On Wednesday, I attended the Endeca 2009 Manufacturing Summit meeting.  If you are not familiar with Endeca, they are an up and coming provider of information search capabilities, and their technology goes much further than just search.

This was, to my knowledge, Endeca’s first event focused specifically on manufacturing and supply chain strategy.  The overall theme of the conference, discovery in daily decisions, was rather appropriate, since I believe that this notion of information discovery will morph to be a key capability in supply chain analytics, and an ever more critical skill set for tomorrow’s supply chain professional.

There were many interesting presentations and demonstrations of the potential of this technology.  Think of this type of application as the ability to perform a Google-like search on the information spectrum of the extended value chain.  This would include typical structured information found in relational based ERP and supply chain specialty applications, as well as various forms of unstructured information such as spreadsheets, word documents, PDF’s or product-related content. Instead of a structured queery on data, where one has to have knowledge of the data relationships, this new technology provides the user the ability to “discover” relationships among key information.  .

The two morning keynote presentations really stimulated my thinking about supply chain and supporting IT strategies, and what direction many industries are headed . 

Dr. Michael Porter, noted author and professor of strategy at the Harvard Business School, shared his insights on the changing role of IT in supporting competitive advantage.  Dr. Porter also addressed the changing role of strategy enablement across a firm’s value-chain.  The key takeaways for me were that in too many industry settings today, IT strategy may have provided a higher level of rigidity, which has led to homogenization or zero-sum competitive positioning.  In other words, if two companies that compete with one another manage their overall value-chain on the same IT platform, competitive difference tends to converge on finite differences in execution.  Further, industry professionals tend to measure operational effectiveness in terms of benchmarking against some other industry-related or best-in-class value-chain.  Dr. Porter’s message was that value-chain strategy is really linked to the overall business strategy, which may determine that a value-chain may need to have different or unique capabilities than other industry competitors. Since information and IT now permeate just about every activity within an extended value-chain, competitive strategy is really about the uniqueness that one value-chain has over any other.  His argument reflects that competitive strategy is built on creating tailored processes, allowing for spontaneous process change and fostering IT tools that facilitate process flexibility and information mining.  

You can view Dr. Porter’s as well as other presentations from this event at the following link.

The second presentation from Paul Sonderegger, Chief Strategist at Endeca, provided the conclusion that in the landscape of IT that has been fostered by ERP and other functionally-driven applications, the re-purposing of existing information for other uses is a much more expensive proposition.  In Paul’s view, process-centric IT tends to trade-off flexibility for information efficiency.  In supply chain parlance, there is an excess supply in data, but a shortage in the ability of users to make more insightful use of that information in their day-to-day decision making.  Endeca purposely utilizes the “discovery” word to connote an ability to empower a user to be able to gather insightful information, even though he or she is not aware of the sources of that information. The user builds his /her own information construct.

These are rather interesting concepts, providing some food for thought for considering decision-support needs in manufacturing, planning, procurement and services support..  The team at Endeca realizes that the full benefits of this technology needs further market education, and this conference was a successful first step in that direction. 

An ability to search an “information market” may well be a more efficient means toward fostering supply chain analytical and intelligence capabilities.  I can think of many viable business cases including supply chain disruption and risk mitigation.  When advanced panning systems (APS) first came to market several years ago, market education and functional process solution development helped foster market adoption.

 I believe this is a technology area upon which to keep your lens focused upon, since this type of technology may be a better means to harvest all that information that’s been gathering within the extended supply chain.

What’s your view?  How can this type of technology provide value in your current or future analytics and value-chain decision-making processes? 

Bob Ferrari

Disclosure Statement: This author has received no financial consideration from Endeca Inc.,  or its investors, in relation to influencing the content or providing the above posting.

It has been a very busy week.  I just got back to my office from attending two very thought provoking conferences this week. On Wednesday, I attended Endeca’s first ever Manufacturing Summit meeting.  On Thursday, I had the opportunity to attend the Fall session of the MIT Forum for Supply Chain Innovation.

There’s also been a lot of news this week that has supply chain strategy implications.  

Over the coming days, look for a series of posts as I catch-up on these and other events. I believe you’ll find worth your read.

 Bob Ferrari

Regular readers of Supply Chain Matters will note that I have penned a number of commentaries concerning ongoing incidents of supply chain risk or disruption.  When I comment on an incident, I prefer to outline the various supply chain response and mitigation techniques that may be at play in a particular incident as a means to share learning.  I often incorporate these real-world examples in my consulting and training efforts related to supply chain risk management (SCRM).

When I deliver executive workshops, I’m often asked to share some helpful resources or web sites that can be accessed to learn more about the leading-edge thinking for SCRM.  I myself utilize Jan Husdal’s husdal.com site. This site serves as a conduit to interesting articles, research papers, books and web sites focusing on SCRM, business continuity, and other related topics. Jan is a researcher with the Transport Economics Research Group at Moreforsking Molde Research Institute in Molde Norway, and engages in transport modeling and cost-benefit analysis of infrastructure projects.  He previously served for more than 15 years as government advisor in vulnerability assessment, safe community planning and crisis management with several Norwegian government authorities. His background provides a wealth of experience toward providing a conduit of interesting and leading-edge information related to SCRM.

As many readers may well relate, I don’t often have the time to read in detail the many research articles that can be generated on a topic.  With SCRM and business continuity becoming an ever more critical concern for businesses, more attention and research is now being placed on the topic One of the greatest benefits I get from Husdal.com is Jan’s ability to summarize the highlights and conclusions of the most interesting findings, allowing me the ability to dive into these papers for more nuggets of information.

I communicated with Jan a few days ago to both make him aware of Supply Chain Matters and suggest that we exchange Blogroll reference listings.  Jan responded that his site doesn’t feature a Blogroll, and instead published his review of this Supply Chain Matters site in the context of ongoing SCRM commentary. I was pleased and humbled to note Jan’s commentary.

For the record, Jan and I have never personally met each other, nor are there any associations among our two sites.  We are just recognizing the quality of each other’s writings.

In your ongoing efforts to address strategies to identify and mitigate supply chain risk, I recommend you set a bookmark to husdal.com

 Bob Ferrari

I had the pleasure of providing a guest posting on the Infosys Supply Chain Management blog.  This posting shares some of my thoughts regarding the debate that revolves around whether companies should internally develop or buy software application addressing the support of advanced supply chain processes.

There is one common option to the constant debate of build vs. buy of IT applications supporting supply chain, and that is having proper context and strategic framework.  Strategic framework equates to the existence of a common understanding of business metrics and outcomes desired by the firm, along with a well defined and understood information architecture that addresses robust information integration across cross-functional supply chain systems, both internal to the firm, and external among suppliers and trading partners. My advice to companies that need to resolve the build vs. buy debate is to first take the time to outline common vision, business outcomes and overall information architecture that can support either continuous improvement or transformation needs.  Proper context and existence of a strategic framework of objectives makes the build or buy option far easier to address.

You can view and provide comments on this entire  posting by clicking on the following link.

 Bob Ferrari

Disclosure Statement- Infosys is a paid sponsor of the Supply Chain Matters blog.  We at Supply Chain Matters are very pleased that Infosys has chosen to sponsor quality thought leadership and commentary related to global supply chain business process and supporting technology.

Much has been written and discussed concerning the current unavailability of adequate doses of the H1N1 vaccine to combat the current swine flu pandemic. As outbreaks of H1N1 influenza continue to peak in the U.S. and other countries, delivery of the vaccine has been falling short of expected levels.  In the U.S., government agencies anticipated that 40 million doses would be on-hand by the middle of October, but a mere 13 million doses have arrived, prompting growing fears that the vaccines will arrive too late to stem potential swine flu deaths.

Since this blog is dedicated to commentary related to supply chain business process and information technology, I thought it would be helpful for readers to view the current problem from a supply chain lens. Our loyal readers are welcome to pass along a link to this posting to those that would benefit from education to the magnitude of the effort.

Let’s look at the current problems from the perspective of value-chain scope and complexity. 

Vaccine producers are dealing with a production and distribution problem of enormous scope.  A medical history expert at the University of Michigan indicated in a press interview “that this is potentially the largest mass vaccination program in human history.”  The World Health Organization (WHO) estimates that as much as three billion doses of vaccine could be produced in a single year.  That represents an incredible level of production and distribution scope.

To adequately prepare for both a potential H1N1 pandemic, as well as the normal outbreak of seasonal influenza, many countries have pre-ordered two different vaccines, the H1N1 specific, as well as the recurring seasonal flu vaccine.  Timing is of course most critical, since the vaccine must be delivered in adequate time to buffer a seasonal outbreak.  There are a minimum of three large-scale drug producers working on volume production and global distribution; GlaxSmithKline, Novartis, and Sanofi-Aventis SA. Glaxo alone has invested more than $3 billion on research and incremental manufacturing in anticipation of supporting a flu pandemic.

Vaccine is produced in batch production techniques, with cycle time varying depending on the characteristics of the particular batch.  Supply chain planners in process-related industry who deal every day with planning batch production are very familiar with the complex challenges related to having to account for various aspects of variability in scheduling the output of a batch production process.  While new production methods are currently being investigated, the majority of the current vaccine demand is grown relying on a fifty year old, egg-based production technique.  One of the problems underlying the current delay is that H1NI virus is not growing as quickly as expected in this production process. Apparently, this problem was anticipated as early as this summer, when U.S. government officials were already predicting a shortage of the H1N1 vaccine by mid-October.  A good perspective on the current production difficulties can be found in a U.S. News and World Report article, Production Problems Plague Delivery of Swine Flu Vaccine.

Another form of controversy concerning vaccine production relates to the use of adjuvant as an additive. Adjuvants are a class of substances that apparently increase the overall potency of a particular batch of vaccine.  A recent and timely New York Times article, Benefit and Doubt in Vaccine Additive, contrasts adjuvant methods with lingering uncertainty regarding the safety or side effects of these substances.  According to the article, the WHO and some health experts have been calling for the use of adjuvants to allow more people to be immunized for H1NI with a given amount of vaccine, prompting some governments to order vaccines with adjuvant. Glaxo and Norvatis are selling pandemic flu vaccines containing newer adjuvant made from water emulsions of squalene, or vitamin E.  If vaccines with adjuvants were to be administered in the U.S., the Food and Drug Administration (FDA) would have to evoke a so-called emergency use authorization. U.S. officials are currently of the view that that increased potency is not large enough to offset the possible risks and extra complexity of using the adjuvants. 

Packaging of vaccines is another factor that manufacturers must address. Priorities and protocols have been outlined by governmental authorities as to which populations will receive the vaccine initially. They rightfully include pregnant women, healthcare workers, and children as the first priority, since these populations are the most vulnerable to the effects of the H1N1 virus.

In order to support high-volume distribution needs, preservatives are added to allow manufacturers to package vaccines in multi-dose vials, as opposed to single-use syringes or nasal sprayers.  The U.S. government requested that nasal spray and preservative-free vaccine be the first priority of initial distribution to insure that the populations of pregnant woman and children be serviced by vaccine.  As high-volume distribution continues in the coming weeks, manufacturers will have to shift vaccine production to multi-dose vials to service broader vaccine delivery needs, hence more preservatives will need to be incorporated.  Consumers remain highly sensitized to the potential effects of vaccine preservatives, which may defer some from actually securing the vaccine.

Vaccine producers are under the gun to dramatically increase production and distribution of all influenza-related vaccines.  These producers exist in healthcare-related supply chains that are not currently noted for overcoming complexity in production methods and global packaging and distribution needs.  There are certainly needs for more value-chain wide visibility to supply and demand alignment imbalances, along with more-timely information flows to make critical operational decisions. 

The current crisis is a symptom of a wider problem. If this crisis provides any benefit, it will be in the understanding that vaccine related supply chains will be our most critical area for future supply chain technology investment.  Consider the fact that both consumer goods products and high tech product related supply chains are currently looked upon with track records of world-class capabilities in process and information technology automation.  These supply chains morph in terms of the production and order fulfillment requirements that are manifesting in vaccine supply chains.  The time for attention and investment is overdue.

 Bob Ferrari