Faith Not Fear - a New Creed!
A few years ago I wrote that sometimes we need to learn lessons from our mothers - I am now learning a major lesson from my DAUGHTER!
Despite the challenges of making it on her own - a single mother with a single purpose - she is starting to get traction in the music and entertainment industry. Her music has a message - and one that I am taking to heart - Faith not Fear - embrace the moment, face the challenge and create your own destiny!
Filed under Uncategorized | Comment (1)Spring is here - time for New Beginnings!
Spring came early for most of the USA this year - 2012 - and although the winter has been very mild this season it was still a wonderful change. Blossoms everywhere - and the frogs in my fishpond making any conversation impossible if you chose to sit outside in the evenings. I love it!
Every Spring I am reminded that no matter how cold and bleak things may seem - or feel - just when you feel it is getting unbearable, things change. Despite the doom and gloom that the media loves to embrace, the reality is that the economy - local and global - is a reflection of the collective optimism of each and every one of us. Every positive thing we do - every dollar we spend - any new initiative we foster - comes back in positive ways. Like the seeds that are sown in the fall, before the cold and despondency of winter, all these positive ventures will bear fruit in the Springtime!
So - I plan to go out into my garden, welcome the new plants and flowers, encourage them with love (and a little boost of MiracleGro) and give thanks for the day. And as for those intruders - the weeds that creep into the flower beds and try to smother the new growth - out with them! And I will use their remains to provide the compost needed to nurture the plants they tried to hide.
I encourage you all to do the same - whether you think of this as a metaphor - or not - I know that a positive attitude conquers all. Follow the new mantra - Faith not Fear! (the latest message from Laura Reed! - www.laurareed.com)
Filed under Uncategorized | Comment (0)Positive Directions for 2010 - growth lies in our own hands
Sometimes the best lessons we learn come from our mother - in this case Mother Nature!
Responding to a message on the notice board at the lovely historical church at the end of my street - ‘April Showers bring May Flowers” - I was reminded that several months have passed since the early days of Spring. Normally diligent in planning and planting during the last few weeks of March, I somehow procrastinated to the point where I was now looking May in the face - with bare flower beds and nothing planned! Although it is a little late for the May flowers, there is always something that can be started in a garden - at any time of year! In my case I discovered that May is the perfect month for establishing vegetables and herbs - the only provision is that these need to be planted at the seedling stage - it is already too late to set out seeds for certain items. Despite gloom and doom predictions related to extremely hot days ahead - with limited rain. I laid out my new beds and wait in optimism for their bounty and eventual harvest. (Nothing ventured - nothing gained!)
Using this as a metaphor for my business life I realise that it is always easy to listen to the naysayers and postpone investing in new activities,new ventures and relationships. However, taking this path of least resistance will almost certainly result in a self fulfilling prophecy. As another expression goes - he or she who expects nothing will never be disappointed!
Like most of the working population of the Western World - and many of those in other lands - I have experienced challenges in the commercial endeavors I have embarked on over the past 2 years. The engagements that started off with excitement and enthusiasm from team members in many cases were terminated due to lack of funds, lack of interest or unexpected complications. Lack of cash flow - in common with the lack of rain that is in the forecast for my newly planted vegetable crop - stunted the growth of several start up operations. In other cases postponing the decision process has created timing issues - second place is never a winning strategy.
So I urge all of you - seize the day - take a chance and plant the seeds that you envision growing into your business dream. And ignore the weather forecast - sometimes we have to be our own rainmakers!
Filed under Uncategorized | Comment (0)The Grinch is Green - but what does that mean???
There is a lot of buzz in the market - all markets - related to the importance of ‘GREEN’ - from operations, logistics to sustainable housing and other ’so-called’ green environments. In fact, irrespective of what publication you peruse - hard copy or virtual - there is sure to be some reference to the ‘importance of being green’.
While researching ’sustainable and environmentally friendly’ (aka GREEN) business models I was rather surprised to learn how widely used the concept is.
Which raises the question - what does Green really mean?
Filed under Uncategorized | Comment (0)Thoughts on Global Trade and Infrastructure
Travel schedules in March took me to New York City, a very different locale from my recent trip to the Caribbean. Somehow the train of thought that was launched while visiting remains of El Moro in Puerto Rico continued on its tracks. New York, like San Juan, began its life as a port and harbor, providing a gateway for the colonization of the New World of North America. Initially known as New Amsterdam, New York grew into a bustling commercial center. In addition to the goods of trade, the port had a more important role to play – this was the point in which many refugees from either economic or religious persecution entered into a new life, creating the melting pot culture that became the United States of America that we know today.
Reflections
On this particular visit to the City that never sleeps, I spent time I had on my hands to make a visit to ‘ground zero’ - something I have both desired and dreaded for many years. The cold and blustery day did not encourage loitering outside, but I could not resist the temptation to just stand and reflect on what had taken place here. It was hard to imagine that an act of malice and aggression by a small group of religious fanatics could have created this painful open wound. Handwritten notes, flowers and other tributes to those who had passed on from this place were reminders of those who remained, as was the graphical representation of the ‘new tower’ that would rise like a Phoenix from the ashes of the Twin Towers.
Crossing the street to the World Finance Center, the symbolism of these city blocks was brought home. These vast structures symbolize trade and transactions – the magic recipe that brings the nations of the world together in the pursuit of a better life for all! Trade has always been the driver for the discovery of new lands and nations, the integration of old ones into the status quo and the rise and fall of empires. My train of thought stopped at yet another station – this was all about the balance of power from an economic perspective, only this battlefield was monitored by bankers, not generals.
Changing of the Guards
My career in supply chain began on another continent, the tip of which boasted the only truly viable ports in Southern Africa. Natural harbors in Cape Town and Durban provide gateways to the arterials that channel the raw materials that are the fruit of the labor of the tribes of this vast land. Large oil tankers and container vessels made ports of call at these deep water harbors, in many cases using smaller feeder vessels to transfer cargo for movement to the secondary shipment locations of East London, Port Elizabeth and Richards Bay. The infrastructure that provided the ability for South Africa to play in a ‘league of their own’ was closely guarded by the Department of Railways and Harbors – a state owned monopoly. The changing of the guard politically and economically has resulted in the privatization of many of these facilities, in common with global trends. This in turn has created a focus on economic viability versus subsidized infrastructure.
Other ports that I have visited over the decades have impressed me with their commercialization, their adoption of technology and innovation. Singapore has transformed their city state into a commercial hub by providing state of the art storage and port facilities – opening the gates for global trade to neighbors in the region. The exploding turbo-capitalism of China is fueling the creation of ports in their country – supporting the movement of goods by air and ocean, in response to global demand. Logistics has come into its own as an area of strategic importance. Ports and harbors are no longer just sordid ‘nether-worlds’, providing a backdrop for nefarious activities, as so graphically depicted in Jackie Chan thrillers!
As global trade moves into the spotlight, the role of ports, port authorities and their impact on the ability of nations to play and win is emphasized. One of the premier global entities, the International Association of Ports and Harbors (IAPH) has summed this up in their motto -
“World peace through world trade. World trade through world ports”.
Global Competition
As highlighted during the debate on the potential management of port handling operations in New York, New Jersey, by a UAE company, there are many areas that need to be taken into account related to port facilities. Global competition is not limited to the manufacture of goods – the availability of world class logistics facilities is an important consideration when selecting partners for global trade. Competing ports need to be able to offer more than access to deep water. Other considerations include the provision of advanced information systems, enabling the seamless integration of data required to comply with rules and regulations. Added to which is the need to ensure the safety and security of goods and personnel that move through the harbors. The introduction of ever larger container vessels (particularly on the routes across the Pacific Ocean) requires the investment by Port Authorities in ever wider and deeper channels and longer berthing facilities.
Then there is the growing need for logistics companies to provide a fully integrated ‘door to door’ service, requiring a combination of multiple modes of transportation. This challenges the traditional roles of ocean carriers, who compete for their share of the traffic. Mergers, acquisitions and alliances with other service providers have created a new set of challenges – and opportunities. Value added services are now a component of the ‘menu of options’ – warehouse and storage facilities providing consolidation, de-consolidation, kitting and other options to those who trade globally.
The convergence of all these forces has created an environment in which it is imperative for public sector entities to encourage participation by the private sector in the development of port facilities and infrastructure. This is evidenced by the result of surveys conducted by the IAPH:
A global survey conducted in 1998 indicated that the majority of the 188 respondents were public agencies or corporations established by government. More recent surveys identified that more than 20 percent of these ports were experiencing changes in structure, with an increasing involvement of the private sector.
Global Integration
Although most port assets such as breakwater, access channel and land are still owned and managed by port authorities, a relatively larger percentage of handling equipment and terminals are operated by the private sector. The need to provide a combination of wired and wireless information technology has resulted in ongoing investments by these port operators. Another result of the increasing global integration of logistics systems is the trend for international terminal operators to have facilities in multiple ports, providing hubs and feeder networks. At the last count, the top 10 terminal operators were responsible for handling one third of the world TEU (twenty foot equivalent unit) traffic. One of the key enablers for this is advances in communications and information technology, allowing these operators to increase productivity.
The changing role of port authorities from provider of services to ‘custodians of the waterways’ demands an understanding of land based infrastructure, to include access roads and highways. This requires coordination with decision makers in city planning and development. And of equal importance, there is a growing concern related to sustainability of port and water operations. Issues related to ship waste treatment, ballast water problems and other areas of environmental concern need to be addressed. As such, there needs to be a true partnership between the public and private sector – focused on local, regional and global challenges – and opportunities.
Global Shift
The global shift of manufacturing operations from traditional shores – like those in Europe and the USA is of concern to many. However, change is a constant, and a combination of technology and innovation can be leveraged to create new opportunities for those engaged in global trade and transportation. This requires a new approach and a different mindset:
- An understanding that the desired result should be the focus of all constituents – internal and external
- Services in the logistics sector create a new revenue model but may require retraining of resources previously engaged in manufacturing
- Thinking globally implies total impartiality – no prejudice, please!
- Global trade needs to take into account physical borders and related regulations – think way beyond the border
- Have respect for the environment – coastal waters are fragile, and what goes around comes around
In conclusion, although the roles we play in the global economy have changed over the years, there are opportunities for all – we just need to recognize them as such.
Filed under Uncategorized | Comment (0)Excellent Overview of Counterfeit and Mitigation Technologies
The issue of counterfeit drugs - and related products - is a global - and growing - problem.
Although legislation in order to create an e-pedigree - or electronic audit trail through the product lifecycle - appears uncertain in terms of timelines, there are many actions that proactive organizations can take. Performing an assessment of all supply chain participants to identify the week links is the first step on the path to creating a secure environment for the manufacturing, storage and shipment of lifesaving products. Reviewing and adopting one or several of the technology enablers available commercially is yet another activity that should not require compliance as a motivation. And on the plus side, both the assessment approach and the ongoing establishment of monitoring and alerting across a supply network have many advantages. The simple act of reviewing each supply chain participant and activity will undoubtedly identify areas of waste and non-value added activity. Eliminating this from the ‘chain of chains’ will save cost, help the environment and create a more agile flow of goods, information and cash All most desirable outcomes!
The following link will take the reader to a recent article on the subject of issues and mitigation strategies and technologies. I encourage you all to follow it.
http://pharmtech.findpharma.com/pharmtech/IT/Drug-Serialization-and-Supply-Chain-Security/ArticleStandard/Article/detail/601169?contextCategoryId=43497
Filed under Uncategorized | Comment (0)Counterfeit Drugs - growing at epidemic proportions
I have spent many years working with pharmaceutical manufacturers - and more recently biotech companies - in the effort to create Safe, Secure and Efficient Supply Chains. During the course of the projects I have worked on - and the critical supply chain issues that I have researched - I have discovered a myriad of risk factors that ‘plague’ this industry. High cost and time from discovery to production, degradation of product through poor handling, storage and transportation, bad inventory control practices resulting in product expiring on the warehouse shelf - and being destroyed…. The list goes on.
Recently I have spent time researching the issue of counterfeit and diverted Life Sciences products. What I have uncovered is literally chilling - this is a growing global issue. In addition, the counterfeiters are extremely competent - not only at the diversion of legitimate drugs, the production of counterfeit product and repackaging of adulterated drugs - they are masters at the art of Supply Chain Management. In many cases the time from the ‘theft’ - or other diversion - of product, to the time it is available ‘on the street’ - or over the Internet - sets a new record for transportation and distribution. And in many cases the channels used for the distribution of these ‘illegitimate’ products are perfectly legitimate - they have been infiltrated with such skill that it is difficult to identify the ’scams’.
Although the majority - in terms of percentages and number - of counterfeit drugs are available in lesser developed countries this is still of major concern to everyone in the more developed countries. After all, people travel, exposing themselves to health hazards which are brought home as ’secret souvenirs’. And then there is the issue of thousands of people being treated for diseases like Tuberculosis and Malaria - in many cases with inert substances. This has a very dark side - these diseases can mutate and create global health threats. The Pandora’s box of illicit and counterfeit drugs is filled with both known and unknown dangers.
So what to do? As the expression goes - Forewarned is Forearmed - I invite you to read the report available on this site under the subject of Supply Chain Security. There are some words of advice that can assist in securing your own supply chain.
And for those of you who have a thirst for knowledge, there are many excellent resources available over the Internet. The following is a link to one report that I found of interest.
http://africanliberty.org/pdf/Keepingitreal.pdf
Filed under Uncategorized | Comment (0)Real Virtuality
The evolution of man is based on discoveries….
· The invention of the wheel created a mobility that expanded regional boundaries.
· Water borne transportation opened unexplored horizons, enabling global discovery.
· Paper and ink enabled the sharing of information, although initially this was only available to the privileged few.
The first true revolutionary technology, the printing press unleashed a new age of discovery. The written word was now available to the masses – education created an environment where hierarchical structures were challenged and democracy was born. The core element that this technology enabled was mass communication. A phenomenum expanded by other media, to include the telephone, the radio, television and finally the Internet. Incremental innovation in the area of digitization has created a new dimension in the information revolution. The real virtuality of a connected ‘global nation of individuals’ has yet again created an environment where the hierarchical structure of nations and enterprises are in question.
Rather than fear the expansionist aims of commercial colonialism, the leaders of this New Age are encouraged to explore the potential opportunities this creates. Corporate courage is required to face the future with honesty, recognizing that the business models of the past will not pass the test of time. The shifting sands of globalization have disrupted old boundaries, created new communities and changed the perspective of a growing global community.
Recognizing that change is a constant is the first step to survival in this new economy. Identifying the changing nature of business partners – customers, suppliers and service providers – is the second step. Finally, embracing change and developing a sustainable business strategy for a digital economy provides the final impetus for the future.
Information, in digital form, is the key to managing a new virtual world, where physical boundaries are transcended by the flow of data at the speed of light. Global communities of workers and consumers can be served from disparate global locations, through a network of manufacturing, distribution and fulfillment entities. This new ‘federation of enterprises’ is a sustainable model for the future’.
And the future is now!
Globalization – the new reality
It is official – globalization is alive and well and here to stay!
Actually. It has been here all along – we were all so busy with our regional issues we failed to recognize that we have always been part of a global continuum.
The expansion of global products has created a homogenous youth culture – clothing, food, music – shared lifestyle trappings available through western branding. Digitization makes it possible to deliver music, video and other communication media across the Internet, transcending physical boundaries. The world of commerce has a new dimension, a new language and a new set of rules for those who want to participate in this New Age.
So what has that to do with digital networks and data synchronization?
Consider the brief history of the world in the context of global trade.
It started when the first caveman decided to cross the mountain and discovered that there were people at the other side. Exchange of primitive goods and ideas enabled this early man to evolve into a species that harnessed the natural resources of the early times, nomadic tribes migrating across the four corners of the globe. Years passed and tribal cultures evolved into nations , with their own cultures and prejudices. Wars were fought and lands won and lost, creating the polarization of East and West, each convinced that they were the chosen, with a superior culture. Walls were erected to keep these cultures apart – both physical and cultural, lines drawn on maps identifying the boundaries created by man.
We are all aware of the first voyages of discovery by Western adventurers, crossing these boundaries and redrawing the maps in search of new lands and the extension of trade across regions The wealth of these nations in turn created new markets – products that represented the cultures of the new lands were embraced by consumers in Europe and other ‘Western’ nations. Furniture, clothing, utensils and food products from distant shores enabled an understanding of the people of the far off lands that created these items. Barriers that had once existed were slowly broken down and a global culture developed.
But still the nations of the world remained polarized – those that understood and embraced the richness of globalization and those who felt challenged by a universal culture and economy that did not take into account national, regional and cultural differences. New languages emerged, as well as media to diffuse these across the geographical boundaries. The advent of the printing press was the first technology that enabled the ‘masses’ to have access to information in a format that was readily available. This created a medium that enabled individuals to learn and understand issues that transcended the boundaries of their immediate environment. This physical communication medium was enriched by the ability to communicate through verbal and visual tools, the telephone, the photograph and ultimately the video technology that is globally ubiquitous. The pace of change that was facilitated by the communication media gained in momentum and speed. One of the by products of this was the change in power – the leveling of the hierarchical structure of the haves and the have nots.
There really are dragons out there – beware the Hydra – the many headed beast of turbo capitalism
The implication from a personal and religious perspective cannot be under rated – increasingly nationalistic and religious fanatics are reacting to the new openness with aggression. As evidenced by the assault on western culture by Islamic fundamentalist leaders. And this is not limited to those on the lunatic fringe. Traditional governments are threatened by access to new ideas and perspectives, available to a growing population who traverse along the electronic highway.. National interests are overcome by individual aspirations and ideological issues are subordinated by economic imperatives.. Television images of lifestyles beyond those that were taken as the status quo fueled economic growth of nations that had previously been satisfied to be carriers of water and hewers of wood. This global workforce embraced the tools of automation, creating new environments that enabled them to compete in a growing global economy. Trade between nations created polarization and authorities stepped forward to create boundaries where none had existed before – Rules, regulations and taxation were introduced to stem the tide of goods and services that was creating an increasingly homogenous global society.
Transcending Boundaries through diffused information
The key to this diffusion, information, gained in importance as technology evolved, machines creating capabilities for humans to access and process data and new ideas. Innovation and productivity increased as a collective global wisdom translated new ideas and capabilities into products and services to meet the growing demand of consumers.
The personal computer created yet another groundswell in information diffusion – this accelerated as browser technology empowered users to make sense of the many sources of data that were now inter connected by the organic growth of the Internet. Implications of this increased ‘digital brain’ are far reaching. Unlike the industrial revolution that enabled the creation of products in a more consistent and high speed manner, the information revolution has created a truly new culture. Interesting side of this is the ability to share information in a networked manner, collective groups of individuals working collaboratively to design and deliver products and services irrespective of the place element. Global workforces can work in a true 24/7 manner sharing ideas and translating these into goods and services at a rapidly increasing pace.
Aided by computer technologies it is possible for global virtual teams to collaborate on the design of consumer goods, software products and even life saving drugs. There is no limit to the potential that the combination of communication infrastructure and computing power has enabled.
Feeding the nations of the world – satisfying a universal intellectual hunger and thirst.
The thirst for knowledge has created an energy in the nations of the world who want to learn more, to have more and to share in the visions of prosperity made available to them over digital media. Self improvement is a constant mantra, shared by the workers once content to work for a rice bowl. And the spoils of the global economy are available to those who are prepared to work for them..
It is no longer necessary to leave the shores of India or Vietnam in order to get a ‘Western Education’ – the passport to economic viability in a knowledge based environment. Online tuition and qualification enables those that toil in the factories in Asia and emerging economies during the day to gain new skills and capabilities by night. And the thirst for knowledge is surpassed by the drive to succeed. Unlike the youth of traditional western nations who take for granted the education systems and lifestyle that they consider to be their right, Asian scholars are prepared to sacrifice leisure time for the opportunity to move up a rung on the ladder of success.
The pendulum is swinging in another direction
Irrespective of the exciting and unlimited opportunities for the nations of the world that have been unleashed by the convergence of technologies, there are implications for those who have ‘rested on their laurels’ and assume that there is no end to the age of entitlement. Prices of consumer goods are in many cases going down – good news for those who are enjoying the added luxury of items that are now ‘Made in China’ – available at every day low prices. However, the workforces of the nations that are driving down the cost to manufacture, supporting the unstoppable trend to ‘outsource’ activities that historically drive national and regional economies, have access to a growing wealth of information and skills.
New Paradigms – The end of the Age of Entitlement for the Western World
While the attention of many western nations was absorbed with regional and political issues, a sleeping giant arose and changed the face of global trade forever.
The combination of a disciplined nation of skilled workers, a government that writes the rule book to suit the moment and a growing trend towards outsourcing, offshoring and cost reduction has altered the global status quo.
The China Factor – the unleashing of one of the oldest cultures in the world into modern times has created an overheated manufacturing frenzy. Factory cities erupt overnight, churning out clothing, electronics and household items in a 24 x 7 workplace. Natural resources of less industrious nations are supporting this explosive growth, creating shortages of steel, oil and other commodities. Infrastructure is being put in place to support the flow of people, products and cash, the new super power embracing capitalism with no holds barred. In contrast, traditional manufacturing nations are witnessing the closure of factories, distribution centers and other evidence of their former glory. Unemployment rates are climbing rapidly in previously wealthy nations – students leaving university finding that the job market they thought would embrace them does not exist – they are finding that the positions they have trained for have moved ‘off-shore’.
The Compass does not matter any more – East is West and West is East – the globe is a continuum – which side is up??
The global demographic model has literally disintegrated. The world wide web has created a virtual geography. Activities that previously required travel, relocation and physical movement of individuals in order to create teams and workforce units can now take place concurrently, with dispersed participants collaborating through a virtual workspace. An interesting thought – those that lament the fact that ‘their jobs’ have been outsourced and ‘off shored’ are in fact in a unique position. It is not necessary for the brain trust of the Western World to stand on the sidelines and bewail the passing of opportunities – telecommunication capabilities and reduced costs have opened doors and borders creating a seamless global community where the only boundaries are those that we create for ourselves.
Although most of the brick and mortar facilities that have literally moved off shore will never return, there are opportunities for knowledge workers located in Europe and the USA to join new teams and enterprises. This creates new opportunities for those who recognize them as such, traversing the electronic highway as commuters in a new age of employment.
The digital infrastructure that was the legacy of the dot.bomb era makes it possible for someone in Mumbai to assist travelers in the United States. Software engineers and designers based in Bangalore can collaborate with their global peers across broadband connection, eliminating the need for relocation to higher priced workspaces. Geographic boundaries blur.
The intellectual capital that has been so carefully nurtured by the Indian authorities has been enriched by education and research in the hallowed halls of the technical institutes of the United States. Graduates have returned to Bangalore and Mumbai, creating new entities that are building on the foundation of so called Western digitization, in many cases extending both the capabilities and rewards of existing technologies.
And this is not limited to high tech industries – incredible advances in biotechnology are possible in an environment where innovation and creativity is not stifled by the prejudices of regional and national interests. An example of this type of breakthrough innovation was evidenced in May 2005 when a team of scientists in South Korea achieved ‘breathtaking results’ in their stem-cell research.
Business models for a New Age
This is truly a new age – an era where old values and measures have no place. Hierarchical structures based on privilege and tradition are irrelevant – this new age recognizes and rewards the individual, not the enterprise. Teams of individuals collaborate, creating new and exciting technologies, building on the open source concept where you take what you need and give back to the electronic community.
As traditionalists watch the structure of the old world crumble away, it is time to re-evaluate olds ways of thinking and adopt a mindset that recognizes the freshness and energy of the new age of individual empowerment.
This in turn has changed the economic dynamic, with many technical implications. New skills have been learned, creating an economic force in countries that were not previously participants in the global economy of the past,. These new age consumers have embraced the wireless world and web based living spaces, exploring digital storefronts and creating a unique purchasing model.
New models for new consumers
The diffusion of technology has made it possible for individuals to ‘surf the web’ researching products and purchasing them, irrespective of supply location. These consumers never pass through the doors of the traditional brick and mortar store fronts, point of sale data does not exist at a tangible level. The point and click shopper of the future leaves a trail that is more valuable than those of the past. From a retail and manufacturing perspective, the focus needs to change from the product centric model – with features and functions tailored to meet varying tastes through ‘mass customization’.
A new approach, with the individual as the center of the process needs to be understood and adopted. Mass ‘personalization’ is achievable through rule and role based information systems, enabling those that satisfy demand for goods and services to skillfully create new value propositions for the market of individual consumers. The key to success in this new paradigm is information – deep, rich and specific information related to a global marketplace of individual consumers, all of whom have different wants and aspirations.
Building on the initial models pioneered by Amazon.com and others, it is possible to create an intimate relationship with individual consumers.
Irrespective of their geographic locale!
All this new technology and open ness has vast implications for manufacturers and consumers alike. Data related to consumers and their potential buying behaviour is available through data mining, cookies and subliminal prompts. Shoppers can be recognized, their preferences known and catered for by a global community of brand masters, solution providers and concierge type services. Mass personalization takes the concept of mass customization to a higher plane, the intersection of demand and supply creating an environment of total customer satisfaction. Exciting concepts – but is this real virtuality a sustainable model that the enterprises of the future need to plan for?
The answer is yes. With a twist - this new accessibility to information is bi-directional. Accountability and sustainable business models are creating new challenges for manufacturers and distributors alike. Corporate entities are also being watched by nations of consumers who use technology to communicate with peers, alerting them to products that are potentially harmful, either to users or to the environment. These silent lobby groups are a death knell to irresponsible manufacturers and their supply chain partners, In a reversal of roles, it is time for the ‘seller to beware’.
Changes to consumer preferences, monitoring areas of potential risk, controlling the sourcing and manufacturing process, securing the supply chain – these challenges keep executives pacing across their board rooms in search of solutions.
The impact of this social and economic change should not be under estimated. The Future is Now and those who fail to recognize the implications of this change have no role to play in the new global economy. Old models are no longer applicable – those who fail to see the writing on the wall – or the digital equivalent – will be left in the wake of the Economic Tsunami of the New World.
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Supply Chain Innovation
Real Virtuality – Weaving the fabric of supply chain innovation
Enjoying a walk through an old tobacco farm on one of the first warm days of an early Spring I was fascinated by the remains of what had once been an animal enclosure. Examining the intricate mesh revealed what appeared to be two or three single threads creating a flexible but strong and secure fence. Further examination identified that several of the links on this particular piece of fencing had become unraveled, destroying the value of the construction and rendering it useless.
The failure of the single thread resulted in the unraveling of a whole section of fencing. This is reminiscent of the interdependence of the various entities in the global supply chain. Unlike the implied sequential series of events that take place in a supply chain, in reality there are several key threads that tie it all together. These include:
- Information, flowing between all parties from purchase order to proof of delivery;
- Physical flow of goods – in many cases through a series of hand offs and physical locations
- Flow of funds, in many cases impacted by variations in predictability in related and interdependent events. Terms of payment, in traditional global trade, are linked to logistics issues, terms of purchase defining change of ownership, encompassed by what are internationally known as INCO Terms.
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As supply chains become more fragmented, extending across multiple geographical locations, the implications of terms of trade and the need to secure strong supply relationships grow in importance. Evaluation of potential new supply locations, service providers and modes of transportation have an impact on the final outcome – a profit or a loss. Also important to consider are implications of change in custodianship to political, social and insurance liability.
Strangers to the intricacies of global trade and transportation, many purchasing executives, operations personnel and related entities are finding out the hard way that, (with a little license on my part) ‘they are not in Kansas anymore’.
In many cases, pressures to reduce costs have resulted in single threaded process improvements – for example manufacturing.. The reality is that manufacturing costs are only part of the equation – in many cases savings in labor rates are more than offset by additional costs related to transportation, product shortages and increased inventory holdings to allow for variances in supply predictability. Responding to the challenges of a virtual market place requires new strategies and approaches. In addition, it is valuable to adopt best practices from established markets, translating these into a global context. Distribution and logistics options include:
· Distributed delivery centers - a global network of distribution centers – owned and operated by the Brand Master
· Partner fulfillment centers - a global network of distribution centers, owned and operated by suppliers who comprise the integrated supply chain.
· Dedicated fulfillment centers - centralized distribution center, owned and operated by the Brand Master, at country or regional levels.
· Third party fulfillment centers - centralized distribution centers, serving specific geographical regions
· Build to Order - to include a combination of distributed, centralized and third party operations where products are assembled based on demand at a global and regional level.
Each of these models has its inherent challenges and benefits – an aggravating factor is the need for real time visibility across a global supply environment .One solution is to view the supply chain network as a single virtual enterprise. All constituents have a role but the focus is on the outcome – the customer experience and financial impact on all parties. Viewing this inter-related community based on outcomes versus activities enables a whole new paradigm. Information technology is an enabler to weave the threads of supply chain processes into a single virtual entity. Real time sharing of information related to fluctuations in supply, demand and constraints creates an effective ‘digital nervous system’. This federated, ‘neural’ model sounds like something out of Star Wars – the reality is that the technology enablers already exist in order to facilitate this. The path forward includes an evaluation of the following:
- Roles and responsibilities – impact and outcome – of each of the supply chain participants
- Information needs and data sources
- Communications infrastructure – existing and required
- Security – data and product level
- Rules and regulations – regulatory and fiscal compliance
- Data capture and auto identification capabilities across the network
- Exception management, alerting and response requirements
- Delivery architecture – capability of players versus ‘reach’ required
Clearly defined and executed the creation of this ‘federated virtual supply chain’ will provide the richness and reach required to meet the challenges of globalization Plus a unified capability to identify and reap the rewards of new markets and opportunities.
The future is NOW. Are you ready for it??
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Travel across the globe - Part 2
Global Trade through the Centuries
By Carla Reed
A winter’s day, on a deep and dark February – (apologies to Simon and Garfunkel) I left the shores of the USA and traveled to one of my favorite places – Puerto Rico. A stop over in Boston reinforced my pleasure in getting a break from the winter of 2006 – snow on the ground and disgruntled travelers, the latest victims of the ‘storm of February 2006’ the latest weather issue of the moment that the news headlines pronounced as the worst storm to hit the north east for blah blah years.
As the plane prepared for landing and slowed for the approach to the Luis Munoz airport, the sun shone brightly – reflecting off the waters of the many lagoons that separate the various locales of the San Juan metro area – Bayamon, Santurce, Condado, Isla Verde –words that now seemed familiar although I can barely pronounce them in a manner acceptable to those of the Spanish tongue. The plane banked and the Moscovo Bridge was brought to the forefront of my vision. The combination of USA and Puerto Rico flags that adorn the bridge signify the relationship between Puerto Rico and the United States – unified but separate.. The plane seemed frozen in preparation for the landing and my attention was drawn to a vehicle crossing the bridge. A Crowley Marine trailer - representing the symbiotic relationship between the USA and the Caribbean – partners in trade despite political and ideological differences.
Better known today for its beaches, its casinos and as a stopover for those reveling in the floating palaces of the cruise lines, Puerto Rico has been an important cog in the wheel of global trade for many centuries. . Beginning with the colonialisation of the New World by the Spanish, the inter-relationship between Caribbean nations and the Western World has always been important. The quest for new lands to explore, new products to meet the needs and desires of the European elite resulted in the discovery of Puerto Rico in the late 1400’s. (originally known as San Juan in honor of John the Baptist – the country and the natural port capital exchanged names in the 1500’s). The expedition into Florida by the Spanish centuries ago was launched from the ‘Rich Port’ of Puerto Rico – the home of the Spanish traders. For centuries Puerto Rico has been a center of global trade and commerce – this pride of the early conquerors and traders providing a gateway to the riches of the Caribbean – and later to Mexico, Central and Southern America.
Looking back into the romantic past of Puerto Rico brings us to the reality that not much has changed in the many years since Christopher Columbus established the Spanish as the new lords of the Caribbean. Over the centuries the freight and cargo that passed through the natural harbor of San Juan has changed in nature – from gold, agricultural products to the slaves that help create the economy that has been sustained until today. But not all the trade was legitimate. Piracy was a way of life in the Caribbean and fortunes were won and lost over the centuries – legitimate and illegitimate Many of these issues remain to this day – global trade, with its many challenges is still an issue. Piracy – with 21st century twists – remains a problem and the safety and security of the trade lanes that lead in and out of the Caribbean is a priority for all those who participate in the complex supply chain that energizes the Caribbean. Known by many as the ‘Third Border’ of the USA, the Caribbean region and Puerto Rico in particular provide a ‘soft underbelly’ for criminals and other unwanted elements who wish to establish operations and move product in and out of the USA. Despite the vigilance of the US coast guard and other agencies, the open waters, multitude of small islands and constant stream of small commercial and private water craft create an environment that is enticing to illegal activities. Smuggling and piracy have a major impact on legitimate enterprises – these are issues that can erode product integrity and brand leadership.
Fortified against intruders by the Spanish, San Juan provided a port and haven for Spanish commerce, and later the Americans of the New World. The US Coast Guard is the current guardian of this gateway in the Caribbean – and the access it provides to the USA mainland. A reassuring thought for those of us who value our place in the Land of the Free and the Home of the Brave!
My reason for this visit to Puerto Rico – a conference related to issues in global trade – occupied two full days but I found time on the week-end to visit the centuries old Forts of Old San Juan. An interesting fact: despite its fortifications, the role of San Juan during the Spanish Empire was more important from a strategic than commercial perspective. Many of the fabled treasure fleets of the Spanish Empire never stopped in San Juan in their voyages to Central and South America. These walls that have stood for centuries had an even more important role to play – they prevented the port and island of Puerto Rico from becoming a base for enemies from which to launch their attach against the Spanish colonialists.
(These fortifications have been put to the test by British, Dutch, French and finally the United States – protectors of this fortress since 1898 when the defenses of San Juan were formally handed over to the US Army.)
On a February morning in 2006, standing in the bastion of El Morro, from within whose walls defenders have waged many battles, I reflected on the news headline of the moment.
‘US port operations to be outsourced to a Dubai based company!!’
Dubai, the capital of the tiny but economically powerful United Arab Emirates, has spawned many a commercial venture of global proportions – the latest of which is the acquisition by Dubai Ports World (a state-owned business) of Peninsular and Oriental (P&O), long a symbol of British power and influence in the world of maritime trade. This is the latest in the death knolls of the British Empire – God Save the Queen!. But this time it touches a nerve – and causes the American nation to catch a collective breath!
Outsourcing has long been the last resort of the incompetent – somehow less of a painful experience when the outsource partner is an ally – after all, the British are pals, aren’t they? The changing of the guard (forgive the pun) in this particular instance can not be tolerated – irrespective of commercial intentions or benefits, the pain of the World Trade Center (falling under the jurisdiction of the Port Authority of New York and New Jersey) has created a raw nerve, irrespective of your point of view.
The primary focus appeared to be concern that the gateways to US commerce could now be manned (or at the very least managed by) members of a foreign nation. Or is it the fact that the United Arab Emirates are a potential host country to enemies of the State? The debate, irrespective of viewpoint, provided a welcome relief from the saga of Vice Presidents and their hunting escapades!
Returning home from my visit to the Caribbean, I found that coverage of the issue had extended to my local printed press – a medium that normally appears more concerned about local issues than affairs of State. In fact, the coverage that continued well into the work week was very enlightening. It was reported that foreign national involvement in port operations was not limited to the East Coast . The Port of Los Angeles – responsible for handling a large percentage of US foreign trade - was home to port handling operations by several ‘foreign’ enterprises. (Rumor has it that approximately 50% of these companies have roots in China – what a surprise!). Another report indicated that CSX (with operations in most major US ports) had sold stevedoring operations to the same UAE based organization that was now stealing the headlines – in fact, this took place almost a year ago – a fact that went unnoticed at the time.
The debate and speculation continued – however it seems that most of those verbalizing their outrage at the situation appear to have missed the point. What should be of greater concern is the fact that key operations, whether they relate to port security, government and governance, or manufacture of goods and chattels, are all game for the lowest bidder – no matter where they call home. Price pressure, response to union demands, environmental issues – whatever the reason for the trend to ‘outsource’ – the reality is that these decisions are being made by US citizens. This is no ‘invasion of the border’ – any enterprise that sets up operation in the USA – or moves the US operation overseas, is doing so openly and with invitation. And not from a select few – demand for more and more consumer goods, at lower and lower prices, is driven by the man (or woman) in the street. Environmental activists are pacified when chemical plants are closed down and moved offshore – for some reason the fact that the rivers that they are now polluting are located in another continent seems to appease their collective conscience. Is this an unstoppable trend? Will the continent of North America one day be devoid of all manufacturing, and the major concern relate to what flag is flown by the ‘keeper of the gate’?
Fortunately there are still companies who prefer to keep regional operations regional, responding to the needs and wants of a demographic that can be reached within a day’s drive. Then there are those who understand the need to be part of a global economy, but ensure that the moral issues are well covered when extending their supply chains across global borders. Actually, the same rules apply whether you are sourcing from Asia or Arkansas – the major difference is that it is easier to play by the rules when your partners are across the State – not across the globe. And the game is getting harder to play. Regulatory officials in the US are getting tougher – enforcing legislation put in place to ensure that trade is not only free and fair but safe. Consider:[1]
► C-TPAT
► CSI
► Free and Secure Trade (“FAST”)
► Importer Self Assessment
► Trade Act of 2002
► Marine Transportation and Security Act
► Bio Terrorism Act
► Known Shipper Rule
► Sarbanes-Oxley[2]
As the mariners of old noted on the edges of their maps depicting trade routes of ancient times – ‘There be Dragons!”.
Ignorance is no defense in the eyes of the law – a statement that is all too true when it comes to international trade. So what to do? Obviously it is important to ensure that the supply chain is safe and secure – however, it is not enough to depend on third parties. As the expression goes – the buck stops with the importer – or something similar. Freight forwarders, carriers and agents have a critical role to play – however it is imperative for the brand master – or whoever the final consignee is – to monitor their own supply network – up close and personal.
- Get to know your suppliers – and their supplier’s supplier – after all this is a chain of chains.
- Leave nothing to chance – ensure that documentation is accurate and in compliance with US rules of origin
- Global finance is tricky – international commerce demands an audit trail for every transaction – make sure that this does not lead to murky waters – or worse still, those who launder their money in them
- If in doubt – don’t!
After all, we do not want to be in the position of having to close the stable door once the horse has gone – who knows, it may be a Trojan Horse.
