Category Archives: Miscellaneous

Five Risks for @Risk

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Yet another vendor, namely Aravo, launched another blog recently, namely @Risk, and, just like the many vendors before who launched blogs, they got some press out of it. But are you going to get anything out of it?

I think it’s a fair question. Over the past three years, dozens and dozens of blogs have come and gone in this space, or lingered on in such a tragic state of decay that you have to wonder why they weren’t put out of their misery months and, in some cases, years ago. Just check the blog directory on the Sourcing Innovation Resource Site. There are 92 blogs listed in the Sourcing category as I write this post … and 30 of them are dead (with no posts in the last 3 months), 17 are taking their last breaths (less than 1 post a month), 26 are fading away (with less than 1 post a week), leaving a mere 19 in stable condition, with 9 of these only managing an average of a post or two a week. That leaves a mere 10 blogs posting regularly, with 5 posting less than 5 posts a week, and only 5 posting more than 5 posts a week.

Needless to say, unlike some of my colleagues, I don’t get very excited when I see yet another vendor launching yet another blog, because there’s well over an 80% chance it won’t be around long, especially if it hasn’t been alive for three months. (When it comes to blogs, the 3/3/3 rule, as comically depicted in the third pane of this xkcd strip, applies.)  Many blogs don’t survive beyond 3 days / 3 posts, many more don’t survive beyond 3 weeks / 3^2 posts, and many more still don’t survive beyond 3 months / 3^3 posts. And in this space, looking at the stats I laid out above, even if it is still pumping out content beyond 3 months, there’s almost a 75% chance it won’t be here in 3 years. Why not?

Well, that’s where the Five Risks, which apply to any vendor blog, come in.

  1. Lack of Time / Resources
    Maintaining a blog that posts regularly enough to attract, and maintain, readership takes a lot of time and effort. Many companies don’t understand this and pile the responsibility on a communications or marketing person who already has a full time job without lightening his or her load. Eventually, especially in recessions where everyone collects more work as time goes on, the person just doesn’t have time to do everything and the “least critical” activity w.r.t. revenue, i.e. the blog, gets dropped.
  2. Lack of Internal Support
    Sometimes the communication, marketing, or services/support person starts it on his or her own as part of a new initiative to build better relationships with the company’s potential customers through regular communication, agreeing to take on the extra workload and overtime until it proves out. But since blogs aren’t overnight successes, and generally take years to get to the level of following and support that is required for the company to label it as a success, the support doesn’t come before the blogger gets disillusioned and either abandons it or …
  3. Burnout
    Sometimes the blogger continues on despite lack of support, working overtime until he or she just burns out. At this point, he or she totally turns against blogging and the blog stops cold.
  4. Repetition
    This is a big risk for blogs narrowly focussed on one topic. After a while the blogger finds that he or she has nothing new to say and starts recycling content. At this point, the readers go away and the blogger, now disillusioned with the power of the blog as he or she watched his or her stats plummet into the toilet, just gives up.
  5. Writer’s Block
    Sometimes, when the blogger has reached a point where he or she realizes she said everything he or she has to say for now, writer’s block kicks in. So the blog gets abandoned for a few days while he or she takes a “vacation”. But that vacation turns into weeks … then months … and then, well, the blog is history.

I’m not saying that @Risk isn’t going to make it. After all, 2Sustain, written by Aravo’s CEO, has survived for almost two years, but that there is a big risk that it won’t, and since it is focussed on Risk Management, I’m going to pick on it … especially since risk #1 is a big risk for @Risk. Aravo isn’t a big company … can they support two blogs when most vendors can’t manage one?

Strategy in a Structural Break

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Last December, the McKinsey Quarterly published an article on “Strategy in a ‘structural break'” that is even more appropriate now than it was then as the structural break, at least according to some, shows no sign of ending this year. The article, which started off noting that a structural break in the economy is an opportunity in disguise, made a good point … you need a strategy … a real strategy … a cohesive response to the challenge … to survive. This is especially true when the old ways no longer work and you have to change … and chances are, for the majority of companies out there, this is the case.

So what can you do? You definitely have to avoid the phenomenon by which process engenders further process, eventually becoming a self-sustaining buzz and reduce the complexity of corporate structures and transform your business models. You have to simplify and simplify again. Then provide lean central and support services that don’t require business units to spend time and energy coordinating their activities.

So what does this mean for your supply chain? What is your strategy for the structural break?

While it’s hard to say, as each company will need it’s own, unique, targeted strategy to survive, I can tell you this. You need to:

  • adopt a center-led strategy
    that allows you to use the best of center-led and distributed models and uses collaboration software to share best practices and knowledge throughout the organization in an easily searchable and retrievable anywhere, anytime model
  • adopt a dynamic real-time push-pull demand chain model
    it’s a volatile market, and old methods of forecasting, pull-only, and push-only don’t cut it anymore … you have to adapt in real time, pull when you sense a sharp uptake, and have your manufacturer push when they can predict uptakes ahead of you and create optimal production runs
  • organize around the “networked person”, not the organization man
    if you’re not on the move, you’re standing still and … in this economy … if you’re standing still, you’re being pushed off the cliff with the rest of the lemmings
  • implement SaaS or cloud e-sourcing and e-procurement technology
    make sure your entire team can use the applications anytime, anywhere to do their jobs and get what they need, when they need it, at the best value point
  • if you don’t have it, get optimization software …
    and if you have it, use it
    figure out where you’re spending the bulk of your money (by way of a good spend analysis if need be), and get the right optimization software for your needs: if it’s goods or services, get strategic sourcing decision optimization software; if it’s transportation get transportation and network optimization software; if it’s manufacturing and production, get production optimization software … applied against the right problem, you can expect a 10X return … or more … for your investment … if not more!
  • use more consultants
    but target them on near-term and mid-term ROI initiatives until you get your cash flow optimized, then go back to the long term planning

Do We Really Need a Chief Commercial Officer?

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As you may have guessed from my Saturday post where I told you I was going CUCKOO with the endless introduction of CXO positions that aren’t really needed, I have to wonder if we really need a “Chief Commercial Officer”.

If you look at the position description given in the Supply & Demand Chain Executive article which says that it is a single executive leader at the right hand of the CEO whose sole job is to drive growth and ensure integrated commercial success and the one person who can own this responsibility as it touches all divisions — from sales and market to customer service to product development, doesn’t it ring a bell? The first description, as far as I’m concerned, is part of the job description for the COO — Chief Operating Officer and the second description is quite close to part of the job description for the CS(C)O — Chief Supply (Chain) Officer. These two positions should be working together to insure success is achieved on the sales side and the supply side in a consistent and integrated fashion. We don’t need a new position to cloud these responsibilities and needlessly pack the board room table. We just need the traditional roles of CEO, COO, CMO, CIO/CTO, and CSO working in concert.

Just like too many chefs spoil the broth, too many executives screw up the company. Just trust me on this one. I’ve seen it happen too many times already, and even though all my hair is now gone, I’m not that old … yet.

Will This Recession Yield The Return of the R&D Lab?

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If you listen to the doom and gloom economists, this recession, despite Obama’s many stimulus packages, is still going to be worse than the Great Depression. As such, as noted in a McKinsey Quarterly article from late last year, it might be useful to derive “innovation lessons from the 1930’s”. Despite the usual executive behavior of acting “cautiously” and delaying investments until the economy returned, some companies made deep investments in R&D and innovation in the 1930s. DuPont boosted R&D and developed neoprene (synthetic rubber) which was in every automobile and airplane manufactured in the US by 1939. Hewlett-Packard and Polaroid were established. Radio Corporation of America returned to profitability as it shifted towards the television market. At least 400 in-house R&D labs were established between 1929 and 1936. And many of these companies, who were able to attract skilled workers upon the destruction of their un-innovative counterparts, flourished.

For almost fifty years, the R&D labs were the center of innovation, and, arguably, of economic growth until the outsourcing, offshoring, down-sizing and right-sizing crazes hit us. Now they are almost non-existent … and the economy is floundering. Maybe I’m imagining it … but I think there’s a correlation.

Besides, think of the new innovations that might appear if the R&D lab returned. New computational models and architectures for cloud computing that will enable the creation of customized true end-to-end supply chain applications in weeks and not years. New low-energy cooling technologies that would dramatically decrease the costs of refrigeration. Better, cheaper high-efficiency solar panels that can be installed on your hybrid fleets. Cheap 3-d model creators and portable fabrication labs for new product design (like the Sun Modular DataCenter or the Google Container Data Center, but for engineers!). And I’m not even being imaginative yet …

Anyway, long story short, there are three things you should take away:

  1. Only acquire IT from solution providers who are still spending on innovation
    A lot of the smaller solution vendors aren’t doing so well now, and they’ll be hard pressed to compete when the rebound occurs and the innovative providers are releasing new solutions and they are still selling the same solution they had five years ago.
  2. Only source critical, custom components from manufacturers investing in new production technology and process improvement.
    The global decline in consumption has resulted in a significant drop in new production. The manufacturers being hit hardest are those unable to offer lower prices or added value. These manufacturers are generally those running old technology and utilizing inefficient and out-of-date processes. Like the IT providers who are not innovating, some won’t survive. Those manufacturers who have been investing in new technology to create higher quality products faster and cheaper and in lean & six sigma process improvements are generally more stable and more likely to be around for the long haul.
  3. Create a Center-of-Excellence
    Do your own R&D on best practices, market trends, and emerging technology. Then share that knowledge across your global operations. You’ll outperform your competition and become organizational superstars.

Earn Your Customer’s Loyalty … And Maybe You’ll Keep Them

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Customer acquisition is an investment, but customer retention delivers profitability, so you should do what you can to keep your current customers, as per a recent article on “how to earn your customers’ loyalty” in CRM News.

The article delivered seven strategies to keep your customers loyal which is worth a review, especially if you are a supply chain department whose survival depends on keeping your internal customers happy.

  • Provide Stellar Customer Service
    It’s a key differentiator in the retail world and in the boardroom.
  • Make your Web Site a Customer Self-Service Center
    And open your applications up to the company, at least for status reporting.
  • Use e-mail to communicate with customers.
    It’s great for keeping them up to date.
  • Pick Up the Phone
    Call your customers regularly to see how they are doing or if they need anything.
  • Solicit Customer Feedback
    Listen, and Respond. Customers want to feel valued.
  • Reward Customer Retention
    Share the success. There’ll be enough to go around.
  • Establish Customer-Friendly Policies.
    Your job is to get them what they need at the best price.