SCM Wire Readers:

Please accept my advice as you continue in your careers:

• Continue to learn and grow professionally.
• Help the small suppliers to succeed.
• Focus on cost, not price.
• Understand your role in overall operations.
• Support the customer.
• Actively participate with the new authors of SCM Wire.

All the best,

Rich

Last weekend my wife asked me to clean the shower head. We have very hard water and it gets filled with sediment. Pretty simple job that I've done many times. But this time it was different. Why? I had just watched This Old House and developed such a level of confidence that this was going to be a simple job. I realished it.

Out with the pliers, and within 20 seconds I had snapped the shower head extension pipe clear off.....with the remnants still stuck in the pipe recessed into the wall. No mater what I tried I couldn't get the piece of pipe out.

I called my plumber on a Sunday (on his cell) and had a call back within the hour. He agreed to come to the house on Tuesday between 8 and 8:30 AM...and he thanked me for calling him! On a Sunday!

Tuesday comes and he is 10 minutes early! He fixed the shower and also a list of other things I wanted him to do as long as he was here. $463.00 later, he was gone...once again thanking me for my business.

He does good work, is priced reasonably, is in high demand but appreciates his "regular"customers, and is pleasant to speak with. A volunteer fireman in town and a Sopranos fan. I almost enjoyed writing the check. Almost.

Suppliers can learn a lesson from simple customer service and customer appreciation, but I've learned to keep my pliers in the toolbox.

The U.S. Government Census Bureau has released their 2004 statistics on the transportation industry. The industry segment on the report includes truck transportation, couriers, messengers, warehousing and storage. There was an aggregate increase of $20 billion from 2003-2004.

• Truck transportation was up 10.4% to $186 billion.
• Courier and messenger revenue was up 4% to $62 billion.
• Long distance general freight revenue was up 10.7% to $105 billion.
• Hazardous materials shipments were up 9.4% to $10 billion.
• See the article in Logistics Today for some additional statistics.

FedEx has agreed to buy out its Chinese partner's 50 percent share and creating it into a wholly-owned subsidiary. FedEx will pay $400 million for Tianjiin Datian W. Group Co.'s 50 percent share in their FedEx-DTW International Priority express joint venture as well as DTW's domestic express network.

The transaction includes assets from DTW Group's 89 locations. When the transaction is complete, FedEx will employ more that 6,000 people in China. FedEx has been operating in China since 1984 and began direct flights to the mainland in 1996. They are building a regional operations center in Guangzhou.

I often had to go on searches for MSDS (material safety data sheets)sheets for facilities management. Even though I always requested MSDS sheets with the product, it wasnot often sent, especially on routine products.

I learned that the most requested MSDS sheet was for WD-40, the ubiquitous can that is in every garage, cellar, and car trunk. I'll bet it is the most common tool in anyone's tool kit. WD-40 has built an interesting site to support their product, including a link to the MSDS sheet directly on their home page...it is the first thing you see.

This site also includes uses for WD-40, tips and suggestions, and also a virtual tour of the factory. You can even get an e-mail sent to you with regular tips. A case study in brand management. Enjoy.

It is no secret that companies are spending less and less on training and development for employees. When budgets get tight, that is often one of the first things to get cut. You'd think that companies would realize that a better trained and educated employee is a more efficient and productive employee....but that is an argument best saved for another day.  

MRO Today's Lean University has a novel approach to a day of training in what they are calling Race City U.S.A (Mooresville, North Carolina). The training day has a NASCAR theme and after the speakers and presentations, there is actually an opportunity to practice some team building exercises as a pit crew member on a real race car.

See the conference brochure.

It is always nice to be present at the birth of an acronym. Advanced Inventory Optimization, or AIO, is expected to grow at 12.6% over the next five years, according to the ARC Advisory Group. The market for 2005 was $99.2 and is forecastedto reach $179.6 million in 2010.

AIO simultaneously calculates where and how much inventory should be held across the the network of inventory locations. Traditional inventory control methods calculate inventory on a location by location basis. AIO is typically outsourced sue to its complexity.

Read the article on Industryweek.com

I am writing an article on TPM (Total Productive Maintenance), the lean process of effectively, and proactively, managing the equipment on the factory floor. Think of TPM as bringing your car in for service every three thousand miles for an oil change and a check-up before it breaks down and has to be towed in. A lot of lean activities are common sense, with an acronym wrapped around it.

I discovered a good site. The Marshall Institute, a  TPM consultancy, is providing some free online courses on TPM. Optimizing Lean Maintenance Practices is a course that might be of interest to the operations types in your company. Good references on the site also.

RoHS has not been fully implemented yet but companies should get ready for REACH, the new European directive on chemicals. This directive looks for the registration, evaluation and possible authorization of 30,000 chemicals in order to minimize damage to health and the environment.

REACH is an acronym Registration, Evaluation and Authorization of Chemicals.

Producers will be required to register products, providing details of chemical ingredients, the use of chemicals and a toxicity assessment. This is submitted to the European Chemical Agency for authorization.

Read the article in Green Supply Line.

We had an old Lionel train set when I was a kid. It was passed down from I think my father and it was the old fashioned style with a solid black metal engine on large gauge track. It also had a transormer a thrid the size of a brick with a red metal leve to control the train speed.

We had enough track to make an oval and once in a while we'd mount it on an old door and put some fake grass and small toy buildings around it. Eventually I discovered HO slot cars (remember them?) and the trains were dismantled and eventually given away. They must be worth a mint at this point.

A local museum has a model train show every winter that is always packed...by adults. I have never been one for trains, but I know it is a passion for many. In fact, my recent post of the Women of the Railroad was quite popular. Anyway,  for you train enthusiasts, I've found a good site for railroad pictures.

Check out Railroad.Pix and enjoy.

Yet another impassioned article in Industrial Distribution Magazine on how to identify and analyze customer margins. The author once feels that once again if the margin is not adequate to support a continued business operation then the distributor is actually best off firing the customer. This "we are in charge" bravado is getting old. 

Now I understand there are some less than desirable customers out there and they may be a margin drain. Then adjust your prices accordingly. Or decline to do things that you know will not result in any future business. Just say no. Trust me, they'll get the message. Business relationships change all of the time, on both sides of the desk.

A little less theater and a bit more reality. Please!

If you are an IT professional reading SCM Wire, Information Week would like to hear from you. They are compiling statistics for their 2006 Salary Survey, so now is the chance to click on the survey and provide some good data to them. It is confidential.

If you participate you can enter a contest and win something nice. But do it for the validity of the data. We all look at salary surveys to benchmark, but if you are like me (a bit cynical) you sometimes question the results. This particular survey has been around for 9 years and 125,000 employees have participated, so I'll assume it is accurate. Good data helps us all.

Here is the survey.

...for the first half of 2006 at least, and then they are expected to rise a bit in the third and fourth quarter. Reports by analysts and detailed in Logistics Today shows that container lines, trucking lines, and the railroads are still going strong and the supply chain seems filled.

The trucking world is still looking for drivers and the new hours of service requirements which went into effect on January 1 still need to be worked through. Railroads are still running near capacity and still addressing delays and infrastructure issues.

The article from Logistics Today is a good summary of the pricing and capacity issues that impact all logistical operations. A must read..if you will.

DaimlerChrysler has announced that they will be cutting 6000 white collar jobs in order to improve operations. Most of the cuts will come from staffing in Germany and will amount to about 20% of the 30,000 person staff. Most of the cuts will come from human resources, finance, and strategic planning. The cuts will be carried out by the end of 2008.

They are streamlining operations to improve quality, bring engineering and "executives" closer together to improve communication. While they are at it they need to also improve communication throughout the supply base and into the factory floor. Funny how things like that work.

This week's edition of Business Week has a cover story on outsourcing. As part of the extended story they have a sidebar called the Modular Corporation where they use IDC estimates to look at the size of the outsourcing spend in 2005. Some interesting numbers:

• Logistics and Procurement $179 billion
• Manufacturing (electronics only) $170 billion
• IT $90 billion
• Customer Service $41 billion
• Engineering $ 27 billion
• Finance & Accounting $14 billion
• Human Resources $13 billion
• Analytics $12 billion

...and growing.

The Supply Chain Management Review's recent Global Survey of of Supply Chain Progress shows continued progress of supply chain related activities. According to the article, many companies are moving up the ladder from internal supply chain practices to greater collaboration throughout the supply chain. Where does your company fit on this scale?

Read the article in Supply Chain Management Review.

If at all possible, take a trip to Chicagoland in March (21-23) to National Manufacturing Week. For factory junkies, there are great opportunities to see the latest in from factory floor automation to the latest in hand tools. Supply chain and logistics folks will also find all of the logistics and e-commerce suppliers all in one place.  

I was fortunate to go five years ago and participate in the show by having the dreaded "booth duty" for the company I was working with. We had 8000 registered visitors in our booth over a 4 day period. The days were long, but the nights were full of great Chicago food. As it was a dot com company with seemingly unlimited budgets, we ordered both the shrimp AND the cracked crab at dinner.

Sorry to see the show move out of the city to the 'burbs near the airport. Certainly more convenient, but the local flavor of the city and McCormick Place will be missed.

By now I'm sure that you've heard that Ford will cut 30,000 jobs and close 14 plants as they try to get their mojo back. I am a proud owner of several Ford cars and will continue to buy their products during what they are calling "Way Forward". Good to see their earnings were up this past quarter, as well as today's stock price. 

What worries me is the impact on the supply chain. While 30,000 employee cuts is nothing to sneeze at, it will also be a devastating shock through their supply base. Less factories will undoubtedly mean less parts...and less suppliers. Look for the ripple effect on supplier layoffs also, as well as the impact in the community where the plants will be closing.

ThomasNet.com and Google's survey on industrial buying and selling behaviors shows some interesting trends when it comes to doing business online: 

• 70 percent of buyers expect to find detailed information on product applications and uses, but only about half provide it.
• 58 percent seek CAD drawings and plans, but only 13 percent provide them.
• 74 percent expect to find product prices, but only 23 percent of companies provide them.
• 67 percent want to see shipping information and costs, but only 17 percent provide it.

How do you get your suppliers to have better information on their sites? Demand it. They are worried about losing the relationship (the sell) if more information is provided on the web. The can offset this fear with good performance and value.

Courtesy of ISM