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January 2008
In this newsletter:
Webcast: S&OP: How To Make It Work
Bullets from Bob: Fingerprints - A Key to Success
What's New: China Trip Report
Featured International Distributor: ASCMS
China
Tom Wallace Webcast
Tuesday, January 22
1:00 pm EST
S&OP - How to Make It Work
Sponsored by Steelwedge
Tom's Webcast will present his and Bob Stahl's latest thinking on implementation: how to implement
Sales & Operations Planning . . . at the Executive level in the company . . . successfully . . .
and quickly.
This will be the first public presentation of Tom and Bob's new implementation methodology, which is
fully detailed in the new Third
Edition of the
definitive book on S&OP: Sales & Operations Planning: The How-To Handbook - Third
Edition.
To enroll, go to www.Steelwedge.com.
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Fingerprints - A Key to Success
In the past few decades, many tools have been developed with the
potential to contribute to a company's competitive advantage. None of
them, however,
represent a quick fix. All of them require a good deal of effort by the
people who have to make them work - to have their personal
"fingerprints" on
it.
We've seen dozens of companies use Executive S&OP in a highly
effective fashion. While there are some common principles among all who
use Executive
S&OP effectively, the application of those principles to a specific
environment is anything but common. Making it work is dependent upon
the company,
its products, its customers, and its operating environment.
We always begin our work with a company as the "teacher," but a
company's success makes it so that we leave as the "student." What this
means is that
a company's people are the ones who make Executive S&OP work at
their company. As such, they become the "teachers" by the time they are
done.
The reasons for this are:
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While the outsider is the Executive S&OP expert, the insider is the
expert about your company; it takes both to make Executive S&OP
work.
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Because Executive S&OP means making substantive change to past
practice, letting go of the past only happens when ownership and
confidence in the
future exists.
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This pride of ownership by the people who have to make Executive
S&OP work is far more important to success that any technical fix.
It is what
generates the energy for change.
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Continuous improvement continues after the outsider is long gone.
In this arena of balancing demand and supply, the lead role is with the
practitioner - not with academics or consultants. All lasting success
with
Executive S&OP has the fingerprints upon it of presidents, vice
presidents, directors, and managers - the owners of the old processes
that had to be
changed.
Best wishes for a Great 2008.
Bob Stahl
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CHINA TRIP REPORT
In November I spent some time in China. Unfortunately, I didn't have
time to do the usual tourist stuff but rather was pretty much consumed
with
teaching four classes in seven days, two each on Executive S&OP and
Postponement. A business trip, in other words.
However, I did get to see a bit of big-city China: Hong Kong, Shanghai,
and Shenzhen and that was enough to form a few impressions:
- To say that
China is "interesting" is a gross understatement. It is "intensely
fascinating." The vitality, drive, and dynamism of the Chinese
society is mind boggling - and that's no overstatement.
- The
Chinese are in a hurry. For example, the city of Shenzhen is so new it
doesn't appear on many
maps. Fifteen years ago, it was nothing more than a small village near
Hong Kong. Today, its population is over six million and Shenzhen bills
itself as the "Manufacturing Center of the World." I
don't know about that, but the pace of new construction is staggering.
- A
similar story concerns the part of Shanghai where I stayed and taught.
It's called Pudong, and
twenty years ago it was mostly farmland. Today it's a metropolis unto
itself, with 5-star hotels, high-rise apartment buildings, shopping
centers, luxury car dealerships, broad boulevards, and home to millions
of people. Some folks I talked to there claim that Shanghai is "the
greatest city in the world." Well, I don't know about that either but
it is quite a place.
Why are the Chinese in such
a hurry? Here are two reasons, among perhaps others. First, the "800
pound
gorilla" is the Chinese population: 1.3
billion human beings, a majority of whom live in or near poverty.
Raising the overall standard of living is a very high priority and
that's why there
is such a push in the manufacturing sector. They have a workforce that
considers working for very low wages to be wonderful; it's a major
increase in
their income. Manufacturing is one of the easiest and quickest ways to
put people to work. And they're doing it.
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Featured
International Distributor
China
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The second reason concerns the Chinese psyche. For many hundreds of
years, the Chinese civilization was very advanced, perhaps the most
advanced in
the world. Then, some centuries ago, China experienced a relative
decline. This led to many parts of China being controlled by Western
powers: Great
Britain, France, Germany, Portugal, and oh yes the United States. The
Chinese felt that deeply; it was very difficult for them. That
experience forms
much of the impetus for their current push to global prominence.
But isn't this causing a loss of manufacturing jobs here in the U.S.?
Of course it is. But, is that really anything new? As an American
living north
of the Mason-Dixon line, I can remember being concerned some decades
ago about job loss to plants in the South. Then plants in the South,
along with
the North, started losing jobs to Mexico. Then the job loss, including
Mexico's, was to Japan. Now Japan and all the rest of us are losing
jobs to
China. While I was there, I heard some Chinese complaining about job
loss to Viet Nam. In the meantime, our unemployment rate is much the
same as it
was 40 years ago. What goes around, comes around.
Are there other problems resulting from the China phenomenon? Of
course, and we know what they are: unsafe toys, unhealthy food,
knock-off products,
sweatshops, chronic violations of intellectual property rights, and so
forth.
Let's take the first two: unsafe toys and unhealthy food. There's a
saying: "fool me once, shame on you; fool me twice, shame on me." In
our context
here, that means we in the U.S. did an insufficient job safeguarding
against these kinds of abuses. In effect, we trusted but did not
verify. Now we
need to verify the quality of products being imported from China (and
elsewhere), applying the same standards there that we impose on our
domestic
manufacturers.
But wouldn't that raise their prices? Perhaps. Which is more important: rock bottom prices or safe
products?
If we have the will to take a firm stand, to say "enough!", I'm
convinced the Chinese will fall into line all across the board: toys,
food,
knockoffs, intellectual property, and yes, even sweatshops. They
desperately want to succeed. They're smart. They're proud. They're hard
working. And
they're flexible. I believe they'll respond to firmness and fairness.
And remember, we had sweatshops back when we were having our industrial
revolution here in the U.S. As did the folks in Britain and elsewhere.
Over
the decades, our societies developed laws on product safety, patent
protection, intellectual property rights, workers' rights, and so
forth. We
didn't develop these laws in a vacuum; we developed them in response to
abuses, sometimes flagrant, by North Americans and Europeans China's
just not
there yet.
In talking about the phenomenal growth in China to my wife, Kathryn,
she said: "This is the 21st century; it's China's turn." Yep. And we
can help
the Chinese help us by being fair and firm. That's probably the biggest
favor we can do for them. And it would be win-win.
Thanks for listening,
Tom
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