Category Archives: Uncategorized

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.

 

 

 

 

 

Managing supplier relationships

We couldn’t agree more with Philip Hicks, procurement manager at Northumbrian Water, who said the key to his company’s supply chain sustainability is getting out and meeting with its top suppliers. As he points out, companies expect their suppliers to help them achieve their sustainability goals, and it’s only through personal engagement that suppliers will come to understand the role they play.

A Sedexglobal report, however, encourages companies to go a step further into the supply chain and meet with as many suppliers as possible, whether they’re Tier 1, 2 or 3. It points out that the “greatest and most critical sustainability risks are found deeper down the supply chain.” Unfortunately, only a third of companies are actively seeking transparency below Tier 1 in their supply chain.

How deep into the supply chain are you managing your supplier relationships? Are you going far enough?

Takin’ it to the street

Frustrated with Procter & Gamble’s lack of urgency in finding sustainably sourced palm oil, Greenpeace literally took to the streets in Cincinnati and London in protest.  The activists, including two dressed as a tiger and an orangutan, unfurled banners on the side of P&G’s Cincinnati headquarters and erected barricades in front of its advertising agency’s headquarters in London.  At the same time, Greenpeace posted a video on You Tube mocking the “Thank you Mom” ad campaign and focusing on the plight of orangutans.

This is a good example of how non-governmental organizations like Greenpeace are ramping up their mass communications efforts to raise people’s awareness of important environmental issues and change their behavior, while governments lumber along, taking years to initiate and enact news rules and regulations.

While Procter & Gamble may have their dander up at the bad press, Unilever executives may be smiling for the way they stayed ahead of the curve. As we wrote in September 2013, Unilever’s goal is to source 100% of its agricultural raw materials sustainably.  In the way they managed their message about palm oil, Unilever stands head and shoulders above P&G.

Conflict minerals reporting deadline approaches

The first deadline for companies to publicly disclose their use of conflict minerals that originated in the Democratic Republic of the Congo (DRC) or an adjoining country is fast approaching.  Justmeans.com reports that nearly 6,000 companies will have to provide these disclosures by May 31, 2014, and they’re finding it’s a complex process.

Any company that uses tin, tantalum, tungsten and gold for the functionality or production of its products now must disclose specific information, including the source of those products, according to the “Conflicts Mineral Rule.” It’s part of efforts to raise awareness of and change the human rights abuses in the DRC mining industry, and the financing of armed conflict from the sale of the minerals.

Less that a year ago, a PriceWaterhouseCoopers survey found that almost half of the executives surveyed were still in the initial stages of their compliance efforts, while 16 percent hadn’t begun gathering information and 32 percent were still trying to determine if the rule even applied to them.

We’ll host a half-day Mega Session on this rule and its long-term implications for companies and their suppliers at the ISM Conference May 5-7 in Las Vegas.  We hope you can join us.

Managing supply chain sustainability at Target

On the heels of Mary Barra’s appointment as CEO of General Motors, we can’t resist sharing this GreenBiz.com interview with another female executive in the supply management world. Kate Heiny leads the enterprise-wide sustainability strategy for Target, a Fortune 50 company and one of the most important retailers in the US with the more than 1,700 stores in 49 states.

Early in her career Heiny recognized that industries would need radical transformation in order to be successful in the future, and she views sustainability as the business strategy critical to the long-term viability of Target.

She and her Sustainability Team are responsible for helping Target’s guests and team members live more sustainable lives and minimize Target’s impact on the environment.

For example, Target is a founding member of the Sustainable Apparel Coalition, a trade organization of brands, retailers, manufacturers, government and non-governmental organizations and academic experts who are working to reduce the environmental and social impacts of apparel and footwear products around the world. Target uses the Coalition’s Higg Index to gauge its environmental sustainability performance and make changes for improvement.

With its grocery items, Target is making long-term commitments to offer food that will be GMO-free by year-end 2014, increase its organic food offerings by 2017 and replace farmed salmon with wild salmon.

Collaboration, creativity and sharing are three words Heiny uses frequently to describe how her team is working to imbed sustainability into their team members’ day-to-day work at Target. “Sustainability needs to be a holistic way of working and operating, not just one initiative or team,” Heiny said.