Supply Chains in Advanced Markets Should Become More Agile, Says Atradius

Atradius, a consultancy specializing in trade credit insurance, surety and debt collections, maintains that the global economy has continued to gain momentum over the past months, with a 3.1% expansion projected for this year.

Higher inflation, falling unemployment, and strengthening Purchasing Manager Indices (PMIs) all suggest higher GDP growth in advanced markets.

Atradius analysts observe that the U.S. economy leads this trend while the recovery in the eurozone becomes increasingly entrenched. The outlook for emerging markets is also brighter, as Brazil and Russia are emerging from recession, and access to finance remains favorable. While the global economic outlook is more robust than in previous years, political uncertainty remains a downside risk to stability.

However, the main challenges to the global outlook – the threat of deflation, negative bond yields, austerity, and low commodity prices – are slowly phasing out.

Global trade is supporting this recovery. After a 1.3% expansion in 2016, trade growth (12-month rolling average, y-o-y) has picked up to 3.3% as of July 2017. The stronger-than-expected expansion is being driven by intra-regional trade flows in Asia and strong import demand from North America.

Despite political uncertainty, most high-frequency indicators point to sustained growth: the global composite PMI posted held steady at 54 in September, pointing to a solid and stable rate of expansion. This has motivated some dramatic upward revisions of trade growth forecasts in 2017. The WTO raised its 2017 forecast for merchandise trade growth to 3.6% from 2.4%.

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Microsoft Reinvents its Supply Chain by Leveraging SAP Ariba & Intrigo Systems

Microsoft Corp. has one of the most complex supply chains in the world.

And to keep it humming and ensure supply keeps up with demand for its hottest products, the company is reinventing its supply chain.

In a newly released Webcast (watch the video above), the company discusses how it is teaming with SAP Ariba and Intrigo Systems to create a scalable, modern platform to support the efficient, cost-effective manufacturing of its most popular products, including the Xbox and Surface.

“At Microsoft, our mission is to empower every person and organization on the planet to achieve more. And our strategy to achieve this is to build best-in-class systems and platforms and productivity systems,” said Ali Khaki, Principal PM, Supply Chain Engineering, Microsoft.

“When we looked at our supply chain, it was clear we needed to build a flexible, scalable platform that could support the complexity of our hardware business.”

And it is using SAP Ariba solutions for direct spend to do it.

“The Ariba® Network is the backbone for Xbox and Surface line of products supply chain,” Khaki said.

Through the Ariba Network and the cloud-based applications delivered on it – including SAP Ariba Supply Chain Collaboration™, Microsoft has created a modern platform from which it can safely and easily collaborate with multiple tiers of contract manufacturers and suppliers across key supply chain planning and execution processes, including:

  1. Sharing production forecasts, orders, quality, and inventory information.
  2. Anticipating and resolving supply assurance problems.
  3. Onboarding suppliers.

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Real-Time Supply Chain Visibility & Connectivity

Through the rich integration of experienced supply chain professionals, world class technology, and customer insights, C.H. Robinson is reinventing global supply chains by making them more prescriptive, automated and efficient.

Navisphere Vision continues to advance the powerful and proven capabilities of C.H. Robinson’s proprietary Navisphere technology platform.

Microsoft, an innovator in fulfillment and logistics capabilities and a customer of C.H. Robinson’s TMC division, has been using Navisphere Vision since its alpha release in 2016.

“Navisphere Vision helps us understand the things that we couldn’t before. It provides the visualization that connects data and the real-time events that are happening within our supply chain,” said Alaina Hawkins, senior manager of global logistics at Microsoft.

“Navisphere Vision helps us make decisions on a more precise, real-time level so we can address any challenges that might occur, react in a less randomized fashion, create predictability throughout our supply chain, and increase collaboration so we can deliver our products to customers on time. It’s tremendously powerful.”

In addition to providing real-time visibility down to an SKU level, Navisphere Vision delivers insights and impacts of potential disruptions from weather, traffic or current events, as well as predictive analytics to help shippers make better, faster decisions.

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Google and Wal-Mart team up to combat Amazon in retail supply chain shake-up

Google has teamed up with Wal-Mart in its biggest even retail partnership to challenge Amazon in the online shopping marketplace and combat the proliferation of its Alexa-powered Echo device as a means of facilitating voice shopping.

The move is expected to have a significant impact on the retail supply chain within the United States as well offering customers a whole new way of purchasing goods.

As Forbes analyst Kevin O’Marah puts it: “It signals an acceleration in the shift from store-based retail supply chains to a hyper-personalised, smart consumer supply chain.

“The dynamics of this new supply chain will be brutal for consumer brands accustomed to shelf-centric demand.”

The new partnership marks the first time that world’s largest retailer is offering products outwith its own website in the US. It announced this week that it’s going to offer a huge array of items through Google’s online shopping platform, Google Express, and eventually through its virtual assistant, Google Home.

Wal-Mart is hoping that it can integrate its large network of stores with its digital business thanks to the new partnership.

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Top tips to build a robust supply chain

All businesses need to ensure its goods and services are procured at the lowest cost and meet the company’s needs in terms of timely delivery, quantity, quality, and location.

This is essential in not only providing the best customer experience, but also in ensuring you stay on top of your competitors, as consistency in the supply chain is key. However, the supply chain management world is constantly evolving and it is key to keep pace with both market expectations as well as opportunities.

Choosing and procuring the right technology is just the beginning of the variety of challenges that are present when managing and securing an IT supply chain. Organisations need to ensure effective asset management configuration and deployment are continuing to take shape, while maintaining technology standards and continuity of supply.

Here are some top tips in managing and creating a robust and effective supply chain, with experience and advice from the largest FTSE listed British IT service provider with over a 30-year heritage in IT and information enablement.

Be clear on expectation and deliverables

Many organisations will issue identical performance indicators and market assessment techniques on all engagements they have, irrespective of the technology being purchased or outcome desired by the business.

This is a detrimental approach as nuances and subject matter expertise are unable to be imparted by the partner that could potentially save money, time or actually mitigate risk.

Truly assess each engagement and accurately as well as realistically assess the desired outcomes/output that you wish to achieve, in comparison to work loads and true capabilities of workforces and systems.

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Clarkson University Delivers 17th Global Supply Chain Management Executive Seminar to Corporate Professionals

Earlier this month, Clarkson University’s Global Supply Chain Management (GSCM) program presented its 17th annual Executive Seminar, delivering state-of-the-art education to corporate professionals.

“We are pleased that our executive seminar continues to attract supply chain professionals from several highly respected global companies,” said Professor Farzad Mahmoodi, the Joel Goldschein ’57 Endowed Chair in Global Supply Chain Management and director of the program. “It’s a strong endorsement of the quality of our faculty and the relevance of our curriculum.”

The annual, four-day, on-campus program attracted participants from Amazon, Toyota, Stanley Black & Decker, Xerox, Lockheed Martin, Verizon, Corning, Raymond Corporation, Entegris, Par Technology and Indium.
The participants came to Clarkson from 12 states: California, Colorado, Connecticut, Illinois, Indiana, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York and Ohio.
In addition to lectures by faculty experts, the seminar utilized a highly interactive format that employs team and hands-on activities, including simulations and negotiations exercises. Participants also benefited from networking opportunities with industry professionals and Clarkson faculty.

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Yusen Logistics Opens Logistics Center in Myanmar to Expand Contract Logistics Service

The event was attended by Thilawa SEZ Management Committee Vice Chairman Cho Cho Win; Ambassador Extraordinary and Plenipotentiary Embassy of Japan in Myanmar Tateshi Higuchi; Myanmar Japan Thilawa Development Limited (MJTD) Chairman Thein Han; Mitsubishi Corporation Chief Representative for Myanmar Mitsuo Ido, Yusen Logistics Co., Ltd.; Kenji Mizushima; Yusen Logistics (Myanmar) Co., Ltd. President Yasuhiko Nojima; and Yusen Logistics (Thilawa) Co., Ltd. President Tatsuhiko Saeki.

“This logistics center will be a cornerstone of our logistics business in Myanmar and an important part of our global network including the connection to surrounding countries,” said Kenji Mizushima, President, Yusen Logistics Co., Ltd.

“We can provide full logistics service from this center which has 6,300 ㎡of warehouse space, including temperature control and bonded areas, together with an assembled vehicles yard area. We will contribute to the development of the Myanmar economy by providing high-quality logistics service that meets our customer’s needs.”
The logistics facility is in the Thilawa SEZ in Yangon District, covering an area of approximately 6,300m2 out of a total area of 30,000m2.

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Top 20 Supply Chain Management Software Suppliers 2017

The market for supply chain management (SCM) software, maintenance and services continued its growth in 2016, generating more than $11.1 billion, a 9% increase over 2015 revenues, according to the research firm Gartner.

That total includes applications for supply chain execution (SCE), supply chain planning (SCP) and procurement software. Since the market’s 2% decline in 2009, the market has posted double-digit growth in four of the past six years, according to Gartner. The SCM market is expected to exceed $13 billion in total software revenue by the end of 2017 and exceed $19 billion by 2021, Gartner forecasts, with software as a service (SaaS) enabling new growth opportunities.

“It continues to be a good year for the supply chain overall,” says Chad Eschinger, managing vice president of Gartner. “The Cloud-based segment grew 20%, which is consistent with what we’ve seen in recent years.”

The push for Cloud capabilities also fueled some of the acquisition activity over the last year. Eschinger cites examples such as Infor’s acquisition of GT Nexus, Kewill’s acquisition of LeanLogistics, Oracle’s acquisitions of LogFire and NetSuite, and E2open’s acquisitions of Terra Technology and, more recently, Steelwedge.

“Broadly speaking, we’re seeing cyclical consolidation,” Eschinger says. “For some companies it’s a land grab, for others it’s an effort to add functional and technical underpinnings to go to the Cloud or provide a fuller complement of Cloud capabilities.”

Suite vendors are increasingly inclined to offer end-to-end solutions, Eschinger says, tying in customer relationship management capabilities, replenishment, network design, clienteling and more. In addition to supply chain efficiency, these solutions are also aimed at improving and standardizing the consumer’s experience.

“The Amazon effect continues to wreak havoc in retail and for manufacturers selling direct-to-consumer,” Eschinger says. “Everyone wants real-time visibility into inventory, so data and the associated analytics continue to be front and center for most organizations.”

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What to Expect from the Logistics & Shipping Sectors as E-Commerce Grows Up

Driven by new technologies and e-commerce growth, changes in the global supply chain are expected to impact industrial real estate for the foreseeable future.

Since 2012, Amazon has been aggressively expanding its logistics and shipping services worldwide, disrupting traditional supply chain operators with direct competition for their business.

Chinese “e-tail” giant Alibaba, meanwhile, has deployed technology that cuts into a portion of third-party logistics (3PL) operator profits.

Alibaba’s “One Touch” platform automates export-related services, such as customs clearance and logistics, to make it cost-efficient for small/medium-sized merchants to participate in the global marketplace.

Cyclical and structural factors, including overcapacity in the container shipping industry and greater use of technology in manufacturing, retail and logistics industries, are also disrupting the sector.

Automation and robots are replacing manufacturing, logistics and warehouse workers. A survey by PwC found that 59 percent of all U.S. manufacturers are using robots for some tasks.

A recent report from real estate services firm Colliers International analyzes how these changes are impacting the logistics landscape. The report also looks at the impacts on industrial and logistics properties.

Report author Bruno Berretta, associate director with Colliers International who leads the firm’s pan-European research activities, says that Amazon Prime has entered the logistics market to take control of its supply chain and improve delivery times. He notes that unofficially Amazon is becoming a 3PL service to third parties.

The company is making a big push to establish a logistics network, opening smaller distribution facilities near customers, according to Berretta, who suggests that Amazon is likely to start competing with traditional 3PL services as it opens new markets.

Additionally, Amazon wants to reduce shipping costs, which have a big impact on profits. The Colliers report notes that in 2015 Amazon spent $11.5 billion on shipping costs, which equated to 10 percent of its global sales. By delivering its own goods and using technology to streamline deliveries, the company estimates it would save $3 per package, or $1.1 billion annually.

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New DHL report reviews supply chain real estate

Companies are re-thinking their go-to-market strategies and, as a result, making different choices about how they locate, design and operate their distribution networks.

This has created a new landscape for supply chain real estate, according to a report published by DHL. Global and regional supply chains are changing, as they adapt to the new realities of commerce and competition.

The findings are part of The New Landscape of Supply Chain Real Estate report, which has been authored by Lisa Harrington, President of the lharrington group LLC, in collaboration with DHL.

The report states that while a healthier global economy fuels the demand for supply chain real estate, it is not the only driver.

Four other forces are at work, and they are having a transformational effect on companies’ distribution center networks.

They include:

  1. The e-commerce revolution
  2. Globalization and right-shoring
  3. Mergers and acquisitions
  4. Technology innovation

“The face of global supply chain networks is changing,” said Harrington, author of the report.

“Gone are the days of operating a static real estate portfolio and tweaking it every five to seven years. Business is too dynamic and the stakes are too high.

“The fact is, the way companies manage their supply chain real estate portfolios has morphed from a tactical/operational concern to a strategic differentiator. Supply chains that operate more nimbly and at lower cost don’t just save money. They drive growth.”

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