Here’s this week’s newsletter. It’s hard to believe that we are halfway through May and still no sports to follow. I am going a bit nuts. BTW, my heart goes out to any of you that are doing double duty of work and being home with young kids. That’s got to be really tough.
Summary
Repeating the theme from last week, supply chain challenges and potential actions are becoming clearer. Companies continue to respond and provide new solutions to the pandemic. I am seeing innovative solutions emerge for a) employee “return-to-work” safety monitoring, b) end-to-end supply chain visibility, c) strategies and tools for managing the current supply/demand situations, and d) expense/cost control management actions.
Most of today’s supply chain software tools take advantage of machine learning. The MIT Technology Review link below, highlights that A.I. models are not designed for extreme changes. Automation that is designed to respond quickly, save money, and free up resources, may require a data scientist to adjust the models.
I’ve included a look at the impact of the pandemic on the electronic components market from the just released, Spring 2020 Avnet Supply Chain Navigator. The impact is mixed with automotive and industrial segments experiencing the biggest disruptions.
As promised last week, I’ll continue the focus on expense management with a quick review of common miss-steps that can occur at the executive and even C-Levels of the business. I would appreciate your input on what expense management issues you would like to see me address. As an incentive, after you submit your comments, you will receive the “Expense Management / Cheat Sheet” (courtesey of Art of Procurement), which includes 24 expense control tactics. Use it to spot check your expense control action plans. Thanks in advance for taking the time.
Top Links
“Behavior during the pandemic is messing with AI models” MIT Technology Review, May 14 (6 min read)
A look into AI application limitations during the pandemic
- The pandemic is highlighting the need to build better machine-learning models across many applications.
- More businesses are buying machine-learning systems but lack the in-house know-how needed to maintain them
- Some may need a data science team to connect what’s going on in the world to what’s going on in the algorithms
Impacts of the Global Pandemic on the Electronic Components Sector SCN, Spring 2020, Interview w/ Dale Ford, ECIA (9 min read)
- 16% report a serious or severe disruption, while 46% now see minimal to no impact on their operations or workforce
- Expectations of a demand decline were reported by 72% of automotive electronics respondents and 55% of industrial electronics companies
- Seeing legislation produced in the U.S. to regain control of critical industries such as medical equipment and supplies and pharmaceuticals
- Expect to see similar moves in industrial applications, automotive and telecom equipment
Building an Expense Management Program – Part 2 of 5 Philip Ideson, AoP Podcast (17 minutes) Expense management miss-steps to avoid
- Setting unrealistic savings targets. a) addressable vs unaddressable, b) % under spend management, c) contract conditions, d) savings leakage
- Determining arbitrary, category savings targets rather than taking into account specific market conditions
- Sending a letter to all suppliers with a demand for a certain percentage reduction or cash rebate
- Taking actions that do not have alignment and buy-in from key internal stakeholders
- Losing sight of your medium to long term goals.
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Best regards,
Don
Don K Brown
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