The SupplyChainBrain Podcast

Humankind is forever striving for perfection. When it comes to the job of demand forecasting, however, perhaps we ought to be a tad less obsessive. Nobody's arguing that the forecast is irrelevant. Suppliers and retailers need some way to get a handle on what the customer's going to buy. But the all-consuming quest for the perfect number is bound to fail. Reality has an annoying way of refusing to cooperate with expectations. Lora Cecere, founder of Supply Chain Insights, joins us on this episode to prescribe a way out of the dilemma. She proposes to redefine the discipline of forecasting and demand planning, with an eye toward embracing probability. In the event, companies can move closer to what ought to be their real goal: crafting an agile supply-chain with end-to-end visibility, and the power to respond to actual demand. ''We've gone about it all wrong,'' Cecere says.

And you thought that sponsorships for the Olympics were all about consumer products and services. Meet the Official Carbon Partner of the Sochi Games. It's Dow Chemical Company – also, by the way, the Official Chemistry Company of the International Olympic Committee. Dow is deploying its new Climate Solutions Framework to create the first-ever, 100-percent carbon-neutral Olympic Games. The initiative embraces hundreds of thousands of tons of carbon emissions generated by activities related to the games, including global supply-chain arrangements and travel to and from the site by fans and the media. But the effort doesn't stop there – it's part of a broader three-year effort by Dow to address the carbon footprint of Russian homes, industry and agriculture. Dr. Nicoletta Piccolrovazzi, technology and sustainability director for Dow Olympic Games, joins us to talk about how the program was developed, and what Dow hopes to accomplish on the carbon-mitigation front – not just for Sochi and Russia, but for future Olympics as well. Let the games begin.

Is trade compliance nothing but a headache? Or can it be good for business? Some international trade regulations force importers and exporters to sharpen their knowledge of suppliers across multiple tiers, as well as the status of products in transit. Others are just a burden, and do nothing but drive up supply-chain costs. So what can traders expect from the ''unprecedented wave'' of new regs that are due to take effect over the coming year? We get a perspective from Susan Pomerantz, senior director of global trade management consulting with customs broker Livingston International. She runs down all of the new initiatives on food safety, customs automation, security and other aspects of trade compliance.

Will we ever get rid of those dreaded spreadsheets? In a recent survey by Logility and APICS, 47 percent of respondents said they were still using manually produced spreadsheets to support their demand-planning process. Change is tough in any organization, and it can be a challenge to convince planners to give up something that's worked so well for years. But there's evidence that spreadsheets today ''could be sabotaging your supply chain,'' says Karin L. Bursa, vice president of marketing at Logility. She oversees the company's strategy development and marketing programs for Logility Voyager Solutions, the company's suite of supply-chain optimization software. Bursa talks about how spreadsheets are holding companies back from engaging in critical activities such as the creation of multiple planning scenarios and ''what-if'' evaluations. Time to get out of the ''firefighting'' mode, she says, and into proactive management of demand planning – to the point where marketers can even begin to shape demand.

If you're a supply-chain executive, there's a good chance that the next tsunami, hurricane, flood or other disaster will take your organization by surprise. Again. For all their talk of the importance of good risk management, companies just can't seem to tackle the issue effectively. In a survey by the American Productivity and Quality Center (APQC), 83 percent of respondents said they were caught off guard by an unexpected supply-chain disruption in the prior 24 months. What's going on here? Two APQC experts– Andrea Stroud, research program manager for supply chain management, and Mary Driscoll, senior research fellow for finance and risk – join us to offer a perspective on the global risk-management landscape. They outline the scope of the problem, then propose a number of concrete solutions.

What's really going on in Chinese factories? Founded in 2000, China Labor Watch is an independent organization dedicated to monitoring labor conditions in Chinese factories producing a wide range of consumer products. Over the years, the group has uncovered multiple instances of labor abuse, insufficient wages, safety and health violations, and poor living environments. It relies on undercover informants to disclose the practices of factory management. Program coordinator Kevin Slaten talks about how China Labor Watch operates, what its investigations have revealed, and whether conditions are really getting better, at a time when factory wages are on the rise.

How is your demand forecast like a tabloid psychic? Their record for accuracy is just about the same. Rob Byrne, chief executive officer of Terra Technology, says big consumer-products companies typically have an average weekly forecast error of more than 50 percent. He joins us in this episode of the podcast to explain why. Byrne lays out all of the challenges that affect the retail forecast: corporate silos, individual bias, old technology and the massive number of SKUs that have to be tracked, to name a few. He also introduces the concept of demand sensing – a technique he says can help to improve the forecast, although no company will ever get it 100-percent right. Get used to it.

Does commercial shipping have to be a matter of life or death? Pirates continue to plague the international shipping lanes, and while vessel seizures off the coast of Somalia are down, they're multiplying in other parts of the world. Martin Murphy, senior research fellow at the Center for Foreign Policy Studies at Dalhousie University, is one of the world's leading experts on maritime piracy. In this episode, he discusses where the most serious threats are today, and critiques the various strategies that are being deployed to protect ships against hijacking. He also addresses the controversy over whether ships should carry armed guards to stop pirates from boarding, and whether shipowners should pay huge ransoms to free their crews from captivity.

All hail the omni-channel. But how can logistics providers possibly keep pace with an explosion in the number of delivery points within a city that must be served? Bob Farrell, president and chief executive officer of Kewill, has an innovative proposal. He'd like to see the construction of shared logistics centers, occupied by multiple service providers, feeding shipments into retail stores and private homes located deep within urban centers. It's one way to combat the gridlock that can only get worse as cities continue to grow, and consumers demand same-day delivery to the doorstep. Listen to Farrell's idea about how we can combat a problem that gets ''worse and worse, day by day.''

It's supposed to be a trade dispute between the U.S. and China over solar cells. But that's not the real story. What's more interesting is the way in which the Commerce Department determines whether imports are being ''dumped'' in U.S. markets. The formula might be based on prices in countries that have little or nothing to do with the matter at hand. It all comes down to whether or not the exporting nation in question is considered a ''market economy.'' And that decision is often more political than economic in nature, according to attorney William Perry, a partner in the trial department of Dorsey Whitney. He talks about the trade tensions that are simmering below the surface of relations between the U.S. and China, and offers his view on how the system should be improved.