Category Archives: Market Intelligence

The (Board) Gamer’s Guide to Supply Management Part VIII: Agricola


It’s 1671, the plague that has raged for the last 323 years has finally been overcome, and you and your spouse are a simple farming couple living in a two-room hut somewhere in (very) rural Austria. Your goal is to improve your quality of life by improving your home, expanding your fields, and multiplying your animals (to sell in the nearby markets).

In Agricola, you do this over a 14-round game where each of your family members can take exactly one action (that has not yet been taken) in a round. In this round you can acquire resources such as wood and clay, harvest your crops, acquire livestock, or expand your family. Each of these actions will need to be taken, but must be timed appropriately You cannot expand your family before you can house (and feed) another mouth (or one or more family members will have to beg), but you cannot plant and harvest more crops without more family members. As a result, some actions will almost need to be paired and you will have to plan action sequences in order to not only survive the game, but win. The winner is the player who builds the best overall farmyard (which is judged on a variety of factors which include fields, pastures, stables, crops, animals, homestead, and improvements).

In this post we will discuss the basic “family game” play, which leaves out some of the more advanced components, as you will need to master the basic game before moving on to the more advanced one. (Just like you have to master the basics of multi-round sourcing sourcing negotiations before trying to do real-time optimization-powered auctions after a multi-round RFX to qualify the final bidders.) The difference is that occupation and minor improvement cards are left out and only the major improvement cards are used.

You start the game with 2 units of food if you are the starting player, and 3 otherwise. You can get more food from the harvest that comes at the end of rounds 4, 7, 9, 11, 13, and 14. (Just like in the real world, crops take time and you can’t harvest immediately after planting.) Food is produced from raw grain and vegetables, and grain and vegetables can be converted to food one-to-one at any time. (If you have a hearth, you can convert vegetables at better than a 1 to 1 ratio.)

Each round without a harvest has four phases:

  1. Begin: Flip over a new round card that makes a new action available.
  2. Replenish: Acquire new goods and food from any previous actions that have a recurring result.
  3. Work: In sequence, each player puts a family member to work by assigning an available action to them, which they will take. The action may yield an immediate or future result.
  4. Go Home: At the end of the round, the family members have finished their assigned tasks and go home.

If the round has a harvest, there are three more phases:

  1. Field: players remove one food unit from each sown field and places it
    into their personal supply
  2. Family Feeding: each player must feed each family member who was born in this round 1 food and each other family member 2 food; a player who does not have the food has to beg and borrow food, but that comes at a cost of 3 points (think 3 food units) in the future
  3. Breeding: any player with at least 2 animals of the same type may breed 2 animals to receive exactly one additional (baby) animal of the same type, provided there is space in that person’s farmyard for the animal

The following actions are always available:

  • Extend Your Hut or Stables : you can extend your wooden hut, ore renovate your wooden hut into a clay hut or your clay hut into a stone house if you have enough reed and wood, clay, or stone to do so. Alternatively, you can build stables to keep (more) animals
  • Extend Your Family: if you have more rooms in your hut than you have family members, and less than five family members, then you can add one offspring to your family (to put to work in later rounds)
  • Tend Your Fields or Bake Some Bread: you can plow an unplowed field, sow one or more plowed fields with grain or vegetables, or (if you have a fireplace, hearth, stone, or clay oven) convert grain to food
  • Raise Your Animals: in order to raise animals, a player must fence pastures or build stables (in a pasture),

Additional actions that may become available during the game (in the form of major improvement cards) include:

  • The Well: produces extra food (as your fields are better irrigated you produce more crop that becomes food)
  • Fireplace: allows you to convert grain, vegetables, and animals to food
  • Cooking Hearth: allows you to convert grain, vegetables, and animals to food
  • Basket Weaver: allows reeds to be converted to food
  • Stone Oven: bake bread from grain
  • Cabinet Maker: makes cabinets from wood that are traded for food
  • Pottery: makes pottery from clay that are traded for food

It’s just like managing an industrial farm at the back-end of agricultural supply chains. The amount of crop you can produce depends on how many fields you have, how many people you have working those fields, and how capable you are at optimizing the output, but the amount of fields you have available and the amount of people to tend those fields depends on how many of those fields need to be used for, or grow food for, the animals you are raising to supply meat to your customers who want grain, vegetables, and meat to stock their shelves and freezers. A field can only be used for one thing at a time, a person can only do one farm task at a time, and those farmhands need to be paid and fed. You have to balance supply with demand with profit and need. If you train your people, they can be more productive, but it costs time and money to do so (and maybe they’ll quit and go work for your competitor). And if you go into debt, the interest accumulates quickly because you’re essentially borrowing from legalized loan-sharks due to your low profit margins and limited clout.

And winning isn’t just profit, it’s sustainability and depends on a number of complex factors that influence your performance over time.

Are you the best agriculture supply chain manager? Play Agricola, challenge (up to four of) your teammates, and find out!

Basware: P2P for the Global “E” Part IV

In today’s post, we continue our introduction to Basware, a Finnish provider of enterprise finance solutions that serves the global e-Commerce, P2P, and AP Automation marketplace with over 2,000 international customers that collectively do business with over 1 Million companies in over 100 countries. In Part II we discussed the AP Automation and Invoice Processing solutions, the full Purchase-to-Pay process coverage from the Procurement and AP perspective, and the full compliance with e-Commerce, Taxation and Digital Signature Requirements that they offer in over 50 countries. Then, in Part III, we discussed the Basware Commerce Network (BCN). An open commerce network that connects almost 1 Million companies in over 100 countries through 170 partner networks, the BCN currently delivers over 60 Million e-invoices per year with a combined value in excess of $420 Billion and Basware expects to be processing over 150 Million e-invoices a year by the end of 2015 with a combined value in excess of $1 Trillion dollars. Part of this increase will be as a result of Basware’s new partnership with Mastercard, which provides suppliers’ a guaranteed payment once the invoice has been approved, and an early payment option as well. In addition, buyers can have extended payment time if they need it. In addition, cross-border payments, which take over a week on average, are simplified and generally executed at a reduced cost to both parties.

Today we are going to focus on their analytics capability, called Basware Analytics. Basware built their analytics platform on top of Tableau Software‘s Data Visualization Engine, a high-performance data engine designed to allow for real-time data analysis, visualization, and reporting. Using this engine as a foundation, they focussed on designing an analytics application that was useable by the average Spend Management professional and that presented that professional with over 80% of the information across the P2P cycle that a Spend Management professional needs immediately upon log-in.

Over time, Basware has built a suite of package reports that cover 80% of a Spend Management and Finance organization’s need for process and spend visibility to drive process efficiency. In addition, they provide a suite of templates that can be easily altered in such a way that, in most organizations, users are able to build reports that quickly cover most of the reporting needs not covered out-of-the-box within a few hours of deployment, and gradually build reports, possibly with the help of Basware’s services organization, that will let them achieve the remaining 20%.

The solution was designed from an AP and Procurement perspective and in addition to standard procurement reports which include, but are not limited to, total spend, geographical spend by organization or cost centre, top suppliers, top products, invoices received, procurement KPIs, and maverick spend, there are accounts payable reports which include, but are not limited to, invoices received, invoices received with or without a contract or PO, cash flow analysis, spend by supplier analysis, AP KPIs, AP Process and Cycle Times, and AP Financial metrics. Each report allows for real-time drill down and filtering on any dimension. Because the underlying analysis engine has been built to sit on top of all invoiced spend and related P2P data, the platform can address spend visibility, supplier performance, procurement performance, contract compliance, catalog coverage, cash forecasting and management, accounts payable and invoice management. With the visibility provided, you can dive into opportunity identification, process optimization, and rationalization.

Users can access the template behind any report and quickly customize it by adding or removing available dimensions, customizing filters, and tweaking the layout. A user can select which of the available data sources1 (which have been mapped to a common schema) she wants to use, specify the dimensions of interest (to build the cube), define the default ranges and allowable filters, choose the graph types, and modify the layout. The application supports all of the standard graphs and charts, including cloud charts (which is great for looking at search term history or the most common products and/or services being bought) and tree-maps, which give a quick visual representation as to which supplier, cost centre, product, etc. is accounting for the most (maverick) spend. It’s one of few, and most effective, implementations of cloud charts and tree maps that SI has seen to date.

The user does not require any technical skills to modify the templates to adjust or create new reports. This solution is optimal for giving more people within the organization real-time access to spend and process metrics, and allows the Procurement and Finance organizations to begin their spend analysis journey immediately. (In addition, if the user needs help or wants to add custom data sources, Basware has professional services personnel in North America, Europe, and Asia Pacific and offers a broad suite of support services, including supplier activation/onboarding, in 10 languages: English, Finnish, Swedish, Norwegian, Danish, Dutch, German, French, Spanish, and Portuguese.)

1 Even though reports are limited to Basware’s data sources out of the box, the customer has an option to extend the reporting solution to other data sources through the use of other Tableau Software tools leveraged by Basware.

Top 12 Challenges Facing India in the Decades Ahead – 07 – Education and Opportunity

If you remember our last post on poverty, you will note that we said that when India is compared to the 16 countries outside of sub-saharan Africa that are poorer than it, it doesn’t do well in any social indicator, with social indicators for Education being one of those indicators. In particular, it’s literacy rate among Afghanistan, Bangladesh, Burma, Cambodia, Haiti, Krygyzstan, Laos, Moldova, Nepal, Pakistan, Papua, New Guinea, Tajikistan, Uzbekistan, Vietnam, and Yemen ranks 9th for Males and 11th for Females (at 82.1% and 65.5%)! Not good. In comparison, the literacy rates in China (at 97.5% and 92.7%), Brazil (at 90.1% and 90.7%), and Russia (at 99.7% and 99.5%) are much higher in comparison, as are the literacy rates of most of its Asian neighbours.

But it’s educational challenges are not just limited to its literacy rate. The challenges also stem to the perception of the importance of education, especially at an early age, as a whole. In their newly published book, An Uncertain Glory, Dreze and Sen do a great job of outlining some of the significant challenges facing India in terms of education and literacy, challenges which start with the first five year plan created by the newly independent India back in 1951.

The first five year plan in 1951, even though sympathetic to the need for University education which it strongly supported, argued against regular schooling at the elementary level, favouring instead a so-called ‘basic education’ system, built on the hugely romantic and rather eccentric idea that children should lean through self-financing handcraft. It went on to say that ‘the tendency to open new primary schools should not be encouraged and, as far as possible, resources should be concentrated on basic education and the improvement and remodelling of existing primary schools on basic lines’. Other than an outright banning of education for the lower castes and Dalit, SI does not think one would find a better prescription for a return to the middle ages. (And what makes this especially sad is that India, in the 4th Century AD, more than 600 years before the first European University was founded in Bologna, had one of the first big Universities at Nalanda. This University, run by a Buddhist foundation and supported by Hindu kings, drew students from all over Asia, and, at its peak in the seventh century had over 10,000 students in its dormitories.)

But it’s not just the outlook on education that’s the problem, it’s the delivery. In a nation-wide school survey conducted by the PROBE (Public Report On Basic Education) team in 2006, only two thirds of the students were present on the day of the survey (according to the school registrars) and even fewer according to the field investigators’ direct observations. In addition, there was considerable absenteeism of teachers as well, in addition to widespread late arrival and early departure problems. Given that 12% of schools had only 1 appointed teacher at the time of the survey, any teacher absenteeism at all is a huge problem. Furthermore, on the day of the survey, 21% of the schools were operating as single teacher schools and, to make matters worse, half of the schools had no teaching activity at all at the time of the investigators’ unannounced visit! (Why? Due to the relatively high salaries accorded to appointed teachers, there is a reluctance to make appointments. In addition, appointed teachers typically have the equivalent of tenure and there is little oversight.)

Officially, there are supposed to be about 200 school days per year. But with a teacher absenteeism rate that was found to be about 20%, a pupil absenteeism rate of about 33%, the chance of both a pupil and a teacher being present on the same day is about 50%. Then there is the chronic problem of a lack of teaching activity and the fact that a given student only gets taught about half the time the student and teacher are both present on a teaching day. The net result is that the average student gets about 50 teaching days per year, or one fourth of what the student would get in a well-functioning school system!

For a considerable portion of the population, the words of Nobel Laureate Rabindranath Tagore (1913, Literature), spoken in an interview with Izvestia in 1930, still ring true. In my view the imposing tower of misery which today rests on the heart of India has its sole foundation in the absence of education. Because, as Dreze and Sen point out in their work, in a society, particularly in the modern world, where so much depends on the written medium, being illiterate is like being imprisoned, and school education opens a door through with people can escape incarceration.

This lack of education is a big contributor to the Unemployment problem in India. (After all, how can you even apply for any meaningful work in our modern economy if you can’t even read and write?) While the official unemployment rate is 9.9% (as per a press release from the Labour Bureau of the Government of India), the problem is much, much worse than that. (How can it not be when over two thirds of your population has to survive on less than $2 US dollars a day?) Consider the recent example of SBI, the nation’s biggest bank, who in April of last year decided they wanted to recruit 1,500 employees and received over 1,700,000 applications?

While the Indian economy did create approximately 60 Million jobs between 2000 and 2005, during the forefront of the outsourcing craze, it did not create more than 2.8 Million between 2005 and 2010 (as per the Institute of Applied Manpower [IAM]). And while the loss of jobs in the agricultural sector was absorbed in the construction sector, the IAM estimates that 5 Million construction jobs were lost between 2005 and 2010. In addition, 93% of the Indian workforce is interim or informal and receive no health insurance, retirement pension, or basic benefits. As a result, the real unemployment statistic is estimated by experts (Source: WorldCrunch) to be around 20% and doesn’t include the interim or informal workers, especially in rural areas or employed in season sectors, who are underemployed.

And the problem is likely to get even worse. The population in India is still increasing, and in order to maintain the current levels of employment, India needs to add about one million jobs a month, but only managed to add about 50,000 a month between 2005 and 2010, one twentieth of the required number! An educated population could at least try to seek work elsewhere, or, like the services sector, compete to bring more work in. An uneducated population, on the other hand … well, ask South Sudan, Afghanistan, or Niger how an utter lack of literacy is working out for them! (Or even Belize, Bangladesh, or Syria — with slightly higher literacy rates, but still quite low with respect to the developed world.)

Sadly, It Looks Like the doctor’s 2014 Procurement Prediction is Going to Come True!

In Prediction Time Again? Ugh. (Part I and Part II), the doctor predicted that 2014 will be 2013 part II and 2009 part VI. Specifically, this means that

  • the focus will continue to be on cost-cutting and not value-creation,
  • valuable, high-ROI, technology will continue to be ignored, and
  • the training and new talent budgets will remain empty.

According to Deloitte’s recently released Global CPO Survey, 79% of CPO priorities have cost reduction as their #1 priority.

According to the Hackett Group’s recent EPM Executive Perspective on Technology Enablement: A Critical Piece of the Performance Management Puzzle, 63% of world class and 82% of peer group organizations still create management reports using spreadsheets as the primary business application.

And ProcureCon’s just-released “State of Indirect Procurement Benchmark Report”, which was complied from the responses to a benchmarking questionnaire distributed to ProcureCon Indirect West’s audience of procurement and sourcing practitioners, found that 55% of attendees at the event felt that their Procurement team was not adequately staffed and 60% of their organizations had no plans to increase the team size.

It’s a dismal state of affairs indeed.

If you need ideas to help kickstart your Supply Management organization and get out of this quagmire, consider joining the doctor at the inaugural ProcureCon Canada event (and register with code PCA14SI). Let’s share ideas, knowledge, and a commitment to moving the discipline forward, even if we need to light a few fires.

Top 12 Challenges Facing India in the Decades Ahead – 08 – Poverty

As per our last post, India is poor. Really poor. By far the poorest of the BRICs with 2/3rds of the population poor by any reasonable definition of poverty. Just how poor is India? In just about any ranking that matters, it’s not well off. When it is compared to the 16 countries outside of sub-saharan Africa that are poorer than it, India is in the lower half of the rankings at best, and near, or at, the bottom in a few cases.

For example, let’s start with some of the leading social indicators (Source: An Uncertain Glory, p 49):

  • Life Expectancy at Birth: 9th
  • Infant and Under-5 Mortality Rates: 10th
  • Access to Improved Sanitation: 13th
  • Mean Years of Schooling: 11th
  • Literacy Rate: 9th for Males, 11th for Females
  • Proportion of Children Under 5 Undernourished: 15th

And this list includes Afghanistan, Bangladesh, Burma, Cambodia, Haiti, Krygyzstan, Laos, Moldova, Nepal, Pakistan, Papua, New Guinea, Tajikistan, Uzbekistan, Vietnam, and Yemen!

Consider the sanitation metric in particular. In Bangladesh, which is considerably poorer than India, only 8.4% of the households practice open defecation. However, in India, 55% of households practice open defecation. How can you become a first world country if you can’t even provide your citizens with toilets? (Or even outhouses?)

The metrics are even worse when you compare it to the BRICs. Worst life expectancy. Worst mortality rates. Least access to sanitation. Worst literacy rates. Most undernourishment. In addition, it has the lowest immunization rates and the lowest health care expenditures as a percentage of GDP.

With respect to health care, India did launch the National Rural Health Mission in 2005-2006, but allocated it a measly RS 10,000 crores per year for the fist five years. Given that almost 70% of India’s population is still rural, if two-thirds are poor and likely in need of the program, that’s about 560 Million people who could use help from the program. If you do the math, that’s less than 1 rupee per five people! Plus, it seems to be going down a road of privatization, relying on private institutions and private insurance, with public transfers for the poor who make the BPL (Below Poverty Line) cutoff and qualify, and this is a direction that has yet to work successfully for any major country. In almost every country with good health care, a good public system preceded a good private system.

SI could go on, but you get the point. While India is increasing its GDP at a relatively rapid rate, it is still poor (and the poorest of the BRICs) and the average person is really poor and needs a lot of social assistance to even reach the same standard of life that poor people have in China, Brazil, and Russia. With about 800 Billion people who could use some form of government assistance, this is a huge burden in a country that collects, on average, 1 US dollar for every 3 citizens in tax revenue.