They do use a very timely approach, expressing the perfect order in terms that would satsify Ralphie, from the Christmas movie classic “A Christmas Story.” The article is well worth your read.

Alas, all is not as clear when assessing the economy. In fact, a “weak dollar” has some significant benefits–especially for the “average” American.  And, for those readers here for Supply Chain information, the impacts of the dollar are felt throughout.

When the dollar is weak, it means that a dollar can buy less of a good or service produced in a foreign nation. BMWs and Computers can be more expensive. The costs to produce haven’t gone up, but rather the relative cost to produce when exchanging currencies. The result is we pay more (and buy less) imported items. keep in mind this also means the price of oil increases. This not only impacts us at the pumps but also increases the cost to transport goods. if the cost to transport goods goes up, consumers are more likely to purchase locally. (And this can mean locally produced since the cost to transport is most likely included in the price.)

But, it also means that goods and services produced in the United States are now more affordable in markets overseas. This means that, assuming we produce goods/services that people want, we start to export more.

Result? Imports–down. Exports–up.

What else does this mean? It means that here at home “American made” once again becomes a sign not only of (we hope) quality but perhaps affordability. Consumers may be paying more for everything, but if “American made” products are once again affordable (relative to the no longer “cheap” imports) then demand for these products should increase at home, as well as abroad.

Win! If demand for US made products goes up, we will find that production will increase. When production increases, employment increases. To top it all off, if energy prices continue to climb, the benefits of “off-shoring” (low labor costs, lessened regulations, among others) starts to be off-set by the increasing costs making “re-shoring” more plausible. Jobs come home.

One final note. I mentioned a few times the increasing costs of oil, and the impact on the pump. What would the silver lining be here? Think “Green.” Market forces (the “invisible hand” of Adam Smith) tend to be the best shaper of policy. Better than government, and far more successful that any promises of any politician seeking to create “Change.” I won’t speak for you, dear reader, but as you know I have started to look for alternative energy sources in my daily life, starting with a hybrid automobile. As petroleum prices increase¹
consumers start clamoring for alternatives. This creates markets² for alternatives.  Once the demand for alternatives reaches a point where the demand makes production viable, we will see alternatives flourish.  We are already seeing this with hybrid autos.  We are seeing the early signs of this in other energy sources as well, including solar and wind. But these discussions belong in another post.

Is it all buttercups and roses?  No.  There are disadvantages to a weak dollar.  Overall prices do go up.  Trips overseas become more expensive. I never argued that there weren’t disadvantages.  It just seemed that it was time to point out that there are some significant advantages to this shift in the dollar.

“Reading Rainbow Moment” To read more about strong, and weak, dollar performance, check out the Federal Reserve Bank of Chicago’s site and specifically their page discussing this very topic.

^1. note, I don’t say fossil fuels. Read more here)

^2. market refers to the group of consumers or organizations that is interested in the product, has the resources to purchase the product, and is permitted by law and other regulations to acquire the product.

One would expect to read that Boeing lost the contract despite being the better aircraft.  That, somehow, the AF overlooked key performance characteristics of the aircraft.  That, perhaps, politics came in to play to select an inferior product.  But no.

According to the NYT, in the article titled “In Tanker Bid, It Was Boeing vs. Bold Ideas” from March 10th, Boeing (and its supporters in Congress) are instead making the nationalistic arguments about job loss and a loss of a national asset.

The company and its allies in Washington have already made a number of arguments. Among them are that too many American jobs are being lost overseas, and that sensitive military contracts should not be in the hands of a foreign company.

The debate about the impact on American jobs is a murky one, because large manufacturing projects typically involve operations in many parts of the world, regardless of which company has a contract.

Yes, the debate is murky, but not simply because of the potential loss of American jobs.  (Let’s ignore, for the moment, that Northrup-Grumman is an American company and that reports are the aircraft will have final assembly in the US making this a Washington State job loss, not a US one.)  This comes down, unfortunately, to politics over policy.

As the NYT also writes

 On Capitol Hill, the blow to Boeing has set off a protectionist furor among many lawmakers. And on the campaign trail, the Democratic candidates for president, Senators Hillary Rodham Clinton and Barack Obama, suggest that the Boeing loss reflects other Bush administration policies that have resulted in jobs moving offshore.

But the hot rhetoric could sound overly nationalistic, and even hypocritical, once the real implications for jobs and national security become clear. Boeing, for example, would have made many of its own tanker parts overseas, and some experts say that claims of job losses to a foreign company seem exaggerated.

For now, though, the pro-Boeing, pro-America talk is showing no signs of letting up.

“We really have to wake up the country,” said Senator Patty Murray, Democrat of Washington State, where Boeing is a significant employer. “We are at risk of losing a major part of our aerospace industry to the Europeans forever.”

Representative Todd Tiahrt, Republican of Kansas, said: “It’s outsourcing our national security. An American tanker should be built by an American company with American workers.” Boeing would have done some of its tanker assembly in Kansas.

So we have National Democrats  on the stage arguing that this is another “Bush screw-up.”  And yet this is the same set of politicians who strongly argue we are fighting a war we shouldn’t have started, with troops ill-equipped to meet this challenges of the new battlefield.  Are they blind to the fact that it is just this sort of politics that has led to the failures to properly equip our troops?  Oversight of weapons system acquisitions that places a priority on location of sub-assembly manufacture over capability. (The B-1B aircraft had parts manufactured in nearly all of the 435 Congressional districts.)  As far back ask 1990 researchers and critics have argued that politicians have focused more on maintaining their districts at the expense of national interest.  According to Kennth Mayer, in his 1993 Public Administration Review article entitled “Policy Disputes as a Source of Administrative Controls: Congressional Micromanagement of the Department of Defense”

Critics argue that these interventions result in inefficiency because they are not based on any “rational” conception of overall defense strategy. Members are accused of examining the defense budget “in terms of how it promotes their own electoral prospects” instead of on the basis of national interest (Lindsay 1990, p. 7). Members are accused of attacking the Pentagon to create publicity, or even to achieve influence within Congress. DoD argues that the pork barrel incentive drives many congressional interventions, as members use their power over the budget to deliver programs and contracts to constituents (OSD, 1990, p. 19). Critics claim that the result is a defense budget choked with regulations and bloated with pork.

So why bring this up?  Because at this point in time, with our nation at war, politicians on both sides of the aisle are positioning for their constituents rather than for the security of our nation.    There are significant questions that could be asked, and perhaps should be asked.  Questions that would cut to the heart of issue of the adequacy of the aircraft to meet our military’s requirements.  But these seem to get lost in the rush to score points with the electorate.

Perhaps Congress would best serve the nation if they asked these questions:

1. What criteria did you use when evaluating one aircraft design over the other?
2. What impact will the larger aircraft (a “widebody” by designation) have on ramp space?
3. Will their be a reduction in “MOG” (or, “Maximum on Ground” ) due to the larger aircraft size?
4. Does a reduced MOG reduce the numbers of combat and airlift aircraft that can be co-located?
5. Will this aircraft type/size necessitate a change in the infra-structure to support it? (fueling stanchions, parking plans, hangars and doors, etc?)

These questions are external to the capabilities of the aircraft itself, but address the important aspects of total operating costs, and impact on mission operations.
¹ Boeing manufactured the veteran KC-135 aircraft (a 707 variant.) That aircraft first production aircraft saw service in 1957 and KC-135s are still flying today. The new tanker is intended to replace this aging airframe.

*As many of you know, part of my “history” includes working on weapon systems’ acquisitions.  I worked

I tell myself this is healthy. This is a good thing. That I am keeping my body healthy. And yet, I can’t help but wonder about the efficiencies of a system that makes clean and pure water available to drink, out of half-liter bottles.

There are a number of concerns here, almost all of which touch on environmental issues, but are also at their heart “supply chain” issues. For instance, if we are shipping cases of water, we are moving tons, literally tons, of water by truck. This uses resources that could perhaps be used, or even saved, to move other things. What resources? Well, the obvious resource is fuel required to power the trucks. In addition, the bottles of water take up space in trailers that could, perhaps, have been used for transporting some other good.

And then, of course, there are the issues of storage. Storage at the bottling plants, at the distribution centers, and finally storage at the retailer. A friend of mine used to work at a bottler, and she had told one of my classes that, to prepare for the busiest months of summer, they started stockpiling bottled water in January. This required that they seek “off site” contractor storage, just to store bottles of water! When you think about this, the costs just keep adding up. Obviously, the bottler incurs an additional cost when they have to pay a contractor for storage. But they also have to pay to transport the water to the 3PL (third part logistics provider’s) warehouse. Again, using fuel, and trucks. Finally, they have at least one additional step moving the water from that warehouse to the retailer, but more than likely bringing it back to their own distribution center first.

And of course, being a good conservative, seeking to conserve resources, I think we should also practice reuse, and recycling. This requires a collecting of the bottles, shipping them to a processing facility, and then sorting and melting them. Can you see the use of resources tied up now, heading both directions in this supply chain? All for the delivery of bottles of water?

A recent Wall Street Journal column by the Numbers Guy (Carl Bialik) tackles deals with the purity of the shipping container used for bottled water–the bottle!

Bialik point s out that “Nestlé claims it offers the lightest half-liter bottles in the U.S. market.”As he usually does, he tackles the statistics, and the numbers, behind the assertions. His quest? To determine if their claims are accurate. I decided to look at a slightly different angle. By reducing the weight of the bottle, what impact does that have on the logistics tail–the supply chain?

Bialik was provided the numbers by Nestlé, and since he trusted their data (gathered by Tragon) I will as well. Let’s assume that everyone uses normal, everyday water, and that any minerals added “for taste” are inconsequential to the issue at hand, the weight. We can be reasonably certain that a half-liter of water weighs a half-kilogram, or 500 grams. This then is our baseline. the lightest bottles (the new Nestlé bottles) weight 12.26 grams, and the heaviest ones weight 25.94 grams.

Simple math shows that reductions from the heaviest bottles (Fiji) to the lightest, will reduce transportation weights by 2.6%. Of course, not every bottle shipped is a Fiji bottle, and Nestlé has not replaced every bottle sold. The actual reduction in weight transported would be less, and thus the environmental and supply chain impact reduction would be less, as well.

What to do? Obviously the first solution is to drink more tap water. If at home, get a water filter. I have a Pur faucet filter, but any would work. Just go check out the selection at your local Wal*Mart or Target.

Might I also suggest we take a page out of the athletes’ book and start using reusable water bottles. Nalgene is the bottle of choice among the swimmers I know, but they are certainly not the only manufacturer. Just be sure to get a high quality water bottle to protect against the leaching of chemicals from the plastics and into the water, and thereby into you.

There are other positive stories coming out, including restaurants finally providing tap-water again, rather than insisting on selling you bottled water. I will work to update these stories on occasion as well. In the meantime, share with me your ways of reducing the logistics footprint, and thus both the environmental impacts, and the costs of logistics!

From the paper:

“Podcasting” has taken the technological and hobbyist worlds by storm, allowing for the creation of highly specialized audio (and now video) productions for delivery over the internet. This sort of capability has found its way into the classroom and into courseware, allowing professors to deliver a wide range of content to their students. (King, et al., 2006) This paper discusses the background of podcasting, the technology that enabled it, and how podcasting can be used to enhance supply chain courses with a “blended” or hybrid learning experience.

In addition to the podcast recording of the presentation, I am including the pdf of the paper, as well as the PowerPoint slides from the presentation.

Let me know what you think of it, and as always, leave comments, or send me a voice mail at the number listed in the contact section!

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DC Velocity has published a great article pointing out the way in which logistics (and by extension, supply chain management) comes through time and time again–and occasionally with a high profile effort. In this case, the author writes about the logistics efforts that were essential to the successful roll-out of the latest, and final, Harry Potter book.

I mention the author, Peter Bradley, focuses on the logistics necessary to deliver 12 million books in quantities large (and small) around the globe for a single, timed, opening. This of course goes beyond a simple planning and execution initiative. It required coordination, as Bradley mentions, between the publisher, and a network of transportation providers (carriers.) He writes:

Scholastic’s success was no act of magic. Rather, it was a carefully planned and executed distribution effort that required close collaboration among members of the company’s logistics team and a core group of carriers.

Planning for the rollout began in January, even before Scholastic had the finished manuscript. Internally at Scholastic, the project would require tight coordination among members of the logistics staff and their colleagues in sales, purchasing, customer service, and manufacturing. Yablin points to Ed Swart, director of operations, and Francine Colaneri, vice president of manufacturing and procurement, as key partners and team members.

The close collaboration also extended to Scholastic’s logistics partners: J.B. Hunt, Combined Express, Yellow Transportation, and ActivAir. J.B. Hunt, one of the nation’s largest truckload carriers, moved the majority of the books—all but about a million of the copies. Hunt operated in partnership with Combined Express, a Bensalem, Pa. based logistics and trucking company that specializes in publishing and retail shipping. Yellow Transportation, a major LTL carrier, handled domestic LTL shipments. ActivAir, an international forwarder that specializes in book and magazine distribution, managed international shipments to 32 destinations in 29 countries.

I would like to point out that contemporary to this initiative was the release of the much-touted iPhone. That release required a delivery between 4 and 6 pm local time, for a store opening of 6 in the evening. Another opportunity for logistics to shine.

Let’s not lose sight of the importance of collaboration across the supply chain for both of these products. In both cases, there was a line in the sand–a promised delivery date for large scale release. Satisfactorily meeting these dates required not only a close coordination of “in house” production but also coordination among all the suppliers that provide key elements to your product. In the case of the iPhone, there are many components that make up the phone, from numerous suppliers. According to their analysis (as reported in RFDesign)these suppliers include: South Korea’s Samsung (The processor core), German-based Infineon (providing the RF and broadband functions), and National Semiconductor (a single chip.) In addition, the most exciting part of the iPhone, the multi-touch screen, has many providers:

It is believed by iSuppli that the supplier for the touchscreen module in the model torn down by iSuppli was Balda, with its partner TPK Holding. It is believed by iSuppli that the iPhone LCD display itself is multi-sourced through Epson Imaging Devices, Sharp and Toshiba Matsushita Display Technology. The cost of the LCD used in the iPhone is estimated at $24.50, representing 9.8% of the 8 Gbyte version’s costs. source: RFDesign http://rfdesign.com/rfic/iphone-isuppli-components-0712/

Coordinating such a complex, and global, supply chain and ensuring pinpoint accuracy in delivery (both spatial and temporal) shows how a collaborative supply chain can truly deliver.

NASA has another on-going mission—NEEMO. This mission titled “NASA Extreme Environment Mission Operations” is “testing concepts for future space exploration at an underwater laboratory off the coast of Florida. “ It’s a very interesting concept. Of course, NASAWatch, the blog dedicated to holding NASA to task, is concerned that NASA is ignoring this mission that they themselves have funded.

NASAWatch does point to a link for the underwater webcams. They are interesting to watch, and the descriptions of the various camera views are even somewhat humorous.

If anyone is interested in Space Logistics, shoot me a note.

Last posting, I put a story up about SAP releasing V 5 of their SCM software. I commented there on the need for software to support supply chain collaboration, among other things. It was pointed out to me by a colleague that the book, “Why ERP” presents an implementation of an SAP ERP system that failed. I have yet to read the book, but it is now high on my reading list (and I encourage those of you interested in these things to do as well.)

Hey, I make it easy for you–I am linking this posting to the Amazon site for this book. But not to get you to buy it, because if that was my goal I would have figured out a way to get a kickback. I wanted to actually link to the comments reviewing the book, like the one quoted above. It appears that this book is fairly common required reading, and that students don’t like it. Don’t believe me? Go read the comments!

This was doubly interesting to me, since it combined the ERP discussion with a discussion on evaluations by students. Over at the blog “Confessions of a Community College Dean” the Dean is trying to figure out ways to evaluate his faculty. This is often stymied by the fact that students’ evaluations are, well, sometimes less than constructive. Note, I say sometimes.

In these reviews of the book you will find there to be constructive critiques. These critiques say things like:

“Do not read this book if you are an expert on SAP or very familiar with ERP systems. This is little more than a text book put in the form of one large example.” (Hmmm one CASE example can be quite rich in individual exmplars used for discussion and study. But still, good critique.)

CAUTION: This book (actually a novel) is good only for those who do not know anything about ERP. Finish this quickly and move on to more detailed stuff like MISSION CRITICAL by Thomas Davenport. (again, the usefulness is challenged, but at least the commentator provides an alternative.)

and, Perhaps the best review:

This actually is a good read. It kept my interest for a full 2 hours, which is what is took to read it. The case study is real and on the mark. It illustrates that even if SAP is being widely adopted in your industry (in this case furniture), it may not be the right solution for you. In this instance, SAP (or the SAP implementation approach) was wrong because the company, whose business model was “make to order”, tried to cut time and costs by directly implementing a configuration which worked well for a company that has a very limited (few part numbers with minimal change) product line.

The author also did a realistic job in presenting the politics of the situation. The company president wanted an easy integration under a tight deadline. The IT geek wasn’t interested in the business model and wanted a showcase quick installation. The marketing guy wasn’t interested in the details and wanted to showcase the installation. The book’s hero is a healthy skeptic, who is trying to understand ERP, its benefits, and how it fit his company’s business.

Based the book’s title, I thought I was picking up another SAP marketing book. But it is not that at all. It’s objective and deals with business issues. No ABAP, idocs, and organization elements here.

My recommendations for anyone writing a review or a critique, including critiquing a course or an instructor? They are quite simple really:

1. Provide positive feedback if at all possible. What did you like, and why? The why is important because it helps to know how to develop future information in a way that worked well previously. Criticism need not be negative, or even pointing out weaknesses. Sometimes people need to be told the good things.

2. Be critical, with a positive attitude. Say things like “While I appreciate XXX, it didn’t work well, because…” Again, the because, or the why, is critical to helping the professor or author provide a fix for things later.

3. Understand the purpose of what you are critiquing. If you are critiquing a course, and the course is on advanced astrophysics, don’t criticize the lack of creative writing assignments. Alternatively, if you are in an MBA program, regardless of the quantitative rigour of the individual course, you should have an expectation that students will be expected to communicate clearly–after all, you are there to be better managers.

So, remember: criticism should be given with the intent of improvement, and while it may have been cathartic for the reviewer to write: “I wouldn’t even make paper airplanes with this book – because they would suck too. When millions of books were burned in WWII, why did they miss this one?” they certainly provided nothing to the discussion.

The Prof

Postscript: (In fact, the paper airplane comment was followed by a recommendation to read “The Goal” by Goldratt. An excellent book, but with a completely different message/intent. This reviewer apparently missed point number three.)

Apparently, the Louisiana Director for Homeland Security went so far as to say the Feds SHOULD have been “force feeding” the people of LA within an hour of the hurricane subsiding. All this says, to me, is that the Colonel served in a capacity other than logistics–and never appreciated what it took to enable him to do his job.

It is challenging, and often means we cannot do as much as we want, as quickly as we would like. And then, human nature kicks in, and we begin to lay blame. Why? Because we cannot accept that some things are beyond man’s ability to control.

I put forward this little poem, The Logistician’s Lament, as a pithy description of the challenges that face logisticians. In this case, I suggest the Colonel in charge of Louisiana Homeland Security is one of the generals.

The Logistician

Logisticians are a sad and embittered race of men who are very much in demand in war, and who sink resentfully into obscurity in peace. They deal only in facts, but must work for men who merchant in theories. They emerge during war because war is very much a fact. They disappear in peace because peace is mostly theory. The people who merchant in theories, and who employ logisticians in war and ignore them in peace, are generals.

Generals are a happily blessed race who radiate confidence and power. They feed only on ambrosia and drink only nectar. In peace, they stride confidently and can invade a world simply by sweeping their hands grandly over a map, pointing their fingers decisively up terrain corridors, and blocking defiles and obstacles with the sides of their hands. In war, they must stride more slowly because each general has a logistician riding on his back and he knows that, at any moment, the logistician may lean forward and whisper: “No, you can’t do that.” Generals fear logisticians in war and in peace, generals try to forget logisticians.

Romping along beside generals are strategists and tacticians. Logisticians despise strategists and tacticians. Strategists and tacticians do not know about logisticians until they grow to become generals–which they usually do.

Sometimes a logistician becomes a general. If he does, he must associate with generals whom he hates; he has a retinue of strategists and tacticians whom he despises; and, on his back, is a logistician whom he fears. This is why logisticians who become generals always have ulcers and cannot eat their ambrosia.

Author Unknown

Yesterday, I wrote about the way technology has been used by individuals to create a virtual community of “The Diaspora.” Of course, many will recognize this as a decentralized, or distributed, network. There exists no central clearinghouse for information, except for those pockets of friends that have the ability to develop lists, and then farm them back out to friends and family.

The Washington Post’s story identifies another need–connecting those who are not connected, because they were unable to flee. For many reasons (all of which will be debated and discussed over the months to come) large numbers of people were unable to evacuate the city of New Orleans. They are effectively cut off from communications, even when located in what was called at the time, the refuge “of last resort.” The challenge? Who should be tasked to pull together these groups, collect the information about the survivors, and those that did not, and get the word out? Historically, that has been the role of the American Red Cross–a role fulfilled through the use of paper, pens, and pencils, and lots of sweat equity. Now they are tasked with finding highly technical means of doing this very thing.

The question that is being worked through is actually one tackled by many a business course. “How does one define oneself?” If the Red Cross views themselves as a provider of relief and comfort, but not technological services, then is their organization prepared to handle such a request? Should the Red Cross be in this business, or should they partner with another organization that perhaps would be better suited for these sorts of technical challenges?

And most importantly, should there be only one organization/firm/business to tackle and coordinate the technical challenges?

These are heady times for technology. This isn’t about the “internet bubble” of the late 1990s. It isn’t about technology stocks making people wealthy. We now see technology being used to ameliorate the wounds of our brothers and sisters. Technology with heart.

The Professor

An addendum:

I have rarely spoken here about my research, but now is perhaps a time for me to speak. I have supervised several research efforts looking at the way we provide support to humanitarian relief operations. While much of it has focused on general command and control type issues, perhaps the most interesting one was a paper that tried to develop a centralized checklist for the NGOs to use to coordinate logistics/supply chain support. Imagine, 30 or 40 different organizations, each trying to get their materials and their people into the ravaged areas, hindered by few/no roads, limited airport access (ramp space is precious–especially if you also have to host a “tent city”) and each optimizing their loads for their cargo, not for the overall cargo required to go in to a disaster area. Quite a challenge.

The problem? These organizations either cannot, or will not, work together. And none can or will take direction from the US Government. Wow–imagine trying to corral these cats…