…break continues…

Well my blogging break continues….

It’s great to have 10 things to do in the day… not so fun when that becomes 30… and a downright pain when you add scope creep to it.

Unfortunately I dont have the luxury of a weekend these days in which to plan G&W posts.

 

I will still be posting things to G&W but it will be a bit sporadic. I thank the patient audience in advance.

 

In Supply Mgmt terms: I have a situtation where I have oversold (time) and thus now have limited supply (of time) to actually deliver to the distribution channels.

The pop-quiz question is : Why am I choosing G&W as the delivery channel which gets less-than-expect delivery of goods? 

Two great avenues for entreprenuers to become global supply partners

I mentioned earlier that it is important for Pakistan to become a part of the global supply business.

Disclaimer: China and other countries already have a significant head-start in what I am about to say here — the good thing is, that these avenues do not depend on who’s first.

Let’s get some facts out of the way :

Fact : we will face a greater set of resistance initially from international customers in convincing them to take their businesses to PK.

Fact : Part of this is an image problem of the country.

Fact : Most of it is a quality issue.

But here are two ideas for entrpreneurs and dynamic companies alike to think about.

As always, a long coffee-session follows. Refill your mugs before diving in.

Thomas Friedman on Dell’s Role in Political Stability

Maybe I tend to refer or promote this book too often but it is true that Thomas Friedman raised some very relevant points in The World is Flat, albeit somewhat obvious to those looking.

He has a great chapter where he describes his thesis of how he thinks a country’s political stabilization is becoming linked with the presence of the country in the global playing field, using Dell as a reference.

I thought it was relevant to write this here because a lot of people in their living rooms complain about how businesses in Pakistan suffer the onslaught of political unrest.

— JUMP

Friedman’s theory, paraphrased, says

‘any country who is part of a significant global supply chain will never see wars and other political unrest — the cost of war for them is to lose $MB in money flowing through them’.

He quotes the example of escalating relations between India and Pakistan a few years ago, where the IT industry in India lobbied to the govt to de-escalate the environment. India, because of being part of the global BPO services supply chain, cannot afford political unrest.

So what does this mean for Pakistan? Well it is good to know that the New Economy is such that businesses can infact determine a role in the political stability of a country.

Our job-shops, factories and materials people need to jointly explore creative ways of becoming atleast one stop in some company’s global supply work — maybe we are materials suppliers, part-makers, manufacturing advisors, what have you.

We need to start taking IP infringement very seriously — infringing on global patents confines the business to remain within the country, it being illegal being the other bad thing ofcourse.

This is actually easier than one might think, and I might discuss some short-term entreprenurial ideas for getting there at some time.

In the idealistic, utopian, long-term: local IC manufacturers feed into local part manufacturers into local product designers all involved with international contracts.

ATO and factory load Part2

We discussed ATO basics a few days ago.

In order to implement ATO, you will naturally go to your factories and ask them to move away from requiring bulk orders up-front, and move towards a long-standing agreement to assemble products according to your customers’ orders.

The biggest concern you will hear from the factories is that of load. “What if you give us 15 orders one week, and 5 the other. What happens then?”

The concern is a very valid one, and infact will be core to any solution. Any solution will be bounded most by the load on the factory, and end-customer price point, among other things.

ATO and factory load Part1

Lean manufacturing essentially started as a means to react to changes in demand in a way that would not result in losses to you and to your suppliers. In one sense, you do this by moving the ‘inventory holding centers’ upstream — i.e. instead of you holding inventories for finished goods, your suppliers, or their suppliers, or theirs, might keep inventory. The rest of the chain just works in a real-time manner to incoming demand.

Parts suppliers — holding stocks of, says, buttons, would be able to assume the risk of holding stocks because they can always sell buttons to someone else if demand for your product changes.

Assemble-to-Order (as opposed to build-to-stock) is one manufacturing process that relies on an agile supply-chain to be successful. ATO can be used to achieve zero-inventory, but most prominently it will help you minimize your working inventories.

After the link I very briefly introduce the benefits of ATO. Without going into theory of how to align your supply chain for ATO manufacturing. I was to start analysing this within the context of Pakistan. 

Why Build-to-stock-only worries me

I mentioned in my last post on lean manufacturing that the model adopted by the industry is a bit disconcerting.

It is more than just build-to-stock manufacturing. As I mentioned I am particularly concerned because companies will often not even forecast the stock to keep. The businesses would just build up a large amount of inventory, and keep going until they stock runs dry, before scheduling another purchasing run.

Why is this a concern? Many things, discussed after the link. But remember, I only point these out so that we can start thinking of strategies to fix them.

To ensure the analysis is complete, please do inform me if you know of anyone doing lean manufacturing, or has minimal inventories. Even if it is a bakery, or scratch cards launched by ISPs. I would like to know who is doing it smartly.

Lean Manufacturing in Pakistan - MIA?

I have had the chance to meet some manufacturers now in Pakistan, and have observed the supply practices of several companies, and I keep seeing a disconcerting trend.

Manufacturing operations here work quite the same way as IT software houses — entirely project-based, and quite unwilling to explore different supply models.

The factories would do nothing until they get a well defined order — “Give me 30,000 units in two months, here are the specs”. The factory would then plan, build capacity and execute the project. They would expect bulk payments, sometimes even in advance as a mobilization charge.

The term in the industry for this is “lag capacity”.

What concerns me more is the supply models used by companies: only build-to-stock manufacturing.

We analyse some examples after the link.