by Fronetics | Mar 23, 2017 | Big Data, Blog, Current Events, Data/Analytics, Internet of Things, Logistics, Manufacturing & Distribution, Strategy, Supply Chain, Talent, Warehousing & Materials Handling
Our series by MBA students and graduates at Peter T. Paul College of Business and Economics highlights some of the most pressing issues in supply chain management today.
A few years ago, the Wall Street Journal called supply chain management the “hot new MBA.” Many universities have been introducing related degree programs, majors, and concentrations in response to a growing demand for new hires with supply chain expertise. Graduates of these programs are heavily recruited by employers, which is helping to attract ambitious, young talent to the industry.
Fronetics had the opportunity to collaborate with some of these rising stars by inviting MBA students from the University of New Hampshire Peter T. Paul College of Business and Economics to author guest posts on our blog. They covered a variety of pertinent topics, from the Internet of Things and Big Data to pet food and Chipotle. Their pieces are summarized below.
In the coming weeks, we’ll be partnering with another MBA class at UNH to author a second series of posts covering some of the most pressing issues in supply chain management today. Make sure you receive our blog e-newsletter (sign up to the right) or follow us on social media so that you don’t miss out.
Steve Mondazzi writes about how the Internet of Things is now being used to improve factory workflow, increase material tracking, and optimize distribution to maximize revenues. Everything from turning lights on and off to security systems can be controlled from your smartphone, and that technology is moving to the manufacturing industry. Mondazzi examines Mark Morely’s theory that the IoT will impact the industry in three main ways: pervasive visibility, proactive replenishment, and predictive maintenance. He also explores hurdles to implementation — such middleware and a common protocol for businesses regarding IoT. Read article
Mikayla Cadoret focuses on the barriers to entry in the pet food industry. New brands have three options: manufacture product themselves, choose a co-packer who uses a private label, or choose a co-packer who will manufacture the food to the specifications of the brand. She discusses the challenges of those choices as well as high-profiles recalls resulting from co-packer error. She recommends strategies that companies implement to keep tabs on co-packers’ sourcing and manufacturing. Read article
Nicole Brooks explores Amazon’s mission to be earth’s most consumer-centric company. The e-commerce giant not only offers low prices, it also exceeds consumer expectations and shifts industry standards with benefits like same-day shipping. Brooks examines Amazon’s biggest technological assets, and looks forward to up-and-coming innovations like Kiva robots in warehouses, drones, Prime Air, and Amazon Business. Read article
Corey Ducharme discusses the traditional four-step problem-solving method and how it isn’t effective in solving needle-in-a-haystack issues resulting from limited business resources. Six sigma can address these issue with its six-step process. With the addition of an analysis phase, solutions become more effective, leading to better results and higher revenue for businesses. Read article
David Chadwick explores whether advances in radio-frequency-identification technology (RFID) will render humans obsolete in the supply chain. RFID could dramatically improve efficiency and accuracy in warehouses by reducing the need for human interaction. But it is uncertain to what degree this technology will be implemented in all aspects of supply chain management. Read article
Dario Cavegn discusses how increasing size and complexity of global supply chains open them up to increased risk. Supply chain disruptions can vary from insignificant to extremely threatening. But regardless of disruption size, supply chains can remain resilient with a business continuity plan, which acts as a road map to continue operations during or after a disruption. Cavegn outlines the development process from analysis to feedback. Read article
Josh Hutchins explores the limitations of big data. The real value lies in the analytics applied to the data. As an example, Solid Gold Bomb drove its prospering t-shirt business into the ground from an oversight and misapplication of data. Hutchins concludes that companies must have an intimate understanding of big data applications to avoid a similar fate. Read article
Michael Hickey discusses third-party logistics providers as a resource for a company’s operations arm. 3PLs offer an outsourcing opportunity for order fulfillment, inventory and warehouse management, as well as transportation of finished goods. But businesses should ask themselves these questions when determining whether a 3PL is a good fit for their needs. Read article
Sarah Hebert discusses Chipotle’s high-profile pork-supplier conundrum. The chain cut their pork supply by a third due to a supplier’s violation of their animal welfare standards. While this affected sales by 7-8%, Chipotle embraced the situation as a strategic PR opportunity. But behind the scenes, the company was scrambling to address long-term supply concerns associated with its rapid growth. Hebert asks, “At what point do you scale back the growth for the sake of maintaining brand integrity?” Read article
Connor Harrison discusses GM’s recall of 2.6 million vehicles. The company’s faulty ignition switches were linked to 13 deaths and 31 front-end collisions, but the company managed to contain the crisis. Harrison examines the root causes of the issue, including faulty ignition switches from GM’s supplier Delphi, a strained business relationship, and legal complications. Read article
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by Jennifer Hart Yim | Feb 27, 2017 | Blog, Supply Chain, Talent
Argentus Supply Chain Recruiting answers the question about what supply chain companies are looking for in new hires in terms of education.
This guest post comes to us from Argentus Supply Chain Recruiting, a boutique recruitment firm specializing in Supply Chain Management and Procurement.
This is the first installment of a new Argentus feature where we answer career questions. We’re starting this feature to help put our years of recruitment experience to good use, whether your questions are specific to our recruiting specialty of Procurement and Supply Chain or more general. You can find more questions and answers on our blog.
Drum-roll please for our first question:
Hello,
What value do you see in getting a Master’s Degree in Business/Supply Chain vs. some of the designations out there? (APICS, SCMA, etc.)?
Thanks, Vince C.
Thanks for the question, Vince. First of all, we aren’t experts in the curricula of both of these types of programs. Every university program is different, just as every professional designation is different. So we can’t speak to the specifics of various programs. However, we can speak to what companies are looking for in hiring, and how graduating from these programs builds your personal brand. We talk to lots of people in the field.
The short of it is that both an MBA and a Supply Chain designation such as APICS or SCMA can be a boon to your career, but your mileage may vary. It’s fairly common that a client looking to hire has designations as a requirement. It’s less common that they’ll ask for a particular designation (i.e. SCMA), although it’s certainly happened before. Companies are often looking to see that candidates are invested in their continued career development and education. A designation is a good way to establish that, and to pick up some valuable skills in the process.
It’s worth mentioning at this point that a designation is also often valuable for newcomers to North America who might have overseas Supply Chain Management experience, but haven’t yet secured that all-important first U.S./Canadian role in the field. A designation can be a great way to learn about local Supply Chain practices and increase your initial marketability while searching for that first role. While this option isn’t financially feasible for all newcomers, we’ve heard of candidates using it successfully in the past. A designation can provide networking opportunities, make you more marketable, and boost your income.
So is a designation the right move for your career?
One thing to keep in mind is that roles we get that “require” designations are typically at the sole contributor level — meaning below the “manager” level. Sole contributor roles can pay anywhere from 50k to 130k, so it’s not necessarily a roadblock, but it’s less common that leadership roles require designations. And while many designations offer strategic components to their curricula, we’ve had feedback from certain executives that a lot of the education offered is more transactional in nature — and that can be a limitation. For example, learning how to fill out a purchase order might make you a more immediately employable Procurement clerk at the junior end, but when looking for future leaders, executives want to hire people who have a holistic understanding of business strategy. Why are you filling out that purchase order? What’s the impact on the business? Should we be purchasing from someone else? Can we streamline our purchasing process? Should we be purchasing this at all?
The key to progressing into leadership is an understanding of strategy — so if that’s your goal, assess designations based on their strategic content.
Which brings us to MBAs — the coveted Master’s of Business Administration. It’s becoming more common for hiring managers to require Bachelor’s degrees, but it’s rare that they require an MBA. It’s also pretty new to have Supply Chain as an MBA specialization in the first place, and some people have used them to good effect to boost their careers.
The perception is that an MBA is going to be strategic. That they’re polished. That they have enhanced presentation ability. All of these are leadership qualities, and that’s why MBAs are seen as future leaders, even if the degree isn’t an absolute requirement to advance into business leadership — especially within Supply Chain.
However, there’s also the perception that an MBA isn’t going to be hands-on. From our perspective, an MBA isn’t going to work as a replacement for solid work experience. There’s a reason why people often work for 5-10 years in the field before pursuing an MBA: it’s going to augment your leadership potential, but it’s not going to give you leadership potential if you don’t have a variety of experience beforehand.
MBA programs encourage their students to think ambitiously, but it’s important not to let an MBA “go to your head.” We sometimes hear from recent MBA grads who expect to earn 150k+ on the merits of their degree rather than their experience, and they often find themselves in a 70k job a few years after graduating. If you’re prepared for this possibility, an MBA can be valuable, and it can help make you more marketable as a business leader.
So if you’re looking to slot into a Sole Contributor role, a designation might get you there faster. But if you’re looking to eventually climb into a Director, VP or CPO or CSCO role, an MBA might help you more. But don’t expect immediate dividends.
Again, we hope our advice is helpful! And every case is different, so take it with a grain of salt.
Oh, and send us more questions by visiting our blog and filling out a brief form. It can be Procurement and Supply Chain-specific, or it can be about any career topic.
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by Jennifer Hart Yim | Jun 22, 2015 | Blog, Manufacturing & Distribution, Strategy, Supply Chain
This article is part of a series of articles written by MBA students and graduates from the University of New Hampshire Peter T. Paul College of Business and Economics.
Melanie Payeur graduated from the University of New Hampshire in 2007 with a degree in Mechanical Engineering. She has since worked in various roles supporting manufacturing and packaging operations in the food and beverage industry.
Do you know where your byproducts go?
Manufacturing often produces some sort of physical byproduct. Examples range from plastic strapping on a pallet of corrugate boxes to carbon dioxide collected off a tank of fermenting beer. Byproducts are the unspoken of and often neglected “cousin” of manufacturing.
Byproducts of manufacturing can be compared to the stage crew at a Broadway show or on a Hollywood movie set. They serve an important purpose. Without the lights, cameras, and curtains, there is no show. Similarly, without plastic strapping, a pallet of corrugate would fall over during transport because it wasn’t properly secured.
The stars of the show are the finished goods on store shelves. Just like people don’t stick around to see the name of the on-set hair-stylist when the credits roll at a movie, consumers often don’t think about the byproducts associated with the packaged food they eat or other goods they purchase. It’s possible that they don’t even know these things exist.
However, consumers are becoming more conscious of supply chain issues. Many have an awareness what Fair Trade is in association with sourcing of products such as coffee and cocoa beans. They discuss agricultural sourcing and the ethical (or not) treatment of animals raised to be part of the food chain. Even the effects of emissions and chemical waste on the environment are among topics of which many consumers have some awareness.
Plastic old, Plastic new
What about the plastic strapping on that pallet of corrugate though? Where does it go? Who even knows it exists other than the operator that cuts it off the pallet in the factory? Could it become a plastic bottle someday? Or a swing set? Maybe it will become plastic strapping again?
While countless other types of byproducts exist, plastic is a particularly interesting example. Fluctuations in the price of petroleum are directly correlated to the price of brand new, non- recycled plastic pellets. It is completely possible, and often realistic, that it is less expensive to create brand new plastic strapping than it is to recycle old strapping.
Trailer Bags and Trash Bowls
Creative and novel uses of byproducts are happening today. One example is a Swiss company called Freitag who produces trendy messenger bags, wallets, and purses from old side panel tarps (popular on tractor trailers in Europe). At the end of their useful life on the road, these tarps are purchased by Freitag and sewn into functional accessories.
Another example specifically related to plastic are Garbage Bowls made famous by Food Network host, Rachael Ray. These bowls are made from recycled pieces of broken plates. There’s a byproduct in there somewhere!
While these are great examples of repurposing byproducts into something new, the truth is that Freitag was originally looking for a material that would create a durable and functional product. Lucky for them, reusing something that might have otherwise been thrown away is a great marketing story. They charge an average of $200 for a standard messenger bag. Is it realistic that the reverse situation can create profits? Can we find another use for production process byproducts which would create a trendy or otherwise highly desirable product?
Can we do better than throwing our byproducts away?
If it’s not a company’s core competency, it probably shouldn’t get into the business of designing handbags. However, as supply chain professionals, we should understand all of the byproducts of our manufacturing process; especially those related to materials that we source as inputs, like plastic strapping.
It is as important to look at the waste stream from our process as it is to examine how we source raw materials. Are we recycling our byproducts? Is there someone who is looking for our ‘trash’ as an input to their process? Do we have the opportunity to have a profitable side business as a coincidental supplier to someone else? At the very least, can we do better than throwing our byproducts away?
An example of success can be seen in the food manufacturing industry. Some companies donate or sell their byproducts to the Bakery Feeds Program. This organization creates animal feed out of food byproducts such as misshapen cupcakes and other edible process waste. It might be cost neutral to dispose of waste in this way, but that is better than otherwise paying for disposal.
I challenge you to examine the waste streams associated with your process. Identify where at least one of your byproducts could go. From here to there and there to here, your byproducts could end up anywhere.
by Jennifer Hart Yim | Jun 18, 2015 | Blog, Logistics, Manufacturing & Distribution, Strategy, Supply Chain
This article is part of a series of articles written by MBA students and graduates from the University of New Hampshire Peter T. Paul College of Business and Economics.
Ben Minerd received his B.S. in Computer Engineering from the University of New Hampshire in 2011 and will be completing his MBA from UNH in May 2015. When not working as a systems engineer, Ben enjoys skiing, hiking, and flying drones.
Some of you technologically curious readers may be familiar with Moore’s Law which predicted that the number of transistors in a dense integrated circuit would double every two years. What all that nerd speak (as a nerd I can use that phrase) boils down to is that the processing capability of electronic chips is increasing at a crazy rate. Like, scary fast.
On the flip side, electronics are really cheap these days. Yes, the $10,000 Apple Watch might be a tad pricey, but I’m talking about the industry as a whole. You can buy a computer that fits in your pocket for $200 that is many hundreds, maybe thousands, of times more powerful than my first computer and I’m one of those whiny millennial youngsters.
How can consumer electronics companies afford to sell their scary fast devices this cheaply? One reason is that the devices are being made by other devices (cue ominous music), as automation and electronics manufacturing are natural complements of each other. But another big factor in the cheap tech equation is the ever-increasing separation of technology development from technology manufacturing.
Contract Manufacturing
Big name companies like Apple, Google, Microsoft, and Amazon are doing less and less of their own widget building these days in favor of contract manufacturing (or CM). Contract manufacturing is essentially the outsourcing of your products’ fabrication and assembly to some other company (who is hopefully better at it than you are).
In theory, using a contract manufacturer should lower your costs and give you access to capabilities that you wouldn’t have access to otherwise. This is especially true of small businesses looking to produce physical goods (versus intangibles like software), where the up-front cost of building your own factory is immense and maybe even a non-starter. Or maybe you’re a big tech company who isn’t good at making hardware (ahem, Google) and you want to stick to your core competencies.
Whatever your reason, contract manufacturing is the unicorn that will slash your costs with its rainbow laser beam eyes. Well, maybe not entirely.
Hidden Costs
To loosely paraphrase Pee-wee Herman, every decision we make in business has a big ‘but’. For the economist reader, you can equate this with TANSTAAFL—There Ain’t No Such Thing As A Free Lunch. One action almost always leads to some other potentially unexpected outcome. Certain people have even gone so far as to say this is always the case (some guy named Isaac Newton).
One of the biggest contributors to hidden costs within contract manufacturing is the loss of control over your production processes. While this might be obvious or even desired, there may be some complications as a result of this new relationship that you hadn’t thought of previously.
Communication is always an important topic, but even more so when it comes to contract manufacturing. Not only may your production team physically reside on the other side of the globe, but things like language, culture, and time zone differences can make it difficult to keep good lines of communication open.
Quickly ramping up or ramping down production to meet changing demand can become a lot more challenging, too. This is partly due to the nature of the shared resources that you are buying access to when you team up with a CM.
A classic example of a culmination of these issues came from Cicso in the early 2000’s, back when out-sourcing was in its infancy. Cisco had been riding the surging wave of growth in the telecommunications industry which starting leading to supplier shortages. Shortly thereafter, the bottom fell out of telecom and Cisco forgot to turn off the contract manufacturing tap. Before long, Cisco’s raw-parts inventory rose by more than 300% from Q3 to Q4 2000, leading to a $2.2 billion write-off of inventory. Wall Street responded as you might expect, causing Cisco’s stock to fall by 50%.
The Human Cost
Perhaps the greatest hidden cost is one that may never make it to your company’s balance sheet: exploitation of workers in the developing countries where many contract manufacturers do business. It’s no secret that the biggest driver behind outsourcing is low labor costs. While it’s not always apples-to-apples to compare a production worker’s wage in China to one in the U.S., by any measurement the difference is more than a factor of 10 (although that number is dropping).
This dirty little secret of the consumer electronics industry came to light in 2012 when it was discovered that Foxconn, the largest electronics CM with over $100 billion in revenue and manufacturer of the Apple iPad, was mistreating some of their workers. Conditions grew so bad that in some cases workers decided to jump to their death rather than survive in that environment.
Bottom Line
Contract manufacturing might very well still be the right choice for you, just keep in mind that you may have more “unknown unknowns” than you had, well, known about. The more you can discuss with your CM candidate up front, the better your relationship will likely be. Also, some of these “gotcha’s” can be planned for in the agreement between you and your CM, so don’t skimp on the up-front work. And remember, there is no unicorn with rainbow laser beam eyes. That I know of.
by Jennifer Hart Yim | May 12, 2015 | Big Data, Blog, Data/Analytics, Strategy
This article is part of a series of articles written by MBA students and graduates from the University of New Hampshire Peter T. Paul College of Business and Economics.
Josh Hutchins received his B.S. in Business Administration from the University of New Hampshire in 2005. He is currently pursuing his MBA at the Peter T. Paul School at the University of New Hampshire; on course to graduate in May 2016.
“Working with data is something I do every day as a financial analyst. I enjoy crunching the data and experimenting with various data analytic techniques. I’ve found that my love for playing with the data and thinking in unconventional ways has led me to be efficient and successful at work. The way data is being used is revolutionizing the way we do business. I’m glad I can be part of this wave of the future.”
The responsibility of big data
Data is coming into businesses at incredible speeds, in large quantities, and in all types of different formats. In a world full of big data it’s not just having the data – it’s what you do with it that matters. Big data analysis is becoming a very powerful tool used by companies of all sizes. Companies are analyzing and using the data in order to create sustainable business models and gain a competitive advantage over their competition. However, as one company would come to learn – with big data comes big responsibility.
Solid Gold Bomb T-Shirt Company
In 2011, Solid Gold Bomb, an Amazon Marketplace merchant based out of Australia, thought of an ingenious way to create fresh slogans for t-shirts. The main concept behind Solid Gold Bomb’s operation was that by utilizing a computer programming script, they could create clever t-shirt slogans that no one had thought of previously. The company created various t-shirt slogans that played off of the popular British WWII era phrase Keep Calm and Carry On. Under the systematic script method, Solid Gold Bombs was able to create literally millions of t-shirt offerings without the need to have them on hand in inventory. With the substantial increase in product offerings, the chances of customers stumbling upon a Solid Gold Bomb shirt increased dramatically. By utilizing this new on-demand approach to t-shirt printing, Solid Gold Bomb was able to reduce expenses, while simultaneously increasing potential revenue by offering exponential products at little additional marginal cost.
Use of ‘Big Data’
The computer script relied on the following to operate: a large pool of words, associated rule learning, and an algorithm.
Large Pool of Words – Solid Gold Bomb gathered a list of approximately 202,000 words that could be found in the dictionary. Of these words, they whittled it down to approximately 1,100 of the most popular words. Some of the words were too long to be included on a t-shirt, so the list was further culled. They settled on 700 different verbs and corresponding pronouns. These words would be used by the computer script to generate t-shirt slogans.
Associated rule learning – Associated rule learning is the degree to which two variables in a given list relate to each other. The first step in associated rule learning is to identify and isolate the most frequent variables. The second step is forming rules based on different constraints on the variables – assigning an “interestingness” factor. In the case of Solid Gold Bomb, the associated rule learning assigned an interestingness factor to verb-pronoun combinations.
Algorithm – The algorithm designed by Solid Gold Bomb was very simple. Each shirt would begin with “Keep calm and”. The algorithm script would then search through the word pool and pull back the most highly associated verb and pronoun combinations. The words would then be put into the typical format of the Keep Calm and Carry On. An image of each individual combination would be mocked up and posted to their Amazon merchant account. The process would continuously loop, creating millions of combinations.
The Big Data Blues
With one innocent mistake, Solid Gold Bomb fell apart in the blink of an eye. Amazon started getting complaints about offensive slogans on Solid Gold Bomb’s t-shirts. Images of t-shirts with phrases such as “Keep Calm and Rape Her” and “Keep Calm and Hit Her” were being sold on their Amazon merchant account. Their typical weekend orders for around 800 shirts were reduced to just 3 – few enough to count on one hand. Amazon ended up pulling their entire line of clothing, essentially putting Solid Gold Bomb out of business.
What went wrong?
While Solid Gold Bomb had a good handle on how to use data that they had gathered and how to use it to their advantage, they neglected to consider the potential hidden consequences of unintentional misuse of the data. When culling 202,000 words down to 700 useable words, words such as “rape” should have been eliminated from the useable word pool. From a high level perspective, the human mind is incapable of naming all the potential combinations of the 700 useable words without the assistance of a computer program. However, the end user needs to be aware that the computer program logic will create every potential combination based on the word pool.
Moral of the Story
Big data by itself is not beneficial to a company. The real value is in the analytics that are applied to the data. The results of the analytics can be utilized in numerous ways – to make more informed decisions, create new revenue streams, and create competitive advantages, to name a few. When a company makes the decision to utilize big data analytics, each process needs to be mapped out to have an intimate understanding of how the data will be used. In the case of Solid Gold Bomb, they failed to have this intimate understanding of how the data would be used throughout the process. As a result, they paid the ultimate price; they were not able to sustain themselves through this debacle. The morale of the story: With big data comes big responsibility. Know your data and know the potential uses of the data better. Don’t be afraid to think outside the box, but know the potential consequences.
For information about another big data faux pas, learn how Target predicted that a 16 year old girl was pregnant before her father knew.
