carry out were more burdensome, unfair, and arbitrary than the types of environmental assessments other Canadian investors with similar projects have had to undergo.)

While it was not the preferred outcome of the Peace Conference, the court does give nation states a viable alternative to war and corporations and investors a way to hold nation states accountable to the global agreements they signed up for. And it is a fairly busy court. Right now, the PCA is the registry in eight inter-state arbitrations, fifty-two investor-state arbitrations, and thirty-three arbitrations under contracts or other agreements to which one party is a state, state-controlled entity, or intergovernmental organization. If you’re working for a big multi-national, the PCA is an entity you should be aware of.

2 in 5 Fleet Owners Suspect Fuel Invoice Errors. What About the Other 3?

A recent article over on TruckingInfo that wanted to know if you are Staying On Top of Your Fuel Invoices noted that only 40% of respondents to a recent survey by FuelQuest suspected errors in their fuel invoices. SI’s question is, what about the other 60%?

According to the article, unaddressed, bulk fuel invoice error rates tend to hover around 25%, but some companies have rates as high as 55%. This is due to complex fuel and freight contracts as well as manual or sample-based reconciliation processes. This is because they lack the processes and technologies to insure complete, consistent, and effective invoice matching and review.

Furthermore, the lack of proper processes and technologies results in the business impact from invoicing errors including overpayments, increased operational costs, and lost trust in suppliers being significantly underestimated. If a large fleet company is consistently being over billed 3 cents/gallon, that’s up to $12 of over-billing on every fill up and up to $2,000 a year of over-billing for every 18 wheeler (with an older model getting an average of only 5 mpg). If you have 50 trucks in your fleet, that’s an over-billing at a rate of 100K/year until it is detected. And how much will be recovered?

Even if you are a 3PL/Logistics Carrier you need end-to-end invoice automation, m-way matching, and exception-based management. Otherwise, you don’t know how much money is being needlessly burned by your fleet.

The Board Gamers Guide to Supply Management Part XX: Le Havre, The Inland Port

You like being the harbour master, but getting in a rousing game of Le Havre is difficult because of the average playtime of one and a half to three hours and you want to get in a rousing game over lunch. Plus, sometimes only one person will dare to take you on. If only there was a more streamlined two-person variant, just like the All Creatures Big and Small variant of Agricola, things would be great.

Good news, there is! Based on the original Le Havre, Le Havre: The Inland Port is a streamlined variant of Le Havre that can be played by two people in thirty to forty-five minutes, allowing you to get a rousing game, or two, in over your lunch break as you both vie for the title of Habour Master — an important title given the importance of ocean logistics, cross-dock, and warehouse management in your supply chain.

As with All Creatures Big and Small, The Inland Port is simpler to learn than the full game, but is just as hard to master, especially since there are 31 building tiles and you will be able to play at most 12 each during the course of the game, and the order of play can change each game (as can the order of availability if you play a full random game).

As in regular Le Havre, the game consists of a fixed number of rounds (12 to be precise) and each round consists of a fixed number of turns (equal to 3 in the first 3 rounds, 5 in the next 3 rounds, 7 in the following 3 rounds, and 9 in the final 3 rounds for a total of 72 turns in all). As in regular Le Havre, one player has more turns than the other in each round, but each player still gets the same number of turns by the end of the game. However, the variable number of turns dictates that, in each round, one player will have one less chance to use available buildings, including two buildings that will become unavailable for use by the end of the round.

Le Havre, The Inland Port reduces the time and complexity required in the game by cleaning up the 3-biggest time crunches in Le Havre

  • Replenishment and Upkeep
    In Le Havre, at the end of every turn, available supplies are replenished and a lot of time is spent updating available inventory (and unlocking buildings now available for use). In The Inland Port, there is no replenishment phase as all supplies are increased (and decreased) through the utilization of available buildings (or the purchase thereof)
  • Feeding
    Although this is an important mechanic, as it represents the real-world need to maintain enough cash-flow to pay your workers, it is a time consuming one. In Le Havre, the feeding requirement is eliminated, but the net effect (of decreasing your cash reserves and/or food supply) is compensated for with the forced-sale mechanism. Any building that is built must be sold within 5 rounds at a loss equal to half of its value.
  • Resource Collection and Usage
    In regular Le Havre, when you use a building to take an action, you are often increasing or decreasing your available resources and moving a lot of resource markers around. In The Inland Port, you keep track of your resources using a resource board which only requires you to move a single resource marker to a different board location when a resource is acquired or disposed of (to buy a building, for example).

These three modifications, combined with the fact that a player has only two action choices on his turn — use an available building or build (or buy) one (along with the ability to sell an existing building at any time) — make gameplay fairly rapid once the basics of the game are understood by both players (and both players are familiar with what each building fundamentally does). The difficulty in this game is not in playing it, it’s figuring out what to do when to maximize your wealth. Proper building acquisition, utilization, and resource disposal sequences can generate tons of wealth (and a player can easily accumulate 200 Francs by the end of the game if she knows what she is doing and is not impeded by her opponent). On the other hand, poor choices will leave the player relatively cash poor throughout most of the game.

In order to maintain some complexity and keep the game challenging, The Inland Port maintains the unit concept, and extends it to all base goods. So, just like you’d waste one unit of energy using coal to power a building that took two units of energy (if you did not have two wood available), if you only have a 3-block of resources, and only need 1 or 2 units, you will have to over-utilize. This dictates the need to balance the utilization of buildings that give you 3-blocks of resources with the utilization of buildings that give you multiple units so as to maximize your resource utilization.)

Each building in The Inland Port:

  • moves one or more good counters a multiple of one unit or three units,
  • generates Francs,
  • exchanges Francs and/or resources for other resources,
  • sells one or more resources for Francs (at the end of the game), and/or
  • increases your wealth.

The amount of goods and/or Francs generated, exchanged, and/or sold varies according to the building type and each building available for use can be used 2 to 4 times by a player on his turn, depending on how long it has been available. (A building, which can only be in play for five rounds, can only be used in at most four rounds as it can not be used the round it is played. It can be used up to 2 times in the following, round, up to 3 times in the round following that, and up to 4 times in the final two rounds it is available for use. Finally, if used in the last round it is available, it also generates 1 Franc.)

It’s a complex little game, and one that will force you to balance your strategic planning and resource utilization skills, as your plans might not always come to fruition — just like wrenches get thrown into your supply chain at the most unexpected of times.