Monday, 28 April 2014

Boundaries and Buffett

Boundaries are where it gets complicated. I'm not talking about regional boundaries though recent events in Ukraine (substitute another dispute if reading this after 2014) are consistent with this.

Boundaries, where responsibilities change, hand-offs in processes are where assumptions are enormously important.

Some of the biggest boundaries are between partners in Supply Chains, between shipment and arrival, between forecast and order, audit and auditee.

When I was taught about Finite Element Analysis as a young engineer, the assumptions you made as to how your model would operate and the answers it would give were explicitly linked to the boundary conditions you set (or observed from test).

I'll be talking more about this at the "Supply Chain: Simplifying the Tiers" event in London this month (Supply Chain at the Ambassadors).

And the Buffett part? Warren Buffet is quoted as saying that until you have to write it down you haven't really had to think something through. So I always like to see key assumptions written down and shared. Across boundaries, between Supply Chain partners.

Thursday, 10 April 2014

"I've got a good idea, let's restrict travel!"

Third quarter figures are looking a little dicey, analysts will be looking for a result in the guidance EPS (Earnings Per Share) range, and Sales don't just magically appear out of nowhere.

What can we do to bring the results in on course, and send a signal to the troops about how serious we are?

"Let's restrict travel!"

"Only essential travel allowed"

"All travel has to be approved by the General Manager/Senior VP/Deity"

"Corporate Travel ban"


Supply Chain improvement, good procurement, quality audits, collaborative working with suppliers, troubleshooting, developing better planning and risk management tools, Plans for every part (PFEP), discovering new vendors...

All of those involve a degree of personal interaction, especially in the early stages and hence travel. When a majority of the cost base is dependent on Supply Chain innovation and competitive advantage too, what does a travel ban do for the future of the business?