Tag Archives: resilient

Five tips and five questions to ensure supply chain finance success

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Supply Chain Finance (SCF) can, and should, be a force for good in ensuring much-needed liquidity reaches all suppliers, regardless of their size and meets the objectives of buyers.

However, many suppliers, particularly SMEs, struggle to access necessary working capital, and buyers lack the motivation to set up or expand these programmes.

Wayne Mills, founder and managing director at Atom Advisory, shares his top five tips for buyers and five questions for suppliers to ensure SCF fulfils its potential to accelerate growth and underpin robust supply chains.

Five tips for buyers thinking about Supply Chain Finance

The importance of building and maintaining resilient supply chains has been well-understood for decades, but COVID-19 brought into sharp focus the need to reassess and reimagine supply chains, including supplier relationships.

The importance of building a resilient supply chain has been known for decades, but the impact of COVID-19 highlighted the need to reassess modern supply chain structures.

These five tips are a good starting place when setting up or expanding a SCF programme.

1. Define the programme objectives

2. Ensure business-wide stakeholder engagement

3. Actively support supplier understanding and onboarding

4. Review the changing external landscape

5. Align physical and financial supply chains

 

Five questions for suppliers to ask themselves

Whilst certainly not true in all cases, there is often an imbalance between the size and financial strength of buyers and suppliers. Careful consideration and individual assessment of SCF can deliver significant benefits to suppliers, but these five questions can help ensure positive outcomes.

1. Which buyers run a SCF programme?

2. Is SCF the right solution for me?

3. Is my working capital optimised by using SCF?

4. What is the best use of my time?

5. Which solution offers the most flexibility?

 

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Resilient Supply Chains in a Politically Uncertain World

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Resilient Supply Chains in a Politically Uncertain World

Resilient Supply Chains in a Politically Uncertain World

The Resilient Supply Chain

Today, the supply chain world iterates faster than at any other point in history. Disruptions – whether related to climate change, trade wars, or a no-deal Brexit – are a given, and black swan events aren’t surprises anymore. We know that the next event is coming fast and supply chains will have to react. So why have we not burned that understanding into our business DNA? Why are we still trying to leverage strategies developed 50 years ago and technologies unaligned to today’s needs?

What I mean is that every supply chain, everywhere, should be prepared at a moment’s notice to shut down, pivot, and spin up whatever operations it needs to, wherever it needs them. I’m of the strong opinion that if supply chain professionals reframe their thinking and look at uncertainties as opportunities then they will thrive. This thought came to me while reading an article on US trade disputes with China, or maybe it was an article on Brexit.

While I understand how conflicts arise, I have a hard time accepting why they are as adversely impactful to supply chains as they are. Contingency planning should cover for every possibility, and the overreliance on any single supplier or region is not smart business anymore. If the year was 1492 or 1839 or 1979, I could understand the desire to optimize a linear supply chain. That’s not the case today. With the advent of cloud technology and the reality of global markets – fallout from any one country’s instability or trade war can be mitigated.

Three Legs of a Resilient Supply Chain:

  1. Availability: For systems to work they need to be ON. As long as power and cloud servers exist, then a supply chain cannot be existentially threatened.
  2. Operational Flexibility and Configuration: Facilities available on a single network eliminate siloes and allow for customized configuration.
  3. More Control: Control is based on visibility, on knowing and seeing exactly where inventory is all the time.

What About Lost Goods?

Declare them lost, minimize losses, and deal with the repercussions.

Over the last two generations, western economies relied on an uncompetitive market to produce goods. Since 2010 the world has effectively been relying on an industrial monopoly.

It may have seemed like a good idea to rely on a single, cheap source of manufacturing fifty years ago. However, by choosing this path, countries damaged their own manufacturing economies.

They also exposed themselves to the exclusive possession and control of that same, supplier. That’s when the system naturally started to collapse. And that’s when the world began to see price-fixing and currency manipulation, among other signs of deterioration. What would you do if you ran a monopoly?

A dearth of suppliers is what companies are now contending with. There is no easy way out.

Read more at Resilient Supply Chains in a Politically Uncertain World

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The Impact of Hurricanes on Transportation and How to Build a Storm Resilient Supply Chain

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This report looks at data before and after Hurricane Harvey in August 2017 and dives into the true cost and volume impacts experienced by logistics customers; it also shares advice on how shippers can prepare for another 2018 challenging storm season.

Hurricanes have massive impacts on transportation capacity and spend.

To better understand true cost and volume impacts, Zipline Logistics evaluated a sample of 33,000 shipments, comparing data prior to the 2017 Tropical Storm Harvey with data after the event.

Access the full report and keep reading this post for the advice you can use to prepare your supply chain for the next tumultuous storm season (Note: the Atlantic Hurricane season runs from June 1 through the end of November.)

Hurricane Impacts on Transportation

We leveraged our KanoPI shipper intelligence platform to dig deep into hurricane impacts. Here’s what we found;

Market surcharges due to hurricane activity were the costliest of added fees in 2017 with a total cost of $673,000.91.

Data shows that the Average Cost Per Load after the 8/26 hurricane went up by $159.58, or 11% and that the Average Cost Per Mile increased by 15%.

915 fewer loads moved after the hurricane (date of 8/26/2017) when compared to previous four-month period. This tells us that people were holding on to shipments that would typically have moved into key areas like Florida, Texas, and surrounding states.

Looking specifically at Florida, there was an 8% drop in volume and 3.4% drop in spending. This shows that for shipments still moved, rates were higher.

Hurricanes brought prolonged delays. Looking at the data, we can see that average transit days went from 2.65 to 2.95, which is an increase of 10.17%.

Read more at The Impact of Hurricanes on Transportation and How to Build a Storm Resilient Supply Chain

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