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The Stimulus and Procurement Reform

Ever since the stimulus package was announced I have been asking friends in the supply chain community as to whether the stimulus package will create new jobs in supply chain and procurement. Logically if you are sourcing stuff, you need managers to both buy (supply chain) and sell (B2B).There were two opinions on this - one was that you can always get contractors to do more if you have a rate contract already set-up. The other opinion was that many local governments will ask for fresh bids . In fact, asking for fresh bids  could really cut down supplier quotes by as much as 45% , given the slow economy. This could in turn free up money for additional projects.

Yesterday, President Obama talked about bi-partisan  procurement reform primarily for the Department of Defense. Any reform means more work for supply chain and procurement management professionals and more jobs for for both B2B marketers and supply managers. Good news as far as this blog is concerned !

G-20 summit a success - is the world really getting "flat" ?

It is not just travel,communication and the Internet -that's turning the world flat as Thomas Friedman famously pointed out. The most amazing  image from the G-20 summit is of  Queen Elizabeth and First Lady Michelle Obama putting their arms around one another. When there was a gasp of protest from royal watchers, Buckingham palace quickly quashed any concerns about breach of protocol. It tells us a lot about the British Monarch  who recognizes the changing "flat world".

The camaraderie of the G-20 leaders also sent a strong message to businesses around the world  that we live in one world and must work together to solve the problems of our time, notably the current economic crisis.

Does this mean that all Governments are on the same page? Will global B2B and supply chains  become seamless - immediately?

Or at a more mundane level will wireless phone providers  start charging the same domestic price for global roaming? Not immediately but we'll get there probably sooner than we imagine!

What types of B2B and Supply Chain jobs will the stimulus package create ?

I have been trying to figure out the kind of opportunities that might come up from the stimulus package - particularly in the B2B  and Supply Chain  areas. I think there will be plenty of opportunities in these areas if you start looking at what the stimulus is planning to do. For example, in the procurement space as towns and communities start re-building infrastructure purchasing skills should be in demand. Now the question is whether ongoing contracts will be expanded i.e. existing contractors will be given more work and they would hire or there might be more new contractors entering the infrastructure. A friend in the purchasing community thinks that new bids will have to be prepared, in record time, but there may not be new supply management jobs in the public sector, although some additional hands may be needed to develop and execute the contracting of all this work. If you are a professional looking for work  in these areas checking with the local Government- may be a good idea.

Then there is the construction supply chain ( I was recently reviewing this literature for an academic paper review ) and herein lies an opportunity for all those sub-contractors out there. They should really start gearing up their B2B marketing with both towns and well established contractors so that they are ready to execute projects. There are a whole lot of displaced professionals (IT , finance)  who have taken up temporary work like painting etc. and this is the time to put your name out there and start lining up your work force.

The stimulus funds would probably be spent at the town level and there is some talk of a deadline of spending the money say within one year and this calls for a  speedy effective local project selection ( which school to renovate  ? - probably a separate blog on this ), contractor and subcontractor selection and off course the direct workers on these projects.  Probably discussion will move to execution aspects of the stimulus as we move forward.....

From a public phone booth in India

My winter break travels in India turned out to be great. Visited Delhi,Mumbai(Bombay),Goa and Kolkata (Calcutta)and got the distinct feel that the economy was on the move. Yes ITES ( Information Technology Enabled Services) are important and this sector feeds the notion of India as the global powerhouse of IT services. But what is more incredible is the booming growth of the local market and consumer demand. Consider the phone booth (right) where Devinder helped me set up my local India cell phone account and helped "refill" my phone balance several times.
    This phone booth is a temporary shack like structure and is actually owned by a blind relative of Devinder who has been awarded the space as part of India's efforts to help its disabled. There seemed to be about 10 people constantly on the counter , either making long distance phone calls or adding money to their cell phone accounts. So I asked - what's your sale per day? "About Rupees 5000 ( about $120 a day),"replied Devinder and I was skeptical because I was pretty certain that the guy had several hundred customers a day. "The customers buy small perhaps Rs. 20 ( 50 cents) of talk time by a cart puller or day laborer" explained Devinder. Incoming calls on India cell phones are free and the poorest are able to get on the mobile phone network by just arranging to receive "blank" calls that they don't pick up and understand when a pal or business associate is trying to reach out. Such communication turns out to be free- next best is the booming use of SMS via cell phones. SMS's are cheap and over 1 Billion ( yes billion) were exchanged when people wished each other Happy 2008 over the new year.
    Transactions at the phone booth are both paperless and computer less. You ask for a re-charge and the phone booth attendant has a cell phone agent's access to the phone company ( there are several companies) and the customer gets a SMS confirming the amount credited. Amazingly the poorest almost illiterate customers seem to be dealing with all this with aplomb and confidence.
    Seeing the continuing boom in India had left me wondering about the "bottom of the pyramid" and what was happening there. Close observation of these BoP folks at the phone booth assured me that the economic growth in India is far more deep rooted and fundamental than I had earlier thought!

Marketing Academic in "Measuring Innovation in the 21st Century Economy Advisory Committee"

I had just happened to call Professor Rajesh Chandy on Monday over a problem with a US Patent database paper that my Research Assistants and me were grappling with. We were trying to do electronic searches with key words and Rajesh's articles were not coming up in the Marketing journals. So I called Rajesh and he was as cordial as ever, and gave me some additional keywords that would help our search. They did.

Today, I noticed that Commerce Secretary Carlos M. Gutierrez has named 15 business and academic leaders including Steve Balmer of Microsoft, George Buckley of 3M, Samuel J. Palmisano of IBM and a host of eminent others to advise on measuring innovation in the 21st Century. Was delighted to note that Professor Rajesh Chandy is on this committee , the only marketing academic to be so nominated. This is quite an achievement because Economists coming from an older much established Nobel prize discipline always seem to dominate Government advising.  Rajesh's nomination is a big deal for the marketing discipline and it's perspective on innovation. Congratulations Rajesh Chandy!

Dems,outsourcing and innovation

With the Democrats seizing control of the US Congress and Senate everyone involved in global outsourcing as suppliers or providers would wonder how things are going to be - going forward. To investigate this - I started looking up what folks are saying ....

For those of you watching campaign ads - you would remember that outsourcing was practically a non-issue this time  unlike the 2004 Presidential election. As the shopfloor.org blog reports manufacturing in the US needs a different kind of help including lowering legal,tax, energy and I'll add healthcare costs. Information week echoes this from Michigan auto industry where outlawing outsourcing is probably going to loose Michigan the new South Korean Kia Factory and its potential new jobs.

Continuing on the jobs situation is research by Vivek Wadhwa of Duke University who suggests that there are enough undergrad engineers in the US  and yet companies are going overseas for the lower cost. In the same story from Duke and reporting a different study Arie Lewin  (a highly respected  organization and international business scholar ) suggests that the engineering talent is simply not growing for  R&D and companies are going overseas for the talent . This  is spurred by declining enrollment in Graduate Engineering and Science programs among US students.

While it is to early to predict decisively what Dems will do with outsourcing - I'd guess that they will focus on innovation being the next stage of outsourcing on one hand, and revamping American High School and Undergrad Science and Engineering Curriculum on the other. With all this has to come more funding for research in this area , irrespective of whether Republicans or Democrats are in power.

Sandy Springs,Atlanta

I was on the elliptical machine at my gym which has nice LCD TV's attached to the machines. Had been watching CNN when a fascinating story about outsourcing town hall came up. Tried to locate the story from the CNN website but it seems to have lost out to other momentous events of the day. Nevertheless, USA today has the story which is about a month old. More details appear at the Atlanta Journal.

New cities like Sandy Springs,Atlanta are outsourcing all town  functions to private company CH2MHill save fire,police and judiciary. Why not fire,police and judiciary also? - after all companies have security contractors handling security all the time? I guess it is a question of "core competence" of the town hall. Their core competence is governance and that is why people elect the Town officials in the first place. The Town Hall managements do not see garbage removal,pothole filling, parks and gardens as "core competence" areas. For example just parks and recreation means getting lawn mowers,managing their maintenance and spare parts. Luckily Atlanta does not have to deal with snow which would mean managing salt and sand inventory as well!

When the organization is a public body and outsourcing is to a company I guess the phenomenon is called "privatization" and opens up a whole new set of issues. The initial rationale is that the cost/efficiency is better from a Private Company whose "core competence" is doing certain things like say "filling potholes". If the company does this for several towns then the economies of running a crew and materials probably work out. .. Why only new towns are trying this ? Apparently due to legacy labor union problems according to the news report...and privatization has its own problems as as Atlanta realized with its water supply- the contractor did not collect payments and gave poor service till they had to terminate the contract with United Water Services. Once again highlights the need of staying on top inter-organizational relationships...

Connecticut Education Gears up for the Global Knowledge Economy

Flipping channels this Sunday morning I happened to switch on the CT-N channel that examines  matters of interest and priority to the State and its residents. I noticed that I had bumped into a goldmine of panelists at the panel discussion (recorded on 9/27/05 at Central Connecticut State University) on  “ What can Education do to improve the State’s Talent Pool- Knowledge Economy Symposium”. Organized by the Office for Workforce Competitiveness, Mary Ann Hanley set the stage and summarized the discussions. Dr. Lyle D. Wray, Executive Director of CRCOG did a wonderful job as moderator of the round table. The eminent panelists included Louise S Berry of the Connecticut Community Technical Colleges, Harry H. Penner Jr., Chairman Nascent Bio Science; Dr. Walter Harrison, President University of Hartford; Jeffery A. Klaus of Bank of America; Lawrence D. McHugh of the CT State University System; Christopher Dadley of St. Francis Hospital and Medical Center; Dr. John W. Rowe Chairman Aetna; Gualberto Ruano of Genomas; Bart Stanco of Gartner; Allan B Taylor Chair State Board of Education and Nathaniel D. Woodson of United Illuminating Co.