Monthly Archives: June 2014

The (Board) Gamer’s Guide to Supply Management Part XXVI: Interlude or Why You Need to Game More to Add More Game To Your Sourcing Skills, Part II

In our last post we noted that Sourcing, like many facets of Supply Management, is not as easy as it seems. The skills required are numerous and sophisticated, not easy to come by, and not easy to advance. For example, analysis and trend identification requires advanced mathematical skills; logistics, resource management, and project management requires the ability to not only apply the mathematical skills acquired for analytics to evaluate trade-offs with respect to quantitative and qualitative advantages but to model physical, financial, and information supply chains; and needs identification and negotiation requires sophisticated collaborative skills.

We also noted that these skills need to be practiced if they are to be honed and improved, but that, outside of the job, you have limited opportunity to practice these skills. And while it’s okay to practice these skills on low-dollar, non-strategic categories where a few extra points is not going to add much to the total cost of the buy, you don’t want to be honing your skills on a large multi-million dollar strategic category where a few points translate into hundreds of thousands of dollars, or more, in losses.

That’s where gaming comes in. Strategic European worker placement / pick-up and delivery / tile placement / economic / resource management games give you a great opportunity to practice your skills in a competitive, but non-threatening, forum where the worst that can happen is you come in last in a friendly game with your peers and maybe have to pick up the tab for the “refreshments” consumed during the game as your punishment. Then you get to sit back and think about where your strategy failed, analyze your choices versus the alternatives, and develop new insights and new strategies for the next game.

Moreover, if you’re willing to track down your local Euro-Gaming store, or patronize one or more of a dozen plus online storefronts*, you can acquire games that can help you work on just about any sourcing, procurement, and logistic skill that you can think of. Even if we limit ourselves to the handful of games already covered in this series, we can see how we can improve each of the skills identified in our last post.

  • Analysis
    Agricola and Le Havre in particular require considerable analysis. There are a multitude of options but in each step you can only take a limited number of actions, which is the best one?
  • Logistics
    The Village and The Settlers of Catan require complicated logistics — you have to acquire goods to reach cities or trade them at the market in the former and build roads, and ships, to reach new locales in the latter.
  • Needs Identification
    In Agricola, All Creatures Big and Small, Le Havre, and the Inland Port you need specific resources to acquire animals, buildings, etc. which represent more value to you than the resources you trade.
  • Negotiation
    in Munchkin, you get to choose whether you help or hurt your opponent, and that usually depends on negotiation. Furthermore, you have to collectively decide in Castle Panic the best course of action.
  • Project Management
    In addition to The Village, Camelot, Carcassone, and Upon a Salty Ocean require significant project management skills as The Village is taking place over generations of workers and each worker can only complete so many tasks before his or her time is up (literally), Camelot is building a castle with a limited set of tiles over multiple rounds, and if projects (roads, towns, and farms) aren’t completed quickly enough in Carcassone, then you lose everything you put into the project.
  • Resource Management
    In Agricola, Le Havre, The Village, and similar games, the same resources are needed to acquire buildings, equipment, and livestock that contribute to your overall wealth and determine whether you win or lose the game.
  • Supplier Identification
    In OddVille and The Builders, you have to draft your workforce, and the skills required are similar to the skills required to identify good suppliers.
  • Trend Identification
    What are your opponents doing? What resources or buildings are they focussing on? What are they likely to do next? What does this leave for you? And what can you do to make the most of this?

In other words, its a great way to hone the skills you need to succeed in your Supply Management job without putting (millions of) dollars at risk. So that’s why, in addition to continuing to review relevant games that you can use to hone your skills (to make sure you find the game that’s right for you), SI is going to show you how to apply, and hone, your analytical skills to, and in, these games, starting with a multi-part series on a great Euro-game by Uwe Rosenberg that lends itself, with a few slight modifications, to solo-play, which allows us to test our theory that analysis will not only improve our game, but hone our skills at the same time.

That means the two-thirds of you who aren’t watching soccer up to 12 hours a day and who take the time to try and follow these long, in-depth, posts, will be a few yards ahead of your peers by the time the World Cup Ends next month, and maybe even a bit of a Dunny rat.

* If you live in Canada, there’s a list of on-line board game stores in the Great White North on the HRM Gamers Alliance. [Note: site is now archived and only the game store list is updated periodically]

The (Board) Gamer’s Guide to Supply Management Part XXV: Interlude or Why You Need to Game More to Add More Game To Your Sourcing Skills, Part I

Sourcing, like many facets of Supply Management, is not as easy as it seems. The skills required to identify the products and services required, identify potential suppliers, construct an appropriate RFI, evaluate that RFI, construct an appropriate RFP, evaluate that RFP, identify suppliers for negotiations/RFQ, assess the market, assess the RFQ responses against the market, select one or more finalists, negotiate, define the award, create a contract, and manage the whole process are quite numerous. Especially since that’s just the basic process. A determination of demand, of current market conditions, of expected cost, etc. will require spend analysis, (should-cost) modelling, and (statistical) trend projection. If multiple bids are competitive, and an auction is out of the question, then (strategic sourcing) decision optimization, and the mathematical modelling it entails, is also required. Plus, if the buy is strategic, then multiple stakeholders will be involved and cross-functional team-management skills will also be required. All this, and more, may be required just to get to a contract.

Then comes the actual Procurement. This will involve considerable skills in logistics, inventory, and global trade. When do you place the order? What is the best mode of transportation? Do you cross-dock or not? If the inventory is available too early, do you store it over-seas, before export, or locally, after import. If there are value-add components, do you take them or leave them, as they can considerably increase import or export tariffs? For example, sometimes the difference between shipping a cartridge in a printer and shipping it separately will save a few percentage points off of the total cost. (Check the HTS codes if you don’t agree.)

So, to re-iterate, you need the following skills at a minimum:

  • (Cost) Analysis / Market Analysis
    What are the current market conditions, what is the expected or best cost, etc.
  • Logistics
    What is the best method of transportation and how do you time it to optimize costs and revenues, etc.?
  • Needs Identification
    What do you need, when, and are there alternatives, etc.?
  • Negotiation
    What do you offer? What’s your minimal viable alternative? etc.
  • Project Management
    How do you balance your resources (time, money, talent) to achieve the goal? etc.
  • Resource Management
    What’s the best use of your limited resources? When do you buy and sell? etc.
  • Supplier Identification
    Which suppliers want to supply you? Which suppliers are acceptable to you? etc.
  • Trend Identification / Projection
    Are demands going to increase, decrease, or stay the course? etc.

These skills are not easy to come by and not easy to advance. For example:

  • Analysis
    requires mathematical skills and training
  • Logistics
    requires cost analysis and network modelling skills and training
  • Needs Identification
    requires the ability to elicit details from both analyses and stakeholders
  • Negotiation
    requires training and people skills
  • Project Management
    requires knowledge and training
  • Resource Management
    requires strong analysis skills and an understanding of the inherent value and limitations of each resource
  • Supplier Identification
    requires the ability to assess a supplier across multiple dimensions and know what those dimensions should be
  • Trend Identification
    requires analysis, statistical training, and an instinct for the right questions

But when do you practice them outside the job? About the only time you’ll practice analysis at any level of sophistication outside the job is when you are buying a house or a car, which is a rare occurrence. You don’t practice global logistics at home. Needs identification is limited to you(r family’s) needs, not a multitude of stakeholders across multiple departments. Negotiation is limited to bargaining with your kids to do their chores. Project Management is really time management to fit all the family activities in. Resource Management is practiced daily, but at a much smaller scale. Supplier Identification is limited to (online) store identification when you need something, and trend identification doesn’t really enter into the picture.

But gaming changes the scenario.

Turbulence, Not Just for Airplanes Anymore!

Turbulence, a flow regime characterized by chaotic property changes, that occurs regularly in the earth’s atmosphere and makes for bumpy air travel when encountered, is not just restricted to air. It’s commonly found in water as well, when the oceanic currents mix, causing rough times for many a seafaring ship.

And when you consider that one of the most common causes is the rapid variation of pressure and velocity in space and time you see that it’s not even restricted to fluid dynamics. The general concept extends to the flow of physical goods and of virtual information when that flow, seemingly regular under normal circumstances, becomes highly irregular with the slightest perturbation.

Turbulence is a hidden risk in every supply chain, and one most organizations are never prepared for because, when a risk assessment is done, it is always focussed on easy-to-identify technological, economic, market, financial, organization, environmental and social risks — not random events that can temporarily interrupt your supply chain and cause temporary disruptions with serious financial or brand consequences. Temporary disruptions which, if regular in nature, can put your organization in real jeopardy and temporary disruptions, which, by their very nature cannot be planned for or even identified in an up-front risk assessment.

For example, when buying product components from China, an experienced risk team is going to identify:

  • Supplier Risk
    Are they financially stable? Will they adequately protect your IP? etc.
  • Factory Risk
    Is the quality acceptable? Are there workplace or safety hazards that could shut it down?
  • Port Risk
    Will the product be safe? Is there any danger of strike or overcapacity? On both sides …
  • Export and Import Risk
    Are all regulations adhered to? RoHS? WEEE? Has all the paperwork been completed and submitted on time?
  • Technology Risk
    Is the real-time product tracking and distribution system reliable? Backed Up? Integrated properly with all parties?
  • Environmental
    Is the product being made or stored in areas subject to regular natural disasters such as hurricanes, typhoons, earthquakes, etc.?
  • Social Responsibility
    Is the product conflict / slave labour free? Are all employees of all partners treated equitably? Is the product, and its production, environmentally friendly or at least environmentally safe? Can the product be safely disposed of?
  • Market
    Will the market still want your product when it is available? Is a competitor going to beat you to the market?
  • Economic
    Will the economy maintain or improve? Or will it worsen, leading to reduced demand across the board? What is the job forecast looking like in target markets – job loss in those areas can weaken consumer demand.

and a few dozen other common risks from the risk identification and management playbook. But it’s not going to identify one-time random events such as:

  • Unlikely Terrorist Attack by a random civilian who goes postal and, when trying to go postal, thanks to a gas leak, accidentally blows up a building due near the docks and causes the port to become unaccessible for 3 days
  • Delayed Delivery due to Paperwork Mix-Up
    One truck is scheduled for delivery of your product to your distribution warehouse, another for mid-term storage at a competitors warehouse on the other side of the continent. And because the small carrier you’re using doesn’t have real-time inventory tracking, and your product is schedule for JIT delivery, the mix-up isn’t detected until the expected delivery date when your product is half-way across the country.
  • False Stock-Out due to Inventory Mis-Key
    The clerk enters 8,000 units instead of 80,000 into the system, stores exactly 8,000 in the proper location in the ware-house, and puts the other 72,000 units of your hottest selling product at the back of the warehouse reserved for discontinued inventory.

Each of these events can happen, and each can cause a real, unexpected, and unpredictable turbulent impact to your supply chain. Are you ready for it? Can you react and adapt when it does?

The (Board) Gamer’s Guide to Supply Management Part XXIV: The Builders (Middle Ages)

It turns out that you did such a great job building the city of OddVille that you have been recruited by another city as one of The Builders and it’s your job as a foreman to build the machines and buildings they need for their city.

In The Builders, you are one of the foreman pursuing your dream of becoming the First Builder of the Kingdom, a position that will be granted to the foreman who builds the most (valuable) buildings in the time allotted. This won’t be an easy task, as you will be vying against other foremen for the best buildings and will have a limited number of workers available to you. Each worker has a different skill set, and is capable of providing you with the different resources you need to build your buildings. Only by selecting the right buildings and the right workers will you achieve victory and become the first builder.

Another resource management city-building card-game, you have limited money to hire workers, each worker has limited ability to generate materials required for building, and you have limited time to deploy those workers. But you need to deploy enough workers to finish your buildings, as the only way you can become the First Builder of the Kingdom is to finish enough buildings to secure your victory. (Which is secured as soon as you build 17 victory points worth of buildings.)

In The Builders, you start the game with:

  • one apprentice and
  • ten coins

Then, on each turn, you can perform three actions. The actions you can choose from are:

  • begin construction of a new building or machine (by selecting one of the available five buildings)
  • recruit a worker (from one of the five available workers)
  • send a worker to work (on a building by paying his wages)
  • earn coins (by spending an action)

Just like in the real world when you are building a new Procurement department, you start with a small budget, one or two assistants, and a potential set of sourcing projects that you have to select from (as you don’t have the resources to do all of them); then you have to recruit new workers, task them with sourcing projects, pay them to tackle the projects, and hope you succeed in time. Also, if times are hard, you moonlight by taking on GPO work to make ends meet.

The complexity of the game is that, just like you experienced in OddVille, each worker has a different experience level and brings with him different resources (stone, wood, tile, and knowledge) that can be used in the buildings you need to build, and each take different amounts of different resources to build. Furthermore, you can’t assign two workers to the same building on the same turn (without sacrificing extra actions), your earnings become exponential if you sacrifice multiple actions (1 coin for 1 action, 3 coins for 2 actions, and 6 coins for 3 actions), and you can buy extra actions for 5 coins. Plus, every machine you are able to build before the game ends gives you an advantage. For example, the circular saw produces 2 or 3 wood, the crane produces 2 or 3 stone, the tile oven produces 2 or 3 tile, and the survey tool produces 2 or 3 knowledge, depending on the one that you build. These tools can be used like workers, but you don’t have to pay them.

Similarly, in the real world, each of your workers have different backgrounds and bring different skills with them; each sourcing project requires a different skill set; you add communication complexity if you assign too many resources to a single sourcing project (and pay for it with delays); building and maintaining a team costs money; and you can acquire additional revenue for your department by providing GPO services.

The game ends at the end of the round in which one player reaches 17 victory points (tallied as the sum of the completed building and machine victory points and the amount of coin possessed divided by 10).

Like OddVille, The Builders (Middle Ages) is a neat little game that, like OddVille, has the advantage that you can generally finish a game with 10 minutes per player once you get that hang of it. You can play multiple head-to-head games against your cube mate, or a couple of 3 or 4 player games in a lunch-hour.