@ Supply Chain Management


Why I will not shop at Walmart anymore?

And the caveat line should be – pending some tradeoff analysis. The fact of the matter is that I’ve made up my mind but I need some numbers behind my intuition even though I think that the numbers will also bear me out.

The surest question that I will be asked is – You shop at Walmart? Perhaps, @ SCM is now on the blacklist of many a reader. So let me give you the list of reasons that didn’t go into making this decision and those that did loom large.

1. I’m not doing this for the Mom and Pop stores. I am a big fan of small businesses but it is because, strategically speaking, they are nimble actors who can identify, supply and defend niches at first and then grow from there. In a sense, I like small businesses because they compete in different ways from large businesses and some small businesses go on to become big businesses because they’ve profited from insight, positioning and in most cases from a good dose of luck. Or to abstract it a layer further, I like small businesses because they have a good deal of pluck and a whole lot of spunk.

2. I’m not doing this because Walmart treats their employees "poorly". There is no doubt in my mind that I will not do the kind of jobs that Walmart employees do. Unless I have no choice but to do so. I do not think that it is beneath me. There is nothing more mind numbing than punching in the item SKU code whenever the reader cannot read it, deal with "some" customers (more of that later but I think you know that special subset of customers that I am talking about) but these guys do it day in and day out. What’s more that they don’t make a lot of money and they don’t get much (if any) by way of health care etc. I am more or less certain or perhaps I "believe" that in the long run (and that’s the shame of it – it is the long run and not the short run), employers who don’t value their employees are just not going to cut it.

3. I’m not doing this because Walmart imports stuff from China. Or India. Or Tahiti for all I care. Undeniably, there is an impact that such wholesale import of goods from every port in the world including Timbuktu (such as on the trade balance between nations for one and its attendant issues) creates in the importing country but if you think that a Ferrari F430 is worth buying and you can do so, I think that a china made floor lamp is worth having and would like to obtain it at the cheapest price. And besides, I need the light a whole lot more than you desire the thrill of the ride. And yes, I am quite aware that such choices affect American manufacturing (and that American manufacturers have to compete with an artificially pegged yuan and so on and so forth) but this land was once the Wild West. I get the distinct feeling that a lot of Americans think of this land right now as the Mild Rest – a significant something has been lost in that transition. The fact that Walmart imports a lot of stuff from China is the effect of that transition but not the cause. To locate the cause, you have to find, metaphorically speaking, the time when the saddle was traded for the armchair.

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Time to go for a boutique?

T’is time to go for a boutique? I’d like to draw your attention to this list of articles by Steve Banker of Arc Advisory Group:

Top SCM Boutique Consulting Firms: Part 1, The Logistics Boutiques

Leading SCM Boutiques – Part 2, Supply Chain Planning Vendors

10 Coolest SCM Boutique Consultants

Most of the firms listed in the lists above span from small consultancies to behemoths who make the industry and in some cases is the industry. So what is it that these small fish are thinking when they play in the playground of the behemoths? By the way, why are there small fish anyways? Are the big fish listening?

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Logistics Management awards Quest for Quality

Logistics Management has as its lead story this month, the winners of its Quest for Quality awards in the transportation arena. Check it out!

The basis of their picks, the criteria of ranking is discussed in the article. They include:

Transportation service providers are rated on LM’s five key criteria: On-time Performance, Value, Customer Service, Information Technology, and Equipment & Operations. Due to the nature of supply chain services offered by third-party players, a different set of criteria is used to judge this category. Third parties are rated on the following attributes: Carrier Selection & Negotiation, Order Fulfillment, Transportation & Distribution, Inventory Management, and Logistics Information Systems.

The evaluation itself is a weighted metric. The scores take into account the importance readers attach to each attribute. Each year, readers are first asked to rank the attributes in each category on a five-point scale, with 5 representing the highest value and 1 representing the lowest value. Our research team then uses those attributes’ rankings to create weighted scores in each category.

And the winners in the broad categories as outlined below are:

Some thoughts to savor though,

But while shippers are clearly more satisfied with their core-carriers, we have noticed a somewhat troubling trend that began with our 2006 report. Overall satisfaction and core satisfaction scores are trending downward over the past two years. As a matter of fact, the survey found that core satisfaction scores were down over 2006 findings in every category with the exception of Truckload-Expedited (38.3), Rail/Intermodal (30.69), and Air Cargo (35.00). And while core satisfaction scores continue to be higher than non-core, our team found that the 2007 overall satisfaction scores were down in 13 of the 16 categories compared to the 2006 results.

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Private fleets for hire!!

Private fleets for hire – a great idea but does it work? Logistics Management reports on the efforts of private fleets to hire themselves out for the back haul – maybe even contribute to the logistics budget bottom line.

The only problem with this is that it is a great idea but execution is the problem. I speak from personal experience. In my previous job at Genco, I worked on precisely this sort of opportunity with a host of private shippers – some really big names in there as well. It was called Genco Shipper Alliance.

The Shipper Alliance started in July of 2005 with Unilever as its first customer. Since this time, GENCO has put a tremendous amount of work into building the program and maintaining good working relationships with all shippers and carriers involved. Shipper Alliance, to be successful, had a dependency on shared assets and collaborative participation by all of the Alliance members. This support has become increasingly difficult to maintain with our customers in the current economic situation and has substantially changed the value proposition of the Shipper Alliance going forward.

The work I did was create the algorithms that created the tours that collaborators in the shippers alliance would use – so its mathematically feasible and with a bit of ingenuity it can be made real time as well. However, the reason why the plug was pulled is illustrative – whose truck, what load, who gets the final say?

Meanwhile, getting back to the article…

Ten misconceptions about Lean Manufacturing!!

From time to time, you get squeezed on every front – the blog has suffered a bit in that time. But there’s light at the end of the tunnel.

This chap is turning ONE! That’s my son Sahel and he turned 1 on July 29th this year and we’re having a birthday bash this coming weekend. Its a bash alright and even though he might not remember anything about it, he will sure get to see the photos. And videos as well.

Sahel’s picture

Meanwhile, I came across this article titled – 10 Common Misconceptions about Lean Manufacturing which I found to be quite interesting. #8 picks my fancy because it is an important point about balance:

8. Lean is the elimination of waste. Much of Lean is about getting rid of waste (muda). There is also the elimination of variation (mura) and overburden (muri). Variation can result in overburden, resulting in waste. The elimination of waste is good shorthand for getting rid of the root causes, which include overburden (forcing a system to do something it is not designed to) due to variation (in customer demand, people’s ability, material quality,etc.), in order to build a stronger system.

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Free download of Six Sigma guide

Manufacturing Trends is making available a free download of an "experts" guide to Six Sigma . I quickly perused it and it looks fine but as always as far as statistical symbols go, a little due diligence is always a good measure. You have to register in order to obtain the download but I think its worth it.


Toyota ventures into the unknown.

A recent article in the trade rag – Tooling & Production highlights why I think that Toyota is a company worthy of emulation. The article titled – Makeover will transform Japanese plant into model of innovation, highlights the recent steps that Toyota has taken in order to venture into the unknown.

In an earlier post, I had highlighted the call issued from the chief executive of Toyota – to embark on radical changes. This article highlights how far along they’ve come in taking bold steps in order to sharpen (not regain) its competitive edge.

When Takaoka’s makeover is completed in 2009, it will build more models, faster, on shorter assembly lines than any other Toyota factory. It will use innovative approaches in virtually every step of the manufacturing process, from stamping and welding to painting and final assembly. It will become a fount of ideas for the Toyota manufacturing empire.

In the general sense, Toyota is setting up its Takaoka plant to be a flexible manufacturing site – thus, what you cannot gain with manufacturing efficiencies, Toyota must make up for with speed. One can imagine that this is really a two step approach. As the models that roll out from the Takaoka plant garner praise/rejection, Toyota’s other plants around the world (which are now dedicated to producing a stable portfolio of cars) will offer the production capacity to quickly capitalize on cars that consumers want. Buried in this story is a delicious irony – that of outsourcing. Toyota is actually outsourcing to the US and Europe.

Toyota’s plants in North America, Europe and elsewhere will continue to be dedicated to high volumes of a few nameplates, or what Watanabe calls "stable production." The elite plants in Japan, in contrast, will produce many models flexibly.

But what are the goals that Toyota has placed in front of its engineering and production teams? Above, you have a preview of the allocation of resources, the way the field has been set up so that the marathon can ensue but what are the milestones on the way?

Watanabe also wants to save money. Toyota’s current cost- cutting program is generating annual savings of $2.5 billion. Not enough. Give me more, Watanabe said. What’s the new target? Toyota won’t say.

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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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August 2020