Archive for the ‘Inbound’ Category:
LG aiming to globalize its Supply Chain network
Last month, at the Council of Supply Chain Management Professionals conference, LG’s Chief Supply Chain Officer Didier Chenneveau revealed the fact LG had been making dramatic supply chain strides with the goal of becoming a top three company in each of its markets. Some of the broader supply chain steps taken by LG include:
* An increase in outsourced manufacturing .
* Improved cost visibility across the organization
* Globalization of its supply chain.
* A move to a more demand-driven supply model with more accurate forecasting.
Among the specific strategies taken up by LG’s supply chain team are:
* Creation of 10 metrics across various areas to track progress and report to the CEO on them twice a year
* Standardize on one ERP system (Oracle)
* Standardize on one financial system
* Consolidate the various WMS/TMS instances
* Standardize RFPs and contract terms and conditions across the company
* Improve sales forecast accuracy from 30% in 2008 to its current level of 40% with the goal of 60%
* Make English the standard language across the company’s supply chain to facilitate better communication
* Standardize job titles in the supply chain
* Rationalize the more than 41,000 SKUs LG carried in 2008.
LG Electronics has been taking these steps with a goal of outsourcing more manufacturing as it moves from a mostly Asian manufacturer to a global consumer electronics giant.
Subscribe to the comments for this postEmergence of SCI Group Inc. to provide SC solutions
A unified brand called SCI Group Inc. headquartered in Toronto has evolved from the Canadian supply chain company that began as Progistix Solutions by combining AMG Logistics, Assured Logistics and First Team Transport. Featuring blue and red as its corporate colors, the company has created its unique unified brand design.
Jim Eckler, president and CEO of SCI Group, says that this new, integrated brand reinforces the company’s market position as an end-to-end provider of supply chain solutions to business, retail and industrial customers.
“By uniting all of our operations under one solid brand and through our revamped web sites, we are letting our customers know that we are a strong, stable company with multiple capabilities across a wide range of supply chain management services,” he says. “As the SCI Group, we can offer the convenience of an integrated solution using technology and advanced supply chain practices resulting in cost savings and streamlining of logistics and administrative functions.”
The three supporting brands involved in the SCI Group include Progistix Solutions Inc., which offers highly specialized service parts logistics solutions for technology and industrial businesses, SCI Logistics Ltd. for supply chain services for manufacturers and retailers with direct-to-store, business-to-consumer and business-to-business fulfillment requirements and First Team Transport Inc., which provides contract and dedicated transportation services for high-value products as well as general transportation management solutions throughout Canada. SCI Logistics Ltd. has been formed after the merger of the AMG Logistics and Assured Logistics brands.
SCI Group is a member of the Canada Post Group of Companies and a leading provider of high value-add supply chain solutions offering business-to-consumer, business-to-business and field service logistics solutions to organizations in the retail, utilities, high-tech, health care and manufacturing sectors.
A study on Success and Sustainability in the Supply Chain
According a report from BPM Forum and E2open released on July 20, nearly two-thirds of the supply chain and operations professionals have marginal or no visibility across all tiers and levels of their supply chain. In addition 78% of companies feel that the synergy and accountability in their global trading network is suboptimal.
The report which was titled as “Acceleration of ECO-Operation: Achieving Success & Sustainability in the Supply Chain,” surveyed more than 125 supply chain, operations, finance and executive professionals around the world to measure and quantify just how companies are managing the complexities of supply chain demands, distribution costs and environmental concerns.
The study which was conducted in Q2 2009 scrutinized the various tiers of supply and demand chain networks to find out their progress in achieving ECO-Operation, or optimal visibility, collaboration, and sustainability.
He study revealed that the major reason of companies not achieving their bottom line benefits was lack of leadership, visibility and standardized sustainability metrics. 42% of companies do not consider their carbon and energy footprint as including their entire extended supply chain, and only 55% say their customers would agree. More than half of respondents say that their competitors use green or ECO-Operation practices for competitive advantage. An overwhelming 85% of respondents say they are actively involved in new programs that drive operational efficiency, CSR and cost-savings across supply and demand chains.
“Unifying and controlling complex, globally-distributed value networks in turbulent, unpredictable times requires real-time operational insights down to the product level, accurate sourcing and sell-through intelligence, and relentless dedication to eliminating waste in all areas of the go-to-market process,” said Donovan Neale-May, executive director of the BPM Forum.
2009 Logistics Best Practices Gold Award to Kimberly-Clark Corp.
Kimberly-Clark Corporation, the customer of PINC Solutions, the leading innovator in real-time visibility enabled supply chain management solutions, has been awarded the 2009 Logistics Best Practices Gold Award for the company’s yard management project using a system provided by PINC.
“K-C transformed managing semi-trailers and yard jockey services at a 1,200-acre site with manual processes from a labor intensive, inefficient and costly process using paper logs, old data, unknown asset locations and lack of actionable information into a modern, Web-based management process to achieve real-time asset visibility and significant cost savings,” the judges of the award commented.
Michelle Kiang, Vice President of Marketing of PINC Solutions, said, “We are very excited to see Kimberly-Clark being honored for its achievement in using technology to improve operational efficiencies,” “By working in partnership with our customers, we have developed a unique technology platform that has proven to help the users improve their supply chain visibility and optimize their yard and transportation operations. Our customers see immediate returns on their investment by reducing costs and improving productivity.”
PINC is headquartered in Berkeley, California, and was named among the 2009 top 100 technology solution and service providers by both Inbound Logistics and Supply and Demand Chain Executive Magazines.
Risks involved in supply chain management
AMR’s supply risk management guru Mark Hillman said, “The greatest risks are the day to day operational risks that can detract from shareholder value and performance. You need to focus on high probability risks that you can control, such as supplier failure or market risks, and take steps to mitigate these.”
All leaders in the field on supply chain management have stressed on the fact the supply chain is a risky affair and there is a great need on focusing on the supply chain risk management. Yet it comes to sourcing cheaper and thereby getting a perceived savings in cost, we turn a blind eye to such risks.
The factors which emphasize the need for focusing on supply chain risk management are:
Political Risks : There is an increasing pressure on Government of different countries to put trade barriers and impose safeguard duties on imports to protect domestic industries against global competition.
Outsourcing to low cost countries: Due to challenges of lean economic conditions, lack of visibility & communication problems, the risks of supply failure, quality & environment related issues, lot of sourcing has shifted to low cost producing countries.
Demand fluctuation: With current economic low, there is always a risk of producing excess stocks that may have to be either discounted or written-off. On the other hand there is a potential of losing sales to competition if a pessimistic view of demand is taken.
Currency Risk : Indian rupee has depreciated by 25% in last one year and this is hampering the balance of trade.
Cash Flow: There is almost always a credit crunch and lack of liquidity despite all governments announcing revival packages & pumping liquidity in the market. To achieve sales targets, some companies may extend credit to their customers which impacts cash flow and business sustainability in turn.
Supplier Sustainability: The entire supply chain is dependent not on a single supplier but on a hierarchy of suppliers. So, even if one of these suppliers follows illegal practices, it poses a big risk not only due to disruption of supplies but also the dent in the reputation of the companies associated with such suppliers.
Well, there are other risks as well e.g. unrest, terrorism and natural disasters, which is beyond anyone’s control.
To conclude, every Supply Chain Manager should start analyzing and prioritizing risks to their business, and make plans to minimize and mitigate risk. The risk management involves three key steps viz, assessment, analysis and proper planning.
Advantages of ASN
A significant part of the supply chain is the management of inventory, and the best way to reduce inventory and improve fill rates is to manage inventory visibility.
When we talk of visibility, the concept is not confined to the inventory within the four walls of a warehouse alone; it also extends to incoming shipments. While warehouse management systems (WMS) and RFID, voice, or bar code-enabled real-time data collection make in-house inventory management simpler, an advance ship notice (ASN) gives you just the advantage you need to be informed about the nature of your inbound shipments, before they reach your warehouse or distribution center.
Once you receive the ASN from your suppliers, you can plan your storage requirements and docking procedures even before the shipment arrives, to increase your warehouse efficiency. You can also minimize inventory held when you know which items can be supplied on demand. And last, but not the least, you can entertain future orders knowing the exact inventory you will have on hand on order ship dates.