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The Supply Chain: 5/12/2015

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Note: These last two articles about “supply chain management is good” is the reason why this report isn’t published every week.  Good, interesting content, is limited.  The same basic ideas and statements are repeated each week.  When I see something good or a great example, there will be a post.  

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Detroit – An American Autopsy

I have been debating if I should cover Detroit: An American Autopsy by Charlie LeDuff on this site. At the surface, a book about the failure of a major American city doesn’t have much to do with IT supplier management or the other topics I cover on here (it could be a better fit at one of my other sites). But if you try hard enough, you can make some connections and come up with a few generalized life lessons.

So why did Detroit fail?  Why does any organization fail?

They didn’t diversify and innovate.  

Detroit lived and died by the auto industry.  When times were good and the factories were pumping out cars, the population of Detroit soared to over 1.4 million people.  Migrant workers from all over the country and especially the south moved to Detroit for a better life, and they found it.

America enjoyed a wonderful and unnatural lack of automotive competition post WW2 (this part isn’t in the book).  Germany was in ruins.  So was Japan.  American pride was at a high, so our grandfathers and fathers bought those Cadillacs.  By the 1970’s fuel prices spiked for a time and those little Civics and VW Bugs were starting to make a whole lot of sense.  The American car makers still tend to fumble with long lasting, fuel efficient cars (not all the time).

So the factories made less cars, tried to get the unions to adjust policy (good or bad), they pushed back, then the car companies moved jobs to factories in other countries.

Detroit had a slew of symbiotic businesses that flourished during the heyday.  People opened their own factories that made car parts and chemicals and even catering services for the plants.  Then the factories started buying cheaper parts and products from China.

By the time those small factories even thought to service international brands, it was already too late.

The jobs dried up.  Working class families left.  The city fell into disrepair without a tax base.

Now the people left don’t have the tools to protect or rebuild the city.  Abandoned house are left to burn because fire fighters don’t have the right gear or enough men to keep up with the amount of arson. Children are asked to bring their own toilet paper to school.

How does this compare to an organization or company?

You have to reinvest.  In infrastructure, in people, in education.  Things can fall into such a state of disrepair that an organization can never pull out (are we seeing that with HP?).

You have to have tight controls on where the money is going.  Corruption is a considerably smaller problem in most corporations compared to government, but good companies still have money leaking out of places it shouldn’t. Money that can be reinvested.

You have to give people the tools they need to be successful and thus make the company successful.

People also need to have faith… that with hard work and a good plan, things will improve and ultimately flourish.  The people of Detroit don’t seem to have faith that things will get better, so they are leaving.  Detroit’s population is less than 700,000 people.

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We have seen this happen to Camden, NJ on a smaller scale and I often wonder can this happen to Philadelphia?  It almost happened in the 70’s.  Factory jobs disappeared, the city’s blue collar workers struggled.  But Philly turned it around by having an educational base (U. Penn, Drexel, Temple, La Salle), became a medical hub starting with CHOP, and some core financial and insurance companies made Philadelphia home (this is long before Comcast).

Here is a Ted X talk with author Charlie LeDuff (he uses colorful language so NSFWish):

Sometimes you can’t kick the can down road, you have to pick it up and deal with it now.

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Supplier Report: 5/9/2015

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IBM made headlines this week with the news that they are selling off Rivermine to Tangoe, allowing the company to focus on big data and strengthening Tangoe’s market-share in the TEM space. Big data and analysis continues to be the major theme with IBM at the moment with news of a partnership with Facebook to improve targeted ads to users. More importantly, it was announced that cancer centers will be using Watson to scan genetic reports for cancer trends.

EMC is starting to think about a post physical storage world while HP can’t move past their Autonomy purchase.

IBM

  • More on the IBM selling Rivermine to Tangoe:

    From an IBM perspective, it will be curious to see if the divestiture allows a refocusing of developing on the other Emptoris assets, including what Spend Matters believes would be a helpful re-platforming of the Emptoris product line to more effectively compete with where other competitive upstream suite solutions (e.g., BravoSolution, Iasta/Selectica, SciQuest, Ivalua, GEP) have headed or are going. For generic sourcing suites, single stack – and ideally a platform-as-a-service (PaaS) model – is the future; spanning sourcing, supplier management, contract management, analytics and more.

    http://spendmatters.com/2015/05/08/ibmemptoris-divests-rivermine-tangoe-picks-up-10m-tem-business-vendor-and-market-analysis/

    PS: There is another important point in the post:

    Now, it appears that a single provider will have the upper hand in terms of market share if not breadth of solution (it will also likely create less pricing pressure on TEM solutions generally, although IBM was never in the business of lowering prices).

  • IBM and Facebook just partnered up:

    Marketers and brand managers will be able to leverage Facebook’s customer insights from its rich user base and Custom Audience (an ad targeting feature) along with IBM’s marketing cloud and analytics capabilities to offer more personalized and targeted advertisements for users. Furthermore, the combined capabilities of Facebook and IBM will allow brands to strategically select users that are more likely to respond to advertisements thereby allowing them to communicate more effectively.

    http://www.investing.com/analysis/facebook—ibm-join-forces-to-develop-marketing-solutions-251078

  • 14 Centers to Use IBM Watson for Cancer Genetics

    Oncologists will upload the DNA fingerprint of a patient’s tumor, which indicates which genes are mutated and possibly driving the malignancy. Watson will then look for actionable targets, matching them to approved and experimental cancer drugs and even non-cancer drugs (if Watson decides the latter interface with a biological pathway driving a malignancy). The centers will pay a subscription fee for Watson, which IBM did not disclose.

    http://hitconsultant.net/2015/05/08/14-centers-use-ibm-watson-cancer-genetics/

    Also in Watson news, IBM is planning more cloud capabilities for the system:

    Watson Hybrid Cloud will use Watson Explorer—a cognitive computing exploration capability for the enterprise—as the on-premises platform for the application development, combining enterprise data sources into the application through a scalable environment that keeps utilized data local, private and secure, IBM said.

    http://www.eweek.com/cloud/ibm-gives-watson-new-hybrid-cloud-capabilities.html

  • SAP, IBM to integrate their HR solutions

    With availability planned for mid-2015, the first offering from this alliance includes a planned integration between the SuccessFactors Employee Central solution and IBM Kenexa’s cloud-based HR software Talent Acquisition Suite. This integration is expected to enable IBM customers to move their HR information systems (HRIS) to the cloud with the leading core HR solution from SuccessFactors, an SAP company, while helping to protect their recruiting investments, and provide customers of SuccessFactors Employee Central with a broader set of options for recruiting, assessment and onboarding of candidates.

    http://www.firstpost.com/business/sap-ibm-integrate-hr-solutions-2234852.html

  • How IBM is monetizing Watson:

    http://www.cnbc.com/id/102643778

EMC

HP

Here is a funny footnote about HP the last few weeks: I build this report on saved Google alerts dumped to RSS feeds.  For HP, Carly Fiorina’s presidential hopes have dominated the news cycle (thousands of articles), completely choking out actual business news. 

  • Thought this story was going away?  Wrong.  HP sues Autonomy founder for $5bn

    What’s striking about all of this is that when news of HP’s Autonomy quest surfaced—the plan leaked before the announcement—the near-universal reaction was that HP, which was struggling with a low-margin PC business and trying to bulk up its software and systems portfolios, was overpaying for interesting but perhaps not world-beating technology. Autonomy’s multi-media search technology worked across audio, and video, not just text, for example. It also had an augmented reality business.

    http://fortune.com/2015/05/05/hp-autonomy-legal-war/?xid=timehp-popular

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