Ellery's Essays

What Does ‘Back-to-Basics’ Even Mean?

Back-to-basics is a line I had heard in just about every enterprise I worked with. Executives would say to subordinates, “we should go back to basics,” with me and the subordinates wondering if the executives knew what that even meant. Do the executives know what they were talking about?

When we say back-to-basics, we probably think of:

Doing what succeeded sometime in the past
Doing things strictly by the rules we had set some time ago (also known as going back to doing things ‘by the book.’)

#1 sounds easy. We just have to re-discover what we did in the past when times were good.

#2 requires some re-education on our part. We’d have to dust off those old rule books or standards which we haven’t read or referred to for so long.

The basics we want to go back to are what we think that worked well in the past. To put it another way, we want to go back to what it was like some time ago, to those good old days when it seemed we were doing better.

Back-to-basics is an ideal. It’s more like a fantasy, like a pot of gold at the end of a rainbow. It’s not only elusive, it also doesn’t exist, at least anymore. Whatever we may have experienced in the past cannot be fully repeated. As adults returning to their native lands would realise: we can’t go home again.

Back-to-basics is a yearning for better outcomes. If we recognise that we can’t go back to what we were doing in the past, maybe we could at least reset or re-engineer whatever structure or system we’re using today. Back-to-basics, thus, becomes a strategy to redo whatever we’re doing.

But do we really know what ‘basics’ we want to go back to? What, in the first place, do we mean by ‘basics?’

Executives would say they want their enterprises to go back and pursue what their original purposes were, what they (or the original founders) had in mind, and how they worked to get the desired results.

And when asked what those original purposes and desired results were, the executives would hesitate or draw a blank. They don’t know! They base the ‘back-to-basics’ on personal experiences or from stories from senior veterans who say that times were different and better then.

Some wanna-get-rich consultants exploit our dilemma of having not clear directions. Their favourite spiel is to tell executives to formulate visions, missions, objectives, & strategies (VMOS). Crooked consultants don’t care to solve what the real problems may be behind why we want to go ‘back-to-basics.’ They offer, instead, buzzwords and sounding-good themes that lead to profitable contracts that benefit them more than their clients.

We should admit when we’re stuck and don’t have answers. ‘Back-to-basics’ thinking is a defence mechanism, a rationalising response to conceal or escape the stress of being unable to overcome a challenge.

Rather than resign to whatever is giving us adverse results, we should face whatever is bugging us and solve it.

VMOS may be well and good in translating dreams into clearly defined goals and plans, but they are not meant to solve problems. When we are clueless to what we ought to be doing and we’re harking to go back to basics, it’s an indication that we need to confront whatever is making us think that. VMOS could be just another defence mechanism.

If we can’t hack it ourselves, then by all means, let’s ask people to help us. Let’s engage qualified credible consultants who will help us solve the problems, not offer silly teambuilding exercises or irrelevant proposals that don’t directly result to desired deliverables.

A leading 3^rd party logistics provider, for instance, pitches consulting services to improve the supply chains of multinational companies. Its favourite approach to solving their clients’ problems, however, is to assign contracted personnel to run their clients’ operations. By taking over the clients’ operations, the 3PL promises better bottom-line results. But in most cases, it doesn’t happen. The clients still experience problems while the 3PL would blame & replace their own personnel for poor performance. The client, meanwhile, becomes over-dependent on the 3PL who bills & profits from the contracted personnel. The client remains clueless about what it should really be doing, which should be to face the problems and solve them.

Hearing executives mention back-to-basics indicates their frustration in overcoming pressing challenges. Back-to-basics is more of a fantasy which stems from us activating our ever-so-human defence mechanisms. We distract ourselves from the problems we can’t seem to tackle.

We should confront challenges & crises and solve them, not sweep them under the proverbial rug in the guise of telling our peers we should go back-to-basics. We should seek help if we can’t capably do it ourselves. We should just make sure that the people we engage with will really do help us, and not take advantage of us.

About Ellery’s Essays

What is Your Supply Chain Doctrine?

In our modern world of the 21^st century, supply chains are the lifeblood of enterprises. We rely on the procurement, manufacture, and logistics for the supply of essential products & execution of services.

Supply chains, given their breadths & complexities, are not easy to manage. We who work in them know that supply chains span beyond our enterprises’ borders and that we must relate with vendors, customers, & 3^rd party service providers to achieve success

Many so-called management gurus preach we should first formulate visions, missions, objectives, & strategies (VMOS) for our enterprises. They say that a VMOS should be the basis for whatever we do in our jobs or businesses.

But as much as a VMOS provides a roadmap for an enterprise, a doctrine is more apt when it comes to managing supply chains.

A doctrine is a principle or set of principles which become the basis for any course of action. A doctrine isn’t a VMOS and does not necessarily stem from one. Doctrines, however, do go hand-in-hand with the development of VMOS and vice-versa.

Doctrines help us manage the supply chain operations which fall under our enterprises’ direct oversight. Doctrines not only define how we oversee operations on our enterprise’s side of the supply chain but also are the foundations of how we relate with those who connect with us, i.e., vendors, customers, 3^rd party service providers.

A doctrine can be a long narrative or brief phrase. The Monroe Doctrine of 1823, which became the basis for American foreign policy, was contained in a speech by then United States’ President James Monroe to the US Congress. More than two hundred years later, American President Donald Trump in his inaugural speech in 2017, presented his political doctrine in two words: “America First.”

A supply chain doctrine would determine how we buy, make, and deliver our products & services in line with whatever VMOS our enterprises’ top executives adopt.

Doctrines for enterprise supply chains aren’t new.

Toyota’s waste-elimination doctrine, which the automotive firm espoused for decades, resulted in Toyota becoming a top-tier global automotive conglomerate, thanks to successful reductions in inventories and breakthrough productivity improvements.

Apple stressed a Just-in-Time doctrine for suppliers in the assembly & delivery of its highly rated products.

Fast-growing fast-fashion e-retailer, Shein, relies on “an on-demand manufacturing model. It subcontracts thousands of small manufacturers in China. They make products in small batches to test market appetite and replenish orders as demand increases.” Shein’s doctrine can be summed up in two words: “on-demand.”

Netflix was the pioneer in the doctrine of mailing (and later streaming) movies & TV shows to customers instead of customers visiting stores.

Many firms have copied Amazon’s e-commerce doctrine in which customers order & pay online.

Tesla banks on a data-driven doctrine in its relationships with suppliers and in how it manages its manufacturing. Tesla relies on data such as “lead times, parts quality, & carrying costs” to rank & favour vendors such that the firm can discover opportunities to strengthen its supply chain.

“Frito-Lay operates 30+ manufacturing facilities across the U.S. and Canada, and more than 200 distribution centres,” in an obvious manifestation of the corporation’s logistics doctrine to ensure availability & delivery of its product lines to anywhere in North America.

When we define a doctrine for our enterprise’s supply chain operations, we establish how we operate independently and together with our partner suppliers, service providers, & customers.

Doctrines are our beliefs translated to principles which guide us to our decisions and actions. They may sound like visions, missions, and strategies, but they are not.

We lead our enterprises via VMOS statements, which are our way of succinctly clarifying our dreams and goals. Doctrines represent principles, how we do things. They are the bases of our policies.

Do we mass produce items for stock, or do we tailor items for individual customers? Do we transport only when we have full truckloads, or do we ship immediately, even if it’s less-than-truckload (LTL)?

Do we buy from suppliers in bulk to take advantage of volume discounts or do we buy in small lot sizes to ensure completeness of materials in inventory?

Do we allow customers to order by the piece or do they must buy by the pallet? Do we allow for short-notice change-overs in our production lines, or do we limit changes in manufacturing schedules to not more than once a week?

Do we accept rush orders or is every order first-come first-serve? Do we prioritise customers who pay in cash or regularly buy more than the rest? Or do we treat every customer order the same, regardless of order quantity or value?

How much quality defect tolerance will we give suppliers? Do we insist on zero defects or will there be an acceptable quality level (AQL)?

Do we allow overbooking of passenger flights, or do we make sure we don’t?

Do we source the cheapest maintenance parts, or do we seek items which are built to last?

These are the kinds of questions supply chain doctrines address. Some may sound easy to answer but in reality, they may not be. Doctrines are the bases of how we decide given different scenarios.

Doctrines aren’t fixed from the start. We will eventually change them as situations change and they get tested with the realities that come with managing supply chains.

We just need to make sure we’re ready to know what principles in those doctrines we are willing to flex and those we will remain steadfast to.

About Ellery’s Essays

How Realistic is a Supply Chain Vision?

Many entrepreneurs have invented all kinds of applications for a variety of uses. We have apps to help in our finances, make music, learn new languages, find places we’ve never visited, make reservations, book rides, and buy tickets.

The one app we (still) don’t have is the one that makes & delivers products. I wouldn’t be surprised if there is some wannabe upstart group of technical geniuses developing a killer app which could do that.

There are, however, app-driven devices in the market which come close to executing production & delivery. Drones, self-driving cars & trucks are already shipping goods to far-flung places and would perhaps be bringing packages to our doorsteps within the 2020s decade. Industrial robots are already ubiquitous fixtures in factories and it’s probably just a matter of time before artificial intelligent (AI) software will be automatically programming them to design & fabricate items on their own.

We can foresee self-propelling supply chains, managed remotely, where AI driven devices plan & execute operations in fully automated manufacturing & logistics facilities and at the same time, dispatch driverless vehicles to deliver items locally & worldwide.

This is what we may define as the ultimate of a digital supply chain. Everything is done via keyboards, mouse clicks, & virtual reality (VR) headsets, with the autonomy of app-driven AI devices running the show.

We see this scenario and make it our vision. We justify its benefits in terms of the breakthroughs we will gain in productivity and customer service. We love the idea that AI-driven automated supply chains could tackle day-to-day issues we would no longer need to sweat over.

A vision of an AI-driven automated digital supply chain would become our basis for our operations management’s missions, objectives & strategies, if we’re not already adopting it now. We cannot hesitate to venture. Otherwise, others, our rivals especially, will overtake us and we’ll be left behind.

We who are subordinates of leaders who mandate such a supply chain vision would be expected to be disciples. Leaders would assume we accept the vision wholeheartedly and work hard for it.

How realistic, however, is such a vision?

Supply chains aren’t really like chains consisting of singular interlocking links. Rather, they are made up of multitudes of operations fostered by relationships with independently owned organisations or individuals. No one organisation or individual dominates any supply chain. It is improbable, if not impossible, to find a supply chain run exclusively by one entity.

Not that anyone has tried.

There are enterprises, particularly multinational conglomerates, who have been attempting to take total control of entire supply chains, from start to end.

Automotive corporations like Toyota and General Motors have bought stakes in suppliers of critical components & spare parts and have shown interest in the mining & processing of raw materials, especially those needed for electric vehicles (EVs).

Behemoth retailers like Walmart and SM dictate contracts & set non-negotiable policies with vendors, who either comply or face ouster in favour for other eager alternatives.

Consumer giants like P&G invest a great deal in downstream distribution channels to monitor & manage the retail presence and the resulting market shares of their products.

Apple manages supply and distribution of its product lines from its contracted assemblers to its many famous Apple stores around the world.

Amazon has formed its own transportation fleet of trucks & airplanes (and drones and soon maybe, ocean-going container ships) in parallel with 3^rd party providers (e.g., UPS, FedEx) to deliver items globally.

ExxonMobil’s supply chain begins from the exploration & drilling of crude oil & natural gas to the refining & shipping of petroleum products to retail stations and industrial customers. ExxonMobil’s reach is global from drilling platforms, tanker fleets, to refineries around the world.

But no matter how powerful they are, enterprises such as conglomerates do not have 100% dominion over their supply chains. There will be the equipment vendors who ExxonMobil executives will still need to negotiate with to operate the oil rigs. Apple has to renew partnerships with outsourced contractors to assemble its iPhones, iPads, and Mac laptops. Amazon depends on book publishers and name-brand suppliers for the many products it sells on its e-commerce platform. P&G must maintain relationships with commodity vendors to ensure continuous supply of ingredients for its consumer products. Walmart and SM depend a great deal on last-mile land transportation providers (truckers) to shuttle goods from distribution centres to their outlets.

As elegant and cool a supply chain vision may sound coming from any powerful corporate executive, it can’t be fully realised unless all links are at least amenable to it.

Executives of greatly perceived power may try to bypass any stalwart individual who represents an obstacle to their vision. Apple, for example, tried to make its own chips for its products but instead, ended up (probably reluctantly) negotiating a multi-billion-dollar supply contract with Qualcomm.

A vision of a digital supply chain where most, if not all, activities are automated is nice to see and hear. But first things first, everyone must be on board to it.

Supply chains aren’t meant to be empires led by oligarchs or autocrats. They represent relationships between enterprises. As much as there may be very influential individuals in those links, how they and the links relate to each other shall determine how successful they can form a unified vision.

About Ellery’s Essays

Five Characteristics of Supply Chains

Supply chains had become popular in the 2020’s, thanks greatly to the era of the coronavirus pandemic when our world experienced major economic disruptions in transportation, production, and deliveries. Because of aggravations such as missed deliveries, shortages, and overstocked inventories, we pledged we’d do better in managing our supply chains.

But we hadn’t done much better. Supply chains, despite our recognition of its importance, continue to challenge us. We face disruptions in sourcing critical materials, climbing prices, and uncertainties in demand. We haven’t come to grips in improving, if not just controlling, our supply chains.

Some of the reasons why we haven’t been that much successful with supply chains lie in their characteristics. Supply chains are models. They represent interdependent relationships between enterprises in which their overall common purpose is to add and reap value from the merchandise & services which flow through and between organisations & operations. Hence, working to optimise supply chains require us to understand what they are.

Number 1: Supply Chains are Complicated

We hardly will find a supply chain we could call simple.

Supply chains are not singular flows limited to three (3) activities, i.e., buy-make-deliver. Supply chains are made up of multitudes of activities. Each activity interacts directly or indirectly with the others in which the performance of one affects the results of another and the supply chain in whole.

Supply chains also don’t go in one direction. They diverge and converge. Iron ore from a mine, for example, go to mills which convert them to all kinds of steel products such as bars, ingots, or plates. These steel products, in turn, become raw materials for all kinds of items like structural beams, cars, appliances, & furniture. Some scrap metals from the factories return to steel mills for reprocessing. The steel supply chain involves countless vendors, 3^rd party providers, & customers, aside from the multiple items it makes available.

In supply chains, we buy not only materials to convert to finished products but also purchase spare parts for our machines. We build multiple factories or outsource production to 3^rd parties and set up distribution centres. We book with brokers to import & export items and at the same time dispatch both vehicles we own or hire to deliver items to buyers.

Any flow chart of any supply chain would show arrows moving to and from activities. It gets even more complex when we map activities of items which share operations with others. Operations for one day may not be the same as the next, depending on what items we’re churning out.

Each supply chain activity is either value-adding (e.g. conversion of raw materials to products, quality control inspection & passing of inbound imported items) or non-value-adding (e.g., items waiting for loading on a vessel, retrieval of rejected merchandise from customers, shuttling empty passenger planes between airports).

As each of us have differing views of value, we may not entirely agree with one another on what operation adds value and which does not. That makes mapping supply chains and pinpointing what activity to prioritise for managing more complicated.

We can rely on our superiors to decide what adds value and what does not. But it’s not that straightforward, because of the next characteristic.

Number 2: Supply Chains Are Beyond the Scope of Any One Enterprise.

No one enterprise rules over an entire supply chain. There will always be an ingredient, material, or service which we would need that would come from outside of our scope of management. Our enterprises can be as simple as a farm where we live off from harvesting our own crops and from tending to our own livestock. We would still need, however, to buy seeds, fertiliser, feeds, nutrients, medicines, supplies, and any other stuff which we can’t make on our own. And the people who sell us this stuff won’t necessarily be under our authority. We’d be negotiating with them to marry our interests with theirs.

We likewise cannot dictate to the customers who buy our crops & livestock, following the example of the farm. We also would need to negotiate for terms & prices favourable for both us and the buyers.

There are conglomerates which vertically integrate their operations, in which they buy stakes in vendors and 3^rd party logistics providers to expand their influence over their supply chains. Some corporations insist on exclusive contracts with suppliers and dealers to lock in supply and distribution of their merchandise. But as much as they may dominate a good part of their supply chains, companies, no matter how big, can’t have it all. There would still be some parts of the supply chain they won’t have full control over.

Supply chains require cooperation and synchronisation between their links. Interaction is a constant. Relationships are vital. Collaboration is a must. We may define our own whatever strategy for our own enterprises, but we cannot escape negotiating with firms who are outside our scope of authority but whom we need for supply or delivery. We can’t have our own vision unless other firms in the supply chain share common ground with us.

And if you think it’s easy to share common ground. Consider the next characteristic.

Number 3: Supply Chains are Vast

Many supply chains, if not all, encircle the globe and involve so many enterprises. For whatever we sell or buy, we are connected in some fashion with many industries around the world. The fruits we buy from Korea could have used fertiliser from Canada. China may have assembled our mobile phones together with lithium-ion batteries their local vendors also produced but which the metals for the phone’s circuits may have originally come from South Africa.

Just about all items we buy and sell may have passed through supply chains which passed from international sources and utilised all kinds of transportation (e.g., sea, rail, air).

Hence, most supply chains are global. They are not necessarily centred in one place as much as they are dominated by one or few enterprises. As much as nations & corporations like to have total control, they’d be contending with operations that are far-reaching and consisting of many types of activities.

The vastness of supply chains has prompted us to develop the structures & systems which convey the flows of products & services. This leads us to the next characteristic of supply chains.

Number 4: Supply Chains are Only Strongest at Their Weakest Links

As mentioned in Number 1 above, supply chains aren’t simple singular chains limited to buy-make-deliver activities. Rather, they are complex relationships in which merchandise & services flow to and from multiple activities.

But, however, complicated they are, supply chains are strongest only at their weakest links, that is, they depend on every operation’s performance. Any operation’s results would have an effect on the total supply chain

But wait a minute. If supply chains are complicated and involve so many multiple operations, wouldn’t there be redundancy? Enterprises could easily make up for one link’s subpar performance with other equivalent ones, right? In the event of failure of one link, we can switch suppliers, hire other transport providers, or keep production lines running via standby machines or spare parts, correct? And we can also keep inventories of merchandise to buffer against the unreliable links?

Our mantra is to fulfil demand. When there is demand, such as a customer order, we serve it. Demand, however, is not a steady constant. It swings depending on the instantaneous needs of customers. And demand isn’t really steady, it grows or declines over time.

In our operations, therefore, there will be times we will have more than enough capacity and there will be times we won’t. We may have more than enough trucks, for instance, to deliver our products at the start of the month and won’t have enough to deliver when salespeople submit last-minute orders to pursue quotas at the end of the month. Even if we have the inventories, our operations may not have the immediate capabilities to fulfil the demand at that moment it comes in.

Weak links are like moving targets. Today it may be transportation, tomorrow it would be manufacturing. Demand is a dynamic; it does not remain constant. even if we know how much customers will buy in a month, we wouldn’t know how much they’ll order today. Any one operation may not have the capability to serve the needs this instant.

We second guess where our weak links would be. We boost capacities, source from multiple suppliers, and negotiate contracts with different transportation outfits. But any given day there would be a particular operational link that would be setting the pace of performance of the supply chain, given the demand of that day.

We develop a lot on infrastructure like roads, bridges, railways, shipping lanes, & ports to strengthen our supply chains. We upgrade our manufacturing & logistics facilities and set up transport networks. We invest in information technologies & automation. By doing so, we try to mitigate the weak links in our supply chains.

But we need talented people to ensure what we do to improve our supply chains will succeed. But the talents we need has to fit in with the supply chains they will be engaged with.

Number 5: Every Supply Chain is Unique

We can identify an enterprise by not only its product or service but also by their supply chains.

No two (2) supply chains are alike. No matter how identical two (2) competing items may be, there will always be differences in how they’re made, where their components or ingredients come from, and how we conduct their logistics.

The organisations behind supply chains also would differ. The talents of managers, staff, and technical crews would not be the same from one enterprise to the next. A supply chain would differ from one another as much as individual human beings do.

Supply chains rely on the talents and experiences of the organisations which manage it. Vendors, enterprises, and customers play their parts in supply chains; each has a role and not any participant is left out. Outsiders, like contractors & consultants, who don’t have roles in supply chains cannot be expected to be recognised as experts even if they may have their own experiences & insights.

Hiring, therefore, is only a starting point when it comes to bolstering a supply chain’s organisation. Training & organisational development count too, as well as the retention of well-honed talented managers, engineers, operators, & technicians. It’s the wisdom of people who have worked long in their supply chains that would be invaluable to new people.

Consultants & mentors from outside the supply chains can help when it comes to teaching management principles. Engineering education is always a plus. But I believe the best talent comes from those who learn from the guidance of experienced in-house managers & workers.

Supply chains are complicated, go beyond any enterprise’s scope, are vast, are strongest only at their weakest links, and each is unique. These five (5) characteristics are what make supply chains not only not easy to comprehend but also downright challenging.

Because supply chains are made up by our relationships with vendors, customers, & 3^rd parties, we must focus on how we deal not only with the links within our enterprises but also with all individuals who add value to the stream of goods & services.

We can’t work on supply chains by our own authority. We can’t dominate them as much as we may gain more influence. We negotiate so we can all collaborate. Never mind if we find it a hard reality that we must work with other people in supply chains.

Any success we attain would be worth it.

About Ellery’s Essays

The Need to Conform Before We Can Sell

There used to be a time when we made things, and they’d sell. Artists would draw their paintings or sculpt their masterpieces, display them, and people would walk up to buy them. Artisans would produce their wares (e.g. potteries, garments, trinkets), place them in front of their houses, and customers would purchase them outright.

We “built it, and they will come.” We painstakingly crafted our items; our customers would see them, and they’d buy them.

In our present-day 21^st century world, the “build it, and they will come” is a fantasy. It’s not enough we just make something. We need to sell our products & services so we can prosper. We live and work in a marketing economy; we succeed by selling. If we don’t sell, we don’t earn.

And we don’t sell products or services anymore. We sell ideas, what our products & services feature, what they’re for, and what they’re worth. If our items promote an attractive idea, chances are we’ll be able to sell them.

We therefore need to persuade people that our products & services represent good ideas, at least ideas which we as customers are willing to enrol ourselves to.

In the very competitive and complicated world of our 21^st century, persuasion comes with prerequisites. Before we convince our customers to buy into our ideas, we’d have to conform to the rules of the prevailing culture.

If we want to offer legal services, for example, we’d have to show we have law degrees from schools our clients would recognise as certified or endorsed by institutions such as the local bar association.

If we want to sell a new software application, we’d have to meet requirements of the firms who run the platforms where we’d be advertising our app. We’d have to not only pay fees but also meet contractual obligations the platforms would insist we comply with.

If we want to set up a shop on a town’s main street, we’d have to apply for the necessary permits from the local government, pay taxes, and comply with regulations.

It’s no longer about how good our idea is per se. It’s not only about how well we develop our ideas into reality, i.e., designing, developing, inventing, and producing working items. It is also about conformity and compliance with the cultural norms of where we pitch our ideas.

I had an idea once. I bought consumer products from a wholesaler and I’d offer small retailers in rural villages that I’d deliver the items they’d need in two (2) days, beating the average one to two weeks traditional area distributors were doing. Since my prices were competitive, I was able to quickly find customers. The area distributors, however, weren’t happy. They reported to their multinational suppliers that I was a threat. The multinational suppliers pressured me with legal action, saying I had infringed on their business (even though I was selling more of their products better than their distributors). After so much harassment, I decided to end the short-lived business.

The consumer goods businesses in the rural areas I was selling to have a culture in which multinational suppliers provided exclusive territorial ‘rights’ to distributors. No one can compete with the distributors without ‘approval’ from the multinationals’ management. If I wanted to break into the business, I had to first apply for a distributor’s license and convince the executives of the multinationals. That was the way and no other.

The “build it and they will come” business is long gone. We live and work in an economy where we need to persuade people to buy into our ideas if we are to sell our products & services. And often, we’d have to conform to the culture of our markets before we can persuade.

We must create demand to sell. To do that, we need to convince customers. And we’d have to comply with the norms of the market we’re selling in.

It’s a complicated world. It’s no longer simple to sell anything.

About Ellery’s Essays

Beware the Aggravation in Addressing Our Problems

Does it seem like there are more aggravations in our lives than ever before?

Aggravations are facts of life for us humans. For most of our history here on Earth, we have had our share of aggravations. We’ve gone through wars, plagues, invasions, natural disasters, famines, and economic distresses. At a tad lower level, we’ve had our conflicts with friends & families and issues at work.

We need to differentiate aggravations from annoyances. They are similar, but not the same. Annoyances are minor inconveniences which cost little to handle. Aggravations are major inconveniences which cost us significantly to fix or overcome.

How each of us determines an annoyance or an aggravation depends on our personal standards. I once saw a businessman on a German commuter train swear and walk out when he heard a public announcement that the train would be delayed leaving the station by five (5) minutes. To the businessman, a five (5) minute delay was an aggravation whereas for other commuters, it would just be an annoyance.

We, of course, try to avoid aggravations. Aggravations stem from adversities. Adversities are the unfavourable situations that we run into or that arrives in untimely fashion. We run into adversities as we pursue satisfying our needs, achieving our goals, and realising our dreams. The loftier our needs, goals, & dreams are, the greater the chance of challenging adversities.

I have observed that we, as in people in general, have set loftier needs, goals, and dreams over the decades. We never have been more dissatisfied; we always desire something better from whatever we already possess. We constantly seek that elusive best for us and for our families. We made it to the moon; we now want to go to Mars. We can live up to 100 years, but we want to live forever. Whatever we have already reached is not enough; we want more.

We can cite ambition, competition, devotion, and other desires as the drivers towards our loftier needs, goals & dreams. But there’s a price to pay and that comes in the form of adversities. And when there are adversities, aggravations follow.

In 2019, the popular buzzword was disruption. Disruption was short for “disruptive innovation,” which described new upstart enterprises challenging established firms with “simpler, more convenient, or more affordable” products. (as per Stefano Virgilli, disruption has actually been a buzzword since the 1990’s, but it seemed quite the talk-of-the-town word in 2019).

Entrepreneurs and innovators challenged mainstream companies, even though some of the latter were former disruptors themselves. Tiktok challenged YouTube. Grab displaced Uber in Southeast Asia. Joyride and Move It went head-to-head with Angkas in the motorcycle ride-hailing market in the Philippines. The delivery apps of FoodPanda and LalaFood challenged the traditional leaders of fast-food industries. And artificial intelligence was looming on the horizon, which spurred the titans of Google, Microsoft, & Apple to review their information technology strategies.

Disruptions bring aggravations to enterprises. We, who are managers, must adjust, adopt, and change either to defend our turfs or counter the inconvenience. Aggravations are a source for many problems we identify, prioritise, and solve.

In 2020, as we were managing through disruptions, the coronavirus pandemic hit us. It was the worst global aggravation since the Second World War. Many of us lost loved ones and saw our livelihoods sink. For us who managed enterprises through disruptions a year earlier, we once again had to adjust, adapt, & change.

Numerous problems followed the pandemic for three (3) years afterward. Some of those problems remained unresolved. Nations went to war. Prices went up. Trade swung up and down. Supply chain shortages & delivery delays festered. Labour was tight as people insisted on additional benefits such as higher wages and the option to work from home. Activists pressed for issues such as climate change and human rights.

With a changed world and with our insatiable demands & desires, we were running into aggravations more so than ever. We acknowledged the need to deal with aggravations, never mind the frequency & intensity of adversities that have come with progress.

Many people (e.g. politicians, so-called wannabe experts) offer quick-fix solutions to our aggravations. Many don’t work because we either didn’t identify the problem in the first place or formulate effective solutions. When we try to solve problems underlying aggravations, we prefer solutions to be fast and easy. And that can’t and won’t happen unless we set aside emotions, step back, and follow a rational problem-solving process.

Solving problems is best done via the following steps:

Gathering information
Identifying root causes
Establishing criteria to choose which root causes to address first
Identifying the problem from the chosen root causes
Laying out options as candidates for solutions
Evaluating the candidate solutions via our established criteria
Selecting the solution
Developing the solution as in formulating strategies, plans, & roadmaps
Designing the program or prototype
Experimenting by running a pilot program or building a prototype
Implementing the solution (‘going live’)

It’s a straightforward process though it may not offer an immediate resolution to aggravations. And that’s the lesson when it comes to dealing with aggravation: we shouldn’t let it rule us. Just as we are taught to keep calm in the face of calamity, so too must we be rational when we face aggravation. We may not avoid the anxiety and emotion, but we can still retain control as we deliberately work out our problems.

Aggravation is a reality for all of us, more so in the post-pandemic world of our 21^st century that is cluttered with so many global issues.

Aggravation stems from adversities and drives many of the problems we prioritise. But we shouldn’t let our aggravation determine how we solve our problems, if not even what to prioritise. We shouldn’t surrender control to whatever (or whoever) is aggravating us. Instead, we should solve our problems deliberately and rationally, through a tried-and-true problem-solving process.

About Ellery’s Essays

When Friends Become Customers

Several years ago, I approached an old classmate from high school who was in the construction business and asked him if he can quote me for a big project I was undertaking. He replied, “sorry, I’m too busy with other jobs.”

Recently, I asked a friend if she can quote me for some equipment she was selling and I was interested in. Her reply: “Will get back to you. Sorry been so busy.” No more contact since.

I found another contractor for my project, and I bought equipment from another supplier. In both cases, I ended up dealing with strangers.

Some years ago, I struck a conversation with a gentleman who happened to be waiting in line along with me at a bank. He was an insurance salesman but for a few months we didn’t discuss business but just had good conversations. We became good friends. I finally bought property insurance from him. My friend personally delivered the policies, assisted in the paperwork, and even made sure I paid the lowest premium price. In between the business dealings, we kept contact and had our usual friendly conversations.

It is said that friends don’t make good business partners because the conflicts and stress would eventually end any friendship. Does this apply to friends who just want to be customers?

It’s one thing to turn down a friend in business. It’s another when that friend wants to be a customer. Because when it comes down right to it, whether or not a customer is a friend, how we treat our customers reflects how we treat our business.

Friends can be customers and still remain friends if both parties just recognized the value of both friendship and customer service.

About Ellery’s Essays

A Primer on the Process of Order Creation & Fulfilment

The process of customer order creation and fulfilment is a core task of many enterprises.

An order creation & fulfilment process in a business-to-business (B2B) relationship typically consists of the following steps:

Propose: Enterprise via marketing & sales presents product or service (i.e. item) to customers.
Request: Customer expresses interest
Quote: Enterprise provides prices, terms, & availability
Order: Customer orders items
Validate: Enterprise sales accounting checks legitimacy of customer & order (e.g. credit line, completeness of data).
Enter: Enterprise sales accepts order & inputs it as a pending order
Allocate: Enterprise logistics reserves available items to pending order
Pick: Enterprise logistics physically picks items from inventory & stages them for shipment
Delivery: Enterprise logistics books & dispatches transport of items to customer
Post-Sales Services: Enterprise via sales & logistics acts on any customer feedback or complaint (e.g., customer returns items, enterprise replaces or fixes items covered by warranty)

Enterprises who sell directly to end-users, that is business-to-consumer (B2C, e.g., supermarkets, e-commerce, restaurants) typically have a simpler process:

Advertise: Enterprise displays items for sale (e.g. on shelf, on screen, menu)
Inquire: Customers ask about items (e.g. price, features, available variants)
Pick: Customers choose items (e.g. place in shopping cart)
Check-Out: Customers commits to buy (e.g. makes payment); enterprise confirms order & payment
Obtain: Enterprise delivers items; customer receives & accepts items
Post-Sales Services: Enterprise via sales & logistics acts on any customer feedback or complaint (e.g., customer returns items, enterprise replaces or fixes items covered by warranty)

Enterprises who offer services, such as what we see in the travel industry, would follow an order creation & fulfilment process like the following:

Advertise: Enterprise displays services for sale (e.g. flight schedules, hotel promotions)
Inquire: Customers ask about services (e.g. price, terms, available seats or rooms)
Book: Customers reserve for services (e.g., seats, rooms, tours, tickets)
Pay: Customers pay (depending on terms)
Register: Customers show up to obtain services (e.g., flight or hotel check-ins)
Experience: Enterprises provide services (e.g., in-flight amenities, transportation, lodging)
Post–Services: Enterprises refund or rebate services for complaints; enterprises reward clients or customers for patronage

The common thread for any order creation & fulfilment process in most enterprises is:

Inquire
Order
Allocate
Deliver
Pay
Post-Sales Services

In many of our enterprises, we share these steps among functions. Sales & Marketing, for instance, would handle inquiries, orders, & post-sales, while Operations would take care of allocation & delivery. Finance and Sales would handle payments & collections (which often cause confusion in who’s accountable).

The purpose of any order creation & fulfilment process is to support the enterprise’s objectives, such as:

Meet targeted sales or revenues
Attain competitive advantage
Expand market share
Build reputation & influence

An order creation & fulfilment process has three typical (3) tactical aims:

Entice customers to order
Deliver items completely and on-time
Pursue payments

We depend on several factors for an order creation & fulfilment process to succeed. Examples of such factors include:

Inventories (e.g., items on stock, available seats)
Assets (e.g., manufacturing capacities, available transport, storage/shelf space, uptime & speed of online portals)
Policies (e.g., terms, rules for order acceptance, credit lines, prerequisite qualifications, less-than-truckload [LTL] allowances, returns & exchanges, inventory policy)
Methods (e.g., do-it-yourself-checkouts at supermarkets, online ordering, payment options, salesperson calls & visits
People (e.g., organisational structure, competencies, head count)

We look to several models or tactics to enhance the order creation & fulfilment systems. Examples include:

Inventory Policies (e.g., minimum stock on-hand, economic order quantity [EOQ], ABC inventories)
Operations Planning (e.g., Enterprise Resource Planning [ERP], Just-In-Time)
Demand Forecasting (e.g., trending demand, seasonal factoring, bottoms-up sales forecasting)
Manufacturing & Logistics Models (e.g., multiple workstations, cellular manufacturing, job shops, hub & spoke networks)
Workplace Systems (e.g., job specialisation & rotation, incentives & quotas, work teams & quality circles).

Order creation & fulfilment is not a straightforward process, as some of us may think. For many enterprises, it is a complicated sequence of steps, in which its performance is dependent on factors such as what were mentioned above (available inventory, asset capabilities, policies, methods & systems in place, & organisational competencies).

We determine how our order creation & fulfilment processes perform. That is, we establish the policies, systems, & structures.

The process differs from one enterprise to the next, contingent on the type of product or service we market & sell, the strategy we lead, and the rules we set.

Some enterprise executives try to improve order creation & fulfilment via brute force, such as mandating criteria & standards everyone in the organisation must comply with. Examples:

Maximum Inventories (e.g,, total inventories must not exceed 30 days of sales)
Acceptable Service Level (e.g., order must be delivered complete in three [3] days)
Sales Targets (e.g., monthly shipment volume goal)

Most mandates fail because they’re frequently done without any assessment or change in existing structures or systems. Items run out (or wrong items are stocked), deliveries are rushed without regard to quality of service, and people get stressed & burned out. Like a rubber band, the systems underlying the process reverts back to its past state. Executives & customers fret.

Order creation & fulfilment is a process that underlie the two (2) basic tasks of our enterprises:

Create demand
Fulfil it

It is a good starting point to study for improvements in our supply chains.

About Ellery’s Essays

What Problems Will AI Solve?

The debut of artificial intelligence (AI) applications like ChatGPT in late 2022 ignited viral media firestorms around the world. AI is no longer science fiction. It is here. It has arrived. It is on our fingertips, demonstrating its power and ready for our use.

With AI apps like ChatGPT, we can use our devices (i.e., smartphones, desktop computers, tablets) to draft our emails, chat online fluently in multiple languages, and write programming code. Sooner or later, if not already, AI could help us write books, compose songs, experiment with new chemical formulae, draw up architectural plans, design new fashion attire, book our travel itineraries, drive our cars, and interview applicants for employment. The potentials for AI are endless and needless to say, it’s making us either very excited or very uneasy about the future of our careers and our cultures.

For those of us who are operations professionals, the opportunity for AI is not far-fetched but huge. We will soon, if not already, be able to use AI to drive our supply chains. AI could capably automate supply chain functions from purchasing, inventory control, production planning, to logistics.

We might in our lifetimes see AI-driven supply chains supported by automated facilities & autonomous vehicles. Merchandise would flow with minimal, if not without, human intervention through robot-equipped factories. AI software would input sales orders, generate pick lists, plan routes, and dispatch self-driving trucks & drones to deliver products to customers. AI could also supplement Enterprise Resource Planning/Materials Resource Planning (MRP) software to formulate purchasing & production plans which would automatically trigger procurement orders & manufacturing schedules.

And while AI drives the supply chains, we who may still be called supply chain managers would monitor & remotely oversee operations online from our offices & homes. Interventions would be limited to equipment maintenance, database & software updates, and once-in-a-while management overrides.

AI might at some point in the future lead to the death of supply chain management. AI could displace the purchasers, planners, and supervisors of supply chain operations and take away the need to employ supply chain staff. The chief supply chain officer (CSCO) role would be a short-lived career which an AI program could render obsolete.

What are the reasons we would embrace AI into our enterprises and supply chains?

Would be it’s because AI is a new technology everyone is getting into and we should too?
Are we afraid our competitors would have AI and we won’t?
Do we fear we would lack the talent and skills in adopting AI such that we become outcasts?

In 1981, IBM introduced the desktop personal computer (PC). It wasn’t new. Apple and other companies had already introduced their personal computers. Because IBM did not fully patent the PC model, however, other manufacturers made available ‘PC compatibles,’ which came with cheaper prices and wide distribution. By the end of the 1980’s, most households & businesses had personal computers on their tables.

We were both excited and uneasy when desktop computers were rapidly coming into the market. We were asking ourselves:

Did we need them?
What happens if we didn’t buy one?
How would it impact our jobs?
Would desktop PCs be harmful to our children?
Would we be left behind if we didn’t have one?

By the 1990’s, desktop computers were ubiquitous appliances like television sets, fax machines, microwave ovens, & refrigerators. If we didn’t have PCs and use word processors, spreadsheet programs, and dot-matrix printers, we’d not be keeping up with everyone else:

We wouldn’t be able to provide or print word processing or spreadsheet files corporations or government entities would be requiring
We wouldn’t be able to quickly prepare presentations in formats our bosses or customers would be expecting

The popularity of personal computers overrode any fears or anxieties. Not having a personal computer (or in the 21^st century, a personal computing device like a smartphone, tablet, or laptop) is out of the question. We would hardly be able to live or work without it. Personal computing devices are no longer luxuries but are needs.

We could argue the same kind of thinking about artificial intelligence. It’s a new technology we should seriously consider adopting, at least, be updated with. If everyone is on the verge of using it, we should be ready too, at least to learn the basics of it. Because if we don’t, we risk falling into the same trap of being left behind.

That doesn’t stop us, however, from asking similar questions we had about personal computers:

Do we need AI?
What happens if we don’t buy the AI hardware & software?
How would AI impact our jobs?
Would AI be harmful to our children?
Would we be left behind if we didn’t have AI?

There’s a chance AI will be become ubiquitous via the apps in our devices and via the transactions we make in the future. So much so that AI’s potentially universal coverage may override what fears & anxieties we may have, just as the flood of PCs did in the 1980’s.

Nevertheless, it pays to evaluate whatever new technology we are considering adopting.

We didn’t, after all, just buy any PC in the 1980’s. We determined what we would need a PC for. Then, we compared models to look for the one that would best. satisfy our needs. We checked the estimated lifetimes of different models. We studied how powerful the PC’s microprocessor should be, how much storage space we should get, and what peripherals (e.g., mouse, keyboard, stylus) will the device accommodate. We weighed what software to buy and the technical support the manufacturer will provide. And finally, we decided how much we were willing to pay versus the perceived value we’d be getting from the PC we want.

AI requires information technology (IT) hardware & software. If we are to adopt it into our enterprises and supply chains, we’d need to determine where it will be applied and what it would cover in terms of scope. In short, we’d use a similar line of questioning as we used when we bought PCs in the 1980s.

Where would we want to apply AI? What AI programs would we like to have? What hardware would we need? How compatible would the hardware be with our current devices? What are our options for software? What would be the estimated lifetimes of the hardware & software? How much would it cost?

Some of us learned the hard way when we bought personal computers just for the sake of having them on our desks. Some ended up idle, to be later disposed of or sold. Some we realised we couldn’t work with, because we didn’t have the right software or hardware—e.g., not enough hard disk memory, the wrong spreadsheet program. We ended up realising that some of the PCs we bought weren’t suitable for the tasks they were intended to support.

We could end up spending so much time and money investing in AI to also realise we didn’t get the right hardware & software suitable for our needs.

In short, we might not match the AI we get for the tasks we want it to handle. We didn’t answer critical questions. We didn’t solve the problems we wanted AI to solve.

We, therefore, should not only ask ‘how do we embrace AI into our enterprises and supply chains?’ but instead, seek answers to ‘what problems will AI solve?’

The fast-pace changes in information technology drive us to adopt new hardware & software such that we could benefit from new and modern innovations while we keep up with our rivals, if not with the times.

We may be excited or anxious about AI, given its revolutionary potential to upend (if not eliminate) how we manage our supply chains. But as much as we examine where we can apply it in our operations, we would still need to evaluate it as we do when we buy new devices or software. That means we need to know what opportunities AI can exploit and what problems it would solve.

AI is here, but we determine its destiny.

About Ellery’s Essays

The Science Behind Management & Why We Need Engineering

In March of 1911, Frederick Winslow Taylor’s The Principles of Scientific Management debuted to the public. It was the height of the Industrial Revolution in the United States of America. Corporations were mass producing items and many Americans were employed in factories. Mr. Taylor’s Principles couldn’t have come at a better time as when it did, it revolutionised the ways of management.

The Principles of Scientific Management argued for the necessity of efficiency in the workplace. Without efficiency, there would be no prosperity. Employees, especially those in factories, had to be productive if enterprises were to be prosperous. Taylor defined prosperity, or more fully “maximum prosperity,” as not only “large dividends” but “the development of every branch of the business to its highest state of excellence, so that the prosperity may be permanent.” A business is prosperous when the workers are productive.

With that in mind, Taylor proceeded with the four (4) elements which comprised the Principles of Scientific Management:

“…develop a science for each element of a man’s work, which replaces the old rule -of thumb method;
“…scientifically select and then train, teach, and develop the workman;
“…heartily cooperate with the men so as to insure all of the work being done in accordance with the principles of the science which has been developed;
“There is an almost equal division of the work and the responsibility between the management and the workmen.”

The Principles of Scientific Management stressed objectivity in job performance and in how we hire & train people but encouraged cooperation & recognition between managers & workers using science as a common ground.

Although Taylor encountered criticism for giving the impression that workers were nothing more than machines meant to be tinkered & optimised, industries adopted his Principles and drove a cultural shift in how we manage our organisations. As a result, over the next hundred years, we became more efficient and more productive.

We have evolved from the Principles. We no longer use the term “scientific management,” but we rationalise our management methods with terms like “evidence management,” “big data,” “statistics,” and “data analytics.” We apply “automation,” “lean thinking,” and in the 1^st quarter of the 21st century, we have become enthralled with “Industry 4.0,” and “artificial intelligence.” If we think about it, all these terms, phrases, & buzzwords directly or indirectly emanate from Taylor’s Principles of Scientific Management. Whether we like it or not, we are purveyors of what Taylor promoted for the progress of productivity.

The Principles of Scientific Management spawned Industrial Engineering and Operations Management. Industrial Engineers defined themselves as designers, developers, & builders of manufacturing systems & operations structures with the purpose of optimising productivity of workers together with their equipment. Operations Management, on the other hand, rose as “the administration of business practices to create the highest level of efficiency possible within an organization. It is concerned with converting materials and labour into goods and services as efficiently as possible to maximize the profit of an organization.” Industrial Engineers stressed they are engineers while Operations Managers emphasised their roles as administrators of the activities essential to the value of their organisations’ products & services.

But as IEs and OMs debate about their identities, those of us who are business leaders see both as change agents for improvement. At work, we don’t split the difference between the two. We only care that IEs & OMs optimise our operations as well as continually improve them.

But the time has arrived that we should perhaps make the distinction between what is management and what is engineering.

In 2023, the world was emerging from a global pandemic, the worst global disruption since the Second World War. Supply chain management had suddenly become popular thanks to product shortages & service failures in which the pandemic impacted the flow of merchandise from sources to end-users. Business leaders recognised supply chain management as a strategic pillar alongside marketing, finance, and people. The supply chain had become a high-profile priority of organisations.

We catapulted the supply chain to the top of our enterprise agenda because we could no longer relegate it to middle-level operations management. We realised that supply chain management is not only about multi-operation integration & multi-enterprise collaboration but also about strategic interdependent interaction with functions such as marketing, finance, and human resources.

Supply Chain Management is rooted in Operations Management. It is a discipline that concerns itself with the operations that underlie the relationships that run between vendors, operators, quality control inspectors, logisticians, transporters, service providers, labourers, & customers.

Industrial Engineers, however, also do a lot of work with supply chains. Supply chains are obvious parts of the IE’s scope in the improvement of productivity. Despite whatever perception that Industrial Engineering leans toward management, IEs are engineers who focus on improvements in systems & structures, like those that underlie supply chains.

Frederick Taylor was a mechanical engineer. He saw a need to improve workplace efficiency and applied his engineering background to do so. The big challenge was to somehow standardise the work of human beings, given that we as individuals each have different physical make-ups.

But he attempted anyway, and it resulted in workplace standards that were applied first to factories and then to other areas of industry, such as warehouses, hospitals, and transportation. His pioneering work in establishing standards in time & motion efficiencies led to his publishing of the Principles of Scientific Management, and the birth of Industrial Engineering.

I’ve heard critics say, however, that there is too much subjectivity in Industrial Engineering. IE seems more based on empirical mathematics, in which IE seems to be more reliant on experience than on proven scientific theory. Industrial Engineering methods also are seen as more art than science, less objective than what we would be in other engineering disciplines.

Hence, some people say IE is not engineering. It’s management that combines with engineering. It doesn’t help that some universities offer IE with course titles such as “Industrial & Management Engineering,” or just “Management Engineering.”

In my mind, Management Engineering, Engineering Management, Industrial & Management Engineering are oxymorons. An oxymoron is “a rhetorical figure in which incongruous or contradictory terms are combined.” To put it simply, engineering is not management, and management is not engineering. Putting together both as one term is a futile and silly attempt to mix one with the other. Each are different from one another as apples are from oranges.

Inspired from Taylor’s Principles of Scientific Management, Industrial Engineers started out as efficiency experts targeting workers to be more productive with their time. IE, over the years, diverged from the basics of time & motion to expand to areas such as ergonomics, statistical quality control, facilities planning, and queuing theory. As much as they influence management, IE is a field that isn’t management. It is engineering that designs, develops, & installs systems & structures with the purpose of improving productivity, never mind if the math IEs use are more empirical than theoretical.

Supply Chain Engineering stems from IE. It expands from improvement of the individual workers’ relationships with their workplaces to groups of workers’ relationships within & between operations. It derives from the applications of IE in which it focuses more on the optimal flow of merchandise & services from their sources to their ends.

Whereas IEs are challenged to standardise solutions for individual humans in their workplaces, Supply Chain Engineers are challenged to standardise solutions for individual group operations and their links to others.

The mathematics of SCE is therefore just as daunting, if not more, than it is for IE. For as much as IEs work to optimise the productivities of individuals, SCEs attempt to optimise the productivities of supply chain operations.

Many supply chains in the present day are inefficient and offer plenty of room for productivity improvement. We can see these deficiencies or imbalances everywhere. Port facilities are either too slow, too overloaded, or are frequently underutilised. Transportation, whether land, sea, or air, often experience constant uncertainties in lead times. Storage facilities either have too much stock or are lacking in stock. Factories either have too much excess manufacturing capacity or don’t have enough to keep up with demand.

We can no longer expect supply chain managers, as operations managers, to improve our organisations’ systems & structures on top of ensuring the continuous flow of merchandise & services. We as supply chain managers can’t pursue needed changes by ourselves.

Engineering is not management, and we can’t do both as supply chain managers. Frederick Taylor promoted science into how we manage our enterprises. And more than a hundred years later, we face challenges to apply science in the continuous improvement of our supply chains. To do that, we must partner with engineers to help us make those productive changes. Engineers have the education and expertise to help us make that happen.

We must realise that we can no longer manage supply chains to make them better.

We need to engineer them.

About Ellery’s Essays