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2015

I interviewed Hank Mullen who discussed Cube, Volume, Density, Dimensional Weight, and How to Convert These to Space-Occupied Pricing.

 

 

 

 

 

 

It’s great to speak with you again, Hank. We’ve done several interviews in the past, and this one, I’m looking forward to going into a little bit more depth on the topic. The title of this interview is “Cube, Volume, Density, Dimensional Weight, and How to Convert These to Space-Occupied Pricing.” My first question, if you could provide a brief background of yourself? Then my question is: Do you know the difference between volume density and space-occupied pricing?

 

Yeah, that’s the whole crust of the biscuit. I’m 46 years into transportation now. I’ve worked with UPS in consolidated freight waste, ground transport, ran the UPS center in Watertown, LTL out of West Palm Beach. I have done over-the-road actual driving of the big rigs, local deliveries. I essentially grew up in the industry, since 1969. All of the things that I’m watching here, everybody says, “How do you know all this?” To be 100 percent honest, every time I made a mistake, I remembered. You’ve got 40-plus years of “don’t do this.” I can tell you why: It doesn’t work. Plus, I’ve worked with some huge corporations and really gifted people, so I had a lot of great mentors as I was growing in the industry.

 

My whole thought right now is: very few people understand classification pricing. It is extremely complex. What they really don’t know is when you sign the bill of lading, which is item 360 in the NMFC, everything that’s in that carriers rules tariff and in the NMFC are incorporated by reference. You agree to over 800 pages of NMFC and anywhere from 30 to 120 pages of rules tariffs. I thought, This just doesn’t work anymore. It’s cumbersome if you have a problem. You go through contracts and everything, so you’ve got to sit down and think about how you’re going to use this system. That’s the biggest problem everybody has. This is just impossible to replace or to make comparisons with what I’m paying now and what I’m to pay and how I make changes as my imbalance is changing and customers request a lot more space of the carriers’ equipment.

 

Thanks. What are your recommendations, then, for moving forward?

 

Three things. I think the most important thing is to realize that, like I said, it’s not your father’s Oldsmobile. You’re going to have to bring the IT people in and say, “Can we do this?” What you’re going to ask them to do is make a call on a cloud-based system that goes directly into the carrier’s pricing module. You say, “Give me a rate for these criteria” and the standards, from-to, weight. The thing you’re obviously going to do is how many cubic feet in UDUs. The IT people are going to look at you and say, “You called me in here to ask if we could make a call to a cloud-based system? Then they get up and walk out because it’s so simple. You’re getting a direct-response rate from the carriers’ pricing at corporate. It’s all downhill from there.

 

We have a system that’s been doing that for over three years. There are 23 different things you can set up to balance all of the nuances that are in freight—inbound-outbound, availability, release value, day of shipment, payment terms, it goes on and on. That’s the biggest thing. This is not hard to do.

 

The second thing I think people have a problem with is how you make these comparisons. Well, if you look at the National Motor Freight Classification Class 100, there’s a cost per hundred that is also scale-associated, which is nine pounds a cubic foot. You have 18 freight classifications, and they have varying pounds per cubic foot. The way it worked when it was set up is Class 100 was the basis. If you had Class 50, it was half of Class 100; and if you had Class 200, it was two times Class 100. If you look at what’s happened to the years, Class 50 is no longer 50 percent of 100; it’s 57 percent. The carriers have taken the smaller freight classes—50/55, 60/65—and really kind of padded them. It changes by lane and by distance.

 

The easiest way to come to an agreement is agree upon everything’s nine pounds a cubic foot or a percentage of on any given lane, any given day, on any commodity. You could end up with what would be, instead of Class 70, 15 pounds a cubic foot, you might have Class 71.4 or 64.4. It’s all based on the amount of space a carrier has at any given time, and it can change on a daily basis. People say, “That’s really, really complicated.” I said, “Have you ever made an airline reservation? That’s all it is; it’s exactly what it is.” If you look at the way the airlines work, you might call at 11 and get a price, and at 11:30, when you call back to book it, it’s changed. That’s because the space they have to occupy on that particular flight is full or 90 percent full. It’s not a new idea. It’s used in the reservation systems on the saber for over 110 air carriers, and it’s been that way for, God, I don’t know, 30 years. It’s not a new idea; it’s just the idea that we have to get into real-time pricing because the carriers have such a hard time with capacity.

 

For example, if you’re in Dallas and you want to ship to Georgia, you say, “I’m going to ship on Monday and Tuesday,” they’re going to say, “Could you do Wednesday?” You’ll say, “Why?” They’ll say, “Because we have sixty percent of our equipment that’s going over there and it’s not full; I’ll give you the best price on Wednesday.” Of course, you can’t do that immediately; you have to consider your customers and everything, but it’s usually worth a good 15 to 20 percent reduction. You’re essentially shopping back haul by lane, inbound-outbound, by day of week and that’s powerful.

 

The kicker is, the people over there in Georgia know how much space they need. Why would you send a twin screw 53-foot trailer out when you can use a 26-foot straight truck on a cash-all basis? Sorry, union guys. It just makes you so much more efficient. That’s what it’s all about: getting all the efficiencies we can and driving out this intimacy system that has cost the * (9:09—unclear) carriers billions of dollars because they just can’t adapt to it that fast. That’s just huge. Your third one—and it’s on our Web page, Dynarates.com, and it’s under the shippers.

 

There’s a good explanation of the difference between cubic space, occupied density, volume, and it’s written by Bill Pugh. He was the executive director of a corporation called the National Motor Freight Traffic Association, or the NMFC. Bill retired in 2007, when the Surface Transportation Board got rid of all the antitrust revisions that the carriers had. If you go to the NMFC now and look at their policies and procedures, Section 11A says the carriers have the right of independent action. They don’t have to do this as a group anymore. But nobody seems to realize that it’s 100 percent legal and it’s the Surface Transportation Board’s 656 antitrust ruling.

 

Everybody’s scratching their head, saying, “How are we going to use this?” The Surface Transportation Board clearly stated this opens up the options for all kinds of new pricing and they’re right. The last time something like that happened that was really significant was the 1980 Motor Carrier Act that just freed up all the transportation. Believe it or not, if you were taking washing machines down Main Street in Detroit and a competitor saw you and they had the rights and you didn’t, you couldn’t do that. It was the biggest form of communism I’ve ever heard. The Motor Carrier Act says anybody who wants to join this, do it; and within a year or two, there were two or three thousand more carriers with a savings to the shippers in billions of dollars. Jimmy Carter, he’s the one who got it done. Three Presidents before him tried to do it and couldn’t get it pushed through; not even Kennedy. Nobody could do it and he got it done and it’s huge. It just frees up what we can do. Everybody’s going to say, “This is confusing.”

 

Like I said, from the start, about 80 to 85 percent of the LTL carrier’s pricing is contracts. When you see a 4.95 increase from some LTL carrier, if you have a contract, it means absolutely nothing to you; you’ve locked in your rates and everything for whatever you’re going to do. That’s the simplicity of it, and it has all kinds of implications in the first place when you do it. Just do the simple cost savings. If you’ve got a $20 million budget, a $2 million budget, or $100 million budget and you’re paying a freight-bill auditor—we did one in Texas. The very first thing we did was eliminate that, and that number was $300,000. We essentially told the carriers, “You audit us, we’re not going to audit you.” It’s very, very common.

 

That’s the bottom line. This is not complicated but you’ve really got to sit down with your carriers and use what’s call vested outsourcing. If you do some Google searches on that, you’ll see some huge corporations that are doing it and the numbers are staggering. I strongly suggest you do that vested-outsourcing Google search and read some of those. The second paper that was written was Unpacking Transportation Pricing, and that was one that Pete Moore, Lynnette Guess, and myself wrote. It’s about 30 pages, it’s really intense, but it breaks it all down, and you begin to realize it. There are 10 or 15 of those papers now, so that’s another thing you might want to take some time to read. It takes some time; it’s really intense. Like I said, that kind of bottom-lines it.

 

Thanks, Hank, for sharing again, and I look forward to continue to have discussions with you as things progress and if you have more insight into this topic.

 

I appreciate this. I’m looking forward to hearing the responses from this.

 

Thank you.

 

 

 

 

About Hank Mullen


 

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Hank Mullen


Principal, at Third Law Sourcing.


 

LinkedIn Profile

I interviewed Alessandro Menezes who discussed Chemical Supply Chain Challenges.

 

 

 

 

 

 

It’s great to speak with you today, Alessandro. Today I’m looking forward to hearing your views on the topic of chemical supply chain challenges. My first question is: Can you provide a brief background of yourself?

 

Dustin, first of all, thank you; it’s a pleasure to be here talking to you and your audience about that. My name is Alessandro Menezes; I’m an American born in Brazil. I also lived in Germany, and for a bit more than a year and a half, I am the senior logistics leader for a major manufacturer of chemical additives, which is Afton Chemical Corporation. We are part of NewMarket Corporation—NEU at the New York Stock Exchange. The family of companies is developing and manufacturing petroleums and additives. Our global operation is our support for our regional headquarters in Asia, Europe, Latin America, and North America. When I’m not traveling, I’m based out of our headquarters in Richmond, the capital of Virginia, and I’m heading the logistics and customer service operations for the region of Latin America.

 

My previous background includes 16 years of several different management roles, mainly within ocean transportation and its added services, especially holding global-product management functions within the container liner industry. Besides also several deep-sea services, I also have worked in coastal navigation in South America, especially in the Brazilian Cabotage, where I was holding positions with the responsibility over supply chain solutions to customers. You can imagine a very complex and undeveloped the infrastructure reality.

 

Well, my experience also includes global logistics roles based out of Germany, especially related to optimizing the empty requisition position of containers. I’m talking about a fleet of over 300,000 containers dispersed over all the countries in the world. After I left the steamship industry and prior to the Afton Chemical role, I also had experiences within the chemical drybox shipping, helping our global customers to better manage their supply and minimize cost, of course increasing efficiency.

 

Last, my educational background includes a bachelor’s in business administration, an M.B.A. at Business School Säo Paulo in Brazil, and a master’s in logistics. With this increasing complex global business environment, I have also attended and concluded some programs on negotiation at Harvard. As a matter of fact, last week I was at MIT, the Center for Logistics and Transportation, discussing a little bit about supply chain management and how to drive strategic advantage and innovate for the future. It may be a good opportunity now to talk about this stuff with you.

 

What are the challenges you see in the chemical supply chain?

 

Chemical companies in general face a growing era of risk within their supply chains. Why don’t we all understand that some of these risks are specific to the chemical industry? Many others are part of the more general risk companies operating in a rapidly changing and increasingly complex global business environment. It’s unrelated to the uncertainty where the environment is reshaping quickly by factors such as technology, economy, regulation and cultural changes and so on.

 

There are a number of large challenges that we are facing today as a result of this but, really, the crucial challenge I see for the chemical supply chain, because of this volatility, is to be part of the selected group of companies that are best managing their supply chains, as, most likely, those companies will be the most successful, let’s put it this way, over time. You cannot reach that if your organization doesn’t have an efficient supply chain resilience process. Reliable supply for chemicals is such a volatile environment; it’s a key aspect. Because production and consumption normal, especially in my case, Latin America, emerging markets. We have production-consumption locations mostly separate, and that becomes another high-risk factor that will be one of the challenges moving forward.

 

Other aspect that becomes more and more relevant is the imperative need of an effective supply chain strategic alignment. Of course, mostly to put in to practice and support the business strategies. To reach this alignment in the chemical industry, for example, we see comparative and sustainable supply chain as one of those big challenges. As we’re dealing with high specialization, especially for hazardous shipping, and when customers’ expectations are going up, looking for on-time delivery, flexibility, and not only at the level that we’ve seen is being featured, but for sustainability.

 

Can you talk in a little bit more detail about why these challenges exist?

 

The first aspect I mentioned related to the supply chain resilience is becoming an increasing challenge because most of the concerned risk is for the chemical global supply chain is related to, for example, immediately a big break in the chain. For example, it could be an explosion, at the key supplier. It could be a natural catastrophe, a war, and several other causes. We see, again, being specifically in the emerging countries, within the developing countries, risk management is generally less rigorous than in the developed economy. The risks of a local aspect are even higher when compared to those in the developed world.

 

Also, these challenges exist when we all take in mind that global trends are effecting regions, countries, industries, and even when we think, for example, about the concerning supply chain risks, we can mention the political and social instability because most of the raw materials are sourced from dangerous and, let’s say, unstable parts of the world. It’s like these global chains, you think they’re about tornadoes and not tsunamis. They are tornadoes: very difficult to predict exactly what’s going to happen, but there is a trend. The challenge is to have the resilience with enough time to react and satisfy the customers’ requirements.

 

Uncertainty of the bad news is: We believe that it’s a key feature of the 21st century; it’s the new normal. Risk management helps many companies do a great job of risk identification, but then they fail to define and implement a clear strategy for addressing those risks. That leads to another challenge, which we refer to, related to the supply chain strategy alignment. How we work with our supply chain partners, with our suppliers, distributors, customers—and even our customers, because as the marketplace becomes more competitive, it’s critical to enforce the existing relationship and work together. You never know what’s going to be needed tomorrow. Bottom line: these trends, they’re a challenge but they are also opportunities.

 

How should the challenges be address?

 

Good question. When we look back years ago and see the lesson of the Japanese disaster and how the supply chain risk management had to change and go beyond the director of suppliers, we haven’t seen, also, regionalization trends, and the implementation of diversifying, and preferably to have the suppliers located in different regions, also to make better service-related decisions, especially in matrix organizations. Most of them used within manufacturing companies, it’s more and more key to understand the operational implications of the cost and service levels involved. What I’m saying is: It’s becoming more important that the groups work together with the supply group, try to analyze the full part and alignment and how it impacts any major service decision and therefore avoid any pitfall.

 

We also believe that because of this organization knowledge development becomes more relevant. As they need to continue to develop an organization which is accountable, which feels empowered, and encouraging an environment where you have the positive change and a culture of continuous improvement, because things will happen really fast. We don’t know what’s going to happen, but we know they will happen. Last is, these supply chains, they are moving from—and they’re still moving from—a cost focus to a more customer-focused-oriented chain. As a result, we see, also, an increasing importance of having these strategic focus and, really, the need of thinking strategically about the supply chain. We can say it has never been so important as nowadays. We believe, in talking to customers and even to competitors, that successful companies will be able to really drive the supply chain resilience, as I mentioned, as a general competitive advantage. That’s going to be really a must down the road.

 

Thanks for sharing to day on the topic of chemical supply chain challenges.

 

It’s a pleasure, Dustin. Whenever you need, I’m available. Thank you so much.

 

Thank you.

 

 

 

 

About Alessandro Menezes

 

 

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Alessandro Menezes

 

Senior Logistics Leader, Supply Chain, Transportation, Liner Shipping, Product Management, Procurement, Ocean Freight

 

LinkedIn Profile

I interviewed Sharon (Neuman) Hartley who discussed Materials Management Transformation.

 

 

 

 

 

 

It’s nice to speak with you today, Rebecca. I’m looking forward to hearing your views today on materials management transformation. Before we start, can you provide a brief background of yourself?

 

Yes. I’ve been in the pollution-control industry for about ten years, in manufacturing and working as the sole agent for two separate pollution-control companies. This was back in the ’80s, when we had incineration. The first company I worked with had a very unique and patented machine that would use a conveyor system to put hazardous waste into an incinerator and combust it at a very high temperature and burn it to the ashes. Then we had an ash-silo system, the back end scooping out the ashes—and no human hands were touching it—and then it was taken on a conveyor belt and put into an ash silo, then taken to a land dump to dispose of the ashes.

 

That was the first pollution-control company I was at. The second one was at a company that was more of a chemical company. What they did is injected chemicals into boiler systems to help them burn hotter. The particulates were reduced for pollution. The EPA really enjoyed it; that particular company really excelled, where the other one had gone out of business because the EPA laws changed so dramatically.

 

That’s interesting.

 

The past ten years, I’ve been doing consulting work. I became a CPM, which is a certified purchasing manager, and it’s a very high and significant designation to have here in America. I went in and went through a whole bunch of different industries, using all the knowledge I had about strategic management and basically cleaning up all their practices and negotiating new contracts and putting systems into place to optimize their resources.

 

Thanks. Can you talk about the topic of materials management transformation? What are process improvements?

 

Process improvements, how we review it, we gather a lot of information in the beginning, and that’s basically looking at their whole process from the supply chain; the beginning of a customer order all the way to when the customer receives the order. We look at each step, and we look at their policies and what they say they’re doing and the procedures, and then we see if we can cut steps that might be unnecessary to their process or causing more issues for them than they realize.

 

We simplify their process, streamline it, and then it cuts down the number of man hours, so it sometimes eliminates personnel, and they can be put to more efficient means and given different kinds of jobs. With all the machinery and automation there is now, a lot of times we can put things that need an actual human’s hands in a different area as compared to the automation, need more programmers, and that kind of thing.

 

Can you talk about how process improvements can help?

 

As you go through each one, you’re streamlining their practices. Basically, for instance, if you had all these different office orders going out and you thought you had the supply for everything there and you didn’t. Every time you place an order, you’ve got several people’s hands involved in this. You’ve got the person who’s placing the order, you’ve got the person who is having to receive the order, you have the person who has to pay for the order; you have all these different people’s hands involved in things.

 

When you automate a process, you’re going to first have someone like me find out what the usage levels are; then you’re going to standardize it to say, “Oh, hey, you guys all agree on this particular pen that I could negotiate on?” and then we can leverage ourselves with more to negotiate with. Now, instead of all these pens all over the place, I’ve got these many pens just on this particular brand that do an efficient job. Now I can go to the office supplier and say, “Hey, look at how much we have, one million dollars’ worth of these types of pens. What kind of deal can you break for me on this?” Then, instead of having all these different pens and everything different, we can standardize that one thing, leverage it, then reduce the cost dramatically, and also use their network, their warehouse, resources to automate the process. We can order online instead of having someone place the order, then have the receiving department receive it, da, da, da, da.

 

You can basically just place one order and then have them receive it directly and then have them approve it so accounting doesn’t have to run all over the place and then pay for it just at the end of the month instead of, “Oh, I’ve got one here, one there, one there,” so at the end of the month, we have one monthly bill. That’s what’s really important: think about it in a bigger way instead of, “Oh, I’ve got this one little thing.” No, you’ve got these hundreds of records that are unnecessarily used, and that’s why it’s so important to really look at those small orders and so on. You can save tons of money that way, and it’s so easy for someone like me to come in and just see all of the waste going down the streamline like, “Oh my Lord, look at all that hidden money,” and save tons, millions for people just with using common sense, really.

 

Can you talk about where you’ve seen some success?

 

I think the biggest thing is in customized machinery. What I found out is that a lot of the engineers would be in fear of their jobs for job-security reasons, and they would not like to release a lot of the information they worked on and had patents for. It would be where every time a customer had a machine order, they’d go through the same process every time. They’d have the bills of materials, they’d have all the blueprints and so on, and I’d have to go step by step looking at the blueprints, getting all the things combined, so on. They weren’t using any electronic stuff; they were all trying to keep it off so they could have their job security by detailing out each thing on a CAD drawing and so on. What I would do is take all that and standardize it.

 

It’s a thing that we have to become with them to say, “You know what? You’re always going to have a job here. We’re always going to need an engineer.” The first thing is to take away some of that fear, and I do a lot of stuff with breathing and exercises in the office to calm people down and even sometimes use music in the background to just calm their peers down. I’m not here to take their jobs away; I’m just here to make the process easier and automate it. I would make assemblies and each time, they use the same stuff, but it would be a different size, maybe a different color, but function and form, it was the same.

 

Once we got that down, again, you can build the leverage back up. You can negotiate because now you have all these parts that are very similar, and you can go in and make the good blanket orders, so you can negotiate yearly contracts instead of every machine and then, really, losing all of your leverage ability. That way, when you’re standardizing products, you can build up a leverage and have really great negotiations.

 

Thanks, Rebecca. Do you have any other final recommendations or comments? For example, recommendations for purchasing managers or engineers or…?

 

I say it’s important to have purchasing in on early design. A lot of people always think of purchasing people as clerical; maybe they don’t give them the type of recognition that they need to get involved. When you’re dealing with holding the purse strings, as I like to say, in purchasing, you can make significant money because you’re not in sales, you’re not in marketing, which costs a lot of money to advertise marketing. It costs money to get a campaign out there.

 

With purchasing, it goes direct to the bottom line. If you’re there with the engineers and they’re like, “I want this to be in stainless steel.” “Well, stainless steel is really expensive. Can we get away with carbon steel and then using a better paint? Then we can just cut the cost right in half.” Those things are best discussed right when they’re creating their designs so they can take all those costs out of there at the beginning of the process instead of later on. I think that’s really important: early supplier involvement and early purchasing involvement.

 

Thanks for sharing today.

 

Sure.

 

 

About Sharon Hartley

 

 

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Sharon (Neuman) Hartley, C.P.M.

 

Purchasing Manager/Award Winner/Musician/Yogi/Entrepreneurial Visionary

 

LinkedIn Profile

I interviewed Ashok Muttin who discussed Will IDN’s (Integrated Delivery Networks) Replace the Current GPO Model and Impact the $600B Supply Chain?

 

 

 

 

 

 

It’s nice to speak with you today, Ashok. Today I’m looking forward to this interesting topic about will IDNs, or integrated delivery networks, replace the current GPO model and impact the $600-billion supply chain? Before we start, can you provide a brief background of yourself?

 

Sure, Dustin. First of all, thank you very much for having me; it’s a pleasure to be here. Since you interview a lot of great people in the supply chain area, it’s a pleasure to be here. I am the founder and CEO of nogpo.com. We are an exchange or a marketplace that brings the suppliers and the hospitals on a common platform so that they can conduct business without the middleman, i.e., the GPOs.


Can you start by explaining what IDN is?


IDN is short for integrated delivery networks. This is nothing but a chain of hospitals or a group of hospitals deciding that they have enough mass and enough volume within their hospitals, so they create an integrated delivery network with or without the participation of the group purchasing organizations so they can basically leverage the volumes they have and be able to get better prices from the suppliers and also be able to share best practices within their network of hospitals.


Why are they becoming popular?


Dustin, as you know, the GPO model has for all practical purposes has lived out its course. GPOs are the only industry that were allowed by the government to officially, accept a 3 percent commission on the volume that passes through their hands. Over a period of time, that 3 percent has increased to anywhere from 15 to 16 percent, and the integrated networks are realizing that it’s cheaper to build the supporting infrastructure. They can pretty much do the majority of the buying directly from the suppliers, and, thereby, they don’t have to pay this enormous amount of money to the group purchasing organizations, and they can better run their supply chains and also better control their relationships with the suppliers. That is not happening today, so the GPOs control all of the flow of the material and information that passes through these entities, so IDNs are interested to create their own network and, hence, manage their own destiny.


How are they different?


They are different from the perspective that they are building their own infrastructure, they’re managing their own processes, they are improving upon the technology infrastructure they already have. If you really look at an IDN world, that’s what should have been happening in the first case. GPOs are an anomaly as you would realize because they’re only in the health care industry, whereas none of the other industries actually have a middleman apart from the dealers and distributors.


IDNs are creating a different network, a different outcome, and I am sure the continuation of the IDNs will proliferate and more and more group hospitals will think of creating their own IDNs, and, probably, they will go to the next step of saying, “When we put all this infrastructure in place, we’re managing our own destiny. Do we really need the GPOs, are they relevant anymore?”


Can you talk about what challenges they face?


Sure. Creating the IDN is the first step in any integrated delivery network becoming an independent, but that doesn’t mean the success is guaranteed. If you really look at it, starting an IDN is a great vision, but the great vision can be undone by poor execution, right? Even within an IDN if the underlying processes continue to operate as usual, then that means they’ve only put a Band-Aid on a very serious business ailment.

 

The second thing is, one size does not fit all. Acute and non acute facilities each have their own requirement, and those IDN requirements have to be built in in order for somebody to start either a new IDN or improve upon the existing IDN.


The third point is: sub standard data that results in substandard savings. In the health care industry, the data, lack of it or the quality of the data plays a big role, so it’s very critical for an IDN to invest in data standardization and to maintain that uniform catalogue pricing, recalls and replacement information, now with the new GS1 coming in, so they would need to invest in that area.


The fourth one is: They have multiple IT systems, and there is a lack of real-time integration. An IDN, if you will see when they start this journey, oftentimes they are dependent on the GPOs to provide some technology infrastructure, and they acquire some technology on their own and when there is a merger-and-acquisitions situation; that system actually gets a lot more complex. The systems really don’t speak the same language—they don’t talk to each other—as a result of which they’re all in silos; you can’t get the information out. If you can’t get the information out, that means you can’t get the business intelligence.


And last but not least is: The health care industry has been very slow in embracing the cloud and the SaaS technologies. Now, that is a combination of either a fear about the patient confidentiality, the HIPAA compliance, and so on and so forth. The ability to embrace these newer technologies, would greatly help an IDN either somebody building a new IDN or improving upon an existing IDN because it’s very powerful.

 

How can existing IDNs become more successful? And what can new IDNs do to lay the groundwork?


I think the foremost question is to be able to clearly define why you’re forming an IDN. Do you have a Cultural ethos in the company where you can bring about these changes? IDNs are going to require a substantial amount of investment in terms of people, process, and technology. The way to cover all those bases is to build some of the supporting services on top of that core technology; then they are building an ecosystem that helps them to work really effectively with the suppliers and be able to remove all those obstacles that can be in the way of success.

 

Thank you, Ashok, for sharing your views today on this topic.

 

Thank you very much, Dustin. It’s been a pleasure speaking to you, and I look forward to, as always, your posts and informative posts on LinkedIn. Thank you.

 

 

 

 

About Ashok Muttin


 

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Ashok Muttin


Purpose Driven Entrepreneur Reinventing Healthcare Supply Chain

 

LinkedIn Profile

I interviewed Jose Vitorelli who discussed The Concept of Hiring a 3PL: A Good Decision or Not?

 

 

 

 

 

 

It’s good to speak with you today, Jose. We’ve done interviews in the past, and today I’m looking forward to hearing your views on the concept of hiring a 3PL and whether or not it’s a good decision. Can you first provide a brief background of yourself?

 

Sure. Thank you very much, Dustin, to be with you and the supply chain expert community. It’s always a pleasure to exchange ideas. I always listen to your program; it’s a very rich, very high concept, and it’s a pleasure being with you.

 

I would like to introduce myself. I’m Jose Vitorelli. I’m professional of the supply chain and logistics industry. Currently, I’m dedicated to develop solutions and innovations for global accounts in Latin America for DHL. DHL is part of the DeutschePost-DHL group. I would like to share with the audience some findings on my study made by CAPGEMINY3PL studies; it’sannual study and they provide in this study what the shippers most value when they’re hiring a 3PL.

 

3PL, just for the audience knows, we are considering a firm that deals with the freight management of its customer at different levels, covering part or all of the supply chain industry. They can be a courier, a freight forwarder, or a firm that takes care of the integrated contracted logistics and other transportation services. Taking that, I’d like to share that 3PL in the recent years, they have been growing strongly since the process of delivery goods is also increasing. Of course, since we are going to a new year, 2015, maybe it’s good for the shippers or for the ones who are dealing with outsourcing or planning outsource to share some of the stuff in a way that the shippers or planner can take advantage of it.

 

My point is basically on the 3PL growing, and some of the companies try to make a lot of investments in the sectors, and 3PLs nowadays, some of them are supporting business during the whole supply chain. Some of the concepts are in terms of the coverage. These studies, they have interesting findings that I would like to share with you.

 

First of all, from a recent study, we noticed that most of the shippers are valuing in 55 percent of the research; they continue improvement. Fifty-five percent is a lot in terms of the comparison. Forty-nine percent of the shippers value the experience in the industry; and 42 percent value ongoing relationships. In addition to the shippers, they’re also looking for a strategy to control costs or to working the balance between centralization and decentralization of all the shippers’ decisions. It’s interesting to share with the customers what they most value in terms of the 3PL.

 

Another important point, Dustin, brought up by this study shows that that shippers are looking to work in a straight collaboration with the 3PL providers. Some of them say their relationships have grown in a collaborative over the recent years with shippers even more likely than 3PLs. Collaboration is creating a positive environment between both providers and the shippers, so shippers needand are looking for a close relationship with their providers.

 

Finally, I think the question is if a shipper should hire or not a 3PL, taking all these points that we brought. I think if you’re a shipper or you’re looking to hire or not, you will have to consider factors in terms of your infrastructure or your requirements to reach your end customers. Sometimes the decision for hiring 3PL companies can go into a lot of aspects. I would like to share some of the main aspects that 3PL could be usefulwhen you’re planning your logistics through a provider.

 

Some of them are, first, expertise. 3PLsbreathe logistics as their core business. Shippers sometimes believe they could handle traffic and transportation better than a 3PL. In most of the cases, this probably could be real, but, of course, if you consider that these guys are really experts in handling their supply chains.Maybe it’s a comparison, comparing what we’re looking for.

 

Efficiency, I think it’s one of the other topics in addition to today, the expertise in terms of the third-party company also having the infrastructure, in terms of the technology that’s translating and hiring service level to shippers and helping the shippers to save costs with some good quality.

 

The other topic would be technology. I think 3PLs, most of the way they invest in technology very heavily, and they are updateand they try to provide visibility to their shippers. It’s an important point. Nevertheless, in terms of technology, I would just like to say that shippers have to be careful because, sometimes the 3PL, they outsource—it’s like a 4PL—they outsource their technology, so you have to keep an eye on that.

 

Also, I think the core competency of these 3PLs in terms of their knowledge could release the shippers to be dedicated to their real core business and try to take advantage of it. Of course, the coverage, some of the 3PLs, they have their own structure worldwide or regionally wide, so it’s important to consider with good 3PL facilities or distribution network or operational staff that could support shippers on their logistics to reach their customers wherever they are, in the other part of the world—China, Europe, America—so you have to consider their coverage.

 

Of course, some of the shippers can consider that this is probably not a good idea, and we have to respect it because sometimes 3PLs, some of them could not be on a good service level. The best we could suggest for these shippers, of course, take a look, evaluate. If possible, try to consult as many 3PLs to know their technology, their core competencies, their expertise to make sure you’re planning correctly and you’re looking to have an even better year with your supply chain and with your core business.

 

Thank you. As a summary, when would it not be a good idea to outsource to a 3PL?

 

Let’s say, for example, in terms of technology, if your 3PL doesn’t have enough technology or they outsource, this is probably a risk because you need to evaluate how trustful the system is or maybe the outsourcing implies additional costs to their shippers. If the 3PL has a core competency that is not related to your sector—some of the 3PLs even specialized in sectors, like engineering and manufacturing, life& sciences, like automotive. We have a lot of expertise, and it’s important to look for a 3PL that could really add to your core competency and your strategy.

 

It’s important to look, for example, if you have global coverage, to hire a 3PL that could covers in terms of worldwide coverage. It’s important to consider it, of course. You have to be controlling your core business. You’ll probably know more than a 3PL how to manage your inventory. On the other hand, in the world, there are competing in terms of their supply chains,you’d better try to see possibilitieslooking for a 3PL that will charge you, for example, not for the whole inventory, butper cost of activitiesso there are lot of possibilities and you have to balance what is good or what is not in terms of you decision in your supply chain.

 

And thanks Jose for sharing today.

 

It’s a pleasure Dustin to be with your audience and I will available any time you need.

 

 

 

About Jose Vitorelli


 

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Jose Vitorelli


Customer Solutions and Innovation

 

LinkedIn Profile

I interviewed Deborah Lange who discussed Embodied Leadership and Creation of the Intelligent Organization.

 

 

 

 

 

 

It’s nice to speak with you today, Deborah. Today this is going to be an interesting topic. I’m looking forward to discussing with you the topic of embodied leadership and the creation of the intelligent organization. Can you first provide a brief background of yourself?

 

Sure. Hi, Dustin, it’s great to be here. I love the opportunity to talk with people about these topics. My background is in education. I moved into the tertiary system and managed business-studies programs in Australia. I then became a management consultant. It was, the time of learning organizations, when Peter Senge first wrote his book. I was very privileged to have the opportunity of working deeply with managers and leaders who wanted to progress their practices and create cultures that were more conducive to enabling people to thrive within an organization. That provided a lot of fuel for my passions.

 

I branched out into the personal-development field and the public field as well, coaching and mentoring individuals in small business.

 

That brings me here today. I’m launching myself again at this stage of my life as i believe in constant re-creation. I don’t want to be narrowed down to one particular area of expertise because I feel like I’ve developed in so many areas. The area we’re talking about today, embodied leadership and creating an intelligent organization, is very dear to my heart.

 

I did some previous interviews on my blog with Dean Dorcas and Matthew Weilert; they were talking about their views on, relationships and resilience are critical factors when dealing with supply chain processes and building an organization. You mentioned in some of the discussions in LinkedIn that you have some views on this as well. Do you agree with their views? What are your views on this topic?

 

I read your blogs with Dean and Matthew, and I highly agree with them that relationship and resilience are critical factors. I wanted to dig a little bit deeper. We need good relationships, but what is good? What kinds of relationships do we need and how do we create those relationships in an organization.

 

I think there is a belief in organizations that people need to be controlled and the relationship is limited to a professional relationship. It is as if the personal part of a person can be left behind and is not required in a workplace.

 

In reality i don't think this happens.

 

I think this belief has been discounted. The most successful organizations and innovative places, like Google and Apple and Inspire9 in Australia are creating organisations that have a sense of community. In community the personal and professional relationships are valued. The more connected we are, the more trusting we are. The more trust the more open we are with our information and our communication. The more information sharing, the more problems can be solved and innovation created. Hence, through the development of trusting relationships and sharing more information there is the opportunity for new knowledge to emerge. New knowledge enables intelligent solutions to emerge for the kind of complex problems organizations are looking at today. Relationship is critical to creating deep levels of trust to allow more information sharing to occur.

 

Is there anything you can say, some specifics? How can you encourage this type of community where personal and professional relationships flourish in an organization?

 

I think one of the starting points is ourselves, having a look at ourselves and the way we interact with other people. How we can build trust very quickly. I have never spoken to you before, Dustin, but we had a brief conversation before we started that enabled us to connect. I connected with you a little bit about your work in China and your passions, and you connected with me so we can engage in a conversation and trust one another and share what we’re deeply passionate about.

 

I think we have to uncover our own beliefs. Are we a dominating manager, who believe we need to control people? or do we believe we can trust people?  Through trust, and a freedom-within-limits approach, where people are very clear on the identity, and the mission of the organisation, people can act with more initiative. They can access information they need through open systems and share information openly. Through that sharing, we can have an exponential expansiveness in intelligence created.

 

I want to go back in history. We have had three major waves of new knowledge developed in our human evolution that has expanded our intelligence and our ideas for civilisation. The first of those was when we went from cavemen to living in community. When We settled in one place, we formed more intimate relationships. Through those more intimate relationships, we developed more language. Those intimate relationships required trust and I’ll use the word love. Today there is emphasis on developing emotional.  We need emotional intelligence to transcend fear. Emotional intelligence makes us able to learn to be in trusting, loving, and respectful relationships. In essence, when human beings settled in one place, it was the ability to love one another, share language, and create reciprocal intimate relationships that created the opportunity to develop agrarian practices and use tools and much more.

 

The next huge wave was when we recorded language in books. When our language went from oral to written, it was an exponential increase in our intelligence and our knowledge expanded. Once knowledge was written in books more people had access to more knowledge. You didn’t have to remember what one person said. We had an exponential increase in knowledge and innovation.

 

The next wave was technology. The technology we’re using today so we can talk has opened up the sharing of information right across the world. This has expanded our ability to develop our intelligence.

 

We have to maintain the connection with the ideas that we generate through thought to our emotional body. If we don't we may make choices that do not serve human needs. The more separated our ideas are from our lived experience the more likely we may make unethical choices.

 

Our language does come from our thoughts connected to our experience. When a baby is born, language is developed through the relationship with its mother, through that experience, which is trusting and loving and safe we make meaning.

 

In fact, the more we can create safety, love and trust, the more intelligent we can be. If we’re working in an organization that’s fear-based, control-based and punitive, we are limiting the intelligence of the organization. We limit the information that’s shared. We limit the openness about what’s working and what’s not working. Does that make sense?

 

Yes, and the question that comes to mind is: How important is individual responsibility in this? Does the individual need to be committed to their own personal development for this work?

 

Definitely, absolutely. It is critical. You’re in a university. I think in general there has been a mind-set that to become educated, is to go through the school system, graduate school and university and then education is over. "I have my skills my job; that’s it."

 

Today we need to believe in lifelong learning. We never stop, people have multiple degrees and they learn on the job. The experience of learning on the job is absolutely critical. We are constantly learning and evolving. I had the opportunity to care for my mother until her passing, and I can tell you that right until the day she died, she was still learning; she still had insights. I really think that there needs to be this shift that learning just doesn’t occur in institutions and universities; it is lifelong and it’s not just learning about the technical needs for a job, ie accounting, engineering etc

 

The personal development or relationship and mind-set skills are just as critical. Without them, we cannot relate to other people to gain the information that we need. If we create a closed system where there’s fear or lack of trust, we’re not going to have the openness and the sharing required to create the innovative solutions required. This is probably being a little bit out there, but if you look at countries which have developed democratic systems which are safe places to live they have expanded their knowledge and intelligence and ways that people can be together in community and work.

 

Countries where people are born into fear, violence and war, have limited opportunity to make technological improvements, and better civil systems, and creative ways to live and be together? They don’t exist because they live in fear, so there isn’t the capacity to create systems that benefit and enable humanity to thrive. We can only thrive if we live in systems where there is trust and love and openness and sharing.

If there is fear and war, we’ll just kill ourselves off, and it’ll be the end of the human species.

 

Personal development is a critical part of education today. We cannot just learn technical expertise. You are also working with the learning organisation. We need technical knowledge and the knowledge of self, relationships, connection, mind-set, values and beliefs. With this knowledge we are more likely to make choices that are good for humanity, and are good for an organisation.

 

The more rational, logical solutions we come up with that denigrate emotional content or our human essence, changes the culture of the organization or the community. We can’t just be technically competent without also being relationally competent, mind-set and value competent, if that makes sense.

 

I use the term embodied leadership because it’s not just learning about ideas and techniques; it’s actually embodying them into a very conscious way of being so that we can relate to one another as human beings. So that our ideas come from our thoughts and our human experiences to improve our systems. So that our systems are conducive for human beings and they don’t become punitive and fear-based. Does that make sense?

 

Yes. Can you maybe help describe your vision or if you imagine what a perfect learning organization would be like, an intelligent organization? How would that look like?

 

I’ll give you a little example of a case study. I had a manager come to me to work with his team and his department. He was a Chief scientist, and he had worked in a scientifical organization, and they had produced great results over his 30-odd years. He wanted to retire and he wanted to make sure that he left his department thriving. He’d realized that there were some things he didn’t know along the way, which were more to do with the people than his science, and that, he had created quite a competitive scientific group.  They were all out looking for research funds and resources competing with one another. He knew they could do better.

 

He took me on board, and I worked with him for about a year. At the beginning of that time, yes, people were closed. Sure, they were doing their own projects, but they were very closed, they kept to themselves, and didn’t share resources. It just wasn’t a very comfortable place to be. Sure, people were producing an outcome, but it could have been better.

 

At the end of the year he and I sat in the back of a room where his people had organized their own conference. They developed teams which included the most junior person to the most senior scientist to work together. They shared where they’d successes throughout that year and their visions for the next year. They totally self-organized themselves without the need for high control and linear hierarchy. There were now cross-functional teams. There was sharing of resources. There were people coming to work smiling, and enjoying their work. They had won more funding. There were more resources to do the work they wanted to do.

 

That was the kind of outcome. There weren’t the silos, there weren’t the barriers, “this is mine and this is yours.” It was much more looking at a bigger picture of “What are we here for, what resources do we need, and how can we share that openly with one another?” It was absolutely, entirely different. Even though, at the beginning it was still a productive organisation. It was now a self-organising system. Now he could leave that group knowing that the people were leading it themselves. There was leadership right across the group.

 

Leadership and even what I’d call followship, because, as a leader, you need to know when to follow. It can’t just be your ideas; you have to enable people to contribute their ideas and take the lead where they’ve got expertise. The leader of today needs to learn followship as well, which is knowing when to lead and when to follow, and how to create the conditions for the people to use their intelligence to contribute and create even more in a better environment.

 

Does that give you any kind of a picture, Dustin?

 

Yes. Thanks today for sharing on this fascinating topic. If you ever want to continue to expand, we can go into further interviews to discuss some more details.

 

Great, I’d really appreciate that. I’ve really enjoyed talking with you, Dustin, and I think the work you’re doing is fantastic, so, yes, I’d love to come on board any other time in the future.

 

Thank you.

 

 

 

 

About Deborah Lange


Deb Lange, https://www.deblange.com is a thought leader, master mentor, intuitive coach, professional facilitator/ trainer, speaker and author.

Throughout her career, there has been a consistent thread, her passion and love in helping others develop their potential and applying their new capacities to their personal and professional lives. A deep, inner foundation is required today for leaders to navigate their way through unpredictable events.

 

Deb offers a unique learning approach with application techniques for corporate programs for both large companies to the small business owner. Deborah brings her work to bring "humanity" to the world of business where at the intersection of love, language and reciprocal relationships lies the capacity for creative intelligence. We need to continue to evolve the way we work together to develop innovative ways to solve our complex organisational and societal problems, creating abundance in our world. Being able to respond intelligently in the face of ambiguity and uncertainty requires skills like intuition, body wisdom, trusting ourselves and others, that the group has the wisdom for any given situation. The ability to be an Embodied Leader, who consciously co-creates processes to uncover the wisdom requires trust, an open system of sharing information, and relationship to allow the creative intelligence of an organisations people to emerge.

 

 

 

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Deborah Lange

 

Thought Leader

 

LinkedIn Profile

I interviewed Pierce Regnier who discussed Manual Application of Cycle Time and Operation Disciplines.

 

 

 

 

 

 

It’s nice to speak with you today, Pierce, and I’m looking forward to hearing your views today on the topic of manual application of cycle time and operation disciplines. Can you first provide a brief background of yourself?

 

I started 39 years ago as a purchasing manager for what was American Hospital Supply Corp. at the time; they were a Fortune 300, I think; been out of business for probably 30 years. I went from there, from medical into construction equipment, and spent 35 years in purchasing materials management and supply chain operations with a few years of consulting and the IT enterprise arena. That’s my background. During that period of time, I’ve come up with personal philosophies and practices that I’ve applied myself as a manager and feel them out, and I like to voice them.

 

Thanks. Can you talk about why lean fails?

 

Well, I think the biggest single issue—I should interject that in my background, I worked with the actual engineers from Toyota Production Systems, who started their own consulting firm, Shingijutsu. Back in the late ’80s, they were in the United States working with Danaher Corp. and with United Technologies. I was working with Danaher Corp. at the time and spent two years with the original Japanese engineers every 90 days and then their subconsulting group, a time-based manager, who were from Connecticut.

 

Given that, I was around doing TPS when lean popped up, if you will. As time went by, I saw it as—I still see it—as a marketing program, so that anybody who buys the package, reads the books, and goes to the classes can implement, execute, and I beg to differ. Learning at TPS and learning about the heart and soul of success in TPS, I feel that we TPS proponents have a little bit more to offer for continuity and improvement than the market programs of lean.

 

Thank you. Did we cover, then, that first question about why lean fails?

 

I’m sorry. The reason it fails is because the learning and applying it, being certified and, therefore, being a practitioner does not include a study of the intangibles that are required to capture the hourly labor-based group and get their individual tasks and knowledge so they become a part of this continuous improvement and not just the continuing employee who’s learning a program. It fails because as soon as you walk away or, not the leader but the manager of these people, it’s just status quo. The term they would use is bought into, but, actually, what it is is become a part of something that helps them personally and individually, which is what Toyota Production Systems did.

 

The Japanese were, we talk about turnover, et cetera, and the Japanese didn’t have that. These were people who had less than a sixth-grade education across the board—the laborers in the ’70s and ’80s, and they were able to do some amazing things because of simple disciplines and the emotional lure or personal involvement under the implementing managers. I think that’s missing in a marketed lean package.

 

What is the solution?

 

Well, initially, the solution is to, I guess to simplify rather than to have this huge methodology of lean, with all of these different practices and levels and the upper management must be a part of it or it will fail. It has more direction toward what will make it fail than why it won’t succeed, to be avoided, than it does the practice of growing the people and developing simple disciplines and understanding each person’s feeling of involvement in their jobs.

 

A little bit difficult to explain quickly, but it’s, at heart, an emotional involvement. I think that the few lean programs that are successful maybe coincidentally have individual managers and leaders who know how to capture this emotional involvement or tie with the employee. Then, very simply, assign disciplines that make each job simpler. It’s a follow-the-rules kind of thing, almost like training a child, if you will. Sometimes I think, as a manager, I go to work expecting my boss to lead me as if I was his child.

 

Now you have simple disciplines and you have people reporting on a short-term, timely basis, and every individual has his own group of methods. It’s just like doing your job and getting your allowance, if you will. It’s all very simple from the standpoint of the employee, from the standpoint of the hourly or lowest level, the task person. And then up the ladder, there’s a pyramid of metrics that actually feed on each other. Six Sigma has a plethora of metrics, but they’re individually based so you can be successful in Operation 5, and Operation 6 can lose all of your value added in 5. There are no programs to show continual value. TPS does that automatically.

 

I hope I’m not getting off track, but that’s kind of the distinguishing feature. There’s not a complexity because it has to do primarily with the, I guess what we would call giving power to the employee.

 

Is there anything more you can say about how it’s done?

 

Let me go back. I guess the real foundation is terminology, defining terms. We all use continuous improvement, but do we really know of a practice, a series of practices, a system that has repeatability and reliability of tasks so that it is continuous, so it doesn’t have to be watched all the time in order to have it repeat itself and not get watered down or disappear or change direction? Probably not.

 

The contention here is that the key is to keep it continuous. How did you do it the first time? How long did it take? Where did you catch failure and fix the failure as opposed to having cause and effect, where you have to go back and look at the cause and how it happened? Now it’s happening again while you’re looking at it. It’s that poka-yoke on line quality and the mind-set of always doing it continuously.

 

The other feature of Toyota Production Systems that’s missing in today’s lean is the quality circles. Now, as those were written up originally, specifically for quality and improving the product, but the concept of 15 minutes every day to review how we followed our disciplines and how we kept our cycle times down as individuals gives you the ability to have this continuity. The other thing is the concept of 5s, which everybody is using today, was initially developed in Japan for the purpose of teaching discipline, not for the purpose of having a nice, clean workplace for you to now do * (9:30—unclear) but exclusively to show the benefit of discipline. Now you have the employees having their jobs easier, and they almost instantly learn this personal involvement with discipline makes their jobs easier, it makes their home and personal lives part of what they do.

 

That’s a reinterpretation of a lot of the features of TPS were brought into lean and misused. I don’t know if that helps. I know I got off the track here. It’s a big picture very simplified.

 

Thanks, today, for sharing on this topic. I’d love to continue our discussions if you want to go into some more detail on some of the points later on.

 

I’d like to very much. I hope that I’ve conveyed some information. I realize that I didn’t present it exactly in a linear, clear outlay, but I hope there’s enough information there to be a benefit to whoever listens.

 

Yes, this is going to be good.

 

Very good.

 

 

 

About Pierce Regnier

 


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Pierce Regnier

 

Implement & execute supply chain disciplines

 

LinkedIn Profile

I interviewed Nanette Bulger who discussed Basics of Integrated Intelligence, Putting the Pieces Together.

 

 

 

 

 

 

It’s nice to speak with you today, Nan, and I’m looking forward to hearing your views today on the topic of the basics of integrated intelligence, putting the pieces together. Before we start, can you provide a brief background of yourself?

 

Sure. First of all, thank you very much for interviewing me today, Dustin; I appreciate the time. I’ve been in business for about 38 years. I started my career as a new-product-development engineer. I spent about 10 years, and that went on to strategy; served as a vice president of strategy for various companies. Then went into a consultant competitive-intelligence role, where I served a global role there. Then went back to strategy for a while with health care and in the defense industry. To make a long story short, I now run The Strategic and Competitive Intelligence Professionals Association, which is a nonprofit global organization focused on building skill sets and strategy and competitive intelligence.

 

Thank you. Can we start by providing a definition, or can you explain what competitive intelligence is?

 

Competitive intelligence is actually the supporting decision support for companies to really help understand their markets, understand the market dynamics, the competitive environment, and to help them make decisions to give them a competitive advantage in the market. Competitive intelligence isn’t just collecting data; maybe 20, 30 years ago, it was about the collection and expertise in collecting information, but now it’s really evolved into sophisticated decision support and analytics. It involves looking at competition, market environment, market sizing, and so forth and really helps people understand how best to compete in a market.

 

And how has competitive intelligence evolved?

 

First, I should say that SCIP is actually going to celebrate its 30th year this year, so it’s been around for 30 years in business. It’s evolved out of intelligence that’s been used for, really, centuries to strategies both in military environments and politics and so forth. Basically, in the beginning, about 30 years ago, competitive intelligence focused primarily on the competitor, really putting that competitor focus at the center of your decisions and understanding the competitive landscape, understanding what competitors were doing to compete, collecting data about competitors in the form of human-source collection, as well as secondary or printed-source collection.

 

Now, today, it’s really evolved into understanding not just competitors, but really putting the customer at the center of the intelligence you collect so you can determine how best to help your customers compete in the market and help your customers make money and looking at how there’s a competitive effect from the competitors, how the political environment affects decisions that customers make, how the market dynamics affect the customer, and so forth. It’s really evolved into a more sophisticated discipline, where it’s not so much about collecting data anymore, but it’s about conducting sophisticated analytics so that you can help your company make decisions about the market in order to help their customers.

 

What are the basic aspects that make up competitive intelligence today?

 

I mentioned it a little bit. When you’re looking at a business environment today, it’s much more sophisticated than it was 30 years ago, simply because we’re a global environment. It isn’t enough to look at one particular region of the globe and understand the landscape there, because the landscape changes depending on where you are in the world or on the planet.

 

Basically, you have to build an environment to understand various global situations. In other words, competitive intelligence, if you really look at it in terms of a spoked wheel, you do have economic intelligence. That really helps you understand regulatory environments for different governments and different political situations regionally. You have different market dynamics depending on what region you are in, which includes the demographics and things like that. You have different things that are going on business-intelligence-wise, which is really collecting information on the size of the markets in various areas. You have competitive situations that are different depending on what part of the globe you’re in.

 

These are all the aspects of intelligence, so you have that competitor intelligence, that market intelligence, the economic intelligence that you collect, the business information, business intelligence you collect, and also the customer insights, really understanding customer intelligence and customer insights. All of these things can be very, very different if I’m here in the U.S. or I’m in South Africa or I’m in the Middle East or I’m in Europe. It’s very important to understand all of these aspects of the business environment that surround your customer and your customers’ buying pattern on a regional basis. That’s why competitive intelligence has really become a more sophisticated discipline.

 

How does it help you compete in the marketplace?

 

Basically, if you can understand your customers, the customers of today—I speak of the customers of today and also the customers of the future. If you can understand what’s motivating your customers today and how you can help them as a company or organization, make money in their business, or to get the products and services they really want and need, that’s going to help you compete.

 

Those customers change based on several different things. They change based on the environment you’re in, because cultures are very different, economic situations are very different, so it’s understanding that. it also really helps you compete because you can understand the way the dynamics are moving in market so you can really determine who your customers of the future are going to be. Your customers today may not be your customers of tomorrow.

 

It really gives you two advantages. It helps to educate you as an organization about the environment in which you’re working who those customers of today are, what motivates them to do business with you or to work with you, and then to help you identify what technologies and products or services and so forth that they’re going to want in the future, what motivates those customers of the future. That’s where you see a lot of technology development, that’s where you see the game changers and things like that happening.

 

Another thing that really affects you as well is, over time, there’s been an increase in data sources and the sophistication of available information. That’s really also changed the way we operate as competitive-intelligence professionals, because we have a lot of data, and we really have to synthesize it in order to make these sophisticated decisions on a global basis for each region.

 

And the title of today’s talk is “Integrated Intelligence.” We haven’t gone into that much. What does integrated intelligence mean? Can you provide a quick overview of that?

 

Sure. Integrated intelligence is really…we touched on it a bit. I spoke about how, originally, we looked at competitors. Now what we’ve done is actually integrated skill sets into the intelligence discipline. When I’m looking at an economic situation, I have a certain skill set that I need in order to understand economics and political situations in a regulatory environment. When I’m looking at competitor intelligence and market intelligence, I need a skill set that really enables me to understand marketing, understand how to segment markets, understand how to build a competitive landscape, and understand competitors.

 

When I look at customer insights, we’ve often siloed market research and customer insight separate from intelligence. Today we want to bring that together so we understand not only competitors, as I said before, markets, but really synthesize that with the information we have about customers. And then, of course, pulling in the other aspects like competitive technical intelligence, where I understand white space and adjacencies and products of the future.

 

All of these different types of intelligence require you to have specific skill sets that you bring together. It’s the integration of those pieces of intelligence and the integration of those skills. The integrated-intelligence professional of today is a very sophisticated strategist and analyst because they have those skills sets and they know how to fuse those skill sets together.

 

That’s one piece of integrated intelligence. Another piece of integrated intelligence, which we can talk about in a separate interview, is really integrating what you do as an integrated-intelligence professional with other disciplines in the company. I want to have skills as an intelligence professional so I can interface with the finance people, as an example, or the supply chain people, so they work with me to help develop the decision support that’s really needed by the company. We’ll cover that. That’s really integrating with other disciplines.

 

A third aspect is really integrating this decision support that you get by understanding these various pieces into the planning cycle within a company. We’ll talk about in another interview how we actually take the skills we have and build the touch points for intelligence decision support into each piece of the planning cycle within a company. Those are really the big pieces of integrated intelligence and how you pull it together and you really build early warning to help your company make decisions about how to really be competitive in a market.

 

Thank you. This is a really interesting topic, and I’d like to do further interviews so we can go into more depth on the points you mentioned about integrated intelligence.

 

Yes; it’s a very sophisticated process. It’s grown, as I said, over the past 30 years. It’s become much more sophisticated and mature. It’s metamorphosed and, really, with the challenges of globalization and available information and really pulling together the most important pieces of information and supporting decision support, it has become quite sophisticated. I very much look forward to breaking down each piece of it and helping people to understand that, because it’s an exciting field, it’s a great place to build your skills, and it’s really needed by companies around the world.

 

Thanks. I look forward to talking to you soon.

 

Thank you very much, Dustin, for the time, and I look forward to it as well.

 

 

 

 

 

About Nanette Bulger

 


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Nanette Bulger

 

CEO, Thought Leader, Change Agent, CI, MI, Strategist, Prod. Dev. Engineer, Profit, Non-Profit

 

LinkedIn Profile

I interviewed Dan Grosz who discussed Implementing NextGen Networks: A Corporate Perspective.

 

 

 

 

 

 

It’s nice to speak with you again, Dan. This is a follow-up interview to our last interview. Can you first give a little bit of background about what we talked about last time?

 

Sure, thank you, Dustin; it’s a pleasure to be with you again. Last time we talked about the provisioning of next-generation networks from a supply chain perspective, and I talked about some of the high-level features and characteristics of this new network architecture, which is far more dynamic and agile than anything we’ve known in the past. Today what I’d like to do is drill down a little bit and focus more on what this next-generation network means from a corporate perspective.

 

Thanks. My first question is: What are some key considerations corporations might have in their next-generation network architectures?

 

There are several. One is that traditional networks are simply not designed to handle the types of traffic growth anticipated for services such as presence, instant messaging, video streaming, call forking, as well as the massive migration that we’ve seen to mobile and cloud-based solutions. They need to really update their networks. That’s the basic impetus they need to consider.

 

Second is that networks will need to be increasingly agile and scalable, and that’s something not readily available with traditional network technology. Existing networks typically take a long time to roll out and to set up and provision and maintain, and they’re not designed to rapidly adapt to changing user patterns, new types of data, and so on. We’re seeing increasingly new kinds of data information proliferating.

 

Third, there are increasing security challenges, and it would require networks to behave differently than before. Essentially, networks will have to become intelligent and be able to adapt much more rapidly and intelligently to threats, which are also rising rapidly.

 

Fourth, companies will need to take an increasingly architectural perspective that fuses layers of what’s called the OSI stack, the open-systems information architecture stack. Particularly, there are three and seven, which is the network to application layers cohesively. These things will become more tightly coupled, actually, going forward, and I’ll explain what that means a little bit later on.

Finally, the other key consideration is the movement away from proprietary hardware to open standards and virtualization.

 

My second question is: What are corporate session border controllers, and how are they different from traditional SBCs, session border controllers?

 

First of all, this device, the session border controller, I think is the key piece of this new network that’s emerging. We’ve had SBCs for quite a while now, but traditional standalone units were designed primarily for large carriers and Fortune 500 companies.

 

Recently, they’ve been some key drivers to re-envision what an SBC is and how it works and who uses it. One of the major differences was spawned by a white paper that was presented in 2012 by 13 major international network operators. These included companies like Verizon and NTT and China Mobile, some really big major players around the world. They called for network function virtualization, which is actually being driven by advances in standard hardware that allow you to put an SBC function on a standard server. There is no longer a need for technical proprietary systems we used to have for SBCs.

 

Increasingly, there are new offerings from a number of vendors, such as Metaphase and Sonus that are addressing this rapidly growing opportunity space. Interestingly, vendors that have been slower to respond to this new kind of SBC, such as Cisco, have seen an unfavorable market response. Look to a lot more things to happen in this space with existing vendors. Interestingly, key software vendors, such as Oracle, are realizing the need to extend and fuse network functions into their core ERP offerings, and this was evidenced by Oracle’s acquisition of Acme Packet in February of 2013.

 

Finally, there’s an increased adoption of Microsoft’s Lync unified communications offering in corporate environments. Traditional PBX systems are being rapidly phased out. All of these things are drivers for corporate SBCs versus the network carrier SBCs that we’ve seen in the past.

 

What is the difference between an SBC and a firewall, and why does it matter?

 

Great question. It’s useful to think of an SBC as a super firewall, and the main difference is that an SBC is designed to handle real-time streams of information, what’s typically referred to as RTP, and that’s the major difference between old networks and the newer ones. The older ones were not really designed to handle real-time streams of information.

 

Beyond that, the role of an SBC is far broader than that of a firewall in that it can force complex policies or business rules. These rules can affect every aspect of network behavior, including security, bandwidth management, and quality of service. Corporate priorities can be instantiated as SBC business rules. An example of that is, let’s say, dynamically changing the quality of service under certain scenarios; let’s say reducing the resolution of video streams if there’s a network surge or dynamically reallocating resources from signaling to media and back as circumstances require. Fourth, the ability of SBCs to secure and encrypt endpoints across the enterprise is particularly irrelevant given the increased popularity of BYOD, or bring your own device, to the corporate environment.

 

Furthermore, SBCs can manage transcoding between analog and digital devices. This is important because most enterprises are unable to rip and replace older or analog technology in one shot, and SBCs allow them to do so incrementally because they can essentially manage the interaction between the legacy and new systems seamlessly.

 

Finally, cloud-based business applications that fuse information from multiple sources, such as business analytics, li-on, this SBC technology, and session-initiated protocols that run on SBCs to marshal and manage disparate data sources, and that’s really becoming a very important, new corporate IT function that really didn’t exist several years ago.

 

Do you have any case studies of companies actually using SBCs in this new way?

 

I can give you some examples that have come from the literature, but, mind you, this is really a new and emerging area, so the number of published case studies is still limited, but I think you will find that there will be a lot more as time goes on. One good example—and these are actually real case studies, not made-up ones—is the ability to quickly ramp up or down customer service resources or even rapidly change outsourced customer service vendors.

 

For example, if you have a holiday season coming on, like we do now, and you need to add a significant number of customer service reps, having an SBC with business rules embedded will allow you to do that and provision data and network and telecom resources much, much more quickly than you can with a traditional network.

 

Another example is the simplification of network hardware while allowing seamless transition from legacy PBX platforms and vendors to new ones. Again, the SBC, because they can do the transcoding, can mitigate the complexity of having to keep a lot of legacy hardware in place while doing this migration.

 

Another good example of how companies have used SBCs is with functional services such as fax services; being able to move these into a cloud-based solution, for example, while still maintaining the fax service but behind the front end, it’s a very different technology that enables this.

 

A fourth example or case study is enhanced collaboration by implementing a corporate unified communications infrastructure while, at the same time, reducing telecommunications charges. This will become an increasingly important function of SBCs.

 

Finally, the automation of provisioning and call routing, resulting in significant IT savings. Essentially, the automation of producing manual IT functions. Those are some examples I’ve been able to see in the marketplace, but there are a lot more coming down the road.

 

Thank you, Dan, for sharing your views today on implementing next-generation networks from a corporate perspective.

 

You’re very welcome, Dustin; my pleasure, as always.

 

 

 

 

About Dan Grosz

 

 

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Dan Grosz

 

IT Executive and Information Architect.

 

LinkedIn Profile

I interviewed  John McCombs who discussed Reverse Logistics and The Key of Having Talented People.

 

 

 

 

 

 

It’s great to speak with you today, John. I’m looking forward to hearing your views today on reverse logistics and the key of having talented people. Can you start by providing a brief background of yourself?

 

Yes, I’ve been in reverse logistics for about the past 20 years. I came in to the supply chain management business and found myself in reverse logistics. In that process, I have been exposed to many different types of commodity vehicles, ranging from Marine machine tools, electronic tests, medical, dental, scrap. The succession of different positions has increased responsibility. It’s been a fascinating industry, and I’ve watched it grow, I’ve watched it expand. I think it certainly, at the beginning of its start, I think that’s exciting; that’s why I would like to highlight it. The young people coming in to the supply chain management industry, that’s why I think you should take a look at the reverse supply chain business, because there’s a lot of upside, a lot of opportunity. We’re at the beginning; we’re not a mature industry.

 

Thank you. My first question is: How do you define reverse logistics? Is this definition evolving?

 

One answer is, yes, it is evolving. I think we’re still figuring those things out. How I define it is a manufacturer manufactures something. Okay, it’s done. The first user has used it. That could be a truck over the road that’s 600,00 miles and they want to sell it; it could be a piece of medical equipment in the United States, an X-ray machine; that a new X-ray machine has come out…that used X-ray machine in the United States is cutting-edge in Africa or the second world. Reverse logistics is about used stuff, and it ranges from consumer returns, where somebody gets something and immediately return it in a matter of weeks—usually, that kind of property depreciates rather rapidly—to construction equipment, machine tools, to medical. Most of the time, those assets do depreciate over time, but you will see occasionally, some assets do appreciate in value.

 

The other thing is scrap. The scrap industry is part of, I consider it part of reverse supply chain. It keeps things out of the landfill; it keeps things back. It’s usable because they’ll take the materials and send them back, and they’ll make them usable again.

 

Can you talk about some of the challenges with this industry and where you see it going?

 

We have to attract talented people to the business. Overall, the supply chain business, it’s all about getting quality people. With that, the right people with the right experience. If you’re in the medical-surplus business, you’re going to want people who are knowledgeable about medical surplus. If it’s trucks, you want knowledgeable truck people. If it’s Marine equipment, you want knowledgeable people. You want people who can learn quickly because things change quickly here. What could be usable today in one year may be obsolete, are not being able to be used a year from now. It’s a business that quickly changes. When you have something like that, having people who can side-think, make decisions, they’re critical.

 

Is there anything more you can say about how reverse logistics can be done effectively?

 

I think it needs to start in the forward supply chain; I think at the beginning. When you’re talking about manufacturing an item, when you’re talking about making an item, you should incorporate what the end state is. It’s not just the first user. I think manufacturers are wise on creating an item, and maybe they have it as a buy-back. You buy this and when you get done with it, you’ll sell it back to us and we’ll sell you our new thing and we’re going to use your used stuff and we’ll send that to some other part of the world, so we’ll want that. Next, you should look at the manufacturer and the forward supply chains. You don’t want to create an item necessarily that’s environmentally hazardous; you want something that can be, if it has to be, turned into possible scrap, that can be recycled and sent back into forward supply chains. I think, Dustin, one of the things I see is that incorporating the reverse supply chain piece in the forward supply chain means that’s critical to turning what has historically been a cost center into a profit center as part of the business.

 

Thank you. Did we cover all the points you wanted to make today?

 

Yeah, sure.

 

 

 

About John McCombs

 

 

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John McCombs

 

Senior Executive in the | Supply Chain | Logistics | 3PL Industry

 

LinkedIn Profile