|
|
|
|
|
| Management Briefings
|
|
|
|
|
|
End of EDI?: Denis O'Sullivan (March 2010)
|
|
|
|
|
|
When electronic data interchange (EDI) was first introduced more than 30 years ago, it was
heralded as a ‘silver bullet’ to cure supply chain communications problems.
But while there has been considerable improvement in trading community communications, the
use of the web in today’s supply chains has brought challenges which EDI struggles to meet
effectively. Of course the internet has brought its own problems, but it has created opportunities
for taking the trading community to new levels of connectivity at far lower prices.
There are several issues with the exclusive dependence of companies on EDI to manage their
supply chain communications. These vary from supply chain to supply chain but are often a
result of one of more dominant trading ‘gorillas’ in the chain.
Dominant players often try to impose their standards on other participants – particularly smaller
suppliers. And while this may sound reasonable – they are a big customer – in fact it is impractical.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
An ounce of prevention: Mark Crone, Jeff Holmes & Kyle Hill, PRTM (November 09)
|
|
|
|
|
|
In today’s uncertain business environment, global companies need to make managing supply chain risk a top priority. In doing
so, many firms focus on their manufacturing operations. But they need to take a more holistic view of the supply chain. This
means not only developing the ability to identify areas at risk, but also having the strategies in place to eliminate those threats
before they wreak havoc.
Fires, earthquakes, hurricanes… these are some of the natural disasters that have long disrupted the balance in extended
global supply chains. Then there are the risks ‘du jour’ – piracy, salmonella outbreaks, oil price swings.
Yet sometimes events that don’t make the headlines can take just as great a toll: the default of an important supplier, changes
in environmental regulations, or restrictions on port capacity, to name a few (see Figure 1).
Whatever the culprit, the threat of a sudden disruption makes risk management critical for any company that has a supply
chain spanning several continents. Yet businesses often underestimate what’s needed to manage risk effectively or where their
supply chains are most at risk.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In demand: Professor Robert Shaw, Demand Chain Partners (September 2009)
|
|
|
|
|
|
Achieving fully integrated demand chain automation is a few years off for most companies, but the technology to achieve it is
available today. More and more companies in different sectors are increasing the degree of automation, integration and control
of their demand chain every year. And by 2010 there will be major consumer goods companies and retailers able to claim that
their demand chains are fully automated.
Demand chain automation (DCA) is a powerful competitive weapon for large companies, especially multinational firms.
Companies experimenting with it include Amylin Pharmaceuticals, Dell, Hewlett-Packard, HSBC Card Services, Intel and
Warner Bros Entertainment. This article examines: why DCA is growing so fast; its key characteristics; who uses it and why; and what benefits it provides.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cloud with a silver lining: Denis O'Sullivan, NetworkedWorld (March 2009)
|
|
|
|
|
|
The current hot information technology is internet ‘cloud computing’. Not only is this set to
change the way we all use computer technology, at work and at home – but we are seeing an
unusual development. Supply chain operations are amongst the first beneficiaries of cloud
computing, yet so far little is happening with the cloud related to manufacturing processes.
Of course, when it comes to the latest developments in software technology, logistics and
transport managers are usually at the back of the queue. There are many reasons for this – and
a common one is that manufacturing and ERP applications take business and budgetary
precedent.
Once those manufacturing systems were in place, there was relatively little budget left over for
the logisticians who were looking to make operations more efficient. However, with cloud
computing this is now changing.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weathering the storm: Martin Williams, Bisham Consulting (January 2009)
|
|
|
|
|
|
In recent years, despite the steadily escalating price of oil, the business climate has been good
and supply chains have generally become more efficient. As a result, most companies will have
signed off their supply chain budgets for 2009 reflecting ever greater demands for better service
and lower cost.
However, over the last few months all the assumptions for the foreseeable future have been
shattered. The threat of a global economic slowdown has become a reality. There is volatility in
the markets, firms are finding it difficult to raise capital and all the economic indicators are
pointing in a downward direction.
Suddenly healthy margins have disappeared and hopes for incentivised bonuses have been
replaced with concerns about job security. Retailers are nervous about high-street sales, the
construction industry is in freefall and the car industry has been forced into factory holidays and
lay-offs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In this together: Jason Barclay, Picme (November/December 2008)
|
|
|
|
|
|
Companies have often talked about supply chain improvement, but what does this really mean
in an environment where direct purchase cost is the key?
Currently, manufacturers are able to pass on price rises throughout the supply chain for the
ever-increasing cost of energy and raw materials, but is this sustainable in the medium to long
term? And can consumers afford this additional outlay?
If we consider true lead times, it is not unreasonable to assume that products being made
upstream today will not reach the end consumer for several months. To improve efficiency, and
therefore cost, organisations within supply chains need to work together to determine what
creates value and how to make it flow quickly along the supply chain.
If we consider the entire length of supply chains, organisations need to develop new ways of working between them that
reduce overall cost, lead time, inventory and the subsequent working capital involved. And traditional methods of reviewing
supply chain performance need to be replaced to meet the challenges ahead. Simply calculating earnings before tax and
deprecation will not motivate companies to seek decreasing lead times.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BRIC building: Nick Gill, Capgemini (September 2008)
|
|
|
|
|
|
Until recently, emerging market economies were mainly thought of as a source of low-cost
manufacturing and cheap labour. This view led to substantial increases in the foreign direct
investment (FDI) in these countries from the early 1990s onwards, as more industries became
globalised and companies in the developed nations attempted to gain access to the rapidly
growing domestic economies of the BRIC nations – Brazil, Russia, India and China.
A less-reported but growing trend, however, has been the growth in outward foreign investment
from these emerging economies. Although FDI from BRIC nations is still small compared to that
from developed countries, it is fuelled by inward investment and strong growth in their home
economies.
This growth is allowing emerging multinationals to manifest ambitious internationalisation
objectives that threaten the Western business model and promise to reshape the current
business landscape.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leaning towards innovation: Nigel Issa, Atos Consulting (August 2008)
|
|
|
|
|
|
Today there is a clear distinction in performance between organisations that invest in their product innovation capabilities and
those that do not.
The global economy enables businesses to rapidly eliminate competitive operational cost advantages through outsourcing and
low-cost country production. As a result, organisations are increasingly competing and sustaining competitive advantage
through innovation. This means pressures to innovate have never been greater, which in turn generates greater pressure on
companies’ product innovation capability. The need to compete via innovation has been heightened by increased regulation and specialisation of consumer needs. As a
result, the velocity and volume of demand for new or customised products has significantly increased.
Von Braun in The Innovation War (1997) found that: “Since the 1950s product lifecycles have shrunk by a factor of four as a
result of the accelerating pace of innovation.” The implication is that organisations have to innovate more – ie, bring more
products to market – in shorter timeframes than they were previously used to.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Think now, save later: Gideon Hillman, Hillman Consulting (May 2008)
|
|
|
|
|
|
The debate about extending the use of RFID across supply chains and negating barcodes has gone on for many years and will
doubtless continue for many more. But whether it’s conducted in the media or at conferences, the debate is usually being
argued by individuals with significant sector and technology knowledge and presented to an audience who may not have the
same level of understanding, but are the intended users of RFID technology.
What companies really need is a short, simple summarised overview that helps them to increase their awareness of the needs,
wants, do’s and don’ts when planning their RFID supply chain systems.
The single most important message is that defined objectives and planning are paramount.
It is recognised that RFID will enable – and already has in some cases – a new era of business optimisation, managing and
increasing efficiencies throughout the supply chain. However knowing that it can assist your business, and understanding how
it will do so, are two very different things – let alone knowing how to actually implement a system that provides a sound return
on the investment, whilst meeting your objectives.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Missing link?: Adam Jura, Datamonitor (April 2008)
|
|
|
|
|
|
Agility is a term that’s been used extensively within the manufacturing industry in recent years. It’s been applied to
areas such as IT, production, go-to-market, supply chain and even talent management, and it doesn’t look like abating.
What makes it such a fascinating concept is that there is no end point for manufacturing companies – it’s a constant
struggle to improve on existing operations and processes. But actually achieving this agility can be challenging for
companies that ultimately have a wide range of operational concerns.
Datamonitor’s research into the manufacturing industry has highlighted a number of strategies that companies can execute
to drive agility across organisational units and functions. Not least of these is linking plant-floor and enterprise systems –
the subject of Datamonitor’s recent report, Linking plant-floor and enterprise systems for greater manufacturing agility.
The two environments of the plant-floor and the enterprise have traditionally been disparate, as manufacturing
companies invest in what are effectively divergent IT strategies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Staying power: Greg Cudahy, Thomas Jacobson & Tiago Salvador, Accenture (Jan 08)
|
|
|
|
|
|
These days, there’s no question that more and more companies are recognising the key role pricing plays in improving
performance. This growing awareness of the need for strategic pricing has led to a surge in the use of sophisticated pricing
optimisation software – and a noticeable increase in the ranks of chief pricing officers.
Yet, in reality, most companies’ pricing competencies are paper thin. Despite pockets of analytical expertise in pricing at many
organisations, the insights gained are not getting to where strategic pricing decisions are being made.
There are abundant examples – which financial analysts are all too familiar with – of companies being drawn into bloody
price battles; and other companies are in danger of defaulting to a ‘win-at-any-price’ mentality as soon as the economy
weakens.
Companies are developing a sense of their customers’ willingness to pay based on demographic and geographic factors. But
on their own, these and other capabilities cannot consistently test or track the effectiveness of various pricing moves. In short,
most of today’s pricing capabilities are simply not sustainable.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All-seeing software: Simon Holloway, Bloor Research (November 2007)
|
|
|
|
|
|
Scenario 1 – No-one needs to tell you that hospitals are busy, sometimes hectic, places. Patients, doctors, staff and
equipment are continually on the move. Scenario 2 – Production shopfloors and warehouses can be littered with expensive assets that people cannot find quickly
enough to answer the urgent order. Scenario 3 – How many people are in a facility prior to the fire alarm going off? Locating people and especially equipment
can be a time-consuming and frustrating task.
In all these scenarios, real-time locating systems (RTLS) can help. But what is an RTLS? Well it is any wireless technology
that can be used to continuously determine and track the real-time location of assets and personnel.
An RTLS solution typically works by utilising battery-operated radio tags and a cellular locating system which detects the
presence and location of the tags. The locating system is usually deployed as a matrix of locating devices installed at a
spacing of anywhere from 50 to 1,000 feet. These locating devices determine the locations of the radio tags.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasure hunt: Barry Payne, Chandresh Harjivan & Mark Deck, PRTM (September 07)
|
|
|
|
|
|
Procter & Gamble. Eli Lilly. Boeing. These three companies, all at the top of their game, have
something important in common: technology scouting, the ability to rapidly identify and locate
emerging technologies to develop innovative products.
This is no coincidence. For the third year in a row, the Economist Intelligence Unit’s survey of
CEOs has reported that the failure to innovate is the one of the top risks faced in developed
markets today. Indeed, 45% of participants in its 2007 CEO Briefing survey said they plan to
rely more on outside sources of innovation over the next three years.
As more and more companies realise, traditional approaches to innovation – where R&D
organisations conceive and develop ideas internally – are no longer sufficient. To remain
competitive, it’s now critical to supplement internal efforts with new technologies from the outside.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wisdom of crowds: Tony Fish (June 2007)
|
|
|
|
|
|
Web 2.0 (two dot zero) as a movement is about the network effect, collective intelligence, wisdom of crowds, tribes, clans,
clubs and all other manner of long-tail matters.
Web 2.0 is the passing phase from the first manifestation, 1.0 – which centred on cost reduction – to the intelligent web.
Moving from 1.0 to 2.0 is the same as moving from separation, isolation and solitude to relationship, engagement and
conversation. 2.0 companies are being built on a number of principles, which are different and have a significant impact on
back-office systems, the supply chain and channels.
The Web 2.0 movement collected its name in October 2005 – when Web 2.0 was first described by Tim O’Reilly
(www.oreillynet.com/pub/a/oreilly/tim/news/2005/09/30/what-is-web-20.html). The movement has at its heart an ideology of
‘harnessing collective intelligence’. The intelligence arises from consumers; as users interact with websites, they provide data
on what is liked, wanted, demanded or worth sharing.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wasting away: Ian Curling, PSM Consulting Services (May 2007)
|
|
|
|
|
|
In the western world, according to the experts, one in three of us is destined to become
overweight. There seems to be very little evidence of any trend towards ‘leanness’. Except
for supermodels, personal success seems to be reflected more in kilos added rather than
kilos lost!
So is this trend for the individual also being reflected in the health and wealth of the
business corporation? It is 16 years since Womack, Jones and Roos gave new life to the
concept of ‘lean’ in their landmark book ‘The Machine that Changed the World’, and it is 10
years since they applied lean thinking to the total corporation, not just the manufacturing
processes.
So in the last 10 years what have you really done to embrace leanness in the way you think
and act in your business enterprise?
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From plastic planes to asthma inhalers: Tony Cronshaw, PA Consulting (March 07)
|
|
|
|
|
|
What do these products have in common: the ‘Femidom’ female condom, an aircraft made with
composite materials, and the latest asthma inhaler? The answer is that all of these innovations,
along with a raft of other ‘breakthrough products’, are pushing the boundaries of product
complexity to new levels. At the same time, they present unprecedented challenges in terms of
quality assurance (QA).
The reason that western companies are moving to ever more sophisticated manufacturing is
clear: products with genuine ‘breakthrough’ features can command a premium in the market.
Whether it’s a new type of condom giving women more choice and control, quieter and more
fuel efficient aircraft, premium food/beverages or the latest type of asthma inhaler, these
innovations typify a trend to design advanced products that deliver new benefits for the
customer, whilst restoring sales premiums otherwise eroded by low-cost imports.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The ultimate profit opportunity: A Mukherjee/R Sipcic, Accenture (January 2007)
|
|
|
|
|
|
To make informed forecasting and replenishment decisions, many companies bring together operational elements of production
and distribution with sales and marketing, executing sales and operations planning (S&OP) collaborative improvement processes.
As cross-functional and consensus-based processes, S&OP activities create value by keeping supply and demand in balance.
But most S&OP arrangements fail to consider or fully account for the effects of pricing and promotional strategies on the
upstream supply chain.
So how does the use of sales and marketing instruments affect upstream replenishment capabilities and overall profitability?
How do capacity, lead times and production status relate to a company’s ability to react to pricing or promotions-induced
demand swings?
Companies should extend the traditional S&OP process to include joint pricing and operational tactics. As Accenture’s
research and client experience confirms, this combined effort can help maximise a company’s profitability and accelerate its
journey to high performance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
What's new?: Professor Robert Austin, Harvard Business School (November 2006)
|
|
|
|
|
|
The future belongs to those who know how to create new things. I said this to a friend of mine,
a world-class product development manager, and he had this to say: “That’s right! We’ve got to
get manufacturing back in this country!”
But that’s not what I mean by ‘new’. There is, of course, a sense in which a manufactured
product – say, a new car rolling off an assembly line – is new. That particular car has not
existed in the world before. But there is also a sense in which that car is not at all new.
Before anyone performs the first operation involved in making a car on an assembly line, the
car and the process for making it are completely pre-specified in exacting detail. If there is
anything surprising about the car that results – if it is different from the product prespecification
in any way – we have a phrase for that: we call it a ‘quality problem’.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tales of the unexpected: Simon Bragg, ARC Advisory Group (September 2006)
|
|
|
|
|
|
What if forecasts were 100% accurate, both in terms of the timing and quantity of customer orders? What if production
adhered to its planned schedules and suppliers always delivered on time, in full, with the right paperwork? Then supply
chain management would be trivially simple. The main issues would probably be supply chain design, perhaps
execution automation, and some optimised routing and scheduling. In this nightmare scenario, supply chain
management would be so trivial that most supply chain managers, consultants and analysts would be out of a job.
Thankfully, forecasts are lucky or lousy, production always runs into unexpected problems, and suppliers are unreliable.
It is, therefore, how uncertainty is managed that is the key supply chain problem. The challenge is to build a supply
chain that is robust against demand, production and supply uncertainties.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Good and bad complexity: Nick Toone, Arthur D Little (June 2006)
|
|
|
|
|
|
Dealing with organisational complexity has become an ever-increasing preoccupation for the boards of multinational
corporations. One key to the success of the best companies is the way they deal with complexity. Some have realised that the
complexity of a product or service offering is often a larger drag on profits and growth than any other single factor in a
business. For others, complexity has driven outstanding market returns and prevented the entry of competitors.
The most obvious sign of increasing complexity in business is an ever-broadening portfolio of products and services. Most
multinationals face constantly changing customer requirements, globalisation and intensifying competition. This, coupled with a
desire for growth, leads to a diversification and expansion of their product and service offerings, increased product
customisation, multiple distribution channels and differentiated service bundles.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Breaking down the barriers to efficiency: Batey/Hoey/Evans, Capgemini (April 06)
|
|
|
|
|
|
The drive to increase business efficiency is now a survival issue. Globalisation and internet commerce bring mounting
competition from low-cost producers. Along with cost pressures, organisations face demands for improved customer
service and reduced order-to-delivery lead times.
To remain competitive, businesses must re-invent themselves radically and fast. The solution we advocate here is a
‘shared service’ approach, which redefines selected operations as a series of interconnected services to replace
traditional independent functions. This approach is already well-established for back-office functions like procurement,
but now it can be successfully applied also to front and middle-office functions.
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|