Manufacturing Executives Eye Supply Chain to Drive Growth and Control Costs

Manufacturing executives plan to use supply chain as a key mechanism to improve both top- and bottom-line performance, despite challenges of the current economic environment, according to results of a recent survey prepared by management consulting firm Archstone Consulting.

Nearly three-quarters of the 265 manufacturing executives surveyed in Archstone's Manufacturing Executive Agenda for 2008 felt that the current market pressures, including sharply rising commodity prices, a sluggish economy and foreign competition, may be triggering significant transformational changes within manufacturing organizations.

"Over 80 percent of manufacturers have responded to the current economic climate by devising aggressive agendas to boost sales and cut costs," said Todd Lavieri, president and CEO of Archstone Consulting.

Two of the four most common ways that executives plan to bolster performance in 2008 depended upon the capabilities of supply chain.

"An interesting pattern emerged, in that manufacturers across the board have high expectations for their supply chains to both boost revenues and reduce costs," said John Ferreira, industrial manufacturing practice leader at Archstone Consulting.

"In the past manufacturers simply used their supply chains as a means to control costs by improving efficiencies," Ferreira continued. "Now they are using their supply chains as a mechanism to boost revenue and improve customer satisfaction through capabilities like better management of highly customized products, quicker delivery times and more integrated services."

The four executive agenda items shared by manufacturers in all industries include:

• Increasing revenue growth by leveraging supply chain capabilities to add value to products and services.
• Reducing costs with supply chain efficiency improvements.
• Improving product innovation.
• Controlling direct material costs.

Industry Trends
Archstone also identified several major industry trends in its Manufacturing Executives Agenda for 2008 surveys, including:

• Aerospace & Defense: Nearly 70 percent plan to simultaneously increase revenues and reduce costs by 3 percent or more.
• Consumer Packaged Goods: Nearly 90 percent anticipate cost reductions of 3 percent or greater. CPG executives cited managing direct material and commodity costs as the most important to achieving cost targets.
• Electrical & Electronic Equipment: Over 90 percent consider the sluggish economy to be a major constraint, and less than half expect revenue growth of 3 percent or more.
• Pharmaceuticals: Nearly 70 percent expect to reduce costs by 3 percent or higher, and 72 percent anticipate revenue growth of 3 percent or more.

Archstone Consulting launched the Manufacturing Executive Agenda for 2008 survey in April to examine which macroeconomic constraints are having the most significant impact on manufacturing executives, what cost and revenue targets have been established, and what strategies or areas of focus executives are evaluating to achieve those targets. Over 265 respondents participated in this survey.
Source-sdcexec.com

RedPrairie launches unified supply chain solution

RedPrarie has announced the release of its E2e Supply Chain Execution suite, which incorporates both RFID and automatic identification and data capture (AIDC) technologies in hopes of simplifying and unifying the supply chain process.

For the new release, RedPrairie has integrated the asset management capabilities of its stand-alone mobile resource management application into its E2e warehouse management module. The system can now support the use of RFID, two-dimensional bar codes and other AIDC technologies to track inventory and assets from distribution centers, throughout the transit process, at customer sites and within a retailer's store network.

Both serialized and non-serialized assets can be tracked at each location, and the system enables customers to track the condition and status of each asset, as well as its movement throughout the supply chain. This enables reusable assets such as freight containers to be tracked at the same time as their cargo, with the hopes of decreasing inefficiencies in the supply chain.

Other elements of the E2e Supply Chain Execution suite include transportation management and work force management. The platform is built on a service-oriented architecture framework enabling it to be operated remotely as well as run on a user's own network.
Source-rfidnews.org

Wordingham Technologies Adds Online Support for Supply Chain Management

Wordingham Technologies, specialists in custom machined parts for optics, photonics and precision instrumentation, announces online customer access for tracking orders and managing releases, 24/7. The Wordingham Quality (WQ) Portal, the first of its kind in this industry, demonstrates Wordingham's commitment to "quality delivered."

"Quality isn't just delivering tight tolerances and great aesthetics, important as those are," says David Trombley, Wordingham General Manager, "it's helping our customers get their parts when they need them, even when their plans change."

The WQ Portal allows customers to log on to a secure site, accessible from http://www.wordingham.com, and view critical planning information. This information includes:

    -- Inventories of all their custom parts
   -- Orders in process
   -- Planned releases
   -- Recent releases
   -- In-process delivery tracking information
   -- Pending quotes
   -- Immediate request for in-person help if desired

Trombley continues, "We want to do all we can to help our customers manage their supply chains better. In today's global markets, victory goes to the agile. That's why we invested in the WQ Portal and made it as easy to use as we could. While we will always give fast in-person response to questions, self-service access is a big plus, particularly to our international customers."

Mike Jackson, Inside Sales Representative and developer of the WQ Portal, notes, "Early feedback has been fantastic. The WQ Portal is letting our customers monitor plans for their own customer deliveries in a new way. But that's not all. The WQ Portal is also helping them construct winning bids for new business, faster and easier, by providing real-time data 24/7."

About Wordingham Technologies

Wordingham Technologies provides full-service, dock-to-stock metal machining, including: multi-axis milling, multi-axis turning, honing, advanced metrology, finishing and mechanical sub-assembly. Though ultimately serving many markets, Wordingham focuses on custom parts for Optics and Photonics, including illumination, medical/biometric, and defense and security; and for Precision Instrumentation, including measurement, data collection/transfer and nano-positioning.

Wordingham Technologies' competitive edge is people: their deep commitment and strong optics roots. From its start as an outgrowth of Burleigh Instruments, an early market leader in life science optics and nano-positioning systems, the company has grown to a team of over 50 with a proven track record for producing high quality precision optics interfaces. Visit http://www.wordingham.com to learn more.
Source-marketwatch.com

Financial Insights Releases First Global Benchmark Comparison of Bank Financial Supply Chain Offerings

Financial Insights has now established the first consistent definition of financial supply chain management services that can be used to make valid comparisons between competitors and provides a snapshot of what is being offered at this point in time. Financial supply chain management is still an emerging area, therefore considerable variation in product offerings and even definitions still exist.

Based on this pioneering study, Financial Insights considers JPMorgan to be in the lead at this time, followed closely by American Express and Bank of New York Mellon. JPMorgan's leading position is based primarily on the comprehensive scope of its offerings, as well as the organizational focus it has shown with regard to the financial supply chain opportunity. The report further states how important it is for financial institutions to support purchasing cards, as this is one of the fastest-growing market segments of the card business and also combines payments and financing, making these cards a natural fit for financial supply chain management.

According to Aaron McPherson, practice director and author of the report, "Financial institutions will have to work together to connect their individual buyer-supplier networks into a single network-of-networks, similar to what is happening in the check image exchange market. Financial institutions still have to agree on a remittance data standard and push their customers to use it in a coordinated fashion as the focus of competition will become comprehensive service, reliability, and quality, rather than proprietary buyer-supplier networks or connectivity standards."

The seven financial institutions profiled in the report have made impressive strides by being willing to buy as well as build the necessary technology and overcome conflicting internal goals to present a unified face to the market. The following financial institutions are benchmarked in this report: American Express, Bank of America, Bank of New York Mellon, Citi, Deutsche Bank, JPMorgan, and Wells Fargo.

A review of the benchmark data and results will be discussed during a Financial Insights Webinar on August 21. The Webinar is open to all: registration is required.

Clients of the Financial Insights' Payments research advisory service may download the report, others are encouraged to contact Financial Insights to discuss how this research fits into strategic technology investments and ongoing go to market services. Please contact us at info@financial-insights.com. To arrange a press briefing with Aaron McPherson, please contact Deborah Stark, 508 935 4318 or email dstark@idc.com.

About Financial Insights, an IDC company

Financial Insights provides independent research, custom consulting, and detailed multiclient studies on the technology issues and challenges facing the financial services industry. Our global research covers topics of strategic importance to corporate and retail banks, insurance carriers, asset management firms, securities and brokerage firms. Our local practices in Asia Pacific, Europe, Latin America and Canada add an in-depth regional viewpoint. Financial Insights, an IDC company, is headquartered in Framingham, Massachusetts, USA. IDC is a subsidiary of IDG, the world's leading IT media, research, and exposition company.

Source : marketwatch.com

The endless quest for indestructible supply chain

At annual risk managers gathering, strategies are shared about wiser monitoring of risk in a dangerous world

Nadia Borowski Scott

THE ‘WHAT IF?’ APPROACH Gary Lynch, a managing director in the risk consulting unit at Marsh, advises risk managers to think about potential remedies to supply chain failures.

Supply chain risk is an increasingly significant concern for corporate managers since so many U.S.-based companies are now global in reach, sourcing raw materials from one continent, manufacturing products in another and ultimately transporting them for distribution elsewhere.

Years ago, such risk entailed a shortage of raw materials or late deliveries because of transportation problems. But it has now grown to include everything from natural hazards or disasters to terrorism, pandemics, political unrest, labor problems or the loss of computer data by a vendor.

In most cases these are risks a company can't buy insurance for, even though any one of them could ultimately result in the destruction of a company's brand name, reputation and stock market value. Some companies are even putting pressure on their suppliers to have enterprise risk management plans in place (see “Supply Chain Only as Strong as Its Weakest Link,” FW, April 21).

Addressing and planning for supply chain disruption in an organization's various firms is essential, but it has to come at a reasonable cost, said panelists at the Risk and Insurance Management Society conference in San Diego last week.

“Clearly, it's about managing volatility within certain parameters or thresholds that you have set,” said Gary Lynch, a managing director in the risk consulting unit at Marsh, “but the risk profile constantly changes” so it's imperative that it be monitored for effectiveness and efficiency, he said.

Adding to the challenges is the fact that risk managers view the issues differently than do the company's supply chain managers, said Pamela Britt Schneider, director of global risk management for Avon Products. “Often, they have competing priorities,” she said.

For example, supply chain managers seek to consolidate vendors and reduce inventory in order to cut costs, while a risk manager wants the company to do the opposite, building in redundancies so that there are alternative sources of product in the event of a disruption.

So it's imperative that risk managers and supply chain managers understand each other's roles, Ms. Schneider said. She suggested that those risk managers try to “become an insider” on the supply chain management team, learning its priorities and how the supply chain works, while simultaneously identifying its vulnerabilities.

“Tell them you want to help them reach their goals and avoid disruptions,” she counseled, adding that at the same time, risk managers must balance that with preparing plans that will sustain the business in the event of a problem and be familiar enough with the issues to take on the role as the firm's intermediary with the insurance company when presenting a claim linked to a supply chain problem.

But one growing problem is that, given the weakening economy and tighter budgets, it may be harder for risk managers to sell the importance of risk management's role to senior management.

So supply chain managers need to build their presence in the C-suite by communicating potential problems to them regularly. One way to illustrate the significance of those risks is by presenting news clippings of recent supply chain catastrophes at other companies and their impact, said Ms. Schneider.

Among Marsh's suggestions are that risk managers create a supply chain risk team that looks at the supply chain end-to-end. Mr. Lynch said Marsh has found that one approach to helping companies find alternatives in the event of a supply chain failure is to tell supply chain managers to bring a “what if?” mentality to their duties. That is, have them constantly asking themselves that question so they have a potential remedy in mind in the event of a supply chain failure. “This approach is not only effective but also highly practical, given the limited resources of most corporate risk departments.”

“Nearly three-quarters of risk managers say their companies' supply chain risk levels have increased since 2005,” according to Marsh's survey of 110 corporate risk managers in January and February.

“[So] for most risk managers, the question is not if they should take on this responsibility but how to do it, given constraints on resources and time,” the Marsh report said.

Avon may be one of the most international of U.S.-based companies, as 75% to 80% of its $9.9 billion in sales last year were made by its direct-sales force, perhaps the world's largest, the majority of which is international.

Its scope includes sales operations in 66 countries and distribution of its products in an additional 48. It has 1,500 direct vendors globally, uses 10,000 different raw materials to produce its beauty products and processes 20,000 product orders daily, said Ms. Schneider.

Add to that the fact that most of its products are produced by third-party manufacturers, and Avon maintains worldwide warehousing, distribution and shipping logistics and one can see that Ms. Schneider is involved in a truly daunting enterprise fraught with challenges from within and without.

Ultimately, “in a post-Mattel world, you have to ensure that the products you are selling are safe and are fully tested for your customers,” said Ms. Schneider, referring to the massive toy recall and subsequent negative publicity the toy maker faced, because excessive amounts of lead were discovered in paint on some of its products.

Source: financialweek.com