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Thomas Goldsby’s recent book review, derived from his LQ Recommended Reading article, http://logisticsquarterly.com/issues/16-2/lq-reads.html raises the critical issue of supply chain skills yet again:

“Assembling the right talent is proposed as the first step. Assembling supply chain talent is not limited to new hires coming in the door, but also the current personnel, including the senior supply chain leaders. It is emphasized that supply chain executives must possess expertise within the activities they manage, and that they must also have an ability to coordinate areas that they do not control in the end-to-end supply chain. This clearly poses challenges for the supply chain leaders who must not only comprehend the challenges faced by other functional areas of the firm (e.g., new product development, sales, finance, and marketing, among others) but to help these “outside” areas to appreciate the capabilities (and limitations) of supply chain operations. With this in mind, the supply chain executive must be held in the same esteem as the leaders of the interfacing functions. The ideal supply chain leader, then, embodies the following characteristics: global orientation, systems thinking, inspiring and inspirational leadership, technical savvy, and business skills. Perhaps most interesting in this embodiment of the modern supply chain leader is the ability to appreciate and accommodate cultural differences in a globally dispersed operation. Supply chain executives who have worked in other countries and understand the global environment are extremely valuable.”

Finding myself “in transition” between careers, I decided to take this opportunity to ask the shipper and Logistics Service Provider supply chain executives, and the Executive Search professionals I am meeting, “What is the toughest skill for you to find in the candidate pool, the most difficult skill to hire?”

Perhaps not surprisingly, many of the executives spontaneously quoted Jim Collins’ “Good to Great” principle – “Get the right people on the bus.”

Here is what these discussions are leading me to conclude:

1. There is plenty of technical supply chain knowledge out there – sometimes it’s a bit too concentrated, stove-piped. We need more broadly based people, not more experts. Companies must force their people to widen their horizons early if they want senior management material – which is expensive to hire and difficult to find. This may be difficult, as many young professionals are eager to get ahead and climb the hierarchy. They may be building themselves a glass ceiling by foregoing the opportunity early exposure to the broadest business perspective may bring.
2. Too few supply chain people really understand and talk the language of business, can articulate their contribution in a way that is meaningful to the rest of the organization and to executive management in particular. Supply chain people must make far more efforts to understand the financial perspective, to communicate in those terms. They must reach out and befriend the financial types. They must also learn to relate to the challenges of sales and marketing, focus on how they can make them successful.
3. In supply chain, as in any other business discipline, a positive, can-do mindset, that is constantly looking for better ways to get the job done, will always be in high demand. Tenacity and drive are more valuable than the technical expertise too many supply chain people exalt. Sometimes its called “project management” skills, sometimes its simply recognized because they get the job done.

Below are some excerpts from those discussions, not intended to be verbatim:

• There is good width of skills, but many lack the caliber of leaders – they manage by the seat of their pants, get sucked into doing, partly out of fear. They must do a better job on the “left brain” things, like better promoting themselves, relate well to the rest of the organization, articulate what they do in terms others can understand. They must be excellent at project management, but beyond the mechanics, get into the applied thinking of what the purpose of the project is and how to deliver the end goal.
• … operations to business facing; people who ‘get’ the customer and business perspectives of our business and can relate what they do to these perspectives. They must have the right mindset, bring balance between the technical issues and the business imperatives. So we seek to develop these skills internally, imbed our staff into opportunities to learn the other side.
• …a balance between technical competence and business awareness. I am amazed at how few supply chain people actually understand what happens on the P&L and Balance Sheet when we have an AR write-off. So I have coached and taught my team to think these through, to work out the implications. I was recently extremely gratified when my procurement team presented a comprehensive risk and financial analysis and insight of the supply outlook, a caliber they would never have bee able to reach several months ago.
• …leadership across the organization, executive presence, capable of fostering employee engagement, spotting trends. Some executives lack the technical skills to understand their own operations, others are stuck one level below their current jobs, in their comfort zone, they are not seeing the big picture that is now their bailiwick.
• I’m looking for people with a jump to their step, self-motivated, lean, leaders by example. We have no time for ‘science projects’ we must have intelligent options that have been thought through, recommendations. I want solution providers who require direction, who will risk offering a solution. Its my responsibility to provide an empowering environment, to take emotion out of decision making. I’m looking for broad/cross-functional experience, I have to actively cross-train early in their careers.
• I’m looking for good analytical skills, and people who can communicate and drive constructive action – people skills. We have been able to hire a little extra capacity, now I am giving them projects to stretch them. But I’m working with intelligent, self-motivated, positive outlook people.
• In a large organization like ours, too many of our people know everything about their stovepipe, and nothing about anything else. They speak from the technical knowledge, cannot relate to the business outcomes. Some cannot cross from one type of fulfillment model to another as we try to leverage our scale across our business units.
• …strong leadership skills, the ‘A’ players who truly join the organization, come in and blossom, bring everything to the job, work for what is best for the business. They are authentic, confident, but not ego driven.
• …people who really take ownership for their results, the progress of the department. Too many of our people put in their hours and then they are gone in spirit and in fact – they do the basic minimum of the job description, they do not try to drive improvement.
• …analytical skill sets similar to a financial roles. Internal training is long, arduous, slow. We need a bias towards breadth, but most CPG companies favor depth, arcane technical insight. Supply chain people end up with “golden handcuffs” of deep technical knowledge that is largely irrelevant for senior executive roles. We have a two tier system, with high fliers being groomed by assignments across the organization, and the rest being condemned to plodding up their stovepipes. We need people who can really relate to the finance, sales, customer issues, retailers do a better job.
• We hear over and over again the lack of financial understanding, the inability to speak to the rest of the business in terms they understand, conversant in the language of the CEO/CFO. They work to different metrics – inventory turns vs. contribution to ROI. Our professional certification is working on building out the technical breadth that has been missing, but these are highly motivated individuals. Others are likely to be disadvantageously differentiated”

I welcome your thoughts, or suggestions as to who I might also speak to. Please feel free to post a comment. You can also reach me at nseiersen@logisticsquarterly.com

Just back from CSCMP’s annual conference where I attended a session the 19th annual survey of Masters of Logistics.

An interesting perspective seems to be at last getting some traction – differentiated service levels for different tiers of customers.  Many supply chain strategies suggest that the “best” customers should get the best service, but it has been very challenging to that actually do with today’s systems and organizations most organizations have. One client I worked with recently sequestered every order so that they could release the Wal-Mart orders first, and so that these would get any inventory that was running low. That meant that each and every order was handled manually, so cycle times were poor, and productivity was weak.

Another theme highlighted is that supply chain visibility is just not there for most respondents. I assessed a company called MStar when I was still at Digital Equipment in Europe, 15 years ago. It has since been acquired . It used event management logic to track supply chain progress. I used the exceptional operating model as inspiration when I helped a Global LSP develop tracking as part of a new service they wanted to offer their best customers who were sourcing offshore. We identified key steps, from cutting the PO, picking up at the plant, delivering to the consolidation centre, stuffing the container, customs clearance, loading the container on the ship, etc. We called them “Toll Boths” and used each one to track whether a shipment was on time or not. A failure to report an event raised an alert. An event that was late by a certain margin raised an alarm. Delivery issues were identified early enough to do something about them – airfreight, expedited overland transportation, etc.

I have since seen these working for retailers and for food manufacturers. I met a software company that offered such a capability, using import folders as their logic key.

Since then, tools that allow email, voicemail, fax, pager alerts directly from computers have been developed and integrated with the alert/alarm capabilities. Some responses can be automated – launch directly by the alert within the correct context.

So if its been about for 15 years, why is it so hard to iy make work in most companies?

One of the insights from the session may provide part of the explanation here – far too many companies are still trying to manage the interfaces across the various “silos” of their supply chains. The interfaces have not been described, they have not been engineered, they are governed by policies set at a very tactical level.

But there was another frightening finding – the fall in intentions of using SaaS or Cloud Computing. These solutions give out-of-the-box functionality (which probably get you 80% of the benefits in most companies, while few use more than 50% of the functionailty) within weeks of starting up. They provide access to many already established connections up and down the supply chain, and this is the biggest challenge in any broader supply chain initiative – connectivity. Connect to Ariba’s Supplier Network (or whatever its called these days), and you have access to hundreds if not thousands of suppliers that maintain their trading data, their catalogues, their prices once for all their customers who use Ariba’s trading platform. Similar online trading communities exist for other applications. Cloud computing makes these available at your fingertips for little more effort that asking to be connected. When you have been through the vendor onboarding process for eProcurement, you know how valuable access to such a community can be. And yet the Leaders responding to this survey are turning their backs on fast ROI and easy trading partner integration.

I beleive that “cloud” solutions get you plenty of functionality and connectivity quickly (hence let’s go to Babylon, where many different languages were spoken and understood), and a predictable ongoing cost that can be easily compared to benefits, so the business case is obvious. You also get hands-on experience and start building a trading partner and product data base that can be ported into a future ERP environment. And on the way, you become a more informed and more effective user, so you will be able to implement more easily. It looks like only upside to me.

I just do not get it. Can someone please help me understand ahy SaaS and Cloud Computing is not getting the success it deserves?

The Blog application has pasted the following link – maybe this is part of getting some insight?

Now, we all know that the procurement professional brings a rigor of process and predictability of outcome, experience of what works and what doesn’t work, how to get the best deal from the market, how to side-step the suppliers’ usual tricks, how to defuse the incumbent’s advantage, how to quantify a “value sell,” a solid grounding in contract and commercial law, understanding of typical risks in the process, and a view of how long it will take, and what has to be done before the deal is done. Line management frequently lacks this perspective, and can be manipulated by the suppliers’ sales forces that play this game all the time.

But the Supply Chain professional rarely has a seat at the table when the strategy is being crafted, and when key decisions are made.

So, how do we get a seat at the table? My advice fits into three buckets:

1. Check Your Alignment – Tie your goals to those of your stakeholders: With your own company’s Value Proposition, with your company’s Agenda, with your trading partners, and with your own people
2. Articulate Your Contribution – Learn to speak the language of business and finance. Use this to get invited to the table where decisions are made. To paraphrase John F Kennedy “Ask not what my company does for me, but what I can do for my company.”  You must be able to spell out:

• What Have I Done For You Lately?
• What Is My Core Purpose?
• What Else Should You Come To Me For? How else can I contribute, if only you thought to ask me
• Here’s How We Can Do What You Are Trying To Achieve, I can help us go where we want to be
• This means managing events at a granular level, and event management systems are invaluable to help you do this. They track what should be happening, and tell you if a deadline was missed, so you can focus on fixing the problems before the shut the plant down.
• It means setting up Service Level Agreements and measuring that everyone is meeting their commitments through Key Performance Indicators. There are some pretty nifty scorecarding applications out there, but they can only track what you tell them. The hard work of managing outcomes is still yours.
• Have I mentioned the importance of alignment of expectations, metrics, outcomes, reviews, planning, and rewards?

1. Make It Happen – Throughout my career on 2 continents, over 10 countries, and in three languages, the one common theme of the dozens of healthy and distressed organizations I have worked with, is ineffective execution. The most successful executives I have worked with Get the Job Done.  

The business environment is tough. Most of the stovepipes have been milked, many are trying to collaborate across their internal silos and across the company boundaries, and are rubbing up against mis-aligned priorities.

In a future post, I’ll tackle the thorny problem of counting savings.

One of the biggest issues facing procurement professionals – and it’s the same for the other players in the supply chain – is that the CFO and his minions do not see the savings – they only see less than half what you are claiming. This is detailed in a recent study by Aberdeen Group.

• The CFO thinks your estimations are suspect – to the tune of 30-40%. Some of it is how you define savings – improvement over first offer, over last year, over budget, over base-line, over indexed cost base, etc.  One critical issue is that there are very few standard savings computation methods agreed and used across today’s companies. Is it a hard savings or a soft benefit? If the deal starts near the end of the year, do I annualize for this year or pro-rate into next year? Is it a Balance Sheet or a Cost item? Is it cost avoidance or cost savings? Where and how will it turn up in the company’s financial statements? Worse, the savings made in one area are often spent in another, so the first savings never showed up in the financial statements.
• The next issue is compliance of the organization and the vendors to the new deal – and Aberdeen found that up to a quarter of the savings were lost here. We all know compliance is an issue. So does the CFO, and he is looking for solutions.
• The CFO thinks you are leaving money on the table. Lack of alignment internally and externally leads to 5-7% loss in savings. Aberdeen found that complicated or strategically sensitive elements (such as cash-flow/working capital, trade financing, and payment terms) were often left on the table. Either these items are not understood – and not seen as opportunities – or they are not in the incentives of the managers negotiating, and they are not addressed. Since Finance functions only provide dedicated resources to procurement in 10% of the companies that responded, this sorry state of affairs is not going to get better soon.
• Finally, the CFO thinks you are not doing enough. The Centre for Advanced Purchasing Studies estimates that 7-40% of spend is indirect (for a cross-industry average of 18.5%). The Aberdeen study found that CFO’s think 54% of spend is under the control of their procurement professionals. The implication is that the rest is not being addressed as effectively as it could be.

Just like “the Walrus and the Carpenter,” the CFO, the supply chain managers and the oysters. When it comes to the bottom line, they have eaten every one!

In a future post, I’ll give some ideas on what I think can be done by the supply chain professionals to stem savings leakage.

15th February, 2010: Four Soft (4S) (NSE: “FOURSOFT”, BSE: 532521), a global leader offering software solutions for transportation and logistics, is pleased to announce that it has recently signed a contract with Len Lothian Ltd, to implement its warehouse management system – 4S eLog across its locations.

Family owned and operated company Len Lothian Ltd has been in the storage business for over 45 years offering 3PL logistics services to industry clients and self storage services to the general public from its five sites located over the cities of Edinburgh and Glasgow.

In addition to traditional pallet storage, Len Lothian also provides archive storage and document management as one of its services. As the demand for this service has increased, real time visibility and tracking of items from pallet through to single policy documents, has become increasing difficult without a best of breed management system in place.

After reviewing several software vendors Four Soft’s WMS, 4S eLog, was selected due to its flexible nature, simple user interface and easy to use web login access for Len Lothian’s customers to book stock in, place orders and have instant access to KPI’s and stock levels from anywhere in the world with an internet connection.

4S eLog built on the modern technology platform – J2EE, covers all aspects of warehouse management including multiple warehouses and clients being managed from within a single database environment. 4S eLog has full RF capabilities and offers web visibility to clients, their customers and their suppliers. With KPI reporting, dashboard tools and extensive interfacing capabilities into business systems such as Sage, SAP, Microsoft and Oracle, 4S eLog will help manufacturing, distribution and 3PL companies move their products more efficiently through their warehouse facilities to their customers’ locations.

Douglas Lothian, Director, Len Lothian, commented, “Our previous warehouse system provided us with enough functionality for our current client base but we needed a WMS system which would expand our service offering and keep us ahead of our competition for years to come. After reviewing a number of suppliers we felt Four Soft understood what we were trying to achieve and being able to handle both document storage and traditional pallet storage on one platform is a huge advantage for us.”

Simon Shore, Vice President, European sales, Four Soft, commented, “We are really pleased to welcome Len Lothian as our latest WMS customer and are proud to see the rate at which our web centric WMS customer base continues to expand. With this implementation, Len Lothian will now have a powerful tool to support their expanding warehousing operations and be able to improve operational efficiency and visibility with the same resources in place”

About Four Soft Limited

Four Soft is a public listed and CMMI level 3 certified company which provides innovative software solutions and IT consultancy services exclusively for the logistics and supply-chain management market place. It is the market leader in the transportation and logistics segment with a large international client base including the majority of the top transportation & logistics companies in the world. With regional offices strategically located worldwide, it supports customers including DHL, Schenker, Agility, UTI and Geodis-Wilson. Additional information about Four Soft is available at www.four-soft.com .

Four Soft offers a full suite of web-native products across the logistics supply chain. This includes 4S eTrans for freight forwarding and logistics, 4S eLog for extended warehouse management, 4S Visilog & 4S VisiLog plus for track & trace, visibility and supply-chain management, 4S eCustoms for customs brokerage, 4S iShipping for shipping line execution and 4S eConnect for business-to-business connectivity.

For more information please contact:

Praveen Gavuji

Four Soft Limited

Mobile: +91 99480 99688

Tel: +91 40 66873034

Email: praveen.g@four-soft.com

Sonal Chawla

Adfactors PR Pvt Ltd

Mobile: +91 9711306364

Tel: +91 11 40565100

Email: sonal.chawla@adfactorspr.com

Houston, Texas, 03 February 2010 – CEVA Logistics, one of the world’s leading supply chain management companies, is pleased to announce the appointment of Mark Lipinski to the position of Ocean Product Manager, Canada.

Lipinski will be responsible for negotiating and maintaining carrier rates for CEVA in Canada as well as managing relationships with the carriers for the benefit of CEVA’s customers. He will work in collaboration with the company’s local, regional and global business development teams to further grow CEVA’s ocean product in Canada.

“We are excited about having Mark join our CEVA team in Canada,” said Bruce Rodgers, Country Manager, Canada. “His experience and success in ocean freight forwarding and management will be a tremendous asset to CEVA and our customers. We’re looking forward to his contributions in helping to establish CEVA as a premier Non Vessel Operator in Canada.”

Lipinski has worked in the industry since 1982 starting with ocean carriers and then continuing with logistic providers such as Danzas, Schenker, Fritz UPS-SCS and Dimerco. He has held sales and operational positions throughout his career and has worked in Hong Kong, China, Latin America and Europe.

-Ends-

For more information please contact:

Laura Gorham
+281.618.3465
Laura.Gorham@cevalogistics.com
CEVA Making Business Flow

CEVA Logistics is a leading global supply chain management company. We provide end-to-end design, implementation and operational solutions in contract logistics and freight management to large and medium-sized national and multinational companies. CEVA employs circa 50,000 people and runs an extensive global network with facilities in over 100 countries. For the year ending 31 December 2008, the Group reported revenues of €6.3bn. For more information, please visit www.cevalogistics.com

The French Forum des Rois de la Supply Chain was held in January. French retailer Carrefour had not one, but two dossiers, in the finalist 8. Both are intriguing.

K+N (a 3PL) and Generix (Saas) put forward their Collaboration and Consolidation Centre experience. Carrefour has chartered 5 different 3PLs to trial this revolutionary concept in 8 different locations. They receive full truckloads from 30 to 60 smaller suppliers, and ship at least one, more generally 5 to 6 full trucks to each Carrefour hypermarket (a bit like a Loblaws attached to a Canadian Tire store).

Suppliers no longer have to deliver to 20 different DCs, just one or two. They are claiming 20% reduction in handling, 25% reduction in distance driven, and 40% reduction in lead times. The Saas solution allows the suppliers to onboard quickly, and to use the new system with a very low systems overhead – the application and data are managed by the vendor, who provide data back-up and securization, and is able to offer added-value service on a menu basis. The system may soon be available to other retail banners.

The other dossier is a joint initiative with Danone. Together, they had measured that shelf level stockouts in their yogurt were about 8% across the 200 SKUs. They piloted a new replenishment system, where the store staff transmit store inventory and yesterday’s sales by EDI to Danone. They use their forecast, the POs data, and the promo plans to compute a replenishment order that the store can review. It’s then sent to the distribution network for fulfillment, using cross-dock delivery through Carrefour’s cooled platforms. Store staff can concentrate on shelf replenishment and inventory quality. Shelf stockouts have fallen to just 2%, and they are claiming increased sales of 3 million Euros. The next step will be to reduce order frequency to reduce delivery costs…

These are two very cool ways in which channel partners are working together to squeeze unnecessary costs out of the system. Have you heard of any good examples lately?

If you wish to read the original articles in French, go to:

http://content.yudu.com/Library/A1k1vs/SCM40/resources/index.htm?referrerUrl=http%3A%2F%2Fwww.yudu.com%2Fitem%2Fdetails%2F113654%2FSCM-40

I was watching in amazement the other day as my young son was throwing a football.  The ball was soaring across the yard in a tight spiral a’ la Peyton Manning.  The kid has a pretty good arm for a seven-year-old, I thought.  Then, on closer inspection, I realized that he was throwing these tight spirals with his right hand.  “Say, with which hand do you write?” I asked, knowing that he had been a dominant “lefty” from his first tactile moments. He confirmed his lefty-ness but that he “like(s) to change things up from time to time”.  Wow, I thought, to be wired so that you can accomplish such a feat with either hand.  “Ambidexterity” is the technical term for it.  The quality of being unusually skillful, or versatile, according to Webster.

Can businesses be ambidextrous too?  Business researchers in the Strategic Management field have written of ambidextrous organizations for some time, given an ability to achieve seemingly opposed outcomes simultaneously.  They speak of opportunity exploitation and exploration — pursuing both incremental innovation AND radical innovation at the same time.   Conventional management wisdom suggests that the entrepreneurial organization can only pursue one of these ends at a time, implying that pursuit of the two together is either undesirable or impossible.  This paradigm is changing, however, as it is becoming increasingly apparent that opportunity exploitation and exploration need not be mutually exclusive pursuits.

Is it possible, then, that ambidexterity can be achieved in logistics?  Our discipline is couched in Systems Thinking — the belief that trade-offs among outcomes must be balanced such that the performance of the whole system is not sacrificed by trying to optimize the individual parts.  The pursuit of a global optimum — if you will — and not a local optimum is the goal.  Logistics activity and costs are loaded with such supposedly inherent trade-offs:  To increase customer service (a good thing), one must take on greater inventory (a bad thing); To reduce inventory (a good thing), one must take on higher transportation costs (a bad thing); To enjoy economies-of-scale (good), one must take on more inventory (bad, again).

But is ambidexterity possible in logistics?  There are those occasions in which service can be improved and costs are reduced.  The application of Lean Thinking to logistics espouses this very outcome.  Through improved synchronization of supply and demand along with stable, reliable processes, we can improve service for customers without taking on additional inventory (even using less) and perhaps also reducing transportation and other operational costs.  This is what we call a “beautiful moment” in the logistics business.  Share some of your beautiful moments with us.

Allan Smith, President, BCG logistics Group

LQ’s Executive Insight Video with Allan Smith

AJC (Allan) Smith, President & CEO, BCG Logistics Group

Allan Smith has been a pioneer in the development of distribution systems and programs for International Corporations throughout his career. With a focus in managing the supply chain in the most efficient manner, Allan’s experience in this rapidly changing fast pace environment gives a unique view of all aspects of warehousing, transportation, systems integration, and high velocity crossdock. more…

Comment are welcome below.

Posted: January 15th, 2010 under LQ Announcements.
Tags: video
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