The Best Place to Do International Business in North America (is still Halifax, Nova Scotia)

Almost six years ago, I penned a piece that demonstrated how Halifax, Nova Scotia, Canada is the best place to do international business. And in my usual style, I was right, although, as always, five plus years ahead of my time. And just like I was recently vindicated in my stance on Home Country Sourcing by Buyers Meeting Point, five plus years after the fact, I have been again vindicated in my position by a recent study by The Boyd Company who state that Halifax-Dartmouth (officially known as the Halifax Regional Municipality) is the cheapest corporate headquarters location in North America with big, big savings to be had. In fact, it is 8% cheaper than the lowest head-office cost site in the U.S., the Indianapolis-Carmel-Fishers area and over 30% cheaper than New York City, the most costly North American metropolis in which to operate a corporate headquarters. This is largely, but not entirely, due to very competitive labour costs (which probably has to do with the fact that it doesn’t yet cost a Million dollars to buy a house in the city).

In fact, the study, which notes Halifax’s proximity to Europe and its position as a regional business centre that attracts top graduates, suggests that companies in Toronto and Vancouver should relocate to Halifax because of the cost savings. And based on my previous analysis, and knowledge of the region, I’d say that any multi-national that wants to straddle North America and Europe equally in a typical work day should consider relocating here. Halifax is the San Francisco of the east coast, with warmer summers and some of the most temperate winters in Canada. (Mark Twain wouldn’t be complaining about the cold had he chosen to spend his summer in Halifax!)

And it doesn’t even consider the fact that Halifax Stanfield International Airport — in the midst of a 10-year capital plan to upgrade its facilities, expand services, and enhance the overall airport experience — offers customs services 24/7/365 (with US pre-clearance), handles over 3.5 M passengers annually, and has a main runway that is 10,500 feet which allows the airport to accommodate wide-body and heavy-aircraft for passenger and cargo service, given that 10,000 feet can be considered an adequate length to land virtually any aircraft at sea level — and Halifax Airport is only 150 m above sea level. Or the fact that our port is also expanding, recently adding more Super Post-Panamax Cranes (SPPX) to support its four SPPX container berths. With the deepest container berths on the Eastern Seaboard, the Port of Halifax can simultaneously accommodate two of the largest vessels in existence simultaneously. And given that we’re at least two days faster to Europe than any other Eastern Port, Halifax Gets it There fast!

However you want to look at it, your North American headquarters should be based in Halifax. See you soon!

45 Million People Are Blind today!! Cheesecake Factory Might Be the Answer? (Part 2 of 2)


Today’s guest post is from Dalip Raheja, past contributor to Sourcing Innovation and CEO of The Mpower Group, Inc.

Would You Go to McDonald’s for Surgery? What if I Added the Happy Meal Toys?

Atul Gawande just wrote a piece in The New Yorker in which he applies The Cheesecake Factory (TCF – restaurant chain) model to the healthcare system. He cites soaring costs, mediocre service, unreliable quality and significant variability in outcomes/results as the dominant attributes of the current medical system in the USA. Sounds like the typical Supply Chain/Sourcing issues that almost all of us are trying to deal with on a daily basis.

Why did Atul choose The Cheesecake Factory as a model? Because they are a chain with 160 restaurants with 308 dinner items and 124 beverage choices serving more than 80 million people a year. And they manage to do it with very high quality, every entre cooked fresh, reasonable prices, etc. etc. Oh by the way, they put out a new menu every 6 months! I will let you read why TCF is highly successful but mostly it’s all the stuff that you and I are so used to dealing with in our professional lives. Size gives them buying leverage, centralized common functions, demand forecasting integrated with inventory management, etc. etc. They aim for no more than 2.5% waste in an industry where the shelf life is very short. (Editor’s note — this is only 6.25% of the average food waste in America! See yesterday’s post … )

In addition, there are some things about TCF that are quite intriguing. They’ve laid out their kitchen like a manufacturing production line. They have a very good POS system integrated with their kitchen to track “manufacturing” and “delivery” times. They make sure that their staff is well trained and provided with all the tools necessary. They have a well-defined oversight process that provides positive and negative feedback at the end of the manufacturing line.

An immediate challenge is that doctors have been historically paid for effort, and not results. While Hammurabi dictated that a surgeon’s hand be cut off if the patient died, we have apparently moved away from that as I don’t see too many one handed surgeons out there. Healthcare reform is now starting to link compensation to outcomes. Standardization has long been looked at very suspiciously by the medical community.

Gawande discusses an attempt at standardizing knee replacement and how it impacted his mother’s surgery — reducing recovery time in the hospital by more than half and reducing rehabilitation time by 3/4ths! And did I mention all at lower costs and better outcomes? The doctor has gathered best practices and then standardized them — an unheard of phenomenon. All the way from anesthesia to rehabilitation, including cutting down on the number of options for prostheses surgeons could order. It is a fascinating must read for ALL supply chain/sourcing people as it reads like a classical case study.

The challenges that Gawande lays out for the medical community are very significant. The first and biggest challenge is the incredible amount of time it takes for this profession to adopt (AEIOU) new ideas — decades for new protocols and guidelines to be adopted. This should come as no surprise to readers of the doctor‘s blog and our numerous discussions on this topic. Competency Development in the medical community is still not focused appropriately — “In medicine, we hardly ever think about how to implement what we’ve learned“. An example he cites is Dr. Armin Ernst who is essentially the Chief Adoption Officer. Ernst does not deal with patients — but works with the doctors at their 10 ICUs in ensuring that best practices are being adopted. He provides the same kind of oversight that was found at TCF. Do you have a Chief Adoption Officer?

The transformation in the health care sector is underway and it will borrow heavily from our profession. Supply Chain/Sourcing can and will contribute significantly. As Dr. Gawande points out, “We’ve let healthcare systems provide us with the equivalent of greasy spoon fare at four-star prices, and the results have been ruinous. The Cheesecake Factory model represents our best prospect for change“.

Thanks, Dalip.

Not Criminal, But it Should Be!

I gotta stop reading, or I’m gonna be more of an angry dad than angry dad Homer and become the Homer Hulk. What’s making me red with rage or green with gall this time? This recent report on Packaging World that “America Trashes 40% of Food Supply”.

How can this be? Food reserves are at an all time low; almost 1 Billion people, including almost one third of children in developing countries, are malnourished and hungry; and the cost of staples is rising to the point that people are rioting in some developed countries because prices are getting to the point where many low income families can no longer afford to put the basic staples on the table. All this in a time when world agriculture produces 17% more calories per person today than it did 30 years ago, despite a 70% population increase. This is enough to provide everyone in the world with at least 2,720 kCal per person per day – which is 30% more calories than the average person needs. In other words, if (North) Americans (and other people in developed countries) weren’t so damn wasteful, we could, in all likelihood, feed the world!

According to the article, which is summarizing research from the Natural Resources Defense Council. Given that getting food to our tables eats up 10 percent of the total U.S. energy budget, uses 50 percent of U.S. land, and swallows 80 percent of freshwater consumed in the United States, we should not even be wasting 4% of our food supply, yet alone 40%! Not only is this costing us $165 Billion that we should be using to ship excess food to those in need, but the rotting food is emitting almost 25% of U.S. methane emissions.

According to the article, reducing losses by just 30%, which is a drop in the bucket compared to the level that the losses should be reduced by, could feed more than 50 million Americans. Given that one in six Americans lack a secure supply of food to their tables, this would almost eliminate hunger in America. Drop losses by 80%, which would get them to an almost acceptable level (assuming this was just the first step in an ambitious continuous improvement effort), and that would probably wipe out hunger in the Americas.

And, getting back to the title of the article, any producer, distributor, or retailer of food products that has waste in excess of 10% annually should be fined until waste levels are under that threshold. And then, they should be forced to reduce waste by at least 10% a year for the next five years until a maximum acceptable level of waste, which I’ll pin at 5%, is reached. We can take lean to extremes on the shop floor and virtually eliminate all waste (as everything is reduced, reused, and recycled), so there’s no reason we can’t take it to extreme in the food supply chain either.

Since feeding the world is one of the biggest contributions an organization can make to corporate social responsibility, this should be a top priority.

Relative to Procurement Tools TCO

Rant on blogger, rant on along
Rant on buddy till the day is through
Rant on brother, sister too
Rant on momma like I asked you to do
And rant on fellow blogger, rant on (Rant On!) 


Today’s guest post is from Ron Southard, the founder and CEO of SafeSourcing Inc, a provider of SaaS e-Procurement solutions.

The single most significant obstacle to improvement, whether personal or professionally, is indecision, so my rant this month is relative to companies that suffer paralysis through excessive analysis when it comes to making a decision about using e-procurement tools. Too many times companies spend excessive amounts of time trying to understand or figure out procurement tools and their TCO, ROI, and CBA etc. instead of just making a decision to try something.

It really is that simple to just DO something! Make a decision already!

It is just so easy to get started with these tools today, that the above will become obvious almost immediately.

There are way too many buzz words and acronyms being thrown around when trying to decide on an e-procurement platform. As such, companies waste way to much time and money trying to understand the complexity of these tools rather than the simplicity they create in helping you and your team in executing your job.

Way too many retail companies spend way too much time meeting, talking, planning, evaluating, designing, trying to implement and then complaining about their procurement solutions. They also spend way to little time DOING. Many of these companies do not have the procurement tools, personnel or the collective capacity driven by both in place in order to compete with the big category killers in any industry (you already know who they are). So here’s a unique chance to DO SOMETHING, ANYTHING. Because the more you talk, plan and evaluate the more behind you will get. And here’s another unique thought, KNOWING is not DOING! Just make a decision.

Just because you have heard about all of the tools available to you today in the form of SAAS, IAAS, PAAS or AAAS (also none as XAAS) all delivered via the CLOUD, does not mean you know how to use them or the strategies required to make them a recurring part of your sourcing strategy and tactics. That is why they all end in the letter (S) which stands for service. And you better believe that service is defined differently by almost every solutions provider in the e-procurement space. The tools are at least 80% the same across the board, and will all drive results. The best results however will come from the companies with the best services attached to those tools. Tools that make customers say, “No one else will do the things you do for us”. The good news is that the CLOUD and all of the AAS’s mentioned above simply means that you can begin as soon as tomorrow. And, there is very little risk. So why do all of the analysis? Just make a DECISION to do something.

It’s really not that hard. Here’s what you need to do. Find a cloud based e-procurement solutions provider with all of the AAS procurement solutions and ask for three references (CEO or CFO). If the references come back as excellent, give the provider a category or two to source for you ASAP. They will probably agree to not charge you if you don’t save at least the cost of the event (cost neutral). The chances are you will see significant results in less than two or three weeks and the payback (see title) will astound you. If it doesn’t, you can turn them off (a benefit of the cloud) and begin with another immediately (another benefit). Perhaps you could even have a bake off with two or more solution providers. It’s just that easy.

If you don’t use e-procurement tools today, you are way behind the curve. The early adopters have done moved on to more sophisticated offerings. This is now a regular part of how they run their business. The good news is you can catch up quickly (another benefit of the cloud and XAAS). Don’t let the clouds and financial acronyms and all the AAS’s get in the way of a decision. Just make a decision.

See. It’s really pretty easy.

Thanks, Ron.