Category Archives: Supply Chain

Even Forbes is Falling for the the Gen-AI Garbage!

This recent article in Forbes on the Supply Chain Shift to Intelligent Technology is what inspired last week’s and this week’s rant because, while supply chains should be shifting to intelligent technology, the situations in which that is Gen-AI are still extremely rare (to the point that a blue moon is much more common). But what really got the doctor‘s goat is the ridiculous claims as to what Gen-AI can do. Claims with are simultaneously maddening and saddening because, if they just left out Gen-AI, then everything they claimed is not only doable, but doable with fantastic results.

Of the first three claims, Gen-AI can only be used to solve one — and only partially.

Procurement and Regulatory Compliance
This is one example where a Closed Private Gen-AI LLM is half the battle — it can process, summarize, and highlight key areas of hundred page texts faster and better than prior NLP tech. But it can’t tell you if your current contracts, processes, efforts, or plans will meet the requirements. Not even close. In fact, no AI can — the best AI can just indicate the presence or absence of data, processes, or tech that are most likely to be relevant and then an intelligent human needs to make the decision, possibly only after obtaining appropriate expert Legal advice.
Manufacturing Efficiency
streamline production workflows? optimize processes? reduce errors? No, Hell No, and even the Joker wouldn’t make that joke! You want streamlining? You first have to do a deep process cycle time analysis, compare it to whatever benchmarks you can get, identify the inefficiencies, identify potential processes and tech for improvement, and implement them. Optimize processes? Detailed step by step analysis, identification of opportunities, expert process redesign, training, implementation, and monitoring. Reduce errors? No! People and tech do the processes, not Gen-AI — implement better monitoring, rules, and safeguards.
Virtual Supply Collaboration
A super-charged chatbot on steroids is NOT a virtual assistant. Now, properly sandwiched between classical AI and rules-based intelligence it can deal with 80% of routine inquiries, but not on its own, and it’s arguable if it’s even worth it when a well designed app can get the user to the info they need 10 times faster with just a couple of clicks. Supply chain communicating? People HATE getting a “robot” on a support line as much as you do, to the point some of us start screaming profanities at it if we don’t get a real operator within 10 seconds. Based on this, do you really think your supplier wants to talk to a dumb bot that has NO authority to make a decision (or, at least, should NEVER have the authority — though the doctor is sure someone’s going to be dumb enough to give the bot the authority … let’s just hope they can live with the inevitable consequences)?

And maybe if the article had stopped there the doctor would let it pass, but
first of all, it went on to state the following for “AI”, without clarifying that Gen-AI doesn’t fit in the process, leading us to conclude that, since the first part of the article is about Gen-AI, this part is too, and thus is totally wrong when it claims that:

“AI” understands dirty data
with about 70% accuracy where it counts IF you’re lucky; that’s about how accurate it is at identifying a supplier from your ERP/AP transaction records; an admin assistant will get about 98% accuracy by comparison
it can “confirm” inventories
all it can do is regurgitate what’s in the inventory system — that’s not confirmation!
it can identify duplicate materials
first it has to identify two records that are actually duplicates;
and how likely do you think this is with a supplier mapping accuracy of 70%?
it can identify materials to be shared among facilities
well, okay, it can identify materials that are used across facilities and could be located in a central location — but how useful is that? it’s not because, first of all, YOU ALREADY KNOW THIS, and, second, IT CAN’T DO SUPPLY CHAIN OPTIMIZATION — THAT’S WHAT A SUPPLY CHAIN OPTIMIZATION SOLUTION IS FOR! OPTIMIZATION!!! We’ll break it down syllabically for you so you know what to ask for. OP – TUH – MY – ZAY – SHUN!
it can recommend ideal storage locations
again, NO! This requires solving a very sophisticated optimization model it doesn’t have the data for, doesn’t know how to build, and definitely doesn’t know how to solve.
it can revamp outdated stocking policies
well, only the solution of a proper Inventory OPTIMIZATION Model that identifies the appropriate locations and safety stock levels can identify how these should be revamped
it can recommend order patterns by consumption and lead time
that’s classical curve fitting and tend projection

And, secondly, as the doctor just explained, most of what they were saying AI could do CAN’T be done with AI, and instead can only be done with analytics, optimization, and advanced mathematical models! (You know, the advanced tech (that works) that you’ve been ignoring for over two decades!)

The Gen-AI garbage is getting out of control. It’s time to stop putting up with it and start pushing back against any provider who’s trying to sell you this miracle cure silicon snake oil and show them the door. There are real solutions that work, and have worked, for two decades that will revolutionize your supply chain. You don’t need false promises and tech that isn’t ready for prime time.

Somedays the doctor just wishes he was the Scarecrow. Only someone without a brain can deal with this constant level of Gen-AI bullsh!t and not be stressed about the deluge of misinformation being spread on a daily basis! But then again, without a brain, he might be fooled by the slick salespeople that Gen-AI could give him one, instead of remembering the wise words of the True Scarecrow.

Source-to-Pay+ Part 10: Over 55 Supply Chain Risk Vendors to Check Out

Last quarter, we ran a 9-part series that served as An Introduction to Supply Chain Risk where we introduced you to the risk elements not covered by traditional supplier management platforms (which we covered in our 39 Steps … err … 30 Clues … err … 39 Part Series on Source to Pay where we listed over 90 supply management companies of which over 1/3 claimed to have some degree of “risk”, which we dub supplier “Uncertainty”, management).

In our series, we focussed heavily on corporate risk, third party risk (which included ESG, Human Rights, Regulatory Compliance), supply chain risk (including transparency, traceability, and multi-tier tracking), transport risk, cyber risk, and analytics. We also noted that our next instalment would provide a starting list of vendors that you could check out to meet (some of) your supply chain risk needs.

This is that instalment. Hopefully this starting list will be useful to you. In the months that come, the hope is that some of these will be covered

Finally, a second reminder that inclusion on this list DOES NOT imply Sourcing Innovation is recommending the vendor.

Legend

 3P 3rd Party / TPRM
S/V supplier risk / verification
SCT supply chain transparency
T/L transport / logistics
 MT multi-tier
  C cyber
ESG Environmental, Social, Governance
 HR Human Rights
 RC Regulatory Compliance
BoM Bill of Materials (Direct)
 DX Discovery
 TX Traceability
Vendor LI/#Emps  3P S/V SCT T/L  MT   C ESG  HR  RC BoM  DX  TX
&wider 20 Y Y
Agora Sourcing 2 Y Y
AMLRight Source 2795 Y Y
Apex Analytix 411 Y Y Y Y
Aravo 117 Y Y Y Y
Archer 681 Y Y Y
Altana Atlas 166 Y Y Y Y Y Y
Brooklyn Solutions 24 Y Y Y
Certa 200 Y Y Y Y
Circulor 63 Y Y Y Y Y
Contingent 28 Y Y Y Y
Darkbeam (Apex Analytix) 8 Y
Diligent 2245 Y Y Y
Exiger 765 Y Y Y Y Y
Everstream Analytics 165 Y Y Y Y
Fact 360 12 Y
FairSupply 40 Y Y
FRDM 28 Y Y Y
FusionRM 275 Y
GoSupply 33 Y Y
IntegrityNext 96 Y Y Y
Interos 254 Y Y Y Y
Kharon 102 Y Y Y Y
MetricStream 1373 Y Y Y Y Y
Navex 1343 Y
NQC 104 Y Y Y Y Y
Overhaul 312 Y Y
Prevalent 161 Y Y
Prewave 150 Y Y
ProcessUnity (w/CyberGRX) 143 Y Y Y
Raad360 3 Y Y
RapidRatings 166 Y
Resilinc 299 Y Y Y Y
Resolver (Kroll) 371 Y Y
Responsibly 17 Y Y
RiskLedger 34 Y Y
Riskonnect 801 Y Y
RiskRecon 116 Y
RoboAI 57 Y Y Y
SAI360 435 Y Y Y
Sayari 180 Y Y
Sedex 442 Y Y Y
Seerist 127 Y
SourceMap 91 Y Y
Sphera 125 Y Y
Supply Risk Solutions 10 Y
SupplyShift 59 Y Y
SupplyWisdom 116 Y
Sustainabill 15 Y Y
The Smart Cube 1033 Y
ThirdPartyTrust (Bitsight) 16 Y
TraceLink 947 Y Y Y Y Y
Trademo 97 Y Y Y Y
Transparency One 23 Y
Trust Your Supplier 15 Y Y
Versed.AI 17 Y Y
VisoTrust 47 Y
Whistic 81 Y
WholeChain 10 Y

The Supply Chain of Supply Chain Talent is Not Only Broken … It’s Running On Empty!

A recent article in Forbes noted that The Supply Chain of Supply Chain Talent Is Broken, which it is, and has been for well over a decade. The problems started back with the global first world truck driver shortages back in the early 2000s, but the real problems were much deeper and hidden from view due to the fact supply chains were otherwise running smoothly and no one was looking behind the curtain or shining a light into the dark recesses of the supply chain.

Why? Because of the rampant digitization of procurement, logistics, and supply chain over the past twenty years, a time when globalization reached its peak, conflict was at a minimum, inflation was in the rear-view mirror, and natural disasters were still manageable, supply chains just worked. Predictable processes, routes, costs, and flows allowed simple systems to manage the supply chains almost automatically. Supply Chains didn’t need traditional supply chain talent to run; they needed buyers, logistics managers, inventory operations, and compliance personnel who could use systems — IT geeks ruled the day!

At the same time, seasoned supply chain professionals — negotiators, logistics professionals, and inventory/warehouse managers — were retiring in droves, and no one was replacing them. More importantly, no one was replacing them because there was no perceived need. These were the individuals who where doing supply chains in the 80s and 90s, before modern systems managed everything, when there were still lots of regulations to deal with (as the EU was still forming), when you didn’t always have container ships available (or easy container transportation to all locales), and when you would have to know, by rote, who to call when a truck wasn’t at the factory or the dock for a pick-up. When you had to do everything by phone and fax, because email was a luxury; when you had to deal with dozens of import/export regulations (and know how to create the reports by hand), and how to manage logistics scheduling on paper, especially when availability of certain carriers or personnel would change by the day. When you had to truly know how supply chain operations worked end to end, and not just push buttons on a virtual screen.

But then they retired, and no one replaced them. Even worse, no one was recruited to replace them. The organizations saw no need, since the systems did everything, the EU and harmonized regulations across regions made trade easy, and the big global carriers managed logistics for them. As long as they had negotiators, system operators, outsourced carriers, and outsourced consultants to do the rest, who cared? They certainly didn’t.

Furthermore, because there was no need in the organizations, people who studied Operations Research and might have went into Supply Chain went elsewhere, and as demand shallowed, so did students, but more importantly, so did apprenticeships. Now, with disruptions on the rise, globalization retreating, inflation resurging, supply chains breaking due to slowdowns, (port) shutdowns, and double canal slowdowns/closures (Panama and Suez), and current systems not designed for the world today, there’s no one who can handle the current situation. And that’s why supply chains are broken, talent chains are broken, and most importantly, why they are empty.

All of this happened behind the scenes because no one was watching, no one was thinking about the future, and no one was doing a risk assessment or managing the risks that were destined to come. All despite the fact that natural disasters were on the rise, political tension was on the rise, and we were being warned that a pandemic was the top global risk for over a decade.

Now we are at a point where software alone won’t fix this, consultancies who don’t have talent either (despite telling you to go to China for two decades) won’t fix this, and hope won’t fix this. The only thing that will fix this is the re-introduction of supply chain apprenticeship programs, as noted by the Forbes article, along with the return of retirees with actual knowledge to mentor the new recruits, which is missed by the article. Most organizations, or consultancies, these days barely have enough talent to manage their own operations yet alone train a batch of new recruits on the side, especially if they didn’t live through the rise in global trade in the 80s and 90s. The retirees did, and they have the knowledge the consultancies, and modern systems, don’t. Along with new recruits, it is their (temporary) return that is needed to fix the supply chains.

It Was the Most Wonderful Time of the Year. Could it Be Again?

A couple of months ago we published an article on how ‘Tis the season … to bring an end to seasonality! (And JIT!) because, while consumer shopping may be seasonal, supply chains no longer support seasonality. The pandemic finally broke globally over-stretched supply chains and with the continued issues (lack of ships, due to scrapping; containers; due to trade imbalances; lack of capacity, due to extended shipping times now that the two major canals are not available and ships have to sail around both capes), the situation is not going to be fixed anytime soon.

In the article we noted that if you didn’t want to seasonally stock out, you needed to stop trying to stock seasonally and start planning for sustained stock up over time. Stock at the rate products are normally produced and able to be shipped. And stock to what you forecast.

But don’t stop there. If, even spacing out the orders and shipments, you can’t reasonably stock to demand, or, if the demand may not be high enough to minimize your logistics costs (via full container shipments), then you need to work on demand shaping as well as demand forecasting. Don’t over market / promote / sell a product you’ll have trouble delivering, and don’t maintain a product that isn’t going to optimize your economic order quantity.

Not everyone needs the newest product, or the top of the line product, some just need a product that works, which can be last year’s product, or the mid-line product. If you shape demand properly, through targeted marketing, targeted selling, or proper account management, you can make sure that you can meet all of your demand and keep each product line you should be maintaining profitable. And while we admit demand shaping can be harder than forecasting, sometimes it needs to be done. But it needs a lot of advance planning, so it’s critical that Procurement work hand in hand with Marketing and Sales to help identify the demands it can safely meet, when, and what demand levels are optimal for each product line. But if you integrate your planning, marketing, forecasting, sales, and supply chain planning, then maybe the holiday season will, in 2024, be the most wonderful time of the year.

It’s No Wonder SMEs Can’t Get Procurement Right!

… when everything that the vast majority of publications tell them is barely on topic at the best of times, and, as per our article on a recent USA Today article, give them horrendously bad advice that makes absolutely no sense whatsoever.

Needless to say, the doctor found yet another article that is just, well, bad. At least this article wasn’t on USA Today. It was a regional business site in the UK (but what should we expect considering all of the examples of Bad Buying that Peter Smith has been bringing to our attention in his articles for about a decade now).

This article, which purported to educate us on 5 tools to streamline your supply chain only managed to identify three (3), that’s right three, actual supply chain tools, of which one (1), that’s right, one, tool would actually streamline your supply chain.

So let’s start with the ONE good suggestion:

Digital Freight Forwarding

Global logistics is hard. Very hard. All of the different paperwork requirements for pre-clearance, clearance, post-clearance; all of the different taxes and rates to keep track of on import/export/sale; all of the parties that need to be involved in getting the goods off the ship to the cross dock to the warehouse where the last mile carrier picks up; etc. is very demanding. If you’re not a big company that can afford a logistics department staffed by a logistics team, not just a PO clerk who has it as his part time job, you shouldn’t be doing it. You should be using a partner — it will be faster, better, and cheaper for you to do so. It will streamline your supply chain.

But that’s the last good suggestion. The following are two supply chain tools that will help you, but they will not streamline your supply chain.

Data Analytics

While a good data analytics solution will help you identify issues and bottlenecks, it won’t actually help you streamline them. You will have to leave the system to examine the issue, come up with solutions, and then go into some other system to implement those solutions.

Inventory Management

A great inventory management system will streamline inventory management processes, making it quicker and easier to maintain visibility into your stock, become aware of low stock (automated alerts), maintain your catalog, find product (when you can record the location), determine actual space utilization, and even optimize your storage rooms and warehouse. But an inventory management solution doesn’t streamline your supply chain if you need 60 days lead time and get an alert that you’ll probably be out of product 30 days before the next order arrives. For that, you need a proper forecasting tool, optimized global logistics with expediting options when needed, integration with your PoS systems for daily updates (to detect unexpected changes in sales early), etc.

And then the last two options weren’t even supply chain! (And definitely wouldn’t streamline the supply chain.) Because:

  • accounting software is for finance
  • chatbots are for customer support

If you really want to streamline your supply chain, then, in addition to help with logistics, you need:

  • automated supplier onboarding (with the ability to integrate risk/compliance data)
    (get a supplier in the system in days, not weeks)
  • P2P for easy (re)ordering and quick-hit RFQs
    (buy quickly when you need to)
  • online contract negotiation, signing, and management solutions
    (get the the deal done quickly)
  • good forecasting
    (so you know how much you will need to order and when)

And there are plenty of affordable options in each of these areas for small and mid-size enterprises. Just check out the many vendor lists that the doctor included in his 39-part Source-to-Pay series.