Midwest floods create short and long-term concerns in the supply chain

While the short-term impact of the massive floods in the Midwest may be dealt with the long-term impacts may be felt for months to come.

In the days and weeks during and after the floods, the primary concerns to buyers and supply chain professionals were logistics-related. Railroads reported major stretches of track underwater, major highways in Iowa and Missouri were closed and damaged and a 300-mile section of the Mississippi River was closed to barge traffic. Union Pacific issued an embargo on its shipments, saying it was simply not able to meet its schedules in the region.

Buyers reported major delays in shipments as a result. “The rail line between Chicago and the west has been underwater for days,” says one respondent to a Purchasing.com survey. “This has halted intermodal traffic. I ship to the West Coast by rail exclusively. The cost to ship there by truck is double the intermodal price.”

Another said: “We are based in central Iowa and the floods closed road in our town as well as in Des Moines, Cedar Rapids and Waterloo. We order and ship material from all of these towns to our location, so our supply chain was messed up for over a week. Things are returning to normal now. Hopefully we won’t see any more rain for a while.”

The floods also caused some manufacturers to shut down production facilities. Cargill Inc., the largest U.S. agriculture company, declared force majeure on its corn-syrup supply contracts after flooding forced it to shut down its corn-milling plant in Cedar Rapids, Iowa. The Minnetonka, Minn.-based company won’t be able to fill all of its customers’ contracts, Cargill spokeswoman Liz Pearce said in a Bloomberg report.

Archer Daniels Midland also said it had a plant in Cedar Rapids downed by the floods. And according to the Iowa Renewable Fuels Association, a total of 300 million gallons per year of ethanol production capacity was forced offline by the floods at two plants: one owned by ADM and the other owned by Penford.

But the long-term impacts of the flooding could be more severe than delayed or even lost shipments. Because the floods were concentrated in Iowa and Missouri, the corn crop in the U.S. could take a hit this year, which would impact not only food prices, but also ethanol and thus gasoline prices later this year. According to Iowa Secretary of Agriculture Bill Northey an estimated 3.3 million acres of corn and soy beans were destroyed by spring floods in Iowa alone, pushing corn prices up to just under $8/bushel in late June on the Chicago Board of Trade before they trended down again. And the higher corn prices go, the thinner margins are for ethanol producers, so ethanol prices will go up.

In some cases, ethanol producers have simply shut down until their business becomes more profitable. David Driscoll, an analyst at Citigroup, said in June that as a result of the rapid margin deterioration, nearly 120 small to midsize ethanol producers “will be shut down over the next few months.” There are currently about 160 ethanol plants in the U.S., according to the Renewable Fuels Association.

But ethanol market experts warn that abandoning the biofuel altogether due to lower margins will only create more havoc for gasoline prices. “Abandoning our commitment to ethanol and biofuels, as some would suggest we do, would do nothing to provide meaningful relief from high prices today or in the future,” said Renewable Fuel Association President Bob Dinneen in a recent Dow Jones Newswires report. “It would absolutely force the price of gas through the roof and require the import of more record-high foreign oil.”

Source by panchasing.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

Manufacturing Insights wants to modernize your supply chain

The last time I spoke to Simon Ellis, he was the supply chain futurist – one of those titles I would kill to get - at Unilever North America (www.unilever.com), a manufacturer of brands as diverse as Slim-Fast and Vaseline.

The other day, I had a chance to speak to Ellis in his new role as supply chain strategy practice director for Manufacturing Insights, an IDC Company. Manufacturing Insights provides strategic business technology and application advice to the manufacturing community.

What got us on the line together was Modernizing your Supply Chain: The Execution Imperative, a new report by Ellis and his colleagues that calls on manufacturers to implement supply chain execution systems that are of the same caliber as their planning systems. To learn more about supply chain management providers, check out Modern’s listing of the Top 20 supply chain management software providers.

The short version of the Manufacturing Insights’ new report is this: Ellis believes that manufacturers have spent a great deal of time and money upgrading their planning capabilities in order to transform themselves into demand-driven enterprises. “For many companies, that was entirely appropriate,” Ellis says. “A lot of companies needed to do that.”

At the same time, many of those same companies forgot that to be successful they have to execute against those plans. “What’s developed is a schism between the demand side of the supply chain, and the ability of the supply side of the equation to act on that demand,” Ellis says. “That’s really problematic as companies pursue low-cost sourcing in China with 90 day lead times.”

Ellis says he wants manufacturers to think about two things as they read the report.

The first is that supply chain execution systems, including warehouse, transportation and manufacturing executions systems have come a long way. “There have been dramatic improvements in the last five years, especially in transportation management systems,” Ellis says. “You really need to compare these new systems to whatever you’re using to see if you’re leaving dollars on the table.”

The second piece is whether or not the demand-driven, or build-to-order, model so highly touted since the e-commerce boom ten years ago, still makes sense for consumer packaged goods manufacturers in today’s economy. “Conceptually, a demand-driven supply chain makes a lot of sense,” says Ellis. “When you think about the supply chain in practical terms, you have factory-utilization and capacity constraints that you just can’t get past. If you’re talking about low volume, high margin products, a build-to-order model works, but I don’t know of any company selling fast-moving, low-margin consumer goods that has been able to make it work.”

While that may sound heretical – haven’t we all been told we have to satisfy a market of one – Ellis uses Dell – the poster child for the build-to-order model – to make his point. “The company is going to produce more preconfigured PCs,” Ellis says, leaving it to the reseller or retailer at the end of the chain to configure the machine to a customer’s requirements.

When Dell shifts gears because of a changing market, it might be time for all of us to take a hard look at how we make and distribute our products.

Let me know what you think about the demand-driven supply chain by posting a comment below or writing me at Robert.Trebilcock@verizon.net .

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

www.quantumretail.com - Mulberry Marketing Communications Dan Brown / Russell Simmons +44.20.7928.7676 dbrown@mulberrymc.com / rsimmons@mulberrymc.com 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 population(1) has purchased an item of Womenswear(2) 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

Quantum's Q software is recognized for its achievements with fast
fashion retailer New Look

Source by pr-inside.com

Squeezing the Most Out of Your Supply Chain

Many companies are investing copious amounts of time and money on their supply chains as business becomes more complex and global By Jessie Chimni and Ashok Santhanam

Investment in supply chain management (SCM) applications, which topped $6 billion last year and is expected to reach an impressive $7.4 billion by 2010, (according to AMR Research) should never be considered a waste. Still, as companies have piled more products, suppliers and distribution plants into their supply chain scenario and changed replenishment strategies, a slow erosion of effectiveness has followed.

But despite the increasing investments in supply chain effectiveness, many companies are finding that such key metrics as on-time delivery, order fulfillment lead time and supply chain response tend to slide as time passes.

In fact, it's likely that your supply chain isn't operating at its peak efficiency right now. Supply chain opportunity assessments can help you determine if this may actually be happening at your company. Like an annual doctor's physical provides a snapshot of overall health, a supply chain opportunity assessment will give your company a complete look at the overall state of one of its most critical functions and provide with you a comprehensive list of opportunities for improvement.

Armed with the report from a supply chain opportunity assessment, a company can immediately begin to take a series of actions to help improve its operating efficiency and ensure that the supply chain is structured to meet any growth trends or expected sales increases. An assessment also guarantees that processes and data can be more tightly integrated and shared with partners, helping fulfill the ultimate goal of realigning the supply chain with business and operations strategies.

Though an assessment might sound intimidating, it's a pretty straightforward and proven analysis process that entails a thorough review and examination of a company's existing supply chain processes. It's also a method that's been proven to work across industries and has been used to improve supply chain performance in businesses ranging from consumer packaging to semiconductors to communications devices.

The following is a working framework to consider when planning a comprehensive supply chain assessment.

1) First, consider the scope of an assessment. Will it be limited to a division or business unit or include the entire corporation? Will you look at a subset of supply chain processes or examine the full spectrum, including demand planning, supply planning, production scheduling, supply replenishment and order promising? Once the scope of the assessment is determined, identify the company's existing concerns in areas such as demand and supply planning, production scheduling, inventory planning and order promising. (One key strategy, from the start, is to recruit the right people to work on the assessment, including both the key stakeholders that own the supply chain process and those managers in all applicable business units.)

More Information

Facing Reality: Is Your Business Rationalizing Away Updated Technology Infrastructure?

A WMS system can provide the cornerstone for a company's supply chain, delivering inventory visibility, on time and complete orders, reduced inventory costs and employee efficiency.By Chris Goldsmith, Director of Product Strategy, HighJump Software
July 7, 2008 -- In a business environment that is constantly changing and growing increasingly complex, small to medium businesses (SMBs) know that to remain viable, they must adopt new technology. However, there is often a disconnect between acceptance and adoption. Is your SMB effectively leveraging technology to address the reality of your competitive environment, or are you rationalizing reasons not to adopt?
As you will see below, a WMS system can provide a rational first building block in developing a robust technology infrastructure for your supply chain. But first, here are two trends affecting adoption in SMBs:
Innovation and Adaptability
Innovation and adaptability are both key factors in keeping up with technology trends. For many SMBs, goods movement and logistics is riddled with inefficiencies due to lack of investment in technology. Legacy applications are showing their age, and oftentimes require massive costs to maintain. These inefficiencies are compounded by the fact that many companies' supply chains are growing more complicated as they explore remote sourcing of raw materials and outsourcing of processes to remain cost-competitive.
Organizational and technology adaptability is important because today's best practice will easily be tomorrow's primitive practices. The rate of change in distribution models continues to accelerate as companies move from push to pull to flow through to lean. Unfortunately, as a SMB, your company is probably not the biggest gorilla on the block and as a result is subject to requirements dictated by the much larger companies in your supply chain (e.g., label formats, RFID compliance, packaging, etc.). This does not even include government regulations such as increasing track and trace requirements throughout the entire supply chain. Your company will need to react to these edicts too, but with fewer resources than your larger brethren.
Competition
Adding a sense of urgency to the trends of innovation and adaptability is increasing competition. As the pace of globalization continues to increase, more and more international companies are competing in your local markets. While these companies do not have your local market knowledge, they bring with them a scale and plethora of best practices that will make them formidable competitors. In addition, barriers to entry in many industries have been lessened. Now a company with a little seed capital can set up a call center in India, source product from China, sell products over the Internet, and take away your customers. With the advances in technology and communication it is very easy to start a global company and address a profitable market. Bottom line: more companies are entering your market and threatening your position.
The results of these trends are making it nearly impossible for SMBs to deliver goods effectively without making strategic technology investments in their supply chains. Still, no matter how strong the justification for modernizing your supply chain and WMS system, there are always going to be reasons for resisting and ignoring change until it is too late. Here are some reasons I've heard:
We need a new system, but cannot afford a long and expensive implementation cycle
We do not necessarily need a complex system today, but we want a system that will grow with us
We want a system with fast employee adoption, and many systems appear too complex
We want a vendor that can share industry best practices
We want a vendor that will be there in the future. We don't want to be restricted to vendors running/developing the system out of their garage
Maybe you have heard similar statements in your company. Many of these assertions assume that SMBs have to deal with SMB software companies. However, as the supply chain is maturing, so are WMS software companies. More vendors are specifically building solutions targeted to smaller companies, including:
Right-sized feature sets
Flexible pricing and delivery models (subscription and/or hosted)
Quick implementation methodologies
Vendors recognize that SMBs have different requirements and different price points for adopting new technology and are actively bringing solutions to market to address these requirements.
Why the Time is Now
The days when only Fortune 500 companies needed a WMS solution have passed. Now any SMB should strongly consider a packaged warehouse management solution. A WMS system can provide the cornerstone for a company's supply chain, delivering inventory visibility, on time and complete orders, reduced inventory costs and employee efficiency.
Updating the technology infrastructure in your supply chain is not a light undertaking, but with the realities at hand, vendors are offering solutions specifically targeted toward smaller businesses with features and functions to make them productive from day one. For many, WMS is the logical first step toward gaining efficiency and keeping pace with the competition. How much longer can your SMB manage this complexity with a paper-based system or legacy application that has been patched together over the years? It's time to face reality: whether your SMB makes an investment in technology infrastructure or not, your competitors surely will.
Chris Goldsmith is Director of Product Strategy at HighJump Software which is a provider of supply chain execution solutions that streamline the flow of inventory and information from source through consumption. www.highjump.com
Source by industryweek.com