What the Heck is Supply Chain Management?

I am a Supply Chain Management consultant.  The trouble is that no one knows exactly what that means!  The subject matter is so broad that it covers nearly everything involved in the day-to-day operation of a business. 

In my ‘elevator speech’ I try to encompass the essence of the business with the following description:

“Supply Chain Management looks at the internal operations of a business in relation to its customers and suppliers.  We seek to align those operations with the company’s business partners to reduce overall cost and mitigate risks.”

This usually gets me a nod or some grunt of comprehension.  However, when pressed for examples of clients I am working with, I usually describe a start-up company in Philadelphia that, with my help, has begun importing a food product from Israel.  My audience usually walks away with the conclusion that I am an Import/Export consultant.

If I describe arranging warehouse space and delivery of product to the customer, they conclude that I am a Logistics consultant.

So how is Supply Chain Management consulting different from Operations Management consulting and Import/Export consulting, etc.?  I think that the key is really about focus.  Like all ‘consultants’ we seek out efficiencies and cost savings in the business operation, however, by focusing on the supply chain, we look to gain those efficiencies by strengthening the relationships with all the stakeholders in the chain.

When sitting with a client, we usually start by looking forward, down the supply chain, towards the ultimate consumer of the product or service.  What, we ask, do they need?  Assuming that the consumer is not their direct customer, the next question is, what does the customer need to most efficiently meet that need?

Few clients know the answers to these questions and the task is to develop a strong relationship with their customers and later to find ways to integrate the client’s internal operations with their customer base.  This can take many forms, including package design, computer systems integration, delivery schedules, etc.  Eventually, procedures must be put into place to monitor the relationship and make the necessary course corrections when conditions change.

Of course, once our clients are equipped with the knowledge of what their customers want and need, the next step is to look backwards along the chain and get the suppliers to adjust their internal operations to bring them into alignment with those of the client and their customers.  This involves strengthening the relationships with the suppliers and making them true partners in the process.

Often our clients’ requirements extend well beyond the traditional supplier / procurer relationship.  Bringing a key supplier in to during product design can reduce the likelihood of expensive customization of the supplier’s products to meet the design criteria. 

A strong supply chain allows other initiatives to be promoted and implemented across the chain.  One focus involves sustainability.  Most companies do not want their product to be associated with child labor abuses, global warming, water pollution and the like.  Most will implement initiatives internally to make certain that they are socially responsible.  Clearly, however, the need for initiatives goes well beyond the 4 walls of the business.  Managing the supply chain gives the business the ability to monitor its suppliers and assist them in implementing similar initiatives in their business.

Supply chain management, although primarily focused on manufacturing and distribution, can also be applied to service based businesses.  Every company, benefits from getting a fuller understanding of their customers and finding ways to more closely meet their needs.

So ultimately, supply chain management is all about building strong relationships and integrating business partners more closely.

Watch your Language!

I guess I knew this all along, but, it caught me off guard none the less. 

Outside the US, language education is started very early and English is often a requirement.  I teach a graduate level class in Supply Chain Management at Stony Brook University and many of my students are Asian. They speak English quite fluently and understand my lectures (in spite of my NY Accent).  That contrasts sharply, with my own language skills.  My high school French leaves me woefully unprepared to converse in anything other than my native tongue. 

In business, English is understood and spoken by virtually everyone.  My lack of skills has not prevented me from working closely with business people throughout Europe and Asia.

I have been privileged to receive referrals to my business from the French American Chamber of Commerce (FACC).  This group is dedicated to helping French businesses get started or expand in the US.  The referrals are always virtual in nature (via email) and initial communications are as well.

Once some initial discussion has set the expectations, I have scheduled a phone call.  Due to the constraints imposed by the distance between us, the calls are scheduled for the morning here which corresponds to the late afternoon in France.

On Morning last week, at the appointed time, I called my contact at an apparel company in Paris to follow up on the emails we had been exchanging.   When I got connected, Aubin’s first question to me was whether I spoke French.  My response “un peu” (a little) prompted him to suggest that we wait until this week when his translator would be available.  He was communicating quite well in English, so I suggested that we try to continue.  Aubin took this to mean that I thought we could proceed in French and began speaking much more rapidly than I had any chance to process. 

Fortunately, with my limited vocabulary and words that were similar in both languages (“logistics” = “logistique”), I was able to get some inkling about what he was talking about.  We agreed to a follow up conversation and I enlisted a neighbor who is fluent in French to act as my translator.

The lesson I learned reminds me of the Boy Scout motto… “Be Prepared”.  Even though under most circumstances a working knowledge of English will suffice, it is important to have a plan B if it doesn’t.

Technology Abuses

I have always been a technophile.  I absolutely love computers and automation.  I was an early adopter of VHS and cell phones.  I got my degree in computer science in 1975 in the age of COBOL and the punched ‘IBM Card’ and never looked back.

I believe that technology can make our lives easier and make us better able to deal with our world.  There is no doubt, for example, that the development of X-ray technology and MRI has saved thousands of lives.  Unfortunately, technology has a dark side.  That happens when governments exploit technology to overstep their bounds.  Here are 3 examples that I find particularly disturbing…

     1)      E-ZPass

I got a disturbing letter in the mail today from the E-ZPass NY Service Center Violations Processing Unit.  The letter was entitled “WARNING OF EXCESSIVE SPEED IN A THRUWAY AUTHORITY TOLL LANE”.  According to the letter, I sped through the toll booth at 25 miles per hour.   The letter warned that “The next violation of the posted speed limit by any tag assigned to your E-ZPass privileges for at least 60 days.  Additional violations may also result in a further suspension or revocation of your E-ZPass account.”

I was definitely driving on the NY State Thruway around that time and I don’t really doubt that I was traveling faster than the speed limit when I went through the toll plaza.  My problem comes with both the threatening nature of the letter and the abuse of technology that prompted it.

No one watched me drive through the toll booth too fast, yet I am being put on notice that I will be punished if I do that again.  There is no evidence that the calculation of my speed is accurate and no way for me to dispute it.

One concern which was aired repeatedly during the roll out of E-ZPass, was the concern that the government would use the information to track our whereabouts.  When the Department of Transportation began to use the E-ZPass transceivers to report of the travel time between various exits, they promised that the information would not be used to punish individual drivers for speeding, even though they could clearly calculate when a particular vehicle traveled between the two points faster than the posted speed limit.

We were assured that the information would only be provided to the police if they had a court ordered warrant.  Today’s letter serves as a warning that they may be tracking more than they promised.

     2)      Red Light Cameras

I have similar concerns about the proliferation of red light cameras.  These devices are designed to allow municipalities to issue tickets to drivers if they run a red light or don’t make a full stop prior to turning right on red and I am sure other infractions as well.

While I certainly don’t condone running red lights, I am troubled that we are using technology to convict people of violations that no one is there to witness. 

How far away are we from a time when parking meters are equipped to issue tickets if you are parked longer than the time paid for?  Or camera’s catching and fining people for littering?

     3)      Government Spying on Every Citizen

I want to be clear that I consider Edward Snowden to be a thief and a traitor and I hope that one day he will face punishment for his actions.  Having said that, I am also outraged at the information that he brought to life. 

Especially since September 11^th, our government, under the guise of protecting us from further attack, has systematically attacked out liberties and curtailed our rights.  Traveling on an airplane means that we are subjected to intrusive searches and pat downs even though we are not suspects in a crime nor are we acting suspiciously.  Now, thanks to Mr. Snowden, we learn that the government is capturing phone records for every call we make or receive and compiling huge databases which they are mining for information about our every activity.  We are not talking about just people suspected of a crime, we are talking about everyone!

They claim that they are not recording every call.  I don’t believe them. Do you?

I believe that it is important to recognize that just because we have a capability to do something does not in and of itself justify the activity.  We must insist that our government entities respect our laws and protect our rights.  

Looking for New Markets?

If you are looking for new markets for your products or services, consider exporting. It is not unusual to find markets which are severely under served in your particular line of business. Entering these markets can be challenging and will require a careful attention to detail. However, the results can be extremely profitable.


The US Commercial Service is tasked with promoting exports from the United States. There are Commercial Service Officers in embassies and consulates throughout the world. They can provide insight and market analysis in their host country. They can identify potential partners on the ground and set up business meetings. This service can be invaluable to getting you started in a particular market. Finding a local partner can help to navigate many of the roadblocks to a successful export venture


Exporting is not without its risks. I had the opportunity to sit in on a webinar this week about doing business in Nigeria. One of the concerns which was brought to the table was the protection of intellectual property. Our ambassador acknowledged that the Nigerian government has been lax in protecting intellectual property (patents, trademarks and copyrights). He indicated that this was starting to change as Nigeria understands that the lack of protection is an impediment to foreign investment.


You may need to customize your product for a particular market. This can be as benign as translating your labeling and instructions to the local language to modifying your content to gain approval from the local government. Some countries require a specific amount of local content to permit a product to be sold there.


Choosing a banker with branches in your target market can increase your chances of getting paid promptly. If your bank doesn't have a branch where you are headed, they may have a correspondent bank with whom they have a relationship. Financial instruments such as a Letter of Credit can protect you by guaranteeing payment as long as the conditions of the LOC have been met (goods delivered, proper quantity and condition, etc.)

In the coming weeks I will offer more tips on getting started as an exporter.

Scam

No matter how street smart you might think you are, I assure you that you are not immune from scammers.  Especially if you are not paying close attention, you can be taken advantage of.

Yesterday evening, the house phone rang.  My wife was on the phone and she got the call waiting beep.  When she answered it, the person on the other end of the phone told her that he needed to speak with me. 

It seems that he had called my mother-in-law and told her there was a ‘problem with her computer, and it was causing errors on the server’.  They needed to fix it for her.  Fortunately, my mother-in-law grew up in The Bronx and is not especially gullible.  More importantly, perhaps, both she and my father-in-law are not computer savvy.   She told the guy that her son-in-law (me) handles all her computer problems and told him to call me.

I told the guy off right away and then hung up on him.  Incredibly, he had the nerve to call my mother-in-law back and tell her that I said it was ok to talk to him.  I called her a minute later she told me he was back on the phone.  I told her to hang up on him immediately, which she did.

Interestingly enough, I got the same phone call from these guys a couple of months ago. 

I don’t really know what their game is.  Are they trying to steal their target’s identity or extort money?  Who knows?  I certainly am not going to give them the opportunity to tell me.

They prey on people who are not computer savvy with techy sounding words like server and virus and computer error.  If someone is unsuspecting, I am sure they could really get hurt.  The bottom line is, if you don’t know the person who is calling you on the phone, sending you an email, etc. you simply can’t trust what he is telling you!  Be wary, be street smart and be careful.

Soom Foods – Turning a Vision into Reality

I recently had the privilege to work on a project for Soom Foods, LLC.  A startup company, Soom is the brainchild of three amazing sisters.  Their vision was to bring a quality Tehina product to market in the US.  Tehina is a sesame product sourced in Ethiopia.  The seeds are shelled and pressed into a paste like substance which is a staple of Middle Eastern recipes.  It is a major ingredient in humus and can also be used in baking and salad dressings and a myriad of other foods.

I first met Amy (youngest of the three) at a networking event in Philadelphia.  Amy explained that she and her sisters were planning to engage a factory in Israel where Jackie (the middle sister) and her husband live and have the product shipped to Philadelphia.  Omri (the brother-in-law) has a good deal of knowledge about the product, having been involved in distributing Tehina since 2005.  Shelby (the older sister) came up with the concept and is the driving force behind starting the business.  Beyond the original concept, the girls had little idea about how to get started.

I worked with Amy to create a project plan to develop the Soom Foods supply chain.  The plan needed to encompass everything from website development to finding a warehouse.  We needed to navigate the importing process speaking with the FDA and Customs officials.  Fortunately, the factory in Israel was already certified by the FDA, thus minimizing the effort in getting the product approved.  Amy’s original plan was to bring in large containers and then repackage the product here.  Instead, we arranged to have the Israeli factory do all of the packaging and labeling there making the job here much less time consuming and stressful.

The Israeli factory agreed to handle all of the shipping requirements and deliver the product directly to the Philadelphia warehouse.  The product is then sold over the web as well as to local restaurants and ethnic food stores. 

In April, Soom received their first container and actually started selling their product.  I know that they are positioned to be a huge success.

You can check out their offerings at: www.soomfoods.com