Tag Archive - Supply Chain Management Efficiency

Extending the Supply Chain Management System

 

A recent change in California law now requires all businesses trading within the state with revenues in excess of $100 million to make their supply chain transparent, for easier verification that they are also complying with anti-human trafficking legislation. Businesses with lower turnovers are also required to make information about their staffing compliance to their customers who do breach the $100 million mark.

HandscuffKnown as the Transparency in Supply Chains Act, this new law is designed to reduce the use of illegal immigrants and slave labour within California and to help businesses identify points in their own supply chains where there may be an issue. As a result, companies are considering how to capture and store this information effectively.

To stay compliant, many companies have begun recording vendor reputation, employee hours and human-resources records in the supply chain management systems, and then making the information available to their supply chain partners. By sharing the information sensitively, businesses up and down the supply chain can see that their partners are not only compliant, but can prove it to the relevant authorities when necessary.

As Boeing found with their supplier portal, sharing information with suppliers and customers within the supply chain, significant efficiencies could be created beyond simply proving legislative compliance. The Transparency in Supply Chains Act has only been in force since January 1st and supporting systems and business processes are still maturing but eventually Californian companies will begin to recognise other benefits available through a more collaborative supply chain.

Information and resource sharing often helps to create a more efficient supply chain, but the politics and costs involved lead many such projects to fail before they even start. By forcing this change on companies, California’s new law will kick-start the collaborative process, which may well lead to further cooperation between affected companies, changing their future prospects.


Posted on April 12, 2012 in Supply Chain, Supply Chain Management by
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Business Processes Part 1 – What Are Processes and Why Should I Care?

 

Business Processes For any business looking to save cash, the obvious answer to look for potential efficiencies within their workflow. These efficiencies can be found in several places, but efforts to save time are often the most effective over the long term allowing for better utilisation of resources.

Enter the ‘process’ which effectively create a template for business operations which can then be repeated over and over again, de-duplicating effort and reducing the need for intervention. Over time, processes become incredibly important because:

  1. Processes save time. Identifying areas of commonality allow for repetitive systems to be created which can then be reused at each appropriate point, saving time and resources.
  2. Processes increase accuracy. Breaking the workflow into smaller segments allows for continual improvement of each sub-section, leading to greater savings in the long run.
  3. Processes allow transference of responsibility. By templating and documenting how a particular process works, the tasks can be passed on to other business units or contractors, reducing administrative burden and costs.
  4. Processes can be scaled to fit requirements. Once defined, a reusable system can automated and implemented quickly, allowing additional time for refinement for maximum efficiency.

These four positive benefits of processes, make it easy to see just how important and valuable they can be to a business. The beauty of processes is that they can be applied to virtually any aspect of a business, be it internal workflows or as a wider part of their supply chain management strategy.

Best of all, the reduction of duplicated effort by implementing a process creates the most valuable resource of all – time. And as the old saying goes, ‘time is money’.

Don’t forget to check back for part 2 in this series – ‘What can be made into a process?’


Posted on March 21, 2012 in BPO, Business Process Automation, Supply Chain Management by
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Deloitte CFO Survey: Cash and Costs and Improving Supply Chain Management Efficiency In 2012

 

A question that keeps popping up here at Celtrino is what’s going on in the minds of the CFO community and in particular, if CFOs are aware of the cost and cash flow benefits of improving their supply chain management efficiency.

Deloitte’s have just published their CFO Survey which is a quarterly survey of Chief Financial Officers and Group Finance Directors of major UK companies. Now in its 5th year, the survey provides another insight into the thinking of the CFO’s and their intended spend patterns in 2012.

The report returned seven key findings:

  1. The biggest concern for UK CFOs in 2012 is the risk of a break-up of the euro. CFOs attach a 37% probability to one or more members of the Single Currency leaving the euro in 2012.
  2. CFOs are pricing in a UK recession and expect the economy to remain weak for a prolonged period.
  3. 87% of CFOs believe this is a bad time to be taking additional risk onto their balance sheet.
  4. The profits cycle is turning. 70% of CFOs expect corporate margins to decline in 2012.
  5. The major priorities for large corporates in 2012 are reducing costs and increasing cash flow.
  6. Financial stress is affecting the supply of credit to large corporates. Credit availability has deteriorated at the fastest rate since the credit crunch in September 2008.
  7. Despite the risks, CFOs see opportunities to expand market share and acquire assets at discounted valuations.

    Deloitte CFO Survey

    Source: Deloitte

According to the report, “Despite the uncertainties 48% of CFOs think troubled times create new opportunities. One-third see opportunities to acquire undervalued assets; 30% think weaker competition provides a chance to expand market share; 19% believe that a difficult economy gives them a chance to implement overdue changes to their businesses. And some foresee new sources of demand. 12% of CFOs plan to develop new offerings to meet needs created by a difficult macro environment.”

Close on 20% of CFOs envisage the conditions to be favourable to affect transformative change to business processes that are either out-of-date or simply inefficient.  As the supply chain is now such a critical component of a company’s performance and very survival it makes perfect sense for CFOs to examine ways to improve the effectiveness and efficiency of how to manage B2B trading activities.

For those 87% of CFOs that believe this is a bad time to be taking additional risk onto their balance sheet, they should consider improving supply chain management efficiency as it is relatively risk free.

A key note about transforming inefficient supply chains is that it both reduces costs and improves cash flow. That’s a powerful addendum to the Deloitte survey for every CFO to take note of.


Posted on January 4, 2012 in Cash Flow Management, CFO, Supply Chain, Supply Chain Management by
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