If it smells like scat, it is scat.

By Steve Geary | 05/18/2019 | 5:24 PM

Understanding data perturbations is essential in Supply Chain Analysis.  Of course, that assumes that those performing the data analysis understand data analysis and the underlying functional and operational relationships.  Unfortunately, that isn’t always the case.

The National Oceanic and Atmospheric Administration (NOAA) just published its intent to award a sole source contract to Florida Atlantic University Harbor Branch Oceanographic Institute.  Specifically, Florida Atlantic University will perform genetic sampling of harbor seal scat samples.  NOAA has published a finding that Florida Atlantic University is uniquely qualified to perform this work.

That’s right.  Florida Atlantic University is uniquely qualified to gather and test seal scat.  That by itself is amusing, certainly, but it gets better. 

NOAA attempts to justify the sole source award, which by statute must be justified.  “A statistical analysis of population structure using microsatellite data from multiple laboratories would require a model with additional parameters to explain any variability due to data collection, which in turn, increases the risks of inflating or masking any differences between populations.”

Notice there is no assertion that Florida Atlantic is better at collecting or analyzing scat than anybody else.  That would be a valid sole source justification.  Instead, NOAA asserts that Florida Atlantic’s results cannot be replicated by anybody else.  In other words, their scat apparently doesn’t stink.

Put it all together, and what we have is sole source justification to analyze scat based on the assertion that other scientists are unable to replicate the results.  “If a finding can't be replicated, it suggests that our current understanding of the study system or our methods of testing are insufficient.

Numbers matter, and so does scat in the real world.  When measuring your “no-scat” operations, make sure the measurements are repeatable and can pass the smell test.  If it smells like scat, it probably is scat.

It’s hard to turn a battleship on a dime, but DoD is changing course. 

By Steve Geary | 05/05/2019 | 4:29 PM

Last September, then Secretary of Defense Jim Mattis issued a memo directing the military services to achieve a dramatic improvement in the readiness rate on four key aircraft.  The memo directed an 80% readiness rate be achieved for the F-35, F-22, F-16 and F-18 fleets by September of 2019.  As icing on the cake, the Secretary also directed a reduction in operating and maintenance costs for those aircraft.

So after more than six months, how is the military doing?

On May 1, in remarks to a House Appropriations Committee panel, acting Defense Secretary Patrick Shanahan hedged.  As reported in Defense News, Real Clear Politics, and several other outlets, Secretary Shanahan said the F-18 is tracking to meet the 80 percent readiness rate benchmark, but it remains unclear to him if the F-35, F-22 or F-16 will be able to meet the mark.

Achieving an 80% readiness rate may not seem like a high hurdle to a supply chain professional operating in the commercial sector.  In the land of fielding leading edge – or in the case of the F-22 and F-35, bleeding edge – systems, it is an aggressive goal.  Progress has been made.  Supply chains have been streamlined.  Perhaps getting to the goal for some of the platforms will roll into 2020, but the military’s progress merits respect. 

We’ll check at the end of the Fiscal Year.

The global supply chain isn’t bilateral.

By Steve Geary | 03/31/2019 | 11:23 AM

President Trump’s tug of war with China continues. Last week the latest round of talks between China and the U.S. kicked off.  The United States is trying address the trade balance between China and the United States in a bilateral fashion. It seems that there isn’t really a bilateral supply chain, as much as the President wants it to be. 

Just before this latest round of Sino-American negotiations kicked off, French President Emanuel Macron and China’s President Xi Jinping announced a thirty billion Euro deal—close to thirty-five billion U.S. dollars—for Airbus aircraft. Of the 300 aircraft included by China in the deal, 290 are the single aisle A320 configuration. The A320 happens to be the aircraft that competes directly with Boeing’s grounded 737 Max 8 configuration.

It seems that there isn’t really a bilateral supply chain, as much as the President wants it to be. In a not-so-subtle challenge to U.S. interests, Politico quotes President Xi saying, "a united and prosperous Europe corresponds to our vision of a multipolar world." American businesses with supply chains and logistics threads extending into China need to pay attention.

President Trump’s game of checkers with China has morphed into a game of chess with the world.

China, Trade, and the Ripples

By Steve Geary | 03/10/2019 | 1:24 PM

After establishing new trade surplus record with the U.S. in December, Chinese exports are collapsing. Statistics released on Friday—numbers released by China, not the United States—show that the expected realignment is underway.

China's politically sensitive trade surplus with the U.S. narrowed sharply, to $14.72 billion, in February, from $27.3 billion in January.  Now, these are numbers reported by the Chinese government, so some skepticism is in order.

“Dollar-denominated exports [by China] plunged 20.7 percent for the month of February from a year ago, missing economists' expectations of a 4.8 percent decline, according to a Reuters poll,” reports CNBC.

CNBC continues, “Dollar-denominated imports [by China] fell 5.2 percent in February from a year ago, missing economists' forecast of a 1.4 percent fall.”

The unemployment rate held steady at 3.8%. The latest employment statistics in the United States for February show non-farm job growth at a near standstill, according to the Labor Department; this may be an aberration, but it bears watching.      

U.S. Census Bureau statistics are still lagging due to the month-long government shutdown, so the best government sanctioned balance of trade numbers available are months old.

Bottom line: the supply chain in the United States remains healthy, logisticians appear to have realigned in anticipation of a collapse in Sino-U.S. trade, manufacturers seem to have found new sources of supply, and employment remains strong.

And China is getting nervous.

Think Globally.  Act Locally.

By Steve Geary | 02/03/2019 | 10:31 AM

Davos, officially known as the World Economic Forum, just wrapped up.

The annual meeting is an event where a couple of thousand people getting together and try to solve the world’s problems.  Quoting directly from the legal charter, The World Economic Forum “is an independent organization committed to improving the state of the world.”  These people are not timid in their ambitions.

This year, their report is over a hundred pages long.  According to the report, the five most likely risks are: 

  • extreme weather conditions
  • failure of climate-change mitigation and adaptation
  • natural disasters
  • data fraud or theft
  • cyber-attacks.

The top five in terms of impact are:

  • weapons of mass destruction
  • failure of climate-change mitigation and adaptation
  • extreme weather events
  • water crises
  • natural disasters.

Together these items are a good list.  There is a very important point worth noting: only two of the ten are cyber threats.  Go poke around on the web, search for Supply Chain Risk, and odds are the references will lead to articles on cyber threats.  There is a disconnect in our discourse.

Logisticians need to figure out how to mitigate Supply Chain Risk in operations, not just cyber.  Our challenge is at the micro economic operational level.  The one of the world point of view belongs to Davos.  We can consider how to mitigate the impact of extreme weather, the implications of climate change on logistics, disaster response protocols, water, and natural disasters.  Every one of these operational risks cascades down to the tactical level.

Supply Chain Risk Management is about managing and mitigating these risks across the spectrum.  Supply Chain Risk Management is bigger than cyber.  Supply Chain Risk Management belongs to the operators, not the technical staff.

Look what Santa left under the tree.

By Steve Geary | 01/01/2019 | 8:48 AM

On December 13, the Department of Defense (DoD) issued an update to the governing procedures for supply chain management

“DoD Supply Chain Materiel Management Procedures: Operational Requirements,” gives solid direction for Supply Chain Risk Management (SCRM). 

Too often risk management is overshadowed by cyber threats; the DoD didn’t do that. 

Instead, DoD defines Supply Chain Risk Management (SCRM) as “strategies to identify, assess, and mitigate potential supply chain risks.” 

In other words, risk isn’t just about cyber.  DoD illustrates the landscape of risks by citing vectors like terrorism, cyber threats, [physical] attacks, insufficient quality, unreliable suppliers, imbedded threats, access points, machine break-down, uncertain demand, obsolescence, vulnerability from interruptions and interdiction of supplies, including fuel and electric power, flooding, labor strikes, natural disasters, or large variability in demand.

Put your tax dollars to work.  Adapt and adopt the blueprint the government published and make it your own.  Then get to work.

And now for the logistics dislocation from the China tariffs.

By Steve Geary | 12/29/2018 | 5:26 PM

Last month we demonstrated channel stuffing on an international scale, quantifying the impact of the trade war with China on trade activity.

The partial government shutdown means that Census Bureau still hasn’t published statistics for November.  It isn’t clear when they will be published, either, so we looked at other sources. 

A quick scan of the Port of Los Angeles November volumes suggests that the predicted collapse in trans-pacific trade has begun.

Year over year imports at the port, measured in Twenty-Foot Equivalent Units (TEU’s), are down almost 9%.  Exports through the port are down over 14%.

If shipment activity through the Port of Los Angeles is a valid indicator of the health of trade with China, then the conclusion is inescapable:  a massive international logistics dislocation is underway.

2019 is going to be an interesting ride.

Channel stuffing on an international scale

By Steve Geary | 11/25/2018 | 9:20 AM

The impacts of U.S. trade tensions with China are starting to show up in the numbers.

According the Census Bureau, an unbiased provider of trade data, in September of 2018 the United States imported over $50 billion in goods from China. Compare that figure to 2017, when it was a little over $45 billion. That $50 billion is an all-time monthly record.

A look at the Census Bureau statistics for manufacturer’s inventories shows where many of those imports are going. Year over year, US manufactures inventories are up 6.7%. 

There will be no debate here on whether or not the tariffs imposed by the Trump administration are a good or bad. What is clear is that because of the tariff situation uncertainty is creeping into the supply chain. Uncertainty makes me nervous.

Anybody who relies on China as a source of supply is looking at the risk profile. Long term, there is a need to realign global supply chains with a more deliberate view toward supply chain risk. Tariff uncertainty is a part of that equation.

We are already seeing the pragmatists react to the uncertainty. They are stuffing their DC’s, as shown in the Census Bureau numbers.  There is no choice but to hedge against supply chain risk by stuffing the pipeline with inbound supplies. 

Build a buffer, stuff the warehouses, and buy a hedge. 

Then say a prayer that the politicians in Washington and Beijing find a way out.

The United States Army has a vision.  Do you?

By Steve Geary | 11/20/2018 | 3:29 PM

The headline for an Army News Service article reads, “Army must update logistics operations as part of modernization efforts.” The article details remarks made to an Association of the United States Army Institute Land Warfare breakfast in early November by Lieutenant General Aundre Piggee.

Piggee’s opinion matters: he is the Army's deputy chief of staff for logistics.

He drove home four points:

  1. Self-Sustaining Brigade Combat Teams. Translating this into commercial terms, we need to delegate responsibility and authority to operating teams, and let the team run with it.
  1. Additive Manufacturing, or 3D Printing, is a “game changer.” The benefit to an operating force operating thousands of miles down the supply line is real. The same opportunity exists in the private sector. A seismic shift may is coming. This technology might actually be more fundamental than Block Chain.
  1. Global Supply Visibility: the Army has been working on this for years, and their system is now fully fielded. That was the easy part. Now that they have global near real time data, what are they going to do with it? Once again, the general is on target, saying “we have to make sure we are using all this data that we're pumping out to make good decisions."
  1. Autonomic vehicles enabled by Artificial Intelligence are within reach, and some would argue that they are already here. How does this capability reshape logistics and material handling? Piggee offered an idea: autonomous vehicles could be a key element in resupply. Are we going to be able to do the same thing in the private sector? If we can't do it over the road, can we do it in the warehouse?

We have to give the General credit, and his thoughts should serve as a catalyst for any logistician.

Gartner Academic Rankings for Supply Chain Academic Programs

By Steve Geary | 11/04/2018 | 10:38 AM

If you are getting ready to search college campuses for Supply Chain talent, Gartner has a list.  

The top 25, according to Gartner, are:  Pennsylvania State University, the University of Michigan, the University of Tennessee, Michigan State University, Rutgers University, the University of Minnesota, he Massachusetts Institute of Technology, Arizona State University, The University of Texas at Dallas, the University of Wisconsin-Madison, the Georgia Institute of Technology, Indiana University, Northeastern University, the Ohio State University, North Carolina State University, Texas Christian University, Wayne State University, the University of Southern California, Howard University, The University of Texas at Austin, University of South Carolina, Syracuse University, University of Houston, the University of Washington, and the University of San Diego.

All are solid, so if you want to go looking for freshly minted talent, these schools are a great place to start.  An article in the October issue of DCV highlights the top school on the list, but if you are searching for talent in today’s tight market don’t ignore the other schools on the list.  They’re all over the country.

 (disclosure:  the author is on faculty at the University of Tennessee, which clocked in at number 3 on the Gartner list.)

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

About Steve Geary

Steve Geary

Steve Geary is an adjunct faculty member at the University of Tennessee's College of Business Administration, and is on the faculty at The Gordon Institute at Tufts University, where he teaches supply chain management. He is the President of the Supply Chain Visions family of companies, and Chief Operating Officer at ROSE Solutions, consultancies that work across the government sector. Steve is a contributing editor at DC Velocity, and editor-at-large for CSCMP's Supply Chain Quarterly. He is listed in Who's Who in America, Who's Who in the World, Who's Who in Science and Engineering, and Who's Who in Executives and Professionals. In November of 2007, Steve was recognized for "Selfless Service to Our Nation and the People of Iraq" by the Deputy Secretary of Defense.


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