“If supply chain management is really nothing more than how companies work together, then why all the complexity and concern?”  It is a valid question asked by those not familiar with todays “always on” operational environment and equally compounded by the just in time (JIT) expectation many organizations, both large and small, have in our rebounding global economy.  The events in early 2011 when a natural disaster of epic proportions struck the Japanese automotive industry , sending shockwaves around the world, reminded us of what can happen when the “always on” mindset we have so come to expect suddenly turns off.

Understanding the risks and opportunities associated with a kinder, gentler and greener supply chain suggest a fundamental need to revisit what we already know inside of our organizations.  With systems managing information in terms of petabytes (or 1000³ megabytes) on a regular basis, one of the challenges of having information is knowing what information you have and where to find it.  This can be a daunting task for many information technology (IT) groups.  Fortunately, with the advent of third-generation enterprise resource planning (ERP) software to include business intelligence (BI) tools, manipulating large structures of information at one’s fingertips – properly organized – is possible.  With this new capability, organizations can begin to readily answer the four big questions constituting a green supply chain program across all facets of company operations:

1. What substances are used to make my products?
2. Who supplies my materials, components, and goods?
3. Where do my materials, components and goods come from?
4. Can I make changes to any of these to be greener and more profitable?

In most cases, a company already has the right information to answer these questions.  They just need to know where to look for it.  Enter the friendly and reliable ERP system in its new and enhanced capability with BI and advanced analytics.

If supply chain is really about collaboration, a greener supply chain suggests removing some of the neo-capitalist “one winner only” purchasing mentalities and replacing them with “co-innovation and value creation” thinking between manufacturers and suppliers.  This can mean “opening the kimono” to allow key suppliers into your core ERP system, or creating supplier portals to share and exchange pertinent information on supply chain performance and expectations.   Creating win-win opportunities to engage a value chain under the auspices of creating value through a greener supply chain can open the door to new thinking, both in how we view traditional operating models and how we measure our performance against a triple bottom-line.  This should give new life to the time-tested and trustworthy ERP system, and a new sense of purpose on what information we use to operate our businesses in new and creative ways.

Click here to receive a full copy of the article as part of the eBook and free webinar offer by Sustainable Business Forum.  Thanks in advance to Sustainable Business Forum for the opportunity to participate in this webinar and eBook project.

Various industry organizations are tracking and updating their respective manufacturers on Conflict Minerals legislative issues (e.g. EICC – Electronic Industry Citizenship Coalition, Global e-Sustainability Initiative (GeSI), AIAG – Automotive Industry Action Group, Mema – Motor & Equipment Manufacturer’s Association). Although these types of associations are knowledgeable sources of information for what will be required for reporting, their role is not focused on the “how to get it done”.

This question on “how” a company can systematically report and track Conflict Minerals is a challenge, especially for industries such as Electronics and Automotive.

…

Finding out a mineral’s origin right to the smelters and mining region is both a workflow and reporting process, and outside the core capabilities of IMDS. The core capabilities of systems that support PLM (Product Lifecycle Management) or SCM (Supply Chain Management) areas tend to be much broader and may not efficiently complete all the workflow and reporting required to ease the implementation around environmental compliance. Without an automated IT and workflow process for compliance concerns like Conflict Minerals, much follow up and requests to suppliers are then limited to emails, letters, and requests for information, all being quite tedious and manual, and prone to error.

You may read the full white paper on the Newport Consulting Group website, which also discusses one possible approach based on our recent client work which can take the myriad of conflict minerals actions into consideration.  Given the gravity of the pending act, manufacturers working with these minerals should plan now in the event legislation is implemented according to schedule or even in the best possible scenario that the implementation period is extended.

Fortunately there are some bright spots.  In some areas job growth, buoyed by a resurgence in manufacturing as well as diversification and small business growth, made big head ways.  Earlier this week the Detroit Free Press reported that for the first time since the new millennium there will be positive job growth for the year in the State of Michigan.  Airplanes got bigger – way bigger - as the new massive Boeing Dreamliner 787 entered flight test and Airbus 380 continued deliveries.  We retired the space shuttle while at the same time opened the door for companies like Virgin Galactic to privatize human space travel on a recreational basis.  Apple had another winner – two actually – with its iPhone 4 and 4Gs models, putting pressure on RIM and Motorola and other mobile technology makers to step up or shut up in the exploding device market.  Software maker SAP made a big splash with its high analytic appliance (HANA) platform, showing that – yes, Virginia – you really can run all that batch computing real-time and allow for in-memory and dynamic simulations of critical business information.  Avionics came to the forefront when a coveted stealth drone was captured by Iranian authorities, starting the clock as to how quickly the Iranians, North Koreans, Chinese and even our new World Trade Organization partners – the Russians – can reverse engineer the information contained in that snappy looking fly-by-wire vehicle.

So let’s have a look at what we expected to happen in 2011 and what we do expect to happen in 2012…

2011:

#5 – It’s still the economy, stupid. Totally got this one.

Manufacturing is back, but for how long? (Photo from Detroit Free Press)

We are and continue to wait for the convergence of key indicators – particularly consistent sector growth in manufacturing and services – along with a robust savings rate upwards of 10% to really spark the economy.  While most of the conversation is still focused around how consumers spend their money, history has shown that the most economically sustainable recoveries occur when there is adequate savings and reserves.  After years of low – and at times even negative - savings levels, we seem to be plateauing around 6%.  Savings, according to the Bureau of Economic Activity (BEA), includes funds not used in the purchase or investment accounts.

#4 – Sustainability isn’t a fad.  You can either get on the bus now or have it run over you later.  While this is true, mainstream business has yet to catch on.

Most of the work in private business that we see is self-directed at least in the US.  While this is good – I believe it is better for a company to want to change behavior rather than feel it must change behavior (a la compliance and regulations) - we are still waiting for the spark to pick up sustainability beyond more than friendly “green teams” and cost-reduction actions in large publicly-traded companies and private enterprises.  See more on this bending trend, below.

#3 – If it ain’t broke, don’t fix it.  If you don’t have it, break something to make it.  Definitely, as there were some really big winners in 2011.

Business Leaders could learn a lot from dead teenagers. (Photo from FX Network)

I mentioned the mobility game-changers that Apple brought, relegating RIM to third place (depending how you measure) from its once undeniable thrown in the mobile device space.  Small businesses led a lot of innovation this year, and big companies like Volkswagen – now making a pile of vehicles in the US – significantly altered their business models to buy market share in their respective industries.  Even in the motion picture and television industry, this quirky show about ghosts – characters who are not even living according to the script – captured Gen-Z and Millennials in a big way by creating a television series hybrid with American Horror Story.  Talk about out of the box thinking!  Business people need to get into the same disruptive thinking in manufacturing and technology segments.  Learn from dead teenagers how to market to living ones.  One big trend is the continuing decline of email use among Millennials and Gen-Zers.  Social media platforms will continue to be more important for basic electronic communications as well as targeted marketing.

#2 – Don’t just change for change sake – have a plan, stick to it, drive to results.  Crap shoot, some did, many didn’t.

Many companies had excellent plans and great analytics for measuring the performance of those plans going into 2011.  Then the tsunami hit and everything went out the window along with the topical black paint for automotive shops (can you say 10-month back order?)  Risk management has come to the forefront and strategy formulation and organization design are just now re-emerging as approaches that are back on the mind of CEOs particularly in the mid-market.

#1 – Welcome the Mobile Society and Sustainable Mobile Computing Duh, this really was a no-brainer and will be for 2012 as well.

After years of social media experimentation, 2011 showed signs that we are going to get serious - really serious - about mobile computing and make big bets in this arena.  Several aspects to consider.  First in mature markets, the advent of 4G infrastructure and near-field computing (NFC) will eventually make money and currency as we know it obsolete.  Not next year, or maybe the year after, but it will happen.  Smart phones will come with personalized SIM cards which will link to our bank accounts, creating electronic wallets that not only will allow wireless transactions from the device but will also recommend based on buying preferences where the products and services most desired by the consumer might be found.  We saw this in 2011 at an application level, particularly with merchants like Starbucks whose smart phone apps were deadly accurate and screaming fast. Second in developing markets, the mobile device will need to operate like a laptop or home office computer to drive commerce.  Applications with a thin “cloud computing” layer and footprint will enable peer-to-peer transactions so that commerce can exist without a large infrastructure.  Finally, the move to sustainable mobility – such as the Our Mobile Generation program – will create ways in which highly toxic mobile devices of today can be made and used on a more environmentally friendly manner.

So what about 2012?  Some thoughts, ideas and trend-benders:

#5 – The Talent Pool will Continue to Drain.

The talent pool will continue to drain in 2012, particularly in the US market.

While hiring has picked up in many markets, employment stagflation – and along with that the talent development of many decision makers including entry-level management – will create issues.   According to human capital consultants and futurists the Herman Group, employment in the US market will remain at near or even higher than 7.5% in the US market.  Meaning that many positions that would normally be added to back office functions in particular – purchasing, human resources, recruiting, supply chain management – will be working with staff that are over-taxed and in many cases under-qualified to handle workload, position responsibilities, or both.  Working with large corporations will require technology solutions to be explained v-e-r-y s-l-o-w-l-y in the US market in particular in order for very busy, over-burdened and in some cases poorly trained staff to take advantage of business benefits.  Until hiring picks up, for mainstream manufacturing and service industries mediocrity will reign supreme for another year.

#4 – It’s STILL the Economy, Stupid.

Until the magic numbers converge, unemployment will remain high, workers over-tasked, and $2 trillion in capital will remain on the sidelines in the US market.  There is no guarantee that the Obama administration will play nice with the US Chamber and other business groups, resorting to politics and regulation versus business cooperation. However there is also no guarantee that we should expect anything different after the 2012 election.  At the time of this writing the Republicans can’t seem to aim their sites higher than their own foot after stumbling with the employment tax relief vote.  All this means that the economy moves up a notch on this year’s CEO list.  Pray for no natural disasters in 2012 and that the Mayans just ran out of room on their calendar.

#3 – Technology Required – You have it or you don’t.

Don't bother me if you can't cloud...

Second generation cloud computing, where you can combine both on-premises and network based solutions, is now reality.  It isn’t an either-or kind of thing and companies are realizing it is less expensive to have specific functions – such as purchasing or human capital management – or for operations of full subsidiaries to be managed in the cloud.  This can in some ways address the talent pool issues (see #5 above) in some of these functions by automating key processes such as employee benefit self service, purchasing analysis, employee performance management, and some logistics functions.  Security issues have been addressed and now the real hurdle is cultural.  Large companies are looking at software providers expecting these “check-list items” will be provided as options or at least on the future product roadmap.  Even product companies, such as home appliance and automotive  manufacturers, have mobile apps to “check-in” on the performance or maintenance cycles.  Need to start and unlock the car for your husband who locked his keys in the glove box from your smart phone? No problem.  Crazier stuff than that will become not just a fad option, consumers will demand it.

#2 – Innovative companies will make bets, take risks, and claim market share.

I see it in the corporate board rooms and with owners of small to mid-sized companies.  Growth will be a top priority in 2012.  Which will be nice, since that word feel off the radar screen for many executives over the past three years.  In case you missed it the manufacturing recovery will enter its third year according to trends from the Institute of Supply Management (ISM) in 2012.  Mergers and acquisitions will pick up as companies blend both organic and non-organic growth strategies.  I am looking forward to my prediction becoming a reality on this one in particular.

#1 – Big Projects are Back, and they must be Mobile

You knew I had to include mobility in this fray somewhere and here it is.  But the caveat is that mobility at the enterprise level will be a major workstream of larger systems transformation projects.  We saw this trend emerge with our crowd source poll earlier in the year regarding the relative marginal costs compared to the significant increase in project approval rates for systems transformation efforts.  Yes mobility is big.  Really BIG. Mobility also needs to be paid for now that it is proven in the enterprise space.  Doing this as a part of a resurgence in large project activity helps to spread expenses and increases the “cool factor” of each project.

Best to everyone for a prosperous and healthy new year!

For more information on scheduling an initial discovery session or for public speaking events please forward your inquiry via email to info@newportconsgroup.com or visit our firm website.

Over the past year I have worked with a number of partner groups inside both SAP Labs and SAP Research to understand the best practices and most appropriate frameworks to introduce into a sustainable business network (SBN).  A Sustainable Business Network consists of supply chains that provide financial, environmental and social value.   The value proposition for SBN across commercial organizations and supply chains include several compelling points and value propositions:

1. Greece owes a lot of people a lot of money.  The next payment is nearly $US 800B in the coming weeks.  They can’t pay it.  Period. So someone needs to step forward to do so and/or an organized reduction in their debt (read: write-off) needs to occur.  There is a proposal on the table from the Eurozone countries to allow this to happen.

2. Regardless of the workout arrangement that finally occurs, the challenge for the 10M Greek citizens will be difficult ones.  The austerity measures demanded by the Eurozone nations have evolved into a set of policy decisions that questions the rights of a nation state to determine its own society.  The Greeks don’t like it and given the fragile political structure in that country the Prime Minister has deftly taken a “it won’t entirely be my decision” approach to democracy and cast the idea of a referendum.  While the populism of this move is unquestionable, the uncertainty it causes in economic markets creates a “more of the same, always in crisis” mode making it difficult to move ahead on any form of structured, lasting and predictable economic recovery.

3. We are all inter-connected, and while we in the US have our own debt conversations and tough decisions to make, the Greek situation – for a nation state of not many more people than my current state of Michigan – has global implications.  Banks around the world including central banks are going to take a write-down on their debt and we will all need to indirectly pay our share.

4. Greece is just one letter in the word PIGS.  Portugal, Italy and Spain all have similar situations in the future, if not by the end of this year than over the next several years.  How and what we do with Greece will serve as a test-bed to organized work-outs with these other, much larger economic issues.

There is a small fringe group advocating Greece leave the Eurozone.  This would be under the treaty guidelines a decision Greece would need to make as no one nation can “force out” another from the EU or the Eurozone.  However, based on my informal conversations with several German business partners, many in Germany wouldn’t shed a tear over Greece returning to the drachma, devaluing its currency, and providing even greater vacation bargains for the rest of the EU to enjoy on holiday.  The downside to this “eat the bitter pill quickly” approach is that it dangerously sets a precedence for nations to abandon the Euro, while at the same time wiping out a lot of savings the Greek citizenry has put into the banking system almost overnight.  This “structured Argentina work-out” might be a good thing for some Greeks, very bad for the confidence of the Eurozone and its member states.

For more information on the Eurozone conversation visit the BBC media sources across the web.

Fellow speakers Tamika Lamison, Catalina Talero and me in the Green Room at TEDxFlint (photo courtesy of C. Talero)

Our approach was to choose the 16th letter – P – as our guidepost and develop an idea or concept or creative expression that would fit the TEDx motif. My offering was a “Personal Model for Sustainability” based on some of the early coaching work I have made with professionals and executives trying to either implement sustainable business practices into their own organizations, or attempting to find the next outlet for their life journey and a balance of mind, body and soul (some relationship either spiritual or with their community) which can allow individual growth and expression.

The discussions and ideas over the course of the day illustrated a number of possibilities (another P word!).  Ranging from “Blaming the Recipe” to a new way of looking at Not-for-Profit organizations (call them “high impact” organizations, thanks Doug!), to the need for all of us to be a “Hero in Waiting.”  We learned how a bounced check and heartbreak can open the door to fulfilling dreams and how education can save your life (thanks Tamika and Catalina).  We were challenged to Stop Discounting People (thanks Terry) and our eyes were opened to the creative movement sweeping the city and the surrounding community.

This for me was an amazing day.  I am so proud of my fellow speakers, the organizers and for my colleagues at Northwood University in Flint for supporting my presentation and those of all others who were able to participate at the University of Michigan – Flint campus and around the world via live internet link and steaming video.

Look for a number of TEDx presentations from Flint over the next several weeks at the TEDxFlint site and on YouTube.

SAP trends in mobile strategy have lead to the introduction of programs such as “bring your own device” into the enterprise. In this 12-minute podcast, site expert William Newman and news and features editor Todd Morrison discuss mobility strategies and how to gain executive support for them. In addition, William and Todd talk about another trend, sustainability, and the idea of a “sustainability program office” and what makes a sustainable supply chain.

Click here for the full podcast on searchSAP.com.  Many thanks to Todd and Jacquelyn for a great podcast!

Not surprisingly there is a lot of “big shitake mushroom stuff”  going on in the C-suite as we head into earnings season and planning for 20-12.  Several trends we are seeing include a reluctance for executives to get “their fingers dirty” in systems work or records in corporate performance.  What? How can this be? There are several years of Sarbanes-Oxley behind us so corporate transparency is top of mind, right?  Well of course, and executives are smart enough to know that when push comes to shove they may indeed be privy and responsible for governance.  But some sure as hell aren’t going to commit it in writing.  That’s what their directors are hired to do.

Combine this and compelling business uncertainties – regulatory, public policy, economic, supply chain crisis management (remember that tsunami earlier in the year?) – and you have a real reluctance  on the part of many executives to engage in real leadership that drives real performance improvements and innovation in the organization.  Enter the blue shiny object, the advent of mobility.  Halleluia.

While I am being quite glib, mobility is proving to be the on-ramp for many corporate transformation programs.  In our unscientific review of several large systems transformation efforts on the drawing table for 20-12, Newport Consulting estimates that efforts which include a mobility extension as a component of the transformation roadmap will receive a 50% higher approval consideration from management.  The general consensus at the recent ASUG meeting suggested that this could occur at a minimum 1-2% marginal project cost in terms of time and budget.*  Of course you can always go “deeper and broader” but that’s the threshold given the rapid nature of mobile app development in this mobility 2.0 world.

Executives are very receptive to this idea.  Mobility extensions allow a quasi-hands off role, approving basic workflow requests and committing comment rather than specific information into systems of record using tablets and smart phones.  It’s cool, it’s convenient, it’s transparent, while at the same time being arm’s-length distant from one’s fingertips.  The perfect approach for the perfect time particularly in light of reports earlier this year that the confidence level of most IT related initiatives was eroding dramatically inside organizations.

This is compelling information not only for IT folks but for business process owners.  The productivity gains, cool factor, transparency and control for executive use and buy-in means that any good program manager needs to embrace the blue shiny object if they want their programs to be funded moving into the coming year.  And as we discussed at the ASUG meeting, if you don’t get the positioning of your transformation program right, the technology and benefits really don’t matter.

*Based on an established mobile application environment already in place, incremental project costs only for a simple workflow app set on an average transformation effort of $1-2m. Rough order magnitude estimate. For more information on how to structure your introduction of mobility into your organization contact our firm at info@newportconsgroup.com. 

Reblogged from TED Blog:

This evening, Apple announced that Steve Jobs, its legendary leader, has died. Watch his powerful talk “How to live before you die” — in which Jobs urges us to pursue our dreams and see the opportunities in life’s setbacks, including death itself. Tom Rielly, TED’s community director and an early Mac fanboy, writes: “Steve Jobs changed my life totally and utterly (and obviously, I’m not the only one). From the moment he introduced Macintosh with mesmerizing flair, I was hooked by his charisma. I knew that …

A number of tributes this morning upon the passing of Steve Jobs. One of the most poignant was his commencement address to Stanford University. Thanks Steve for the Mac, iPad, iPhone, iPod and your contributions not only at creativity and innovation but also to humanity and society.

From Time Magazines Techland, a number of quotes from prominent business and government leaders, friends, and Apple Computer:

Jobs has been instrumental in many of Apple’s hit products, stretching back to 1976 with the Apple I, all the way to the modern-day iPhone and iPad. He revealed to Apple employees in 2004 that he’d been diagnosed with pancreatic cancer and underwent a liver transplant in 2009. In late August of this year, Jobs stepped down as CEO of Apple.

(PHOTOS: Steve Jobs: An Extraordinary Career)

He is survived by his wife of 20 years, Laurene, and their three children. Jobs also has a fourth child from a past relationship named Lisa, after whom he named Apple’s “Lisa” computer in 1983.

Apple’s board of directors has issued the following statement:

“We are deeply saddened to announce that Steve Jobs passed away today.

Steve’s brilliance, passion and energy were the source of countless innovations that enrich and improve all of our lives. The world is immeasurably better because of Steve.

His greatest love was for his wife, Laurene, and his family. Our hearts go out to them and to all who were touched by his extraordinary gifts.”

(MORE: Steve Jobs: His Life and Career in the Pages of TIME)

Apple changed the way that consumers saw their products, not just based on the product innovation but the mindshare of the marketspace.  The 1984 “Big Brother” commercial by Apply is arguably one of the most-watched and re-watched Super Bowl commercials (notice I did not say the most watched and re-watched Super Bowl moment – Janet Jackson holds that honor).

Click to view article on Techland

Finally as we prepare for the fall TEDx season, TED published their own memorial with a replay of Steve Jobs’ commencement address to Stanford University “How to Live Before you Die.” Truly required viewing – worth re-watching or watching for the first time.