Category Archives: Miscellaneous

Social Media May Increase Awareness, But Will It Increase Acumen?

In a recent article in Manufacturing & Logistics IT from i2 SCL contributors on Social Marketing & Supply Chain Management: The Next Consumer Data Challenge and Opportunity, the authors quote a recent Forrester Research report that states that three of four adults who go online in the US are leveraging social content on a regular basis and state that it’s a resounding yes that retailers and consumer product companies can leverage these tools and the demand signals they render to better run their supply chains.

I’m not sure I entirely agree. First of all, the concept of “social intelligence” is still much more nebulous than “business intelligence”, which is still quite nebulous and not always a successful endeavour (and, historically, BI projects are famous for low success rates, high costs, and time overruns). How can you leverage what you don’t understand?

Secondly, the social media marketplace is scattered. Some of your customers will be on MySpace, some on Facebook, some on Linked-in, some on Twitter, some on Ning, and some on dozens of other sites. Unless you can be everywhere, you could be missing a sizeable portion of your customer base. And even if you are, that’s still only 75% of on-line customers. What about the rest?

Thirdly, most users are quiet unless they have something to gripe about. So while you’ll likely have no problems getting feedback on everything your customers don’t like, you’ll likely have limited feedback on what they like and your surveys will be skewed. That doesn’t make for good decision making.

Any differing opinions?

Share This on Linked In

Dude! I got a Debt!

Forgive me for this bad play on words, but I just couldn’t help it after reading this story in a recent edition of eWeek on how “N.C. Wants Dell to Repay Incentives for Closing Plant”. It seems that Dell received over $300 Million in tax breaks and other incentives in exchange for opening its plant in Winston-Salem North Carolina 4 years ago and didn’t take that into account when they decided to close the plant. Now, North Carolina Governor Beverly Perdue is determined to ensure that the state gets “every red cent back that Dell has received”.

Just goes to show that you shouldn’t make any major supply chain decisions before you do a total cost model and consider all of the current, and future, implications of your decision.

Share This on Linked In

Will Poor Spend Management Be The End of Harvard?

Back in August, after reading Nina Munk’s Hard Times at Harvard article in Vanity Fair, I asked if Poor Spend Management Will Be The End of the Ivy League after Harvard’s endowment lost a whopping 8 Billion in the first four months of its last finical year. This amount, which is greater than the entire endowment of Columbia University (at 7.1 Billion) put Harvard in dire straits, especially since Harvard’s President warned of an expected 30%, or 11.1 Billion, loss. (The actual loss was about 11 Billion, and the full report can be found on the Harvard Web Site.)

Then I read this article over the weekend, which noted that Harvard University lost 1.8 Billion alone from the cash account it uses for daily operations through investments in high-risk vehicles (which included stocks, hedge funds, and risky assets), I started to wonder if poor spend management is going to spell the end of Harvard, at least we know it. However, what I really want to know is how could Harvard, with the famed Harvard Business School and Harvard Business Review, be so stupid? Even the dumbest companies know that, unless you have more than three months of operating capital, you keep your daily operations cash in savings accounts, and even if you have more than three months, you only invest it in low risk investments like money-market mutual funds which have a long history of slow and gradual changes (and not high risk stocks that can plummet overnight)!

All I can say is that I’m at a loss for words! Anyone want to chime in?

Value is a Two-Way Street

A recent article in “Reliable Plant” on how “survival depends on delivering value and not just cutting costs” pointed out that, to survive, you have to focus on your value proposition because, these days, customers don’t just want costly products, they want valuable services such as warranty, care, and customization.

It also pointed out that if you wanted to sell value, you had to

  • define “value” in terms everyone on your executive team understands and
  • define “value” in terms your customers can understand.

This is too true. Not only will your customers not buy what they don’t understand, but management probably won’t support you in your efforts to create it if they don’t understand what it is.

More importantly, it points out that value is a two-way street. For something to be truly valuable, it has to create profit for you and your customer. It’s not value if you lose money making your customer happy. And it’s not value if it doesn’t keep your customer happy, because they’ll just go elsewhere if they can find something that does. Value is that which benefits everyone. So remember to take the holistic view next time you are updating your value proposition.

Share This on Linked In

The Three-Pronged Core of the Modern Supply Chain

A recent article over on Supply Chain Digest purported to tackle “supply chain at the core”. I thought it would be about the core of the supply chain, but instead it was about how the supply chain is now the core of most companies. For example, GM just attributed it’s 7% increase in gross margins to manufacturing & distribution (supply chain), a 2B consumer goods company has realized that their supply chain is the key to their success, and the lack of supply chain sophistication is what allows private-equity firm Frontenac to buy companies at a discount and make profitable ventures out of them (by installing proper supply chains and supply chain management).

I was curious as to what they’d say about the core of a modern supply chain. A Google search for “supply chain core” turns up core disciplines, planning and optimization, and lean six sigma, which, while important, all miss the point. Which is very simple.

The three-pronged core of the modern supply chain is the same as it’s always been — people, process, and platform. The only difference is that the people are more skilled, the processes are more involved due to the truly global nature of the modern supply chain, and the modern platform is a sophisticated tangle of modern technology. But the core is still the same — good people, good processes, and good platform. Everything else is just a layer.

Share This on Linked In