Category Archives: Uncategorized

Sustainability is key

If any suppliers needed more evidence of the importance of sustainability in the sourcing decisions of huge consumer goods companies, they certainly got it in spades over the last several weeks.

General Mills’ executive vice president of supply chain operations John Church announced a new corporate climate policy to track and reduce GHG emissions as part of its commitment to environmental stewardship and sustainable agriculture. In his blog post, he said this new policy requires key ingredient suppliers to demonstrate environment, social and economic improvements in their supply chains.

Shortly afterwards, Coca-Cola increased its investments in Africa to support, among other activities, key sustainability initiatives and programs there. The company also signed a letter of intent to launch Source Africa, an initiative to secure more consistent, sustainable local ingredient sourcing for its products, in partnership with the New Alliance for Food Security and Nutrition and Grow Africa.

On the heels of Coca-Cola, Tata Global Beverages announced their plans for 100% sustainable sourcing by 2020. A major focus of its sustainable sourcing strategy is sustainable agricultural practices, including reducing the use of Plant Protection Products in the tea industry.

Suppliers, take note.

Big Data Reality

We’re hearing a lot about big data. Marc Herman raises the question – can big data investment in big data will this help prevent huge distributions in supply chain like it did in 2011 in Japan during its earthquake and tsunami?

A better way of assessing the risk of earthquakes and tsunamis would be the straightforward (but tedious) task of mapping your supply chain all the way back to raw materials. That map  ensures you are aware of every step along the way which will explain your risks a lot faster as opposed to crunching huge numbers to evaluate your risks.

Having more information is useful for better calculating financial impact of those risks, however good ol’ fashion common sense and leg work will go a long way toward mitigating risk.

What do you think of big data?

Good economic news

The outlook for the U.S. economy is “very, very good” according to Moody’s Analytics’ Chief Economist Mark Zandi. He told attendees at ISM 2014 his optimism stems from fading headwinds from Washington, expected growth in housing and our country’s incredible energy story.

His outlook followed the release of ISM’s Spring 2014 Semiannual Economic Forecast, which predicted manufacturing revenue to increase 5.3 percent through 2014 and non-manufacturing revenue to jump 2.7 percent.

We’re on the right track!

Do you know a rising star?

ThomasNet.com and the Institute for Supply Management are looking for Millennials in the supply chain industry whose initiative, collaboration, innovation and/or leadership are strengthening our industry. The “30 Under 30 Rising Supply Chain Stars” recognition program was launched this week during ISM2014 to find those rising stars.

It’s common knowledge that, by the year 2025, members of the Millennial generation will make up 75% of the workforce. We need to identify, encourage and honor those young people who represent the future of our industry.

Winners will receive a complimentary membership in ISM for one year, and one “megawatt” professional from the group, and his or her nominator, will receive an all-expense paid trip to ISM2015 May 3-6, 2015, in Phoenix.

New index will determine supplier risk

Concerned your suppliers might not be prepared if a disaster strikes? Or that they may be doing something that could be considered unethical? This morning at ISM 2014  a new “Supplier Risk Index” was announced to enable companies to survey the risk, ethics and sustainability practices among their suppliers and their supplier’s suppliers.

The new index will help companies identify potential supply disruptions — including disasters, and ethics, compliance and sustainability issues — to keep their businesses running and protect their brands. The data can be used to address any weaknesses and implement risk mitigation strategies before anything happens.

ISM and The Ethisphere Institute partnered to develop the new index and will demo it on Wednesday, May 28, at 1 p.m. ET on Readytalk.com.

How to recognize a supply chain leader

What particular characteristic defines a leader in the supply chain industry? It’s the ability to recognize the importance of innovation and put it at the top of his or her agenda. And what’s the end result of strong supply chain leadership? Significantly higher levels of performance for the organization on both revenue growth and EBIT measures compared to the industry average.

According to a new study by Deloitte, organizations with superior supply chain capabilities or “supply chain leaders” achieve significantly higher levels of performance.

Deloitte surveyed more than 400 executives in manufacturing and retail around the world. Organizations were designated as supply chain leaders if they were rated by their executives as significantly above average compared to their industry on two metrics: inventory turnover and the percentage of deliveries on time and in full.

In addition to being innovative, supply chain leaders are more likely to:

  • be early adopters of disruptive technology like 3-D printing
  • use analytics extensively
  • empower executive leadership
  • connect the organization
  • develop talent strategies for the new era of professionals
  • Develop supply chain maps beyond the first tier
  • Have an extensive risk analysis
  • Drive cost and value improvement through the supply chain
  • Maintain prioritize business and customer needs
  • keep strategies forward looking

 

Which are you, a leader or a follower?

Look Who is Buying From Bangladesh

It’s easy to say the right thing, but it’s not always easy to do the right thing as a recent investigation by The New York Times reveals.  The U.S. government, which encourages companies that buy goods overseas to use their spending clout to push for improved working conditions, is itself spending more than $1.5 billion each year to buy clothing from factories in Bangladesh, where hundreds of garment workers have died on their jobs.

The challenge of putting its money where its mouth is: how to spend the U.S. taxpayers dollars efficiently without supporting companies that abuse their workers. However, cities like Los Angeles and states like Maine have found ways, including requiring companies that bid on their contracts to publicly disclose the addresses of the factories where the clothing will be made.

The Sweatfree Purchasing Consortium maintains that similar requirements could work on a national level if federal agencies coordinate their purchasing decisions more closely and consider conducting joint investigations to ensure they are using only the best factories.  In other words, the U.S. government should use its own clout to make a difference.