Category Archives: Miscellaneous

S&DC Executive on The Future of Work

Supply & Demand Chain Executive recently ran an article on “10 Changes in the World of Work in the Next 10 Years” (which is based on trends identified by Gartner) that scares me. According to the article, in the future, we will all work like the Borg. Specifically, we will

work in swarms,
do so with the collective,
while we are hyper-connected.

I don’t know about you, but that scares the daylights and the night lights out of me. That’s not the creative knowledge-driven future we’ve been promised, but a routine, repetitive-task based future reminiscent of the first production lines. If that’s our future, teach me Hindi, pack me up, and ship me off to India because at least they are being creative and entrepreneurial!

McKinsey Insists that Five Global Forces Will Reshape Your Supply Chain

… but are they right? Let’s take the five global trends they have identified as key transformational forces one by one:

The Great Rebalancing
The emerging market countries will contribute more growth than the developed ones.

Once emerging countries increase their standards of living across the board, they will no longer be low-cost countries. If you rely on low-cost countries to power your supply chain, you’ll have to find new low-cost sources of supply.
The Productivity Imperative
Developed economies will need to generate pronounced gains in productivity to power continued economic growth.

In addition, an average company will need to generate pronounced gains in productivity and efficiency to survive — including enhanced efficiency and productivity in the supply chain. As a result, an average company will have to accelerate its adoption of new processes and technology.
The Global Grid
The global economy is becoming increasingly connected with increasingly complex flows of capital, goods, information, and people.

The supply chain will have to become increasingly connected as well. This will require more communications and information technology at each and every stage of the supply chain.
Pricing the Planet
Demand for resources is rising, supplies are becoming constrained, and changing social attitudes are heightening the focus on environmental protection.

Supply chains will have fewer top talent resources, will have to focus on helping engineering identify designs that require less of those raw materials in short supply, and will have to be redesigned to decrease their environmental footprint.
The Market State
The contradictory demands of market growth and safety nets is putting governments under extraordinary pressure.

As a result, supply chains can expect to be subjected to an onslaught of legislation in the near future as governments attempt to adapt.

In other words, McKinsey is right and the five global forces will have an effect on your supply chain. In the short term, you will have to:

streamline your processes,
adopt new technologies,
implement lean and minimize waste,
improve your ability to comply with regulations, and
start looking for new low cost sources of supply.

And then you’ll have to get creative.

Supply Chain Problems? Look North for a Solution!

I was thrilled with the results of the recent IACCM worldwide study that found “Canada is ‘Top Dog’ when it comes to World Trade”. It just confirms what I’ve known all along … there’s no one easier to work with than us canucks and no one more eager to help you solve your supply chain problems.

Furthermore, as Tim Cummins notes, with companies and public sector agencies worldwide increasingly concerned about reputation risk, it’s ethics, fairness, integrity that really matter. If there’s one thing us Canadians tend to have in spades (politicians excepted), it’s ethics, fairness, and integrity. The reality is that Canada is the sort of environment that can be trusted and where risks can be managed effectively. So come north. We’ll be glad to help you out!

Procurement Has a Long Way To Go if Being a Doorstop is a Measure of Success

A few months ago, the CPO Agenda published the transcript for its roundtable in London in May 2010 on “budgeting for a wider influence”. While this post is not going to summarize the transcript as it really doesn’t say anything that this blog hasn’t been telling you for years, buried within the transcript is a very interesting quote by David Noble, the Chief Executive of CIPS.

If we do not have the ability to get in there and hold the door, we will lose it and be back to where we were 10 years ago.

In other words, a current measure of success is your ability to hold a door, i.e. your ability to act as a doorstop!

It’s sad, but at many companies, it’s still true. Just like there are at least five companies that haven’t tried e-Sourcing or e-Procurement for every one that has, for every best-in-class company where Supply Management has influence and/or control over the majority of the organizational spend, there are five companies where Supply Management doesn’t have influence or control over the majority of organizational spend.

So how do you get more spend under your control and move up from door-stop to door-person? You kick-ass on some major projects and get more and more support from the C-Suite. So how do you get those big projects? You start by speaking the language of finance, because once you get the CFO on your side, the CEO will follow and then you’ll have the credibility you’ll need. Start with Bob’s great posts on Speaking Like a CFO (Part I and Part II). Then review the quick introduction to finance posts (Part I, Part II, and Part III). Make sure you understand what the Z-Score really is. Then bookmark Investopedia. It will be your best friend. Its dictionary on finance more than rivals Wikipedia’s.

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Where is Your Company on the Transformation Curve?

A recent article over on strategy+business on why it makes sense to adjust did a great job of outlining why business transformation needs to be a continuous process. Now that operating in a more volatile, less predictable environment has become a way of life, companies must be ready to repeatedly transform themselves. If the company can not respond to new challenges with a broad-based, enduring plan , it may soon be left in the dust by its competitors.

But most companies can’t do this, because they don’t have an adequately proactive road map for transformation. Instead, they attempt change on the fly, reacting to business disruption with equally explosive responses that may not be useful six months down the road or even sooner. On the transformation curve, they are stuck at the bottom in the reactive stage, when they need to be at the top of the curve in the sense-and-adjust stage.

A company that is reactive employs minimal seat-of-the-pants transformation strategies with little cross-company coordination or follow-up. Such strategies are not only limited, but unsustainable.

A company that moves up the curve becomes programmatic and takes more comprehensive approaches when major changes are required and the company has sufficient lead time. These approaches include thought-out widespread change initiatives across the lines of business that are most affected. Such programs — that include tactics, milestones, and executive assignments — can be quite effective in dealing with contained threats, such as new competitors or new rival products, but fall apart when the threats are not contained and well understood in advance.

But a company that reaches the top of the curve is able to sense-and-adjust. This continuous long-term strategy allows a company to constantly and consistently smooth out volatility in areas of business subject to swift and dramatic change. This is important in turbulent times.

And very important if a company is to have a successful supply chain, which not only has to deal with a tumultuous and unpredictable market, but also has to deal with risks of every colour and flavour, which pop into existence when and where they are least expected. Does your company sense and adjust? Is your supply chain ready?