@ Supply Chain Management


The Big Bad Blogger Throwdown @ Sourcing Innovation

Hear ye, hear ye! Michael Lamoureux is hosting this year’s Big Bad Blogger Throwdown at his blog – Sourcing Innovation. Here is the link to the announcement of the cross-posting cornucopia.
Michael makes an interesting versioning idea ala Web 2.0; he calls its Spend/Supply (Chain) Management 2.0. The topic of the confab of posts from a number of bloggers (including yours truly) is to come up with the top three issues that supply chain bloggers blog about.
Or, Eh Mannnnn!!!, What getteth thy goat?
In English, that would be:

  1. What the issue is
  2. Why it is important
  3. What a company can do about it and
  4. What could happen if its not addressed

I’d better get cracking on them because I hope to have them up next week. Michael is smart enough to realize that you should never give a blogger two weeks. Wars are finished in less! Well, some of them are.
Lastly, kudos to Michael for taking this on.

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Supply Chain Network Optimization and Competitive Advantage – Part 2

In Supply Chain Network Optimization and Competitive Advantage – Part 1, I began exploring the notion articulated by SC Digest’s editor Dan Gilmore in a recent post about Supply Chain Network Optimization and Competitive Advantage. In the article Mr. Gilmore goes on to describe how a few companies are adopting this particular aspect of Supply Chain Management in their processes so much so that it is seen as a source of competitive advantage.
In Part 1, I explored whether the use of such network modeling and optimization tools constitute a true competitive advantage and finding in the negative, I hope to explore what it might really be called. But before getting there, I need to revisit the notion of competitive advantage again (and not for the last time). As explored in the previous post, the essential components of a competitive advantage are:
1. A member of {Demand Competitive Advantage (Customer Captivity), Patented/Superior Technology, Economies of Scale}
2. Provides a barrier to entry
3. Realizes a net positive return on some Sales-Cost metric
As Greenwald and Kahn note in their article – All strategy is local, there is an essential difference between Strategy and Efficiency. Strategy is (Oh well! – change that to “should be”) cognizant of (if not focused on) the other players in the arena – thus outward looking. A strategy that doesn’t assert (based on the probable reactions of competitors) or react (based on the actions of competitors) can be effective if only luckily so. However, while the formulation of a strategy is outward focused, executing a strategy is limited by what is available internally. Efficiency on the other hand is very much focused on internal structure, processes and in an advanced case collaboration and partnership with key suppliers and enablers. Efficiency might have a focus on the efficiency benchmark from other players in the arena (or in the case of benchmarking – players that are quite unrelated in the competitive space) but again it is not related to the topic of competition per se. As the authors note,

A company’s best and most innovative users of information technology, business models, financial engineering and almost everything else that applies to operations suffer from the same availability to rivals. What a firm can do, its competitors can eventually do as well. IT effectiveness, HR policies, financial strategies, and so on are essentially aspects of what it means to operate efficiently.

So where does the above discussion leave the supply chain planning and network optimization function?

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Supply Chain Network Optimization and Competitive Advantage – Part 1

SC Digest’s editor Dan Gilmore has a recent post about Supply Chain Network Optimization and Competitive Advantage and how a few companies are adopting this particular aspect of Supply Chain Management in their processes so much so that it maybe a source of competitive advantage.
While I am quite convinced about the need for strategic planning for supply chains at the highest echelons of management using the very kinds of tools that Dan Gilmore is talking about, I am hesitant, if not quite in the opposite camp, when the use of such tools is deemed to confer, even offer, a competitive advantage. The opportunity of deriving a competitive advantage this way is minimal at best. What is competitive advantage and what is not is the subject of this part of the series. In following parts, I hope to identify what supply chain planning and optimization really is.
In order to explain myself, I need to first elucidate the very notion of competitive advantage and strategy (or strategizing). I refer you to the excellent article on strategy: All strategy is local by Bruce Greenwald and Judd Kahn. The byline of their article states that:

True competitive advantages are harder to find and maintain than people realize. The odds are best in tightly drawn markets, not big sprawling ones.

The aim of true strategy in their opinion is,

to master a market environment by understanding and anticipating the actions of other economic agents, especially competitors. But this is possible only if they are limited in number. A firm that has privileged access to customers or suppliers or that benefits from some other competitive advantage will have few of these agents to contend with. Potential competitors without an advantage, if they have their wits about them, will choose to stay away. Thus, competitive advantages are actually barriers to entry {emphasis is mine}. Indeed, the two are, for all intents and purposes, indistinguishable.

Greenwald and Kahn contend that true competitive advantages, whatever their source, are really barriers to entry – in the sense that gaining such a competitive advantage presents a significant threshold to be scaled. The conclusion is an acceptable one and as you can imagine begins to chip away at the notion that the use of supply chain strategic planning tools in some way offer a competitive advantage. I think there is a case to be made about sources of competitive advantage with regards to all aspects of supply chain management within a firm. I do not see that the output of supply chain strategic planning (which is a streamlined and robust supply chain network) offers any real competitive advantage. To belabor the point, any competitive advantage that can be easily replicated is not an advantage, it is the entry price for remaining in the competitive arena.

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Pearls before Breakfast – If it is moving, will you stop?

If there is something that you should read today that is totally unconnected to the reason why your search query string in Google/Yahoo/MSN brought you to this site or this blog happens to be in your reading routine or for some other reasons, it is this article from the Washington Post – Pearls before Breakfast.

It was 7:51 a.m. on Friday, January 12, the middle of the morning rush hour. In the next 43 minutes, as the violinist performed six classical pieces, 1,097 people passed by. Almost all of them were on the way to work, which meant, for almost all of them, a government job. L’Enfant Plaza is at the nucleus of federal Washington, and these were mostly mid-level bureaucrats with those indeterminate, oddly fungible titles: policy analyst, project manager, budget officer, specialist, facilitator, consultant.
Each passerby had a quick choice to make, one familiar to commuters in any urban area where the occasional street performer is part of the cityscape: Do you stop and listen? Do you hurry past with a blend of guilt and irritation, aware of your cupidity but annoyed by the unbidden demand on your time and your wallet? Do you throw in a buck, just to be polite? Does your decision change if he’s really bad? What if he’s really good? Do you have time for beauty? Shouldn’t you? What’s the moral mathematics of the moment?

I’m not so crass as to think that this is a telling story on the state of the culture today (It may very well be) but what is it about the business of living that one bypasses that which is truly moving in life? A culture that is deaf to truth and beauty in one aspect will find that it is deaf to truth and beauty manifest in other aspects of life as well.
But would I have stopped? Now, that is the question of the moment?

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This move was easy – NOT!

You’d think that a move is a piece of cake but talk about inventory obsolescence. Like I’ve blogged before, I am in the midst of a move and that’s why the blog has not had posts lately. Considering that I’ve moved houses, companies and countries every few years, I didn’t think that it would be that difficult. However, the days of living and moving out of suitcases are over. The era of truckload moves has begun.
Now, I moved between apartments of roughly the same size but different configurations. Now getting out of one apartment configuration was primarily done by the movers but getting all the stuff back into the configuration of the new apartment is proving to be trying to say the least. There are box after box of stuff that just won’t go anywhere and I’m wondering if they’re destined to remain in boxes (Out of sight and out of mind?) or whether they’re about to be discarded (which is my wife’s ultimatum – No prizes for guessing whose stuff I’m talking about). And that’s my situation with inventory. Not unlike the hoards of stuff sitting on shelves in some forgotten part of the warehouse.
As the move plays out, I’m getting deeper into my ILOG role as well. I think that the tenor of the blog might change even as the supply chain focus remains the central purpose of the blog. Like I’ve mentioned before, I will be working in real-time scheduling in a Wafer Fabrication facility. So my role has more to do with the nitty gritty of real operations in contrast with logistics related activities which were the content of my previous position.

Update: One more thing: I used Allied Van Lines for my move and I was very impressed by their professionalism and service. If you’re moving into or out of the Green Bay, WI area, I can’t think of a better agent than Skaleski Moving, an agent for Allied.

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About me

I am Chris Jacob Abraham and I live, work and blog from Newburgh, New York. I work for IBM as a Senior consultant in the Fab PowerOps group that works around the issue of detailed Fab (semiconductor fab) level scheduling on a continual basis. My erstwhile company ILOG was recently acquired by IBM and I've joined the Industry Solutions Group there.

@ SCM Clustrmap

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April 2007