Archives April 2023

All things impacting global supply chains this week with Tony Hines.

• Iran seized an Oil Tanker bound for Huston with Chevron Oil on board. This is retaliation for the US seizing Iranian Oil from a tanker around the coast of South Africa as part of US sanctions.
• Tighter US rules UFLPA have hit Vietnam's apparel industry hard.
• Rail Freight data reveals a fall of activity on the west coast of the US while east coast data shows increased freight volumes.
• Sudan humanitarian logistics to evacuate US, EU and UK nationals.
• Coronation of King Charles 3rd happens within a week. This generates much income for the economy by stimulating demand for goods and services.
• What happens when something goes wrong in global supply chains well it can be deadly. Toxic cough syrup manufactured in India found its way to Gambia and killed a number of children under 5 years old.
• San Francisco, First Republic is the third regional US Bank to fall into receivership.
• Exon Mobil and Chevron have mountains of cash that they do not know what to do with as a result of global gas and oil prices this year.
• The Book Depository closed its doors for the final time this week. It competed with Amazon since it was started by an ex-Amazon employee in 2004. It was taken over by Amazon in 2011.
• Generative AI featured in all the profit reports for Big Tech Companies.
• Implications of AI for supply chains.

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About Tony Hines and the Chain Reaction Podcast – All About Supply Chain Advantage

I have been researching and writing about supply chains for over 25 years. I wrote my first book on supply chain strategies in the early 2000s. Each week we have special episodes on particular topics relating to supply chains. We have a weekly news round up every Saturday at 12 noon. All things impacting global supply chains in that week, so come and join us on the Chain Reaction podcast. I look forward to seeing you there.

You can follow and subscribe to the show on your favorite podcast platform.
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All things impacting global supply chains this week with Tony Hines.

You can follow Chain Reaction on LinkedIn, Twitter and Facebook

About Tony Hines and the Chain Reaction Podcast – All About Supply Chain Advantage

I have been researching and writing about supply chains for over 25 years. I wrote my first book on supply chain strategies in the early 2000s. Each week we have special episodes on particular topics relating to supply chains. We have a weekly news round up every Saturday at 12 noon. All things impacting global supply chains in that week, so come and join us on the Chain Reaction podcast. I look forward to seeing you there.

You can follow and subscribe to the show on your favorite podcast platform.
Follow like and share the Chain Reaction Podcast with colleagues and friends on social media.

Facebook
Twitter
LinkedIn
News about forthcoming programmes click here

Four episodes for May:

1. How to become a better supply chain manager
2. How to make your supply chain efficient
3. Last mile delivery
4. Benchmarking and Performance

Pick the episode up on your favourite platform.
Make sure you subscribe and you will be first to know when new episodes are available.

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Tony Hines revisits the the Rana Plaza disaster 10 years on to ask has anything changed. Have supply chains developed a moral compass or could this happen again.

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All things impacting global supply chains this week with Tony Hines

• President Joe Biden pays a visit to Ireland
• Serious security breaches in the US
• Brazil's President Lula visits China
• Farm fire in Texas kills 18,000 cows
• China imports copper from Russia
• China Central Bank Governor Yi Gang criticises friend shoring
• Feature on the global market for Electric Vehicles
• Amazon joins AI competition with proprietary technologies – Bedrock
• Boeing pauses delivery on Max 737 because of supply issues
• Tupperware is a 77 year old US company and iconic brand under pressure
• Brazil is negotiating trade deals in China both want to trade in their own currency and not the US Dollar

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During the past forty years the number of consultants has grown worldwide. More organizations use consultants and the global industry is worth $250 billion. There is a symbiotic relationship between Business Schools and Management Consultants that maintains a steady supply of fresh graduates to a growing industry. An interesting question is to ask what role management consultants play in adding value to organizations in both the public and private sector.

The 'Big Con' describes the confidence trick the consulting industry performs in contracts with hollowed-out and risk-averse governments and shareholder value-maximizing firms. It grew from the 1980s and 1990s in the wake of reforms by both the neoliberal right and Third Way progressives, and it thrives on the ills of modern capitalism, from financialization and privatization to the climate crisis. It is possible because of the unique power that big consultancies wield through extensive contracts and networks – as advisors, legitimators and outsourcers – and the illusion that they are objective sources of expertise and capacity. To make matters worse, our best and brightest graduates are often redirected away from public service into consulting. In all these ways, the Big Con weakens our businesses, infantilizes our governments and warps our economies.

Conflicts of interest can be problematic when organizations employ consultants. It is necessary to ensure that any conflicts of interest are declared at the outset before work is done. We have seen during the Covid 19 Pandemic that many contracts handed out by the UK Government suffered from a lack of scrutiny bypassing normal processes  in an effort to speed up action. This increased costs and some contracts given to management consultants were excessive. £600 million spent on this. Much of it on Track and Trace. In addition much public money was wasted on Personal Protective Equipment contracts given out in grace and favour to those in the loop.

If you want to work in management consultancy then a degree at Business School is a starting point often the MBA. Business Schools will tell you about all types of tools and techniques to add to your toolkit. such as Motivation Theories, Theory x and Theory Y, Teamwork, Business Process Re-engineering, 7 S Framework, Lean Thinking, Agility, Flexibility, BCG Growth Share Matrix among many four box strategy models along with Porter's Value Chain Analysis, Five Forces and many other management fads. The problems emerge when the novice management consultants decide to put them into practice without sensitivity to context and specifics of the problems.

Here we take a look at the role of Business Schools in developing the supply chain for the management consulting industry. Drawing on some critical commentators such as Locke and Spender 'Confronting Managerialism'.  The failure of management is explored in this book. Another contribution comes from Duff McDonald in 'The Golden Passport'. Henry Mintzberg wrote a book 'Managers Not MBA's' which makes some telling points about the nature of MBA's in Business Schools.

So what do you think? Have firms devolved their responsibility to manage by employing an ever-growing army of management consultants? 

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In this Easter Special Edition Tony Hines takes a retrospective look at all things impacting global supply chains and identifies some key challenges for supply chain managers and the C suite.

Many factors have disrupted global supply chains including:

• Geopolitics
• Inflation
• Energy Price Increases
• Climate change and droughts
• Shipping costs and container box prices
• Covid 19 pandemic
• Disruptions continue to impact global supply chains
• Ports under pressure with delays and strikes
• Trade wars between US and China
• Threats to supply chains from cyber attacks
• US policies aim for resilient supply chains and the notion of friend shoring
• Costs and risks moving to EV's and China's leading position in controlling mineral resources along with their processing capabilities give the country a leading edge in shaping the new automobile market.
• Retail supply chain costs have risen and average inventory levels are much higher
• Russia invading Ukraine and the grain shortages that followed
• Food shortages due to many factors including climate change, droughts, and Brexit have caused empty shelves in the supermarkets. 
• Labour shortages and skill gaps emerged in the UK and Brexit made matters worse. This impacted food supply chains with shortages of workers to pick and harvest crops.
• Inflationary pressures have brought strike action as workers seek to get higher wages. 
• Energy prices have gone sky high and many businesses may decide enough is enough and some already have.
• Brexit has posed many challenges for the UK with the Northern Ireland Protocol, worker shortages, supply chain frictions, additional costs and extra paperwork which has added to the problems of inflation for the UK.
• Energy, food and water security are some of the big challenges.

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In this episode Tony Hines takes a look at superforecasting and AI and how it will change and impact the supply chains of the future.

Super in this sense means better.  According to Phillip Tetlock superforecasters consistently make better predictions.  They do this avoiding bias, updating as new facts emerge and through their cognitive processes.  We examine how forecasts can be better by examining practices and processes used by superforecasters.

There is much potential to employ skills to make better supply chain decisions adopting approaches discussed.

Artificial Intelligence (AI) and machine learning also offer ways to combine human and computer technologies to improve supply chain management by improving predictions that impact business.

Further Reading:
SCHOEMAKER, P. J. H., & TETLOCK, P. E. (2016). Superforecasting: How to Upgrade Your Company’s Judgment. Harvard Business Review, 94(5), 72–78.

Superforecasting: The Art and Science of Prediction, by Philip E. Tetlock and Dan Gardner, Crown Publishers, a division of Penguin Random House LLC, New York, New York, ISBN 978- 0804136693

Power and Prediction. (2023). Developing Leaders, 40, 212–214.

Power and Prediction – The Disruptive Economics of Artificial Intelligence, co-authored by Ajay Agrawal, Joshua Gans and Avi Goldfarb, HBR Press (Nov 2022) 9781647824198 (ISBN10: 1647824192)

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All things impacting global supply chains this week.

• Cause for concern that inflation is driving the movements in the banking sector at present. Two recent regional bank failures are at the mercy of central banks as they try to dampen inflation. Last week interest rates increased by 0.25 per cent.
• GlenFlat has created solutions to lowering cost of moving empty containers
• AI concerns have been raised and there are calls to halt experiments with AI. Of course if this happens in the US or Europe there wil still be experiments elsewhere in the world.
• Cyber attacks on supply chains are back in the news this week.
• British supermarkets have been defrauded by suppliers labelling contaminated meat as British when its country of origin is elsewhere in South America and Europe.
• The UK strikes an Asia Pacific trade deal with 11 countries.
• The spat about microchips between the US and China continues as China claims it could be threatened from the importation of US microchips which present security risks for China according to the Cyber Security Administration in China. Similar claims have already been made by the US about Chinese microchips. Micron is the US company impacted by the claims.
• Environmental Protection Agency (EPA) says 50 per cent of trucks will be electric by 2035. Other states have followed suit. Transport is the largest contributor of greenhouse gas.
• Consumer spending in the US is modest at 2 per cent in February. Economic growth eases risks of credit crunch.
• Inflation in Europe is also falling. Energy and food costs remain volatile.
• President Macron visits China 5-8th April escaping Paris protests about pension rises.
• EU suppliers of seeds withdraw from UK supply because of post Brexit difficulties with certifications and it is costing them too much to maintain supply.
• Lithium prices have been fixed in China.
• Looming potato crisis as UK farmers reduce land used to produce the crop by 10 per cent beacuse of higher energy costs according to Farmers Weekly.
• Ex-President Trump is the first US President to be indicted for criminal prosecution.
• Late news coming in that all global supply chain problems have been solved and World Leaders reach agreement there will be no more wars.

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