Ellery's Essays

‘Who You Gonna Call?’

There is no such thing as ghosts.

But there is such a thing as unexpected problems.

And when unexpected problems do arise, whom do you call to solve them?

The 1984 hit film, Ghostbusters had the hilarious premise of ghosts haunting New York City. But it also was about wacky scientists inventing devices to capture the ghosts. New York residents hailed the scientists as the go-to group to get rid of pesky ghosts, hence the theme song, ‘Who you gonna call?’

Whether ghosts exist or not is a debatable topic. But unanticipated problems are a certainty.

You often know whom to call for many problems, like the police for crime, the fire department for burning buildings, and lawyers for legal issues.

But whom do you call for problems you’ve not experienced too often or had never happened before?

The answer isn’t about finding whom to call, but about identifying and solving the problem. In Ghostbusters, people praised the scientists for figuring out how to fight supernatural beings. The clamour to call the scientists for their ghost-busting services came after they successfully solved a problem no one anticipated and didn’t know what to do about.

Find Ellery

All in the Mind

My dad would tell us that any difficulty was “all in the mind.”

When I and my siblings were kids and we found anything hard, he’d tell us it was “all in the mind.”

It could be whenever we’re sick, we’re stuck in homework, or we’re just not feeling like eating or drinking. He’d just say it was “all in the mind.”

That’s all he would say, and he would just walk away with a deadpan face. We’d just stare but eventually we’d hurdle whatever hardship was preoccupying us.

Once, when my dad, I, and my siblings were much older, we went on a trip abroad. While sightseeing at a tourist spot, my dad said he couldn’t walk another step and had to find a place to sit. That’s when we pounced and told him, “it’s all in the mind.”

He didn’t stop laughing.

My dad left a long time ago. But I tell myself whenever I feel reluctant to do something important, it must be all in my mind.

Find Ellery

The Four Types of Supply Chain Relationships

How do you want your supply chain relationships to be like?

Supply chain relationships consist of the connections between enterprises such as those between enterprises and their vendors, service providers, and customers. They also include the interactions between internal operating groups within enterprises, such as purchasing, inbound & outbound logistics, manufacturing, and planning.

There are four types of supply chain relationships:

In Lose-Win, the other party benefits; the enterprise doesn’t. The ‘partner’ gets the better deal; the enterprise does not. The enterprise’s leadership adopts a defeatist mindset while its ‘partners’ dictate the conduct of the relationships. The enterprise finds it futile to wrangle for better terms. An example is when a larger multinational retailer lays down a take-it-or-leave-it approach to competing small businesses. The ‘winning’ small business firm adheres to the multinational’s terms & conditions even if the firm finds them unfavourable.

In Lose-Lose, the enterprise and its partners resign to a relationship that they see as necessary but hold no hope for benefits. An example is a courier service who loses money from shipping packages to a client’s customers who are in faraway rural places. The courier service shoulders high transport costs it cannot pass to its client because of government-regulated restrictions. Meanwhile, the firm’s order-to-delivery performance is below par because the courier firm will not give priority to transporting the firm’s products. Both parties incur losses as they pray their business environments would change someday.

In Win-Lose, the enterprise sees benefits only coming by having things done its way and not favourably for its partners. Winning can only come when the other side loses, much like in games of sports. Concessions from partners is the goal. An example is when a large fast-food corporation demanded a winner-take-all approach to its chicken suppliers. The fast-food executives insisted chicken suppliers allocate all their supply to the fast-food’s commissaries as well as preferential pricing which would be lower than the rates sold to competitors.

The ideal of any relationship is Win-Win, where the enterprise and its partners benefit from each other’s businesses. A tangible proof of a win-win relationship is a mutually beneficial contract, such as that between a service provider and a client. Exclusive dealerships, distributorships, and 3^rd party outsourcing services are where we can find potential win-win relationships. Apple corporation’s long-time partnership with Taiwanese firm Foxconn is a close example of a win-win relationship.

Aiming for Win-Win relationships is the principle behind building supply chains. Whatever structures & systems the enterprise and its partners set up must support a Win-Win ideal.

Supply chains are not meant to have one or more losers among their relationships. A losing partner in a supply chain relationship will inevitably lead to losses in productivity and to higher risks.

The small business awarded a Lose-Win contract from a multinational retailer was reluctant to invest for further growth. It decided to seek other avenues to grow. The small business offered to distribute for other suppliers even if it violated its contract with the multinational. The multinational fired the small business but by then, it already had established more favourable agreements with other suppliers.

The transport firm & its client stuck in a Lose-Lose relationship decided to go their separate ways. The client firm discovered it could save costs by buying its own trucks to deliver products to customers in distant rural areas. The transport firm, meanwhile, refused to adapt its transportation to changing infrastructure; it eventually lost market share to upstart companies.

The fast-food corporation in the Win-Lose scenario was caught off-guard when its suppliers one day could not deliver needed quantities of chicken to its restaurant branches. Shortages ensued. The fast-food firm’s market share dropped as it suffered a public relations nightmare due to out-of-stock of its flagship chicken product. The fast-food firm was forced to shut down branches to wait for supply to catch up and was compelled to renegotiate its contracts with suppliers.

Apple’s Win-Win relationship with Foxconn is not perfect. Both had faced issues such as labour conditions and spikes in trade tariffs. Yet, both continued to collaborate in manufacturing & delivering new products of high quality to their global customers. Both had over their years of working together built a system & structure which strengthened their product supply chain. And both continue to find ways to improve.

It is in continual improvement where we justify the Win-Win relationship for enterprises in the supply chain. Relationships between individual enterprises enable the flow of merchandise. In a scenario where there’s at least one loser, productivity suffers and everyone loses.

In supply chains, relationships matter. When everyone wins, everyone benefits.

Find Ellery

The First Step is Always the Hardest

https://www.123rf.com/photo_36332326_cartoon-of-two-business-people-standing-on-cliff-and-looking-across-to-next-cliff-there-is-a-small.html

“The journey of a thousand miles begins with a single step.” In building a supply chain, that single first step can be a doozy.

When we construct a home or facility, the first thing we think we of doing is plan. Seek a site. Draft a layout. Determine our budget. Schedule the construction.

But that is not really the first step. We consult real estate agents to find the best place to build. We engage architects to draft the designs. We talk to accountants to budget funds. And we hire contractors for construction. In short, we establish relationships before we build.

The same very much applies for building supply chains.

Before we build supply chains, let alone improve them, we’d need to first acknowledge the relationships that underlie them. These include whom we buy from (vendors, service providers), whom we sell to (customers, clients, consumers), and the functions & departments within our own enterprises (e.g., manufacturing, logistics, purchasing, planning, sales, finance, marketing engineering, quality assurance, human resources).

The contracts we sign with our vendors, the orders we accept from our customers, and the standards & policies we conform together with our enterprise counterparts form the bases of the operating structures & systems of our supply chains.

Because supply chains are multi-tiered, our relationships include not only whom we buy from or sell to directly but also those who our vendors buy from and who our customers trade with. We connect with all individuals & enterprises from where merchandise & services originate, to where they are converted or transformed, to who conveys or transports them, and to who are the final end-users or consumers. Ideally, this includes all parties all along the supply chain, whether big or small, near or far, and within or beyond the borders of our enterprises.

Connecting with our relationships is the first step in building supply chains. We assess our links, recognise the strong & weak ones, and renew our ties, if not make new ones.

It’s not going to be easy. It’s going to be a doozy. But how we connect with our relationships will define our supply chain’s fate.

Find Ellery

The Changing & Un-Changing Supply Chain

Since Keith Oliver and a Mr. Van ’t Hoff coined the phrase in the 1980s, supply chain management has evolved from an obscure middle-management responsibility to a high-echelon business priority. Supply chains had become hot topics in executive suites and business school lecture halls. At the same time, operations managers face endless enigmatic problems as external factors from natural disasters to geopolitical events rock global trade.

Supply chains are far more different from what they were in the 1980s but at the same time, they’re not, in some respects.

What did change?

Supply chains have advanced technologically.

Thanks largely to pioneers like Amazon, consumers order many products via e-commerce portals. Warehouse management systems (WMS), artificially intelligent (AI) algorithms & robots assist logistics workers in allocating, picking, loading, and dispatching deliveries.

Supersize containerships, self-driving vehicles, drones, and longer-range energy-efficient aircraft are propelling the transportation of merchandise not only faster and farther but also at greater volumes.

Artificial intelligence (AI) is also enabling enterprises to upgrade not only the automation of their factories but also of their offices. Executives had been aspiring to apply AI in the planning and execution of all supply chain operations.

What didn’t change?

Supply chains are global, but they always have been since civilisations began buying and selling from one another. The ancient Silk Road connected Asian merchants with Europe. Europeans, in turn from the medieval ages, shipped goods by sea to and from the American New World and the Far East. American railroads, at the onset of the 19^th century Industrial Revolution, transported products & people from the Atlantic coast to the Pacific. In the 20^th century, nations trade globally via the Internet and elaborate transportation networks.

Supply chains had been predominantly dependent on contracts which organisations haggle and hammer out with vendors & customers. At the same time, nation-state governments had taxed & regulated supply chain operations, such as manufacturing and export & import activities.

Executives also had tended to limit supply chain management to operations which they have direct influence over. Even before supply chain management became a buzz-phrase, enterprises already were forecasting demand, processing orders, controlling inventories, planning production & capacities, inspecting & assuring quality, reducing expenses, spending for fixed assets, supporting new product initiatives, and measuring performances.

A good number of business owners, however, continue to treat supply chains as nothing more than logistics or transportation. Manufacturing and purchasing functions have remained outside of supply chain managers’ scopes in many firms.

Worse, some managers have blamed supply chain management for undelivered pending sales orders, product stock shortfalls, customer complaints, runaway costs, and high working capital.

What also hasn’t changed was the perception that computerisation and automation are the best solutions for supply chains. Much of what have been talked about in supply chain social media sites and business articles are how much hope executives, academics, bloggers, and consultants have been putting in on state-of-the-art artificially intelligent (AI) driven information technologies (IT) to drive supply chains to the next level, whatever that would be.

And finally, what has also not changed since Keith Oliver’s time is that supply chains could only be improved via management. Supply chain management is operations management, one of four basic branches of business administration which included sales & marketing, finance, and people. Supply chains are components of the business of operations.

Executives had thought they could improve supply chains via management, they saw themselves as ready experts as per their business acumens. They saw themselves as more than qualified what with their education from business schools and/or from their hands-on experience in their respective industries. Executives had been confident they could manage supply chains via the basic management principles of planning, organising, directing, and controlling.

Managers have gauged supply chains based on assessed capabilities. Hence, to improve supply chains, executives simply needed to hike capabilities. The obvious options would be in tactics such as increasing production capacities, adding more logistics assets such as storage space & handling equipment, and hiring more people.

Managers also leaned toward information technologies to drive supply chain improvements. Executives just needed to invest in IT hardware & software to automate processes and streamline the flow of data & merchandise. Never mind that almost one out of two enterprises have not succeeded in implementing new IT into their business.

Also hardly changed was the bias of executives towards the other branches of business administration, namely sales & marketing, finance, & people (organisational development). Many executives tended to delegate supply chain management to subordinates because they either had no professional experience, or they just didn’t see it as an avenue for personal career development. Supply chain management was a slow-growth career path. Much attention to supply chains in many firms stemmed from crises, such as when materials don’t arrive or customers complained about unserved orders, late deliveries, or off-quality goods. Many executives did not see supply chain management as an equal to strategic planning.

Supply chains had, therefore, gotten stuck. Executives stubbornly held on to the belief that supply chains were no more than internal operations which they by themselves could handle. New attractive technologies like AI & robotics, were the easy answers for improvements; all that was required was capital investment.

If we want to improve supply chains, we’d need to change how we perceive them:

Supply chains are not limited to the internal operations of an enterprise; they encompass activities that add value to merchandise & services from the point of their creation to their final usage or consumption.
Supply chains consist of relationships in which their effectiveness & efficiencies rest on the maturities of the partnerships forged between parties.
Structures & systems underlie the operations of supply chains, and they are where we should focus any improvement, not only in their capabilities, but also in their achievements to meet the strategic priorities of organisations.

It would be quite a tall order for executives to veer from the mindset of meeting their enterprises’ individual priorities to that of nurturing supply chain win-win relationships and building structures & systems beyond the boundaries of their internal operations.

This is not something entirely new. Past civilisations had recognised the need to work with partners such as vendors & customers. Merchants, craftsmen, and shipping owners had always been active in improving methods and workplaces.

What’s different is that we should take in a more holistic approach in dealing with our supply chains. As much as we may continue focusing on minute tasks, we should also be approach supply chains as relationships working together in unison. We should define how every link should perform and how every connection should work together.

It is from there, we can build the supply chains we want, regardless of how different they may be from the ones of today.

Find Ellery

What’s the Big Deal About 300?

People celebrate milestones; I’m no exception.

Birthdays, anniversaries, victories. We celebrate sentimental times and achievements.

Sometimes, we play down some these things because whatever we’re celebrating doesn’t stand up to what others had done or had been awarded with. We compare notes; we look small; we decide not to make a big deal.

I once did a barbell squat of 197 lbs, but so what? Others had squatted way more.

The business I manage just churned an after-tax profit of USD$ 80,000, but what is that compared to the millions of dollars many other firms make?

This is my 300^th essay. Many other writers had done more. There are more famous authors who wrote scores of books. So, what’s the big deal?

Essays are passé to most people, especially in the 21^st century age of overly abundant information and short attention spans. Essays compete but are essentially no match to streaming videos, blog posts, and artificially-intelligent-enabled data-bots. Who would want to read an essay for five (5) minutes when an AI program can provide the same insightful information in five seconds?

Still, I’m amazed I wrote 300 essays.

Fine, some were quite short as in less than a hundred words. I will not apologise for it. I learned that essays need not require so many words to make a point. My late high school professor, Rev. Fr. Daniel Clifford, SJ (†) would disagree, as well as other traditional academic writing instructors who believe that essays need to be content-rich to be worthy. But I couldn’t agree more with the less-than-a-hundred words philosophy of Grant Faulkner & Lynn Mundell.

In our fast-paced world, making a point matters, especially one that will influence readers.

That remains my goal, never mind it remains elusive. (I don’t get many hits or likes ☹).

It can be quite heartbreaking to see other bloggers become viral, receive accolades, and multiply their followers as soon as they debut on social media.

Obvious advice would be for me to give up. Or change my strategy such as shifting to more attractive topics or seeking artificially intelligent (AI) assistance. Or find a famous sponsor who would plug me in with positive reviews.

But I’m not giving up.

Worse, I’m even going to try* to write a book.

For the meantime, I bask in the humble achievement of writing 300 essays and hope it brings some wind on my back as I begin an ambitious undertaking.

*Given the seemingly insurmountable difficulties to book-writing, I emphasise the word “try.”

Find Ellery

Why the Yellow Line?

The yellow median on the street means traffic is two-way. When it’s white, traffic is one-way. It’s one of many standards written in land transportation manuals and taught in driving schools.

In Philippine roads, however, white or yellow lines divide two-way highways. Motorists just know the lines divide the roads; it’s up to you to figure out if traffic is one-way or two-way.

Many drivers don’t know or don’t care about medians, signs, or traffic lights. “STOP” is a suggestion. “YIELD” is whatever. A red light may mean green; green means no need to brake.

No wonder driving is dangerous in the Philippines.

About Ellery’s Essays

Beware the Fine Print

My sisters and I ate lunch at our favourite Japanese restaurant.

When we got the bill, I presented my credit card and mentioned to the server we like to avail of the 50% discount the card-issuing-bank and the restaurant were advertising.

“Sorry, sir, but you do not qualify for the discount,” the server replied. “Only customers who reserved in advance qualify for the 50% off.”

The ad did say so…in the fine print.

I paid the bill but presented my and sister’s senior citizen cards which qualified us for a 20% discount.

It’s a lesson I always forget: read the fine print.

About Ellery’s Essays

A Reason to be Grateful

A 77-year-old family friend was angry with God.

He was born with only one (1) kidney, has congenital heart disease, and was hospitalised due to trouble breathing. He was angry at God for the sufferings his illnesses caused.

We told our friend:

“Should you not be grateful that you have lived 77 years despite your illnesses? That you have done well in business and have a happy marriage with successful children?”

Our friend didn’t respond but we think he got the message.

Do you, too?

About Ellery’s Essays