Supply Chain Movement » review

Necessary but not sufficient

Martijn Lofvers — Thu, 29 Oct 2009 10:47:04 +0000

A great deal has been published about Baan Company, in many different media. The best-known book is the one by Mark Houben and Jeroen Wester of the Dutch newspaper Het Financieele Dagblad, which gives an illuminating overview of the issues with Baan. ‘Baan – Opkomst en Ondergang van een Software Bedrijf’ (Baan– Rise and Fall of a Software Company) describes in chronological order and in very understandable terms the incomprehensible practices of this company. The authors mention the failed attempt at a coup by Jan Baan, which he had planned in October 1998 together with logistics guru Eliyahu Goldratt, to try and save the company. This explains that Goldratt’s novel ‘Necessary but not sufficient’ is actually about the way Baan Company might have developed, had the coup been successful.

Goldratt’s novel Necessary but not sufficient

The protagonist of this book is Scott Duncan, CEO of the ERP supplier BGSoft. Every quarter, his listed company has to give forecasts of percentile growth in the double digits. In November 1998, Scott notices that one of their competitors is hit by negative financial growth and is forced to fire six hundred people. Is the entire ERP industry grinding to a commercial halt? The way out for BGSoft is selling value: BGSoft customers are not required to pay until the pre-calculated savings targets are met.

Two years ago the Dutch film ‘De Uitverkorene’ (the chosen one) came out, a fiction film that was clearly inspired on the lives of the brothers Jan and Paul Baan. This powerful film shows how all kinds of conflicts of interest can suddenly arise when people’s work, faith and private lives become too closely intertwined. The company in the film will surely go down, just as Baan Company did in 1998. Dutch actor Pierre Bokma won an International Emmy Award for his performance as one of the two brothers.

Account management in the Supply Chain

Martijn Lofvers — Thu, 29 Oct 2009 09:38:45 +0000

A book about customer-oriented collaboration in the Supply Chain sounds very promising, like an inspiring subject. For a long time, major multinationals in particular focused on chain control of internal collaborations with sister and parent organisations.

Now, finally, we are at the dawn of an age that focuses on the relationship between actual suppliers and customers, with the exchange of actual money, not purely bookkeeping transactions. A book like ‘The Relationship-Driven Supply Chain: Creating a Culture of Collaboration throughout the Chain’ should respond to this evolving focus. Instead, the two British authors apparently feel the need to spend a third of the book looking back on the development of Supply Chains, through endless lists (with annoying bullet points) and tiresome qualitative tables.

The Relationship-Driven Supply Chain: Creating a Culture of Collaboration throughout the Chain

It seems that the authors tried to collect as many PowerPoint presentations about Supply Chain Management as they could and stuff them in a book. And then, when there is a risk that the book may actually become interesting, the persevering reader is given a number of uninspiring, often anonymous cases to read, and a plainly unrealistic, insipid dialogue between a ‘smart’ Supply Chain Manager and a traditional, ‘dumb’ buyer. Finally, the proposed model for collaboration between purchaser and supplier looks like it was drawn by a six-year-old. This topical and intriguing subject of collaboration deserves so much more than what it gets in this book.

Strategies and tactics in supply chain event management

Martijn Lofvers — Fri, 11 Sep 2009 12:00:44 +0000

The authors of ‘Strategies and tactics in supply chain event management’ have bundled a number of articles about theories, methods and tools for dealing with various disruptions in the supply chain. The book is mainly intended for supply chain professionals and researchers and provides many practical insights, models, tools and examples of schedules and budgets. It discusses cases of best practices from various industries, including retail, pharmacy and aviation. Thus, the book focuses not only on disruptions, but also on distinguishing different scenarios.

Strategies and tactics by Raschid Ijioui, Heike Emmerich and Michael Ceyp

The book concludes with a number of interviews about the use of SCEM. These make it clear that while the term SCEM is not often used as such, many elements of it are embedded in underlying processes. At Ford, for instance, SCEM is embedded through the use of EDI with both internal and external partners. The important thing is to create transparency and to monitor business processes – and this book provides plenty of pointers for that.

Measuring the Value of the Supply Chain

Martijn Lofvers — Fri, 11 Sep 2009 11:56:23 +0000

Enrico Camerinelli, senior analyst at the Celent Banking Group, has recorded his experiences with the financial supply chain in a book. He describes the bridge between the supply chain manager and the CFO as being threefold: 1) it is hard to translate qualitative standards for such things as reliability, responsiveness and flexibility into financial indicators; 2) there is no unique set of numbers or unique measurement instrument to monitor the performance and efficiency of the supply chain; 3) there is a lack of similarly-named definitions for the measurement system and for the co-ordination between the supply chain and the financial side.

Measuring the Value of Supply Chain by Enrico Camerinelli

Camerinelli arrives at these three issues after having explained the basis of supply chain management and having linked it to the influence of supply chain operations on the financial aspects, like shareholders’ value, financial indicators, profit and loss account and the balance sheet.

In the second part of the book, he discusses various measurement methods; the second chapter is dedicated to the SCOR model. This is how Camerinelli succeeds at providing the CFO and the supply chain manager with a toolset for finding a joint principle for measuring the value of the supply chain. This book, too, concludes by expressing the necessity for a new type of collaboration that focuses on trust, speaking the same language and sharing value.

Hidden champions

Martijn Lofvers — Tue, 11 Aug 2009 11:51:35 +0000

Hermann Simon has been studying ‘Hidden champions’ for more than twenty years, and already published some of his findings in 1996. In this sequel, he mainly focuses on the influence of globalisation on these companies. ‘Hidden champions’ are medium-sized, unknown companies that have become the market leaders in their industries. They have turnovers under $ 4 billion, are on average twice the size as their most powerful competitors, and often have world market shares of more than 50%, sometimes even up to 70-90%. ‘Hidden champions’ spend less and employees represent a high value. This is expressed not only in a very high level of productivity, but also in unique, high-quality products.

Hidden Champions by Hermann Simon

The added value of materials and services is an average of 42% for these companies. ‘Hidden champions’ focus more on service, the needs and wants of customers and on excellent performance rather than on price and marketing. Other companies would do well to follow their example, also in terms of the integration of systems and the realisation of lasting collaborations with other companies. This book was written for those who are interested in international business operations and for managers of all types of companies, but it provides many examples of business situations that are directly related to the set-up and implementation of the supply chain in terms of market focus, globalisation, innovation, leadership, employees and strategy.

The Contract Scorecard

Martijn Lofvers — Tue, 11 Aug 2009 11:46:38 +0000

With ‘The contract scorecard’, author Sara Cullen guides her reader, step by step, through the various elements of an outsourcing contract. The ‘contract scorecard’ consists of four quadrants: quality, finance, relationship and strategy. Cullen starts out with a clear explanation of the development of KPIs, the drawing up of KPI schedules and planning the scorecard, then explains every quadrant in turn.

The Contract Scorecard by Sara Cullen

The many field cases give a clear idea of just what can go wrong if it is not recorded what the two parties expect from a contract: breach of confidence, long drawn-out lawsuits and very high costs. Cullen repeatedly stresses the importance of communication between the parties involved, and gives a number of practical pointers to this end in the chapter ‘relationship’. In addition to the cases, the many examples of KPIs and documentation are extremely useful if you mean to evaluate a contract yourself.

1609: The forgotten history of Hudson

Martijn Lofvers — Mon, 15 Jun 2009 20:39:08 +0000

With just a slight twist of fate, New York might have been called Nouveau Paris. The English sailor Henry Hudson, who sailed to America on the ship Half Moon four hundred years ago on behalf of the Dutch East India Company (VOC), was also at the time negotiating with the French King for the same journey.

Through a rich but embittered Amsterdam merchant named Isaac le Maire, who had been thrown out of the VOC, Hudson had provided the French with all the information which he had also given to the VOC about his previous expeditions to the North. A silent battle had been taking place to hire the explorer Henry Hudson. Dutch journalist and historian Geert Mak describes this fascinating intrigue in part one of his book ‘1609: The forgotten history of Hudson, Amsterdam and New York’, which is published by the Henry Hudson 400 Foundation and can also be downloaded for free.

The second part of the book deals with the events after Henry Hudson finally sets sail out of Amsterdam. Russell Shorto, a writer for The New York Times, presents a lively picture of what it must have been like on the Half Moon. He sees the threat of mutiny as the primary reason that Hudson neglected the VOC’s instructions to sail a north-easterly route around Russia and, instead, headed westward toward the newly discovered America. Hudson was convinced that this was the shortest route to the Sea of Japan. In those days, the best calculation of the size of the earth estimated it to be about one-third smaller than it actually is. Hudson first sailed to a friendly English settlement in what is now Virginia, before sailing up what we now know as Hudson River, which has tides and is therefore salty, under the mistaken belief that it was a passage that would lead to the Pacific Ocean. Once he and his crew discovered that the river was not, in fact, the much sought-after route to Asia, he sailed back to Europe.

On a subsequent voyage, Hudson’s crew finally mutinied and forced him and his son into a small open boat and set them adrift in what would later become known as Hudson Bay, where they are assumed to have died an icy death. Based on the discovery from Hudson’s first trip, the Dutch Republic had laid claim to a broad strip of land along the east coast of North America. The newly established West India Company established the colony of New Netherlands there, which encompassed five future US states, and it established the settlement of New Amsterdam on Manhattan Island. Under the leadership of Governor Peter Stuyvesant, this tolerant melting pot of many nationalities flourished; it was granted a charter in 1653 – the official year that the subsequent City of New York was established. In 1664, English battleships appeared in the harbour of New Amsterdam and Stuyvesant reluctantly surrendered his command and the colony.

‘1609: The forgotten history of Hudson, Amsterdam and New York’ (2009), by Geert Mak and Russell Short, published by Henry Hudson 400 Foundation, 77 pgs. Free download at: www.hudson400.com (About Us, Projects & Events).

Visible Cities

Martijn Lofvers — Thu, 11 Jun 2009 20:46:15 +0000

In his book ‘Visible Cities’, the Leiden historian Leon Blussé paints a clear picture of the economic world of the 16 th, 17th and 18th centuries based on a study of three key cities: Canton in China, Nagasaki in Japan and Batavia in the Dutch East Indies, where the trading company the Dutch East India Company (VOC) was represented.

‘Visible Cities: Canton, Nagasaki and Batavia and the coming of the Americans’ by Leon Blussé

According to Blussé, the local culture is the secret tosuccess behind the Dutch’s famed adaptability. The pushy Catholic Portuguese were run out of the Japanese island of Dejima in the bay of Nagasaki, after which the reserved Protestant Dutch ran this important trading post. When the Shogun was insulted by seeing the Christian inscription Anno Domini 1639 on a newly built Dutch warehouse, the Dutch immediately destroyed the storage site. A supervising Japanese officer was relieved that he need not carry out the order to use brute force with the least or smallest sign of opposition from the Dutch.

After the Dutch Republic was invaded by France in 1794, merchants from the recently independent US came to the aid of the Dutch and American merchant ships and started sailing to the Japanese city of Nagasaki in 1797.

‘Visible Cities: Canton, Nagasaki and Batavia and the coming of the Americans’ (2008), by Leon Blussé, published by Harvard University Press, 133 pgs., $ 25.95.

Think Again

Martijn Lofvers — Fri, 10 Apr 2009 11:30:31 +0000

Even top managers with a proven reputation of intelligence can make fatal mistakes. How does that happen, and how can it be prevented? The book ‘Think Again. Why Good Leaders Make Bad Decisions and How to Keep It From Happening to You’ describes how the human brain works when one makes decisions.

Think Again. Why Good Leaders Make Bad Decisions and How to Keep It From Happening to You

The three authors, who work at renowned business schools, give examples of disastrous decisions by nevertheless capable leaders, like the acquisition of soft drink producer Snapple by Quaker, which eventually led to Quaker being taken over by PepsiCo. They also discuss strategic military mistakes, like Operation Market Garden and the Battle of Midway.

The causes for these wrong decisions are misleading experiences, misleading prejudices, inappropriate self-interest and misplaced attachment. In order to avoid making such mistakes, five types of safety precautions should be taken: new experiences, data & analyses, challenging group debates, governance teams and a monitoring process. These recommendations are extensively discussed in the (anonymous) case of a Germany company that considers moving its global headquarters. Fascinating stuff.

‘Think Again’ (2008), by Sydney Finkelstein, Jo Whitehead and Andrew Campbell. Published by Harvard Business Press, 236 pages, € 24,90.

Rating: ****

Mastering the Hype Cycle

Martijn Lofvers — Sun, 15 Mar 2009 11:25:03 +0000

The two Gartner technology analysts Jackie Fenn and Mark Raskino make a convincing argument with their book ‘Mastering the Hype Cycle’, using the stock market graphs for Amazon and investments in China, namely that the familiar S-shaped innovation curve (of hyped expectations through disillusionment to acceptation and implementation) is not merely a conceptual theory, but actually exists.

Mastering the Hype Cycle by Jackie Fenn and Mark Raskino

They mention the Dutch 17th century tulip craze and the international success of the online bank ING Direct as telling examples. With the STREET process (Scope, Track, Rank, Evaluate, Evangelise and Transfer) they provide a practical approach to directing innovation.