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2012

I interviewed David Greenberg who discussed the future of IT supply chains.




Dustin:      Thank you, David, for spending your time today to discuss the future of IT supply chains. Can you start by providing a brief background of yourself?


David:               Sure, Dustin. Basically, I’ve been in the IT industry for the better part of fifteen-plus years. I’ve been working for global companies like NTT and Verio, as well as some regional companies like TIAC and Coghlin. My functional experience has spanned from account management to strategic partner in development and, most recently, I’d say the better part of the last eight years or so, I’ve been very active working with the regional integrator with IT supply chain issues, IT procurement, and IT sourcing.


Dustin:      Thank you. My first question is: Why are you so passionate about IT supply chains, and can you talk about what they are?


David:               Sure, sure. First, as far as what they are, classically, we think of the IT supply chain as, I should say it’s really overly simplistic terms as the flow of raw IT materials, if you will—boards, chips, hard drives, et cetera—to an OEM manufacturer—maybe it’s Apple or Lenovo—and then from there, moving to a distributor or * (1:38—unclear) and then to an end user. In short, it’s basically the linkage of IT suppliers and customers, and we create a long, if you will, supply chain and, hence, an IT supply chain. I’m passion about IT supply chains because they really provide people, organizations who really focus well on IT supply chain management, it really provides them with a strong, competitive advantage. You see this on the global level with Apple and Dell, but you also see it on the local level, where they’re able to really have a well-thought-out supply chain or sourcing strategy so that they’re able to really provide products and services to their clients very quickly.


Dustin:      What do you see as the future of IT supply chains?


David:               That’s an excellent question. Basically, there are a few things. One, on the end user end—that is, the client who’s using IT solution—it’s gonna become much more service-oriented. You’re seeing this with all these SaaS, cloud solutions, things like that, so it’s not just gonna be product in the supply chain, but it’s also gonna be service. What we’re also already seeing on the front end of the supply chain is that it’s becoming much more globally dispersed. We’re already seeing it now, and we’re probably gonna see it even more magnified, where suppliers at the front end are all over the globe, so it becomes much more challenging to manage your supply chain. Interestingly enough, with what’s happening at the, how should I say, the end user end, where it’s becoming more service-oriented, in the middle you’re seeing huge data-centered companies that are rising up, so it’s becoming more condensed, where there are few very strong data-centered companies. What’s happening there is now, they’re becoming new suppliers of things like cooling requirements, power requirements that are really entering in a big way, more upstream into the supply chain.


Dustin:      And who needs to pay more attention to IT supply chains?


David:               That’s another good question. Basically, the OEMs tend to pay very good attention. They’re very in tune with what’s going on in the IT supply chains. Some do it better than others. Governments are starting to pay much, much more attention to the IT supply chain for various reasons. There’s the concern about tampered goods, if you will, or how should I say, bad material getting into a supply chain and then creating a security issue for governments as well as end users. Also, the government is starting to pay much more attention to streamlining processes, as well as, how should I say, moving to service-based solutions like what we said before. They’re starting to pay more attention to the IT supply chain. Probably the folks who pay the least amount of attention and who should probably pay more attention is the end user. The end user is usually just focused on what’s coming through; that is, the product and now the service. It would probably behoove them to pay much more attention to the actual flow so that they could better predict issues or problems that arise.


Dustin:      Thank you, David, for sharing your views and some thoughts on IT supply chains and what’s gonna be in the future for IT supply chains.


David:              Thank you very much, Dustin. I appreciate the opportunity to speak with you.

 

 

About David Greenberg

 

Dave1jpegsmall 3.jpg

IT Procurement, Sourcing and Supply Chain

LinkedIn Profile

Twitter

http://it-supplychain.com/IT Supply Chain

I interviewed Norman Katz who discussed supply chain fraud.

 

 

Norman:            My name is Norman Katz, and I am president of Katzscan Inc., founded in January 1996, and located down in the south Florida area. My background is, I graduated from university as a business major, also with a computer information and science degree—I combined them both together—and I started my career, I guess it would be about twenty-eight years ago. I really started off as a programmer, worked my way programmer, analyst, systems analyst, and IT manager. I had the opportunity to work with some well-recognized consumer-product companies. And then in late 1985, through a series of happenstances, I decided to go off on my own, and I started Katzscan in January 1996, specializing in my core expertise areas of ERP systems, barcode labeling and scanning applications, and electronic data interchange.


                        Through network and meetings, I met a private investigator, I became a Florida-licensed private investigator around 1997, I would say, about a year or two after I started, and then around the time of WorldCom-Enron collapses, I became a certified fraud examiner and have also added certified fraud specialist designation and one or two other designations. During the time that I was studying for my CFE exam, back about seven years ago, I came up with the perspective of supply chain fraud, basically looking at all the frauds that were being described in the study manuals from a supply chain perspective, not from a financial-auditing perspective, which is the way the materials presented it.


                        The core foundations, if you will, of supply chain fraud detection and reduction are to get transactions from paper to paperless; not that paper isn’t still important, but they are a lot of paper-based transactions that need to go to paperless, extending the ERP system through EDI and barcode labeling and scanning. Now we’ve got all this data together, and we need to close the gaps where fraud can exist and fester. I look at the supply chain as something not just external to the walls of the organization; it happens within the organization. So, my supply chain fraud model looks at a seamless, just inbound and outbound supply chain and also closing the gaps where fraud can exist specifically in getting paper-based transactions paperless and doing a lot of cross audits and checks. I hope that sums it up.


Dustin:         Why is it important to pay attention to supply chain fraud?


Norman:            Well, certainly, supply chains are stretched globally right now, so organizations can’t put their fingers on their suppliers or what their suppliers are providing very easily, because everything is stretched not just domestically, but also internationally. Also, a lot of fraud is perpetrated within the organization, so the frauds where companies are hacked and millions or tens of millions of e-mail addresses or identities or tens of thousands are stolen get a lot of play in the press, but, realistically, employees and even valued consultants and valued suppliers, once they’re inside the protective infrastructure, they can wreak as much havoc internally as hackers can do from external. The supply chain from an internal-external perspective needs to be addressed because this is about internal controls as much as it’s about risk management from suppliers and even customers, from entities that are outside the organization.


Dustin:      Do you have any examples of fraud that take place in the supply chain?


Norman:            Well, there are some very good examples that I’ve used in recently published book, Detecting and Reducing Supply Chain Fraud, by Gower Publishing, which was released in August. The one that really rings true to me—and I think it’s just a great example—is the pet-food scandal that happened several years ago, where pet owners in the U.S. purchased pet food and their pets got very sick and died. What happened? The pet food originated in China and was tainted with melamine, which is chemical that is used to artificially, to produce artificial results with regards to protein levels in foods. I’m not a chemist but from what I’ve read, this is what melamine is used for; it will artificially boost protein levels when food substances are checked. The other reason why this is gonna be a great example because here in the United States, we certainly like to point our fingers at China and say, “Gee, it’s the Chinese that are guilty of so many things, and in no way could it be us.”

BookCover_supply_chain_fraud.jpg

                        Here’s what happened. Yes, the pet food was tainted in China, and the conspirators were caught. One person was found guilty and possibly executed, and another person, when found guilty, I believe committed suicide. The perpetrators were caught and the story does not end there because the pet-food product was shipped to Canada to a company that private-labeled pet food for distribution under many brands in the United States. The question here is: Why didn’t anybody in Canada, why did not anybody in the United States think of checking and doing their own quality testing? Apparently, nobody in Canada thought to quality-test the product that was coming in from China, and nobody from the United States, from any of the companies whose brands were in those labels thought of opening a can or opening a bag and doing quality testing to see if any foreign substances were present.


                        Now, the dairy company in China suspected that their products were tainted and, in fact, sent samples to a Chinese laboratory that determined that there was a foreign substance, which later proved to be melamine in dairy products. This was a global concern because a lot of companies were buying the dairy products in liquid or powder form. We have the technology to test for a foreign substance and then determine what it is, but nobody in Canada or the United States thought to do this. You can look at this and say supply chain fraud certainly happened in China, but I can certainly present the case to where supply chain fraud would’ve happened in Canada and the United States if costs were cut by executive management to the point where quality testing was either not done or was perhaps made impotent because of pressure to get throughput done because of poor sampling or poor equipment that was used or not the right equipment to truly test for foreign substances. I think that’s a great example—those are two great examples—because it starts to give us a different definition of what possibly could be fraud. It’s not just tainting food product; it’s also potentially by executive management, who says, “We’re not going to fund good-quality testing because we want to keep costs of goods sold down and increase stock prices, make our financials look good so we all get bigger bonuses.”


Dustin:      Thank you, Norman. Do you have any final recommendations for supply chain executives?


Norman:            Certainly, and my book does go into this. Certainly, governance and ethics come into play quite a bit. This definitely starts at the top and has to trickle down from executive management, who say, “We’re going to do the right things all through our organization.” Auditors and risk managers may find it difficult to police an organization in trying to enforce certain types of internal controls. What I would say is that instead of trying to police an organization into risk management or internal controls, there needs to be a level of collaboration, which may not exist today in a lot of organizations between internal auditors, risk management, and the supply chain professionals that are handling technology and operations internally and externally because the same types of technologies and process improvements that can get our organizations more efficiently, more effectively, greater throughput can also be used to help detect and reduce supply chain fraud. It’s interesting that the more data we collect, the more we have an opportunity to detect fraud earlier in the supply chain or red flags that could be fraud earlier in the supply chain before they manifest themselves into something much worse. Again, this gets down to the better collection of data at all the points in the supply chain and then cross-analyzing them.


Dustin:     Thank you, Norman, for sharing your insights on supply chain fraud.


Norman:          You’re very welcome. Thank you, Dustin.


About Norman Katz

 



norman_katz.jpg

President

Katzscan, Inc.

LinkedIn Profile

Main web site: www.katzscan.com

www.supplychainfraud.com

I interviewed Erik Lopezmalo who discussed improving supply chain performance using operations research techniques.



Please provide a brief background of yourself.

 

Sure Dustin, I am a Supply Chain Optimization and Network Design professional, I am an Industrial Engineer with a MBA and a Certified Supply Chain Professional by APICS.

 

I started my career in Logistics Operations in the cement industry back in 1995 working for Holcim Ltd’s sister company in Mexico, being my last position as a Terminal Manager. In 2003 I got transferred to work for Holcim’s sister company in the US .

 

My involvement with Operations Research (OR) techniques  and tools started a year later when I used network design tools to optimize operations and balance supply – demand of a cement distribution network of 15 plants, 77 terminals and 85+ different products across the US and Canada. As a Supply Chain Planning Manager, that role transitioned to a more strategic focus and I leveraged network design tools to support important business decisions such as plant closures and new product introductions.

 

Afterwards, I transitioned to a consulting role where I implemented a network design functionality for a large fertilizer company and applied Discrete Simulation (another OR tool) to right-size truck fleet for an important limestone slurry producer in Texas.

 

I formally joined CGN and Associates in 2010 and led and managed Supply Chain Optimization and network design projects for a heavy equipment manufacturer returning to the corporate world in 2011 with Cargill to help them designing improved Supply Chain processes leveraged in the SAP APO tool.

 

How can operations research techniques be used to improve the performance of supply chains?

 

OR applies advanced analytical methods to help make better decisions. Nowadays, pressure on corporations to squeeze margin, increased Supply Chain complexity and the need of better risk management greatly increments the need of having an holistic view of Supply Chain Operations. This now is possible given the developments of computer power and better algorithms.

 

Just to mention Mathematical Optimization and Simulation as a couple of techniques, organizations can improve its performance by:

 

  • Depending on the scope of the study, network design ensures a holistic / enterprise view of problem solving is taken into consideration, not just local ones
  • Having the ability to constantly run several “what-if” business scenarios and understand impact in business and variables trade-offs (i.e. if inventory is increased, carrying cost increases too but customer service levels improve).
  • Mimic real Supply Chains by modeling its interactions, checking for soundness and understand future behavior without committing to an up-front investment.

 

Why is this important?

 

Having an holistic / enterprise view of problem solving ensures organizations that they’re not “sub-optimizing” and fosters collaboration across departments. What we’re trying to improve is the organization’s bottom-line, not a specific region or segment P&L.

 

Utilizing OR tools and techniques assures removes management decision-making bias but it doesn’t substitute good business judgment; since it is mathematical based, even a 1 cent cost difference may lean the business decision towards an alternative or another.

It improves organization’s flexibility by being able to run multiple business scenarios in a relatively short amount of time and improves Supply Chain risk management by quickly identifying what your next best business alternative is.

 

 

Who should implement the techniques?

 

Typically, this roles are performed by Supply Chain Planning Analysts or Managers. Some developed organizations already have a department of business analysis or analytics where OR techniques and tools are applied. As you can see, data input needs and impact of studies where OR techniques are applied cut across the organization, so the main point here is the great deal of collaboration this role entails rather than the person / department in charge of doing it.


About Erik Lopezmalo


 

erik.lopezmalo.jpg

Erik Lopezmalo

MBA, CSCP, CSCA

Supply Chain Optimization Manager passionate about using Ops Research tools to solve business problems.

LinkedIn Profile



 

 



I interviewed Michael Kleis, the founder of Tradesparq.com who discussed their social network for international trade and supply chains. 




Michael:            My background is with a company called Global Sources. I was a general manager there for seven and a half to eight years, working on a lot of their content, running the content development for them, and I launched their supplier sourcing reports. My business partner, Brian Hager, was also at the same company, and we left Global Sources to start this company.


                        We had both the background and the Internet, in-sourcing and using online B2B; that’s what we know. You just work and realize that there’s a new way to approach this. Just putting up a directory of supplier information, given the way the Internet has gone and the way social has taken over much of the Internet, we realized that a new approach was needed, both in helping the buyer source and also in the pricing model for suppliers. That’s basically, what I have been doing in China for about ten years. Before Global Sources I was with a start-up called MeetChina.com, which was similar to an Alibaba when they were first getting off the ground. So, we know the space pretty well.          


Dustin:    Thank you. Can you talk about what is a social graph and why is it important to the supply chain?


Michael:            In a social graph you would look at the people who you know, who is in your network. LinkedIn has really taught us the value of that, and Facebook is more fun stuff. But on the business side, often when you’re sourcing, building a supply chain and when you’re looking for new customers, the people you talk with first are people you know, and their wider network can help you grow your own business. That’s what we work at, it is called the social graph.


                        People that I know personally are doing trade in their network. I can go through my connections, people that I know, to get introduced to other people that may be able to help me. For example, as a start-up company, we used LinkedIn an awful lot because it’s a good way. In fact, we found each other, you and I, on your new business via LinkedIn. I would not have been able to find you otherwise. So, for sourcing or for actual trade services, if you think about it, the logistics providers, the inspection agents, they’re right in the middle of trade. However, the way current B2B Web sites are working, it’s mainly a supplier directory. A buyer gets on the site and they’re sourcing via a supplier directory.


                        But where are the logistics providers? Where are the inspection, Customs, legal, and all of these other trade services? When you’re looking at a social site, these guys are in the middle. If I’m doing a search—for example, I’m a buyer and I’m doing a search on a supplier and I’m searching for paper cups, a supplier that is connected to someone I know, like an inspection agent or a logistics provider, would come up higher on a search in Tradesparq than they would in a regular B2B directory site, because I can verify that supplier through my network.


                        The reason this helps the trade services is, since these guys are in the middle, they’re connected to everybody, so it helps them grow their business because as buyers search for suppliers, they will come up as a relationship to that supplier, and that can help them in networking and to get more sales. And vice versa; suppliers can search for buyers on our site. The trade-service providers are right in the middle. I don’t know if that explains it or not, but in that type of network, they have more value than they would in a directory site because in a directory site logistics companies are not paying the tens of thousands of dollars to get on Alibaba or Global Sources to advertise their services (only the sellers of products are). That’s now how those sites work.                                 


Dustin:   That sounds interesting. Does your service help identify the background of potential suppliers that you may not know anything about? Does it help with that sort of security?


Michael:            The way we looked at is this: A lot of the B2B Web sites today, verify suppliers by saying it’s a gold supplier or it’s a multi-star supplier, but, in reality, they’re not doing much verification at all. The suppliers are paying ad fees, and the salespeople on a lot of the B2B sites go on and say, “Yeah, it’s a company and there’s a business registration and let’s be done with it.” That’s not real verification.


                        We looked and we don’t think a Web site can verify suppliers that way. We think verification should happen differently and that is via your network, so the first thing you can do is when you do a search and you find a supplier is connected to someone you know, you can immediately contact that person, go ahead and find out anything about that supplier via a reference. That’s the way Trade really works. You talk to a lot of sourcing guys on the buy side, they’re talking to people they know when they’re looking for a new supplier. That’s the first thing they do, and we want to facilitate that. In addition, we have added ratings to our site; not like a Yelp or the public ratings, but ratings within your circle.


                        In other words, if I happen to be connected to you, I can rate a supplier, and only you would see my ratings. This works good for sourcing teams that come on our site, where the team comes on. There may be ten people in a sourcing team. They could rate suppliers and only people within that sourcing team can see the ratings. That works, for example, if I’m a buying group and I buy down in Latin America, researching for something. What could happen is, a supplier will come up that’s connected to maybe one of their colleagues in China that they didn’t know about. They could go ahead and immediately see what the colleague has written about them, the supplier assessment the colleague has uploaded. Verification is happening via the network, not because we called someone a good supplier.


                        Lastly, what we do different is, we let a supplier put wherever they are on the Internet. In other words, instead of just having a profile, for example, on Alibaba, they’re saying, “Hey, Supplier, where are you?” If you have your own Web site, if you have a Global Sources and Alibaba, if you have a Facebook site, if you’re on LinkedIn, all of these other places, you put it out. We’ll let you market all of them because that provides the buyer with more details about you.


Dustin:   Where have you seen some success?


Michael:            We’re seeing a lot of success, first of all, in buyers coming on to the site. On the buyers side we see them coming on to the site and doing a search like a regular B2B site and then importing contacts and then filtering the search by the contacts. We’re seeing a lot of action on buyers going ahead and filter. On the supply side a lot of what we’re doing is we’re getting a lot of suppliers that upload products that can do it for free. Actually, the whole site is free; it follows a premium model like LinkedIn. Once they upload product, they’re sharing it across the network. We found that really valuable.


                        The suppliers are doing an awful lot because, often, when they upload a product, the first people they want to see the product are their preferred customers, people they’re already working with. With us, they can upload that product and only share it if they want to their preferred customers before having it sent out all over the Web. On the supply side there’s a lot of trade-show follow-up, where suppliers go to a show, they may be getting a ton of business cards, a buyer came by, was looking at a product. They can go ahead and share product details and specs directly with the buyers they came across at the trade show at the click of a button.


                        Some of the surprising things that, like a LinkedIn, we allow the buyers and suppliers to connect. That’s happened a lot. We thought buyers would connect with each other less; that has been surprising. A lot of buyers are connecting with each other because they know each other and they’re seeing who’s on their network. I think they’re surprised about that. And we’re getting a lot of China suppliers connecting with each other in the supply chain; i.e., components guys connecting with finished-product guys. That makes perfect sense; we just were not thinking of it that way when we first started buyer and supplier, but we’re getting a lot of domestic components connecting with finished-products guys, and that’s been really valuable. The connection part has been exciting because that’s new in the trade space.


                        There was some education that needed to be done, but I think where we’re lucky enough is that we’re following along the success of a LinkedIn and a Facebook and these places, so a lot of the suppliers and buyers are familiar with the social network now, and they’re familiar with coming on to a dashboard, not just a search engine. They understand when they connect with somebody, suddenly, all their feeds come to their dashboard. When someone they know rates a supplier, one of their connections rates a supplier, they can see that rating. They understand that and I think that’s been a success for us. We thought we would have to educate a little more on the social network, and, surprisingly, that’s been better than we thought.


Dustin:    Are you dealing mainly with China suppliers right now?


Michael:            Starting this site, the first thing that needs to be done, obviously, on a network site, is get content. So, being based in China, my business partner Brian and I both here, we knew how to go ahead and contact the suppliers and get suppliers coming in and uploading their products. It started with China but every single day we’re getting suppliers around the world now uploading products. A lot of Southeast Asian, Vietnamese, and India is actually * (10:30—unclear), quite a bit of the European now and U.S. suppliers starting to upload. It’s definitely expanded beyond China, which we hoped and it’s good to see. Still, the bulk of it is China because, in the network effect, a lot of the China suppliers know others, so that’s making the China part spin faster than the world part. Brazil, actually, a lot of South American; a lot more on the buy side, though, than the supply side, but it’s still going pretty well.


Dustin:     Is it challenging to integrate the different social networks from the different countries? Like China, I know there are restrictions on some of the social networks. How do you get all the different social networks together?


Michael:            Actually, the way you use it is, you have to import your own network. In other words, if you’re on LinkedIn, there are ways you can go ahead and import your LinkedIn contacts. Or if you’re on Sina Weibo, we’re saying you do have to import the contacts. Most of the social networks, like a Facebook or whatever, you can’t, they don’t have an API, the software that lets you completely leverage and pull that community into your community. We can’t sit there and say, “You’re my connection on Facebook; therefore, you’re now my connection on Tradesparq.” It doesn’t work that way; it works where you need to import your connections from the other networks. So, that’s why we had to have the reason to make that valuable. In other words, suppliers are importing so they can share products; they have a reason to do that. And the buyers are importing so they can go ahead and filter their search.


Dustin:     It sounds like this is a very innovative business model, and it looks like you’ll have some exciting developments coming up. How can people take a test drive of your product?


Michael:           Tradesparq is free, so our whole theory was, hey, if you can put your entire photo album up on Facebook and share it with everybody before you buy, can’t you do that on Trade? We’re definitely a freemium model. Suppliers and buyers both come on, fill out a simple profile, upload their products, and start working immediately, so it only takes minutes to get on the site. Then, of course, you have got to start connecting with other people in your network, and that’s where you start, really, to see the value. First come in for free, no problem. Start connecting, sending inquiries, sending messages, that’s fine.


                        VIP services are paid on our site. Revenue is tied to mainly on the supply side, where they can see who’s viewed their profile, a little bit like LinkedIn, they get a slight preference in search ranging for their products if they’re VIP, but the most important thing in our search is relationship, and even VIP members can’t overcome it; they need to be related to somebody or have a connection to really jump in the search results. But it’s free, so come on in, give it a test ride, especially the trade-service providers. These guys are right in the middle, and their networks are really valuable to both the supplier and the buyer. They’re the guys that often appear as the shared connection on a search. Those guys should come in, put up a profile, and import their contacts and get rolling in minutes.


Dustin:    Thank you, Michael, for sharing your insights about your company and how it’s developing.


Michael:          Great, thank you very much. I appreciate the chance and the opportunity.


 

 

Michael_Kleist.jpg



Michael Kleist


Founder


Tradesparq.com

 

LinkedIn Profile


I interviewed Brian Helfer who discussed a very comprehensive, benchmarking, and in-person networking forum on how to identify virtual export compliance risks, safeguard ITAR and EAR controlled data, and manage access to shared networks and collaborative platforms. The event is titled 'IT Management of Export Controls Seminar' 28 February 2013 - San Diego.

 

In today’s day and age, the biggest area of concern is compliance. The biggest area of change management right now is trying to automate processes and procedures, taking your current landscape, whether it be SAP, Oracle, or multiple ERP systems and/or SAS solutions and making sure that they’re compliant with government for export controls. In layman’s language, your packing list, commercial invoice, certificate of origin, your bills of laden. Any transportation mode of moving goods across the border has to be compliant with the government of export.


 

Dustin:      It’s good to speak with you again, Brian. I look forward to hearing about the upcoming IT Management of Export Control seminar, which you’re involved with. Can you start by providing a brief background of yourself?


Brian:               Sure, Dustin. I appreciate your time. I work with a company called Global Resources, and we provide global trade-management consulting and solutions for manufacturers and import distributors around the globe. I’ve been asked by the American Conference Institute to join them in producing a workshop of seminars on February 28, 2013, in San Diego, specifically focused on IT management of export controls. What you’re going to find is a comprehensive, benchmarking, and in-person networking forum that they’re pulling together specifically dealing with export compliance risk, IT issues around safeguarding of ITAR and EAR controlled data.

    

                        Basically, the managing and the sharing of networks and the collaboration platforms helping corporations with exporting goods out of the United States. I’m going to be specifically focused on two    areas:


        1. How to identify your company’s virtual export compliance weaknesses. In that area, we’re gonna be diving into the overall IT risk assessment, dealing with detecting threats and weaknesses based on government rules and regulations for exporting and helping a company pull together an IT program that addresses export compliance.
        2. Selling the export-compliance program to senior management. We are going to be discussing how to pull together a project plan and to address the key areas of export compliance and show an ROI to your senior management.


Dustin:      Can you talk about who should attend?


Brian:               Overall, both your business and IT personnel, your senior management, compliance, legal, supply chain, executives should be attending this type of forum. There is going to be a number of representatives there from the United States government, as well as corporations such as ITT, Eton, as I mentioned, the BIS, SAP will be there, Lockheed Martin, Oracle, NexLabs, and my own team with Global Resources Management will also attend.


Dustin:      Can you talk a little bit about why they should attend?


Brian:               Well, in today’s day and age, the biggest area of concern is compliance. The biggest area of change management right now is trying to automate processes and procedures, taking your current landscape, whether it be SAP, Oracle, or multiple ERP systems and/or SAS solutions and making sure that they’re compliant with government for export controls. In layman’s language, your packing list, commercial invoice, certificate of origin, your bills of laden. Any transportation mode of moving goods across the border has to be compliant with the government of export.



Click Here for IT Management of Export Controls Event Agenda



About Brian D. Helfer


 

brianhelfer.jpg
http://www.linkedin.com/in/BrianHelfer

Principal & Managing Director

Global Resources Management Inc.

809 Three Degree Road, Butler, Pennsylvania 16002  United States of America

Tel:     +1.724.822.1890     

Email:   BHelfer@GlobalResources.us

Skype:  BrianHelfer

Web:    www.linkedin.com/in/BrianHelfer


Delivering Results within Global Trade Management:

  • Global Sourcing and Procurement (purchase to pay)
  • Global Sales and Distribution (order to cash)
  • Global Supply Chain (Export/Import compliance, customs processing, landed cost, ERP automation)





I interviewed Chris Hewitt in South Africa who discussed Lean, Continuous Improvement.




Dustin:    Can you start by providing a brief background of yourself?

 

Chris:    Yes, I’ve been in supply chain for the last six years. I’ve spent two years in the automotive space, so doing continuous-improvement projects in the outbound distribution, so from warehouse to dealerships within the South African region.

 

Basically, I am based out at the Nissan production plant in Victoria, South Africa. For the last four years, I’ve been with a company called Super Group, where I’ve been championing a lot of the lean, continuous improvement initiatives. I’ve been involved in turnaround of operations using the lean, continuous improvement methodology as a sort of changed-management tool and mostly to rock the ships so to speak.

 

We’ve seen some significant results as a result of implementing these tools and techniques under the lean banner. I’ve presented at a number of lean conferences, the turnaround specifically of an FMCG business, just really by implementing the tools and techniques used to sort of merge the systems that support the supply chain and the people. So, to get people to use the tools and technologies more efficiently and more effectively to produce results for the customer.

 

Dustin:    Thank you. And my first question is: What is continuous improvement and how is it implemented?

 

Chris:   Lean, continuous improvement really is about creating a culture within a business of continuous improvement. Looking to improve every aspect of the business; not just from a financial perspective, but from a process perspective and from a people perspective. Getting people within the business to look at their different parts of the business and see how they can improve on a day-to-day basis, and we really do this through things called the tools, so your team performance areas, really setting up the key performance indicators for each and every team in the business.

 

Also providing visibility of all the key measures, but also providing key visibility of the specific processes. So, really getting people to understand the roles that they play and the different tasks that they need to complete on a day-to-day basis and to understand the different interchanges that they play so that the whole team understands the end-to-end process rather than just one specific role player. And by focusing on the whole end-to-end supply chain, you can then improve service delivery to the customer.

Dustin:    Where have you seen success with the turnaround situation?

 

Chris:    Essentially in a number of different—in the FMCG business. We were sitting on a stage where we had, from a South African Rand perspective, we had eighty thousand Rands’ worth of outstanding proof of deliveries. We managed to reduce it down to five thousand Rand. That’s basically near ten million dollars if we convert it as eight to one. Ten million dollars of outstanding PODs sitting at customers. Just by implementing these tools and techniques, we’re able to reduce that down to five thousand rand, less than a thousand dollars.

 

We’ve also seen significant improvement in technology business where we were able to improve service delivery to customers. We’re running our projects across the globe for a company called the World BOC Linde Group, and, essentially, through the lean process, we implemented standard operating procedures, we mapped business processes.

 

So, when we’re dealing with other partners around the globe, we would send them standard operating procedures, send them process maps just to ensure that we’re on the same page when it comes to resolving specific issues. By being on the same page, we’ve found that problems were solved in a much shorter time space.

 

Also using things like problem-solving methodology, so to structure the whole process around resolving the problem. That produces significant results. We’ve also seen it in a vehicle fleet-rental business, so renting of trucks, refrigerated trucks, lat trucks, more your one-turners through to your eight-turners. Just really dealing with end customers on ad hoc types of rentals, we’ve seen some significant improvements and visibility within that space.

 

Dustin:    Can you talk about who needs continuous improvement?

 

Chris:    I believe every business needs continuous improvement. I think in today’s global marketplace, you cannot afford to not have continuous improvement, because every business has waste. No business is ever lean enough. Every business needs to be trying to sweat their assets as much as possible. I think with lean, continuous improvement, a lot of the waste that we see is actually not visible.

 

It’s the waste that you see when someone has to walk through to a fax machine, has to walk fourteen meters to a fax machine to fax every day. It’s about bringing that fax machine to his specific desk so that he can finish his work at three o’clock in the afternoon rather than working ’til seven o’clock at night, because a lot of the time that he’s spending is actually walking to a fax machine to make a fax or to make a printed copy.

 

Dustin:    Thank you, Chris, for sharing your insights on continuous improvement.

 

Chris:    It’s my pleasure.

Dustin:    Did we cover all the topics you wanted to discuss, all the issues?

 

Chris:    It’s such a broad topic, so it’s quite difficult to see sort of the end-to-end, what the requirement is, but I believe, in a nutshell, lean is a fantastic tool and must be investigated by very single business, because it can really make a big difference.

 

The challenge is when you get your returns, from a lean, continuous improvement perspective, where you need to create a culture of continuous improvement, because that creates a groundswell of focus within the business to drive down costs. It’s not a silver bullet; it’s actually a journey.

 

About Chris Hewitt


CSH Work Photo1.jpg

Senior Project Manager
Super Group

 

Emailmrchrishewitt@gmail.com
Phone083 648 7289 (mobile)


Jim Tompkins, founder and CEO of Tompkins International, is a long-time supply chain guy. And guess what? Jeff Bezos, CEO and founder of Amazon, is a supply chain guy too. He has to be, because business is now at a critical X-Roads in demand-driven supply chain and customer satisfaction. Amazon has invented – and is continuously refining – new ways to connect customers with solutions. They are your biggest competitor.

 

 


Dustin:      Thank you, Jim, for spending your time today to share your interesting views on Amazon and how it’s related to the supply chain. I know you have a press release on the Amazon effect. Can you start by providing a brief background of yourself?


Jim:                  Sure, Dustin. I have a bachelor’s, master’s, and Ph.D. in industrial engineering. I began the consulting firm Tompkins International in 1975, and that is what I’ve done my entire career. What we do at Tompkins International is we do end-to-end supply chain, which, to us, means three things. Number one, we do all of the supply chain processes—plan, buy, make, move, store, sell. Secondly, we take it all the way from supply chain strategy through to supply chain implementation. And, thirdly, we work in North America, Europe, and Asia. That’s what we call end-to-end supply chain.


Dustin:        Thank you. My first question is: How should companies respond to Amazon.


Jim:                  Well, I think that’s a great question, Dustin. I don’t think there is a answer to that, but I do think that question is the right question of the day. I think each company needs to determine what is their unique strategy going to be to allow them to compete with Amazon. So, as retailers, I think there’s four components of their strategy: there’s price, there’s selection, there’s convenience, and there’s experience. What we need to do is, each retailer needs to ask the questions: How are we gonna compete with Amazon on price? What are we gonna do with respect to selection?

         

                        What are we gonna do with respect to convenience? What are we gonna do with experience? We need to define what’s going to give our customers a unique value proposition so that they want to buy product from us. I think a lot of companies are just sitting there saying, “Well, we do what we do, and we’re not gonna change.” Well, if you’re a strictly online retailer, you need to beat Amazon in at least one of those four characteristics. If you’re an in-store retailer, you need to figure out how can you leverage your stores to provide the customer a value proposition that Amazon, who does not have stores, offers. I think each individual company needs to determine how are we going to respond to Amazon, and if they don’t do that, I think we’re gonna have companies that wil be going out of business.


Dustin:        You say in your video that you’re a supply chain guy, so why do you study Amazon?


Jim:                  Very good question. I am a supply chain guy, and I think if we look at the great supply chain guys of all time, the people we think about first of all is Sam Walton, who, from an in-store point of view, was a great, great supply chain guy. Then Jeff Bezos, the CEO and founder of Amazon, is a great supply chain guy in the electronic era.

                        , ...as a supply chain guy, it really behooves me to understand what is Amazon doing, what is Wal-Mart doing that is really working well, that allows them to capture market share and to be profitable so that I, as a supply chain guy, can work within that context?

                        I really see it’s important that companies understand how the supply chain plays into the future of where they’re heading. I talked about strategy. Once we determine the strategy, I then believe the supply chain is the vehicle that allows us to deliver our strategy to the customer. And so, from that perspective, supply chain is critical in the overall success of a company, and, therefore, folks like Amazon, that are really doing things well, I need to understand what they’re doing and how that applies to other retailers and consumer-products companies.


Dustin:        You say that Amazon is a leader in being customer centric. Can you explain why you say this?


Jim:                  When Jeff Bezos started the company, he started—this was back in 1997—he started having a chair in the room that was empty, and it was in the center of the conference table, either on the left-hand or the right-hand side, and no one was allowed to sit in that chair because Bezos’ view is the customer needs to attend every meeting. We need to have the customer really attend the meeting, and we need to hear the voice of the customer in all decisions we make. Ten years later, in 2007, Bezos decided that they weren’t listening to the customer enough, and so what he did was he replaced that empty chair with a full chair, and in that chair sat a customer advocate. So, the customer is attending all meetings and is really providing input.


                        If you listen to Bezos, one of my favorite quotes of his, says: We see customers as invited guests to a party, and we are the host. It is our job every day to make every important aspect of the customer experience a little bit better. So, he obsesses over the customer, and, in fact, he designs his business around the customer. The belief he has is, the way we should really design our business is that we should begin by saying, “What does the customer want?” and then we work backward from there. I think his focus on everyday low prices, his focus on a great convenience of same-day, next-day delivery, his focus on a great experience of having all the tools available on-site, and then his huge selection and his great prices really make him the king of customer focus, and he’s very customer centric.


Dustin:        My final question is: Amazon says that Amazon Prime is a shipping program. You say it’s a loyalty program. What’s the difference?


Jim:                  Dustin, they would love for us to believe that what they have is a shipping program in Prime, but the fact of the matter is, if we look at the results of Prime, we see something quite to the contrary. If we look at what’s happened in their business since they’ve created Prime, we see a set of numbers that are just absolutely mind-boggling. Prior to Prime—Prime was created in 2005, but it really didn’t take off until 2007—but prior to Prime, Amazon’s growth in North America was about seventeen percent versus the growth of all online business in North America was thirty-two percent, so Amazon was growing about half as fast as the market. Since 2007, when Amazon really focused on Prime, their growth on an annualized basis is thirty-six percent versus the growth of online in general of thirteen percent. What Amazon Prime has allowed Amazon to do since 2007 is grow 2.7 times faster than the market.


                        The reason for this is, once the customers get really established with Prime, they will only really shop at Prime. Yes, it does provide two-day shipping for free, and yes, it does provide some other benefits, but what it really, really, really does is it changes the way people think about shopping. Step one is: Open your computer and go to Amazon, and then determine what you want to buy. I guess one of my favorite quotes here is from the VP of Amazon Prime, a guy named Robbie Schweitzer, and Robbie said, “Amazon Prime is not a shipping program. It is a customer-loyalty program. In all of my years here, I don’t remember anything that’s been as successful as getting customers to shop in new-product lines.” So, Amazon’s growth has been tremendous with Prime, and they are being very selective as to where they open Prime. Prime is now open in nine of the eleven countries where Amazon serves. The two countries where it’s not opened yet is China and Canada, but those will be coming soon. When that occurs that means Amazon is really gonna be aggressive on market share, so it’s really a great loyalty program that’s really worked well for them.


Dustin:        Thank you, Jim, for sharing your views on Amazon and how it’s related to supply chains and being a leader in the supply chain.


Jim:                You’re welcome, Dustin. It’s great to be with you today, and I appreciate the opportunity to talk.


Check out his recent video on the Amazon Effect


About Jim Tompkins


James A. Tompkins, Ph.D.

President and CEO

Tompkins International Supply Chain Consulting

LinkedIn Profile

 

 

Jim_Tompkins.jpg

James A. Tompkins is an international authority on leadership, logistics, material handling, outsourcing, and supply chain best practices. As the founder and CEO of Tompkins International, he provides leadership for Tompkins globally.

 

His 35-plus years as CEO of a consulting / integration firm and his focus on helping companies achieve profitable growth give him an insider’s view into what makes great companies even better. As a high-level business advisor, his unique perspective prepares corporations and executives for the future.

 

To share his knowledge and provide up-to-date information on supply chain and business trends, he developed the GoGoGo! Blog and Global Supply Chain Podcast. Jim is also a thought leader, sharing insights on business strategy through his “Business at a X-Roads” and “The Amazon Effect” presentations.

 

He has written or contributed to more than 30 books, including Caught Between the Tiger and the Dragon, Bold Leadership, Logistics and Manufacturing Outsourcing, The Supply Chain Handbook, No Boundaries and Facilities Planning. Jim has been quoted in hundreds of business and industry magazines such as The Journal of Commerce, Supply & Demand Chain Executive, and FORTUNE, and he has spoken at thousands of international engagements.

 

Jim has served as President of the Institute of Industrial Engineers, the Materials Management Society, and the College-Industry Council on Material Handling Education, and Purdue has named him a Distinguished Engineering Alum. He has also received more than 50 awards for his service to his profession.

 

Jim received his Bachelor of Science in Industrial Engineering in 1969, his Master of Science in Industrial Engineering in 1970 and his Ph.D. in 1972, all from Purdue University.

I interviewed Matt Motsick who discussed a web-based software for the international logistics industry. Its flagship application, Catapult QMS, allows importers/exporters and freight forwarders to combine their ocean, air, and ground rates into one system so all offices can see their best cost option from point A to point B.

 





Dustin:         Thank you, Matt, for spending your time today to discuss your company and some of the issues in the industry. Can you start by talking about your company, which seems to have come out of nowhere? When did you start Catapult, and how have you been able to grow the company?


Matt:                Catapult started around five years ago, and I was a traffic manager for an importer-exporter for a midsize company, and we would import and export goods on a daily basis. We found that it was difficult to house all of the air, the ocean, and the ground rates from all of our providers into one tool. So, that’s kinda what we came up with, was a system that you can access your providers’ rates—air, ocean, and ground rates—into one system, and that’s what we’ve built; it’s called Catapult QMS. I would say our key to growth has really been the ability to work with freight forwarders, ocean carriers, NVOCCs, and combine a lot of rates into one software component for global corporations.


Dustin:        Can you talk about what is ocean contract management?


Matt:                Ocean contract management is a service that Catapult provides to keep rates and surcharges up-to-date. There are several different ocean carriers out there on a worldwide scale, and each ocean carrier has several surcharges that change all the time. Catapult keeps all those rates managed and accurate and up-to-date for all of our clients.


Dustin:        So, how does Catapult manage all of the rate fluctuations?


Matt:                Well, it’s difficult because each carrier has their own surcharge names, so while, maybe OOCL would call it a bunker, which is also really labeled “fuel,” another ocean liner such as Maersk may call it a BCR. Every carrier has their own different surcharges, so what we do is we have a staff that come from the ocean-carrier market such as K-Line, Maersk, APL, Mitsui, and what they do is they have twenty years’ experience to identify what the surcharges are, and then we apply these surcharges to go into our software package so that way, then our end customer can see what the total rate is going from point A to point B.


Dustin:         And what do you see happening within corporations in terms of international shipping? Are they using NVOCCs and forwarders, or are they going direct with ocean steamship lines?


Matt:                It depends on the size of the company. Some importers-exporters are using NVOCCs completely. It means that they’re using a freight forwarder for the air or a freight forwarder for the ocean, also called an NVOCC. Some are going direct with the steamship lines and forming contracts or agreements. And then there are others that use a little bit of a combination; so, they use the freight forwarder to manage the documentation and the paperwork while they still have direct steamship-run contracts. What we’ve been finding is that each aspect is totally different; it just all depends on the size of your company and the needs of the service of your company.


Dustin:        What advice can you give importers and exporters when it comes to ocean shipping?


Matt:                Well, what we’re seeing is that there are corporations that have different business units and different subsidiaries, and a lot of corporations are still decentralized, meaning that they have branch offices and other business units that are purchasing transportation to actual spend on their own. There are companies that could have thirty offices worldwide that each office has control of their own spend, and what we’re find is, there is a huge cost savings based, if you can actually consolidate it into a global corporate initiative and really trim down the number of suppliers that you’re using. One of the things that Catapult helps companies with is we help centralize that process by providing a software tool that allows all offices to see who your best cost option is or best transit option is from point A to point B, so that way every branch office would be able to see who’s their best cost option or who’s their best transit option from point A to point B.


Dustin:        Thank you. Do you have any final recommendations or conclusion?


Matt:                I think if you get organized with your ocean- and your air-freight spend and you know what you’re spending and you can actually have software help you determine and help your branch offices determine what your spend is and who to choose, I think there could be a considerable cost savings if you’re a global corporation.


About Matt Motsick


 

Matt_Motsick.jpg

CEO

Catapult International, Inc

LinkedIn Profile

 

Catapult was named to the following lists:

Top 100 Logistics IT companies (2011 and 2012)

50 fastest growing companies in the Central U.S.

KC Business Magazine Rising Star Award


I interviewed Sergio Retamal who discussed the 4PL Business Model.


 


Dustin:        It’s good to speak with you today, Sergio, to hear your views on the 4PL business model. Can you start by providing a brief background of yourself?


Sergio:              Sure. First, I appreciate you taking the time to talk to me. My background is basically twenty-five years in logistics. I’ve been on both sides of the fence. I’ve been on the manufacturing side, working for companies like hard disk drive manufacturers and servers and computers such as Micropolis and also companies like Sun Microsystems and others on the manufacturing side. I’ve also been on the service level, service side.

 

I worked for Ryder, which is a big company well known for their truckers, but they have an equally large consulting firm. At that time I specialized in companies like Apple computers and Applied Materials. I’ve been on the logistics side for the last twenty-five years, both from an efficiency point of view and also compliance point of view. I’ve been in the industry all my adult life, working mostly with multinationals, which have their requirements both in country and foreign. They have fully sophisticated supply chains.


Lately, I started my company in 2004. We have been helping both small companies and large companies, and some are very sophisticated, with new technology. Some are domestic. I’ve been in all kinds of different environments, but, basically, I’ve been in logistics for the last twenty-five years.


Dustin:        Thank you. Can you start by discussing what is the 4PL business model?


Sergio:             The 4PL is basically a term coined by Anderson back in the late ’90s. Basically, it’s a company that integrates human resources, technical capabilities, technology, solutions, or tools. They also bring the best of the service providers or other organizations that, at the end, are going to meet the customers’ needs.


Basically, we are a director moving different parts, bringing new technologies, new skills that a company may or may not have. In our case we develop software for the supply chain based upon what we know about our customer’s needs to either have better visibility or manage their process. However, at the same time, we bring the technical expertise.


If somebody needs to do business out of China or into the U.S. or into Europe, you need to have a set of skills that other companies might not be able to afford or they may not have the skills, because they will only do it once.


The 4PL model basically is a combination between an outsource and an insource model, and we bring as many tools, as many software, and as many skills that a company may require.

 

Dustin:        Why is the 4PL model important?


Sergio:              It’s important—like anything else, 4PL applies for some companies, so it’s important in the sense that depending on where your company and the life stage of the company is. In the beginning you may need to set up procedures, and it’s very difficult to set up correctly if you don’t have the expertise, you don’t have the resources, or you don’t have the expertise to do something specific.


The beauty is that we can bring X amount of resources for a week or a month or a year in order to make sure the company that doesn’t have any setup can start doing it correctly from the beginning. The importance is not everybody, even if they have money, have enough hands, enough boots in the ground, or capabilities to do everything that they need to do.


In some cases we help them just a bit; in some cases we bring stuff on site, and we run the operation. The importance is the ability to be able to pull resources as you need them. Not everybody can afford to bring ten people for a month or ten people to do a project, but the fact is, if you can plug and play specific needs when you need them, then it becomes a very cost-efficient model where you can bring in expertise when you don’t have any hands into a transfer of knowledge and teach somebody how to do something.


In the cases of those companies that already have the expertise but they just don’t have enough hands, then you pull those resources. The model is set up in a way that’s neutral. That’s the key for a 4PL to be successful: You always have to be absolutely neutral, which means that you’re always taking care of your customer, because you’re a part of their organization; you’re not acting on behalf of anybody else but your company. The important skill is being able to be neutral, because you are going to be dealing with other service providers. Basically, as soon as you can pull the best service provider that is going to meet your customers’ needs, then you are going to be very successful.


It is the ability to bring new sources when you need them and plug-and-play skills, hands, resources, technical capabilities. Just the fact that you’re bringing in tools you don’t have to go through the learning curve because when we bring tools, we have the people that know how to use them and they implement them. Then the learning curve is very short, and you’re gaining a lot of resources that otherwise would be almost impossible to gain.


Dustin:        Who can benefit from the 4PL model?


Sergio:              As I said, not everybody can benefit from it, but the fact is, there are small companies that need expertise, they need processes, they need tools, they need experience. So, the small company can benefit; it’s just a cost-benefit issue.


Then the midsize company, normally has basic setups or they have pretty robust setups, but, like everybody else, they may have weaknesses or areas that they need reinforcement, and we provide that. In the case of large companies, and we’re talking about the multinationals, they do have the resources and they do have the boots in the ground, but you may have ten projects, but you only have staff for only eight or seven projects. We can help large companies in both adding an extra pair of hands or boots in the ground.


Then you get into specific projects. A large company may be going to Brazil, and they are going to Hong Kong, and they don’t have those resources because they may use it once or it’s just brand-new. They can bypass the learning curve by using a 4PL.


In the case of the high-tech companies—for instance, Hong Kong, Singapore, Malaysia, Thailand—they’re absolutely the easiest countries to get in…unless you have encryption. Then, if you have encryption, you need to have not only the expertise to deal with the importance licenses, but, also, you get into the fact that you need to have boots on the ground in order to support those operations.


Some companies can afford to hire people, but they don’t have the legal entities that allow them to hire personnel in different countries, so the 4PL model helps in the sense that you can add personnel. Also, like globe 4PL and our case, we have legal entities in over ten countries because in order to be efficient in country, you need to have a legal presence in order to be the important, in order to be the exporter. Large companies don’t—by choice, in some cases—don’t like to have too many legal entities—especially if they’re public—because they have to coordinate the financials with a quarterly release for all those countries. So, being able to pull and plug and play a player that can represent you in different countries on a case-by-case basis or an ongoing basis allows them the flexibility that otherwise they couldn’t have.


Dustin:        Thank you. Do you have any final recommendations or conclusion?


Sergio:              Lately, there are so many compliance issues. Not just import compliance or export compliance, but you have compliance in that you may be very strong in the U.S., but you are very weak in the EU or foreign-to-foreign. There are some areas that require bringing in an expert or bringing in the outside resources to support specific projects. It makes sense.


Very short-term projects which bring in a tremendous amount of knowledge, let’s say, in country out of EU licensing, which you see a lot of cases of companies that absolutely comply in the U.S., but they have big problems in Europe because they don’t have the amount of resources all over the place where they need to have them.


A word of advice would be, especially in cases of compliance or complexity or issues of lithium batteries or new regulations or the case of compliance of minerals, conflict-free minerals, or state regulations, country regulations….it behooves some companies to take the time to bring in resources, especially when you’re working in a new environment.


The long-term benefits lie not only the cost reduction but avoiding the amount of compliance issues that, right now, has become a revenue generation for many, many countries around the world. If they can find you or if they can get additional revenue by enforcing local regulations, they will do so, and we’ve seen that case many, many times in the last couple years, where the revenue generation by fines and penalties from government offices, has become a big money generator.


Dustin:        Thank you, Sergio, for sharing your views on the 4PL model.


Sergio:            I appreciate it. Thank you.


About Sergio Retamal


 

sergio_retamal.jpg

What We Do:  We help companies save money and avoid costly errors in their global logistics operations by implementing innovative logistics solutions with immediate, measurable results. We assist either on a project basis or as a result of the ongoing outsourced resources relationship.

 

President & CEO

Global4PL Supply Chain Management

866-475-1120 Direct

sergio.retamal@global-4pl.com

www.global-4pl.com

LinkedIn Profile