Monthly Archives: July 2025

Don’t Underestimate the Strength of Straw Bridges!

Joël Collin-Demers says that running your Procurement Department on Excel, which was not designed to support business processes, is like asking a straw bridge to support an elephant. (Original LinkedIn Post)

His point being that Excel should only be used for its intended use: ad-hoc spreadsheet-based analysis.

While I applaud his goal, as we need to stop running the business world on Excel (especially since over 90% of spreadsheets have significant errors and these errors will cost you billions), Joel doesn’t understand just how strong well engineered straw bridges can be.

Engineering Students in the classroom have built (13g) straw bridges from 0.4 gram straws, using trusses and lots of triangular bracing, that can support over 4 kg! (Video)

Now, of course, this is for stationary weight, and Procurement, like Supply Chains, has moving parts, but engineering students have demonstrated that Howe bridge designs, made from a roughly 2kg PASCO model bridge set, can minimize the compression force to 5.7N! (1N = force required to accelerate 1kg at 1m/s)

And it’s very likely that even stronger bridges will be built out of straw in the future.

This means that if we consider that a plastic straw has a compressive strength exceeding 20 MPa (2 N/m^2 * 10^6) and a surface area of approx 24π cm^2, that tells us that we likely haven’t reached the limit yet (which would be about 20 N).

In other words, his comparison, meant to move Procurement off Excel, actually illustrates why Procurement won’t abandon Excel. While seriously flawed as a Procurement tool, continual bursts of innovative creativity allow Excel to continue supporting the ridiculous weight being thrust upon it. It might be built from straws in the application world, but, as we just demonstrated, properly arranged, straws can be unbelievably strong.

Remember that the next time you are arguing against Excel.

America: Please Get a Plan and Sign Your Trade Deals! FAST!

the doctor stopped reading the daily tariff news about a month ago, because it was too depressing. (Especially since he had already told you that, since you didn’t start preparing years ago, your only real solution was BTCHaaS.) But now it’s unavoidable with the 90 days expiring, few deals done, and “letters” supposed to replace deals. Moreover, the news hasn’t improved any since the rumours in May that the Big Three Automakers were going to scale back and shift global production outside the US. (EEEK!)

These trade wars aren’t helping America. They’re hurting America. Every day more and more American small businesses close their doors. Every day an average lower class or working class American pays more and more taxes on basic necessities that cannot be sourced from within America’s borders. And every time an American Government representative attacks Canada with false claims of hostility, 400% tariffs on US imports, huge trade deficits (which don’t exist, as per yesterday’s post), and so on, more and more Canadians go elbows up and forget about the pain an average American is experiencing and how important it is for Canada and the USA to work together to combat global threats and maintain a strong North America.

Anyway, back to the point, you need to get a plan and sign your trade deals fast because if

  • small businesses continue to fail,
  • the 12% lower class and 31% blue collar working class have to continue to pay 10% to 30% more on food and necessities they need just to survive, then your poverty rate (which is already 11% and quite high for the richest country in the world) is going to explode, and
  • trade partners continue to look elsewhere to trade their products and services

then America is losing out!

It’s important to remember that there are two, and only two, good reasons for tariffs:

  1. Tax Rates in a Consumption-Based Tax Regime. (America, like Canada and most first world countries are Income-Based Tax Regimes.)
  2. Protection of core/critical industries by ensuring third parties can’t dump massive amount of cheaper (and usually inferior) products and services into your country and damage your industries.

In other words, in America, and Canada,

  1. there should ONLY be significant tariffs for products and services that the country is capable of meeting it’s total domestic need for,
  2. there should ONLY be moderate tariffs for products and services where the country is close to, but not yet capable of meeting, the domestic need (so that the remaining need can be met, but outside products and services will only be chosen to meet the gaps)
  3. there should ONLY be low tariffs for products and services that the country can not (come close to) meet(ing) the domestic need for, but where the government has to ensure safety, quality, compliance with laws etc. (e.g. outside food needs to be regularly inspected by the FDA, for example)
  4. there should be essentially no tariffs (beyond minimal inspection/processing fees) for products/services the country cannot produce domestically

Anything else hurts the populace. Also, since American economists didn’t do the math, a Canadian economist did. And the outlook for (sustained) tariffs above 10% is NOT Good! See this article. Or, if you don’t like economics and math, note that it more-or-less reinforces what the doctor said above. Low tariffs (on the majority of products and services) are actually good. They reduce trade deficits (presumably by discouraging dumping) and encourage real GDP growth (as current factories have the chance to maximize production and local markets with some protection), but only to a point! Somewhere between a 5% and 10% tariff rate, any and all benefits from tariffs cease.

So get those deals, and get the tariffs down to the right rate for the category of good or service (and country of origin) in question. Next to nothing for basic foods (like mangos) you don’t produce locally. The 5% to 10% range for raw materials (like aluminum and steel) you can produce of lot of domestically, but not totally meet your need for. 10% for industries that are strong and you need to protect (and grow). But please remember that you can’t build a new factory overnight, and in most modern manufacturing industries, and hi-tech electronics in particular, it takes 5 to 10 years to build and get a factory up and running. In the interim, you have to buy those products elsewhere.

In other words, you need a detailed plan, not just broad goals, reactionary policies, or a belief that if you will it hard enough, it will happen. Just because you want to play baseball, that doesn’t mean the world does. And, unfortunately, the nature of trade is you have to work with your partners (while, and this is key, making sure they work with you — don’t just get agreements for reciprocal trade, encode penalties into those agreements where if they don’t increase their purchasing, the tariff will go up every time the trade deficit fails to decrease by a pre-determined amount. Remember that some countries, like China, like to make broad promises, like they did in your President’s first time, but then fail to follow through).

The last thing Canada wants to see is this come crashing down, which would result in millions of layoffs (outside the tech industry), big manufacturers relocating production to the global market outside of the US, or global partners dumping American holdings or the American dollar as the default currency. It’s important to look at history and remember that while America was globally one of the richest countries the last time tariffs were high in the Gilded Age, the average American was quite poor. Furthermore, the short-lived Progressive Era that followed ended in the Great Depression, and that’s something we never want to see again! Short term trade wars can be a good thing if it leads to a re-stabilization of a drifting global economy, but long term trade wars aren’t good for anyone — and the country that started it in particular.

So please, get your deals, establish a new operating norm, and let everyone get back to work. Thank you!

Canada is NOT the Cause of America’s Financial Woes!

This post is designed to educate those of you (in America) who don’t know the reality (because many American news sources are only telling half of the story) as a precursor to tomorrow’s post.

1) The US administration claims to have a 100 Billion trade deficit with Canada! If you do the analysis and dive down into the trade data just one level, you see almost 170 Billion of Canadian exports consists of Energy and Oil.

1a) A significant number of American states DEPEND on Canadian electricity for a portion of their energy needs, including Maine, Massachusetts, Connecticut, Rhode Island, Vermont, New Hampshire, Washington, Oregon, Nevada, Arizona, and California. Three American states depend on Canadian energy (from Ontario in particular) for a significant portion of their energy needs and would experience brownouts/rolling black outs otherwise: New York, Michigan, and Minnesota. (That’s 14 states! Newsweek summarized the 10 states that are top importers of Canadian energy.) (Without this energy, America would have an Energy Crisis!)

1b) American utilities pay very low commercial rates for Canadian energy. While not always public (as many utilities are privately owned in America), it’s easy to calculate. For example, in 2023, the average cost per kwh (kilowatt hour) paid by a resident of Maine was 21c USD. In Nova Scotia, the average cost per kwh paid by a resident of Nova Scotia, in USD, was 23c! American utilities exist to make a profit. Since these utilities charge Americans LESS than what Canadians pay, it’s pretty obvious their discount is higher than the discounts even Canada’s commercial entities receive.

1bii) American state utilities chose this route to meet their energy needs because it was much more economical for them to buy Canadian energy, that Canada can produce cheaply in bulk with ample hydro that many American states don’t have the option of (and states that would otherwise have to resort to polluting fossil fuels near populated areas OR build nuclear power plants, and no one wants those nuclear power plants near populated areas). This strategy works out better for the average American.

1c) America buys tens of billions of dollars of unprocessed crude oil from Canadian oil sands at rates 10 to 20 basis points below the market rate, which America processes to meet its energy needs, and then resells what it doesn’t use at an annual profit of about 20 Billion a year. In other words, America gets cheaper unprocessed crude from Canada than it does from anyone else and in the world and America (not Canada) profits from it.

2) Taking the energy and oil out, you see it is actually Canada that has a 70 Billion trade deficit with the US when it comes to goods and services. So, if Canada is actually buying more products from the US than the US is buying from Canada, what is Canada actually exporting?

2A) Motor Vehicle Parts. Yes, Canada has some automotive plants in Ontario, but most of the Big Automakers use our plants to make parts (not vehicles) cheaply (because of the dollar conversion, with the Canadian dollar typically being less than 75c for an American), import those into the US, make finished vehicles sold at a high profit margin, with a number of those sold back to Canadians (because they realize they profit twice when they make the cars there, once when they import the parts cheaply and once when they export the cars back to Canada to be sold at a profit). (i.e. Canadians pay more for what Canadians make!)

2B) Agricultural Products. Grains, Oils, Seafood and Alberta Beef are big exports. Canada has three prairie provinces which have little else but wheat and grain fields, a huge amount of coast, and Alberta is well known for its beef. America has 10 times the Canadian population, needs 10 times the food, only has so many mid-west states with so much farmland area, and only a fraction of the Canadian coast. So America needs tho make up its food deficit from somewhere, and the most logical sources are its neighbours, Canada and Mexico, who can supply it more cheaply than anywhere else.

2C) Metals and Minerals. Canada has a land area that roughly equals America’s, and more undeveloped land area that it can more-or-less freely mine in. Plus, Canada’s lower labour costs help America. And oh, because America’s President signed a great deal for Americans in his first term (USMCA), like everything else on this list, America is getting a great price on these metals and minerals that it can manufacture into world leading products (with the best engineers in the world) to sell at high profit margins.

2D) If you start to put this together, Canada is not responsible for any American job losses or manufacturing declines. McKinsey and the other Big X Consulting Firms who started the outsourcing trend to China (and then neighbouring countries) in the 1980s and 1990s are! THEY convinced American corporate executives to take your jobs away, Not Canada! (Canada wanted you to stay strong in manufacturing so we could stay strong in raw material and part production.)

(McKinsey and Big X Consulting firms not only convinced American executives to take your jobs away, but they created the current China crisis. In 1990, China was a mere 1.8% of global GDP. In 2024, China is 19.45% of GDP. Canada didn’t do that, and neither did the majority of America’s trading partners (as none of them come close to the wealth and power of the USA which is the only country that, on its own, typically controls over 25% of Global GDP (despite only being 4% of the global population). [But if you are wondering who else helped make China strong, look at the big green segment of this 2021 GDP Map by Visual Capitalist.] Canada exists to provide America with raw materials and parts and support, and Canada WANTS American sectors to be strong so its sectors can be as well.)

3) The American administration’s claims of 300% to 400% tariffs on dairy are complete and utter falsehoods. While Canada does have tariffs of 298.5% for imports above-maximum butter quota and 245.5% for above-maximum cheddar cheese quota, America is currently NOT hitting its allowed zero-tariff maximum in any category of dairy product (Source: CNN. America is only coming close to the quota (above 80%) in two categories and only halfway there in two more categories. (Source: TheDeepDive). Under USMCA, America’s President negotiated the biggest increases to quota ever!

“During the renegotiation of CUSMA (USMCA), the United States secured substantial tariff-free access to the Canadian dairy market. As a result, the U.S. enjoys a significant dairy trade surplus with Canada, exporting $877.5 million CAD in dairy products while importing $357.9 million CAD in return.” (Source: Dairy Farmers of Canada). You can find them on the Office of the United States Trade Representative Web Site. (Note that the Dairy Farmers of Canada believes this concession amounted to a loss of 18% in domestic production, which, simply put, means Canadian industry shrank 18% and when an industry shrinks 18%, there is usually a corresponding loss in jobs. In other words, Canadians gave up jobs and welfare for American dairy farmers!)

i.e. If you finish putting all of this together, America is making out great off of Canada as a result of USMCA. (When your President said it was the greatest deal ever for the US in his first term, he was right!) From 2019 (it’s signing) through 2024, GDP Growth totalled 13.45% when you added up the growth or contraction (during COVID) for each year, with nominal GDP being 35% higher in 2024 than 2019. In Canada, it was closer to 9.75%, with nominal GDP increasing only 29%. In comparison, from 1993 through 2018, from the signing of NAFTA until its conclusion, nominal GDP in Canada grew 293% compared to the US nominal GDP growth of 300%. This means that while Canadian growth went from being on par with America during NAFTA, it’s since declined to being only 83% or 4/5ths of American growth since USMCA. Think about that!

And while you are thinking, remember that Canada never complained once! (Why? 1. When Canadians make a deal, Canadians keep it. If Canadians make a bad deal, Canadians take responsibility for it and eat it. 2. Canadians want their allies to be strong, even if that means giving up a bit more than they should. Most Canadians realize that a strong America means a strong Canada and our often willing to go the extra mile when asked, especially if they believe, or are led to believe, America needs the help and could hurt otherwise.)

4) While Premier Ford of Ontario might be the exception, Canadians are NOT hostile. Any claims Canada is hostile is just the pot calling the kettle black. Literally all you have to do to get Canadians back at a negotiating table is just ask nicely. [And remember, Canada doesn’t like bullies. As another history lesson, guess which country among Canada and America was the first to defend freedom in World War I, by 32 months, AND World War II, by 25 months? Hint: It wasn’t America!])

Also, Dear Americans, have you taken a close look at that Big, Beautiful Bill your representatives passed? The one that is estimated to add, not subtract, 3.4 Trillion to your national debt? That’s 50% more than the entire GDP of Canada! Canada is nothing more than a rounding error in America’s financial calculations!

When It Comes to Gen-AI, I’m NOT Yelling Enough! Part III

AI in every Barbie, Ken, & Action Figure. What could possibly Go Wrong?

Simple Fact: If you want to truly manage risk, think of the worst possible situation that can occur. Then realize that is the BEST CASE SCENARIO. And try again. Repeat until you are literally shaking in your boots at the thought of what could happen. Only then have you identified the real risk!

Mattel has signed a deal with Open-AI to put AI in all its toys, which target K-12. (Dot.LA)

The White House has pledged AI education for K-12. (Babl.AI)

So what’s the worst that can happen?

It’s NOT the stunted mental development that will likely result. (If it erodes critical thinking skills and leads to cognitive decline in fully developed adults, what will it do to children??? [Time] For those with certain developmental disabilities, it could mean reading, righting, and ‘rithmetic are a thing of the past! [And how long did we struggle to get near universal literacy in first world countries?])

It’s the EXPLOITATION. And not just the exploitation by manufacturers, who will also sign deals with OpenAI and other AI providers, to ensure not only cognitive and emotional dependence on their products [ Futurism ], but by hackers. [And we know cybersecurity isn’t keeping up. In most countries, successful cyber attack rates have penetrated 44% to 74% of all businesses, with up to 94% of businesses being targeted! That’s right. In the least targeted of the first world countries, at least 50% of business have been hacked in the past year. In the most targeted, 75% of businesses. ]

First, let me remind you that sleeper code can be injected into these models. [ Cornell ]

Now let me remind (or, for most of you, inform) you that over 300 Million children a year are victims of technology-facilitated exploitation and abuse. [ ChildLight.org ]

Getting the picture yet? Just imagine what these transgressive deviants are going to do with these talking “toys” that will be by your child’s side every waking minute of every day (due to the dependence described above). (Or, if you want to keep your sanity, don’t — but acknowledge this reality nonetheless.) Predatory grooming will reach whole new levels. Terrified yet? You should be!

Don’t give me any BS that these systems will have heightened security (because toy manufacturers have no clue how to secure advanced software systems, and software providers have no incentive to do any more than meet the minimum regulatory requirements) or that testing will prevent it (as the research paper above showed that it won’t). Hackers and transgressive deviants never give up. Let’s not give them yet another tool to exploit!

So now will you join me in Declaring war on Open-Access LLMs?!?

Postscript:
And, FYI, it won’t necessarily be Mattel and Hasbro that you will have to worry about (too much). They will (hopefully) be under heavy scrutiny. But there are over 2,700 businesses in the toy, doll, and game manufacturing industry in the USA and somewhere between 5,000 and 10,000 toy factories in China. There’s no way we can monitor even a fraction of them!

Data is Too Darn Expensive Today … But It Won’t Be For Long

THE PROPHET, who has recently discovered ranting is his new favourite thing to do (on LinkedIn), recently complained that Procurement, Commodity, and Supplier Data is Too Darn Expensive.

And while he’s right in that data is often too expensive for what it is, it’s not going to stay that way. Next generation providers are going to commoditize quality data and lower anonymized community data subscriptions to win (and keep) clients, because they know that there’s no value in advanced technology alone (and especially in analytics, optimization, and AI wihtout quality data to feed it) but there are three key points he missed in his rant where he complained about data prices and advocated the use of LLMs and Gen-AI as a substitute (which they are not, and considering how much they hallucinate, we wouldn’t even trust them to be directionally accurate — just feed the historical data you can get your hands on into Excel and do some basic trend plotting if directionality is enough).

1) As Lisa Reisman noted in the comments, sometimes you need highly granular accurate data by geography, volume, and production methodology. When pennies make a difference, because you are buying tens or hundreds of millions worth of the material for a global operation, it matters.

2) Most firms are still ignoring their own data, which, when run through something like Covalyze (which THE PROPHET should love as it was founded and designed by economists), gives very accurate target cost models on any category the firm has enough historical data on, allowing them to pinpoint where they need more data and why for cost breakdowns (and should cost models to refine the target cost models), and which suppliers they actually need those expensive profiles on. Then they can go to pay by the sip providers like Veridion for basic supplier data or other emerging commodity and supplier data portals.

3) The amount of data most firms need is much less than they think. In the tail, most of the spend is not significant enough for any market data to provide insight on a significant savings potential beyond what you will get from analyzing your own historical data and market quotes. When pennies won’t make a difference, you don’t do detailed cost breakdowns by raw material. When the product is a commodity that can be supplied by multiple suppliers at similar price points and equal quality levels, you don’t do deep risk profiles because you can just go to the next supplier in the queue if the first one fails you. And so on. You only do detailed analysis where there is statistical likelihood of a real opportunity or a real risk. Otherwise it’s a waste of time, money, and resources as no organization today even comes close to fully analyzing the significant categories and risks they have in any given year. Thinking you will do more is delusional and not worth it if you don’t have the basics covered.

By the time firms actually need more data, you can bet a next generation of data providers will have it readily available and cheap by today’s standards.