The five-year-old is now six, and getting sophisticated. The other night at dinner, a pan-Asian cuisine spectacular, he confidently announced, "You know, you have to use chapsticks to eat this kind of food." Taken aback, I dropped my chapsticks on the floor, occasioning grumbling from his grandmother and shrieks of laughter from the munchkins assembled, who thought it was all part of the act.
Reflecting on the incident later, I contemplated the dangers involved in applying close, but not quite right, tools to supply chain planning and operations. They often sound like the right thing to do, the right way to go. But, without closer examination, they could prove to be not as useful as hoped, or worse, downright harmful. The difference between chapsticks and chopsticks is minimal in print, noticeable upon inspection, and catastrophic in mis-application.
Whomever is selling either solution, is usually confident, and persuasive, though. It's up to you to discover when you need - and can benefit from - trying to use one or the other.
Note: ChapStick is a registered trademark of Wyeth Consumer Healthcare, which is being acquired by Pfizer Inc.
Softair Ag's CEO, Gabriel Weisskopf has hit another one out of the park. In a recent parable from his Opinion column in Air Cargo World, he recounted the tale of an uncommon service provider, led by its CEO, Hugo First.
In contrast with the parade of usual suspects who took PowerPoint and bombast to new lows, glazing the eyes and numbing the senses of the selection committee, Hugo brought only a flip chart and a bizarre attitude. After writing, "I am not here today to sell you anything," Mr. First admitted that he had really come "to find out what kind of buyer" he was dealing with.
Horror ensued. No brochures, no testimonials, no incomprehensible "value propositions." What was going on?
Actually, the approach is one that might signal bright prospects in a budding business relationship. After all, what kind of business partner is interested only in: 1) itself, and 2) how to get you to buy something, and soon?
Maybe the the right kind of service provider is one who's interested in the longer term, and how good the fit is between it and you. Or art least, wants to take the time tom understand you and your people before crafting approaches and solutions designed to actually solve real business problems in the supply chain.
Is this tactic sheer insolence on the part of a service provider, or an intelligent means of beginning to build the foundation of something sustainable - and valuable?
About a month ago, John Trentacosta wrote about a subject that no one wants to talk about (mhmonline.com). Fact is, an otherwise phenomenal supply chain can be brought to its knees when one partner in the chain runs into financial trouble. A business relationship with a pauper is not sustainable.
Some early warning signals - the canaries in the coal mine - include: requests for price increases, early payments, accelerated terms, or even financing support; late deliveries or quality degradation; failures to appropriately invest in IT and/or other assets; maintaining spend during downturns; delinquent taxes, deteriorating receivables, and extended payables; and bad press, among others.
Due duiligence on the front end can help prevent problems on the back end, but sometimes bad things happen to good people. That's when an early response team reaction to early warnings can pay off. Sometimes, you've got to pull the plug. But, often you can mutually develop work-out plans to let the troubled partner survive long enough to prosper -and to keep your supply chain humming in an unrelentingly competitive marketplace.
So, now I read that many carriers and service providers are struggling with capacity issues. They cut back, mothballed, whatever, when the economy turned down.
But, we've been preaching the need to get ready for recovery for the better part of two years. Those who didn't listen are now paying a price. Those who did are clearly going to wind up ahead of those who chose not to develop rapid response capacity alternatives.
It's difficult to work up much sympathy for either extreme: those who spent like inebriated seamen in the teeth of recession, or those who refused to believe that down cycles are always followed by up cycles. Either approach risks the success of the supply chains involved, and jeopardizes the market position of innocent partners in the end-to-end chain.
I should come as no great shock that the companies caught up in the failure to marshall capacity additions as volume picked up are likely not to be invited to next year's prom - plunging them back into the abyss of the depth of recession while the economy around them recovers.
A good friend of many years was recently bemoaning what he sees as the continuing decline of manufacturing in the US. His biggest complaint was that, every time a plant closes, its engineers hit the streets newly badged as "lean" consultants.
"Lean" indeed - a larger population trying to capture bigger pieces of a shrinking pie.
I don't have the data to challenge his contentions. Clearly, a lot of manufacturiung has left our shores over the past couple of decades. But, we still manufacture many things, although perhaps not on the scale of what General Motors plants used to look like. Certainly not at the employment and production levels of twenty years ago. That said, we're still in the early stages of in-shoring and right-shoring movements, and productivity - if not production - continues to climb throughout the sector.
It's possible that my morose amigo has seen his consulting and training business shrink because, at least in part, of other factors. More and better-educated and better-trained engineers and operators. Radical shifts in learning and knowledge transfer paradigms. Tired branding and terminology.
And maybe - just maybe - more companies are learning from one another in close relationships, and have focused, targeted, and empathetic partners to help them improve performance. Or perhaps they are getting help from subject matter experts with different styles, with different kinds of client relationships, and with different approaches to salvation that go beyond traditional projects and programs.
Seems to me that part of staying in the game - and ahead of the pack - in the 21st century is continual reinvention . . . within a supply chain, within a company, within a product, and within oneself. I'm just sayin' . . .
Costco continues to amuse and amaze by offering more than the usual products to pile in the cart. The Costco Connection magazine for June (www.costco.com, "connection") has a page devoted to "Fresh Views," with mini-features on: Wally "Famous" Amos (who has moved on to found Wally's Muffin Company),brainstorming techniques, and a quick summary of a 2009 book, Extraordinary Groups: How Ordinary Teams Achieve Amazing Results.
My big takeaways this month, aside from a hankering for a muffin or a chocolate chip cookie, were from Extraordinary Groups. One - not quite an aha! moment - was that a group dynamic can hinder, rather than stimulate, group productivity. The other was that "exceptional experiences can be thoughtfully nurtured and intentionally encouraged."
Good stuff, but the authors may have missed the larger point, which is that transporting tools and techniques for elevating group performance, to the operation of business relationships involving entire companies, can magnify and multiply the consequences of what might be accomplished.
Maybe an even greater message, though, lies in how Costco works at a fuller customer relationship by providing unexpected value, beyond the nuts and bolts of selling them tires and tube steaks.
CSCMP's game-changing CEO Rick Blasgen really nailed it in his latest Direct Connection segment in the Q2 issue of Supply Chain Quarterly (www.supplychainquarterly.com). The general point emphasized the value of face-to-face human-level communications in an age of instantaneous electronic communication via numerous media.
Even the Millennial Generation, btw, recognizes this value, despite its fondness for electronic access to all manner of information (and entertainment). My deep suspicion is that way too many people of all ages like to hide behind the impersonal facade of email, texting, tweeting, twittering, flittering - anything that buffers them from interactive personal contact. But, that reflects a personality disorder rather than a generational "preference."
Rick went on to promote the idea that communications leads to collaboration, which can be transported from individual application to organizational relationships. I take heart - when our profession's leaders get the picture this clearly, there's hope that the profession itself will follow.
Things get tricky at this point. Organizational collaboration can't really be - as in the George Gershwin song from Porgy and Bess - "a sometime thing," done when it's convenient for one supply chain partner or another. It needs to be part of day-to-day, and everyday, transaction execution within business relationships.
Now, the hard part. Collaboration doesn't just happen; relationships don't blossom just because they're planted and watered occasionally. All this is part of conscious investment of time and resources in creating the right kind of relationships with the right kind of partners, and all with a business purpose.
The investment, consuming as it may be, is where the big payoff in supply chain management is, though. It transcends momentary gains and losses when designed to deliver sustainable end-to-end marketplace advantage. And, the wunderkind at the end of the table who's texting while you're talking is part of that set of organized relationships.
Stadia emptied, vuvuzelas silenced, the Netherlands team has four years to contemplate what might have been in their resurgent prominence in the world of World Cup soccer. FIFA has a shorter time to assess the salutory effects of public hanging for sight-challenged and judgement-impaired referees. In the meantime, we'll don our colors and pull for Ajax, the pride of Amsterdam.
Back in the real world, the good news is that our universe of supply chain management is making headlines. That's also the bad news. USA Today's July 8 Money section carried a top-of-the-fold feature on shipping bottlenecks and their negative impacts on cost and timeliness. Our friend Rosalyn Wilson was cited (but CSCMP's production of her annual State of Logistics study was not mentioned - another rant for another day).
The problem was blamed on recession-driven capacity cutbacks in air cargo, ocean shipments, and truck transport. Adding container shortages to the mix makes marine transport the most severe manifestation of the problem, with shipping volumes increasing while Chinese container manufacturing has been seriously curtailed.
But, some of the damage was self-inflicted, and some continued difficulty is a matter of choice - an investment in short-term pain in exchange for a payoff in longer-term financial pleasure. Carriers (of all types) embraced sharp price cuts in order to keep operating - even at a loss - when times got tough. Many shippers took advantage of a perceived desperation, and turned the screws even tighter.
Now, the carriers want to get well - and fast. The USA Today feature reports a 150% increase in transportation costs (following the historic decline of 2009). Significant additional increases lie ahead, with re-activated capacity lagging demand. Some observers maintain that the ocean carriers' recent practice of "slow steaming" is a faux green maneuver to mask a cynical manipulation that reduces effective capacity - and creates unholy pressures for further upward price movement.
Despite the fine words and high concepts coming from many players in the global supply chain community, this scenario reflects a sobering reality about talking the talk versus walking the walk.
How often must we repeat these cycles of adversarial win/lose (and lose/lose) industry-wide confrontation? At some point, the strategists among us will learn to think, like Bobby Fischer, four or five moves ahead and build long-term business relationships. Real relationships will insulate genuine partners from the debilitating skirmishes that perpetuate the paradigm of creating immediate transactional focus, short-term one-sided gains, and long-term supply chain underperformance.
We know better; now we've got to do better. But, doing better requires that everybody - shippers, carriers, service providers - gets in the game. And plays to win-win.
Kevin Cornish (atrisk.net) recently blogged about situational values and fake parts in the supply chain. His best line? ". . . the human element matters more than ever . . ."
Citing the loquacious, but nearly always on-target, Tom Friedman from the New York Times, Cornish introduced the ultimate reality that all partners in supply chain relationships must become more responsible because we can't shield ourselves from the irresponsibility of others.
Right on, Kevin; right on, Tom!
But, do consider this. The issue of values among supply chain collaborators would be much easier to deal with in those cases of building the right kinds of relationships with the right kinds of people (i.e., organizations) in the first instance.
Think about the potential for financial and emotional catastrophes lurking in trying to extricate oneself from an E&J Gallo-induced marriage to a pole dancer of recent acquaintance.
It's much tougher to reconcile value systems after the fact, when commitments have been made on a superficial basis, cost per transaction for example, rather than on the value of integrated and collaborative efforts in a competitive marketplace.
Have we over-outsourced our supply chains? Michael L. Hetzel, a vice president at ProQC International, says that we in the US have, in a paper distributed to American Society for Quality (ASQ) members. I believe that we have done so in Europe, as well.
Hetzel maintains that extended and distant supply chain structures have isolated and siloed procurement, quality, design, and logistics functions, with each focused on its own objectives and measurements - to the detriment of the end-to-end supply chain.
The stunning realization in all this is that loosely-connected functions in the supply chain are more likely to fall apart under stress than a strong system of better-integrated links would be. There may be no stronger argument than this for the value of - the necessity for - carefully structured business relationships among supply chain partners.
Perhaps near-shoring, in-shoring, right-shoring and the like might mitigate the consequences somewhat. But, the risk of supply chain catastrophe in a world of bankruptcies, sudden and sometimes unforseeable communications and logistics breakdowns, economic turmoil, civil unrest, government actions, and Icelandic volcanic eruptions is simply too great to do otherwise.
The US Department of Transportation's Secretary, Ray LaHood, announced the inception of the "America's Marine Highway" program in April (Logistics Management, May 2010; www.logisticsmgmt.com). For those weary of bailouts and stimuli, the initial grants involve under $100 million (with an "m" not a "b").
Are short-sea and other maritime transport modes really viable in the US? I don't know. I do suspect that longer-distance river transport could be more employed than it is if: 1) shippers stopped to think about it, and 2) locks and other infrastructure elements were upgraded and maintained. But, it does seem reasonable that, if Secretary LaHood's concept embodied compelling merit, profit-motivated players in the private sector would have jumped on the notion quite some time ago.
It's appealing that there might be environmental benefits to the movement of goods over water instead of over the road (either rail or highway). In the wake of BP's catastrophic misadventure in the Gulf, there might be some concern about the environmental risks of a maritime shipping accident involving who knows what kind of cargo.
In the broader economic equation, I'd like to know if marine highway proponents have considered: 1) the cost of added handling and delay if a water link were to be added to supply chains; and/or 2) the added complexity of introducing more players into the complex business relationships that make up end-to-end supply chains.
The Q1 issue of CSCMP's Supply Chain Quarterly (www.supplychainquarterly.com) features an article, Time for a checkup?, that suggests a thorough supply chain examination might uncover logistics cost reduction possibilities of ten to twenty per cent.
The approach proposed is well-thought-out, well-structured, comprehensive, and useful. And, yet, I couldn't shake the lyrics of a children's song, "Miss Lucy called the doctor, Miss Lucy called the nurse . . ."
My challenge with the piece is that the program appears to contemplate a more-or-less static and self-contained system, with singular control and direction. Some mention is made of variable service levels for different products, customers, and/or markets, and one illustration includes a cryptic note about "trucking and other service providers."
Ultimately, my contention is that optimizing one element of an end-to-end supply chain, without the involvement - and collaboration - of other players in the chain, risks sub-optimizing the whole. Not to mention that it fails to leverage the knowledge and experience of all partners in the chain.
The authors, Dr. Timm Gudhus, a consultant from Hamburg, and Dr. Herbert Kotzab, a professor at the respected Copenhagen Business School, do allow that "there continues to be a gap between logistics theory and business practice." It is possible that, in some dimensions, business practice might be out in front of theory. My hypothesis might be that the audit process described could be orders-of-magnitude more effective if greater weight were to be given to the integration and relationships among supply chain partners, rather than being limited to the mechanics of product flow.
Okay, we've heard from the doctor(s) and we've heard from the nurse. I've no clue what we might hear from the lady with the alligator purse.
Don't get all lathered up, it's only a song title. I may be erratic, but I'm not delusional.
Respected veteran supply chain journalist Jean Murphy recently wrote that stronger supplier relationships are a "post-recession priority." (Supply Chain Brain, May 2010; www.supplychainbrain.com) She went on to outline the stresses that tough economic times put on outsourced and/or extended supply chains. Now, businesses are struggling to get their supply chains up to speed, she continued.
Right Said Fred, invoking the name of a band from the era of Frankie Goes To Hollywood and Cocteau Twins. Right Said Fred, btw, gave us the marvelous tune referenced above. But, do I hear the strains of Carole King and It's Too Late in the background?
Where was all this concern when it really mattered, at the worst of the hard times? Wasn't that the right time to go the extra mile to keep things together, to invest in maintaining the business relationships that would make the difference when recovery inevitably arrived? Of course it was.
Those who did so are going to be way ahead of those who didn't (and are scrambling today). And those who are turning to advanced technology to make up for lost time - and lost opportunity - are likely to be disappointed. Remember that for the next downturn - or if this recession turns out to have a double dip in its course.
When the late night conversation turns to this particular topic, my friends sometimes accuse me of going all DJ and channeling Wolfman Jack on speed - oh, wait, that's redundant.
Don't get me wrong. Technology is great, and can propel supplier relationships to higher levels of performance. But it is no substitute for having built and tended to the human side of the equation - the "for better or worse" commitment of authentic human representatives of enterprises in advanced supply chains that can weather extreme challenges, rebound, and move forward.
Wal-Mart brecently announced an intiiative to take over the transport of products from its suppliers into its distribution network. The move might be seen as a natural extension of its traditional practice of requiring suppliers to distribute to Wal-Mart network locations, rather than to the individual stores. The ostensible objective? To reduce costs (and perhaps roll back some more prices).
Benign on the surface; possibly even commendable. But, what are the consequences, unintended or otherwise, on suppliers' relationships with their carriers and other logistics service providers? They'll have less product to ship with their (often long-standing) transportation partners. Those partners will have less business, overall. Maybe, with capacity reductions made during the recession, that's manageable. But the question is unavoidable. With lower volumes, will supply chain costs for customers and channels other than Wal-Mart increase? Will that make supply chains vying with Wal-Mart in the marketplace less cost-competitive?
Wal-Mart's prominence in the world of retail supply chains is enormous, and growing - and would be even bigger and more powerful with an inbound transportation takeover. Some observers go so far as to maintain that Wal-Mart is really a supply chain operator, as much as, or even more so, than a retailer.
I surely don't attribute all of the ethical failings of George Lucas' master of the interplanetary deal to Wal-Mart. But I am occasionally reminded of Budd Schulberg's anti-hero in A Face In The Crowd, who, in a memorable phrase, "brung happiness to millions."
Do Wal-Mart's increasingly dominant supply chain - and consumer pricing - positions contain the seeds of diminishing returns, or even backlash? Are its customers really all that happy with the seductive allure of low prices? According to the June issue of Consumer Reports, not so much. Wal-Mart's ratings kept it barely (by a single point) ahead of last-place Kmart (and it was next-to-last in 2002, as well).
Wal-Mart was ranked "worse" or "much worse" in eleven of sixteen categories, and "better" in none. Maybe that reflects the demographic skew of Consumer Reports' readers. But it could mean trouble if the humongous enterprise's future growth is tied to targeting increased penetration with middle-class customers - no matter what the supply chain costs are, and no matter how the company controls its supply chain relationships.
H. Donald Ratliff, PhD, heads Georgia Tech's SCLI Integrated Food Chain Center in Atlanta. In the April/May 2010 issue of Food Logistics magazine (www.foodlogistics.com), he discusses the increasing necessity of integrated food chains. Not desirability, not advantage, not importance. Necessity.
His thesis is that there's got to be supply chain integration among the several entities within the food chain, that the enterprises involved "must cooperate" to achieve results. So far, so good. He goes on to outline three trends that will force a greater level of integration. They are: 1) impending food safety legislation; 2) technology for monitoring and control; and, 3) the need for better analytics in an increasingly complex environment.
Hey, Don's a cool guy (pun intended). And brighter than a collector's set of mint condition state quarters. But, I think there's an element of success that's missing in this analysis.
No quarrel with the trends and their importance, but the idea that this integration has to be forced doesn't bode well for sustainable collaboration among food chain partners - or for cheerful and wholehearted cooperation. Further, I'd submit that the real secret sauce in food chain integration is building the kinds of business relationships among key players that can take the core ingredients of regulation, technology, and analytics - and transform them into a dish that is not only good for you but that tastes really good, too.
What do you think? Have I been spending too much time watching the Food Network?
The tragic and catastrophic Gulf oil spill has, regrettably, some vital lessons for the world of business relationships in supply chain management. At the risk of trespassing on Chuck Taylor's turf, let me 'splain.
BP Plc, the well's majority owner, gets most of the ink. They're on the hook for the entire cost of clean-up, plus $75 million in ither damages. Seems a paltry sum to compensate for the destruction of entire industries, ecosystems, and people's lives and livelihoods. Under pressure, pun intended, BP has quickly pointed the fickle finger of blame at Transocean Ltd, the well's driller and operator, blaming "their systems, their people."
Transocean - no fools, they - quickly downloaded responsibility to its subcontractors, specifically naming Halliburton (the #2 oilfield services company) and its cement casing work. They claimed that they had made no errors, but the issue might be moot because BP had indemnified Transocean in their contract. Halliburton counter-punched with an unequivocal statement that the cement work had been completed on time and had been tested, showing that the work had been "properly" done.
Meanwhile, the well's blowout preventer, which did not cause the spill, but failed to prevent the lethal blast, was found to be leaky and less-than-100% reliable. It's manufacturer, Cameron International Corporation has seen a 25% drop in its stock value. But, according to some, Transocean was responsible for the BOP's maintenance.
In a public move worthy of Pontius Pilate, Anadarko Petroleum, the well's 25% owner claims to have had nuthin' to do with nuthin' in that they merely approved a budget amount, relatively late in the process. Btw, the Federal government's Minerals Management Services seems to have at least a finger in this dog's breakfast, as well.
Are these the kinds of moves made by genuine partners in open, collaborative supply chains, integrated and synchronized to work together in delivering product, quality, and value to its ultimate customers? Or, are these the behaviors of companies that don't know how to create and maintain sustainable business relationships for the greater good of both themselves and their customers? It makes no diffference that the supply chain(s) involved are related to infrastructure build and maintenance, and not to the delivery of consumer goods.
I'm betting that what we are witnessing, in the midst of a disaster, is a chilling illustration of short-term, "git 'er done" transactional relationships that take the money now, and the devil take the hindmost. I'm also betting that the sinister dance will become more complex, with more intensity, and with more entities involved as more commas work their way into the total price tag.
What do you think?
McNeil, the respected Johnson & Johnson unit, has faced a product recall of stunning proportion over the past few weeks, with a wide range of liguid analgesics, notably Tylenol, involved. This raises supply chain issues at a couple of levels.
One is how to handle products in the hands of consumers. These, it should be obvious, can't be physically returned in a reverse logistics application at any reasonable level of cost or effort. Accordingly, refunds are being issued, with instructions to get rid of any unused product, whether unopened or partially used. Another is getting earlier shipments out of retail customers' stores and warehouses, where larger quantities might require physical movement. I'm confident that J&J's supply chain partners value the speed and candor with which the situation has been handled, and would have expected nothing less.
There may be another level of interest, though, and I'm not quite sure how to approach it. In supply chain education, we are fond of - in examining the linked components of integrated supply chains - distinguishing between the "old days" of a logistics perspective and a 21st-century view of supply chain management. In the former, we were focused on what happened between the boxes in the diagram - physical movement and handling. In the latter, we say we are vitally interested in what happens inside the boxes - how we plan and execute procurement or conversion (manufacturing), for example.
But, are we really? Do we - can we - have visibility and oversight when the preceding link in the supply chain is J&J? Should we? If the source were not a provider of the same scope and scale, would we insist on having that visibility?
Should we rely on the processes, controls, and track record of any manufacturer to detect and correct problems, and keep the entire supply chain out of trouble? Or, do we not challenge behemoths, and hope for the best?
What are the ramifications of these questions on the quality of our business relationships? Are the risks real? Are they offset by longer-term benefits?
What do you think?
I'm grappling with a concept again, which is no surprise - nothing comes easy to someone with my limited candlepower. Malcolm Gladwell devotes considerable space in Outliers to the premise that exceptional intelligence might be of little incremental value in the real world, that being "smart enough" is good enough to provide a foundation for success.
I've been trying to apply the principle to the world of supply chain management and how the players in a given supply chain relate to one another. Apologies if I'm twisting the author's meaning and intent a bit. I do agree that a level of intelligence that makes people - and organizations - capable of operating only in some bizarre parallel universe doesn't help make things go well in everyday life.
But, if I were constructing a supply chain designed for success, I'm inclined to think that I'd pick participants who were somewhat better than smart enough. It's like choosing up sides for a schoolyard game - you want players who are better than good enough, but you might avoid the superstar divas (unless you, yourself, are the diva).
Then, I'd be looking for supply chain partners who were also creative and innovative. Not simply creative enough, but better than creative enough, without being completely undisciplined and wildly impractical, or even irrelevant.
The importance of - and difference between honest enough and better than honest enough is a discussion for another day, but you get the idea.
Am I wrong? Aren't we all striving to create solutions, organizations, and business relationships that are noticably better than good enough, without losing traction in a fruitless quest for the diminishing returns of absolute perfection?
Note: Achieving perfect order performance is not a fruitlesss quest; it is a byproduct of being noticably better than good enough.
The late philosopher, music theorist, and remarkably chemical-free visionary, Frank Zappa, once observed: "You can't be a real country unless you have a beer and an airline - it helps if you have some kind of a football team, or some nuclear weapons, but at the very least you need a beer."
In the same spirit, I wonder if you can have a real supply chain without an infrastructure. My thesis is that you cannot. Having visited places without much of a physical infrastructure - roads, railways, communications, etc. - over the past several years, and as recently as last week, I remain skeptical of vague claims of being part of the supply chain management universe. In Jimmy Durante's memorable complaint, "Everybody wants to get into da act!"
Never mind that the ultimate infrastructure concept of multi-directional supply chain rlationships remains mysterious to all too many pretenders in the no-barriers-to-entry world of self-proclaimed supply chain management.
But a lot of high-sounding phrases, citations of standard concepts, all augmented with seminars, workshops, and conferences populated with learned local academics and imported guest experts aren't the same as day-to-day supply chain execution at ground level. Too often, they reflect wishful thinking and self-congratulatory make-believe - Potemkin villages constructed for the sole purpose of getting into da act.
The April 14 issue of The Economist (www.economist.com) asks whether the twenty-five year (or more) run of the shareholder value model has ultimately failed. (NB: See Michael Jensen and William Meckling's 1976 "aha!" work, Theory of the Firm.) This very fine self-styled newspaper goes so far as to quote a ferociously persuasive practitioner of the model, "Neutron Jack" Welch, who, in a possible about-face, recently called shareholder value "the dumbest idea in the world."
Yet another guru, an academic writing in the Harvard Business Review, has called shareholder value a "tragically flawed premise." As an ardent adherent of the "human face" school of capitalism, I can only applaud signs of a return to a stakeholder value model, in which the interests of employees, suppliers, customers - and, yes, shareholders - are looked after in a balanced way, and with a long-term (i.e., longer than one fiscal quarter) perspective.
Here is the crux of the contest between shareholder and stakeholder value models, in my view. Can tightly integrated supply chain partners successfully maintain effective business relationships if they are not on the same4 page of the value-model hymn book? Further, does insular commitment to a shareholder value model preclude wholehearted participation in a supply chain driven by visions of collaboration, mutual benefit, and sustainable end-to-end performance for ultimate customers?
You may intuit my bias easily enough, but what's your take on the ebb and flow of competing value models?