Supply Chain Management Blog : End-to-end

Closing the Loop, The Operational Side of Things

christianverstraete — Thu, 26 Nov 2009 16:41:00 GMT

In Supply Chain, we have to keep the business flowing, regardless of the variations in demand. Integrating key partners, sharing information and events, using dashboards and identifying alternative options to react to the unexpected help operations and...(read more)

Is Supply Chain Data safe in the Cloud?

christianverstraete — Mon, 26 Oct 2009 12:28:00 GMT

At the Gartner Symposium, last week, HP's CEO Mark Hurd was quoted about the lack of security in the Cloud . This is only one of the voices heard about cloud computing security. So, should we stop thinking about linking our partners in the cloud to...(read more)

End-to-End Supply Chain and Metrics

christianverstraete — Mon, 12 Oct 2009 17:02:00 GMT

Last week, I was in Singapore at the SCM Logistics World 2009 . My presentation was around how to build a weatherproof Supply Chain through the increase of visibility across the ecosystem. Having talked about the subject previously on this blog, I'd...(read more)

Building Flexibility in the Supply Chain

christianverstraete — Mon, 27 Oct 2008 09:35:00 GMT

The other night I was looking at CNN. As many of you probably know, in these financially troubled days, they visualize the evolution of the Dow Jones Industrial Average. During my one hour watch, I saw the DJIA at +198 and at -456, and about every other position in the middle. This is around a 7.5% swing in one hour. Similarly, this summer the barrel of oil was at 147 US$, today it's in the area of 65. How are we able to manage our supply chains in such volatile times? That's really the question for Supply Chain executives.

The Supply Chain Council has integrated the concept of flexibility in its SCOR© model. They use two concepts, the concept of adaptability, covering the amount of change that can be implemented, and of flexibility, the time it requires to get this change going. To measure this, they calculate the time it takes to respond to a 20% increase or decrease in customer demand. The 20% is arbitrary, but allows comparisons between companies and supply chains.

Building such flexibility across the eco-system requires an in-depth understanding of the dynamics of the value chain. Such understanding can only be gained through the collection of key information, not only within the company, but also across the whole chain. Flexibility cannot be developed cost effectively in isolation. Obviously one could increase the responsiveness of the supply chain by establishing large inventory buffers; however in the current circumstances this is not really applicable due to the short shelf life of many products and the cost/lack of capital to finance those buffers.

Building more collaborative relationships with partners and including them in the effort of building the flexibility in the Supply Chain is probably a better way of approaching things. It is a difficult one, however, as most of our companies have traditionally developed a rather adversarial approach with their suppliers. The procurement department being measured on savings only, has pushed the suppliers to reduce costs and only that. Building this collaborative relationship however requires an approach where both partners find benefits, a win-win approach as it is often called. Actually increasing flexibility and responsiveness in the supply chain is beneficial to all parties. Often companies forget that when a problem occurs, the most important is to respond faster than its competition. Issues, particularly when they are industry wide, bring with them opportunities, and it is not the first time companies have taken advantage of that. For example, FedEx handling of the Katrina hurricane situation and the speed of its response has helped them grow their business in North America. As described in an Information Week article, real-time visibility of its operations and careful planning has allowed FedEx to react quickly. The fundamental question is whether your company is ready to move next time?

With the current variability in the marketplace, are there opportunities to grow the business by improving the responsiveness of the organization to the variability? Can we take advantage of the large swings in the market? Do we have the tools to understand its impact not only on our business, but on the business of our whole supply chain?

We need the End-to-End view

christianverstraete — Fri, 18 Jul 2008 13:09:00 GMT

I ran into a blog entry on Cnet the other day. It was entitled "LCD making worse for the environment than Coal?". This got me thinking. LCD televisions and screens are often seen as "green", eco-friendly, because they consume less energy than conventional CRT tubes. However, according to the blog, during manufacturing nitrogen trifluoride, whose globe-warming effect, according to scientists, is 17.000 times stronger than that from CO2, is used in chemical vapor disposition. I have heard a lot of requests to move to flat panel displays for lower energy consumption, but this was the first I heard about the harm during manufacturing.

It illustrates very well the importance of looking at the impact of a product throughout its whole lifecycle, from manufacturing all the way through recycling. Most companies today unfortunately do not provide that information, nor do they focus on that. We find many, laudable, efforts to reduce this or that substance from a product, but it is not put into context. If we take a substance out, by what do we replace it? Is the new substance, including its manufacturing, usage and recycling, less harmful than the previous one? These are the real questions that we need to ask ourselves.

HP and a number of other companies are using "Design for the Environment" to take the product lifecycle into account right from the product design stage. In doing so, they not only look at the manufacturing of the product, but also at its usage and recycling. Such approach requires an in depth understanding not only of the components going into the product (which can be obtained from the suppliers), but also from the product usage (work with consumers), and recycling operations. But to achieve this, the company needs data, provided by suppliers, the distribution channel, the consumers, and the reverse logistics partners. This is becoming the next battlefield. The companies that will be first at being able to convince their partners to share more information and use it to their advantage to make "greener" products will be the ultimate beneficiaries. Legislation helps, but has a tendency to lag behind the innovators.

With the same logic in mind, I was surfing another blog entry, called "BPA-free and proud of it", pointing out that Sigg, a Swiss company, has developed reusable drinking bottles in stainless steel to reduce the usage of disposable bottles and cups. It's an interesting concept. However, let's think about the lifecycle impact. What has been the effect of manufacturing the stainless steel and paint on the environment? How much water is used to rinse the bottle? If the bottle needs to be collected for refill, what is the effect of the collection process? And I could continue that way. Frankly, I don't know the answers to those questions, and the bottle may be a great addition to our increasing list of "greener" products. Unfortunately, I don't know whether anybody ever did the exercise.

You disagree with me, obviously feel free to react.

I am going on holiday for a couple weeks, so will be quiet, but my partners are keeping the blog going during my absense.