Category Archives: Blogologue

Supply Chain Syllabi Suck – But Should You Be Designing One?

It’s an interesting question, and one I have to ask after coming across Adrian Gonzalez’ recent post over on Logistics Viewpoints on A Supply Chain Course Designed by You. While I agree that the average life of a supply chain text is two to three years where case studies are concerned (but not where core principles are concerned as some of the classics by Robert Rudzki and Dick Locke are still holding up eight and seventeen years later), I don’t necessarily agree that syllabi go out of date that fast, or that you are the best person to be designing one.

I also agree that trends do develop every day, that most traditional syllabi are about two decades out of date, and that an instructor should update the syllabus as required before every course delivery, but I’m not sure it should be based solely on student requests. While an instructor should attempt to address as many student questions as possible, they should be restricted to the subject matter of the course. More specifically, if the course is on sourcing and procurement technology, the instructor should not go off on a tangent on proper multi-tier supply network design, which should be a different course.

However, the real reasons that an instructor should not design an entirely student driven course are the following:

  1. Every student will likely have a different problem that he or she believes he or she needs addressed that is
  2. based on a different understanding of what proper supply management for (what) a proper supply chain (is) and
  3. that problem is not necessarily the root problem or representative of the core theory, and practical solutions, that need to be addressed.

If the student knew what she needed to learn, she would not be a student, she would, at the very least, be a mentor, if not a teacher herself. For those of you with a martial arts background, you would not be deshi, you would be yudansha or sensei yourselves. Because you have not gone before, you don’t know the way you need to go. That’s why you need a teacher, a guide, to show you the way and teach you the basics you need to know in a cohesive, relevant framework appropriate to the course. A well-designed course by an instructor who is trained in the theory and experienced in the practice will weave together the foundations with relevant examples in such a way that the student will learn to identify what the root problems are, what solutions might work, and what questions should be raised, and addressed by the instructor — who will have no problems weaving the answers in, on the fly, to the lectures at hand.

In other words, I don’t think the methodology proposed by Adrian is necessarily the right process for designing a course, but I do think it’s a great process for tweaking a course, and, more so, for determining what course(s) a student should be taking. In other words, an organization or institution offering Supply Management and Supply Chain training should, before allowing students to enrol in a course,

  • request that the students fill out a questionaire that outlines their key questions and topics of interest a month or so in advance,
  • analyze the responses and determine potential best fits between the students and the courses being considered, and
  • create pre-course discussion groups, facilitated by the likely instructor, a few weeks in advance and invite the students to participate in the group to gather consensus on key topics, issues, and questions that should be addressed — and figure out if the course is really for them.

Then the provider can let students register, knowing that there will be good fits, and the instructor can tweak the course to be as relevant as possible to the needs and interest of the students, using the most relevant case studies and focussing on the secondary topics of common interest once the core material has been covered.

Of course this is just the doctor‘s opinion (and his only real qualification for this argument is that he has been an Assistant Professor in Academia and an Industry Trainer), and it will be interesting to see the results if 30 (thirty) practitioners take Mr. Gonzalez up on his offer.

Three Critical Operating Imperatives to Mitigate Increasing Volatility

This summer, Patrick Burnson, the Executive Editor of the Supply Chain Management Review, published a great piece on Operating Imperatives to Mitigate an Increasingly Volatile 2012 that summarized the findings of a recent Hackett Group piece on “Six Imperatives to Respond to Increasing Economic Uncertainty”.

In brief, the six imperatives were:

    • Pursue World-Class Cost Levels
      Typical companies can realize average savings of 27 percent on the delivery of their main business services functions by achieving world-class performance levels.
    • Reduce Complexity
      In finance, for example, reducing application architecture and data complexity can enable process cost reductions of nearly 50 percent.
    • Redesign Process, Governance, and Organization Models
      Adopt business process reengineering focused on an end-to-end approach for both transactional and knowledge-centric process.
    • Move from Functional Centralization to Global Business Services (GBS)
      Oranizations that migrate to a GBS model typically go through three stages of complexity, and most are still moving from stage 1 to stage 2, which is the basis for our last post where we asked how advanced your shared services really are.
    • Build a Common Integrated Technology and Information Architecture
      Hackett Group’s research confirms that the IT strategy of technology architecture rationalization is a top priority.
    • Upgrade Talent to Support Today’s New Realities

Talent is the most critical competitive differentiator today.

But as far as SI is concerned, if you really want to mitigate volatility, the three you need to focus on, in order, are:

  1. Upgrade Talent
  2. Reduce Complexity
  3. Implement Better Technology

Because if you do this, the other three factors will fall into place. Talent realizes the best way to get results is to work efficiently and effectively and will start by trying to reduce unnecessary process complexity. If you let them do this, they will be able to redesign process, governance, and organization models to better fit your organization. This will allow them to not only impelemtn better technology, but do so in an integrated fashion. Then they will be able to get consolidate views of data that will translate into decision support information that will allow them pursue world-class cost levels. In this effort, they will determine if the best results will be obtained by keeping the function in-house or moving to a GBS model. And then the new realities will be supported.

It’s ultimately all about talent, technology, and transition — and talent has to come first.

Data Good. Brains Better.

Brains aren’t just for Zombies. They’re for people too, although, sometimes, it seems that some people forge this. 😉

But, anyway, I have to applaud the HBR Blog Network for this recent post on “Why Data Will Never Replace Thinking” because it’s not all about big data. There’s a reason that we have been arguing for centuries about whether deduction from first principles or induction from observed reality is the best way to get at truth.

I tend to side with Popper’s synthesis in that the only scientific approach is to formulate hypotheses that are falsifiable. Sure, with big data, you can look at information in real time, and you can make minute adjustments, and you can build a closed-loop system, where you continuously change and adjust but I do not believe that you make no mistakes, because you’re picking up signals all the time because you never get all the signals. And even if you captured every monetary transaction, you still wouldn’t be capturing the drivers behind every transaction, which are fundamentally human in nature, and often emotional, and not captured.

As the article says, the element of hypothesis/prediction remains important, not just to science but to the pursuit of knowledge in general. We humans are quite capable of coming up with stories to explain just about anything after the fact but it’s by trying to come up with our stories beforehand, then testing them, that we can reliably learn the lessons of our experiences -— and our data. No matter how big the data gets, we still need hypothesis, and the more data, the more important the hypothesis gets — otherwise, what is all the data for?

And the quote for Nate Silver is great: data-driven predictions can succeed -— and they can fail. It is when we deny our role in the process that the odds of failure rise. Before we demand more of our data, we need to demand more of ourselves.

What Elements Are Truly Necessary To Prevent Missing Links in Your Supply Chain?

A recent article in Canadian Transportation & Logistics that asked “where the missing links in your supply chain are” did a great job of of pointing out that when it comes to supply chains, what you see is what you get. And it often is the situation that the more you can see into the chain, the more benefits you can receive.

It also hit the nail on the head when it noted that the ability to view timely, accurate information from the beginning of the chain to the end is essential for:

  • reliable forecasting
  • accurate decision making
  • minimizing risks
  • optimizing inventory turnover
  • reducing days and costs in supply chain cycles
  • healthy cash flow and profits
  • customer satisfaction
  • competitive advantage

But when most companies rely on a patchwork of systems and software to address supplier management, purchase order processing, receipt of goods and inventory management, did it have the right checklist of critical system and software capabilities required to avoid the critical missing links that are currently present in most enterprises that are not Supply Management Leaders?

The article identified these necessary elements, which we’ll take one by one:

  • Real-time detailed visibility into every key juncture
    i.e. demand, procurement, production, transportation, and inventory and accounts payable (to make sure the invoices match the order), market data (to make sure quotes are reasonable), risk data (to detect potential volatility or issues as soon as the signals appear), and trade data (to inform you on issues of regulatory and customs compliance)
  • portals connecting the entire supply chain from order through deliver
    what year is this? 2002? there has to be e-integration all the way down through you supplier, and their suppliers, to raw material providers for key or scarce raw materials, but it doesn’t have to be a portal; heck, it could be as simple as the pull of a daily update EDI file from a secure FTP server or as complex as real-time asynchronous communication between multiple databases in a replication configuration
  • collaboration capabilities that allow stakeholders of the chain to readily share information on supply and delivery
    and communicate with each other, in real time, when they are both online
  • ability to integrate varying information formats from various supply chain partners
    which is a given and should be automatic; again, it’s 2012, not 2002
  • open-endedness with flexibility
    enabling easy modifications and integration with other systems and this is a definite must — avoid any system with proprietary integration methods
  • capability of generating alerts of events that require attention
    throughout the supply chain as most day-to-day management should be exception based, with the exceptions defined on your rules (and not the vendor’s)
  • ability to create “dashboards” that enable consolidate viewing of information from multiple sources
    in a manner that focuses on problem areas identified by missed metrics, bad data, missed data, or declining trends — generally speaking, you don’t care about the green, only the red

These were quite good, but it’s also very important not to overlook:

  • sourcing, procurement, logistics, and global trade solutions
    this could be one solution with dedicated sourcing, procurement, logistics, and global trade modules (or views) or multiple solutions that are interconnected — you need end-to-end sourcing to identify the right deal, procurement to secure it, logistics to get it delivered on target, and global trade to make sure there are no costly, disruptive snags
  • an analytic solution
    that lets you analyze trends and predict demand levels, market cost changes, and potential disruptions
  • out of the box ERP support
    because chances are that a number of supply chain partners are going to have one of the big ERP solutions and be relying on it at least partially
  • security
    as there will be a lot of sensitive data flowing back and forth — make sure it is encrpted and only accessible by authorized parties
  • adoption
    how many companies are currently using the solution, how big are they, how much third party support is there and what is the long term outlook for the solution

But if you can meet all of these requrements, and the collaboration flows, the the solution is probably going to prevent many of the critical missing links in many of today’s supply chains.

What is Visibility?

Supply Chain Visibility is a hot-topic, and, as reported in this article in Logistics Management on Defining Visibility late last summer, was the hottest project in 2011 according to a Capgemini Consulting study. Fast forward to 2012, and visibility is a term I’m hearing from at least every other vendor as a selling point of their supply chain services and solutions.

Thus, at this point, I have to ask — what, pray tell, is visibility? When we look up visibility, the first definition returned from dictionary.com is the state or fact of being visible, which isn’t very useful since visible is defined as that [which] can be seen. So what do we have to see?

Well, if you talk to a software-based solutions vendor, we have to see the data. Specifically, data on where your order is in terms of production, shipment, or delivery. And this is good, but it’s not enough. While this will tell you that production on an order is three (3) days behind, it won’t tell you why. Is the plant recovering from a backlog, and about to put your order into overtime production tomorrow? Are they suffering from a worker shortage, or strike, and your order is delayed another week? Or have the components and/or raw materials not yet arrived? And if it’s the latter situation, why? Is it a transportation delay? A production delay? Or a raw material shortage that may take months to correct? So you need visibility into the status of your order and all of your supplier’s orders that impact your orders. But this isn’t always enough.

While it would be great to know as soon as a delay occurs that could potentially impact your supply chain, and give you more time to respond and potentially create and/or implement mitigations and counter-measures (such as finding an alternate source of supply or stepping in to help the supplier solve the problem), this still doesn’t give you any indication of problems that could be brewing. That’s why other vendors try to sell you risk-focussed data solutions such as financial viability reports (from credit-based data) and activity reports (from import/export data). But these solutions only allow you to judge supplier viability, they don’t allow you to determine if an external event in the supplier’s locale (such as war breaking out or a likely natural disaster) could take the supplier out even if they are financially viable and low-risk from a business perspective. So other solutions try to sell you country-based risk assessment solutions with data on each of the locales you are doing business with. And this is a type of visibility. As are sustainability tracking solutions which track sustainability data (with regards to environmental, legislative, and other types of compliance data) to try and predict current and future supplier health based upon a sustainability score that goes beyond pure financial data. And this is another type of visibility.

And if you had all these solutions, you could certainly argue that you had supply chain visibility, but the question is, how complete is it? How much do you need to see to be confident that the chances of an unpredicted event are sufficiently low and/or the chances of you not knowing about an unpredictable event soon enough to implement mitigations are sufficiently low? It’s hard to say. It probably depends upon your operation, your risk exposure, and the strength of your supply chain and supplier relationships.

Regardless, visibility is a concept that is hard to narrow down and no one approach completely solves the problem. Keep that in mind when evaluating solutions on the strength of their visibility.