Tag Archives: Supply chain

Managing the Financial Supply Chain

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Managing the Financial Supply Chain

Manufacturers devote considerable time and resources to managing their physical supply chain, but often it’s their financial supply chain that needs the most attention. As costs continue to escalate, managing cash and capital is just as important as managing relationships among supply chain partners. And in many cases, the integration between the physical and the financial supply chain is such that any weak links in one of the chains will threaten the vitality of both chains.

By way of definition, “the financial supply chain refers to the transactions that occur between trading partners that facilitate the purchase of, and payment for, goods and services, such as sending purchase orders and invoices, and making payment,” explains Scott Pezza, senior research associate with analyst firm Aberdeen Group.

Just as finance involves much more than just “bean counting,” the financial supply chain represents the actual lifeblood of an organization, as it provides the cash flow needed to ensure the doors are kept open, the lights are kept on, the employees are being paid and products are being made and shipped.

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Is Your Supply Chain Ready for the Holidays?

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Is Your Supply Chain Ready for the Holidays?

Doug Pasquale, senior vice president of supply chain solutions for Ingram Micro Mobility, shared with Apparel magazine his insights on supply-chain strategies ahead of the crucial holiday season.

1. What are your top three best practices for pre-holiday logistics planning?
First and foremost, have a dedicated holiday supply chain strategy put in place at least six months before the holidays. It’s always a good idea to begin planning immediately following the previous year’s season and engage manufacturers and logistics partners as soon as possible.

2. Holiday supply chain disruptions are inevitable – whether it’s a natural disaster or a sudden shift in consumer demand. In your opinion, how much stock should retailers put in demand forecasting and planning?
There will always be situations that arise causing disruptions in a supply chain — you cannot plan for every possible scenario. I am a big advocate for sophisticated demand forecasting and planning, but retailers should also bear in mind they don’t have a crystal ball.

3. What advice could you give apparel retailers at the holidays based on your experience working with mobile device retailers?
The mobile device retail industry isn’t as removed from the apparel industry as it might seem at first. Both industries are at the mercy of quickly changing consumer demand, and overseas production is common. However, the mobile device industry tends to move at a faster pace – while most retailers change their stock of clothes by season, mobile device retailers are flooded with new technology weekly.

4. With only 26 days between Black Friday and Christmas this year, how does this affect supply chain planning and strategy?
The peak season always puts a crunch on supply chain planning and strategy, but when faced with less time to orchestrate all the activity happening between manufacturers, suppliers and logistics providers, a shortened season leaves little room for error. Even one or two fewer selling days during the peak season can have a potentially negative financial impact in retail if not prepared, so it’s imperative for retailers to open early, clear lines of communication with manufacturers and logistics providers for demand forecasting, inventory needs and delivery dates. Timely communication and information flow is absolutely critical.

5. Where should retailers be on their planning trajectory at this point in the year, and what should the next step be?
Ideally, retailers should have begun their peak season supply chain preparations back in January when cycles were set for the remainder of the year. That is the time to start forecasting demand and working with manufacturers to strategize product portfolio, market demand, stocking, and returns preparation. By this point in the season, retailers should be fine-tuning any adjustments to that strategy and should be well under way with executing it. Retailers currently should be firming up delivery schedules and finalizing promotional packaging designs, special deals, and production schedules to ensure they are ready for the coming busy peak season.

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Five New Supply Chain Risks and Regulations

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Five New Supply Chain Risks and Regulations

Supply chain risk is a major issue, and new sources continue to pop up. Adverse weather, natural disasters and factory fires have historically grabbed the attention of CPOs, but there are other risks procurement leaders must be aware of that are just as hazardous. The world of procurement is constantly changing, and supply chain managers must be on top of their game. Here are 5 new threats that you might not be ready for:

1. Financial Fraud

Financial fraud can come in the form of collusion, poor monitoring of employee expenses, or misconduct from the vendor, including falsified labor and inflated bills. Did you know that less than one-third of executives are utilising data-analytics tools that can detect fraud or vendor waste?

2. Cybersecurity Threats

Many companies have lax procedures in protecting critical data, leaving businesses vulnerable to attacks that could harm customers, operational processes and brands. Even if you have security measures in place, the suppliers you work with may not.

3. Supply Chain Management Regulations

New rules and regulations continue to pop up in the supply chain, and companies need to be ready to disclose information about their sourcing and supply chain practices. For example, the Transparency on Trafficking and Slavery Act requires companies to file annual reports with the SEC, disclosing efforts to address specific human rights risks in the supply chain.

4. The Talent Gap

Baby boomers are retiring and there are few up and coming procurement gurus to take their place. CPOs are scrambling to find a solution to this problem, as the implications of this issue are likely to last for at least a decade.

5. Rising food costs

Droughts are worsening across the United States, increasing food prices and ultimately raising the cost structure for many firms. Overall food prices are expected to increase by 2.5-3.5 percent this year, with fruit up 3.5-4.5 percent and vegetables up 2-3 percent.

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How Do You Turn Supply Chain Data into Actionable Information?

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How Do You Turn Supply Chain Data into Actionable Information?

There is a continuum in terms of presentation of data that allows for continuous sophistication in understanding and interpreting data. There are lots of ways to view data, but three that are particularly useful in supply-chain analytics are –Reporting, Scorecarding, and Benchmarking.

The simplest form of looking at data is what we have all seen dozens of times, we call it “Reporting”. Back in the day, reporting was numbers printed out on green bar paper, but today’s business intelligence reports are far more detailed and dynamic than in the past. For instance, a BI report of today displays all the data about transportation providers as usable information, in a scorecard format. Factors such as on-time delivery, freight cost per unit shipped, and transit time are assigned metrics and weighted averages to help users determine how well carriers are performing overall.

Operation managers and executives who want a quick, daily overview of what is happening in their transportation or supply chain network use dashboards to provide information in near real-time to help users understand what is happening within their network, and allows them to make proactive decisions to remedy problems as they occur. Where reporting is really like looking in the rearview mirror, dashboards are used to see what’s going on now, and makes it easier for users to identify trends and exceptions, and to intervene before something goes wrong.

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3 ways companies can identify climate risks in supply chains

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3 ways companies can identify climate risks in supply chains

Despite the enormous value at stake, climate risks in supply chains can be hard to see because they are so large. The key to getting it right, according to Acclimatise CEO John Firth, who spoke at the BSR Spring Forum last week, is for managers to address supply chain climate risks in terms of existing stressors — such as procurement costs, on-time delivery, water availability and secure energy and infrastructure.
At the Forum, speakers and participants identified three lenses that can help company managers connect climate change to existing supply chain concerns.

Vulnerable regions

The economic costs of climate-related disasters are rising, in large part because business is consolidating in vulnerable regions in the name of market growth and efficiency. It is projected that by 2070, seven of the 10 largest economic hubs will be in the developing world, and assets exposed to floods will rise from 5 percent to 9 percent of global GDP.

Categories at risk

Sustainability professionals also can address climate risk through global supply or procurement categories that are dependent on stable climatic conditions, such as crops, capital-intensive infrastructure and water-intensive operations.

Sustainability destabilizers

Finally, climate change undermines companies’ ability to address material sustainability issues. Many companies are working to improve economic development in the communities in which they operate, yet climate impacts, especially disasters, can depress job markets for years. Or, while it is typical for companies to commit to reducing greenhouse gas emissions, the lower water runoff associated with droughts can reduce the capacity of hydropower, the most mature source of renewable power

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Five factors of supply chain sustainability

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The five factors of supply chain sustainability

Leadership, empowerment and sharing success stories are among the attributes required to implement sustainable procurement.

That’s according to a panel of experts who shared their top tips at the Institute for Supply Management annual conference in Las Vegas, US last week. The advice included:

  1. Sustainability champions : “Find out who’s passionate about this in your organisation and ask them to be champions.”
  2. Leadership : “You are all leaders to your supply chain, they’re looking to you and your actions and expectations.”
  3. Empowerment : “If you give people a ladder to execute in their own fashion they will take ownership of it.”
  4. Success : “Nothing sells better than success, so we recognise and reward success.”
  5. Metrics : “If you can communicate what you [have done], it is really a powerful story.”

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FusionOps Unveils LiveAnalytics for Supply Chain Data

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FusionOps Unveils LiveAnalytics for Supply Chain Data

FusionOps, a supply chain analytics company that provides a cloud-based business intelligence (BI) application, has launched LiveAnalytics for supply chain data. LiveAnalytics uses images and live metrics to create infographics for supply chain processes and workflows.

The FusionOps application allows businesses to create new analytics from scratch. In addition, the application offers thousands of configurable analytics, metrics and tickers, FusionOps said.

LiveAnalytics leverages FusionOps’ interactive, root-cause analysis across the supply chain. FusionOps said LiveAnalytics users can visualize changes in their supply chains in real-time and evaluate data from all functional areas to become more efficient.

Some of LiveAnalytics’ features include:

  1. Alerts – When alerts are triggered, users are notified via email about supply chain events in real-time.
  2. Key performance indicator (KPI) dictionary – The new KPI dictionary explains pre-built and company-specific metrics.
  3. Personalized navigation – Users can access thousands of dashboards, KPIs and reports directly from LiveAnalytics’ main navigation and “Favorites” menus.

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80 per cent of supply chain managers don’t believe their supply chain enables business strategy

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80 per cent of supply chain managers don’t believe their supply chain enables business strategy

Some eight out of 10 supply chain managers do not see their supply chain as an “enabler of business strategies” within their organisation, according to a survey.

The poll, conducted by Hitachi Consulting, also found 55 per cent do not regard their business’s supply chain as a “fundamental source of business value and competitive advantage” and 29 per cent see it as “purely an operational function”.

Cathy Johnson, vice president at Hitachi Consulting, said: “These figures are far from reassuring. For the most part, it seems that senior executives understand the strategic importance of the supply chain, yet the managers who deal with the supply chain on a day-to-day basis do not.

“A supply chain that doesn’t support the overarching business strategy, and which doesn’t deliver competitive edge – and which isn’t going to deliver a material change in performance over the next five years – is clearly not a desirable asset.”

The survey, involving 100 supply chain managers and directors from nine European countries, revealed almost half did not believe their organisation’s supply chain would deliver increased profitability over the next five years, just a third believed it would deliver an improved customer experience over the same period, and half did not think it would deliver a “reduced working capital requirement”.

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How to Develop a Performance Management System

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A "dashboard" is like a speedometer ...

(Photo credit: Wikipedia)

How to Develop a Performance Management System

Performance management involves more than simply providing an annual review for each employee. It is about working together with that employee to identify strengths and weaknesses in their performance and how to help them be a more productive and effective worker. Learn how to develop a performance management system so that you can help everyone in your organization work to their full potential.

  1. Evaluate your current performance appraisal process
  2. Identify organizational goals
  3. Set performance expectations
  4. Monitor and develop their performance throughout the year
  5. Evaluate their performance
  6. Set new performance expectations for the next year

Setting performance expectation for the next year is one of the important keys. What is your new year’s resolution? Feel free to leave us a comment or send us a message.

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Coca-Cola refreshes sustainable sourcing goals

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Coca-Cola refreshes sustainable sourcing goals

Coca-Cola has increased efforts to make its supply chain more sustainable by announcing a series of new targets in the areas of sourcing, water use and carbon dioxide emissions.

The drinks producer, which is working with the World Wide Fund for Nature (WWF) on its sustainability programme, announced a target of improving water efficiency by 25 per cent among a series of sustainability goals for 2020. It also pledged to reduce carbon dioxide emissions of its drinks by a quarter and to work with the WWF to ensure that materials for its PlantBottle, which is manufactured entirely from plant materials, are sourced sustainably.

Other additions to its 2020 sustainability strategy include working to ensure key ingredients, such as sugar cane, mango and pulp and paper are sourced sustainably and replenishing 100 per cent of the water expended through its operations. It also aims to reach a 75 per cent recovery rate on the bottles and cans it sells in developed markets.

Coca-cola’s strategy is one of many good examples about how supply chain management is utilized into operations. If you are interested in how to improve your supply chain management, feel free to contact us.

 

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