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.

Doctor's Note (February): Growing a Green Supply Chain

Protecting the environment has become a priority for many organizations, both in the private and public sectors. As with any new initiative it is difficult to isolate the wheat from the chaff. In fact, I'm amazed at the number of green consultants that have hit the streets. One thing is for certain: the efforts to reduce green house gas (GHG) emissions are not something that will go away any time soon. In fact, the current US administration's goal is to reduce GHG emissions 80% by 2050.

Doctor's Note (January): Top 3 things you can do in 2009 which cost little or no money

There is no doubt that 2009 is going to be a tough year. With companies struggling to survive, supply chain initiatives will be focused on cost reduction and conserving cash. So what should a company do in 2009?

Collaboration is an overused word. No one argues that collecting information from diverse sources is important, but collaboration is more than just gathering data from different people. For example, gathering forecasts from management, sales persons, and customers is useful, only if there is a well thought out process to reconcile the different inputs. All too often, efforts to create a collaborative process end with data gathering.

Cost containment seems to be the overriding trend in food manufacturing, according to a panel discussion at the Food Automation and Manufacturing conference in Florida. This has led to a greater emphasis on performance measurement and more widely to consolidation through mergers and acquisitions. Faced with a similar situation, the chemical industry in the mid 80's and 90's responded by using technology to streamline their supply chain planning and extract value from their supply chains.