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ModusLink’s Value Unchained

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tunnel sm resized 600How often have you heard the phrase “my business is different?” Perhaps you have used it...I know that I have. It is easy to get wrapped up in the details of the challenges that we face on a daily basis—the customer challenges, the compliance requirements, the competitive landscape—and to see the world only from your own company's perspective. 

You find yourself solving unique challenges for that business that require your operations to be configured in a particular manner, that justify the extra non-standard system or that invalidates the comparisons to other companies or other industries. You take comfort in the fact that you are breaking new ground and that your innovative approach is yielding better results. You define a competitive set that is narrow enough to give you comfort that you are making progress against your personal and business objectives. 

When I first I joined ModusLink (a short 17 years ago), we served clients predominantly in the software and computing verticals. Not only were our client challenges different, but they even differed from region to region. This fostered an approach of reinvention of different solutions in different locations around the world to what I now can see were many of the same problems. It was certainly seen as more exciting to create a new solution to a “new” problem than to copy exact a proven solution. At the time, clients loved our responsiveness but not surprisingly were sometimes frustrated by our challenges in executing in a consistent manner globally. Not surprisingly, customization and consistency can present conflict. When we entered the consumer electronics vertical, that too was seen as different—by us and by those clients—and we needed to earn our reputation and gain experience in that space. Subsequently, hard disk drives were different, mobile phones were different, and now as we start to serve clients in the healthcare supply chain , that too is seen as different. 

Over the years however, and as we became a more mature supply chain organization, it became clear that despite the industry specifics, many of the fundamental supply chain processes are the same. With that learning it also became clear that a robust process focus could be applied to meet challenges across many industries. 

I do not intend to trivialize genuine business differences—because they certainly do exist and must be accommodated in the supply chain—but we often overlook the learnings that are available to us if we broaden our perspective. When I meet people at conferences I find that I can learn as much from executives from industrial, pharma, automotive or process industries as I can from those in high tech.  

Even now I look with envy to the retail integration and sophistication of some FMCG companies, to the relentless search for efficiencies of leading high tech supply chains and the disciplines in protecting the value of the brand in luxury goods supply chains. Should we not all be looking across industries for similar benchmarks? 

Do you find yourself defending your supply chain performance in the context of your closest industry peers and using the phrase “but my supply chain is different”?   Maybe it is time to step back and look to a different peer group. What do you think?



Originally posted by Lorcan Sheehan at http://blog.moduslink.com/bid/80162/Don-t-be-a-prisoner-to-a-narrow-definition-of-supply-chain

describe the imageAs the holiday season nears, the product launch cycle of the next new things is coming to an end. We are now tempted by a range of faster, thinner, lighter and brighter devices and of course they have bigger screens. However, with mature markets reaching a saturation point, stimulating demand for new devices has to extend beyond the simple creation of desire for the latest products and the industry must look at emerging customer expectations.

Today’s targeted device replacement cycles are considerably shorter than the products’ useful lives, therefore providing consumers with a user-friendly mechanism to realize the value of their old products is an important part of financing new device sales. Trade-in programs are here to stay, but delivering true value to the market requires reliable refurbishment, data wiping and greater assurance to the customers of refurbished devices.

As functionality has increased, the customer experience extends beyond the physical hardware to include an ecosystem of software, content and applications. Consumers expect synchronized mobile, tablet, traditional computing and gaming experiences, as well as integration between business and social environments. As if on cue, the rise of cloud-based solutions helps achieve that synchronization and also provides protection for the increasing value of content on the devices.

Finally, with new devices costing up to $700 USD without a carrier subsidy, the issue of repair must be addressed. Out-of-warranty issues such as cracked screens or devices dropped in water may not be the fault of manufacturers, but loyal consumers will expect more than a “not our problem” response from leading brands. An important extension to service and repair programs will be an easily accessible out-of-warranty service.

Today’s devices are tools for photos, video, email, social, mapping, gaming and yes, they can even make phone calls. Consumers buying the latest devices expect more than just the initial thrill of a shiny new package. It’s up to manufacturers, carriers and their reverse logistics partners to work together to manage the expanding ecosystem and address the increasing service expectations that come along with that yearly purchase.



Originally posted by Lorcan Sheehan at http://blog.moduslink.com/bid/79958/Ecosystem-service-and-lifecycle-predictions-for-mobile-in-2013

MB polish resized 600For those of you that attend your share of industry conferences each year, you will recognize the fact that they can range from the intellectually stimulating to the painfully commercial.  This week I had the pleasure of attending Luxury Interactive in New York, which to the credit of the organizers and the many speakers that gave their time, was a fascinating glimpse into how many of the world’s leading luxury brands are embracing the new worlds of digital and social to reinvent their customer engagement and retail strategies.

Leading brands such as Tourneau, Louis Vuitton, Donna Karan, Mercedes Benz, Swarovski, Four Seasons Hotels and Resorts, Tods, Tory Burch, Tumi and L’Oreal were among those to present, which made for an interesting cross section of the luxury industry and an ever so slightly more stylish conference than yours truly is in the habit of attending.

It was clear from the offset that the sheer pace of change that the explosion of social interaction has driven in the industry. While nobody is declaring victory on these social strategies, there are clearly those that are making significant progress in figuring out how to engage global brands in a meaningful dialogue with individual customers around the globe. This conversation is occurring across multiple social platforms – Twitter, Facebook, Pinterest, YouTube and Instagram being the most common. Each social tool has its own role in engaging customers, yet there is also a centralized strategy and social framework with regional and local empowerment of employees that is required to effectively participate in conversation.

The engagement does not exist exclusively in the digital realm, however. Retailers such as Tourneau demonstrated how their customers are using digital commerce to initiate transactions that end up delivering a more compelling brick and mortar retail experience. Although I will not do it justice, think of customers engaging on the aspirations and desires associated with a product, building a virtual ‘watch tray’ or wish list on line and scheduling time with a retail associate to review this tray and complete the purchase in store. By providing this information to the retail associate—perhaps with iPads in the store—think of how much more meaningful that in-store interaction can become. 

What strikes me as particularly compelling about this approach is that it is almost the exact opposite of the ‘showrooming’ concepts that many electronics retailers complain about where their brick and mortar stores are used as showrooms for transactions completed online with Amazon and other retailers. While the electronics retailers seem engaged in a race to the bottom in cost, it is maybe not surprising that luxury brands seem to be using similar technologies to create value by creating desire.

What I will call ‘humanizing’ the brand seems to be another critical element of the success.   Whether it is the empowerment of a trusted employee to live the values of the brand in a digital environment as in the case of ‘DKNY PR GIRL’ ( @DKNY – Aliza Licht) or the empowerment of associates in each of the Four Seasons properties around the world or the training and empowerment of retail sales associates in the case of Tourneau it is clear that Luxury brands really understand that people buy from people and want to engage with people rather than companies.

It is rather a timely reminder for me as I look at our client satisfaction surveys and recognize that in our own B2B service environment, our clients that scored highest for satisfaction also called out our front line people that enabled that satisfaction. Thank you to our team and our clients for that reminder—honestly, not a surprise but a good reminder.

Thanks to all who shared their time and experiences at the conference. In addition to the insights above, you have inspired some much needed further personal research on the emerging range of social sites, tools and best practices to better engage our customers and deliver value on behalf of ourselves and our clients.



Originally posted by Lorcan Sheehan at http://blog.moduslink.com/bid/79681/Luxury-brands-embrace-digital-and-social

Rowers resized 600During the Hi-Tech & Consumer Electronic Summit held in Singapore, where ModusLink was a sponsor, the topic of Supply Chain Collaboration was a focal point both in panel discussions and keynote presentations. The two day event saw around 150 supply chain professionals congregated to listen, discuss and educate one another over a wide spectrum of topics.

 

 

Collaboration in recent times has become such a business-critical driver that Ronald K. Ireland, together with Colleen Crum, in their book entitled Supply Chain Collaboration argued that collaborative commerce will be the defining business discipline for the 21 st century.

 

 

The concept of a collaborative supply chain is fueled by a very uncertain business climate where the rate of change is accelerating. If we look at the US economy as far as 20 years back, we will see that the boom cycles have halved from a ten year cycle (1991- 2001) to a 5 year cycle (2003- 2008). Now, based on some analysts outlook, the boom cycle might shrink to a 2 to 2.5 year cycle. This is compounded with today's other business realities: a fragmented consumer base with lower brand loyalty, shorter product life cycles fueled by disruptive technologies, and weak business forecast accuracy especially in the hi-tech and consumer electronic industry. The result is the vertical integration model of supply chain has given way to a virtual integration model involving multiple supply chain parties for better market responsiveness.

 

 

Judging from the discussion and presentations on this topic during the two day event, supply chain collaboration is both business-critical and elusive at the same time. It is elusive to many businesses because there's no one boilerplate answer to achieving it. Businesses have to be very savvy in managing genuine collaboration among its supply chain partners and should:

 

 

  1. Establish Shared Goals: This is both the starting and the end-point for a successful collaboration. The success of any collaboration lies unequivocally with the results that should be spelled out with clarity and agreed on at the start of any collaborative efforts. Goals have to be translated to a mutually agreeable set of metrics and KPIs and should address a wide spectrum of supply chain performance themes including customer service, internal efficiency, demand flexibility and product development. (For more discussion on the areas a company can look at when trying to improve supply chain performance, please read my previous blog post Keeping Score on Supply Chain Management Performance.) Establishing mutually agreeable metrics and KPIs can involve considerable effort, especially if it is consequential. Targets not attuned to reality and the dynamics of the environment and that are set with the interest of only one party are unlikely to elicit the desired level of collaboration or end results. Onerous goals often produce transaction-based compliance.

 

  1. Demand Accountability: Once shared goals are agreed upon by the supply chain partners, businesses need all players to put skin in the game so that rewards and sanctions are tied back to what the partners have ploughed into the collaboration and to what extent the shared goals or expectations are met. Rewards and sanctions can be based on end results, behaviour and process/ standard adherence, or both. There has to be a culture of accountability. One of the ways to actualize it is to have the shared goals and mutually agreed metrics and KPIs codified in enforceable agreement. This argument of you are either all in or you are not in it at all sense of collaboration was brought home during one of the panel discussion at the Hi-Tech Summit when a head of supply chain at a leading technology firm shared that a ultimatum was given to their supply chain partner to either collaborate or they will start looking for new partner that will. Apart from the carrot and stick approach, establishing and institutionalizing constant business communication practices or rituals such as weekly or monthly operations review and Quarterly Business Reviews to establish alignment will be equally important.
  2. Manage Tensions: During one of the panel discussions at the same event, a company president in the mobile media space shared that managing inherent tensions among supply chain partners is key to actualizing the full potential of the collaborations. How to manage the potential loss of a company's proprietary technology or know-how while staying true to an open and collaborative working approach with partners was a focal point in the discussion of managing tensions in collaborations. Mark Millar, the chairman for the summit,  captured this relationship with a concept called coopetition where partners cooperate in areas where the value generated through joint efforts are greater than the individual endeavour, while competing with each other on one or several fronts.  It is my opinion that unless parties have considerable confidence in managing the risk factor, one way or another, or are willing to give up what is at risk over time in exchange for tighter collaboration, the objectives of collaboration cannot be adequately actualized.
  3. Execute Methodically: This is the how part of collaboration.  The head of business management at ST Ericsson discussed this in his keynote speech at the summit saying that businesses can leverage on time-tested methodologies to manage visibility, facilitate alignment and co-ordination in terms of practices and processes across the supply chain partners. The lack of such visibility and alignment across the supply chain have been known to create supply phenomenon called the bull whip effect where demand is amplified at the point in the supply chain furthest from the end-user.  Michael H. Hugos explained the phenomenon in his book Essentials of Supply Chain Management saying small fluctuations in product demand by consumer at the front of the supply chain ripples into wider and wider fluctuations in demand experienced by company further back in the supply chain.
  4. Enable Through Technology: In their book Ireland and Crum observe that while there are cases of success with what we may define as manual collaboration efforts, technology is necessary to take collaboration to scale and to a much lower level of detail.

 

 

Two of the leading supply chain management methodologies that businesses can consider implementing:

 

  1. Supply Chain Operations Reference Model (SCOR): In the definitive subject matter book on SCOR, authors Peter Bolstorff & Robert Rosenbaum in their book Supply Chain Excellence explained SCOR as a comprehensive and eclectic framework that combines elements of business process engineering, metrics, benchmarking, leading practices, and people skills into a single framework. Under SCOR, the key constituents of supply chain management include PLAN, SOURCE, MAKE, DELIVER and RETURN.
  2. Collaborative Planning, Forecasting, and Replenishment (CPFR): The objective of the model is the integration of supply chain and to facilitate cooperation in the management of inventory by providing visibility and replenishment of products throughout the supply chain. There are nine steps to CPRF involving 1. Develop Front End Agreement 2. Create the Joint Business Plan 3. Create the Sales Forecast 4. Identify Exceptions for Sales Forecast 5. Resolve/Collaborate on Exception Items 6. Create Order Forecast 7. Identify Exceptions for Order Forecast 8. Resolve/Collaborate on Exception Items 9. Order Generation

 

 

What are the measures your company is taking to promote collaboration? Write and let us know.

 

 

Originally posted by Patrick Tang at http://blog.moduslink.com/bid/79649/Collaboration-tough-but-required

Make Buy Cloud resized 600Based on a recent presentation that I gave at an IT executive seminar entitled Cloud Computing, When the Mist Has Disappeared ,  I had discussions with several CIOs and CTOs on their experiences and views on cloud computing. What was noticed from those discussions was that cloud computing is still being seen as a pure IT topic, regardless if it is an Infrastructure as a Service (IaaS) or a Software as a Service (SaaS) solution. My view is that if an organization really wants to benefit from a cloud solution, such an implementation must be performed as a business project. This as most of the times the implementation will have a change on the business model, especially with implementing a SaaS solution.

A different approach
It is strange to see that “regular” outsourcing deals are being performed with a lot of control mechanisms and yet the same approach is not always performed for selecting and implementing a cloud solution. The technology part is given much attention but the impact on the business is often overlooked. My first question, likewise for any outsourcing deal, to a cloud vendor is always, “What is your exit strategy?” This as it's easy to get into a cloud relationship, but it can be very difficult to leave.

Business perspective on cloud computing
Does this mean that cloud solutions are a no-go area? No, as mentioned in one of my previous blogs, cloud computing provides a wide range of opportunities that will help to leverage eCommerce services.

As the current business climate is still unpredictable, business organizations like to gain agility with variable, volume-based costing models. It allows them to be more flexible than ever before.
The benefits of cloud computing are obvious and can be grouped into three categories.

IT on demand- This category emphasizes the IT functionality available “at a finger click.” These characteristics are improved:

  • Flexibility and scalability
  • Availability and manageability
  • Time to market
  • IT resource independency

  Service portfolio- This category underlines the ability to quickly add business functionality; the key features are:

  • New (reliable) functionality
  • Responsiveness to market
  • Location independence

Cost optimization- This category contains the benefits that come with the new financial models of cloud computing like:

  • No or less CAPEX
  • Costs aligned with usage
  • “Pay as you grow”  

So, what is new?

There is a lot of fuss about cloud computing. Is it a revolution? No not really, many cloud computing services have been available in the market for many years. Is it about new technology? No, the IT systems are being used for many years. Is cloud computing the next step in the IT as commodity evolution? That’s the most reasonable answer. Based on the increased network capacity, IT services/solutions have become available through the internet.  IT services have become location independent, and due to virtualization, the services can be used in almost any business format. Is it a new flavor? If we put cloud computing in the business perspective it can be seen as a new service model. Until now we had two service options: m ake or b uy. With the introduction of cloud computing services, we have an additional option: rental , also known now as cloud computing.

Control demand management and IT roadmap
As described in my blog Increasing Complexity of Managing a Global e-Commerce Function, it is essential to channel the demand from multiple directions of the organization. The need to channel these demands is increasing to avoid conflicting directions which will jeopardize the ability to manage the IT (internal/external/cloud) solutions in an effective way.  If not managed well, the change for creating sub-optimized solutions is plausible. 

The tool used to map available cloud computing solutions in the overall IT roadmap is not critical, as long as the process is being followed.  During the mapping, a validity check needs to be performed on the fundamentals: architecture validity, economic validity and business risk containment.

Beneath a graphic overview of how this can be done:  Part 1 graphic resized 600If such an IT Transformation roadmap has been created it has to be maintained. As cloud solutions in the market mature and many new solutions are being offered rapidly, the need to perform a periodic review and map the available services/solutions into a roadmap is more needed than ever. If a SaaS (Software as a Service) solution has been implemented it becomes an integrated part of the application portfolio.  Be aware that probably not all applications in your portfolio are cloud ready (can be virtualized) and therefore can put boundaries on your ability to migrate solutions to the cloud. 

In my next blog I will provide more insight on the basic steps to select and implement a cloud solution.

 



Originally posted by Robert Koornneef at http://blog.moduslink.com/bid/79491/Cloud-Computing-from-a-Business-Viewpoint-part-1

describe the imageBrad Mackler is a director of client solutions at ModusLink.

Innovate, innovate, innovate and please be strategic! Look, the supply chain of the future is here, right this way! Don’t believe me? Just walk down to the basement and over 100 supply chain providers will try to make a compelling case that they are blazing a trail unlike any other vendor has ever done.

There seems to be three different reports and analysis on the “State of the 3PL Industry.” Some common themes:

  • Shippers want innovation but only believe that 3PLs are capable of being innovative less than 30% of the time.

  • Shippers want 3PLs to be proactive and deliver strategic solutions, but believe this happening at the same rate of around 30%.

  • Last, but not least, 3PL CEO’s believe that attracting and retaining top talent is the number one inhibitor of growth and success in the 3PL space.

In looking at the CSCMP conference guide for 2012 in Atlanta last week, I was struck by the notion that if I looked back several years at prior guides and removed the dates from the cover, anyone would be hard-pressed to see significant difference between what was being discussed and the vendors doing the discussing.

To succeed in this commoditized space, 3PLs must think strategically and deliver true innovation to their customers or they will fail to grow. A few providers in my mind have delivered unique and beneficial services and thus dominate their space. MecuryGate has developed an affordable web-based multimodal transportation management system (TMS) that now has over 270 customers.  They are pulling away from the pack of other TMS vendors to become the market leader in less than 5 years. CH Robinson has now eclipsed $10B in revenue with a simple model based on they will move all of your freight at a competitive price and combine it with world-class visibility. US Bank has developed the largest network of carriers in their space and is able to audit and pay your freight quicker and at a lower cost than any other vendor and at the same time offer the protection and security of one of the largest banks in the world.

Lastly, Amazon is one of the largest retailers in the world with arguably the best fulfillment system in place. Combine this with a growing network of fully automated 1mm+ square foot warehouses strategically placed all over North America and you have the recipe for domination. If they can figure it out, and I believe they will, they are going to be a dominant 3PL in the years to come. How do you compete with a value prop that says, “Give me your product and I manage everything from VMI all the way to ultimate delivery for 10%?” Someone asked if they had bigger plans for the automotive logistics space and the Amazon rep just smiled and said, “Stay tuned.” Can you say service and aftermarket parts?

These three companies in my view all have top-notch talent who all seem to be very satisfied with their jobs and employer. Conversely, I counted 6 recruiting companies who had exhibit booths. The most I have ever seen! They all said that business was booming. I also noticed that a lot of booths lacked staff—certainly not the best image!  (Might they be off talking to all those recruiters?) To bring this full circle, I believe the message here is most supply chain providers are not innovating and thinking strategically and thus are not able to attract and retain the talent that is required to do so. Those that are developing unique services and solutions clearly have an energized talent pool. It’s a great time to be a supply chain recruiter in this environment, but even better, it’s a great time to be thinking outside the cardboard box and finding new supply chain solutions for our clients.



Originally posted by Contributing Blogger at http://blog.moduslink.com/bid/79318/It-s-a-good-time-to-innovate-a-CSCMP-take-away

describe the imageBlogger Jeff Elliott is Vice President of Americas Sales at ModusLink

How fitting that one of the final sessions at the 2012 CSCMP Global Conference would be a session that looked forward to 2025, and explored the mega trends predicted to shape our global supply chains over the coming years. For those of you were fortunate enough as I was to find a seat in this standing room only crowd, you were able to join a session that really needed a bigger room to accommodate the obvious interest in the topic. The panelists certainly didn’t disappoint, as I heard many people comment that this was their personal favorite session – quite the compliment given the number of quality sessions at this event.

The sessions panelists were selected not only to provide a depth of supply chain expertise, but also to provide a breadth of experience that ensured a variety of different perspectives.  Kevin O’Marah (Senior Research Fellow, Stanford Global Supply Chain Forum) did an excellent job moderating and providing his own insights into the topic.  The three panelists were Beth Ford (Executive Vice President, Chief Supply Chain and Operations Officer, Land O’Lakes), Frank B. Jones (Vice President, Technology and Manufacturing Group, General Manager, Customer Fulfillment Planning and Logistics Group, Intel Corporation), and John Lund (Senior Vice President, Disney Parks Supply Chain Management, Disney Destinations, LLC); and they were able to provide commentary from very divergent perspectives that somehow managed to converge on alignment on the issues that we face.

The session started with a thought-provoking video—a graphical perspective on individual health (lifespan) and wealth (income) in each of the world’s countries. It started with a rear-view mirror perspective, depicting the data from 1860 to the present, and then projected forward to predict how the various countries around the world would progress. Particularly interesting was the breakout of China into the individual provinces, showing the disparity between those that have benefited from their coastal position, versus those further inland that have not progressed at the same pace. Those of us that have spent time in China were not at all surprised by the data we saw, but it definitely helps to partially understand the dichotomy that exists in China today. The look forward was based largely on an extrapolation of the current improvement, and showed China catching the US within the next decade. However, it also recognized the reality of opposing forces that would slow this development. While none of us can definitively predict how China will react when their growth inevitably stalls, there does appear to be a view that this represents a risk to many of our existing supply chains.

I know that this introduction really set the stage for what was to come, as the panelists discussed a number of different topics that would influence our global supply chains. The discussion of environmental responsibility went beyond simple discussion around corporate responsibility to reduce green-house gas emissions, as Beth Ford presented data around the reality of water availability and how it would influence supply chains in the future. This was a bit sobering for the closing session, but framed this topic with more urgency than I have seen in the past. Having spent 14 years in environmental engineering consulting, I am not usually surprised in this area.

Probably my greatest take-away though was around the subject of automation. As a supply chain professional with a leading global provider of supply chain management solutions, I am well aware of the many factors that influence our decision-making regarding the optimal location for executing manufacturing and distribution activities. We are well aware of the trends in labor rates, raw material availability and costs, fuel prices, location of consumer demand, degree of localization, etc.; and we routinely consider these variables as we make recommendations regarding the optimal location for execution of these services for our clients’ supply chains.  The trends affecting costs provide an objective metric that is already beginning to point towards more manufacturing near the consumer. Risk management and requirements for increased differentiation in final product configuration are contributing to this trend as well, although in a less easily defined way (from a pure economic perspective). The increasing consumer demand in locations that were previously viewed as simply low-cost labor locations is a competing influence in this analysis. While we currently employ some automation in our sites, I had not previously seen the significance of this megatrend. 

I learned during this session that compared to the 5 billion mobile phones that have been sold globally, there have been only 700,000 robots. However , the capabilities and utilization of robots is expected to grow significantly, as they become more economically attractive solutions to manufacturing. The implications of this trend to our supply chains will be undoubtedly significant, as it shifts the impact of labor costs, and makes manufacturing closer to the point of consumption a much more attractive solution. 

I don’t think anyone is ready to predict an immediate shift, as major shifts in points for manufacturing do not generally occur overnight. However, it was interesting timing to return to my home outside of Raleigh, North Carolina and read that Lenovo had announced that they were planning to begin manufacturing computers in their fulfillment site down the road in Whitsett.  Maybe these panelists really do have a crystal ball?



Originally posted by Contributing Blogger at http://blog.moduslink.com/bid/79209/Supply-Chain-Megatrends-Looking-Ahead-to-2025

describe the imageWith 24 simultaneous learning and information tracks, each meeting eight times over a three day period, there is no shortage of information for attendees of CSCMP’s annual global conference. 

Within that much content and choice, it can be at times hard to find the sessions that provide real value and new insights. I would love to see the CSCMP consider taking a more aggressive approach in pruning the content—maybe by as much as half—and be more disciplined in the track themes and structure. There were many cases where competing sessions had similar themes and where attendance was sparse.

That said, I must take my hat off to all those that put the effort in, mostly on a voluntary basis, to pull together tracks, sessions and presentations. Having been responsible for the logistics of just one session I got a sense of the scale of the task of pulling together an event such as this.

This is an event that is closing in on its 50 th year and still attracts 3,000 supply chain professionals, so they must be doing something right. I have found it worthwhile to attend for what is my sixth time (which still makes me a newbie in CSCMP circles) and each year I find sessions that shed new light on my perspective on supply chain and I add a few more people that I will try to follow up with in the future.

The learning from the event comes from a combination of seeing the themes that are trending in the sessions—to use a twitter analogy—and finding those sessions with real practitioners that have achieved amazing things in their supply chain and the visionaries that challenge your thinking on the future of supply chain.

Trending strongly this year were risk management and the impacts of e-Commerce in supply chain.

Risk management has always featured strongly at the conference and the events of Japan and Thailand are still fresh in the memory. Geo-tagging of supply base and extending visibility beyond the initial tier 1 suppliers are becoming accepted best practices, but there is recognition that just improving visibility is not enough. A prioritized approach to risk mitigation such as the Value at Risk metric developed by the Supply Chain Council is needed to quantify risk impact and inform risk mitigation decisions.  It was also interesting to see executives challenge the blunt instruments of additional inventory and dual sourcing as potentially effective but expensive tools in managing risk. It is no secret that we at ModusLink are strong proponents of the role of postponement in addressing risk and it was refreshing to hear senior supply chain executives echo that sentiment.

e-Commerce can no longer be dismissed as a complex but insignificant channel within the overall supply chain. The significant progress of on-line retailers in the overall retail mix now has the attention of major brands and traditional brick and mortar retailers. Projections see e-Commerce breaking through the single digit percentage of sales mark and companies are coming to terms with the implications for their business:

  • Distribution center footprint and configuration

  • Multi-channel distribution sites versus dedicated e-Commerce fulfilment centers

  • Shipping payment models

  • Consumer expectations for next day and same day delivery

  • International e-Commerce needs and requirements

  • Supporting finance and customer care processes

Top of my list for individual case studies at the event were The Home Depot’s retail distribution center transformation and Kraft’s commitment to and use of retail demand data in their supply chain. The use of retail data in this manner is an area where high tech and consumer electronics companies can really learn from the leaders in CPG. Look out for more detail on that in future posts on this blog.



Originally posted by Lorcan Sheehan at http://blog.moduslink.com/bid/79149/Nuggets-of-real-value-in-a-mountain-of-supply-chain-content

cscmp logoToday, Georgia is not only on my mind, but on the minds of over 3,000 supply chain management professionals convening in Atlanta to kick off this year's Annual Global Conference.  I always look forward to this conference as it is the single largest gathering each year of people from around the world who share a common interest in education and in the advancement of the global supply chain management discipline. It's not industry-specific, so my neighbor in an educational session on network optimization could be thinking about how the topic applies to his global apparel supply chain, and my other neighbor may be re-tooling her approach to how she manages perishability in her fresh food supply chain.

 

 

Personally, for me, Georgia has also been on my mind as it is a brief homecoming three-quarters of the way through my two-year expat assignment in The Netherlands.  My time overseas has afforded me some excellent opportunities, including serving in a leadership capacity on the Board of the CSCMP Benelux Roundtable.  Also, in June, I had the opportunity to attend CSCMP India's first annual conference.  While I have had plenty of experience working with clients to innovate their global supply chains throughout my career, this time living abroad has taught me a lot of valuable lessons and given me new perspectives.

 

 

For the most part, we in the supply chain management world are having the same conversation around the world.  Cash flow, currency stability, environmental sustainability, disaster recovery, contingency planning, fuel sources and pricing; these challenges are on the minds of supply chain professionals everywhere.  So, let's look for some differences in our conversations; in importance, urgency, or severity that may be spurring faster innovation than average.

 

 

Japanese companies manufacturing in China are suddenly facing the very urgent need to shift to non-China supply sources to continue to satisfy global demand during this time when employee security is threatened by violent anti-Japan protests.  US-based providers to the defense industry are making plans A, B, and C in the event the expected sequestration spending cuts come to fruition, there is a change in the Oval Office, or Arab Spring continues to strengthen requiring stepped-up US involvement.  Companies in Thailand, Japan, the Philippines, Turkey, and New Zealand that have been impacted by deadly natural disasters recently, are re-examining their infrastructure and global footprint so they can re-gain pre-disaster market positions and be prepared for future risks.  Companies buying, selling, or operating in the European Union are looking for innovative solutions around supply chain financing, exchange rate fluctuation, and making smarter nearshoring decisions.  Indian companies continue to struggle to solve the challenge of developing their infrastructure proportionately with their growth in an environmentally sustainable way.  The list goes on and on.

 

 

While this annual conference offers our prospects the chance to attend a session on supply chain basics or hear for the first time how RFID adoption is right around the corner, it also provides a forum where seasoned professionals learn, share, and invent new solutions through dialogue.  Need more inventory turns?  Talk to someone who ships lettuce around the world.  Curious about your company's risk management plans?  Learn what tools, processes, and approach your Japanese counterparts are using these days.  India's ports particularly painful for your company?  Speak to a Dutch attendee knowledgeable about capacity improvements planned for the Port of Rotterdam and improve your ability to predict when and if India's ports will catch up.  Losing your A players to your customers or competitors?  Learn what it takes to retain and develop tomorrow's top talent by attending the many sessions on this topic.

 

 

So, this unique opportunity to come together each year with people from all over the globe and vastly different industries, is extremely valuable to me because of what we share; a thirst for deeper knowledge and accelerated advancement in how to most effectively, sustainably, profitably, and rapidly match supply and demand in our ever-changing world.  At this conference, we get a few days away from agendas driven by politics, profit, and even our own company's priorities; all about listening, learning, hypothesizing, debating, and creating new ideas and plans with the help of that narrow portion of the worlds population that prides themselves Supply Chain Management Professionals.

 

 

Which sessions or tracks will you be attending at the conference?  In the spirit of CSCMPs mission of knowledge sharing, why not share a few supply chain topics or challenges that are on your mind that you hope this years conference will help you solve?

 

 

Originally posted by Rich Sheubrooks at http://blog.moduslink.com/bid/79082/Connecting-CSCMP-s-Global-Dots

RepairImageReturns, especially consumer electronic devices, are a big business. According to a 2011 study by Accenture, between 11% and 20% of all consumer electronics (CE) devices purchased in the U.S. are returned. With volumes like that, it’s important for both retailers and manufacturers to manage returned items in ways that maximize their bottom line.

The unopened box items are easy to process, but what can be done with items that have been opened, used or even damaged in transit or during the returns process? Years ago, you would simply pay someone to recycle them and take the financial hit, but today there is such a growing aftermarket for these refurbished products that retailers and manufacturers would miss a real opportunity for resale, and therefore a larger yield, if they continued their outdated recycling process.

The key to optimizing the CE returns process and yielding the greatest return on returns is to truly understand the current market value of the item. Many CE products have a significant aftermarket value and it is worth the money to consider not only refurbishing damaged products, but also repairing them. It’s also key to have clear guidelines about where to draw the line between cost-effective repair versus potential value in the recovery of materials.

ModusLink leads the industry in reclaim services. Part of that process is strict evaluation and grading, then multiple levels of repair capability. Here is a breakdown of repair efforts:

LEVEL 1: No Fault Found
At this level, the unit is tested and inspected and if it passes the full functional test, the item can be repackaged and kitted for resale. This simple process is simply to ensure the unit is working properly. According to the 2011 Accenture study, 95% of all U.S. returned CE products will pass this level.

LEVEL 2: Software Upgrade
In addition to level 1 repair, some units may benefit from a software upgrade. This assures that when the product goes back out into the market it functions at the highest level for that product and support requirements for the product will be minimized.

LEVEL 3: Minor Repair
This level means that during the inspection process, the unit failed, but that failure is assumed to be a typical problem that can be remedied quickly. This may include repair or replacement of basic electronics or cosmetic parts. Once this repair is completed, extensive testing of the unit is performed again. If it passes, it goes on to resale. If it fails, it goes to Level 4 Repair.

LEVEL 4: Component Level Repair
In-depth diagnosis and repair is required to identify and fix damage all the way down to the circuit or component level. Years of experience and certifications are required as well as specialized equipment such as microscopes, temperature controlled soldering stations, heat guns, and BGA repair stations. Often times a small repair from an experienced technician on a valuable device, can increase yield to levels not thought possible before.

While many CE companies are taking this route to maximizing returns, a good number more can benefit from a proper feasibility study regarding repair options, parts availability and repair costs. This, coupled with a good market valuation study on the particular product, can help outline a specific plan for optimization of returns and added support for the bottom line.



Originally posted by Matt Maudlin at http://blog.moduslink.com/bid/78763/Repair-May-Be-the-Needed-Fix-to-Increase-Return-on-Returns

tradeshow image mediumAs an exhibitor, I find that a great event contains a couple of key elements.  I am most interested in not only creating awareness for the company brand, but also generating leads and adding contacts to our database.

We all know that the more exposure your brand gets, the more recognition you have in your target’s eyes.  Most event organizers will allow you, as a Sponsor, to add your logo to their website and/or develop signage at the event itself to create brand awareness.  Some organizers, though, will actually assist in promoting your company during a session pertaining to your product or solution, to help draw booth traffic.  My colleague, Patrick, found a session at the SCM Logistics World event held in Singapore that was relevant and pertained specifically to our target audience.  He then asked the organizers to promote our contest at the conclusion of the session.  This will encourage contacts to visit our booth and drop their business card for a chance to win at our drawing.  This tactic will help create awareness for ModusLink, as well as provide an opportunity to acquire new contacts to speak to at our booth.

Adding contacts to your database and generating leads is why we spend the extra cost on exhibiting.  Events that assist with this task make it all the easier.  I particularly like choosing those events that will guarantee a number of meetings set-up on your behalf, either at your booth or in a separate meeting room.  It is extremely difficult to receive a complete list of attendees well enough in advance to try and effectively cold call for appointment setting.  By adding guaranteed meetings to your contract, a lot of the time and effort can be eliminated.  Highly targeted meetings set-up ahead of time increases the chance of you walking away with highly qualified leads.  By setting up the time in advance to speak to an individual and hear their specific pain points, I feel it is an ideal way to convey your message and solutions to a potential client.  It isn’t always an easy task to do while networking during a break.   

So when you are looking for an event to participate in, try and look for those that not only speak to your target audience, but also assist you in reaching those targets easily and effectively.  Be creative and don’t be shy in your requests.



Originally posted by Carrie Ephgrave at http://blog.moduslink.com/bid/78571/What-Makes-a-Great-Industry-Event

OldMonitorsIt’s a growing problem with no easy solution: with the expansion of technology, an increasing amount of electronics waste is ending up in developing countries such as Ghana, India and parts of China. Most of this e-waste comes from the US and Europe, while only a small amount of it is produced locally. Africa is seeing a slightly different trend, where the burgeoning access to PCs and cell phones is creating a domestic e-waste problem. According to the UN Africa will produce more E-waste than Europe by 2017.

Although under the Basel Convention, the export of hazardous materials to other countries is prohibited, waste electrical items are routinely exported as functioning equipment or bundled with other products such as used cars. There is potential benefit to be found as most of the products are stripped to get at the high-value metals such as copper and gold. However, the toxicity of these materials directly and significantly affect the health of the people involved and pollute the landscape, soil and water for years to come. In these developing areas there are virtually no locations where the products can be processed and recycled in a safe and environmentally friendly manner. In response to this illegal dumping and the hazards it presents, many countries have put programs and legislation in place to manage waste recycling. The WEEE Directive, which puts recycling goals in place, and RoHS, which restricts certain materials use in the manufacturing of electronics, is two examples.  Recognizing the problem and the opportunity to play a part in solving it, many of the largest consumer electronics companies, including HP and Samsung, have set up recycling and take back programs that manage and audit the returns and recycling process so the products are dealt with in an environmentally responsible way.

Going a step further, ModusLink is working with several entrepreneurial companies that have developed various business models based on managing the return, reuse and recycling of electronics. They represent a merging of sound business opportunity, social responsibility and even humanitarian effort in bridging the digital divide with lower cost refurbished products.

For companies looking to develop programs, several best practice points to consider include:

  • Where the WEEE Directive is in place, join the local recycling group.
  • Where legislation is not in place, adhere to guidelines set up by the Basel convention on the certification and testing of waste electrical equipment and get any waste recycled in a certified manner.
  • Set up an accessible and efficient reverse supply chain in your country of operation.
  • Work with retail and distributor channels to incentivise customers to recycle when purchasing new products.

Is your company addressing this issue in a new, unique way? Tell us about it.



Originally posted by Eoghan Dillon at http://blog.moduslink.com/bid/78459/A-look-at-solving-the-e-recycling-problem

BigDataBlogImageGoogle Big Data and your top results will be from the leading names in enterprise IT: Oracle, IBM, Intel, McKinsey and the like. Its a hot topic with tremendous business-driving potential. Big Data is loosely defined as huge, complex data sets that require powerful analytical tools and the industry at large has described three dimensions: volume, velocity, and variety. Recently, there's a lot of discussion about a fourth veracity, which speaks to the difficulty businesses have in deriving value from their information. These are key to understanding what 's new about Big Data.

 

  • Volume: There is so much of it—12 terabits of tweets per day for example.
  • Velocity: The data may need to be analysed in real-time, such as with financial transactions that can happen instantaneously.
  • Variety: The data can be generated from an ever-growing list of sources like social media, text, images, sounds, sensor readings, RFID and many more.
  • Veracity: Businesses simply don’t trust much of the information they have on hand to make business decisions. This challenge is compounded by the other 3 Vs.

 

The volume of big data is ever increasing—every day we create 2.5 quintillion bytes of information. So with this increasing amount of data in the eco system, the question is what do we do with it and can it be useful to assist in improving the supply chain?

 

Some of the core areas of Big Data that relate specifically to the supply chain according to Oracle are:

 

  • Web Logs Customer shopping patterns, order data, browsing information.
  • Trailer Tags Tracking data on trailers or shipping containers including transit times, temperature logs and security data.
  • Pallet/Case Tags Travel and dwell times for individual pallets or cases.
  • EOBRs (Electronic on-Board Readings) Vehicle transit times including driver hours and productivity.
  • Mobile Devices Application usage by employees, partners and customers.
  • Social Platforms – Social media information on the popularity of products and profiles of users.

 

These sources are above and beyond the more traditional sources of supply chain data which include:

 

  • EDI Order information, goods receipt data
  • Planning Data S&OP including suppliers and customer plans
  • Financial Transaction Data Purchase orders, payment details

 

Well-planned analysis of big data represents a huge opportunity to optimize supply chains by giving more detailed information than ever before at every aspect of the supply chain. By harnessing the data, supply chain improvements can provide big business benefits

 

  • Products demand can be better forecasted
  • Changes in demand will be picked up more quickly improving supply and inventory
  • Bottlenecks in materials procurement, assembly, and transit can be identified and better managed
  • Products can be further customized and targeted at specific groups or individuals

 

In order to take advantage of the opportunities, a key competency will be how to manage the data flows through the supply chain utilizing ERP systems and more importantly automating processes to effectively analyse the data. We'll look at advancements in information technology within the supply chain in future posts.

 

Originally posted by Eoghan Dillon at http://blog.moduslink.com/bid/78265/Big-Data-and-the-Supply-Chain

According to The World Bank, the global economy is experiencing strong headwinds in the form of Euro uncertainty with deleveraging from European Banks, fiscal consolidation from high-GDP countries while key developing countries are facing production constraint with their capacity utilization. All these drivers are translating to moderate growth for 2012.

All facets of business are buckling up in the wake of anaemic growth and poor runway visibility. This would imply to the supply chain function as well with newly laden pressures on raising the bar set on the balance between market responsiveness with cost efficiency.  In the process of rationalising which process needs improvement, Michael H. Hugos in his book “Essentials of Supply Chain Management” provides 4 paradigms to frame supply chain performance measurement:

Customer Service: Defines the ability of the supply chain to meet the expectations of the customer in terms of product availability and delivery turnaround time. This expectation varies from market to market. Zappos, the online merchandising company known for its customer service and customer loyalty, overhauled its supply chain strategy by eliminating the drop ship model from its business in order to improve order fulfilment to its customers. In his book, “Delivering Happiness”, Tony Hsieh talks about how Zappos chose to run its warehouse 24/7 in order to maximize customer experience by getting orders to their customers as quickly as possible.

Internal Efficiency: Refers to the capabilities of the supply chain to achieve appropriate level of profitability that is associated with the market conditions. For instance, in some mature markets where demand forecast is more accurate with less risk and also profit margin, supply chain can take the opportunity to leverage economies of scale and commit large business volume to boost the company’s gross profit and to make up for gross margin. On the other hand, form factor can be a key cost efficiency driver. In situations where the core product, such as a digital camera, only takes up 30% space of the final product packaging but accounts for 90% of the product value, it would be more cost efficient to air freight the high value camera to the regional distribution center but have the package sourced and perform pack out near the end-user market. This is discussed in more detail in the article from Loadstar, A tale of two parts: why the high-tech supply chain is coming to Europe, where the author, Gavin van Marle toured ModusLink’s Brno facility.

Demand Flexibility: Flexibility here is two-fold. First, it refers to the ability to respond to uncertainty in demand forecast and the fluctuations that happen concurrently in different markets. Second, it is defined by the ability to respond to uncertainty in the range of products that may be demanded.  In the white paper, “Meeting the Challenges of Supply Chain Management”  we rationalized that shipping units in bulk to regional distribution centers near the actual end-user market and performing localized configuration and/or packaging there might be the strategic choice for a business that has lower forecast accuracy (which could result in excess and obsolete inventory) and/or in cases where there are different end-market configuration requirements for finished goods.
 
Product development: This capability involves evolving along with the markets served. It measures the speed to develop and deliver new products in a timely manner. These capabilities can be pivotal in a developing market where the climate is shrouded with uncertainty in terms of demand and supply and industry platform and standards are still emerging and on tectonic grounds.

What are the areas your company looks at when trying to improve Supply Chain? Write and share your experience.



Originally posted by Patrick Tang at http://blog.moduslink.com/bid/78103/Keeping-Score-on-Supply-Chain-Management-Performance

Rating agency Standard & Poor’s recently downgraded India’s long-term investment rating from stable to negative. Despite the downgrade, India remains a highly desirable marketplace and one where ModusLink will continue to invest. India’s economy is projected to grow 5.3% next year. Even though this marks a slowdown of India’s record growth over the past decade, an economy forecasted to grow 5.3% is the envy of most countries.
 
India will continue to show strong growth driven by a large and fast-growing domestic market, significant foreign investment and an improving regulatory environment. The government has adopted a style similar to China with Special Economic Zones (SEZ) which are treated as foreign territories for the purpose of trade operations, duties and tariffs.
 
Based on IBEF (India Brand Equity Foundation) updates of May 2012, more than 70% of India’s population resides in rural areas. Capturing these markets is one of the most lucrative options for all sectors. Key drivers behind this growth include government initiatives and schemes, infrastructure development, industry projects and emphasis on local employability. Other reasons to continue investments in India:

  1. India is the second most populated country with 1/6th of the global population. Countries worldwide are anticipating a future shortage in the working population due to aging and rising dependence ratios, but India has a young and rapidly growing population. (source: The Economic Times of 01-09-2011) 
  2. 60% of India’s population has seen income levels steadily rise over the last decade mainly contributed by the industry and service sectors. Growth in the higher income categories of India’s population has created an affluent society which has significant level of purchasing power.
  3. With new found wealth, India is rapidly adopting Western ideas of consumption. Increased per capita income, coupled with an emerging middle class, has provided the necessary impetus to consumerism.
  4. A $30 billion consumer electronics market. India remains a major importer of electronic components and finished products, mainly from China. The Indian electronics industry is just under 1% of the global electronics industry, but is growing at over 25% CAGR and is expected to be worth $158 billion by 2015. According to Indian-industries/electronics newsletter of January 2011, the electronics industry is one of the fastest growing in the country and is driven by growth in key sectors such as IT, Consumer Electronics and Telecoms.

What are your views about venturing into the Indian market? Do you see the same big opportunity?  Leave a comment and share with us your thoughts or experiences.


 



Originally posted by Dr. Mukesh Chander at http://blog.moduslink.com/bid/77616/The-Indian-Market-Opportunity

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