Archive for October, 2009

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strategic overview of the global financial crisis today

Friday 30 October, 2009

The Chicago Counicil on Global Affairs hosted this event NAVIGATING GLOBAL BUSINESS IN THE NEW ECONOMY featuring David Nelms, CEO of Discover, Carlos Cabrera, former CEO of UOP, & moderated by Paul Laudicina, Chairman of the Board of A.T. Kearney.  They had some interesting insights on how the world is fairing in the global financial crisis.  Laudicina led off by noting there have been 120 actions by WTO countries to battle the financial crisis since the WTO’s November, 2008 meetings, so the world has been working on getting its finances back in order.  AT Kearney’s framework looks @ 5 drivers:

  1. globalization
  2. demographics
  3. natural resources/environment
  4. changes in consumer preferences
  5. activism/regulation

He noted there has been an explosion in productivity, which is what happens when you fire lots of people & force those who remain to do the same work.  Also for every 5 years baby boomers work rather than retiring, it contributes $1T of economic benefit to the economy.

Nelms offered a few interesting tidbits:

  • American savings has risen from 0 in 2004 to 7%
  • debit card use is up 50%
  • lending capacity has been cut so there is less credit available @ higher prices, resulting in less debt & risk:  the new normal should result in lower interest rates

Cabrera posited:

  • there is a standstill in investment in oil, resulting in supply problems
  • since fossil fuels provide 95% of energy world-wide & there is a “cap” of 10-15% for non-fossil fuels, the argument isn’t about carbon, rather “how do we change our energy diet?”-substitution or diversity?
  • China is worried about its environment, but 80% of its energy comes from coal & they have no scale in distribution/transportation.

issues are:

  • sources of lithium for electric cars
  • wind turbines require magnets of which the raw materials come from China
  • the US is the biggest supplier of natural gas in the world, but all oil reservoirs only use 30% of capacity
  • electricity users will see relief if nuclear power comes online
  • demand in the future is coming from the developing world
  • think diesel, not gas

Q&A

short/medium/long-term outlooks-

  • Nelms-most worried about Fannie Mae/Freddie Mac
  • Cabrera-worried about a China intervention to securing energy sources

Nelms-the fed has done a fine job, but mortgage rates will rise to bite us again & holiday spending will be flat

Cabrera-new energy discoveries are coming:  technology will create opportunities

My last word-Nelms really only addressed domestic issues, but why host a speaker who only talks about the US @ a GLOBAL affairs event?

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is world unemployment or a worker shortage the issue?

Thursday 29 October, 2009

I saw this presentation by Dr. Edward Gordon organized by the Independent Writers of Chicago (IWOC): Taming the Talent Revolution: Thriving in the Brave World of Work.  He posited that despite rising unemployment in much of the world, the most pressing problem is an impending labor shortage.  The bottom line is the future is in technology & our workforce is not yet trained to handle many technology jobs.  There are 3 trends at work which create a jobs paradox:

  1. technology raises the bar for skills & we are missing the middle layer of technicians trained by career academies/trade schools
  2. baby boomers can no longer afford to retire (15% of college graduates are functionally illiterate, but the #1 major these days is communications)
  3. globalization is leading employers to export good jobs abroad.   Intel couldn’t find 2000 qualified engineers in California & Texas, so they had to go to Dresden, Germany to find the talent they sought.  Ironically, the dual education system in Germany is dying so that now German students can more easily change academic tracks.  1/2 million workers are returning to India & China, but only 60 of 600 engineers in China & 100 out of every 400 in India are well-qualified.

There are currently 3 million vacant jobs for which there are no qualified applicants, which will balloon to 12-24 million in years to come.  Gordon gave the example of Santa Ana California, which lost many jobs in the 1990’s.  The local chamber of commerce organized a Community Based Organization (CBO) of 300 public & private organizations to work together to solve the employment problem.   He proposes these CBO’s as the bridge to the future.

Q&A

  • overeducated applicants is not the problem because there will be labor shortages soon.
  • while 20,000 journalists are out of work, the future lies in tech writing.
  • despite the number of authors writing books is increasing, we are creating an anti-writing culture.
  • breakthroughs in green technologies will create opportunties
  • better teaching is needed
  • potential new markets are:
  1. repairing bad websites
  2. working with foreign businesses
  3. writing for corporate training

 

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global midwest alliance sets up shop & hosts clean-tech conference

Tuesday 27 October, 2009

I checked out Business Network Chicago international group ‘s meeting featuring the Global Midwest Alliance, (GMA) a new organization formed by by Gail Longmore, formerly of the Illinois Global Partnership, under the auspices of the Economic Development Council.  Apparently the World Bank has ignored the US, in that up until the GMA roped them in, the World Bank’s Private Sector Liaison Program had no representation in the US.  GMA has rectified that.  Here’s her presentation:  Business Network Club Final 100809

They are hosting the Midwest Clean Tech Conference the last week of November.  Here are the details:  Midwest Clean Tech 2009 Summary This is an expansion of last year’s smaller 1/2 day event.  I’d like to add more comments, but pretty much everything is contained in the presentations.

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international panel @ Human Resources Technology conference

Wednesday 21 October, 2009

I attended this panel discussion Going Global Panel: Lessons From Executives Who’ve Been There at the Human Resources Technology Conference which was more interesting than I thought it would be.  Here are some of the points they brought out:

  • Interpretation of HR feedback varies across countries.
  • There is a variation of extremes in orientation from a focus that is all local to all headquarters oriented, but it’s even more complex than that.  Google tests user feedback on all sorts of orientations.
  • Language is an issue because going beyond English only opens a multilingual can of worms.  For Kelly Services, it depends on the level of the employee & media employed. HP goes even further to say it varies by individual.  Their engineers speak better English than employees @ Citigroup (where she was employed prior to HP).  Regardless, Americans should do a better job of learning local languages.
  • Global performance measures are hard to come by.  For Google, in-country performance measures vary.  It’s difficult for foreign managers to know whether to be critical or praiseworthy.  Different leadership styles complicate evaluation, but are predictable on a country-by-country basis.  HP seeks quantifiable goals, while Google warns that focusing on either extreme of qualitative vs. quantitative measures is destined for failure.  You really need some combination of both.
  • In working with vendors, Google builds everything themselves, so they “can’t eat others’ cooking,” but notes that what business wants isn’t always what business needs.
  • HP is cutting costs by making all HR employees report to 1 global HR department & not individual business units to that they can leverage the function.  Global processes are leveraged by technology.  Others have 1 global center for HR plus local organizations or 1/2 & 1/2 split between HR & business units.
  • Kelly Services agreed that American workforce development for the global economy is woefully inadequate.  It’s a huge issue & affects how we are perceived around the world.  We don’t socialize & educate to be globally-oriented.  However this is changing with younger, more digitally engaged generations.  Google noted they seek international things out.  Google seeks this kind of experience in their leadership teams.  They embrace those who know cultures & languages with recognition of the importance of relationships & respect.
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another SDL Global Information Management conference

Monday 19 October, 2009

I attended another SDL Global Information Management Conference which was a bit of a disappointment because some of the material presented was a rehash of their events earlier in the year.  Anyway, there are some new tidbits, so there is still some value in checking it out.  Here are links to the presentations that were presented:

  • SDL’s GIM evangelist Andrew Thomas’  introduction
  • They did take my suggestion after their last event & add a small-business example, Jason Arnsparger of Caridian BCT.
  • Larry Arnold was back from Garmin with an updated presentation from what he presented earlier this year.

The most substantial trend which came out of this is the advent of DITA, (Darwin Information Typing Architecture), which uses .xml to design, write, manage, publish information by topic rather than by document, etc.  This is significant because it unhooks content from traditional sources & makes it more easily accessible in other formats, media, etc.

My assumption is SDL invited a new & different set of attendees to this event, but still, I would think they have enough customers that they should be able to find someone else to present who hasn’t presented before.  That way they can engage the same attendees with new material.  SDL is good & big, & good at what they do.  I expected more, & was disappointed I didn’t have the opportunity to learn more new stuff instead of what we saw a number of months ago.

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European & emerging markets presentations @ global supply chain conference

Friday 16 October, 2009

I attended these sessions to see the attached presentations  at the Council of Supply Chain Management Professionals (CSCMP) Global Conference:

  • Global Supply Chain Developments presentation: Logistic Trends in Europe V1 090922 Q&A:  Globalization is closing the gaps between the have- & have-not countries.  Despite the fact that most top-level managers speak English, demanding citizens still prefer to communicate in their local language.  It’s still difficult to penetrate Europe from the outside.  Even working from the UK is not enough.
  • Where in the World? presentation:  CSCMP Where in the World Q&A:  opportunities in China in some ways are limited because land titles were burned long ago, so land can only be leased.  Evaluating total landed cost vs. least cost is always an issue.  Discrete inventories, depending on which modeling tools you use, are not always cost-optimal.
  • Eastern European Infrastructure I requested the presentation of the presenter, but haven’t received it yet, so I’ll summarize briefly here.  The 5 largest ports, (all of which are expanding, btw),  handle 80% of Europe’s cargo traffic.  Hamburg relies on Asia.  It’s difficult to serve continental Europe from the UK as well as the reverse.  Central/Eastern Europe is getting more congested.  Distribution centers are expensive, but make sense there.  Russia is another dilemma.  You can’t bring product to the customer’s doorstep, so you don’t know where it ends up.  You can’t simply transplant your US system in Europe.  It requires study & planning.  Turkey offers incentives for product coming in & going out.  Recommendations:  do your homework-learn the tariff & non-tariff barriers.  Eastern Europe is not North America-there are differences in infrastructure, Value-Added-Taxes, etc.  Rivers are big & key transport means.  North American assumptions don’t hold.  Get professional help from freight forwarders-an auto parts company set up a distribution center in Antwerp, Belgium, only to find all of their customers were in Germany.  Q&A:  Because all European countries maintain their autonomy, security can be a problem.  Antwerp can be a better gateway to France than LeHarve.  Digital infrastructure now pervades, but companies don’t share information up & down the supply chain.  Despite the fact that the Soviets invested nothing for years, infrastructure in Central/Eastern Europe is catching up to western Europe.
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Global sourcing panel @ supply chain conference

Wednesday 14 October, 2009

I caught this panel Global Sourcing Panel: Making It Happen at the Council of Supply Chain Management Professionals (CSCMP) Global Conference:

James Lewis, EVP/Chief Supply Chain Office, Fellowes Inc (F) led off.  Fellowes has offices in 15 countries, works with 130 customer countries, 500 supply chain partners, & $500M spend.  Their keys are total cost management & supplier risk assessment.

Gregory Rake, Sr VP, SC-Pier 1 Imports (P1)was 1 of the world’s 1st global importers…it’s in their name.  Their international buying department is 1st in class.  90% of Pier 1 product is imported with a $200M spend.  Importing with secure social responsiblity is a core competency for them.  Cottage industry sourcing, flexibility, & security are keys for them.

Farzad Khaledan, Director, ITW works in 2000 locations in 52 countries.  50% of their revenues come from outside of the US.  They started an international sourcing team in 2007 based in Europe.  They implemented small parcel & fleet management programs world-wide.    ITW saved $1B by cutting 200 freight forwarders/customs brokers down to 15.

Q&A

What changes have you made in reaction to changes in the economy, fuel prices, & financing?

  • P1-terminate @ the coasts & ship own inland, waiting until Walmart & Target set rates for marine
  • F-this is our biggest opportunity ever-challenge everything
  • ITW-acquisitions are dead, so they are focusing on driving operations costs down

How do you conduct supplier risk management?

  • ITW-rely on local management & intuition
  • P1-65 factories closed in China resulting in unemployment of 1M.  They are building the equivalent of the US highway system every 5 years.
  • F-use KPI’s to monitor & track local employees

Have you used international procurement organizations?

  • F-a few in Asia didn’t work, so F had to build own (1 ex-pat out of 2000 employees in China)

Has nearshoring resulted in lower total costs?

  • ITW-buy closest to the customer, ex. Vietnam & India are now viable markets & Africa is coming, but there are infrastructure issues

What modeling/analysis do you use?

  • ITW-scanalytics
  • F-global data warehouse & Oracle TMS
  • P1-interns crunch supply chain data

How are you dealing with the 10+2 requirements/ensure CTPat compliance?

  • P1-we’ll be OK by 2010.  It’s easy to get the information, except they have 5000 vendors.  Use buying agents.

What new approaches are you using to work with partners?

  • F-qualify them
  • P1-negotiate sustainable business relationships
  • ITW-can’t change often-take a long-term partnership approach

How fully automated are your organizations?

  • P1-use own internal systems
  • F-use own operating platform with standards of expectations
  • ITW-focus on 10+2 standards

How are you reducing your carbon footprints?

  • F-recycle packaging
  • ITW-focus on more efficient operations & curtail energy use in the summer