Category Archives: rants

Remember, You Can’t Control the Clouds!

Even though futurists have been predicting weather control for well over half a century, and even though the US Government tried to control the weather for over 20 years (primarily with respect to storm prevention), the reality is that we still can not control the weather, or the clouds.

Thus, the clouds, which are not fluffy magic boxes and not omniscient magic mirrors, and which are, in fact, filled with hail despite your sweet fluffy dreams to the contrary, are perfect metaphors for the new breed of virtual hosting solutions being offered by countless vendors.

As per a recent Ponemon Institute study, as summarized by this recent CFO article on “Cloud Control”, a significant majority of 127 cloud-computing service providers surveyed believe it is their customers’ responsibility to secure the cloud, not theirs!

When Bruce Lynne, managing partner of Financial Executives Consulting Group, said Cloud is just a fancy word for outsourcing, he was right and, as a smart CFO knows, when a company outsources, it sheds work, not responsibility. And the Cloud is inherently insecure. Heck, even Amazon has “no liability … for any unauthorized access or use, corruption, deletion, destruction or loss of any of Your Content or Applications”.

And private clouds are no more secure than public clouds, because your data is still on a virtualized platform and this means that when a hacker accesses one server, he accesses them all! Almost instantaneously!

Plus, you have no idea how long your data hangs around if the service doesn’t fail. 90 days? 1 year? For as long as the service exists? Maybe the provider deletes your archived e-mails after 90 days as per the contract and your corporate data retention policies. Maybe the provider doesn’t. And you might not find out until you get sued and have to turn over 3 year old e-mails that weren’t supposed to be kept. And more importantly, how quickly can the provider retrieve all of your corporate e-mails for the past 90 days from the 10,000 employee data store that you have to turn over for discovery?

And then there’s the problem that it doesn’t matter how secure you are or how secure the provider is if even one of the cloud provider’s customers is insecure. Remember, it only takes one hacker to penetrate one server and … boom … game over.

Supply Chain Realtime Adaptive Priority Solutions — Where Are They?

In these uncertain times, what the supply chain really needs is Supply Chain Realtime Adaptive Priority Solutions, SCRAPS. Reading article after article that reiterates the age-old need to reduce risk, conserve cash, and target the most-fruitful opportunities first while simultaneously reading article after article about the same-old technology, with no innovation in sight, I am starting to look for the SCRAPS.

After asking who is going to upset the market in 2011, and seeing nothing but solution renovation from a few vendors in 2011, I’m not only wondering where the innovation is, but why for the most part (outside of a few vendors who have been improving their existing platform offerings greatly), there have been no (fundamentally) new technologies for a couple of years now. (Even though I know the answer in a lot of cases, and it’s NDA.)

We need something, even if it is only SCRAPS. And, to be honest, SCRAPS might be just what we need. Given the growing plethora of technology platforms, suppliers, geographies, internal customers, and market segments that we need to manage with very limited resources, we need a better way to stay on top of what is most important — TODAY, tomorrow, and the day after. And it’s no longer as simple as simply tracking promised award dates, contract expiry dates, order dates, shipment dates, delivery dates, promotion dates, and other dates of interest.

If a print media campaign has been delayed because a product has been delayed, how important is it to make an award today? If the contract expiring is for plant watering, is it really urgent? Especially when you could just hire a high school kid to come in once a week. But if you need seven days lead time to get those all-beef patties and you’re supporting restaurant operations where all-beef patties are 40% of orders, unless your cube is on fire, you better get that order in. Similarly, if you’re in the apparel industry and a ship date has been missed, given the lifetime of fashion, you better be ready to jump on a plane if necessary to find out what happened. And if a shipment you need tomorrow gets held in customs, you need to know about that right now, not in two days when the product doesn’t show up as expected. And you better be cognizant of when marketing decides to hold its promotions and be prepared to shift your priorities appropriately. If demand doubles, the last thing you want to do is stock out.

Thus, we need technology solutions that can re-organize and re-prioritize tasks and issues that need your attention based upon what’s the most important today, taking into account risk and opportunity (with immediate risks and short-term opportunities getting the highest priority), and not based upon traditional project timelines. And, more importantly, we need solutions that can take the different tasks and risks being captured by your sourcing (spend analysis, RFX, eAuction, optimization, contract management), procurement (requisition management, invoice management, P2P, etc.), transportation and trade (document management, 3PL & transportation management, regulatory compliance management), and risk management solutions and integrate them into a cohesive picture of what is important now, short term, and long term and that can “calendar” them into daily, weekly, and monthly priorities so that you can focus on what’s important, ignore what’s not, and find time for long term strategic planning (by only focussing on real fires and not prank smoke bombs).

Thoughts? Do we need a few SCRAPS?

Still Having Problems Making Ends Meet? The Onion’s Solution Is Still Valid!

Having trouble paying off your mounting credit card debt? Has the interest rate on your variable rate mortgage (on your still under-water property) become too cumbersome? Is that place in the Aspens stretching your budget now that your bonus is only a faded memory?

A classic article in The Onion archives has the perfect solution for you! Thanks to recent advances in quantum physics, primarily in hyper-dimensional string theory, you can now compute perpendicularly across the space-time continuum and take on a 4th shift!

The article quotes Labor Secretary Elaine Chao who notes that, for those lucky enough to have work, the maximum 24 hours of possible work time offered by our plane of existence is simply not enough to provide a living wage in the current economic climate, especially given the debt levels that many Americans are still facing and these difficult circumstances have compelled 76 percent of the American workforce to seek additional hours in an alternate space-time dimension, where more competitive pay can help them to avoid years of crippling debt.

I’m sure this option is going to become especially popular as jobs slowly return as those of us who have been out of work for 6, 9, or 12 months (or more) look for ways to quickly pay down the mounting debt associated with survival in these harsh economic times!

And if you think this article is insensitive, as the real unemployment rate in the working class is approximately 15%, then I ask why you aren’t doing anything about the relative lack of coverage the OccupyWallStreet movement, and similar movements around the world, are getting in mainstream media, which, as I write this, is literally more concerned with Kutcher‘s tweeting than the fact that many of these protesters will be freezing their buttocks off with the coming winter, which can get quite harsh in the northern climates. The 99% is reaching a level of poverty not seen in over a century, and the almost 15 to 1 earning ratio between the top-earning 20% of Americans and those below the poverty line (source: USA Today) is just ridiculous.

Inequality between rich and poor in the US is now more than in many “undeveloped”nations. Something’s just not right and something needs to change. And it should begin with limits on executive pay. The unconscionable ratio between CEO pay and worker pay in 2010 was 325-1. Three Hundred and Twenty Five to One! That’s absurd. There should be strict limits on how much a CEO is allowed to be paid and strict civil penalties on any organization that breaks them. I would propose a law limiting base CEO pay to a maximum of 10 times the average worker salary. If you’re average worker makes 20K a year, I would say it’s unconscionable that you get paid more than 200K. Bonus pay should also be limited as well, and should be a simple formula based on profit or year-over-year return and your salary. Say maximum (10% of profits, 10% year-over-year growth, 10 X your base salary) if there was profit or year-over-year-growth, or half of that if not. And if the corporation pays the CEO more, it has to pay a penalty of 10 times the CEO’s total compensation for greed and unconscionable distribution of wealth. What do you think?

Have Some Lessons Been Learned by Supply Professionals?

World Trade recently ran an article on “lessons learned by supply professionals” which started out by doing a great job of proclaiming the obvious — it’s been a rough year. As noted, unemployment continues to thwart efforts to tame it, customers are becoming more conservative, and in some quarters, forward thinking and strategizing seem to have been put on hold and profits are hard to make these days.

But is there a silver lining? New opportunities borne of anxiety and the desire among clients and potential clients to overturn every stone they can find to bolster their competitive edges and their bottom lines is a good start, but not a silver lining in and of itself. And executing on the lessons learned from 2008 is something companies should already be doing.

Understanding the market is good, understanding the technology requirements of the market is better, and understanding how to utilize both to provide more value to the customers is key, but should it take an extreme harsh environment to learn the lesson? And is the consensus reaction of lengthening decision times and more deliberation right when efforts need to be made to reduce costs and create value now?

And are 3PLs really getting more business opportunities? They’ve always done, and had the ability to consult on, inventory, regardless of whether or not companies care about inventory optimization outside of down markets. And there hasn’t really been any new offerings in VMI (Vendor Managed Inventory). And leading companies have always been doing supply network optimization on a somewhat regular basis. And smart companies never chase bad deals.

It sounds to me like average company hasn’t learned much, and that it definitely has not learned that the best way to weather a storm is to prepare for it before it hits. Innovation and improvement should be continuous and strategically planned, not a one-time tactical response to a down market. That’s the one lesson worth learning.

Another Lesson In The Peril of Spreadsheets

A recent article in Supply and Demand Chain Executive on why you should NOT “Let This Happen To You” had some scary lessons on why spreadsheets should be tossed out of your operations management process forever and ever.

  • a high-volume software company unwittingly threw 20 Million annually into the scrap bin because of a hidden, devastating, logical spreadsheet error that systematically triggered over-ordering of seasonal printed materials
  • a financial services firm underestimated support centre demand by over 250 agents, roughly 25 percent of total demand because of formula errors and inappropriate assumptions
  • a national build-out of a digital service network was beset with months of delays and millions of dollars in lost revenue because spreadsheet-based material planning and execution tools were overwhelmed with the size and complexity of the job

And, as the article pointed out, management is usually unaware of the issues until crisis is upon the company. Spreadsheets might “get the job done” when a quick and dirty calculation is needed for an estimate, but calamities incubate when an application is extended to problems that are too large or complex and eventually significant error creeps in that could devastate your business.

This is especially true in Supply Management. As the author notes, the high-volume software company that lost 20 Million annually relied on spreadsheets that not only included forecasting information, but that extended all the way into the Procurement of materials. The authors neglected to include materials already on order as part of supply requirements. As a result, every time the spreadsheet was reviewed, another unnecessary buy was signalled.

And it’s true in Service Management. The financial services firm that underestimated support centre demand used a spreadsheet that assumed demand would stay constant with a major service platform roll-out.

For any calculation that goes beyond an initial estimate, the repeated use, alteration of, and reliance on spreadsheets quickly leads to manual error. And for any calculation that is large (in value) or complex, it isn’t long before a scenario arises where consequences and execution risk become very high — and costly.

So ditch the spreadsheets and put in place proper financial, enterprise planning, data analysis, and supply management tools. The corporate bank account will thank you.