Category Archives: Blogologue

Supply Chain Social Networks: Useful Resource or Productivity Killer?

In full disclosure, maybe I’m not the most neutral individual to be writing this post, as you already know my views on social networks and my intent to stay faceless and spaceless, but the invites to the new kids on the supply chain block, specifically, the Ning based SCM Professionals and iProcurement.org, have started to come fast and furious, as well as request to comment on them and their functionality. So, for better or for worse, here’s my take on the new “communities”.

In an effort to be optimistic, we’ll start with the positives.

They both have blog capabilities, and not only are blogs great sources of information, but there’s a few blogs out there that are better than most, if not all, of the publications in the space.
They both have news headlines from in-bound RSS feeds, however, the fact that they don’t list the article source or time is very annoying – and productivity draining. If you know a source consistently has poor articles or poor information – do you really want to waste time clicking through to it? And if you regularly click through to articles from poor sources, you’re going to quickly give upon the feature and deem it worthless.
They allow you share relevant presentation materials, as photos, and instructional videos from other sites. Of course, the search feature is only on the free-form video description text, which, if not carefully constructed by the uploader, can be pretty useless.
They allow for the constructions of “groups” within the community, so that like minded individuals can easily find each other, and with appropriate e-mail settings, geographically local groups can easily organize events and keep each other informed. Of course, the lack of a digest feature (or at least the lack of a locatable one) could lead to a very annoying amount of e-mail to the point where you feel like you are being spammed, turn off all e-mail, and negate most of the benefits the groups were designed to provide.
One of the sites has an expanded news amalgamation service with headlines, source, time, and the first 100 words – but the box organization that is used wastes so much real estate that you get three articles on the sidebar, which takes up a third of the screen. Not useful.

And that’s the good stuff, as not-so-good as it is. Now on to the negatives.

Latest activity tracker – with the exception of big brother (with his dreams come true at the sheer amount of personal data available on today’s social networks), who the hell cares who the last 10 people to log on were, or what they looked at, or when they signed out, etc.
Comment wall – graffiti for the virtual world. Need I say more?
Photo free for all – upload anything, any time, with any description, or lack thereof; how are you supposed to find anything useful?
Video free for all – anything, anytime, any header; think the latest Bugs Bunny cartoon has a good supply chain lesson? upload it … watch it randomly make the “featured videos” selection. Real professional.
“Featured” – members, groups, etc. – unless these are personally selected by real experts who have personally confirmed solid content, I don’t care; right now, most social networks are set up so that everyone gets an equal, random, shot at the rotation
“New” – members, groups, etc. – if a network is successful, you’ll have thousands of new members, photos, etc. a day – who has time to wade through all that? Plus, I don’t know about you, but a bunch of empty grey heads doesn’t look that attractive to me. Most new members, groups, etc. don’t have / upload pictures / logos right away. The selection logic should at least be intelligent enough not to select those profiles without images when trying to make an image montage. A single “if” statement. Junior high programming skill. Or at least I thought it was!
Very amateur look and layout – I’m sorry, but I don’t want to scroll down an average of four screens on the average page to see what’s going on, a header doesn’t need to take up over a third of the screen, thumbnails don’t need to be three times the average size, and an “Uncle Sam Wants You” ad-campaign rip-off isn’t going to inspire professionals from around the world to sign up. I could go on, but you get the point.

The verdict? Given the relative lack of useful content, the difficulty of identifying the sources and / or finding the content, and the over-abundance of purely social network features, for the time being, I’m definitely classifying these in the “Productivity Killer” category. When it comes to finding the relatively small amount of fresh, new, useful, and innovative content out there that is actually worth reading, I don’t see them being of any help in their current form, and actually see them as being more trouble than they’re worth. Connecting with people? Conferences, e-mail, and the good old fashioned telephone work just fine!

Maybe it’s just me, but I have no interest in ending up like the jacked in, strange talking cyberteens in love in Dowler’s bleak picture of the future or the on-liners in the “Net Worth” Sliders episode where they can’t talk to each other without going through a computer. And I guess that’s just where I see today’s social networks taking us if we continue on this road.

In summary, supply chain community: good. Social network: bad. And maybe the two should never meet.

China Matters Less

It looks like my predictions that the China craze may soon be coming to an end, first expressed in mid-2006 when I asked if low cost country sourcing to China was really innovative, are coming true. Consider this recent Slate article that points out how we’re now in the last days of cheap chinese and how we are about to start paying more (and, in some cases, a lot more) for clothes, electronics, toys and just about everything else.

Thanks to irrepressible inflation, soaring prices for raw materials, oil costs over 100 a barrel, and China’s Generation Y, the era of cheap Chinese goods is coming to an end. Some Chinese factories are now asking their American customers for price increases of as much as 20% to 30% – and getting it.

No longer is China desperate for foreign investment. No longer is there excess capacities in every industry. No longer are there millions of unemployed Chinese extremely desperate for city employment (as now there are millions of employed Chinese desperate for better wages). No longer is the Chinese renminbi extremely undervalued. And, most importantly, no longer are government officials turning a blind eye to every labor and environmental violation being committed in the country.

Unions are on the move. In January, Beijing introduced a new labor law that significantly strengthened the influence of the union in management decisions and the All-China Federation of Trade Unions, the country’s state-backed labor organization, has launched an aggressive recruiting campaign.

China’s Generation Y (born after the one-child policy came into effect) are increasingly aware of their rights to a legal wage, health insurance, and a certain number of days off every month – and they want them. As the article points out “already, southern China’s Guangdong province, known as ‘the workshop of the world’, is short 2 million workers, the equivalent of 14 percent of America’s entire manufacturing workforce”.

Does this mean that importers who currently rely on China are going to move away? Not likely. There are no other countries waiting in the wings to be the new China, just like China was waiting in the wings to be the new Mexico years back. Vietnam? It only has 85 Million people and only a fraction of its population is suitable for factory work – plus it’s inflation is faster than the rest of Asia. India? It can’t get its act together, it’s transportation system is a mess, it’s not set up for volume, and with an educated populace in many of its cities that speaks reasonable English, it’s going after the higher paying jobs in the information economy. Kenya? Madagascar? A ways off, at the least.

In other words, China is here to stay – but many of the “advantages” it had, especially where costs are concerned, are now gone. Get used to it … and in addition to paying a lot more at the pump, get used to paying a lot more in the stores as well.

Where are all the (Supply Chain) Leaders?

Get offa me!
Away from me!
Get me outa here!
Don’t follow me!
Don’t bother me!
I’m no leader.
from “Leader” on “Essentially Naked” by Bif Naked

In his latest article (“Supply Management Transformation: A Leader’s Guide”), Robert Rudzki of “Transformation Leadership” and Greybeard Advisors notes that he likes to ask two questions when presenting at a conference: “Do you believe that most senior executives around the world understand the enormous potential of modern supply management?” and “Do you believe that those same executives understand how to achieve that enormous potential – how to build the transformation roadmap?”. He also notes that while 10% of the audience – at best – might raise their hands for the first question, there will be no hands raised after the second is asked. I have to say I’m not surprised.

This is unfortunate because you need a strong leader in place to not only achieve a supply management transformation, but to communicate the benefits of such a transformation to the senior executive team. This person must be willing to advocate change and put her neck on the line. She’ll need to develop a bold vision with stretch objectives that relate to the primary interests – namely ROIC (Return on Invested Capital) and ROE (Return on Equity) – of the executive team. Furthermore, she’ll also need to lay out a specific transformation plan and roadmap with concrete milestones and construct a business case that offers a performance commitment in exchange for the executive support needed to make it happen.

Furthermore, the “transformation” she leads must go beyond simply a re-organization of the organizational chart. Although it is true that a poor organizational design can impede success, an organizational design is rarely a driver of success. The quote by Petronius Arbiter, circa 210 BC included by Robert in his article says it all:

We trained hard … but it seemed that every time we were beginning to form up into teams, we would be reorganized. I was to learn later in life that we tend to meet any new situation by reorganizing , and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency, and demoralization.

Finally, the leader must ensure that the interests of all of the key stake-holders and participants are linked to the objectives of the transformation process. It must be part of their performance objectives and part of the criteria used to determine their compensation.

It’s a great article, which is also filled with great information on the six dimensions of successful transformation, drivers of world-class supply management, and successful supply management organizational design.

Should You Recession Proof Your Business … or Idiot Proof It?

Industry week recently ran an article on how to “recession proof your business” by three authors that had a rather interesting take on how you go about this. According to the article, you start by identifying the tribes that constitute your business and determining where they are in their sociological progression. If they are in the “life stinks” (stage 1), “my life stinks” (stage 2), or “I’m great” (stage 3) stage — where the latter is said to be the case for 48% of workplace tribes in the U.S., then the consensus (of the authors) is that your business won’t survive the recession.

It’s obvious that a “life stinks” and “my life stinks” mindset is a recipe for disaster. But why is a “I’m great” mentality mindset insufficient? As the author’s note, this is where the theme is “I’m great, and you’re not”, people at this stage have to win, and winning is personal … they’ll out-work, [out-]think and [out-]maneuver their competitors, and the mood that results is a collection of “lone warriors,” wanting help and support and being disappointed that others don’t have their ambition or skill. As I’ve mentioned before, the day of organization man is over … it’s the era of networked person, who’s a team player.

In comparison, a tribe that has reached the “stage 4” mindset, where they believe that “we’re great”, have evolved beyond a loose organization of lone-warrior organization men into a tightly knit organization of cooperative networked persons. As the authors note, they are nimble, innovative, stress-resistant, and adaptable — the qualities that help them do well no matter the circumstances. They align on core values, build strong relationships, and develop plans in real time — the key to the responsiveness needed to navigate the troubled waters of a downturn and the uncertain demand that it brings.

Thus, the authors contend that the best way to “recession proof” your business is to do what it takes to help your team reach “stage 4”. Now I’ll agree that this is a necessary factor for success, and one of the keys to surviving a downturn — but, I hate to say it, it’s not necessarily sufficient. It takes a good team — but this team needs good data, good technology, great support, and resources. If your team doesn’t have good data, how will they make good decisions? If they don’t have the technology they need to capture good data and analyze it in real-time, how will they be able to take action with any confidence? If they don’t have your support, how likely are they to be willing to put their neck on the line when it counts most? But most importantly, if they don’t have the resources, and more importantly, if you don’t have the resources, does it matter?

Innovation, enabled by an innovative team, is the best way to survive a downturn and come out as a market leader, but that team is going to need good systems, good management, and the resources to ride it out. That requires you to be running your company appropriately in the first place — to be making smart long-term decisions on a regular basis and spending the corporate coffers responsibly. If you’ve been following the market, throwing money away like the boom is never going to end, making bad decisions year after year, or acting like an Enron or Boo.com (remember them? — if not, look them up) — in short, running your business like an idiot, then chances are that a great team is not going to save you — because, at this point, there won’t be enough of your company left to save. And when it comes right down to it, if you’ve kept your team free of idiots, there’s a good chance that your teams quickly achieved “stage 4” on their own — which would mean that your business is already recession-proof. So isn’t the answer to idiot proof your company?

To All The Whiners …

For those of you who haven’t noticed, Jason Busch over on Spend Matters has found a new cause – Anti-Dumping Fever (because “Dumping is Code for We Suck, Help Us”. (Much better than the China Fever he had last summer and fall.) And I have to agree with him this time … but what’s really peaked my attention is how fast the “no-trade” protectionists who want to transform America into the Soviet Union or China of times past when the iron and red curtains were drawn tightly shut have jumped on him like a hoard of hungry jackals on a wounded rabbit.

Take yesterday’s comment from an anonymous poster offering one opinion:

You offer up an interesting argument but it is only one side of the story. What about the jobs that Leggett and Platt provides to its workers? Will they be sent to China? Shouldn’t US workers have a right to a job in global economy. It is not their fault that their employer has made business mistakes. And what happens when there are no inner spring manufacturers left in the US? What will we sleep on? Trade is a tricky subject with multiple perspectives.

Wow! What an argument! Maybe the government should step up every time management in a company screws up and “protect the jobs of the workers”! Can’t produce parts cheap enough? No problem, anti-dumping. Granted mortgages you never should have granted in the first-place? No problem, bail-out. Stupidly hired more workers than you can afford? No problem, tax-break.

While we’re at it, why not start “socializing” all of the businesses! The government can be a part owner in everything. That way, at the first sign of trouble, it can start creating and enforcing new anti-dumping and anti-free trade laws instead of waiting until things get too bad. That way, no jobs get lost and no massive bail outs are needed.

Aw, heck! Why stop there? Why not repeal all the free trade acts introduced by past administrations – you know, the ones that catapulted America to times of unmatched economic glory and solidified its place as the leader of the free world. After all, in a free market, there are always losers as well as winners, and the losers will have to lay people off … and even though many of them will be instantly snatched up by the winners, there’s always a few that might be out of work for a while – and we all know that it’s the good of the few, or the one, that matters, and not the good of the many – so let’s make sure their jobs are protected for life! That way, even the lazy and incompetent, a small minority but a minority nonetheless, will never have to worry about their jobs again!

And yes, I’m being very sarcastic. I don’t know how else to describe how backward-thinking or narrow-minded these individuals are. If they have their way, America would be the next socialist/communist regime – and one only has to look at Venezuela and Zimbabwe for some recent examples of how devastating that can be … and for those with longer term memories, the former Soviet Union or China before they started opening the iron and red curtains. Where people stood in lines for days just to get basic food and household items because the economies were in a constant state of collapse.

And it’s not like the US economy isn’t in a bad enough state as it is. The dollar is already worth less than its northern neighbor on some days and is now worth roughly half of a British pound. Closing the borders and finding new and creative ways to block free trade is only going to make things worse.

So what if some jobs go away? In a global economy, new jobs are also created every day. And for first world leaders, these are usually better jobs. If you’re a qualified engineer … you’re in demand. No more inner-springs? Okay. Make springs for automotive assemblies. Those get outsourced too? No problem – design springs for next generation automobiles. Remember, outsourcing intellectual tasks is always exponentially harder than outsourcing grunt labor. And leadership is one thing that just can’t be outsourced.

Furthermore, isn’t the US supposed to be a leader in education and accessibility thereof? Can you not only retrain for another job but also retrain to be a world-class designer and leader versus just a rank-and-file doer and follower? Then, not only will you always have a job in the global economy (though not necessarily the same one you have tomorrow that you have today – and that’s the point!), but you will be a leader in the global economy – and possibly one that manages R&D teams around the world.

So what do you want? A continued rise to glory? Or do you want to oppress the country into a state that would make even the dark ages of olden times look good? It’s your choice, and I hope the majority of you, especially at the polls in November, choose wisely.

And to the whiner’s, I dedicate this poem:

To the whiners on Spend Matters
Who moan about free trade spatters
I wish they’d all stay home
I dedicate this poem
To the whiners on Spend Matters

To the whiners who always moan
So much that they would fill a tome
On issues big and small
Their moans don’t enthrall
Oh why should we throw them a bone

The winds of change are always blowing
And every time you try to stay
The winds of change continue blowing
And they’ll just carry you away

To the whiners so full of strife
Go suck it in, it’s free trade life
We don’t live in a dome
I dedicate this poem
To the whiners so full of strife

To the whiners so pitiful
Who will cry you a bucketful
You’ll never get my heart
Even though you are a part
Of the populous resentful