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Turbulent times make B2B and Supply Managers more important in organizations

Think about it - if things are going smoothly in the environment like the economy is humming along, there is general peace where you conduct business and the weather is predictable you have steady demand for your products and services. On the supply side you can put together long term contracts, try Just in Time (JIT) and suppliers can drive down costs and bring steady improvements to quality. Generally, the sales forecast is working well and the sales people are making good commissions. Your internal operations are your only concern when you craft strategy.

But in turbulent times,such as these, both boundaries of the firm face uncertainties. On the supply side long term contracts are a "no-no" and on the demand side uncertainty in quantities and payment has your marketing severely challenged. You find that your boundary spanning managers (Supply chain managers and Marketing managers)  are the only ones who have been looking up (the supply managers) and down (your marketing and sales managers) your value chain. Suddenly, managers at both ends of your firm become much more important.

This was brought to sharp focus at the Keynote Session  of the 94th ISM conference,with ISM Chair Shelley Stewart where Christina De Luca   started off with a call to action by all supply managers as their work was "not good enough" for the times. Her somber example of the oil industry was powerful because while price dropped to half demand also dropped significantly, putting all calculations in jeopardy. The other panelists, including Lisa Martin  offered valuable tips to deal with this huge turbulence. The bottom line was that Supply Chain Managers suddenly find themselves center stage in their organizations and its a great time to step up.

Steven Chu will be Energy Secretary

In naming Steven Chu as Energy Secretary Obama has highlighted the importance that the new administration will attach to science and a scientific temper to the whole energy question. Steven Chu is a Nobel Prize winning Physicist and has both a biology and physics background. While his nobel prize was "for development of methods to cool and trap atoms with laser light" he is currently studying biological systems at the molecular level. 

Steven Chu is incidentally of Chinese ethnicity, and that should send a strong signal to big energy consuming countries like China,India and the rest of the world how important energy conservation and sustainability is for the globe,going forward. My guess is that energy issues will become a much higher priority with governments across the world with Nobel Laureate Steven Chu as Energy Secretary in the US.

US Senate approves India agreement for cooperation on peaceful uses of nuclear energy- a day before Gandhi's Birthday

I guess the bailout approval by the Senate eclipsed a very significant bill that was passed by the US Senate-A bill to approve the United States-India Agreement for Cooperation on Peaceful Uses of Nuclear Energy. Check out the official Senate announcement here - passed 50 minutes before the bailout bill. Interesting, I could not find any major US news report online on this very significant development, with all the other excitement surrounding the bailout and elections. I guess - the mainstream US media just has too many things going on.

In any case, the agreement will end India's 34 year  isolation from accessing the latest nuclear power technology and supplies. This is really special because as the Senators explained, although India is only one of the three countries that has not signed the Comprehensive Test Ban Treaty  the world's largest democracy India(with a great peace record)  and the world's oldest democracy - the USA would be able to make this agreement work.

The  co-operation between US nuclear suppliers and the booming electricity sector in India would provide business to US companies - at least 3 of the 8 initial nuclear reactors. This in turn would create  much needed jobs here - an estimated  250 000 US jobs , according to the US Chamber of Commerce.

A cause to celebrate the Mahatma's birthday today.The world seems to buy the idea that Gandhi 's India will remain peaceful and focussed on "green" nuclear energy development and not proliferate nuclear weapons.

"Hot Flat and Crowded" The ET industry

Thomas Friedman was on NBC with Tom Brokaw this morning on Meet the Press and was talking about his new book. Watch the video here.

I am a  fan of Friedman and of the flat world book. Tom Friedman observes the world and reflects and then tells us stuff which is absolutely compelling. In this interview Tom was calling for a new industry "ET" or "Energy Technology." Innovations in the energy sector has become absolutely critical. Why? Because each one of us is thinking about how to reduce energy consumption (have online meetings, merge errands, get a better oil burner and so on). The global market is simply hungry for energy innovations and Friedman's book is timely. Friedman is calling for hundreds of thousands of innovators in the "ET" sector who would come up with ideas and even if a few succeed as with the IT revolution,the world will be a better place. It'll be greener and better for succeeding generations.More on this, after I read the book.

How do you green the upstream supply chain ?

Recently there is a great deal of discussion about sustainability and the importance of going green with the supply chain. For example, SCDigest has a great summary of the recent McKinsey report that mentions that 80% of the carbon footprint for many companies comes from the upstream supply chain. Also, there was a Zurich summit in February that tried to put arms around greening logistics and transportation.

The question  is, how do you action some of these genuine concerns in the running of your upstream supply chain? For starters, just asking suppliers by way of introducing a clause in RFP's would help, straight away. Many suppliers would tell you that small lot orders  on a part-truck basis or by urgent airfreight simply add to the carbon footprint. Similarly rationalizing secondary packaging could go a long way in both reducing cost and improving the environment. "Green metrics" very similar to calorific values of foods would make decisions easy to make. The IT industry is attempting to do this, more traditional businesses need to follow suit in obvious,somewhat routine subjects  like a defining a "Green" RFP clause, coming up with a "Green Transportation metric" and reviewing secondary packaging "green" options.

Green in Beijing 08-08-08

The question of air quality at Beijing has assumed center stage as the Summer Olympics start in less than 10 days. Athletes are worried that the air quality will affect performance. Every fraction of a second counts for athletes at the Olympics and many athletes are planning to arrive hours before their events to avoid performance issues that may arise due to poor air quality. The Chinese authorities, on their part have closed  down air polluting factories and have taken millions of cars off the road and if necessary will take all cars off the road if necessary.

The focus on air pollution at the games will bring attention to air quality issues worldwide and that is a great thing. Some years ago New Delhi's air was unbreathable and then the Delhi Transport Corporation decided to convert all buses to compressed natural gas (CNG) and things improved dramatically. Taxis, auto rickshaws and many cars also moved to natural gas or the more riskier liquid petroleum gas (LPG) partly because of  laws but mainly motivated by significant  lower costs.

I guess cities worldwide will take a cue from the Beijing situation as will industry. This is a good time to examine air pollution issues in whatever organization's buy,produce or sell. Whatever reduction one can do will be good for business and the environment. A Win WIn !

Winning brings us back to Beijing and I am sure this will be a great Olympics as they open at 8.08 pm on 8-8-08 as this blog started counting about a year ago.

Happy Earth Day -"Green" Value Chain and Clorox

Today is "Earth Day" and here is to wishing readers a very happy earth day! The Earth day movement has an interesting timeline  and there is much to celebrate in terms of the progress we have made globally. However, much needs to be done. I had written about how B2B folks can help with greening the supply chain. Essentially consumers have a preference for "green" today if prices are comparable. Marketing and Sales Managers being closer to their own customers can start with one product and work with their supply management and supply chain to introduce green. Many organizations in the grocery business are doing exactly that.

An  intriguing example corporate green initiatives is the "Green Works" initiative from Clorox. One would think that Chlorine is bad for the environment but the company has gone natural and here are their definitions. I have not got around to using their "green " products but I am sure impressed by the competitive prices and great in-store displays across different segments of retailers from Home Depot to Wal-Mart.

Corporate Social Responsibility

Last week my article in the Inside Supply Management of December 2007 appeared in print. This is a short piece on Corporate Social Responsibility and what the supply manager can do to contribute to Corporate Social Responsibility. I talk about three areas first the Global Supply Chain and quality problems (eg. toy recalls), supplier diversity for global suppliers and greening of the supply chain. All three topics are important for the supply manager, going forward and things that would resonate with enlightened CEO's and company boards. Inside Supply Management is well circulated and is a monthly publication and covers some great and relevant content. The article itself can be downloaded here.

Boeing 787 Dreamliner launched

On Sunday Boeing 787 - Dreamliner was launched amidst much fanfare by 15,000 primarily Boeing employees. Couple of things make the launch remarkable. First is 677 orders (at $200 million each)before being assembled ,excluding an order of 20 Qantas planes,placed over the weekend, as the Sydney Morning Herald,happily clarifies. Second, according to Reuters, 50% of the primary structure by weight is based on composite carbon material including titanium and aluminum. Instead of panels bolted together, the composite material barrels are fused together saving thousands of sheet metal bolts and fastners. But most importantly, being 20% lighter the fuel efficiency will be higher as will be the lesser pollution. Moreover, the air pressure and moisture will be more comfortable in the cabin leading to lesser aches and pains for long distance air travellers. As a Boeing marketing executive pointed out on TV, their expectation is that consumers will prefer the 787 and will force the airlines to adopt it. However, the delivery period for new orders is 8 years at this time.

Passenger aircraft are infrastructure products like power plants. Getting individual customers  to demand an expensive business infrastructure product is every business marketer's dream.Boeing has clearly won this round competing against the giant Airbus 380. One Boeing marketing person put it very well on TV saying that both can fly Kansas to Shanghai,non-stop. On the 787 you will be dining with 200 other passengers while on the Airbus 380 you'll be dining with 600 others. Don't you get the feeling that the Airbus might just "feel" more crowded?