Category Archives: rants

Insufficient Sleep is a Public Health Epidemic – Don’t Let Your Supply Chain Give You Insomnia!

As per this feature on the Centers for Disease Control and Prevention website, insufficient sleep is a public health epidemic, which shouldn’t be surprising given that over one third of the US adult population gets less than 7 hours of sleep a night, when the average adult needs 7 to 9 hours a night. (Source: National Sleep Foundation)

Why? There’s a plethora of reasons. Overwork. Stress. Late Night Talk Show Addictions. Facebook and Twitter Addictions. And Insomnia. However, Supply Chain Insomnia should not be a reason.

According to this ridiculous article (on causes of supply chain insomnia identified) over on Supply Chain Digital, the following 10 issues are keeping supply chain leaders up at night and giving them insomnia:

  1. Collaboration
  2. Inventory Management and Planning
  3. Demand Management and Forecasting
  4. Supply Chain Network Optimization
  5. Supply Chain Risk Management
  6. Training and Development
  7. Sales and Operations Planning
  8. Material Purchase Price Reductions
  9. Performance improvements in warehouses and RDC’s
  10. Supply Chain Segmentation

There’s no excuse for any of these issues to be keeping you up at night. There have existed great Best-of-Breed technology solutions that have enabled an organization to solve the following issues for years, many of which have been profiled on this blog:

  • Collaboration
  • Inventory Management and Planning
  • Demand Management and Forecasting
  • Supply Chain Network Optimization
  • Sales and Operations Planning

The following can be appropriately addressed with the right mix of talent, process transition, and technology:

  • Supply Chain Risk Management
  • Performance improvements in warehouses and RDC’s
  • Supply Chain Segmentation

And the following is easily solved by actually putting money back into the training budget and letting your people go on courses, instead of taking money out of the training budget to increase CXO pay while working your talent half to death:

  • Training and Development

Which leaves only one issue to worry about:

  • Material purchase price reductions

But when you get right down to it, we’re in inflationary times and everyone knows it. Prices are going to go up and people are going to grudgingly pay reasonable, minimal, price increases. So the issue is not price reductions, but cost containment, and this is easily accomplished with

  • market intelligence and an understanding of what the real price currently is,
  • process improvement that takes price out of raw material acquisition, product production, and logistics, and
  • creative re-design that reduces the need for costly raw materials and production processes.

And all of this can be accomplished if you have the right talent with the right training. So invest in your talent*, give them the right technological tools, and let them transition your processes to where they need to be. Then you won’t have to worry about any of these problems.

*It’s not like the 95% investment in the top 1% has done any good! (Source: UC Berkeley Study)

Why Aren’t We Dealing With Extra-Planetary Supply Management on a Daily Basis? Part II

Why not? Lack of funding and focus.

It’s going to be expensive, but we have the money. Even if it costs ten times as much to put a man on Mars as it did to put a man on the moon, that’s only 4 Trillion. The annual GDP of the US is close to 16 Trillion. If the goal was to reach Mars in 10 years, that’s 160 Trillion, and only 2.5% of GDP would be required annually. The US definitely can afford this. Right now, the US is pouring its money into its military at a rate that is unfathomable given that it has not been attacked in a declared act of war on its own soil since Pearl Harbour. The US is spending close to 18% of its budget on military efforts, compared to China which is spending less than 2% of its budget on military efforts and which still has the second largest military expenditure in the world. the doctor will concede that the US has other problems to fix, and the military budget should probably be reduced by more than 2.5% so that those problems can be fixed as well, but there’s no reason that 2.5% couldn’t be redirected to this effort, especially considering it could still be considered military expenditure and employ just as many (if not more) people. This could still be a win for the US that likes it’s military, and appears to like deploying its military given the number of wars its been involved in since WWII. Furthermore, when you consider the dangerous nature of going first, the US probably wouldn’t want to send anyone but its best and brightest. And if we’re not alone, and we advance our technology to the point where inter-stellar travel becomes possible, we might attract the attention of an aggressive alien race and need the ability to defend ourselves. (Which would give the US an excuse to try and democratize space!) It would be a win for the US any way you want to look at it.

But the US isn’t the only country to blame. China, the world’s oldest culture, wants to regain its glory as the dominant empire (even though it’s been centuries since it could make that claim). As the world’s second largest economy, with a GDP exceeding 8 Trillion, and the fifth country to launch a satellite back in 1970, it should be making more efforts to establish itself as a dominant player in space, and focussing more on Mars. A target of 2040 – 2060 for a crewed mission to Mars is just too far off. If China dedicated itself to this goal, it could spark a new space race (as the US would want to be in the lead), which is just what we need to advance not only our space exploration ability, but mankind as a whole.

In addition, if one considers these big, mostly non-political, problems facing the US right now:

  • High Unemployment, partially due to a
  • Continual Decline in Manufacturing Jobs and Expertise, another impending
  • Housing Crisis,
  • Privacy Issues, the never-ending
  • Drug War and,
  • Unfunded Liabilities, partially due to the
  • Collapsing Dollar.

And if one considers these big, mostly non-political, problems facing China right now:

  • the need to maintain an appearance of success and save face,
  • 1.3 Billion citizens to keep happy and 930 Million to keep employed,
  • population growth that can’t be adequately managed by the one-child policy,
  • factories that need to run and products that need to be consumed, and
  • corruption and the age-old tradition of bribery.

And if one goes on to examine the root causes of these problems, one will find that many of them could likely be significantly addressed, if not solved, by a space race to Mars. How so? Come back next Sunday for Part III!

Why Aren’t We Dealing With Extra-Planetary Supply Management on a Daily Basis?

It’s a fair question, considering that we put a man on the moon forty-four years ago and fifty years ago General Dynamics promised us we’d be on Mars by now (see this post).

It’s not an easy question, given the challenges involved, but the doctor thinks he has the answer. But first, consider the following:

1) Putting a man on the moon cost 400 Billion in 1969 terms. (Source: “The Cost of the Moon Race” on asi.org) That was roughly 9% of the US GDP in 1969. However, the effort really started in 1959 with Project Mercury, which had the goal of a manned earth orbit. In other words, the US put a man on the moon in 10 years using only 1% of GDP. NASA’s annual budget today is about 18 Billion, which is about 0.1% of GDP, or roughly 1/10th of what they were getting when the race to the moon was on. (With respect to the Federal Budget, in 1966 they had 4.41%. This year, they have less than 0.5%.)

2) Current robotic missions to Mars take about 8 months. Improvements in technology could probably shave a few months off of that. However, given that the orbits of Earth and Mars around the sun allow for opportunity’s to embark and return roughly every 26 months, even if the trip were shortened, it would just mean more time on Mars as one would want to minimize trip distances to ensure enough fuel. So that means over two years in space. Given that a Russian cosmonaut spent 1.2 years in the International Space Station, it’s obvious that humans could train, and endure, a mission of that length.

3) Damage from asteroids is a big concern, as they have an average orbital speed of 25 kilometers per second and we know of asteroids with orbital velocities of over 30 kilometres per second, or almost three times the estimated speed of the rocket. Large ones will be detected long before they reach the ship and enable it to make course corrections. Smaller ones could pose a problem.

However, we have the technologies to produce titanium-based metal alloys up to four times as strong as steel, exceeding 2 GPa, carbon fibres that approach 6 GPa, and lonsdaleite, an allotrope of carbon with a hexagonal lattice that is commonly called a hexagonal diamond, but which is 58% harder than diamond and able to resist pressures of 152 GPa (GigaPascals), which is a pressure that is roughly equal to 1.5 Million times atmospheric pressure. Given that standard atmospheric pressure is roughly 14.7 psi (Pounds per Square Inch), lonsdaleite can withstand an impact of up to 22 Million psi! That means we can make mighty strong spacecraft.

In other words, it’s not a question of money, trip duration, or the ability to create a space ship that can safely withstand the dangers of intra-solar system travel. So why aren’t we dealing with extra-planetary supply management on a daily basis?

Come back next Sunday for Part II and the answer.

Supply Chain 2020 – What Will It Take to Get There?

I’ve been noticing an uptick in Supply Chain 2020 discussion and blogging lately, despite the fact that 2020 is only 7 years away. Why do I say only? While 2020 may be 28 years away in ‘Net Time, given the pace at which the average Supply Management Organization moves, that’s breakneck speed! (It shouldn’t be, but it is. That’s why, despite the fact that it’s 2013 and e-Invoicing is old enough to drink, approximately 90% of invoices are still paper-based.) Furthermore, most prognosticators want to make predictions that are far enough away that either their prediction will almost guaranteed to be a reality by that time or everyone will have forgotten completely about their prediction by then. (Given the rate of increase in ADD/ADHD in recent years, that might be long enough for all of us to have forgotten everything from today, but I’d like to think that some of us may still have a long-term focus, and a longer-term memory, in 2020.)

A lot of these discussions are focussing on what the Supply Chain is going to look like in 2020, what technologies are going to drive it, and how the Supply Chain is going to run. These discussions are interesting, because we all want to know what tomorrow is going to look like today, but it’s not 2020 — it’s 2013. And whatever vision you have of 2020 is not going to become a reality without a plan to get there. That plan will, of course, depend on your vision and your end goal, but regardless of the plan you choose, there are three elements that will be required to get there.

What are these three elements? The Three Ts of Strategic Supply Management, of course!

  1. Talent
  2. Technology
  3. Transition

No innovation, or renovation, will succeed without these 3T’s, and an alignment thereof.

Despite the need for transportation, Supply Chains don’t run on trucks and trains — they run on Talent. Talented people identify potential suppliers. Talented people run strategic sourcing events. Talented people negotiate and execute contracts. Talented people collaborate with supplier personnel to ensure quality, on-time delivery, and quick issue resolution. Talented people deliver to Sales and Marketing what the consumers want.

And what do these talented people use to accomplish their tasks? Technology. Real-time communication with suppliers around the globe requires modern technology. Value-generating strategic sourcing events require good strategic sourcing technology. Contract generation, management, and supplier performance management requires good collaboration technology. And the list of technological needs goes on.

However, the technology that is required, for most organizations, is not the technology that the organization currently has. In order to acquire and implement this technology, the organization will have to transition appropriately. This will involve mapping current processes, mapping desired processes, identifying technologies that can appropriately support the desired processes, and putting together a transition plan, that takes into account the needs (but not necessarily the wants) of all of the stakeholders and that is supported by the appropriate executive(s) in the C-Suite, that will get the organization there.

So if you want to get to 2020 in style, first get to 2014 in-style and focus on the 3Ts. This is one best-practice that is year-independent.

OMG! LCL is MTWI! Should I be ROTFLMAO?

LCL, or Less than Container Load, as noted in this article over on Inbound Logistics on Less Than Containerload, More Than Worth It, was, historically, slow, costly, risky, and nothing to get excited about. But that was before we had consolidators, freight forwarders, and 3PLs who had access to advanced route planning and optimization technology that can figure out the best way to consolidate LCL shipments from multiple vendors.

As the article notes, today’s LCL is much improved, with end-to-end pricing; direct routes and frequent sailings; increased visibility and control; streamlined processes; and packaged solutions that provide security, clarity, speed, and certainty. This is true, and has been for quite a while. Logistics, Inventory, Warehousing, and Route Planning solutions have been pretty damn good for almost a decade now, and this is old news.

The only thing that’s not old news is the fact that many a shipper, still operating on the 3 bids and a buy, using the phone, and doing it like they were 20 years ago, still don’t know the realities of the new reality and are not taking advantage of all of the options that are available.

Good visibility and optimization capability allows 3PLs to consolidate LCL shipments to make FCL for most of the shipment, take advantage of empty miles using services like BuyTruckload.com that allow shippers to save as much as 20% as a full truck is better than an empty truck, increase service frequency to meet demand, and take almost direct routes to the destination. So do what’s best for your business, be it LCL, FCL, LTL, or FTL. There are good options for all of them.