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2012

In my last entry, I covered the principles described and highlighted in ‘Moneyball’; the critical importance of identifying and understanding the facts (this includes identifying ‘new’ facts that can provide additional insight to the challenge); do not be swayed or confused by emotion; and then the ‘x’ factor which I call the desire to achieve success!  These obviously are critical to the success of any initiative in any business, and I would say they are especially important in the success of your extended supply chain initiatives.  In an interesting twist in thinking about the story and the methods that were introduced by Billy Bean with the Oakland A’s I realized that this story was a new dramatization of a Business Process Management initiative in baseball. 

 

When I realized this I thought; what a novel idea!  How can this practice bring improvements to other areas of sports?  Sports seem to be the ultimate level of achievement in human resolve and talent.  I would suggest, however, that we should view this from the flip-side perspective; why aren’t more team based sports embracing these methods and principals?  After a bit of retrospective I think I identified the reason; sports are the ultimate emotional activity!  I think everyone has been involved in a team sport at one time or another and had the ‘vision’ of driving in the game winning run, or touchdown or basket, even though everyone also knows that the odds are against them.  So we have the most significant reason why more professional sports teams have not jumped on the band wagon, as it were. 

 

A final point that I want to call out regarding these principles described in ‘Moneyball’ is that these are not new concepts, especially in the supply chain and extended supply chain!  The only point of significance in this story line is that it is presented as a bold new concept, or method!  If you’ve followed my earlier story lines you have probably been thinking that this is just another example of tried and true basic principles of success wrapped up as a shiny ‘new’ principle or practice.  Maybe I’m getting cynical in my old age, but is this just another example of re-packaging a practice with shiny new descriptions in order to present a ‘new’ discovery in another field.  In this specific case I would be remiss if I did not call out the fact that Business Process Management improvements is itself just another way of describing a continuous improvement program, measure, design the change, implement the change, measure the success and then start the process over again. 

 

The good news is that we’ve identified another example of achieving success through a focus on facts, measurements and procedures!  The bad news is that many people, including myself I guess, have gotten excited over the promise of a ‘new’ discovery only to realize we’ve been fooled again.  Again, if you’ve followed my posts regarding these topics you will also come to the same realization that I did, I’m sure.  I certainly do not profess to be a genius in these matters, I guess that my success comes from an ability to cut through the flowery descriptions and make the connections to the historical methods.  The key to success in these endeavors is the ability to identify the key factors and metrics to measure the success.

 

Now for the audience participation portion of this program……

 

What methods do you employ to identify key metrics and even ferret out new, or previously hidden.

tbrouill

Moneyball Principal

Posted by tbrouill Jul 28, 2012

I recently read the book ‘Moneyball’, by Michael Lewis, the book about the Oakland A’s manager Billy Bean who perfected a method to manage a professional baseball team on a shoe string budget.  I think it’s a great story and provides many lessons that can be taken to heart across many businesses, markets and even the economy.  The key point of the story is the method that Billy Bean identifies and exploits ‘undervalued’ talents and abilities in ball players to win games.  I think there are a couple of additional lessons that are at least as important; it highlights the old saying, necessity is the mother of invention; it also highlights the critical importance of focusing on the facts and not being confused or swayed by emotion.

 

I think that the key factor in this story is the determination of Billy Bean to overcome his limiting circumstances; the key factor being the severe financial limitations placed on his recruiting practices.  This is the story of Billy’s determination, imagination and openness to try new ideas and concepts.  Above all else I think his success came about because of their almost ruthless drive to seek out the facts and the factors that increase the likelihood of success.  I strongly disagree with the reviews that highlight Billy’s focus on exploiting ‘undervalued’ talent.  Don’t get me wrong, I’m not saying that this was not critical to his success, but I am saying that the key factors that supported his success were his overwhelming and almost pathological desire to win, his focus on the facts and the details that support those facts, and his willingness and ability to listen to and see the value in new concepts and methods to achieve success.

 

Of course though, the story line almost had to focus on exploiting undervalued talents in baseball, it gives the whole story a Dave vs. Goliath quality, or even a ‘Rocky’ quality, of the underdog achieving great success.  It also makes a great story line for the movie, although the story line is much more developed in the book.  It also doesn’t hurt that Billy Bean is a larger than life personality that is a fascinating highlight of the book.  Let’s face it; while the slow and the sure will be successful in the long run, it’s the lightning strike that draws the attention.  And in this case, the slow and sure method of comparison, identification and measurement of new key statistics in baseball success would get very dry and boring.

 

As I’m writing this it also dawns on me that other key factors to Billy’s success is the strength of belief in the concepts and the patience to allow the concepts to be successful.  In my observations, there are three supporting factors or personality traits that help to achieve success; the first is a faith in the objectives and methods to achieve the objectives; the second factor is the patience to allow the your trials to succeed (just like in nature, the instant success of a ‘lightening strike’ is unusual); and the third factor is the intelligence and foresight to recognize when your methods are not working and must be changed.

 

All of these lessons described in the book are critical success factors for any business or supply chain!

 

Now for the audience participation portion of this program……

 

Would you say that you focus on the facts and strive to identify and measure these factors to achieve success?

So, now I come to the second part of this new series on Integration and Collaboration, the collaboration needs and benefits with your extended supply chain partner.   First I should start with the baseline objectives, or needs, of your extended supply chain and then I will get into the opportunities and benefits of collaboration and integration on your extended supply chain.  In addition I see some additional factors that also impact the baseline objectives.  These factors relate to the economic climate and shifts in the market and business capabilities and support requirements.

 

Let me start with the additional factors that impact the extended supply chain.  The first is the economic climate and more specifically the impact of staff reductions on both the supply chain and your business.  I think there will be a long period of hesitation and push back to adding additional staff to support increases in volume.  This is for two reasons; the first is that in the current economic climate the choppy demand causes hesitation in hiring and the second is the increase in discontinuous change in the business environment.  These will drive the need to increase the integration and collaboration across the extended supply chain, and will increase the need and dependency on supply chain management consulting and also the Third Party Logistics market growth.  These factors will drive the growth and the expansion of the extended supply chain and with the growth and expansion of the extended supply chain we will also experience an exponential growth in the importance of expansive integration and collaboration across your extended supply chain.

 

So, now to get back to the baseline needs and objectives I think are critical to the success of your extended supply chain.  In this economy we are experiencing very ‘choppy’ demand, in addition to that the market and business requirements are shifting from a pallet, or truckload, model to a package, or ‘each’, model.  We have been experiencing these trends for 15 years and over the last two to three needs the importance and focus on this have increased dramatically.  Next, layer on top of these trends the staff reductions and the related reductions in experience and capabilities.  These factors all play into the critical nature and impact that effective and focused collaboration can provide to support the needs and the objectives of the market.

 

I have written in the past about the impact the recession has had on the extended supply chain.  I have also written in the past that I see this reduced staffing, experience and capabilities as the ‘new normal’ in most businesses.  So now I have come to what I believe has become the ‘new normal’ in your extended supply chain.  This ‘new normal’ is the importance of collaboration with your extended supply chain partners!  Your extended supply chain partners are the ones that will ‘fill the cracks’ in your experience and capabilities with the experience and manpower to meet the pressures placed on your business by this new age of discontinuous change!  In order to maintain your position in the market you must recognize this as an opportunity and then step up to develop these collaborative partnerships within your extended supply chain in order to meet the demands that will be placed on your business by the increase in discontinuous change.

 

In order to develop these collaborative partnerships across your extended supply chain, you must put into place an integration framework, or foundation, that will provide the flexibility and capabilities to support a highly volatile network of key partners!

 

Now for the audience participation portion of this program……

 

How do you currently define your partners within your extended supply chain?  Have you identified the critical partners and developed a framework to solidify these relationships?

 

How many different integration tools are in place in your extended supply chain?

 

How do you manage these integration points within your extended supply chain?

 

How has this focus impacted your organization and your team?

In my previous series of articles I discussed suggestions for recognizing and working through the short attention spans and short term focus to promote a long term perspective.  You have probably noticed, based on these discussions and also previous threads of discussions that I believe that taking a long term view and approach is critical to the long term success of an organization and especially the extended supply chain.  Today I want to focus on the importance of integration and collaboration in the success of your extended supply chain. 

 

Let’s start with the integration aspect of the extended supply chain.  This has been, in many respects, a Holy Grail quest for many organizations; I think the challenge to the success is a determination and focus on following through to the conclusion.  Over the years there have been many technologies and practices that have been utilized to integrate the supply chain.  These technologies started with the simple faxing of purchase orders and have progressed through to the development of vendor portals to allow and encourage the integration of vendors within the supply chain.  Each of these technologies has started all shiny and new with enormous promise, and then when each of these technologies obtains a 20% - 50% acceptance and they begin to stall due to lack of interest.  I know I’m over simplifying in my example because these technologies start off fast by incorporating the highest volume activities, then they begin to lose momentum when the volume and value of the activities to be addressed diminish.  It comes down to the old ’80 – 20’ rule; you will achieve 80% of the value from 20% of the activities. 

 

This rule came to mind for me again the other day in a conversation with a colleague.  We were discussing integration, in fact, as it relates to carriers and even import vendors where there was a shockingly low level of electronic integration.  Even in this day of advanced communications and technology, one of the major means of integration in the extended supply chain is email and Excel spread sheets!  EDI has shown the same trajectory, even after 30 years of this industry accepted technology and practice we are still only at about a 50% - 70% acceptance rate!  I would have to say that Wal Mart is the only leading organization with the conviction and patience to follow through to a higher acceptance rate and this has been achieved mainly through sheer force of the size the Wal Mart business.

 

Maybe the challenge in follow through and increasing the acceptance of any one of these technologies is one of human nature.  Maybe we lose interest after the high value work is completed because we start to search for the ‘better mouse trap’.   As I think about this dilemma it begins to dawn on me that maybe human nature is the ‘shiny object’, or short attention span tendency that must be continually overcome in order to succeed. 

 

I come to believe that in order to succeed we must focus on a flexible framework that allows the various and sundry types of integration technologies to co-exist.  This framework would provide the translation and communication linkages to support the various levels of capabilities of the partners within the extended supply chain.  I come to believe that we may not have had the ability to understand this and ‘connect the dots’ until now.

 

The flip side, or twin, of partner integration within the extended supply chain is partner collaboration.  In my next posting I will focus on the collaboration aspect that can extend the value of these concepts and develop strong and valued partnerships across the supply chain.  I will then wrap these concepts and technology in a social framework to provide the method to increase the value of the extended supply chain network.

 

Now for the audience participation portion of this program……

 

How many different integration tools are in place in your extended supply chain?

 

How do you manage these integration points within your extended supply chain?

 

How has this focus impacted your organization and your team?