I have been asked this question a lot on Quora, as well in my board and other speeches. A lot of supply chain commentary is becoming too technical and mysterious. Supply Chain Software sellers have a vested interest in creating the mystique – similar to what McKinsey used to do about 20 years ago. But Supply Chain Management (SCM) need not be mysterious. Remember, if someone cannot explain it easily enough – they do not understand it well enough. The purpose of one of my books – Unchain Your Corporation – was precisely this – to demystify the supply chains. This books is written for layperson, can be read in 2–3 hours, and had more than 200 stories and anecdotes to help the readers use complex concepts. At its core, SCM is just about two things – integration, and optimisation. Integration of various functions (purchasing, production, logistics, inventory management, finance, sales) within a company. And, Integration of of various companies that form a supply chain together to serve an end consumer. Optimisation – is the art of getting the best results from the same inputs. You will be surprised to know that most GPS software do not even give you the optimum route even if they have real-time traffic information. The key to testing optimisation is by doing the same exercise manually and comparing against the results of the software. There are clearly degrees of Integration and Optimisation. Higher levels of Integration and/or Optimisation will lead to higher level of efficacy in supply chains. See the figure below – that comes from one of my board speeches:
If you supply chain consultants are not telling you these two simple truths, then all the talk of automation, big data software and driverless vehicles is a pipedream without a purpose. And, if your Supply Chain MBA is not teaching you these two basics then you might have wasted 2 years and thousands of dollars. Here is why… …Everything else in supply chain stands on those two foundations. Your supply chain relationships are part of integration effort, and automation is part of optimisation effort.
First let me start with a story. I have some personal experience in 1990 with this ancient mariners’ rhyme:
Day after day, day after day,
We stuck, nor breath nor motion;
As idle as a painted ship
Upon a painted ocean.
This was on a ship with a very intransigent bunch of crew from an aggressive Marxist union. What I did not know at this point was that all the crew ratings received a hardship allowance for every day they spent on the ship under water rationing conditions.
The ship embarked on a several weeks voyage across a vast ocean with sufficient stock of water, and then some surplus. This was one of my responsibilities.
I was also closely monitoring the daily usage. I had the cadet and chippy (carpenter) take sounding morning and evening – and write the daily water consumption on a blackboard in the crew mess, as well as the officers ward rooms.
I took daily rounds in the accommodation to monitor the dripping taps to stop wastage of water. Any jump in water consumption was promptly investigated – all for a good reason. I wanted the ships company to arrive with sufficient water stock.
Perhaps it was just an accident – but somehow sea water gained entry into every fresh water tank on the ship (but that is a long story about unions and compensations which is best told at some other time).
The captain (and I) was left with a dilemma, whether to rely on the fresh water generator on board for a long sea voyage, or not. There was no shortage of water – it just was too salty for most purposes.
I will tell you how this voyage panned out at the end of this blog post.
to the real purpose of the post – the over-abundance of un-usable data, and the opportunities that it presents for start-ups.
In my last blog post I recounted a real life story of a business transformation project where information technology fell woefully short. This is not the only such situation I encountered. In fact I recount more than 20 similar examples in my book ‘UNCHAIN YOUR CORPORATION’.
Look at the growth in global data storage capacity below:
Obviously it is not just the capacity – but also the data that is growing. There are many graphics showing growth of data – a few of them are Every Day Big Data Statistics, Data Generated On Social Media Every Minute and 4 V’s of Big Data and all over the cyberspace. The key story they all are telling is just one –
Just like the ancient mariner had no dearth of water, we have no dearth of data. And, just as minute quantities of salt (3.5%) that is present in all that seawater, is enough to make raw seawater unusable for most practical purposes, minute quantities of data error is enough to make most of the raw data unusable for practical purposes.
On the ships (and in many locations on land) we deploy fresh water desalination plants such as Sydney Desalination Plant. The sole purpose of these massive plants is to parse seawater, take it into a pressure chamber, evaporate it at high temperature (because that requires less energy) and then condensate it into distilled water. Further processing is required to remove other contaminants such as bio-hazards. Check here for infrastructure of the full process in some more detail.
In information technology the most bang for the buck is not in generating or collecting more data, but in making the data more usable.
I was asked a question at a recent speech why I was not as bullish as everyone else on big data. I likened the current big data set-ups to an ocean full of seawater. It still takes a huge expense to desalinate the seawater, and to make the data usable.
Any start-ups that figure out a better way to collate, parse, access, and make usable the data to create insights would be a tremendous success. If you know of any, please let me know in the comments below.
In the voyage above, we had to put into an emergency port to get fresh water rations. Without doing this none of our sailors would have survived.
In the emergency port, we had to fight with a bunch of sea pirates, which is a whole new story .
“Call it a clan, call it a network, call it a tribe, call it a family. Whatever you call it, whoever you are, you need one.”
Business Networks are important to accelerate and sustain success for any individual or organization. It is imperative to learn from the evolution and success of business networks. Business structures have evolved radically to such a degree that nowadays, most businesses have no option but to create business networks.
Naturally your business infrastructure is fixed, rigid and cost accruing. Your business networks, on the other hand, are evolutionary, flexible and revenue accruing.
Those businesses which had the most responsive and resilient business networks were the ones to recover from any downfall the quickest. See who survived the global economic downturn during 2008 – 2009.
Data is visibly conclusive that in times of cash crisis, the quality of their business networks saves companies. Those with more robust business networks have far more superior cash conversion cycles, nearly 6 times better. In fact, as pointed out by Aberdeen Group, business network masters improve their cash to cash cycle leading up to the Global Financial Crisis while the rest of the industry went backwards.
Even relatively smaller businesses can achieve remarkable results quickly based on the responsiveness of their business networks. In economic booms, whether accompanied by economic volatility, or economic stability, business networks allow you to realize higher profits, quickly. The potential of your company’s capabilities are multiplied many times over, by the leverage effect provided by your business network. This is only possible through extensive utilization of business networks that the company has built, nurtured and managed effectively. Most executives grossly under-estimate the value and efficacy of business networks in ramping up capacity rapidly in boom times.
Especially during times of extreme volatility, we see airlines and shipping companies forming global service alliances to ride out the season and economic peaks and troughs. In such volatile business environments, budgeting and planning can become a nerve-racking exercise for all companies except those which use their business networks to cushion the lean periods with long term contracts and find scarce capacity during boom periods. Supply chain is unique to every company and industry, formulated over a number of decades in many cases, and is worth several trillions of dollars in value.
Estimates range into trillions of dollars, and yet may be underestimating the full extent and power of these hidden business resources. The magic of business networks has made it possible to design, build, launch and sell revolutionary products in less than one-third time of the industry. If you cannot make your business networks more visible and manage them more proactively, you may be silently yielding the competitive advantage to others who can. It is, after all, the obtainable magic.
Want to start now? Create your own 5-Star Business Network today.
The digital revolution (aka tech revolution) has changed the way we live, work and play. The boom of software and IT solutions have caused disruption and realignment for businesses. When business intelligence is implemented and used effectively there is a real pay-off. There are still a lot more developments in technology to come and businesses that have their finger on the pulse have a huge vantage point. For business transformation, the key question will be how IT can facilitate the process without everyone feeling enslaved by technology. For more information on the answer to this critical question please refer to my newest book Unchain Your Corporation.
Why do companies achieve far worse performance than what could be feasible with their superior hiring and training capabilities? It appears as if there are some invisible chains that are constantly pulling these companies back all the time. Something significant yet intangible is acting as a brake that inhibits the functionality of the business, causing each component to operate at less than its full value. Everyone is doing their best under the circumstances and their personal and departmental priorities, yet there is always a gap in the inter-functional integration.
What is this gap, and how does it happen? How does this gap harm you and your company? In my newest book, Unchain Your Corporation, I explore these questions in greater detail.
New challenges need new responses. The common organizational model looks like the generic drainpipe structure, meeting the mammalian need for an ordered hierarchy and flow of power within a business. Most companies have evolved in the last 2 decades and their functioning has become almost entirely customer centric. Their customers’ priorities drive most of the business workings. The traditional drainpipe model frequently stifles customer responsiveness and innovation, therefore there is a clear need for a new standardized customer centric model of business. The new customer centric model starts with customers at the apex of the organization. It is the customers’ needs which the organization is trying to serve, so directly aligned with the customers is the sales team. The function of the sales team is to have an https://www.viagrapascherfr.com/le-viagra-vente-libre/ intimate understanding of the customers’ needs. Only then can an organization create successful products. An organization can outsource almost everything else it does, but it can never outsource its sales. Two other key functions which are equally important and support the sales team is marketing and research & development. Between these three we form the top tier of the modern organization’s structure.
It’s no surprise that customers hate companies with too much internal focus. As organizations free up their inter-departmental planning from rigidities, the communications start to bloom. Efficiency improves considerable and everybody starts running together, faster. However, a higher set of problems emerge due to lack of external focus – on suppliers, customers, and end-consumers. Many times everybody inside the organization is running together, faster, but in the wrong direction.
To combat the symptoms of departmental silos many organizations implement a very rigid Enterprise Resource Planning (ERP) system. This helps run their internal processes and coordinates inter-departmental communication. By their nature, these systems are very formulaic and prescriptive with a one-size fits all approach to planning. Now a different bunch of problems start surfacing as a result. If you’ve ever wondered why you see so much chaos, anxiety, blame game, and other such dysfunctional behaviors in businesses, this is the key reason.