Nick Gaganiaras, MBA

Road to supply chain leadership videos – Part IV – The universal problem solving process: Analytical thinking   Video: https://lnkd.in/g4x5ds9A - (“tinyurl.com/” with “PowellVideoRSCLPartIV”)   Talking #supplychainmanagement: The fourth in my series of videos presents what I have been calling the “universal problem solving process.” It builds on the universal modeling framework which requires the answers to three questions:   1.    What metrics are used to evaluate performance? 2.    What types of decisions are being made (and who makes them)? 3.    What are the types of uncertainties that affect the performance of the system?   Answering these questions for a game such as playing chess is trivial – it would take two minutes and a single page. But answering them for complex problems such as those that arise in supply chain management (more specifically, any business problem) can be quite challenging. … and there is no mathematics!   These three questions arise in *any* business problem that involves making decisions. You need the answers to these questions before you develop any mathematical model, whether the problem is being solved with a spreadsheet or sophisticated computer package.    For complex problem domains, knowing the right questions is a real skill, and it is a teachable skill that can be reinforced by a steady stream of case studies and internships. I think business programs in supply chain management are perfect for this role. I also think this is much more useful than teaching students simplified mathematics that can only solve stylized problems.    This is what I call “analytical thinking.”

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“I want 100 more Shopifys in Canada,” federal Innovation, Science and Industry Minister François-Philippe Champagne told me last week. A more realistic aim might be to create 10 more companies like fellow Ottawa company Kinaxis : a mission-critical software company with global customers, a valuation in the billions (Kinaxis sports a market capitalization of $4.5-billion) and room to run. The company is going through a bit of a slower period in terms of growth and investor interest but has built a second-to-none global reputation in the field of supply chain software under the leadership of CEO John Sicard. My latest: Kinaxis leading a supply chain ‘renaissance’ – but can the Ottawa company reignite investor interest?

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A new approach to managing uncertainty I keep seeing people who approach uncertainty in #supplychainmanagement by proposing to take problems that exhibit a high level of uncertainty (also called “unpredictable,” “unforecastable,” or “stochastic”) and try to turn them into problems that are that are more predictable (or forecastable, or deterministic). The latest example is Lora Cecere’s thoughtful article   “If Only the Supply Chain was Reconfigured” https://lnkd.in/e54nMaFQ (“tinyurl.com/” with “CecereForecastability2024”)   where she argues for fundamentally reconfiguring the supply chain to manage uncertainty.    Of course, there will never be a single solution to managing uncertainty with an operation as complex as a company running a global supply chain, but there is one point that I keep running into: the desire to perform “forecasts” and assume that the goal is to perfectly predict whatever is being forecasted: monthly demands, lead times, lead time demands, component costs and market prices.   Years ago Lora called for a “new analytics.” I claim that the new analytics starts with using what many (such as Lokad) call “probabilistic forecasting.” This requires a fundamentally different approach to forecasting, especially along three dimensions:   1)   We need a new attitude toward forecasting, which means predicting the distribution of what might happen, rather than guessing what will happen. 2)   We need a new approach to how we evaluate the quality of a forecast, which means evaluating how well it performs in terms of making decisions (including both expected performance and risk) rather than measuring the difference between actual and the point forecast. 3)   We need to rethink what to do with a probabilistic forecast, which means learning how to live in an uncertain world. This is where Lora’s ideas fall, but this has to be approached with (1) and (2) in mind.

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I'm thrilled to be sharing the screen with a few other incredible founders who are tackling HUGE problems with brilliant solutions. Thank you, Instrumental Inc., for making this happen! Dec 3, 11am PST! Link in 1st comment for convenience :) Supply chain is a new battlefront. Supply chain leaders across aerospace, defense, and commercial electronics are navigating unprecedented challenges. Recent events, such as the discovery of U.S. sanctioned parts in battlefield systems in Ukraine, a coordinated pager attack in Lebanon, and China’s sanctions on Skydio, have brought these issues to the forefront. Join Instrumental's upcoming webinar on 12/3 to learn about today's top risks and strategies for mitigation directly from supply chain experts. Panelists include Ilya Levtov, co-founder and CEO, Craft.co , Phillip Gulley, Co-founder and Chief Strategy Officer, Cofactr, and Anna-Katrina Shedletsky, co-founder and CEO, Instrumental. (More panelists will be announced soon, stay tuned!) Join these supply chain experts as they discuss the critical threats facing electronics makers and share actionable strategies for mitigation. This Build Better webinar is brought to you in partnership with Cofactr. Save your spot here: https://lnkd.in/gSDzvmwV #supplychain #aerospace #defense #hardware #electronics

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CSCMP - Council of Supply Chain Management Professionals EDGE Conference Update Wednesday Closing Keynote: Developing and Retaining High Performing Supply Chain Teams To develop and retain supply chain teams, focus on trust as a core retention strategy. Create a culture where transparency, open communication, and accountability are valued. Hire for cultural fit by integrating values-based questions into interviews, assessing problem-solving skills, and ensuring alignment with your organizational ethos. Invest in a leadership framework that emphasizes continuous learning, mentorship, and empowerment, encouraging leaders to foster growth and innovation within their teams. Recognize and reward contributions, offering clear career progression paths to motivate and engage teammates. Embrace diverse hiring practices to bring varied perspectives and enhance team performance. Implementing these strategies will build resilient and committed supply chain teams. Featuring: - Tim Perkins, CSC from Sourcifi - David Colyott from MGP Ingredients - Lucas England, MBA from DP World - David Hauptman from Kenco Group - Anthony Suggs from Nieman Marcus - Omar Troncoso from Kearney - Colin Yankee from Tractor Supply Company ~Mr. Supply Chain #AlwaysBeLearning #SupplyChain #CSCMP

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I have an opinion piece in Transport Topics this month - it discusses what TL carriers need to know about how shippers look at transportation procurement. Specifically, I address the importance of monitoring the Spot Premium Ratio and the New Rate Differential in the markets. Enjoy the short read! #TL #transportation #procurement #spotpremiumratio #newratedifferential https://lnkd.in/esxiuvdP

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The move to restore manufacturing to the US, Canada, and Mexico is gaining momentum, driven by various incentives beyond just labor costs. But manufacturing and distribution have markedly changed in the past 20 years and other factors impact the success of manufacturing and distribution projects: 1) Automation & Energy Grid: The shift towards automation highlights the critical need for a reliable and cost-effective energy grid. Ensuring a resilient energy infrastructure is now a significant driver of production costs and efficiencies. 2) Education: With automation comes the necessity for skilled workers. Investments in education and ongoing training programs are pivotal in enhancing productivity, fostering agility, and building adaptable production teams. 3) Transportation: Establishing flexible distribution networks is key to optimizing transportation efficiencies. Strategic location decisions enable seamless utilization of multiple transport modes such as truck, rail, air, and sea. 4) Data Networks: The integration of AI in manufacturing underscores the importance of robust data management. The ability to capture, store, and analyze data will play a crucial role in enhancing production processes. Access to reliable data centers and internet infrastructure is vital for leveraging AI technologies effectively. The evolving manufacturing landscape underscores the significance of adapting to these changing dynamics beyond traditional cost considerations. Embracing advancements in automation, education, transportation, and data management is essential for staying competitive in today's manufacturing environment. #Manufacturing #Automation #Education #Transportation #DataAnalysis #Agility #SupplyChain

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"The only certainty is uncertainty", as Pliny the Elder would say. Three threats are challenging the container market: 1.     The looming strike in the US East Coast ports. Based on the effects of the 2002 West Cost ports’ strikes, it may cost to the US economy some USD 1.6-4.9 billion/day. 2.     The announced port strike in India, that may result in congestion in major transhipment hubs throughout Asia, impacting the major east-west trades. 3.    The persisting attacks on vessels by the Houthies. The Suezmax tanker presently abandoned on fire in the Red Sea, risks to turn into the 5th largest spill ever from an oil tanker.   Finally, in Lars Jensen opinion, “it would be a fool’s errand to assume there will not be any unexpected disruptions also emerging in the year ahead”. Shipping operations are more than ever called for agility to succeed in securing global supply chains.     #shipping, #CMACGM, #logistics, #business

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I am completely sympathetic with Lora Cecere tiring of the "word-salad" hype cycles in supply chain management. This is a complex problem, and I have spent my 40+ year career watching the supply chain community bounce from one fad (JIT anyone?) to another (the variations of AI). But I am going to confirm that her latest post is somewhat controversial by challenging her inclusion of "probabilistic planning" as part of the latest hype-cycle. People like Joannes Vermorel and I have proven the value of probabilistic forecasting in our respective companies (Lokad and Optimal Dynamics) who have implemented these ideas in software that is actually running and producing benefits for our customers. This isn't hype - this is real product working in the field. I live by the line "If you want to run a better supply chain, you have to make better decisions." Decisions require planning, and absolutely no-one can predict the future perfectly (even as a reasonable approximation). Uncertainty defines the businesses that our companies work in. Over my career of trying to teach computers how to make decisions in the presence of uncertainty, I have found that the research community is hopelessly fragmented, creating a complicated melange of methods. It took my career to pull together everything in the research literature, along with industry practice, to develop my universal modeling framework for sequential decisions under uncertainty (see https://lnkd.in/erC5zNt6 for an introduction to this rich area). Lora insists that uncertainty simply translates to safety stocks, which ignores the other ways to handle uncertainty - e.g. where to locate buffer inventories, the choice of suppliers (and whether to have redundant suppliers), along with the design of the product (which impacts what materials and components are needed). Other ways to handle uncertainty may involve terms with customers, the use of accelerated transportation modes (I am sure companies have other tricks they use). There are two ways to build uncertainty into policies for making decisions. One is to incorporate uncertainty into a lookahead model (a "stochastic DLA" in my terminology). The other is to use a simple parameterized policy (e.g modified order-up-to policy) that has been trained a) in a stochastic simulator or b) in the real world (a widely used approach in industry that has been largely ignored in the academic research literature). As long as businesses have to make decisions in the presence of uncertainty, we are going to need either probabilistic forecasting (for stochastic lookahead policies) or stochastic simulations (which can be done in the computer, or in the field). This is not new, and it is not hype.

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FreightWaves has never lacked modesty about their repeated claims that they correctly predicted the onset of the 2022 freight recession (though in reality they placed the date ~3-4 months too early). However, they have not had as much success predicting when the current bear market will end. In that regard, I wanted to call out an article from September 2023 that, in retrospect, missed the mark substantially (https://lnkd.in/gbmVSFEs). First some quotes and then lessons to learn: •Quote: "the freight rate cycle will begin to move at a faster pace (perhaps later this year; more likely late in the first quarter of 2024). Rates will move higher." •Quote: "Conditions for carriers could improve dramatically in Q2 2024; and they may have the upper hand in negotiations with shippers at that time." What went wrong? Let me offer the following: [1]: FW's theory of freight demand calls attention to consumer spending and containerized imports. Yet, containerized imports represent a small share of total truckload movements (across all modes, roughly 5% at best). As I keep preaching, trucking volumes are much more contingent on domestic manufacturing activity, most of which the end consumer never touches. [2]: FW's emphasizes net changes in operating authorities to proxy change in capacity (as do many organizations). Yet, this method is flawed because it doesn't consider firm size. Yellow Corp's failure would have taken out 4 operating authorities but over 10,000 trucks. Instead, look at the BLS's employment data for truck transportation. Implication: I'm sure when the truckload market does eventually turn that FW's will loudly proclaim that they "called the market swing." Don't let them fool you, as their crystal ball hasn't performed very well for predicting the end of the current bear market. #supplychain #supplychainmanagement #freight #trucking #truckload   

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Five steps to help reduce detention and demurrage charges? Yes, please! Check them out in C.H. Robinson's latest guide. https://bit.ly/4fwtTD7

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As a potential strike by the ILA looms, this article does a good job of addressing their objection to automation and the uncompetitive position it is placing US port operations in. Regardless of our sector in the logistics industry, automation is here and can create efficiencies to enable more effective operations at higher volumes. The ILA is about to affect the livelihoods of many outside of their ranks and are not willing to partner with other members of the market for the good of all. Read the room. The remaining partners, whether it be marine carriers, port operators, or trucking companies, have all adjusted to the benefits new technology can bring our end users. It's time to embrace the positive change technology can have, rather than allow an antiquated labor model negatively impact all in the industry.

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This situation reminds us how critically connected we are. Supply chain lessons learned during the pandemic should never be forgotten for possible new seasons of disruption. Hopeful negotiations are successful. #supplychain #resilience #agility #transportation #workforce https://lnkd.in/eU87Be3Y

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In this week’s Roar: What a Trump win means for supply chains, Port issues spread in Canada, the realities of visibility, the state of sustainability, and the complex issue of port automation. #thefreightarchitects #jaguarfreight #logistics

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No amount of predictive analytics can help supply chain planners prepare for such a disruption. #Canada's two biggest #railroad operators have begun an unprecedented, simultaneous stoppage over deadlocked labor talks. This could inflict massive damage on supply chains across North America, particularly those of food grains, corn, meat, fertilizers, and chemicals used in the construction and manufacturing industries. Industry groups on both sides of the border fear additional trade costs, potential shutdowns, and even layoffs if the disruption continues. For traders, producers, and, of course, consumers, there is no getting around this—no other mode can help replace railroad freight to such a degree.    I hope the disruption ends before it puts any palpable inflationary pressure on the U.S. economy. In an election year, we already have a long list of issues to contend with. Learn more: https://lnkd.in/dkKXx2Mt #SupplyChainDisruption #RailroadStoppage #NorthAmericaTrade #LogisticsChallenges #EconomicImpact #ElectionYear #SupplyChain

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Are you struggling with data aggregation for your supply chain network design? This article from from industry experts Marianna Vydrevich and Jeff Metersky highlights common pitfalls and offers practical strategies for ensuring your supply chain data is structured effectively. #SCND #DataAggregation #SupplyChainManagement

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Fascinating interview from my CEO, covering a wide range of topics, including emerging threats (and how we're adapting). Thanks Dany Lehoux for sharing this with me.

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