Category Archives: Miscellaneous

Only One More Week. Give Dave Your Support!

On July 6, 2009, Dave Carroll shared his story with the world about how United Airlines carelessly smashed his guitar on March 31, 2008, when he was on the way to a week-long tour of Nebraska, and how United refused to accept any responsibility or fix it. (Full story.) As you may recall, his story, first expressed in a music video on YouTube, was an overnight sensation that quickly received over Three Million views in the first week. It was such a sensation that it even inspired the Harvard Business Review to do a case study on how viral videos spread and what firms can do about them.

 

To date, the trilogy has garnered over 9,942,000 views!

United Breaks Guitars Views (June 29, 2010)
Song 1  8,733,989
Song 2  1,036,185
Song 3  172,070
TOTAL  9,942,244

 

Since the first video was released on July 6, 2009, this means that we’re only one week away from the one year anniversary! It’s time to step up and thank Dave by ensuring that his fantastic efforts receive the Ten Million Hits they deserve before the anniversary is reached … because the airlines, as a whole, still haven’t gotten the message. United Breaks Guitars, Northwest Breaks Dulcimers, and now Delta Smashes Bicycles, proving that they just don’t care whether or not you TriAndGiveaDam or whether or not the children in Africa have water.

Share the links and spread the word! Surely 58,000 views in a week isn’t much of a challenge!

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The Impact of Poor Quality on Cost

Every since the Toyota Production System (TPS) made Toyota famous for efficiency, there’s been a lot of talk about six sigma, lean, and TPS for a reason — because efficiency is good, and quality (which can be obtained when the systems are implemented properly, like they are in Asia, and not like Toyota chose to implement them in the US and Europe) is even better. But do you know how much better quality is?

More specifically, when you buy an inferior product, do you know how much this costs your organization? Chances are, poor quality products cost your organization three times as much as you think they do. In other words, for every dollar you spend on a poor quality product, your organization is losing three. An AMR study demonstrated that two thirds of poor supplier quality costs are non-material. For example, if there aren’t enough quality parts to keep the production line moving at 100%, this will incur additional overhead costs and labor costs in addition to return (processing) costs.

So what can you do to increase quality? According to this recent article in Industry Week on how “managing hidden supplier quality challenges can save millions of dollars”, which contained a case study on Graham Packaging, you start with BI. When you can find the quality-related problems with each supplier, determine which ones are a significant cost to the organization, and quickly get to the root of the issues, you can generate quick savings which, in Grahams case, amounted to millions of dollars a year.

And if you already have a modern, powerful, spend analysis system that allows you to build cubes (and reports) on any data set you please, you can crunch all of the performance related data in the corporate ERP system, create roll-up scorecard reports that capture all of the performance metrics, create comparison reports that indicate which performance metrics are below average and unacceptable, drill down to find the reasons, calculate the projected savings by improving the performance metric and, if the savings outweigh the costs associated with implementing any required improvements, take the reports to the supplier and start working on a fix to stop the leaks. It’s that easy.

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Summer Brings More Permanent Vacations for the Oompa Loompas!

When we last checked in on the Oompa Loompas, we found that there was No Valentines Day for the Cadbury Oompa Loompas who were sacked only one week after Kraft promised not to close a factory and lay them off. And to add insult to injury, Kraft beat estimates and posted a higher-than-expected quarterly profit for first quarter — which I’m betting would have been more than enough money to keep the plant operating and the oompa loompas employed.

And now the Hershey Oompa Loompas are feeling the pain. Despite the fact that Hershey stock recently hit a high on sweet sales, with a better-than-expected sales volume first quarter that resulted in a raise in its full year forecast, and that Hershey expects to save $60 Million to $80 Million annually from its ‘”Next Century” modernization program to enhance its supply chain’, it just announced that it is going to trim 5% of its workforce.

At this rate, you have to wonder if there are going to be any oompa loompas left to enjoy the “Orange County Chocolate Festival” that is coming up this November. Personally, I don’t know what the problem is. Considering that the industry’s revenue for 2009 was approximately 4.9 Billion in the US alone (Reuters), you’d think they’d be able to keep the oompa loompas employed! And now that new research has determined that a little chocolate might cut cholesterol, you know sales have nowhere to go but up!

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Beyond the Clouds …

… lies asphyxia, hallucinations, brain-damage and death.

Depending on where you are on the planet, cirrocumulus, cirrus, and cirrostratus clouds can form as high as 60,000 ft. At this height, atmospheric density is half that at sea level. Or, each breath contains roughly half the oxygen you’d be breathing at sea level. At sea level, oxygen level is 21%. At only 19%, a normal person has a decreased ability to work strenuously and impaired coordination. At 15%, respiration and pulse increases, coordination decreases further, and perception is impaired. At 12%, you have a further rate of increase in respiration and pulse, bluish lips, and poor judgement. At 10%, which is what you are effectively breathing at 60,000 ft, you have nausea, vomiting, mental failure, fainting, and in the weak, unconsciousness as you slowly asphyxiate and begin to hallucinate your way to brain damage, and, eventually, death.

Remember this next time one of those valley solution providers offers to take you beyond the clouds!

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Why a Sourceror’s Job is Never Done!

As pointed out in this recent piece on “responsive supply chains thru flexible warehouses” over on the ChainLink Research site, “optimal” does not last long. Demand changes, product mix changes, freight costs change, available carriers change, available suppliers change, raw material costs change, and so on.

It’s not just the warehouse. It’s the end-to-end supply chain operation. That’s why it’s crucial that not only are sourcing projects conducted for each category consistent with the cost cycles (and, specifically, when they tend to hit their low points if the organization is able to source at that time), but that each time the project is conducted, serious effort is put into analyzing and optimizing the buy. Because if the organization simply makes the same decision it made last time, it likely is not making the optimal one.

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