Tag Archive - Integrated Supply Chain Management

Supply Chain Management: Preparing for Material Shortages?

 

Supply Chain Management: Preparing for Material Shortages?Much is made of the impact that natural disaster can have on the supply chain, but businesses in the manufacturing sector are also having to think more strategically about sourcing materials which are becoming ever more rare as we consume more. The British Geological Society has gone on record to state that 52 commonly used minerals are now classified as rare. More troubling still is that 27 of these can only be obtained from China.

Alarm bells ring for supply chain managers whenever their business is forced into a single channel as the margin for knock-on effects on production and stock level is nullified. Where China is the only supplier of elements critical to high tech product development, the best that a business can do is source a number of suppliers to provide fail-over in the event of a disaster. That or stockpile materials, driving up prices in the market and increasing costs through warehousing and the like.

Sourcing additional suppliers can be costly and inefficient, particularly where a high degree of integrated supply chain management between buyer and seller is required. Each new supplier requires significant investment for full onboarding, in both time and money. The provision of a hosted supply chain portal or method by which systems can communicate automatically with minimum onsite intervention can reduce many of these costs whilst delivering the benefits expected of an integrated system.

And although these mineral shortages are currently restricted to high tech electronics manufacturers, other materials are certain to become scarce, affecting the wider manufacturing sector as a whole, regardless of output. The conscientious supply chain manager will be not only scouting for alternate materials and providers, but planning for the capacity required to support and maintain the business relationship.

Does your current supply chain management system provide the flexibility required to add additional capacity as and when required? Can it communicate cross-border without major intervention? If not, perhaps you’d best give Celtrino a call to discuss their Smart Admin platform which can do all this and more.


Posted on February 27, 2012 in Integrated Supply Chain Management Platform, Supply Chain, Supply Chain Management by
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Apple’s Obsessive attention to Supply Chain Management pays off

 

For the fourth year in a row, market analyst Gartner has rated Apple as having the world’s best supply chain. In their annual breakdown, Gartner examine the discipline, execution and value-added capacities of each of the 25 largest global corporations to produce the list which is now in its seventh year.

So how did Apple attain this latest accolade? The Cupertino-based computer giant is well known for its cut-throat pricing negotiations and obsessive supplier secrecy, which allows them to exert a high degree of control over the entire manufacturing process. Although they sell their own hardware, Apple manufacture very little themselves, choosing instead to outsource as much as possible.

Apple logo in AcesOne of the major tools used by Apple to ensure supply chain success is a willingness to invest heavily in every aspect of it; reports from Apple suggest that supply chain expenditure will almost double this year to $7.1 billion. Apple has found that massive expenditure on supply chain management is not only good for their business, but provides a significant advantage over their competitors too.

Back in 1997 when the original coloured iMac was released, Apple took the unusual step of buying up all of the available air freight around the Christmas period to ensure stores would be able to stock the computer. The move cost $50 million dollars, but it also hamstrung the opposition including Compaq, who were unable to secure any air transportation for their goods over the crucial holiday period. So successful was the move that Apple moved into ‘drop-shipping’ when the iPod was released, delivering goods to the customer directly from the factory and reducing lead times (and costs) yet further.

Since that time, Apple have managed to stay ahead of the opposition by taking a similar approach to every aspect of their supply chain. If a new manufacturing technique is identified, Apple sign exclusive supply contracts and invest further with the supplier to keep competitors playing catch up.  Similarly Apple have the reserves to offer significant pre-payments to suppliers, obligating them to fulfil Apple’s product orders first. Because of this the lead time on certain parts increases, again delaying production and release of competitor’s offerings.

This attention to supply chain efficiency, ruthless negotiation and an awareness of the effects of their business actions on the competition are a significant part of what has allowed Apple to become the world’s most successful company. Apple invest heavily ensuring that their supply chain does exactly what they need, how they want it and in time to fulfil their customers’ orders proving that obsessive control does pay off.

The Gartner Supply Chain Top 25 for 2011 is the seventh year of their annual Supply Chain Top 25 Report. You can download a copy of the report from the Gartner website.


Posted on December 7, 2011 in Supply Chain, Supply Chain Integration, Supply Chain Management, Supply Chain Performance by
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Supply Chain Performance – You Need Metrics

 

The drive for efficiencies and savings often leads a business to consider the performance of their supply chain. Logically, if bottlenecks within the supply chain can be eliminated, time and cost savings will be a natural by-product.

But in order to identify and recognise a potential saving, a business needs to understand exactly how their current supply chain is operating, its costs in terms of tiSupply Chain Performance - Measurementme and money, and the exact stages between raw materials coming in and finished products leaving at the other end. To carry out an accurate supply chain analysis it is therefore essential to identify the metrics of measurement which will be used to quantify each element, establishing an initial benchmark against which future improvements can be measured.

During the first attempt at benchmarking, businesses should record the metrics which are vital to their operations. Rather than starting with the tiny details, look at the larger processes as this is where many of the major cost savings will probably be found. Measurement of metrics take time to acquire so patience is required to define an accurate starting benchmark. Given this, businesses should not feel pressured to implement changes immediately. A large number of small refinements to a supply chain often have a far greater positive impact than a single big-bang overhaul.

The collection of supply chain statistics are not the overall goal of the metrication process either. The data collected should be used to help inform changes and future developments, otherwise the whole process will actually cause more wastage; time is better spent working in an inefficient system than in collecting information and statistics which serve no wider purpose.

Finally, it is important that identification of weaknesses within a supply chain should not be hidden or ignored. Each failure or breakdown identified during analysis should be viewed positively as a chance for your company to grow, to learn and to excel, reaping additional benefits in the process.


Posted on December 5, 2011 in Supply Chain, Supply Chain Management, Supply Chain Performance by
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Document Tourism

 

What?

Document Tourism is a phrase we use to describe the process whereby a particularly important piece of paperwork “goes round the houses” upon receipt because it lacks certain critical information. The best way to explain the concept is with an example:

A Purchase Order arrives by post at the Supplier’s office. The document is directed to the Accounts Payable department via internal mail ready for processing. However as the clerk begins to enter the Purchase Order onto the in-house accounts system, he notes that the requisite purchase order is missing. Document Tourism

At this point the clerk must contact the account manager for the client and pass the incomplete purchase order back to them for follow-up. The account manager will almost certainly have to send a copy of the faulty document back to their contact at the purchasing company (physically or electronically) so that an amended version can be sent back. Depending on the complexity of the purchasing and payment procedures in place at the buying or selling company, there may well be several more steps involved.

So?

Just like a tourist on a hop-on hop-off bus service, the document travels around several locations, spending varying amounts of time in each location as it makes its way back up the supply chain. Just like a traveller, every stop takes time and therefore costs money (although purchase orders don’t have to buy a coffee at every stop).

Each step in obtaining the missing data results in a delay, and if time is money (which it is), every stop on the trip costs the Supplier.

Touchless to the rescue

The way to resolve similar problems is to implement a data verification gateway, preventing incomplete forms and documents from entering the supplier’s system. Known as “Touchless Systems”, presentation of purchase orders are presented electronically, sent directly from the buyer’s accounts system to the supplier’s electronically.

Taking the example of the missing purchase order number, the document leaves the buyer’s accounts department and is checked for data integrity as it reaches the supplier. If anything is found to be incomplete, the purchase order is immediately rejected and the buyer is notified. Both buyer and supplier benefit from automated processing in this way because less time is wasted by physically passing documents for manual correction.

Touchless processing immediately cuts out the problem of document tourism as there is only ever one stage in passing information back to a buyer in the event of an incomplete request. The savings of time, effort and money will grow exponentially as fewer and fewer documents require manual correction.

For more about touchless systems and how Smart Admin could help prevent document tourism within your organisation, please get in contact.


Posted on November 18, 2011 in Accounts Payable, Business Process Automation, Order Management Processing, Purchase Order Capture Automation, Supply Chain Management by
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EU Digital Agenda Roadshow Reaches Dublin and London

 

Digital Agenda for Europe logoFollowing the success of similar events last year, the EU Digital Agenda for Europe agency are organising a follow-up regional “tour” inviting localised stakeholders to discuss the creation of a true European Digital Single Market. Ministers from both the Irish and British governments as well as EU representatives will participate in a number of sessions to explore the potential solutions to the challenges that this presents.

Despite there being an unfortunate bias towards “digital content creators” on the agenda, certain challenges face any business looking to do business across international borders, from cultural differences to the need for integrated IT supply chain management and invoicing systems. Given this, several question and answer sessions are scheduled, along with opportunities to network with key EU Commissioners and Directors of Policy allowing conference delegates to learn from the experiences of their counterparts in other European countries.

During the morning open discussion and lunchtime sessions, the different approaches to e-Procurement and e-Invoicing used across Europe will also be debated as UK businesses seek to understand the implications of trading electronically with other government bodies and businesses on the continent. Standardisation of systems and platforms will also become essential as the single market concept develops.

The use of hosted services that transcend physical borders and language differences for electronic invoice presentment and payment will also be of keen interest to businesses seeking to expand their European operations. Platforms and services which are locale agnostic and can accept input from any finance system will be essential to the development of a true cross-border, pan-European marketplace.

The Digital Agenda for Europe agency intend to run further local sessions in Cardiff, Manchester, Edinburgh, Bristol and Birmingham, although there has not yet been any official date announced.

Questions and comment from UK and Irish stakeholders are also being sought via Twitter for presentation during each of the events. More details are available at http://ec.europa.eu/information_society/events/cf/daelocal/item-display.cfm?id=6999


Posted on November 9, 2011 in Digital Agenda for Europe, Digital Single Market, e-Invoicing, EIPP, eProcurement, EU, European Commission, European Union by
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e-Invoicing Platform to partner with Microsoft Azure

 

Celtrino showcased the innovative SaaS-based integrated supply chain management solution at Microsoft Worldwide Partner Conference in Los Angeles.

Read more about our partnership with Microsoft Azure.

E-invoicing platform to partner with Microsoft Azure

View more documents from Celtrino


Posted on November 9, 2011 in Announcements, B2B Platform in the Cloud, Integrated Supply Chain Management Platform, Smart Admin, Supply Chain Management, Windows Azure by
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Upstream and Downstream – Navigating the Supply Chain

 

Upstream and Downstream in Kanuti River, Alaska.In terms of metaphors, the river is a perfect picture of a general supply chain. At the river’s source lies the producer of the raw materials. He loads his wares onto a boat and sails downstream until he reaches his buyer whereupon he offloads his goods, takes his payment and sails back upstream to his home. The buyer then assembles the raw materials into a product and ships them further downstream to his buyer. The goods travel downstream and a payment is returned upstream. This process continues down the length of the river until the finished goods are sold to the consumer.

In terms of the river, two things always happen. Goods travel downstream and money travels upstream. And so it is with the supply chain.

In the event that the supplier at the start of the river delivers directly to the end customer, the supply chain is a simple two stage process. Once there are multiple buyers and suppliers involved however, the supply chain becomes more complicated.

Also worthy of consideration is the fact that the cost of the intermediate goods rises with each stop. Value is added to the product at each intermediate stage and prices must also rise to cover mounting costs.

At this level, everything is still quite simple without any obvious room for efficiency savings. However, add an accounts department at each stop and the process immediately becomes more complex. The buyer has to send a purchase order to the supplier upstream before the goods can be sent downstream adding another journey to the supply chain. An invoice can be sent along with the goods, but payment and remittance advice will not be available immediately upon presentation, so that means another trip upstream to clear the account. Suddenly the supply chain is slowed considerably. Instead of a simple there-and-back trip, the are now three or four journeys required for one hop in the overall supply chain.

At this point, only the introduction of a system which links both up and downstream but which exists outside both can make the efficiency savings required to maximise profit and ensure value added is retained as profit. Adding an electronic supply chain integration platform such as Celtrino’s Smart Admin system obviates all the journeys back and forth with bits of paper between suppliers and buyers – almost like sending a carrier pigeon between both parties and saving the ship’s captain a number of trips.

Less trips, means lower costs. Tying seller and buyer together with an integrated supply chain management helps increase efficiency and everyone shares in the increased profits.


Posted on October 24, 2011 in B2B Platform in the Cloud, Electronic Remittance Advice, Integrated Supply Chain Management Platform, Supply Chain Integration, Supply Chain Management, Supply Chain Performance, Supply Chain Upstream and Downstream by
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