@ Supply Chain Management


When that last terrorist is killed…

What has been unfolding over the last two days in Mumbai has been shocking to say the least – I’ve been glued to CNN practically non-stop. My prayers are with those killed and wounded by the terrorists, with the families who wait outside to know the fate of their loved ones and for India’s bravest who took the fight to the terrorists to the bitter end. The time for questions and blame is after.

When that last terrorist is killed, I wait to see my Tricolor fly on the dome of the Taj and Trident hotels…

Tags: Terror in Mumbai

For this Thanksgiving day…

For this Thanksgiving day, I have but two posts to share:

The Pilgrims’ Financial Crisis

First they [Pilgrims] migrated to the Netherlands, which practiced religious tolerance of alternative religions. But the English Puritans wanted their children to grow up in an English culture, not as Dutchimen. That is why after a few years they sought to establish their own colony in the New World, where they could control their own government, religion and culture.

In these precarious conditions, it was natural for them to work together and share their food and shelter. Even so, 45 of the original 102 died that first winter, including 13 of the original adult women, with one more passing away in May.


But as the colony grew, this initial quasi-socialist community of share and share alike was not working to produce enough for essential basic needs, let alone the prosperity that was expected in the new world. Available wild supplies of food, in particular, were no longer enough.

All this while no supply [of wild corn] was heard of, neither knew they when they might expect any. So they began to think how they might raise as much corn as they could, and obtain a better crop than they had done, that they might not thus languish in misery. At length, after much debate of things, the Governor (with the advice of the chiefist amongst them) gave way that they should set corn every man for his own particular, and in that regard trust to themselves; in all other things go on in the general way as before. And so assigned to every family a parcel of land, according to the proportion of their number, for that end

Whammy and Double Whammy…

A little while ago, I blogged about the very real threat of supply chain shocks primarily originating from the drama in the credit markets – Are you ready for the Supply Chain Shock?. While those risks remain, there is a lot more to think about now – It’s time for the next whammy – Demand shock. This article reported in the International Herald Tribune – A sea of unwanted auto imports is symptomatic of the problem. What is recounted in the article,

In the 150-acre terminal where Toyotas are unloaded, there is a sea of Corollas, Camrys and RAV4s. The mere presence of so many cars is not unusual, given that Toyota brings in 250,000 cars a year in biweekly shipments. But in a sign that something is amiss, dozens of tractor-trailers that transport new cars to dealers sat empty last week amid the rows of Toyotas.
Kurt Golledge, 48, was one of just two truckers loading his green, 75-foot-long hauler with cars lastweek. Golledge said eight of his colleagues were laid off this month because Toyota dealers did not want more deliveries.
"I was dropping cars in Henderson, Nevada, about a month ago and the dealer told me: ’Take ’em somewhere else and dump ’em,’ " said Golledge, who works for a company called Allied Systems. "All the dealers are telling us the same thing."


It is more unusual to see a lot at the California port filled with thousands of unsold Mercedeses, most of them gathering dirt on the plastic white film that protects their hoods and trunks. Some appeared to have been stashed at the port for several months.

smacks of demand shock. This glut of cars which is but one product attests to the emptying of the pipeline inventory and WIP that existed as most of these firms have cut back their production. Multiply this picture across the spectrum of imported goods and you begin to see the scale of the problem. Now, not only is it difficult to fund operations for a factory/firm, there is less demand for those products as well as consumers cut back. That points to the obvious, as there is less need for production – more layoffs to come. And this downward spiral reinforces itself.

I leave you with a question of the times – Do you really think that the Keynsians of the incoming administration are about to do any better than the departing one? And, if so, Why?

It is as they say of second marriages – "The triumph of hope over experience."

Update: Some more evidence of Demand shock rippling through the Supply Chain: Workers riot at Chinese toy factory

Tags: Demand Shock, Toyotas at Ports, Pipeline Inventory

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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November 2008