A few weeks ago I shared my takeaways from attending the MIT Forum for Supply Chain Innovation Fall conference that focused on the current widespread problem of bogus and counterfeit materials infiltrating multitudes of supply chains. The conference speakers reinforced how widespread this problem has become, not only in commercially-oriented, but even defense-oriented supply chains. Scrupulous players have found that there are more monetary and other incentives for engaging in counterfeit part activity suppliers and other players have discovered more sophisticated means to alter the composition or stated quality of parts, more often beyond current means to detect such deficiencies.
The latest evidence of the extent of the problem and how strident government monitoring and enforcement will become was highlighted in a recent Electronic News story. A California man, one of three family members that were indicted by the United States Attorney’s Office for trafficking counterfeit electronic components, has pleaded guilty to two separate counts involving conspiracy to defraud the United States and trafficking in counterfeit goods. This individual now faces five to ten years of incarceration and fines ranging in excess of $2 million dollars, but has agreed to cooperate with the government to uncover others.
Reading this article will give you a sense of how the counterfeiting process was allegedly conducted, and how these defendants on 22 occasions imported over 13 thousand integrated circuit assemblies bearing counterfeit trademarks, including military-grade markings involving contracts to supply the U.S. Navy and other government agencies. The counterfeited parts involved altering the trademarks of seven different semiconductor companies.
While the Acting U.S. Attorney issues a very stern warning regarding how serious stepped-up enforcement will become, we have to wonder how many of these counterfeit parts are currently still populating our most sensitive supply chains and supply depots.
Yesterday’s news of the Gartner acquisition of AMR Research has, as expected, generated lots of commentary across the blogsphere. I penned my initial comments to this announcement yesterday.
The acquisition of AMR Research has a special significance, since AMR has garnered quite a following in our extended community. Much of the existing commentary I’ve reviewed thus far has been directed at specific communities. This includes the industry analyst relations community (AR) who’s primary role is to maintain positive relationships with specific industry analysts that provide coverage for their particular’s company’s technology and/or services, as well as the broader audience of technology providers who utilize industry analyst research or opinion as part of their overall product marketing toolset. Some insightful commentary to the AR community can be found on the IIAR, Lighthouse Analyst Relations and Sage Circle blog sites.
The focus of this series of postings will be on the implications to the recipients of industry analyst research, those functional supply chain professionals who have to make well informed business process, management or technology decisions regarding all facets of supply chain.
I anticipate three implications that would play out as a result of the AMR acquisition:
- A changing business model of providing industry analyst services catered to global supply chain process and technology selection needs
- Gartner’s future plans for incorporating AMR’s research agenda and client services
- The continued evolution of new industry and global supply chain functional advisory services
In this Part One posting I will share my observations on the changing business model that has led up to the AMR acquisition. Parts two and three will elaborate on the two other implications for our community of supply chain professionals.
A Changing Business Model
It is no secret that the business model for providing industry analyst advisory services has been challenged over the past five or so years. The global economic recession of late has not helped, since research and advisory services unfortunately tend to be placed on lists for discretionary cuts when tough cost cutting decisions need to be made.
AMR has done a superior job of targeting and garnering broad influence from specific manufacturing and supply chain oriented audiences. The attraction of clients to AMR was grounded in the deep influence and insight the firm had in the specific topics related to global supply chain strategy, which was the core of AMR’s founding The primary reasons that I was attracted to join AMR as a supply chain industry analyst was the down-to-earth maturity and practical experience of its existing analysts and its unique culture.
Today’s AMR go-to-market business model now includes a very high analyst to sales person ratio, the equivalent of one salesperson for every analyst, which insured a very active sales and business development touch model could be wrapped around core research themes.
The open question is whether a deep supply chain focused advisory model will be able to economically exist from an industry analyst firm from here forward. In my view, there are two other analyst firms that can attempt to fill the void, IDC Manufacturing Insights or ARC Advisory Services. Since Manufacturing Insights can draw on the deeper pockets and global presence of IDC, it may have the only shot remaining for having a specialized, high-touch model of manufacturing and supply chain analyst services, but a renewed emphasis on Web 2.0 and media based reachout may be in order. One of the rather attractive reach-out services provided by AMR was its weekly podcasts on the key developments of the week.
That leaves the door open for alternative options for catering to specific customer needs. As Lighthouse Analyst Relations pointed out in its posting- “Every firm merger leaves buyers looking for a new source of second and third opinions.” When critical decisions need to be made, there is often a need for a well-informed or specialized third-party objective opinion. From my experience, sometimes a well informed second or even third opinion also helps teams move quicker toward consensus.
Today, opinions can come from specialized media, conference events, or other web-oriented outlets. I’m betting that a new business model will evolve that fills this void with an emphasis on one-on-one advisory services. My consulting services will focus more on this void and I’ll comment more in a later posting.