Category Archives: Market Intelligence

The (Board) Gamer’s Guide to Supply Management Part X: All Creatures Big and Small

You want to prove that you’re the best at managing an industrial farm at the back-end of agricultural supply chains, but you can’t get enough of your team-mates together for a raising game of Agricola. Don’t worry! Thanks to Z-Man Games, you can have a one-on-one game of Agricola: All Creatures Big and Small and out-farm your cube-mate to your heart’s content!

Based on the original Agricola, All Creatures Big and Small was designed as a simpler alternative for only 2 people. (Even though the original could be played by 2 people, it was designed specifically for 3-5 players, and 62 of the occupation cards in the full game — which we’ll get to once you’ve had time to figure out the basic game which is more involved and complex than you think it is,just like the back-end of a real agricultural supply chain — can only be used if there are 4 players.)

The 2-player game is simpler to learn than the full game (but just as hard to master, especially if you get the expansions). The number of actions you can take in each round are fixed, whereas the number of actions in the full game depend on the number of family members you have; the focus is on raising animals, building fences and stables to hold them, and other special buildings and you don’t have to balance this with growing crops and producing food like in the full game; and there are no cards to deal with, only special buildings. It’s quick to learn, but still hard to master because, as with the full game, only one player can take an available action and if you don’t build your pens or stables in time, you can’t breed more animals — and while special buildings and farm expansions can give points, many of the points depend on the size of your flock. Plus, if you believe the game is getting too easy for you, there are two expansions: “More Buildings Big and Small” and “Even More Buildings Big and Small” that add a total of 54 more special buildings to make your game even more unpredictable, just like farming in the real world (as each building has an ability, just like each supply chain professional you could hire brings a different skill, and you can’t build them all, just like you can’t hire afford to hire too many people, so you have to find the right mix of buildings that give your farm that right mix of capabilities just like you have to hire the right mix of professionals in the real world with skills that complement each other and make the team as a whole greater than the sum of its parts).

In this 2-player version, you start the game with a farm board and a cottage that can hold one animal and 9 borders, which you can place when you select the fencing action, provided that you have enough wood to place those borders.

The game is played over 8 rounds and each round consists of 4-phases.

  1. Refill: Refill the indicated spaces on the game board with the goods printed on them. Every round, more wood and stone becomes available to be retrieved from the mill or quarry.
  2. Work: Take turns placing each of your three workers on available actions.
  3. Return Home: Your workers return home for the next round.
  4. Breed: At the end of the round, if you have at least two animals of the same type, and room for one more animal of the type, you breed one new animal of the type.

The available actions are:

  1. 1 wood: Acquire all wood in the 1-wood resource space and become the start player next round.
  2. 3 wood: Acquire all wood in the 3-wood space. (Just like in the real world, the first person to market often gets the most goods at the best price when demand exceeds supply.)
  3. 1 stone: Acquire 1 stone.
  4. 2 stone: Acquire 2 stone.
  5. Fence: Build as many borders as you can at the cost of 1 wood each. Each enclosed pasture can hold 2n animals of the same type, where n is the number of spaces that are enclosed.
  6. Wall: Build two free borders and pay 2 stone for each additional border you wish to build.
  7. Building Materials: Acquire 1 wood, 1 stone, and 1 reed.
  8. Expand: Take a farm expansion that allows you to expand your farm (which starts with 6 fields 3 more fields).
  9. Stall: Build exactly one stall for 3 stone and 1 reed. A stall can hold 3 animals of the same type.
  10. Stable: Upgrade one stall to a stable for 5 wood or 5 stone. A stable can hold 5 animals of the same type.
  11. Feeding Trough: Build one trough for free, and additional troughs for 3 wood each. A trough doubles the number of animals that can be kept in the pasture or building it is located in.
  12. Special Building 1: Pay the building costs and put up a special building. Each special building does something different. For example, the open stables gives you one free animal and bonus points at game end; the half-timbered house replaces the cottage, gives you bonus points, and holds two animals instead of one; the shelter, which can hold one animal, gives you one free animal; and the storage building stores resources and allows you to gain points from them (as they are kept in pristine condition and can be resold at the end of the game if not used).
  13. Special Building 2: Pay the building costs and put up a special building.
  14. Millpond: Harvest a reed and capture any sheep near the pond.
  15. Pigs and Sheep: Capture the pig and any sheep on the space.
  16. Cow and Pigs: Capture the cow and any pigs on the space.
  17. Horse and Sheep: Capture the horse and any sheep on the space.

Sounds simple enough, but, just like in Agricola, you’re managing an industrial farm at the back-end of an agricultural supply chain, but unlike Agricola, you’re only managing the stables. The amount of animals you can raise depends upon the number of separate pastures, stalls, and stables you have, how many troughs you have available, how many workers you have to build, how many resources you have available to put up fences and buildings, and how many special buildings you have that give your workers additional capabilities. And, as in the real world, winning isn’t just profit, it’s sustainability and depends on a number of complex factors that influence your performance over time.

Are you a better agricultural supply chain manager? Play All Creatures Big and Small and see if you can best your cube-mate, and when you think you’ve mastered it, switch back to the full game, break out the full version, and start preparing yourself for the ultimate supply management challenge (which this series is leading up to — given that the majority of the market is still, depending on the analyst firm you ask, less than halfway up the ladder, we have to first give your peers a chance to take their supply chain game up a couple of rungs).

Top 12 Challenges Facing India in the Decades Ahead – 05 – Sanitation

Sanitation in India is a major problem. The fact that India is 13th among a list of the 16 countries outside of sub-saharan Africa that are poorer than it in the rankings does not do the severity of the problem justice. As we noted in our post on Poverty, in India, 55% of households practice open defecation. In comparison, in Bangladesh, which has half of the GDP of India per capita, only 8.4% of the population practices open defecation.

Moreover, only 88% of the population has access to an improved (clean) water source (for drinking). In rural areas, the statistic is even worse — 84% (compared to 96% in urban areas). That’s 16% of the population without even access to clean water. For an emerging country, this is a disgrace. In China, a country with three times the land area, the statistics are 98% and 85% (and 91% overall). Why is it so bad? Well, for starters, as of 2010, only two cities in India — Thiruvananthapuram and Kota — get a continuous water supply (which is a situation that needs to change).

This is a huge problem. Even worse than the health care situation. When you get right down to it, if more people had access to sanitary conditions, communicable diseases and infections, which account for a percentage of deaths that is (at least) 20 times the percentage of deaths that communicable diseases and infections should account for, wouldn’t be so widespread. (People can’t die from a communicable disease or infection they don’t get, and the number one way to stop the spread of communicable diseases and infection is better sanitary conditions and sanitary practices.) With respect to diarrhoea, 88% of deaths occur because of unsafe water, inadequate sanitation and poor hygiene.

Sewerage, where available, is usually in a bad state. In Delhi, for example, the sewerage network has lacked maintenance over the years and overflow of raw sewage in open drains is common, due to blockage, settlements and inadequate pumping capacities. The capacity of the 17 existing wastewater treatment plants in Delhi is only enough to process about 50% of the waste water produced. Across India, the most recent estimate (in 2003) was that only 27% of India’s wastewater was being treated, with the remainder flowing into rivers, canals, groundwater or the sea. Abysmal!

Just how bad is the situation? Consider this passage from Wikipedia:

For example, the sacred Ganges river is infested with diseases and in some places the Ganges becomes black and septic. Corpses, of semi-cremated adults or enshrouded babies, drift slowly by. NewsWeek describes Delhi’s sacred Yamuna River as “a putrid ribbon of black sludge” where the concentration of fecal bacteria is 10,000 times the recommended safe maximum despite a 15-year program to address the problem. Cholera epidemics are not unknown.

Plus, the continuing depletion of ground water tables and the continuing deterioration of ground water quality are threatening the sustainability of both urban and rural water supply in many parts of India. India can’t afford to pollute any more of its water supply and needs to get waste water treatment under control rapidly. Otherwise, health care problems are just going to get worse, and the repercussions will be substantial.

Nine Rules for Insuring the Dash For Cash

CFO World recently published a short piece on “ending the dash for cash” in which they outlined then steps to success that an organization can take to help shrink working capital in which they got it all wrong.

Good working capital management doesn’t shrink working capital, it enlarges it. So, in the spirit of Mark Perera’s “Nine Rules for Stifling Supplier Innovation” (Old St Labs), Sourcing Innovation gives you nine rules for insuring that you will eventually have to dash for cash to keep your business afloat.

  • Focus on recently overdue accounts. If the customer has a history of paying on time, but just missed a payment or two, even though chances are they just screwed up because they haven’t implemented proper e-Invoice Management and temporarily misplaced your invoice, call them up and give them a stern lecture on how deeply disappointed you are in them.
  • Insist that there is no acceptable excuse for late payment. Even if the excuse is that the customer is disputing the amount you charged them because you failed to apply a discount or mistyped the quantity they actually received (because there is no integration between your shipping system and billing system and a data entry clerk has to key in quantity). Insist they should pay now and you will resolve the dispute later.
  • Never change your standard payment terms. They worked ten years ago, why shouldn’t they work now?
  • Pay on your terms, no matter what. Who cares that the supplier has to borrow at 20% annual compounding interest to float your 120 day payment terms. That’s their problem, right?
  • Don’t fret the inventory. If sales ordered it, they’ll move it when they’re good and ready. It’s not your problem, it’s the COO’s.
  • Forget next quarter. Wall Street is only going to judge you on this quarter, so do whatever you can to put the books in the best possible light, especially if it’s year end. You’ll figure out next quarter when next quarter arrives.
  • Link performance measures to year-over-year profit. Again, that’s all Wall Street cares about, so forget about those pesky savings targets, sustainability initiatives, or long term cost reduction measures. They never materialize anyway, right?
  • Focus on quarter-over-quarter cash on hand and net income reporting. Reporting on increases in current and future liabilities just dampens everyone’s mood unnecessarily.
  • Don’t be a sucker for early payment discounts. It lowers your cost, but it lowers your cash on hand even more — and that’s what Wall Street will judge you on.

Follow these rules and I ensure you that, sooner or later, you will be making a dash for cash.

The (Board) Gamer’s Guide to Supply Management Part IX: Small World Part 2

In Part V of our original series2, we introduced you to Small World, a delightful game from Days of Wonder (iOS Version available) that, in the words of Wil Wheaton, combines the military strategy of Risk with the delightful art and fantasy races of Cosmic Encounter. Except its more dynamic than Risk, and more variable than Cosmic Encounter, because while the races and powers are fixed, the combinations are not. [There are 14 races and 20 powers, or 280 different possible pairings. Plus, the pairings are ordered, and if a player does not select the pairing made available to him during his turn, he must spend 1 gold for each pairing, up to 5, that he wants to skip, which not only impacts his ability to accumulate the most victory points and win the game, but improves the selections available to the next player, who may gain one or more victory points by selecting a skipped pairing. So, if you do the math, there are P(20,14) possible power-race combination orderings, which is equal to 3,379,030,566,912,000 possible distinct games when orderings are taken into account!]

So what does this have to do with supply management? As per SI’s original post, Wil could just have easily have said Small World combines the military strategy of Risk with the marketing strategies of an MBA program. Whoever has the most money at the end of the year wins. We earn money by conquering and maintaining market territories. Empty, blue ocean, territories cost two units to conquer. Every competitor or obstacle in a territory costs one more unit to conquer. At the beginning of every game, each player will choose a primary market strategy, like brute advertising force, niche marketing, or price-undercutting, and combine it with a perceived marketing advantage such as a big war chest, coveted partnership, or new manufacturing process that allows production costs to be drastically slashed. The primary market strategy and perceived marketing advantages change every game. And therein lies the connection. Small World is a good introduction to how your supplier’s sales and marketing force is going to try and counter, and undermine, your every effort to procure and manage supply at a fair and sustainable price (as profit is the name of their game, not cost control). Today we are going to dive into the races and powers and solidify that connection.

The races1 in small world can be mapped to the different personality types in an organization that, directly or indirectly, support, or limit, the sales organization. Consider the following:

  • Amazons: A nation of all-female warriors in Greek mythology, these warriors seem to multiply in battle. They’re like the accounts receivables clerks who come out of the woodwork to descend on your deadbeat customers en-masse.
  • Dwarves: The mythical miners from the popular fairy tale, they’re the professional arbitrators who excel in dark rooms and endless negotiations.
  • Elves: The long-lived long-ears from the world of Tolkien who are almost immortal, they’re like the IRS auditors who never die.
  • Ghouls: Like the accounting trolls in Accounting popularized in Dilbert comics, they are the immortal accountants.
  • Giants: Like the feared giants of medieval times, the rich C-Suite, when they are on top, can conquer others with less effort.
  • Halflings: Like the burrowing hobbits, these 3rd party independent consultants pop-up out of nowhere and take over part of the project, and there’s nothing you can do about it.
  • Humans: Like the born-and-bred farmer who is a master of his fields, these account managers excel at up-selling your existing customers.
  • Orcs: Like the toll-extracting orcs of myth, these high-performing salesman excel at getting the big deal, by force if need be.
  • Ratmen: Think lawyers. ‘Nuff said.
  • Skeletons: Like mythical skeletons, these marketers multiply every time they conquer a new territory.
  • Sorcerors: Like real sorcerors, the members of your corporate intelligence team uses espionage and influence to convert insiders to win a deal.
  • Tritons: Like the legendary masters of the sea, these logistics managers rule the sea trade.
  • Trolls: Like the gate-keeping trolls, these on-site consultants — once they are embedded in your culture — are almost impossible to get rid of.
  • Wizards: Just like the wizards could conjure something out of nothing, these analysts can conjure actionable intelligence out of random data bits.

And the powers can be mapped to different skills that can give your race an advantage:

  • Alchemist: In the old days, these magicians turned metal into gold just like your smooth-talking salesman turn feature requests into profitable change orders.
  • Berserk: Just like these warriors sometimes gained sudden bursts of strength before every battle, your evangelists can sometimes beat the competition even when the odds aren’t in your favour.
  • Bivouacking: Just like invading armies would sometimes build encampments to fortify their defenses, your account managers are masters at placing on-site consultants to fortify yours!
  • Commando: Like the marines, your analytics team, with more training than your competition, can beat the market hands down with fewer resources (allowing you to outperform your peers).
  • Diplomat: Your customer relations are so good, no one can encroach upon your customer base! Your smooth-talking sales team should be in public office!
  • Dragon Master: One of your CXOs is a legend in the space, and never loses the one battle he chooses to engage in, just like the mythical warrior who rode the dragon never lost.
  • Flying: Your command of the air, also known as your no-limit travel pass, gives you a larger territory in which to trade.
  • Forest, Hill, Swamp: Just like certain people are suited for certain terrains, your sales team does better in certain verticals than others (and makes a lot more money from a lot less effort).
  • Fortified: Just like conquering armies would sometimes build an almost impenetrable fortress from which they could rule their newly conquered land, you can dedicate your efforts on a marquis account and become so embedded therein that the account becomes almost impossible to steal.
  • Heroic: Just like mythical heroes could’t be conquered, the efforts of your two best sales teams, and their House of Lies, are unparalleled and can’t be challenged.
  • Merchant: Like the great merchants of legend, you make more profit on every sale than the people you are trading with.
  • Mounted: Just like a mounted army was more effective than one on foot, your big data advantage crushes the uninformed competition.
  • Pillaging: Just like the Vikings would loot, when you conquer an account you always find integration and data maintenance efforts that double your profit.
  • Seafaring: Just like the most successful merchants in ancient times always rules the seas, your command of the sea allows you to trade where others can’t.
  • Spirit: Just like spirits never die, your on-site consultants are so knowledgeable in their domain that even when a competitor manages to sell their product, your consultants are still maintained for their expertise and you play on.
  • Stout: Just like the army of anubis never needed rest, neither do your sales team who can swoop from one deal to the next without need for a recharge. They live on caffeine, adrenaline, and victory!
  • Underworld: The domain of the lawyers. ‘Nuff said.
  • Wealthy: Just like the tomb raiders of old, you come into sudden wealth when that one client decides to shift all its consulting to you.

It’s a small world
But it’s the only one we’ve got
Huey Lewis

1 For this post, we are limiting ourselves to discussion of the 2nd Edition of the original Small World and not Underworld, Realms, or the various expansions such as Cursed and Be Not Afraid!

2 The original series:
Part    I: Ticket to Ride
Part   II: The Settlers of Catan
Part  III: Munchkin
Part  IV: Castle Panic
Part   V: Small World
Part  VI: Zombie Dice, Tsuro, and Get Bit!

… and the new series to date:
Part  VII: Upon a Salty Ocean
Part VIII: Agricola

Top 12 Challenges Facing India in the Decades Ahead – 06 – Health Care

As per our post on poverty, health care is a substantial problem in India. Not only does India have the 9th lowest life expectancy among the 16 countries outside of sub-saharan Africa that are poorer than it is, but is also has the 10th lowest infant and under-5 mortality rates and the second worst proportion of children under 5 who are undernourished! Then, as per our last post on education and opportunity, at leaset 93% of the workforce has no health insurance in a country leaning heavily towards privatized health care.

And this is just the tip of the iceberg. Almost 40% of all deaths in India are still due to infections! (Source: Health and Health Care in India by UCL) The majority of the remainder are due to non-communicable conditions such as cardiovascular diseases, chronic respiratory disorders, and cancers. (Compared to the developed world which manages most chronic respiratory disorders and some of the cardiovascular diseases so well that the patients often die from other causes.) In comparison, the only type of death due to infections to break the top 10 in Canada is death due to influenza and pneumonia which strike down 1.6% of the population to grab the 9th spot. In other words, the number of deaths in India due to easily treatable infections is at least 20 times higher than it should be!

India currently spends about 1.2% of GDP on publicly funded healthcare, an amount considerably less than most other comparable countries. In comparison, health care spending clocks in at 5.1% of GDP in China and Russia and 9% in Brazil! (Total spending on health care, including all private spend, is about 4%, but the private spending is mainly by the rich.) Due to this limited funding, and the substantially insufficient funding allocated to the National Rural Health Mission (NRHM) (as outlined in our post on Poverty), 400 Million to 600 Million of the poorest Indians do not get access to the essential medicines they need. When you also consider that India is now the worlds 3rd largest producer of medicine by volume, the absurdity of the situation really comes into the spotlight.

And progress is slow. Even if the extension of the Government’s National Common Minimum Programme, announced by Prime Minister Manmohan Singh on the country’s 66th Independence Day achieves its goal and provides access to free public health care to over half of the population by 2017 (as opposed to the fifth who currently have access) via the country’s 160,000 sub-centers, 23,000 primary health care centers, 5,000 community health centers, 1,000 sub-district hospitals, and 600 district hospitals, that will still leave hundreds of millions of Indians without access to even the most basic of health care services. (Furthermore, the proposal that the Federal Government would directly fund 75% of the relatively limited cost of extending the generic medicines supply to the public health service doesn’t go far enough. At least one third of the population cannot afford to pay even 25% of the cost of generic medicine, which, as it is produced in India, represents relatively little cost to the Government.)

And even though 160,000 sub-centers might sound-impressive, the requirements for a sub-center is one Auxiliary Nurse Midwife (ANM) and one Male Health Worker. That’s it. Not even a full nurse. You only find those in Primary Health Centers, Community Health Centers, and Hospitals. In addition, the primary health centers (PHC) also tend to be minimally staffed. They are only required to have one medical officer (doctor) who is supported by an average of 14 paramedical and administrative staff, in total, and, at current numbers, support a population base of 50,000 people! Furthermore, a community health center, which has to serve approximately 200,000 people on average, typically only has four medical specialists (a surgeon, general physician, gynaecologist, and paediatrician). Plus, per capita, the number of physicians is quite low. Right now, India clocks in at roughly 6.5 per 10,000 people (and many of the doctors are in the hospitals), while Canada has 20.7 and the United States has 24.2. (Source, KFF) Also, while India has roughly 1,600 hospitals to serve 1,237 Million people, the United States has almost 6,000 to serve 314 Million people. In other words, there are 15 times as many people per hospital in India as there are in the United States. (770,000 citizens per hospital in India vs 52,000 per hospital in the United States)

Health Care is a huge problem and one that desperately needs to be solved. After all, if your population is not healthy, how can you expect to give it a good education if it’s worrying about being well enough to study? And if you cannot educate it, how can you ready it to take advantage of any opportunity that may give it the hope of lifting itself out of poverty, something which must be done to increase the tax base enough to build the required infrastructure to support the fierce competition of today’s global economy?