Category Archives: rants

Can the US Post Office Be Fixed?

As chronicled in SI’s winter post that decided it was Too Bad the US Post Office Did Not Follow Royal Mail’s lead (before we got wind of the Royal Mail Fiasco), it’s old news that the US Post office is in dire straits. (No, no, not this Dire Straits. The US Post office definitely are not The Sultans of Swing.)

When you have more debt than 50+ countries have capita, that’s a bad thing, and not something a single (barrel) of sourcing projects is going to fix overnight. (Any operation hemorrhaging cash that bad should have hemorrhaged management years ago!) A drastic Supply Management-led transformation is required, but what should it look like? Obviously, Saturday service can be eliminated (as we Canucks do without it just fine), and obviously the sorting centres should be more efficient, but that’s a small drop in the labour and overhead categories relative to the 20 Billion the US Post Office needs to save (if it doesn’t want a good excuse to be shuttered).

Where should it start? Damn good question. Obviously, a technological transformation is a great place to start, but even the doctor is at a loss at how you cut 15 Billion when the bigger problem is obviously that you lost it in the first place! However, a few people are taking stabs at it, and this recent piece over in Progressive Railroading, on how Intermodal rail [is] a ‘sensible’ transportation option for U.S. Postal Service, that quoted a report recently issued by the U.S. Postal Service Office of Inspector General‘s Risk Analysis REsearch Office, showed someone has a head on their shoulders.

In “Strategic Advantages of Moving Mail by Rail”, shifting a portion of mail volume from tuck to intermodal rail could yield $100 Million in annual cost savings without requiring changes to the postal service’s network. Wow! Imagine how much could be saved if the network was optimized. I’m guessing double that, or more. If I’m right, that could yield 1 Billion in five years. With almost no effort!

They have to do something. As CNN notes, it’s a summer of discontent at [the] Postal Service. But given that it’s on the verge of defaulting on a $5.5 billion payment covering retiree health care due August 1, what can we expect?

At this point, I have to agree with Bob Ferrari, who, in his recent Friday Rant*, said that solving the problems of this agency involves a number of structural changes as well as an infusion of modern supply chain management practices related to efficiency and productivity. We have been clear that the U.S. needs a vibrant and efficient postal service and that may not necessarily equate to wholesale privatization. And, most important, there is an obvious need for a non-partisan, independent commission to oversee the process of re-structuring the USPS. Instead of audit agencies reacting to the obvious and pointing to required management changes, an independent commission should be tasked with a comprehensive look at how the USPS can be transformed to a highly efficient agency that instills modernized physical distribution and information management practices. Hear, hear! Let’s face it — 3.3 Billion is an awful lot for highway transportation contracts, even if you are the USPS.

* What’s with S.M. bloggers and Friday Rants anyway? Haven’t they figured out yet that any day is a good day for a rant!

This is What Tar and Feathering is For

I get disgusted when I see articles like this recent article in The Economist on how Bogus degrees from non-existent colleges cause headaches for employers.

It’s bad enough when a job candidate, who is actually a con-person, lies about a degree — either by leaving off the field or specialization of the degree in the hopes that you’ll believe an accounting degree was actually a computer science degree (as a certain high-tech CEO did) or by claiming to have a degree from a college / private institution that is no longer in business or, better yet, just had a fire and lost all the records.

But when someone sells a fake degree from a fake institution, as the nine people who stood trial in China in April did, that calls for a public tar and feathering. It’s disgusting. A degree is not only something that should be earned (which is why I also get upset when a celebrity who went to a certain institution gets a degree in something they don’t really know anything about, or the catch all Doctor of Letters degree, just because they are famous*), but something that should be certified as granting the holder a certain degree of knowledge and capability. You should be able to go to a registered, and reasonably respected, body and ascertain that the institution or individual in question had the authority to grant the degree, which conveys that whomever awarded the degree had a reasonable understanding of the knowledge required to verify that the recipient met the minimum requirements for the degree and was worthy.

And if I wasn’t livid enough after reading this point, you can bet I was ranting like a madman after reading that, in China, the really shrewd conmen have gone beyond simply selling fake degrees from fake universities, to pretending to offer real degrees from real, accredited, institutions. In one situation, a group of 68 students had been paying to attend class at what they thought was a programme affiliated with the Shangdong Institute of Light Industry (SILI). After four years they found out that everything about the programme had been a scam, and that the man behind the scheme had vanished. If you buy a degree, and get ripped off, that’s your problem. But in this case, a very enterprising conman leased a building, found some equipment, hired an instructor (who was probably qualified enough to teach the classes), and, as far as I can tell, literally offered the SILI degree program. Yes, the fake institute was not affiliated with SILI, but if the students came out of the four-year fake program with the same skills and knowledge as the students who went through the real-program, they have earned the degree as much as their peers — but because they didn’t get accepted into, and pay, the real institute, they’re screwed. In this situation, they should be allowed equivalency examinations, and get the degree if they pass, but you know this is not going to happen unless they pay the full degree cost — all over again. In this case, we not only need tar and feathering, but the walk of shame through the capital — end to end. Then comes the jail time and mandatory repayments, with damages.

Short story — don’t ever, EVER, EVER offer a fake degree or certification, because if the doctor finds out, he will make sure that the entire world knows and report you to every certification body, law enforcement authority, and regulatory body he can find the phone number or e-mail for and make sure you, or your institution, is publicly humiliated. This goes double if you offer fake degrees or certifications in Supply Management, or make false claims about what a certified or degreed individual will be able to do after obtaining your certification or degree. You have been warned!


* My readers who, like the doctor, earned their Ph.D. (and paid for it in blood, sweat, hair, and mental health) will understand!

Is it Time to Stop Blaming Governments and Start Blaming Economists for All the Economic Turmoil?

How many recessions has North America had in the last two decades? How long has the Eurozone crisis been going on? Does anyone know anymore? It’s been nothing but doom and gloom for years. Doom and gloom which immediately followed periods of growth that was too rapid or optimism that was too unfounded. What the heck happened?

We can blame the governments for failing to keep the currencies in check and failing to invest in innovation and jobs, we can blame the private sector for trying to rampage out of control, or we can blame the economists who give everyone bad advice. Maybe that’s what we should be doing. According to some very recent research, by Emre Soyer and Robin Hogarth, which is being published in a special section in the July-September 2012 issue of the International Journal of Forecasting, we have “The Illusion of Predictability” [preprint] (How Regression Statistics Mislead Experts) which can be succinctly summarized by saying “economists are overconfident [and] so are you” (as summarized by Justin Fox over on the HBR blogs).

Soyer and Hogarth did a study with 257 economists who were asked to read about a regression analysis that related independent variable X to dependent variable Y and then answer questions about the probabilities of various outcomes. When the results were presented in the typical manner (as average outcomes followed by a few error terms), the economists did a really bad job of answering the questions. They paid too much attention to the averages, and too little to the uncertainties inherent in them, thereby displaying too much confidence. Moreover, they did only slightly better when they were shown the numerical results plus scatter graphs. Only the economists who were shown only the graphs actually got most of the answers [close to] right.

In other words, when the data is presented in standard form, statistically literate experts are just as likely to glom (glom glom) onto the point estimate and discount the uncertainty as innumerate journalists and make the same mistakes. (They could use Pinky and the Brain’s refresher refresher lesson on statistics.) Ouch!

We in Supply Management know that the world is often much less predictable than economists would lead us to believe — having to deal with the effects of demand spikes, supply shortages, currency fluctuations, labour strikes, and natural disasters on a(n almost) weekly basis — and that no economic model is going to capture the full extent of the reality of the situation. It’s too bad that an average economist doesn’t, because if (s)he did, then maybe the advice wold be better, and the markets would, as a result of more rational actions, be more stable and make our job a little easier. In the interim, we can do our part by making sure that we help procure any services that require an economist or economic analysis and insure that such economist or group has a tendency for presenting, and analyzing data, the right way without unnecessary exuberance, one way or the other. Because this result, captured in the preprint, is scary:


72% of the participants believe that for an individual to obtain a positive outcome with 95% probability, a small X (X < 10) would be enough, given the regression results. A majority state that any small positive amount of X would be sufficient to obtain a positive outcome with 95% probability. However, in order to obtain a positive outcome with 95% probability, a decision maker should choose approximately X=47.

Simple math says that the majority of the participants were off by a factor of 5 (or more). Ouch! Late last year the BBC ran a point of view article that said we should beware of experts when it comes to running things. Maybe they were right!

“e” does not change the fundamental nature of anything

Purchasing Insight just ran an awesome article by Ian Burdon who talked about the “e-wheels on my wagon”. Attempting to carefully explain why the e-Procurement debate is at least ten years behind the curve (and that if you’re not doing proper e-Procurement by now, you probably just crawled out of a cave somewhere … or at least that’s the doctor‘s interpretation), he makes a great point that has been often missed in the internet age that must be repeated:

If you take a text which is riddled with “e” this and “e” that, the first thing to do is to strip out all of the “e”s. If it then looks like nonsense, it will not be improved by putting the “e”s back. More than a decade after the dot.com boom one hopes people would be less credulous but, alas, marketing budgets are long and memories are short.

To make a long story short, good e-Procurement is good Procurement, whether you’re using paper and pen, telephone, fax, the Internet, or HyperNet (in the year 3000). As the author astutely notes, e-Procurement is more than e-Sourcing, P2P, and e-Invoicing, and the end goal goes well beyond savings. Proper e-Procurement is about more than merely buying things over the World Wide Web. Proper e-Procurement supports a proper Procurement strategy, which encompasses everything from corporate planning and market analysis to understanding and working with the whole supply chain in an effort to deliver the corporate strategy. That goes well beyond putting a pencil in your shopping cart by way of a punch out. And it certainly goes well beyond endless debates about structured documents which entirely miss the scale and nature of the transformational opportunities available.

So don’t get sucked in by the e-Hype. Look for solutions that deliver real Procurement value, and you will not be among those acting like they just crawled out of the e-stuary. And if you need a good guide on how to start, after checking out SI’s recent post on a good lesson in e-Procurement System Selection (courtesy of Discount Tires) and the X-emplification (Day 5) and X-asperation (Day 6) posts, as well as the SI e-Procurement 3.0 Illumination (here), don’t forget about the Enterprise Software Buying Guide as well as SI’s recent 2-parter on How Much That Enterprise Supply Management Solution Really Costs (Part I and Part II) and you’ll be well on your way.

O Canada!

O Canada!
Our home and native land!
True patriot love until Harper’s command.

With glowing eyes we now despise,
(A) Conservative in charge!

From far and wide,
O Canada, we want a change for thee.

We want our land glorious and free!
O Canada, we want a change for thee.

O Canada, we want a change for thee.

You are the biggest prick I have ever met, & I've met George Bush!