Don't be fooled by the current economic environment, there's still a global talent shortage and we're headed towards an impending crunch because the talent war is going to heat up again along with the recovery. And chances are that you're going to be on the losing end according to some recent research from TopGrading Solutions. (Tip-of-the-hat to Kevin Cornish.)

According to the research, 67% of currently employed personnel surveyed will be looking for new opportunities once the economy picks up. That's right, if you're an average company, when the economy recovers, you can expect that two thirds of your workforce will be looking for work. If you thought you had turnover problems before, you ain't seen nothing yet. Why? Well, if you're an average company, you cut your staff by 10% to 20% and pushed those that remained to their limits with pay cuts and unpaid overtime. That's why over 78% of employees do not feel that they were treated well (enough to stay in their current position).

All I can say is that you better get started on your succession plan. Given that there's a 4 in 5 chance that you're going to be hit by an internal talent shortage real soon, I don't think you can afford to turn a blind eye to the issue any longer. Good luck!

Share This on Linked In

In addition to the presentation of 18 theses around the continued scarcity of energy resources, Volume 1 of the Transportation & Logistics 2030 report on how supply chains will evolve in an energy-constrained, low-carbon world by PriceWaterhouseCoopers and the Supply Chain Management Institute also identified some (emerging) opportunities for transportation and logistics operations that are worth close scrutiny by any provider looking to differentiate themselves in the marketplace.

The report provided opportunities in four areas:

• Products & Services
• Finance & Accounting
• Processes & Organization
• Strategy & Policy

Today, we're going to overview the products, services, finance, and accounting opportunities.

Products & Services

• Virtual Delivery
  e-Document providers capable of quickly and cost effectively digitizing any type of document (received by any traditional means of communication) and reproducing an exact copy at the destination will gain a short term advantage as companies begin the slow journey to true paperless operations.
• Eco-Consultants
  Companies who recognize the market for green logistics and SCM early and develop an expertise will have the opportunity to provide eco-consultancy services to their customers.
• Slow Transport
  Companies that provide slower, but much more energy and cost efficient, transport options might see a booming business as the eco-conscious consumer starts to dominate the market.
• Co-opetition (Competitive Collaboration)
  Cooperation between competing businesses as a way to cut costs and achieve competitive advantages will gain increasing acceptance. For example, logistics providers have an opportunity to collaborate on "last mile" deliveries and significantly reduce associated costs with network and route planning optimization.
• Low Cost Logistics
  Going beyond co-opetition and allowing a customer to assemble logistics services according to their needs, which could be limited to the actual transport of goods (where the customer takes over administrative processes and work steps) could be a booming business. (Of course, these providers will need to implement a sophisticated real-time infrastructure with cost transparency to enable this service.)
• Fabbing Supply Chain
  Fabrication of products using a computer and a 3-D printer could be common by 2030. Providers who offered this service to consumers who bought "blueprints" over the internet could see a booming business.

Finance & Accounting

• Mobility Account
  Environmentally aware companies may start introducing mobility accounts and monitor the carbon footprint caused by their employees business trips. Providers that offer (SaaS) solutions for mobility account tracking could see a booming business.
• CO₂ Ticker
  Companies tracking carbon emissions will start reporting all carbon emissions associated with product and transport with a CO₂ Ticker. Companies who can reduce this number will see a competitive advantage.
• Green Credits
  Green Credits, a positive incentive system to act in an environmentally friendly way that grants credits to employees who engage in activities to improve environmental conditions, might catch on. Providers who offer such credits to customers who select greener alternatives might gain a competitive advantage.
• Total Emission Monitoring
  CO₂ emission tracking is just the tip of the iceberg. In the future, sulphuric dioxide, nitrogen oxides, noise, and other pollutants will also be monitored. The first to market with Total Emission Monitoring solutions will have a clear advantage.
• Sustainability Rating Agency
  Third party sustainability ratings will be as important as third party credit ratings in the future. Logistics companies with high sustainability ratings that could improve the ratings of their customers will be looked very favourably upon in the future.

Share This on Linked In

This article, from the October 12, 2009 print edition of Canadian Business (and Yahoo Finance), got my attention. After all, I'm a well educated Ph.D. who can build some of the most complex mathematical and computer models in the world, and I often don't have a clue what these people are trying to, or should I say not to, tell me. (And that's why I don't have a personal financial advisor who oversees my financial decisions and plan to keep it that way.)

And we have essentially the same problem as supply management professionals every time a new sales person comes knocking on our door. Is he selling us a better product, or is he selling a fresh batch of snake oil? And how do we tell the difference?

The article reiterated a great piece of timeless advice that we all need to remember, "if it's too good to be true, it probably is". That's not to say that there aren't categories where you can save 50% or more off of what you're paying now, as there are, but that they'll likely only represent a small fraction of the "opportunities" that sales people will try to bring to. By the time you factor in switching costs, logistics costs, quality trade-offs, etc., the real opportunity will in fact be a lot smaller than the sales person may make it out to be.

So do your research, and just like you should start with a security commission check and Google search before you meet with a financial advisor, you should check with the supplier's local Better Business Bureau (or equivalent) and do a Google search before you get too far down the negotiating path. It's better safe than sorry, especially in this economy.

Share This on Linked In

PriceWaterhouseCoopers and the Supply Chain Management Institute recently released Volume 1 of their Transportation & Logistics 2030 report on how supply chains will evolve in an energy-constrained, low-carbon world. The first issue focussed on the scarcity of energy resources and how it will likely affect the industry over the next 20 years and contained a number of theses that were assigned an average probability of likelihood by 48 experts under a Delphi study. Of the 18 theses addressed in the report, the following 11 were assigned a greater than 50% chance of occurrence, with the first thesis given a 71% chance of likelihood.

• Continuous real-time control of the flow of goods eliminates disturbances in the supply chain and thereby significantly increases resource efficiency.
  Technology will never eliminate disturbances as some risks can't be predicted, but given that the real time visibility solutions already available can greatly reduce supply chain fluctuations, I have to agree that most supply chains will flow smoother in 20 years (especially since those that don't improve will perish in the current economic climate).
• By using standardised measurement and evaluation systems (i.e. emissions trading, toll systems), the carbon footprint of logistics processes in supply chains will be allocated to the causer and factored into the price of the product.
  Governments are slow to move, but the pressure is on. This could happen in the next decade.
• Consumer behaviour has changed such that locally produced products are strongly preferred.
  Consumer behaviour is already changing to environmentally preferred products ... and as consumers better understand the unnecessary environmental damage caused by shipping products halfway around the world that can be produced down the street, this is inevitable.
• Larger means of transport (gigaliner trucks, ultra-large container ships) have become prevalent in order to compensate for rising transportation costs.
  We already have 15.2K TEU container ships that are almost 400 meters long, and I don't see this record standing for long.
• The reduction of transportation costs has become the predominant criterion in determining where to set up production sites.
  As the cost of fuel continues to rise, this is inevitable.
• Work environments, everyday activities, and leisure options are better integrated, which has led to considerable reductions in transport.
  We're seeing the start of this revolution today with the rise of the networked person who can work anywhere.
• Autonomous and self-controlled systems (agent systems, automatic guided vehicles) have revolutionized freight transport.
  While I think revolutionized is a strong word here, warehouse operations will become a lot more automated and a lot more streamlined.
• Nanotechnology has significantly improved many means and procedures in logistics (e.g. transport, maintenance, repair and overhaul).
  This is one I have to disagree with. Until we see some real breakthroughs in the industrial application of nanotechnology, it's going to be a while before we see a transition from the lab to logistics.
• Personal influence on the logistics process has become more important for customers than the speed of delivery. Customers actively intervene in controlling the delivery process of goods.
  We're already seeing the beginnings of this. If a customer can get the goods when they're needed, how long they take to get there is not as much of an issue.
• The minimization of energy consumption is the paramount criterion in supply chain design, rather than cost efficiency and speed.
  Since energy costs are going to rise as sustainability and corporate social responsibility continues to grab headlines, the focus will shift to minimizing energy. Furthermore, reduced energy consumption will reduce in decreased costs, so a focus on cost reduction won't be as important.
• The global energy turnaround has now advanced to the point so that in some countries alternative energy accounts for up to 80% of the overall energy mix.
  While this will be the case in a few emerging markets, I am going to make the sad prediction that most of the countries in today's developed world will still be struggling to surpass the 30% to 40% marks.

Share This on Linked In

The November 9^th print edition of Canadian Business had an Opinion piece by Stewart Hall, titled "The Age of 'Water Wealth' Has Arrived in Canada", that quoted a very scary statistic from the Water Footprint Network. The virtual water footprint of a full breakfast including juice, newspaper, milk, coffee, toast, two eggs and bacon weights in at a hefty 2,800 litres!

While one's virtual water foot print is largely related to choice of diet, even a survival diet alone leaves a footprint of 1,000 litres per day. A vegetarian diet needs 2,600 litres and a high protein North American style meat-based diet runs the meter up to 5,000 litres of water per day. On top of this, we North Americans use twice as much water a day for our personal needs than our European counterparts, using 400 litres per day out of the tap to their 200, while a person in the developing world will use just 10 litres (and we each need 3 litres of water a day just to survive).

This isn't a problem since the 71.1% of the Earth's surface is covered by water, right? Wrong! Only about 3% of the water on the planet is safe to drink, and two thirds of that is locked up in glaciers and unavailable for consumption. That leaves a mere 1% of potable water for over 6.8 Billion people to share. And with the UN estimating that ground water is already being used at a rate of 4% beyond it's replenishment rate, that tells us that even those of us who are water rich are going to be in trouble within 25 years while those of us who are water poor (like China, India, and Pakistan who are currently pumping out twice as much water out of the ground as rain is replenishing) could be in dire straits within 5 years.

We need to reduce our consumption and do it fast, because, unlike the energy shortage which could be easily fixed with a sufficient investment (which, unfortunately, is still much more than anyone wants to spend as almost all of the investment has to be made up front), there are no limitless sources of renewable "clean water" to match the almost limitless solar, wind, and hydro potential that we can tap into.

So if you really want to be a forward-thinking socially-responsible supply manager, make sure you select sources of supply and production processes with minimal water utilization. You'll save big-time in the long run.

Share This on Linked In

The November 9th print edition of Canadian Business had an article by Heather Li on "Charging Cars for Pennies ..." that had an amazing calculation that, if it were more widely known, could totally change the way we look at smart cars. By using wasted power, smart grids can charge electric cars for 42 cents a night!

Let's see ... in a fuel efficient car with gas prices at about $3 a gallon in the US and over $4 a gallon in Canada, you're paying at least $30 in the US and at least $40 in Canada for a tank of gas that will get you the same 400km to 500km of travel that an electric car with a high-performance lithium-ion battery pack will get you ... which could cost you a mere $0.42 to recharge. Now, it's true that the batteries will eventually need to be replaced ... but as the new battery packs have an estimated life of about 250,000 km, you might replace the smart car first!

How could we do it so cheap? It has to do with the fact that while our power demands fluctuate throughout a 24 hour cycle, power production does not. Water doesn't stop flowing, nuclear reactions don't stop half way through the chain, and it's just not practical to shut down coal plants. As a result, much of the energy produced at night goes to waste. In Ontario, the difference between how much is used and how much is produced in off-peak night hours is often 10,000 mega-watts -- which is potentially enough power to support one million electric vehicles! And, as you guessed, the power companies lose money on this production (which they make up for by charging a rate for energy consumption that covers the average total cost of production over a 24 hour period, and not just the cost of the energy you use). But if we had a smart grid, that utilized new smart meters, it could be programmed to charge our smart cars during times of peak excess energy availability and the power companies could charge us a fraction of a penny per kWh (or just a few dollars per MWh, instead of the average consumer price of $27.59 per MWh in Canada in November) and still make a profit.

Bring on the Smart Grids!

Share This on Linked In

Be sure to check out today's Dilbert! You'll laugh so hard, you'll cry ... and then you'll cry so hard you'll laugh, because we've all been there!

Is it the grid and the possibility of another great blackout (due to a lack of breakers)?

Is it the unpredictable terrorist act that could blow up a pipeline in North America (which includes friendly Canada)?

No, it's Sciurus Carolinensis!

One little squirrel in one little circuit-breaker in one little substation can knock out power to 9,000 homes with a single nibble, as FirstEnergy customers in North Royalton found out on Tuesday.

Maybe Dark Verne has the right idea when he thinks we need to Get Rid of that Squirrel!.

Have you ever wanted a mathematically correct breakfast? Well, thanks to George W. Hart, now you can (have one)!

Check out this great page on how to slice a bagel into two linked halves. (Now, if you're not watching your weight, it will also work on a properly proportioned old-fashioned donut, but I strongly recommend the bagel.)

Hat-Tip to Matthieu Cormier, of Cocoa Mondo, a fellow Haligonian.

If you said "yes", think again! I know for a fact that the odds of you having your biggest supply chain risk covered are so statistically insignificant that they are effectively zero. Why? Because I cover supply chain technology, and it's current reach. And despite the best efforts of myself, and a few other individuals who have been pounding away at the keys for years, most of the technology that you really need hasn't yet permeated your four walls (or your ceiling or your floor for that matter).

You see, your biggest risk is not market shifts, natural disasters, or political turmoil -- it's your platform. The platform that your people rely on day-in and day-out to do their jobs ... and if it doesn't give you the visibility you need, you'll never know which risks you have, which risks you have mitigated, or which risk just appeared that is about to wipe-out a third of your operations if you don't act fast and mitigate it.

So check out my two-part series that ran last week on @Risk and 2Sustain, because when I say don't ignore your platform risk because sustainability is an internal concern as well, I mean it!

Share This on Linked In