Category Archives: Market Intelligence

What’s the Big Idea?

Seriously, what it is? Inquiring (not enquiring) minds want to know. Because, as far as many of us can tell, there aren’t any big ideas any more. As Neal Gabler said in the New York Times article on the elusive big idea, we live in a society that no longer thinks big. And that’s bad. Why? In many fields of technology, there have been no big ideas for decades. Sure, we see new and better devices every year and sure the iPad just came out, but, let’s face it, the iPad is a netbook with a touchscreen. A netbook is just a miniaturized laptop, and a laptop is just a miniaturized portable computer, and portable computers have been around for over 30 years. (Yes, you read that right, over thirty years, with the first portable computer manufactured in 1979.) And touch-screens have been around almost as long (with the first commercial touchscreen computer released back in 1983). Apple just took the technology to the next generation, while making sure it was easier to use than all of its competitors products. But, contrary to their marketing, there is no new “big idea” in the iPad.

The cloud? Well, I hate to burst your bubble (actually, not true, I love to burst that bubble), but the cloud is just a return to the fundamental concept of mainframe computing with dumb terminals — one big shared computer that services a whole bunch of users who are remote and don’t want, or need, to know how the big computer works. Except this time the big computer is a whole bunch of smaller computers networked together and, since the network is very big (and, in fact, global), the computers can reside anywhere. I could go on, but, even in computing theory, almost everything traces back fifteen to thirty years (or more).

I’m almost ready to agree with the author of a recent Forbes opinion article on the New York Times article that asked why did big ideas die when he said that we live in a post-idea society where people don’t think at all. With exceptions fewer and further between by the day, most people don’t think [deep] anymore.

Why is this? As Gabler says, we are living in an increasingly post-idea world — a world in which big, thought-provoking ideas that can’t instantly be monetized are of so little intrinsic value that fewer people are generating them and fewer outlets are disseminating them.

Who’s to blame? Gabler blames the usual suspects — the web, Twitter, and everything else that, instead of facilitating a lively intellectual life, instead drowns us in information. And while some of these suspects, like Twitter, are indeed a problem, the reality is that they are a symptom and not the root cause.

The problem lies with Wall Street and VCs. They’ve convinced the business world that nothing matters beyond the current quarter and any idea that can’t be brought to market overnight isn’t worth it. We did not come further in the last 100 years than in all of human history by only focussing on products that could get to market quickly. (We have to remember that the first cross-Atlantic transmission did not occur until 1902. This transmission, and all major computational and communication advances since, did not happen in a quarter. Most of the advancements took years of research and decades to perfect.) If you’re trying to change a market — to go from a Model-T to a Jaguar — that takes years, but VCs won’t support anything that can’t be done in more than a few months. As a result all we get are small incremental improvements, with significantly diminishing returns as time goes on, as no one is investing to take the big leap forward.

And, despite claims to the contrary, we haven’t really reinvented the organization (as telecommuting and outsourcing have been common for at least a couple of decades), education, health care, or ownership. We’ve simply redefined management and, in some cases, who foots the bill. I’d like to see some fundamentally new big ideas, but these are looking more unlikely by the day.

Is “Low-Cost Country” Inflation Driving Manufacturing OnShore?

There’s a lot of noise out there about how inflation may be forcing manufacturing back on-shore (to South America, Mexico, and even the Good Ol’ USA), but how much of it is noise and how much of it is (about to become) reality. Leaders want to know, and so does the Hackett Group.

As a result, the Hackett Group has just launched a new complimentary study designed to assess whether inflationary pressures are driving manufacturing out of China, India, and other low-cost countries. It is trying to answer the relevant questions, which include:

  • What impact are rapidly changing cost drivers having on manufacturers?
  • What strategies are manufacturers using to offset these costs?
  • Are manufacturers bringing production closer to customer markets?
  • What are the critical success factors for optimizing the supply chain footprint?

The study is open until September 16 (2011) and all participants will receive a free copy of the research report and an invitation to the presentation of key research findings. As always, responses from individual participants will remain completely confidential and will be used only in combination with those of other study respondents to develop a composite picture.

The study on “Optimizing the Supply Chain” can be found on the Hackett site.

What Defines a Procurement Master?

In their recent piece on “Compulsive Contributors”, which reported the results of their 2011 Procurement study, Accenture defined their hallmarks of procurement mastery. Briefly, they were:

  • A formal procurement strategy integrated with the corporate strategy.
    77% of masters have this, 88% have procurement governance processes in place, and 90% provide innovative value above cost savings as a key element of such strategy
  • Effective integration with supply networks.
    66% of masters look beyond first-tier suppliers for collaboration opportunities (and 60% of masters actively monitor supplier performance)
  • Sourcing and category management excellence.
    Coupled with a push for better demand management as part of a long-term category strategy that drives continual cost improvement. Nearly 75% of masters have resources and processes in place to ensure compliance and nearly 70% of masters have structured sourcing processes.
  • More spend under management (SUM).
    And better visibility to boot (by way of a melding of process and technology). (81% of masters have an integrated end-to-end source-to-pay process and 73% have a master data strategy.) In fact, they manage 15% more indirect spend and 12% more direct spend.
  • They do more to retain and attract the best talent.
    While they need to do more, and recognized this, masters are ahead of contenders in terms of talent development programs. In addition, 67% of using balanced scorecards and KPIs.

These insights, which echo what many Procurement thought leaders have been preaching for some time now, are good as they validate what the experts know. Talent-focussed masters go beyond three-bids-and-a-buy. Taking the strategic approach, they look for value across the board — and deliver that value like no other function can.

Public Procurement in 2020 — Are You On Track? Part V

At the beginning of the week, we began our discussion of Hansen’s predictions for public procurement in 2020, which were offered as a 5-part series last month in response to the 5 predictions of Bob Lohfeld (of Lohfeld Consulting) that were published in Washington Technology in early July. We started with a discussion of the Government Market and then moved onto discussions of Workforce, Process, and Technology. Today, we tackle the final predictions on Transportation.

In his piece, Lohfeld prognosticated that:

  1. While computing will be ubiquitous, we will still be plagued with transportation problems.
  2. Traffic will become so congested around major cities that employers will always offer alternative work schedules and telework options.
  3. The Washington Beltway will regularly come to a standstill and no longer be considered a reliable transportation corridor. The Tysons Corner area will be in its eighth year of modernizing, and Maryland will be in its 40th year of studying the environmental impact of building an outer beltway. The Silver Line will finally reach Dulles Airport.

Well, duhhhh! He might as well have said that the sky is blue, grass is green, and roses are often red. His prognostications are so obvious that I can’t believe he would label them as predictions, nine years out!

What did Hansen have to say? This time, having the same complaints with transportation, he overlooked the obviousness of Lohfeld’s prognostications and simply noted that transportation, especially within the context of an increasingly global supply network is a linchpin component of an overall logistics and supply chain strategy. It is in essence the glue that holds the interconnecting elements of the end-to-end process from raw material extraction to manufacturing and through to distribution and, as a result, cannot be overlooked in any piece that looks into the future of Supply Management.

All I have to say is that logistics are always going to be an issue. First of all, not only is there not enough logistics infrastructure in many parts of the world, but the rate of new construction is not keeping up with demand — which is expected to increase substantially in line with global population increases and rising automotive sales in emerging marketplaces. Secondly, there are projections of significant talent shortages in logistics in the coming years as the baby boomers retire. Thirdly, global trade is going to continue to increase. Everything points to logistics challenges for at least the coming decade, if not longer. And we’ve all witnessed the increasingly slow pace of infrastructure development in North America in recent years. Prepare for the unending challenge.