2013 Bloomsday 12K Spokane

I participated in the 2013 Bloomsday 12K run/walk in Spokane, WA on May 5.  This is an important and well-known road race, mostly because of the event’s size.  About 50,000 people participate from the surrounding areas and some from across the country.  It’s a fun event with bands and fans all along the hilly course and a big party at the finish line.

At about mile 5, while I was desperately trying to take my mind off my aching feet, I started to think about the supply chain support required for special events like this.  Bloomsday is exceptionally well organized and managed, and the supply chain challenges are especially difficult.

Just getting people lined up in the proper time/age groups at the start of the race is amazingly orde

50,000 runners start Bloomsday in Spokane

rly and efficient.  And consider for example, making sure that there is enough water poured into cups and ready to hand to 50,000 people at 4 stations along the route.  Water is critical to keep participants hydrated in the warm May sunshine and for their successful finish of the race.  These are major logistics challenges of a huge event like this, and the Bloomsday logisticians did a remarkable job.

There are other considerations, too.  T-shirts at Bloomsday are legendary.  The design of the annual t-shirt is kept secret until race day, but behind the scenes, ordering 50,000 shirts must be a daunting task.  The tag inside my t-shirt says it was made in Mexico.  Sourcing t-shirts must have included months of planning for production and importing into the US.  The shirts (in the size we ordered) were available at organized distribution tables at the end of the race. 

These kinds of big events are akin to other supply chain challenges such as pumpkins and costumes at Halloween and Christmas trees in December.  It takes a lot of talent and effort to get the right products to the right place at the right time.  Bloomsday Supply Chain people are some of the best.  Well done Spokane Bloomsday, well done!

Change in Command – US, China, Russia

I am in China again this week and it seems everyone wants to know about the US elections.  They watched the Presidential debates and the election news with great interest and a kind of wondrous amazement.  “We heard what your politicians believe and what they will do,” one executive told me.  “In China, we have no idea what the policies of the leaders will be.”

I hadn’t really considered the difference in politics this way.  Americans have access, information and a fundamental understanding of what the leadership is planning.  Chinese people have none of this.  Most people have no clue about what is in the new Chinese 5-year plan, or how the new Communist Party Chief Xi will lead the country.

With the US elections now over and Obama reelected, the new President Xi assuming the leadership of China and Putin in Russia, we should all be wondering what will change in the world.   These three super-powers will surely bring dynamic change in the world order.

The Chinese Communist Party began its leadership transition as the 18^th National Congress opened in early November.  This transition in leadership happens only once every 10 years. The new President Xi will be charged with executing the new Chinese 5-year Plan, developed earlier this year.  This plan includes a heavy emphasis on the environment, and from what I have observed in China, whatever the government decides to do, gets done.

In the US we have had the privilege of watching the Presidential and Vice Presidential debates, listened to endless TV advertising and news reports.  We have a pretty good idea about the President’s agenda.  But how that agenda will interact with Xi’s and Putin’s is a big unknown.

Hello from Borneo

I spend most of my time working on global supply chain consulting engagements.  But from time to time, I also do Expert Witness work for legal cases involving supply chain issues.  At the moment, I am working on a legal case involving agri-business across Malaysia and Indonesia.

palm oil fruit

Arriving after midnight last night, I couldn’t help feeling a little creepy as we sped from the airport to town in a rickety old taxi.  The third world flew by the windows.  The ancient driver was going 140km/hr until I begged him to slow down. What if we broke down or had an accident?  Were there headhunters lurking? The $50 “best hotel in Sabah” turned out to be rather scruffy around the edges and even the bottled water looked suspicious.  But in the morning, things looked better. Our driver arrived with cold water and a 4-wheel drive Jeep to take us the 50 miles to the plantation, over rutted dirt roads. Finally, we arrived at the estate plantation, a bit rattled from the very bumpy ride.

As remote as this plantation is, in the hot and humid jungles of Borneo, it strikes me that the supply chain issues faced by this company are not that different from any other company large or small, rural or in a metro area.  Here, in the wilds, the managers are worried about planning and forecasting, raw materials such as fertilizer and seeds, labor and transportation.  Harvested product needs to be processed within 48 hours; shipped to the processing plant via rag top trucks.  Then, processed product must get to market to meet customer demand.   The managers worry about IT systems to capture production data and pay the workers.  They do analysis for continuous process improvement.

The plantation workers live in plantation housing and their bare-foot children attend plantation schools.  The people are poor, but very friendly.  Hopefully, the year-round harvest is good, and too much of it won’t be eaten by tree rats or monkeys.  Even rain can ruin the workday.

This is indeed the third world, but they must deal with first world global supply chains and technology. It is gratifying to know that the topics we master as supply chain professionals are truly universal.  The skills we learn apply across industries and continents and cultures.  The differences are fewer than we might expect.

It was an interesting adventure and about as far away from my Silicon Valley home as one could possibly get. At least at home, I don’t have to deal with monkeys…at least not that often.

Taxis Around the World

I recently had the opportunity to travel from the US to Europe to Asia and rode in taxis in all three places.  I was reminded that while a taxi ride may seem mundane, the differences are quite significant. 

 

Take London, for example.  The famous shiny black cabs are the pride of the city: neat, clean and the drivers are professionals who are required to take a test of their knowledge of London before they are allowed to drive a cab. 

 

You will experience the complete opposite in a place like Chengdu, China, a city of 14 million people, where you risk your life when you go for a wild taxi ride…that is IF the taxi driver knows where you want to go and is willing to take you there, after you argue over the destination and the price. It’s the Wild, Wild West of China, where traffic laws and standard driving rules are still in the early development stages.  When the ride is over, you’ll breathe a polluted, but grateful sigh of relief that you survived.

 

In Germany, the taxis are likely to be Mercedes Benz, which feels a little less threatening as the drivers go at break-neck speed to your destination.  Everyone in Germany will tell you that speed is safe. What is it about the Germans and their love of speed?

 

Then there is Seoul, Korea.  A taxi driver will simply refuse to take you anywhere he doesn’t want to go.  And knowing the secret between black cabs (those drivers speak English) and the silver cab (good luck trying to communicate) is important to a successful journey.

 

Un-huh…then there is New York City: taxi drivers in stinky cabs honk at one another, people, cars, and trucks for seemingly no reason at all, all day long and all night long.  On one journey in NYC, when I argued with the driver that my building was across the street in Times Square and I expected him to take me all the way there and not drop me in the middle of the chaos, he yelled at me, “get out of the cab, lady and walk!”

 

And San Francisco, where a drive through the steep hills at 0-60mph for every block, will take years off your life. The drivers are quite friendly and often chatty there, while they risk your life.

 

And then, there is Beijing.  If you don’t ask for the driver to turn on the meter, you will get charged 5-10 times more for the fare than you should.  On a recent trip from the Beijing airport to the Hilton Beijing, I asked for a meter cab.  The driver took me to a side street across from the Hilton, instead of the entrance, and unloaded my bags.  The fare was 58 RMB.  I handed the driver 100 RMB and asked for change and a receipt.  He got in his taxi and drove off with my 100.  I should have known better.

My visit to a Chinese machine shop

I visited a State Owned Enterprise (SOE) machine shop near 5^th Ring Road in Beijing one very hot and humid August afternoon.  The machine shop was located among a cluster of buildings that didn’t seem very remarkable from the outside.  But inside was a different story.

We were greeted by the Plant Manager and the Operations Manager, who were expecting us for a visit that afternoon.  After the greetings were exchanged, the two managers disappeared to take a phone call and we were left to wander the plant by ourselves, unescorted. 

We walked down the center aisle of the machine shop, surrounded by giant drilling and cutting machinery making thunderous noise and throwing off metal shavings.  We were offered no eyewear protection, no foot/toe protection and no earplugs.  The Chinese machine tool operators were wearing black cloth shoes with rubber soles; not the steel-toed boots you would expect in a US factory.  About half way down the center aisle, a chemical smell was so overwhelming, that I looked for an open window or door to gasp some “fresh Beijing air”.  I was allowed to take as many photos as I liked.

The lack of safety standards and allowing us to walk through the factory unescorted was a dose of reality regarding Chinese manufacturing.  China’s steady climb in the industrial world has not been paralleled with world standards for safety.  The climb to achieve these standards in China is extremely steep.

Demise of Manufacturing in China

Recent stories in the Western press describe impending doom for Chinese manufacturing, relating the Chinese demise to Japan in the 1990’s.  But to real China-watchers and experts, this is a naïve view.  It assumes that the Chinese government will sit back and do nothing to correct the trends and that the Chinese economy will stagnate.

While Chinese manufacturing is not known for innovation, it really is just a matter of time.  With 700,000 graduating engineers per year, China is quickly becoming the world’s powerhouse in manufacturing engineering and in continuous improvement.  The next phase is innovation and optimization. 

To address innovation, the Chinese government advocates student exchange programs and invites thousands of visiting US professors into its universities to infuse creativity into the education systems. Over time, this will reignite the creative innovation spark that the Chinese displayed over thousands of years, inventing printing, gun powder, deep water bridges, massive sailing ships and irrigation to name a few.  While US politicians tell us not to worry because China cannot innovate, the Chinese are busy proving them wrong.

To address optimization, China has started on the journey to automation.  Automation and the adoption of software systems will dramatically increase productivity at the factory level and will drive continuous improvement and optimization.  Although this is a long road to travel, it is nonetheless the road Chinese manufacturers are on.

It’s time to wake up and smell the green tea.

Apple’s Foxconn Factory and Mike Daisey’s Lies

Mike Daisey, a journalist and feature writer, delivered a radio show about Chinese factory workers on NPR “This American Life” in January.  I listened to the show one Sunday morning with a friend and kept thinking how odd it was that the things he was saying about his interviews with workers outside of Foxconn, just didn’t ring true.  I remarked to my friend throughout the broadcast that his examples weren’t true, or were odd. For example, he claimed he talked to several young girls who told him they were 12 and 13.  If they were underage workers at the Apple factory, why on earth would they say so and risk losing their jobs in one of the best factories in China?  In another example he talked about guards at the factory gates toting guns.  I have never seen anything like this in the factories I have visited.

Well, it turns out that Mike Daisey lied and embellished his story for NPR and for his off-Broadway monologue called “The Agony and Ecstasy of Steve Jobs”.  Only a few parts of his story were true…enough to make it sound real.  NPR has broadcast a retraction and the world press has skewered Mike for lying.

It’s not that those of us with China experience don’t believe there is room for improvement.  Chinese factories in general have a long way to go to improve working conditions and address human rights issues.  Conditions are not consistently up to world standards yet.  But the Foxconn factories are some of the best places to work.  Apple, HP, Dell and other companies have taken pains to monitor the production environments to make them humane and safe.

What bothers me most about Mike Daisey’s lies is that he has incited people to believe more fiction about China.  It’s time we dig deeper and question stories like this in the Western press and demand that our news companies verify all facts prior to printing or broadcasting.

The Silk Road – first global supply chain

Spices have been traded in Istanbul for 2000 years

I spent the holidays on vacation in Venice and Istanbul on a mission to understand more about these two important end points on the Silk Road. Starting around 200 BC and extending 4,000 miles, the Silk Road got its name from the lucrative Chinese silk trade and tea trade in exchange for spices, nuts and jewels from Europe and the Middle East.  In addition, various science and technology innovations were traded along with religious ideas as well as the bubonic plague.    The Silk Road was a significant factor in the development of the great modern civilizations. 

Very few people actually traversed the entire Silk Road.  Mostly it was made up of agents and merchants who bought and sold goods along the way.  At major points, great bazaars opened to facilitate a meeting place for traders.

Istanbul is a city that spans the continents of Asia and Europe and was the end of the overland Silk Road.  Merchants took their goods to the Grand Bazaar where they also traded ideas and innovations.  Walking through the Istanbul Spice Market and Grand Bazaar you can just imagine what it must have been like centuries ago packed with merchants bargaining with one another.  The influences of both Asia and Europe are evident here in the architecture of places like the Blue Mosque and the Hagia Sofia representing Islam and Orthodox Christianity.  And of course in the history of its name: Constantinople and Istanbul.

Venice became a major trade port in the Middle Ages when the Chinese Treasure Fleet (at least 100 years ahead in the mathematics needed for navigation) sailed in, ladened with treasures from China.  In Venice you can see the influence of Asian architecture in the mosaics installed in the Basilica of San Marco.  In the Doge’s Palace the famous maps show the Americas and Australia long before Columbus “discovered” the new world.  Plenty of evidence indicates that the Chinese heavily influenced Venetian map making in the 1300s and early 1400’s.  Just imagine what the Europeans and Chinese thought of one another.

I tried to imagine what it was like in these two cities in the Middle Ages.  With a little site seeing at the Spice Market and a walk through San Marco, it wasn’t hard to do.

Counterfeiting is a problem worldwide, but it is particularly acute in China.

On Nov. 8, 2011, the Senate Armed Services Committee held a hearing on counterfeit parts in the defense supply chain, including electronic parts used to manufacture weapons and other defense department equipment. Investigators found that counterfeit or suspect electronic parts were installed or delivered to the military for several weapons systems, including military aircraft such as the Air Force’s C-17 and the Marine Corps’ CH-46 helicopter, as well as the Army’s Theatre High-Altitude Area Defense (THAAD) missile system. Legislation is being proposed to require defense contractors to certify all parts for authenticity.  This will place a tremendous burden on defense supply chains in terms of authentication process verification

But of course, counterfeiting is not limited to defense goods.  Any electronic gadget or equipment is likely to include some counterfeit parts, and the counterfeiters are getting better and better at it. It is so difficult to tell counterfeit from legitimate parts, that industrial buyers are often fooled.  Even the price of counterfeits may be equivalent or close to legitimate parts, thus eluding suspicion about parts origins.  This is a problem of such magnitude, that we are just beginning to unravel the stories.  Counterfeit parts may cause your iPOD to fail early or not work properly at all.  But think about the real danger in counterfeit parts in machinery, automobiles and aircraft.

The only way to control counterfeiting is to maintain control over your entire worldwide supply chain.  This means verifying and monitoring all parts suppliers, distributors, subcontractors and manufacturers.  Take nothing for granted. Know your supply chains from start to finish. Verify and monitor every step of the way.

ASEAN Single Windows Project

The Association of South East Asian Nations (ASEAN) Single Windows Project is a USAID-funded initiative to facilitate trade between the 10 member states.  This includes developing standard documents and processes across the member states of Singapore, Indonesia, Malaysia, Philippines, Thailand, Laos, Vietnam, Myanmar, Brunei and Cambodia.

I was invited to lead a Business Process Design Workshop for this group in Singapore in August.  What an honor it was to participate in this event with policy makers and customs officials from the member states.  There were 2-3 delegates from each country plus representatives from the ASEAN Secretariat in attendance.

I started off the day with a lecture about Business Process Design and then introduced a toolkit to assist in developing or revising processes.  The challenge was to use examples that were relevant to import/export and logistics as well as those things that are specific to ASEAN regional trade.  As a consultant and coach, I also like to add colorful examples to drive home the points I want to make.  I chose some images such as an elephant to enrich my stories.

Lecturing and coaching in a very diverse cross-cultural meeting was one of the more difficult things I have ever done….and also one of the most rewarding and enriching.  I hope they invite me back for more.