A Case Study on Leveraging Supply Chain Risk Management Solutions to Drive Revenue for a Leading Consumer Packaged Goods Firm

SpendEdge, a global procurement intelligence advisory firm, has announced the release of their new ‘supply chain risk management study on the consumer packaged goods industry’. A well-known consumer packaged goods company with a considerable number of manufacturing units spread across economies was facing difficulties in identifying the potential opportunities in the market. The CPG sector client wanted to leverage the use of supply chain risk management solutions to achieve a more robust supply chain network. The consumer packaged goods client was also looking at devising an effective risk treatment plan including measures to protect the supply chain.

According to the procurement analysts at SpendEdge, “The CPG industry acts as a foundation for the modern consumer economy as it drives not only huge amounts of money into other businesses like retail and advertising but also generates a massive portion of the gross domestic profits (GDP) for countries across the globe.”

In the consumer packaged goods industry, leading firms are looking at leveraging the use of supply chain risk management solutions, as it helps them integrate several previous or ongoing initiatives, including those for business continuity and supply-chain security. Our supply chain risk management solutions assist clients in the consumer packaged goods market space to align their risk management strategies with supply chain risk exposure.

The supply chain risk management solutions offered by the experts at SpendEdge helped the consumer packaged goods client to monitor the complete process, starting from risk analysis and risk evaluation through risk management and right up to residual risk control. This helped the CPG sector client to achieve productivity and avoid sales losses.

Read more at A Case Study on Leveraging Supply Chain Risk Management Solutions to Drive Revenue for a Leading Consumer Packaged Goods Firm

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How to Measure Supply Chain Performance

The appropriate metrics to manage and measure the success of a company’s operation vary significantly by industry, by individual company, and by the scale of the business. What does not vary, however, is the universal need of all companies to employ a well-structured, hierarchical framework to organize and manage their metrics.

The absence of a cohesive framework to house metrics greatly increases the likelihood that a company’s performance measurement system (PMS) will provide inadequate management support, and that resources will be wasted developing duplicative, unaligned and even conflicting metrics.

There are a number of well-known models and frameworks for operations, logistics and supply chain management. Two of the most prominent are the SCOR model and the Balanced Scorecard, and the interested reader is referred to these.

Figure 1 depicts an integrated hierarchical supply chain performance measurement system. The framework contains three levels (the strategic, tactical and operational), and within each level, it has both external and internal measures. In this PMS framework, it is the scale of an operation or activity that a particular metric monitors which determines its place in the hierarchy.

Figure 2 provides additional insight on how this hierarchical PMS framework works, displaying sample external and internal metrics for a distribution organization at each level of the hierarchy. The external metrics measure outputs and/or services that flow across the supply chain and evaluate some aspect of serving the customer. The internal metrics have an “inward” focus; and as shown in Figure 2, they evaluate how efficiently the overall distribution organization and each of its sub-functions operates.

Read more at How to Measure Supply Chain Performance

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Making sure it’s business as usual, whatever the weather

The UK was recently subjected to an extreme cold spell that saw widespread disruption across the UK. Dozens of rail services and flights were delayed or cancelled, thousands of schools were closed, a raft of homes were left without power in certain parts of the country and many people struggled to get to work in the snowy and icy conditions.

This short spell of disruption would have come at a cost to the UK economy, but in reality we should be thankful we’re not subjected to the extremes of weather that can impact other parts of the world. Anyone remember the scenes we saw on our TVs in the wake of Hurricane Irma in the Caribbean and Florida? In addition to the devastation caused to thousands of families’ homes, businesses were left in turmoil too. Florida, for example saw the price of its diesel soar and shipping and trucking capacity was severely limited in the region. It is estimated that the economic cost of the storm which has caused significant damage to homes, businesses and crops could be as much as £227bn.

The knock on effect of the storm’s impact is still being felt, especially for any businesses with suppliers based in the storm-damaged regions. This event highlights the increasing risks businesses face when they have a supply base in a region that could be affected by adverse weather or other environmental factors such as earthquakes, or volcanic eruptions.

No matter where in the world your critical supply base is located it is essential that businesses ask their suppliers the right questions from the start of their relationship. Even with non-business critical purchasing activity, adopting a proactive approach to on-boarding/supplier evaluation and supplier contracting means that you can assess your suppliers and ask questions about disaster recovery, insurances, and best practice around handling large scale environmental events from the outset. Sounds obvious, but it’s very easy to overlook this line of questioning, especially if purchasing is being done on a decentralised basis.

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Four Steps to Building a Global Chain Risk Management Platform

Be proactive – and significantly reduce global supply chain risks, discover the 4 steps to building a global supply chain risk management platform in a white paper from Avetta.

A global marketplace presents a complex set of challenges, especially when attempting to maintain a safe and sustainable working environment for your employees, contractors, and suppliers.

A minor detail, if left unresolved on the front end, can explode into a financial or operational disaster.

But the implementation of a world-class risk mitigation solution can save time, money, and even lives.

It’s critical to have the plans, resources, and technology in place that verify credentials, measure financial stability, and encourage sustainable business practices.

A proven supply chain risk management partner can ensure that your program is configured efficiently, intuitively, and effectively.

Save your business from negative impacts to its revenue and reputation by taking the right steps to minimize global supply chain risks.

In this white paper from Avetta, you’ll learn the keys to successfully managing your supply chain, protecting it against avoidable situations, and recovering from unforeseen disasters.

Find out how to better equip your business to prevent:

  1. Incidents caused by under-qualified or untrustworthy contractors or suppliers
  2. Injury to employees, contractors, suppliers – and the obligation of medical expenses associated with them
  3. Direct costs such as damaged goods and materials, machinery repair, and insurance deductibles
  4. Indirect costs including revenue loss from brand damage, employee and supplier down time, production delays, and fines

Read more at Four Steps to Building a Global Chain Risk Management Platform

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6 Ways Quality Can Strengthen Supply Chain Profitability

To thrive in today’s competitive global business environment, manufacturers must have a top-to-bottom quality-oriented approach that infuses innovative thinking into every part of the supply chain in order to deliver world-class performance through products, processes and people.

Some promising news, according to a recently published report by Forbes Insights and ASQ, is that senior executives and quality professionals see a direct connection between the success of their continuous improvement initiatives and the success of their organizations as a whole.

The Forbes Insights/ASQ research surveyed 1,869 executives and quality professionals from around the world and focused on the links between quality efforts and corporate performance, as well as the evolving business value of quality and its relationship to the supply chain. Thirty-six percent of enterprises surveyed said that they regard themselves as an established quality organization, while 39% reported that they are still developing their quality programs and 25% said they are struggling to implement quality in their companies.

For those organizations that do have established quality programs, more than half say their initiatives already encompass a range of key corporate functions, including operations and supply chain management.

This focus on quality for the supply chain is especially crucial when one recognizes that supply chain management is often motivated to achieve the least cost when identifying and qualifying new suppliers. Supply chain leaders are often rewarded for these cost-savings. But then extra costs are incurred once the final product is manufactured and delivered and it is discovered that reworks are required due to the focus on price and not quality.

Read more at 6 Ways Quality Can Strengthen Supply Chain Profitability

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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.

Read more at Top tips to build a robust supply chain

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All in with online, can J.C. Penney get up to digital speed?

I had a few occasions chatting with the IT people of the company in the past few years. They were reluctant to adapt to the on-line trend of the retail market. One year, they wanted to expand their on-line catalog business; the next year, they closed the on-line catalog business and moves the majority of their IT people overseas in the following years. This time, it appears that the new SVP, Mike Amend, hired from Home Depot, is ready to face the on-line retail business challenges.

This article highlights a lot of positive actions for the company to transition itself from a traditional retail business to an on-line one.

  1. Recognizing its market strength: Research from comScore tells Penney that its customers have household incomes of $60,000 to $90,000, and they tend to be hardworking, two-income families living both in rural and urban settings. They don’t have the discretionary income to commit to membership fees.
  2. Last month, Penney added the ability to ship from all its stores, which immediately made about $1 billion of store inventory available to online customers and cut the distance between customer and delivery.
  3. About 80 percent of a store’s existing inventory is eligible for free same-day pickup.
    Last week, it offered free shipping to stores with no minimum purchase. Large items like refrigerators and trampolines are excluded.
  4. JCPenney.com now stocks four times the assortment found in its largest store by partnering with other brands and manufacturers.
  5. More than 50 percent of its online assortment is drop-shipped by suppliers and doesn’t go through Penney’s distribution. Categories added range from bathroom and kitchen hardware to sporting goods, pets and toys
  6. JCPenney.com now has one Web experience regardless of the screen: phone, tablet or desktop.
  7. Its new mobile app and wallet include Penney’s new upgraded Rewards program. Customers can book salon appointments on it. The in-store mode has a price-check scanner.
  8. Penney set out to “democratize access to the data,” so that not only the technical staff could understand it, now dashboards and heat maps allow the artful side of the business — the merchants — to measure such things as sales to in-stock levels or pricing to customer behavior.

Read more at All in with online, can J.C. Penney get up to digital speed?

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How a pharmaceutical supply chain company is taking advantage of the Internet of Things

In 2014, during a routine check from the Ministry of Health in the U.S., it was found that only 55 percent of vaccines were stored and transported in the temperature conditions that ensured the medication maintained its quality. To put that into perspective, every baby born receives vaccines to prevent diseases such as small pox and measles. If only 55 percent of those vaccinations maintain safety requirements, that creates a situation where a majority of babies don’t get the quality dosage and medication they need to protect them from diseases.

To overcome this challenge, organizations are turning to technology. More specifically, the Internet of Things (IoT) is making it possible to ensure the safer transportation and delivery of medications. Dutch pharmaceutical services company, AntTail, is paving the way for building innovative IoT applications that more effectively track the conditions of medications while in transit.

The team at AntTail built an IoT application using the Mendix low-code application development platform. The application collects sensor data from medication shipments to provide information on temperature, as well as send push notifications to patients with reminders on when to take the medication.

One of the barriers for creating IoT apps is the requirement of many disparate technologies. AntTail uses a central router as a hub for all of the sensors, collecting the data when there is a connection and storing the data when there is no connection to ensure that no data is lost. The Router uses Vodafone’s Managed IoT Connectivity Platform as a way to connect to AWS, and has a Java service running that puts the data into Hadoop.

Read more at How a pharmaceutical supply chain company is taking advantage of the Internet of Things

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Transforming Integrated Planning & Supply Chain Processes with Augmented Intelligence Capabilities

In conjunction with the announcement, o9 released an eBook titled, “Who Gets the Cheese?”

Aptly named after one of the greatest business books of all time (Who Moved My Cheese?), this resource details one of o9’s systems for optimally allocating resources across initiatives and brands at consumer goods companies.

Founded by executives, practitioners and technologists that have led supply chain innovations for nearly three decades, the o9 team has been quietly developing a game-changing Augmented Intelligence (AI) platform for transforming Integrated Planning and Supply Chain processes.

The team has deployed the AI platform with select clients, including:

  1. Bridgestone Tires
  2. Asian Paints
  3. Restoration Hardware
  4. Party City
  5. Del Monte
  6. Aditya Birla Group
  7. Caterpillar
  8. Ainsworth Pet Foods

Speaking on behalf of o9 Solutions, Co-founder and CEO Chakri Gottemukkala said, “While executives we work with hear the buzz around technologies for data sensing, analytics, high performance computing, artificial intelligence and automation, they are also living the reality of slow and siloed planning and decision making because the enterprise operates primarily on spreadsheets, email and PowerPoint.”

Read more at Transforming Integrated Planning & Supply Chain Processes with Augmented Intelligence Capabilities

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How can Lean Six Sigma help Machine Learning?

Note that this article was submitted and accepted by KDnuggest, the most popular blog site about machine learning and knowledge discovery.

I have been using Lean Six Sigma (LSS) to improve business processes for the past 10+ year and am very satisfied with its benefits. Recently, I’ve been working with a consulting firm and a software vendor to implement a machine learning (ML) model to predict remaining useful life (RUL) of service parts. The result which I feel most frustrated is the low accuracy of the resulting model. As shown below, if people measure the deviation as the absolute difference between the actual part life and the predicted one, the resulting model has 127, 60, and 36 days of average deviation for the selected 3 parts. I could not understand why the deviations are so large with machine learning.

After working with the consultants and data scientists, it appears that they can improve the deviation only by 10%. This puzzles me a lot. I thought machine learning is a great new tool to make forecast simple and quick, but I did not expect it could have such large deviation. To me, such deviation, even after the 10% improvement, still renders the forecast useless to the business owners.

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