Category Archives: Market Intelligence

Sustainable Supply Chains Sacrifice China! (Most of the Time.)

Last Friday we posted China is the Enemy because, especially where your supply chain is concerned, China has just demonstrated what SI has known for over a decade — it is the enemy. (This isn’t the only situation where China or the CCP is the enemy, but those are different rants. Note that we do NOT equate China or CCP with Chinese people. Most Chinese are NOT the enemy of your supply chain or democracy just like most Americans are NOT the enemy of intelligence and common sense.)

Long time readers will know that in the naughts, SI spent a lot of bandwidth telling your deaf ears that you should be investing heavily in nearshoring and home country sourcing because of the dangers of outsourcing in general, and, the dangers of oversourcing to a specific country, like China, in particular — which have finally become very apparent. It’s too bad it took a freakin’ pandemic to make clear how dangerous it is to outsource so many critical products and JIT materials to a country halfway around the globe, especially when such sourcing in bulk across the industry leads to the lack of capacity close to home due to factory closures and talent evaporation.

There’s a reason the doctor told you two weeks ago to remember the 80’s (and the early 80s in particular) … and that’s because that’s the last time most multi-national corporations in the Americas got outsourcing right … when they were near-sourcing to Mexico (who should build the wall just to keep Trump out, but that’s yet another rant for another day).

Let’s face it, some stuff just shouldn’t be sourced from home. Stuff that’s not critical, stuff that’s very expensive to make at home (but easily trucked across a single border) for various reasons (which can go beyond labour to energy costs if there are no affordable renewable sources nearby, transportation costs for raw or unprocessed materials are ridiculous otherwise, etc.), or stuff where most of the raw materials or necessary environmental conditions (for growing, mining, etc.) are just not present at, or near, home.

But when you consider a typical organization, how much stuff really falls into this category? First of all, you have to exclude any product for (re)sale that’s a primary profit line. Then you need to exclude any raw material or component critical to production unless you just can’t get it nearby. Then any product necessary for security or safety. And so on. At the end of the day, you don’t have much left, and if you’re doing the analysis right, you’re going to be left with:

  • raw materials and products just not available nearby (because you need certain growing conditions, large deposits of a mineral only found in certain geographies, etc.)
  • processed materials or chemicals where the raw materials are very expensive or dangerous to transport
  • products unique to a culture or region
  • novelty or other items not critical to your business

which (before the short-sighted wall-street loving common sense hating clueless and unskilled consultants of the late 80’s and early 90’s, like Steve Castle, put everything into the outsourcing bandwagon and blinged it out beyond belief) were the only products a company would outsource halfway around the world and still the only products a company should be sourcing from halfway around the world. Everything else should be near-sourced, and if really critical or the cost differential is small, home-sourced.

This also means that just shifting everything to another country in the BRIC, and India (which is ruled by a more open, transparent, and dependable democracy) in particular, is also NOT the answer. (They may not be the enemy, but they are still NOT the answer.)

So, unless you want your Supply Chain to completely collapse after the next global disaster, go back to basics, remember the smart outsourcing decision from the 80s, reopen those Mexican factories, and start near-sourcing again. And then, where you can, bring it back (close to) home.

Surviving the coronavirus crisis for the self-employed or COVID-19 disenfranchised (Part 3)

In our previous two installments in this coronavirus series for small-business owners, we noted how two general categories of business have been hit hard by the coronavirus shutdown: services and non-essential products. We focused on how those businesses not selling products will be especially hard-hit and have to be creative with e-commerce, social media and other online tools to have any chance of survival in some cases. We also noted that these businesses would not be able to maintain staff levels and would be contributing even more to the COVID-19 disenfranchised workers as time went on.

The shelter-in-place emergency measures mean less shopping or spending money on a meal or a night on the town — so a large number of people are out of work, including:

  • entertainers
  • sales clerks
  • wait staff (restaurants, coffee shops, liquor establishments, etc.)
  • personal services professionals (tattoo artists, barbers, stylists, cosmetologists, etc.)
  • tour guides, museum staff, etc.With the exception of some personal services professionals who can work out of their homes, there is no traditional work for these individuals. This doesn’t necessarily mean that they can’t do anything related to their chosen profession, just that they can’t do it the way they intended to do it — and that they might need to find other work to supplement their income. Or they may need to change jobs for the time being (and in doing so they just might find a better career).

So what can they do? Read Part III of the doctor‘s 3-part series on Surviving the Coronavirus that just posted over on Spend Matters.

Remember the 80’s? You should!

And no, I’m not talking about That ’80s Show that was an abysmal failure (as they tried to follow the magic of That ’70s Show too soon with a cast that had no chemistry on set’s that had no style with laugh tracks recorded by people who were clearly trying not to cry), I’m talking about the decade. A decade you should have learned from, not forgotten.

And I’m not talking about the extreme fashions (such as the iconic big hair, the ripped jeans, the leather, the leather, the leather, etc.) the birth of the yuppies, the dominance of a republican regime that was, well, not run by corrupt or inept leadership, breakdancing, the rise of rap (even if it did tell us to fight the power with funky cold medinas), the great nuclear meltdown , or the fall of the Berlin Wall (although that should not be forgotten).

And while relevant, nor am I referring to the end of the Cold War (which indirectly led to more trade and globalism), the mass famine in Ethiopia (which gave us our first mass collaborations between musicians in the modern age), the rise of the personal computer (though very relevant to the world we live in today), the first mobile phones (which have now morphed into mobile computers that do everything, but, apparently make calls in the hands of a millennial), the rise of dungeons and dragons (which would have prepared you well for the endless entrapment in the dungeons we have created for ourselves), or ALF, even though he would make a much better world leader than many countries currently have (who insist on electing celebrities and populists instead of economists and politicians who actually have some idea how to run a country).

No, I’m asking you to remember Mexico, the country the current President of the United States wants to wall up, and the significant contribution they made to the North American economy. More specifically, the contributions Mexico made to the North American economy in particular. As per this graph below, which can be found on Trading Economics, you can see that from about 1982 to 1990, Mexico had a balance of trade consistently in its favour.

Why is this important? It’s important for the same reason that, during the same period, the balance of trade for China was significantly not in China’s favour, as per the graph below also from Trading Economics.

And that reason is …

Something you’d be well aware of if you’ve been reading this blog from the beginning and actually listened to the warnings the doctor gave you last decade about improperly designed supply chains. And that we’ll remind you of in our next post on the subject.

Surviving the coronavirus crisis for physical small businesses: Take a lesson from creators! (Part 1)

Two general categories of businesses have been hit hard by the coronavirus shutdown: services and non-essential products.

In the first case, while it’s regrettably the case that some small businesses might not survive, many services professionals can weather the storm if they get creative. In the second case, your storefront may be gone, but your business doesn’t have to be. Chances are, your business is already online to some degree. Now’s the time to go all in on e-commerce.

How can you survive, you ask? Simple. Take a lesson from creators.

A third industry that has been hit very hard is entertainment. Performers who make the majority of their income from productions and performances are, on the surface, totally screwed. Think about it. If you depend on a bunch of people crowding into a bar, concert hall, theater, studio or arena, what do you do?

You get creative, or you starve!

So let’s take a look at what creators are doing.

Musicians, especially independent musicians, are doing live-streaming, direct selling of digital content and Patreon-based (or similar) fundraising with special perks. And they’re also creating new content and recording at home. Thanks to modern technology, at least if you live in a relatively quiet building or house, you can produce near studio quality for a fraction of what studio recordings used to cost, and you can definitely do recordings with a “live” feeling.

Comedians are doing online comedy or talk shows, for free, to engage with a fan base (that might in turn buy merchandise), or through third party ad-supported channels (and, when possible, taking a cut of the advertising revenue or getting a small commission from the platform). All they need to engage their audience is a laptop with a decent quality camera and mic and a web-sharing tool with recording capability.

Actors and performers are doing podcasts to stay relevant with their fan base, and some are using that to promote books or merchandise they have for sale. Post offices and delivery companies are still delivering.
In other words, while they have all lost their major income streams and often must perform from home, they haven’t given up — and neither should you!

If you can’t keep your small business going through the shutdown, you can at least keep going and maintain your relevance and be ready to be the first to recover when you can re-open and get back on track to normalcy.

So how do you do that?

Read the full article over on Spend Matters to find out!

COVID-19: You Can Get Through This!

the doctor still believes that it wouldn’t be so bad if we could all be honest, smart, logical adults but when you have players like China and the USA in the mix (especially when [a] certain Republican[s] is/are in charge), and seniors who are more stubborn than millennials, that’s just not a reality. (In the doctor‘s view, only Sweden has it right. Put some strong measures in place, make sure people understand it’s bad and could be extremely bad if they don’t do as much as possible to prevent that, but don’t ignore it until it’s too late and then shut everything down when it is too late. But that’s a discussion for another article.)

So, we’re in a global mess, and the only way we’re going to get out of it individually is if we’re creative, and collectively is if Procurement takes the lead.

To that end, the doctor has been collaborating heavily with the globally distributed Spend Matters analyst team (because no one person can get us out of this) to bring a unified, technologically focussed, COVID-19 response to help you.

Since the beginning, the global analyst team has been working together to identify the issues that you will be facing and the technologies that will help you get through this, and making a significant amount of this information (which would normally reside behind the PRO paywall given its depth and the amount of analyst time that went into it) FREE for all. (Only the vendor coverage, based on our extremely deep vendor dives, is behind the paywall, but the names of the vendors we are covering are not.* And while the doctor‘s name won’t be attached to much as a lead analyst, you’ll certainly find his digital fingerprints all over it.)

So far, we have given you the first, or second, iterations of:

Note: Some pieces posting today and tomorrow!

0. CoronaVirus Coverage Introduction

1. Supply Risk Management

2. Sourcing & Commodity Management

3. Advanced Procurement Analytics

4. Procure to Pay(P2P)

5. Fraud, P2P, and Vendor Management Safeguards

6. Deep Contract Analytics (Coming Soon!)

7. Contingent Workforce and Services Part I and
Part 2

And we will be updating these with additional issues and vendor coverage as time goes on. (For example, by the end of the week, an extended version of Advanced Procurement Analytics should be up with more issues and more vendor coverage.)

And SpendMatters has even prioritized Brand Studio, Sponsored, and Main Site content that could be helpful to you, including:

And even main site posts on how we can help individually:

And starting this week, the doctor will be leading a main-site series on Dear Procurement, No Excuses (Part I: Carpe Diem per Scientia et Lectum Diurnum) on how you can not only do everything you used to do in person and/or at the office virtually and distributed, and do it better (by embracing the full capabilities of modern technology to knock capability, and productivity, up a notch (no spice weasel needed).

Keep an eye out for it. (the doctor will let you know here when they go live. Don’t worry!)


* As you know, even though he writes a considerable chunk of it, the doctor usually doesn’t push Spend Matters Pro on this site as the smart will seek out the best information they can get (and other analysts can’t hold a candle to the technology coverage the doctor can do), but he wants you to know that if you are considering Pro#, there has never been a better time!

Through the end of April 2020, a Spend Matters’ special PRO Expert Survival Pack is available to procurement practitioners at up to 50% off! See the COVID-19 PRO Expert Survival Pack!

# PRO has published well over 100 vendor deep dives, including dozens and dozens by the doctor himself, in the past three years that go far beyond anything you’ll find anywhere else, as well as thought leadership series on UX, AI, and various S2P areas that are more insightful than most books …

(and while the doctor would like to offer this deep coverage on SI, the reality is the number of vendors who will support educational content vs. thinly disguised marketing content are few and far between and the model SI would like to follow is just not sustainable … the doctor will continue to bring you best practice advice when he can, and will be cross posting some of the public content on, and related to, COVID-19, but if you want the deepest vendor and thought leadership coverage there is, subscribe to PRO [and keep the doctor writing] which you know is always completely unbiased as its paid for by readers, not vendors!