I set out a New Years resolution to keep this space updated frequently and maintain a flow of fresh ideas and observations. FAIL.
In fairness, it has easily been my busiest and most challenging year both personally and professionally. I've travelled for business and with family much more than any past year, and we break ground on a major home remodeling project in early January. But enough with the excuses. In supply chain management we turn challenges into opportunities, and the incredible strain of all the reasons that have kept this blog sparse have created a deep, deep well of new ideas and experiences to fill this space. Now to just find the time to organize the ideas and put fingers to keyboard.
In the meantime, it's Thanksgiving in the United States which requires visitation of the cliche: what am I thankful for...?
Family & Friends. The best part of any business trip over a week in duration should be the moment you see who is waiting for you at the terminal aft your last flight arrives. If not, then you're doing all st hard work for the wrong reasons. Sure, the goal is to love what you do for a living and I do. But the idea that I'm setting a strong example of work ethic, building a better future through my company's products, and building the US and Global economies will all benefit my family and generations to come is a strong motivator that gets me through the long weeks away from home. The paycheck would never be enough.
Colleagues and Business Partners. No man is an island, right? We live in a complex global economy and mange multi-tiered international supply chains. Without a strong team around you and high-quality external business partners who focus on solutions, success would be impossible and great ideas would all be classified as unreachable dreams. I have been lucky to have been able to identify a network of experts in so many of the areas that are important to achieving my professional goals. A motivated team and strong relationships are the first step in building any sustainable competitive advantage.
Opportunities to Learn. School was many times the last place I wanted to be. I can recall counting the seconds until some of my classes ended and once I was bored the next step was usually some sort of reprimand for whatever behavior I found to break the boredom. But after a couple years after my MBA was completed, I realized that despite my resistance I had been constantly learning new things for my entire life. My career path has allowed me so many opportunities to learn new things to the point that noes I crave learning new things and understanding hoe they fit into the bigger picture of my work and the society in which I live. Meeting with different cultures and doing business with people who share diverse opinions as well as regional and global business travel allow me to consistantly and satisfactorily scratch the itch to learn new things.
Baseball. Google. TDi Engines. Nachos. My favorite easy chair. Family Pets. Bookstores. HD LCD TVs, iProducts. Mackinac Island. There are lots of little things to be thankful for but the three explained above are things I couldn't live without. No matter what else is going on, I am thankful for the people in my life and the many opportunities to learn and expand my knowledge.
Happy Thanksgiving! I'm going for a second helping of mashed potatoes.
Thursday, November 22, 2012
Thursday, January 26, 2012
Today was the second time I volunteered for Junior Achievement - Reverse Job Shadow Day. The first was in April 2011 and both times have been with 8th grade Middle School students. If you would like to get an idea as to the degree of difficulty in keeping the attention of Middle School age kids while explaining how a supply chain works, listen to this podcast on Middle School from This American Life.
It wasn't easy to create a one-hour cirriculum that makes Supply Chain Management the slightest bit interesting to teens, but I'd like to think I sorta pulled it off. The presentation is broken up into 4 quarters:
Q1: Introduction and definitionsQ2: Supply Chain Activity
Q3: Education
Q4: Problem Solving Activity + Final Questions
Q1: We start with a short introduction and by explaining the ingredients that make up a hamburger and the steps it takes to get the materials out of the ground (or out of the cow). Kids' aren't stupid...they grasp it quickly. So we increase the degree of difficulty and explain - with map - the global supply chain for a Dell computer all the way down to extraction of crude oil. This sinks in too and we move to talking about very basic reasons why we must manage supply chains (Hint: Save money, Avoid disruptions).
Q2: The first activity involves five volunteers named as their own companies in different regions of the world. We set up an intentionally flawed supply chain between them with a sizeable bottleneck. They use bolts, nuts, and washers to put together a "product" with each student company "supplying" the other with a WIP part. The finished goods and all the unused inventory in counted and a price given to each explaining working capital. Then we talk about the bottleneck, discuss strategies to increase speed and efficiency, and re-balance the links in the chain with the best strategy and run it again. After the second 60-second run, the remaining inventory is added up to show how much money this supply chain has just saved. The final run is explained as an attempt to "beat their last number of finished parts", but between 15 and 45 seconds, I start tossing spare parts at one side of the table to simulate a regional disruption caused by natural disaster, war, labor unrest, etc. The output ends up as the lowest of the day and leads to a discussion about how the supply chain was disrupted and about what strategies we can do to ensure that a disruption in one part region or link of the chain will not shut down the entire operation. We re-balance the chain one last time and use dual sourcing principles to minimize disruptions. After the last discussion, the volunteers get a round of applause. If the students seem really engaged and attentive after the first round, I have the option of working in a description of push vs pull and JIT as well. If they are easily distracted, we stick to the basics.
Q3: Shifting gears to education, I try to drive home two points. First, whether you know or don't know what you want for a career, the worst thing a student can do is limit their own options. What if you graduate and decide to be a Doctor but can't get into Med School due to bad grades? What if you think you want to be a park ranger and one day develop a passion for the legal profession? The best strategy for education is to earn the best possible grades you can and it is the only way to avoid someone telling you someday that you CAN'T be hired for the thing you have decided is the right path for you. Teenagers always feel like they are being told what they CAN'T do by parents, teachers, law enforcement, street signs, and their peers. The idea that they can put themselves in a position where all options are open and no one can tell them NO really resonates. Will that thought be enough to drive them to do well in school? Probably not, but maybe there are one or two kids sick of hearing NO that will latch onto the concept.
Q4: The second activity involves three bags of chips. In case you didn't know, Middle School students LOVE unexpected snacks. Three more volunteers guess at the prices and sizes of each bag - one family size, one medium size, and one snack size. The prices of each bag are reviewed and the class agrees that the snack size bag is the best value because it's only $0.99...once they have totally convinced each other that this is accurate, we divide the price by the ounces of product in each bag and find out that per ounce, the smallest bag is double the price of the family size. I explain that if we multiply this result by 10,000,000 bags of chips, I would be fired for recommending that my company buy the snack size bags based on it's status as the lowest price per bag. So we've driven home the point that analysis and comparison of similar but not identical products is a vital function of Supply Chain Management and Purchasing. Finally, they get to eat the chips while I take questions. If there is time, we can work on one or two more activities.
Things I learned from this experience...in no particular order:
- The amount of learning that occurs during a hand's on activity is exponentially higher than during a lecture.
- During a discussion on careers, kids are not shy about asking how much money you make.
- Teenagers are impressed by the symbols of success and by big numbers. When I mention that my company does almost $30 Billion in sales annually and employs close to 200,000 people world wide, they take notice. Whn I mention that my company uses a private jet to shuttle salaried staff between locations and that I use this service regularly, they look at me like I'm Jay-Z. During activity #1, the remaining inventory is priced in the millions per piece. I've learned that they pay more attention when they hear that after the second run they saved $15-$20 Million instead of $0.15 or $15.00.
- Again, kids LOVE unexpected snacks!
- It must be incredibly difficult to manage a class; I tended to gravitate toward the kids I knew were interested and participating and ignored the kids that were acting up or obviously tuning me out. I can get away with that for one hour, but a teacher has to attempt to get these kids engaged without creating boredom for the kids that are more interested and grasp concepts quicker. I can't imagine the level of multi-tasking needed to create such an environment.
- Middle School students don't quite grasp globalization, and are shocked when they hear the wages paid to laborers in China and Thailand...and we don't even get into child labor practices.
- Each kid reacts differently to having projectiles tossed in their direction by an adult. Some will just stop what they are doing and look completely confused, some will never look up and assume it's coming from other students, some will threaten to throw them back, still others will become very agitated and stare at you like they are going to attack. Still...every single reaction is utterly hilarious!
- Finally, you will suffer the consequences of including "nuts" in an activity with 13-15 year olds. You will make at least one innocent comment about nuts that gets a big laugh from the students. And at least one student will come up with their own joke that's just risky enough to get a laugh without drawing punishment from the teacher. Buyer beware.
Junior Achievement is a critical part of creating links between today's professionals and tomorrow's workforce. Our society should be focused on mixing more career professionals into daily classrooms to raise some of the burden on teachers and help kids answer the question: "When will I ever use this...?"
Saturday, January 14, 2012
Think Different?
Three worlds collided this week. No one was hurt. And probably very few people really noticed.
One of my favorite apps for the iPad is the collection of the This American Life radio shows in podcast format. Something about Ira Glass’ monotone drawl and stories about regular people in irregular situations is interesting and relaxing at the same time. To my surprise, the latest episode was dedicated to a scathing indictment of Apple, Inc. and the working conditions at Apple suppliers.
And there it was…Supply Chain risks…This American Life…Apple products…all colliding in one place.
It’s worth a listen, but in summary: Mike Daisey, a pure Apple fan and self described “story teller” performer decides that despite his deep devotion to Apple, he knows nothing about the actual people to assemble the Apple products he loves so much. And with time and money available to him (or maybe just obsession), Mr. Daisey heads to China and talks to workers from Shenzen-based Foxxcon. The situation is dire and working conditions are similar to those seen in the US during the early 1900’s. Among the stark picture of industrial abuse are anecdotes of 34 hour workdays, wages less than $50 USD per week, injuries, exposure to dangerous chemicals, worker suicides, and a foreign business community and Chinese government that both are at best looking the other way and at worse participating in the exploitation. The program ends with the simple statement that Apple claims to have made strides, but without the list of names for all suppliers and data on working conditions none of Apple’s claims of policing suppliers can be validated and a cloud of suspicions will exist.
I could see every CEO in America defiantly proclaiming that they have no need to provide such information to the public, that their suppliers deserve anonymity, and that increased scrutiny does not always being out the truth. Or…an economic freight train like Apple could simply ignore this left-leaning radio show and assume that the entire episode would blow over just like criticisms in the past.
The last thing I expected to see when I logging on to Google News was several stories proclaiming that Apple had actually released their supplier list to the public less than a week after the story aired. Clicking over to www.apple.com yields a new pathway on the main webpage titled: “Supplier Responsibility: Apple’s Supplier Code of Conduct and 2012 Progress Report ). http://www.apple.com/supplierresponsibility/ ).
The impact of this convergence between Apple, This American Life, and supply chain management will have ripple effects. Imagine tossing an iPad into a small puddle of water…although the two will not mix to create something new, it is a good bet that both will be seriously altered by the other. Please return to this space as I will attempt to dissect what the events of the past week may indicate for Apple, it’s competitors, supply chain professionals, media, and consumers. In the meantime, feel free to browse available information on the topic.
Happy reading!
Sunday, January 1, 2012
2011 Reflection = 2012 Planning
Welcome to 2012! A fresh start, a new beginning, an opportunity to improve or re-define ourselves! Hold on. If you are reading this it’s safe to assume you have at least a passing interest in Supply Chain Management and you are also aware that analyzing, improving, innovating, and evolving are the key tenets of SCM so if you are waiting for a new year to integrate such practices into your daily work, there’s little chance to achieve the organization’s goals and maybe it’s time to update the resume.
So what does the change in the calendar mean for leaders in the field of Supply Chain Management? I’ve always believed that January 1st is a prime opportunity to look back on the past year and get a sense of the trends that may have ended or may carry over into the next year. Any ideas on major supply chain themes for 2011?
Risk? Yes, risk seemed constant over the past 12 months. Uncertainty? Yes. Absolutely. Let’s take a brief moment to consider only the largest news stories related to supply chain risk and uncertainty:
- Japan 6.8 Earthquake / Tsunami [January]
- Egypt Uprising and Mubarak’s Ousting [February]
- Fukushima Nuclear Plant Damage [March]
- 800+ tornadoes hit US East Coast & Midwest [April]
- Iceland Volcanic Ash Clouds [May]
- Thailand Floods [July - September]
- Japan 6.8 Earthquake / Tsunami [January]
- Egypt Uprising and Mubarak’s Ousting [February]
- Fukushima Nuclear Plant Damage [March]
- 800+ tornadoes hit US East Coast & Midwest [April]
- Iceland Volcanic Ash Clouds [May]
- Thailand Floods [July - September]
- Libya Civil War [August - October]
- Hurricane Irene [August]
- East Coast Snow + Floods [October]
- Philippines Floods [December]
Wow. Almost mind numbing. It was obviously a tough year in many respects, and this list is by no means comprehensive nor does it touch upon supplier financial stability, work stoppages (local or national), civil unrest, or smaller localized weather and political incidents. Even a traffic accident on a freeway 3 miles from a factory can cause a major disruption to a lean supply chain.
It I safe to assume that as the global supply chain becomes more integrated into a wider variety of products, such global, regional, national and local disruptions will increase in parallel with supply chain complexity. Therefore, it is vital that we evaluate the components and services that are irreplaceable and devise strategies for minimizing disruptions to key areas of the chain. This sounds like pure common sense and maybe even “SCM 101” but once you really consider how many risk avoidance plans you have in place, it may come as a shock as to how focus on the daily grind has left us truly unprepared.
Each supply chain is its own living, breathing entity and each product requires different key components to be produced. So even if I could, I’m not going to provide all the answers today…after all, there is still college football to be consumed before the work week begins. However, this WSJ article on Boeing addressing supply chain risk should help to spark some ideas and start 2012 off with a purpose: Evaluate inherent risk and plan risk avoidance into each new strategy. When your competition is losing sales and sitting idle due to disruptions while you have activated your plans and quickly recovered, the work put into annual risk avoidance preparation will feel like a small price to pay for success.
And speaking of continuous improvement, I am resolved in 2012 to greatly increase my presence on this Chain Ink blog and @jcinglie on Twitter in order to create a resource and think tank for supply chain professionals. If you enjoy the limited content so far, please comment or follow me on Twitter. Knowing I have an audience will give me the motivation to stick to my resolution and to make sure that the content of this space is in keeping with high quality standards.
HAPPY NEW YEAR!!!!
- Hurricane Irene [August]
- East Coast Snow + Floods [October]
- Philippines Floods [December]
Wow. Almost mind numbing. It was obviously a tough year in many respects, and this list is by no means comprehensive nor does it touch upon supplier financial stability, work stoppages (local or national), civil unrest, or smaller localized weather and political incidents. Even a traffic accident on a freeway 3 miles from a factory can cause a major disruption to a lean supply chain.
It I safe to assume that as the global supply chain becomes more integrated into a wider variety of products, such global, regional, national and local disruptions will increase in parallel with supply chain complexity. Therefore, it is vital that we evaluate the components and services that are irreplaceable and devise strategies for minimizing disruptions to key areas of the chain. This sounds like pure common sense and maybe even “SCM 101” but once you really consider how many risk avoidance plans you have in place, it may come as a shock as to how focus on the daily grind has left us truly unprepared.
Each supply chain is its own living, breathing entity and each product requires different key components to be produced. So even if I could, I’m not going to provide all the answers today…after all, there is still college football to be consumed before the work week begins. However, this WSJ article on Boeing addressing supply chain risk should help to spark some ideas and start 2012 off with a purpose: Evaluate inherent risk and plan risk avoidance into each new strategy. When your competition is losing sales and sitting idle due to disruptions while you have activated your plans and quickly recovered, the work put into annual risk avoidance preparation will feel like a small price to pay for success.
And speaking of continuous improvement, I am resolved in 2012 to greatly increase my presence on this Chain Ink blog and @jcinglie on Twitter in order to create a resource and think tank for supply chain professionals. If you enjoy the limited content so far, please comment or follow me on Twitter. Knowing I have an audience will give me the motivation to stick to my resolution and to make sure that the content of this space is in keeping with high quality standards.
HAPPY NEW YEAR!!!!
Monday, November 1, 2010
Innovation and Art Projects
My nerdyness when it comes to interesting business principles apparently knows no bounds. My Wife and I were shopping for some last minute art supplies to finish our daughter's Halloween costume and passed by a rack of multi-colored pipe cleaners.
I paused for a minute, and turned to my Wife:
Me:"Pipe cleaners must be the most under-appreciated story of innovation ever."
Her:"What? Why?"
Me: "They were a product designed for a singular purpose and as the market for that purpose was declining, someone decided that they would make good art supplies for kids. I would love to see the statistics on whether they sell more pipe cleaners now than they did when pipes were popular. I would bet they sell more now."
Her: "Uh huh. Sure. Why not."
And still she loves me. Anyway, pipe cleaners have succeeded in a transition where so many products fail and become obsolete. Whether it was a shrewd marketing move or happenstance, it is still a model situation that can provide lessons for our organizations:
Me:"Pipe cleaners must be the most under-appreciated story of innovation ever."
Her:"What? Why?"
Me: "They were a product designed for a singular purpose and as the market for that purpose was declining, someone decided that they would make good art supplies for kids. I would love to see the statistics on whether they sell more pipe cleaners now than they did when pipes were popular. I would bet they sell more now."
Her: "Uh huh. Sure. Why not."
And still she loves me. Anyway, pipe cleaners have succeeded in a transition where so many products fail and become obsolete. Whether it was a shrewd marketing move or happenstance, it is still a model situation that can provide lessons for our organizations:
Every product runs a life cycle that can span days, weeks, months, years, or decades, but the ultimate success of a product is whether it can continue to relevant after it's peak in popularity. Why would a supply chain management professional care about the term of a product's life cycle? Simple. New products create disturbances in existing supply chains. If we are to rely on Wikipedia.com for our understanding of the world (and who doesn't, right?) the following describes a simple model for extending the product life cycle:
- Price Reductions
- Promotions
- Re-packaging
- Re-designing
- New Markets
While many sources - especially marketing texts - will provide a litany of additional paths such as re-branding, co-branding, and re-positioning; I still feel that the the wiki found the most viable options in the five listed above. And aside from the New Markets option, all of them involve either cutting costs or adding cost and risk to the supply chain. Price cuts and promotions typically filter back into the supply chain and are not easy to obtain given declining volumes; they are ways to limit the bleeding, but they won't give the patient a new lease on life and will not foster good supplier relationships. Likewise, re-designs of attributes, features, packaging, or functions may be short-term help, but can create unexpected problems and challenges while driving unexpected costs. What if the re-designed packaging drives completely new shipping containers? What if a product re-design requires a change in suppliers and costs for obsolete inventory in the pipeline? As supply chain professionals, we are naturally flexible and can roll with the punches, but why is putting ourselves in front of Mike Tyson the first option rather than the last option?
Instead, we should learn the pipe cleaner lesson and use a long-standing product in a new way with new customers. Adding new channels of distribution is more likely to create opportunites for shipping consolidation and reduced pricing via increased volume. If we can keep our existing products relevant more often and refresh their purpose we can develop longer-term supply chains and better partnerships with suppliers because they know that there is always a chance that we will continue to need their services after the initial volume starts it's decline. Avoid risk. Increase savings opportunities. Create consistancy. Foster strong existing supply relationships. Build new distribution relationships.
Not every product can find pipe cleaner-level success by uncovering a radical new market for an existing product, but it serves as an opportunity for supply chain professionals to be a driving force for innovation within each organization and ask the tough questions in hope that we can push organizations toward more creative product planning.
- Price Reductions
- Promotions
- Re-packaging
- Re-designing
- New Markets
While many sources - especially marketing texts - will provide a litany of additional paths such as re-branding, co-branding, and re-positioning; I still feel that the the wiki found the most viable options in the five listed above. And aside from the New Markets option, all of them involve either cutting costs or adding cost and risk to the supply chain. Price cuts and promotions typically filter back into the supply chain and are not easy to obtain given declining volumes; they are ways to limit the bleeding, but they won't give the patient a new lease on life and will not foster good supplier relationships. Likewise, re-designs of attributes, features, packaging, or functions may be short-term help, but can create unexpected problems and challenges while driving unexpected costs. What if the re-designed packaging drives completely new shipping containers? What if a product re-design requires a change in suppliers and costs for obsolete inventory in the pipeline? As supply chain professionals, we are naturally flexible and can roll with the punches, but why is putting ourselves in front of Mike Tyson the first option rather than the last option?
Instead, we should learn the pipe cleaner lesson and use a long-standing product in a new way with new customers. Adding new channels of distribution is more likely to create opportunites for shipping consolidation and reduced pricing via increased volume. If we can keep our existing products relevant more often and refresh their purpose we can develop longer-term supply chains and better partnerships with suppliers because they know that there is always a chance that we will continue to need their services after the initial volume starts it's decline. Avoid risk. Increase savings opportunities. Create consistancy. Foster strong existing supply relationships. Build new distribution relationships.
Not every product can find pipe cleaner-level success by uncovering a radical new market for an existing product, but it serves as an opportunity for supply chain professionals to be a driving force for innovation within each organization and ask the tough questions in hope that we can push organizations toward more creative product planning.
Tuesday, September 21, 2010
Kickoff
Chain Ink is a space intended as a one-stop shop for insight and thought provoking discussion centered around supply chain management. Purchasing, logistics, inventory control, will all be discussed as well as marketing and sales strategy. The world is flat again. Detroit, Dallas, Dubai, and New Delhi are all just a mouse-click away -or iPad touch- from each other and getting closer. The resulting supply chains are growing and becoming more complex.
We will explore the trends and technologies that got us here as well as the strategies that can keep us competitive in this environment. This blog will succeed in its mission if it gives one professional the license to see outside the box of traditional strategies and into the world of possibilities opened up by today's dynamic business environment. And if we can provide some entertainment along the way, there's really no better service one can provide for those chained to a cube wall obsessing over data like...well...this guy.
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