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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Former Microsoft CEO Launches New Tool For Finding Government Data

This Tax Day, former Microsoft CEO Steve Ballmer launched a new tool designed to make government spending and revenue more accessible to the average citizen.

The website — USAFacts.org — has been slow and buggy for users on Tuesday, apparently due to the level of traffic. It offers interactive graphics showing data on revenue, spending, demographics and program missions.

For example, the site prominently features an infographic created to break down revenue and spending in 2014. Revenue is broken down by origin; spending is broken down by what “mission” of government it serves, based on the functions laid out in the Constitution.

It’s a big-picture view of where U.S. tax dollars come from, and how they’re spent. But click on a subcategory and you’re taken to a more detailed, granular view of that spending.

Ballmer didn’t create the site because he was an expert on government data. Quite the opposite, according to The New York Times’ Dealbook.

The Times says that Ballmer’s wife was pushing her newly-retired husband to get more involved in philanthropy. Ballmer said — according to his own memory, as he described the conversation to the Times — “But come on, doesn’t the government take care of the poor, the sick, the old?”

Read more at Former Microsoft CEO Launches New Tool For Finding Government Data

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Supply Chain Resiliency: Developing a Strong Posture

“Typhoon Halong in Western Japan not only devastated regional economics and residents, it also had a significant impact on regional supply chains with an estimated loss of $10 billion in revenue. It impacted 446 production sites and took 41 weeks to fully recover.”

“The severe coastal flooding in NYC, America’s largest city, had an estimated revenue loss of $4 billion, impacted two production sites with a 38 week time of recovery.”

“Chemical spill at an Intel plant located in Phoenix, Arizona resulted in loss of production at two sites taking 10 weeks to fully recover. The technology company and its supply chain partners lost more than $900 million in revenues.”

Too often the latest headlines highlight disasters impacting geographical regions and more specifically supply chain networks. In the past year we have witnessed global disasters related to extreme weather patterns, global terrorist attacks, rising cybercrime, and slowing global economies.

Once again, managers are reminded that our supply chain organizations are increasingly operating in dynamic, uncertain environments exposing these networks to unprecedented risk. According to the British Standard Institute’s 2016 study on supply chain risk, global supply chains have incurred $56 billion in extra costs related to disruptive events. To be competitive in today’s marketplace, our supply chains must stretch across the globe in new and unfamiliar regions which are highly susceptible to disruptive events. These can negatively impact supply chain operations from an operational and profitability perspective.

Operationally, the effects of a supply chain disruption negatively impact service levels as consumers are unable to get the products they demand. A Proctor & Gamble study on inventory availability found that supply chain disruptions resulting in product unavailability results in higher customer dissatisfaction, lower brand/retailer loyalty, and, more importantly, an immediate sales loss of four percent.

In addition to customer service and sales revenue impacts, supply chain disruptions increase overall logistics costs from eight percent to 11 percent due to increases in product handling, storage, and transportation. On the inventory side, supply disruptions require companies to increase inventory investments by 14 percent to offset product non-availability in the affected area, region, or site.

From a profitability perspective, supply chain disruptions have a near and long term effect. Corporate profitability is impacted drastically at the time of a supply chain disruption with the effect extending into a three year period.

Companies who have experienced a disruption event will likely encounter the following impacts immediately: over a 100-percent drop in operating income, seven percent lower sales growth, and 11 percent growth in operational cost. In the three year period after the disruption, companies continue to experience the effects on their profitability with 30 percent to 40 percent lower stock returns resulting in average shareholder losses ranging from $129 million to $145 million per disruptive event.

Understanding the ramifications that supply chain disruptions can have, managers have moved supply chain risk management and resiliency strategies from tactical to strategic level in the company when discussing corporate goals related to consumer satisfaction/service, competitive advantage, market expansion, operational efficiencies, and profitability. The shift in supply chain priority within the company is evident as we have seen the inclusion of c-level supply chain positions, such as chief supply chain officer, included with other corporate executives (e.g. chief executive officer, chief operations officer, etc.) along with board members and shareholders to determine the company’s course of business.

To ensure supply chains continue to keep consumers, suppliers, and the company connected to each other, these networks must be protected from unnecessary exposure to risk and failure due to faulty risk mitigation and resiliency strategies. Companies seek to incorporate use of these strategies to build higher levels of supply chain resiliency which can lessen the impacts of a disruption when it occurs as well as quickly returning the network to normal state. In order to achieve this level and type of supply chain resiliency, companies must proactively review their supply chain risk exposure using an external and internal perspective.

Externally, companies need to review their supply chain area of operations to understand their susceptibility to risks associated with economic market factors; acts of terrorism/war, changing consumer behavior and demand patterns, economic uncertainty, natural disasters, political upheaval, work stoppage, or other types of events which can lead to supply chain disruptions, delays, and inventory loss.

Internally, companies need to review their supply chain network structure to determine how well its resiliency posture can withstand a disruption and quickly return the network to a normal state. This review should include an in-depth examination of company risk associated with its network of assets, policies, people, processes, products, and systems. To conceptually understand how this external and internal review process is conducted, figure 1 below outlines the impacts and interactions these factors have on the success or failure of a company’s supply chain resiliency posture and its ability to return the organization to optimal operational performance.

Read more at Supply Chain Resiliency: Developing a Strong Posture

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7 Reasons to Merge Revenue Cycle and Supply Chain Management

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:

  1. Increased and more accurate reimbursements
  2. Strengthened contract negotiations and enhanced contract compliance
  3. Improved transparency
  4. Streamlined cross-check utilization of supplies and ease of monitoring supply revenue
  5. Capturing cost-to-charge data visibility will be smoother
  6. Billing will be more accurate
  7. Labor will be wisely utilized and not wasted

Read more at 7 Reasons to Merge Revenue Cycle and Supply Chain Management

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