Monthly Archives: May 2014

Now That You’ve Taken Responsibility, Get Sustainable Results

In our recent (re)post last week, we told you that if you do not get sustainable results, blame yourself. By now, you’ve owned up to your shortcomings and are ready to do something about it. Today we are going to overview steps you can take to make sure you maximize the chance of a perfect order, which, by definition, is acquired at just the right cost (which means there are no savings to be had).

As per this post, for savings to materialize, the following necessary (but not sufficient) conditions have to be met:

  • the order has to be placed with the contracted supplier
  • with sufficient lead time
  • and then shipped by the supplier on-time
  • using the approved carrier and shipping arrangement
  • with the required third party and government fees promptly paid
  • and paperwork promptly filed
  • so there are no delays and the product arrives at the warehouse on time
  • where it is properly received, inventoried, and shelved
  • and then the invoice is verified against the good received and the PO
  • and paid at the right time when everything is okay.

This is a tall task, taller than accepting the tall tale of Jonah and the whale, but not an impossible one, and no miracles are required to make it so. Just the acquisition of the right technology, implemented in the right framework, supporting the right processes, and tailored to support your organizational talent. It will take some terrific transition management to get the right organizational alignment, but such alignment is possible (and we’ll be discussing this in more detail next quarter), and the leaders will get there over the next seven to ten years.

So where do you start? Acquire the core technologies you need to streamline your supply management practices.

  • an e-Procurement solution that only allows orders for products on contracts from approved suppliers
  • a demand planning solution (which may be part of a next-generation ERP solution) that integrates with your e-Procurement solution and notifies you when order deadlines are approaching and automatically submits auto-fill orders
  • a 3PL solution that tracks shipments in real-time
  • a Trade Management solution that automatically generates the required paperwork, computes the required fees, and manages, tracks, and confirms their submission
  • an Inventory and Warehouse Management System that integrates with the e-Procurement Solution that manages receipt, shelving, and distribution
  • an e-Procurement solution that also does invoice management and m-way matching
  • an e-Payment solution that integrates with the e-Procurement solution and includes Supply Chain Finance Capabilities (including dynamic discounting, supplier financing, and pre-shipment finance, for example) to help the company determine the best payment time

It’s just the beginnings, but it’s a good start.

One Hundred and Ten Years Ago Today

The United States began construction of the Panama Canal, one of the seven wonders of the modern world.

The Panama Canal, completed 100 years ago this August, is a 77.1 kilometre ship canal in Panama that cuts across the Isthmus of Panama and connects the Atlantic Ocean to the Pacific Ocean. It has 3 locks at each end to lift ships up to Gatun Lake, which is an artificial lake created to reduce the amount of excavation work for the canal that sits 26 meters above sea level. (The current locks are 33.5 meters wide, but a wider lane of 55 m locks is under construction as part of an expansion project that is scheduled to complete next year. More information is in the 2012 Progress Report).

One of the largest and most difficult engineering projects ever undertaken, the shortcut considerably redoes the amount of time taken for ships to travel between the Atlantic and Pacific Oceans, which up until then had to take the lengthy, hazardous Cape Horn route around the southernmost tip of South America via the Drake Passage or the Strait of Magellan. A ship can traverse the canal in 20 to 30 hours vs the 20+ days it would take to sail the thousands of kilometres to go around the Cape. (For example, ships sailing from New York to San Francisco save nearly 13,000 kilometers going through the Canal. This saves an average slow-steamer cargo ship 20 days of sailing time!)

The Canal was managed by the US until the 1977 Torrijos–Carter Treaties provided for handover to Panama. From 1977 to 1999, the canal was jointly controlled by the American and Panamanian governments, until the canal was taken over entirely by the Panamanian government in 1999.

The amount of traffic that flows through the Panama Canal on an annual basis is staggering. When it first opened in 1914, about 1,000 ships went through the Canal a year. In 2011, total traffic reach 14,685 ships that generated $1,730,052,192 in tolls on 222,358,944 long tons of cargo with a net tonnage of 321,845,065! (Original table no longer available, updated transit statistics available on the Panama Canal site.)

It’s not only a modern wonder, it’s a major empowerment to the ocean trade that your global supply chains are so reliant on!

The Board Gamers Guide to Supply Management Part XVIII: Camelot, The Build and Carcassone, New World

While the focus of this series is primarily on economic, worker placement, and pick-up/delivery games which model the economic, labour, and logistics issues prevalent in the product and services supply chains that you manage day-in and day-out, other types of games, such as tile placement — which are reminiscent of supply chain design activities — and hand management — as you can only hold so much inventory at any one time — also model elements of your supply chain and sharpen skills that you need from time to time. Plus, many of these games can easily be fit into a lunch-hour, and regular (Euro) gaming against skilled opponents can help keep your mind sharp. (Much sharper than using a self-driven brain-training game that you can master with enough rote memorization – you can’t memorize, or even predict, what an adversary will do next.)

Today we are going to cover two tile placement games — Camelot, The Build and Carcassone, A New World — as they allow you to sharpen your resource management skills as both games give you a set number of tiles and a set number of options and you have to do the best you can on each turn. Plus, they’re quick to learn and relatively quick to play. Camelot, The Build typically takes 30 minutes or less and Carcassone, New World takes 30 to 45 minutes or less, depending on the number of players, experience, and skill. You can easily fit a game, or two, of these in during your lunch hour. Plus, the age ranges on these games are 8-10 and up, so you it won’t take long to learn the basic rules. (Mastery, on the other hand …)

In Camelot, the Build you are an interior designer in the time of King Arthur and The King needs help finishing the interior design and layout of his castle. The core structure has been built, but it’s up to you to layout the rooms and the hallways and finish things up.

In this game, designed for 2 to 5 players, you each get 10 tiles, of which up to 3 can be kept secret, and you can play up to 3 on your turn. The tiles you play are replenished (randomly) at the end of your turn (until all tiles enter the game). Some of these tiles are worth points, and some aren’t. Tiles that are worth points generate additional points when they are placed against one or more tiles edgewise. Tiles that aren’t worth points can generate additional points when they are placed in such a way as to border tiles that are worth points. In addition, if a player manages to play 3 tiles during her turn in a connected fashion, then she doubles the points she scored that term.

What’s the catch? There are eight types of tiles — blank, blank wall, furnished wall, rounded corner wall, furnished great hall, garden, small hall, and fireplace tile — and each type of tile can only be played in a matching tile space. Wall tiles can only be played on matching wall tiles, hall tiles on matching hall tiles, and blank and garden tiles can only be played on unwalled spaces. So there are a limited number of places you can play each tile. In addition, wall tiles can generate up to 3 additional points if correctly played, hall tiles up to 4 additional points, and garden tiles up to 8 additional points (as adjacent corner tiles also score points), so you have to balance between playing a tile too soon (for too little points) and too late (when a prime location has been boxed in and you can’t play 3 connected tiles to double your points).

In addition, as you can see at least 7 of the 10 tiles each of your opponent’s have, you can see how they can generate the most points and you have to balance between making the most points you can in a turn and blocking your opponents from making the most points they can. If your opponent has a play that could generate twice as many points as the best play you have on your turn, you probably don’t want to be playing a greedy strategy and instead use a blocking strategy that prevents your opponent from generating too many points. Finally, you don’t want to hang onto your best tiles for two long — points scored in the final round count against you! Just like waiting too long to sell on the open market can ruin you, so can waiting too long to cash in your victory points in Camelot, the Build!

In Carcassone, New World, you are exploring and settling the New World. Unlike regular Carcassone, where you get points for completing claimed roads, cities, and farms, and where the challenge is picking what to claim (as you have a fixed number of workers to claim roads, cities, and farms) and then getting your claimed roads, cities, and farms completed (because your opponents will do their best to prevent you from obtaining completion and deny you your victory points), in New World, where you also get points for completing trails, towns, and farms (and plains), the challenge is to not only complete the trails and towns and farms, but do so before you lose your ability to claim the points for doing so. Unlike regular Carcassone, where you can claim a road or city and spend the entire game extending it in an effort to maximize your points for the claim, New World adds two surveyors to the game and one surveyor moves “west” each time a trail, town, or farm is scored. If the eastern-most survey moves to a location that is west of the settler you placed on a trail, town, or farm, then your settler is returned to your supply and you lose the ability to score that feature. You could spend 7 turns working to complete your farm, in hopes of obtaining the 9 points it generates, and lose it before you get a chance to play your last tile because two opponents decided to finish and score their features ahead of yours and move the surveyors westward. It’s just like playing the real market, how long do you hold during an up-swing before you sell and take the profit in front of you. Sell too soon, and you make very little. Wait too long, and the stock crashes and you lose it all.

So, you have to decide between completing a feature now for a few points or waiting to complete it later in the hopes of scoring a lot more points (but with the possibility you might lose all of the points you hope to gain). When deciding to complete it now, it’s not only the points you gain but the effects on your opponent(s) you have to consider. If completing a feature now will prevent one or more opponents from scoring any points for a feature they claimed, especially if it is one they have been building up for a while, it might be worthwhile. If completing later could double your points, it’s worth the wait unless there’s a good chance your opponents could complete their features and knock you out.

Both games are great for sharpening your analytical and planning skills and they both provide a great interlude in this ongoing series.