Tag Archives: Globalization

News You Can Use: 6/21/2017

  • Why Remote Work Can’t Be Stopped

    Despite these moves by big companies, data indicates that the remote-work trend in the U.S. labor force is inexorable, aided by ever-better tools for getting work done anywhere. Surveys done by Gallup indicate that in 2016, the proportion of Americans who did some or all of their work from home was 43%, up from 39% in 2012. Over the same period, the proportion who only work remotely went to 20% from 15%. Amazon.com , American Express , UnitedHealth Group , and Salesforce.com allow employees to work remotely at least some of the time.

    Regarding tools used:

    For remote workers, the communications tools they use daily are the equivalent of these common spaces. The canonical example, owing to its explosive growth and creeping ubiquity, is the group-chat service Slack. It’s designed to make it easy for employees to communicate in ways that aren’t so different from the way they would around a water cooler or a conference table. Slack’s playful features, like on-demand animated GIFs, make it good for collegial interaction, while its library of chatbots and integrations with other enterprise software make it useful as a hub for communicating about and controlling many aspects of a business.


    https://www.wsj.com/articles/why-remote-work-cant-be-stopped-1496577602?mg=prod/accounts-wsj

  • After London Attack, Tech Firms Urged to Do More to Fight Extremists

    Mrs. May said Britain must work with other democracies to “reach international agreements” to regulate cyberspace to prevent terrorism planning. Her statement ratcheted up already critical remarks her cabinet members made in the wake of a March attack, also in London, that killed five people near Parliament. Saturday’s London attack came 12 days after a suicide bomber killed 22 people outside a concert in Manchester, England.

    Also

    Many tech companies say they already work hard to police their platforms for terrorist content, and cooperate with judicial and police investigations. When it comes to propaganda, Alphabet Inc.’s YouTube, Facebook, Twitter and Microsoft Corp. all agreed last year to create a common database of identifiers of terrorist images to speed up flagging and removal of propaganda videos.

    Twitter said it suspended 376,890 accounts in the second half of 2017 for promoting terrorism. Twitter said it identified almost two-thirds of those itself, with less than 2% of accounts shut down because of government requests.

    https://www.wsj.com/articles/british-leaders-call-on-silicon-valley-to-do-more-to-combat-extremists-1496598615?mg=prod/accounts-wsj

  • Captivate: The Science of Succeeding with People
  • Why “I’m Just Not Technical” is No Longer an Excuse in the C-Suite

    Acknowledge that investing in a partnership with experts, needs to be discussed. When it comes to securing your organization, it’s not about whether your internal team has the aptitude, it’s about the time. It’s not uncommon to hear that IT departments have roles that “wear many hats.” So you need to consider whether they have the time and resources to dedicate to maturing the cybersecurity posture of your organization? Be warned though: you get what you pay for from a partnership with a cybersecurity firm. This should not be the same team that is selling you hardware and/or assisting in the configuration and implementation process.

    http://www.cio.com/article/3199906/security/why-im-just-not-technical-is-no-longer-an-excuse-in-the-c-suite.html

  • Is Your Boss Getting Ready To Quit? How To Tell And What To Do

    Next, look at the landscape and think about what your options are, says leadership expert Susan Fowler, author of Why Motivating People Doesn’t Work . . . and What Does: The New Science of Leading, Energizing, and Engaging. There is the potential for great change ahead. Think about what you want to happen next, she says. Are you ready to move up? Are you still motivated to be with the company? Is there an opportunity for you ahead? These are some of the questions you should be asking yourself, she says. Once you have a vision for your next goal, you can begin to formulate a plan.

    https://www.fastcompany.com/40426129/is-your-boss-getting-ready-to-quit-how-to-tell-and-what-to-do

Photo: Johannes Plenio

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China: Bust or Boom?

sn_china_Travel Coffee Book

China is a country that captures imaginations and can fill the role of the exotic destination, land of adventure and opportunity, and in some cases, it can be painted as a villain.

As Americans, we bemoan the loss of manufacturing and scowl at the influx of affordable gadgets and exploding hover-boards that have flooded into our homes. We fret over Chinese businessmen coming into this country and snapping up all of the available real estate:

Between 2010 and 2015, Chinese buyers put more than $17bn into US commercial real estate, with half of that spent last year alone. Unlike many countries, there are very few restrictions on what foreigners can buy in the US.

But during the same period at least $93bn went into US homes. And in the 12 months to March 2015, the latest period for which relatively comprehensive data could be gathered, home purchases totaled $28.5bn.

China’s economic advancement has come at a cost to the country and its 1.35 billion people. This post highlight some of those issues to give my readers a better understanding of difficulties China will face in the coming years.

Population

Everyone knows that China has an enormous population, but you might not be aware that 194 million people in China are over the age of 60. That is close to 15% of their population.

You might say to yourself, 15% doesn’t sound too bad. From a percentage view, the United States has a similar age distribution.  However…

Until last year, China had a population control methodology in place that limited couples to only one child. The policy started in 1978 and impacted an entire generation of Chinese families.

Thanks to modern medicine, people are living longer. China is no different.  But the unintended consequence of the population control measures and people living longer is that China doesn’t have enough people to care for their elderly population (yes, that is ironic)

This dynamic is called the 4-2-1 problem: 4 grandparents, 2 parents, all being looked after by 1 child who is also the person who is expected to earn an income.

Another interesting wrinkle in the 4-2-1 problem is the lack of brides. Due to the one child policy and China’s cultural preference towards male children, there are almost 40 million men in the country that will remain bachelors:

Today, an estimated 35 to 40 million women are “missing” from China’s population. For years, demographic experts have predicted the huge surplus of young men would cause a rise in sexual violence and social instability. Now the first generation of children born since 1980 has reached marriageable age, and problems such as bride-kidnapping and forced prostitution are soaring.

The bachelors in areas like Da Xin are the least likely of all to find love. As the gap between rich and poor widens in China, uneducated rural men have little means of upward mobility. “I don’t have any money to move away to look for a wife,” says Jin. “I must stay here to work our land and support my elderly mother.”

Think about these 30-something men (basically men my age) who work all day, not to come home to a wife or child (and a reason to get up everyday and go to work), but to their aging parents and grandparents. Knowing that the only way to change things is to abandon their family.
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Working Conditions

Some people do leave their villages and their families in the hopes of finding better jobs and better romantic prospects.

Manufacturing represents 44% of China GDP and is supported by an estimated 100 million workers. In the video above, you can see hundreds of people waiting outside the factory every day with the hopes of finding work inside the plants.

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Once they do get jobs, employees might find themselves working 12 hour days, 6 or 7 days a week, and living in cramped dorm rooms.

The conditions became so bad at some factories that administrators had to put up nets to prevent employees from jumping off the buildings:

The Foxconn suicides occurred at the so-called “Foxconn City” industrial park in Shenzhen, China. The 18 attempted suicides by Foxconn employees resulted in 14 deaths—the company was the world’s largest contract electronics manufacturer at the time. The suicides drew media attention, and employment practices at Foxconn were investigated by several of its customers, including Apple and Hewlett-Packard (HP). Foxconn is a major manufacturer that serves high-profile consumer electronics firms such as Dell, Motorola, Nintendo, Nokia, and Sony.

Chinese workers are concluding that perhaps factory work is not for them and are shunning that life:

Finally, many first-generation migrant workers have worked in the cities for 10-15 years, yet they are still denied entitlement to any social benefits. While government policies now require employers to pay benefits for their employees, implementation is still at a primitive stage and differs vastly across the country. Naturally, migrant workers would prefer to work in regions where social-welfare policies are better implemented.

In addition to potentially poor and cramped working conditions, Chinese workers are also rejecting factory work due to the health issues…

Environmental Problems

Why has the rest of the world outsourced their manufacturing to China? Yes the labor is cheap and (mostly) abundant, but they are also very lax in their regulation of pollution.  Yes, our beloved gadgets are a result of some very toxic manufacturing processes.

So toxic in fact, that many employees have been poisoned:

In mid-July, Long found herself unable to move her legs. “I was just lying on my bed all day and needed help to eat,” she says. Long ended up in a hospital in Guangzhou with more than 30 other Fangtai Huawei workers. Doctors found they’d been exposed to n-hexane, presumably in the “banana oil.” It’s an industrial solvent that causes neurological damage at just 50 parts per million. Workers using it are supposed to wear respirators and operate in a ventilated area. As treatment, Long endured daily injections—she says they “hurt more than anything else in the world.”

Not only does making the stuff cause pollution, but keeping the lights on at all of these manufacturing cities takes energy… lots of it.  And like many other countries (including the United States), China’s primary sourcing of energy is burning coal

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Burning coal is dirty (as seen in the video above)

China’s apparent demand for crude oil will reach 550 million tonnes (11 million barrels per day) and apparent demand for natural gas will hit 205 billion cubic meters, Nur Bekri, head of the National Energy Administration (NEA), said, according to Xinhua.

Electricity consumption will rise to 5.7 trillion kilowatt-hours and coal consumption will be 3.96 billion tonnes.

Burning coal and running factories is such dirty business that China has a tendency to shut down production when visitors arrive. They shut down factories for the Beijing Olympics, and they are planning to do so again for the G20 Summit in September.

Since this is a supply chain focused webpage, I am curious to see how the supply chain will be impacted by this production shut down. If you think you could be impacted, check to see which of your suppliers (n-Tier) are receiving goods from the affected region (especially from chemical, electro mechanical, building material, and pharmaceutical industries).

Conclusion
This is not a condemnation of China. America has a long and horrible history of mistreating workers and our natural resources:
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Cuyahoga River Fire (Cleveland), 1952

In the coming years, Americans won’t be moaning about China taking their jobs, because the Chinese don’t want them. Those jobs will taken by automation and robots.

There is actually an opportunity for America to re-emerge as a manufacturing leader, but powered by the same robots and AI that will replace Chinese workers.

China is at a critical point in their own history: they have a massive population with needs that are going unmet and they don’t have the infrastructure in place to address those needs. Additionally, the poor treatment of their own natural environment is going to lead to even more medical and social distress.

As the country grows and becomes more connected with the rest of the world, the people who are making the stuff you love, are going to want stuff to love for themselves. It is already happening.

China is going to grow and evolve regardless of what I type here.  But will the country continue to be the hands and feet of the global economy or will they clean up their cities, open their borders (for workers and for brides), and create something new?

It is going to very interesting to see how this plays out.

Note: Here is the Fair Labor Report referenced in the video.

Photo: Travel Coffee Book

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News You Can Use: 1/13/2016

sn_windows_Ricky Kharawala

  • A.T. Kearney Is Just Plain Wrong

    Not only are more than half of US manufacturers considering reshoring now, we have some really great examples of success stories including GE Appliance Park, Starbucks, Apple and others. In addition, we can point to other companies such as Haier, Nissan and Smithfield Foods where Foreign Direct Investment (FDI) has directly resulted in the establishment of more manufacturing in America.

    All of the signs and statistics (other surveys by Boston Consulting Group, Alix Partners and several European studies) point to the rebuilding of manufacturing in America and in Western Europe. The trend is strong and we are very optimistic that it will continue to be so. US jobs loss to offshoring is now about equivalent to jobs created or reshored to America. We need to be reshoring supporters and make more of this happen, not detractors.

    http://www.scmr.com/article/a.t._kearney_is_just_plain_wrong

  • How Quitting Can Get You Exactly What You Want

    Quit selling those cheap houses to those unqualified, needy people who he didn’t like working with. If he was going to attract million-dollar sellers, he was going to have to give up on working with $100,000 homes. That meant reaching way out of his comfort zone and giving up on what he had built so far. If Jon was going to gain traction, pick up luxury sellers and earn more money, he was going to have to project the image of expertise, confidence and exclusivity. Exclusivity meaning he had to be selective of who he worked with. The days of taking on any old client were gone. If they didn’t fit the luxury mold, he had to refer them out.

    http://www.entrepreneur.com/article/253924

  • PAGING DR. ROBOT: THE COMING AI HEALTH CARE BOOM

    More than six billion dollars: That’s how much health care providers and consumers will be spending every year on artificial intelligence tools by 2021—a tenfold increase from today—according to a new report from research firm Frost & Sullivan. (Specifically, it will be a growth from $633.8 million in 2014 to $6,662.2 million in 2021.)

    http://www.fastcompany.com/3055256/elasticity/paging-dr-robot-the-coming-ai-health-care-boom

  • Strategic Sourcing predictions for 2016

    the doctor is already seeing a number of 2016 posts about how this is the year we replace “negotiate” with “collaborate” (which the thought leaders have been saying since strategic sourcing decision optimization started becoming common in the leading Sourcing organizations, also known as the Hackett Group top 8%), that analytics will take off (which is the same speech we heard 15 years ago when Business Objects and Cognos were the names in analytics), that the skills gap will finally be addressed (which reminds the doctor of conversations he was having nine years ago), and so on. It looks like the amount of future sh!t that is going to be dumped upon you this year is greater than the truckload Biff Tannen had dumped upon his head in the original Back to the Future movie, way back in 1985. (A reference that is very appropriate because every year at this time it seems we get taken back to the future.)

    http://sourcinginnovation.com/wordpress/2016/01/04/sis-prediction-for-2016-it-will-only-get-hotter/

  • To connect to last week’s podcast, How Millennials Are Affecting the Supply Chain

    Respondents said that the biggest impact millennials will have on the supply chain is in terms of how they change the way consumers buy. The move towards new marketplaces – online, mobile, via social media – will be one of the transformative ways supply chains will be affected.

    http://mhlnews.com/labor-management/how-millennials-are-affecting-supply-chain

  • In 2016, Intel’s Entire Supply Chain Will Be Conflict-Free

    Since Intel and other manufacturers began the program, the profits from mines have started flowing to miners themselves rather than to war. In the last study of three of the major materials—tungsten, tantalum, and tin—a nonprofit called the Enough Project found that the amount of money going to conflict had dropped 65%, and it continues to fall.

    http://www.fastcoexist.com/3055066/change-generation/in-2016-intels-entire-supply-chain-will-be-conflict-free

Photo: Ricky Kharawala

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Podcast: The Innovation At The Heart Of The Global Economy

sn_shippingcontainer_RoelHemkes

While shipping containers are not directly related to IT or strategic sourcing, the global economy would not be what it is today without them.

So I present to you the origin of the humble, world-changing, shipping container.

Photo: Roel Hemkes, Flickr

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News you can use: 7/22/2015

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Photo: Nico Time, Flickr

  • The End of Buying and Selling

    Yet buying and selling became central enterprises of business over the course of the last century. Corporations focused on standardization—the Deming ideal—so needs became predictable enough to compare vendors directly, find the greatest price value through the routinized process of request for proposal (RFP), and thereby provide what everyone needed. Buying became the science of squeezing price, sales the art of justifying price, and both functions grew into large organizations. Business is getting too complex and dynamic for centralized buying and selling machines. What’s more, the strategic sourcing initiatives of the past two decades all but erased margins for high-volume suppliers. When the absolute floor is the baseline, there is no need to sell, per se. There is only a need to serve. In fact, there is a heightened need to serve. The only way to differentiate a company is in helping customers profit through the use of products.

    http://www.sdcexec.com/article/12091986/the-end-of-buying-and-selling

  • 7 Mentors You Didn’t Even Know You Had

    You want to build an awesome business right? Then you need to understand how to create an awesome customer experience. Well, you’re a customer too right? Most of what I’ve learned about customer service has been from being a customer. I look at each person or company I buy from as a mentor because they help me create better experiences for my customers by creating a good or bad buying experience for me.

    http://www.entrepreneur.com/article/247900?ctp=BizDev&src=Syndication&msc=Feedly

  • McDonalds vow to end deforestation in its global supply chain

    Applying throughout the entire supply chain, the core principles and practices of McDonald’s commitment on deforestation include: No deforestation of primary forests or areas of high conservation value; No development of high carbon stock forest areas and no development on peatlands regardless of depth, and the utilization of best management practices for existing commodity production on peatlands.

    http://www.supplychaindigital.com/supplychainmanagement/4052/McDonalds-vow-to-end-deforestation-in-its-global-supply-chain

  • 83% of supply chain executives report lackluster performance as they struggle to get to grips with effects of globalization

    Supply chains are being held back by the effects of globalization, according to a new survey, with 83% of executives from leading enterprises claiming to see only average or poor performance. Over 60% said this is primarily due to the number of partners involved and the risks this creates, which is in turn limiting their flexibility.

    http://mhwmagazine.co.uk/LatestNews/83%25_of_supply_chain_executives_report_lacklustre_performance_as_they_struggle_to_get_to_grips_with_e-19059.html

  • ORACLE CLOSES ITS CLOUD PROCUREMENT GAPS

    The two new services include the Order Management Cloud and the Global Order Promising Cloud. Together, they offer order management, visibility and order fulfillment capabilities, the company said. But to go a step further, Oracle’s new services connect businesses’ current sales and order processes in its Configure, Price and Quote Cloud product and their current packing and shipping services in the Inventory Cloud product, all to Oracle’s billing in the Enterprise Resource Planning Cloud.

    http://www.pymnts.com/news/b2b-payments/2015/oracle-closes-its-cloud-procurement-gaps/

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