Category Archives: Supply Chain Management

Many High-Tech Firms Adopt ‘Right-Shoring’ Supply-Chain Strategy, UPS Survey Finds

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Many high-tech companies have adopted a “right-shoring” strategy for their manufacturing supply chains, an approach that balances factors such as cost, quality and transit time, according to UPS Inc.’s fifth-annual Change in the (Supply) Chain survey.

The survey, conducted for UPS by IDC Manufacturing Insights, polled 516 senior supply chain executives in the high-tech industry in North America, Europe, Asia, the Pacific and Latin America.

Offshoring of manufacturing and assembly operations to countries with low labor costs remains the most common strategy, but a growing number of tech firms said they are “near-shoring” — moving production closer to end markets — to improve service levels, reduce inventory in transit and gain more control over product quality.
Among the survey’s respondents, 45% said their companies use right-shoring strategies, 47% said they offshore and 35% said they near-shore. Near-shoring was up 25 percentage points from 2010.

“High-tech companies are building more flexibility into their shoring strategies and supply chains so they can respond better to demanding market dynamics,” said Dave Roegge, high-tech marketing director at UPS. “They’re thinking more holistically about their strategies to evaluate their transportation costs and the time it takes companies to deliver goods.”

Read more at Many High-Tech Firms Adopt ‘Right-Shoring’ Supply-Chain Strategy, UPS Survey Finds

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Zara’s Agile Project Management Advantage

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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.

Read more at Zara’s Agile Project Management Advantage

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Supply Chain Management in QlikView / Qlik Sense

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With complicated structure in a supply chain, it has been a challenge for executives to see and understand the associated changes and movements in a supply chain. Examples are raw materials, inventory, products, marketing campaigns, promotions, and other supply chain activities.

As brands and products proliferate, are spun off, and re-consolidated, supply chain companies find themselves struggling to understand what they have, what they need, and where they’re going. Doing so requires a tremendous amount of data, drawn from both external sources (suppliers, partners, customers) and internal ones (marketers, production managers, supply chain groups). The ability to see all of the data surrounding a brand at a glance is a tall order, one only made harder by the proliferation of systems and processes designed to support it. Before companies can profit from efficiencies of scale, they need to consolidate these systems. This is an area where business intelligence (BI) can help them.

However, melding disparate data sources through business intelligence turns out to be a disaster, when companies are using multiple technologies under one roof. These technologies could be from Microsoft, Oracle, SAP, IBM, Teradata, and others. People are struggling before BI implementation, and people are struggling even more after it. As a result, instead of placing information in the hands of the managers who needed it, they are now locked inside those data and technologies, where they could barely get to the real BI they desperately need. On the other hand, IT departments are struggling with questions like: “how many people I needed to build reports”, “how long it is going to build reports”, and “what those reports should look like”.

To meet the challenges of data and technologies, a possible solution is QlikView or Qlik Sense from Qlik. Compared to other BI vendors, the most unique feature of QlikView / Qlik Sense is that people don’t have to think about the joins of tables; people don’t even have to think about which tables to pull out of their ERP. The appliance just bolts onto the side and sucks the whole thing out. People, or even non-IT people, can spent a week extracting the relevant data tables from the central data warehouse, then loading them into QlikView / Qlik Sense as individual data sets — one for sales, one for materials management, and so forth. And, suddenly, they can gaze across a total landscape of its supply chain before drilling down by product or brand or segment or market — or any combination it liked.

With QlikView / Qlik Sense, companies can train or hire a handful of savvy managers who in time became the trainers for their respective divisions. When the need arises for a report, they’ll point you to an existing report or enhance it or build a new one if need be, if everyone agrees it’s the right thing to do. People are taking reports into their own hands and customizing them to suit their needs.

In addition to this special feature, people can also implement their supply chain management BI by using one of the following templates in Qlik Demo site:

  • Executive Insights
  • Production Insights
  • Forecasting and Planning
  • Sourcing and Supplier
  • Regulatory Compliance
  • IT Management
  • Warehousing and Distribution
  • Transportation and Logistics
  • Merchandise Management

In addition, people can find other supply chain solutions provided by Qlik vendors at the Qlik Market. A screenshot of the Order and Inventory Management Dashboard is enclosed below. You can go to its interactive demo site here.

Order and Inventory Management.qvw

In summary, supply chain management is implemented in QlikView / Qlik Sense as applications or reports in all areas of the supply chain management, which can come from one of a reports template Qlik provides, custom made to match what you have today, or created by one of its vendors. The applications and reports do not need specialized IT departments to create and can be created by your very own people in the field.

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Top fashion labels save millions from China’s sustainable supply chain

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A leading group of Chinese textile mills, which create clothing for major high-volume apparel brands and retailers including Target, Gap, Levi Strauss and H&M, are saving $14.7 million each year by adopting simple efficiency measures in their production processes, according to a new analysis by the US Natural Resources Defense Council (NRDC).

These improvements have dramatically reduced the pollution generated by these mills, cutting up to 36 percent of water use and 22 percent of energy use per mill and a total of at least 400 tons of chemicals.

The 33 mills are part of NRDC’s Clean By Design program, a global model for manufacturing sustainability that is working with major fashion retailers and designers to green the fashion supply chain industry-wide.

“Great fashion can also be green fashion. Although apparel manufacturing is among the largest polluting industries in the world, it doesn’t have to be,” said Linda Greer, Ph.D., NRDC senior scientist and director of Clean By Design. “There are enormous opportunities for the fashion industry to clean up its act while saving money, and Clean By Design offers low-cost, high-impact solutions to do just that.”

Over the past two decades, China has become the epicentre of global manufacturing, and it currently produces more than 50 percent of the world’s fabric, totalling more than 80 billion meters annually.

As a result, the country is suffering from increasingly serious pollution problems while also contributing significant carbon into the atmosphere. Textile manufacturing, particularly the dyeing and finishing of fabric, is incredibly water and energy intensive as the process swallows up to 250 tons of water for every 10,000 meters of fabric produced and consumes 110 million tons of coal every year.

Read more at Top fashion labels save millions from China’s sustainable supply chain

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Preventing a talent gap in supply chain management

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When you hear about skills shortages and talent gaps, the discussion tends to surround STEM — science, technology, engineering and mathematics — professions. However, a new concern also is breaking through.

Supply chain management has become a far more complex and skill-demanding ordeal for businesses in a wealth of industries operating in virtually every location around the globe. This has been driven by the fact that commodities markets, global trade and regional economic conditions have been volatile at best, and show no signs of simplifying or stabilizing anytime soon, meaning that managers of the supply chain have a lot more variables to worry about today than in the past.

Thankfully, it appears as though many businesses, including those operating within the manufacturing sector, are working to nip this problem in the bud by providing their own types of training for supply chain managers to digest. After all, the greatest weapon in the fight against any talent gap is increased investment from the private sector in training and development, and this medicine appears to be more commonly embraced in the modern era.

Automotive excellence
Manufacturing Business Technology magazine recently reported that a new study from DHL revealed automotive giants are likely to face what it calls a “perfect storm” that will wreak havoc on supply chains from around the globe. According to the study, supply chain management professionals, specifically those looking to get a job at an automotive manufacturing firm, already are few and far between, and this problem is expected to become more complex in the near future.

Read more at Preventing a talent gap in supply chain management

How do you deal with the talent gap in supply chain management? Share your thoughts with us in the comment box.

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Secrets To Success: How Supply Chain Services Tripled Its Business

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Five years ago, Chip Emery, a retired big-business CEO, bought a small-time, 8-year-old reseller startup, Supply Chain Services.

At the time, the bar-coding VAR was profitable, with $9 million a year in revenue, but Emery, the owner and CEO of the company, simplified the business. Five years later, the company has just come off its most profitable year in its history, pulling in $25 million in revenue, and is set to make an additional $30 million this year.

So what radical changes did he make to drastically grow the company? Well, as Emery said, it was really quite simple. He just had the company focus on what it did well.

“One thing that we did when I bought it was to focus on where our expertise is,” Emery said.

“I learned very quickly that our expertise was in warehouse, distribution and manufacturing, so I made the leap of faith and decided, ‘Why don’t we focus on what we know and stop talking about selling to hospitals and municipal government, and point-of-sale equipment in the retail world, and health care? Let’s just stop all that stuff.”

Emery had the Minneapolis-based company focus its energy on just three major markets, as he said you can only do two or three things really well at the same time. If you try to take on more than that, you’re taking on too much, he said.

Read more at Secrets To Success: How Supply Chain Services Tripled Its Business

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Fairtrade Foundation assesses female participation in international supply chains

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As the world prepares to celebrate International Women’s Day this Sunday (8 March), Equal Harvest, a new study published by the Fairtrade Foundation, states that enabling more women to join the organisations that grow produce such as bananas, cotton and tea, could benefit businesses and support global development, as well as bringing gains for women.

Although women make up almost half the agricultural workforce in developing countries, they account for just 22 percent of the farmers registered as members of the 1,210 small producer organisations that are certified by Fairtrade.

Legal, social and cultural norms often act as barriers to women’s participation, for example, membership of co-operatives can be dependent on owning land or crops, some agricultural work may be deemed inappropriate for women, and women may be expected to undertake most of the domestic work in the home, giving them less time to participate in producer groups.

Although the Fairtrade Premium is often invested in projects that benefit women, such as access to childcare or training to help them diversify their income, Fairtrade says that increasing the participation of women farmers could boost productivity, improve development outcomes for communities and provide opportunities to launch new products such as the ‘Grown By Women’ range marketed by Equal Exchange.

A female banana producer in the Dominican Republic said that enabling women to become members of producer organisations is important because “it gives women the right to vote, to participate in decision making, to receive benefits and to live with dignity.” A male cotton producer in India said that women should be supported to take up leadership positions because “women are more disciplined and organised and will run these institutions better, whereas men fight amongst themselves and let egos come in the way.”

Read more at Fairtrade Foundation assesses female participation in international supply chains

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Seven Supply Chain Resolutions for 2015

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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.

Read more at Seven Supply Chain Resolutions for 2015

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It’s 2015, Are You Ready for the Chinese New Year?

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It’s 2015, Are You Ready for the Chinese New Year?

According to the Chinese zodiac calendar, 2015 is the year of either the Goat, Sheep or Horned-Animal (i.e., Ram). You may designate either animal, as you think best.

But whichever one you choose, Chinese New Year (CNY) is nearly around the corner, and transpacific shippers must once again prepare themselves for the inevitable annual impact it will have on their supply chain operations.

Chinese New Year or Spring Festival is the biggest holiday of the year in China. This year, the Chinese New Year begins on February 19, and most Chinese will have eight days or more of vacation, commonly referred to as Golden Week.

Because this traditional holiday brings families together to celebrate the New Year, it is common for many companies to extend their shutdown periods prior to and after CNY to allow employees to travel home to celebrate with family.

Customary activities include fireworks, red decorations, the New Year’s Dinner and an exchange of red monetary envelopes. But the planning for CNY goes beyond these traditional celebrations as transpacific shippers have come to grasp the real effects of the extended holiday period. Let’s examine some things to consider:

  1. Take the opportunity to communicate your production deadlines early in order to avoid potential delays.
  2. The increase in inventory and the pressure to get those goods underway prior to the CNY shutdown can create a backlog of goods awaiting export from Chinese ports.
  3. Some factories may also not experience a 100-percent return of their workers until after the holiday – further extending the time to return to full capacity.
  4. Shipments should arrive at the ports no later than 10 days prior to the CNY in order to ship before the holiday.
  5. It is particularly wise to book shipments two weeks in advance to ensure space on vessels.

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2015 New Year’s Resolutions for the Supply Chain Industry

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2015 New Year’s Resolutions for the Supply Chain Industry

Resolution #1 – Stop using the term VISIBILITY

People say that information is power. I beg to differ. I say, an informed decision is power. The visibility term has been over used. I’ve even heard some say that getting visibility to your supply chain is 80% of the challenge. They must not have run a supply chain. I see many supply chain leaders that have visibility, some in excel and some in automated tools. The ones that don’t have visibility can easily call the supplier and get it. Getting visibility isn’t the challenge. The real 80% challenge is “what are you doing with the visibility?”

Resolution #2 – Read only ONE “Cool Theme” report

In 2015, I resolve to read only one Cool Theme report. I’m tired of research analysts peddling these themes as a means to gain an edge on readership. Yet, I watch the audience during some of these Cool Theme presentations. And, half the people are on their smartphone working core issues back home, while the Analyst is talking about how supply chains should save the Panamanian golden frog, reduce the ozone layer, produce products with plastic wire from 3D printers and generate forecasts from Facebook posts!

Resolution #3 – Stop moaning about Bad Data

Let’s face it, everyone has some form of bad data. And, when you include all your tiered suppliers, they have bad data. The one constant is that you will never fix all the internal and external bad data. Yet, I still hear supply chain leaders say they need to focus first on fixing the data. I’ve seen many presentations from “Top 25” supply chains and how they’ve cleaned data, and why they should be considered a top tier supply chain story.

Resolution #4 – Fix the Disruption you can influence, not the Disruption you are concerned with

There are two types of disruptions. That which you are concerned with, and that which you can influence.

Volatility, regulation, geopolitics, economics, energy, and the list goes on. These are in your Circle of Concern. They happen, and you should be concerned. Yet, many supply chain leaders face fail to focus on the Circle of Influence, the area where you can make a difference.

Resolution #5 – Scrap the Talent Research, Make Planners more Productive

After reading all the Talent Research done in 2014, the topics of attrition, retiring professionals, and university-business alignment, I notice a big gap. The one thing missing in all this Supply Chain Talent research is the concept of being more productive with the talent you already have.

How can every supply chain improve productivity? In every supply chain I’ve seen in my past 25 years, there’s one constant – they all use some form of Excel – mostly to search for exceptions. Planners spend half their day dumping ERP and BI data into Excel, and then search for exceptions.

What are your resolutions? Share with us by leaving comments or contact us for a discussion.

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