Category Archives: Miscellaneous

Is a New Age of Partnerships Near at Hand?

There is an interesting article over on the IndustryWeek site about “how the world is coming to Partnership”. Apparently the message that came from the Horasis Global Russia Business Meeting in Limassol, Cyprus in mid-April was that whatever happens in business, in nations, in economies during the coming months and years, we have to be working hand in hand. In other words, the message was that we’re partners.

It is definitely time for businesses, and the supply chains that drive them, to globalize if they want to be world class, but are true partnerships required? The first stage of globalization for an average business or supply chain is typically outsourcing. The second stage is typically expanding operations on site. Only in the third stage are true global business units created. But even then, partnerships are usually restricted to the most strategic of suppliers. True partnerships are few and far between, and most companies believe that if they want local market intelligence, production, and delivery, they either outsource the whole kit and kaboodle, or build a local operation and hire local talent. Many companies still don’t see partnerships with a local operation as a viable option.

However, I do agree that the smart people will form business partnerships that use technology to advance the interests of both organizations as best-in-class organizations use leading technology solutions to increase their efficiency and effectiveness from spend analysis through sourcing to procurement and trade management.

What’s the Right Portfolio View of the Supply Chain IT Investment?

A recent article over on the SCRC site on The Supply Chain IT Investment Enigma promoted a portfolio view of the IT investment, in line with Hackett Group recommendations, that appropriately balances the sustainment of current capabilities with the development of new capabilities. The question is, for an average organization, what’s the right balance?

It’s difficult to say as it depends on where the organization is on the technology curve, how long since it has acquired the solutions it has, what types of solutions it has, and what the gaps are between the organization and world class organizations in its peer group. Furthermore, it’s often hard to differentiate sustainment technologies with new capabilities, since upgrading certain solution suites, such as the sourcing suite, will not only sustain the organization’s capabilities but add new ones to the mix.

And the article, which ran through the laundry list of Supply Chain Technologies — DM, PLM, PP, APS, SCEM, SRM, WMS, etc. — wasn’t very helpful in terms of describing what that portfolio should be. Analytics needs to be there. World class sourcing and SRM needs to be there. And PLM needs to be there. But what else needs to be there depends upon the current state and specific needs of the organization. And so does a solution that integrates all of the solutions onto one backbone. But it might not be possible to determine more than this without a gap analysis by an appropriately experienced supply chain IT professional. Any other thoughts on the issue?

Is Great Leadership Culture Independent?

There’s a very interesting post over on the HBR blogs on “Leading Across Borders” that suggests that if you want to get it right, you don’t change a thing. The author, who has managed in India, the U.S., Europe, and Asia, states that while he was always advised that you don’t live in <blank> anymore, and the quicker you figure out the differences, the better, experience taught him that their warnings were totally misguided.

The author states that regardless of geographic location or culture, what drives people to the highest level of engagement is innately human and universal and that great leadership looks the same wherever you are because the most effective executives are the ones who draw energy from a clear sense of purpose and a set of deeply held personal values. Furthermore, they also energize their employees by ensuring that their expectations about three overarching elements of work — the nature of the role, the work environment, and their professional development (RED) — are in line with the organization’s purpose. (In fact, the blog post author wrote a book on this theme: “Too Many Bosses, Too Few Leaders”.)

It’s a very interesting post, especially when he draws the similarities between Tony Fernandes, founder of Air Asia, and Howard Schultz, founder and CEO of Starbucks, and their companies and how similar styles have led to success. I think I agree with the first commenter though — the what is definitely the same across cultures, the “how” probably does varies with local norms and values. For example, in Japan, the “role” is very dependent upon what the “group” wants, but in America, the “role” is very dependent upon what the boss wants. The environment needs to be very well defined in some eastern cultures, but can be wild west in some western cultures. And professional development desires vary too. Some people want to become “manager” as soon as possible to impress the future father-in-law, and some just want to cut code until the day they croak. It’s definitely worth reading and thinking about as you transition to a global operation in your quest to be a true Next Level Supply Management organization.

the doctor’s top 11 priorities for supply chain information technology

Industry Week recently ran an article of “Tompkins Associates’ 11 priorities for supply chain information technology”. It was pretty good. Here is the doctor‘s version.

1. Get a Talent Management Solution in Place Now (TA01)

The talent gap is widening by the day in supply chain despite unprecedented unemployment levels as a result of the ever increasing skill set required for success.

2. Define your on-site vs. off-site (SaaS / Cloud) needs (TA03)

Before selecting new solutions, understand what your options are.

3. Update your base Supply Chain transaction store (TA02)

Get all of your transactions into one place for effective and efficient management.

4. Make sure your spend analysis solution is world class. (TA08)

BI is key to right decisions, but good intelligence requires good data, and the starting point is always organizational spend.

5. Make sure your e-Negotiation solution contains decision optimization.

There are only 2 e-Sourcing solutions that consistently deliver average returns in the double digits: spend analysis and decision optimization.

6. Make sure your e-Procurement/P2P solution contains m-way match against Purchase Orders and/or Contract terms.

Otherwise, somewhere between 30% and 50% of your negotiated savings will leak away due to maverick spend, misbillings, and overpayments.

7. Put a Global Trade Management Solution in place. (TA10)

With many transactions requiring dozens of documents, and significant delays resulting from any missteps, an appropriate global trade automation solution is a must.

8. Have automated solutions for regulatory compliance. (TA07)

Regulations like REACH, WEEE, and RoHS are springing up not only in Europe, but around the globe.

9. Get a solution that enables stronger SRM. (TA11)

Your success is dependent upon your suppliers’ success.

10. Make sure your freight management solution can handle as many bids and cost models as you can throw at it. (TA05)

Due to the rising cost of fuel, and the impending driver shortage, freight is going to go up.

11. Get a NPD solution in place and take costs out from day one.

Once 80% of the costs are locked in, the opportunities for savings are minimal. Take costs out from the get-go.