Archive for the ‘Inventory management’ Category:
New solution from Oracle to help shippers expedite their invoicing
Oracle has come out with a new solution designed to expedite financial settlement and billing which will help the shippers gain more speed and transparency in invoicing. This is being termed as the industry’s ‘first comprehensive” approach to managing Enterprise Application Documents. This announcement was made at “Oracle OpenWorld” and aims at helping the shippers expedite business processes constrained by critical information tied up in paper forms and electronic documents.
“When your employees can’t see critical enterprise documents like invoices, customer agreements and product specifications while they are working in their CRM and ERP applications, they can feel like they are flying blind,” said Andy MacMillan, Oracle’s vice president, product management. “We realized that we needed to take a comprehensive approach to managing Enterprise Application Documents that would work both in the context of CRM applications that require flexible, ad hoc access to customer and product documents and with ERP applications that have high volume, transactional requirements.”
“We realized that just providing ad hoc or transactional support wouldn’t let our customers empower all their users and reap the productivity gains possible through a truly unified approach to Enterprise Application Documents,” added MacMillan.
Oracle’s Enterprise Application Documents approach is enabled by the integration of Oracle content management products, part of the Oracle Fusion Middleware product family, and Oracle Applications. With this integration, Oracle is providing its Applications’ customers with a set of content management services that makes all paper-based and electronic documents — including invoices, HR forms, product specifications and customer contracts — directly visible, searchable and manageable from within Oracle Applications.
Subscribe to the comments for this postLG 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.
Emergence 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.
Maersk Logistics & Damco merge to provide a host of logistics services
The two brands, Maersk Logistics and Damco, of Maersk Group, Copenhagen, Denmark, have been merged into a single brand which will now handle the companies’ supply chain management activities as well as its freight forwarding business. At present, Maersk Logistics brand deals with supply chain services and Damco handles the forwarding services. The merger will take place on September 7 and after that the unit will operate under the single brand name, Damco.
According to a statement released by the Maersk Group, this new brand Damco, will have a base of more than 10,000 global customers and will cover a range of logistics services from forwarding and time-sensitive reefer logistics to advance supply chain management solutions and consultancy.
“We believe we represent the best of multiple worlds,” Rolf Habben-Jansen, chief executive officer of Maersk Logistics and Damco, said in the release. “The locally anchored and customer-focused forwarding business combined with the advanced and visionary solutions of our supply chain solutions — all backed up with the strengths, stability and capabilities of the A.P. Moller-Maersk Group.”
CSCMP’s Annual report shows decline in logistics industry
CSCMP’s 20th Annual “State of Logistics Report®” released by the Council of Supply Chain Management Professionals (CSCMP) shows that the US logistics industry is finally facing the blow of recession. The report has tracked and analyzed all the costs associated with moving goods through the US supply chain since 1998 and has included key metrics in US logistics such as transportation and inventory-carrying costs, freight volumes, and revenues.
Founded in 1963, the Council of Supply Chain Management Professionals is the leading
worldwide professional association dedicated to education, research, and the advancement of the supply chain management profession.
According to the report which was released at the National Press Club in Washington, DC, after rising over 50% during the previous five years, business logistics costs fell to 9.4% of US Gross Domestic Product (GDP) in 2008. This number is down from 10.1% in 2007.
Total US logistics costs dropped to $1.3 trillion last year, a decrease of $49 billion from
2007. Interest rates plummeted to over 50% lower in 2008 than they were the prior year.
In 2008, inventory-carrying costs plunged 13% due to both a 2.2% drop in
inventories and an 11.2% decrease in the inventory-carrying rate. Warehousing costs, however, rose 9.5%.
Transportation costs were only up 2% over 2007 levels. Trucking, which comprises 78% of the transportation component, increased 1.3% compared to 4.4% for rail, air, and ocean modes.
Rick Blasgen, CSCMP president and CEO said, “The economy will eventually recover, and when it does, those companies that use the statistics and industry insight contained in this report will be better prepared for the business boom ahead. This research details ways that company leaders can capitalize on the recovery when it occurs, such as restructuring their distribution networks to maximize efficiency and minimize miles, investing in technologies to facilitate ‘green’ transportation, and improving real-time data flows to increase visibility and enhance productivity.”
Importance of Supply Chain visibility to cut down inventory costs
It is general notion that the market for medical goods is more or less consistent and devoid of fluctuations but the fact is even medical industry need supply chain visibility to reduce variable storage costs and obsolescence and inventory carrying costs. To have the right products at right time is the key to success and reduced costs for any industry.
Here one can site the example of Terumo Cardiovascular Systems (Terumo CVS), which saved around $1 million — in one year — by reducing its inventory by 36%. Terumo CVS is a global manufacturer and distributor of more than 1,500 finished goods like heart-lung machines, disposables including blood oxygenators, and a steady flow of custom tubing pack orders.
These products face many variations and indispensable steps in its supply chain mixed with seasonal demand, it was quite difficult to track the numerous plants and distribution centers despite its efficient forecasting system.
“Believe it or not, even medical products are seasonal,” says Kevin Doughty, Director of Supply Chain Management for Terumo. “Our three biggest sales months are October, January and March because people avoid having surgery during the holiday season.”
Finally, to increase its supply chain visibility and to track the seasonal changes, Terumo CVS implemented Demand Solutions Forecast Management and Requirements Planning in 2006. This increased their visibility into supply and demand streams enabling them to reduce their inventory by more than a third in one fiscal year with an effect of a $1 million savings. Terumo CVS’ executives also hold monthly Sales & Operations Planning meetings to make strategic decisions based on the forecasts.
To conclude, one can say that the only way to save costs in these recessionary times to increase visibility in supply chain management and thus cut down on inventory costs.
Facing the challenges in Contract Management
Contract management can be the link between strategy and execution and that makes contract management a tricky part as enterprises could build or lose significant savings through contract management. Contract management plays a vital role in focusing on key measures such as compliance, collaboration, and commitment; and the impact of globalization, re-sourcing, re-negotiation and innovation. As such, implementation of the ‘right’ strategy can help you address issues while leveraging contracts across the enterprise.
When companies (esp. in Retail and Manufacturing) invest on Contract Life cycle management packages / tools, they soon realize that the package is not flexible enough to manage the growing business needs such as Globalization, changes in business processes like invoicing against contracts etc. Apart from this, some of other challenges include
Lack of collaboration internally as well as externally,
Absence of clear metrics and measurements of contract values and compliance,
Penalties for non-compliance unknown,
Lack of tools to track and manage contracts
And finally poor implementation due to poor articulation of user requirements and organization TCM – Transition Change Management aspects not addressed.
In order to face these challenges, before investing on any contract management solutions, it is suggested to create a compelling business case by auditing internal contract management processes, systems, and controls. This will ensure there is no inflexibility in the system. Apart from this, Central Repository should store all the contracts and all authorized parties should have access to the past and the current contractual information.
All sub-agreements should roll up to the parent agreement like Item level to Commodity level to Supplier level and Department to Company to Regional org to the HQ. Also template based contract creation ensures that the appropriate clauses, terms and conditions are used and templates can streamline contracting cycle time, minimize risk, and maximize compliance.
Last but not the least, it is of utmost importance to measure program performance and results and look for the areas of improvement to keep the business evolving.
Risk factor associated with Supply Chain Disruption
Given the recessionary times, it did not come as a surprise when 35% more companies filed for chapter 7 bankruptcy than in previous years in 2008. Now that a supply chain disruption can cost a manufacturer up to $5 million, irreparably harm a brand and cause loss of customers, manufacturers are searching for ways to reduce exposure to supplier failure.
With supply chains become increasingly global, and ownership moving further and further from the original equipment manufacturer, risk factors come in many shapes- operational, managerial, geographic and more.
As such the manufacturers are taking various steps increasing transparency when it comes to supplier information, monitoring suppliers on dozens of critical factors, working with suppliers to improve stability and operational performance and extending strategies beyond Tier 1 suppliers to protect the extended supply chain.
One major challenge of supplier risk management is compiling all supplier information into one centralized location. Once the suppliers are in a single location, the manufacturer can create master supplier lists broken into categories, such as single source and global, making it much easier to monitor suppliers’ performance.
How to reduce supply chain logistics costs
Controlling costs is one of the key factors for those involved in international trade. One important ingredient of total cost is the supply chain logistics costs which accounts for 5% to 50% of a product’s total landed cost. Logistics management covers all activities relating to the procurement, transport, transshipment and storage of goods. There are various reasons which contribute to high logistics costs. Some of them are high fuel prices, port delays, complex international trade laws, increasing warehouse costs and so on.
However, following certain steps one can cut down these costs to some extent:
1. Asctertain which area is costing more: Calculate freight, duty, brokerage, and inventory carrying costs involved in your supply chain. Once you understand the true total landed cost and total impact to the business, that domestic buy may look a lot better. You can also opt for alternate sourcing, one you realize how much the current sourcing is costing you.
2. Keep your transit times certain because the receiving party is using more premium freight, building buffers of inventory, or ordering more often and more quantity than necessary to compensate for the uncertainty.
3. Consolidate your shipments to avoid LCL (less than container load). If you have multiple suppliers in one country, consolidate their goods into one shipment.
4. Tariff engineering. Strategically source and manufacture products to take advantage of classification duty rates and eligibility for special trade programs such as NAFTA.
5. Automate compliance processes to speed the cycle times associated with tasks being performed manually, such as document preparation, and eliminate the associated errors. Automated compliance procedures also bring fewer delays at border crossings, resulting in on-time delivery, adequate inventory levels, increased customer satisfaction, and the avoidance of fines.
6. Give out clear and precise information to your decision-makers/customers of your logistics network about the cost of freight for each service level, the reliability of each lane for each service level, and the true cost of carrying inventory so they can make informed decisions.
7. Re-check your insurance costs and avoid the extra cost of Carrier’s Insurance if your company is self-insured and the policy covers shipment of goods.
8. Check if you really need express shipping costs because more often than not when a company runs into a supply chain issue, it will have an entire shipment sent on an express/expedited (highest cost) service level basis. In this case, you just need to do a bit of calculating to find which goods express/expedited service level, so that the balance of the shipment can be sent using a standard (lower cost) service level.
The new inventory module from SCC to conserve capital
Supply Chain Consultants (SCC), founded in 1993, is a supply chain management software and services company with headquarters in Wilmington, Del. SCC’s Zemeter software and related services help manufacturers plan demand better, manage inventories, plan production and replenishment, and schedule operations.
The company has announced the introduction of a new inventory management module for its Zemeter family of supply chain management software tools. Now is a time of economic recession due to which products of all types are beginning to back up in the supply chain. This in turn results in the blockage of money in an idle asset. So, the basic area in focus in the modern supply chain scenario is reducing inventories and conserving working capital. The newly released Inventory Analyzer (IA) by SCC provides a scientific way to identify pockets of non-productive inventory so a business can reduce working capital without having detrimental effect on its performance and other business goals.
“Pressures to reduce working capital have never been greater,” said Sujit Singh, chief operating officer of Supply Chain Consultants. “The need to generate cash is more urgent than ever before. Now, for the first time, there is a painless way to identify not only what inventories can be cut, but also exactly how many dollars can be reduced. At the same time, the process allows you to see areas where “inventory right-sizing” indicates the need to increase certain stocks or rebalance their location.”
“Based on our experience with initial users, this new inventory management tool has been able to demonstrate savings of tens of millions of dollars,” added Singh. “We believe we can replicate this kind of savings with any large manufacturing company.”
The many benefits of the Inventory Analysis software include:
• Reduction in the size of idle inventories and regular updation of inventory status.
• Quantifying dollars reducible (over target) at flexible levels of aggregation (by any slice/dice combination);
• Providing executives with a clear, simple of total cash reductions achievable across materials and plants;
• Tracking progress continuously versus using reduction targets.