ADR

In this three and a half minute podcast (download iPod compatible, 19MB), Bill outlines four lines of business that ADR, North America, intends to grow in the coming twelve months. Currently, ADR North America is experiencing 20% growth and seeing a whole new category, interim management, emerge based on customer demand. Interim management is a service where ADR provides clients with short term executives to fill a temporary skills gap. Bill believes that he can tap into a ready supply of high quality human capital that will allow him to provide these services.

He also believes that there will be more work in low cost country sourcing. Right now, the focus is on Asia, but that focus will shift as Asian suppliers move more into the middle class and other regions supplant them in cost leadership.

In this 6 minute segment (download iPod compatible, 28MB), Bill Michels of ADR applies an analytic perspective to global sourcing. There are really two benefits to offshoring: (1) Gaining expertise unavailable in your home country, for instance, outsourcing tooling from the United States; (2) Gaining an advantage in labor.

Material and capital investment are essentially the same across countries. However, you are adding coordination and travel costs. You are also adding risk of falling afoul of regulatory requirements since the offshore company may be under a different regulatory regimen than you experience in your home country. Finally, the benefits of offshoring might be superseded by simply automating the process.

In this thirteen minute podcast (download iPod compatible, 68MB), Bill Michels and I continue our conversation regarding how ADR North America fills gaps in the supply chain training market. An important theme of the conversation is that the training market place is starting to look for Return on Investment (ROI). ADR North America addresses the need for ROI in several ways:

• They perform an initial assessment over the Internet to determine where skill gaps are according to their pace model of purchasing management.
• They then target individuals with the highest skills gaps.
• Training is delivered both face-to-face and through elearning modules. Companies like the initial training to be face-to-face with elearning as a refresher and for new hires.
• ADR focuses its courses on projects that the company actually faces.
• ADR then provides counseling to individual trainees.

The total intended effect of this package is to increase the skill levels of employees so that they can meet the challenges that the company actually faces.

In this nine and a half minute podcast (downlaod ipod compatible, 47MB), Bill Michels, CEO of ADR North America, explains ADR's pace model of supply chain management. This conversation sets the stage for a series of segments on how ADR helps foster innovation in the supply chain.

The pace model might be thought of as a framework that helps identify the different phases a company might experience in managing its supply chain:

• Price drift: The supplier is increasing its price to the purchaser but experiencing relatively stable costs. The supplier is capturing all of the value in the difference between what it charges and what it pays.
• Price down: The purchaser starts to demand back some of the surplus from the supplier.
• Cost down: The purchaser and the supplier start to cooperate in getting the supplier's cost down so that they can continue to make margin.
• Cost out: The purchaser and the supplier move to radically rethink the supplier's offering to continue to get cost out of the product for the purchaser.

As might be apparent from this description, different skill sets are required at the different phases. In our next segment, Bill describes how ADR developed an assessment tool for diagnosing whether companies have the right skills for the stage they are in. In a later segment, we'll talk about how offshoring can complicate the picture, particularly in the later, strategic stages of the relationship.