Wednesday, February 29, 2012
Tuesday, February 28, 2012
These trends are
1. Demand Planning:
Companies have shifted their focus from plant level production to demand level production. They now have a more customer focused mindset. This is also includes having all stakeholders on board such as marketing, sales and finance and develop a consensus towards a single Demand plan. Demand planning also has a positive impact on new product introductions, inventory planning and management, customer service, supply chain efficiency and sourcing strategies. Dell's just in time model is purely demand focused and creates supply chain efficiency in terms of zero inventory for them.
Some of the questions answered nowadays by companies designing a globalized supply chain network are
- Where should facilities be located?
Many companies such as Apple have manufacturing facilities in China to exploit the cost efficiencies in that region. Companies want to locate their manufacturing facilities in places that gives them a cost advantage over their competitors.
- How many facilities should I have and what capabilities should they have?
- What kind of capacity should they have?
- What product and services should they handle?
- Which contract packers or manufacturers should I use?
3. Increased Competition and Price Pressures
With continued commoditization of products companies, are looking for better ways to distinguish themselves in the market. Through supply chain redesign and use of technology, companies are benefiting from significant cost improvements. They not only want to remain cost competitive, but also provide significant value added services to their high end sophisticated customers.
Cost improvements around inventory management, logistics operations, material management and manufacturing costs, including raw material and component acquisition can be found with:
- Sales and operations planning
- Transportation/distribution management
- Improved product lifecycle management
- Improved strategic sourcing and procurement
Suppliers differentiate themselves by providing value added services and capabilities to their customers. These include
- Vendor Managed Inventory
- Labeling and packaging
- Drop shipping
Companies have realized that outsourcing parts of supply chain to other countries can give them a competitive edge. However in recent times, as labour costs in developing countries have increased consistently, the increase in transport costs are eroding that competitive advantage. There could be a trend to relocate manufacturing facilities back onshore to reduce transportation costs and incur significant productivity gains. Most of Apple's IPhone manufacturing is handled in Foxconn facilities in China. As labour unions are getting stronger there, workers are demanding better living conditions and salary. This is driving up the labour costs and puts significant pressures on the margins of Apple. Its same for other companies also that have their suppliers and manufacturers in China.
The optimally outsourced supply chain, either in its entirety or just a component,
relies heavily on:
- Superior supply chain network design
- Inclusion of that outsource partner in the information chain.
- Establishment of control mechanisms to proactively monitor the various
components of the supply chain
- Information systems to connect and coordinate the supply chain as seamlessly
5. Shortened and More Complex Product Life Cycles
In today's world, the product lifecycles has decreased. Companies are bringing new products at a faster rate into the market. There is pressure to develop innovative products and bring them to market more rapidly with minimizing cannibalization of existing products, which are still in high demand. In order to meet the needs of both customers and consumers, companies need more efficient product lifecycle management processes. This includes heavy emphasis on managing new product introduction, product discontinuation, design for manufacturability and leveraging across their entire product and infrastructure characteristics.
Technology helps companies design products that can share common operations, components or materials with other products, thereby reducing risks of obsolescence write offs, increasing cost leverage on the purchase of new materials and ensuring that infrastructure investments are optimally utilized. Additionally, getting this right would significantly improve their time to market.
6. Collaboration between Stakeholders in the Extended Supply Chain
The ultimate goal of collaboration is to increase visibility throughout the value chain in an effort to make better management decisions and to ultimately decrease value chain costs. Companies that expand the usage of Sales and Operations Planning have greater visibility across their own enteprise and respective value chain, gain the agility necessary to improve Product Lifecycle Management (PLM) process.
Another example of collaboration is the use of RFID Tags. RFID helps chain members to gain visibility into critical information as products flow through the value chain.
The main intention is to reduce overall logistics costs as products move through the supply chain to fulfill safe stock levels and ultimately consumer demand.
Enterprise Resource Planning Tools and SCM solutions have addressed the needs of manufacturing and distribution companies in areas such as
- Network and Inventory Optimization
- Product Lifecycle Management
- Sales and Operations Planning
- Manufacturing Optimization
- Logistics Optimization
- Business Intelligence
These technologies have helped enable the supply chain members to innovate, drive cost reductions improve service and meet customer expectations better than ever.
- Top Management actively supporting the initiative
- Top Management provides the right people to do the right job
- Clear Company Policy
- Communicate the needs of the organization
- Success of the implementation to be assigned as a Key Performance Indicators of the staff
- HR must support with employee development master plan and career path for employees
- Good budget support
- Effective communication with employees
- Project team provides continuous feedback to top management on the status, progress and areas of concern of the implementation
- Effective training on role and skill
- Providing detailed manuals to staff
- Conducting reviews post the implementation
- Involvement of employees in the change process
JC Penny Failed in F-Commerce
We all know that JC Penny used E-Commerce to turn its sale around. With Facebook ‘s penetration growing bigger and bigger, E-Commerce consultants were predicting social media storefronts would be selling $30 billion worth of products by 2015, with Facebook driving the majority of this business. There was talk in some circles that Facebook might even have the legs to threaten Amazon’s domination as an online retailer. This expected explosion in Facebook driven e-commerce even spawned its own term: F-commerce.
This lead us to late 2010, when JC Penny tried get ahead of the social Networking / ecommerce game by announcing that its full catalog will be now available on Facebook. It sounded like a good idea, Facebook shoppers would have a full range of shopping options with the new service, including the ability add and/or remove items from a shopping cart, as well as checkout, pay with credit cards, and tailor their shipping addresses and information. 
Fast forward to a year later, Business Week is reporting that F-commerce appears to have failed. Retailers GameStop, J.C. Penney, Gap Inc. and Nordstrom have all shuttered their Facebook stores.
Why did F-Commerce fail? As it turns out, Facebook is a place where people hang out online with their friends. They may peruse ads and take advantage of deals, but they don’t log onto Facebook to go shopping. When retailers already have their own retail websites, there’s little incentive for customers to shop on Facebook instead. For the retailers, building and maintaining the second online storefront on Facebook meant additional costs with no apparent gain in customers. As Forrester Research analyst Sucharita Mulpru points out in a Bloomberg interview, “it was like trying to sell stuff to people while they’re hanging out with their friends at the bar.”
For retailers, the lesson seems to be that social media sites, including Facebook, remain valuable advertising and promotional tools. But Facebook is not at the stage of being a virtual mall. As its IPO approaches and potential investors wonder how Mark Zuckerberg plans to monetize his customers to help justify a potential $100 billion valuation, strike F-commerce off the revenue list. At least for now.
As F-Commerce has failed, I couldn’t help but wonder, what would be their next step in winning in the e-commerce game?
 "When Big Retailers Don Like Facebook." InvestorPlace. Web. 28 Feb. 2012.
 "JCPenney Turns Its Sales Around through E-Commerce." - MarketingVOX. Web. 28 Feb. 2012.
 "E-commerce News." E-commerce News. Web. 28 Feb. 2012.
1. Quick processing of information.
2. Better customer service.
3. Reduced paper work.
4. Increased productivity.
5. Improved tracing and expediting.
6. Cost efficiency.
7. Competitive advantage.
8. Improved billing.