Author Archives: Teddy Nee

Cloud-Based Supply Chain Faces Scrutiny

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Cloud-Based Supply Chain Faces Scrutiny

As the supply chain looks for new tools to manage increasing complexity, as well as a need to manage risk and other variables quickly and proactively, cloud-based solutions, which are relatively underutilized today, will become more common.

What are some of the common misconceptions around cloud computing and supply chain applications?

Supply chain has generally been a very slow adaptor to new technologies, and cloud computing is no exception. Besides data security and ownership, other factors come into play around how the infrastructure would behave in terms of excess volumes and concerns the in-house IT team may have with feeling helpless when it comes to issues around performance, managing downtime, and handling end customer pressures.

Often, lack of management support is cited as a reason for not adopting cloud technology. Why do you think the corner office is reluctant to support these sorts of initiatives?

Not all senior managers have yet to fully understand the implications of moving into cloud. They still look it as a pure cost saving initiative vis a vis the risks and the litigations they may end up facing in case they encounter issues around their data. Managers would like to hear success stories that [demonstrate that the concerns about] data security are all addressed by big product vendors, which are now moving over to cloud.

What are the best ways that supply chain managers can “speak the language” of business leaders to quantify the potential benefit of cloud-based apps for the supply chain?

The ROI of moving to a cloud-based service is very fast. Customers need not invest in capex for their expensive infrastructure, licenses, and upgrades. This can be very easily worked out. Another factor is that often, companies invest in large IT teams and have to constantly manage them – thereby deviating and investing in a division that is not their core business. By moving to the cloud, they can overcome this by maintaining a lean IT team.

Do you have any personal views about utilizing cloud-based system? What do you think are the advantages and disadvantages?

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Risk management in an evolving global supply chain

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Risk management in an evolving global supply chain

The festive season has ended, and the retailers can breathe a collective sigh of relief. Their busiest time of the year means their operations have had to be resilient and robust. The supply chain is at the heart of this and it has been used to plan the Christmas period for months. But what lies at the success of this supply chain and what lessons can be learned?

Managing a supply chain in today’s global economy is fraught with difficulties. Supply chain managers have to maintain a balance of cost, agility, and sustainability, as well as manage the logistics and the manufacturing footprint. All these issues come with their own problems, but overall the trade-off is cost versus risk.

To strike a chord between cost and performance, supply chains have to be inventive. That means essentially going out into new markets, using new local suppliers, and accessing new customers. Invention comes at a cost, as these are new, unexplored areas of risk. So risk management is an important part of supply chain management in a global context.

As organisations strive for new opportunities for a more effective supply chain, so risks are more prominent. Who is that new local supplier? Can they be trusted with your product? The new country you’re now operating from – what are the geographical risks? The political risks? The legal risks?

What have you thought about this topic? Share with us in the comment box and subscribe to get updates in your inbox.

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6 Steps To Supply Chain Risk Management Success

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6 Steps To Supply Chain Risk Management Success

Lean production may traditionally be considered the linchpin that holds successful supply chain management together, but reducing your exposure to risks is becoming a key priority for maritime companies.

Our dependence on, and partnerships with suppliers, whether it be via outsourcing or mitigating stock opens up a whole world of exposure for marine businesses and their procurement teams. That’s why risk management is so crucial to the supply chain.

Navigating risks really is the key to management success. With the global expansion of supply chains comes ever more complicated business structures and so countless issues can arise causing disruption, delays and ultimately money going down the drain.

Both buyers and suppliers can be hit by a number of unavoidable problems. From natural disasters to terrorism or cyber attacks. Each problem can have big effects on both upstream and downstream partners.

So what can you do to mitigate risk?

The best way to reduce exposure is to make sure you and your company keep up to date with developments in the maritime sector. And to follow a few key steps…

1. Choose your suppliers carefully

Conduct audits of your suppliers on a regular basis and if necessary, inspections to make sure they are committed to risk management like you are.

2. Authenticate suppliers’ insurance cover

It’s worth remembering that a certificate of insurance is only evidence of the insurance cover as it was when it was written.

3. Clearly define contract scopes and draft contracts

Be careful when defining contract scopes and draft contracts.

4. Understand the extent of your exposure

How much risk are you and your business exposed to?

5. Put a plan in place

Identifying risks is the easy part, now you have to get an action plan in place.

6. Lower the threat of risk by purchasing the right cover

Making sure your policy covers your company’s specific exposure mix and risk tolerance is important.

Do you have any ideas to add regarding risk management in supply chain? Share your opinions in the comment box or send us a message for discussion.

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Six trends changing the face of supply chain finance

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Six trends changing the face of supply chain finance

Supply chain finance is revolutionising the way companies buy and sell, but its full potential has yet to be realised.

The amount of cross-border SCF conducted today is just a tenth of what could be done say European banks. One reason is the complexity of SCF. However innovations in both developed and emerging economies promise to change that modest uptake in the coming years.

Making SCF easier to use and understand is essential if it is to become the norm in financing global trade. Several trends should speed that process:

1. SCF is becoming widely accepted in cross border trade

Bankers expect the European and US crossborder markets to grow 10-20 per cent a year for the rest of this decade. Already some banks have seen annual growth of 30-40 per cent andin the UK and Germany that figure is closer to 70 per cent, according to Demica.

2. More buyers are financing their suppliers

SCF has traditionally focused more on the relationship between suppliers and their banks. This is changing. New technology is helping buyers use SCF to help their strategic suppliers at better rates than they might find elsewhere, thanks to often higher credit ratings.

3. Non-bank players are emerging as an alternative source of SCF

New entrants, including peer-to-peer lenders, dynamic discounters and early payment marketplaces help buyers and suppliers exchange purchase orders, invoices and accelerate cash transfers. Private investors, financial institutions or even buyers provide funding for these new solutions to invest in their own payables.

4. Providers unite to offer a global service

Fragmented banks are recognising the need to partner logistics companies, local banks, export credit agencies and other transaction banks to offer corporates solutions across the supply chain. That is a change from the more fragmented approach until now.

5. Technology is replacing the paperwork

Electronic documentation is playing an ever greater role in international trade business as corporates automate trade supply chains toimprove speed and efficiency. That means corporates who use a number of banks require them to deliver electronic solutions on a common platform.

6. Countries are getting involved

Governments around the globe are paying more attention to supply chain finance. The UK for instance has initiated an SCF programme with some of Britain’s leading companies and banks. In the US, the Treasury’s Invoice Processing Platform uses electronic invoicing to ensure that suppliers are paid on time or even early.

Do you have any opinions about supply chain finance? Share it with us in the comment box.

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What is the most crucial goal for supply chains?

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What is the most crucial goal for supply chains?

One of the driving forces behind the expansion of business relationships is a mindful effort to reduce risk. This is particularly true in supply chains.

To be sure, the pursuit for lower-cost materials and more efficient logistics are very important to industries of all kinds today. But reliability of supply and precautionary redundancy have prompted firms in industries ranging from basic materials like steel and chemicals to high technology, to establish supply networks across the globe.

Ironically, it’s likely that in going global, companies have not actually decreased their risk profile but actually increased it. Broadening exposures can actually drive total risk higher, either by actual exposure to new perils or simply by making existing risks more difficult to quantify or manage.

That is especially true of global supply chains, through which goods or services often come from countries with low per-capita income, weak regulatory control or where the quality of risk management practices—as well as building codes and standards—are weak or nonexistent. In several memorable cases, retail chains and clothing brands have had to respond to fires and collapses of the factories making their garments on the other side of the planet.

Even the industrialized world is not immune to global risks, as was proven by the earthquake and tsunami in Japan in 2011. Automobiles, car parts, electronics, and many other sectors saw their supply chains disrupted for weeks or even months, prompting them afterward to geographically diversify their sourcing, production and inventory.

What is the most crucial goal for supply chains in your opinion? Share with us in the comment below or send us message for discussion. Subscribe now to get updates in your inbox.

 

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2015 New Year’s Resolutions for the Supply Chain Industry

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2015 New Year’s Resolutions for the Supply Chain Industry

Resolution #1 – Stop using the term VISIBILITY

People say that information is power. I beg to differ. I say, an informed decision is power. The visibility term has been over used. I’ve even heard some say that getting visibility to your supply chain is 80% of the challenge. They must not have run a supply chain. I see many supply chain leaders that have visibility, some in excel and some in automated tools. The ones that don’t have visibility can easily call the supplier and get it. Getting visibility isn’t the challenge. The real 80% challenge is “what are you doing with the visibility?”

Resolution #2 – Read only ONE “Cool Theme” report

In 2015, I resolve to read only one Cool Theme report. I’m tired of research analysts peddling these themes as a means to gain an edge on readership. Yet, I watch the audience during some of these Cool Theme presentations. And, half the people are on their smartphone working core issues back home, while the Analyst is talking about how supply chains should save the Panamanian golden frog, reduce the ozone layer, produce products with plastic wire from 3D printers and generate forecasts from Facebook posts!

Resolution #3 – Stop moaning about Bad Data

Let’s face it, everyone has some form of bad data. And, when you include all your tiered suppliers, they have bad data. The one constant is that you will never fix all the internal and external bad data. Yet, I still hear supply chain leaders say they need to focus first on fixing the data. I’ve seen many presentations from “Top 25” supply chains and how they’ve cleaned data, and why they should be considered a top tier supply chain story.

Resolution #4 – Fix the Disruption you can influence, not the Disruption you are concerned with

There are two types of disruptions. That which you are concerned with, and that which you can influence.

Volatility, regulation, geopolitics, economics, energy, and the list goes on. These are in your Circle of Concern. They happen, and you should be concerned. Yet, many supply chain leaders face fail to focus on the Circle of Influence, the area where you can make a difference.

Resolution #5 – Scrap the Talent Research, Make Planners more Productive

After reading all the Talent Research done in 2014, the topics of attrition, retiring professionals, and university-business alignment, I notice a big gap. The one thing missing in all this Supply Chain Talent research is the concept of being more productive with the talent you already have.

How can every supply chain improve productivity? In every supply chain I’ve seen in my past 25 years, there’s one constant – they all use some form of Excel – mostly to search for exceptions. Planners spend half their day dumping ERP and BI data into Excel, and then search for exceptions.

What are your resolutions? Share with us by leaving comments or contact us for a discussion.

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Elemica Discusses 10 Top Supply Chain “E Lessons Learned” in 2014

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Elemica Discusses 10 Top Supply Chain “E Lessons Learned” in 2014

Elemica, the leading Supply Chain Operating Network provider for the process industries, discusses lessons learned in 2014 that will deliver value to a company’s supply chain, better positioning businesses to champion their marketplace in 2015. Companies that use these lessons learned to implement evolving practices and gather metrics across supply chain processes will capture new market opportunities and mitigate risk, significantly reduce operating costs, and improve their customer service capabilities.

“2014 was a year of economic growth for many industry sectors, yet there is still room for improvement, especially if a company is on a continuous improvement journey,” said Ed Rusch, Vice President of Corporate Marketing at Elemica. “We’ve put together these ‘E Lessons Learned’ from real customer experiences, industry analyst expertise, and our own involvement with peers to help businesses grow and move forward in the New Year.”

  1. Ecosystem – Supply Chains are becoming more of an ecosystem rather than disparate parts, enabling accountability, visibility and agility.
  2. Experience – With customer requirements ever changing downstream, process manufacturers are deploying more sophisticated strategies to keep customer service levels high without resorting to piling on the cost in terms of buffering stock.
  3. Extend – Instead of focusing inward on the company itself, outside-in supply chains put the customer first.
  4. Expectation – Unmet expectations occur when companies attempt to force trading partners to collectively adopt a single standard. Integration across the varied, distributed, and complex needs of thousands of individual trading partners and their respective enterprises, without requiring any of them to change the way they do business, is a reality today.
  5. End-to-End – The process industries are moving away from a manufacturing focus to more of a supply chain view linking supply with demand.
  6. Exponential – The network effect builds when the capability to do more with more makes all the existing participants better off.
  7. Engage – Build better relationships with B2B Social.
  8. Ease – Business Networks enable companies to find common ground with their customers.
  9. Expose – Bring risk and variability to the forefront or expect surprises.
  10. Envision – Master Data Management (MDM) creates a single view of the business.

What have you learn about supply chain in 2014? Share with us in the comment box. Feel free to send us a message for discussion and subscribe to get updates in your inbox.

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THE CHRISTMAS SUPPLY CHAIN: MORE ‘HO HO HO’, LESS ‘OH NO NO’

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THE CHRISTMAS SUPPLY CHAIN: MORE ‘HO HO HO’, LESS ‘OH NO NO’

In the United States the day after Thanksgiving is known as Black Friday. Originally it earned its name because of the disruption caused by the post holiday crowds. Lately, however, Black Friday earns its moniker because it’s the day when U.S. retailers supposedly hit profitability for the year. Falling as it does in late November it’s become the busiest shopping day in the American calendar.

Managing seasons and public holidays is a never-ending task for retailers. If there isn’t a public holiday then there will be a new season starting, or another one wrapping up with a sale.

Of all these special events, Christmas is undoubtedly the most important, and puts enormous pressure on supply chain managers to ensure products are available and that everything moves smoothly through the season. After all, it is the weeks just before Christmas that, in many retail sectors, determine a business’s financial health; John Lewis, for instance, reportedly generates 80% of its annual profits during Christmas period.

The challenges that retailers face during Christmas naturally vary according on the sector and from company to company. For many specialty retailers, having to cope with long lead times, Christmas challenges centre around estimating the season’s demand both well in advance and accurately; not an easy task. For grocers the problem is less about lead times and longterm forecasting but more the sheer volume of everything, which requires careful capacity planning and good execution. Lastly there are those retailers for whom Christmas is a nonevent – in fact, one that might even cause sales to drop as customers spend their pennies elsewhere.

Yet while plenty has been written about the Christmas retail season and pages are devoted to analysing Christmas successes and failures, there’s very little been published about the underlying supply chain challenges. So, to address this deficit, here is an overview of the Christmas-related hurdles that supply chains face, with some suggestions on how to tackle them.
Supply chain problems are generally most readily solved one at a time, by continuous improvement of the process, and not by trying to fix everything at once.

What do you think about this article? Share your opinions below and subscribe to get more updates in your inbox.

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Step by Step Supply Chain Risk Management

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Supply Chain Risk Management Step by Step

Managing risk in the supply chain can be a daunting task. Supply chain managers increasingly realize that protecting their supply chains from serious and costly disruptions. But often they don’t take action, because they are paralyzed by not really knowing how to start.

Zurich’s 2014 Supply Chain Resilience Survey puts some figures on the problem:

  • 73.5% of organizations surveyed said they do not have full visibility into their supply chains.
  • 76% of respondents reported at least one instance of supply chain disruption last year.
  • 44.4% of disruptions originate below Tier 1 suppliers.
  • Loss of productivity (58.5%), increased cost of working (47.5%), and loss of revenue (44.7%) were the most commonly reported consequences of supply chain disruptions.
  • 28.6% reported low mangement commitment to the issue of supply chain resilience.

Taking a step-by-step approach can help. Solid planning, carefully planned and executed, not only reduces risk but also can increase supply chain efficiency, enhancing the organization’s bottom line.

What are your thoughts about risk management in supply chain management? Share with us in the comment box and subscribe to get updates in your inbox.

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Asia Pacific leaders to boost supply chain performance by 10 per cent

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Asia Pacific leaders to boost supply chain performance by 10 per cent

Political leaders in Asia Pacific have pledged to improve the performance of supply chains in the region by 10 per cent by the end of 2015.

At the Asia Pacific Economic Cooperation (APEC) leaders’ meeting in Beijing, China this week, the region’s politicians committed to building capacity and offering technical assistance projects to meet the target. They also welcomed the establishment of the APEC Alliance for Supply Chain Connectivity to support the aim.

A declaration following the summit also called for increased resources for the APEC Supply Chain Connectivity Sub-Fund to be able to meet this goal. A network has also been set up to work on making supply chains more sustainable.

The leaders also promised to implement the World Trade Organization’s Trade Facilitation Agreement, which aims to speed up the movement of goods around the world and details co-operation measures between customs and authorities.

Do you have any opinions about the recent APEC meeting in Beijing? Share it in the comment box and subscribe for updates.

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