Category Archives: Blogologue

Supply & Demand Chain Executive: Mapping the Global Enabled Supply & Demand Chain with One Eye Closed

A month or so ago, Supply & Demand Chain Executive released version 12 of its “Global Enabled Supply & Demand Chain”, accompanied by it’s interactive version, which for some reason has an accompanying version number of 14.

Since they are proclaiming themselves as the go-to-source for complete knowledge and information on end-to-end supply and demand chain solutions, I thought I should check it out. And if you don’t mind missing out on 95% of the space, they sure are!

At first glance, the map looks just as impressive as always, breaking companies down into procurement, sourcing, order demand capture (which is really part of procurement), decision support circles (which scares me … do you really want to be using circular logic in your souring and procurement decisions?), PLM, fulfillment & logistics, supply chain integration & technology, payment, and CRM (huh?). Each group (except for CRM) appears to have at least 10 companies. But looks can be deceiving, and in this case, they are! If you take the intersection of each of the groups, you find there are only 28 unique solution providers – and most of them DON’T offer as many solutions as the map would lead you to believe (or at least not to the depth that I think is required to qualify as a solution provider in a given category). Furthermore, there appears to be a one-to-one match between the 28 unique solution providers and the index of advertisers on the back. Disturbing to some, no doubt — including yours truly.

Needless to say I’m even less impressed than I was with the fact that their Pros-To-Know candidate list is largely based on self nomination. I completely understand their need to give their advertisers their due – they’re a traditional publication with traditional costs and they need large amount of traditional dollars to pay those costs.

But you can’t eliminate at least 95% of the supply chain (let’s face it – there are at least 540 companies out there that can help you: I’m currently tracking over 450 on the resource site, and I can guarantee that the consulting, logistics, PLM, SCM, and inventory & warehousing categories are only a sampling of what’s out there) and still be the go-to-source for complete knowledge and information on end-to-end supply and demand chain solutions. Either you’re there for the readership, or you’re there for the advertisers. There’s nothing wrong with the latter, but you should be 100% clear if you are.

But maybe I’m expecting too much.

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?