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Executive Insight: Letters to the Editor
Marketers need to know about competitive modeling
Further to your commentary, "Modeling your competitor's supply chain: The untold story" (Supply Chain Executive Insight, February 2010), I have provided network-analysis services for close to 30 years. During the eight years I worked for General Electric, we modeled competitors' and suppliers' networks to identify their service weaknesses and logistics costs. Today [my company] offers to model the "competitor's supply chain" in our sales pitch, which serves to demonstrate our capabilities and experience with analysis techniques. It never fails to impress the potential client. However, this information is more powerful in the hands of marketing personnel who typically are not involved in the project. Do you think your article reached anyone in the marketing department, and if it did, how many will follow up?
The competitor-modeling technique is fun to discuss, but I believe there are more critical issues facing the users of network-optimization applications and services. Namely, the obsolescence of linear optimization techniques in site location and the "back of the envelope" inventory-impact calculations associated with changing a distribution footprint.
– Steven J. Schumaker, President, Core Strategy Design LLC
Delivery by public transit is a viable option
Although I was excited to read your editorial about the return of the courier and the use of public transit for parcel delivery (Supply Chain Executive Insight, May 2010), I was disappointed when I fully read it. Expecting to find some new item about transit usage, such as the parcel trams in Amsterdam or the French postal trains, all I read was stereotypes and myths—particularly the last paragraph. I thought it especially amusing that that very morning I had done what you consider to be far-fetched in the "wide-open spaces" of the United States: I delivered a package to a client via public transit.
This is a practice that is very common here in Chicago and in other cities with decent transit systems. In fact, I deliver packages for my company via transit several times a week. It is faster, cheaper, and more reliable then mailing or sending them via UPS or FedEx, and it is much easier than driving. For example, we recently delivered all of our materials for a trade show via train and bus. Two of us were able to get several cases and poster boards halfway across Chicago within an hour, at a cost of US $5.00 round trip for both of us. And we are not alone; many other small businesses in town do the same.
Europe is not one huge mass of crowded, narrow streets and densely populated cities, nor are the United States and Canada nothing but wide-open spaces accessible only by driving or flying. You might be surprised to learn that France and Ohio have the same population density. The difference is that France has far greater mobility than Ohio, and it has the freedom that comes with having viable choices in travel and land usage.
Please stop spreading the myth that delivery by transit cannot work here. It robs us of the opportunities we desperately need to be competitive in a global market.
– Mark Schwinn, Assistant Executive Director, Midwest High-Speed Rail Association
Be careful when modeling a rival's network
With regard to your article on modeling a competitor's network (Supply Chain Executive Insight, February 2010), the type of truly useful knowledge one could gain from this activity is speculative at best.
Any modeling effort requires detailed data, such as throughput, inventory positions, labor rates, transportation rates, supplier arrangements, etc., etc., etc. These are a far cry from assumptions and/or ratios divined from a 10-K or other published annual report.
At best, you can ascertain a competitor's next-day delivery capabilities based on standard transportation delivery promises from carriers against competitors' known locations. This, in fact, is something that I have done with regularity. However, I warn the recipient of that information that the result is based on the assumptions that all products are in all locations and that expedited freight is not in the competitor's cost/value equation.
I have been involved in a number of modeling efforts, and I can tell you that obtaining good results is difficult enough when you have full access to the data, let alone when you are making large-scale assumptions about a competitor.
– James (Jim) Schultz, Principal, James Schultz and Associates
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