E-letter: Interesting times

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The ancient Chinese curse, “May you live in interesting times,” is not an ancient Chinese curse, after all. But don’t you think it should be? I mean, after the past two weeks you can say these times are nothing if not interesting. And they weren’t all that helpful.

Kerry Knudsen

Let’s take a look at the coronavirus. The media and governments are all-a-twitter over the virus, its spread, its mortality rates, etc., but there is another significance for family owned businesses in Canada. You might go broke.

These pages in the past have been critical of the nouveau, flash-bang idea of Just-in-Time (JIT) production. As we have said, it is granted that a penny saved is a penny earned, a stitch in time saves nine and waste not; want not. Efficiency is not a new idea or a bad idea. It’s just that a whole generation of “consultants” by now has dined out, spoken up and cashed in on ideas that are not really that new or advanced. They just took them to an absurd level.

Our main caution back when we addressed this topic was in the vulnerability of a just-in-time supply chain in an environment where the producers were small, their output based on tight margins and their competition tough. Our reasoning at the time was that labour outages, border stresses and natural disasters would put the chain to the test, that producers would run out of supply inventories and that customers, also under time stresses, would look elsewhere.

One of our associates runs our circulation and IT from Hong Kong. I’ve known Adrian from Omni Data Services for over 20 years — long before he made the trek from Toronto to Asia — and he remains the best in the business so we stick with him. Adrian mentioned that surgical masks had become a gold standard in Hong Kong, and had become unavailable.

I resolved to help out, so I tried to order a bunch from here. Why not? Canada is the land of plenty-and-then-some, eh? Well, my request was rejected. There are no quantities of masks in Canada, the U.S. or Europe.

Why not? They are all made in China, and China has blocked all exports. So much for JIT. I hope you’re not having a knee done in the next six weeks. On a more business-like note, you are likely looking at extended shipping times for adhesives, coatings, completed products and other supplies over the next little while, which will likely affect your P&L. We don’t get paid for work we don’t complete.

 

Our likely response after this is over will be to go back to business-as-usual and hope it doesn’t happen again, which is a worse curse than living in interesting times. It’s creating interesting times when we don’t need to.

One obvious resolution would be to create a back-up, duplicate supply chain. (And no, redundancy is not a new idea and we don’t need any speakers consulting on it.) But redundancy has a cost. Let’s say you set up a duplicate supply chain for widgets in Venezuela. Like China, Venezuela is a communist dictatorship and can supply free labour. (Yes, I’m being sarcastic. Free labour seems to be what we require, irrespective that we won’t say it.)

The problem with your Venezuelan redundancy is that it has to be at work. You can’t simply gear up a supply line the day after China gets the flu. The duplicate plant has to be producing product concurrently so it can pick up the slack when China goes down. Since you can only consume so many widgets on a shift, that means to keep the Venezuelans busy you have to cut back your orders with the Chinese. And that creates interesting times. It appears Apple will solve its supply chain problems by just having people work when they are sick, so that may be an option (still sarcastic).

There is a fascinating story about how China used its invasive access to people’s cell-phone records, matched with their GPS readings, to identify, isolate and suppress the virus with AI and big data at https://asiatimes.com/2020/03/china-suppressed-covid-19-with-ai-and-big-data/. Being a communist dictatorship has its benefits.

Speaking of interesting times, the brief flight of the Bloomberg was one to behold. Of all people on earth, Michael Bloomberg knows and respects the power of advertising. He has made himself very, very rich on advertising. As an aside, I am not very, very rich, and I, too, publish a business magazine. Something, here, is not fair. I am still quite short of $68 billion US, and it has to be the fault of the advertisers. As reparations, I suggested to Lee Ann that I set up a GoFundMe page, but she said, “Why don’t you just forget it?” Interesting question. I’m working on it.

So Bloomberg sank somewhere between $500 million and $1 billion US into advertising himself, and he accomplished the most visible, most excruciating, most expensive and most telling political face-plant in the history of American politics. And they have had some doozies.

 

So what happened? It can’t be that advertising doesn’t work, because it does. Bloomberg knows it does, and he leveraged his knowledge and his resources, but fell flat.

Like JIT, I figured this would not work. It won’t work for the same reason Wood Industry and Bloomberg Business News DO work. (Nice to see those two titles keeping company, eh?) People will do anything for the right information. They will also do anything to people that try to play them for fools.

So Bloomberg, enchanted by the bright, shiny objects created by the consultants and seminar-givers on the ancillary products surrounding publishing, drank the Kool-Aid instead of selling it. Instead of sticking with his core business of business publishing, he hired legions of “influencers.” If you don’t know what influencers are, look it up on Google, for lack of any remaining credible lexicon. My definition of an influencer is “pajama boy.”

I got irked with the idea of “influencers” a few years ago, approximately 68 seconds after the first time I heard it. I did not find it “interesting.” I found it fraudulent. In fact, I even asked you, the “market” who you thought is the most-recognized personality in the entire industry in North America in our annual survey. Granted, the question was tongue-in-cheek, but the responses were real people, and over 90 percent of you said it’s me, with Mike Holmes running a distant second. Influencers R Us.

Bloomberg took himself too seriously, and he took his audience too lightly. He forgot that buying ads is not a matter of broadcast minutes, “native content,” influencers or unique page views. It’s a matter of connecting with an audience and sharing valuable information – stuff people want to know.

If you want to know how to make reparations for the advertisers’ slight in not giving me $68 billion, don’t feel you need to pay it off in one lump. Anything is appreciated, and I’ll let you know how to send it as soon as Lee Ann will let me.

In the interim, watch for our next issue. It’s coming soon, will have actual, original, relevant content, will have ads from people that actually know what you’re doing and what you need without Chinese espionage and I am not running for president. Yet.