The Chartered Institute of Procurement & Supply (CIPS) has launched a free online tool to support procurement and supply management professionals and those with an interest in buying to develop resilience in their own supply chains.
A CIPS survey in 2016 of 900 professionals revealed a growing awareness that unmitigated risk can have disastrous consequences for companies in terms of revenue and impact on margins.
Of those surveyed, 46% ‘sometimes’ have mitigation strategies in place and yet 52% expected the same level of service from their suppliers in the event of a disruption.
The Risk and Resilience Online Assessment Tool helps procurement professionals to identify where specific risk exists in their supply chains in seven key areas:
- Geographical. Restrictions on commodities or trade tariffs can have devastating effects on supply chains along with environmental concerns and reputational damage.
- Functional. Poorly conceived strategies and poor systems controls can make critical parts of the supply chain high risk.
- Performance. Suppliers may be engaging in bad working practices or failing to provide the right product, at the right time, to the right place.
- Technical. An inadequate level of internal security surrounding IT systems could lead to cyber risk and loss of customer, or partner data and loss of revenue.
- Governmental. Actions from governments could influence the movement of goods, with sanctions and embargoes and could affect reputation if found to be supportive of human rights abuses.
- Ethical. Dents in customer confidence will affect revenue streams and reputation, disaffected workforces can produced delayed, poor-quality goods.
- Legal. Breach of laws and statutes will cause delays and issues in supply chains. Diligence is required to ensure suppliers and contractors are also compliant.
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
Share your opinions with us in the comment box and subscribe us to get updates.
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.
- 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.
- 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.
- 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.
- JCPenney.com now stocks four times the assortment found in its largest store by partnering with other brands and manufacturers.
- 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
- JCPenney.com now has one Web experience regardless of the screen: phone, tablet or desktop.
- 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.
- 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.
Express your opinions about this topic in the comment box. Subscribe us to get updates in your inbox.
You may be aware of risks and problems in your own business, but increasingly it’s possible to be exposed to issues by other organizations that you deal with, particularly if you’re buying in IT services.
How can enterprises deal with these threats and ensure that their data and that of their customers is kept safe at all stages of the supply chain? We spoke to Dean Coleman, head of service delivery at service management and support specialist Sunrise Software, to find out.
BN: How difficult is it for larger organizations to manage problems that might occur further down the supply chain?
DC: It can be quite difficult, historically most organizations have a handle on risk in terms of what’s going on in the business, financial targets and so on. But when it comes to IT risks and the supply chain providing IT they don’t have the same visibility. These days IT is everywhere and businesses depend on it so IT problems have a larger impact. The understanding of risk needs to be something that key decision makers are more aware of.
BN: Is this a particular problem when dealing with smaller companies who might not have resources in house?
DC: Yes, from the supplier side of the fence we see that smaller organizations often don’t have the skills in house to deal with security, infrastructure, and so on. They rely heavily on these services but don’t see them as a core part of their business. Because they don’t have the skills and resources they will often turn to third parties to manage these things for them. However, in some cases the third parties also don’t do a very good job, they’ll be providing reactive services rather than the proactive ones that are really needed to predict problems based on risk.
Read more at Managing risk in the digital supply chain [Q&A]
Should you have any questions, please post it in the comment box. Subscribe us to get updates in your inbox.
Using technology to merge supply chain management and revenue cycle departments may help advance cost-to-charge transparency and increase accuracy in terms of managing reimbursement costs. “In most provider organizations[,] supply chain management (SCM) and revenue cycle operations function in silos, occasionally responding to anecdotal evidence to make improvements in the processes linking the two areas,” confirms HSRC-ASU. “Hospitals and health care systems that become proficient in managing the revenue environment achieve strategic advantage by reaching their financial goals and assuring a stream of revenues to support their clinical efforts,” the researchers explain.
According to HealthITAnalytics, supply chain management should be considered as a marathon endeavor, not a short-lived sprint. Successful supply chain involves connecting costs with analytics to enact substantial long term change. Additionally, hospital executives claim non-EHR health IT acquisitions strengthen the supply chain, states HealthITAnalytics.
Consistency is an essential key to ensuring accurate coding and pricing efforts. “Linking the traditional aspects of supply chain management (e.g., strategic sourcing, logistics, and inventory management) to margin management decreases the probability of lost charges occurring,” the researchers state. “Prices should be strategically set to optimize maximum allowable reimbursement. Charge capture processes should be incorporated in pricing strategies in each of the targeted areas,” they add.
HSRC-ACU confirms seven reasons to combine revenue cycle management and supply chain management:
- Increased and more accurate reimbursements
- Strengthened contract negotiations and enhanced contract compliance
- Improved transparency
- Streamlined cross-check utilization of supplies and ease of monitoring supply revenue
- Capturing cost-to-charge data visibility will be smoother
- Billing will be more accurate
- Labor will be wisely utilized and not wasted
Thank you for reading, please do share your opinions about this article in the comment box. Subscribe to get the latest updates in your inbox.
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?
Free ebooks from O’Reilly Media, available on Amazon, look at Big Data disruptive possibilities, emerging architecture, tools, applications, and trends, with a special section on health care.