SUPPLY CHAIN RESOURCE COOPERATIVE

A lot of blogs and writers are discussing the role of machines vs. humans and their relationship, especially in the context of supply chain management.  Scenarios are being painted of computers operating in a real-time environment, using blockchain to process transactions, relying on Internet of Things to order goods and services, which are delivered by drones to consumers homes.  The reality of this scenario is far fetched indeed, primarily because futurists are dramatically underestimating the degree to which people organizations must change to deal with these technologies.  A similar level of euphoria existed 17 years ago, when people started playing against computers in chess.  Some readers may recall the level of discomfort when computers were playing against and beating Grand Chess Masters in the 1990-2000 period, described by Gary Kasparov in this book “Deep Thinking”.

“The growth of machines from chess beginners to Grandmasters is also a progression that is being repeated by countless AI projects around the world. AI products tend to evolve from laughably weak to interesting but feeble, then to artificial but useful, and finally to transcendent and superior to humans…Overestimating the potential upside of every new sign of tech progress is as common as downplaying the downsides. It’s easy to let our imaginations run wild with how any new development is going to change everything practically overnight. Human nature is simply out of sync with the nature of technological development. We see progress as linear, a straight line of improvement. In reality, this is only true with mature technologies that have been developed and deployed. We expect linear progress, but what we get are years of setbacks and maturation. Then the right technologies combine or a critical mass is reached and boom, it takes off vertically for a while until it reaches the mature phase and levels off.”

Kasparov also notes that it is important to recognize the role that machines have in AI, and the importance of humans “in the loop”, through the use of “Moravec’s paradox.

“In 1988 the roboticist Hans Moravec wrote, “It is comparatively easy to make computers exhibit adult level performance on intelligence tests or playing checkers, and difficult or impossible to give them the skills of a one-year-old when it comes to perception and mobility.   Computers are very good at chess calculation, which is the part humans have the most trouble with. Computers are poor at recognizing patterns and making analogical evaluations, a human strength.”

Or as Bill Gates stated in his axiom:

“We alway overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.”

These insights suggest that change management is not just option, but truly imperative in a period when so many new technologies are coming on-line. Waiting for something to happen will be result in failure to adapt, and ultimately, to extinction.

A central issue that emerged from discussions I’ve had with executives in the last month is the importance of the three big shifts occurring in terms of defining organizational governance, establishing the talent requirements for the change, and building the right level of trust between enterprises to share data.   Concern by executives is expressed around how to socialize these changes, the communication strategy for the digital economy, and getting people to adapt. The intent is to engage people to share “what decisions could you make if you had this specific information?” as a means to identifying how to design not only the user interfaces, but the timeliness and specific types of data required for these decisions. Being able to see what “experts” are doing in terms of “best practices” can help establish the essential features of the data platforms and interface mechanisms.

Another important element is how to incent suppliers to be honest and share their issues. How can you trust them to trigger orders, without having to ask them and check on them? How to reward people who go the extra mile, and using smart contracts through emerging technologies such as block chain?  These and many other questions are more interesting to consider then how fast the technology will be adopted.

 

The cultural transformation that will accompany these changes will be significant. Using the example of driving and “trusting” the Waze app to take one down the right street to avoid traffic, participants noted that Deere managers will have a hard time trusting new systems and follow their guidance. The change management portion of analytics will be a bigger inhibitor than the software and hardware changes. This needs to be explicitly accounted for in developing talent strategies.

[No comments]

I had the opportunity today to listen to a fantastic presentation to a group of Lenovo executives, while working with their SAIL Executive Development program.  Kirk Skaugen, Executive VP and President of the Data Center Group at Lenovo, spoke to the group on some key lessons that he learned throughout his career, which began at Intel more than 20 years ago.  Kirk’s advice was I thought something that all supply chain students need to hear.  Here they are.

10 Pieces of Career Advice from Kirk

Little things don’t mean a lot – little things mean everything. People come in to present to me – but hadn’t booked a conference room and couldn’t connect their computer – and so they start 6-8 minutes late for a 30 minute meeting!  When I had to present to a CEO – I would book the room early, and make sure the screen was working! If I had a meeting with a client I would be sure to fly in early the day before to avoid being late. One time I heard it was a manager’s birthday, and I brought in a birthday cake for someone and it meant the world to her. As a result of these little things, I ended up getting a huge promotion.  When I asked my boss why, he said “because with you every little thing clicked” . Little things build up the level of trust through execution excellence, and people notice.

Burn your bridges and you better be a good swimmer. I was with a senior director of a big customer, acting as  his supplier. Now he is running the company and he is trying to sell to me at Lenovo! I have tons of of examples where people I used to work for are now working for me.  Beware of getting frustrated and closing doors, as it will come back to bite you!

Execution trumps intent. Most people will walk in with a plan but how many people actually say what they are going to do, and then do them?  One study I read claimed that about 10% of people who write their goals down and execute them make 90% of the wealth.   Everybody has a plan but are you executing it? Personally, I enjoy mentoring people who actually go do it!

Assume accountability. In a big organization – so many things fall through the cracks. Who are the people stepping into the cracks and assuming accountability?  People notice this.   You need to assume the problem is YOUR problem.   If you see empty Coke cans in a conference room, pick them up and recycle them, don’t wait for housekeeping to do it!

Trust overrides capability. I knew a person who was the world’s expert in a technology, but he didn’t get a high level assignment.  Why?  Because he had most capability but people didn’t trust him. The obvious expert didn’t spend time building trust with their boss to understand the decision-maker – and didn’t get the sign-up. The promotions go to people who actually get things done.  So if you assume capability to get things done, you will build trust and elevate people’s estimation in your ability to be a leader.

Development plans matter – have a plan “B”. Organizations constantly re-organize. I had a plan A for a lot of my career, but rarely did it work out.  My entire career has been a series of plan B’s.

Know your flexibility and market it! You can be flexible and if you do some things that you wouldn’t be able to normally do – then you can do more things. You need to be able to be very clear with your superiors about what you are willing and able to do, as well as what you don’t want to do. If you are clear, you are more likely to get the roles you are interested in. I marketed my flexibility to an executive, and they were making decisions quickly and almost passed me over – and then we moved to Singapore to a job I might never have gotten!

Think carefully about who you select for your Mentor. You need to be very careful about the person you want to select who has the same basic life principles as you. The best mentors are people who might be a peer, and you agree to make each other better.  That person can walk out of a meeting with you and tell you what you did wrong in that meeting and how people are perceiving you.

Lions don’t need to roar. Be humble and have humility, the world is driven by people. If you are responsible for something and admit things aren’t going well, then you will get more respect than if you pretend things are perfect.

Prepare and embrace the “big opportunity” when it arrives. You will get an opportunity to do something that is above your level of capability and you need to be willing to prepare like crazy for it. Spend two or three hours for every hour with your customer. Know your numbers. People get opportunities and they blow it and don’t take advantage of the moment.

Every student needs to think about these rules when they go out to work in an internship or a new job!

[1 comment]

This past week we held a roundtable focused on “Combating Counterfeiting in the Supply Chain”.  This post is a continuation of an earlier post I wrote on this subject.  Counterfeiting is seen as a major problem facing major manufacturers as well as our defense organizations.  A common theme discussed was that greater public education is needed to ensure that customers know the effects of buying counterfeit products. This is particularly the case for internet sales, as e-platforms are exploited by counterfeiters. An electronics manufacturer has repeatedly sent letters to online retailers complaining of counterfeit products being sold on their site, but often as not there is no response. There are forms that are filled out, but little else. The company has had some success with third parties that are employed to scan Amazon websites using search algorithms using the brand name in the search string, and identifying sites selling fakes, and shutting down these sites. But the sellers just open new ones. Having the company brand in the website is however too common, and there are tens of thousands of sites that have these names I them.

A similar challenge exists with tax fraud. Tax rates in states differ, and for companies to sell their products to comply with these laws requires them to ship and sell in states using a specific tax rate. But criminals will buy products and sell them in other locations, and there is a liability and compliance risk to the brand. The company will often track where the product is being shipped – and show that it was distributed legitimately, but it becomes difficult to track wholesaler activity. There has been increased tightening up of wholesale records, but when it goes to retailers, it is difficult to track. There is very little that brand owners can do to solve illicit activity that is feeding a demand for illicit product on the part of consumers.

An important point that emerges from this discussion is the importance of identifying the “critical interdiction point” where the product passes through a user’s hands. For aerospace maintenance, it will be the maintenance engineer. For instance, Air Force operations are focused on one-on-one training of junior technicians by senior experts, to show them what to look for in a product before it is installed in a repair operation. There is also specific training related to avoiding situations where “emergency orders” are placed through distributors from unidentified sources that claim to be “certified parts”. These parts will often pass preliminary inspection and testing, but once installed, may fail within a matter of hours. A critical location of aerospace counterfeiting origin is the Shenjen area of China, and this has also been targeted for audits. Another example of a critical interdiction point is in currency counterfeiting, where the Federal Reserve has focused its $100M public relations campaign at the cashier level. Training is carried out to educate cashiers on what to look for in a note. There may not be a need to educate the entire public, but the critical point of interdiction should be identified.

Application of Cognitive Technologies and Blockchain to Combat Counterfeiting

At the meeting,Rob Allen from IBM shared insights on how Watson can be used to model correlations in unstructured data that straight line analysis cannot do. For instance, Watson can work on detecting irregularities in transactions that lead to insights into used to authenticity of transactions. The second application is on Internet of Things to track products. Finally IBM is working on block chain, to better track order management. These technologies can be used to drive recommendations and alerts regarding transactions.

Block chain involves a shared ledger and a smart contract, with business terms embedded in a transaction database and executed by transactions. Transactions are secure, authenticated, and verifiable, and all parties agree to the network verified transactions. It is an “append-only distributed system of record” shared across a business network.   An individual can check into the authentication of who shipped a product, and that individual has to be digitally approved.

A potential application of block chain is that it is ‘hack proof’ from counterfeiters. If there is a problem at the end customer, the block chain can be traced to identify where the chain of custody broke down, as a majority of people in the block chain have to ‘approve you’. This would effectively replace EDI.

When combined with IBM global financing, block chain could dramatically reduce invoice disputes on late payments. It is about trust… if you send an invoice and it isn’t paid, you are “voted off the island’. IBM is working on a pilot with Maersk on digitizing customs processes. IBM and Walmart are ensuring food safety and are piloting pork chops with a group of pilot volunteers, with all pork shipments from China going on the block chain. This is extending back all the way to the farm, to enable identification of tainted meat. The farmer would set up the original transactions, and sell 75 pigs to the wholesaler, which is now on your ledger, and then the transference continues down the chain.

A big challenge to consider in the block chain is the degree to which parties can get others in the supply chain to join the block chain. For instance, how can an enterprise get all of their tier 1, 2, and 3 suppliers on their collaborative Elementum platform to share data? Or how to get all suppliers on the Ariba network to join through supplier enablement? There are lots of examples where suppliers may not want to join an electronic network. Some of the challenges inherent in this issue involve demonstrating the value for supply chain participants to join, understanding how gain-sharing and time sharing will occur, defining how these gains will be shared, and developing the governance around the structure of the block chain activities.

Another use case is conflict minerals and understanding their origin. A willingness to expose and be transparent is an assumed and implicit requirement for participation in the block chain. But will the farmer or the miner want to share this information – and how is it monitored? The “permissioning” of data is a big part of the challenge here, and the question of whether the right person is in the chain is also implicit. The block chain assumes the identity of the person is legitimate and known – whereas others may choose to use bitcoin to remain anonymous.

Counterfeiters as Competitors

An important conceptualization emerged from the discussion, and to think of counterfeiters as competitors for your product in the market channel. A participant who worked extensively with a large film producer discussed this paradigm as a way of thinking about the problem. The film producer had problems prosecuting and investigating counterfeiters of digital movies. Digital vendors of their products are everywhere in the world, and they recognized early on that prosecuting these individuals in China and other places was fruitless. So by thinking of counterfeiters as competitors, it changed the way that they attacked the problem. They recognized they needed to find new ways to deceive and disguise the content, as law enforcement was not a legitimate source of protection. Even when prosecution occurred, the criminals paid the fines and went back to their old lanes of supplying product to customers. To truly protect the product requires a way to interdict the market in a way that counterfeiters cannot profit from.

The solution, in this case, was relatively simple. Executives recognized that weren’t trying to avoid paying for movies – they simply didn’t want to wait for the product to come out on DVR, and wanted to view the content as quickly as possible. This simply meant re-thinking the go to market strategy; consumers are willing to pay for the product in a format where they can download the movie right away and watch it, even while it is in theaters, and before it is released. This in fact created a premium market that did not exist before, that allowed the product to get to market faster, and essentially interdicted counterfeiters. Of course, the volume of counterfeit product still exists.

These insights reveal how creative strategies are needed to truly combat counterfeiting in the supply chain.

[No comments]

This week’s guest blog is from Marvin Magusara, who contributed insights into an area often maligned…. packaging!  The role of packaging is an important contributor to total cost of ownership, as it also impacts cube on trucks, inventory storage, product safety, regulatory compliance, and customer satisfaction. Packaging errors are often the root cause of massive recalls, excess and obsolete inventory costs, and can often be prevented through a clear error-proofing process.  Global Vision is one of the industry leaders for packaging and labelling quality control for the food, pharmaceuticals and consumer products industry. The company has worked with over 72% of the biggest companies in the pharmaceutical industry worldwide, and its customers list can be found on their website.  Here are the top 3 reasons why packaging errors occur in the food and drug industries.

 

Since the industrialization in the nineteenth century society has become more reliant on food packaging and labeling, as a key element of information for food products. As the food industry grew throughout the years, so have the strict requirements and regulations for food packaging and labeling.

Each individual country has their own requirements and regulations regarding packaging materials and labeling. Even though different, each country follows similar procedures, such as providing accurate information on labeling and preserving physical, chemical and sanitary integrity of food product – in regards to food packaging,

Therefore, packaging materials need to be processed and approved through the correct Agency before going on the market. Such Agencies include European Food Safety Authority (EFSA), U.S Federal and Drug Administration (FDA), and China Food and Safety Law. And labels need to be inspected constantly, to minimise the chances of error, which could lead to major losses.

Labeling and packaging errors can result in premature spoiling, cross contamination, consumer illness and fatalities, if the error primarily lies within the allergen information. Manufactures can establish a positive brand reputation, supply chain relationships and risk-free distribution, retailing and consumption of products within the food industry by means of preventing packaging and labeling errors.

These packaging and Labeling errors mainly occur due to packaging art and multiple labels, last minute information and promotional activities and human error.

Packaging Art and Multiple Labels

Packaging needs to protect the product from contamination, spoiling, facilitate the use of the product, and it needs to sell the product – and this is where packaging art comes in.

Every industry, including the food industry, use packaging art to create a brand identity, which consumers will feel comfortable buying.

Perfect example would be packaging for Pringles. We all know when opening a bag of delicious crunchy chips, there is more air in the packet than chips. However, pringles cylindrical packaging design leaves little room for air since it’s filled to the brim with delicious flavoured chips, and not only does it protect the chips from breaking, unlike in a normal bag of chips, it also provides the consumer with the satisfying feeling that they are receiving their money’s worth. And the vibrant colours, like dark green for sour cream and onion, and dark blue fore salt and vinegar, immediately attracts the consumers attention.

Designing a unique packaging art is tricky, however, if done correctly, can lead to great success in the sales department. However, some products have similar artwork or packaging design – the difference might be a letter or an added feature to the design – and that is where error can occur. In the midst of packaging inspection, the inspector might not notice the difference between two packaging design or artwork,due to the similarities, and proceed to packaging process .

In a situation like that when end inspection occurs and the error is noticed, total recall will occur and that batch will not be useable. Thus, a waste of packaging material and no profit would have been made from that batch. The same with labeling.

Labels contain all information about the product, and in the food industry labels must contain information such as: name of product, name and address of manufacturer, list and quantity of ingredient/s used, and sell-by / best before/ expiry date .

And in processed food, such as honey-glazed ham and soft cheese, labels must contain: potential allergens (such as nuts, gluten, lactose), list of additives (such as: food colouring, sweeteners, preservatives, thickening agents, and so forth). Directions on how to use the product, suitable warnings, suitable storage areas/ temperatures, net weight of the product, and amount of calories per serving.

In addition countries might differ on labeling, for example, in India a AGMARK is on the label, which is a certification mark for fresh produce, which means the produce has been approved by the Directorate of Marketing and Inspection, an agency of the Government of India.

However, all countries must adhere to the same standard Labeling regulation, and provide accurate information about the product on labeling.

Packaging art and Labeling go hand-in-hand, with the sophisticated packaging designing and all the information that must be on the labels, the chances of errors have increased throughout the years.

60% of recalls were due to labeling errors and packaging art.

Simple errors such as spelling mistakes, two similar labels placed on the wrong product, incorrect label on the incorrect side of the product, translation from one language to another is incorrect (such as from English to Portuguese). And all of these can cause high levels of interruptions in the packaging process and total recall on that product, which in turn means that the batch cannot be sold.

Many food packaging companies rely on suppliers, such as TLC Packaging (UK), JK Labels (India) and Jet label (Canada), to provide reel of labels and films. However, there is also a chance of error on their side. A splice reel of labels or films are common and if not inspected properly can cause packaging error and total recall.

Companies that supply and design packaging and labeling have proofreading software , in which they inspect the graphics and text on the packaging before printing. In a situation of high stress, it is easy to spell a word incorrectly or place an incorrect expiry date on the label, so by having multiple inspections through the software, and the error can be corrected, before printing. Thus, minimizing error and minimizing recalls.

Due to the fact that packaging and labeling is so important in the food industry, it is crucial that proper protocols and inspections are set in place to avoid error and minimize recalls, and that requirements and regulations are followed.

Last minute information and Promotional Activities

 In the food industry changes are frequent. This means we need to adapt and respond to these changes quickly, and most often at the last minute.

Meaning quick decision making, last minute information and high production demand leaves room for error.

These errors occur in the forms of text error (last minute information that is highly important hasn’t been added to the labeling and packaging), barcode error (incorrect barcode on the packaging for a specific product or barcoding is non-existent), and wrong product being mispackaged, just like Nestle’s KitKat Original Milk Chocolate Bites that were mispacked with KitKat Peanut Butter Bites. And that KitKat batch was recalled due to the product having nuts, which is an allergen, and was not stated on the label or packaging. When these errors have been detected then total recall MUST occur.

Last minute information could vary, such as a difference in amount of ingredients used in the food processing of a product, any new additives, change in name or address of manufacturer, and even promotional content can be added. Basically any information on the packaging and labeling can be changed, however, it needs to be correct.

Every country has it’s own laws about promoting of food products, such as United States have ‘The Federal Trade Commission Act (FTC Act)’ with sections 5 and 12, and ‘The Food, Drug and Cosmetic Act ( FD&C Act which is under the FDA) with sections 201 and 403, that state any false or misleading labeling, promotional content on packaging or advertised is prohibited.

In China, the PRC (People’s Republic of China) Food Safety Law 2009 have specific regulations when it comes to promoting, since they have a unique importance to human life, advertisements, endorsements and promotions CANNOT be false or exaggerated. Food advertising cannot exploit the title or image of a professional to sell product.

Even though, every country has it’s own laws and regulations about advertising, they all come to the same conclusion – False advertising is not allowed. That is why promotional activity is a top reason for packaging error.

In most cases, the production team is briefed about the promotion at the last minute or when the packaging arrives, before production starts. In turn, this causes pressure on the production team, which leads to lack of clarity around when the promotion was meant to start and finish. This leaves a lot of room for error. In some categories promotional activities are constant, which has an impact on making sure that the right product is in the right promotional packaging. Incorrectly packaging products into packaging which still contains promotions even after the promotion has ended can lead to retailer fines, and claims for loss of income due to wrong prices being scanned at the tills. Situations like this can be very damaging for the manufacturer’s brand reputation.

Human Error

Even Though, humanity strives for perfection, humanity is still very imperfect. On average 25% to 50% of total recalls were due to human error. This means that the company has followed procedures to investigating the cause of the recall, and have come to the conclusion that eliminates production issues and confirm that the individual has the means to correct the error, but was simply unfocused.

Due to retailers pushing for all category range to have a unified look has created a variety of difficulties for the production team to ensure that the correct labels are applied to the products, and that the products are in the correct packaging.

Label artwork and packaging for all products are now commonly similar, with only a small difference, which makes it hard to distinguish one design from another. Hence, in a high speed, quick change over the food factory environment, it is very easy to select the incorrect label for a product from a big box of labels.

Total production recall can also be caused due to date code error, which was incorrectly calculated, or was changed during setup or changeover, and was not identified. This falls under Human error.

Conclusion

Individuals up and down the supply chain make errors every day. It’s up to the manufacture to feel confident that their systems can detect, prevent and correct these errors. Even though, manufacturers have manual and automated systems in place to check labeling and packaging, it isn’t 100% fool-proof. It’s up to the manufacture to make sure that their product is up to standard, to make profit and build reliable brands for consumers.

[No comments]

A roundtable of executives was held at North Carolina State University on May 31, 2017, focused on exploring insights into the following questions related to counterfeiting in the supply chain.

  • What processes are companies using to identify and understand the scope and level of counterfeiting across their tier 1 and tier 2 nodes (upstream and downstream) in the supply chain? (A secondary question is the size of the counterfeit problem across supply chains.
  • What are the means through which organizations can contain existing flow of counterfeit product? (Examples include supplier audits, logistics container seals, track and trace technologies, or other means).
  • How can organizations work to proactively prevent counterfeit products from successfully broaching the supply chain through improved resiliency approaches such as blockchain and IoT technologies?

A diverse group of executives attended this session.  The meeting began with an overview of the Document Security Alliance. The alliance was initially founded by the Secret Service following 9-11, and the origin of the group was driven by the need to identify the origin of the counterfeit drivers licenses used to gain access to the airport, using the fingerprints on these licenses, and working with the print manufacturers. The focus of this group is not on how to improve documents and counterfeit deterrents, to counteract fraud and criminalization. The group has a broad objective that goes beyond counterfeiting, and goes beyond simple return on investment private sector issues. They explore a number of technologies that can make documents secure, including passport security that is often the means through which human slaves are trafficked. More than 1 million children in particular are being trafficked across borders, supported by counterfeit passports, which in turn supports organized crime and terrorism.

The cost of fraud is estimated to be significant, over $1.7 T. The presentation showed how entire factories are coming over in container-loads through the LA port, and the outer wrapping and tax stamps of these cigarettes and liquor are professional and look exactly similar to the untrained eye. Videos showed how real cans of Budweiser were being “refilled, re-sealed, and re-sold” from a factory in China. Other products that have been counterfeited are Tide, baby formula, and other packages that are often collected from trash cans, cleared up, repacked with fake product, and re-sold. There is also a large element focused on taking recycled goods shipped to China, stripping it down, clearing it up, and re-labeling it. This occurs a lot with electronic boards, often recycled and sold back through distributors to government agencies. Logs may be harvested in the US, shipped to China, processes as plywood using formaldehyde, and then imported and used to construct houses in the United States.   Even though these are not counterfeit, they are fraudulent as they do not meet housing code requirements.

What is needed to address counterfeiting is a holistic view of collaboration. There is also a need to come to grips with the fact that there is apathy on the part of the consumer towards document and brand fraud. Prescription fraud is an issue that is also not adequately highlighted, even though people are ingesting fake drugs. There is no single silver bullet that will work, but there needs to be a layering of security processes and bringing together different technologies that span cover, semi-covert, and overt technologies to stay ahead.

But there are also constraints to the proposed solutions. It must meet regulations, and be cost effective. If it slows down manufacturing productivity, it will be a ‘non-starter’. All of these factors must be considered through cross-functional team engagement and solution exploration. Data storage for product serialization records, for example, is a big issue. Who will manage it and who will validate the data, as this is becoming very expensive. Currently, no one “owns” the verification data and processes, and the criminals are exploiting this gap.

If you are interested in this subject, read more in Part 2.

[No comments]

Germany companies are becoming more commonplace in not just automotive supply chains (BMW, Bosch, Daimler), but in chemicals (BASF), pharmaceuticals (Bayer), industrial manufacturing (Siemens), and software (SAP).  There are a lot of misperceptions on how to interact with German managers, so we have invited a guest blog from David Rainey, from Dammann German-English translations on some of the most common Misunderstandings Between Americans and Germans in Managing Buyer-Supplier Relationships.

Effective communication between German and American businesses is essential for business relationships to be fruitful. However, it’s not always possible to communicate in quite the same way as you might do within your own culture as you would do when discussing business transactions with a German.

Every country, including Germany, has a unique way of communicating and doing business. What is most important is the message that the communicator is trying to get across.

The sorts of things you should consider when arranging a business deal with a German client include:

  • being aware of the full range of verbal and non-verbal language;
  • keeping an open mind with reference to the views of others and how they do things.

Communicating face-to-face

First impressions are of great importance to Germans, as they are to many other nationalities and could have an impact on the outcome of any business deal. This means adopting certain non-verbal skills that your German counterpart will approve of, such as:

  1. ensuring you stand an arm’s length away when conversing with a German businessperson;
  2. keeping good eye contact is essential and respected while also indicating the conversation is important;
  3. keeping direct eye contact is essential when toasting. You should say “Prost!” while toasting with beer and “Zum wohl!” while toasting with a glass of wine;
  4. not extending your middle finger. This is a negative gesture as is pointing with the index finger to the head.
  5. being formal and reserved. One shouldn’t wave frantically to attract someone you know who is at distance from you.
  6. recognizing that many Germans appreciate privacy and quietness;
  7. exchanging business cards at a meeting;
  8. understanding that German businessmen may show how much they have enjoyed a presentation when a business meeting comes to a finish by tapping their knuckles on a table top.

 Verbal Communication

The following etiquette should be followed when communicating with a German business person:

  • Don’t phone a business associate in his or her home after 10 pm
  • Business people are not in their offices after 5 p.m. from Monday to Thursday or on Friday after 4 p.m.
  • When answering a phone call in Germany, you should identify yourself by referring to your last name.

In conversational situations in a business meeting, Germans are usually quite straightforward in approach and often only use a small number of chatty, but polite phrases. Typically, they tend to get to the point quite quickly and expect a result by the time the meeting has come to an end.

Avoiding common misunderstandings in a business meeting

As in any cross cultural situation, there is a possibility of misunderstanding, unless the participants are aware of differences in acceptable behaviour. These are some common situations which can lead to misunderstanding.

  1. If you only know a little German, you might be aware that there are two versions of the pronoun “you”. Unless you know a business colleague very well, it is safer to stick to the more formal “Sie” rather than the more informal “Du”. Using “Du” with people you do not know could be regarded as an insult.
  2. Even quite close colleagues will refer to each other formally and rarely, especially in a business meeting context, with first names, which is a much more common mannerism in the U.S. or Australia.
  3. It is polite to shake hands when meeting business partners or associates as well as when leaving them. Handshakes tend to be brief but firm. German businessmen tend to regard a wave rather than a handshake as impolite.
  4. Don’t try and make a fuss about paying the bill after a business meal if it was you that were invited. This is the responsibility of your hosts.

Author:- Alison Williams

My interest in writing became important to me in 2001 after I gained an MA in Applied Linguistics and I started to move into writing as a means of securing an income. I have since then specialised in writing blog posts and web pages for a variety of clients including those in the legal and translation niches. I have built up the ability as a highly skilled writer to communicate with a variety of audiences and in an array of styles and formats. Over the past few years, I have worked with executives, entrepreneurs, industry experts and many other professionals in writing and publishing, SEO web content, blogs, newspaper articles and more.

[No comments]

This week’s blog is a guest blog posted by Consider Digital, an online marketing company based in Kuala Lampur, Malaysia.  They shared with me some insights based on their experiences in data collection, considering the pros and cons of digital vs. paper-based market data collection.  These are important points for anyone in the early stages of considering how to go about collecting customer or supplier data.

Data Gathering – Paper Based vs. Electronic Data Collection

Data gathering can be carried out in a myriad of ways. Among them are Computer Assisted Personal Interviewing (CAPI or “electronic”) and Paper and Pencil Interviewing (PAPI or “paper based”). These methods come with their very own set of advantages and disadvantages. PAPI is a more traditional method that involves questionnaires or surveys in paper form whereas CAPI is a newer and more popular method that involves tools like tablets, smartphones or laptops to record responses. Although CAPI is gaining popularity today, PAPI may still be the right choice in certain situations.

Here is a list of pros and cons to help you make the best decision:

Computer Assisted Personal Interviewing (CAPI or “electronic”)

https://www.pinterest.com/pin/456904324681684341/

Pros:

  • Data gathering through electronic tools is most effective when the data generated through a well-constructed questionnaire can be fed in for analysis directly without any need for further data cleaning.
  • Studies have also shown that electronic tools generate a much higher response rate and allow researchers to connect with a vast population regardless of their location.
  • Data entry and integration is fast, information gets stacked and processed for real time usage. Electronic tools eliminate the need for manual intervention and minimize human error.
  • It’s easy to modify the surveys based on the real-time feedback. Electronic tools allow for flexibility to make changes quickly and send the survey back into the field without waiting for an entire cycle of surveys to end.
  • When the cost of initiating an electronic survey that requires large overheads is compared to the magnitude of the survey’s reach, the cost-per-response is significantly lower compared to other alternatives. Avoid the hassle of hiring employees to carry out electronic surveys; Dattel will do it for you. Click here (http://www.dattel.asia/) to ASEAN’s leading face-to-face data collection service provider that utilizes tablets, digital tools and artificial machine learning systems to collect the true voice of the respondents across a vast urban and rural gamut. To date, Dattel has more than 310,000 unique and verified respondents, over 250 full time Field Data Associates as well as over 40 quality assurance officers across 3 countries. Real-time data collection and analysis has never been easier.

Cons:

  • Poor communication connectivity can be the most debilitating liability when it concerns areas that lack the adequate infrastructure. Electronic tools cannot be used to administer surveys effectively in areas that don’t have sufficient internet connectivity or access, and this will negatively impact the process.
  • The lack of familiarity with electronic tools on the part of the researcher and respondent can cause major hiccups when it comes to answering and administering surveys correctly. Also, complete reliance on electronic tools may hinder researchers from carrying out surveys in areas where respondents may be uncomfortable with these devices.

https://www.pinterest.com/pin/157274211965527103/

Paper and Pencil Interviewing (PAPI or “paper based”)

https://www.pinterest.com/pin/490540584396352781/

Pros:

  • Even though wireless infrastructures are rapidly spreading everywhere and low cost mobile device usage is at an all time high, the lack of familiarity with electronic tools among respondents and poor communication connectivity makes paper based surveys the most reliable option. Most respondents of any sample are highly likely to be familiar with paper-based information. This method may very well elicit the best response when it comes to respondents that are not tech savvy.
  • It is also less expensive as it requires a lower overhead cost and more often than not, don’t require an initial investment.
  • Electronic tools require researchers to be adequately trained to use the devices correctly so as to not impede the data collection process. Whereas, paper based tools require little to no training.
  • This also means a potentially higher reach spanning the most remote and sparsely populated areas that are sometimes left out because of poor power supply and internet connectivity.
  • Paper based tools are almost completely devoid of technical glitches like tablets losing power due to a finished battery or laptops hanging due to overuse.

Cons:

  • It takes a lot of time to transfer information from the point of collection to the center of data assimilation and analysis due to the manual nature of the process. It can be very time consuming to administer paper-based surveys and this is inevitable.
  • Data entry can bring about human errors that can’t be avoided. Digitizing information collected on paper based surveys and analysis allows for erroneous entries. The lapse of human attention is a drawback, which may make electronic tools a better alternative.
  • Paper based surveys mean unnecessary bulk if there is a need to retain records. Also, record retention and recall is a challenge. Sheets of paper can suffer wear and tear during transit and storage.
  • Another challenge is logistic difficulties that are encountered when surveys are mailed and respondents are less than willing to complete the survey and make the extra effort to return it.

https://www.pinterest.com/pin/754212268816421781/

For more on data integrity, click here: https://scm.ncsu.edu/blog/2017/02/14/bad-data-lack-of-standards-lousy-supply-chain-analytics/

 

 

 

 

 

 

[No comments]

This week the Supply Chain Resource Cooperative is holding an executive panel focused on the challenges of dealing with counterfeiting in the supply chain.  We will be hosting a number of major public and private sector participants including the Air Force, the Treasury, the pharmaceutical sector, consumer products sector, technology sector, and services sector.  All of these sectors have a common enemy:  counterfeit crime.  Most people don’t realize how big an issue this has become.  A report by Jeremy Wilson at Michigan State University, which hosts the country’s only Center for Anti-Counterfeiting and Product Protection, notes that counterfeiting has grown from a $30B trade problem in the 1980s, to $600B in trade.  Some project that this could soon cost nearly $1.8 trillion, which is more than the gross domestic product of most countries!  A summary of the potential impacts produced by the International Chamber of Commerce is shown below.  The roundtable is being hosted by NC State, and is a project funded by the Center for Advanced Purchasing Studies, in conjunction with Dr. Robert Handfield of NCSU and Dr. Anand Nair of Michigan State University.
Wilson notes that the explosion of counterfeiting is occurring for several reasons.  First, most companies don’t know (and often don’t care) about the origin of their product components.  Intermediary components are invisible to the general public, with the exception of ingestibles, which has recently become a bigger priority.  So this means that brand owners need to focus much more on mapping and monitoring their supply chain, something which we often refer to in the purchasing world as “supplier relationship management” (SRM).  Rule one of SRM is – know who you are buying from and who is in your supply chain!

Second, when it comes to combating counterfeit products, the Internet is not your friend.  The volume of sales through the Internet is growing at an exponential rate – but since  majority of counterfeits are marketed through an online presence, tracking down their origin is very difficult.  The general acceptance of online purchasing by consumers, combined with the financial rewards and minimal risks to the counterfeiters selling online, is the secret sauce for the explosion in sales of counterfeit goods.  Not surprisingly, most of these sites are based in China.  So brand owners should begin by focusing on the biggest and most frafficed sites, such as Taobao in China with approximately 130 million daily users, as well as Alibaba and Aliexpress.

Third, the problem here is also related to consumer behavior.  Most people “don’t care” if their product is counterfeit, and they don’t mind paying less even if it does violate intellectual property rights.  Most people would argue that “You can’t die from buying a fake T-shirt or downloading an unauthorized album”.  Well yes, you can actually – if the profits finance terrorism or organized crime like drugs, vice and illegal arms.  Which is not all that uncommon, by the way.  So the key here is going to be education of consumers as well as enterprises along the entire supply chain.

Why is education important?  Because the best solution to counterfeiting is to take away the demand.  It is one thing to buy fake toys, and shoddy fake Prada handbags.  Counterfeit criminals are producing fake airbags for cars, poorly produced engine parts for jet fighters that don’t meet FAA requirements, and fake parts for your vehicle, putting everyone at risk when we travel by car or commercial airlines.   Worst of all are fake pharmaceuticals, which have deadly effects.  It has been estimated that 80-90% of the pharmaceuticals in Africa, for instance, are counterfeit.  The World Health Organization also estimates that counterfeit drug sales total about $75B per year, which typically don’t contain any active ingredients whatsoever, and may be mixed with ingredients like lead.  But nobody really knows for sure just how bad the situation really is.

The obvious approach to combat counterfeiting is to move towards innovative security labeling technologies that permit track and trace.  Tracking is about recording information about movement of the product along the supply chain, tracing is the ability of operators to access information about the product.  However, that isn’t enough, because counterfeiters are a particularly nefarious bunch when it comes to outsmarting technology.  As such, technology providers are using multiple forms of “product authentication”, including overt (obvious to the naked eye), covert (specialized equipment such as microtext and UV fluorescent inks), and forensic solutions (molecular markers).

A good security labeling system must be relatively inexpensive, resistant to attacks, contain both overt and covert features, and allow law enforcement, customs, and brand owners to determine authenticity 100% of the time with 100% accuracy.  Labeling systems can make counterfeiters lives more difficult, but is unlikely to solve the problem entirely.  A multi-layered approach that requires true collaboration across multiple parties in the supply chain is what is really required.

So if an online deal sounds too good to be true… it probably is.  Counterfeiters don’t care about brand protection, safety concerns, or quality control.  So our complacency breeds the growth of their illegal activity. But at its core, combating counterfeiters is a much bigger problems, that involves in fact the entire supply chain.  Every party in the supply chain is involved, and a single enterprise acting alone will have no effect.  Criminals benefit when law enforcement, regulatory bodies, government entities, and private sector industry do nothing.

We hope that this roundtable will lead to some productive insights that will drive this research forward and contribute in a meaningful way to the prevention and deterrence of counterfeiting.

[1 comment]

In a recent article in Supply Chain Navigator, I spend some time discussing the interesting relationship between the introduction of wolves in Yellowstone Park, and the evolution of digital supply chains.

When the wolves were all killed off in 1926 due to over-hunting, the elk population erupted, and the larger herds took a heavy toll on the systems’ trees and plants. When 31 wolves were reintroduced into Yellowstone in 1974, ten years later the population had grown to 301. Not only was the elk population reduced by half in the years that followed, but the over browsing of wood species by elk, notably aspen, cottonwood and willow was halted. This “trophic cascade” of wolves impact on increasing the population of trees, also impacted the lives of beavers, which feed off willows. And the wolves also reduced the number of coyotes in the park, which feed on young pronghorn antelope. Studies have shown that fawn survival rates are four times higher in sites with wolves then without them.

The rationale behind this is simple: Predators keep the balance of nature, and mankind needs to think about letting the natural rules of evolution play out. In the world of supply chains, the “natural rule” of evolution also emphasizes open and free trade, emphasizing open forces of competition, that drive naturally occurring outcomes. When wolves or elk are out of balance, bad things start to happen to the natural ecosystem. By the same token, supply chains should also compete fairly.

In our new book “The LIVING Supply Chain“, Tom Linton and I  propose that humankind needs to seriously consider letting the natural rules of evolution play out in the world of supply chain commerce as well. Today’s supply chains require competition to thrive but also require a degree of harmony. This is an important concept to remember, as we face a new world order that is increasingly localized and closing borders.

The “natural rule” of evolution emphasizes open and free trade and open forces of competition, which can spur innovation and continuous improvement. In this new fast-moving, digital economy, unbalanced supply chains can cause a cascade of economic impacts and instability.  Competition is good – but so is transparency.  We need both to keep the ecosystem healthy, and the wolves roaming for prey.

A New York Times story suggests that may change, researchers say, as more hunting is allowed in the states that surround the park.  As the packs grew, many wolves roamed outside the national park, replenishing the wild lands. Wolves now number about 1,700 in the Western states of Montana, Idaho, Wyoming, Oregon and Washington. Threats to livestock have intensified in recent years, pitting ranchers against conservationists and prompting some states to permit limited wolf hunting again at certain times.  A paper published last year by Dr. Smith and others found that sightings of wolves in Denali and Yellowstone “were significantly reduced” by as much as 45 percent from trapping and hunting.  Let’s keep the wolves healthy, and not hunt them down, for the good of everything in the ecosystem!  And think about this the next time you negotiate with a supplier or distributor, or when you vote for a politician who wants to shut down free trade…

 

 

[2 comments]

I recently published a white paper with Balaji Soundararajan and Joe Yacura, focused on the topic of data governance. The paper was published with the support of Bravo Solutions, and also included respondents from the SCRC.

The study deals with an issue that most organizations face today: the overwhelming amount of data being collected and stored both internally and externally. With the sheer volume of data projected to increase tenfold by 2020, the procurement and supply chain function is no exception to challenge of assessing better ways to leverage this dramatic increase in both structured and un-structured data.

These same organizations are seeking to adopt advanced analytical practices and utilizing innovative business intelligence approaches. The nature of these mechanisms is reliant upon continuous availability and utilization of data from multiple sources. Companies have invested significant infrastructure to support the availability of data in various structured (databases, data feeds etc.) and unstructured (social media, emails, text etc.) forms that provide volume, variety, velocity and veracity. The term “Big Data” is pretty commonplace to describe this activity using data. A basic assumption of all “Big Data” initiatives is that there are reliable sources of high quality, relevant, complete and accurate sources of data that support decision making. Given the volume of data and the expectations of quality, value and speed; procurement organizations need a strong “Data Governance” program in place.

“Data Governance” is a system of decision rights and accountabilities for the information-related processes, executed according to agreed-upon models which describe who can take what actions with what information, and when, under what circumstances, using what methods.
(“Data Governance” Institute). If this seems fairly straightforward and obvious, then think again. The results of our survey found that 68% of companies in America agree that their decisions were definitely impacted by a lack of solid data. Further, there is little clarity on what is meant by the term ““Data Governance””, and no widespread agreement about who is responsible for it. So far, there is no clear role on how procurement will handle current and future “Data Governance” needs. Only 15% of procurement leaders know or understand the specific presence of data governance functions within their companies.

Perhaps the most important function enabled by Data Governance programs is to ensure acceptable data quality levels for procurement function. Standardizing data quality across the entire procurement function will certify the veracity of analysis using any approach. Of the traditional six dimensions to data quality, Accuracy ranks the highest priority among the procurement professionals we surveyed, followed by validity and completeness. Our study also showed that governance programs helped increase overall data quality by 33% on average.

How should companies get started on a data governance program? Download our paper to read more…

Data Governance Survey | The Results are In!

Hi Andrea,

On behalf of BravoSolution and North Carolina State University’s Supply Chain Resource Cooperative, thank you again for taking the “Data Governance in Procurement Survey” a few months ago. As we promised, because you took the time out of your busy day to share your thoughts, you have first access to the report before it is officially published. The goal of the study was to determine how Procurement can truly benefit from advanced analytics.

Investment in Data Governance is a Foundational Requirement for Procurement

As companies seek to derive value from investments in advanced analytics, a recurring but often ignored subject that comes up in discussions is the challenge around data governance. Data Governance is a system of decision rights and accountabilities for an enterprises’ information-related processes that specifies how data is collected, flows, and is organized. The results suggest that despite having access to more data than ever, almost two thirds of organizations note that “bad data” is the primary reason for less than optimum decisions in procurement.

This report highlights the importance of data quality and governance mechanisms that organizations can put in place to achieve value. The results of this first Annual Procurement Data Governance Survey emphasizes that for organizations seeking to harness the power of analytics, investment in data governance is a foundational requirement for procurement.

Thank you again for your participation in this survey!

Sincerely,

Andrea Brody
Chief Marketing Officer

[No comments]