Author Archives: thedoctor

Supply Chain Realtime Adaptive Priority Solutions — Where Are They?

In these uncertain times, what the supply chain really needs is Supply Chain Realtime Adaptive Priority Solutions, SCRAPS. Reading article after article that reiterates the age-old need to reduce risk, conserve cash, and target the most-fruitful opportunities first while simultaneously reading article after article about the same-old technology, with no innovation in sight, I am starting to look for the SCRAPS.

After asking who is going to upset the market in 2011, and seeing nothing but solution renovation from a few vendors in 2011, I’m not only wondering where the innovation is, but why for the most part (outside of a few vendors who have been improving their existing platform offerings greatly), there have been no (fundamentally) new technologies for a couple of years now. (Even though I know the answer in a lot of cases, and it’s NDA.)

We need something, even if it is only SCRAPS. And, to be honest, SCRAPS might be just what we need. Given the growing plethora of technology platforms, suppliers, geographies, internal customers, and market segments that we need to manage with very limited resources, we need a better way to stay on top of what is most important — TODAY, tomorrow, and the day after. And it’s no longer as simple as simply tracking promised award dates, contract expiry dates, order dates, shipment dates, delivery dates, promotion dates, and other dates of interest.

If a print media campaign has been delayed because a product has been delayed, how important is it to make an award today? If the contract expiring is for plant watering, is it really urgent? Especially when you could just hire a high school kid to come in once a week. But if you need seven days lead time to get those all-beef patties and you’re supporting restaurant operations where all-beef patties are 40% of orders, unless your cube is on fire, you better get that order in. Similarly, if you’re in the apparel industry and a ship date has been missed, given the lifetime of fashion, you better be ready to jump on a plane if necessary to find out what happened. And if a shipment you need tomorrow gets held in customs, you need to know about that right now, not in two days when the product doesn’t show up as expected. And you better be cognizant of when marketing decides to hold its promotions and be prepared to shift your priorities appropriately. If demand doubles, the last thing you want to do is stock out.

Thus, we need technology solutions that can re-organize and re-prioritize tasks and issues that need your attention based upon what’s the most important today, taking into account risk and opportunity (with immediate risks and short-term opportunities getting the highest priority), and not based upon traditional project timelines. And, more importantly, we need solutions that can take the different tasks and risks being captured by your sourcing (spend analysis, RFX, eAuction, optimization, contract management), procurement (requisition management, invoice management, P2P, etc.), transportation and trade (document management, 3PL & transportation management, regulatory compliance management), and risk management solutions and integrate them into a cohesive picture of what is important now, short term, and long term and that can “calendar” them into daily, weekly, and monthly priorities so that you can focus on what’s important, ignore what’s not, and find time for long term strategic planning (by only focussing on real fires and not prank smoke bombs).

Thoughts? Do we need a few SCRAPS?

CBTM #2: Our People Are Our Key Asset


Today’s guest post is from Dalip Raheja of The MPower Group, who declared that Strategic Sourcing is Dead last year, and who has returned to stir up a new hornet’s nest.

Our people are our key asset! How many times have you seen this on the walls of major corporations? If this is true, then should we be applying some sort of asset maximization strategy to this key asset? I would assume that any expenses (training, coaching, recruiting, etc.) associated with maximizing this key asset have a very high priority and are one of the last items cut from budgets? By the way, how much of your capital dollars are you allocating to this asset? To truly embrace this thinking, you have to adopt a mental model of viewing your organization as a consulting company whose only value producing assets are the employees. In our last post, we laid out the case for Talent Management. In this post, we will address Competency Based Talent Management (“CBTM”) and then talk about some of the key issues in developing and executing a CBTM strategy.

The first step is determining the Intended Consequences (“IC”) of your Sourcing/Supply Chain organization. These ICs need to be directly derived from, and tied to, the overall corporate objectives and strategy of the company. Are you an organization measured by the year-over-year price savings that you get from your supply base while reducing lead time and improving quality? Or are you an organization that is measured by the impact you have in reducing sales cycles, increasing margins on existing deals, and streamlining the time to market of new product introductions? Think of this as defining the market you are trying to serve as a consulting company. Are you aspiring to impact tactical and operational Value Drivers or are you also looking to directly impact the overall corporate goals and strategy and therefore be a direct part of the elusive CEO’s agenda? That will help you determine the required characteristics of the asset base you will need to deliver on the Intended Consequences. This role definition then becomes the foundation for your desired competency model. From there, it’s on to determining where you are today, the gaps between where you are today and where you need to be, and then making sure that you have an asset maximization strategy in place that is funded for the next 3-5 years to close the gaps. Voila! All done! Obviously it’s a bit more complicated than that and we will be happy to share a very detailed model and an approach to getting it done. Here are a number of challenges that you should be aware of:

  • Commit only when you can deliver to expectations.
    CBTM will raise the expectations of the employees so make sure you are ready to launch and deliver.
  • Designing the solution is only a start.
    Focus on the adoption issues and invest as much in them as in solution design, if not more.
  • Competencies are applied skill and knowledge towards the Intended Consequences.
    The focus has to be on demonstrated application whether you are recruiting or promoting.
  • Shortage of talent is a symptom, not a cause.
    Apply systems thinking to the entire life cycle of Talent Management (recruiting, training/development, performance evaluation, career development and succession planning). Otherwise, you will always be recruiting.
  • Hold your direct reports accountable for success of CBTM.
    Ensure it’s in their goal sheets in a meaningful way.
  • It’s not a tactic — it’s a strategy.
    Account for appropriate time for the strategy.
  • Think asset portfolio maximization.

In our upcoming posts we will address some of the Next Practices associated with each of the five phases in the Competency Based Talent Management life cycle.

If you are interested in getting involved or would like to follow this topic further, here are a series of critical activities coming up:

  • Release of the results of the Executive Forum we just facilitated at the IACCM Global Forum for Contracting & Commercial Excellence on Talent Management.
  • A major research project to not identify the problem one more time but to identify Next Practices to solve the problems.
  • A webinar with IACCM on CBTM.
  • A White Paper to focus on Next Practices in CBTM.

Please contact Crystal Jones at crystalj <at> thempowergroup <dot> com for more information.

Has Your Product Been Greenwashed?

About a year ago SI published a post that asked if it was green, or just more greenwashing after Terrachoice released its annual “Sins of Greenwashing” study that found 95% of the 5,296 products that were reviewed were still committing at least one greenwashing sin.

In response to this post, a reader has directed me to an awesome graphic, “Green Marketing Exposed”, created by Marketing Degree (.net), embedded below (with permission), that breaks down the seven deadly greenwashing sins of

  • no proof
  • hidden trade-off
  • smoke and mirrors
  • vagueness
  • false labels
  • irrelevant
  • bold lies

and the top three ways consumers can avoid the greenwashing traps

  • shop at big box retailers (heavily scrutinized by media)
  • beware of the electronics, DIY construction product, toys & baby product, and household cleaning product industries in particular
  • look for trusted logos

This is very useful for your supply chain sustainability manager. Know what to look for before your customer finds it!

Green Marketing Exposed

Still Having Problems Making Ends Meet? The Onion’s Solution Is Still Valid!

Having trouble paying off your mounting credit card debt? Has the interest rate on your variable rate mortgage (on your still under-water property) become too cumbersome? Is that place in the Aspens stretching your budget now that your bonus is only a faded memory?

A classic article in The Onion archives has the perfect solution for you! Thanks to recent advances in quantum physics, primarily in hyper-dimensional string theory, you can now compute perpendicularly across the space-time continuum and take on a 4th shift!

The article quotes Labor Secretary Elaine Chao who notes that, for those lucky enough to have work, the maximum 24 hours of possible work time offered by our plane of existence is simply not enough to provide a living wage in the current economic climate, especially given the debt levels that many Americans are still facing and these difficult circumstances have compelled 76 percent of the American workforce to seek additional hours in an alternate space-time dimension, where more competitive pay can help them to avoid years of crippling debt.

I’m sure this option is going to become especially popular as jobs slowly return as those of us who have been out of work for 6, 9, or 12 months (or more) look for ways to quickly pay down the mounting debt associated with survival in these harsh economic times!

And if you think this article is insensitive, as the real unemployment rate in the working class is approximately 15%, then I ask why you aren’t doing anything about the relative lack of coverage the OccupyWallStreet movement, and similar movements around the world, are getting in mainstream media, which, as I write this, is literally more concerned with Kutcher‘s tweeting than the fact that many of these protesters will be freezing their buttocks off with the coming winter, which can get quite harsh in the northern climates. The 99% is reaching a level of poverty not seen in over a century, and the almost 15 to 1 earning ratio between the top-earning 20% of Americans and those below the poverty line (source: USA Today) is just ridiculous.

Inequality between rich and poor in the US is now more than in many “undeveloped”nations. Something’s just not right and something needs to change. And it should begin with limits on executive pay. The unconscionable ratio between CEO pay and worker pay in 2010 was 325-1. Three Hundred and Twenty Five to One! That’s absurd. There should be strict limits on how much a CEO is allowed to be paid and strict civil penalties on any organization that breaks them. I would propose a law limiting base CEO pay to a maximum of 10 times the average worker salary. If you’re average worker makes 20K a year, I would say it’s unconscionable that you get paid more than 200K. Bonus pay should also be limited as well, and should be a simple formula based on profit or year-over-year return and your salary. Say maximum (10% of profits, 10% year-over-year growth, 10 X your base salary) if there was profit or year-over-year-growth, or half of that if not. And if the corporation pays the CEO more, it has to pay a penalty of 10 times the CEO’s total compensation for greed and unconscionable distribution of wealth. What do you think?

The Basics of Information Technology Cost Management

It’s a simple five-step process:

  1. Get a handle on the TCO of IT to the business
    How many units have IT support staff? How much are you paying in maintenance and software licenses each year? How much are you paying in hardware leases and upgrades? What about consultants and outsourced support? The data center(s)? Hosting? And don’t forget the “device propagation” that results every time a new application is added to the data center or a CXO gets a new toy (like an iPad).
  2. Focus on the Cost Drivers
    Energy? Hardware? Software? Projects? Where’s the money going, and why? Treat the IT organization like it is a business and balance the supply and demand.
  3. Be relentless in Valuing IT services
    Examine the cost structure through the eyes of your customers and segregate functions and services into value-add and commodity categories and drive the associated costs accordingly.
  4. Be creative in meeting demand and sourcing work
    Examine the people, process, and technology infrastructure carefully to determine if there is a more cost effective way to deliver the necessary services.
  5. Bring in an expert to re-source the hardware, software, and support you need
    Don’t negotiate multi-million dollar deals on your own if you’re not an expert in IT systems and the current state of the market. If you try, chances are that you’ll overpay by a lot more than 10%!