Sourcing Innovation: Recent Comments

Comment on The Strategic Category Management Lifecycle: Getting it Right; Part III

Contract Lifecycle Management — Wed, 01 May 2013 11:47:35 GMT

The phases you have explain in this article are really very useful for efficient contract management. Keep sharing such valuable information.

Comment on A Great Post on Home-Shoring on the Manufacturing Innovation Blog

Frank Lange — Mon, 29 Apr 2013 18:59:19 GMT

I've seen the cost impacts of a rising GDP in China first hand when I was running a 3PL in Shanghai. With labor rates exceeding 30% year on year, manufacturing incentives expiring and ancillary costs rising, the rationale of looking at China as a low-cost manufacturing location is losing its luster.

Unfortunately, there are several structural barriers in place to prevent a full scale move to relocate manufacturing back to the US in the short or even medium term. More realistic is the persistent move by many component manufacturers to reposition themselves closer to their global demand markets. Mexico and Eastern Europe are good examples. While gaining headlines for their drug problems on the border, Mexico has taken significant strides to attract manufacturers seeking a more cost efficient and productive supply chain to serve the US.

Demand markets themselves are changing, with former "export" markets in Asia and Latin America now showing great promise as demand markets. This shift is not lost on manufacturers seeking alternative growth markets, but 3PL's and logistics providers tend to be slow to respond to this opportunity.

Comment on Why A True Supply Management Professional will Never be Replaced by Technology

Emily Smith — Thu, 25 Apr 2013 20:36:29 GMT

There’s a lot of discussion about what robots may do in the future, and specifically, what jobs they’ll take. You took a great approach- instead of worrying about what robots can do better, focus on what they cannot do and how we can use them to enhance our own productivity. Even the most advanced technology and software need teams to apply them and even the most reliable machines need to be serviced. These are openings for the next generation of workers to focus on maximizing their knowledge of latest technologies- that’s why we sponsor educational events like these at Intelligrated: http://www.intelligrated.com/news/NationalRoboticsWeek2013

Comment on Can We Harness the Wisdom of Crowds in Supply Chain Forecasting?

Navdeep Sidhu — Tue, 09 Apr 2013 15:41:20 GMT

"diversity is not enough. You need expertise. And you need the right expertise."

Great point. As your example with the plane and farmers shows, a large sample of the WRONG thing isn't going to get you anywhere. You need a large sample of people that actually know enough to make an educated opinion.

Comment on Can We Harness the Wisdom of Crowds in Supply Chain Forecasting?

Per Wendelboe Nielsen — Mon, 08 Apr 2013 07:45:36 GMT

(Seemed I was about to run out of space so double posting, sorry about that.)

So - the most important question in relation to forecasting - could you ask all these people that submitted their rates if they think the official reference rate will go up or down? You could but the result would be rubbish.

Of course, recent research suggests asking an analyst would be rubbish as well :)

What you could ask them however, was whether they would expect to get a better rebate in relation to an index (the reference rate) in the future - and that result would in all likeliness be spot on as they are given a huge amount of historical data that can be filtered for their specific location / size of loan etc.

Comment on Can We Harness the Wisdom of Crowds in Supply Chain Forecasting?

Per Wendelboe Nielsen — Mon, 08 Apr 2013 07:33:33 GMT

It's a difficult question for sure - one that is made difficult by applying the term wisdom - which (as per your post) really doesn't make much sense.

I do know of a an example of a very well-implemented version of 'crowd-harnessing' - potentially usable from a supply-chain perspective exactly because the wisdom-bit has been removed.

It's a user-driven map of interest rates for housing mortgages in Sweden (where I currently reside) - basically you add details about your mortgage and its displayed on a map along with all other submissions. Obviously, this holds little value if only 2 people submit their rates but the map is now up to hundreds of thousands of entries.

You can have a look here (it's in Swedish though): http://www.svd.se/naringsliv/sag-din-ranta/

Now, obviously - there is no wisdom required, just submit your details and you'll see if you got a good deal on your mortgage if not. Details cleverly include all the parameters generally known to affect the outcome of your negotiation with the bank (the result is a 'rebate' on the official reference rate).

This holds real value to the user and is self-cleansing in the sense that no one has any interest (pun) in submitting the wrong rate.

The actual result can be used for sourcing a better deal for yourself, obviously - as any negotiation benefits from facts on the table - and it really has, which is why it has grown so popular.

So - in my opinion you can harness the power of the crowd but you have to ask the right questions. Apart from stating a 'fact' the crowd is also very good at telling you whether or not they are happy with something (yes/no) - which means the step from this map to adding a 'perceived value received' overlay really isn't that far (they have yet to do this though).

b2c examples aside I think a similar map for different segments of industry / different types of value-added servicves could add an interesting twist to your numbercrunched baselines or further your SIM efforts in a number of ways - or like the example, simply a graphical visualisation of negotiation results across the board.

The main barrier here would obviously be protectionism on behalf of the buyers and maybe its not for everyone or every category - but is it a tool that should be discarded? I don't think so.

Then again, I'm maybe not that smart on my own ;)

Comment on Does Your 3PL Have the CCSF Designation?

jamesfranklin — Tue, 26 Mar 2013 11:06:53 GMT

Nice Post on CSSP. These days many Freight forwarding companies have already joined a Certified Cargo Screening Program that supports companies in the screening process.

Comment on Adoption a Problem? Incentives are the Answer!

John Shaw — Thu, 14 Mar 2013 14:49:23 GMT

I second your sentiments, this is one of my favorite topics.

Another common misalignment I see is making a category manager double as a super user but only compensating that person based upon savings performance in their own category.

I've also seen 'spend through the system' metrics backfire where users are still following an offline process but asking the winning supplier to submit a final bid online to get the spend officially recorded. A sure sign of this is a large number of RFx documents with only one supplier invited, exclusive use of external attachments for content, or ridiculously short durations for the supplier response window.

It can be hard to find the perfect measure, but it’s not nearly as difficult to peel back the onion to see some of these deeper metrics that tell you how your measures are driving behavior.

Comment on WOW! Finally a Decent Piece on Higher Education!

David — Thu, 14 Mar 2013 03:25:52 GMT

Education is priceless. You don't only need it for finding a job but also to make use of what you learn in your everyday life. Don't let negative opinions stop you from aiming for your goal of succeeding in life through finishing higher education.

David

Comment on Minimizing Late Payments

Dick Locke — Wed, 06 Mar 2013 14:23:10 GMT

I just received a contract proposal from an expert witness broker company. The payment terms are "we'll pay you when our client pays us." I think I'll be negotiatin'.

Shaming seems like a good approach.