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LSCMS Blog

Blog for updates and happenings in logistics in the Asia-Pacific region

July 31, 2014

Need Something from the Vending Machine – Saw Blade, Drill Bit, Wrench?

Filed under: Logistics,Newsletter,Supply Chain Management — admin @ 11:09 am

drill-bits-1414624-mMSC Industrial Supply (MSM) is one of the country’s largest suppliers of what are called “indirect supplies,” manufacturing tools and materials that don’t end up in the final products: drill bits, safety helmets, wrenches, clamps, saw blades, and the like. MSC will sell you a stapler, but most of its clients aren’t Dunder Mifflin-style cubicle farms—they’re manufacturing plants that cut steel or process foods or produce paper.

Over the past few years, MSC has started offering those clients the option of installing special vending machines on their shop floors. Some look like tool chests with touchscreens; others look a lot like snack machines. Workers who need supplies can skip the stockroom and go to the MSC machine, swipe an ID card, and choose whatever they need.

[Read more… Curated from Business Week]

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July 26, 2014

The Countries That Will Shake Up Global Supply Chains in the Coming Year

Filed under: China,Newsletter,Supply Chain Management — admin @ 11:09 am

Podcast.GIFWhen it comes to assessing supply-chain risk and opportunity in emerging markets, the landscape never stops changing.

Today, China is the go-to country for cheap manufacturing. Tomorrow, it’s somewhere in Southeast Asia, or even Latin America. Shifting political, economic, legal, environmental and labor conditions make it tough for businesses to decide the best places for sourcing and selling their products.

[Check out the podcast… Curated from Supply Chain Brain]

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July 25, 2014

Ocean Carriers Are Hardly Finished Trying to Form Alliances

Filed under: Newsletter,Supply Chain Management — admin @ 11:08 am

Sea (Port Cranes) - by Ronald See

Sea (Port Cranes) – by Ronald See

Ocean carriers are clearly not yet done with mega-alliance expansion following China’s rejection of P3. Maersk and MSC’s subsequent 2M agreement is only the latest. Evergreen and the CKYH alliance are still talking to the US’ Federal Maritime Commission (FMC) about extending the scope of their operating agreement between Asia and Europe to include the US, and CMA CGM has yet to clarify who its new partners will be. The hot money is on CSCL and UASC.

New partnerships are required as no one has yet come up with a better alternative to reduce costs and improve service frequency at the same time, short of take-overs and mergers. Some may claim that mega-alliances are little better than price-regulating cartels, but poor to non-existent ocean carrier profitability since their introduction argues otherwise. As in the airline industry, where just three alliances handle the majority of passenger traffic, ocean carrier alliances handle the majority of East-West container traffic, and less integrated vessel-sharing agreements handle much of the North-South traffic. As ships get larger, even bigger cooperation agreements between more carriers will be needed to squeeze out economies of scale.

[Read more… Curated from Maritime Executive]

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July 22, 2014

Pharmaceutical Supply Chains: The Riskiest Business

Filed under: Newsletter,Supply Chain Management — admin @ 11:09 am

network-spheres-1008232-mAll supply chains entail a certain degree of risk. But none faces a more daunting challenge than the business of pharmaceuticals.
Pharma supply-chain managers must cope with four distinct threats: Intentional adulteration of product, the theft of popular drugs for illicit or unintended use, counterfeiting of branded items, and diversion to unauthorized markets.

As if that weren’t enough, the industry is grappling with a pair of new regulations that intensify scrutiny of product moving throughout the chain.

[Read more… Curated from Supply Chain Brain]

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July 20, 2014

How to Attract Millennials to a Career in Supply Chain

Filed under: Newsletter,Supply Chain Management — admin @ 11:12 am

Podcast.GIFThe shift is happening. Baby Boomers are beginning to retire, and Millennials are on the rise. But how to entice them into a career in supply chain?

One way is to recognize excellence in those younger individuals who are already on the job. ThomasNet.com has joined with the Institute for Supply Management to create a “30 Under 30 Rising Supply Chain Stars” recognition program. The idea is to highlight accomplishments by high achievers, as well as attract other Millennials – job seekers between the ages of 18 and 32 – to the field.

[Check out the podcast… Curated from Supply Chain Brain]

A popular conversation on Twitter:

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July 18, 2014

The Changing Role of the Supply Chain Manager

Filed under: Newsletter,Supply Chain Management — admin @ 11:09 am

team successSupply-chain managers have a new focus: to move from cutting costs to enabling new processes and making corporations more connected and agile to create value across the entire enterprise.

A key part of this transition includes the transformation of traditional supply chains into demand-sensitive networks, according to research in an Economist Insights report. Creating more agile companies requires building acceptance of rapid change into the organisational structure, allowing decisions to be made collaboratively and having roles and responsibilities be more flexible. Supply-chain managers can help their companies become more agile by making best use of the new data and analytic tools available to them.

[Read more… Curated from Supply Chain Brain]

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July 16, 2014

Over 50 Percent of Retail CEOs See SC as Strategic Differentiator

Filed under: Logistics,Newsletter,Technology — admin @ 11:12 am

eccommerce-concept-1-1415244-mBut many are not making required transformation to take advantage of the pace of change according to survey done by PwC for JDA Software

Over 50 percent of retail CEOs see supply chain as strategic differentiator, but many are not making required transformation to take advantage of the pace of change

Digitally-connected consumers have turned retail models upside down as omni-channel shopping has transformed supply chain from an important business concern to a mission critical one. So profound is this change that 50 percent of CEOs recognize that their supply chain can be a strategic differentiator. However, 83 percent of worldwide CEOs believe that their retail supply chains are currently “not optimal” for today’s changing retail environment.

[Read more… Curated from JDA Software]

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Most Retail CEOs Don’t See Omnichannel Shopping Affecting Them. What Are They Thinking?

Filed under: Newsletter,Supply Chain Management — admin @ 11:12 am

The technology-driven shift to omnichannel shopping is the most transformative change to hit retail in decades. Yet in a global survey of CEOs conducted by PwC, only 22 percent felt this monumental shift would impact their organizations. Are these retail CEOs missing the boat?

[Read more… Curated from Supply Chain Brain]

SUPPORT SUPPLY CHAIN RESEARCH IN THIS AREA: Omni-Channel Fulfillment Survey

The purpose of this Survey is to develop a better understanding of the best practices being used by retailers, wholesalers, and their channel partners to ensure on-time order fulfillment in the omni-channel environment. In other words, how will fulfillment practices evolve with the proliferation of multi-channel commerce. ARC Advisory Group will use the information collected in the survey to identify the business processes and technologies that are driving omni-channel success.

Who should take this survey?
Supply chain executives and managers that are responsible for order fulfillment and related processes.

Privacy
All responses will be strictly confidential. No individual or company specific information will be disclosed. All responses will be tallied and only aggregated results will be published.

Benefits
You will receive a FREE survey summary report upon publication that will help you gain valuable insight into how your peers approach omni-channel fulfillment.

The survey is located here, at Omni-Channel Fulfillment Survey.
https://www.surveymonkey.com/s/ocresearch

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Strategy & Strategic Planning for LSP’s

All logistics providers — 3PLs, transport, forwarders, warehouses, logistics centers, ports and others — and whether they are asset based or non-asset based should have a strategy. The strategy identifies challenges, issues and risks with markets and their dynamics; and, going forward, can set the direction where the company is going for new markets and new business and customers to grow sales and profits.

Surprisingly, despite the purpose and benefit, many service providers do not have a viable, current strategy. Instead they view developing one as too much work, react to what customers ask or what competitors are doing, or have one that is outdated. In a way, they letting business vagaries drive their direction and future. Having no strategy can be a risky approach, especially if competitors, established and the potential new entrants, have a well-done strategy and especially given the reality of global economic change.

The strategy can be operations focused or it can be a significant change, to transform the company. Which strategy is developed can be based on and reflect risks for the business or for the service sector, competition, or changing customer and/or market segments.

There are two parts to a successful strategy—first, developing one and second, executing it. Developing a strategy comes from serious, formal strategic planning process. It involves a blend of financial and non-financial objectives. The plan should also focus on the present business, and how it will adapt to the future and new services and opportunities. It identifies where the company is going–and where it is not going– and what it takes to succeed in that service arena.

Planning. The starting point is where the business is now as to present dynamics with trends, markets, services, and customers; value proposition, and competitive positioning, coupled with sales and profits. At any stage of the planning process, at the minimum, a SWOT (Strengths, Weaknesses, Opportunities, and Threats) is useful for the present and potential future scenarios.

Planning contains mistakes that can limit the ability to develop a worthwhile strategic plan. Some of the shortcomings that can lead to a bad strategy include:

• Firms only go out one to three years with the plan. While that span is easier to deal with than looking out five years or so, that is based too much on what has happened, miss-assumes what will happen, over-assumes the company’s position in that future trend and is not strategic. It is more like a budget or extended sales plan.

• As a corollary to the short-span view, companies confuse goals with strategies. Increasing sales or reducing costs by a certain percent is a goal, not a strategy.

• Providers try to mimic what a competitor is doing, especially if it is new. That is not a strategy. A good strategy separates the business from the competition. Emulating competitors or chasing the next new logistics service is a short-sighted approach that often lacks understanding of market niches, operational nuances and value proposition.

• Companies stay with what they are familiar with, their comfort zone. This can be a myopic bias against performing the diligent planning analysis that is necessary.

• It does not identify and address hard questions and challenges, such as how sustainable the present business approach and operations model are. That negates the concepts of strategy and of planning.

• Planning is not rigorous and does not adequately assess both external and internal factors. Internal analysis does not get the rigorous attention it should get. Diligent self-assessment is required, but it can be difficult. Overestimating abilities and underestimating problems short-circuit any serious planning.

• Companies oversimplify trends, especially global ones, and their impact on future business. They let the past dictate too much of what will happen, even against the dynamic and changing global business world. Firms do not comprehensively deal with uncertainty and look at “what if” scenarios. It is a dismissive approach based on the past. Change, with its speed with competitors and markets, is more than local; it is global.

• Businesses create a wish list of strategies. Aggregating a catalog of possible ideas, no matter how worthwhile, is not strategic planning. The effort dictates potential strategic choices be culled and prioritized and that hard decisions must be made on what to do.

• Service providers do not scrutinize how well the strategy positions the service offering to the dynamics of global economic and business forces. They also overestimate potential competitive advantage—and underestimate its transiency– that the firm may create with its strategic placement.

• Companies keep the planning within the C level and do not extend down to others who may have a better understanding of the present activity. There is also an underlying assumption that what a company and its executives do are transferable to the future. This lack of communication and buy-in with the planning often continues with attempts to execute the strategy—attempts that often fail.

• Planning is an annual process with little happening with regards to implementation. That creates frustration and lack of interest with the effort.

There are basically three approaches for logistics service providers to strategically differentiate themselves—

1) Status quo. The conservative, stay-the-course option may seem like the safest choice; but it carries significant risk in the ever-changing and competitive global economy. Executives with strong risk aversion favor this way. It depends on the past to predict the future and on simplified assumptions to assume away uncertainty.

2) Organic growth. This can be a slow and assumed steady method using internal capabilities and resources. The approach implies high expectations and requires improved performance.

3) Aggressive growth. External partnerships or alliances and, especially, merger and acquisition are options with this choice. In addition to identifying right target firm, timing is an issue with this choice.
Companies, whether using organic and aggressive, can pursue one strong initiative or a few worthy opportunities. These approaches mean there will be an allocation, even reallocation, of resources–capital, people, assets and technology.

Going forward, firms should adapt and change their present businesses and build new ones. Companies should both change existing services and create fresh service offerings. It is not an either-or as to adapt or create; it is to do both, unless the plan involves divestiture or maximize profits of the present service and let it fade away.

Execution. Strategy implementation is critical. The best strategy, without good execution, will struggle to succeed. And the more dramatic the strategy is with scope and impact, the greater is the challenge for sound execution. An operations strategy has an internal capabilities and requirements, perhaps best-in-class. The significant change strategy has both internal and external requirements. Each strategy carries different proficiencies to implement and creates challenges for present executives, managers and employees to have the skills to implement the strategy.

Achieving the strategy separates planning for the sake of planning and planning needed to advance into the future. It also demonstrates the conviction that the company has in the strategy. Executing the strategy means communicating the plan within the company and with stakeholders to build support—both operating and financial–and aligning the business with its strategy. Adequate resources and defined responsibilities for execution are needed, along with corresponding, relevant metrics to track progress.

The transformation and its rate of implementation to carry out the strategy may require recognizing and dealing with the need for change management. In reality, there are strong similarities between change management and successfully implementing a strategy.

Tied to the grand strategy are underlying strategies and implementation plans for sales, pricing, marketing, positioning, operations and technology. Logistics providers should recognize the life cycle to their services, especially with regard to profit maximization and the commodity service view of their offerings. This service life cycle creates the need for the subset of strategies and fulfillment of them. How people within the company grasp and execute these opportunities can have significant effect on long-term margins.

While direction can come from the top level, carrying out the execution needs clear lines of responsibilities couple with a coordinated, cross functional effort by different groups within the company. There can be no standalone activities for success. It should be integrated. The potential for assuming away the need for the collaboration can create unnecessary surprises and failure to gain all the market, operations and financial benefits of the strategy.

Strategy planning and execution are not easy for logistics providers. They are a challenge. But as difficult as they are, doing nothing in the face of dynamic competitive and market changes can be dangerous for all stakeholders. Logistics providers that do not plan well and implement well let events drive where they are going. They do not control it. These providers are market followers, not market leaders. As a result, these firms do not transition to take full advantage of opportunities. They miss out on market share, customers and profits that companies, who have a coordinated planning and strategy execution, earn and enjoy.

TomLTD2Tom Craig is president of LTD Management, a cutting-edge consulting firm that specializes in logistics and supply chain management. Tom has real world supply chain experience with major global corporations. He has an MBA in logistics from The Pennsylvania State University. 

LTD Management’s consulting is reflects the actual experience and knowledge of its team. LTD provides strategic and tactical consulting with solutions that work. The company website is http://www.ltdmgmt.com

Tom is a long standing Advisory Board Members of LSCMS and a judge at the upcoming LogiSYM2015 Industry Awards – www.logisym.com

Tom can be contacted at tomc@ltdmgmt.com

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July 15, 2014

How Legacy I.T. Can Sabotage a CEO’s Agenda for Change

Filed under: Newsletter,Supply Chain Management,Technology — admin @ 11:12 am

server-concept-1439272-5-mNewly hired chief executive officers arrive at their companies in a flurry of publicity and promise, determined to place their personal stamp on the organization. But there’s one element that can cripple their efforts from the very start.

The culprit is legacy information technology. Lurking deep within the guts of many businesses are systems that can’t handle the requirements of modern-day supply chains. They are the enemy of all attempts to revamp the way that companies interact with suppliers upstream, and customers downstream.

There’s also the issue of corporate security. Old systems, riddled with dead code, leave companies vulnerable to attack. “It’s a perfect place for people with malicious intent to hack in and write code,” says Miten Marfatia, CEO of EvolveWare. “When the time is right, they will activate it.”

The presence of old I.T. goes against the “lean-and-mean” philosophy that so many companies practice today. They might be laser-focused on driving out wasteful inventory and redundant business processes, but that level of diligence doesn’t necessarily extend to software applications.

[Read more… Curated from Supply Chain Brain]

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