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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.

Robots lift China’s factories to new heights : Can you eat your free lunch?

Ladies and Gentlemen, I give you evidence #1 that it is well nigh impossible to eat your free lunch. Now, I’m of the opinion that there is only 1 free lunch in the world : “Learning from the mistakes of others.” But just because there is such a free lunch, please don’t assume that you can even eat it.

Why did we outsource/offshore everything to China? Labor cost? Heck, the chinese think that the true cost of labor is still too expensive. By true cost, I mean not just the hourly pay. From the article: Robots lift China’s factories to new heights,

From car plants to microchip foundries, China’s industrial sector increasingly runs by machine.

According to Nomura, 28 percent of factory machines in China use numerical controls – one measure of automation. That may be far lower than Japan’s 83 percent, but China is growing far faster than Japan did at a comparable stage of development, says Ge Wenjie, a machinery analyst with Nomura.

The supposed reason is quite stunning as well,

"You don’t have to be an expert see the (quality) gap between Chinese cars and those made by companies like Audi and Volkswagen," said Li Shaohui, who oversees automatic control engineering for the company. "To beat those competitors we have no choice but to use a higher level of equipment and technology."

But you do sir, you do have to be an expert to know that the quality gap is not just the lack of high tech robots.

However, the whole game of international trade is coming full circle now – stunning in the sense that it took only about 15 odd years to rapidly industrialize (the benefit of the free lunch) to start feeling the need for advanced machinery and consultants from developed nations.

However, the lingering question is going to be whether they will just buy the robot because of its supposed supra-human like qualities or pause to chew on the mistakes of their forebears when they went the route of the robotic revolution.

Process, People, Process – Robots should go to management and join the other robots there…

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.

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