Category Archives: Global Trade

Who sets supply chain standards?

After hearing about the recent NIST (National Institute of Standards and Technology) Interagency Report (7622) on 10 Practices to Secure the Supply Chain, it got me wondering as to who should set the standards. Supply Chains are global, so it shouldn’t be a single government agency, even if it’s a standards agency. While supply chains run on technology — it’s only one of the three corners of the supply chain triangle, with the other two being talent and transition (management).

But, of course, supply chain standards are probably not high on the WTO (World Trade Organization) agenda — as the primary purpose is to supervise and liberalize international trade — keeping the flow smooth. Trade agreements take priority over standards. Someone has to bite the bullet and take the challenge. But we need more than high-level practice definitions. These are the 10 perspective practices that the NIST recommends:

  1. Uniquely identify supply chain elements, processes and actors
  2. Limit access and exposure within the supply chain
  3. Create and maintain the provenance of elements, processes, tools and data
  4. Share information within strict limits
  5. Perform supply chain risk management awareness and training
  6. Use defensive design for systems, elements and processes
  7. Perform continuous integrator review
  8. Strengthen delivery mechanisms
  9. Assure sustainment activities and processes
  10. Manage disposal and final disposition activities throughout the system or element life cycle

Taken one by one:

  1. obvious, no help here
  2. also obvious, no help here either
  3. you should be doing that already to conform to the plethora of trade and security regulations you’re already subject to
  4. given the lack of openness in most supply chains between trading partners, this is probably already happening
  5. this is good advice — it’s common knowledge, but when it comes to training, no one is listening
  6. here’s where it gets good — I don’t think defensive design is part of supply chain design today and it’s a great approach to keep things in perspective
  7. that’s just good risk management
  8. that’s just part of continuous supply chain improvement
  9. this is good advice too — while the sustainability message should also be common knowledge, there’s not enough action on this front either
  10. this is great advice — everyone focusses on the acquisition, but often neglects that, at some point, everything created has to be destroyed; everything acquired has to be disposed of

In summary, I give it a 4 out of 10. So, what would be good recommendations? We’ll take that up in a later post. But for now, do you have any?

Halifax Gets It There dot com

Long time readers will know that the doctor has been telling you to set up operations in Halifax (if you haven’t already) if you’re doing business in North America and Europe or if you’re shipping between North America and Europe, India, and/or southeast Asia (including most of southern China) due to its strategic location (on a time-zone halfway between Los Angeles and London) and ready, quick access to many global ports from the Port of Halifax. (the doctor still stands by his 2006 post that said Halifax is The Best Place to Do International Business in Canada!)

The Port of Halifax has made considerable investments in infrastructure over the last five years — as pointed out in this post from 2010 pointing out that Halifax Can Handle Your Ocean Freight as a result of it’s $35 Million Berth Project to insure that it is the deepest North American port on the Eastern seaboard — and is now ready to handle the vast majority of your shipping needs (including heavy lift, special project, roll-on/roll-off, steel coils, forest products, dry bulk, and liquid bulk). At 16.2 m of depth, it can handle 8,800 TEU vessels with a 15.00 m Draft. Plus, it has transload capabilities direct to rail and cross-docking capabilities for efficient consolidation of shipments from 40 ft containers into 53 ft trailers and a full-service grain elevator.

The port’s ocean terminals have 13 berths with over 400,000 square foot of covered storage with direct loading to ship, rail, or truck; a 65,000 square foot cover shed with 20-25 foot vertical stacking capability with six rail loading/discharging bays and 5,000 linear foot of on-dock trackage; four truck loading docks equipped with levellers; and three dedicated cold storage warehouses with HACCP and CFIA approved programs.

As noted in a prior post, Halifax, via the Suez Canal, is a day and a half closer to southeast Asia than any other North American east-coast port and is two days closer to Europe. For example, it’s only 6 days to Rotterdam or Hamburg, 20 days to Singapore, and 21 days to Ho Chi Minh City. And rail to Montreal, Chicago, and Memphis is quite competitive. It’s only 1.5 days to Montreal, 3 days to Chicago, and 4 days to Memphis. And if you want to know how long it will take, the Port’s new HalifaxGetsItThere.com site has a spiffy new Transit Time Calculator in addition to Route Maps, a Schedule-at-a-Glance, and a Daily Status Report.

Just remember that HalifaxGetsItThere.com and come to Halifax. Your business will thank you for it.

the doctor’s Top 10 Cities for Supply Management Centres of Excellence (Where Should Your Supply Management Organization Be Located? Part V)

Yesterday, I gave you the top 10 mega-regions in which to locate your Supply Management Centre of Excellence, and indicated the major cities in each region that should top your list. For those of you keeping count, I listed 46 cities. If you’re indecisive, that’s a lot of cities to choose from! So, today, I am going to give you the doctor‘s top 10 cites for your Supply Management Centre of Excellence and his rationale!

Rank City Mega-Region Rationale
10 Dallas The Dallas Triangle The telco corridor. Oil and gas USA. Just a few hours north of Silicon Hills. Finance. More Fortune 500 headquarters than any other city in the USA. The centre-point of the largest metropolitan area in the south and the fourth-largest metropolitan area in the USA. East-West and North-South focal point of the interstate highway system — get anything, anywhere, anytime. One of the largest, and busiest, airports in the world (so you won’t miss Chicago). Sports, sports, and more sports. The world famous Dallas Cowboy Cheerleaders. People named JR. A great education system. Birthplace of Amy Acker, who, before taking the Whedonverse by storm, made sure that those of us who were adults with young children didn’t get the short end of the Wishbone.
9 Frankfurt The Frankfurt-Gärtringen Corridor The stock exchange, renewable energy, great transportation and telecommunications infrastructure, and German engineering! And let’s not forget Frankfurther Rindswurst. Woot! Woot!
8 Rio de Janeiro The Rio de Janeiro to Sao Paulo corridor It’s not the CRIB, it’s the BRIC, and it starts with Brazil. It’s the emerging South American powerhouse, which is the most visited city in the southern hemisphere (and home to Carnival), on the coast, and surrounded by a great transportation infrastructure. It is the headquarters of many state-owned companies, the centre of the oil and gas industry in Brazil, and the second largest industrial producer in the country. Foxconn, who produces all of Apple’s iPads and iPhones is down the corridor in Sao Paulo, so you know that Brazil, and Rio de Janeiro, is here to stay as a major player in global trade.
7 Paris Greater Paris La ville des lumières. La ville de l’amour. La vie en rose. Audrey Tautou. La mode, l’architecture, et la philosophie. Quoi d’autre avez-vous besoin?
6 Seoul Greater Seoul A megacity with a population over 10 Million, it is the largest city proper in the OECD developed world, that is home to major multinational conglomerates and one of the world’s top ten financial and commercial centres. A very technologically advanced infrastructure and an openness to the Western Way of doing business. Architecture, fashion, and culture extrude from every crevice. And it’s home to the Wonder Girls of K-Pop. How can you go wrong?
5 Amsterdam Amsterdam – Brussels – Antwerp Central European location, an almost universal understanding of English, great international relations, strong fashion and tourism industries, architecture, and culture (even excluding its world famous Red Light District). Plus, lots and lots of conventions — no travelling required!
4 London London – Leeds – Chester More visits from The Doctor than any other place on earth (and the most likely city to be the first to participate in intergalactic trade). On a more current note, the LSE, the fashion scene and haberdashery shops, and the entertainment industry draw all shapes and sorts of creative talent. Plus, it gave us The Clash and Generation X. What more can you ask for?
3 Tokyo Greater Tokyo Domo arigato gozaimashita! You have to interact with a lot of people everyday. And not all of these people are polite. Why not go somewhere politeness reigns? Plus, it’s the home of Sanrio (hello kitty) and the J-Pop explosion. How can you go wrong? (Oh, and the financial clout, hi-tech infrastructure, and the wide range of cultural pursuits from ikebana and origami to shopping and whiskey, doesn’t hurt either.) And if that’s not enough, anime, manga, and gaming central! (If you think Gibson is inspired, just wait until you read Masamune Shirow!)
2 New York Boston – New York – Washington Corridor If you’re gonna be in Supply Management for the long haul, you gotta have Heart. And since New York is The Heart of Rock & Roll, it’s as good a place as any to start. Plus, the easy access to capital doesn’t hurt!
1 Los Angeles The California Coast Despite our desire to move to a paperless office, we still have to deal with a mountain of paper every day. Purchase Orders, Goods Receipts, Invoices, Import Forms, Export Forms, RFXs, etc. etc. So why not base your Supply Management organization in the home city of Wil Wheaton, the guy who made collating paper cool!

the doctor’s Top 10 Mega Regions for Supply Management COEs (Where Should Your Supply Management Organization be Located? Part IV)

Our first post in this series began the discussion of where a better-than-average Supply Management (SM) organization on the path to becoming a world-class Supply Management organization should locate its new Centre of Excellence (COE) for its new centre-led Supply Management organization. We discussed the traditional factors of customer proximity, supplier proximity, business incentives, infrastructure, and the local talent pool and ended up demonstrating that the only thing that really matters in the end is the local talent pool. (This is because it is the people, not the process or the technology, that ultimately identify and drive the results.) Our second post discussed what type of talent you were looking for and where they were likely to be found. We concluded that you were definitely restricted to major urban areas, but did not identify which particular urban areas are likely to contain the talent your organization needs. Then, in our last post, where we dived into the findings of Professor Richard Florida, as chronicled in Who’s Your City, we illustrated that your new Supply Management COE should be in one of the top 40 mega regions, and a mega region with a strong innovation focus and a lot of open minded talent. We then indicated that, if you intended to be North America based, that you should be focussing on one of the following five mega-regions: the Boston-New York-Washington (D.C.) corridor in the Northeast; Miami and southern Florida in the Southeast; the Houston, Dallas, and Austin triangle in Texas; the San Francisco Bay Area down to LA on the West Coast; and the Portland-Seattle-Vancouver corridor on the West Coast. But kind of left you hanging if you were looking for a global SM COE outside of North America.

So, today, the doctor brings you his top 10 Mega Regions for Supply Management COEs, culled from the list of the 40 Mega Regions based upon North America data, cultural analysis, and emerging or current trends.

Rank Mega-Region Economic Clout Major Cities Rationale
10 The Rio de Janeiro to Sao Paulo corridor 230 Billion Rio de Janeiro, São José dos Campos, Sao paulo, São Bernardo do Campo Culture, fashion, finance, and the centre of the emerging South American Economy, lead by Brazil (but followed by Colombia and Argentina).
9 The Dallas Triangle 400 Billion + Dallas, Austin, Houston Finance, Oil, easy access to the Gulf of Mexico, and a good old fashioned “don’t mess with” attitude.
8 Greater Paris 380 Billion Paris, Versailles Culture, fashion, architecture, and a strange attractor for top talent across Europe and the Americas.
7 The Greater Seoul Region 500 Billion Seoul, Incheon, Ansan, Hwaseong, Suwon The economic power-house of South Korea and an economic powerhouse of Asia with a new generation culture that, unlike their predecessors, is (openly) embracing western styles of business, fashion, and life and that is the most willing of all of the Asian nations to take risks (which are often necessary for true creativity and innovation).
6 The Frankfurt-Gärtringen Corridor 630 Billion Frankfurt, Darmstadt, Mannheim, Heidelberg, Stuttgart, Cärtringen The Frankfurt stock exchange, renewable energy, and German engineering!
5 The California Coast 1280 Billion San Francisco, Sacramento, Oakland, San Jose, Los Angeles, Long Beach, San Diego Fashion, Entertainment, Technology, a global innovation leader, and home to the largest ports on the West Coast.
4 London – Leeds – Chester 1200 Billion London, Northhampton, Leicester, Nottingham, Leeds, Manchester, Chester, Birmingham Not only do we have (one of) the major financial, fashion, and trade centre(s) of Europe in London, but we also have the home of the Commonwealth. The UK may have been overtaken by the US in the final years of the 19th century in GDP production, but it is still in the top 20 and will always be of prominent importance.
3 Greater Tokyo 2500 Billion Tokyo The world’s largest mega-region in terms of economic clout, Greater Tokyo cannot be ignored. And while the Japanese are typically wary of uncertainty and risk, unwilling to commit to deadlines, very orderly in business, extremely respectful of hierarchy, very shy, and extremely respective of face, Tokyo is an exception. The younger generation have adopted a lot of western values, have no problem relating to the west, and are even willing to behave like outsiders in their soto groups. It’s also close to other major centres (and mega regions) in Asia.
2 Amsterdam – Brussels – Antwerp 1500 Billion Amsterdam, Rotterdam, Brussels, Antwerp The world’s fourth largest mega-region in terms of economic clout, one of the most open and advanced regions in Europe in terms of broadband penetration and clean technology, and close proximity to the UK and Germany, two European powerhouses.
1 Boston – New York – Washington Corridor 2300 Billion Boston, Hartford, New York, Philadelphia, Baltimore, Washington As the world’s second largest mega-region in terms of economic clout, the centre of the North American finance and fashion industries, and the nation’s capital, there is serious clout and talent readily available here.

Where Should Your Supply Management Organization Be Located? Part III: The Mega Region

Our first post in this series began the discussion of where a better-than-average Supply Management organization on the path to becoming a world-class Supply Management organization should locate its new Centre of Excellence (COE) for its new centre-led Supply Management organization. We discussed the traditional factors of customer proximity, supplier proximity, business incentives, infrastructure, and the local talent pool and ended up demonstrating that the only thing that really matters is the local talent pool. This is because it is the people, not the process or the technology, that ultimately identify and drive the results. Our last post discussed what type of talent you were looking for and where they were likely to be found. We concluded that you were definitely restricted to major urban areas, but did not identify which particular urban areas are likely to contain the talent your organization needs. That is the subject of today’s post.

In short, based on the research of Richard Florida, as chronicled in Who’s Your City, you should probably locate your centre-led Supply Management organization in a city within one of the forty mega-regions, which are the new economic units of the “spiky world” that we live in. By overlaying maps of continual, unbroken, light intensity around the clock, innovation (as measured by patents), and economic activity, Richard was able to identify forty global mega-regions that each produce more than $100 Billion in economic output and collectively account for 23% of the global population, 66% of economic activity, and 86% of patents. Led by Greater Tokyo and surrounding area and the Boston-New York-Washington (DC) corridor, which produce in excess of $2.5 Trillion and $2.2 Trillion respectively, these mega regions are the powerhouses behind the global economy in which your Supply Management organization functions. They are so productive that the top two mega-regions produce more GDP than all but the top three economies (now that China has moved up the list) and the top six mega-regions place among the top ten national economies in the world.

The talent you need is going to be in one (or more) of these mega-regions, clustered around one of the global innovation centres in the region (which include Tokyo, Seoul, New York, San Francisco, Boston, Seattle, Austin, Toronto, Vancouver, Berlin, Paris, Stockholm, Helsinki, Osaka, Seoul, Taipei, and Sydney). But which one? Not only do the most talented and ambitious people need to live in the means metros in order to realize their full economic potential because the proximity of talented, highly educated people has a powerful effect on innovation and economic growth, but they need to live close to people they collaborate well with. Close to other innovators where their collective efforts make a whole that is greater than the sum of the parts. (When the right people come together, it has been statistically demonstrated that a doubling of population in an urban area results in more than two times the creative and economic output.)

But, as Porter has found, the economic world is not only taking shape around clusters, the clusters are becoming more specialized in individual locations. For example, if I say New York, you probably think finance and fashion, and you are right. And if I san San Francisco, you probably think technology, and you are right.

But since Supply Management is just emerging, we don’t really have Supply Management clusters (even though places like Singapore, where global companies tend to cluster and bring their Supply Management talent with them, contain higher than average Supply Management professional populations), and since not all clusters in early stages actually crystallize into long term clusters, what we do have may not be long-term. So how do we pick the right mega-region? Lucky for us, we know that a good Supply Manager has a certain personality profile and not only do we find clusters of talent, but we find clusters of talent with similar personality profiles.

At least in North America, Richard helps us out here again. He presents clusters for each of the five personality types, including the open personality type, which is the personality type that is required for Supply Management success given the need to interact with a wide range of people in a wide range of cultures using a wide range of processes and technologies. In North America, while such personality types are spread out across the country, they are clustered in only some of the mega-regions, and only found in significant concentrations in the following five mega-regions: the Boston-New York-Washington (D.C.) corridor in the Northeast; Miami and southern Florida in the Southeast; the Houston, Dallas, and Austin triangle in Texas; the San Francisco Bay Area down to LA on the West Coast; and the Portland-Seattle-Vancouver corridor on the West Coast.

In other words, we’ve already weeded out the Chicago-Pittsburgh Corridor, most of the Houston-New Orleans corridor (outside of Houston which we’ve opted to place in the Texas Triangle), the Charlotte-Atlanta corridor, the Phoenix-Tucson corridor, the Toronto – Buffalo – Chester triangle, and Mexico. And if you want your COE to be based in another part of the world (like Europe or Asia), all you need to do is get similar personality profile surveys or, where they are lacking, cultural profiles and you will be able to limit your options even further. For example, if you are thinking of Asia, while Singapore may be a great choice and Beijing a good choice (given the recent increase in innovation and cultural offerings in the area), given the lack of individualism, the lack of tolerance for risk, and the polychronic view of time in the Thai culture (as detailed in this SI post on overcoming cultural distances in international trade with Thailand), Bangkok is not going to be a good choice for your Supply Management organization. (On the other hand, it’s probably an excellent place to put a factory as they will want the factory to work like a Swiss time piece.)

The reality is that, when you do your homework, you’ll find that you really don’t have many options in the spiky world, and if you want to consider infrastructure, corporate strategy, or the willingness of your current superstars to relocate to one of the places on your short list, you’ll have even fewer, But considering that, by 2025, our world will be considerably more concentrated around mega-regions than it is today, this might not be a bad thing.