Category Archives: rants

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.

Is It Time To Move Your (Supply Chain) Operations to an Emerging Economy?

After reading this recent piece in Chief Executive (CE) on how US companies are “garotted by red tape”, SI is wondering whether the time has come to follow the lead of IBM and other big multi-nationals and move your supply chain, followed by your headquarters, to China or another emerging economy. Even though I still think North America is going to retain the edge in High-Tech Innovation for a few more years (despite the fact that the numbers say that both India and China should be producing four times as many geniuses each year), the cost of doing business, or at least of keeping your supply chain and headquarters, in the US is becoming too high.

Consider these vary scary stats from the CE article:

  • In 2010, the Feds spent 55.4 Billion enforcing regulations
  • In 2009, economists Crain and Crain estimated the true cost of the Feds’ regulations was 1.75 Trillion – or 12% of GDP – compared to only 1.46 Trillion in pre-tax profits businesses earned
  • The Federal Register that compiles regulations is over 81,405 pages long
  • Since Obama took office, regulators have imposed 38 Billion in new costs
  • There are 2,785 proposed rules in the pipeline and 144 are economically significant and will add burdens of over $100 Million each for a collective burden of over $14 Billion on this 5%!

At the moment, federal regulations are a runaway train that no one can stop. And until the US gets a Denzel Washington or a Keanu Reeves that can deal with the situation, it’s only going to get worse before it gets better.

As a result, it might be time to consider moving your supply chain operations somewhere where the regulations are a little less severe … even if you have to pay a few government bribes or deal with a few pirates. After all, 238 Million (which is the amount paid to pirates in 2010 for ransom) is a lot less than 1.75 Trillion (at 0.01%), and a few hundred thousand goes quite a long way in developing economies where bribes are concerned. And while SI is not condoning bribery or pirate ransoms, there are much better uses from an innovation and jobs standpoint for 1.75 Trillion dollars than red tape.

Maybe if a few big companies start leaving and the feds realize that if they don’t stop the runaway train that the city will be empty by the time it arrives they’ll bring in a Denzel or Keanu to deal with it. SI doesn’t know, but thinks it’s a good question to ask.

Thank You Brian! Building Apps IS Wrong!

In a recent post over on Software & Services Safari, Mr. Brian Sommer tells us that Building Apps is Wrong! and, as far as the doctor is concerned, he couldn’t be more right!

According to Brian:

      Software application development has been going on for decades. In the old world of software, applications took a (usually accounting) business event and then validated, stored and reported it. These were internal usage utilities that dealt with internal data. That’s the wrong perspective to have today. Businesses don’t want apps – they need ‘capabilities’. Moreover, they need capabilities that serve different kinds of information to different kinds of smart devices to mobile, interconnected workers.

And, as Brian points out, not only do interconnected workers that want to access information whenever and wherever they are, they want one user interface no matter how many solutions are serving up information on their device.

This means that a Desktop App, an iOS App, an Android App, a Windows App, each customized to the browser or platform, is not the way to go. When you customize to the platform, you tend to drift away from the current UI to the new UI until you have a hodge-podge of interfaces across a dozen platforms. Unless you want to develop your own extensions to the default development libraries on each platform, and alter your UI to be observant of the limitations of each library, you need to focus on a platform-independent delivery method (such as mobile-compatible HTML 5) and focus on what the user really wants — a slick, information-rich, user experience, and not a solution exclusively oriented around the data and the capabilities of the platform.

After all, as Brian points out, what the user really wants is:

  • Context to enrich and complete transactions, customer interactions, etc.
  • Information served up at point of need
  • Information designed to answer the worker’s or customer’s needs
  • Information beyond transactional data
  • A solution that makes the most of data, voice and video

and not flash. If they want HD graphics, they’ll fire up a HD game.