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| Management Briefings
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A new dimension?: Tim Lawrence, PA Consulting Group (October 2008)
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In the last year or so there has been a lot of talk about a new approach to supply chain management – an approach which
turns the supply chain from concentrating on cost reduction into becoming a flexible and responsive, service-oriented
commercial competitive edge.
This new approach has been coined ‘customer-driven supply’ (CDS) or customer-driven logistics. But is it just talk – is this a
commercial competitive edge or just a myth?
There’s no doubt that supply chain is coming out of the shadows and is increasingly being recognised as a key driver for
improving financial performance. More leading companies are looking to the supply chain to create a competitive edge which
will directly impact their financial performance.
As this recognition emerges, supply chain is becoming much more closely linked with sales & marketing, and leading-edge
companies are integrating demand creation activity with supply chain capability. These new supply chains are more customer
centric, with strong collaboration between supply chain partners who are all focusing on the ultimate end customer.
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The innovation culture: Mateen Greenway, EDS (June 2008)
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Manufacturing and supply chain companies are keen to innovate and be seen as innovative.
But why should innovation be so attractive? After all, innovation is not a thing that can be
purchased or installed like a computer system. Rather it is a culture that must be adopted and
nurtured – and it needs to have some aim or purpose for the company concerned.
So why is there a focus on manufacturing innovation now?
This trend can be traced back to the 1990s and early 2000s which can in many ways be seen
as an era dominated by corporate cost cutting. The mantra was ‘if it is not broken, then do not
fix it’. But this approach was a short-term view and when properly applied, concentrated on
reducing waste within an organisation.
Information technology also plays a role in this. The widespread perception that IT is a cost of doing business rather than
something that contributes to the success of a company suggests there is no clear link between IT and business value.
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Evolution of EAM: Nigel Spooner, Logica (February 2008)
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Enterprise asset management (EAM) has undergone a rapid change in recent years, maturing
into a co-ordinated and focused strategy from its roots in various isolated functions. But the
recent research study, Agile working: unlocking productivity improvements for physical asset
managers in Europe, commissioned and published by Logica, suggests that organisations could
be missing out on huge productivity gains by failing to use new techniques and technologies to
manage assets more effectively.
In fact, an inability to provide real-time asset information to engineers in the field, combined with
a lack of flexibility to reschedule their work dynamically, could be costing European businesses
potential savings of €5 billion each year.
The report reveals that field service crews in the telecoms, utilities, transport and allied service
industries spend over a third (39%) of their time back at base or en route to jobs, and only 61%
of their time performing tasks in the field. By reducing travelling time and increasing productivity,
companies with 500 field workers could achieve annual cost savings of almost €2 million each.
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Pulling it all together: John Pope (December 2007)
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As I write this I have a client in mind, a mid-size engineering company of about £30 million
turnover which should be making about £2 million profit but is not.
This company manufactures, on three sites, large-ticket items for the construction industry and
also for home improvement. It has a big range of standard products in a variety of sizes and
finishes, and an even bigger range of specials, which are manufactured to customers’ order. It
supplies these products to its market through a combination of specialist dealers and construction
companies, and its despatch and transport bill is big – a lot bigger than its meagre profit.
Concerned about its distribution costs, the company commissioned a pretty good survey by
specialist transport and distribution consultants who reckoned there was scope for several
hundred thousand pounds a year saving if it was managed better. Integrating the management
and production of distribution is their solution. So should the client go for it?
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Why buy?: Denis O'Sullivan, NetworkedWorld (October 2007)
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One of the biggest inhibitors to efficiency and high levels of customer service in the supply
chain has always been a lack of real-time relevant knowledge. There is plenty of historical data
about what went right and wrong, but it is a huge task to recover and analyse this to gain a real
understanding.
What is needed is real-time knowledge of what is happening out there now – but delivered in an
affordable way, without the need for major capital expenditure.
Yet companies are wasting money, time and resources in buying traditional software licences
for their logistics and transport operations; and they wasting even more money on the capital
expenditure needed for the hardware and annual maintenance and upgrades. There are also
hidden costs, one of the most significant of which is the disruption to business for installation
and regular upgrades.
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Towards the truly agile: Jeremy Batchelor & Ian Kirkpatrick (July/August 2007)
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Despite all the apparent advances in information technology, we are still a long way from a vision of truly agile logistics
systems. Furthermore, we are perhaps guilty in logistics of attempting world domination through management of the ‘supply
chain’. So this article explores how on the one hand technology has to evolve considerably to deliver true agility, and how on
the other hand as logisticians we need to ‘stick to the knitting’ of logistics. Over recent years, in moving through the terminology from distribution via logistics to supply chain, there has been an
appropriate recognition of how vital the moving and storing of goods is to the long-term success of logistically intensive
organisations.
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The good habits of collaboration: Rod Horrocks, Procertis (February 2007)
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Organisations are awash with technology that could potentially help them create and operate
highly efficient, flexible and productive supply chains. But you have to look very hard to find a
working example of supply chain excellence – even within a single organisation, let alone
across an extended enterprise of partners.
So what must organisations do to make their supply chains work the way they dream them?
Companies need to rethink what it means to be a part of a supply chain, and in particular they
must overhaul both their attitudes to collaboration and their habits of working. If companies build
their supply chains together, and trust each other, they will achieve more than they’ll ever get
from the deadly combination of computers and conflict.
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Spot the difference: Andy Coldrick & Duncan Alexander, StrataBridge (Dec 2006)
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The last few years has seen the emergence of differentiated supply chains to meet higher customer expectations, in an
environment of fierce competition and pressure to increase market share.
Cost and efficiency were (and still are) seen as crucial, but in the late 1990s companies were demanding more ‘speed’ – the
ability to respond quickly, to increase flexibility, to customise products at the last moment, and to deliver more frequently. Many
businesses, particularly in the fast moving consumer goods (FMCG) industry, invested in these areas in an attempt to be first
in responsiveness and adopted the mantra of ‘responsiveness, flexibility and agility’.
But there is an implicit danger in seeing responsiveness as a supply chain panacea to please customers.
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There may be troubles ahead: Simon Tomlinson, The Logistics Business (Oct 2006)
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Warehouse automation has been around for more than 40 years. So you would think it would
be getting easier to get right – yet in reality it is often more difficult. It is not that modern
automated warehouses don’t work, just that on average it is taking longer to get them working
properly, during which time users suffer great inconvenience and stress, not to mention cost.
These are multi million-pound projects which form the linchpin of UK logistics operations for
many major organisations, delivering massive savings and customer service improvements over
the old manual operations they replace. So why is it becoming increasingly difficult to
successfully implement major warehouse automation projects in the UK? There is certainly
more than anecdotal evidence that this is the case.
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Implementing mobile solutions: John Hookham, Adrelia (August 2006)
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The first part of this article looked at choosing a mobile supply chain solution and the various
hardware options for client-side applications together with the need – if indeed there is a need –
for real-time data communications. This second part addresses security, server-side integration,
whether there is any benefit in running a pilot project, ongoing deployment issues and the hard
and soft business benefits. The conference room pilot has been a standard part of the ERP (enterprise resource planning)
software selection and proof-of-concept process for many years. And many suppliers and
purchasers apply this same approach to mobile solutions. However there is little, if any, value in
piloting a mobile solution providing you take care when selecting the solution.
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Into the unknown: John Hookham, Adrelia (July 2006)
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For many service management companies and plant maintenance departments, the provision of
handheld devices to mobile workers is seen as a cost-effective way of increasing their
productivity and efficiency while improving overall service levels and meeting SLAs (service
level agreements). The message is simple: you can use mobile technology to add to the bottom
line by improving workflow and shortening the data feedback time.
But for most organisations, mobile technology is an unknown entity. The IT department has
often grown up with propriety hardware and software but has made the transition to standardsbased
client/server or web-based enterprise applications. Connecting remote workers to
central systems (other than via email) is new and different, and in many cases the IT
department is not even clear on the questions to ask. In fact, there are two fundamental
questions.
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RFID comes of age: David Jacoby, Economic Intelligence Unit (May 2006)
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Like many ‘hot’ technologies, radio frequency identification (RFID) has its supporters and opponents. The technology
enthusiasts believe RFID will unlock a multitude of valuable applications, ranging from mundane but highly economical
track-and-trace technologies in the supply chain, to cutting-edge uses in the healthcare, military and security sectors.
On the other side of the debate, consumer privacy groups have campaigned strongly against a technology that could,
they argue, allow unscrupulous companies to gather and misuse sensitive information about their customers.
In reality, RFID is neither as powerful nor as dangerous as it is sometimes depicted – at least, not yet. What is already
clear is that RFID can make many business transactions more convenient, improve product availability in stores, reduce
fraud and theft, and help businesses run more efficiently. In short, it has the potential to make many things work a little
bit better.
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A S&OP to success: Robin Goodfellow, MLG (January 2006)
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We constantly hear stories that few companies are achieving their expected benefits
when implementing supply chain IT systems. There can be many reasons for this which
are well documented. But one possible problem is the lack of a sales & operations
planning process. It is not the software that is important – it is the creation of an
effective, efficient S&OP process, leading to a high-level monthly review and approval of
the plans. First, a recent definition: sales & operations planning is a decision-making process to
balance demand and supply, to align volume and mix, and to integrate financial and
operating plans. It is essential that the top-level management of the business accept ownership of and responsibility for
the S&OP process. It is their tool for steering the company to deliver the strategic objectives and business plan. They
own the process, and are responsible for ensuring that it adds value to their business.
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