Supply Chain

Not all Suppliers contribute equally. The hunt for the “right” suppliers begins in your own backyard.

I’m finding that most 1st and 2nd tier OEM’s are reducing their supplier bases by 50 percent or more. How is reducing your supplier base efficient if you’re not keeping the “right” suppliers? Conversely, operation and supply chain managers who fail to initiate supplier operating partnerships with their best vendors run the risk of their company’s customers, and their company's profitability, to competitors who move first.

Supplier operating partnership- arrangements that involve tightly linked extended supply chains- should be the supply chain goal. They offer tremendous gains for both the supplier and the OEM including; (1) decreased costs (2) a shift to a strategic positioning as a highly service-differentiated supplier [even for companies who are stuck as commodity providers and subject to constant price wars]; (3) a direct relationship with “value-oriented” top vendor executives, rather than “price-oriented” insides sales and field sales reps and (4) a highly defensible competitive position with switching costs.

Model a supplier. Choose a few suppliers and products that are reasonably representative of your current vendors and look carefully at their offerings. Try choosing a large and small vendor, each from a few key commodity segments and volume moving products, from each of the few key product families. Ideally you should have six to twelve representative situations to examine.

Look at the cost drivers for different products. Try different business model configurations such as order frequency, service interval, direct or distribution advantages. Look at cost level and mechanism- altering the product mix and developing a substitution program- this can provide valuable cost levers for cost improvement. Once you found effective cost levers, check your other vendors to make sure you can generalize your findings.

Modeling the effects of cost levers on representative suppliers works well for three reasons: (1) it will identify order pattern; (2) you can call one of your vendors to see what their reaction to the potential change would be and;(3) it can be easier to explain the changes using specific examples when you “sell” the initiative to your colleagues and superiors. Bringing in the wrong supplier will add incremental cost and subsequently decrease profits.

OEM’s should be seeking more intensive operating partnerships with fewer, more capable suppliers. Price should no longer be the primary deciding factor. Companies who develop and offer these arrangements will equally benefit from such planning. Flexibility is the new value-add.

The “right” supplier should try to help evaluate the OEM’s supply chain to see if a tightly linked partnership is probable, the OEM should be asking the right questions and providing information as warranted by the potential supplier. This only helps the OEM and leads to an (eventual) cost productive relationship.

If tightly linked partnerships are available at the distribution level, why would 2nd tier OEM’s want to be direct? Is the decrease in cost from direct to distribution that beneficial?

How can a strategic position help the supply chain? Are large distributors headed towards a CM model? Stay tuned…

Mass Media

I have a very sarcastic approach to Mass Media. I believe that the mass media is controlled by the government. Everything seems to be censored. Whether it’s the radio, TV or newspaper it’s all censored. It’s almost like there is a paradox. The paradox here is; freedom of speech. You should be able to speak your mind and not have the government control what we do. We say we’re a free country but then why can’t we speak our minds through the mass media. I guess my question is, what’s the real story? How much does the government sensor? Here is a solution to my problem with mass media. Come up with an adult channel for the news. You have to subscribe to it but you get uncensored news, advertisements and TV shows. If we did that, then TV would be a cool medium. I know I combined two concepts of mass media, cool mediums and government conspiracy but not a bad idea, right?

Television is a Cool Medium

I guess there are a few points. First, I agree and disagree with McLuhan. I agree because the medium could articulate the message better. I disagree because the message could be distorted. Basically, the format and logic of the medium are just as important as the content. It’s just as important because the medium reaches the end user and affects the overall message. To answer the entire question, yes-the medium can determine the entire message.

In evaluating TV’s affect on the medium and the idea that television is a cool medium, it’s difficult to agree with Mcluhan’s, “hot distinction.” People are stimulated by, “changing images,” however the message isn’t always correct. Even more so than ever, people have more control over the content they view. Although our definition of information has changed, the medium isn’t cool it’s just incorrect. Now that audiences have more control people are demanding more out of their media sources.

Cyber Relationships

I’m a member of the LinkedIn network. I have 107 connections. I have not met half of the 107 connections. In my position, I receive a lot of sales calls. When I get those calls, I try and add those people to my LinkedIn network. By expanding my network I can see more people when I do a ‘people search on LinkedIn.” I use LinkedIn as a tool. LinkedIn helps me find names of contacts for people that might be interested in my company’s products and services. The relationships I have are very business oriented. The concept of, “if you scratch my back, I scratch yours” is a major concept. The concept of adding each other to LinkedIn is mutual. Each person opens up their network to each other and there is a benefit to that.

To expand on cyber relationships, I believe there are different levels of cyber relationships. Sometimes you meet someone and you use cyber-ing as a tool to maintain that relationship. I work 50 hours a week, so I can not meet everyone for lunch, but I can write an email.

Online Relationships

I did an online study on Facebook which drew my interest to the characteristics of electronic relationships. Electronic relationships have always fascinated me. I have online accounts at Linkedin, Facebook and Myspace. All my online classes provide different things. However, according to the study the number one reason why people join these websites is to meet people. Relationship development online is something where people involved in the relationships “overestimate one another’s attractiveness.” On Facebook there are pictures that people can browse in addition to online conversations. Disinhibition is when people feel like they have the freedom to express “our emotions in a nonnormative way.”

One thing I failed to accomplish in my study is to capture these two concepts. As it seems there is a reason why online relationships are more appealing to people than face to face interaction. I believe it’s easier for people to be social online but I think there is a reason why people have social anxiety. It’s because they don’t practice enough.

Attraction

When I was young, I did not have filters. I didn’t understand what I wanted and to describe my behavior, “I was all over the place.” When I aged, I realized that I wanted things out of life. I realized I wanted a career and I wanted different things in life. As I began to go through a series of trial and air I started to filter out what I wanted and didn’t want.

Characteristics or behaviors that lead me to judge others as unattractive are things that don’t align with my values. More specifically my classes have taught me that people have different beliefs and attitudes. However if their values don’t align to mine those are the things I find unattractive.

Ducks theory makes sense to me. I can not say that I have eliminated someone by using a sociological or pre-interaction. I never knew about the theory up until now. The theory works in 4 stages of theory starting from sociological to preinteraction cues, to interaction cues and ends with cognitive cues.

Rigid Role Relations

I believe submissive symmetry is the most difficult to change. I believe it’s the most difficult to change because “both parties struggle to relinquish control.” It seems to be an unhealthy relationship because the contributors in the relationship are trying to manipulate each other by forcing the other to make a decision. I think that type of behavior is something people can’t control. That it’s something people began when they were kids and they were trying to manipulate their parents to buy them a toy.

Conversely this can be very damaging to the relationship as it forces each other to not take control yet still be satisfied. It seems to be a paradox between give and take but nonetheless can’t be healthy.

I believe the most damaging of the self esteem is competitive symmetry because both members fight for positioning. Similar to athletes competition is something that can be good to increase performance but when you lose, it can’t be good for your self esteem.