Feature Article
Supply Chain Management
Recent events highlight the strategic importance of this important skillset
It seems like every day a new challenge arises impacting our ability, as a Nation, to grow our economy! The impact of the devastating Japan earthquake and following Tsunami on the supply, and subsequent price, of electronics, automobiles, and other goods sourced from that region. Gas prices surging to over $4 a gallon across the nation causing additional pricing pressures in transportation costs and the costs of goods such as food and other retail products. The unrest in the Northern Africa, while promising in the long-term, is causing uncertainty and speculation driving up the cost of oil. We are certainly living in a time of change and volatility.
Nowhere are these changes more impactful than in the area of Supply Chain Management. Supply Chain Management is about creating reliable networks of supply, transportation, and processing of materials in order to ensure products are brought to respective marketplaces at the best cost. The design method of choice in Supply Chain Management has been “just in time (JIT)”. The premise of JIT is that products are delivered to the point of consumption only when they are needed. The efficiency of JIT is based on the theory that the cost of carrying inventory, and the financial risk to do so in terms of excess and obsolescence, is greater than the cost of transporting materials on a demand pull basis.
JIT is the method of choice when supply and transportation costs are predictable but what lessons might the industry explore given recent supply disruptions and increased volatility in cost of transportation? A recent article reported that some of the major electronics manufacturers have to delay product launches as a result of these events. Likewise, the auto industry is supply constrained on some models sourced from Japan. The result will be missed sales, increased prices, and muted economic recovery as the forces of supply and demand balance out over time.
Is your business leveraging the latest technologies and state of the art practices in Supply Chain Management? Do you see the value of obtaining an independent evaluation of deployed sourcing and demand planning methods? ASIL consultants are Service and Supply Chain professionals with over 100 years’ experience in Domestic and International Service and Supply Chains. We know what it takes to create success now and into the future. We have a proven track record of pragmatic and creative solutions and welcome the opportunity to help navigate your journey to successful outcomes. Call us today and let us help you achieve new areas of visibility, profitability and success in this ever changing economic climate. Call us today at 408-980-9904.
Contributed by Warren White
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Spotlight
Who are you accountable to?
Accountability begins with each of us. Yet it seems that we typically blame somebody, anybody, or everybody else that needs to be reminded about their actions. The list below is a brief compilation of things that drive all of us crazy on a daily basis. No doubt we have routinely experienced these behaviors, and goodness forbid that we may actually be a part of the problem.
How many of these situations have you observed or personally experienced? Anybody you know? Most people really are not aware that they are doing it.
Believes their ideas are the best, routinely dismisses others
Focuses more on defending a position versus learning new perspectives
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Is important to always be seen as right, versus being human and vulnerable
Wants to be known as a leader, but routinely ignored as a leader
Wants to be known as an Expert, but routinely loses audience in discussions
Believes that they are a Team player, yet routinely undermines authority and others
Takes credit for others work, yet quickly assigns blame
While the delays, infighting, missed deadlines and more can be costly, the real impact is the loss of opportunity. The potential that never becomes realized because it is derailed before it begins. Most employees will shut down and not participate to their potential in these environments.
So why should you care? Because you can make a difference just by taking a few small steps. As managers and leaders we need to observe and take action to change our environments. It starts with holding each other professionally accountable. If you permit the above activities to routinely occur within your departments, teams, and organizations then you set the stage for the disruption, lack of trust, and emotional uncertainty. Seek out the areas that undermine the potential of your employees and address them with clarity and swiftness. Accountability begins with each us and how we chose to be accountable defines the playing field of success.
Contributed by Peter Pazmany
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Editor Corner
Leveraging Tension
Tension is prevalent in every type of company and business. There is a key to understanding tension, namely, it is comprised of two forces. As Peter Senge* alludes, there is emotional tension as well as creative tension. Tension comes from a single source, assessing the current reality of one’s situation. Being able to ascertain what the current state of the organization is can be crucial when trying to determine where to move forward. This understanding of reality generates both emotional and creative tension. Emotional tension comes from employees interacting with one another in non-constructive ways to the extent where the company’s production or service suffers. Creative tension comes from seeing a vision to move to from a current reality and working to achieve that vision. Emotional tension draws its strength from fear while creative tension generates its energy from positive interactions of people in pursuing a future they are creating.
A scenario using both emotional and creative tension shows that outcomes of tension can vary quite substantially. Ralph and Fred both have different ideas to help enhance a project their company is currently working on. Utilizing emotional tension, they get in a disagreement about who has a better idea. Ralph finally looks at Fred and announces this is the final straw in a long line of suppressed grievances. They both go home and come back the next day only to talk about their encounters with their peers, creating departments that begin to avoid one another. The project gets neither idea and now there is a serious schism in the company.
Approaching this situation using creative tension reveals a very different outcome. Ralph and Fred both have the same two ideas. Seeing their ideas being different, they begin to discuss the merits and potential issues of each other’s ideas. They decide to bring these ideas to their boss to see if they can help improve the project. Their boss decides neither idea will work alone, however, when combined the ideas help the project become more efficient and cut costs. With creative tension, the difference in opinions and ideas actually improved the project because they were seen as a source of creative energy.
Consider both situations, either one can easily be slipped into merely through a choice of how to interact with one another in the workplace. Ralph and Fred make the choice to either work with one another productively or use each other as a punching bag. It is important to remember that employees will use tension when they are introduced to their reality. This means that there will be tension and it can be either emotional or creative. If your employees are not using creative tension then they will use emotional tension and vice versa. By guiding your employees to exploit the creative tension, the emotional tension will naturally decrease because of the improvement of interactions between employees. If you or your company is looking for suggestions regarding types of tension and the possible effects on your organization, contact ASIL at 408-980-9904 to discuss a consultation.
* Senge, P. (2006). The fifth discipline: The art and science of a learning organization. New York, NY: Doubleday.
Contributed by: Joe Pazmany
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Industry Trends
Dealing wth Risk
The lack of Visibility, Accountability and Control can place a high level of risk on your business and can impact your success. As with any risk associated to your business, you have options on how to address and resolve each risk. The table below from Gartner identifies five actions that are available to you.
| Action | Description |
| Accept the risk | When the risk is so unlikely or its impact so low that it warrants no further action, the company can decide to simply bear the cost of recovery if the need arises. |
| Avoid the risk | When the cost and likelihood of the risk are large, it may no longer be feasible to continue operation in the area of activity that incurs the risk. |
| Transfer or share the risk | When the risk is part of the business, but the cost is predicable, the company may share or transfer risk through insurance, contracts and warranties, and joint-venture agreements. The cost of those penalties belongs entirely to the delivery service. |
| Reduce or mitigate the risk | Often, risk must be borne for a core function of the business; however, systems and controls will be needed to mitigate or reduce the likelihood or the impact of the risk. |
| Ignore the risk | It is very dangerous for executives to do nothing-neither consciously accepting the risk nor mitigating it. |
Source: Gartner
Understanding risk and what to do about it is a never ending task. Most companies complete a major risk evaluation and assessment either once or twice a year. During these sessions, they identify the major risks that exist, determine their importance and likelihood of occurrence and then the outcome will be the level of action to taken for each risk. This could include changing processes, people, software, hardware, providers, etc. Any number of possibilities can occur to reduce or mitigate risk.
A fundamental activity for success is to identify, assess and monitor risks. There are many tools which can help you complete this task. Some organizations use spreadsheets, presentations and e-mail as tools to accomplish tracking. Others employ an integrated software solution that has the tools that assist in risk mitigation. In either case, of key importance is not to allow any of these risks to fall through the cracks. Make sure that whatever process or system that you employ provides you with Visibility, Accountability and Controlled.
Do you need help performing a risk assessement? Call the professionals at ASIL, Inc. at 408-980-9904 to discuss how we can help.
Contributed by Michael Singleton
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Our Software Products
Click on the links below to view ASIL, Inc.'s MAX Partnering® self-paced software demonstrations:
Strategies and Execution - This demo depicts the tools that organizations can utilize to embrace change effectively and implement it successfully.
Self Assessment Sample Questionnaire - This demo will enable you to respond to a small sample of self assessment questions focused on change management and create a Heat Map of your responses to see areas that may need attention. The Driving Complex Change® methodology addresses the six areas of Direction, Ability, Incentive, Resources, Structure, and Action that can impact your effectiveness of change management.
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