Tomorrow is the Thanksgiving holiday that is traditionally celebrated annually in the United States. The holiday is meant to be a time to pause from day-to-day work and leisure activities and give thanks for the blessings of life and family. The tradition calls for extended families and friends coming together, some traveling long distances, to celebrate the holiday over turkey dinner and other group activities.

We would like to share a few thoughts on the eve of Thanksgiving 2011.

This has been a rather challenging year in terms of tragedy across our global community.  We all witnessed by the instantaneous power of media and the Internet, the powerful images of suffering and sheer devastation caused by the earthquake and subsequent tsunami that occurred in northern Japan.  I can still recall the video images of this horrific event. Families in Japan are still adjusting to the after effects, both personal and physical.

We should recall the severe floods that impacted Australia, the floods and tornadoes that struck the U.S.; the other devastating earthquakes that struck Turkey and other countries along with the other extraordinary occurrences of natural disaster that have impacted people and families. The latest reminder has been the monsoon related floods in Thailand that have taken over 600 lives and impacted countless of people.

The “Arab Spring and Autumn” have caused some to lose their lives because of the belief in freedom and human rights.  Members of the military and public safety continue to risk their lives on a daily basis while their families always live in a state of anxiety.

The unemployed have found their lives suddenly changed with a stigma that is not of their doing, and others face hardship.

Sometimes we get too caught-up in our day-to-day lives and lose focus on how much we should be thankful.

We give thanks for our small blessings, family and friends.  We remember those who experienced tragedy and trust that they will come to eventually give thanks.

Happy Thanksgiving to all of our readers and extended community.

An added note for readers from supply chain technology, service providers and event organizers.  Readership of the Supply Chain Matters blog continues to increaseand we just exceeded our 2011 readership and visitor milestones. Why not consider Supply Chain Matters as an online focal point for your brand?

We are currently offering rather attractive 2012 sponsorship opportunities that will feature your brand as a sponsor of quality global supply chain thought leadership.  We additionally provide consulting and service offerings to boost your firm’s presence and effectiveness in social media based product marketing.

You can double-click on our sponsorship information tab located on the top menu bar, fill-in the requested information, and we will contact you with additional information and rates. Alternatively, you can send an email inquiry to info <at> supply-chain-matters <dot> com.  Please include appropriate email and phone contact information.

The following Supply Chain Matters guest posting has been provided by Mark Wells, a principal at End-to-End Analytics.

Online Wall Street Journal Photo

“Supply Chain Matters” readers are painfully aware of yet another serious supply chain disruption, this time from tragically severe flooding in Thailand.  According to recent reports featured on the Wall Street Journal Online site (paid subscription or metered view may be required) Ford, Toyota and Michelin have cut back operations.  Ford says that lost production could reach 30,000 vehicles.  Forty percent of hard drives for personal computers ship from Thailand  and Western Digital makes sixty percent of its disk drives in that country.  More disruptions to value networks are surfacing as I write as a result of this catastrophe.

While the human cost of these disasters is devastating and defies valuation, the cost to businesses whose value networks include operations or suppliers in Thailand will not only be measurable, it will also be significant.

At a recent IBF Conference in San Francisco John Brown, Director, Risk Management, Supply Chain Development at The Coca-Cola Company (TCCC) recently made the point that while you cannot simulate the infinite list of events that might disrupt your supply chain, you can simulate most of the effects.  For example, if you have a significant portion of your value network in a country or region, you need to anticipate a loss of supply and have a contingency plan on what to do when that happens.  Then, as Kevin Harrington, Vice President, Global Business Operations, Customer Value Chain Management, Cisco Systems, has emphasized in multiple presentations, it is important to train your organization on exactly what procedures to follow in the event of a disruptive effect.

Firms who are leaders in planning to be resilient in the face of disruptions evaluate at least single level effects, create contingency plans for each, and then train key personnel on how they will operate under those contingency plans.  It’s difficult to take the time do training when there is no visible disruption, but that experience will become invaluable when trouble strikes unexpectedly.

Natural disasters are not the only source of disruption, but they are significant and difficult to anticipate.  When a natural disaster, civil disruption, or similar event resulting in a serious downgrade to your value network transpires, you need the capability to quickly simulate the how flow of materiel, information and cash can be facilitated with portion of the value network seriously degraded.  Beyond simply having the technical ability to simulate, you need the talent and insight to ensure that the inputs and assumptions upon which you base the model are valid and that the conclusions you draw from the results are reasonable and feasible.

Economic risks can compound the effects of these natural disasters in the form of rising and or uncertain commodity prices as well as fluctuations in currency exchange rates.  Skilled data scientists can build econometric models that enable you to predictively analyze commodity prices and foreign exchange rates, not only to arbitrage risk today, but also so that you will know immediately what strategic procurement actions to take in the case of a disruption.  Dow Chemical, for example, has created an advanced analytics group that focuses on (among other things) predicting prices of key manufacturing inputs.

It was Ben Franklin who said, “By failing to prepare, you are preparing to fail.”    Preparation for a disruption to your value network through planning and practice will always seem like overkill before the disruption.  During the disruption, however, previous preparation will demonstrate the wisdom of your investment in planning and practice and help to maintain the value of your enterprise.

Other reading on the topic include recent posts in this blog, “The Effect of Supply Chain Disruptions on Long-term Shareholder Value, Profitability, and Share Price Volatility,” by Vinod Singhal from Georgia Tech and Kevin Hendricks of The University of Western Ontario (June 2005) and The Resilient Enterprise:  Overcoming Vulnerability for Competitive Advantage  by Yossi Sheffi, MIT Press 2005.

Arnold Mark Wells is currently a principal at End-to-End Analytics.  He blogs weekly at Friday Forethought.

Last week, while traveling,  I received word of the sudden passing of a former SAP colleague, Stefan Theis, who lost a brave fight with cancer at an all too early age. At the time of his passing, Stefan was the head of the line of business solutions team for SAP supply chain planning.

Stefan’s efforts were was very instrumental in charting the direction and support programs for SAP’s supply chain management applications. I had the honor to work with Stefan for over two years.

The following is a tribute which I have submitted for his family and SAP colleagues:

I was shocked and saddened to learn of the news regarding the passing of Stefan Theis. I came to know Stefan in 2002 when I arrived at SAP to lead Supply Chain Management product marketing. I have great respect for Stefan’s abilities in understanding the detailed functionalities of SAP supply chain applications, along with his abilities to meet with customers and help resolve their supply chain planning and collaboration process needs. Stefan was not shy in expressing his viewpoints, but was also very respectful of other viewpoints. He truly cared about customers and their needs, and passionately advocated for improved functionality.

More importantly, I valued my friendship with Stefan, including his unique style of humor and his passion for sports. We had many enjoyable coffee room conversations regarding automobile racing and soccer. I was impressed with his passion for biking to and from his office. During my trips to Walldorf, I would often make the time to visit Stefan to have conversations regarding organizational and technical developments at SAP, means to improve product marketing, as well as to have humorous conversation on organizational politics.

We have lost a contributor in the supply chain management community. I will miss Stefan.

I extend my deepest condolences to his family, friends and SAP colleagues.

Bob Ferrari

Two weeks ago, Supply Chain Matters posted a commentary on the difficulties in planning supply chain fulfillment activities concerning the upcoming holiday buying season which begins in a matter of weeks. This is the period where supply chains are planning, procuring and positioning inventories for peak holiday buying and promotions in the coming months, and a lot of logistical volumes should be moving from Asia toward key market consumption regions. Then again, most of this year’s growth has come from emerging markets, and the question is whether holiday peak movement reverses, from west to Asia.

We again ask our readers to participate in our interactive poll regarding current planning assumptions.  The interactive poll is located on our right-hand panel and all responses remain anonymous.

Thanks for your participation and readership.

Next week we will be attending the annual conference of the Council of Supply Chain Management Professionals (CSCMP) being held in Philadelphia.  This is one of the premiere educational and professional conferences among the supply chain management community and we are looking forward to catching-up with friends and colleagues.

If readers are planning on attending, please stop us in the hallways or send us an email. We will be hosting one of the tables at the Roundtable Luncheon on Tuesday, representing the New England Regional Chapter of CSCMP.  Supply Chain Matters will also be blogging some of our impressions and observations from this year’s conference.

Bob Ferrari, Executive Editor