Not so long ago, I wrote about the problems plaguing Apple’s supply chain. Subsequently, Apple released their Supplier  Responsibility Progress Report. Amidst reports of illegal child labor being found in their suppliers’ locations, I analyzed Apple’s Supplier report and published my findings. Today, news is circulating in the blogosphere about a similar issue being discovered about Microsoft’s supply chain. Microsoft has also been in the news recently for their vision to simplify the Digital Supply Chain. But do they know what’s happening in their own backyard? Especially with all the work The Bill and Melinda Gates Foundation has been doing in the developing world, I’m not sure how the Gates’ feel about this discovery.

Underage, underpaid workers working 15-hour shifts, sexually predatory security guards, hourly pay of just 52 cents per hour after deductions for the canteen food. No talking during work hours, no listening to music, no bathroom breaks. These are just some of the conditions that workers at China's KYE Systems Corp. plant in Dongguan City have to endure. The factory produces hardware for U.S. companies, including Microsoft, and its work practices have been documented in a report by the National Labor Committee.

Source: Fastcompany

You can access the full report here. Below are key points from the report’s executive summary.

KYE recruits hundreds-even up to 1,000-"work study students" 16 and 17 years of age, who work 15-hour shifts, six and seven days a week.  In 2007 and 2008, dozens of the work study students were reported to be just 14 and 15 years old.  A typical shift is from 7:45 a.m. to 10:55 p.m.

Workers are paid 65 cents an hour, which falls to a take-home wage of 52 cents after deductions for factory food.

 

Security guards sexually harass the young women.

Not only are the hours long, but the work pace is grueling as workers race frantically to complete their mandatory goal of 2,000 Microsoft mice per shift.  During the long summer months when factory temperatures routinely reach 86 degrees, workers are drenched in sweat.

It is apparent that labor laws or companies’ code of conduct do not have the desired effect in China. With a lot of manufacturing currently being carried out in China, this represents a serious problem for companies with a global business model. The problem is that we can’t put the blame entirely on Microsoft or Apple or any one such company. The true problem is how are companies going to control their supply chains? Frequent supplier audits, combined with strict penalties for deviating from the code of conduct must be ensured. I’m pretty sure we’ll soon have other companies being added to this list. Any specific thoughts on how companies can go about eliminating such incidents and preventing future occurrences in their supply chains? Are you perturbed by the fact that most of the gadgets you use might be manufactured by harassed laborers?

Finally! Finally someone had the guts to commit to a ‘Zero” environmental footprint. Today, Sony surprised the rest of the world by making headlines of a different kind. They committed to a complete zero environmental footprint by 2050. Their plan, titled “A road to Zero” is a really, really long term decision but at least it is something. I think this is the most groundbreaking announcement they have made in the recent past. This despite being in the headlines for their new PlayStation controller and  for a slew of new cell phones. Very recently, I’d written about the concept of “Supply to Zero”, an idea inspired by Bill Gates’ concept of “Innovating to Zero”. Sony has taken this a step further by covering all aspects of its business.

Sony’s Goals I must say their goals are extremely lofty. Sony has announced targets based on four environmental perspectives – biodiversity, climate change, control of chemical substances and resource conservation. Their specific targets for the term starting fiscal 2011 and ending fiscal 2015 (which translates into March 2016) include:

- 30% reduction in annual energy consumption of products (compared to fiscal 2008)

- 10% reduction in product mass (compared to fiscal 2008)

- 50% absolute reduction in waste generation (compared to fiscal 2000)

- 30% absolute reduction in water consumption (compared to fiscal 2000)

- 14% reduction in total CO2 emissions associated with all transportation and logistics (compared to fiscal 2008)

- 16% reduction in waste from sources like parts packaging used by suppliers (compared to fiscal 2008)

- Increase of waste recycle ratio to 99% or more

- 5% reduction in utilization ratio of virgin oil-based plastics in products (compared to fiscal 2008)

- Assessment of impact of resource procurement and facility construction on biodiversity, and promotion of biodiversity programs such as groundwater cultivation

- Minimization of the risk of chemical substances through preventive measures; reduction in use of specific chemicals defined by Sony; and promotion of use of alternative materials

Source: Asahi article

Analysis The sheer comprehensiveness of their commitment surprises me. It seems to cover the entire breadth of the product lifecycle, including parts of their supply chain. The distribution piece is covered – albeit in a minor way until 2015. Plans include using more economical and environmentally friendly modes of transport. Also, they’ve committed to reduce the amount of incoming packaging – something that a lot of companies like HP, Dell and Wal-Mart have already been practicing. The direct impact that this is going to have on their procurement piece is yet to be seen. The goals here are a bit generic-sounding like “Understand greenhouse emissions attributable to parts and raw materials”. This is understandably a first step. I would personally love to see what they discover in this regard.

This is a something that will inspire a lot of “green” news in the future. Wal-Mart announced just last month that it was going to work with its suppliers to reduce its carbon footprint. What Sony has announced is certainly a more massive effort. What does tomorrow herald? A great new dawn? Do give me your thoughts.

Two people whom I personally consider thought leaders in the supply chain space write blogs about Supply Chain Management. They both wrote articles last week which got me thinking about the right way to go about designing and operating the "Ideal Supply Chain". I would love to hear your ideas about this after you read these two viewpoints and my thoughts. The first case in point: Christian Verstraete's blog about Supply Chain and Technology. In his post on The Flexible Supply Chain - ESC Day 1, he recounts the discussions at the Extended Supply Chain 2010 Conference which he'd attended. Here are his opening words
"This year’s theme was: The Flexible Supply Chain – meeting customer needs by responding efficiently to constantly changing market conditions."

On the face of it, the theme seems pretty well thought out - especially with many companies starting to finally look positively towards the future. But this line, especially the mention of "efficient response" reminded me of another blog post on the Kinaxis Supply Chain Expert Community written by Lora Cecere. If you're in the Supply Chain space and are not a member of this community, you should be. It has a lot of information and meaningful discussion taking place. Lora is one of the few supply chain "thinkers" I've come across online. She expresses her thoughts on her personal blog too. She recently wrote a post on her Kinaxis blog titled "What we can learn from Mother Nature". I found this to be an extremely interesting post about "efficiency" being a wrong goal most companies have generally used while designing their supply chains. This is why Christian's article caught my attention. Lora argues that the most efficient networks in nature are designed to be the most redundant, not the most efficient - and that efficient supply networks might function well for a while but break down frequently. Here’s an excerpt.

"Over great seafood in Austin, we discussed what nature teaches us about networks. Networks with the greatest resilience -- ability to stand the test of time-- are not the most efficient. In fact the least resilient networks in nature are the MOST efficient.  Instead, the most resilient networks have two characteristics:

Redundancy:  In nature, the networks that last over the generations are those that have the right amount of redundancy.  Excess capacity, extra nodes, and bypass routes.  The efficient network with minimal capacity, node-to-node connections, and no parallel routes fail.  This is especially true in push environments.

Dynamic reconfiguration:  Likewise, in nature, the networks that stand the test of time have the ability to reconfigure under stress.  Networks with the most centrality have the greatest failure rate."

About a month back, I was introduced to something called the Constructal Theory. It is a design theory that mimics nature's design philosophy in engineering. There's a Wikipedia article explaining the theory.

"in the constructal theory's point of view, the naturally optimized forms such as rivers, trees and branches, lungs and also the engineered forms coming from a constructal evolutionary process of maximization of flow access in time."

I have been thinking about the application of Constructal Theory in Supply Chain Management. The basic premise of the theory is for flow systems (in this case, flow of materials in a supply network) to maximize flow access. This is especially true in the case of supply chains too. Maximizing flow access in time will allow more reach while using up the same amount of resources (from a network point of view). The supply chain application does make sense but it isn’t proven yet. Let us for a moment assume it has indeed been practically shown that the theory applies to supply chains too. Consider the goals discussed in the ESC conference - A flexible supply chain that responds efficiently. Note that the network (in this case the supply chain by design) needs to be flexible, not efficient. The ideal network would respond efficiently to changes.  Building an efficient network and a network responding efficiently are two completely different things. Now let us bring in Lora's thoughts about the best networks in nature being redundant. However, redundancy is the enemy of efficiency. So how do we build a supply chain network that responds efficiently? The answer is the 'people' factor. At the core of a Supply Chain are the people running it. I have previously written about the importance of people in building a world-class supply chain. One very important lesson anyone can take away from this confluence of viewpoints is the following:

"The flexibility of a supply chain and its ability to respond to different demand patterns is a direct result of the network design. However, the efficiency of a supply chain and the speed of response depends more on the people that run the supply chain."

Thanks to Lora and Christopher for sharing their thoughts and giving birth to this post of mine. I wonder how many of today's "world-class" supply chains can claim - after reading this article - to have a "flexible supply chain that can respond efficiently"? What do you guys think?

Right off the bat, let me thank SupplyChainToday’s Facebook page for posting the video that eventually led to this blog post. The video is an interview of the President of Wal-Mart’s India operations. The reason I felt strongly about this video is because several sectors including retail have reached a flat growth curve. Looking ahead, the developing world is the area retail companies are going to expand. Like the massive green initiative that Wal-Mart recently announced, it has been one of the first American retail companies to have set foot in the developing world too. And it has been forced to do this very differently. India, like a lot of developing countries is heavily regulated in the retail sector. Wal-Mart is taking an interesting approach in India by acting as a wholesaler/distributor to the millions of retailers.

Here are two key discussions from the interview. I’ve embedded the whole video at the end of the post. It runs to about 14 minutes and I think its time well spent.

Question: Wal-Mart in India is not really in the retail business. Can you explain why this is so?

Answer: In India, retailing is a protected sector and the government currently does not allow any multinational company to operate in retailing. That’s why we don’t have retailing in India. What we propose to have in India is a wholesaler cash-n-carry business which is only permitted for business members. We’re also partnering with Bharti Retail who’ll run and own stores. But we do provide them with merchandise and marketing expertise.

Question: How would this business to business model work?

Answer: Essentially India is a nation of retailers. India has 12 million kirana stores (mom n pop stores). This is per capita (despite the size of India) the highest in the world. These stores buy from wholesale markets and direct manufacturers. The distribution chains operated by big companies like Unilever serve close to 1 million of the 12 million kirana stores directly. So a majority of these stores have to go to wholesale markets to buy products. It is a low-cost operation but it is also very inefficient. Especially in the area of fresh produce, meat, etc., it is very archaic. So how this model works is you have a selling point where you directly source product from manufacturers and sell these products to kirana stores at great prices.

The interview goes on to talk about other aspects of the business and how government regulations and legislations affect the way they do business in India. I find this model very interesting because Wal-Mart is taking its expertise – that is logistics and distribution and creating a business model to reach economies that they normally wouldn’t have been able to enter. This also ensures that Wal-Mart is able to continually grow its business in other parts of the world. This move also benefits India as they would be getting the supply chain expertise of one of the most evolved and efficient supply chains in the world. Two facts from this interview that I think will interest a lot of you are

• There is no organized supply chain in India. There is not much forecasting and retailing runs on a largely push based system.
• Almost 40% of all fresh produce in India gets wasted between the time it is produced and the time it reaches the customer.

Also, it is to be seen how soon Wal-Mart is able to integrate their Indian suppliers into their sustainability watch. The green initiative is going to direct the future of Wal-Mart’s interaction with their suppliers. It’ll be interesting to see how they approach this in the developing world where governments are not very carbon friendly as yet. Watch the rest of the interview and let me know what you think.

Interview with the President, Wal-Mart India

Do we in the Supply Chain industry really care about something called the Water Footprint? Is it something that you’re even aware of? I was not aware of this until I read a Harvard Business blog post  detailing the impact water shortage might have on businesses in the future. Sure – we’re hardly started with the whole Carbon Footprint issue and you dare bring this upon us!! The author of this post is CEO of a sustainability consulting company. Is it just me or are we really trying to invent newer ways to make our already complicated world of business all the more so? Is it not enough that we’re battling hard to get the right item at the right place and time, while being efficient and making money doing so?

While reading the article, I started wondering if the concept of a Water Footprint was pertinent to all industrial sectors. One aspect that has made the carbon footprint this popular, is the fact that the concept can be applied to all companies irrespective of whether they are involved in manufacturing or service. The apparent immediacy of the problem compounds the effect. I can easily say that the Water Footprint is a concept that will apply mainly to manufacturing companies. It is the very nature of the problem we’re trying to tackle that makes it so categoric. The HBR article itself talks about a beer brewing company SABMiller and how they’re evaluating water use in their supply chain. SABMiller has even released a report in collaboration with the World Wildlife Fund which details their perspective. But for a beer brewing company – or any beverage company for that matter, water is indeed an important resource. The article goes on to list other sectors that water footprinting might be relevant. Here’s what the article had to say (note that there is not one non-manufacturing sector mentioned)

Supply chain water footprinting is not just confined to the beverage sector. Borealis (a plastics materials provider) and Uponor (a plumbing and heating systems company) have initiated a study of the water footprint in the plastics value chain, from raw materials to plumbing and water systems installed in a home. The goal is to reduce resource use in product design and manufacturing in addition to developing water-efficient products.

Again like I said, it is the nature of the problem we’re seeking to tackle in this case. For pertinent industries however, analyzing water usage does make sense. Again, what level are we willing to take this to? The HBR article also talks about a World Water Week event conducted at Stockholm recently.

The linkage between water and business was a hot topic at the August 2009 Stockholm World Water Week. Bjorn Stigson, president of the World Business Council for Sustainable Development, singled out supply-chain water use for specific attention. As fresh water becomes more scarce and supplies uncertain, how companies use water and where it comes from will increasingly affect their business risks and opportunities.

I did some further research and found that the issue indeed is a ‘silent giant’ – something that’s out there – we just don’t know about it yet. I found a website dedicated to this issue - Waterfootprint.org. They have an interesting take on the supply chain perspective of Water Footprint.

The water footprint of a business - that is its 'corporate water footprint' - refers to the total volume of fresh water that is used directly and indirectly to run and support the business. It consists of two components:

 

• the operational water footprint, i.e. the direct water use by the business in its own operations,
• the supply-chain water footprint, i.e. the water use in the business’s supply chain.

Many businesses have a supply-chain water footprint that is much larger than the operational water footprint. This is particularly the case when a company does not have agricultural activity itself but is partly based on the intake of agricultural products (crop products, meat, milk, eggs, leather, cotton, wood/paper).

 

When consumers use the products from a business, there can also be a water footprint in the end-use stage. Think about the water pollution that results from the use of soaps in the household. In this case one can speak about the end-use water footprint of a product. This footprint is not part of a business’s water footprint, but it is part of the consumer’s water footprint. That does not mean that the business can withdraw from some responsibility about what happens in the end-use stage.

Check out the image I’ve attached. It should give you a perspective about what this metric means to your business. The Waterfootprint.org website is a good and informative read nevertheless and it gives valuable input on a topic I never knew existed until a couple of days back. Here are some links to studies that you can download if you think the topic is pertinent to your organization. They are sourced from the Waterfootprint.org website.

1. Barton, B. (2010) Murky waters? Corporate reporting on water risk, A benchmarking study of 100 companies, Ceres, Boston, USA.
2. Ercin, A.E., Aldaya, M.M. and Hoekstra, A.Y. (2009) A pilot in corporate water footprint accounting and impact assessment: The water footprint of a sugar-containing carbonated beverage
3. SABMiller and WWF-UK (2009) Water footprinting: Identifying & addressing water risks in the value chain, SABMiller, Woking, UK / WWF-UK, Goldalming, UK
4. Hoekstra, A.Y. (2008) Measuring your water footprint: What’s next in water strategy, Leading Perspectives, Summer 2008, pp. 12-13, 19.
5. Hoekstra, A.Y. (2008) 'Water neutral: reducing and offsetting the impacts of water footprints'
6. Gerbens-Leenes, P.W. and Hoekstra, A.Y. (2008) 'Business water footprint accounting'

It does take time for a concept to prove itself. I think people supporting this issue as part of a broader sustainability strategy for companies will need to convince businesses of the economic viability of measuring the Water Footprint. That is going to take time – think similar to what happened with the Carbon Footprint. Remember there’s 5 things you can do today to improve your personal Carbon Footprint. Personally, at this point in time, my opinion mirrors my post title – Water Footprint? Seriously?

It seems like the “Apple” of the eye is the talk of town this year. January was all sweet news as the world anticipated and later debated the features of iPad – Apple’s flagship device that’s shipping April 3. On the other hand, the month of February has not been as kind to Apple – especially its supply chain. First,  came reports that an Apple Supplier (read Foxconn) had roughed up a Reuters reporter in China. This news caught wind and brought back memories of the Foxconn iPhone leak suicide case. I’d debated whether these acts were turning into a New kind of Supply Chain Risk caused due to over-secretive company policy. Later towards the end of February, reports started floating around claiming Apple’s supplier responsibility report contained a mention of illegal child workers – an issue that spread like wildfire and prompted many strong reactions. I wrote a post about this issue detailing what companies need to do if they were faced by similar issues. This post, entitled “The Apple that ate the child” went on to become the one of SCM Blog’s most popular posts in February. Today, I aim to compare Apple’s Supplier Responsibility Reports from 2009 and 2010 and present my findings. I think you’re going to be quite surprised. The impact – as always, lies in the minute details.

KEY DIFFERENCES

Change in focus: As I looked through both reports, closer to the top, I saw a slight change in how the report opened. I’ve pasted screenshots here to show you what I mean. In 2009, the introductory passage looked to familiarize the reader with Apple’s supply chain structure and make him understand who was being measured. In the 2010 report, Apple looks to make the reader understand the importance of the supplier code of conduct. It clearly articulates the areas in which the Supplier Code of Conduct seeks to exercise its authority.

This is a good step forward. Apple has looked to depict the seriousness with which it looks at the various aspects of Supplier Responsibility in the 2010 report. Apple gets a plus for this one.

Number of facilities audited: Apple has audited more locations in 2009 than it did in 2008. In the 2009, they’d audited 102 facilities compared to 83 in 2008 and 39 in 2007.  However the rate of increase in the number of facilities audited has reduced dramatically. I’m not quite sure if this is because they plainly ran out of facilities to audit or something else. My tries to find out the total number of facilities Apple’s suppliers run ended a blank. Do let me know if you have some insight into how many facilities Apple has in total.

The Child Labor Saga: This fact is something that shocked me too. After all the angry commentaries we’d read about Apple finding illegal child workers in their supply chain. Check out the images to the left. Turns out, the 2009 report tells of Apple having found illegal child workers in SEVEN facilities compared to the THREE facilities quoted in the 2010 report. I wonder if there was as much noise made about the same issue last year. Any comments?

Environmental Impact: There are a few more disturbing facts that I was able to uncover from the report for those concerned about the Green Apple. The percentage of compliant comapnies has gone down from 2009 to 2010. While this is probably because of the increase in the number of facilities they audited this year, the decrease is uniform across a lot of categories. For instance, the percentage of “Management systems in place” for over 5 categories went down in 2010 compared to 2009. Check out the two graphics here. The one colored blue is from the 2009 report and the green image is from the 2010 report.

You can look at the reports for yourself here. It certainly looks like there is a lot of information in the supplier reports that a company could use. Especially if you’re Apple’s supplier and have not been audited yet. Should Apple really have rated themselves so high? Are they doing enough? What do you think? Let me know in the comments section.

You might also want to read the other articles I’ve written about this issue – “The Apple that ate the child” and “A new kind of Supply Chain Risk”.

Every week, I post five interesting articles and links I came across in my Twitter Stream with their sources. I try to think of it as a weekend series where I get a chance to look at other people’s ideas. Check out my Twitter page. It is just one of the several ways of connecting with me. I’ve also created a list of “Supply Chain” related people I follow on Twitter. The list keeps growing. In my first Twitter Stream post, I’d mentioned that the lis t had 55 people. Today, the list has 85 people and is growing everyday. Here is this week’s five tweets. Do let me know what you think.

Twitter Stream #03 

McKQuarterly Interview with HP's CFO: Thinking longer term during a crisis http://bit.ly/dtdFzn

thegreengod Recycling efforts fail to change old habits: ... in the past decade, even as environmental concerns have sparked “... http://bit.ly/dovo2n

SupplyChainMgt Should We Switch To Consumption-Based Carbon Dioxide Accounting? http://ow.ly/16NxOc

rmontellano RT @SupplyChainBlog: 5 Case Studies on Companies That Win at Social Media and eCommerce http://bit.ly/18aq9n

christianve Community #clouds can foster #collaborationacross the #supply chain http://bit.ly/91VtYd Combining services facilitates this

I especially think the community clouds idea has a lot of potential. Thanks Chris and thanks to all the tweeters in my stream. Keep the ideas coming.

What are your ideas about the Twitter Stream series? Do you think it adds value to you?

Sometimes, I post updates about how certain changes have greatly affected me. I hope these updates help you learn something new and useful too. Last weekend, I changed my workflow – and the outcome has been dramatic.

Anyone who knows me personally, knows that I use feed reader applications in time-blocks through the day to keep myself updated about current trends everywhere. I use both Google Reader and Feedly in various ways. If you don’t know what a feed reader is, don’t panic. The concept is quite simple. Here’s a short intro courtesy Wikipedia.

In computing, a feed aggregator, also known as a feed reader, news reader, rss reader or simply aggregator, is client software or a Web application which aggregates syndicated web content such as news headlines, blogs, podcasts, and vlogs in a single location for easy viewing. Aggregators reduce the time and effort needed to regularly check websites for updates, creating a unique information space or "personal newspaper". Once subscribed to a feed, an aggregator is able to check for new content at user-determined intervals and retrieve the update.

If you’re still not clear about the concept, read this Newbie’s guide. 

I’ve been using feed readers for years now. They help me stay up to date about things I’m interested in. Many of this blog’s popular articles like “The Apple that ate the Child”, “A new kind of Supply Chain Risk” and “A green and sustainable Wal-Mart” were written because of news I got through my feed sources. But this has its inherent disadvantages. I’m interested in way too many things. Most of these websites end up publishing over 20 articles (usually news tid-bits) a day. This ends up leaving way too much information for me to consume, increasing number of unread items everyday and last I checked, something I used to enjoy had become a chore. Last weekend, I started a massive reorganization. Here’s all I did in the space of a couple of hours.

• Created a new Google Account for SCM related feeds.
• Got rid of over 10 feeds that I hardly visited.
• Moved all my SCM/Supply Chain related feeds onto the new account.
• Organized remaining feeds into seven different categories: Workflow (8), Blogging Tips (2), Casual (9), Finance (4), Humor (2), Mobile (4) and Tech (7)
• The result is a grand total of 36 subscriptions (down from 50- something), organized into relevant buckets.

Also, as fodder for thoughts to use in this blog, I’ve started building a (massive) database of Supply Chain Related blogs on my new Google account. I like to think that I have the most comprehensive list of blogs in the field – but I continue to find newer ones everyday. For the moment, I’m focusing on blogs that are being updated regularly.

I’ve classified them into just 4 categories for the sake of simplicity. Company Blogs (9), Educational (1), Green (2) and Personal Blogs (20). I continue to add to this list of 32 subscriptions. I’ve also decided to use Feedly which is a magazine-styled feed reader to consume my Supply Chain feeds. It helps me be more efficient while consuming large amounts of information.

Apart from this, I’ve also joined the Kinaxis Supply Chain Community. If you’re a supply chain professional, I think this is a good place to share ideas about SCM. It has several of the industry’s key thinkers blogging and taking part in discussions. I’ve made it my browser’s start page so that the first few minutes every time I open my browser are spent contributing to discussions. I’ve also started using different browsers – so my personal stuff is on Google Chrome, while my Supply Chain websites, feeds and the like are open on Mozilla Firefox.

These are all small changes to my workflow and I’ve just tested them out a few days. But I’m noticing massive improvements in speed and efficiency already. I’m not getting bogged down by information overload and can concentrate and use the information better. Hope you found at least some of the information useful. Do let me know what you think. Do you want me to share more information like this in future? Or did you find this particularly irrelevant and uninteresting? Write to me.

Yesterday, I told you about the innovative concept of an online Supply Chain Conference. I also did tell you t hat I was going to review interesting topics in the coming few days. Here’s the first of such articles. This is about a discussion called “The Smarter Supply Chain of the Future”. The reason I chose this discussion was because of the issue in focus. We do not know how supply chains are going to morph in the future. Companies constantly experiment with new technologies like the “WalMart RFID” venture which is now being implemented in their stores as well. Some of these ideas work while some don’t. Yet, it is these ideas that are going to give shape to the “Supply Chain of the Future”. In this scenario, it helps to get an insight into what Supply Chain executives all around the world are thinking in terms of future directions of their supply chains.

The first part of the discussion focuses on an IBM survey about what Chief Supply Chain Officers (I wonder where the term came from. I haven’t seen it being used much myself) think are the key issues facing supply chains today. Based on this, the survey plots a ‘map’ that is supposed to lead your supply chain to become future-ready. This is useful folks!! Find the entire presentation embedded below.

ISSUES The five biggest issues SCM Executives have pointed out (in order from most important to least) are

• Supply Chain Visibility This is by far the biggest concern of executives – and rightly so. Even today, after technology has advanced to the level where truly wondrous things can happen, our supply chains lack a streamlined model that will ensure complete visibility to all nodes of the supply chain. Sure, each company has its own approach to this problem. Wal-Mart’s Retail Link and One Network’s hosted solution are two different ways of tackling the same problem. A common goal requires a common solution. I wish one of the supply chain leaders would come forward and take the initiative to form a group that can work on an open-source data model that will provide real-time information about product movement across the supply chain.
• Risk Management Risk and SCM go hand in hand. The very mention of risk leads us to think about physical damage to goods and the like. More recently, economic and political concerns have become part of the definition of risk. I myself debated on “A new kind of supply chain risk” not too long ago.
• Increasing Customer Demands This is the topic that struck me as being ironic. We’re the ones pushing for an “always on” society where all consumer needs are ‘real-time’. In the case of information delivery, this need has been satisfied by the advent of new technology and the penetration of the internet. It is but natural that people come to expect increased speeds and reliability in product delivery too. Again… Common goal, common solution is what we’re looking for.
• Cost Containment Cutting costs has been on the mind of businesses forever. Today, we’re just looking at the problem differently and finding newer ways of cutting costs while maintaining product and process quality. Lean processes are being incorporated into more industries than we had ever imagined. Today, if you’re in the supply chain industry and ask “Who is Deming?”, you’re considered ignorant.
• Globalization A connected world is seldom a less complex world. Globalization presents a lot of practical challenges. While some companies have grown adept at tackling these problems (this might explain why globalization is at the bottom of the list), others are still struggling.

While looking at these issues and providing a roadmap to the future is a win for all, one thought whose importance simply cannot be overstated is that “Technology is a tool – a means to the end, not the end in itself.”

THE “SUPPLY CHAIN” IN MANAGEMENT Another important aspect about the future is going to be the importance of the “supply chain” in management as a whole. In the past, the sole goal of companies was to be profitable and make the most money for its owners. Somewhere down the line, they all started to care about their employees and how a company treated its employees became critical at least from a PR point of view. Today, companies have to balance a whole gamut of issues including being “Green”, efficiency, CSR, etc., This list is bound to grow in the future with “Supply Chains” becoming more important than ever to companies of the future.

Today, for the first time I came across the term CSCO (Chief Supply Chain Officer). This just restates to me the increasing importance supply chains are getting in today’s marketplace. The future is going to be even more complex. We know about the Digital Supply Chain. I think we’re just at the tip of the iceberg. There are other concepts that we’ll invent as we go along. Social Media in supply chains is one such. It certainly is an exciting time in the world of “supply chains” where the future is unknown yet anticipated. The only known fact is that “Future Supply Chains” will become more important in the context of management as a whole.

You can listen to the “SCM World Live” discussion from the comfort of your home too. You just need to register (for free) on their website. Let me know what you think about my perspective. Did you listen to the discussion too? What did you think about the conference – Sensation or sham?

Would you like me to cover specific topics in the future?