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First Thoughts
  By Dan Gilmore - Editor-in-Chief  
     
   
  Dec. 6, 2012  
     
 

A Supply Chain Christmas List

 
 

I looked at the calendar this week, and realized I had only three of these columns left in 2012. Since the last two are committed (our annual No Blah Blah Blah issue on the best presentations I saw in 2012 that will run next week, and something special for Christmas the week after that), I had to pick among a few good options for today's piece.

Ultimately, tying in a bit to the season, I decided write on my supply chain Christmas wish list for 2012. I offer a number of my own below, and managed to solicit some additional wishes from a few supply chain luminaries to add to the discussion. We encourage you to send your supply chain wishes at the end of this article.

Gilmore Says:

Too many consultants are just focused on the process. They would do themselves and their clients a favor if they retained the detail.


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I must confess that while my original intention was to offer these in a very positive vein, in a few cases upon initial read they started to border on griping. I revised a couple of them a bit to better fit the holiday spirit, but some Scrooge-ness remains. My apologies.

So here is my supply chain Christmas wish list, in the order I thought of them.

I wish that more companies contributed presentations and case studies at industry conferences: Here is the reality: there is a clear 80-20 rule here, or more like 90-10, in which a small percentage of total companies wind up carrying the majority of the industry load.

You don't have to go to many events to figure out who those companies are. From my perspective, those companies include The Limited Brands, Intel, Procter & Gamble (though P&G did not present at this year's CSCMP - and I believe I know why), Kraft (especially the last few years), International Paper (mostly relative to transportation), Caterpillar, and Pepsico, who I would say has been the most generous of all in recent years. There are others - if you have a candidate or want to toot your own horn, please let me know.

We all owe these frequent contributors a debt of gratitude, and we really couldn't have these conferences without them. We need more companies in the boat.

I wish most supply chain academic research was more useful: We have a lot of really smart supply chain and logistics academics, and I know many of them personally. But far too few of them are using those talents to produce research that is of practical use to supply chain professionals. It is often almost unreadable except to other academics, if then.

Yes, I understand this is far from unique to supply chain, and indeed is probably the status in virtually every academic discipline. I also get the whole "public or perish" thing in academia. Yet, we have a decent set of examples of supply chain academics who do consistently produce research work that is highly useful to the rest of us. Those include David Simchi-Levi and Chris Caplice of MIT, John Bartholdi and Vinod Singhal of Georgia Tech, Hau Lee of Stanford, the late Tom Mentzer of the University of Tennessee, Kevin Gue of Auburn, and great folks like Bud Lelonde and the late Don Bowersox in the past. Who am I missing?

John Langley of Penn State recently told me that at some (but not all) supply chain departments an academic would actually get more credit for tenure or promotion for some abstruse paper in a journal none of us know or would want to read than for an article that was published in the Harvard Business Review. This is crazy. I discussed this topic with Dr. Bowersox once a few years go, and he told he knew of one excellent academic who wasn't hired at a prestigious supply chain program because his research was deemed too "applied" - meaning practical. We can do better.

I wish after all this time Warehouse Management Systems implementations were better: As some of you may know, a lot of my supply chain roots are in WMS, and I have done a few implementations myself in the past. Now I will freely state the WMS is uniquely hard to make work, due to the need to synchronize the moving and dynamic physical flows of goods with the logical information flows - and that is not easy.

But ironically, too many WMS deployments involve more pain than they need to have even as the software bugs that used to plague projects years ago are largely gone. I know why this is, but am going to save that for another day. Don't get me wrong, the trend is definitely positive, but slower than it should be. Again, we can do better.

I wish more consultants retained "hard knowledge" from their client engagements: OK, this is the one that will surely get me in the most hot water (happy to take the angry emails, but please remember the season). But I am just surprised that a lot of consultants seem to not take very much away from each client engagement.

Chris Gopal, now at IBM, gave me the term "hard knowledge" for this skill set a few years ago, and I like that distinction, in contrast obviously to "soft knowledge" that characterizes too many consultants. Let me just say, as an example, that I have spoken with consultants who were involved for instance in a multi-month Transportation Management System selection project, and when I asked them to detail the functional differences between the three final candidates, all I received were high-level descriptions that anyone in the know could have probably said without going through the selection project

I can say this with some authority given my time as an industry analyst, where I was expected to know a lot more than that without the privilege of going through the far more revealing process of a software selection.

Too many consultants are just focused on the process. They would do themselves and their clients a favor if they retained more detail.

I wish natural gas-powered trucks would really take off: It is more than about logistics. It will transform our economy, to the better. Please Santa.

I have many more, but wanted to save room for the supply chain wishes of a few other supply chain gurus I greatly respect.

My friend Gene Tyndall of Tompkins International offered this:

I wish that supply chain leaders would be more confident and advanced in presenting their value to CEOs and boards: After years of working hard to persuade "the world" that supply chains are among the top 3 strategic weapons a company possesses, there is still misunderstanding and under-appreciation of SCM prevalent in all industry segments. Misunderstanding because the prevailing view continues to be that supply chains are only about logistics. Under-appreciation because operating cost reduction is the only value most CEOs and boards see. Supply chains drive shareholder value: operating margins, capital efficiency, and profitable growth. Why isn't this more fully understood?

Here is the nice wish from CSCMP CEO Rick Blasgen:

I wish the disciplines of logistics and supply chain management were as core as other business disciplines in high schools and even grade schools: My son was a senior in high school last year here in the Chicago area. Toward the end of his year, one of his business classes would bring in senior leaders from Chicago-based companies to talk about careers. Leaders from Finance, Sales, Marketing, and IT all addressed the class. Of course I asked: What about supply chain management? His perplexed look said it all. We need to get this dynamic, ever-changing and globally demanding discipline further down into our educational system as a primary, long term career opportunity it is.

From Mike Regan of TrazAct Technologies and a prominent force on the transportation scene:

 

I wish Supply Chain and Logistics professionals would start asking the "what if" questions on a more routine basis: For example, "What if Santa brings me a lump of coal this year because I failed to ask the what if questions and left my company's supply chain exposed to unforeseen events?"

Had I been more willing to ask the what if questions, I might have considered how the shutdown of the LA and Long Beach ports in December would effect my supply chain. Or I might ask, "What if the predictions about how the upcoming changes in the Hours of Service Rules will affect capacity come true, and I can't find truck to move my products in the third and fourth quarters of 2013?"

All good stuff. Would love to hear any of your supply chain Christmas wishes too.

Any reaction to any of these supply chain Christmas wishes? Do you have any wishes to add? Let us know your thoughts at the Feedback button (email) or section below.

 

 
 
     

Recent Feedback

As both academic and consultant, I couldn’t agree more on retaining hard knowledge from practice.

In fact, it is consulting that provides insights on how Supply Chains work and what are the most sound methodologies and specific tools for delivering value. However, by using academic  rigor on practical findings that we can create/improve appraisal tools which let all SC practitioners enhance the toolbox. I might add as my personal wish that more academics would venture into consulting, and vice versa.

All the best.


Jose Antonio Espin
Consultant
systrategum
Dec, 06 2012

Interesting list.

In response to Wish #1, I think the supply chain industry conference organizers get exactly what they want.  I have tried to get smaller company presentations accepted at several APICS and CSCMP annual meetings now and have been turned down everytime.  The organizers of these events want big name company presentations even though some of the more innovative supply chain ideas originate from smaller companies.

In response to Wish #3, Companies need to stop thinking about warehouse management systems as separate stand alone systems and embrace an integrated approach.  Some warehouse management systems do not have separate databases so there are no issues around synchronizing what's happening in the WMS with what needs to happen in the company's ERP system.  Companies need to stop worrying about the wiz-bang functionality that they will never use and embrace a more integrated versus best-in-breed architecture.

And in response to Wish #6, It is all about talking the language of the board room.  Supply Chain leaders need to understand how a CFO or CEO communicates, how they are incented, and how they make decisions.  They don't care about forecast accuracy, they care about return on investment.  You can't talk about warehousing efficiency or inventory accuracy.  You need to talk about cost of goods sales.  When a supply chain leader puts a proposal in front of a CFO it needs to clearly identify the value of the proposal in the terms the CFO is use to.  If not, the brilliant proposal might just be shuffled to the bottom of the pile until the CFO has time to unravel it and put it in terms he can use to compare it with other proposals.


Hank Canitz
Senior Director Marketing - Manufacturing Industries
QAD
Dec, 06 2012

Although I do not always agree with you, I often enjoy your commentaries.  However, your inclusion of the wish for more hard data to be taken away from client projects, by consultants, is way off base.
 
Dan, there is this thing called CONFIDENTIALITY.  Maintaining that confidentiality is one of the primary mainstays of the profession.  Betraying confidentiality would totally undermine the credibility of any professional consultant.  Heck, NDAs involved with SCM consulting projects often include the stipulation that the engagement with that client remain confidential, occasionally even restricting any statement that the engagement occurred.
 

In actuality, it is often difficult to convey to prospective clients the specific quantitative accomplishments made, because of expected confidentiality – at the conclusion of a meeting with the Chairman and the CEO of a prospective client, I actually was told that my reluctance to share some other clients’ hard data was the tipping point, causing them to choose us – confidentiality is really that important..  Plus, in reality, those accomplishments are never totally the result of any consultant’s influence alone.  The client has to buy-in, follow-through and do all the other hard things necessary to cause positive things to happen.  Any consultant claiming to have made such accomplishments demeans the efforts and performance of the client’s team in effecting change.  You may want to recall Machiavelli’s comments about change and the vulnerability of the change agent, from The Prince. 

 

It is far easier to identify the need for change IF the client feels confidence in freely sharing everything, including the ugly stuff.  The prospect of having hard data made public would cause a natural resistance to sharing such, by the SCM executive who brought-in the consultant, in addition to  the CEO and the Board, for fear of having competitive vulnerabilities exposed,. In another instance, I got a call from the CEO of an extremely large logistics firm, asking assistance on a project of some extreme, national significance – he indicated that he called us because he knew that we would keep it quiet, while other, larger firms, would be broadcasting their involvement in something so major on-the-street.  

Having a consultant who publicly shares such hard data further lays effective claim to any successes, undermining the performance of the risk-taking change agent.  Who would want to work with a consultant who would essentially confirm Machiavelli’s thesis?

How’s that for nasty feedback?  I’m guessing that Gene Tyndall has already jumped you on that one.

 

By-the-way, you left John Coyle from the list of academics – Coyle, Lelonde and Bowersox were the lead academics, from whom today’s academic leadership has taken their lead.  Although more tactical in their initial transition into SCM, following deregulation, John, Bud and Don formed the trio that helped those of us fending for ourselves, out in the real world, with the formulation of some academic cohesion, while seemingly everyone else in academia was railing against that to which many of them referred as the demise of logistics structure – instead of just teaching how to follow rules, they actually had to think.  Under Coyle’s leadership, Penn State became and remains the top rated SCM school.

 

Buon Natale (Italian for Merry Christmas)


Chuck Franzetta
CEO
Franzetta & Associates, Inc.
Dec, 07 2012

Editor's Note

No, based on conversations from the past, I am sure Gene agrees with me on this one, since he considers himself one of those who retains the hard knowledge.

 

What I am referring to has nothing to do with confidentiality. To be able to answer, as just one  but a common example, what software vendors can do what after a long selection process is not a confidentiality issue. I simply know they didn’t really learn anything. I am also talking about one on one conversations, where confidentiality isn't an issue.

 

I know there are exceptions, but I think this is the case far too often –the consultant go through the process, and are just not focused on the learning.



Dan Gilmore
Editor
.
Dec, 07 2012

You are killing us! That second item on your list about academia reinforces exactly what you want to end.

You can't get tenure at the schools you mention - MIT, Stanford, etc. - without writing articles that none of your readers could read and are in obscure journals.

Many of the rest of us are desperately trying to do work that is relevant to practitioners and can get us tenure. Yet, you dismissed all of us except guys that are famous because of the schools they work at. Schools that demand theoretical work that is not relevant to practitioners.

I have really tried hard to be relevant. My early stuff on 3PLs has led to a lot of interesting things. This year I received the IWLA Distinguished Service Award - not for being theoretical and irrelevant. I have done a lot of stuff in reverse logistics and sustainability that companies are using. I did two webinars last week for SCMR and DC Velocity. You and I had an interesting moment last year related to the Perfect Order, SAMBC and P & G. That was real stuff.

Many of us are  trying to be relevant to business. But your Christmas list makes it worse. Please don't marginalize those of us that are working hard to do relevant work. Our universities who don't think practical work is good and know the stuff the guys you mention have written will be certain they are correct.

I read the SC Digest and enjoy it. You do a nice job with it.

Dr. Dale S. Rogers
Rutgers


Editor's Note:

I was simply citing the academics I have consistently seen producing "stuff" that is of interest to me and I think others. I scan SCM academic journals occasionally,  but less with every passing year, and find them just largely a waste of time, unfortunately, for practitioners. 

Every single academic I have talked to about this issue over 5-6 years seems to completely agree with me.

I agree there may be more good academic work out there, but it just isn't being "marketed" effectively. Why are so few others than folks like I mentioned taking the journal stuff and turning it into columns, presentations, etc., if it really is practical?

In the end, my standard is who has done work that has impacted the discipline, and I have no qualms about the list I have mentioned in that regard versus the rest. Maybe you could call it thought leadership in some cases versus research, but that is not an important distinction to me.

If a tree falls in the forest and no one hears it, did it make a sound?

I did ask for other examples of others, and it certainly appears you have done some good work. Sure there is more out there. Let's hear it!





Dan Gilmore
Editor
Supply Chain Digest
Dec, 07 2012

You have a great list.

Not throwing any rocks your way on the comment about consultants, academics and WMS implementations.  A bottle of scotch and a nice hard cheese instead. 

Have you ever heard a soft consultant say “we made a mistake”?  Any mea culpas?  Ney.  The soft consultants don’t have substance.  That they stay in business speaks more of the clients than the consultants.  I want those soft consultants to keep being soft, they provide contrast for what my team does.  Bringing the hard truth to light for my clients is what makes our work so much fun, and brings the joy of value to our clients.

How many academics could practice the art in the field?  There are some that could.  There are some that did.  Most, they teach because they don’t know how to do.  Not to say that they are not great in the art of teaching, many are.  The same, many have no clue of the practical world.  This is true across different sciences and across the ages.  The academics help bring us clients too, because the clients come to us for translation to the practical.

People forget that WMS implementation is an Abnormal Event.  Not only are you making a technological change, implementing WMS is a business process change, a cash flow change, and a floor operations change.  WMS implementation is hard because many leaders fail to recognize how many people in the extended organization are touched by the project, how many different process transactions are affected, how many ingrained habits are disrupted.  WMS vendors get too much of the blame.  Oh, they deserve some; I contend that it is incumbent on the WMS vendor to scare the krap out of the customer to make sure they understand everything that could go wrong.  Still, the ultimate culprit in a WMS implementation failure is the leaders of the company that bought the system.  Any mea culpas?  Are you kidding?

Now for my Christmas Wish, which is part of the solution to your wish that more companies present at industry events.  Santa Clause – please rework the SEC Fare Disclosure Rules.  Transparency of information was the intended outcome of this dotcom regulatory measure. The opposite happened.  While companies are always concerned about the leaks of “secrets”, the legal and corporate communications teams of many public companies stifle the process.  In some cases, they just say no, as in no, you can’t present at your professional meeting.  If you do, then we have to do a FD disclosure to the public, and that is too much work.  Just look at how much trouble Read Hastings is in for a FaceBook post he made in July. 

http://money.cnn.com/2012/12/07/technology/netflix-facebook-sec/index.html?hpt=hp_t3 .    

Happy Holidays to you and all of the readers at SC Digest.


David K. Schneider
CEO
David K Schneider & Company, LLC
Dec, 07 2012

I am disappointed that you didn’t mention the academic research of Dr. Karl Manrodt (who you know well), in the areas of Issues and Trends in Transportation and Logistics as well as the Annual DC Metrics Study. 


I think both of these are useful to practitioners, and presented in a format that is not overly “academic”.  Also Karl’s work related to elevating supply chain partner trust and collaboration through Performance Based Logistics and Vested Outsourcing.


Steve Murray
Principal Consultant and Chief Researcher
Supply Chain Visions
Dec, 07 2012

Provocative thoughts you have shared based on the feedback I have just read. As someone who has organized over 100 Supply Chain/Logistics events I would agree with your 90/10 rule, and indeed it is getting harder to get some variance in the speaker faculties. There are so many companies now that simply do not allow their employees to speak at industry conferences, even when their 'success' or supply chain innovation is relatively non-competitive. 

I would also reply to Hank's comment on trying to get 'smaller company presentations accepted', you are right on both counts. Organizers need the big company names because that primarily draws in the attendees, and without the attendees you have no event. Although smaller companies may well have the best stories (and also tend to give better presentations, with more useful detail than those of publically traded companies especially, who often have to have everything 'checked by corporate'), a speaker faculty of just small companies will not attract an audience. There is a 'chicken and egg' situation at play here. Once we have seen a great presentation by a smaller company we are more than happy to add them to the speaker faculty regardless of whether it is a marketing draw, as we know that on the day people will be happy.....but it's a risk to do so having never seen the company present in the first place. We have found that by adding multiple tracks at events you can afford to take more risks with these smaller companies, whilst still maintaining a full program of big companies to attract people in the first place (CSCMP should be able to do this with 40+ tracks).


Chris Saynor
CEO
eyefortransport
Dec, 07 2012


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