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2013

     You hear it all the time: lessons or advice from successful sports coaches can be applied to business leadership. I think you could turn that the other way around, and just as well say that lessons or advice from successful CEOs can be applied to sports leadership.

 

     Anyway, I was reminded of this by a column in the Chicago Tribune about the Chicago Blackhawk’s head coach, Joel Quenneville. The Blackhawks, in case you don’t follow hockey, were the winners of the Stanley Cup in 2010, and just beat the Boston Bruins on Wednesday night in the Stanley Cup Final opener. In the column, Phil Rosenthal wrote that Quenneville—who previously was a head coach in St. Louis and Denver and spent 13 seasons playing for five NHL clubs before that—is enthusiastic and tireless, and he makes it clear he expects the same from players. Additionally, he’s an effective, judicious communicator. Not everyone has to know everything, but he understands it’s important everyone believes they know enough.

 

     “I don’t think I’m great at giving motivational speeches but there are certain ways that we expect our team to play, knowing that we want to be the hardest-working team in the league,” Quenneville says. “The top players deliver this message better than anyone else, and usually those are your leaders too. When your top players aren’t your hardest workers, it’s a little more challenging.”

 

     Blackhawk Marian Hossa says in the column that Quenneville is a “players’ coach. He’s easygoing, but also demanding.” Hossa adds that, there aren’t many of that type of coach.

 

      “Players want to play for him,” Hossa says.

 

     When Quenneville was an 18-year-old defenseman for the Windsor Spitfires in the Ontario Hockey League, Wayne Maxner, longtime Spitfires coach never had to worry when Joel was on the ice, he recalled in a Chicago Tribune column earlier in the week.

 

     “I knew he was going places. I made him captain because of his leadership qualities, and he never disappointed me,” Maxner said in the column by David Haugh.

 

     What I found most interesting, however, was that after Quenneville left his hometown of Windsor for the AHL and an eventual 803-game NHL career, the Spitfires made an in-season trade in 1978 for a feisty, no-nonsense defenseman who reminded Maxner of Quenneville. The next season, Maxner named that player, Claude Julien, team captain because he was the same type of player as Quenneville. Both players weren’t afraid to work hard and lead, he recalls.

 

     “I would say they are almost identical as coaches and people,” Maxner says in the Tribune column.

 

     Fast forward to today, and Claude Julien is coach of the Boston Bruins. The Bruins, by the way, also happened to win the Stanley Cup in 2011. Like Quenneville, Julien is known for preaching enthusiasm and hard work, along with accountability and consistency.

 

     There obviously is a great deal more to winning sports championships, or being successful in business, than a coach’s or CEO’s attitude. However, at some fundamental level, that attitude does trickle down, and to a certain extent, an organization can be modeled after his or her mindset.

 

     What I’d like to know though, is how much impact you think that executive leadership mindset has on an organization’s performance? Do you work, or have you worked somewhere, where hard work, enthusiasm, accountability and consistency were preached? If so, what effect did it have on employees and organization performance?

     Have you been following the on-going story about the National Security Agency (NSA) and its Prism initiative?

 

     Prism is the name of an NSA classified program used to access the central computer servers of nine U.S. Internet companies, extracting e-mail, audio and video chats, photographs, documents, and other material. Prism first became news last week as a result of reporting by the Washington Post and the British Guardian. The Obama Administration then confirmed much of what the newspapers reported. In an initiative parallel to Prism, NSA obtained a secret order from the FISC compelling Verizon Communications to provide the agency with data on all its customers’ phone calls.

 

     Edward Snowden, a former U.S. government contractor thought to be hiding out in Hong Kong, identified himself as the source of recent disclosures about the secret NSA data-gathering programs. Last Sunday, the self-described whistleblower who had worked for a major NSA contractor, said the technical breadth of the surveillance program prompted him to disclose details about it in the hopes of sparking a debate over U.S. policies because he had grown, as the Guardian reported, concerned about how “massive and invasive the system has become.”

 

     If his goal was to spark a debate, then I’d say he was pretty successful.

 

     However, one of the things that intrigues me is that essentially, this is about key advances in computing and software in recent years that allow the NSA to analyze far larger volumes of phone, Internet, and financial data to search for terrorist attacks. Of course, there are other concerns about how tech giants—including Microsoft, Google, Yahoo, Apple, and Facebook—seem to have made it easier for NSA to gain access to their data. But they aren’t talking, or at least they aren’t saying much other than to deny knowledge of the NSA project.

 

     What the heck does all this have to do with the supply chain? Well, it’s that the government is successfully able to collect and manage this “big data” to its benefit.

 

     “It’s the ultimate correlation tool,” a former U.S. counterterrorism official said in an article on the Wall Street Journal’s website. “It’s literally being able to predict the future.”

 

     That type of capability would have a significant impact on the supply chain, according to the respondents who took part in an eyefortransport survey. An article in Supply Chain Quarterly, the journal of the Council of Supply Chain Management Professionals (CSCMP), reports that of the 307 respondents, 80 percent said big data analytics would have a “reasonable” or “significant” impact on their companies’ performance, and four percent said it would be “a total game changer.”

 

     The survey found that 27 percent of the respondents were already deploying big data analysis in their supply chain operations, and another 34 percent were considering its use. Three fourths of those respondents said they were using or were considering using big data analysis to increase supply chain visibility. Most of the respondents (61 percent) said they want to use big data analysis to reduce supply chain risk, and 58 percent of the respondents seek to enhance demand-planning capabilities.

 

     As for allegations that the U.S. government is spying on its citizens and fears that “Big brother is watching,” well, there’s truth to that too. I don’t mean to be flip but I think many people—at least in the back of their minds—expected the government to be doing something like this anyway. Maybe not something this widespread but some sort of activity. It also reminds me of how Scott McNealy, CEO of Sun Microsystems, famously said during the dot-com boom that people have “zero privacy anyway” and that they should “Get over it.”

 

     What do you think? Will the continued coverage of the story cast a spotlight on big data analytics?

     The unknowing use of counterfeit parts is rampant in the U.S. defense supply chain, according to a new report. These counterfeit parts show up in everything from night-vision devices and laser range-finders used by the Army, to the V-22 Osprey Aircraft used by the Marine Corps, to submarine-launched ballistic missiles used by the Navy, and the Hellfire air-to-surface missile and F-22 Raptor Fighter used by the Air Force.

 

     A recent report, commissioned by the Alliance for American Manufacturing (AAM), calls attention to “our military’s growing and dangerous reliance on foreign nations for the raw materials, parts and finished products needed to defend the American people,” notes a recent article that ran in IndustryWeek. “Remaking American Security,” written by Guardian Six Consulting President John Adams, a retired Army general, warns that “foreign sourcing puts America’s military readiness in the hands of potentially unreliable supplier nations and undermines the ability to develop capabilities needed to win on future battlefields.” The report calls for action to increase domestic production of the natural resources and manufactured goods necessary to equip the U.S. military, the article explains.

 

     “This report is a wake-up call for America to pay attention to the growing threat posed by the steady deterioration of our defense industrial base. Excessive and unwise outsourcing of American manufacturing to other nations weakens America’s military capability,” says Adams. “There is a real risk that supply chain vulnerabilities will hamper our response to future threats.”

 

     The AAM report recommends a number of steps to promote domestic manufacturing capacity and make the U.S. military less dependent on imported products. These steps include increasing long-term federal investments in high-technology industries, developing domestic sources of key natural resources, and building consensus among government, industry, the defense industrial workforce, and the military on the best ways to strengthen the defense industrial base, the IndustryWeek article reports.

 

     The report reminds me of news last November in which iSuppli noted that the rise of counterfeit parts threatens the success of NASA’s missions, along with the safety of its personnel and the security of the country. In a webcast, Steven Foster, head of procurement quality assurance at the Dryden Flight Research Center, said the center’s number one challenge is counterfeit parts.

 

     Pointing out a significant challenge, Rory King, director of supply chain global product marketing at IHS, said in the webcast that counterfeiters are sophisticated operators who are highly in tune with the market. They track market conditions much in same way that legitimate producers of original parts do. When they see the market ramping up, they ratchet up their counterfeiting activities to take advantage of the tight supply situation. They identify market opportunities and exploit them to the fullest, King said.

 

     In addition to the threat to personnel and even a potential security threat, the costs of just a single counterfeit incident can be enormous. For instance, the Department of Defense spent $2.7 million to repair problems caused by fake parts in the THAAD missile system.

 

     Part of the problem is the sheer scope involved. A bill of materials or parts list for a military application system can include somewhere between hundreds to tens of thousands of purchased parts, so even if one percent of the parts are counterfeit, it can still be a staggering number of parts. Also, once they have entered the supply chain, counterfeit parts can surface time and again for years. So while the U.S. government is working to tighten regulations, and information services organization ERAI offers a means for reporting and investigating suspected counterfeit electronic parts and components, one must wonder if that’s enough.

 

     What do you think? Are counterfeit parts just an unavoidable part of business? Can a call to action or even new government regulations slow—or perhaps halt—the influx of counterfeit parts?

     U.S. ports play a vital role in the supply chain. According to the American Association of Port Authorities (AAPA), U.S. seaports are responsible for moving nearly all of the country’s overseas cargo volume: 99.4 percent by weight and 65 percent by value. Each of the 50 states relies on at least 15 seaports to handle its imports and exports, which total some $3.8 billion worth of goods moving in and out of U.S. seaports each day. Finally, seaports also support the employment of more than 13 million people in the U.S., says AAPA.

 

     Yet up until recently, there was no reliable measure of the U.S. port system’s cargo handling capacity. That’s changing now, however. A research initiative called the Center for Secure and Resilient Maritime Commerce (CSR) launched in 2007 by the U.S. Department of Homeland Security is addressing this lack of awareness. Led by the Stevens Institute of Technology, the research carried out by CSR is now producing actionable results, including an on-line application called Port Mapper that was developed by the MIT CTL team, wrote Jim Rice, deputy director, MIT CTL, and Ken Cottrill, global communications consultant, MIT CTL, recently on Supply Chain @ MIT (thanks to SupplyChainBrain for pointing me to the article). A beta version of the on-line application was used by the U.S. Coast Guard as part of its response to Hurricane Sandy last year, Rice and Cottrill note.

 

     If a port is disabled and cargo has to be diverted to another facility, Port Mapper identifies which terminals are available to handle the goods. So the application shows, for example, that if a user wanted to know the Top 10 ports that could handle containers if the Port of Savannah were closed, they would select Container under SIC Group in the application; on the second input line they would select Top 10 under Ports to View and then also select Port of Savannah in the drop down menu next to Port to Fail, then click on Map Port. Pretty easy to use, right?

 

     This could be a valuable tool in the event of hurricanes so companies could reroute shipments. The NOAA (National Oceanic and Atmospheric Administration) forecasts that for the six-month hurricane season, which began June 1, there is a 70 percent likelihood of 13 to 20 named storms (winds of 39 mph or higher), of which 7 to 11 could become hurricanes (winds of 74 mph or higher)—including 3 to 6 major hurricanes (Category 3, 4 or 5; winds of 111 mph or higher). These ranges are well above the seasonal average of 12 named storms, 6 hurricanes and 3 major hurricanes. I certainly hope that forecast doesn’t come to pass, however.

 

     But severe weather isn’t the only threat to the integrity of the nation’s ports. The application could be used in the event of a labor strikesuch as the strikes last year at the Los Angeles and Long Beach ports, which handle about 44 percent of all cargo that arrives in the U.S. by sea—or even potential strikes, such as those that almost took place along the U.S. East and Gulf coasts earlier this year, to avoid work stoppages that could bring cargo handling operations to a halt.

 

     The application is now being refined with the addition of features such as pop-up windows that display distances between facilities and port volumes, Rice and Cottrill write. In the longer term, the MIT CTL research team aims to expand the scope of Port Mapper by integrating it with data on highway freight flows.

 

     I think Port Mapper is an interesting tool with some very intriguing potential that may have a significant impact on supply chain performance when used to mitigate risk. I look forward to seeing how it will be used and further developed.

     A supply chain talent shortage for mid-management positions stems from three factors: growth of global economies and the need for supply chain talent in emerging markets, the growth of opportunities for supply chain leaders in general business, and the retirement of baby-boomers. While there has been an assumption that people would be available for these jobs, that’s just not true today.

 

     As a report from Deloitte, “Talent Edge 2020: Redrafting talent strategies for the uneven recovery,” explains, many executives look to strengthen their leadership development pipelines and programs. So, for instance, approximately one-third (30 percent) of executives surveyed ranked developing leaders and succession planning as today’s top talent priority—the highest of any response. A nearly equal percentage (29 percent) predicted it will likely remain the top talent concern over the next three years.

 

      Indeed, as the baby boomer generation retires over the next 10 or so years, this demand will only increase. Interestingly though, as the supply chain management field becomes more complex—and employers demand more education and technological experience—there has been a rise in college and university offerings targeting supply chain management as both undergraduate and advanced degrees.

 

     An article in the Wall Street Journal explains that, noting demand from companies experiencing growing pains in their global supply chains, more than a half-dozen universities have introduced undergraduate majors, M.B.A. concentrations, and even entire degree programs dedicated to procurement, inventory management, and global supply-chain strategy.

 

     For example, The College of Business at Bryant University in Smithfield, R.I., last fall added an undergraduate major and M.B.A. specialization in supply-chain management after introducing an undergraduate minor about four years ago. Courses include global sourcing and social responsibility in the supply chain as well as a hands-on consulting project. The school already has nearly 150 undergraduate and M.B.A. students pursuing a major or concentration in the field.

 

     Bryant also joined the University Alliances program run by software company SAP AG to give students hands-on training with the logistics technology they will be expected to use in the workplace. SAP has added more than 250 schools to the program in the past 18 months, and now counts more than 1,300 partner institutions.

 

     Meanwhile, Rutgers Business School in New Jersey, which launched its M.B.A. concentration in supply-chain management more than a decade ago, added an undergraduate major in 2010 in response to employer demand and undergraduate requests. So far, it has registered 450 students for the degree, which includes classes in transportation, contract management, and even packaging, the Wall Street Journal reports. Top employers hiring out of Rutgers include Dell, Johnson & Johnson, and Panasonic.

 

     What I found more interesting is that a growing number of institutions are targeting mid-career professionals who now look to strengthen their supply-chain skills. So, for instance, Neeley, which has offered an undergraduate degree and M.B.A. concentration in supply-chain management for about 10 years, now has plans to add an M.S. in supply-chain management curriculum aimed at working professionals with five to 15 years of experience.

 

     I suspect there may be a growing opportunity for on-line studies as well, and this may be where a revolution of sorts takes place. The Wall Street Journal article points out that University of Southern California’s Marshall School of Business announced earlier this year that it plans to enroll its first on-line M.S. in global supply-chain management class in the fall. Portland State University’s School of Business Administration has developed a similar program. My guess is many other institutions will quickly follow suit.

 

     So all in all, I see two good things here. The first is that college students see the supply chain as a rewarding career path worth pursuing. Secondly, companies are able to hire employees with the supply chain knowledge and experience they require. Of course, those employees will require further experience but that’s always the case anyway.

     The explosive growth in recent years of patents has spawned an industry built around lawsuits. Patent-holding companies, known as nonpracticing entities and derisively called “patent trolls,” have been drawing attention from regulators and policymakers including President Barack Obama.

 

     What happens is these patent-holding companies amass portfolios of patents to make money not from building new products but instead, by pursuing licensing fees. Critics say the companies and their lawsuits cost the economy billions of dollars and stifle the creativity of the very people the patent system is designed to protect.

 

     On Tuesday, President Obama took direct aim at the companies and their practices. He has said the patent trolls have a business model “to essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them.”

 

     The president followed up on his rhetoric Tuesday with policy actions and legislative proposals designed to restrict patent-holding companies from abusing the legal system. Among the proposals written “to protect innovators from frivolous litigation,” Mr. Obama called on Congress to allow monetary sanctions on parties that file frivolous lawsuits. He also ordered the Patent and Trademark Office to require companies to be more specific about exactly what their patent covers and how it is being infringed. The administration also told the patent office to tighten scrutiny of overly broad patent claims.

 

     A statement from the White House explains that over the last two years, the number of lawsuits brought by patent trolls has nearly tripled, and account for 62 percent of all patent lawsuits in America. All told, the victims of patent trolls paid $29 billion in 2011—a 400 percent increase from 2005—not to mention tens of billions dollars more in lost shareholder value.

 

     But this is about more than just the company bottom-line: when businesses need to constantly worry about abusive patent litigation they are able to put less of their efforts into creating new products and serving customers, the White House statement continues. Today, some of the largest innovators in high-tech spend more money on patent litigation and acquisition than they do on research and development for new products. Smaller companies are hit just as hard, and 40 percent of technology startups targeted by patent trolls reported a significant impact on their business operations, according to the statement.

 

     One would think the policy actions and legislative proposals would be seen as good news by companies of all types. However, that’s not necessarily the case. An article in The New York Times notes that lawmakers previously encountered resistance in 2011 to some of the measures Mr. Obama just ordered. The opposition then came from, among others, pharmaceutical companies fearing the legislation would hinder their ability to defend their own patents.

 

     Furthermore, some big software companies also expressed dismay at some of the proposals, saying they could themselves stifle innovation, the NYT article reports. A proposal to expand the patent office’s program allowing for special review of computer-related patents “could inadvertently put at risk innovation for many industries that rely on software, from manufacturing to biotech,” says Matt Reid, senior vice president for external affairs for BSA: The Software Alliance, a trade group that represents software companies.

 

     Other companies use their patents to strategic benefit as well. A Washington Post blog points out that while Microsoft has struggled to gain traction for its smartphone products, the firm holds tens of thousands of patents—so many that it’s effectively impossible to build a smartphone OS without accidentally infringing numerous Microsoft patents. Microsoft has used this “patent thicket” to force most firms selling Android phones to pay licensing fees, the blog notes.

 

     Consequently, the most innovative start-ups are increasingly forced to make payments to their more established competitors, whether or not the latter continue innovating, the blog notes. Essentially, that discourages innovation, the opposite of the effect the patent system is supposed to have.

 

     What do you think? Does companies’ use of patent infringement lawsuits discourage innovation? Is the problem the patent system itself?

     As manufacturers face a talent shortage driven by older workers leaving the market but not enough new workers entering the market, one would think it would be fairly easy to hire new workers. But as has been noted before, manufacturers also face a skills gap, and consequently find it difficult to hire highly skilled workers.

 

     I was interested then to read recently about how Hypertherm, a manufacturer of advanced cutting products, created its own training program. As an article in IndustryWeek, written by Dick Couch, CEO and founder of Hypertherm, explains, the company’s past training process was to hire a machine operator, and then have them shadow a more experienced Hypertherm associate to learn how to operate advanced CNC machines. Unfortunately, that process took months, if not years, to get an operator up to speed—and even then their knowledge tended to be superficial.

 

     Realizing that the process wouldn’t support forecasted demand, executives decided to create the company’s own training center. Working with Vermont HITEC—a nonprofit organization in Vermont that had successfully run training programs—the company opened its Hypertherm Technical Training Institute. The immersion-styled education program teaches people who have a good attitude and an aptitude to learn to be skilled machinists in just nine weeks.

 

     What I was most intrigued with is that students accepted into the program are guaranteed jobs at Hypertherm and paid full wages during training. So as Couch writes, this allows people who may not have otherwise been able to go through such a program because they couldn’t afford to go nine weeks without a paycheck, to participate. Furthermore, not only does the training meet Hypertherm’s immediate need for employees, it also offers an opportunity for unemployed and underemployed people to have a brighter future.

 

     The program was further improved in 2009 when Hypertherm formed a partnership with the New Hampshire community college system that enabled students who successfully completed the training program to earn college credit toward an Associate’s degree and a certificate in Machine Tool Technology, Couch explains. Since then, Hypertherm has also opened its training institute to other employers to improve the competency of CNC machine operators regionally.

 

     I’m also interested in the rise of programs at community colleges that offer manufacturing skills certification. A recent Chicago Tribune article provides a bit of good news and bad news on the topic. First the bad news: a rising number of college graduates—sometimes with business degrees—have been unable to find work in their chosen fields. So, rather than taking temp work or low-wage positions, they have gone back to community college for certification in various programs.

 

     The good news is that not only is the number of such programs growing, there is considerable interest in them. For example, the article reports that when Harper College in Palatine, IL launched its “fast track” advanced manufacturing program—certification in one semester, followed by a paid internship with a partner company—the information session attracted a standing-room-only crowd.

 

     “Companies just don’t have the time to train people on the job anymore,” says Maria Coons, a Harper administrator, in the Tribune article. “So [students] come here, acquire additional skills and go to work.”

 

     That type of certification is projected to be in great demand. Indeed, one of the biggest voids in the marketplace is “middle-skills” jobs, which require special training or certification, says Anthony Carnevale, executive director of Georgetown University’s Center on Education and the Workforce, in the article. Almost a third—17 million out of 55 million—new job openings from now through 2020 are going to require those skills, he says.

    

     Has your company found it difficult to hire people with the right skills set? If so, is your company offering training, watching local college programs, or something else?