Wednesday, December 30, 2015
Tuesday, December 29, 2015
Reviewing the role of Information Technology in enabling effective Supply Chain decisions
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INFORMATION TECHNOLOGY AND SUPPLY CHAIN DECISION MAKING |
Information technology plays a huge supporting role in ensuring the right mix of decisions and designs that helps supply chain managers take the right decision
Information technology helps managers to access information on the functions and status of all other supply chain across geographic units.
For example a retail store can not only afford to figure out the store inventory, but also need information on consumer demand, lead times and associate variability’s like “logistic and transportation “
- The IT department provides seamless and friction less support across the supply chain implementation , which forms the core of the supply chain. Any process related to order and purchase, manufacturing , inventory, transportation and logistics , and warehouse are mapped and tracked
- IT provides internal collaboration across departments, which are shared across the internet and cloud . It helps vendors, suppliers and other stakeholders across the supply chain to co-operate and collaborate.
- IT based decisions support systems is used to aid better decisions through the supply chain mechanism and ecosystem. Any critical issue on delivery, demand fluctuations ,lead time and risk can be “ tracked in real time” therefore giving the operational managers, the flexibility and the time to ensure compliance
- The role of Information Technology in terms of measuring the entire supply chain performance and aid the operational managers to set internal metrics and benchmarks and observe “ their effectiveness”cannot be more emphasized. Business Intelligence tools includes a technology stack with layers for reporting and analysis
Supply Chain Application Marketplace Review
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SAP grew their share of the worldwide SCM market from 23.9% in 2013 to 25.8% in 2014. |
There are broadly 4 categories of firms that supply supply chain management application software.
- ERP vendors offering comprehensive solution or a variety of vertical industries
- Independent vendors offering a comprehensive solution for a variety of vertical industries
- Niche Players offering solution for specific supply chain functionalities.
- Niche players offering solution for specific industries
Its important for supply chain managers to understand the interaction between the ERP systems and niche functionality provided by supply chain retailers. Although the supply chain application marketplace players are viewed as competitors they also rely on each other to compliment features and functionalities
Among the major trends in the SC Application Market review is the gradual shift to Cloud-Based (SaaS) Technology .SCMS adoption is growing faster than the broader enterprise application software market. The annual revenue from SCMS (both premise-based and SaaS) reached $10 billion in 2014, a 12 percent increase over 2013.
A recent Gartner projection forecasts 60% of the growth in Supply chain management software (CMS) between 2015 and 2018 will be based on the SaaS subscription model, driven by a growing realization of the benefits of cloud-based services.
The SaaS-based SCMS market grew by about 24% in 2014 and is projected to continue to grow at a 19% (CAGR), reaching $4.4 billion in annual sales by 2018
ERP vendors particularly SAP has added supply chain management functionality to their offering and succeeded in leading the marketshare by a huge margin, and make it difficult for independent or niche players to sell to ERP vendor clients. Further ERP vendors have been developing industry specific supply chain management solutions..and as a result the share of supply chain management software sales going to ERP vendors has risen , while the niche and start ups vendors have drastically been left at the bottom languishing in sales
Monday, December 28, 2015
Reviewing Supply Chain Redesign : Centralization vs Decentralization
HOW CENTRALIZATION AND DECENTRALIZATION OF IMPACT SUPPLY CHAIN REDESIGN
A supply chain redesign has a significant impact on the inventory and supply chain costs. This can be done only by a rigorous cost benefit analysis The centralization and decentralization example also illustrates the benefit of Risk Pooling.
For example a company has 10 regional stock points which it serves its dealers from the stock point that is the closest and wants to centralize its stock holding, which means that the stocks will be held at one point and the retailers would be served from there.
However this arrangement, will increase the transportation costs along with the fact that it cannot force the retailers to hold excess inventory. This means that the company has to work on a much faster transportation and logistics scheme.However this will increase its logistics costs.
Whereas in the decentralization model, the transport costs will be low, but the cost of holding inventory at the companies warehouse will be high.
Thus its essential to do a rigorous and effective costs analysis by “ using a preductive software to estimate demand and supply chain redesign In general whenever we pool demand across locations , the phenomenon of rik pooling may be observed. Risk pooling suggests that demand uncertainity is reduced when one pools demands are spread across location
A supply chain redesign has a significant impact on the inventory and supply chain costs. This can be done only by a rigorous cost benefit analysis The centralization and decentralization example also illustrates the benefit of Risk Pooling.
For example a company has 10 regional stock points which it serves its dealers from the stock point that is the closest and wants to centralize its stock holding, which means that the stocks will be held at one point and the retailers would be served from there.
However this arrangement, will increase the transportation costs along with the fact that it cannot force the retailers to hold excess inventory. This means that the company has to work on a much faster transportation and logistics scheme.However this will increase its logistics costs.
Whereas in the decentralization model, the transport costs will be low, but the cost of holding inventory at the companies warehouse will be high.
Thus its essential to do a rigorous and effective costs analysis by “ using a preductive software to estimate demand and supply chain redesign In general whenever we pool demand across locations , the phenomenon of rik pooling may be observed. Risk pooling suggests that demand uncertainity is reduced when one pools demands are spread across location
Thursday, December 24, 2015
5 Supply Chain Predictions for the Manufacturing Industry
Supply Chain Predictions
International Data Corp (IDC) has predicted that the next four years are likely to see a re-imagining of the manufacturing supply chain process, amid changing customer demands and technology. Here are the IDC top 5 Predictions for global chainThe IDC Future Scape provides the top 10 predictions for global supply chains for 2016.
- Top 10 Supply Chain Predictions: ● By the end of 2016, the majority of all manufacturers will be actively employing eCommerce networks and marketplace model
- By 2018, supply chain will be driven by the proliferation of advanced, purpose-built, analytic applications aligned to the Internet of Things (IoT) will result in 15% productivity
- By 2019, 50% of manufacturers will have modernized their logistics network to leverage 3D printing, robotics, and cognitive computing
- By the end of 2017, the need for visibility, scalability, and flexibility across the value chain will drive 60% of manufacturers to invest in cloud-based WMS and TMS solutions aligned to their trade partner networks.
- By 2018, 40% of manufacturers will be investing in robotics, autonomous guided vehicles (AGVs) and associated systems within their warehousing operations to drive automation into their fulfillment processes.
- By 2020, 50% of the operational jobs in the supply chain will have evolved into “knowledge” roles required to support new technologies like cognitive computing and modern robotics.
Tuesday, December 22, 2015
5 Biggest Supply Chain Challenges for Manufacturers
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WHAT ARE THE BIGGEST SUPPLY CHAIN CHALLENGES |
In an McKinsey survey opinions are divided on their companies’ preparedness to meet those challenges, and fully two-thirds expect supply chain challenges risk to increase. This chart shows the top 5 biggest supply chain challenges for manufacturers and retailers across industry
Different organizations in the supply chain may have different, conflicting objectives depending by type
- Manufacturers: Transportation and Shipping Costs Manufacturing and production ,quality control
- Distributors: low inventory, reduced transportation costs, quick replenishment capability
- Retailers:shorter order lead time, stock shortage,high in-stock inventory, no of SKU,efficient inventory management analytical engine Bullwhip effect; One of the most glaring challenges ,in supply chain is the phenomenon of orders and inventories getting progressively larger (Bull whipping happens when ordering/producing is done on large lots which increase the safety stock of suppliers and its corresponding carrying cost.
- Vendors/Suppliers:Uncertainity of vendors,suitability of suppliers
- Omnipresent Supply Chain :The effective presence or lack of an omnipresent supply chain
- Labor and arbitration issues, shortages of labor
Reviewing 5 Trends that will shape supply chain and logistics by 2016
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5 trends that will shape supply chain and logistics by 2016 |
The next 5 tech frontiers : that will change the supply chain and logistics industry :
1)Algorithm, Remote and real time shipping : Powered by drones, this technology is set to go where no man, machine or android has ever been before.. At the customers doors without a human waiting to deliver goods.
The development of drones has progressed much faster that users expected. Automated Drones with Remote sensing, using powerful algorithms, along with geo targeting,remote sensing capabilities will deliver packages to consumers in flat 60 mins
The top speed of a drone : 50 mph per hour while the max done payload is less than 5 LBS, at this capacity the drone can deliver 86% of Amazons inventory Trend :
How Soon :in very near future within 2-5 years
2)Same day delivery is now MUST ‘ In the early 2012, shipping time used to be one week as a standard. In 2012, around 50% of consumers felt ok to wait seven days ( a week for a package delivery) In 2014, only 35% felt ok with one week deliveries
How soon? An overwhelming 85% believe that same day delivery should be the norm by 2017-18
3)RFID zation of managing inventory by :The RFIP market is further set to grow with increasing consumer online buying.Another step towards industry moving toward internet of things , fuelled by increasing adoption of RFIDs, as they reach the point of sale quickly.An Idtechex research data show that RFID market will be up from $8.9billion in 2014 to $27.31 billion by 2024
4)Real vs Retail : The lines between retail stores and online stores is soon to get blurred : Closer home online retail will have much bigger share of the wallet with more than 10% of all retail sales coming from internet by 2017
infographic: via
Friday, December 11, 2015
Reviewing the Supply Chain process of Apple's iPhone
Though most of us know that " Apple products" including iPhone has this tagline " Designed in California and Made in China, but not many know how the apple supply chain runs. To summarize the " below infographic makes it clear how big an exercise is it to manage a global supply chain, when the individual components that support the iPhone come from countries as varied as China, Taiwan, Malta, Japan, South Korea and Germany.
Apple contracts have enabled its suppliers to invest in their own businesses. Foxconn, Apple's biggest supplier, for example, has invested heavily in robotics to help it meet its production quotas. Other emerging economies are getting in on the act too with iPhones now being assembled in Brazil. There are Apple suppliers in more than 30 countries around the world.
A recent AMR Research 'Supply Chain Top 25' list, Apple topped the spot outwitting Nokia, Dell, Procter & Gamble, IBM, Wal-Mart and others, due to what it called " a supply chain with "an intoxicating mix of brilliant industrial design, transcendent software interfaces and consumable goods that are purely digital,
Most of the iPhone components are outsourced except the Apple iOS, which is sourced at US. Here is the breakdown of Apple component maker by supplier and the country where it is manufactured.
Apple contracts have enabled its suppliers to invest in their own businesses. Foxconn, Apple's biggest supplier, for example, has invested heavily in robotics to help it meet its production quotas. Other emerging economies are getting in on the act too with iPhones now being assembled in Brazil. There are Apple suppliers in more than 30 countries around the world.
A recent AMR Research 'Supply Chain Top 25' list, Apple topped the spot outwitting Nokia, Dell, Procter & Gamble, IBM, Wal-Mart and others, due to what it called " a supply chain with "an intoxicating mix of brilliant industrial design, transcendent software interfaces and consumable goods that are purely digital,
Most of the iPhone components are outsourced except the Apple iOS, which is sourced at US. Here is the breakdown of Apple component maker by supplier and the country where it is manufactured.
- Samsung in South Korea : Application Processor & Memory
- GT Advanced Technology in Austin: Sapphire Crystal Components
- Texas Instruments in US : Touchscreen Processor
- Micron in US : Flash Memory
- LG in South Korea : The Largest Display Panel supplier
- Dialog Semiconductors makes the power management components
- STM Microelectronics of Taiwan used to make the accelerometers and the gyroscope, but recently it lost out to Invensense, a San Jose, California-based company
- Cirrus logic makes the audio controller
- Murata in Japan creates the WiFi and Bluetooth components
- Infineon in Germany make the phone network components
- Sony in Japan : supplies both rear and front cameras
Reviewing the evolution of Supply Chain models
15 Key Innovations in supply chain strategy: Ford Assembly line, EDI, MRP, ERP, Dell Direct, Walmart Cross Docking
The 1950s - Ocean Shipping Container: Malcolm McLean invented the standard steel shipping container first implemented in 1956 at the port of New Jersey.
The 1960s – Electronic Data Interchange (EDI) – Started when computer systems first had the capability to transfer data to other computer systems. Enables the exchange of electronic business documents.
1961- Material Resource Planning (MRP) – Josef Orlicky makes the first MRP system in Racine, Wisconsin. A year later, Gene Thomas from IBM invents the Bill of Materials Processor.
1990: Universal Product Code (UPC) – a company called Logicon wrote a standard for something close to what became known as the Universal Product Code (UPC) to identify via a barcode a specific SKU. The first implementation of the UPC was in 1974 at a Marsh's supermarket in Troy, OH.
The 1980s – Enterprise Resource Planning – In 1990, Gartner Group first employed the acronym ERP which came to represent a larger whole, reflecting the evolution of application integration beyond manufacturing.
1984 – Dell Direct Orders – Michael Dell started his company in his dorm room shipping computers to customers. This developed a unique model of make to order that provided custom configurations to customers and shipped to them.
1985 – FedEx Tracking System – After re-inventing the category of express parcel shipments, FedEx went a step further by developing a new computerized tracking system that provided near real-time information about package delivery.
1987- P&G's Continuous Replenishment: Order patterns were totally dependent on sales and retail buyer input until P&G bought a mainframe application from IBM for "continuous replenishment" re-wrote it for retail,
1988 – Walmart Cross Docking – With the rapid expansion in the number of Walmart stores, the company needed an effective communication system. They introduced the first cross docking system, which enabled them to track goods across all their DCs and stores
Source: opsrules
Wednesday, December 9, 2015
5 Things Retailers hate to encounter
Running a retail business without using technology is more like locking horns with the bull. It can give you nightmares that you never imagined. Here is a list of 10 things that retailers never want to encounter.
- An empty shelf of an important product– There are few products which sell like hotcakes in the retail space. And these same products are often missing on shelves. To this retailers can only surmise in retrospect about what went wrong.
- Delay in delivery of much-awaited products– Sometimes there are issues of transportation or miscommunication that can lead to a plethora of problems in the supply chain. Hence, the much-awaited products are delayed which leads to losses on every front.
- Expiry of products even before they get sold– There are products on shelves which do not sell at all. Often as a customer, we hate to even see them on shelves. Still no one seems to care about them. So with the passage of time, they get expired leading to your loss only.
- Cluelessness on demand and supply– There is supply in accordance to the demand. And demand is volatile, so keeping a track of it is impossible.
- Losing customers– All these mentioned problems leads in losing of customers which is the most dreaded experience for any retailer. This happens due to inventory mismanagement. And inventory is mismanaged because it is done manually. So taking the help of technology is a smart way of avoiding loss of the customer. Predictive analytics can be that saviour.
The 5 ways of managing inventory and stocks
Kinds of inventory: In general Inventory management may be divided into various categories. This categorization helps companies to tag and manage their inventory. Inventory is divided into broadly 6 categories
Cycle Inventory
Safety Inventory
Pipeline Stock
Decoupling inventory
anticipation inventory
Dead Stocks
1)Cycle Inventory: As most firms work on the model of economies of scale, they need constant replenishment to their raw material and stocks. Mostly goods and raw material comes in batches.This inventory resulting from the production or purchase in batches is called as cycle stock . This is so called as the “ material and goods comes in a cyclical process and keeps repeating one after another
2) Safety Stock : As the name suggests , safety stock is m, Decouaintained due to emergency or as a contingency plan in case supplies are affected .In an ideal case of constant supply and demand safety stocks need not be maintained . However safety stocks are kept “ in case production is impacted due to political changes, uncertainty against nature, or disruption or natural calamities
3) Pipeline Stock: In the pipeline inventory management " the pipeline" are the material and goods that are already being worked on ( work in progress inventory) As production and transportation activities are constantly in progress , carrying in transit stock or pipeline inventory is required .Pipeline inventory is impacted by choosing alternative modes of transportation
4)Decoupling stocks : Inventory that is accumulated between two interdependent operations, as a buffer against the breakdown , disruption of machines/production . Thus it is not unusual for organization to hold large inventories across organization level as well as departmental level. This decoupling gives flexibility to decision making unit to manage its operation independently across their respective spheres of the supply chain
5)Anticipation Inventory: Anticipatory stocks consists of stocks accumulated or collected in advance, riding on back of expected higher or peak sales. This is done specially during the holiday season, when consumers are expected to purchase more. Anticipatory stocks” are stocks and raw materials that are kept “ to meet higher sales. There are two kinds of anticipatory stocks. a) Seasonal stock and b)speculative stock
6) Dead Stock : Dead inventory is that part of the non moving inventory that is unlikely to be further used across supply chains or markets.These dead stocks are accumulated either due to changes in customer, demand and tastes ( due to changing demographics) or products that have become obsolete in the market.Ideally firms should dispose of dead stocks on a periodic basis, however they choose to show them under assets in their balance sheet, as disposing off would these reflect a financial loss in the accounts book.
Tuesday, December 8, 2015
Reviewing The Top 10 Logistics & Supply Chain Management Softwares
Top 5 Consumer-driven Trends in Retail
The impact of Social Media– Social media platforms are now the determining factor behind sales of any brand. Any word out on social media as tweet or post can make or break any brand.
The generation born in the 80s or 90s are setting the tone– The kids born in 80s and 90s are setting the tone for any brand. They are already profoundly shaping the consumer experience. Their spending power is one of the key factors in driving sales.
Personalized or Customized Preferences– Brands have now focussed their attention on personalization. Personalized products according to the choices of the customer are the hottest trend in the marketplace. Basically, the customer is the king and services are offered for him to cater his needs.
Applications on Smartphones– Peek into your smartphones, few clicks on the screen and you’ve successfully purchased the product. Applications have invigorated the shopping experience. From groceries to clothes, everything is available on smartphones. E-commerce websites have played a big role in shaping the popularity of shopping applications.
Big Data & Predictive Analytics– Big data is the massive amount of data that consumers are generating with every click and even physical movements in stores. The collected data can be analysed with the help of technology. Recent developments in predictive analytics have ensured the effectiveness of big data. Retigence Technologieshave developed such a technology in predictive analytics to handle the inventory problems that any supply chain faces. Retigence’s PRAN crunches the fed data to outline what to keep, what not to keep and how much to keep.;jl;ksnkl;kl;glsa
Reviewing The Most Popular Business Intelligence Softwares
Monday, December 7, 2015
State of Indian FMCG market : 5 trends for Marketers
Web Based Inventory & Demand Forecasting Software :10 Softwares Reviewed
THE TOP 10 WEB BASED INVENTORY MANAGEMENT SOFTWARE REVIEWED
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