Turn Right At The Produce Aisle

Costco continues to amuse and amaze by offering more than the usual products to pile in the cart.  The Costco Connection magazine for June (www.costco.com, "connection") has a page devoted to "Fresh Views," with mini-features on: Wally "Famous" Amos (who has moved on to found Wally's Muffin Company), brainstorming techniques, and a quick summary of a 2009 book, Extraordinary Groups: How Ordinary Teams Achieve Amazing Results.

My big takeaways this month, aside from a hankering for a muffin or a chocolate chip cookie, were from Extraordinary Groups.  One - not quite an aha! moment - was that a group dynamic can hinder, rather than stimulate, group productivity.  The other was that "exceptional experiences can be thoughtfully nurtured and intentionally encouraged."

Good stuff, but the authors may have missed the larger point, which is that transporting tools and techniques for elevating group performance, to the operation of business relationships involving entire companies, can magnify and multiply the consequences of what might be accomplished.

Maybe an even greater message, though, lies in how Costco works at a fuller customer relationship by providing unexpected value, beyond the nuts and bolts of selling them tires and tube steaks.

Face-To-Face vs. Send-To-Send

CSCMP's game-changing CEO Rick Blasgen really nailed it in his latest Direct Connection segment in the Q2 issue of Supply Chain Quarterly (www.supplychainquarterly.com).  The general point emphasized the value of face-to-face human-level communications in an age of instantaneous electronic communication via numerous media.

Even the Millennial Generation, btw, recognizes this value, despite its fondness for electronic access to all manner of information (and entertainment).  My deep suspicion is that way too many people of all ages like to hide behind the impersonal facade of email, texting, tweeting, twittering, flittering  - anything that buffers them from interactive personal contact.  But, that reflects a personality disorder rather than a generational "preference."

Rick went on to promote the idea that communication leads to collaboration, which can be transported from individual application to organizational relationships.  I take heart - when our profession's leaders get the picture this clearly, there's hope that the profession itself will follow.

Things get tricky at this point.  Organizational collaboration can't really be - as in the George Gershwin song from Porgy and Bess - "a sometime thing," done when it's convenient for one supply chain partner or another.  It needs to be part of day-to-day, and everyday, transaction execution within business relationships.

Now, the hard part.  Collaboration doesn't just happen; relationships don't blossom just because they're planted and watered occasionally.  All this is part of conscious investment of time and resources in  creating the right kind of relationships with the right kind of partners, and all with a business purpose.

The investment, consuming as it may be, is where the big payoff in supply chain management is, though.  It transcends momentary gains and losses when designed to deliver sustainable end-to-end marketplace advantage.  And, the wunderkind at the end of the table who's texting while you're talking is part of that set of organized relationships.

Heads You Win, Tails I Lose

Stadia emptied, vuvuzelas silenced, the Netherlands team has four years to contemplate what might have been in their resurgent prominence in the world of World Cup soccer.  FIFA has a shorter time to assess the salutory effects of public hanging for sight-challenged and judgement-impaired referees.  In the meantime, we'll don our colors and pull for Ajax, the pride of Amsterdam.

Back in the real world, the good news is that our universe of supply chain management is making headlines.  That's also the bad news.  USA Today's July 8 Money section carried a top-of-the-fold feature on shipping bottlenecks and their negative impacts on cost and timeliness.  Our friend Rosalyn Wilson was cited (but CSCMP's production of her annual State of Logistics study was not mentioned - another rant for another day).

The problem was blamed on recession-driven capacity cutbacks in air cargo, ocean shipments, and truck transport.  Adding container shortages to the mix makes marine transport the most severe manifestation of the problem, with shipping volumes increasing while Chinese container manufacturing has been seriously curtailed.

But, some of the damage was self-inflicted, and some continued difficulty is a matter of choice - an investment in short-term pain in exchange for a payoff in longer-term financial pleasure.  Carriers (of all types) embraced sharp price cuts in order to keep operating - even at a loss - when times got tough.  Many shippers took advantage of a perceived desperation, and turned the screws even tighter.

Now, the carriers want to get well - and fast.  The USA Today feature reports a 150% increase in transportation costs (following the historic decline of 2009).  Significant additional increases lie ahead, with re-activated capacity lagging demand.  Some observers maintain that the ocean carriers' recent practice of "slow steaming" is a faux green maneuver to mask a cynical manipulation that reduces effective capacity - and creates unholy pressures for further upward price movement.

Despite the fine words and high concepts coming from many players in the global supply chain community, this scenario reflects a sobering reality about talking the talk versus walking the walk.

How often must we repeat these cycles of adversarial win/lose (and lose/lose) industry-wide confrontation?  At some point, the strategists among us will learn to think, like Bobby Fischer, four or five moves ahead and build long-term business relationships.  Real relationships will insulate genuine partners from the debilitating skirmishes that perpetuate the paradigm of creating immediate transactional focus, short-term one-sided gains, and long-term supply chain underperformance.

We know better; now we've got to do better.  But, doing better requires that everybody - shippers, carriers, service providers - gets in the game.  And plays to win-win.

The Value Of Situational Values

Kevin Cornish (atrisk.net) recently blogged about situational values and fake parts in the supply chain.  His best line?  ". . . the human element matters more than ever . . ."

Citing the loquacious, but nearly always on-target, Tom Friedman from the New York Times, Cornish introduced the ultimate reality that all partners in supply chain relationships must become more responsible because we can't shield ourselves from the irresponsibility of others.

Right on, Kevin; right on, Tom!

But, do consider this.  The issue of values among supply chain collaborators would be much easier to deal with in those cases of building the right kinds of relationships with the right kinds of people (i.e., organizations) in the first instance. 

Think about the potential for financial and emotional catastrophes lurking in trying to extricate oneself from an E&J Gallo-induced marriage to a pole dancer of recent acquaintance.

It's much tougher to reconcile value systems after the fact, when commitments have been made on a superficial basis, cost per transaction for example, rather than on the value of integrated and collaborative efforts in a competitive marketplace.