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79 posts categorized "Miscellaneous"

January 02, 2012

Unless the Mayans Were Right -- Welcome to the New Year

G. Jeffrey MacDonald noted, "Authors disagree about what humankind should expect on Dec. 21, 2012, when the Maya's 'Long Count' calendar marks the end of a 5,126-year era." ["Does Maya calendar predict 2012 apocalypse?" USA Today, 27 March 2007] As 2012 has approached, the frenzy over the date has increased because it's going to be hard to sell books or movies on the subject in the future (whether the world ends or not). In some ways, the build-up is reminiscent of the frenzy that preceded the advent of the new millennium (i.e., Y2K). I agree with Sandra Noble, executive director of the Foundation for the Advancement of Mesoamerican Studies in Crystal River, FL, who told MacDonald, "For the ancient Maya, it was a huge celebration to make it to the end of a whole cycle. ... To render Dec. 21, 2012, as a doomsday or moment of cosmic shifting, she says, is 'a complete fabrication and a chance for a lot of people to cash in.'"

Apparently we've already passed one milestone that predicted the end of the world. Dee Finney writes, "In the mythology of the Aztecs, the first age of mankind ended with the animals devouringAztec Calendar clear humans. The second age was finished by wind, the third by fire, and the fourth by water. The present fifth epoch is called Nahui-Olin (Sun of Earthquake), which began in 3113 BC and will end on December 24, 2011. It will be the last destruction of human existence on Earth." Since you're reading this post, it looks like we're safe until next December.

My operating assumption is that the world isn't going end this year. That's why Enterra Solutions is making long term plans about how it can continue to help companies optimize their supply chains. Hal Borland once wrote, "Year's end is neither an end nor a beginning but a going on, with all the wisdom that experience can instill in us." We at Enterra hope to build on the successes of the past, draw on the knowledge of the present, and apply it wisely to the challenges that we will face in the future.

We hope that the new year brings you great joy and prosperity. If, like us, you don't believe the world will be ending any time soon, we would be more than happy to help you find long-term solutions for your supply chain challenges! Happy New Year.

December 23, 2011

Christmas 2011

Although Sunday is the Christian holiday celebrating the birth of Jesus, it is part of larger holiday season that marks the end of another year. One of the favorite carols sung during the holiday season is the "The 12 Days of Christmas." For the past 28 years, PNC Wealth Management has calculated how much it would cost to buy the gifts mentioned in the song. This year's grand total is $24,263.18 -- up 3.5 percent from last year. To see how PNC Wealth Management calculates this total, click on this link for a fun, interactive train ride.

The $24,263.18 figure is the grand total only if you don't take the song at it's word, which requires your true love, on each subsequent day, to buy anew all of the presents that came before. For example, on the first day, the song says that your true love bought you a partridge in a pear tree. On the second day, your love true bought you two turtledoves AND a partridge in pear tree. If you follow that pattern through to the end of the song, this year's total surpasses the $100,000 for the first time (the exact amount being $101,119.84, a 4.4% increase on last year). Quentin Fottrell provides a gift-by-gift explanation of how this total is reached. ["The '12 Days of Xmas,' Itemized," Wall Street Journal, 2 December 2011] Let's get the gifts rolling:

Day 1: Partridge in a pear tree: $184.99 (+14%) -- The pear tree accounts for $170 of that price, up more than 13% on last year, according to PNC Wealth Management investment strategist Rebekah McCahan, who compiled the list. The full-grown "Chukar" partridge costs $15, a 14% spike from last year, she says.

Day Total: $184.99

Running Total: $184.99

Day 2: Two turtle doves: $125 (+13%) -- The cost of feed as well as availability sent the two turtle doves soaring 25% from last year -- still weaker than the 79% increase in 2010. However, doves are less common than some of the other breeds and, as such, more expensive. Some can run up to $400 to $500 apiece, she says. McCahan sourced her doves at the National Aviary in Pittsburgh, Penn.

Day Total: $309.99

Running Total: $494.98

Day 3: Three French hens: $150 (unchanged from last year) -- After significant increases last year, prices for most of the birds remained relatively stable this year, in part due to the lack of demand. McCahan used "Houdan hens" -- named after a town in France -- and first imported to North America in 1865. Originally raised for meat and eggs, the Houdan is now predominantly used as a show bird. For money-saving purposes, experts say it does lay decent-sized eggs.

Day Total: $459.99

Running Total: $954.97

Day 4: Four calling birds: $519.96 (-13%) -- The calling birds dropped in price by over 13% to $519.96. Male song birds usually have a territorial call and are more expensive, but this year the male and female birds were the same price. Strictly speaking, calling birds are European blackbirds, but consumers can also use canaries or other caged exotic birds, which would do the job just the same.

Day Total: $979.95

Running Total: $1934.92

Day 5: Five gold rings: $645 (-1%) -- These 14-carat gold ladies rings were chosen for their very narrow band, which is why they're so inexpensive. As recession-fearing consumers are still being careful with their holiday spending, the price for gold rings is actually down, despite the rise in gold over the last 12 months. "While gold commodity prices are at or near record highs, the demand for retail gold is waning," Dunigan says.

Day Total: $1624.95

Running Total: $3559.87

Day 6: Six geese-a-laying: $162 (+8%) -- Geese, which were sourced at the National Aviary, are a more popular seasonal dish than calling birds and Houdan French hens, so they were not nearly as expensive as those other items, McCahan says.

Day Total: $1786.95

Running Total: $5346.82

Day 7: Seven swans-a-swimming: $6,294.03 (+12.5%) -- The price of these gifts fluctuates wildly depending on supply and demand. The cost of the seven swans-a-swimming typically provides the biggest swings from year to year in the survey: They rose by 12.5%, almost double last year's 6.7% price hike, to $6,300. McCahan priced Trumpeter swans, with long necks, which are rarer and, therefore, more expensive than other breeds.

Day Total: $8086.95

Running Total: $13,433.77

Day 8: Eight maids-a-milking: $58 (unchanged on last year) -- The maids' costs remained flat along with the federal minimum wage, which currently hovers at $7.25, and hasn't changed since The Fair Minimum Wage Act 2007, which increased the minimum wage by nearly 11%. However, this doesn't include tips, and the minimum wage rules vary from state-to-state. For instance, Oregon doesn't allow tips to be included in that state's minimum wage of $8.50.

Day Total: $8144.95

Running Total: $21,578.72

Day 9: Nine ladies dancing: $6,294.03 (unchanged on last year) -- McCahan got an estimate on how much it would cost to hire nine modern dancers for a private event from Philadanco, a Philadelphia Dance Company. Clearly, these would be an extravagance. "We are talking about a small basket of goods and services here compared to the Consumer Price Index," Dunigan says.

Day Total: $14,438.98

Running Total: $36,017.70

Day 10: Ten lords-a-leaping: $4,767 (unchanged on last year) -- These were priced based on an estimate given by the Pennsylvania Ballet and the lack of price hikes reflect the company's rates. However, the Pennsylvania Ballet is currently offering 20% to 30% off subscription packages, depending on how many performances are booked in advance.

Day Total: $19,205.68

Running Total: $55,223.38

Day 11: Eleven pipers piping: $2,428 (+3%) -- The price of these Scottish bagpipers was estimated with the help of a local musicians union in Philadelphia, McCahan says. Jimmy Mitchell, this Texas-based bagpiper, says the final cost would also depend on the requested playing time, location of the event (he does weddings and funerals) and whether his presence is required at a rehearsal.

Day Total: $21,633.28

Running Total: $76,856.66

Day 12: Twelve drummers drumming: 2,630 (+3%) -- Again, the cost of these drummers was based on trade union rates. But there are hidden expenses for eccentric romantics with cash to spare who would like to emulate the list in its entirety. McCahan, who has been compiling the list for 26 years says the total price of the list doesn't include a barn. "And, to house all of these, you would probably need one," she says.

Day Total: $24,263.18

Final Total: $101,119.84

The Twelve Days of Christmas might be a bit extravagant for your taste; but, that's alright. As an alternative, the late author Oren Arnold (1900-1980) recommended the following "Christmas gift suggestions: To your enemy, forgiveness. To an opponent, tolerance. To a friend, your heart. To a customer, service. To all, charity. To every child, a good example. To yourself, respect." From all us at Enterra Solutions -- Happy Holidays.

December 16, 2011

Supply Chain Management Education, Part 2

Part 1 of this two-part series discussed the rising interest in Supply Chain Management (SCM) education. In this post, I'll discuss what a few supply chain professionals believe needs to be done to ensure that graduates of SCM programs are equipped to tackle the jobs they land. Business consultant Ron Stappert put together a few thoughts after reading Victoria Taylor's article in Bloomberg BusinessWeek (discussed in Part 1 of this series). ["Tomorrow’s Supply Chain Leaders – Do they know the fundamentals?" The 21st Century Supply Chain, 17 November 2011] What concerned Stappert was that Taylor reported, "Many of the current supply chain managers are transplants from other parts of their companies, with no formal schooling in the discipline." He wonders, if supply chain executives can do their job without formal SCM education, are such programs really needed and what's their value added?

In answer to the first question -- are such programs really needed? -- it should be pointed out that senior executives transplanted into supply chain management obviously have some leadership skills and business background. What they don't have is supply chain knowledge and experience. To succeed, they must rely heavily on supply chain professionals. The answer to the second question -- what is the value added of formal SCM programs? -- is: If designed correctly, graduates from such programs have a steep learning curve when hired into entry-level positions. This can be a great benefit to employers. Stappert asks, "So what are the potential risks of filling these roles with managers from other parts of the business?" He continues:

"To understand the potential risks, one must understand the key ingredients which make C-Level Supply Chain Executives successful. A good white-paper written by William V. Fello and Peter Everaert for Korn/Ferry International, 'The New Supply Chain Executive: Using the Integrated Supply Chain as a Competitive Weapon' lists five ingredients:

1) A seat at the strategic decision-making table

2) Cross-functional expertise and relationships

3) Strong customer and supplier relationships

4) A global mindset

5) Demonstrated success as a change-agent

"When you examine the list, two items stand out as the greatest potential risks: Cross-functional expertise and relationships and strong customer and supplier relationships. The reason is that it would be extremely difficult for someone who hasn’t spent significant time managing the supply chain to have a deep understanding of the supply chain processes and the internal motivations and politics of various customers and suppliers alike. The risk would be a supply chain strategy that lacked cohesion, recognized critical challenges, and lacked the commitment of sufficient resources. Often this results in a supply chain strategy that is nothing more than a disparate list of key initiatives."

Although graduates of formal SCM programs don't come fitted with relationships, they should have an excellent understanding of supply chain processes, best practices, emerging trends, and so on. Stappert realizes that if there were only negatives associated with placing a transplanted executive in charge of supply chains, companies would have stopped doing it long ago. So, he asks, "What are the potential rewards of filling these roles with managers from other parts of the business?" He continues:

"Back to the previous five ingredients, the very last one, demonstrated success as a change-agent combined the first ingredient, a seat at the strategic decision-making table can bring in a fresh approach and, with it, the commitment to see that approach to completion. Typically change-agents are self-described students. They study the problem, they take input, the examine alternatives, they weigh consequences, and then they create a vision. The vision is simple but it focuses the efforts of the team and prioritizes the commitment of resources. When you combine this with executive support, positive change is almost always the result. An excellent example of a change-agent coming from another business (though not a C-Level supply chain one) is Steve Jobs when he took over The Graphics Group which later became known as Pixar. His initial intent was for it to become a high-end graphics hardware company. Not that much of a stretch for a hardware guy. However, here was a smart, creative, driven technology change-agent who pointed his company in a new direction. What he needed to know, he learned. What he didn’t need to know, he appreciated the complexity and how it impacted his success. The people talent he needed, he found. If something didn’t work, he understood why and then went in a different direction. He established a vision and then changed the computer animation world forever. He was a change-agent who was also the head of the strategic decision-making table."

Stappert sympathizes with the transplanted executive because he admits that he was one. As a trained engineer with military and manufacturing management experience, he said he thought he was "more than prepared for a new challenge when [his] Plant Operations manager asked [him] to take the newly created Inventory Control manager position." I'll let him explain, in his words, what happened next.

"The reality ... was that I didn’t have a clue as to what I was doing or what I was getting myself into. Even worse, I was trying to establish inventory control in a factory that didn't understand the meaning of the word 'control.' Fortunately for me, my boss had confidence in me and gave me time to learn and fill the void. What followed were countless hours of APICs training, materials management conferences, reading books on materials and supply chain management, trial and error in the real world, and, most importantly, understanding the fundamentals of the processes and how ingredients are needed to effect change."

He admits he was fortunate to have an understanding and patient boss. Through hard work, Stappert was able to learn his trade. He would have been much better prepared, however, had he had the formal education being offered in today's best universities. Stappert honestly admits that "fifteen years later, that very same company and plant, could ill afford to have someone so under-qualified in such a key role without jeopardizing their ability to consistently produce and meet financial expectations. A young smart guy with a lot of passion is no substitute for a highly qualified practitioner of supply chain management." He concludes:

"Personally, I welcome more formally educated practitioners into the profession. My hope is that upon a strong formal educational, with time and additional experiences in the trenches, they will have the foundation needed to be in the next generation of C-Level supply chain positions. They will focus on substance and see through the smoke and mirrors. They will lead and innovate instead of turning the same levers and expecting a different result."

One concern expressed by the editorial staff at SupplyChainBrain is that formal SCM programs could focus too narrowly on supply chain issues and ignore broader business-related subjects that make for a more well-rounded (and valuable) employee or executive. ["Educational Priorities for Future Supply Chain Leaders," 12 August 2011] The article states:

"Supply chain MBA programs should give students a broad business education rather than being too narrowly focused on supply chain disciplines, says Thomas Speh, director of MBA programs at Miami University's Farmer School of Business. 'I favor a very broad-based program that gives students exposure to a lot more than just supply chain management, because they will be working in global environments and they will be interacting with C-level executives, so they need to be able to talk the language of CEOs and CFOs, which means they need exposure to areas like strategy, finance and leadership,' says Speh."

I wish Speh would have said that he favored a broad business education program for supply chain students because some of them would be moving into C-level positions not just "interacting with C-level executives." Speh's attitude reflects the fact that few supply chain professionals make it into the boardroom. For more on that subject, read my posts entitled S&OP: Supply Chain's Foot in the Boardroom Door and C-Level Supply Chain Executives. The article continues:

"He also favors MBA programs with an experiential approach, rather than those that are centered on book learning and lectures. 'In our MBA program, almost every course is based on case studies, with students analyzing cases, presenting to their peers and arguing with their peers,' he says. 'We also engage the students in internships, where they work one day a week throughout their entire course of study. They are out there having to do things, rather than simply reading a book and listening to a lecture.' Technology is an important part of education today and students certainly come in with strong technology skills, he says. 'What we want to teach them is how to strategically use technology. The focus is not on how to write code for a particular computer program, but on understanding where an application fits and how it can help them be better managers,' he says."

In Part 1 of this series, it was pointed out that companies are showing more interest in undergraduates with SCM majors than in individuals with graduate degrees but no experience. Speh seems to agree that getting an advanced degree makes more sense after you have some experience under your belt.

"The best supply chain MBA candidates are those who spend two to five years in the workplace before going after a post-graduate degree, says Speh. 'These students come into the program with a much richer background, with questions, with an understanding of how an organization works and how the supply chain works. Students that come in straight from graduate school do not get the same richness from the program because they don't have that context,' he says."

Stappert pointed out in his article that some supply chain managers don't make an "investment in educating themselves." Adrian Gonzalez believes that, whether an individual has been foramally educated in SCM or not, lifelong learning is a must. ["Learning and Leadership in Supply Chain Management: Is a New Model of Learning Required?" Logistics Viewpoints, 29 June 2011] He agrees with Ken Blanchard who stated: "When you stop learning, you stop leading." The supply chain field is rapidly changing and formal educational programs will need to keep pace with those changes. I'm convinced that the best way to top of the corporate ladder is by placing that ladder on a firm educational foundation. I suspect that more and more universities are going to offer SCM programs that prepare students for the jobs that will help companies thrive in the years ahead.

December 15, 2011

Supply Chain Management Education, Part 1

Some interesting articles and posts have been written recently about supply chain management (SCM) education. Victoria Taylor is even bold enough to ask if supply chain management is "the next big thing." ["Supply Chain Management: The Next Big Thing? Bloomberg BusinessWeek, 12 September 2011] She reports, "Hiring is strong for supply-chain managers and salaries are rising. No surprise that it's an increasingly popular MBA option." Taylor continues:

"Supply chain management—the acquisition of parts and raw materials, from purchasing to delivery—is not one of the classic B-school majors, for either undergraduates or MBAs. But job openings, comfortable salaries, and the prospect for advancement have caused the academic community to take notice, with more students majoring in the subject and more programs offering courses and concentrations in it. With such companies as H.J. Heinz and AnnTaylor Stores creating C-level supply chain positions in the past few years, more students are seeing career possibilities in the major."

Of course, that comes as no surprise for supply chain professionals; but, it does surprise people who believe that traditional MBAs are the only way to the top. One of the schools that has an active supply chain management program is Arizona State University. In my last post on this subject [Interesting Students in a Career in Supply Chain Management], I mentioned a series of videos explaining supply chain management that was produced by Professor Eddie Davila, a member of the faculty at ASU's Carey School of Business. For her article, Taylor interviewed William Verdini, an associate professor and chairman of the Supply Chain Management Department at Arizona State University’s Carey School of Business. He told her, "Businesses don't compete; supply chains compete. Now, supply chain officers are getting in on the strategic decisions that are being made." Taylor reports that supply chain management courses are getting so popular that students are now being turned away. She continues:

"Lehigh University’s College of Business and Economics is reporting the most undergraduate SCM majors in the program’s 10-year history. One of the major's required courses, Supply and Cost Management, ended up turning students away when it was capped at 45 students last semester. The course’s previous enrollment high, in 2007, was 27 students. SCM has even piqued the interest of accounting students to the point that North Carolina State University’s Poole College of Management is exploring the possibility of establishing a supply chain concentration within its undergraduate accounting program. The number of freshman supply chain majors at the Carey School has doubled since the 2007-08 academic year. This year, there were 211 senior majors and 18 freshman majors. According to the Association to Advance Collegiate Schools of Business (AACSB), the number of undergraduate SCM programs has increased 25 percent since 2006. Almost half that jump happened during the 2009-10 school year."

Those numbers are not large; which could be the reason that there are so many opportunities for graduates holding SCM degrees. Those opportunities are generating student interest. Taylor explains:

"Supply chain jobs are available out there. According to a survey by the National Association of Colleges & Employers, only 45.4 percent of business administration majors and 46.9 percent of accounting majors from the Class of 2010 job applicants received at least one offer. At Carey, 64 percent of undergraduate supply chain majors surveyed who graduated in December 2009 and May 2010 reported having a job at graduation. Supply chain management majors and MBAs are in demand. Carey reports a 100 percent placement rate for the supply chain MBAs who graduated in May, compared with 75 percent for marketing students. This year, more than 40 companies recruited Carey MBA grads specifically for supply chain jobs, and the biyearly SCM career fairs at Penn State University’s Smeal College of Business attract more than 60 different employers."

Not only are jobs available but Taylor reports that are good paying jobs. She writes:

"Salaries are another draw. The Institute for Supply Chain Management’s 2011 survey shows that the average salary for supply chain management professionals is $103,664, up from $98,200 a year earlier. The average entry-level professional supply management salary is about $49,500, but the average salary of those with five or fewer years of experience is $83,689, up from $72,908 in 2010, an increase of nearly 15 percent."

If you are a student thinking about a career in supply chain management, noted supply chain analyst Lora Cecere has some advice for you. ["Yes, Abby, there is a Santa Claus," Supply Chain Shaman, 6 December 2011] First, however, she gives "thanks that academic programs are fueling the wave for the third generation of workers." She notes, however, that "we are unsure what your world will look like" when you graduate. "We think that the forecast entry-level jobs will be rosy, but we are unsure of how SCM practices will evolve." Below are "five pieces of advice" she thinks will help you on your journey to a career in supply chain management:

  • "Get good at Math. SCM is a world where math geeks excel. Be proud of it, but learn how to use data to drive value-based outcomes. Think analytically, and use it to influence cross-functional groups. Data for the sake of data or math for the sake of math does us no good.

  • "It starts with Clarity of Strategy. I cannot count the times that I hear that it is about 'people, process and technology.' Yawn, I say. I think that the REAL secret to supply chain excellence is alignment on supply chain strategy. If this is done right, it is the foundational building block to aligning people, building processes and selecting technology. Without the clarity on what is supply chain excellence, the world circles, functional organizations cannot align, and the technologies never work. Help to forge clarity in the organizations where you go on supply chain strategy.

  • "Take what you have learned in School with a Grain of Salt. No two supply chains are the same, and no one company has it all figured out. Leave school with a solid foundation of the concepts, but realize that these practices are evolving. The real world is not as absolute as the writings of textbooks. Embrace the fact that SCM is ever-changing based on market drivers. Learn to think outside-in. Start first with what is happening in outside markets and then map the possibilities outside-in.

  • "Learn to ask the Hard Questions, but nicely. It is not a world for a 'bull in a China Shop', but there are a lot of paradigms that need to be broken. Learn to ask the tough questions, but with respect. Ask how processes evolved, and what they could become if we could improve data quality, reduce latency and build stronger cross-functional processes.

  • "Learn to Dance with the World of Gray. In SCM, there are no black and white answers. Success happens when you can take the world of gray and see patterns, build processes and forge bonds cross-functionally."

Good higher education has always been about teaching students how to think and solve problems rather than providing them with rote answers. I think that is what Cecere is trying to say -- learn how to think clearly and solve problems creatively. If you do, you'll be an asset to any company you join.

You should also put a little thought into which school you should attend. In most fields, the reputation of the school often makes a difference to recruiters. Back in 2009, "AMR Research started a bit of SCM collegiate controversy ... when it released a list of the top supply chain university programs." AMR was acquired by Gartner last year and Gartner has revived the practice. ["Let the Debate Begin Anew! Gartner Ranks Top Supply Chain University Programs," Supply Chain Digest, 20 July 2011] The article reports:

"An important and worthwhile change in 2011 is that Gartner this year broke the rankings into US undergraduate and graduate programs. There has been a call in many business circles for more emphasis on undergraduate programs to balance the more expensive hires coming out of the top graduate programs with positions for those with just undergraduate degrees who can begin at lower levels in the organization. The 2009 list was really a ranking of just the graduate university programs. Another change for 2011 is that, 25 graduate and undergraduate programs were ranked, versus just 19 graduate programs in 2009. This is likely both to be consistent in style to Gartner's annual top 25 company supply chain rankings, and also because more universities participated in the program this year than in 2009."

Like most lists that rate institutions of higher education, "a great deal of subjectivity [is] involved in such a ranking." The article states that "Gartner did its best to quantify the process." It explains how they did that for undergraduate programs:

"For undergraduate programs, the ranking used a weighted average of 40% for 'undergraduate industry value' (mentions as a top university program or recruiting spot based on a survey, having an internship requirement, and average starting salary of graduates); 20% on sheer program size (number of professors and students); and 40% for 'program scope' (how many of 11 key knowledge areas according to a Gartner framework does the program include?)."

I'm always skeptical of rankings based on surveys. It would be interesting, for example, to see if there is any correlation between respondents and their alma maters. Alumni can be myopic when it comes to rating their schools. I might have given a little less weight to the surveys and little more weight to content. Here's Gartner's list of the Top 25 Undergraduate Programs:

  1. Penn State
  2. Georgia Tech
  3. Arizona State
  4. Rutgers
  5. Michigan State
  6. University of Texas/Austin
  7. Ohio State
  8. University of Wisconsin/Madison
  9. Texas A&M
  10. Tennessee
  11. Maryland
  12. Western Michigan
  13. Stanford
  14. Lehigh
  15. Marquette
  16. Syracuse
  17. Indiana
  18. South Carolina
  19. Auburn
  20. Texas Christian
  21. University of Nevada/Reno
  22. Kansas
  23. North Texas
  24. Iowa State
  25. Rider

As you might imagine, many universities with highly ranked undergraduate programs are also ranked highly for their graduate degree programs. Here's Gartner's list of the Top 25 Graduate Programs:

  1. Penn State
  2. Michigan
  3. Michigan State
  4. Rutgers (tied for 3rd)
  5. Arizona State
  6. Syracuse
  7. MIT
  8. Ohio State
  9. Georgia Tech
  10. Tennessee
  11. Stanford
  12. Lehigh
  13. University of Texas/Dallas
  14. University of Wisconsin/Madison
  15. University of Texas/Austin
  16. Texas A&M
  17. Indiana
  18. South Carolina
  19. San Diego
  20. Florida
  21. Maryland
  22. North Carolina State
  23. Oklahoma
  24. Kansas
  25. Auburn

The Supply Chain Digest editorial staff concludes, "Accurate or not (and of course, the reality is that it is not measurable, though Gartner follows a pretty good methodology), universities will want to be seen as top programs regardless. We'd like to see some weight given to the level of actual productive research (not just academic papers) coming out of the faculty." In Part 2 of this series, I'll look at what some other supply chain professionals have to say about SCM education and what should be taught to students entering the field.

November 24, 2011

Thanksgiving 2011

Today is the Thanksgiving Day holiday in the United States. Like the past several years, it finds many people in need living in an economy that gives them little reason to hope. Yet, even in dire circumstances, a person should be able to find something for which to be thankful. I truly believe that having a thankful heart can make even the most miserable conditions more tolerable. Thanksgiving Day was set aside for people to pause and give thanks to a higher power; but, even individuals who don't believe in a higher power have reason to give thanks to someone. Henry van Dyke wrote:

"Gratitude is the inward feeling of kindness received. Thankfulness is the natural impulse to express that feeling. Thanksgiving is the following of that impulse."

Wherever you might find yourselves, and in whatever circumstances, I hope that on this day you will be able to search your heart and find something for which to be thankful. If you find yourselves with much to be grateful for, then I suggest that you ponder about what you can do to make someone else's life better. You may be the person for whom those individuals offer thanks next year. From all us at Enterra Solutions, Happy Thanksgiving.

October 17, 2011

Rebranding Your Company

Today, my company, Enterra Solutions, LLC, officially announced the launch of its new web site and a new slogan, "Welcome to the mind of Enterra." The new web site is first step in a rebranding campaign to let potential clients that Enterra's focus is primarily on supply chain optimization. The press release announcing this rebranding effort reads:

"Enterra Solutions, LLC, announced today that it has launched its new website and Facebook page to focus on its commercial and critical infrastructure businesses. Enterra has introduced a new, clean look and feel that reflects the cutting edge technology used in its product offerings. Based around the slogan, 'Welcome to the Mind of Enterra,' the new web site and Facebook page underscore the unique, capability that allows organizations and global supply chains to 'Sense, Think/Learn, and Act.'

'We are extremely excited about these first steps in our new corporate branding and marketing campaign,' said Stephen DeAngelis, Enterra's President and CEO. 'We wanted our website and Facebook page to be the first elements brought to market that help us more clearly and simply describe our technological innovations. We also wanted a venue to describe to a broad audience how Enterra's Core Sense, Think/Learn, Act Kernel™ offers intelligence through the use of an automated ontology and rules, combined with probabilistic logic and reasoning that enable real-time insights and agile responses, as well as systemic experiential learning.'

Because the Kernel combines large and complex data ingestion capabilities with artificial intelligence to sense, think/learn and act in real time, it helps decision makers identify challenges and take appropriate actions within established decision cycles. Enterra currently applies this technology to service manufacturers and their supply chain partners in the consumer products and retail sectors. The value of this new approach was recognized earlier this year when Enterra was selected as one of 25 companies featured in the Editors’ Pick section of Consumer Goods Technology (CGT) 2011 Readers’ Choice Issue.

Mr. DeAngelis stated that Enterra offers cloud-based, Solution-as-a-Service (SaaS) products because they provide real-time intelligence, 24-hour control, and large-scale results. In what supply chain analysts are calling the coming era of 'big data,' only cloud-based solutions can provide the necessary scalability for clients of all sizes.

The website launch is the first phase of the company’s new marketing and branding campaign, Enterra is positioning itself to be premier provider of leading supply chain solution in consumer products and retail industries. Enterra will soon launch its Twitter capability which will be linked to Mr. DeAngelis’ blog as well."

As the news release states, in the near future this blog will connect to social media outlets that as a part of the rebranding effort. The blog will probably get a new look as well. Wikipedia states, "Rebranding is the creation of a new name, term, symbol, design, or a combination of them for an established brand with the intention of developing a differentiated (new) position in the mind of stakeholders and competitors." Enterra's rebranding activities don't involve a name or logo change, but they do include elements of design. As the Wikipedia articles notes, "Far from just a change of visual identity, rebranding should be part of an overall brand strategy for a product or service."

Readers who have followed this blog over the past few years know that Enterra has worked in a number of areas (from security to international development). With the success of our supply chain optimization solutions, however, we've decided to concentrate primarily making them even better for our clients. As the Wikipedia article states, "The main reason for a re-brand is to communicate a new message for a company, something that has evolved." That certainly describes why my company has undertaken its rebranding effort.

Several years ago, John Williams, founder and president of LogoYes.com, a do-it-yourself logo design website, wrote, "There are just about as many reasons to rebrand a business as there are ways to do it." ["The Art of Rebranding," Entrepreneur, 3 July 2006] Even though there a number of ways to rebrand, Williams insisted that "there are right and wrong ways to go about it." REBRAND, a company "focused on effective brand transformations," agrees that there are at a lot of mistakes that companies can make. ["The Top 20 Mistakes Marketers Make When Rebranding — And How to Avoid Them," Rebrand.com] REBRAND asserts that smart companies "evolve their brands over time to keep them relevant. Some do it well, while others become the target of cynical bloggers." Williams reminds us, for example, about how New Coke flopped. One of the re-branding missteps that the REBRAND article indicates companies should avoid is "clinging to history." It states:

"Rebranding well means staying relevant. Assumptions made when the brand was established may no longer hold true. Analyze changes in target markets when exploring opportunities for brand expansion, repositioning and revitalization."

The first thought that comes to my mind are cereal companies that have changed from trying to sell their products based on sugary taste to selling them on their healthy side effects. That doesn't mean that sugary cereals have disappeared, but branding has certainly changed. The next mistake that companies make, according to REBRAND, is "thinking the brand is the logo, stationery or corporate colors. Brands encompass everything from customer perception and experience to quality, look and feel, customer care, retail and web environments, the tone and voice of communications, and more." Williams, for example, pointed out how Sprint rebranded itself after it merged with Nextel. He wrote:

"The company eliminated the angular logo (and red corporate color) that seemed indicative of inflexibility and replaced it with a more fluid logo--placed on a cheerful gold background--that reflects the company's friendliness and flexibility."

Sprint soon discovered, however, that customers were becoming more aware of network capabilities and it began losing ground to companies like AT&T and Verizon that had better coverage. Today, Sprint is stressing the value of its networks. The next mistake that companies make, REBRAND claims, is trying to navigate the rebranding process "without a plan." As Lewis Carroll wrote, "If you don't know where you are going, any road will get you there." When a company sets out to rebrand itself, it obviously has a reason and an objective. To reach that objective, make and follow a plan.

Another mistake that companies make, according to REBRAND, is "not leveraging existing brand equity and goodwill." The article states:

"Dismissing brand equity when rebranding alienates established customers, while unnecessary overhauls can irreparably damage a brand’s perception. Consider the needs and mindset of the target market carefully before digging into the process. Sometimes a small evolution – or a new coat of paint – is all that’s needed to rejuvenate and make a brand relevant."

I recently read an article that indicated that a number of companies that sell products that have been around for generation are repackaging those products to look more "retro." They are rebranding with an old coat of paint rather than a new one. They may have adopted that idea from the National Football League, whose teams have played a number of games in retro uniforms. On the other hand, REBRAND states that a true rebranding can't be just a "superficial facelift. The rebrand’s story must be believable given the existing brand experience and customer perception. It must also hold credibility internally. If employees who live the brand day-to-day don’t believe, the target audience won't either." Another mistake companies make is failing to include improved customer service along with rebranding. The article states:

"Simply calling your own 800-number or receptionist may reveal challenges customers face and inform your rebranding strategy. Take the time to navigate your own website, buy your products and return something. Better yet, ask a friend or family member to do so and learn from their experiences."

We spent a lot of time navigating our new web site before we launched it. Obviously we want our customers to have a good experience when they go there. For more on customer service, read my post entitled To Survive the Current Economic Malaise Retailers Should Try a Little Customer Service. Another big mistake companies make, REBRAND says, is "forgetting that people don't do what they say. (They do what they do.)" The article states:

"Use caution when basing rebranding strategies on focus group-type research. Unless you're physically in the customer's environment observing them using your product or service, you're not getting the full story. Actual observation, while not perfect, will get you a lot closer to the right solution."

The folks at IDEO call this taking the "The Deep Dive." I would go even further than the folks at REBRAND and state that sometimes listening to the customer is simply wrong. Luke Johnson pointed out that Henry Ford, at the launch of the Model T, stated: "If I'd asked the customer, he'd have asked for a faster horse." ["Why focus groups tell you the obvious," Financial Times, 24 March 2010] Johnson and the folks at REBRAND have a different perspective on the value of research. REBRAND asserts that you shouldn't rebrand without research. Johnson claims, "Over-reliance on researchers means owners and managers are separated from the consumer. Successful [business people] I know put more effort in talking to customers themselves, than they do working with costly experts who tell them what they should have learned long before." Personally, I have found that industry experts can be very helpful.

Earlier this year, Judith Aquino, from Business Insider, provided her list of The 10 Most Successful Rebranding Campaigns Ever. The companies she singled out were: J. Crew, Burberry, Pabst Blue Ribbon, Harley-Davidson, McDonald's, Target, Walmart, Old Spice, Apple, and UPS. Click on her article to read why she believed these were great rebranding campaigns. Aquino concluded, "A successful campaign requires more than a revamped logo. It demands a vision that inspires customers, investors, and others to see the company in a new light." At Enterra, we hope that our efforts do just that.

September 30, 2011

Friendship, Happiness, and Courage in the Workplace

As an employer, I'm aware that job satisfaction is critical for retaining great employees. Employers would love to be able to control all of the factors that lead to job satisfaction; but, as we all know, they can't. Many things factor into what makes an employee happy and satisfied. In this post, I would like to discuss a few articles that with deal some of those factors. Let's begin with the topic of friendship. Ralph Waldo Emerson wrote, "A man's growth is seen in the successive choirs of his friends." My guess is that if you ask people on the street, "Does your happiness increase with the number of friends you have," the majority of people would answer, "Yes." After all, who doesn't like to be popular and popularity is measured by volume rather than depth.

A recent study, however, claims that the size of the social network you have may be determined by your genetic make-up rather than your sparkling personality. An article about the study asserts, "The number of friends you have can be accurately predicted by the size of a small almond-shaped part of the brain called the amygdala." ["How many friends you have can be predicted by the size of your ...," Gizmag, 27 December 2010]. Actually, the study's authors use the terms "social life" and "social networks" rather than "friends." The article reports:

"According to a university study, ... the strong correlation between a larger amygdala and a full social life holds true regardless of age or gender. Scientists have discovered that the amygdala, deep within the temporal lobe, is important to a rich and varied social life among humans. 'We know that primates who live in larger social groups have a larger amygdala, even when controlling for overall brain size and body size,' says Lisa Feldman Barrett, PhD, of theAmygdala_hippocampus_lateral_large1 Massachusetts General Hospital (MGH) Psychiatric Neuroimaging Research Program and a Distinguished Professor of Psychology at Northeastern University, who led the study. 'We considered a single primate species, humans, and found that the amygdala volume positively correlated with the size and complexity of social networks in adult humans.' The researchers also performed an exploratory analysis of all the subcortical structures within the brain and found no compelling evidence of a similar relationship between any other subcortical structure and the social life of humans. The volume of the amygdala was not related to other social variables in the life of humans, such as life support or social satisfaction. 'This link between amygdala size and social network size and complexity was observed for both older and younger individuals and for both men and women,' says Bradford C. Dickerson, MD, of the MGH Department of Neurology and the Martinos Center for Biomedical Research. 'This link was specific to the amygdala, because social network size and complexity were not associated with the size of other brain structures.' Dickerson is an associate professor of Neurology at Harvard Medical School, and co-led the study with Dr. Barrett."

If, in the hypothetical question I posed above, you replaced the words "numbers of friends you have" with the "size of your social network," my guess is that the majority of people would answer, "No." Friends and social networks are not equivalent. As George Washington put it, "Be courteous to all, but intimate with few, and let those few be well tried before you give them your confidence." As an employer, it would be interesting to have access to data indicating the size of a person's amygdala before hiring them as sales or marketing people. The larger a person's social network, the better they should be at those tasks. But, as far as happiness and job satisfaction go, it would tell employers nothing.

People can and, hopefully do, have friends at work; but, that is not always the case. So what else can affect a person's happiness and sense of well-being either at or away from work. In a book entitled The Happiness Equation, author Nick Powdthavee, an economist at the University of York, attempts to share what economists and psychologists have learned about "the secrets of human happiness." ["Lessons From Cloud Nine," by Bryan Caplan, Wall Street Journal, 16 August 2011] In his book review, Caplan, a professor at George Mason University, writes:

"Powdthavee ... deftly explains the main determinants of happiness: the small effect of money, the great effect of marriage and friends, the massive effect of personality. Even extremely good news (such as winning the lottery) and extremely bad news (such as losing a spouse) rarely changes an individual's happiness for more than a couple of years. Mr. Powdthavee also explores the effect of happiness on success: Happiness today predicts higher job performance, better relationships and more years of health in the future."

Based on that brief abstract of Powdthavee's book, you can understand why employers should be concerned with the employee's happiness -- even if there doesn't seem to be a lot they can do about it. Caplan continues:

"In his discussions of money, Mr. Powdthavee puts special emphasis on relative income. People don't care only about the numbers on their paychecks, he writes; their happiness also depends on whether they make more or less money than their peers. Yet Mr. Powdthavee's explanation of the income-happiness connection is both misleading and confusing. He suggests that large differences in relative income can have a large influence on happiness, basing this claim on Richard Easterlin's atypical, somewhat dated finding that the richest Americans are twice as likely to be 'very happy' as the poorest. Yet he buries the standard, lower estimates after a long discussion of statistical methods that only an expert could understand, and he relegates to an endnote the powerful international evidence against the importance of relative income that has been gathered by Justin Wolfers and Betsey Stevenson. While absolute poverty can have a powerful negative affect on happiness, in First World countries there is little connection between either absolute or relative income and happiness."

Despite deep analysis that "only an expert could understand," common sense tells you that within a company peers getting significantly different salaries could be a source of conflict and unhappiness. Certainly a person's self-esteem could affected by knowing that he or she makes less than a peer for performing similar work. That's the reason that so many companies have policies that prohibit employees from sharing salary data. Caplan, who is an economics professor, is a bit offended by Powdthavee's book because it "unjustly caricatures the economics profession as dogmatically hostile to the very concept of 'happiness'." Caplan claims, "The topic has been mainstream for more than a decade, and only a tired minority continues to insist that if you can't objectively measure it, it doesn't exist." It shouldn't surprise you, then, that Caplan concludes:

"If you've never read another book on happiness, you may learn a lot from 'The Happiness Equation.' But better books on the same subject already exist—most notably, Daniel Gilbert's 'Stumbling on Happiness' and Arthur Brooks's 'Gross National Happiness.' Mr. Gilbert, a Harvard psychologist, is a virtuoso writer, while Mr. Brooks, the president of the American Enterprise Institute, seamlessly interweaves the data with reflections on the human condition. 'The Happiness Equation' can only really be recommended to those with a deep interest in the subject who have read other books on the topic and plan to read more. Mr. Powdthavee deserves credit for concluding his book with some of the big questions: 'Is happiness overrated?' 'Should government force people to be happy?' But he neglects the many ways in which government could sharply increase happiness by intervening less."

I would like to conclude with the discussion of two interrelated topics: fear and courage. There are people, I suppose, who never doubt their abilities or chosen course in life. But indications are, those people are rare. I think it's both appropriate and useful to question yourself on occasion. But, according to Melinda Beck, doubts can be taken to the extreme with the result being unfounded fear. ["Conquering Fear," Wall Street Journal, 2 January 2011] She writes:

"The boss loves your work. Your spouse thinks you're sexy. The kids—and even the cat—shower you with affection. But then there's the Voice, the nagging presence in your head that tells you you're a homely, heartless slacker. Even people who appear supremely fit, highly successful and hyper-organized are sometimes riddled with debilitating doubts, fears and self-criticisms."

Beck reports that the nagging doubts aren't really the problem, it's making sure that they don't become debilitating that matters. According to her article, a new "wave of cognitive-behavioral therapy is catching on in psychology and self-help circles. It holds that simply observing your critical thoughts without judging them is a more effective way to tame them than pressuring yourself to change or denying their validity." She continues:

"'Tame' is an interesting word," says Dr. [Steven C.] Hayes, who pioneered one approach, called Acceptance and Commitment Therapy. 'How would you go about taming a wild horse? You wouldn't whip it back into a corner. You'd pat it on the nose and give it some carrots and eventually try to ride it.' This new psychology movement centers on mindfulness—the increasing popular emphasis on paying attention to the present moment. One of its key tenets is that urging people to stop thinking negative thoughts only tightens their grip—'like struggling with quicksand,' Dr. Hayes says. But simply observing them like passing clouds can diffuse their emotional power, proponents say, and open up more options."

Although this "mindfulness" therapy remains controversial, employers should be aware of it because they may have employees who suffer from debilitating self-doubts. If you know someone who fits the description, point them to the article. The opposite of fear is courage. Natalie Angier writes, "Courage is something that we want for ourselves in gluttonous portions and adore in others without qualification. Yet for all the longstanding centrality of courage to any standard narrative of human greatness, only lately have researchers begun to study it systematically, to try to define what it is and is not, where it comes from, how it manifests itself in the body and brain, who we might share it with among nonhuman animals, and why we love it so much." ["Searching for the Source of a Fountain of Courage," New York Times, 3 January 2011] She continues:

"A new report in the journal Current Biology describes the case of a woman whose rare congenital syndrome has left her completely, outrageously fearless, raising the question of whether it's better to conquer one's fears, or to never feel them in the first place. In another recent study, neuroscientists scanned the brains of subjects as they struggled successfully to overcome their terror of snakes, identifying regions of the brain that may be key to our everyday heroics. Researchers in the Netherlands are exploring courage among children, to see when the urge for courage first arises, and what children mean when they call themselves brave. The theme of courage claims a long and gilded ancestry. Plato included courage among the four cardinal or principal virtues, along with wisdom, justice and moderation. 'As a major virtue, courage helps to define the excellent person and is no mere optional trait,' writes George Kateb, a political theorist and emeritus professor at Princeton University. 'One of the worst reproaches in the world is to be called a coward.' Yet defining what it means to be courageous has often proved as thistly as distinguishing the wise ones from the fools. For Plato and many other authorities, courage is above all a martial art, most readily displayed on the battlefield — the iconic brave solder running into the line of fire to retrieve an injured comrade. But Dr. Kateb points out that if courage finds its highest expression in war, then the trait paradoxically becomes an immoral virtue, ennobling war and carnage by insisting that only in battle can men — and it usually is men — discover the depths of their nobility. Marilynne Robinson, the novelist and social critic, has observed that courage is 'dependent on cultural definition' and 'rarely expressed except where there is sufficient consensus to support it.' Where religious martyrdom is lionized, there will be martyrs; where social or political protest is seen as glorious warfare in civvies, there will be a rash of red-faced declaimers, soapboxes on every street."

That brief history of studies and thoughts about courage is interesting, but has only tangential interest to happiness and satisfaction in the workplace. The following study noted by Angier is more pertinent. She writes:

"In pioneering work from 1970s and beyond, Stanley J. Rachman of the University of British Columbia and others studied the physiology and behavior of paratroopers as they prepared for their first parachute jump. The work revealed three basic groups: the preternaturally fearless, who displayed scant signs of the racing heart, sweaty palms, spike in blood pressure and other fight-or-flight responses associated with ordinary fear, and who jumped without hesitation; the handwringers, whose powerful fear response at the critical moment kept them from jumping; and finally, the ones who reacted physiologically like the handwringers but who acted like the fearless leapers, and, down the hatch."

Of those three groups, only the "jumping handwringers" were judged to be courageous. Expanding on that definition of courage, Angier writes, "Courage becomes democratized and demilitarized, the property of any wallflower who manages to give the convention speech, or the math phobe who decides to take calculus." That doesn't mean that the "fearless" group won't be good paratroopers or good employees, quite the opposite. A business needs both the fearless and the courageous. But courageous employees are important because they can help point out uncertainties and challenges that a fearless person might not. They are courageous because they "are aware of a danger but proceed in the face of it." What you don't need in your business is someone who is stupidly courageous (i.e., someone who proceeds with an activity that can have devastating effects on your business with little upside potential). The rogue traders in European banks come to mind. Rewarding courageous employees with a bit a praise or a bonus goes a long way to increasing their self-esteem and satisfaction at work.

The bottom line of this discussion is that employers must be cognizant of a lot more than job performance to extract the best from employees. In situations where inattention can result in serious injury or death, being aware of an employee's needs or predilections and recognizing changes in behavior or mood are even more important. Happiness, fear, and courage all play their role in the workplace and the more we understand about them the better.

September 05, 2011

Labor Day 2011

I would have liked to have titled this post "Happy Labor Day"; but, with an unemployment rate hovering over 9 percent and few prospects of it diminishing in the near term, I decided "happy" probably wasn't a very good modifier for a day dedicated to labor. Happy or not, I hope you find a way to enjoy the holiday. The following history of the holiday is taken from U.S. Department of Labor site:

Labor Day: How it Came About; What it Means

Labor Day, the first Monday in September, is a creation of the labor movement and is dedicated to the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.

Founder of Labor Day

More than 100 years after the first Labor Day observance, there is still some doubt as to who first proposed the holiday for workers. Some records show that Peter J. McGuire, general secretary of the Brotherhood of Carpenters and Joiners and a cofounder of the American Federation of Labor, was first in suggesting a day to honor those "who from rude nature have delved and carved all the grandeur we behold." But Peter McGuire's place in Labor Day history has not gone unchallenged. Many believe that Matthew Maguire, a machinist, not Peter McGuire, founded the holiday. Recent research seems to support the contention that Matthew Maguire, later the secretary of Local 344 of the International Association of Machinists in Paterson, N.J., proposed the holiday in 1882 while serving as secretary of the Central Labor Union in New York. What is clear is that the Central Labor Union adopted a Labor Day proposal and appointed a committee to plan a demonstration and picnic.

The First Labor Day

The first Labor Day holiday was celebrated on Tuesday, September 5, 1882, in New York City, in accordance with the plans of the Central Labor Union. The Central Labor Union held its second Labor Day holiday just a year later, on September 5, 1883. In 1884 the first Monday in September was selected as the holiday, as originally proposed, and the Central Labor Union urged similar organizations in other cities to follow the example of New York and celebrate a "workingmen's holiday" on that date. The idea spread with the growth of labor organizations, and in 1885 Labor Day was celebrated in many industrial centers of the country.

Labor Day Legislation

Through the years the nation gave increasing emphasis to Labor Day. The first governmental recognition came through municipal ordinances passed during 1885 and 1886. From them developed the movement to secure state legislation. The first state bill was introduced into the New York legislature, but the first to become law was passed by Oregon on February 21, 1887. During the year four more states — Colorado, Massachusetts, New Jersey, and New York — created the Labor Day holiday by legislative enactment. By the end of the decade Connecticut, Nebraska, and Pennsylvania had followed suit. By 1894, 23 other states had adopted the holiday in honor of workers, and on June 28 of that year, Congress passed an act making the first Monday in September of each year a legal holiday in the District of Columbia and the territories.

A Nationwide Holiday

The form that the observance and celebration of Labor Day should take were outlined in the first proposal of the holiday — a street parade to exhibit to the public "the strength and esprit de corps of the trade and labor organizations" of the community, followed by a festival for the recreation and amusement of the workers and their families. This became the pattern for the celebrations of Labor Day. Speeches by prominent men and women were introduced later, as more emphasis was placed upon the economic and civic significance of the holiday. Still later, by a resolution of the American Federation of Labor convention of 1909, the Sunday preceding Labor Day was adopted as Labor Sunday and dedicated to the spiritual and educational aspects of the labor movement. The character of the Labor Day celebration has undergone a change in recent years, especially in large industrial centers where mass displays and huge parades have proved a problem. This change, however, is more a shift in emphasis and medium of expression. Labor Day addresses by leading union officials, industrialists, educators, clerics and government officials are given wide coverage in newspapers, radio, and television.

The vital force of labor added materially to the highest standard of living and the greatest production the world has ever known and has brought us closer to the realization of our traditional ideals of economic and political democracy. It is appropriate, therefore, that the nation pay tribute on Labor Day to the creator of so much of the nation's strength, freedom, and leadership — the American worker.

Although I agree with those last sentiments, I believe the best way to pay tribute to the American worker is to provide him or her with a decent job. I believe that labor, management, and government leaders need to work together to foster the conditions that generate more jobs. Private sector job creation is critical for ensuring the health of the American economy. But jobs must come neither as gifts nor as part of a welfare program. Workers need to shoulder the responsibility of preparing themselves for the jobs that are available. In the coming days, the President and his Republican rivals are going to present their recommended programs for job creation. The philosophical foundations of those plans are likely to be very different; however, no good idea should be discarded or discredited because of basic ideological differences. Job creation is too important a matter for bipartisan bickering. The polls continue to show that the American public is tired of politicians putting partisanship and ideology ahead of principled leadership. Americans want what's best for America, not what's best for the Democratic or Republican parties. Neither party can stake claim to having all of the good ideas or programs. It would be refreshing if politicians would listen intently to one another looking for an idea they can work on together. Unfortunately, it's hard to listen if you never stop talking and it's hard to agree if you are only looking to be disagreeable. I hope this Labor Day provokes politicians to remember that unemployment saps the strength of individuals, of families, and of the nation itself. Let's hope next Labor Day can be a happier one.

July 04, 2011

Happy Fourth of July

Almost every country in the world sets aside a day to celebrate its heritage and history. For the United States, that day is the Fourth of July. For Americans, the Fourth of July represents more than a day to celebrate culture and heritage; it's a day to remember some of the higher ideals -- like freedom and democracy -- that motivated its founding fathers to form the nation. America's first president, George Washington, once said, "As Mankind becomes more liberal, they will be more apt to allow that all those who conduct themselves as worthy members of the community are equally entitled to the protections of civil government. I hope ever to see America among the foremost nations of justice and liberality." It's perhaps a bit ironic that, given the fact that he used the term "liberal," George Washington might have a difficult time getting elected president in the current political climate.July-newrevgroup2

Amidst our celebrations I would hope that we would look for those things that we cherish in common rather than the issues that divide us. Someone once said, "Liberty is the right to choose. Freedom is the result of the right choice." The implication, of course, is that we can make wrong choices. Millions of people around the world are suffering because wrong choices have been made in the past. Albert Camus asserted, "Freedom is nothing but a chance to be better." Unfortunately, freedom also allows us to be worse. Extremely hard choices must be faced in the days and years to come. They are choices that will affect the futures of children, grandchildren and great grandchildren. We need to choose leaders with the courage and good sense to address them. We haven't done all that well in the past.

On 7 March 1985, midway through Ronald Reagan's tenure and president, a conservative columnist with libertarian leanings named Charlie Reese wrote a column for the Orlando Sentinal entitled "Looking For Someone To Blame? Congress Is Good Place To Start." During the last presidential election, the column was widely distributed by Tea Party advocates. Despite Reese's conservative leanings, the column takes swipes at both sides of the aisle. Reese wrote:

"Politicians are the only people in the world who create problems and then campaign against them. Have you ever wondered, if both the Democrats and the Republicans are against deficits, Why do we have deficits? Have you ever wondered, if all the politicians are against inflation and high taxes, Why do we have inflation and high taxes? You and I don't propose a federal budget. The President does. You and I don't have the Constitutional authority to vote on appropriations. The House of Representatives does. You and I don't write the tax code, Congress does. You and I don't set fiscal policy, Congress does. You and I don't control monetary policy, the Federal Reserve Bank does. One hundred senators, 435 congressmen, one President, and nine Supreme Court justices equates to 545 human beings out of the 300 million are directly, legally, morally, and individually responsible for the domestic problems that plague this country."

Reese was correct as far as he went; however, laying off the blame on those who were elected lets those who elected them avoid blame too easily. In the nearly three decades since Reese first penned his column, things haven't gotten any better -- and voters are to blame as much as politicians. In one of his plays, George Bernard Shaw wrote, "Liberty means responsibility. That is why most men dread it." During this celebration of the Fourth of July, Americans should recommit themselves to shoulder the responsibility that freedom places on their shoulders. In doing so, we needn't be mean-spirited nor cold-hearted. There are still those to whom we must reach out. Greatness lies in rising to challenges, not shirking from them. I believe America remains a great nation. Happy Fourth of July!

June 07, 2011

Search for Resources at the Top of the World

Joseph Spears reports that the Arctic region "includes a rich basket of natural resources." ["The Snow Dragon Moves into the Arctic Ocean Basin," The Global Realm, 8 February 2011] He continues:

"The U.S. Geological Survey estimates that 25 percent of the world's undiscovered hydrocarbon resources are found in the Arctic region along with 9 percent of the world's coal along with other economically critical minerals."

Although this is not breaking news, Arctic resources are a hot topic because climate change is making access to them much easier. The focus of Spears article is China's interest in those resources. He notes, "In a warming and changing Arctic, China is stepping up its activities in the Arctic Ocean Basin." He continues:

"While China’s interests and policy objectives in the Arctic Ocean Basin remain unclear, Beijing is increasingly active and vocal on the international stage on issues that concern the region. To that end, China is actively seeking to develop relationships with Arctic states and participate in Arctic multilateral organizations such as the Arctic Council. ... The Arctic Council, is a high-level intergovernmental forum which addresses issues faced by the Arctic governments and the indigenous people The Arctic Council states include Canada, Iceland, Russia, Denmark, the United States and Norway Finland and Sweden. The Arctic Council allows [a] number of observers to attend the Arctic Council and [China] almost became an observer in 2008. Since that time China, Korea Japan and Italy [have attended as] ad hoc observers. Full membership is reserved for Arctic countries and indigenous groups."

Spears draws the headline for his article from the name of "the world's largest non-nuclear research icebreaker, Xue Long (Snow Dragon)." He reports that the icebreaker "has embarked on four Arctic research expeditions in recent years into Arctic waters." Spears writes, "This is part of China's larger polar scientific research effort which has seen 26 expeditions in the Arctic and Antarctic since 1984." In a more recent article, Wenell Minnick reported, "As polar ice caps melt, China is preparing to take advan­tage of potential opportunities that have broad national security im­plications, including new shipping routes along the Arctic rim and massive hydrocarbon reserves of oil and gas under the Arctic." ["Ice Station Dragon: China's Strategic Arctic Interest," Defense News, 16 May 2011]. Minnick continues:

"Though most international envi­ronmental groups see the melting of the polar ice caps as a disaster, China is seeing an opportunity, said Wang Kuan-Hsiung, a re­searcher at National Taiwan Nor­mal University. The Arctic will be largely ice-free in the summers within a decade, he said, and China views potential new shipping routes along the Arc­tic rim as a way of avoiding maritime piracy and cutting costs with shorter routes to Europe. Beijing has had security con­cerns over the sea lanes of com­munication. China is dependent on oil and gas shipments from the Middle East. Potential choke points in the Malacca Strait and territorial disputes in the South China Sea have added to the con­cern. For the first time in China’s modern naval history, it has taken up anti-piracy patrols in the Gulf of Aden to ward off Somali pirates. Though an Arctic passage would do little to solve security concerns over oil and gas shipments from the Middle East, it would provide a shorter route for China’s exports to Europe. It is estimated that the maritime route between Asia and Europe could be reduced from 15,000 miles to less than 8,000 miles, Wang said."

To learn more about potential northern shipping routes, read my post entitled Supply Chains and the Northwest Passage. To learn more about the piracy challenge, read my post entitled Shiver Me Timbers -- A New Age of Piracy. Minnick notes that, even if new northern trade routes open, "it is un­clear whether Chinese vessels will be allowed access to both the Northwest Passage, controlled by Canada and the U.S., and the Northeast Passage, controlled by Russia." China's larger goal is to maintain the Arctic as an international resource and it could "challenge Canadian claims of historical sov­ereignty over the Arctic in general and the Northwest Passage in particular." Minnick continues:

"In an effort to enhance its inter­national position, China has estab­lished three polar research sta­tions: the Great Wall Station and the Zhongshan Station in the Antarctic, and Yellow River Station at Ny-Alesund in Norway's Sval­bard archipelago in the Arctic. China also operates the MV Xue­long (Snow Dragon) polar re­search vessel, which has come un­der scrutiny by Taiwan authorities. In 2005, Taiwan frigates chased the Snow Dragon out of the island's territorial waters for alleged spy­ing. The vessel was allowed a goodwill visit to Taiwan in 2009, but ordered to turn off electronic monitoring equipment before en­tering Kaohsiung harbor. China has also been paying close attention to Iceland, where Beijing has established a large embassy and has been in discussions with Reykjavik officials about the cre­ation of a major Arctic shipping hub on Iceland, Wang said. China wants the Arctic sea pas­sages declared 'international terri­tory' or the 'shared heritage of hu­mankind,' Wright said. Beijing's 'nightmare scenario' is that the A5 or five Arctic littoral states — Canada, Denmark, Norway, Russia and the United States — will agree to exclude China and 'divvy up the region’s resources.'"

As noted earlier, those resources include: oil, natural gas, coal, iron, phosphate, peat, and non-ferrous metals." It's not just China that could create controversy in the region. Joby Warrick and Juliet Eilperin report, "As glaciers defrost and ice floes diminish, the North is being viewed as a source of not only great wealth but also conflict, diplomats and policy experts say." ["Warming Arctic opens way to competition for resources," Washington Post, 15 May 2011] Warrick and Eilperin continue:

"In recent months, oil companies have begun lining up for exploration rights to Baffin Bay, a hydrocarbon-rich region on Greenland's western coast that until recently was too ice-choked for drilling. U.S. and Canadian diplomats have reopened a spat over navigation rights to a sea route through the Canadian Arctic that could cut shipping time and costs for long-haul tankers. Even ownership of the North Pole has come into dispute, as Russia and Denmark pursue rival claims to the underlying seabed in hopes of locking up access to everything from fisheries to natural gas deposits. The intense rivalry over Arctic development was highlighted in diplomatic cables released last week by the anti-secrecy Web site Wikileaks. Messages between U.S. diplomats revealed how northern nations, including the United States and Russia, have been maneuvering to ensure access to shipping lanes as well as undersea oil and gas deposits that are estimated to contain up to 25 percent of the world's untapped reserves. In the cables, U.S. officials worried that bickering over resources might even lead to an arming of the Arctic."

The Arctic Ocean is the smallest of the world's oceans. A quick glance at a map from a top-of-the-world perspective highlights why a northern passage and access to resources there would be game changing. Warrick and Eilperin report that one leaked 2009 State Department cable quoted a Russian ambassador as saying, "While in the Arctic there is peace and stability, however, one cannot exclude that in the future there will be a redistribution of power, up to armed intervention."

Arctic Ocean 03

It was exactly that kind of talk that led to "an extraordinary diplomatic gathering ... in Greenland's tiny capital Nuuk" in early May. Although it was the annual meeting of the Arctic Council, it was extraordinary in that it was attended by two U.S. cabinet members, Secretary of State Hillary Rodham Clinton and Secretary of the Interior Secretary Ken Salazar, and resulted in "the first legally binding treaty in its history, a pact that sets the rules for maritime search and rescue in the region." Warrick and Eilperin report, "Although modest in scope, the treaty, authored mainly by Russia and the United States, was hailed as a template for future agreements on issues ranging from oil-spill cleanup to territorial disputes." Following the meeting, Secretary Clinton stated, "The challenges in the region are not just environmental. The melting of sea ice, for example, will result in more shipping, fishing and tourism, and the possibility to develop newly accessible oil and gas reserves. We seek to pursue these opportunities in a smart, sustainable way that preserves the Arctic environment and ecosystem."

According to Warrick and Eilperin, another significant outcome from the meeting was the vote "to establish a permanent secretariat to the council, to be located in Tronso, Norway. Clinton asserted that the region's powers must recognize the council as the 'preeminent intergovernmental body, where we can solve shared problems and pursue shared opportunities.'" From China's perspective, the move to establish a permanent secretariat is probably viewed as a power grab to ensure that Arctic sea pas­sages don't become international terri­tory and/or that the region's resources aren't declared a shared heritage of hu­mankind.

With so much attention now being given to the Arctic region, retired General Joe Ralston insists that the U.S. should no longer view itself "as a nation bounded by two great oceans." He writes, "The world has changed. The Arctic Ocean is no longer optional. In fact, it has become our nation's third great ocean border - and the opportunity of a lifetime." ["From sea to shining sea to Arctic Ocean," Washington Times, 13 May 2011] He continues:

"The Arctic is of strategic importance to national security, global commerce and climate, and in meeting the world's energy needs. Cooperation in the neighborhood now can prevent conflicts later over sovereignty, shipping, the environment, energy and national security. ... The Arctic nations are preparing claims to take control of extended continental shelves that could carve up the Arctic Ocean floor - almost to the North Pole. Shipping is expanding exponentially. Russia's northern-route shipping volume is predicted to increase 500 percent this year over last, and Russia is granting permits for foreign vessels to transit its northern route. Eager to show its interest, China is allocating more to polar research, even going so far as to send an icebreaker north of Alaska last summer and north of Iceland this summer to do reconnaissance on shipping routes. Other nations, such as South Korea, also are gearing up because the northern routes can save billions of dollars in time, fuel and piracy problems."

The General concludes, "We're watching history being made." Because there is so much at stake, the Arctic region is going to be an interesting hot spot to watch over the coming decades.