The Supply Chain Category

Supply Dynamics: Vendor Snapshot (Part 1) — Background & Solution Overview [PRO]

manufacturing

Direct materials procurement is similar in some respects to indirect procurement: you want to see your spend, aggregate demand and find opportunities to reshape your value chain to unlock value. But that’s where the similarities end. Analyzing direct spend (especially across multiple tiers of supply) is sometimes like seeing a cloud of smoke coming out of your tailpipe — you know there’s something wrong but don’t know the cause. For indirect spend, you basically change the oil, replace the air filter and hope for the best. But for direct spend, you need specific engine diagnostics to figure out what’s driving performance and how much you could potentially improve. And unfortunately, in many cases, the manufacturers of those engines parts don’t want you poking around under the hood.

Whether it’s for plastics, resins, hydrocarbon feedstocks, agricultural commodities, standard catalogue parts, electronic components or metals, you must translate your demand for parts into the raw materials that go into them. And you must understand the demand volumes, supply chain capacities and processing capabilities that drive that pricing — especially if you want to tap into aggregated buying channels beyond the stuff you buy to support your own internal factory requirements.

This intersection of supply chain modeling, demand forecasting, demand-supply reconciliation, demand aggregation and commodity price forecasting is where Supply Dynamics plays. The idea originated with one of North America’s largest privately owned metals distributors where the opportunity to roll up demand information across OEM customers and their outside contract manufacturers gave it a unique opportunity to build out specific analytics that would help it size up opportunities for its customers and itself. But last year that technology was liberated from its previous owners and is now a commercial offering for any manufacturer or distributor that wants to optimize its own extended supply chain.

This Spend Matters PRO Vendor Snapshot provides facts and expert analysis to help buying organizations make informed decisions about whether they need a solution like Supply Dynamics to expand their analytics initiatives into previously unchartered materials and supply chain components. Part 1 of our analysis provides a company background and detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider Supply Dynamics. The rest of this multipart research brief covers product strengths and weaknesses, competitor and SWOT analyses, user selection guides and insider evaluation and selection considerations.

Latest Modern Slavery Index Released: Turkey and EU See Increased Risk

No company wants its global supply chains to have any exposure to slavery. Yet new research shows that the risk is on the uptick worldwide, including in 20 European Union countries. Global risk research firm Verisk Maplecroft released its Modern Slavery Index 2017 on Thursday. The index assessed 198 countries for risk of modern slavery, which the researchers define as including slavery, human trafficking and forced labor. The percentage of countries at “high” or “extreme” risk for modern slavery has grown to 60%, a 2% increase since last year.

3 Hot Topics Procurement Won’t Be Able to Stop Thinking About Even at the Beach

As we slog through the dog days of summer, many procurement folks are letting their minds wander to more pleasant thoughts — a drink by the beach, a few rounds on the back nine, a moment of peace (however fleeting) without the constant ding of email notifications from a smartphone. And as they pack for a well-deserved vacation, they’ll try leave behind some of those more persistent thoughts and concerns, as well. What has been top of mind for procurement this year, and what has stressed them out to the point where they need to get away from it all for a bit? Here are the top three topics our readers have been sweating over for the last seven months.

From MABD to OTIF: Wal-Mart’s Latest Supply Chain Imperative

From must arrive by date (MABD) to on time in full (OTIF), Wal-Mart’s latest delivery standard is not just another supplier scoring metric. It’s actually a dynamic reporting mechanism that could become one of the best tools for measuring inventory flow ever conceived — at least, that’s what logistics experts and various consultancies with a compliance training interest are saying.

How to Decide on Organizational Sourcing Structures, Supply Market Intelligence Sources (ICYMI)

category management

Last week, we ran two stories that have come out of our new feature, Ask Spend Matters. The feature asks readers to tell us what they’ve always wondered about procurement and supply chain, and our editors then select questions to pursue and investigate. While our first replies covered the intricacies of tail spend management and the use of big data in public procurement, last week we tackled two questions related to the sourcing side of procurement. Check out what your peers are wondering and be sure to leave us your own question!

The Role of Logistics in Reviving Retail Markets [PRO]

Everybody knows about “bricks and clicks” in the supply chain, but I have a question: Can the clicks save the bricks for those who’ve been getting Amazoned? In other words, does an increasingly fragmented and tech-enabled market for logistics services have the right “stuff” — the information-based mortar to put traditional retail’s bricks back together? While Amazon’s vertical integration has experts predicting a knockout blow to competitors, across the supply chain the industry’s largest players are getting even larger and they’re learning how to counterpunch.

Amazon has single-handedly accelerated the evolution of logistics from a retail and distribution standpoint. But Wal-Mart is no slouch either, even if it’s generally a step behind. Together, their demand and requirements for ever-increasing service levels have quickly reshaped the logistics services landscape, redefining what’s possible not only for their own businesses but for all businesses across industry. Yet the mega players aren’t just in the retail end of the supply chain. Contract manufacturers are going big and going digital (e.g., Flex’s foray into incubating supply chain startups like Elementumand Jabil, too). Carriers are also supersized, with FedEx and UPS are expanding their digital capabilities, and DHL is doing some extremely innovative work in supply risk management that we’ll be featuring soon in an upcoming PRO series. The logistics market is a very interesting ecosystem for the broader supply chain because logistics is like the circulatory system in an animal — and it’s critical to support all the animals big and small, not just the gorillas.

New Report: Are Our Supply Chains Less Responsible Than We Think?

hidden workers

Corporations are becoming wealthier. As of last year, 69 of the world’s 100 biggest economic entities are not nations but businesses, an increase from 63 in 2015. Can it be argued that those behemoth private sector corporations should be held to stricter procurement regulations and transparency, more like, dare one say, public procurement? This is a question that arises from the findings of a recent report from The Economist Intelligence Unit on supply chain responsibility.

Building Supply Market Intelligence: Which Data Sources are the Best?

Often, it’s all about how quickly one can digest something. No, I’m not talking about Joey Chestnut’s eating-champ prowess. I’m talking about market intelligence. In a procurement professional’s day-to-day, that sentiment has certainly become more widespread than ever. In fact, with time at a premium, the majority of procurement pros — from junior buyers all the way up to CPOs — are faced with this issue every day. However, it can pay dividends to approach supply market intelligence in a strategic way.

Supply Chain Visibility: Big Brother Shippers and Truckers Need a Prenup

trucking

Over the last several weeks, I have watched five supply chain visibility product demos from very different and successful solution providers — each focused on track and trace capabilities designed to benefit freight shippers — who explained to me that knowing the exact location of a shipment has become an industry requirement. Yes, I raised my hand and asked “why,” because watching an icon move on a map, while cool, just didn’t strike me as essential. As I learned, Wal-Mart and Amazon, once again, are responsible for the shift.

Japan: High Employee Bonuses in Manufacturing Until Inflation Picks Up

Spend Matters welcomes this guest contribution from Irene Lauro, senior economist at IHS Markit.

In Japan, labor shortages and rising productivity are not leading companies to increase ordinary wages. Signs of a Japanese economic recovery have started to appear in rising corporate profits and falling unemployment. A meaningful pickup in wage growth, however, is not in the cards, as corporates are reluctant to lift ordinary earnings because of uncertainty about the economic outlook.

ICYMI: What Have You Always Wondered About Procurement (But Were Afraid to Ask)?

The Spend Matters editors have been busy working through reader questions these past two weeks. Our recent submissions run the gamut from how to implement supplier relationship management to what professional skills will be most in demand in the supply chain and procurement field to, er, prank questions from our own colleagues. You might be thinking, “But hang on! What’s all this? Can I submit a question? Is this a new feature?” Yes and yes! In case you missed it (this is peak vacation time, after all), earlier this month we launched Ask Spend Matters, where you tell us what procurement questions to investigate, and we report out the answer in the form of an article.

Blame the Supplier: A Roundup of Recent Supply Chain Scandals

Makeup for tweens is controversial enough on its own, but when asbestos is involved, national news headlines follow. ABC11 reported this week that asbestos was found to be present in the “Just Shine Shimmer Powder” sold at Justice, a national retailer of girls’ apparel. Asbestos fibers, once inhaled, remain in the lungs permanently. As Sean Fitzgerald, the director of research at the lab where the investigation was conducted, told ABC11, children “could die an untimely death in their thirties or forties because of the exposure to asbestos in this product.”