A survey by researchers at WMG, University of Warwick saw 249 mid to large manufacturers from food and beverage to automotive, and pharmaceuticals to electronic equipment and more industries respond to the survey about their supply chain resilience in the current state and future potential…
The COVID-19 pandemic has affected many people across the world, one particular way includes supply chains, some people found they couldn’t buy pasta or loo roll, and it was the same for manufacturers, who suddenly had to change their strategies to ensure their supply chain during the pandemic.
There have been many challenges in the past for the manufacturing supply chain, such as the 2001 recession, SARS, 2011 Tohoku earthquake, 2016 oil crisis, and Brexit. Although there have been other pandemics such as swine flu and Ebola, the COVID-19 pandemic was nothing the modern world had ever seen before.
A survey by researchers at WMG, University of Warwick saw 249 mid to large manufacturers from food and beverage to automotive, and pharmaceuticals to electronical equipment and more industries respond to the survey about their supply chain resilience in the current state and future potential.
They found several impacts from the COVID-19 pandemic, including:
· 58% of firms ae still experiences a decrease in demand 3 months post lockdown
· 66-73% of firms have been effective to responding to increases and decreases in demand
· Buffer management, multi-sourcing and visibility were favoured over agile production networks
· Cash management and securing supply were critical initial responses to the covid-19 crisis
· 84% of firms found their planning systems were effective, but still required human intervention
· The most apparent bottlenecks to their supply chain was people issues, such as warehouse staff being in quarantine at home
The researchers then assessed manufacturers supply chain resilience in three different times, business as normal, during COVID-19 and preparation for Brexit. For each time period they identified how 6 supply chain resilience practices that could be used proactively (pre-disruption), reactively (during and post disruption) or both. These included:
2. Visibility – Having access to real time data (Proactive)
3. Collaboration – Working with SC partners to deliver customer value (Proactive & reactive)
4. Buffer management – Utilising inventory and production capacity to enable material flow (Proactive and reactive)
5. Flexibility – Establishing multiple sourcing options (Proactive and reactive)
6. Adaptability – Transforming the SC in responding to dynamic business environment (Reactive
In normal operation firms found their practices to generally be effective. However, there was opportunity for improvements in visibility and collaboration to support improved supply chain planning. Firms also said they have been effective in managing buffers in normal operation.
During the Covid-19 pandemic firms utilised supply chain planning as a response to the pandemic with effective planning systems reported by 84% of manufacturers. However, this still required a high degree of human intervention. Buffer management and flexibility were found to be less effective than in normal operations. The survey found that 55% of manufacturers used inventory as their primary buffer against disruption, with only 32% utilising flexibility within the agile production systems of suppliers. Inventory buffers whilst effective if the disruption creates an upturn in demand, can be catastrophic to cash flow if demand drops.
Similarly to COVID-19 when it comes to Brexit they’ve found that an increase in collaboration has led to improved supply chain visibility and planning. However, the uncertainty of Brexit is a cause for concern in terms of supply base flexibility with firms unsure of what type of response will be required.
Professor Jan Godsell from WMG, University of Warwick comments: “It’s interesting to see that the lessons manufactures’ have learnt in developing supply chain resilience practices in response to COVID-19 pandemic are helping manufacturers to prepare for Brexit. However, the uncertainty of Brexit, particularly in terms of the impact of flow of material is challenging for developing supply base flexibility. Whilst manufacturers can proactively prepare for Brexit, a high degree of adaptability will be required to buffer against the unknown.
“All manufacturers should consider assessing their current level of supply chain resilience to identify the areas in which their current supply chain resilience practices could be developed. Working collaboratively with supply chain partners to improve supply chain visibility and planning are the key building blocks. More effective use of inventory and capacity buffers, and flexibility within the supply base can further improve resilience. Some disruptions cannot be predicted, and supply chains need to the capability to adapt.”
Author
Kevin Davies
Published
26 December 2019
Estimated Read time
5Mins
Heineken, the world’s most global brewer, has been working with JDA Software, Inc., for more than five years on its…
Heineken, the world’s most global brewer, has been working with JDA Software, Inc., for more than five years on its large-scale cloud-based digital planning transformation. HEINEKEN has recently committed to extending its JDA footprint in specific geographies, which is already live in five operating countries (Italy, Netherlands, Spain, Poland and France). With a strategy to shift from a sales & operations planning (S&OP) model to an Integrated Business Planning (IBP) model, HEINEKEN is fundamentally upgrading the way it plans its business with JDA.
HEINEKEN is the
world’s most international brewer, and the number one brewer in Europe, with
operations in more than 70 markets globally. It is the leading developer and
marketer of premium beer and cider brands. Led by the HEINEKEN® brand, the
Group has a portfolio of more than 300 international, regional, local and
specialty beers and ciders. They are committed to innovation, long-term brand
investment, disciplined sales execution and focused cost management. Through
“Brewing a Better World”, sustainability is embedded in the business
and delivers value for all stakeholders.
“We have some of
the most complex and volatile markets in the world and have been working with
JDA to make faster, more well-informed decisions, which directly impact
everyone in the value chain” said Joost Luijbregts, senior Director Global
Customer Service / Logistics / Planning, HEINEKEN. “With JDA, we have taken big
steps forward – fundamentally changing the way we plan our business in terms of
S&OP and scenario planning. As our partnership with JDA continues to
strengthen, I am looking forward to work with JDA on our journey towards IBP.”
HEINEKEN
embarked on its strategy to shift from an S&OP approach to an IBP approach,
uniting sales, marketing, finance, supply chain and procurement together to
make well-informed decisions, and plan and forecast for the future. New
scenario planning capabilities have allowed the business to make trade-offs on
costs, margins and capacity. Since deploying this strategy across Europe,
HEINEKEN has seen an increase in forecast accuracy, reduction in stock-outs and
improved inventory turns and productivity.
Moving forward,
HEINEKEN will bring the integrated JDA solution to most of its larger global
locations, signifying the largest cloud-based solution at HEINEKEN. Going
forward, HEINEKEN has its sights set up harnessing the power of artificial
intelligence (AI) and machine learning (ML) with JDA, as it begins a pilot
project using JDA Luminate Demand Edge.
“We’ve formed a
strategic relationship with HEINEKEN with a foundation built on trust and
openness, which is highly critical as we develop the next phase in their IBP
roadmap,” said Johan Reventberg, president, EMEA, JDA. “With a clear roadmap
for the future, HEINEKEN is well-positioned to continue driving a leadership
position in the market, while delivering superior customer levels across all
its 70+ markets.”
Author
Dale Benton
Published
25 August 2019
Estimated Read time
5Mins
In a world awash with a seemingly never-ending list of technology buzzwords such as automation, machine learning and Artificial Intelligence…
In a world awash with a seemingly never-ending list of technology buzzwords such as automation, machine learning and Artificial Intelligence (AI) to name a few, AI is one such technology that is moving away from simple hype and stepping closer to reality in procurement.
Here, CPOstrategy looks at 5 ways in which AI is being utilised in procurement…
Procurement, by its very nature, is tasked with handling huge quantities of spend and with spend comes spend data. Often described by leading CPOs as a repetitive task, understanding and sorting that spend data is now being achieved through the implementation of AI.
Through the use of AI, procurement teams can remove human error, increase efficiency and realise greater value from spend data.
Chatbots
One of the biggest ways in which AI is being implemented around the world is in the customer interaction space. In telcos, for example, customer support can now be handled via a highly developed AI chatbot that uses legacy data and context to provide real-time, and unique, solutions for customers.
In procurement, chatbots follow a similar path for both internal and external customers. With tailored and context-aware interactions, chatbots create an omni-channel user experience for all stakeholders in the procurement ecosystem.
Supplier risk identification
Procurement and risk go hand in hand and one of the biggest risks is identifying and working with the right partner. Working in partnerships, which ultimately proves to be a failure, can be extremely costly and so AI is now being used to reduce the risk of failure.
Machine Learning technology, powered by AI, captures and analyses large quantities of supplier data, including their spend patterns and any contract issues that have emerged in previous partnerships, and creates a clearer picture of a supplier in order for the procurement teams to be able to identify whether this particular partner is right for them – without spending a penny.
Benchmarking efficiency
Benchmarking is key to any organisation’s ambition to measure and continuously improve its processes, procedures and policies. In procurement, organisations such as CIPS are used as examples of best practice in which procurement functions all over the world can benchmark against and identify any gaps.
Similar to supplier risk identification, AI can be implemented within ERP systems to analyse the entirety of data that passes through procurement and present this key data in easy to digest formats.
Examples include data classification, cluster analysis and semantic data management to help identify untapped potential or outliers in which procurement teams can improve their processes.
Purchase order processing/Approving purchasing
Procurement has evolved from its traditional role as simply managing spend into a strategic driver for a number of organisations all around the world.
As the role of the CPO has changed, technology such as AI has been implemented to free up their time from the menial tasks (such as PO processing and approving purchases), allowing them to spend more time in areas of growth.
AI software can be used to automatically review POs and match them to Goods Receipt Notes as well as combining with Robotics Process Automation (RPA) to capture, match and approve purchases through the use of contextual data. This contextual data allows AI to identify and make decisions based on past behaviour.
Part four of a six-part supply chain masterclass with Frank Vorrath, Executive Partner of supply chain at Gartner. Frank explains how to build a supply chain excellence operating system, enabled by a centre of excellence.
Frank Vorrath, Executive Partner of Supply Chain at Gartner
One of the key things identified within your concept of a supply chain excellence operating system is two-directional thinking, where you’ve got people working in the business and people working on the business – could you elaborate on that, please?
Transformations are really driven by future growth ambitions of those organisations, or if they are looking and expanding into new areas and new business models. Lots of things are changing very fast and exponentially. If you look at that, that sets limitations for organisations to actually do the same things as they did in the past. From a structural point of view, your current capabilities won’t allow you to compete in the future. You have to think about how you are going to approach that.
There’s also a limitation in terms of resources. The concept of perform and transform is simple to understand, which means you still have to focus on your core business and create results and good performance, while at the same time transforming. The concept is almost like running a sprint and a marathon at the same time. If you think about what you can do with the same setup and structure you have without investing, and potentially a different set of excellences, then it’s probably stretching your current resources to a limit.
If you think about the transform activity you
have to do as an organisation, you think more about what you need to do to be
successful in the future. If you think about the sprints, you still have to
focus on your core business and on day-to-day good performance, and you also need
to think about what enables you to perform day to day, running these sprints,
making sure you keep and stay focused on delivering performance end results to
your business and to your customers as well meeting their objectives and needs,
but also transforming the organisation at the same time and building the new
muscles you need in the future related to the capabilities.
What sort of
challenge does this balancing act, between the two areas, present?
If you do that with your current resources you have available in your business you may find yourself in a position that is too much a stretch for your resources: to be able to deliver on your expectations. Somewhere, you need to balance it. The question is can you balance that with your existing resources and the existing structure you have, or perhaps you have to set up a different structure – where you have people working in the business and people working on the transformation. Both are equally important to you as a business because one is really keeping the lights on and delivering the performance you need today, which is finding the capabilities you have to build for the future. That needs to be balanced. Is it easy? Probably not. But is it required? Absolutely.
Where does
change management come into the equation?
With change management and transformations, it’s really shifting the mindset and the behaviour and actions towards generating more an improved and sustainable business performance and results. It’s about having clarity of the destination, and a clear understanding of why are you doing this, and what you want and need in order to transform.
The next important part of change management is role modelling. Your leadership plays such an important role here in championing the transformation with clear and defined specific communication and milestones. Taking people along with you on this journey and having an understanding of ‘walk the talk’, and being visible and aligned on a leadership level creates the pull in an organisation.
There’s also organisational capabilities, the resources I need, the financial commitment that an organisation has to make to transform, because it can be dependent on the maturity of that organisation. Sometimes you have to be able to invest first to generate the benefits later on. You have to be able to have governance in that model, which is strictly focused on priorities for the business as an outcome and is steering the organisation through that transformation. The culture and the mindset of the people, the knowledge and skills have to be in place, and it has to be somewhere measured and sustained.
Also, you have to be able to reinforce. How do you align your goals and objectives and your incentives structures on the two important activities, perform and transform, in a balanced way? Not just incentivising generating results today, but also incentivising transforming the organisation to be able to compete in the future. It’s not just continuous improvement. It’s building an operating system, considering what drives change, creating push and pull in an organisation, and really with the mindset of the future to improve, as well as building muscle, creating sustainable business performance and end results, and meeting the never-ending customer expectations in future.
How does a
role model approach help overcome the challenges in change?
It has to start at the top of an organisation, which means you have to be very clear, very concise and compelling. People need to understand why you are doing this, and be very clear about the outcome, when you want to do certain things, and what it’s actually going to do for the organisation. Take people along the journey and bring them in a way in that they have a stake in the game, so they are able to participate and provide their input into the transformation. That’s really important when you start your change management and transformation.
You also have to somewhere create an excitement
factor for your people to believe that the future you’re going to create for
them is a future where they want to be part of, where they want to be proud of,
so they are excited to actually take you as an organization forward into that
future.
How do you
bring the customer into the conversation?
It’s key to incorporate customers into it. Don’t
be shy in asking your customer how can you serve them better. How can you
create more a collaborative joint partnership together? It’s no longer about
vendor and supply and customer relationship, it’s about a partnership on a more
strategic level. As a business, if you’re able to figure that out and bring
your key customers in, listen to them and make them part of it, or even make
them a joint development in terms of building an operating system, even better.
You may want to consider joint investments into building the capabilities you
need in future, especially in areas when it comes to looking into talent related
to emerging technologies, data, data scientists, etc.
You really have a scarcity and you have to build and think about how you want to build these kinds of talents in your organisation from a different perspective and different ways. You may want to do this jointly together with your customers, because they probably have the same needs like you have in their own business, and the same kind of limitation and challenges to find the right talents. Instead of just doing it on your own and being completely internally focused, combine the inside out with the outside in. The key in that is your customer or your customers.
How
important is it to develop an end to end supply chain IT strategy and
technology roadmap so that the technology and the procurement transformation
are aligned?
You have to have an end-to-end view of your technology. Technology can’t be seen in isolation with what you are trying to accomplish with the strategic objectives of your business related to the value proposition you have. Technology and digitalisation, you can be taken from two angles and that’s what I’m seeing currently happening in the marketplace. On the one side, you see companies focusing and creating new business models through digitalisation related to their products and services, selling outcomes and solutions instead of selling products and devices.
On the other side, you see a lot of activity in terms of digitalisation in the supply chain. These two things are connected, but we also know that 70% of the initiatives currently in the marketplace are disconnected. Technology is creating new business models, using data to access and provide insights to your business for better and informed decision making. Data could also mean monetising that data and creating new business models. Technology, from your business process optimisation point of view, can create a new level of maturity in terms of efficiency.
That’s where a lot of companies are focusing on and deploying new technologies because they want to figure out if there are business benefits they can introduce to the business and to harness new capabilities and with automated processes that reduce time, errors, cost, and also increase the efficiencies they have in their business. To be able to do that, you need to have a blueprint and an understanding of where you are at currently with your technology landscape and your applications, and also where you want to grow in the future.
What is the overall journey of this centre of excellence system, where it starts with developing infrastructure, building supply chain excellence capabilities, and then reaching a stage where that supply chain excellence is woven within the organisation’s DNA?
The ideas of transform and perform, and the
resource constraints that organisations are having by using the same resources
has been recognised in the market widely and you have seen over the last couple
of years more and more organisations actually building a centre of excellence.
With a centre of excellence, you have to consider that there are different
centres of excellence. Now you have to have a functional centre of excellence
where you just focus on building the maturity in certain areas of your supply
chain.
You could also have a logistics centre of
excellence. You could have other centres of excellence, like a manufacturing
centre of excellence. The goal is to design your centre of excellence and be
aligned with the main activity across your whole value chain, which means if
you are a manufacturing organisation and a supply chain organisation or procurement,
you would organise your centre of excellence in a way that would incorporate
the strategy element into that. There are different ways of structuring a
supply chain centre of excellence.
My recommendation, if a business can afford it,
would be to focus on end to end, rather than just functional, because if you
just focus on functional excellence, again, your integration and collaboration
across the different functions might be a bit of a challenge.
Is
excellence an ever-moving target?
You always have to work on that. You’re never
done. If you really think about your
plan of a transformation, does it stop after three years? No, it’s not going to
stop.
What you’re hoping for when you had enough momentum, excitement and generated the results, is the building of a culture and a DNA. That is probably the longest part of a transformation which is never-ending, because if you think about it from a leadership point of view, when you build it with your team and operating system, you want to build something which is sustainable and not dependent on you as a leader or your team. It should be there, even if you move on. It should be part of the culture so that people and generations after can still build from what was built, to make it better.
Eman Abouzeid, Global Procurement and Supply Chain Professional, discusses how important ethics and CIPS’ code of conduct is to fellow industry professionals
Understanding
ethics and exercising good ethical behaviour are vitally important areas within
the procurement and supply profession, and the procurement professional should
always disclose any potential conflict of interest and follow the advice given
from a person in authority.
In this article, I am demonstrating the importance of the CIPS code of conduct in procurement and supply management and outline the actions and behaviours that all CIPS members must follow, as CIPS code of conduct promotes the adoption of ethical processes within procurement and supply, and encourages individuals to raise any concerns regarding unethical behaviours with a person of authority within the organisation.
CIPS
is the global leading organisation serving procurement professionals. As such,
CIPS has a code of conduct that all CIPS members are expected to follow. The
code is current and reflects modern business environments.
The purpose of this code of conduct is to define behaviours and actions which CIPS members must commit to maintaining as long as they are members of CIPS.
Member
of CIPS worldwide should encourage their organisations to adopt an ethical
procurement and supply policy based on the principles of this code and raise
any matter of concern relating to business ethics at an appropriate level
within their organisations.
Let’s briefly survey and explain the different sections of CIPS code of conduct, in order to define what are the behaviours and actions that CIPS members must commit to maintain.
Enhancing and protecting the standing of the profession
This
part of the CIPS code of conduct is to do with how a procurement professional
should always operate in ways that both enhance and help to protect the
standing of the profession. Furthermore, it ensures that CIPS members should
act in a professional way in both their working and personal life, and they should
always operate in accordance with their organisation’s policies while being
mindful of the profession they are representing – this part of the code of
conduct includes the following practices:
Never
engaging in conduct, either professional or personal, which would bring the
profession or the Chartered Institute of Procurement and Supply into disrepute.
Not
accepting inducements or gifts (other than any declared gifts of nominal value
which have been sanctioned by your employer).
Not
allowing offers of hospitality or those with vested interests to influence, or
be perceived to influence, your business decisions.
Being
aware that your behaviour outside your professional life may have an effect on
how you are perceived as a professional.
Maintaining the highest standard of integrity in all business relationships
Integrity
is about being honest and ethical, and working to or portraying conduct which
reflects strong moral values. This part of the CIPS code of conduct outlines
why a CIPS procurement professional should maintain a high standard of
integrity within business relationships, and includes the following principles:
Rejecting
any business practice which might reasonably be deemed improper.
Never
use your authority or position for your own financial gain.
Declaring
to your line manager any personal interest that might affect, or be seen by
others to affect, your impartiality in decision making.
Ensuring
that the information you give in the course of your work is accurate and not
misleading.
Never
breaching the confidentiality of information you receive in a professional
capacity.
Striving
for genuine, fair and transparent competition.
Being
truthful about your skills, experience and qualifications.
Promoting the eradication of unethical business relationships
Ethical behaviour is very
important within procurement, procurement professionals can help eradicate
unethical behaviour through not creating or maintaining a relationship with businesses
that do not promote good ethics – Such eradication of unethical business
practices is done by the following practices:
Fostering
awareness of human rights, fraud and corruption issues in all your business
relationships.
Responsibly
managing any business relationships where unethical practices may come to
light, and taking appropriate action to report and remedy them.
Undertaking
due diligence on appropriate supplier relationships in relation to forced
labour (modern slavery) and other human rights abuses, fraud and corruption.
Continually
developing your knowledge of forced labour (modern slavery), human rights,
fraud and corruption issues, and applying this in your professional life.
Enhancing the proficiency and stature of the profession
The code
of conduct in this section asks members to bring skills, competences and a good
reputation to the procurement industry. In addition, CIPS members are expected
to keep their CPD up to date and undertake a certain amount of training,
reading or knowledge gathering each year. In doing so, procurement
professionals can apply their knowledge within their employment and help to
develop both themselves and colleagues.
This can
be achieved by:
Continually
developing and applying knowledge to increase your personal skills, and those
of the organisation you work for.
Fostering
the highest standards of professional competence amongst those for whom you are
responsible.
Optimising
the responsible use of resources which you have influence over for the benefit
of your organisation.
Ensure full compliance with laws and regulations
The final part of the CIPS code
of conduct is related to complying with legislation and regulations through:
Adhering
to the laws of the countries in which the procurement professionals practice,
and in countries where there is no relevant law in place they will apply the
standards inherent in this code.
Fulfilling
agreed contractual obligations.
Following
CIPS guidance on professional practice.
Last but not least, the CIPS
code of conduct outlines what is important to help a procurement professional
practise in a professional, ethical, and effective way. This code is reviewed
regularly to keep it relevant and is approved by CIPS Global Board of Trustees.
In conclusion
Procurement
professionals who are perfectly familiar with the CIPS code of conduct and its
correct standards, and follow such standards at all times can help their
organisations to achieve long-term success, being more financially successful, and
create and sustain a good reputation.
Ethics
in procurement and supply operations are a moving goalpost that procurement
professionals should ensure they keep up to date with. Legislations and
standards can change frequently so it is significant to always follow the
current version of the employer’s code of ethics in order to ensure that
procurement best practices are used.
I hope this has
been of interest to you and furnished you with some knowledge to consider.
Author
Andrew Woods
Published
28 July 2019
Estimated Read time
5Mins
Welcome to July’s packed edition of CPOstrategy! Read the latest issue here! Our cover story this month, features David Medori,…
Our cover story this month, features David Medori, Chief Procurement Officer at William Hill who reveals how strategic procurement is aiding the global gaming giant…
During 2018, 600 million bets were placed with William Hill, further establishing its reputation as a world leader in gaming. Employing more than 15,500 people in 10 countries, the 85-year-old bookmaker and games provider is continually innovating new and engaging ways to bet and game, whether in shops, sports books, online or mobile devices.
Leading a procurement function in this world-renowned brand and
operating on varying platforms in differing geographies is no easy task,
whether your requirement is software, hardware or professional services.
William Hill’s Chief Procurement Officer, David Medori, is responsible for
procurement of all third-party goods and services, covering indirect and direct
procurement. We met up with David at William Hill’s brand-new headquarters in
Tottenham Court Rd, London, to see how the procurement function is transforming
under his leadership…
Elsewhere, we spoke to Edgar Lim, Vice President of Technology and
Procurement at EnterSolar to explore how a sound procurement philosophyachieves growth in a “solar-coaster” market. Jon
Hansen tells us the 3 Obstacles To Digitally Transforming Your Supply
Chain and we also catch up with Tradeshift co-founder
Gert Sylvest, and CPO Roy Anderson, who reveal how their global open business
platform is transforming the future for buyers and sellers.
We also list the top 5 key influencers in procurement and reveal the
biggest events and conferences from around the globe.
Andrew Woods
Author
Dale Benton
Published
31 May 2019
Estimated Read time
1Min
Gartner Inc released the results of its Supply Chain Top 25 ranking for 2019, with Colgate-Palmolive, Nestle and Nike among…
Gartner Inc released the results of its Supply Chain Top 25 ranking for 2019, with Colgate-Palmolive, Nestle and Nike among the global leaders for supply chain best practice.
Announced at the Gartner Supply Chain Executive Conference in early May, 2019 represents the 15th consecutive year that Gartner has collated the Top 25 as a platform for insights, learning, debate and contributions to the rising of supply chain practices on the global economy.
The Gartner Supply Chain Top 25 for 2019
Rank Company
1) Colgate-Palmolive
2 ) Inditex
3 ) Nestlé
4 ) PepsiCo
5 ) Cisco Systems
6 ) Intel
7 ) HP Inc.
8 ) Johnson & Johnson
9 ) Starbucks
10) Nike
11 ) Schneider Electric
12 ) Diageo
13 ) Alibaba
14 ) Walmart
15 ) L’Oréal
16 ) H&M
17 ) 3M
18 ) Novo Nordisk
19 ) Home Depot
20 ) Coca Cola Company
21 ) Samsung Electronics
22 ) BASF.
23 ) Adidas
24 ) Akzo Nobel
25 ) BMW
The Supply Chain Top 25 rankings are defined by two main areas: business performance and opinion. Business performance in the form of public financial and CSR data provides a view into how companies have performed in the past, while the opinion component offers an eye to future potential and reflects leadership in the supply chain community.
As the pressure to create
the perfect supply chain continues, it has become apparent that human
processing alone won’t be able to keep up with greater complexities and a high
volume of orders. Businesses must ensure their establishing a strong
relationship with their suppliers, manufacturers and consumers, and are driving
continual improvements.
Supply chains used to be
very siloed meaning organisations would have different systems and reports for
each supplier. Unfortunately, this approach provided no real visibility of what
was happening behind the curtain, or between the siloes, and caused confusion
for all involved. As more firms have recognised that suppliers are an extension
of their in-house teams and should be treated as such, closer relationships
have been forming. Technology has helped this process as it’s enabled improved
communication and transparency.
To stay ahead of the
competition, having excellent supplier relationships that are supported by the
right technology will be key. Over the next decade concerns around
sustainability are set to drive consumer behaviour, therefore organisations
need to keep a close eye on their supply chain, as well as their internal
practices to establish a sustainable platform. Establishing a strong
relationship with suppliers will make them more willing to give companies
improved levels of visibility, helping to refine their end-to-end supply chain
processes. Through providing one central location of information, businesses
can ensure cross-functional supply teams are using the most up-to-date
information to guarantee that they are only placing businesses with approved
suppliers. This strategy enables organisations to plan and manage all of their
interactions with the suppliers to mitigate the risk of poor collaborative
practice and identify opportunities for growth.
The role of Artificial
Intelligence (AI) and Blockchain technology in the supply chain is growing. The
introduction of blockchain will provide companies with the ability to fulfil
vital parts of a product’s journey; this will give them a competitive edge, as
they have the insight needed to deliver an immutable, reliable record. And with
the addition of AI, these businesses will also be able to process the large
volumes of data available, quickly and intelligently. All these factors will be
key to unveiling even more essential information about operational performance,
providing the opportunity for organisations to reconsider supply chains both
tactically and strategically. The extended insights can also drastically reduce
the risk associated with embracing new suppliers, while providing businesses
with the details they need to reassure consumers that they’re embracing
ethical, valuable practices.
Author
Kevin Davies
Published
25 March 2019
Estimated Read time
5Mins
Global procurement market intelligence firm SpendEdge has released its Global E-Commerce Logistics Category of its Procurement Market Intelligence Report. According…
Global
procurement market intelligence firm SpendEdge has released its Global
E-Commerce Logistics Category of its Procurement Market Intelligence Report.
According to SpendEdge, “the growing popularity of the e-commerce industry has spurred the rise
in intra-regional and cross-border trade which is supported by the prevalence
of favourable e-commerce trade policies across the globe”.
The improving purchasing power is, according to the report,
giving freedom to the working-age population to exhibit a significant
incremental spend on e-commerce websites, which consequently, is accelerating
spend momentum of the e-commerce logistics market.
This e-commerce logistics market intelligence report offers
a comprehensive analysis of the primary cost drivers and its subsequent impact
on the overall pricing. Current supply market forecasts and the spend
opportunities for the suppliers are also outlined and the category spend is
analysed from the perspective of both buyers and the suppliers.
SpendEdge procurement expert Anil Seth said: “Buyer’s
service requirements vary based on their geographic location. This makes it
essential for them to select suppliers based on their capability to provide
customised services.”
In the news again, retail giant Walmart
has revealed that it is taking control of its own rail supply chain. The
company has launched a pilot programme that will see them use name-brand
freight containers to cut out third-party rail companies and middleman fees.
The Raymond
Group in India has announced that it plans to reshuffle its own
supply chain so as to manage demand and supply more effectively. The move is
powered by the shifting sands of economic outlook and market demand and is
designed to put the company on a more competitive footing.
A smart sensor that allows for total supply chain visibility and
increased security has been implemented by Kerry
Logistics Network. The sensor forms part of the organisation’s shift
to using the Internet of Things (IoT) to optimise its supply chain and its
deliverables.
On the security frontier, research from security specialist Symantec
has found that vulnerabilities in commercial software and operating systems
were increasingly being used to launch cyberattacks. These supply chain attacks
use loopholes in third-party solutions and increased by a startling 78% from
2017 to 2018.
Along with security issues, technology and the changing nature of the supply chain will be hot topics at the 2019 Retail Supply Chain Conference that opened its doors in Orlando, Florida, today. Keep an eye on the hashtag #Link2019 to keep up to date on insights and commentary from the event.
ResearchAndMarkets has released its global supply chain analytics market forecast to 2023 today. Focusing on supplier performance analytics, demand analysis and inventory analytics, the research has estimated that the market is set grow to $US 7.1 billion by 2023 with a CAGR of 14.6 percent. The release stated that there is a ‘need to analyse demand patterns, develop effective production plans and improvise forecast accuracy…’ To add some weight to the research burden, Acumen Research and Consulting released its own research on 24 February that outlined how the supply chain analytics market will be worth around $US10.7 billion by 2026.
Meanwhile: the release of foldable smartphones – a trend that’s now
impossible to ignore as Samsung reveals remarkable, Huawei competitive and LG
broken – has a knock-on effect on the supply chain;
there are fabrics
that can remember your passwords; a Business
Insider Intelligence’s research report examines the impact of edge
computing solutions; and IBM
reveals five technologies that it believes will disrupt the food supply
chain.
Author
Tracey Harris
Published
22 February 2019
Estimated Read time
5Mins
In a bid to shift the costs of drugs for patients and hospitals, non-profit organisation, Civica RX, is preparing to…
In a bid to shift the costs of drugs for patients and hospitals,
non-profit organisation, Civica
RX, is preparing to up-end the supply chain for drug sourcing in the
USA. According to Bloomberg, the company is aiming to address critical drug
shortages by finding the quickest routes to market. Using a three-pronged
approach that includes sourcing from existing drug companies and hiring
contract manufacturers, Civica RX is looking to change the high cost of critical
drugs and increase supplies.
KPMG has released a report that outlines the risks and the hype that
surround the digital supply chain. The report takes a long hard look at the
security threat that comes in alongside digital investment and transformation
and warns that cyber criminals are ‘realising that the shortest way is not
through the front door, but through the “weaker links” that make up a digitally
enabled supply chain’.
Still with KPMG and technology threats, another report released by
both KPMG and Oracle
examines the security gaps that exist in cloud services. The global survey is
designed to provide decision makers with relevant insight into the threats with
commentary from 450 participants.
In Canada, the Supply
Chain Management Association (SCMA) celebrated its 100th anniversary
and used this as an opportunity to announce the beneficiaries of the SCMA
Fellow Award. The prestigious award that recognises excellence in supply chain
leadership was given to Madeleine Paquin, President and CEO of Logistec
Corporation in Montreal, and Robert Wiebe, Chief Administrative Officer for
Loblaw Companies Limited in Toronto.
Data Analyst, Ken Gibson of Black Ink Technologies, examines how blockchain
can play a pivotal role in reducing the increasing complexities of the supply
chain. He points out that ‘supply chains have gotten to be ridiculously
complex…’ and points to the growing need for reliability in management,
administration, sourcing and control.
AP
Møller Mærsk (APMM)’s fourth quarter results
were released on 21 February, revealing a company still busy with its
restructuring. The numbers released were didn’t impress investors, however, and
it seems the company has a way to go before reaching the levels that will
rebuild confidence.
Also in the news: Goldspot
Discoveries, the first AI mining company, has just listed on the TSX
Venture Exchange; the Tri-County
Defense Supply Chain and Business Resource Fair allows for
businesses to connect to government contracting; supply chain integrity
solutions provider, Overhaul
Group, announced that Robert Pocica has joined as a Senior Advisor
to the board of directors; and Gizmodo
wins the headline of the day with ‘Thank god phones are getting weird again’…
Author
Tracey Harris
Published
14 February 2019
Estimated Read time
5Mins
The future of the supply chain industry has long been held in the hands of technology and innovation. These have…
The future of the supply chain industry has long been held in the
hands of technology and innovation. These have shifted the goalposts, placing
customers in the driving seat and changing how they engage with brands and
business. In a recent article
by James Manyika and Susan Lund in the Harvard Business Review, this shift is
taken into deeper context as they examine how the ‘Next Era of Globalization
will be Shaped by Customers, Technology, and Value Chains’. Kicking off with
the statistic that three quarters of companies say that their global investment
strategies are changing thanks to uncertainty over trade policy.
At the NRF
2019 Big Show, this trend was placed in sharp relief as brands
showcased the technology designed to drive customer experiences. From
artificial intelligence to virtual reality, numerous solutions were on display,
all providing the sector with much-needed insight into what could potentially
lie ahead and what could be used, right now, to transform customer experiences.
While on the topic of experiences, Ford has decided to shift its
focus from comfortable cars to intelligent beds. The company believes that
these high-tech beds will save marriages as an embedded conveyor belt – built
with car technology – gently rolls unruly sleepers back into position. Using
the Lane Assist technology, it’s called, somewhat unimaginatively, the Lane
Keeping Bed.
Pensa Systems and Birdzi, two startups immersed in the development of retail experience technology solutions, have revealed they’re joining a Dallas-based venture firm called RevTech. The company specialises in retail technology and tools that allow stores to become part of the so-called Age of Amazon with innovations in in-store drones, voice-activated assistants and more.
Retailers are under pressure to invest in digital and its potential.
The question is – who will succeed? The digital leader or the digital explorer?
An in-depth article in Retail
Customer Experience tries to answer the question as to which mindset
is winning the race to digital transformation, and why.
In New Zealand, the government announced a proposal to merge all of
the 16 polytechnics
around the country into a single national institute. The goal is to reform the
organisations in an attempt to redress some of the challenges it faces in falling
enrolments and increasing debts.
According to the report, out of the 16 institutions, nine were in
deficit while 11 suffered falling enrolments in 2017.
Also in the news was: the Selfcare
Summit 2019 that reimagines retail for wellness, Virtual Vision’s
launch of a platform
designed to create smarter physical stores, the partnership
between the Retail Industry Leaders Association (RILA) and the startup Smarter
Sorting for AI-based compliance, an analysis
as to what lies ahead for retail with regards to predictive analytics, and FDA
testing of a secure supply chain pilot programme.
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