New DHL report reviews supply chain real estate

Companies are re-thinking their go-to-market strategies and, as a result, making different choices about how they locate, design and operate their distribution networks.

This has created a new landscape for supply chain real estate, according to a report published by DHL. Global and regional supply chains are changing, as they adapt to the new realities of commerce and competition.

The findings are part of The New Landscape of Supply Chain Real Estate report, which has been authored by Lisa Harrington, President of the lharrington group LLC, in collaboration with DHL.

The report states that while a healthier global economy fuels the demand for supply chain real estate, it is not the only driver.

Four other forces are at work, and they are having a transformational effect on companies’ distribution center networks.

They include:

  1. The e-commerce revolution
  2. Globalization and right-shoring
  3. Mergers and acquisitions
  4. Technology innovation

“The face of global supply chain networks is changing,” said Harrington, author of the report.

“Gone are the days of operating a static real estate portfolio and tweaking it every five to seven years. Business is too dynamic and the stakes are too high.

“The fact is, the way companies manage their supply chain real estate portfolios has morphed from a tactical/operational concern to a strategic differentiator. Supply chains that operate more nimbly and at lower cost don’t just save money. They drive growth.”

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Three supply chain challenges and how to overcome them

The modern supply chain is becoming more complex by the day. Businesses continue to struggle with keeping their supply chain under control but hidden risks still pose a significant threat to the industry. Even with all the new technologies making their way to the industry, businesses must be aware of these hidden risks and understand how to react appropriately.

Businesses of all kinds must keep supply chain visibility, cyber risk and natural disasters in mind at all times. All of these factors or even just one could have a significant impact on a company’s bottom line. In this current edition of the ‘Challenges and Solutions’ series, we will take a close look at the most troublesome issues in the supply chain and how businesses can avoid or plan for these risks.

New technology

Advancing technology is making its way into the supply chain, forcing businesses to constantly change systems. New services that provide an “Uber-Like” freight experience require supply chain managers to constantly hone their talents and adapt to these kind of digital disruptions. Not only with the Internet of Things be transforming the supply chain end to end, the way people utilize technology to create new processes will need to be monitored. The challenge is keeping supply chain managers and procurement professionals up-to-date and trained with all these new advancements.

Finding a solution can be challenging at first. It will take some time for a business to discover the right process that works for them. There is no one answer fits all, rather a unique, business specific training program must be developed. Some solutions may include putting together a team in charge of locating the latest supply chain innovations and coming up with a plan to train the rest of the staff. Others could be outsourced training programs funded by the organization whose employees will be taking part. Continuous training will be vital in order to remain effective in this transforming industry.

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How Big Data And Analytics Are Transforming Supply Chain Management

Supply chain management is a field where Big Data and analytics have obvious applications. Until recently, however, businesses have been less quick to implement big data analytics in supply chain management than in other areas of operation such as marketing or manufacturing.

Of course supply chains have for a long time now been driven by statistics and quantifiable performance indicators. But the sort of analytics which are really revolutionizing industry today – real time analytics of huge, rapidly growing and very messy unstructured datasets – were largely absent.

This was clearly a situation that couldn’t last. Many factors can clearly impact on supply chain management – from weather to the condition of vehicles and machinery, and so recently executives in the field have thought long and hard about how this could be harnessed to drive efficiencies.

In 2013 the Journal of Business Logistics published a white paper calling for “crucial” research into the possible applications of Big Data within supply chain management. Since then, significant steps have been taken, and it now appears many of the concepts are being embraced wholeheartedly.

Applications for analysis of unstructured data has already been found in inventory management, forecasting, and transportation logistics. In warehouses, digital cameras are routinely used to monitor stock levels and the messy, unstructured data provides alerts when restocking is needed.

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Six Lessons In Supply Chain Strategy From Genghis Khan

Supply chain strategy can be a squishy topic. Basically, we try to keep costs down and service up, but what does this really say about how to win in a competitive business? Working harder at the same things is not a sustainable strategic advantage.

True strategy means finding ways to use and combine tactics and resources to achieve a goal in conditions of uncertainty. For supply chain leaders, it demands thinking laterally about everything that happens from the customer back and then placing bets to gain an operational edge.

In addition to modern thinkers like Peter Drucker and Michael Porter, some of the best lessons on this topic come directly from the playbook of Genghis Khan, the 13th century Mongol who conquered nearly all of Eurasia.

Here are six that apply today.

1. Use the skills of others.

The Mongols made no products, farmed no crops, and built no buildings, but still saw the value of engineers, miners, doctors and scholars.

2. Communication is essential to power.

Having armies spread over thousands of miles led Genghis Khan to establish a sort of Pony Express that was designed and maintained centrally.

3. Embrace technology.

In the year 1206, when Genghis Khan was born, his tribe had no metal and lived in felt tents. Fifty years later, they had mastered siege technologies like catapults and trebuchets as well as early firearms and cannon.

4. Never stop learning.

Genghis Khan’s genius was not the result of some epiphany but came rather, in the words of biographer Jack Weatherford, “from a persistent cycle of pragmatic learning, experimental adaptation, and constant revision”.

5. Cherish diversity.

A typically among history’s great empires, the Mongols allowed complete religious freedom and employed almost all of their conquered peoples’ best minds in the imperial administration.

6. Swallow your pride.

Genghis Khan cared nothing for appearances and would often feign retreat to draw enemies onto more favourable ground.

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Two thirds of buyers not managing supply chain risk effectively

Almost two thirds of buyers think their organisations are not managing their supply chain risk effectively.

Responding to a mini-poll held during a webinar organised by Supply Management in association with business information publisher Bureau van Dijk, 63 per cent of listeners said they didn’t believe their organisations managed threats in the best way.

Ted Datta, BvD’s strategic account director – London, said a majority of negative response underlined the increasing awareness among companies and buyers of the key importance of good supplier risk management. This was increasingly important because legislation was covering new and wider areas, said Datta.

“Know your suppliers, business partners and third parties,” he said, emphasising buyers needed to be up-to-date with new risks as situations changed every month. Datta said as there was so much information to monitor, companies could segment their supply base to identify key strategic suppliers and monitor those suppliers ‘in real time’ or as frequently as possible depending on their resources. Others could be reviewed in a more structured way, he said.

David Lyon, head of procurement at Cancer Research UK, told the webinar, Enhanced supplier due diligence: the implications for supplier risk management, reputation was vital for a charity and it had to ensure suppliers were aligned with its core purpose. “As an organisation that spends 80 per cent of every pound donated on our core mission of research, we must work hand in hand with all our suppliers,” he said.

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Tapping into the ‘big data’ that can help Greek supply chains to be more agile

Supply chain platform provider GT Nexus has begun tapping into the big data that has accumulated in its system to help shippers, carriers and forwarders provide “assurance of supply”.

In an interview prompted by the possibility of a Greek exit from the Eurozone, GT Nexus’s EMEA director of marketing, Boris Felgendreher, said the Greek crisis bore all the hallmarks of major disruption – the sort that shows the limitations of supply chain planning.

“This sort of situation puts a premium on being agile, in respect of companies being able to move from one sourcing location to another, and that is always difficult. This particular disruption has an added element in that it is financial,” he said, alluding to the fears of a ‘Grexit’ and the problems Greek companies have with making and receiving payments.

And although Greece itself has accepted the terms of its bailout, a number of Eurozone countries have still to ratify the deal, meaning the threat of a Greek exit persists.

However, Mr Felgendreher explained that a recent development by GT Nexus could offer firms a way to circumvent these issues through a “fusion of the physical and financial supply chains”, following an agreement between the platform developer and trade finance solutions provider SeaburyTFX.

SeaburyTFX has developed a funding programme that leverages big data on the GT Nexus platform to deliver suppliers access to low-cost capital. The programme opens the flow of capital into the supply chain to reduce costs and risk by basing funding decisions on the trading partners’ performance history, instead of the buyer’s or supplier’s credit.

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Zara’s Agile Project Management Advantage

Zara is a fast fashion retailer that has achieved staggering success since its inception in 1975. Compared to its Zara peers in retail, Zara has one practice that helps contribute to its competitive advantage: an agile project management oriented supply chain.

Agile Project Management
Broadly, agile project management is based on the 12 principles brought forth by the agile manifesto. This manifesto forms the basis for a project management theory that focuses on iterations, adaptations, collaboration, and constant improvement. As opposed to many other project management designs, agile project management is a non-linear approach to problem solving that hopes to provide flexibility and adaptability, without having to go back to the start with each iteration undertaken.

While originally developed for software and technology problem solving, agile project management has gained acceptance in the supply chain industry for its ability to help companies adapt to market dynamics. In the same way agile project management helps a software company develop non-linear solutions to problems, agile project management allows a supply chain to creatively adapt to market evolutions without having to disrupt supply chains from start to finish. Zara has used this agile supply chain to earn a distinct and unmatched advantage in retail.

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Resilinc to Unveil the Top 10 Supply Chain Risk Management Insights of All Time

The Top 10 Supply Chain Risk Management insights of all time are the most impactful conclusions, lessons learned, and heuristics that all SCRM practitioners should be acutely aware of in order to maximize their chance of success in achieving risk management and resilience performance excellence. Bindiya Vakil, founder and CEO of Resilinc, and Ann Grackin, CEO of ChainLink Research, will lead the discussion.

“These are the insights born from real-life experience in the trenches, battle scars, and “ah hah” moments,” said Vakil. “They are based on Resilinc and ChainLink Research company experience—working with the most complex supply chains in the world as solution providers, consultants, and practitioners in previous lives—as well as crowd-sourced contributions from risk thought leaders and luminaries in industry and academia.”

The top 10 insights will each be presented as important threads in an overall strategic-framework fabric. When implemented in their totality, the top 10 insights may form the backbone of a successful best-practice-driven SCRM program.

Participants in this Webcast will have the opportunity to:

1. Gain insights and best practices to improve SCRM and resilience program performance.

2. Apply insights as part of a strategic framework for success.

3. Benchmark their organization’s resilience program best practice adoption against the top 10 insight list.

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Seven Supply Chain Resolutions for 2015

Map your Extended Supply Chain: Our collective supply chain eyes were opened in 2011 as a result of the earthquake/tsunami in Japan, and then severe flooding in Thailand that decimated key suppliers in the high-tech sector.

Model Your Supply Chain: A relatively small but growing number of companies maintain an active network model of their supply chains that they use for on-going decision-making, from inbound supply flows to what products to make where.

Develop a Talent Strategy: Do you really have a plan for finding and developing supply chain talent? A few leaders do – but not many. A few years ago, Pepsico took a look at this – and wasn’t happy with what it found.

Start Benchmarking: In general, we do far too little benchmarking in the supply chain. I am referring not just to maybe participating in some survey or service that allows you to compare your results (sort of) with those of others, but meeting with companies to see how they do things, and swap and compare ideas and practices.

Review Your Technology Portfolio: Do you know exactly what software you have where? Do you have any “shelfware,” meaning software you paid for but never implemented, either in total or at certain locations?

Paint a Vision for becoming Demand-Driven: In the early 2000s Procter & Gamble came up with the “consumer-driven supply chain” concept, which the then AMR Research morphed into its demand-driven supply networks.

Start Lunch Time Education Meetings: I know a few companies – Campbell Soup used to be one of them and maybe still is – that hold weekly or monthly Friday “brown bag” lunch days focused on education. Could be an internal team member presenting insight into their area of operation.

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US Supply Chains More Vulnerable to Climate Risks

US Supply Chains More Vulnerable to Climate Risks

Lack of preparation currently leaves supply chains in Brazil, China, India and the US more vulnerable to climate risks than those in Europe and Japan, according to a report by CDP and Accenture.

Supply chain sustainability revealed: a country comparison also finds suppliers in China and India deliver the greatest financial return on investment to reduce their greenhouse gas emissions and demonstrate the strongest appetite for collaboration across the value chain.

The research is based on data collected from 3,396 companies on behalf of 66 multinational purchasers that work with CDP to manage the environmental impacts of their supply chains. They account for $1.3 trillion in procurement spend, and include organizations such as Nissan and Unilever.

Analysis and scoring of suppliers’ climate change mitigation strategies, carbon emissions reporting, target setting, emission reduction initiatives, climate risk procedures, uptake of low-carbon energy, and water risk assessment efforts, as disclosed by suppliers to CDP, were used to create a sustainability risk/response matrix that shows how well prepared suppliers across 11 major economies are to mitigate and manage environmental risk in their supply chains.

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