Thursday, April 28, 2005

Measuring the supply chain

Business Times p.B4
Thursday, April 28, 2005

By Moje Ramos-Aquino, FPM
Measuring the supply chain

FOLLOWING the input-process-output (IPO) model we discussed earlier, we realize the importance of measuring the supply chain. All the entrepreneurs we interviewed so far realize that one of their key value creation processes is the management of the supply chain.

One trader was aghast to find a very expensive imported machine part ordered by a customer years ago unserved, gathering dust and occupying precious space in her warehouse.

Paul Niven (Balanced Scorecard Step-by-Step; John Wiley & Sons) defines a supply chain as “a set of three or more organizations directly linked by one or more of the upstream and downstream flows of products, services, finances and information from a source to a customer.” He continues, “most of us think of the supply chain as comprising three main processes: sourcing and procurement, order fulfillment and planning, forecasting and scheduling. In industry after industry, supply-chain practices are becoming the key basis of competition, and little wonder since the stakes are very significant.”

It becomes imperative for an entrepreneur to gather relevant data, measure and analyze them to better manage their supply-chain. Authors Karl Manrodt, B. Manrodt, David A. Durtsche, D. Michael Ledyard James S. Keebler/002-7437947-2516053" David Durtsche, Michael Ledyard and James Keebler (Keeping Score: Measuring the Business Value of logistics in the supply Chain; Council of Logistics Management), suggest going back to basics for effective supply-chain measurement.

First, “strategy matters. Communicating the strategy also matters. If people don’t know what the strategy is, they really won’t know how to respond when faced with a problem that needs to be solved. Strategy should not only help entrepreneurs determine what measures to use, but also assist in determining how much weight or emphasis to place on each measure.”

Second, “slowing down and defining the metrics should also be done at work, but preferably in front of everyone. The measure could have been defined by the customer, or defined jointly with the customer. Coming up with clear standards is much more difficult for direct-to-customer retailers. Instead of dealing with just a handful of major customers, the retailer is faced with thousands of people whose expectations may change based on their last experience with the firm, a competitor, or even another unrelated provider. The challenge here is to understand what is critical to key traditional market segments, such as age, income, and so on. Another way is to segment the customer group based on usage of products or services.”

Third, “know your costs. Deciding on how much customer service to offer requires detailed cost information. Use the data to perform cost-benefit analyses.”

Fourth, “Take a ‘process’ view. Define your measure at the process, not the functional, level.”

Fifth, “Focus on key process measures for the various supply-chain activities. Some of these measures are:

Involving trading partner: customer complaints, on-time delivery, over/short/damaged, returns and allowances, order cycle time, overall customer satisfaction, days sales outstanding, forecast accuracy, perfect order fulfillment, inquiry response time.

Internal focus: Inventory count accuracy, order fill, out of stocks, line item fill, backorders, inventory obsolescence, incoming material quality, processing accuracy, case fill, cash/cash cycle time

Efficiency measures: outbound freight cost, inbound freight cost, inventory carrying cost, third party storage cost, logistics cost/unit vs. budget, cost to serve.

Productivity: finished goods inventory turns, orders processed/labor unit, product units processed per warehouse labor unit, units processed per time unit, orders processed per time unit, product units processed per transportation unit.

Utilization: space utilization versus capacity, equipment downtime, equipment utilization versus capacity, labor utilization versus capacity.

Remember, if you can not measure your supply chain, you can not manage it. If you can not manage, you can not improve.

ASTD 2005. An opportunity to learn from the outstanding practitioners and network with 16,000 other participants is offered by the American Society for Training and Development in their Annual International Conference and Exposition on June 5-9 in Orlando, Florida. Please go to or call Grace Victoriano at 715-9332 for details.

To avail of discounted registration fees, please write delegation code “10429860” on your registration form.

(The author, president of Paradigms & Paradoxes Corporation, assists entrepreneurs in their quest for human resource and organizational development toward business excellence. Her email address is

Thursday, April 21, 2005

Measures for key value creation processes

Business Times p.B1
Thursday, April 21, 2005

By Moje Ramos-Aquino, FPM
Measures for key value creation processes

Habemus papam! Prayers for Pope Benedict XVI.

As we rejoice and welcome the new Vicar of Christ, let’s move on with our Journey on Entrepreneurship using the Balanced Scorecard. These past many columns we’ve been identifying and discussing key value creation processes of different entrepreneurial endea¬vors.

According to the Baldrige Criteria for business excellence, these are your key product, service and business processes that create value for your customers and other key stake¬holders and improve your marketplace and operational performance.

In order to manage these processes, we need to measure them. To measure them, we need to identify, design, deploy, implement and perform them system-wide to meet the requirements of customers and integrate them to meet your organizational needs.

In his book, Balanced Scorecard Step by Step, Paul Niven identified a number of measures of internal process:
Average cost per transaction
On-time delivery
Average lead time
Inventory turnover
Environmental emissions
Research and development expense
Community involvement
Patents pending
Average age of patents
Ration of new products to total offerings
Labor utilization rates
Response time to customer requests
Defect percentage
Customer database availability
Breakeven time
Cycle time improvement
Continuous improvement
Warranty claims
Lead use identification
Products and services in the pipeline
Internal rate of return on new projects
Waste reduction
Space utilization
Frequency of returned purchases
Planning accuracy
Time to market of new products/services
New products introduced
Number of positive media story

It is also important that you have fact-based, systematic evaluation of these processes in place to ensure continuous improvement and organizational learning.

Next columns, we’ll benchmark with successful entrepreneurial ventures on how they measure their internal capabilities vs. their vision, mission, values and goals.

If you want us to feature your own business, just send us an email.

ASTD 2005. The American Society for Training and Development (ASTD) International Conference and Exposition will take place in sunny Orlando, Florida, on June 5 to 9.

Among the 200 featured speakers are former NYC mayor Rudy Giuliani; NYC Leadership Academy head, Bob Knowling; National Geographic staffer Steve Uzzell; world-renowned expert on creative thinking Edward de Bono; father of human capital strategy and analysis Jac Fitz-enz; futurist on technology, learning and people Elliott Masie; leaders in human performance improvement Jim and Diana Gaines Robinson.

A new feature this year is the Innogizer series. These innovative sessions are designed to energize you at the end of a long conference day. Innogizers will revitalize your ability to engage and learn. Likewise, ASTD is partnering with Disney to offer a special preconference workshop entitled, Organizational Creativity, Disney Style. This workshop will provide learners with an opportunity to experience the business behind the magic at the Walt Disney World® Resort by focusing on the ways the business structure fosters a collaborative environment that enhances creativity.

For details go to www.¬ Simply write the delegation code “10429860” in your registration form to avail of discounted registration fee.

(Moje, president of Paradigms & Paradoxes Corp., assists entrepreneurs in their journey to business, organization and human resource excellence. Her email address is moje¬

Thursday, April 14, 2005

A fish story that is true

Business Times p.B1
Thursday, April 14, 2005

By Moje Ramos-Aquino, FPM
A fish story that is true

Yesterday morning when I went to the wet market, I took note of all varieties of fish available. At the talipapa on V. Mapa Street in Santa Mesa, Rosalie de la Cruz showed me tambacol, alumahan, sapsap, tilapia, tulingan, bisugo, bangus, dalagang bukid, tamban, salay, baby lapu-lapu, betilla, danggit, talakitok, maya-maya, tanigue, tuna, dulong, dilis, galungong plus alamang, shrimps, squid, octopus, clams, mussels and even seaweeds. Rosalie said that these are the fish varieties that working people normally buy, particularly tilapia, bangus, galungong and squid. People buy shrimps in small quantities to be used as flavoring for their stir-fry recipes.

My second stop was at the stall of Yolly and Glicerio Sab-a at the New Santa Mesa Mart on R. Magsaysay Boulevard (a morning-only wet market). Because their clientele are mostly rich Chinese and restaurant owners (You can tell by the models of vehicles parked outside), they sell the big and expensive fish varieties. These are tanigue, sole, lapu-lapu (big for filleting, alive, ulpot), salmon (whole and belly only), blue marlin, gindara, maya-maya, pompano, apahap, bacoco, anchu, mameng, dapa, bangus, hasa-hasa, asohos plus shrimp, prawns, squid and, once in a while, live dalag and hito. Yolly says that their customers’ favorites are the big fish, filet and prawns.

Rosalie and her brothers Ricardo, Along and Omie inherited the business from their parents Aling Ely and Mang Espe de la Cruz. Rosalie said she used to just help her parents, when they became too old to do business, then she and her brothers took over and they have been doing it for the past 16 years. They display their goods on a 3” x 6” table. What keeps them going is that they have their respective families to support and they have their suki (regular clients) to serve.

Also, Yolly says this is their only means of livelihood since 1982. She occupies five adjoining stalls and pays P700 a day. Aside from her husband, eight helpers do the fish preparation while she does the selling and accounting. She enjoys meeting all kinds of people and knowing their idiosyncrasies. She could tell who will buy what kind of fish, in what quantity and how much they are willing to pay. She says there are no more cheap fish nowadays and requests that customers not to be too barat because prices are generally constant and they could not give discounts even for bulk purchases. What is important, according to her, is that aside from selling really fresh fish, her weighing scales are honest and reliable and so customers are getting their money’s worth. A Manila city hall inspector comes on a weekly basis to test their scales.

As add-on service, they clean the fish meticulously and cut them according to the specifications of the customers. They also give advice on how to cook certain kind of fish—steam, stir-fry, fried, stew, grilled and others.

Rosalie and family wake up early at 4 a.m. to buy fish from their regular suppliers in Farmer’s Market, Cubao, where they get bulk discounts. On the other hand, Yolly goes to Malabon between 7 p.m. and 2 a.m. She prefers to get them by the kilo rather than by banyera to make sure that she gets the fresh ones.

Yolly say that you can tell the freshness of the fish by the eyes (looks alive and not red), the body is firm and slippery to the touch and naglalaway (spits). She cautions that the gills are not good indicators of freshness because they could easily be colored with pork blood.

I asked them why they use incandescent bulbs which consume a lot of electricity and they both said that fluorescent lamps are too bright and fish don’t appear attractive under their beam; incandescent light makes fish look good and fresh.

At the end of the day, what makes them smile? Rosalie and Yolly said that when they are able to sell every single fish, make a modest profit and when customers come back again and again. Asked if they eat fish, they both laughed and said, “What will we do with the unsold fish? Also fish is health food.”

(Moje assists entrepreneurs in their journey to business excellence, organization and human resource development. E-mail at

Thursday, April 7, 2005

Farewell, Pope John Paul II

Business Times p.B1
Thursday, April 07, 2005

By Moje Ramos-Aquino, FPM
Farewell, Pope John Paul II

With Pope John Paul II’s passing, I am filled with questions.

• If I know I would die in a few days, what regrets would I have? On hindsight, could I have avoided those same regrets?
• How do I judge others? Higher, lower or same standards as I judge myself?
• What truth do I want to know about myself, my life, my future?
• If a female friend tells me she is going to have an abortion or a male friend tells me his wife is going to have an abortion, how would I react?
• If I know that a friend is walking out of Catholicism and embracing another religion in order to enter into another marriage legally, what would I do or say?
• If I find that my brother is gay and wants to marry, what would I say to him?
• If I were to give up all material things I possess and allowed to keep only one item, what would it be?
• If I would remarry, should I choose a very rich man with unknown character or a kind man with modest means?
• If I were to raise my sons again, will I do it the same way or differently?
• If I were to choose a career or profession again, what would it be?
• Given an opportunity, what ten questions would I have asked the late Pope?
• Who is the most important person in my life? What should I do to improve our relationship? Am I willing to do it?
• If I know that a client can afford and will be willing to pay any price I will charge, how much should I charge?
• What, if anything, is too serious to be joked about?
• Should I tell my best friend that she has, figuratively, bad breath?
• What would I do if I find out that a friend sells illegal drugs?
• What would I do if I discover that my maid has stashed my expensive-but-seldom-used necklace in her bag?
• Of all the people I love, whose death will be most distressing?
• What huge sacrifice am I willing to take to go to the Vatican right now?
• What has been the biggest disappointment in my life? Major mistake?
• If I suddenly find a bagful of money, what would I do?
• What sorts of things will I do if I win millions in lottery?
• If my bank miraculously lends me money for my business, what would I do?
• If a guy I know offers to give me my dream Volvo for a night of sex, what would I do?
• Who among my friends will I keep in the next ten years?
• To whom should I leave my estate when I go: to my children or to my favorite charity?
• A few years from now, when my children are settled with their own family, should I actively pursue charitable work or a religious life?
• If I were to write a book, should it be about business or about life?
• If I were no longer be in business, what should I write about instead?

These questions and a thousand more might not be as grave or serious as the ones that weighed down the papacy, but these are questions that face us, ordinary mortals, as we walk through life. I have no answers now, but when a question begs an answer I shall be guided by my Catholic beliefs and values and inspired by the life and wisdom of Pope John Paul II.

Farewell, Holy Father. I am positive you are happily united with God the Father.

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