@ Supply Chain Management

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A brief history of the Supply Chain

SCM Operations has this wonderful assembled history of how the idea of a Supply Chain came to be through the years – in a little over a century.

The graphic is here: History of Logistics and Supply Chain Management and is reproduced below for your benefit.

Enjoy!!

Supply Chain Optimization – careful with those words now…

Abcoautomation has a post up on How Supply Chain Optimization can help you beat your competition. Except that, the sort of optimization that is referred to there is not Optimization. I suppose that I have to start making a distinction between Big “O” optimization and small “o” optimization. However, that is a topic for another day. The topic for today however is two fold – Ernst Haeckel and the effect of Dr. Haeckel’s pithy summation on almost every and anything that we engage in. In very broad and general terms.

Ernst Haeckel, for those of us who are not likely to be avid readers, was a contemporary of Darwin (Yeah, that Darwin) championed a notion in evolutionary theory that can be summed up as, “Ontogeny recapitulates Phylogeny.” I assure you that you’re perfectly within your rights as a blog reader to switch to another page right now. It’s about to get a lot worse.

The following is the clarification of the terms: Ontogeny – the development of the form of the creature and Phylogeny – the location of the creature in the general scheme of evolutionary descent. Dr. Haeckel proposed (hypothetical creatures, drawings etc al), that Ontogeny recapitulates Phylogeny, which is to say that creatures in development exhibit developmental characteristics associated with creatures situated earlier in its evolutionary descent. This was quite an assertion which however in time turned out to be entirely wrong.

The surprising thing is that while “Ontogeny recapitulates Phylogeny” has little support in the natural world, something quite akin to it can be readily observed in the world of intellectual ideas and their application.

Here’s the content from the above story:

I heard a story one time about a Vice President of Distribution for a very well-known health and beauty aid manufacturer who gave this talk about when he took over as VP.  He asked what is the cash to cash cycle line for a particular brand of shampoo?

What is the time from the point where we spend money on boxes bottles or whatever you need for the shampoo and the manufacturing process to the time you get the money back from Wal-Mart (their end customer). Guess how long that process was?

Really, write it down and make a commitment you might be surprised at the answer. Well despite the fact that I’m not Vanna White, here is the answer. 47 weeks, 47 weeks of time. From the time that they bought bottles of goop, and paint and to the time they got their money back from Wal-Mart.

Now the next question he asked was this of those 47 weeks how much time do you really take to add the value process?

That is to make the product. Surprise again. 90 minutes. So out of the 47 weeks of time they only spent 90 minutes actually producing the product, and the final question how much of the corporate attention was on the 90 minutes?

The Supply Chain as an idea or the very recognition of the idea of a supply chain occurs quite later in the development of the capitalistic economy. So, quite akin to Dr. Haeckel’s formulation, this is a prime exhibit of later forms of organization and complexity recapitulating similar variances of thoughts and problems that were exhibited in earlier forms of organization. So while “Ontogeny recapitulates Phylogeny” was the mantra of an age past, I offer that “Novel forms of organization repeat the same problems exhibited in earlier developmental eras.” Or in other words, “Ontology recapitulates teleological gaps”.

Ontology has to do with the “that which is” and in this case would be the idea of the supply chain or manufacturing or putting things together. Teleology is about the purpose or end driven action that one undertakes day in and day out. So all that the statement above is referring to is the gaps in purpose that often exist in the recapitulation of newer ontologies.

This is precisely what prompted this long winding post – You see in the article above from abcoautomation, there is the suggestion that 47 weeks of lead time can be improved such that the non-value added proportion of this lead time can be reduced. However, that can only be done to a certain point i.e. as far as there is slack capacity to drive down the lead time. However, is there really slack capacity?

My simple point is this – these are problems that has been discovered and addressed in manufacturing – sometime well and sometimes not so well. The supply chain as a newer ontology (vis a vis Manufacturing) seems to recapitulate the same gaps in purpose.

Avoiding this recapitulation and the associated costs of this recapitulation is the only free lunch available – the question is whether you even realize the free lunch offer.

Winning through Better Supply Chain Design

Supply Chain Design is an oft overlooked field of specialty because of the “math” involved. While several providers have come up with nice interfaces to hide that math – the truth of the matter is that without the math, you’re slipping constants into GIGO (Garbage In Garbage Out) mode.

Supply Chain Management Review and Logistics Management have made this free webcast available on this topic : Winning through Better Supply Chain Design.

Supply Chain Network Design – By the Book

This article by SC Digest: Supply Chain Network Design – By the Book is about a new kid on the block (a book: Supply Chain Network Design: Applying Optimization and Analytics to the Global Supply Chain) as far as Supply Chain Modeling and Optimization goes.

As you might be aware I’m not really that keen on the adoption of optimization in businesses even though I’m sold on the absolute necessity of it. I’ve outlined several reasons over several posts on this blog : Coming off a tough tough project (for starters).

Some of the ideas in the article are tried and tested – as in I was employing them in Supply Chain Consulting way back in 2004-06 timeframe.

Parting thoughts for 2012

Here’s my parting thought for 2012.

Here’s how I’ve been doing it for the last 6 years – yeah, it’s been six years on this blog. It’s been a lot of ups and downs but the less and less time that I’ve had this past year has made a big dent. So I want to shake things up a little. So here’s my pitch – Bring me your problems, your supply chain problems. Put them up here or if you’d like, email them to me (ajsirch@yahoo.com with “@scm” somewhere in the subject header )and with your prior approval, I’ll post them here (minus company/personal identification if you’d prefer that) and let’s get some ideas sprouting. Or if you have a better idea, put it in the comments section.

What do you think?

Have a  blessed remnant of the year and of course a rip roaring year ahead!!!

IBM’s Supply Chain Offerings

I wanted to highlight 2 videos available from the IBM Supply Chain Offerings (free sign up required)

Visibility into your B2B Operations

Supply Chain Management Solution Demo

Have fun!!!

Guest Post: Disney and Others Focus on Supply Chain Logistics with Jaxport

It was announced recently that Disney Parks and Resorts will be teaming up with Jaxport, the TracPac shipping terminal in Jacksonville, Florida. About 75% of Disney’s merchandise will now be going through this port as opposed to the one they were previously using in Savannah, Georgia.

When asked about the move, Senior VP and CFO of Disney Parks and Resorts, Anthony Connelly, had this to say:

“From a business decision for us, it’s about optimizing our supply chain and being able to minimize the cost associated with bringing freight here.  So to us, it was about saving money and we’re certainly excited to participate in growing Florida’s economy as well as Jacksonville’s economy.”

Although a quarter of Disney’s merchandise will still pass through the port in Savannah, the goal of the company is to eventually have Jaxport be the standalone terminal for all of Disney’s merchandise.

Jaxport – America’s New Logistics Center

Disney’s switch to Jaxport is a signal that this hub is becoming a major player in the import and export industry. What makes Jaxport so unique is its ability to serve as a terminal for both inbound and outbound cargo as well as the ease of distribution of goods to numerous parts of the United States.

Jaxport can also boast a new state-of-the-art container terminal, and the hub’s location in Jacksonville, Florida means it is the crossroads of global commerce, with multiple highway and rail options in and out of the city.

Disney is not the only company taking advantage of Jaxport’s superior capabilities. Brands like Coach, Michael’s, Bridgestone, PSS World Medical, Sears, Samsonite, Maxwell House and Unilever have all made the switch to Jaxport in an effort to better optimize their supply chains.

Rich Markovich, Director of International Logistics and Compliance for the Michael’s art supply chain, notes an advantage Jaxport has and why it is such an attractive choice:

“A real point of strength is the workforce in the Jacksonville area – on top of the dynamics that make Jacksonville a very attractive place when it comes to domestic transportation.”

The Decline in U.S. Manufacturing Leads to New Supply Chain Logistics Centers

Throughout the last decade, there has been a measurable decline in the manufacturing of goods on US soil as production has shifted to overseas markets where costs are much lower.

This shift has caused an increase in imported goods to this country and a need for new supply chain logistical centers that can handle the arrival and distribution of thousands of cargo containers.

Many ports throughout the country are trying to capitalize on this import trend, but it is the ports on the southeast coast in particular, such as Jaxport, that are in a position to reap the greatest benefits. This is in large part due to the fact that west coast ports are currently close to operating capacity and cargo moved from these hubs must absorb increasing expenses as fuel prices remain high.

From a First Coast Vision Report:

“Supply chain logistics centers are catalysts for further economic activity in the community. Clustering of these facilities is common because businesses feel more confident in their location decisions when they see companies with similar business needs thriving. As Jacksonville attracts more of these companies, others will seriously consider Jacksonville for their own relocations and expansions.”

As supply chain management executives continue to seek optimized and cost-effective logistical solutions, they must consider using ports of entry with established supply chain centers that have connections to major trade lanes, reliable containership services, and a qualified workforce. These considerations make Jaxport a natural supply chain logistics center choice despite intense competition.

Pete Kontakos is a contributor who writes about supply chain management certification online.

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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