Doctor's Note (December): A Year Like No Other

For most organizations, 2009 was a challenging year. But challenges bring out the best in organizations with a mission and a purpose. As in other years, we saw many of our clients adapt to the current conditions and react to opportunities.

Doctor's Note (November): Are You Getting Your Money's Worth?

Based on a recent survey, the average company spends almost 50 person-days a month running its Sales and Operations Planning (S&OP) process. At a nominal employee cost of $800 per day, this is almost $40,000 per monthly S&OP cycle. The question that management needs to ask is; “what am I getting for this?” The answer is not simple. Well run S&OP processes avoid problems, but companies reward people for fixing problems and not for avoiding them. Given the pressures on performance and costs, employees tend to focus on solving the current crisis and avoid tasks that have no immediate and visible payoff.

Doctor's Note (October): Supply Chain Knowledge: Don't Reinvent the Wheel

If you ask the management in any company, the chances are that they will say that one of their most important assets is the knowledge of their employees. Yet most companies have no idea if their organizational knowledge went up or down last year. In fact few, if any, companies actually measure their organizational knowledge.

Doctor's Note (September): Positioning the Recovery

The worst is over. The latest Labor Department statistics show a 6 percent increase in productivity. Much of it is due to the decrease in real wages and benefits. This is normal at the bottom of a cycle when companies have completed the layoffs and furloughs and are operating with their belts tightened. Economists are no longer arguing about how deep the recession will be, but whether the growth will be consumer driven or investment driven.

Doctor's Note (August): Managing Outsourced Manufacturing Operations

Last month, Invista, one of the largest producers of polymers and fibers, announced that it was entering the engineering polymers business. While Invasta is well positioned to make the nylon 6.6 itself, it will use a number of toll manufacturers (contract manufacturers) to compound the products.

Doctor's Note (July): Inventory Woes - It is Time to Act Now!

US manufacturing inventory as compared to sales has been steadily declining over the past 20 years. Since 1991, the sales to inventory ratio (months) has come down from about 1.6 to below 1.3 in 2008. The recent slowdown has raised the ratio to above 1.4, but this is still only to the level it was in the 2001-2002 timeframe.

Doctor's Note (June): Unique Opportunities in a Downturn

We all assume higher productivity is better. So if a company is making a product for $100 and now starts producing it for $50, should the CEO get a bonus?

Doctor's Note (May): Modern Business Intelligence

In the last note, I mentioned that the Microsoft platform provides the better tools for BI. I was asked to expand on that. First of all, there is no concise definition of BI. The Wikipedia definition does not help because it is so broad that it includes everything. Almost everyone will agree that a huge component of BI is the process of bringing the required data to the point of decision making.

Doctor's Note (April): SAP Upgrade Woes

SAP announced its latest upgrade in February (SAP® Business Suite 7 software) to coincide with the global credit crunch. As always, the sales representatives and assorted consultants are buzzing like bees around a honey pot to get a piece of the pie, promising painless upgrades, lower costs, and increased competitiveness through functional innovations. The stick is that maintenance costs will increase if a company does not upgrade its SAP installation.

Doctor's Note (March): Supply Chain Makes a Difference in Hospitals Too

Hospitals in the US have many objectives, but rarely do they have a clearly defined mission . . .

Bypass surgery costs between $35,000 and $50,000 in the US. The same surgery costs about $4,000 in India. Given that President Obama is launching a national initiative to provide better health care, it makes sense to see how other countries can deliver quality care at a fraction of the costs. It might surprise many people that much of the cost differential cannot be explained by personnel costs alone. It is also tied to how the hospitals operate their supply chains.