Supply Chain Management Forum

SCM vs. Logistics

2011-01-14T14:21:00.000+01:00

What exactly is the difference between supply chain management and logistics? Is logistics part of SCM? Can the two phrases be used interchangeably?
A comprehensive discussion about this topic can be found in the Supply Chain and Quality Management Forum of 12manage.

A new survey on decision-making in retail supply chain: Please participate

2007-07-06T13:51:00.000+02:00

I have been kind of involved in a survey about how companies can make better decisions for buying supply chain IT solutions.

The research is trying to gain some new insights in the area of supply chain and IT management and is initiated in MIT-Zaragoza International Logistics Program and Chalmers University in Sweden.

I strongly recommend you to participate in this survey: You will receive the final report and there will be a prize too; a copy of the book "Resilient Enterprise" by Dr. Yossi Sheffi of MIT.

It will take around 10 minutes of your time. You can start the survey by clicking here.

Wal-mart's RFID plan remains unchanged for 2007

2007-02-25T20:27:00.000+01:00

Yesterday I read a recent article in Financial Times on Wal-mart's RFID policy in 2007 and it seems to me that the giant retailer doesn't want to step back from its original objectives. Wal-Mart has said it will maintain the "aggressive" RFID plan in spite of what analysts are calling continued scepticism among suppliers and retailers about the system.

According to a recent article retailer now expects to have five distribution centers and 1,000 of its US stores - about one in four - equipped with RFID readers by April. It wants more than 600 suppliers to be using the tags this year - 300 more than last year.

Consistent plans of Wal-mart, Tesco and Metro Group, in a situation that the general populace has taken a "Wait and See" position, brings this question to the mind that whether we'll see a huge change in RFID adoption level or not…

What do you think?

(Source: Author's article in RFID-Weblog)

SupplyChainer to announce the list of best supply chain partners in 2006

2006-12-08T14:08:00.000+01:00

Year 2006 is ending and what I’m doing is to announce the list of the best supply chain partners in 2006. At SupplyChainer I have already developed some criteria and done some ranking for this but I will be more than happy to receive your inputs as well. So send your votes about what companies are the best as consulting partners, ERP solution vendor, SCE vendors, and demand management solution providers and so on.

I’m looking forward to receiving your information about votes. Keep visiting the SupplyChainer.com till Dec. 20 for the final results. Send your emails to ehsan@creative-weblogging.com

Companies failing to address supply chain dependency threats in Asia, Marsh finds

2006-09-05T23:04:00.000+02:00

According to a recent survey by Marsh non-Asian companies that have supply chain dependencies in Asia often lack awareness of regional risks and have not addressed these in business continuity plans.

According to Continuity Central, the Marsh survey found that 40 percent of respondents were not prepared for a terrorism attack, while only 28 percent were prepared for a natural disaster that could destroy their supply and business operations.

Matthew Elkington, vice-president of Marsh's Risk Consulting Practice, said: "The dramatic rise in supply dependencies with Asia, and in particular China, creates significant and diverse risk exposures, several of which are unique to the region in terms of their nature or severity. For example, according to the European commission, 50 percent of product risk notifications arising in the EU in 2005 originated from China.

"Intellectual property, counterfeiting and ethical risks are often just as important as the more traditional infrastructure, financial and natural disaster considerations and should be given equal weighting on a company's risk agenda," states Mr. Elkington.

The companies that participated in the survey were a combination of multi-national organizations that have supply chains or sites in Asia and independent companies domiciled in the region

(Source: SupplyChainer.com)

Is 2-D DataMatrix barcode a serious competitor?

2006-08-19T18:02:00.000+02:00

As the price of RFID tags are still too high for many companies looking for tracking Technologies, a series of other competing Technologies are trying to catch up and one of them is 2-D DataMatrix barcode.

In the past, some problems regarding the use of traditional barcodes made companies migrate to RFID. Among those problems, it can be mentioned that, the dirt, water and humidity rendered many of the codes unreadable. On the other hand, high cost of RFID tags, software and high-end enhanced readers was also a challenge which still exists today.

By the way, some companies such as ImageID Ltd., with their 2-D DataMatrix barcode solution, claim that they have combined best of the two world and offer reliable, low cost tracking technology. I myself am not quite sure that whether this is a serious threat for RFID or not in the long run but it may definitely be in the short term till RFID tags become cheap enough to dominate the market. What do you think?

(The post is originally written by the author in RFID-Weblog)

Need HELP on this questionnaire!!

2006-08-18T12:14:00.000+02:00

Dear members of this forum,
I am conducting a research as part of my dissertation of my master's degree on City University, London. For this purpose I have created a questionnaire on RFID adoption and other related issues.
I would be very grateful if you could answer this, since it is a very important part for the completion of my project.

In order to retrieve the questionnaire please reply with your email, so I can send it to you(or alternatively send me an email to mitsbuc@hotmail.com). It is very quick an easy to answer, and it should take no longer than 10-15 minutes to complete it.

I really appreciate your help. Thank you very much in advance. I am looking forward for your responses.

Best regards,
Thomas.
mitsbuc@hotmail.com
Thomas Dintsis
Business Systems Analysis & Design
Department of Computing
City University
London

Outsourcing: Look beyond costs...

2006-08-01T15:07:00.000+02:00

It's no surprising to see that according to a research done by Gartner, business process improvement is not among the top reasons for outsourcing in the companies.

High pressure from financial markets to increase profitability has resulted in emphasis on short-term financial goals and this has been automatically translated into supply chain actions plans such as outsourcing efforts. But is it really sustainable?

I don't think so. I agree with the point of view of Ousourcing Times that:

Instead of placing emphasis on low cost when choosing an outsourcing partner, companies will gain more by looking at the bigger picture, and scrutinizing if the firm has the necessary resources and the ability to deliver. The firm should be a part of the strategic decisions taken by the parent company, and commitments should be based on long-term returns that benefit the business as a whole, rather than just saving on short-term costs.

(Source: SupplyChainer.com)

My advice for 3PLs

2006-07-05T10:02:00.000+02:00

I'm writing this piece for 3PL companies: Put yourself in the position of your clients. What are the main reasons they use your services instead of developing in-house capabilities?

1) State of the art technology
2) High quality customer service
3) Service flexibility
4) Cost effectiveness

Ok, so these are Key Success Factors in your business. Take a look at your action plans and see whether you see all these elements as part of your objectives...

Analyzing Supply Chain Dynamics in Modern Industries

2006-07-04T07:14:00.000+02:00

The phenomenal growth of wireless industry and the automotive industry has greatly increased the intensity of competition. Modern business competition seems to be undergoing a fundamental change. The concept of threads, fabric and weaving develops a framework to explore this industry dynamics and analyze the changing value dynamics. The study helps to comprehend the transformed nature of the dynamics in wireless and automotive industry.

Thread-Fabric Framework and KSN

As the market is becoming very dynamic and so the wireless industry, firms in wireless industry form and dissolve partnerships and the chains at a rapid pace. Hence, there is much collaboration to bring the products and services to market as soon as possible to gain the competitive advantage. This also applies to the automotive industry.

Same type of product can be manufactured by many different manufacturers and there can be many suppliers to supply the parts needed with equal or competitive flexibility and quality. All such link-ups of the value adding activities are value threads, and the totality of the value threads constituting the industry are value fabric. If so, then there is no fixed value chain linking the companies, rather it is flexible, contingent and opportunistic. This makes the unfolding structure of the industry as continuous weaving of value threads into certain patterns of fabric.

The Knowledge Supply Network (KSN) and the platform priorities upon which the value delivered by the KSN is launched, makes this value thread weaving more complex. The degree, at which the KSN partners share the forecasting information beyond being Suppliers and Customers of one another, plays an important role in creating the value thread and the bullwhip effect.

It is evident that the business competition is becoming fierce as players striving against one another to propose value threads to their potential partners, to weave their value threads into a pattern agreeable to the market, there by shaping the value fabric of the industry to their advantage.

The patterns of pragmatic logic, helps to identify the thirdness of the wireless industry. This suggests that, there is a high level of complexity involved in wireless industry and knowing the game at every point of time is important to take the advantage. The change of platforms leads to the shift of push-pull boundaries across the wireless industry. For example, the ongoing migration from 2G to 3G, the WCDMA technology promoted by GSM players Vs the CDMA2000 technology promoted by Qualcomm and its CDMA-1 partners. Market demand being so dynamic as per the geographical interests of customers, the change of platform is necessary which demands flexibility, speed and timing, in-short correct meta orientation and correct strategies-tactics. This will help to capture most of the market with maximum customer demand satisfied on right time, also confirming the required flexibility in value chain. It gives rise to fabric patterns which are manifold.

Modeling and simulation

Modeling and simulation of these two types of value chains; Supplier driven value chain and Distributor driven value chain, allow us to check the shift of push-pull boundary, to evaluate the bullwhip effect and flexibility of the supply chain. It also evaluates, how fast the industry can adapt and exploit the changing circumstances. It helps to visualize the various ways; the market fabric might unfold, spin and weave its value threads accordingly. The player’s conception and maneuvers in modern dynamic industries are analyzed using the simulation model. The phenomenon that, formation and evolution of value threads are disorderly, opportunistic and contingent can be experienced. The bullwhip effects can be analyzed and compared in both type of supply chain. The same concepts can be applied to the automotive industry.

A diet for your supply chain...

2006-06-16T05:42:00.000+02:00

Dan Gilmore, editor of Supply Chain Digest, is one of the people I really admire as a supply chain expert. His fresh ideas and wonderful articles are always inspiring.

In one of his new articles, he has written about a new book titled "The Wall Street Diet: Making Your Business Lean and Healthy". He has strongly recommended the book as a useful guide in SCM area (I trust the guy so I think you should read it).

As title of the book shows, the ideas are couched in terms of a diet and it makes sense. Why? Because like individuals trying to shed excess pounds, companies and their supply chains are plagued by two related challenges: building a total "health" program, not just focusing on one specific element, and "keeping the weight off" after the initial improvement.

Here are some of the most important elements of the "diet" according to Dan Gilmore:

- Create a "Lean" Enterprise - using Lean principles beyond manufacturing to drive out waste and improve efficiency

- Achieve "Advanced" Supply Chain Management (more in a moment).

- Adopt Six Sigma type quality principles across many business processes to achieve a "quality-focused" enterprise

- Improve metrics to track progress

- Expand use of "smart" outsourcing as a function of really looking hard at what functions and processes could be better performed by someone else.

- Take a new, more enlightened focus on customer satisfaction

(Source: SupplyChainer)

My experience on the use of Best of Breed

2006-06-03T23:34:00.000+02:00

This is a question I have been asked many times: "Which approach do you recommend for adoption of Supply chain IT solutions: Single vendor or Best of Breed?".

And my answer to this is: "Good question! the answer is it depends...". But, even though the answer to the above mentioned question would heavily depend on the size of the company, the type of the industry and so forth, I myself vote for Best of Breed approach.

This approach, where companies hand-pick the best software product for each piece of supply chain process, comes with its set of headaches such as: extended vendor evaluation period, complex software integration problems and version control problems.

On the other hand, it may be an investment that provides greater long-term flexibility and higher quality of the solution. The fact that final solution has better fit to the enterprise, makes it a more preferable solution to me. What do you think?

(Source: SupplyChainer.com)

Supply chain market analysis: The Google way

2006-05-22T21:38:00.000+02:00

This new service called Google Trends, developed by Google.com is really wonderful. I have to confess that I've become addicted to it. At least 5 times per week, I go to the website and look at the frequency of the keyword searches in different subjects: George Bush, nuclear, Jennifer Lopez and of course supply chain and RFID...

Using the words RFID and Supply Chain, I realized that top 8 highest number of searches for these key words belong to Asian countries (5 cities in India, and then Hong Kong, Singapore and Thailand). Dublin and Atlanta are respectively in the 9th and 10th place.

Wow! Does this have any implication? For sure. Does it mean that people in India are natural RFID lovers? No. So what?

It's not because of the population coz China is also a big country and United States is comparable with countries such as Singapore or Thailand!

I want you to comment on this and tell me what do you think about the reason.

(Source: SupplyChainer.com)

10 Important trends in Transportation Management Systems

2006-05-11T21:02:00.000+02:00

Adrian Gonzalez of Arc Advisory Group had this interesting piece in SC Digest about 10 important trends in TMS market. Below, I have mentioned some of them which seem even more important to me:

- Addition of Multi-Mode Capabilities: With cost and capacity issues in trucking, and huge growth in offshoring, TMS solutions are starting to provide more robust support for rail and ocean shipping integrated with other modes, though there is still a way to go here.

- Move Towards Service Oriented Architecture: Support for SOA by TMS vendors will ease integration with ERP and other systems and enable more process-based approaches.

- Increase Focus on Performance Management: Scorecarding and sophisticating reporting systems are an increasingly important element of TMS implementations to leverage the rich trove of transportation-related data.

For Entrepreneurs Seeking To Exploit New Media

2006-05-05T07:52:00.000+02:00

The emergence of this new media is completely participatory and very complex from that is generally conceived by people. Orientation will decide the future actions and chances of running a successful business.

Following steps are very important to be a successful entrepreneur seeking to exploit this new media.

1. Background research on market

One has to do some market research such as which services and products are in more demand and what are the orientations /virtues of the companies (competitors) providing them. It is very important to understand the current market because it is changing everyday. This will help in deciding the orientation.

2. Target maket or customers

Next important thing is defining the target market. People are not willing to spend money unless they get what they want. There are majorly four kinds of people as (a) who are ESCAPISTS, (b) who are AESTHETIC and want ENRICHMENT, (c) who are interested in EDUCATION and ERICHMENT, (d) who are interested in ENTERTAINMENT. One needs to make sure that he is targeting/ catering the products/services to all of these four categories, if he wants to earn money.

3. Orientation & Service Quality

In-order to decide the orientation and service quality, apart from above two steps, one needs to know who are his competitors and what is their orientation, virtue, strategies for playing right game at right time. He needs to know how to get into the decision cycle of the big giants in the market. It is easy to make fast money once the business reputation is built. For this the orientation and service quality are very important. Example : Google

4. Technology & Innovation

Technology keeps changing everyday as the world is changing fast. So innovation plays an important role in business to succeed against the competitors. That is why the new concept of Business Intelligence is coined. One should make sure, that he is putting enough efforts in it. It may be possible to collaborate with small and individual firms in order to compete with some big giant in the market. Example of technology and innovation: As far as, creating content and downloading on web is concerned, many corporate giants had built the so called distribution pipes with download speeds greater than upload speeds. The possible improvement is making efficient use of the technology to provide much faster service for both uploading and downloading as compared to competitors. Example: Google

5. Service virtue and Competitors virtue

It is very important to have service virtue and for that one needs to know his competitors virtue. Customers should be happy and they should return back. Examples are: Ikea, Kansai Airport, Hard Rock Café, and Outback Steakhouse

6. Design for experience

It is a challenge to design and structure a business with emphasis on "Customer Experience." If one wants to make money, Customers should be happy and they should return back.
Examples are: Ikea, Kansai Airport, Hard Rock Café, and Outback Steakhouse

7. Design the configuration of service

One needs to make efficient use of the new media tools to give better services and also focus on collective intelligence in the form of new filtering and collaborating technologies. One needs to design the configuration of service in such a way that he should be able to provide what other competitors are not. I should efficiently use the network effects to create market places because sometimes, they only become barriers to entry to other business rivals.
Examples are: Google, Microsoft, Ikea, and Shouldice Hospital

8. Playing the right game

Once the business starts running well, the product growth or service cycle will reach its peak value and then will start maturing. It is important to maintain the market share, value created the quality of service and expectations of the customers. Playing the right game at right time is more important in in pre-mature state of service cycle and also after that to maintain the market share. Getting into the decision cycle of the big giants in the market, knowing their game strategies would help to solve this problem and improve the business prospects further.

The Meaning of Green

2006-04-26T09:17:00.000+02:00

Recently, the MIT center for transportation and logistics has published a material around environmental regulations and macro factors influences on supply chain among supply chain 2020 (SC2020) project, to shed a light on the greening of supply chain. This study which has been led by one of the MIT’s professor Randy Kirchain, addresses environmental issues as macro factors and the impacts of these factors on diverse aspects of supply chain such as global production system, business operations and planning in supply chains. I propose to have a look through the article ‘The Meaning of Green’.

What should we do about RFID vulnerabilties?

2006-04-14T13:21:00.000+02:00

It’s almost been a month since researchers at the Amsterdam's Free University created a radio frequency identity (RFID) chip infected with a virus to prove that RFID systems are vulnerable despite the extremely low memory capacity on the cheap chips.

Since the release of this news, there has been a lot of discussion going on about the root causes and effects on RFID adoption strategies. Anita has also covered some aspects of RFID vulnerability in her earlier articles. But the question still remains that: Should the companies take it as a really serious threat or not?

Well, I myself like the notion by Paul Faber of Industry Week which seems more robust:

The publicity surrounding this RFID virus research is no reason to delay any planned RFID implementations. The practical lesson to learn from the research is to ask the right questions of RFID integrators and software service providers. If you are currently planning an RFID technology project for your facility, simply include your current IT experts in the technology selection process. This will go a long way towards safeguarding you from any potential problems with RFID.

Managing Service Experience

2006-04-13T08:47:00.000+02:00

Often, the psychological behaviours of human being are very well used in the corporate world for running a successful business. In a way , it gives rise to the management philosophy.

As per the management philosophy, there are four kinds of people (customers.)

1. Those who always keep running from things and try to get something new, just to avoid thinking on what they did! = ESCAPIST

2. Those who do things for their interests and still believe in contemplating on the things they did. = ENRICHMENT AND AESHTETIC

3. Those who know right from the start what they want to do and where they are heading to! They do eaxactly that with some reasons behind. = EDUCATION AND ENRICHMENT

4. Those who are unaware of whats happening around them/ with them and who are really not bothered about it. May be bacause of their lack of ability, awareness, or some reasons. They just go by flow...join others in whatever they do! = ENTERTAINMENT

How the Management Guru's use these four categories for their strategies as Operations Strategies in Service Sector, for creating the disposition among customers, for creating organizational/business orientation, is interesting.

It is generally made sure by them that, they cater all above four categories of customers for running successfull business. It is a challenge to design and structure a business with emphasis on "Customer Experience", technically called "Managing Service Experience."

Now, the important question is- why talk about experience ?

It would give New Sources of Revenues when the needs of goods and services are essentially met.

Three sources of New Revenues are:

1. B2C - move towards providing "experience"
2. B2B - improve service, enhance work- experience ( thereby effectiveness), come up with new business processes.
3. Global Market - Provide goods and services to those who don't have them yet.

Extended examples of Designing for Experience are:

1. Frank Lloyd Wright's Unitary Temple
2. Ikea
3. Kansai Airport
4. Hard Rock Cafe
5. Outback Steakhouse

Extended examples of Desiging the Configuration of Service are:

1. Automobile sales, design and manufacturing

GM's Internet Overhaul, Technology Review

http://www.findarticles.com/p/articles/mi_go1932/is_200210/ai_n7283969
http://www.manyworlds.com/default.aspx?from=/exploreCO.aspx&coid=CO104021291446

Ghosn's revival of Nissan

Carlos Ghosn; Shift - Inside Nissan's Historical Revival

http://www.businessweek.com/magazine/content/05_03/b3916021_mz005.htm

2. Shouldice Hospital

My advice to you for reinventing your supply chain...

2006-04-08T16:18:00.000+02:00

Based on what I have seen in different companies, usually, you can translate what your target cutomers want into measurable obejectives in these 5 factors:

1) cost
2) speed
3) flexibility
4) quality
5) dependability

The key point here is which one is the most important to create value both for customers and the company (well, that's what the management is all about). Then the next step is to form the whole supply chain around this factor to fulfill customer demands. If the company succeeds in doing this, the results will be highly rewarding.A good example is my favorite company in fashion industry: ZARA

Zara's focus from the start has been on speed: production planning, new product development, transportation and all the other things have been designed in a way to achieve this goal. By focusing on speed, the company has found its way to become the most profitable fashion company in the world.What is the most important factor in your industry?

(Source: SupplyChainer.com)

Standardization Club !

2006-04-03T13:04:00.000+02:00

I'm a fan of standardization management. If there existed a club for fans of this idea, I would definitely join that. The thing is when I use the term "standardization management", I mean companies can benefit alot from standardizing the components of their products and services. This issue decreases complexity through supply chain significantly.One example in service area is Southwest Airlines: because their planes are only Boeing 737, if for example one pilot becomes sick, they could easily assign another pilot to that plane and the pilot is familiar with cockpit, control panel and these stuff (no training is needed). Maintenance and repair and supplier relationship would also become much more easier too. I will try to touch apon this issue more in future.

Soaring RFID Usage through Immobilizers

2006-03-31T14:09:00.000+02:00

Undoubtedly the major present segment for adopting RFID technology is in vehicle entry and security systems, mainly the immobilizers (to immobilize a vehicle if not its RFID reader detects the right tag in the driver's ignition key). Although, adopting RFID in auto industry gets back to 20 years ago, mainly for providing visibility and security through the supply chain, yet, it has been employed for more than a decade in auto industry specially immobilizers. An attempt carried over by ABI Research Center (www.abiresearch.com) indicates that around 40% of new products of auto-makers in North America contain such immobilizers and the volume of utilizing this technology is soaring, generated $3.7 billion as revenues all around the world in 2005.

Is IT a remedy for GM's poor results?

2006-03-23T09:06:00.000+01:00

General Motors Corp. is turning to automation to improve its auto parts distribution system to dealers, ending practices that had made for a bumpy ride for its auto parts supply chain. By the end of 2007, GM expects to have its approximately 8,000 U.S. and Canadian dealers using its Retail Inventory Management (RIM) system, which relies on intelligence gleaned from nationwide parts sales to recommend parts-restocking policies at dealerships, Computer World reported.

Today, GM parts distribution relies heavily on the judgment and practices of individual dealer parts managers, who typically wait until the end of the week to submit a batch of parts orders. This has meant that a large percentage of parts orders have arrived at GM distribution centers at the same time, driving up labor costs because workers earn overtime pay as they rush to fill orders.

One main question is Is IT a remedy for GM's poor results? The answer is maybe. It's for sure that the giant auto maker must reduce its cost of development and also supply chain cost heavily in the next three years to survive and this plan is in line with cost reduction objective, but this should be combined by a set of other restructuring efforts acting in a coordinated way to be helpful.

Chinese university to tag 300,000 library items

2006-03-17T23:24:00.000+01:00

The recently merged RFID tag and inlay manufacturer UPM Raflatac has entered into an agreement with Shanghai RFID System Technology to provide its RFID tags to Jimei University Library in Xiamen, China - an agreement covering the supply of some 300,000 RFID tags. The new RFID system being deployed for Jimei University Library will help the library automate the borrowing and returning of library items, thereby reducing queuing times and theft. RFID technology will also speed up the sorting of library items, which will result in items being returned to the shelves quicker. Inventory is made much faster and easier by simply passing the RFID reader along the bookshelves.More libraries to come

According to Using RFID, rafsec's tags are designed specially for RFID library applications. Edward Lu, business development director (Asia) for UPM Raflatac's RFID business, said: "We're excited to be taking part in this large-scale RFID library project. We have been supplying RFID tags for library applications for many years in many parts of Asia but the technology is just starting take hold in China. Our collaboration with Shanghai RFID System Technology will permit us to expand our presence significantly in this rapidly growing market."Jimei University Library will move to phase two of the implementation in the second half of 2006, with more RFID implementations also to be conducted in other libraries throughout the campus.

(Source: SupplyChainer.com)

New research on supply chain vulnerability

2006-03-14T10:04:00.000+01:00

Using GPS technology, the U.S. Department of Homeland Security tracked cargo from several companies between 2002 and 2005. The goal of the project, named Operation Safe Commerce, was to identify weak links in the supply chain. According to a Feb. 28 report on ComputerPartner.com, the conclusion that is being drawn from this report is that "companies actually know very little about what goes on in their supply chains." The article cited unsafe practices such as: truckers dropping off containers without ever encountering terminal security, containers left in unsecured areas, and containers bypassing a port that's considered safe and traveling instead through a country that poses a greater threat -- without either the company or U.S. Customs and Border Protection being informed.

According to Industry Week, These practices will soon come under closer scrutiny, according to the article, as the government demands more information about the supply chain. While compliance with the Customs-Trade Partnership Against Terrorism, or C-TPAT, which requires that companies take responsibility for the security of their supply chain, is currently voluntary, it is believed that soon all companies will be required to participate. To view the full article which provides a detailed analysis of upcoming regulations visit: http://www.computerpartner.nl/article.php?news=int&id=2632

The art of a Chief Supply Chain Officer

2006-03-13T16:42:00.000+01:00

There are many fads, new concepts, cures and solutions in the area of supply chain management for a variety of problems and every day we hear about something new. Most of them promise better performance in supply chains. But an important point here is, what works in a company may not work in another one. Every company has to find right solution for its problems itself and there is no one size- fits all thing in the area. So personally, I don't think that general solutions available help companies to be pioneer and achieve competitive advantage. They may help companies to improve their performances but it will be marginal. In addition to the point that there is difference between one company's supply chain with another, I can add that there are also differences between one company's different supply chains and this is a point which is neglected in many cases. Different supply chains within the company need different strategies and different solutions. The challenge here is that in reality, it's not that easy to separate these supply chains and they interact with each other in a very complex way. The art of a Chief Supply Chain Officer is to determine which type of strategy is suitable for each chain and how to leverage the power of new technologies to implement that strategies.

Effective Supply Chain Manager (1)

2006-03-13T16:40:00.000+01:00

Recently I was thinking about the role of supply chain manager in the organization. Along with his day to day duties and responsibilities, an effective supply chain manager also does some other things which contribute to the profitability of a company. One important role in within the product development area. Supply chain manager can attend in weekly sessions about products development and provide designers and project managers with the valuable information like sourcing condition of some components or increased costs of applying some materials into the new products.

Lack of skilled labour still holding back RFID adoption?

2006-03-13T16:37:00.000+01:00

The deployment of RFID technology continues to be hampered by a shortage of individuals skilled in the technology, according to a new survey by the Computing Technology Industry Association (CompTIA). Seventy-five percent of the technology companies participating in the CompTIA survey said they do not believe there is a sufficient "pool of talent" in RFID technology to hire from. That figure is down slightly from a similar survey conducted in 2005, when 80% of respondents said there was a shortage of RFID talent. Among companies that believe there is a talent shortage, 80% said the lack of individuals skilled in RFID will impact adoption of the technology. The figure is significantly higher than a year ago, when 53% of responding companies said the shortage of talent would have a negative impact on RFID adoption.

Complex and evolving

"RFID is a complex and still evolving technology, and expertise is absolutely required for its usage to be a success," said David Sommer, vice president, electronic commerce for CompTIA. "The skill sets and 'need-to-knows' related to RFID are many and varied. Clearly there is work to be done in our industry in terms of RFID education, training and professional certification."CompTIA is currently working with more than 20 major players in the RFID market, including product manufacturers, distributors, system integrators, education and training providers, and end-user customers, to develop a professional certification of RFID skills for individuals working with the technology.CompTIA's RFID+T is a vendor neutral certification of RFID skills that addresses the needs of RFID hardware/software manufacturers, value added resellers, training developers, and end-users of the technologies. The certification, scheduled for worldwide availability on 28th March 2006, is intended for technology professionals with 6-24 months of experience in RFID or related technologies. Among the skills the certification exam will test are installation, configuration and maintenance of RFID hardware and device software; site surveys and site analysis; and tag selection, placement and testing.

(Source: CompTIA, Using RFID, SupplyChainer.com)

Tremendous returns on/of Investment in EDI

2006-03-13T14:29:00.000+01:00

The supply chain management efforts are witnessing of drastic increase in adopting EDI and, if correctly adopted, its consequent incredible returns among diverse industries.The largest retail chain of stores that offers a number of products for home improvement, agriculture, lawn and garden maintenance, and livestock, equine and pet care through US, Tractor Supply Co. (TSC, www.tractorsupplyco.com), has employed EDI to support its transportation management system with the aims of reducing lead-time and increasing visibility and reliability of collaboration with vendors and carriers. By joining the greatest logistics network all through the North America (Nistevo, www.nistevo.com), this company captured a salient reduction in transportation costs cut by 20%, significant improvements in its on-time deliveries by 10%, reduction in inquiries by 90%, as well as improvements in vendors and carriers interface systems, by utilizing EDI. As published, return-on-investment will be over the first year of investing in EDI by this company, and there is no need, I think, to discuss around the return-of-investment in this exemplary EDI project following this one year period.

Make you supply chain agile (1)

2006-03-11T15:40:00.000+01:00

Flexibility: That's like an oxygen for supply chains today, a necessity for competing in an environment where dynamic costs puts a premium on agility. Let's all hope we'll never see $100-$200 a barrel oil, but you sure better have a plan if we do. So, we have to gain an understanding of what is the characteristics of an agile supply chain and how to make it happen. Here comes some suggested by Dan Gilmore from Supply Chain Digest. This is the first part:

Continuously Plan Your Supply Chain Network

Traditionally, firms have treated supply chain optimization as a strategic event run every two to five years, until a major corporate event occurs, like an acquisition, or "the pain is so bad they can't stand it". This periodic analysis does deliver significant value; a firm typically will reduce the operating expense in scope by 5-15% upon implementing a supply chain network redesign. Despite the significant initial operating improvements, results often begin to deteriorate within months. Why? Firms operate in a dynamic environment, where constant change threatens to create new imbalances within their supply chains. Kilgore says that in order to sustain the value provided by sophisticated analysis, firms need to conduct continuous rather than sporadic planning efforts. Continuous analysis enables companies to accelerate decision-making, view the supply chain holistically, and answer ad hoc questions with fact-based analysis. SCDigest notes that while a small number of companies, such as Pepsi/Frito-Lay, have taken this approach to continuous supply chain network planning and achieved very positive results, they are the exception, at a time when it is more necessary than ever given today's dynamic corporate strategy and cost environment.

(Source: SupplyChainer.com)

Supply Chain Organization Success

2006-03-10T10:33:00.000+01:00

Supply chains have been in the business spotlight for years now, as companies like Dell, Wal-Mart, and others have built much of their competitive advantage on efficient supply chains. That said, a new survey of 300 North American companies conducted by AMR reveals that most companies are actually in the early stages of defining their supply chain organizations. About forty-two percent of surveyed companies either lack a supply chain organization altogether or have less than a year of experience in managing a supply chain organization. These figures show that there's a lot of organizational learning yet to be tackled on the supply chain front. In this regard AMR has offered three tips for success to young supply chain organizations:

Supply chain planning reporting to the supply chain organization improves new product launch successes.

Use customer scorecards to measure performance.

Cross-functional involvement with sales and marketing teams improves success.Companies with mature supply chain organizations are deeply involved in cross-functional planning ("When asked if a company had more than a 70% success rate in new product introductions, survey respondents indicated that supply chain teams with planning groups directly reporting to the supply chain organization met this hurdle 50% more frequently than if planning teams reported elsewhere in the organization"), customer scorecarding (" the higher the company performs in sensing demand and new product introductions "), and involving the sales and marketing teams ("While 59% of companies surveyed take more than two weeks to sense true channel demand, companies with sales and marketing having direct reporting relationships to the supply chain organization are more likely to be a leader in demand sensing. Companies that are better in demand sensing also have higher success rates in S&OP as well as new product development and introduction [NPDI] efforts").One of the most valuable aspects of a business survey is how it can offer insight into what top-performing companies are doing. AMR hopes that these insights distilled from mature supply chain organizations will be adopted by younger organizations.

Indian government asks fertilizer industry to focus on SCM

2006-03-08T14:40:00.000+01:00

Well good news for consultancy firms in active in India:

IndiaIndian Government today asked fertilizer industry to strengthen its distribution network so that supplies reach farmers living in the countryside. "Industry should strengthen its distribution network in order to ensure down the line availability of fertilizers at the farmer's field," Indian Chemical and Fertilizer Mininster Ram Vilas Paswan said at meeting of the Fertilizer Advisory Forum.

He said consumption of fertilizers would increase threefold, if adequate supply is made available to the farmers at the right time.He also stressed that there should not be hoarding of fertilizers at any level in the supply chain leading to even a temporary shortage.

Paswan asked the fertilizer industry to remain vigilant in order to ensure that no adulteration takes place in the supply chain."Industry needs to develop packing and marking standards so that farmers can be sure about the genuineness and quality of products while buying fertilizer," he said.The minister again clarified that no state-owned fertilizer units would be put on the block for sale, instead they would be revived.

"We are trying to ensure availability of gas for this purpose," he said.Asking farmers to use micro nutrients, Paswan said they should not use urea just because it was low cost.

New Book on Health Care Supply Chain

2006-03-06T21:35:00.000+01:00

If there is one area of discourse within supply chain dynamics that has been ignored or underplayed, it is the complexity of the health care supply chain. This lack of evidence-based inquiry has hampered the field, which has lacked a comprehensive, research-substantiated offering. A new book, "Strategic Management of the Health Care Supply Chain," by Eugene Schneller, professor of health management and policy in the W. P. Carey School of Business, and the late Larry Smeltzer, begins to fill the gap. This book looks at the health care supply chain from a new, holistic perspective, pulling in concepts from strategic planning. The book is based on Schneller and Smeltzer's observations of best practices from progressive health systems such as Swedish Medical Center (Seattle), the Mayo Clinic (Rochester, Minn.) and BJC HealthCare (St. Louis).

"Strategic Management of the Health Care Supply Chain" also builds on the key concepts of sourcing, demand forecasts, distribution models, risk assessment and supply management excellence. Readers will find that they can gauge the movement that their own systems have made in improving the supply function."While frequently the largest employers in American communities, hospitals have been seen as part of the public service environment that does not produce an 'economic good,'" explains Schneller. "From a supply chain perspective, materials have not been seen as assets. However, more recent economic impact studies demonstrate that hospitals are a major driver of economic development and are part of an overall infrastructure that is necessary -- if not sufficient -- for economic development."

I personally recommend this book to all the people interested in managerial issues in health care industry specially supply chain.

New supply chain executive courses at MIT

2006-03-06T21:28:00.000+01:00

MIT is going to run two short executive courses on July this year. I thought maybe some of you would like to go there:

The first one is: Demand Driven Supply Chain Management

In this course, supply chain optimization models and engineering marketingmodels that support demand-driven supply chain management will be examined.Differences in modeling approaches across industries such as consumerproducts, consumer durables, retailing, and industrial commodities will alsobe discussed. Several cases will be presented that describe successfulapplications in distribution, retailing, and manufacturing companies.

The second one is: New Approaches to Optimizing Inventories

In this course, modeling concepts and details will be presented for managinginventories as part of holistic supply chain optimization at all levels ofplanning. Cases describing successful applications in retailing, consumerproducts, and manufacturing companies will also be discussed. The instructor for the courses is Jeremy F. Shapiro, my favorite professor...I myself recommend these courses to busy practitioners and CIOs who want to become updated with current issues in a short time.For more info you can visit these two links:

http://web.mit.edu/mitpep/pi/courses/optimizing_inventories.html

http://web.mit.edu/mitpep/pi/courses/supply_chain_management.html

Service-Oriented Architecture (SOA)

2006-03-06T17:33:00.000+01:00

Recently, IT (Information Technology) and IS (Information System) are following scientific approaches to introduce new architectures for their users. In this regard, mathematical solutions are providing tremendous aids to catch the real understanding and turning issues more logical and analysable processes through channels of information and knowledge.
Despite of being complicated the architecture of information system in a chain of organizations, it has witnessed to simulate as a common, basic form of mathematical articulation over time. In this respect, an interesting expression I think that has been introduced so far is by Advantys (www.advantys.com) as follows:

SOA = (EDI + EAI + XML + BPM) x WEB

Although the formula seems a little bit sophisticated at the first shot, however, it is so simple to express. As a matter of fact, the business processes optimisation and management, which previously performed by workflow considerations, as mention in above formula, nowadays are being facilitated by:
- Standardise exchanges of information between different information systems with EDI (Electronic Data Interchange) and XML documents using EAI (Enterprise Application Integration) solutions,
- Automate the circulation of information and optimise processing with a BPM (Business Process Management) tool,
- Integrate these changes with Web standards such as HTTP protocol and Web Services.

Gap's poor results and changes in the supply chain

2006-03-05T01:48:00.000+01:00

Yesterday, I read in the Financial Times that Gap, giant american retailer, has shown poor results and its sales has dropped 11%. Today, I saw another intersting piece about their immediate changes in company's supply chain: Gap's supply chain officer to leave !

The departure of Cullen is the latest in a string of high-level executives to leave the specialty apparel retailer. The interesting part is that the company doesn't plan to replace the chief supply chain officer post. Instead, the company said it will separate the sourcing and logistics functions to better align the global sourcing team with the brands, and logistics with inventory planning and distribution.

Gap also said that Stan Raggio, a former supply chain executive with the company, will return from retirement to lead its sourcing division as senior vice president of sourcing and vendor development. Raggio will report directly to Chief Executive Paul Pressler and will work closely with the company's operating units, Gap said. Raggio, who worked at Gap from 1991 to 2002, will rejoin the company on March 16. (OK, BACK TO THE ROOTS ! )

The company's logistics division, which formerly reported to Cullen, will continue to be led by senior vice president Colin Funnell, who will now report to Byron Pollitt, Gap's chief financial officer.

Competition in the supply chain space is intensifying...

2006-03-03T13:47:00.000+01:00

Bad news and good news: A market survey done by Frost & Sullivan recently about SCM market shows that competition has become more and more intesifying.The market for supply chain management (SCM) is increasingly gaining momentum with the introduction of RFID technology and the retail expansion happening around the globe. Also, there are signs of consolidation in the supply chain space due to the evolution of software suites, which are cost-effective and have minimal integration issues."Competition in the supply chain space is intensifying mainly after the entry of ERP vendors, who provide end-to-end solutions which incorporate SCM functionalities within them," notes Frost & Sullivan Research Analyst, Raja Srinivasan. "The fragmented market is entering into a consolidation phase which is evident from the recent mergers and acquisitions and this trend is expected to continue in the near future."This is good news for companies looking for partner in supply chain solutions because they can enjoy their increased bargaining power and also improved quality of service provided by SCM solution providers.

Information Flow, Knowledge Flow

2006-03-02T12:36:00.000+01:00

Undoubtedly, an efficient adoption of electronic information systems is one of the major challenges of organizations through their supply chain (as discussed in previous posting). For successful customer-oriented companies, all the efforts of employing e-business strategies are around customer satisfaction on the basis of timely information collecting from downstream. Now, we are talking about information, information sharing, and information flow throughout entire supply chain. But there is an issue lied here in this debate: what is information? And is the information worth by itself?
Information has a role as science and awareness I think, i.e. as long as it has not been converted into knowledge and expertise, can be merely as a source of waste in resources (in diverse manners) in terms of collecting and storing information. Successful organizations always attempting to utilize knowledge generated by collected dynamic, mobile, and time sensitive information, and hence, it is not surprising if we talk about knowledge flow and knowledge transfer protocols (either technological or behavioural) through supply chain instead of information flow.
Recent studies and efforts prove a drastic attention of organizations toward knowledge flow and their attempting to manage and remove obstacles of this transferring process through supply chain. For instance, I think I reflect an interesting word from one of the academic works in this spot dealing “It is not uncommon to find the situation where an Americas-based sales or marketing agent will pitch a product that cannot be feasibly built by the production staff in Asia. Why? Because the knowledge about system design and development was not transported efficiently to the marketing agent”*.

* Kevin C. Desouza, "Optimizing Knowledge Networks"

EDI, Success or Failure?

2006-03-01T12:09:00.000+01:00

EDI facilitates the exchange of data between supply chain associates and obviously, the immediate sharing of market data all over the supply chain association is the key to attain the ability in order to reduction of costs and the concurrent improvement of customer satisfaction. This approach requires communications at all levels of supply chain association to be effective and timely, and hence the integration of ISs (Information Systems) becomes a necessary element of a successful supply chain association. That is why the past decades were witnesses of numerous large organizations reliance on EDI to handle their relationships with suppliers, and exchanging vital information on VANs (value-added networks).
Here, by pointing out Ehsan’s posting on 14th of February 2006, I may say Yes! Traditional VAN-based EDI business are rather expensive, and in some cases, are an unaffordable cost for small or mid-sized organizations, even with the development of Internet and E-SCM, widely using XML (eXtensible Mark-up Language) to communicate with business partners as a common language, etc. Because of this fact, and importance of having an IOS (Inter-Organizational Information Systems), still many suppliers are unwilling to switch their current EDI systems integrating because of their high investment in past.
Nonetheless, in spite of benefits of employing EDI systems, and adopting cross organizational electronic integration (upstream and/or downstream) among many organizations, the main question is still persisting: why does electronic integration in supply chain associations fail every so often? And what are success (or failure) factors of this integration?
It is complicated! In my opinion the electronic integration across a supply chain association relies on some attributes like every other integration, which eventually identify the success or failure of an EDI system adoption in its turn. In this respect we can call (out of many): mutual commitment and trust, social aspects of associated organizations, and power balance and dominance. As a matter of fact, in addition to investing in EDI and electronic integration solutions, besides, attributes are to be focused as supply chain associated organizations attitudes and prevailing atmosphere in the integration.

Must Have Features of a Clinical Supply Chain

2006-02-26T11:52:00.000+01:00

(Note: Yesterday, I read this interesting article by Doug Meyer in Supply and Deman Chain Executive about Clinical Supply Chains. I thought that maybe it would be interesting for you as well, so below you can read a shortened version of the article with some moderations.)

Selecting a clinical supply chain solution presents unique challenges that vary greatly from generic supply chain management requirements. All too often companies try to adapt legacy systems or work with the leading supplier only to find out that their expertise doesn't extend to information systems used to manage clinical trials.

As a result, chief information officers (CIOs) typically face three scenarios: 1) facing the realization that the legacy “upgrade” doesn't work and starting the request for proposal process over again; 2) continuing with the leading supplier through years (and often millions of dollars) of customization; or 3) working with a specialist in developing solutions specifically for clinical supply chain management.

Regardless of the starting point, when selecting a software package that will be used for the clinical supply chain there are specific features that should be incorporated into the system to maximize benefit. CIOs can save considerable time and headaches if they keep these in mind as they consider a solution.

Features for the Clinical Supply Chain

In order to comply with Good Manufacturing Processes (GMP) standards, a clinical supply system should be able to manage resources within the clinical manufacturing and packaging processes, using features such as recipe and process management, electronic batch records and resource scheduling.

A clinical supply system that supports the printing of labels would also help ensure the ability to identify and control the product at every stage of the process — from receipt of materials, to dosage of the study subject, to destruction.Getting the right drug to the right patient at the right time is critical during a clinical trial too. Oftentimes however, the clinical supply chain is prey to lags caused by the movement of paper documents from one actor to the next.

One powerful function of a clinical supply chain software package should be the provision of electronic work routing and automatic e-mail notifications to users of tasks to be completed. Various parts of the clinical supply chain are oftentimes controlled by separate systems from unrelated vendors. Ensuring that a chosen system has the ability to interface with other applications would help increase its effectiveness.

It goes without saying that any system managing inventory in the pharmaceutical industry must meet many standard quality assurance requirements and several crucial regulatory controls in the clinical supply process, this includes the CFR 21 part 11 compliance guidelines set forth by the Food and Drug Administration (FDA). With these features in mind, CIOs will be well equipped to ensure the solution they select delivers the performance they need without the headaches and delays associated with costly upgrades and customization.

Higher rate of acquisitions in Supply Chain solution providers: Case of i2 Technologies

2006-02-25T18:35:00.000+01:00

As the software market matures, larger companies look to gain customers through acquisition, and smaller companies have trouble getting critical mass, as the spate of deals in the last 18 months indicates. Among the big ones, i2's recent strategic moves can be mentioned as a good example: The once high-flying company stumbled badly at the end of the technology bubble, but under CEO Mike McGrath has now achieved three consecutive profitable quarters and dramatically improved its balance sheet. Once a frequent acquirer, RiverOne “is the first acquisition for i2 in several years,” noted McGrath.

The company announced this week it has acquired the assets of RiverOne, primarily an on-demand provider of software solutions that offer visibility, ecommerce and collaboration capabilities to the contract manufacturing market. What attracted i2 was both the multi-tier nature of the functionality, and RiverOne’s customer base, said Mike McGrath.“It’s the multi-tier nature that’s really different,” McGrath said.

“Our current products can do some of that, but RiverOne has a number of live, satisfied customers.”Multi-tier visibility or collaboration means the “channel master,” and perhaps other supply chain participants, can collaborate and have visibility beyond their direct trading partner relations. So, for example, an electronics OEM can see the purchase commitments and delivery status of the components purchased from suppliers by its contract manufacturer. Dell and other electronics companies have been building such capabilities for several years, though it is far from universal, and still relatively immature in its application even in most companies embracing a multi-tier solution.

“We believe collaboration is still very immature in the marketplace, but will be an essential element of next generation supply chain,” said McGrath.While the RiverOne solution has been targeted primarily to the electronics and contract manufacturing market, supply chain changes in other industries, such as offshoring and outsourcing, means these kinds of capabilities likely will also be of value there.Acquiring just the assets (software, intellectual property, etc.) means i2 will have to re-sign existing RiverOne customers and hire RiverOne employees. “We’ve had a lot of success on both counts in the last 2 days,” McGrath said.

(Source: SupplyChainer.com)

Able Energy, Inc. Optimizes Its Supply Chain for Renewable Fuel Products

2006-02-22T10:44:00.000+01:00

Able Energy, Inc. ("Able") announced today that it has agreed to sign an agreement with TransMontaigne Inc., a leading supply chain management and fuel logistics company. The agreement allows Able Energy to optimize its fuel supply chain, accelerating distribution of biodiesel, a clean-burning, soy-based alternative fuel product, Business Wire reported.

As a result of the alliance with TransMontaigne, Inc., Able Energy, Inc. is taking a giant step forward in advancing the company's commitment to conservation, energy efficiency, and environmental health. With access to the TransMontaigne fuel supply chain platform, Able Energy Inc. will be able to provide its customers with fast, efficient and reliable access to biodiesel fuel.

Biodiesel is a clean-burning, environmentally friendly fuel alternative produced from domestic renewable resources. Biodiesel can be used efficiently in diesel engines and in home heating oil applications. Derived from natural oils like soybean oil, biodiesel meets the rigid specifications set forth by ASTM (American Society of Testing Materials). While biodiesel contains no petroleum, it can be used in its pure form or blended at any level with petroleum diesel to create a cleaner burning biodiesel blend. Studies show that the use of biodiesel in conventional diesel engines and home heating applications can substantially benefit the environment and human health. Biodiesel has been shown to emit lower levels of carbon monoxide, unburned hydrocarbons, and particulate matter compared to conventional diesel fuel. In addition, exhaust emissions such as sulfur oxides, sulfates (major components of acid rain), and aromatics are essentially eliminated in biodiesel.

Able Energy will offer a biodiesel blend for use in home heating applications supplied by TransMontaigne Inc. In addition, Able Energy's acquisition candidate, All American Plazas, Inc. has commenced use of a new biodiesel fuel blend also supplied by TransMontaigne Inc. at its All American Plaza truck stops in Doswell, Virginia, along with Bethel and Harrisburg, Pennsylvania.
"Biodiesel represents an exciting opportunity environmentally and economically for the region," states Able Energy CEO, Gregory Frost, "and it can be used in existing engines without compromising performance." Frost adds, "We're using a similar blend for our home heating oil business through Able Oil and PriceEnergy.com. We're partnering with TransMontaigne because its Navitus(TM) Supply Chain Platform is a valuable tool and because TransMontaigne is a leading supplier of BQ9000, the gold standard of biodiesel fuel quality."

Executive Vice President of TransMontaigne, Rick Eaton, states, "Able Energy is to be commended for leading the way in bringing clean-burning, environmentally friendly fuel alternatives into the retail market. We applaud Able Energy for demonstrating industry-leading vision and innovation in creating a cleaner environment, both at home and on the road."

Data Pool Raising Hong Kong's Profile as Asian Logistics, Trading Hub

2006-02-21T23:26:00.000+01:00

GS1 Hong Kong and GXS today announced the official worldwide launch of the GS1 HK Data Pool, designed to enable enterprises in Hong Kong and the Pan Pearl River Delta (PPRD) region to exchange accurate, GS1 standards-compliant product information with their global trading partners, Supply and Deman Chain Executive reported.

GS1 Hong Kong (formerly known as the Hong Kong Article Numbering Association or HKANA) is a not-for-profit industry support organization that helps Hong Kong enterprises optimize business efficiency through the provision of global supply chain standards and enabling technologies.

The GS1 HK Data Pool, Global Data Synchronization Network (GDSN)-certified and based on the GXS Data Pool Manager (DPM), is one of 26 GDSN-certified data pools worldwide. It is intended to serve as a global gateway for enabling more efficient international collaboration between manufacturers and their retailer trading partners, with the goal of achieving improved business processes for globally sourced goods and services.

Trading Data

The Data Pool allows trading partners to exchange consistent data, based on common global standards of Global Trade Item Number (GTIN) and Global Location Number (GLN), with trading partners around the globe. GXS technology enables the GS1 HK Data Pool to interoperate within the GDSN to synchronize information about products with other global data pools in conjunction with the GS1 Global Registry, a global data directory managed by GS1.

According to GXS, the GS1 HK Data Pool serves as both a source and recipient data pool, and it provides enterprises with a platform to exchange accurate and up-to-date product information compliant with GS1 System standards. Companies connecting to GS1 data pools can benefit from fewer out-of-stocks, increased speed-to-market for new product introductions and reduced logistics costs, GXS said.

"The impact of this global initiative on global e-commerce will be profound," said Anna Lin, chief executive of GS1 Hong Kong. "The GS1 HK Data Pool enables trading partners to collaboratively achieve increased efficiency, improved productivity and superior economic benefit within and across sectors electronically."

Microsoft collaborates with DHL on XBox case

2006-02-19T21:52:00.000+01:00

For video gamers eagerly anticipating the launch of Microsoft's Xbox 360 gaming platform last year, the wait ended with the November 22 U.S. product launch and the December 2 European rollout of the new game console.

But for Microsoft and its long-time logistics partner DHL, the game's debut marked the culmination of a year's worth of planning and execution dedicated to one objective: moving thousands of Xboxes across three continents, on time and on schedule, into the hands of the game's fans.

The lesson: an agile supply chain, employing a variety of transportation modes, is a critical component of ensuring a smooth global product launch.

Long-time Collaboration

"Microsoft set specific deadlines and promised the world it would meet them," said Jane Sabin-Pass, global customer manager for DHL Global Customer Solutions. "In so doing, Microsoft challenged DHL to think creatively and to anticipate the unpredictable scenarios that often accompany a major product launch during peak season. The precise delivery schedules were a testament to the skill of both companies to link the global supply chain with flawless accuracy and transparency."

The Xbox 360 project drew upon 15 years of collaboration between Microsoft and DHL, which included the rollout of the first Xbox console in November 2001. According to DHL, knowledge of each other's systems and processes played a vital role in expediting Xbox 360 launch schedules, reducing implementation lead times and meeting strict deadlines.

Launch planning began in November 2004 when both companies mapped out shipping strategies and laid the foundation for the information technology (IT) network that would serve as the project's central nervous system. By August 2005, with the first of the Xbox 360s ready to ship, the project shifted into high gear.

(Source: SupplyChainer.com)

UPS Supply Chain Solutions wins excellence award

2006-02-19T17:42:00.000+01:00

World's largest package delivery company UPS Supply Chain Solutions, the supply chain unit of UPS has been awarded the “Excellent Partner Award“ by Hitachi Global Storage Technologies, a technology leader and manufacturer of hard disk drives.

The award is the company’s highest award for suppliers, which recognizes UPS SCS for its global logistics services.

UPS SCS was the only logistics company cited among award recipients.

UPS SCS has provided a single point of contact for Hitachi GST's finished goods distribution network since Hitachi GST was founded three years ago.

This includes transportation, distribution and fulfillment services for all of the Hitachi GST companies’ manufactured goods produced in China, Thailand, Singapore, the Philippines and San Jose.

In addition, UPS SCS provides return and warranty services from UPS SCS service parts facilities.

Singapore serves as the global base for these UPS SCS services.
UPS SCS also provides many value-adds for transportation including shipment visibility and customs brokerage. The distribution centers have capabilities for testing and reconfiguration.

UPS SCS also manages more than 60 Vendor Managed Inventory (VMI) hubs around the world that support Hitachi GST's key customers.

”UPS SCS has provided tremendous value to their business, helping them to streamline their supply chain solutions, increase their efficiency and enhance service levels to their customers.

This alliance is very important to us and they are happy to show their appreciation with the ‘Excellent Partner Award,’” said Clint Dyer, vice president, operations, Hitachi Global Storage Technologies, Inc.

Penske Truck Leasing Selects TelaPoint's Petroleum Supply Chain Solution

2006-02-15T12:27:00.000+01:00

TelaPoint, Inc., a leading Internet supply chain software provider for the Convenience Store and Petroleum industry, announced today that Penske Truck Leasing Company, L.P. is implementing its TelaFuel(TM) Internet software suite of products including Smart Replenishment, Smart Buying and Smart Invoicing to streamline and manage its fuel operations.
According to Yahoo! Finance, Penske Truck Leasing will use TelaFuel, a browser-based application suite, to improve management of fuel purchasing, replenishment and invoice reconciliation operations across more than 450 locations in North America. With TelaFuel, Penske expects to achieve significant benefits including the ability to lower fuel procurement costs, optimize fuel inventory management, better coordinate 3rd party transportation services and streamline supplier and freight invoice reconciliation operations.

"TelaPoint is very pleased to be a technology provider to Penske Truck Leasing and is committed to assisting Penske in achieving their strategic petroleum objectives," said TelaPoint's President, Mike Dahlem. "Leading global companies such as Penske clearly recognize the enormous potential to increase business process efficiencies, lower costs and to develop and enhance relationships with new and existing trading partners."

Are Supply Chain IT systems so costly to run and maintain?

2006-02-14T12:39:00.000+01:00

Miya Knights from Computing has written an article recently, regarding the results of a survey between 400 European and American companies. In the survey 26 percent of the companies said that SCM solutions are so costly and if they invest large amounts of money on these solutions, they won?t have enough money to spend on the business itself.

Actually a critical question arises here: Should the managers invest in buying these solutions or not? I myself think, the answer depends on the size of the company and also a concept which I call SCM Readiness.

Let's start with the Readiness. I think that achieving a level of maturity in implementing and using IT systems is a predecessor for buying a SCM solution. Otherwise, it may lead to more frustration and high costs. I will come back to this idea of maturity later in the next articles.
And about the size, yes, maybe it's to costly for small businesses to run such solutions and they'd better use some simple soft wares instead.

So, it's better to look at these issues too before buying these expensive complex packages.

Cold Chain

2005-11-23T09:35:00.000+01:00

As food retailers are increasingly emerging as the paymasters of the coldchain, the quality of the latter needs to be rexamined. Individual responsibility for supply chain problems - and failure in some cases - is not always easy to determine.

If loaded at the wrong temperature in a truck, fresh produce will deteriorate quicker than necessary. If air-flow within a confined space, truck, warehouse or vessel is not set correctly or malfunctions in the course of transit, problems are bound to occur further down the coldchain. As a result a retailer will have to reject a whole pallet or if the problem was detected at a discharge port a whole container load may have to be written off.

Although apparently technology has sufficiently matured to recognise early signs of of supply chain failure still far too many consignments reach the retail shelf in an unacceptable condition. Ever tried bananas tasting of cardboard or pineapples that are so sour that you wonder whether minimum sugar content tests have ever been applied at the packhouse in the country of origin? Why is the quality of fresh produce in the UK generally remain far inferior to that of France, Spain and Germany? Why does fish and meat consumed in the UK have so little taste?

But even in countries such as Italy and Spain with a high percentage of fresh produce fish and meat consumption quality problems remain. The longer the current coldchain complacency continues to remain unchallenged, the harder retailers will have to breathe down the necks of those responsible for supply chain failure than necessary.

If air-flow within a confined space, truck, warehouse or vessel is not set correctly or malfunctions in the course of transit, problems are bound to occur further down the coldchain. As a result a retailer will have to reject a whole pallet or if the problem was detected earlier a whole container load may have to be written off.

The longer the current coldchain complacency continues to remain unchallenged, the harder retailers will have to breathe down the necks of those responsible for supply chain failure.

Alex von Stempel

Information Flow - Manufacturing Unit

2005-10-03T21:21:00.000+02:00

Dear members,

My topic for thesis is the information flow in the supply chain management. Specifically, its the manufacturing unit, I am mostly concerned. In a manufacturing unit, if you have many products and many suppliers required, then there should be something to keep track of the inventory. Now a days we have J2EE platform, IMS platform which are helpful in the efforts. But small manufacturing companies may have some constraints and they may not use these technologies.

In my thesis , I am designing a software which will have two policies, ( Q,R) Policy and (s,S ) Policy with which we can decide the order size, locations(Suppliers) . There are few things which are never considered in the research such as Physical Inventory, Database Inventory,Actual Inventory & Lost Customers. Sometimes the databse shows that you have enough inventroy in the warehouse but you don't have it in reality, sometimes there is Physical inventory available in the warehouse and you assume that all that can be used for deliveries but few of that inventory may have been assigned to somebody else. Hence these sort of uncertainites creat problems in fulfilling the demand and gaining the profit. You may lose many customers. Its assumed that the information we get from the warehouse is the most upadated one and decisons of delivery and order are taken on the basis of that information. Also the cost of updating the inventory may differ depending upon the policy whether its updated daily , weekly or monthly.

This uncertainity in the inventory management combined with the costs related such as Order Cost , Database Update Cost , Backorder Cost , Holding Cost , Delivery Cost affect the Total cost or profit of the Manufacturing unit. In the software I am designing , I am working on the lines so that you get to know the Change in the "Total Cost" and the "Total Customers Lost" with your change in , Inventory Policy Decison( Q,R or s,S Policy), Databse update decison, Order Decison ( to supplier) , Delivery Decison ( to Customer) .

My effort is to make the software userfriendly ( Many products , Many Suppliers, Many Markets - case) and very affordable.

Any suggestions are welcome. Please let me know your comments.

Thanks.

Yogeshwar D. Suryawanshi

Supplier Risk Management - KPI

2005-08-30T09:31:00.000+02:00

Hi Dear Forum Members,

I write my master thesis in the topic of supply risk management and try to find real life examples to my work. If you were as kind to share some examples, how the preventive supply risk analysis at your company looks like, what KPIs and information sources you use, that would be a great help for me. Please indicate the industry, your company is active in.

My e-mail address is htamas88@yahoo.com

Thank you for your help!

Tamas Horvath

Supply Chain Risk Management

2005-08-19T08:34:00.000+02:00

When it comes to impacts on the market, your suppliers' missteps can be as dangerous as your own. Indeed, a question many businesspeople should be asking is: Isn't it time to pay attention to risk management in the supply chain?
Risk management is nothing new, of course. Smart companies have always defined, prioritized, mitigated and audited all sorts of risks. As the supply chain has evolved new philosophies, procedures and relationship structures have evolved as well — along with new risks. We might well ask: What is the best way to manage supply chain risk? How do leading companies approach this task? How do they differentiate it from other risk management functions?

Sanjay Agarwal explores the impact of risks on SCM and discusses some SCRM techniques and philosophies.

Most interestingly, Agarwal recommends three organizational levels of Supply Chain Risk Management:

Corporate risk management (level 3). This function has to manage the universe of risks discussed in the previous figure, including several that often reach the radar screen of CEOs. So when asked about this new area of supply chain risk, most don't have the resources for anything more than a quick audit.
A cross-category supply risk manager (level 2). Many companies, knowing that they need to not just audit but mitigate and manage risks, are creating this new position. The supply risk manager has the tools, methodologies and intellectual capital to coordinate risk management across categories, and also to manage high-priority risks.
Category managers (level 1). We call this level 1 because as the function evolves, category managers will perform risk management in addition to their other supply-chain responsibilities such as costs, pricing and contracts. After all, the amount of risk management required depends on the category: In some low-risk categories, such as office supplies, the focus should remain on cost reduction. In other categories, such as a single-sourced material for a high-profit product, risk management will be more important than squeezing out an extra 5 percent cost reduction. In other words, risk management is a logical extension of the category manager's responsibilities, and organizational structures will come to reflect that.

Read on.

Who can share more best practices on the way Supply Chain Risk Management should be organized?

Supply Chain Visibility

2005-03-23T19:03:00.000+01:00

Collaborative Consulting, a company that specializes in optimizing its clients' business and technology capabilities, announced today that it has published "The Case for Supply Chain Visibility," the latest in a series of white papers from the organization's subject matter experts and thought leaders.

Written by Mark Carleo, the leader of Collaborative's Supply Chain Management Practice, the paper highlights the benefits of supply chain visibility, notably the way it can help organizations extend the value and return on investment of their existing supply chain systems. Mr. Carleo also explains how a visibility hub can foster better, more streamlined collaboration among companies and their customers, suppliers and trading partners. The results include better vendor relationships and more loyal, satisfied customers.

Moreover, Mr. Carleo shows how organizations can make significant improvements to their operational excellence initiatives, without substantial investments in time or effort, or costly new technologies.

For copies of "The Case for Supply Chain Visibility," or to speak to the author, see Collaborative Consulting.

Campbell, Coca-Cola, Coors, eo ally on Supply Chain Benchmarking

2005-03-20T10:50:00.000+01:00

Six leading consumer products companies have joined forces to conduct a review of the supply chain best practices and metrics of the world's leading consumer products companies.

Campbell Soup Company, Coca-Cola, Coors, Hallmark, Whirlpool and Polo Ralph Lauren Corporation have formed an advisory board for what they are calling the Consumer Products Supply Chain Best Practices Review.

Focused on supply chain processes, the advisory board will define the specific processes and metrics to be surveyed and will oversee the collection and analysis of responses from participating companies through a Web-based interview tool.

The data analyzed will be presented to participants in a series of reports and review meetings that will provide specific insights into the current and best practices of consumer products companies within various industry subcategories.
Read further.

Fresher, faster, fewer: the food supply chain

2005-03-16T15:13:00.000+01:00

Food companies are using increased delivery frequencies, smaller orders and faster order cycle times to keep costs low while meeting their customers' and consumers' increasing demand for fresh food.

Some of the latest trends in the fresh fruit supply chain.
* Increased focus on freshness. This requires that fruits, vegetables and semi processed (ready to eat) salads must be presented to consumers in immaculate condition while maximising shelf life to avoid costly waste.
* Proliferation in fruit and vegetable product variety. Along with meeting increased demand for organic and imported specialty fruits and vegetables, retailers must be able to secure high quality local and imported products all year round. This requires wholesalers to act as both local agent and a value added sourcing specialists.
* Increased attention to maintaining the "cold chain".

Bestselling Supply Chain Management Books

2004-12-29T15:50:00.000+01:00

Building Deep Supplier Relationships

2004-12-08T10:04:00.000+01:00

"In my opinion, [Ford] seems to send its people to 'hate school' so that they learn how to hate suppliers. The company is extremely confrontational. After dealing with Ford, I decided not to buy its cars". (Sr executive, supplier to Ford, October 2002)

"Toyota helped us dramatically to improve our production system. We started by making one component, and as we improved, [Toyota] rewarded us with orders for more components. Toyota is out best customer". (Sr executive, supplier to Ford, GM, Chrysler and Toyota, July 2001)

These are serious quotes of course. Jeffrey Liker and Thomas Choi give some more of these quotations plus recommend the following steps for companies that want do something about this and are interested in building deep supplier relationships with their supply chain partners as Honda and Toyota do (Harvard BR Dec04):

Understand how your supplier work,
Turn supplier rivalry into opportunity,
Supervise your suppliers,
Develop suppliers' technical capabilities,
Share information intensively but selectively,
Conduct joint imporovement activities.

Being nice is not on their list.

A+A+A Supply Chains

2004-10-24T10:36:00.000+02:00

In an article in this months HBR (October 2004) Hau L. Lee (Standford SCM-Professor) argues that few companies are taking the right approach towards building a strong SC. Lee bases himzelf on 15 years studying more than 60 companies to gain insight into this and other SC dilemmas.

His conclusion: Only companies that build SCs that are Agile, Adaptable, and Aligned get ahead of their rivals. All three components are essential; without any one of them, SCs break down.

Great companies create SCs that respond to abrupt changes in markets. Agility is critical because in most industries, both demand and supply fluctuate rapidly and widely. SCs typically cope by playing speed against costs, but agile ones respond both quickly and cost-efficiently.

Great companies also Adapt their supply networks when markets or strategies change. The best SCs allow managers to identify structural shifts early by recording the latest data, filtering out noise, and tracking key patterns.

Finally, great companies Align the interests of the partners in their SCs with their own. That’s important because every firm is concerned solely with its own interests. If its goals are out of alignment with those of other partners in the SC, performance will suffer.

What I liked in particular about this comprehensive article is the list of methods to actually achieve the 3 A's plus an example how it worked out for a Japanese convenience store chain.

Lee's final words are also worth mentioning:

When I describe the triple-A SC to companies, most of them immediately assume it will require more technology and investment. Nothing could be further from the truth. Most firms already have the infrastructure in place to create triple-A SCs. What they need is a fresh attitude and a new culture to get their SCs to deliver triple-A performance. Companies must give up the efficiency mind-set, which is counterproductive; be prepared to keep changing networks; and, instead of looking out for their interests alone, take responsibility for the entire chain. This can be challenging for companies because there are no technologies that can do those things; only managers can make them happen.

Samsung Electro-Mechanics Deploys i2 SCM

2004-08-10T11:03:00.000+02:00

SEM has implemented i2’s solutions at the same time in three of SEM’s divisions: Multi-Layered Ceramic Capacitor (MLCC) division, Ball Grid Array (BGA) division, and Optical Pickup Device division. SEM’s goals in this project are to improve on-time delivery ratio, inventory level, and forecast accuracy by shortening planning cycle time from monthly basis to weekly by applying the i2 SCM solution suite.

“We believe i2 SCM gives us the opportunity to highly improve our business practice,” said Bang Hwan Chung, vice president (CIO) of SEM. “By using i2 SCM, we intend to install a unified global business process in three divisions, which would be a very difficult job without i2 SCM. We will pursue process innovation and believe we gain global competitiveness with i2 SCM.”

SEM deployed i2 SCM, which includes i2 Demand Manager, Supply Chain Planner, Factory Planner, and Demand Fulfillment. The project ended in early 2004 and this is the first i2 go-live for SEM. The company is now implementing i2 SCM in three additional divisions. SEM’s main customer is Samsung Electronics, which has been using i2 since 1997. Both companies are in the Samsung Group.

Read on

AMR predicts 5% growth in SCM applications in 2004

2004-07-05T13:38:00.000+02:00

After years of caution, manufacturing companies are finally increasing investments needed to achieve their supply chain objectives. As a result, the Supply Chain Management (SCM) software market is expected to grow five percent, from $5.24 Billion in 2003 to $5.5 Billion in 2004, announced AMR Research at their SC Executive Conference. The bulk of new investment will be in SC execution initiatives and demand-driven supply networks.
AMR Research’s annual enterprise market projections conclude that companies seeking profitable growth are investing in technology that allows them to reduce costs while improving customer responsiveness. “An obsession with cost cutting and asset utilization has evolved into a focus on innovation and creating an ability to capitalize on the variability of demand,” said Kevin O’Marah, vice president of research at AMR Research. “Using technology to leap-frog the competition, reinvigorate growth channels, and provide shareholder value is the new earmark for SC savvy enterprises.”
Factors such as increased outsourcing, supplier collaboration, and the pursuit of perfect demand information have spurred the need for applications that provide better management visibility across the enterprise. Vendors who work in these categories are likely to experience the most growth in 2004.
AMR Press Release

Trust Factors in SCM

2004-06-29T15:47:00.000+02:00

Trust is a critical factor fostering commitment among SC partners. The presence of trust improves measurably the chance of successful SC performance. A lack of trust among SC partners often results in inefficient and ineffective performance as the transaction costs (verification, inspections and certifications of their trading partners) mount.
In an article in the Journal of SCM (Spring 2004) Ik-Wang G. Kwon and Taewon Suh report results of their empirical testing of such relationships.
- A firm's trust in its SC partner is highly associated with both sides' specific asset investments (positively) and behavioral uncertainty (negatively).
- Information sharing reduces the level of behavioral uncertainty, which, in turn, improves the level of trust.
- A partner's reputation in the market has a strong positive impact on the trust-building process, whereas a partner's perceived conflict creates a strong negative impact on trust.
- The level of commitment is strongly related to the level of trust.
It is interesting that Kwon and Suh recommend that curricula in business schools need to be changed from traditional functional disciplines toward an integrated and strategic-oriented curriculum to satisfy the needs of a new breed of decision makers. That makes sense to me.

Responsible SCM

2004-06-21T21:58:00.000+02:00

In the Harvard BR of June 2004, there is an interesting article by Elliot Schrage about coffeemaker Starbucks. Not only did Starbucks react to antiglobalization activists singling out Starbucks for having exploited third-world farmers: to protect its brand the company also began to actively cultivate and reward environmentally and socially responsible suppliers ("sustainable sourcing"). This is a preferred supplier program to attract and reward farmers committed to socially and environmentally responsible farming.