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Category: Business & Communities

Not heard of ZIZEK? Why should you read ZIZEK?

I must say that a few months, I had not heard of ZIZEK.  But we all should have heard of Zizek because we are going to hear a lot more about him.

Why should a mechanic, a fireman, a hairdresser and god forbid, a member of the chattering classes, read sociology?

I know a lot of people who never read any sociology and the live quite happily.   Maybe they are happier than us too.  And they probably are richer and more powerful too.

But not knowing about the sociology of your time is like not knowing that the banks deal in derivatives that are 10x the value of real assets.  Even if we don’t have the big money to play on the derivatives market, we should at least understand that

  • liberalization of banking means derivatives
  • and derivatives mean a banking system that has electronic (or printed) money
  • that there is more than one derivative (so to speak) for each tonne of wheat or gold that they say they own
  • and there is not 10% more but 10x more paper than things.

90% of derivatives are what you and I think of as a pyramid scheme.

So we read sociology because we don’t want to be caught out holding useless paper assets

Any economist or financier reading this will wince at my crude explanation but you do see my point.  If you willfully persist in ignoring the basics of social science, don’t cry when you are standing in a Northern Rock queue when the bank almost falls over.  Don’t cry when your pension turns out to have been invested in derivatives and they turn out to be worth 10% of their face value or nothing at all.

And we are tired of the argument that there is nothing you and I can do

Many people will talk to me as if I am an idiot, and say “there is nothing we can do about the mess of our politics and economics”.

That indeed maybe true too.  I am not telling you to start fixing the derivatives system.  But I am explaining that knowing more about sociology will mean you will be the patsy less often.

We begin by knowing what is going on

I am pointing you here to a commentator who is worth reading, even if he writes real sociology that requires a little concentration.

So you go and read Zizek. 

In my next post, I will try to give my understanding  of what  Zizek says about the way we are living.

And I’ll do what psychologists do: translate what Zizek says into what you  and I can do ourselves – apart from read him.  So go read.  See you later on my next post.

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The basics of managing a collaborative supply chain (Part 5 of 5)

In this the last of a series of  five posts on collaborative food chains, I’ll sum up by asking whether the Scottish pig industry achieved a ROI (return on their investment) in an information system that collects data across the whole supply chain.

Was this just an annoying additional set of ‘paperwork’, or does the system supply information that allows players up-and-down the food chain to work out why variations occur and what can be done about them?

Improvements depended on knowledge of the entire supply chain

The Scottish pig industry described two examples of vitamin supplements on the farm helping to control quality control at the abattoir (by reducing ‘drip loss’) and in the shop by slowing discolouring (which you and I don’t like when we buy meat).

These examples show that a business cannot be dependent only on information collected within their own business. They need information on businesses on either side of them in the chain. The pig industry provides that in 4 quarterly reports.

Improvements depend upon us experimenting systematically to find the causes of unexplained variations

These reports are obviously ‘after the event’. They are not part of the day-to-day management of operations which generate forward momentum. They are an additional diagnostic system to help us understand ‘unexplained variation’.

We have the information systems now to run experiments.  For example, I can ask, if I add Silenium and Vitamin E, will the colour of the meat hold up all the way to the 2nd or 3rd day of display in the store?  Perfecting our craft becomes a matter of understanding consequences along the line.

3 simple lessons for managing collaborative supply chains in other industries

To draw out lessons from the Scottish pig industry for other industries:

  • Collect data across the whole food chain so people at the beginning can help solve variations later in the food chain.
  • Remember this is a diagnostic loop.  It provides data after the event.  It is does not tell us what to do when.  That is management.  But used correctly, and an extra diagnostic loop helps us understand what is important and what is not.
  • Don’t think quantity and control.  Think variations and unexplained variance.  We want to understand what is happening so we can bring good food across the system from farm to plate.

Does the new system help provide better food at a good price?

Well, I hope so because to be well-fed, I need farmers to be making a fair living and I also want farmers to know when I am walking past their food in the shop and not buying it.

A free market system of letting the incompetent go broke is naïve.  Of course we learn some things by chance but in a system as complicated as a modern food chain, we also need a sophisticated feedback system so that everyone who is really into what they do, can do a better job – with data, proper analysis, and well thought-out experiments to understand events beyond our immediate control yet affecting us and being affected by us in small part.

I hope these five posts have helped explain why collaborative supply chains are a critical part of business in a developed economy.  The Scottish pig industry is a good example, down-to-earth, close-to-home and relatively easy to imagine why we collect and share information at industry level.

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The basics of managing a collaborative supply chain (Part 4 of 5)

This is a series of posts using the Scottish pig industry to explain collaborative supply chains.

In post 1, I described the problem of complex supply chains.  Feedback gets lost.  Or to use an example, if I don’t like the bacon on my plate, the farmer does not get to hear about it.

In post 2, I explained that in years gone by we thought food had to be cheap or expensive and there was no in-between. Toyota showed in the car industry that there is an in-between when we move from cheap high-volume to agile, just-in-time supply systems by working closely with our suppliers. Computers make it easier to work collaboratively across a whole sector.

In post 3, I briefly described the diagnostic system that runs in addition to the management system.  Information is sent out every quarter that allows everyone to see the whole supply chain and to work out where variations in quality are happening. I ended that post by staying that a management system will tell us what is explained variance and what is unexplained variance.

Explained variance allows us to act; we have to think about unexplained variance

Simply when we understand the cause of a ‘blip’, we can take action, confidently.  When we see variations that don’t have a known cause, then we have unexplained variance and we have to stop and think.  So what are our choices?

What can we do about unexplained variance?

Unexplained variance means one of three things:

  • We need to do more analysis to see if any of the factors we had thought to be important, and have been dutifully recording, indeed account for dips in quality.
  • Maybe there is no answer, at least for now, and we are going to have to plan for variations in quality (more wastage).
  • Or we can investigate further and collect data on new factors to see if they explain variations as they happen, not only in our own business, but further along the line.

 

Unexplained variance might have its cause several steps removed in the supply chain

You might think that everyone does this already. They do – with the data they have.  But by working together across the whole food chain, the Scottish pig industry is able to help farmers see if there is something they can do on the farm that will help manage variability much further along.

  • To take a simple example where the farmer’s action brings a clear and immediate benefit to the farmer – giving a pig Vitamin C shortly before it is sent to the abattoir reduces the drip-effect, i.e., maintains the weight of the meat and gives the farmer a better price per carcass
  • To take another example that benefits the whole industry and gives the farmer a better price eventually because average prices are higher – giving a pig Selenium and Vitamin E slows down the discolouring of meat, meaning it looks a heap nicer in the supermarket and I as a consumer are willing to keep it in my mix of groceries.

When we can match data on what is happening in our business with data on what is happening in businesses up-and-down the chain, we might find new solutions to unwanted variations.

Once we know what to do and what to look for, future variations done to these causes, become of course explained variance – which is good, we know what to do now.

But is this science good business?  Is there a ROI on a collaborative supply chain?

In the next post, let’s ask whether the Scottish pig industry got a ROI (return on their investment).

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The basics of managing a collaborative supply chain (Part 3 of 5)

This is the third post in series on collaborative supply management.  The posts are based on a case study of the pig industry which I’ve rewritten to bring out how we manage collaborative supply chains.

In post 1, I described the supply chain for pork products simply and pointed out that feedback gets lost in complex supply chains and does not reach people who need it.

In post 2, I pointed out that Toyota showed that it is not necessary to choose between cost-driven high volume businesses and high margin niche luxury businesses if we are able to manage our supply chains to deliver ‘just-in-time’.  Becoming nimble becomes easier with modern computers.

In this post, I’ll move from telling you about the general problem to what the Scottish pig industry did to manage their collaborative supply chain.

The Scottish pig industry already had an efficient system of delivering pigs and pork to market

The Scottish pig industry got together to do what they do well even better.  The farmers, the butchers, the shop-keepers and yes, the farm and meat inspectors run the ‘forward system’.  In psychological parlance, they track – they pay attention, they coordinate and they get everything done in an intricate and complicated dance.

And they added a diagnostic system which feeds information on the whole system back to individual players

The Scottish pig industry, working together, then added a ‘diagnostic system’ which collects information and feeds it back to everyone in the food chain every three months.

An example of a collaborative supply chain

Let’s take an example of how it works.

The farmer has records of how much food was given to a particularly pig, what supplements it gobbled up, how often it was ill and what medicines it was given.

By monitoring food throughout the chain, farmers can now learn what happens to a pig after it leaves them and they can find the condition of the meat when it lands on our plates (or rather leaves the supermarket in our trolley).

Let’s imagine that sometimes the pork I eat is fantastic and sometimes it makes me regret my purchase.  The information system in Scotland lets farmers know that this variation is happening.

The information system can also analyse the variation to see whether it the fluctuations are triggered at a particularly farm, a slaughter-house, a shop or transport system.

Once we have seen the numbers, then we can begin to understand ‘unexplained variance’

Moreover, the information separates out explained and unexplained variance.

Explained variance means, in plain English, that we know what caused something.  If we know what caused a blip, then we know what to do and we do it with confidence knowing that when we do the necessary, quality will go up and will be seen to go up. The consumer will be happy again.  Bravo. Simple. We can get it done.

I’ll explain in the next post what we mean by unexplained variance.

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The basics of managing a collaborative supply chain (Part 2 of 5)

This is the second post in series on collaborative supply management.  The posts are based on a case study of the pig industry which I’ve rewritten to bring out how we manage collaborative supply chains.

The Scottish pig industry has set up a sophisticated feedback loop to listen more closely to consumers

The Scottish pig industry has set out to create a feedback loop between you and I, who buy bacon, ham and pork in small quantities once a week, or maybe even less often, and everyone in the supply chain from our favourite shop working back through the abattoir and factories (that we some of us don’t even like to think about) to the pig snuffling in its pen at the farm.

Their focus has shifted from competing to collaboration

Scottish farmers have good commercial reasons for setting up this feedback loop.

We all know that much of the food arriving in our supermarkets is cheap and well, nasty. But that does not have to be so.  In the past, business schools taught that a business must choose between cheap and horrible, on the one hand, or expensive and good, on the other hand.  One of the benefits of collaborative supply chains is that we may not have to make that choice.  We may not have to choose between working in industries driven only by cost and industries that are quality but niche.  For that matter, pigs may not to be condemned to cheap and nasty living conditions either.

The key to collaboration is sharing information on the bigger picture so we can each be more nimble

Industry began to move away from the idea of cheap or luxurious when Toyota figured out how to work with its suppliers and deliver good products ‘just-in-time’.  The internet is making it even easier to produce good things at reasonable prices.  High speed computers mean we can collect information, share information and analyse information and get enormously better at what we do.  We all benefit – producer, shopkeeper, consumer and animals.

So what is the information we need to collaborate and become more nimble?

In the next post, I’ll tell you more about what the Scottish pig industry did to use information to improve their entire supply chain.

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The basics of managing a collaborative supply chain (Part 1 of 5)

Our food comes a long way from a farm

Let’s imagine a farm and on this farm, the farmer keeps pigs.  He, or maybe she, feeds them and waters them and breeds them and fattens them.  And when the pigs are big and fat, the farmer puts them on a truck and sends them off to the abattoir.  At the abattoir, the pigs are slaughtered, and sold as carcasses to butcheries and supermarkets who butcher the meat and package it into smaller quantities for us to take home and cook.

But if we don’t like it, it is difficult to let the farmer know

You and I, the shoppers at the supermarket, know what we want.  We want a meat that cooks well, looks good, smells good, tastes good, and feels good.

And when we don’t get what we want. . .well, exactly how is that communicated back to the farmer?

And are we sure that the problem was with the farm and not elsewhere in the complicated food chain?

And indeed how would the farmer know that it was something to do with his (or her) farming that created the undesirable quality.  Possibly the problem is elsewhere in the food chain… the transporting of the live pig or the handling of the pork at the butchery. . . to pick only two possible points.

A series of five posts to understand how we benefit from the collaborative management of a complicated supply chain

In this series of five posts, I have rewritten a case study of the pig industry in Scotland to help people who are interested in collaborative supply chain management understand how we  organize the collaboration and the key role of computers, data, analysis and experiments.

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From shopkeeper to B2B business

Next generation Leicester?

Monder Ram and colleagues at De Montfort University in Leicester (England) have just published a paper Raising the ‘table stakes’? Ethnic minority businesses and supply chain relationships.

For readers from outside the UK, Leicester was one of the textile kingdoms in the days of empire and attracted waves of foreign settlement. Textiles are no longer a large part of their economy and De Montfort U, one of its two universities, is known for its leadership in the creative sector.

Against this background, Monder Ram researched “minority” firms who have moved from small retail businesses to B2B businesses in IT, business services or food.  His interest is whether it is really advantageous to reposition one’s firm in the supply chain of a large company.

Small shops who become suppliers to big companies

My interest is in the more general case.  How do small firms move from a traditional format of selling goods and services to consumers, or other small businesses, to a B2B format where they sell goods and services to other business for on sale to yet more businesses or the final consumers?

Working out your HRM policy from first principles

Monder Ram and his co-authors describe the changes in moving from B2C to B2B. These changes can be also be deduced from first principles for the case of any particular firm.  The process for defining our HR policy follows these steps.

  1. What is the pattern of our sales?  Or in the case of a start-up, what pattern of sales do we expect?
    1. What is the long term trend for our sector? What is the long term future of this line of goods and services?
    2. What are the seasonal fluctuations? (e.g., do sales increase at the end of the tax year?)
    3. What are the day-to-day short term fluctuations? (i.e., how long does it take to make a sale from first enquiry and how long does it take us to deliver the goods or services and receive payment?)
    4. We want to know the average amounts per month for the next 5-10 years and we want to know the variability.  Variability is important because detail is going to drive our ‘demand for labour’.
  2. What is the nature of our technology? (Now and for the whole future we envisage?)
    1. What technology, including professional techniques and standards, do we use?
    2. How does our technology limit individual input?  For example, if a car travels down the motorway at 70mph, a person can get to the job at a certain time and no faster (though probably slower).
    3. Now we can put technology with sales and work out our demand for labour for the next 5 to 10 years.  And we will work in some detail because that is the only way we can select and train people ahead of when we need them.
  3. Last, we can set up our HR policy.
    1. Unlike marketers who think relatively short-term, when it comes to people, we have to think long-term simply because it takes time to get people in place, working smoothly as a team, and practiced at what they do.
    2. We also have to consider the needs of employees. The work we offer must sustain their lifestyle, including their obligations to their family, and provide them with a trajectory suitable to stage of life
    3. A small family firm may have to think through how to incorporate outsiders who will play a large role in the success of their business.
    4. All firms look at their selection, training, pay, conflict handling and so on, to bring together a coherent system that delivers exactly the right skills at the right time to meet customer demand as it occurs.  The extent to which we mesh customer demand and labor supply is productivity.  All the mismatches, which of course are many, reduce our potential profits (and probably annoy our customer and employees).

Is it a good idea to move from running a shop to supplying big business?

Monder Ram and his colleagues seem to think that people are overenthusiastic about switching from B2C to B2B.  I don’t think we should be surprised that people are surprised when they discover the reality of their moves.   They are frequently!  We should rather have a process model of how people find out about a sector and how they deal with the dashing of illusions. A basic three-stage culture shock model should do – infatuation, disappointment, building a sound relationship.

Oddly though, people who live and work in a free economy often have dodgy ideas about the free market when they apply the principles of the free market to themselves.  We all see to think along the lines of what yours is mine and what’s mine is mine.  How many of us do not believe that we are worth more per hour than other people and in particular, people doing jobs we don’t like to do (like cleaning the floors.)

Yes, some people do manage to work the system and get more per hour than others.  That doesn’t mean they are worth more. They have just worked the system and often in a way that will bring the business to ruin eventually.

If we are paid more per hour than someone else, it is only be for two reasons:

  • We traded leisure time in the past to invest in skills (e.g., we listened in class rather than played on our phones).
  • We gve up leisure time now to work and bring in money.

Very simply, in a free market economy, our time is paid for equally (or the system is corrupt – which of course it is in many instances).  We should expect ‘swings and roundabouts’.  Our choice is only whether we prefer swings or roundabouts.  To be sure, we do have preferences, but they are only that – preferences – not statements of intrinsic worth.

So the conclusion of Ram and his colleague does not surprise me. We often chase after dreams thinking we are going to get something for nothing.

What are the downsides of moving into B2B?

Monder Ram and his co-authors also seem to point to the conclusion that some of the small B2B firms included in their study were little more than free lancers.  Some worked as much as 90% for one customer.  In many instances, tax officials and employment courts would not see their firms as enterprises separate from their customers.  My point is that the firms, and the people working in them, have chosen to work in the liminal world of free lancers where big firms are able to push variability and uncertainty.

There is a large policy and legal black hole in the United Kingdom about this kind of work but it still accounts for a only small % of employees in UK which is still dominated by corporate or bureaucratic organizations (I think. Correct me if I am wrong).

Also, in the creative sector, unstable employment has always been the norm.  So it is likely that people working on the edges of this sector, in social media for example, or IT, are seen as normal.

What is normal, and not particularly remarkable, is the HR logic.  Start with what you can sell and manage for variability.  If you can move the risk to someone else, a freelancer or a start-up, of course do so. But a big firm should only do so if they can manage the relationship. If they cannot, then they should understand they have got rid of the variability but they remain with the uncertainty.  Hence big firms like to employ people so that they can train them themselves.  They prefer job contracts which allow them to redeploy people to other tasks when business is slow.

A big firm that does not develop long term relationships simply does not expect to be around long.  The relationship they offer signals their business model.  Off-loading uncertainty onto free lancers should not be confused though with managing a supply chain a la Toyota. Toyota (at least in the classic form) does offer a long term stable relationship to its suppliers and provides suppliers with privileged information about itself for them to make their plans.  Off-loading uncertainty is something else. It is simply externalizing the liabilities of employment and going as far as tax and employment law allows.

If you are a B2B free lancer, what is the best way to think?

The freelancer or freelancing type firm, has exactly the same goal as the big firm: manage variability so they can sell the maximum number of person hours.  How do they do this?  I think that is what the firms in Ram’s study were probably trying to do.

What everyone has to understand, in their line of work, is the “social, economic and institutional context” in which we operate.  There is nothing magical or given about the customs which surround us. They are only customs that emerged over time because of decisions people have taken.  But customs are powerful. And they are riddled with peculiar psychological features.

Why for example did poorly qualified whites in South Africa support apartheid? They weren’t gaining a lot from the dastardly system.  The answer is simple – they thought they might lose even what they did gain without protection.

People engage in all sorts of protection rackets, often for the silliest of reasons.  We do need to understand the essentially political nature of the customs of business.  If Britain of today lacks anything, it is the social consciousness of why we do what we do and the purpose, or whose purpose, it serves.

Those people working in the liminal areas absorbing variability of demand – whether it is traditional to do so as in the arts or whether it is a new custom such as unpaid internships – those people need to understand the ‘game’ as surely any young black kid growing up in Soweto before apartheid collapsed needed to understand the system.  And they need to make their choices accordingly.

Assuming we cans simply ‘step’  into a better world makes no sense.  If the world is better, by definition there is some a protection-racket going on and we aren’t going to be cut in just like that.  But even more oddly, many people on the inside think there is a protection racket going on, even if there isn’t, and will do their damnedest to protect it.

Swings and roundabouts.  B2C or B2B.  Neither is intrinsically better. We make our choice.  And we go after what we want.

But we do need to be realistic.    Some of the demands of other sectors are real. We have to be able to do the work and match our supply of labour to variable demand.  Other demands are just plain odd.  Work it out and do the needful!  Have the skills to do the work. Have the management ability to organize the work.  And do the political work to side step people protecting a racket.

I don’t know too many small entrepreneurs who have a plan of action let alone show any solidarity with others.  @pcmcreative of Nottingham is an exception.  Most entrepreneurs I know just fling themselves at perceived opportunities hoping to benefit without really knowing what is involved.    It is time for us to think again in Britain about the essence of work but until then,  we all need to wise up.

What is the demand for our product or service and what is the timeline of sales?

What do we need to do to make good on the sale (and get paid)?

How do we equip ourselves for a good innings of 5 to 10 years?

It’s standard HR. It is not magic.  Though there is often some old boys networks involved.  Play that game too if you have to.  But it is standard HR.  Choose. Organize. Deliver.

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Commuters agree to be deprived of life for eternal slumber

Frustration by greencandy8888 via FlickrfYesterday evening, the M1 motorway heading north out of London was closed – for 24 hours.  Thousands upon thousands of commuters going home and people heading north for the weekend were stranded.

Staying in London overnight is a large expense for a commuter.  Outgoings will be at least 100 pounds.  Your dogs and cats back home remain unwalked and unfed.  And I put that first because I am British.  Your partner and children might be ill amused too.

There is no insurance for commuter travel.   And no liability for the operators or the utility providers.  The commuter bears the risk as an Act of God.

Yet we don’t treat our commuter travel as part of the reason why we travel.

@documentally was grumbling.  I don’t blame him because I would have been worn out with frustration too.  And if I am honest, I’ve cut down my use of public transport to the minimum.

But the irrelevant frustration, the signs that we are going along with senseless commodification of our lives that only hurts us led me to wax lyrical.

My tweet of the morning that infuriated @Documentally even further

@Documentally We’ve been duped into believing that several hours travel isn’t an adventure – deprived of life for eternal slumber?

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Is your soul in your city?

365.107 dancing on ruins by aaron.bihari via FlickrIs your city long past its prime?

I can understand the argument that many British cities, like Liverpool and Birmingham have

  • “outlived the lifespan of their own economic base or infrastructure and must now live primarily by their “superstructure”

and

  • “such institutions as museums-of-local-life or tourist-related service industries which recycle and re-package the industrial past assume a primary role in the local economy”

(Peter Barry in Contemporary British poetry and the city)

Are we hankering after times long gone?

There is also nothing wrong in selling history, geography and a variety of temporary, low grade experiences.  Though not from a holidaying culture,  I too have been on ‘holiday’ in my time.

But it makes no sense to

  • Think we can roll the clock back and re-assert the raison d’etre a place had in the past.
  • Deny that the old  raison d’etre has gone out with the tide of history.

Is there not a place which speaks to our soul?

If we aren’t selling history (and enjoying selling history) maybe we should move to a city which has a raison d’etre that speaks to our soul.

I know we don’t all have a choice but I am sure clear thinking will give us more choices.  I know from past experience that  it is utterly deadening to live in a place that has lost touch with why it exists.

Like a traditional farmer in winter, a city might be enjoying the fallow winter and living off stored harvests.  That is OK too.

It’s the self-delusion or alternative cynicism that makes us feel zombish.

Why does our city exist?  Do we empathize with its soul?

Why does our city exist?  And do we empathize with its soul?

What is the resonance between us and the city where we live?

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