Lora's Latest Post

Ironies

Irony: the use of words to convey a meaning that is the opposite of its literal meaning. 

Dictionary.com

 

Do you remember Horton, the good-natured African elephant, in Horton Hatches the Egg? Mayzie, an irresponsible bird, asked Horton to sit on her egg while she took a short “break.” To make a long story short: Mayzie permanently relocates to Palm Beach leaving Horton, the elephant, sitting in a tree attempting to hatch an egg.
Naturally, the absurd sight of an elephant sitting atop a tree makes quite a stir in the community. As Horton braves the elements, he is laughed at by his jungle friends, captured by hunters, forced to endure a terrible sea voyage, and is finally placed in a traveling circus. However, despite his hardships and Mayzie’s clear intent not to return, Horton perseveres. He refuses to leave the nest insisting that he keep his word. He often repeats, “I meant what I said, and I said what I meant. An elephant’s faithful, one hundred per cent!”
As luck would have it, the traveling circus ends up visiting near Mayzie’s new Palm Beach home. Mayzie visits the circus just as the egg is hatching and demands that Horton return it, without offering him a reward. However, when the egg hatches, the creature that emerges is an “elephant-bird,” a cross between Horton and Mayzie, and Horton and the baby are returned happily to the jungle, rewarding Horton for his persistence, while Mayzie is punished for her laziness by ending up with nothing.
Ironies
So, a reader might ask, “Why a treatise from Lora on Horton on this week before the holidays?” I like stories. To me it is a metaphor for what I see today. For many companies the supply chain is a function; but the supply chain leader is also asked to be the owner of value chains. They attempt to nurture and design the value chain to deliver the greatest value. However, due to the many functional organizational agendas, the supply chain leader is often left sitting alone on the branch attempting to drive value for the greatest good. The point of my story? We have to persevere.
As I sit at my kitchen table as an entrepreneur, working with many of my clients’ supply chains at the end of the year, I am struck by a number of supply chain ironies. These are the ones that I see today:

  • Cash Can Travel Faster Today, but Payment Is Slower. I can now transfer funds in hours, but the average Days of Payables for a manufacturer has increased 30 days over the last decade. (It varies by company, but has increased by 28 for Procter & Gamble, 53 days for Nestle, and 64 days for Bristol Myers Squibb.) Only a few companies have partnered with their suppliers to move money more quickly. This includes BASF that has reduced the number of days by 20 and Coca-Cola that has reduced the number of days by ten. Most companies are pushing costs and waste backwards in their supply chain. Unfortunately, the transactional nature of companies to focus on short-term transactional benefits, blinds their ability to see the impact on their suppliers. Many companies will have to start seeing suppliers fail before they wake up.
  • Large Companies Can Scale, but Not Start Up. Small Companies can Start Up, but Not Scale. Large Companies Could Lend a Hand, but They Don’t. Large companies are power brokers in the supply chain. They usually have a lower cost of capital. Many could fund their supply chains more cheaply than their suppliers going to the bank to get commercial terms. Yet, the buyer and seller arrangement for a small software company trying to do co-development with a large company is very one-sided. I watch large company after large company KILL the promise of innovation. In my opinion, co-development partnerships need to be defined as much more than a buyer and seller transaction.
  • Customer Service Is Everywhere, but NOWHERE. During this holiday season, as I sit on the phone waiting for a “customer service agent,” I think that supply chain leaders everywhere should rethink customer service.  As seen by the growth of Zappos and Audi,  it matters. As I wrangle my way through the maze of auto-response systems and Indian-based Business Process Outsourced Services, I wonder who ever leaves these calls thinking that they are defined to give the customer service.
  • Companies Say Customer First, But Can They Listen? As I work with clients on their 2014 agendas, many espouse a customer-centric supply chain, but they are hesitant to build listening capabilities. While marketing and sales are traditionally about yelling the message, a customer-centric supply chain starts with the customer and judges the supply chain by its ability to serve. And, how can we serve the customer if we cannot listen? I am amazed how slowly supply chain teams are adopting sentiment analysis for unstructured text mining to listen to the true voice of the customer.  When companies can listen directly through the mining of unstructured data, they can hear quality issues… and five times faster.
  • Technologies Should Improve the Experience.  What About a Real Person? Last week, I paid my mortgage. The check was a manual check written for $2500.00, but it was read as $25.00 through the automated reader. If I was not watching my online banking, I would have ended up with  late charge and a ding against my credit. Sometimes, I think that we get so caught up in the mechanics of technology automation that we forget we are real people doing real business with real people.

Dealing with Mayzie
So, if the Supply Chain Leader is Horton in this story, who is Mayzie?  In my opinion, Mayzie is the group that is focused on short-term benefit. It is the team or function that wants to work opportunistically to drive short-term gain for the firm while negating the longer-term value that can be driven through a value chain. Like Horton in the book, many supply chain leaders are left defending the original promise of improving value. So, as you sit on that branch questioning what is happening, remember Horton when he said,  “I meant what I said, and I said what I meant. An elephant’s faithful, one hundred per cent!” The supply chain leader must buck current trends and stay true to the original mission of driving value.
These are the ironies that I see.  Did I miss any? Let me know.  And, hopefully, you are not caught in a snafu of your own where your check is misread, the call is placed on hold and the automated “customer service” technology cannot understand your accent.


Search the Archives
Search
Share this Post
Email
Twitter
LinkedIn
Facebook
Pinterest
WhatsApp
Featured Image
Recent Posts

Is your Supply Chain AI Ready?

A simple quiz to assess an organization’s AI readiness.

The pace of change is fast and furious. Every day, technology advances faster than we can digest. A great challenge to have.

Determining whether a supply chain is “AI-ready” is less about technology and more about the gray matter between the ears of supply chain leaders. Leadership, alignment, and clarity of goals matter.

Too few companies are clear on the definition of supply chain excellence. Measuring and rewarding functional metrics reduces the firm’s value. Putting agentics on top of today’s processes can make bad practices run faster, reducing value.

The toughest job for the supply chain leader is challenging existing supply chain paradigms that were defined by the limitations of decades of supply chain technologies. As the curtain lifts on the potential of new forms of technology, process redefinition is our opportunity, but only if we are clear on what drives value. (Here, I link to the Supply Chains to Admire reports to help you define value. The next report will be published on June 23rd, along with my Dynamic Benchmarking Product, to help you define value in the face of your AI readiness. More information about the launch is at the bottom of this blog.)

Read More »

Case Study: A Scrappy Demand Management Approach

This study of Franklin Sports shines a light on the work that needs to be done at the sales account level to challenge a retail forecast, and also highlights the importance of a new technique for a forecast engine — reinforcement learning.

Artificial intelligence comes in many forms — large language models, generative AI, machine learning, unstructured text mining, deep learning, neural networks, reinforcement learning, agents, and agentics. While the industry is wigging out about agentics, I think reinforcement learning is a great step forward in the journey of Artificial Intelligence.

Read More »

Can We Side-Step the AI Spin Cycle?

When it comes to combining tech, 1+1+1 should equal more than 1. The impact should be exponential. Unfortunately, today, the answer is 0.

What do I mean? Let me explain.

I find that the supply chain technology market moves slowly along traditional technology lines. Conferences are usually focused on the use of technology, not on redefining work. This bothers me. I want it to bother you as well.

Here I share some insights to drive change.

Read More »

Supply Chain Health Check: The Power of an Orbit Chart

An orbit chart is a powerful tool for understanding the “health” of a supply chain and its potential for improvement. The supply chain is a complex, non-linear system with limited trade-offs. The relationship between trade-offs varies by industry, region, and size. The orbit chart is a diagnostic we use in the Supply Chains to Admire work. Here I explain the use case.

Read More »

Are You Writing a Check You Cannot Cash?

Don’t let a well-intending, but ill-informed consultant or technologist set an expectation that you cannot meet. No when wins when there is a check written that cannot be cashed. In this case, the consultant will move to the next account leaving you holding the bag. Fight back with a data-driven argument. Help the organization think about inventory more holistically.

Read More »