Why are global supply chains becoming more fragile?

General Motors recently recalled nearly 4.3 million vehicles with defective software. The bankruptcy of Hanjin Shipping, one of the world’s largest ocean carriers, left half a million containers with $14 billion worth of goods stranded at sea.

Fiat Chrysler recalled 1.9 million vehicles worldwide for possible airbag and seat belt failures. Samsung had to recall a million of its newly launched Galaxy Note 7 smartphones after some devices burst into flames. And in Europe, Volkswagen was forced to shut down production of nearly 10,000 vehicles after a supplier refused to deliver key components.

These examples all point to two worrying questions: are global supply chains becoming more fragile and if so, why?

The above Volkswagen example is a good place to start to find answers and begin to address this issue begins it soon becomes apparent this fragility is itself, the first signs of a major shift for global supply chains.

Inherent imbalances – from single company to ecosystem

The automotive industry has come a long way since Henry Ford’s Motor Company mke everything that went into its product in-house. Today, 75 percent of automotive parts are not designed or built by car manufactures themselves but by their suppliers.

That means that manufacturing a car is no longer the job of a single enterprise. It’s the job of a complex ecosystem of supply chain partners. And VW is no exception. Indeed, any manufacturer of a complex product such as a car, hi-tech consumer electronics or even clothing relies upon its ecosystem of suppliers far more than the manufacturer may realize.

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Why Supply Chains Need Business Intelligence

Companies that want to effectively manage their supply chain must invest in business intelligence (BI) software, according to a recent Aberdeen Group survey of supply chain professionals. Survey respondents reported the main issues that drive BI initiatives include increased global operations complexity; lack of visibility into the supply chain; a need to improve top-line revenue; and increased exposure to risk in the supply chain. Fluctuating fuel costs, import/export restrictions and challenges, and thin profit margins are driving the need for businesses to clearly understand all the factors that affect their bottom line.

Business Intelligence essentially means converting the sea of data into knowledge for effective business use. Organizations have huge operational data that can be used for trend analysis and business strategies. To operate more efficiently, increase revenues, and foster collaboration among trading partners companies should implement BI software that illuminates the meaning behind the data.

There is a vast amount of data to collect and track within a supply chain, such as transportation costs, repair costs, key performance indicators on suppliers and carriers, and maintenance trends. Being able to drill down into this information to perform analysis and observe historical trends gives companies the game-changing information they need to transform their business.

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How Big Data and CRM are Shaping Modern Marketing

Big Data is the term for massive data sets that can be mined with analytics software to produce information about your potential customers’ habits, preferences, likes and dislikes, needs and wants.

This knowledge allows you to predict the types of marketing, advertising and customer service to extend to them to produce the most sales, satisfaction and loyalty.

Skilled use of Big Data produces a larger clientele, and that is a good thing. However, having more customers means you must also have an effective means of keeping track of them, managing your contacts and appointments with them and providing them with care and service that has a personal feel to it rather than making them feel like a “number.”

That’s where CRM software becomes an essential tool for profiting from growth in your base of customers and potential customers. Good CRM software does exactly what the name implies – offers outstanding Customer Relationship Management with the goal of fattening your bottom line.

With that brief primer behind us, let’s look at five ways that the integration of Big Data and CRM is shaping today’s marketing campaigns.

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Managing risk in the digital supply chain

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.

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2016: The Year of Wearable Technology in the Supply Chain

Wearable technology, and the use of cloud software, will become much more widespread across the industry in 2016. The ability to access and input data in real time is the key way in which suppliers will be able to meet the stringent demands of supermarkets.

The adoption of cloud software will be aided by the fact that the price of good quality laptops has fallen below £200, with good quality tablets available for under £50. These prices, which may fall even further in 2016, mean the bar to entry associated with cloud technology in the supply chain has been significantly lowered.

With the ability to put these powerful devices in the hands of everyone, 2015 required us at Linkfresh to think about making core lines of business software available across these devices. That sea change has laid the foundations for what we will see in the industry in 2016.

Supermarkets are pushing suppliers harder than ever, a situation which looks certain to continue throughout the coming year. Dealing with this pressure is the biggest challenge the industry faces.

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Cloud Solutions for Logistics and Supply Chain Management Software

Logen Solutions, a software company that specializes in logistics efficiency software, released CubeMaster Online, a comprehensive cloud solution for logistics and software for supply chain management.

CubeMaster Online is a load plan and optimization software, and palletizing and packaging design software that calculates the optimal loads for pallets, trucks, trailers, and sea and air containers. Companies can help reduce 5 to 20 percent of the trucks or container loads used. This can result in significant time and cost savings for many companies.

CubeMaster Online helps facilitate collaboration with teams working together in distribution areas. This collaboration feature presents logistics, engineering, marketing, management and distribution centers with an easy, efficient way to share and control load planning and execution across various geographical areas.

CubeMaster Mobile provides mobile pages built on HTML 5, which enables connection to any service with any mobile devices. This mobile version is designed to run on mobile devices such as iOS and Android tablets and smartphones.

CubeMaster Web Service is the most recent technology to enable the integration of CubeMaster Online with customer applications, such as enterprise resource planning (ERP), warehouse management systems (WMS) and transportation management systems (TMS) at the application level. It allows the remote applications written by ASP, APS.NET, Java, PHP and SAP to call remotely the application program interfaces (APIs) served by the CubeMaster Online server.

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Have you used the cloud solution for logistics and software for supply chain management mentioned in the article? Share your thoughts with us in the comment box. Subscribe to get updates in your inbox.