19 Replies Latest reply on Mar 27, 2012 8:16 PM by tbrouill

    SCM30 Discussion Series: What can we learn from the biggest SCM mistakes?


      Welcome to the first discussion in the Supply Chain Expert Community's SCM30 series. To commemorate the 30th anniversary of the term "supply chain management," this year Kinaxis will explore the past, present, and future of supply chain management. Look for a variety of content with the SCM30 logo from Kinaxis throughout 2012.




      Our first discussion question is:



      What have been the biggest supply chain mistakes (or failures) during the last 30 years, and what can we learn from them?




      Share your insights by clicking "reply" below.



      You'll see a blog post by Ray Karaffa on the same topic next Friday (March 23) on the 21st Century Supply Chain blog. Feedback from this discussion thread will be incorporated into the blog post, so weigh in, and your thoughts may be published!



      We look forward to seeing what you have to say!

        • Re: SCM30 Discussion Series: What can we learn from the biggest SCM mistakes?
          RDCushing Master

          Wow! That's a big topic.


          I would have to say that the biggest mistake made in SCM over the last 30 (or more) years is reliance upon forecasting.


          1. Forecasts are virtually always wrong. They may be wrong by a little bit, or they may be wrong by a lot. But they are--for all practical purposes--always wrong. The forecast may be wrong and you have too much inventory--which your firm may call "good' ("Great job! We didn't have an out-of-stock.") or it may call it "bad" ("Hey! Wake up! We are holding too much inventory!"). The forecast may also be wrong and you have too little inventory, which (again) management may call either "good" ("Great job! We sold out of that!") or "bad" ("Hey! Wake up! We lost sales on that because we ran out of stock!").
          2. Forecasts only lead to one of two conditions: over-stocks and out-of-stocks.
          3. Forecasts offer no assurances of being responsive to the market.


          Personally, I believe that if the industry had spent as much time, effort and money on increasing replenishment frequency (reducing lead-time), improving supply chain visibility (end-to-end), making inventory management more agile (providing rapid response to changes in end-user demand) and better understanding and management of sudden demand changes (seasonality and similar events) there'd be a more sales, lower prices, reduced obsolesence and happier supply chain managers everywhere today.


          Replenishment frequency

          Both Lean and Theory of Constraints management have certainly taught us that replenishment cycles should be as short as possible. One-for-one replenishment is ideal. But short of that, daily is better than weekly; weekly is better than every two weeks; and so forth. When the costs of obsolescence, lost sales, lost customers (due to lost sales), marketing costs required to recover for lost customers, and the many other costs associated with out-of-stocks (on the most popular times) and over-stocks (on the "dogs") if find it hard to believe that most organizations would not perform better with more agile suppliers and logistics even if the so-called "cost of goods" might be marginally higher. Correct valuation of Throughput certainly should teach us that lesson in many, many cases.


          End-to-end supply chain visibility

          One of the things wrong with today's supply chain is that the manufacturers actually believe that they have made a "sale" when then they sell the product to the distributor. In turn, the distributors believe that they have made a sale when they unload some product on a wholesaler--and so forth on down the supply chain.


          The truth is, until the end-user has made a purchase, all the other "sales" have simply put inventory into the supply chain. Inventory that will become obsolete or eat demand for newly-introduced products when liquidated at "discounted" prices. Either way, it's bad for profits in the supply chain.


          Imagine how much better it would be if the manufacture (in Malaysia, or wherever) knew within 24 hours precisely how many finished goods were being purchased by end-users every single day. They would know how to pace their production and manage their inventory buffers--as would everyone else in the supply chain!


          Inventory management agility

          Instead of setting inventory policy once a year, or even several times a year, systems should dynamically adjust for changes in demand (via supply chain visibility) constantly. And, instead of complexity and hard-to-understand formulas, inventory managers should be able to repond to simple visual signals indicating the condition of inventory in their direct control--as well as signals coming from across the supply chain.


          Managing sudden demand changes

          Supply chain systems should be able to rapidly analyze historical data and identify SDC (sudden demand change) items by simple rules. The systems should then help the supply chain managers understand how to manage build-ups and build-downs for SDC items based on the supply chain production capacities for each item or group of items.


          Personally, I think time, energy and money spent in these areas--some of which is now happening--would do a "world" of good (pun intended).

            • Re: SCM30 Discussion Series: What can we learn from the biggest SCM mistakes?
              rkaraffa@kinaxis.com Apprentice

              I couldn't agree with you more on forecasting Richard.  The minute you create a forecast it is wrong.  It is impossible to predict the future.  If we could, life would be no challenge since we would have all won the powerball drawing by now.  I've said it before that I really don't like to forecast but when you are dealing with Independent Demand, sometimes you have to bite the bullet and make a forecast.


              Some good aspects about MRP vesus the archaic use of Order Point formulas is that MRP allows you to easily react to current history and you don't have to forecast or guess on every part.  MRP has product structure, unlike order point formulas, so you only have to guess at the independent demand level and then derive demand from the product structure for the vast amount of the parts.  This makes it easier to adjust forecasts to current history a lot easier also.  When you discover a forecast trend is changing, all you have to do is readjust your forecast at the independent demand levels and the derived demand for the vast majority of the parts are automatically adjusted.


              The key things about getting anywhere near forecast accuracy are constant vigilance and adjustment of the forecast to current history and that is exactly what MRP facilitates.


              I also agree with your comments about replenishment frequency.  So many times I hear that MRP doesn't facilitate lean manufacturing.  It does it very well in my opinion.  Lean can be accomplished in MRP through the use of discrete lot for lot order quantities.  The problem we get into in order lot sizes is because of not following proper MRP principles.  Garbage In Garbage Out!  Since we have such things as over-inflated lead times and large lot sizes to facilitate not running out of parts because of poor data integrity in our MRP models, we order in large lot sizes and clog up our shop floors and supplier capacities with unnecessary requirements.  We have to clean up our own MRP house before we can expect our suppliers to clean up theirs.


              Your comments about sudden demand changes are exactly what the RapidResponse Control Tower is all about but I think that we have a lot of work to do on the basic foundation of that control tower which is planning.  After 30+ years of supply chain management, I really think we still need to improve our planning processes before we will ever see the full benefit of the Control Tower.


              Thank you very much for your interesting observations.



            • Re: SCM30 Discussion Series: What can we learn from the biggest SCM mistakes?
              Jenny Tyrrell Expert

              Since the inception of Supply Chain, and the move towards the outsourcing model in the mid 90’s, where to place the manufacturing base has been a constant headache for Supply Chain Managers. Cost base often persuaded these decisions, superseding issues in relation to geography, leadtime, timezones, language, market placement, and logistics and distribution. The common practice became one of shifting operations out to the Asia Pacific Rim, where the emerging markets of China, Thailand, Malaysia and others offered minimal labour costs, and low corporate tax. If you were not doing this, your business model was being questioned by the industry analysts.


              Mixing Finance with Supply Chain can be problematic if not handled sensitively.  Supply Chain people are expert in the global management of product manufacturing and movement, and are less inclined to factor cost, speed is of the essence. Finance people (appropriately) are more inclined to approach the problem from a balance sheet perspective, taking the bottom line as the decision clincher.


              But here was the dilemma in this industry move towards APAC as a manufacturing base. Distance. Where is your customer is KEY. How long will it take to move material from one end of the globe to the other, when in a demand driven market, customers expect delivery of goods within a time frame that demands localized access to people who can make a decision, and delivery of products within an acceptable level of lead-time that need to match or beat your competitors.


              APAC certainly delivered bottom line reduction, but outside of the cost of manufacturing, other costs spiraled for products being manufactured in this region destined for the North American and European market. Lead-times jumped considerably, adding 10 days freight to an already squeezed delivery timeframe to service customer demand. Freight charges became a massive headache, sea freight is slow, when moving across such a massive distance, and expedite costs became unmanageable as they were being employed far too often to service customer requirements, decimating product margin. Moving tonnes of material via air freight is costly. Customs experts were now required as material would be backlogged in international hubs  awaiting paperwork requirements and duty payments specific to the region. Product Management was also another practical that escaped consideration. It is difficult to run a production line remotely, in a different time zone, and off your ERP system where visibility is non-existent  ( Supplier collaboration in Rapid Response has been key in addressing this issue).


              The industry reacted by developing a hub system, housing inventory strategically placed in certain geographical locations to reduce lead-time, and enabling faster reaction time to customer demand. This led to another issue – forecast accuracy is always questionable, so how do you know what to store, and how much of it. Inventory stock increased exponentially, with no guarantee of a buyer. The industry moved from a pull system, to a push system, building to stock, instead of building to order. Inventory write down became commonplace, and costly.


              The result -  a lower manufacturing cost base on paper, designed to increase margin, but the reality was, the supply chain had to scramble to react to this decision. Margin is only valid if you have a customer.


              The lesson – Making a decision where to make a product is key, as is margin. Outsourcing is still the preferred model, but how to do it, and what to think about when you do, has changed considerably. It is critical to factor in all of the elements, not just the bottom line. We now see supply chain experts at executive level determining all of the factors listed above, rather than looking at a balance sheet. This is a positive move. When you look at the Control Tower model, ‘layering’ is key. Supply Chain, logistics and distribution, finance, capacity, and human resource are all considered in the decision making process, and the management process, collaborating at a level that is a new and revolutionary. This new approach would have avoided this dilemma that Supply Chain faced 15 years ago. This is 21st Century Supply Chain in action.

                • Re: SCM30 Discussion Series: What can we learn from the biggest SCM mistakes?
                  rkaraffa@kinaxis.com Apprentice

                  Those are some very interesting observations Jenny.  It sounds like outsourcing hasn't been the easy way to profits that it was touted to be.  Distance really is a problem when you stretch out your supply chain.  Just ask Boeing about their world-wide multi-national manufacturing effort of their 787 Dreamliner in which they have about 800 on order and are about three years behind schedule on deliveries.  I think they have only delivered five or six of these aircraft so far to All Nippon Airways in Japan.  Distance has been a major problem for them in both quality control and on time deliveries so much that Boeing engineers are thinking of retreating from this expanded supply chain concept.


                  I think more and more companies aren't viewing outsourcing as the panacea it once was.  I keep seeing more and more articles on U.S. companies wanting to return to onshoring verses offshoring.  I know that our President Obama has requested that some of the companies return jobs to the United States but I don't think this is the sole reason some are doing this.  I think just as you have stated, there are numerous hidden costs associated with expanding your supply chain to great distances.  Major costs such as the hub inventory you discussed are quite a problem.


                  You talked about the difficulty of running a production line remotely in a different time zone and off of your ERP system.  I don't know about companies in Ireland but here in the states, in my experience, the informal system of shortage lists and meetings are the actual way that things get shipped anywhere close to on-time.  I think that a lot of companies and finding it next to impossible to run a worldwide shortage meeting in order to get the job done.  Shortage meetings and hotlists work somewhat better locally than trying to prioritize a shop floor halfway around the world.


                  Thanks for your comments.



                • Re: SCM30 Discussion Series: What can we learn from the biggest SCM mistakes?
                  dustinmattison1974 Elite

                  There is a real urgency in rebuilding local economies. Going local and the emerging process of economic localization will have significant impacts on supply chain strategies of the future. Local small businesses employ more people and respond to community needs better than big corporations do. However, nearly all of our investment dollars are placed with huge companies and Wall Street banks.


                  Can we rebuild local economies by localizing more of the global supply chain? How would that work exactly? What structures, systems and processes would be needed?


                  William Rees, one of the architects of the concept of an ecological footprint, defines reslience as "the capacity of a system to withstand distrubance while still retaining its fundamental structure, function, and internal feedbacks".


                  I believe global supply chains can become more resiliant when they are designed to make local communities more resliant. Seizing this opportunity requires new local supply chain approaches which rechannel into priorities that reside locally.

                  • Re: SCM30 Discussion Series: What can we learn from the biggest SCM mistakes?
                    Jim Fulcher Master

                    This is a fun discussion with some interesting reading.



                    I’d like to follow up on Ray’s point about offshoring and a return to onshoring. I don’t think offshoring was necessarily a big mistake, but rather instead, the mistake came from such widespread—and, perhaps, unquestioning—adoption of the practice. It seems many companies moved operations overseas simply because “everybody else was doing it” or “it seemed like the thing to do at the time.” So the mistake, to me, was really a lack of due diligence.



                    I’ve talked to many manufacturing managers and executives who, often off-the-record, lament the decision. To be sure, their companies significantly reduced labor costs by sending manufacturing offshore. But what many of them eventually came to realize is that they simply traded labor costs for something else. Some were surprised by the cost of shipping goods, others were forced to carry larger inventories so they could remain responsive while simultaneously dealing with long shipping times, other companies noticed a drop in product quality, and so on.



                    There’s a growing amount of research showing that, as a result of rapidly climbing labor wages in China and other countries and other factors as well, the time is right to bring manufacturing back to the U.S. I agree with Ray’s previous post in that offshoring wasn’t the panacea that many believed it would be. I also think a return to onshoring, while offering a number of advantages, may not necessarily be a panacea either. In many cases, it certainly will make sense to shift manufacturing, but not always. Companies need to take a hard look at what they expect to gain, but also identify what they realistically may lose. Then they must determine how they can strike an optimal balance.

                      • Re: SCM30 Discussion Series: What can we learn from the biggest SCM mistakes?
                        rkaraffa@kinaxis.com Apprentice



                        Very interesting comments.  I don't think offshoring is really a bad thing either.  We live in a big world and a global market.  Gone are the 1950's where the U.S. shared a small industrial silo with a few countries in Europe.  I believe in the free market and the bigger and free-er, the better.  The more competition there is in this world the more efficiently the resources will be distributed.


                        The thing that really bugs me is why are we always looking for the supposed "easy way out"?  I've been involved in the Supply Chain for almost 40 years now.  During that time I've witnessed a lot of finger pointing.  Within a company, it usually starts out with the Manufacturing / Materiel wars.  Manufacturing doesn't ship product on time and they point the finger at Materiel for not having the purchased components on time.  Materiel in turn, points the finger at the suppliers for not delivering on time.  It has to be the suppliers fault.


                        After we beat that horse to death, we turn our attention to the software.  It must be the software.  If one MRP package doesn't work, let's go to another and another.  It usually starts out that we are going vanilla with this new and complete MRP implementation and will modify our processes to adapt to the software.  That usually lasts for about six months before the requests begin to flow into IT for modifications to the new software to bend it back to accommodate the old processes.  Oh and by the way, we aren't going to implement the full package.  Forget the shop floor modules.  Manufacturing wants to run their own shop floor with Excel spreadsheets.  Just get them the material on time and they will worry about the scheduling of the shop floor.


                        We closed the loop on MRP in the 1970's by implementing Shop Floor Control processes.  I read the results of a APICS manufacturing survey (sometime around 2005) where they asked the nation's manufacturers if they have implemented automated manufacturing execution systems.  Less than 3% responded with a yes.


                        We have always pointed the finger at labor costs.  After all, that's the reason the Japanese are doing so well.  Well now that they are becoming so affluent, their labor costs are also rising but they are still cleaning our manufacturing clocks.


                        And so now, the latest easy way out was offshoring.  Go for that cheap labor offshore.  But now we are discovering there are also more costs and logistics problems in doing that so now is the current easy way out onshoring?  So do we go round-robin and begin again with the Manufacturing / Materiel wars?


                        As Rodney King said, "Can't we all just get along?"  When are we going to realize that we and our processes are the problem.  Software is very important but we should also follow the proper processes for planning, scheduling and execution and that is truly the easy way out.


                        Thanks for your comments Jim.



                          • Re: SCM30 Discussion Series: What can we learn from the biggest SCM mistakes?
                            Jim Fulcher Master



                            You bring up a good point, and that’s the constant shift to whatever seems easier instead of focusing on the hard—and prolonged—work of changing processes and even corporate culture. So there’s often a quick fix but it does not lead to substantial improvement. For example, how many times have we heard about a company that only uses the finance/accounting side, and maybe HR, of an ERP solution? The reason is the rest of the solution “just doesn’t fit our business. We’re unique and we don’t want to change our processes.”


                            The same is true for Lean and Six sigma initiatives. The companies that seem to have the best success are the ones that are focused on achieving long term improvements. On the other hand, there are plenty of companies that apply Lean tools and gain some amount of quick improvement. But if they don’t take the time to study the theories and concepts of Lean, and then work to sustain Lean, there’s only so much they can gain.


                            Finally, one of the biggest stumbling blocks to S&OP seems to be a commitment to change management. If everyone’s objectives and departmental goals are different, then there won’t be much collaboration in the S&OP meetings. And if everyone doesn’t collaborate, the meetings (and process) won’t have much value.


                            Maybe the problem here is really an over-reliance on technology, and not enough focus on actually managing the business and people?

                              • Re: SCM30 Discussion Series: What can we learn from the biggest SCM mistakes?
                                rkaraffa@kinaxis.com Apprentice

                                Over-reliance on technology and not enough focus on actually managing the business and people?


                                Jim, like Dustin, I think you are nailing the problem!  I think that historically, MRP, MRPII and now ERP production planning softwares are considered automated scheduling tools by most companies that are utilizing them.  In other words, the planning and scheduling process has been computerized so what do we need good planners and schedulers for?


                                Dr. Joseph Orlicky of IBM developed the original computerized MRP model (PICS - Production and Inventory Control System) that is still used by the current ERP applications by studying the production planning systems of the successful companies back in 1961.  He recognized that success in manufacturing revolved around scheduling raw materials and components in right quantities at the right time to support the proposed shop floor production schedule.  Everything after that, in the evolution of MRP to MRPII to ERP grew off of that original shop floor schedule support routine.  The schedule was considered basic and fundamental and it had to be the truth.  If we don't do a good job of scheduling the shop floor, nothing else that flows off of that matters much at all.


                                I've been searching for a way to convey this in some of my blog articles for some time now and it really came to me after watching a video posted on SuppyChainBrain.com (http://www.supplychainbrain.com/content/index.php?id=5032&cHash=081010&tx_ttnews[tt_news]=13274).  In this video entitled The Control Tower:  Breaking Down Enterprise Barriers!, our CEO of Kinaxis, Doug Colbeth, describes tying together all parts of the enterprise and eliminating silos.  He describes the Contol Tower as a single platform with a single version of the truth.  No silos.


                                A single version of the truth.  To me, the basic foundation of this control tower is the Plan or the Shop Floor Schedule.  Everything else builds upon that foundation.  The shop floor schedule has to be accurate, doable and achievable.  We have to work to this single version of the truth.


                                My first job back in 1973 was in the supply chain working with the first MRP package developed by APICS and IBM (the IBM PICS Package).  I cut my teeth on MRP for two years in a fast paced production assembly line of residential and commercial roof-top air conditioning units.  After leaving that job I spent another two years experience in the manufacturing of electric driven coal mining machinery utilizing a manually MRP routine, much like the processes Joe Orlicky modeled computerized MRP from.  This manual MRP system utilized Acme Visible ledgers and lots an lots of clerks posting to these ledgers.


                                The main scheduling formula for the backscheduling of operations from the manufacturing order due date to the start date in the original MRP model was and is Manufacturing Lead Time = Move Time + Queue Time + Setup Time + (Run Time per Unit * Order Quantity).  The fixed lead time elements are the move, queue and setup times.  The variable element is the order quantity times the run time per unit.  This is what gives a 100 piece order more lead time to complete than a 10 piece manufacturing order.  It also schedule the start dates of the manufacturing orders correctly so that you are scheduling in the purchased parts and subassemblies properly based on the start date of that order.


                                Those old time schedulers that trained me on manual MRP would have thought me to be completely crazy if I would have suggested in giving the same lead time offset for a 100 piece manufacturing order as I would have for a 10 piece manufacturing order.


                                I have looked and looked though all of my APICS dictionaries and training materials and could never find anything referring to Fixed Manufacturing Lead Times where you would input one fixed manufacturing lead time for all the manufacturing orders of an assembly but in my experience that is the main scheduling formula in just about every company I've come in contact with.  That means giving the same scheduling lead time offset for a 100 piece assembly order or a 1,000 piece assembly order.  In MAC-PAC/D it was called Manufacturing Lead Time Override.


                                When my company implemented SAP, I was excited because I was told fixed manufacturing lead times didn't exist but one enterprising planner told me that they found it and it is called In House Production Time.  Oh well, if I was a software developer selling software and not scheduling, I would include it in my package also.


                                I think that over the years we have thrown out the scheduling baby with the bath water.


                                Oliver Wight is another MRP pioneer that I greatly respect for his down to earth, common sense approach to MRP (Supply Chain).  In his book titled Production and Inventory Management in the Computer Age, he describes being wary of computerized systems and the human interaction relating to Garbage In, Garbage Out.  It is as follows:


                                "The human being understands the intent of the system.  The computer processes data in vast quantities, but like a high-speed idiot.  It performs its assigned chores faithfully.  Right or Wrong."


                                Do we have a high speed idiot in our midst?




                          • Re: SCM30 Discussion Series: What can we learn from the biggest SCM mistakes?
                            tbrouill Master

                            I've just been browsing the discussions in this thread and feel that these are all great topics and suggestions, I find it facinating how valuable a thoughtful review in hindsight can prove in topics such as these.  I am especially cognizant and highly agree with the outsourcing and 'going local' topics and would like to add to these points an addition regarding what seems to be an almost blinding desire to focus on the short term, no matter the cost in the long term.


                            I see in the outsourcing and the 'going local' discussions the result of this lack of forsight and vision to take into account the long term.  The sad, and frustrating, point is that this is not a new topic.  I think the short term focus has risen to ascendancy over a 30 to 40 year period and has come to a head in the last recession.  While the last recession was not a SCM failure, I don't think that anyone would argue that the results of the recession have been devestating on many organizations' supply chain. 


                            The recent reactions to the recession are another in a series of business decisions that in their blind focus on the short term, they have already and will continue to have repercussions over the future that will be hard to forecast or adjust to.  I think the results of this latest example will be unpredictable and will also, unfortunately drive a new series of short term decisions with questionable value!


                            I find it facinating, and also a huge disconnect, that over the last 20 -30 years vision, strategy and planning have been the hotest topics in the industry, seminars and events, yet over and over it would seem that these 'critical' objectives are thrown out the window at the slightest decline or deviation.  I was interested in the forecasting and replenishment topics and while I agree that these are critical practices and we should be striving for accuracy, I also see this practice as a microcosm of the long term vision challenge. 


                            I would like to propose an additional question for the discussion....  How can we hope to learn from the biggest SCM mistakes when we can seem to maintain a plan for 3 months?  In addition, does the group see a relationship(s) between the mistakes, or trends based on the mistakes encountered?

                              • Re: SCM30 Discussion Series: What can we learn from the biggest SCM mistakes?
                                rkaraffa@kinaxis.com Apprentice



                                You make some very interesting points and I agree with you.  I think that each one of your points again relates to what most or all of the responses to this blog discussion are stating.  Your point about strategy and planning being the hottest topics in industry seminars and events when times are good but being thrown out at the slightest decline or deviation falls in general with the theme within the responses to this blog thread.


                                That theme appears to be that in good times, we attend all of these good forecasting and planning seminars and events that tend to focus on rolling up our sleeves and getting down to work putting long term plans and objectives into place.  After we walk out of these events and back to our day to day routines in SCM, again they are probably discussed but never put into practice and I agree with you that in periods of decline, these great topics are thrown out the window until good times are here again.


                                As I said before, we in SCM are always looking for the easy way out and not willing to roll up our sleeves and make these important long range changes to our planning and execution processes.


                                Thank you for your input.



                              • Re: SCM30 Discussion Series: What can we learn from the biggest SCM mistakes?
                                lynmcdiarmid Newbie

                                As a first time contributor, I really enjoyed the discussion around the problems with supply chains. I completely agree with the statements that forecasting is not a useful tool and the realities of a global supply chain with outsourcing offshore, means that we seem to have less and less control over our own success. Having spent 30-plus years involved in supply chain with much of it in a contract manufacturing role, I am aware that the unforecasted disruptions can be devastating and no amount of 'disaster recovery planning' can alleviate all of the problems. Sure, we all remember the Sumitomo factory explosion, the shortage of tantalum, the Japanese earthquake and tsunami etc. etc. but what about the parts that we were expecting to have delivered and then found out that Apple had spec'd them into the iPhone and we were pushed down the list?


                                My point is that in the complex, global supply chains that we all enjoy, it is impossible to predict what will go wrong and how serious the problems can be. So my candidate for something that we continuously do wrong is that we put too much onus on having our supply chain partners give us their very best price, and then expect them to bail us out of the problems that either we cause ourselves, or are caused through no one's fault. We all know that 75-80% of the cost of sales of a product is material, so we all push our buyers and suppliers to squeeze every last penny they can find. This seems to make sense, especially in light of the earlier posting that today's investor is looking for short term profits, driving CEOs to make decisions that compromise the long term strategies we used to admire. But what it does, in effect, is drive stress into the supply chain to keep all fat trimmed, watch all excess stocks and keep inventory turns up. Again, this is just good business, but at a certain point, we have now driven away all of the safety valves that will save us when something big goes wrong. I was always measured on BOM cost reductions and inventory turns, but the metric I watched closest was how many times did the assembly lines go down due to material problems. To me, the steady flow of product can erase a mountain of doubts that we are getting the very best deal we can. You will always find someone who says that you are leaving money on the table and that collaboration with the big guys like Avnet and Arrow, is just dreaming, but I find that if you leave them an extra point or two when negotiating a long term deal, they will be there when you need them to 'borrow' someone's allocation or call in a favour at the factory. Supply chains are no longer manageable on our own. We need partners who will be there for us. The best way to have a good parnter is to BE a good partner!