We’re not mysterious. We’re Canadians!

I got a chuckle out of this recent article over on Inbound Logistics on “Ten Tips for Getting Shipments Across the Canadian Border” which said that businesses underestimate the complexity of the Canadian customs process because it can be very difficult before addressing the mysteries of the clearance process. Mysteries? Are they serious?

Let’s look at the arguments.

The Canada Border Services Agency continually revises compliance requirements
And the US doesn’t? And Europe doesn’t?

Hidden Charges
According to the article, unexpected and additional delivery charges are a significant issue for Canadian consumers. This has nothing to do with getting shipments across the Canadian Border, but everything to do with the importer doing its research beforehand.

Trade Agreements Offer Economic Incentives
Isn’t this a good thing? Yes, it takes some effort to navigate NAFTA, but it’s not that hard — and many customs brokers have it all mapped out.

Trusted Shipper Programs Speed Clearance Process
And isn’t this a good thing too? And easily understood! I’m confused? What’s difficult and mysterious?

Consolidation is key for smaller shipments
Yes, consolidated shipments clear the border as a single unit and can speed importation, but it’s not necessary. It depends on what you are importing and what you are importing it for. Especially since, for some importers, a full truck can be a “small shipment”.

Canada has gone (almost) paperless
And the fact that border clearance is largely conducted through web-based portals and online transactions is a great thing. It really speeds up, and clarifies, the process.
(But yes, you have to use that new-fangled computer thingie. But it is 2012, after all!)

Your government may pay you for shipping to Canada
The Duty Drawback program in the U.S. reimburses businesses for import fees paid on materials used in the manufacture of goods than subsequently exported. Nothing mysterious or difficult about this either — just a bit of paperwork that is, in effect, another good thing.

All provinces are not the same
Ok, so this adds a bit of spice to the process, but we’re talking about a country with only 10 provinces, not 50 states. And the only real issue is taxation. Some provinces use a harmonized sales tax that combines the federal goods and services tax with the provincial sales tax, while others keep them separate. Either way, it’s one tax, and one simple lookup table. The multiplication tables you learned in grade school are more complex.

Be sure you can reach your customers
Uhm, isn’t this a requirement wherever you import? It has nothing to do with Canada. Sure, we are the second largest country by area, but like the article says, 80% of our population lives within 100 miles of the US border, and everyone else knows that if you want variety, you make your weekly / monthly / annual pilgrimage to the closest city. (The 80/20 rule works great!)

Partner with an experienced logistics provider
Huh? And what does this have to do with Canadian import complexity? Nada, zip, zero.

So, final score:

Relevant Issues 3 (Compliance Requirements, Taxes, e-Filings)
Universal Issues 2
Irrelevant Issues 3
Benefits 2

Verdict? Joke!

Look, here’s what you need to know. We’re friendly. While that means we play nice with American and European security regulations in addition to global security initiatives, and that’s why we update our policies regularly, it also means that we’re an open book. Not sure, all you have to do is go to the CBSA website, which has everything you need. Don’t know where to start? Remember, we’re friendly — you can always send an e-mail or pick up the phone and ask. Our country was, and is, built on immigration and our prosperity is built on global trade. Just follow the process, you can rest assured that you can speed through our border clearance (except, maybe at the Detroit Windsor Tunnel which experiences some of the highest cross-border traffic volumes).

All Models Still Lead to Total Value Management

Not that long ago, Sourcing Innovation released “Taking the First Step on Your Next Level Supply Management Journey”, a white paper sponsored by BravoSolution that defined a simple 3-level maturity model that an organization can use to determine where it is on it’s Supply Management organizational journey. Noting that your organziation is either below average, above average, or best-in-class*, SI did not see any point in trying to be more complex (even though many industry associations, consulting firms, and analyst powerhouses will often proffer four and five level models).

And while the acronyms and acclamations — including VFS, Hi-Def Sourcing, Next Level Supply Management, Next Practices, and Value Chain Creation — will fly fast and furious, there is still one commonality among all leading models, including Gartners Global Trade Management Maturity Model, which is nicely summarized in this free white paper from Amber Road that offers “A Model for Value Chain Transformation”.

That commonality is something that the doctor has been prescribing for over five-years — Total Value Management (TVM). When you get right down to it, that’s what Strategic Business Enablement is all about. Maximizing value across the orgnization, end-to-end. In the sourcing process, the organizational model, the finance operation, the (information) technology platform(s), product management (& marketing), risk management, asset management, and relationships — the eight directions of the supply management navigator’s compass. QFD (quality function deployment), maximization of SUM (Spend Under Management), and end-to-end transportation management is all about extracting maximum total value for the organization. Demand creation, joint innovation, and new market entry is all about creating maximum total value for the organization.

And that’s why, if you’re not already there (above average and on the road to best-in-class), and more than half of you are not, you need to be moving to an advanced sourcing platform that supports in-depth spend-related analysis, decision optimization, collaboration, and market-informed category-based sourcing. These tools allow you to identify, maximize, extract, and retain value in your operations. For more information on these technologies, check out SI’s other recent white-paper, also sponsored by BravoSolution, on the “Top 10 Technologies for Supply Management Savings Today”.

*but not average as average can only be defined as an organization that is dab-smack in the middle of every other organization

Sound, Conventional Financial Management is NOT Good for Supply Chains

And it’s not good from a cost of capital perspective either!

While skimming through Purchasing Insight’s recent white-paper on “Supply Chain Finance: A Procurement Strategy” (after stumbling upon their recent “Supply Chain Leakage” post that got them a Sourcing Innovation Thumbs Up, I stumbled on the following paragraph:


By extending payment terms to suppliers (paying them as late as possible) DPO is maximized and by being efficient at collecting from customers (getting the money in as soon as possible), DSO is minimized. This is sound, conventional financial management. It’s all about keeping hold of cash for as long as possible, minimizing the need to borrow and providing an opportunity to earn interest on cash deposits. Poor management of DPO and DSO increases the need to borrow and, in an economic environment where credit is scarcely available to some, borrowing can be very expensive indeed.

It may be sound conventional financial management, but, in reality, maximizing DPO is just another name for screwing your supplier, and all that does is increase your costs while decreasing the overall value you are able to extract from the relationship.

All I can say is that I’m glad the next section went on to say that:


For the procurement community, payment terms can be a double-edged sword. While it’s good to contribute to the reduced cost of working capital by extending payment terms, this doesn’t always support healthy supplier relationships and it can put an inordinate strain on the finances of the supplier, which is in the interests of neither party.

Finally, someone else who realizes that screwing suppliers is a bad thing! (I’ve lost count on how many times I’ve had to rant on this subject over the last six years.) Because, as the white paper goes on to state:


There is another, more compelling reason why the traditional approach to working capital management doesn’t make sense from a procurement point of view. It costs a fortune! The fact is that the traditional, siloed, adversarial approach adopted by most buying organizations toward their suppliers has a huge supply chain cost especially in the current economic climate.

Hear, hear! In order to extract a 0.1% return by holding on to your cash an extra 30 days, you’re risking a rise in costs of 1% to 3% as your supplier passes on their high cost of factoring to you!

However, when trying to improve your working capital practices in such a way that they benefit you and the supplier to take cost out of the entire supply chain, don’t limit yourself to early payment discounts as the sole tool at your disposal. It can be a great tool, as cash strapped suppliers get cash early and you get a better return, but it’s not the only tool. Another option could be to buy the raw materials or components on behalf of your supplier. You might have more leverage with a supplier that you are doing business with on another category and be able to get a better price. A third option, especially in this economy, could be to barter services for better prices. Maybe they need help with their back-office functions. Maybe you have a great relationship with a GPO that could help them and your weight could get them better pricing, or, your technical experts, who recently oversaw the implementation of good back-office accounting and P2P software in your firm could oversee the implementation of the same software in their firm in exchange for free value-added services from them. Be creative. There are many ways to win-win.

The (Board) Gamer’s Guide to Supply Management Part IV: Castle Panic


Some games are so fiendishly clever, so devilishly difficult, the players must join forces and fight against the very game itself … because, in the end, we will either all win, or we will all be sitting on the couch of shame.

I’m euphoric to continue this one-of-a-kind summer series that will help you whether you are just interested in finding out about this new and exciting career opportunity, or ready to take your Supply Management career to the next level. Not only is it more fun than watching the defragmentation bar in Windows 95 on a 386 with 4 MB of RAM and an almost full 1 GB hard drive (which boots up in a day and a half), but when you can grasp a lot of the basic concepts by playing the right mix of strategic (and sometimes tactical) board games with your friends, it’s two blasts and a half!

While we still have to tackle the economic games (like Puerto Rico) at some point, we’re going to make use of the fact that, thanks to unprecedented generosity of Wil Wheaton (@wilw) and Geek & Sundry, we have another fantastic TableTop episode where Wil Wheaton introduces us to the game. Until we run out, we are going to take advantage of the priceless gifts that Mr. Wheaton has granted us with this series.

Wil Wheaton gives us a very succinct introduction to Castle Panic, a classic castle defence game (of which there are thousands on the internet and at least dozens for your iPhone) turned into an exceptionally well crafted team-based board game:


The board is divided into three areas called arcs. There’s a blue arc, a green arc, and a red arc. Each arc is further divided into three zones that are targetable by archers, knights, and swordsmen. … The bad guys are trolls, orcs, and goblins. They’re coming out of the forest, advancing towards our castle, trying to ruin our lives. Every turn, the active player will draw cards and then trade a card with another player so that they’re in a position to fight the bad guy most effectively. This is how we work together. We have to get useful cards to the active player so they can target one of the guys coming in to knock down one of our castle walls. After all that happens, the bad guys will advance towards the castle and then we will do the entire thing all over again. … If the bad guys come in and knock down all of our towers, we lose the game. If we manage to defeat all the bad guys, even if there is only one tower left standing, then we win the game.

In TableTop Episode 6, we learn that Castle Panic teaches cooperation, not co-opetition, in the face of almost insurmountable risks as a result of unexpected disasters. Think of goblins as environmental disasters, orcs as socio-technological failings, and trolls as geopolitical-economic crisis that could smash your supply chain into pieces if not properly addressed. And just like in reality, depending on what the risk is, and where it is, only a certain type of mitigation can be brought to bear. An environmental disaster that destroys a production plant and wipes out a source of supply can only be countered by finding a new source of supply, which, in supply chains, may often mean trading with your competition who has locked up excess supply but needs something else that you have more immediate access to. Similarly, in Castle Panic, staying alive often means trading archers, knights, swordsman, heroes, and even barbarians with other players to insure you have the resources you need to take out the immediate threats.

Just like each monster begins with a different number of hit points in castle panic, each disaster has a different degree of severity and requires and may require multiple actions to resolve. If a geopolitical uprising or economic sanction all of a sudden makes your suppliers in Vietnam inaccessible, whom you were depending on for raw materials and production, you will have to find a new source of raw material supply and a new manufacturing partner.

In Castle Panic, just like in your supply chain, the risks, and the disasters they represent, keep coming. At the end of very turn, players must draw 2 tokens from the monster pile (until all 49 are exhausted). These may be run of the mill goblins, trolls, and orcs or they may be special tokens that move monsters around the board; advance them closer to the castle you have to protect (such as the Orc warlord or Troll Mage); force you to draw additional monsters (including the Goblin King); kill your defenders (by way of plagues), or that unleash a giant boulder that, while having the benefit of squashing all monsters in its path, doesn’t stop until one of your walls or towers are destroyed. (The same way that a new piece of legislation, a trade barrier, or other unexpected turn of events can cut off a market for your organization.)

Furthermore, in Castle Panic, just like in your supply chain, your resources are limited. Players draw to replenish their 5-card hand at the beginning of their turn, and once those resources are spent, they are not replenished until the beginning of their next term (just like your budget is only replenished once a year). While most cards take the form of defenders (archers, knights, swordsmen, barbarians, and heroes), some are special cards that will allow a player to draw 2 extra cards, rebuild a wall (with brick and mortar), slow monsters down (with tar), drive monsters back (into the forest), or even scavenge the discard pile and reuse an already played card.

It’s a great team-building game, and one you should play internally with your cross-functional teams to get them thinking strategically and to help them understand that you stand together, or you fall together. Because, just like in real life supply chains,

we will live together, or die alone — in Castle Panic.