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Lessons learned when selling optimization to business users

Jean-Francois Puget is a distinguished engineer at IBM in the Optimization and Analytics practice. He has made available a slide deck about lessons learnt when selling optimization to business users. He offers his prescient views on how businesses approach the topic of optimization – worth a read.

Follow him at his own blog @ IT Best Kept Secret is Optimization.

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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.

Starting the New Year by design

Happy New Year to all of you…

Start designing you life is an article by Tim Brown, CEO of IDEO which is an interesting way to start off the year. I’m a great believer and user of mind mapping tools

– As a way of brainstorming

– Documentation and sharing

The tools that I tend to use are also free and open source, Freemind and Freeplane (which is a fork of the former). There are a lot more cloud based mind mappers too these days.

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!!!

Coming off a tough tough project…

For the last four months, I’ve been part of a tough project – tough on multiple dimensions, beset by every sort of calamity that one can dream up (every day was an example of Murphy’s law in action). That’s a nice way of saying – don’t give me grief on a lack of updates for that reason. Well, not really -  blogging is therapeutic mostly.

But the point of this post is not to really go into the inanities of a project – it’s to place on the table the only free lunch in the world. So take from it what you will… Here’s what I learnt.

1. An unhappy client is not your fault, not the project’s fault.

Bang!! Front and center. Chances are that an unhappy client was unhappy long before you ever got there. In fact, unhappiness (both micro and macro) takes constant effort. It takes a whole lot of time and energy to be and remain unhappy. I’m not talking about the depressives or the manic-depressives but that class of people and organizations that are intent on getting there. An unhappy client is symptomatic of an unhappy culture or sub-culture of the firm and deeply unhappy ones are caught in a vortex – there is very little that one can do be it in through the project or as an individual to break the vortex. No measure of competency, delivery or solution can ever break the vortex – it has a life of its own. Like a demon. Such vortices don’t have technological solutions, project solutions or in some cases managerial solutions.

In nature, vortices dissipate because they encounter an environment capacitated to absorb the energy of the vortex. Vortices of sub-cultures ought to be dissipated by the larger culture of the firm. A vortex of culture within the firm cannot be dissipated inside the firm – these firms are dangerous to every thing around them and themselves. It is dissipated by the industry through the process of competition. And so on… Only competition, I believe, can break the vortex and this gets tricky at the team level but I see no other way to break the cycle. It’s something similar to what you might see on the Dog Whisperer where the energy of the pack is channeled into calming the dog that is freaking out.

2. Optimization is a mistake.

I love optimization. To me, it represents a curious blending of the platonic mathematical world and the real world – the world of the idea of the numeric colliding into the real where nothing of the sort exists. However, optimization (as is often sold to the business world) is first and foremost a terrible mistake. In a subset of these mistakes that businesses and firms make, it is the most important mistake that you need to make. Not in the sense that now that the firm has made it, walk away. No, once you’ve made the mistake of optimization, you’re ready to make the leap to the higher world of bigger mistakes. Such mistakes subside as you learn how to wield it properly.

However, most firms cannot deal with optimization. They (and by they I mean the people in the firm) are not able to deal with the intersection of the math and the real. They’re very content with their take on the real or other iterations on the real no matter how they’re being placed at a competitive disadvantage by those firms that not only invest in mastering optimization as a discipline but also as a way of approaching the business problem. Iterations on the real are reconceived processes, new technologies and the like. So most firms that take on the mistake of optimization treat it as a black box that keeps chugging away in the background telling them the “optimal” way to do things which passes through a gut-check filter and so it goes on… This is like buying a katana and using it for chopping vegetables.

Part of the issue with optimization is while there is an active movement to make supply chain a “C” level responsibility or at least have it on their radar – optimization (like statistics) is a nice to have. While the supply chain is an integrative activity of processes both inside and outside the firm, optimization is a quant backed way of executing the business (pun intended).

3. Plan – Do – Check – Act (PDCA)

While PDCA is quite important as far as continuous improvement goes and this simple concept underlies most of the continuous improvement methodologies out there, it has some relevance to the world of project delivery. For me, there has always been a question of which task do you start with: Is it Plan? Is it Check? or Does it even matter where you start? I now think that the right step to start with as far as project delivery / consulting projects go is to start with Check. The simple reason for that is that when you’re an external consultant, you’re essentially going by what you’re told. Often times, I find that there is a delta between what the client knows and what is actually present. The Check step is best visualized and not tabulated/reported. And its better to make it real-time in some way. Some people refer to this as analytics and that in my opinion is where any such project ought to start because it gives visibility of the changes that are going to happen or happening in execution. This has the added benefit of putting the client in the driver’s seat as you work on the engine while in motion.

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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