Managing the Global Supply Chain

The global supply chain is a vital part of modern business. Presenting a global view of the scope and complexity of supply chain management, this book reflects the rapid change that has taken place within the supply chain and its environment.

Schary and Skjøtt-Larsen have fully updated their successful first edition, giving readers of this new edition an insightful overview of the conceptual foundations of the global supply chain. The book has been completely reorganized toward a customer orientation and rewritten to include the new changes in technology and practice.

'Managing the Global Supply Chain' is based on three parallel elements: structure, process and organization to build a supply network that includes distribution, production and procurement within one integral system. It moves beyond concepts from business logistics to emphasize inter-organizational networks and the strategic role of the supply chain in corporate strategy. A separate section on management and strategy examines organizational forms and management tools.


Source : www.cbspress.dk

GLOBAL SUPPLY CHAIN MANAGEMENT

With increased globalization and offshore sourcing, global supply chain management is becoming an important issue for many businesses. Like traditional, supply chain management, the underlying factors behind the trend are reducing the costs of procurement and decreasing the risks related to purchasing activities. The big difference is that global supply chain management involves a company's worldwide interests and suppliers rather than simply a local or national orientation. Because global supply chain management usually involves a plethora of countries, it also usually comes with a plethora of new difficulties that need to be dealt with appropriately. One that companies need to consider is the overall costs. While local labor costs may be significantly lower, companies must also focus on the costs of space, tariffs, and other expenses related to doing business overseas. Additionally, companies need to factor in the exchange rate. Obviously, companies must do their research and give serious consideration to all of these different elements as part of their global supply management approach. Time is another big issue that should be addressed when dealing with global supply chain management. The productivity of the overseas employees and the extended shipping times can either positively or negatively affect the company's lead time, but either way these times need to be figured into the overall procurement plan. Other factors can also come into play here as well. For example, the weather conditions on one side of the world often vary greatly from those on the other and can impact production and shipping dramatically. Also, customs clearance time and other governmental red tape can add further delays that need to be planned for and figured into the big picture. Besides contemplating these issues, a business attempting to manage its global supply chain must also ask itself a number of other serious questions. First, the company needs to make decisions about its overall outsourcing plan. For whatever reason, businesses may desire to keep some aspects of supply chain closer to home. However, these reasons are not quite as important as other countries advance technologically. For example, some parts of India have now become centers for high-tech outsourced services which may once have been done in-house only out of necessity. Not only are provided to companies by highly qualified, overseas workers, but they are being done at a fraction of the price they could be done in the United States or any other Western country. Another issue that must be incorporated into a global supply chain management strategy is supplier selection. Comparing vendor bids from within the company's parent-country can be difficult enough but comparing bids from an array of global suppliers can be even more complex. How to make these choices is one of the first decisions companies must make, and it should be a decision firmly based on research. Too often companies jump on the lowest price instead of taking the time to factor in all of the other elements, including those related to money and time which were discussed above. Additionally, companies must make decisions about the number of suppliers to use. Fewer supplies may be easier to manage but could also lead to potential problems if one vendor is unable to deliver as expected or if one vendor tries to leverage its supply power to obtain price concessions. Finally, companies who choose to ship their manufacturing overseas may have to face some additional considerations as well. Questions regarding the number of plants that are needed, as well as the locations for those plants can pose difficult logistical problems for companies. However, it often helps to examine these issues in terms of the global supply chain. For example, if a business uses a number of vendors around Bangalore, India than it may make sense to locate the manufacturing plant that would utilize those supplies in or around Bangalore as well. Not only will this provide lower employee costs, but overall shipping and tariff expenses should also be reduced. This would then save the company money. Source : www.epiqtech.com

Church’s Chicken Enjoys Supply Chain Efficiency, Low TCO with ArrowStream OnDemand

CHICAGO - Arrowstream, a leading provider of supply chain management and logistics services for the foodservice industry, announced that it is working with Church’s Chicken to help the leading fast food chain achieve growth objectives. Church’s has more than 1,600 locations worldwide in 19 countries and sales exceeding $1 billion.

Church’s Chicken sought a new solution to manage the purchasing process for its volume of stores and 12 distribution centers, because the company desired technology that would enable it to automate critical purchasing actions such as invoice management at the restaurant level.

The company required a solution that would increase efficiencies, could be quickly utilized, would integrate readily with Church’s distributors’ systems, and would also require little to no initial investment in hardware and software.

Church’s found ArrowStream OnDemand to be the right solution that delivered fully-integrated and automated purchasing management with low total cost of ownership.

“ArrowStream was unique for three reasons. First, it allowed us to get the system running quickly, with no investment in hardware and software,” said Alan Stukalsky, CIO, Church’s Chicken. “It offered complete visibility from the supplier to the backdoor of the store and includes logistics information. And it synchronized our distributors’ data with our own.”

To effectively capture share of increasing consumer demand, Church’s has plans to expand its menu and its presence by growing the chain by almost a thousand new restaurants by 2010.

IMPROVE EFFICIENCY FOR CONSUMER AND FRANCHISE SATISFACTION

Church’s identified invoice management as an area that could quickly deliver efficiencies with ArrowStream OnDemand. Managers at each of Church’s 275 U.S. stores were spending about one and one-half hours processing invoices for each of the twice-weekly distribution deliveries.

“With the new automated system, it now takes the average manager just five minutes to enter in each invoice, offering time savings of about 500 man hours per week.” said David Taylor, director of restaurant systems for Church’s Chicken. “This allows restaurant managers to spend more time on customer service, which ultimately improves customer satisfaction and store profitability.”

These new efficiencies, according to Stukalsky, are also having an unintended benefit by creating goodwill throughout the franchise network and contributing to franchisee’s greater satisfaction with the organization’s quality.

ATTAIN FAST START UP AND INTEGRATION WITH DISTRIBUTOR SYSTEMS

ArrowStream OnDemand integrates distributor data with its other chain operator customers, enabling a rapid start-up of the system that was fully synchronized with Church’s distributors.

“ArrowStream possesses such broad expertise and relationships with distributors that we were able to begin to reap benefits immediately,” said Stukalsky.

“To gain optimal visibility from the supplier to the back door of the store, we sought a system that would readily link distributor information to our systems,” he continued. “And if a franchisee wishes to add suppliers, we can rapidly accommodate them and integrate that distributor into the system.”

AUTOMATE PURCHASING PROCESSES WITH LOW TCO

“ArrowStream OnDemand requires no initial investment in hardware and software, unlike other software application providers,” explained Stukalsky. For companies like Church’s that are trying to control overhead, this is a profitable benefit.

Stukalsky believes that low cost of ownership is also enabling Church’s to redirect resources to channels that deliver more direct value to its customers.

SUPPORT GROWTH OBJECTIVES WITH SCALABLE APPLICATIONS

As Church’s continues on its steep growth trajectory, ArrowStream OnDemand is able to rapidly scale to meet Church’s needs in functionality and scope.

“We are working with ArrowStream to adopt software applications that will continue to give us greater visibility of product movement and pricing, and help us automate limited time offer processes,” said Stukalsky.

“We have aggressive growth targets, and with ArrowSteam OnDemand, our software can easily grow with us,” said Stukalsky. “The system is fully scalable to adapt to the chain operator’s needs in terms of function and capacity,” he explained. “With ArrowStream, I have access to more resources than I could possibly gather on my own, and I have a team that is always on the cutting edge of supply chain and logistics solutions,” said Stukalsky.

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About ArrowStream

ArrowStream has helped chain operators and distributors in the food service industry to more effectively manage their supply chain and reduce logistics costs by an average of 20 percent. ArrowStream OnDemand is a software suite that gives chain operators and manufacturers tools to synchronize and manage their supply chain data, thereby enabling panoramic visibility into the supply chain. This software suite has a lower total cost of ownership that is proven to save time and improve decision-making regarding product supply, pricing, and LTO promotion management. ArrowStream’s management team, with more than 60 years of experience in the food service, software, and logistics industries, developed an innovative logistics management network that optimizes each customer’s inventory replenishment and routing, and substantially reduces transportation costs. To learn more, visit www.ArrowStream.com.

View Company Website: http://www.arrowstream.com

Quantum Retail Wins ‘Supply Chain Excellence’ at the 2008 European Retail Solutions Awards

MINNEAPOLIS--(BUSINESS WIRE)--Quantum Retail has come out top in the ‘Supply Chain Excellence’ category at the European Retail Solutions Show for its work with leading multi-national fashion retailer, New Look.

Quantum’s Q solution has been used by New Look since October 2007 to manage its inventory replenishment and allocation processes across its 600 locations. The excellent results yielded by Q have not gone unnoticed by the retail technology industry, a fact reflected at the European Retail Solutions Awards ceremony.

New Look’s Group IT & E-Commerce Director, Adrian Thompson, said: “As a fast fashion business with our customers at the core of everything we do, we recognized that Quantum Retail’s demand forecast model offered us an opportunity to gain significant competitive advantage,” Thompson was also impressed with Q’s return on investment: “Q went live within 7 months, and had paid for itself just 5 months later.”

Over the last 12 months, New Look has increased its retail space by 20% and diversified into new online and franchised channels. In order to support its expansion and diversification, New Look required a superior replenishment solution to improve management of store/SKU demand and supply. Following an extensive review of the solutions available on the market, Quantum’s Q solution was selected.

Spencer Maynard, Head of Stock Optimization at New Look added: “Q has enabled us to proactively manage products by exception, whilst the Q system takes care of the day-to-day decisions. We can now focus our attentions on expanding the business and exploring new routes to market.”

The prestigious European Retail Solutions Awards is an annual event focused on recognizing retailers and suppliers for excellence and innovation in retail technology. The awards ceremony was held at Old Billingsgate Market in London, following the second day of the Retail Solutions Show.

Chris Allan, Co-Founder of Quantum Retail was delighted with Quantum’s achievement: “We are proud to be acknowledged as the leading retail supply chain technology solution at the European Retail Solutions Awards. We believe our solution is the best way to allocate and replenish goods, and we are glad to see that the retail industry has seen the definitive and tangible benefits of the Q system.”

Phil Wrigley, New Look’s Chairman, concluded: “The Quantum implementation at New Look has been first class. It has placed the customer at the heart of our stock management, and has delivered impressive financial payback.”

About Quantum Retail Technology, Inc.

Quantum Retail Technology, Inc. is a leading provider of software solutions that enable demand driven supply networks. Quantum’s flagship solution, Q, allows retailers to optimize inventory availability and supply network performance with low risk and high ROI. Q helps retailers continually achieve the merchandise and financial goal for every item in every location. By leveraging item assortment strategies and goals, Q links the art of merchandising with the science of inventory fulfillment. Q is available as an annual subscription and Quantum Retail offers low-impact pilots to ensure value delivery, alignment of investment to benefits and rapid ROI. Q can be deployed in either hosted or customer deployed environments. Quantum Retail’s customers include Guitar Center and New Look. For additional information email info@quantumretail.com or visit www.quantumretail.com

About New Look

New Look has 598 stores in the UK and Eire, and 265 stores in France & Belgium trading under the name Mim. In addition, New Look has 15 New Look branded stores in France and Belgium, and has recently opened franchise stores in Dubai, Kuwait and Saudi Arabia.

New Look has a volume share of 5.6% in the Women’s Outer/Sportswear age 16+ market, and is the 3rd largest retailer by volume in this market. New Look also has a growing market share in Mens & Kidswear.

New Look is now the number 1 retailer of women’s shoes in the UK by volume, with a market share of 7.4%. (Source – TNS).

38% of the British female population¹ has purchased an item of Womenswear² from New Look in the past year (52 w/e 30th March 2008). This amounts to just under 9.2 million individuals. The average age of shoppers in New Look is 31.

Further information can be found on www.newlook.co.uk and Product and Management photos are available upon request.

¹ aged 12+ years; excluding Northern Ireland

² includes Women’s Outer/Sports, Nightwear, Underwear, Hosiery, Footwear & Accessories

Source by Businesswire

Rapid globalisation is stretching the supply chain

Supply chains are losing flexibility due to rapid globalisation, causing major concern to more than 60 per cent of companies surveyed in sixth annual Global Supply Chain Trends Survey published by PRTM.

The study aims to offer insight into how leaders are responding to the challenges of globalising their supply chain operations.

PRTM spoke to more than 300 global manufacturing and service companies compiling information between December 2007 and February 2008.

More than half of participants said they do not have the internal capabilities to adequately manage their external partners. However, in spite of these challenges more than 50 per cent said they plan to move all manufacturing operations outside their home country by 2010. During the same period off-shoring of product development is expected to almost double.

The research found that 96 per cent of participating companies were not currently able to fully achieve the planned benefits of globalisation.

Average reported benefits include an 18 per cent reduction in material costs and a 26 per cent decrease in labour costs.

Management costs proved to be the hardest to reduce with only eight per cent of participants reporting lower costs in this area. More than 40 per cent of companies, however, made no benefit at all or saw an increase in management costs.

Gordon Colborn, lead director for PRTM’s UK business, said: “This is an indication of how difficult it is to globalise without having a solid operational strategy in place, and a tactical framework against which to execute.

“Even companies with significant collaboration experience are struggling to develop and cultivate the right management skills to deal with the complexity resulting from working with multiple partners around the world.”

The study also found that by 2010 the need for greater supply chain flexibility will have overtaken product quality and customer service as the major factor for improving supply chain strategy.

In addition, the survey revealed that the majority of companies are only turning to more environmentally friendly solutions in order to comply with legislation.

Colborn added: “These findings should be of concern to any company planning to move operations to a new geography without a corresponding plan to address the resulting supply chain impact.

“The survey highlights that many companies will be unable to make the changes required to deliver their strategic objectives if they fail to evolve and develop the necessary skills and competencies to manage the complexities of global supply chains. If they are not careful, they will lose the ability to design and implement strategies that deliver competitive advantage and better business performance.”

Source by supplychainstandard.com

Integration is key to global supply chain success

To find success with global supply chains, companies need to integrate operations both vertically and horizontally, a new briefing paper from the Economist Intelligence Unit has warned.

The study, which is sponsored by Oracle, highlights the problems suffered by aeroplane manufacturer Boeing, which in October announced a six month delay in the delivery of the 787 Dreamliner.

“After months of touting the benefits of its new collaborative supply chain management system . . . the company cited shortages of key materials and slow deliveries by suppliers as primary reasons for delaying initial deliveries of the Dreamliner until late 2008,” the EIU said.

The study, entitled “Global supply chains: understanding risks and rewards”, provides a tour of the key issues involved in managing risk as globalisation extends supply chains across continents. It also provides a number of case studies.

Source: logisticsmanager.com

Software Provider Offers Supply Chain Guidelines

Basware, the leading provider of financial process automation software, has released guidelines designed to help companies create green supply chains. These guidelines were developed for the growing number of companies that are basing purchasing decisions not only on the value that vendors deliver but also on their compliance with green initiatives and other key corporate values.

"Companies realize that an environmentally friendly supply chain helps them to fully support their corporate values, attract and retain key talent, and create goodwill among customers and prospects," said Jari Tavi, chief technology officer, Basware Corp. "Just as vendors have been required to be compliant with Sarbanes-Oxley regulations, they will soon need to achieve a certain level of compliance with environmental initiatives and other social responsibility imperatives."

According to industry analyst firm, Gartner, Inc., "‘Going green’ is no longer just a phrase. Future suppliers will need to be certified green just to remain on shortlists for enterprise consideration. The green movement will pick up steam in 2008 and change the way businesses approach environmental conservation. Strategic Planning Assumption: By 2011, suppliers to global enterprises will need to prove their green credentials via an audited process to retain preferred supplier status."

There are several key steps to establishing green supply chains including:

• Determining your organization's purchasing strategy. Companies should first identify and prioritize the purchasing criteria that are most important to them.

• Establishing good processes that are streamlined and flexible. This will enable companies to effectively implement the green policies that they are establishing.

• Finding ways to cut down on paper. By automating your invoicing processes, you can dramatically decrease your use of paper and gain greater efficiency and environmental benefits. Invoices represent the largest number of legally required documents in a company, and for every invoice, there are typically two to 10 times that amount of supporting documents, such as goods received, contracts, etc.

• Making purchasing democratic. Any system you implement must be easy to use to encourage user adoption. It is also important to put purchasing systems in as many hands as possible so that it becomes an organization-wide initiative to support green suppliers and other favored vendors.

• Recognizing and rewarding the true value in your supply chain. Price alone should no longer be the major factor in selecting a vendor. The value a vendor provides, such as quality and reliability, as well as adherence to corporate values, are key areas that companies should consider.

Source: eponline.com

Trimble First Quarter 2008 Revenue Up 24 Percent to $355.3 million

Sunnyvale, CA, - Trimble (Nasdaq: TRMB) today announced results for its first quarter of 2008 ended Mar. 28, 2008. In the first quarter of 2008 revenue was $355.3 million, up approximately 24 percent from revenue of $285.7 million in the first quarter of 2007.

Operating income for the first quarter of 2008 was $58.0 million, up 48 percent from the first quarter of 2007. Operating margins in the first quarter of 2008 were 16.3 percent, compared to 13.7 percent in the first quarter of 2007. Amortization of intangibles increased from $7.9 million in the first quarter of 2007 to $10.8 million in the first quarter of 2008. The impact of stock-based compensation expense was $4.0 million in the first quarter of 2008, compared to $3.4 million in the first quarter of 2007. There were no in- process research and development or restructuring expenses in the first quarter of 2008, while there was a $2.1 million in-process research and development expense and a $2.7 million restructuring expense in the first quarter of 2007. In addition, amortization of acquisition-related inventory step-up was $0.2 million in the first quarter of 2008, compared to no amortization of acquisition-related inventory step-up in the first quarter of 2007. Excluding these impacts, non-GAAP operating income of $73.0 million grew by 32 percent compared to the first quarter of 2007. Non-GAAP operating margins were 20.5 percent in the first quarter of 2008, up from 19.4 percent in the first quarter of 2007.

Net income for the first quarter of 2008 was $40.1 million, up 40 percent compared to net income of $28.7 million in the first quarter of 2007. Diluted earnings per share for the first quarter of 2008 were $0.32, up 35 percent from diluted earnings per share of $0.24 in the first quarter of 2007.

The tax rate for the first quarter of 2008 was 33 percent, compared to 32 percent in the first quarter of 2007. Trimble's tax rate was lower than forecasted due to the implementation of a global supply chain structure which is expected to result in a structural tax rate of 33 percent for fiscal 2008 and beyond.

Adjusting for the amortization of intangibles, in-process research and development, the impact of stock-based compensation expenses, restructuring, and the amortization of acquisition-related inventory step-up, non-GAAP net income of $50.1 million for the first quarter of 2008 was up 26 percent compared to non-GAAP net income of $39.6 million in the first quarter of 2007. Non-GAAP earnings per share for the first quarter of 2008 were $0.40, up 22 percent from non-GAAP earnings per share of $0.33 in the first quarter of 2007.

"The first quarter of 2008 emphasized the growing diversity of the Trimble business portfolio. Although E&C continued to be impacted by slow U.S. economic conditions, we saw strong growth across all other geographies. In addition, we experienced almost 75 percent growth in our TFS segment, driven by strong agriculture product sales," said Steven W. Berglund, Trimble's chief executive officer.

"While monitoring the continuing uncertain economy, our view for revenues for the entire year remains generally unchanged with an expectation for higher earnings per share than previous guidance."

Trimble Results by Business Segment
Segment operating income is revenue less cost of goods sold and operating expenses, excluding general corporate expenses, amortization of intangibles, amortization of acquisition-related inventory step-up, and in-process research and development. In addition, for each segment, non-GAAP operating income excludes the impact of stock-based compensation expense.

Engineering and Construction
First quarter 2008 Engineering and Construction (E&C) revenue was $194.2 million, up approximately 11 percent when compared to revenue of $175.6 million in the first quarter of 2007, with strong international sales.

First quarter 2008 operating income in E&C was $37.0 million, or 19.0 percent of revenue compared to $42.2 million, or 24.0 percent of revenue, in the first quarter of 2007.

Non-GAAP operating income in E&C was $37.9 million, or 19.5 percent of revenue, in the first quarter of 2008 compared to $43.0 million, or 24.5 percent of revenue, in the first quarter of 2007. The decline in operating margins resulted primarily from unfavorable foreign currency exchange rates, the impact of recent acquisitions and product mix.

Field Solutions
First quarter 2008 Field Solutions (TFS) revenue was $88.0 million, up approximately 73 percent when compared to revenue of $51.0 million in the first quarter of 2007. Sales were strong across all geographic regions and product lines, with the majority of the increase coming from the agriculture business.

First quarter 2008 operating income in TFS was $35.1 million, or 39.9 percent of revenue compared to $16.6 million, or 32.6 percent of revenue, in the first quarter of 2007.

Non-GAAP operating income in TFS was $35.3 million, or 40.1 percent of revenue, in the first quarter of 2008 compared to $16.8 million, or 33.0 percent of revenue, in the first quarter of 2007. Operating margin expansion was due primarily to higher revenue.

Mobile Solutions
First quarter 2008 Mobile Solutions (TMS) revenue was $44.0 million, up approximately 47 percent when compared to revenue of $29.9 million in the first quarter of 2007.

First quarter 2008 operating income in TMS was $2.5 million, or 5.6 percent of revenue compared to $1.0 million, or 3.4 percent of revenue, in the first quarter of 2007.

Non-GAAP operating income in TMS was $3.9 million, or 8.8 percent of revenue, in the first quarter of 2008 compared to $1.8 million, or 5.9 percent of revenue, in the first quarter of 2007. Operating margin expansion was driven by higher subscription revenue and operating synergies which were partially offset by higher new product development costs.

Advanced Devices
First quarter 2008 Advanced Devices revenue was $29.1 million, approximately flat when compared to revenue of $29.3 million in the first quarter of 2007.

First quarter 2008 operating income in Advanced Devices was $4.7 million, or 16.1 percent of revenue compared to $3.3 million, or 11.4 percent of revenue, in the first quarter of 2007.

Non-GAAP operating income in Advanced Devices was $5.0 million, or 17.3 percent of revenue, in the first quarter of 2008 compared to $3.7 million, or 12.6 percent of revenue, in the first quarter of 2007. Operating margins improved due to product mix.

Stock Repurchase Program
In January, Trimble announced a stock repurchase program for up to $250 million. As part of this program, in the first quarter of 2008, Trimble repurchased approximately 968 thousand shares of Trimble stock at an average purchase price of $26.71.

About Trimble
Trimble applies technology to make field and mobile workers in businesses and government significantly more productive. Solutions are focused on applications requiring position or location-including surveying, construction, agriculture, fleet and asset management, public safety and mapping. In addition to utilizing positioning technologies such as GPS, lasers and optics, Trimble solutions may include software content specific to the needs of the user. Wireless technologies are utilized to deliver the solution to the user and to ensure a tight coupling of the field and the back office. Founded in 1978 and headquartered in Sunnyvale, Calif., Trimble has a worldwide presence with more than 3,600 employees in over 18 countries.

For more information visit Trimble's Web site at http://www.trimble.com.