“We have seen that disruptions to supply chains caused by natural disasters — earthquakes, tsunamis and volcanic eruptions — and from criminal and terrorist networks seeking to exploit the system or use it as a means of attack can adversely impact global economic growth and productivity,” Obama said in a letter dated Jan. 23 and released by the White House today.

“As a nation, we must address the challenges posed by these threats and strengthen our national and international policies accordingly.” See Bloomberg for full story

> iTunes has revolutionized the way we buy and consume music
> Amazon has reinvented the way we read books
> Groupon have inject hysteria into the process of bargain hunting on the Web.
> Go to www.reebok.com/Customize , www.nike.com/iD, or www.miadidas.com, to design a pair of sneakers.
> Shirts My Way asks users to submit their exact body measurements for a shirt tailored to fit.
> MixMyGranola lets you choose all the fixings that go into your granola mix.
> Chocri lets you create your own chocolate bar.
> Heinz will let you add custom labels to ketchup bottles.
> Personalized M&Ms are now available with your face, or a company logo on them.
> SAP has even found an orchard that lets you customize apples (see picture)

So, how will social networking affect businesses and supply chains? We are seeing a lot of marketing to end consumers, and thus new channels to drive demand, but how can we improve our supply processes? Can we leverage social networks to drive benefits across our end-to-end supply chain processes?

Enter the social and mobile network

With an estimated 1.2bn people (20 per cent of the world’s population) on social networks, we are at a point where social software capabilities need to be prevalent throughout enterprise systems. And increasingly, we are accessing this social network through mobile devices.

In 2010, the installed base of mobile PCs and smart phones exceeded that of desktop PCs and about 20m tablet devices (e.g. iPads, ) were sold. By 2016 this number is estimated to rise to 900 million, or one for every eight people on eartth.

Is your supply network ready for the Social Network?

At the recent CSCMP Annual Global Conference there was a session on Social Media in Supply Chain Management where the question was posed “Is Social Media in Supply Chain Management a Waste of Time?” The moderator, Adrian Gonzalez wrote a great summary of the event in his logistics viewpoint article.

As the examples above show, to this point social media has been used mostly by business-to-consumer (B2C) to enable companies to promote their brands and market their products to consumers. From a business perspective, the “early adopters” are young professionals who already use these tools (such as facebook, twitter, LinkedIn and blogs) in their personal lives, and the focus has been largely on enhancing external communication, awareness and thought leadership.

Now we are starting to see leaders leveraging social networks for more business-to-business (B2B) processes. Collaborating with customers, suppliers, outsourced manufacturers, LSP’s and other partners. www.socialtimes.com reported that the “Use of social networks by the Fortune 500 companies has seen explosive growth in 2010, with 83% of the companies using at least one of the social media sites.”

A recent report by Buddy Media and Booz & Company identified Facebook (with 850 million users, it shouldn’t surprise anyone that 94% of respondents regard it #1), Twitter(77%) and YouTube (42%) as the top three preferred social media platforms for brands to utilize. This information does not mean that the functionality of other social media platforms, including blogs, and enterprise systems like Moxie Software and Yammer are not valuable to enhance external communication and collaboration (See 11 Predictions for B2B Social Media in 2011).

SAP recently announced the acquisition of Crossgate to instantly connect SAP customers and their business partners to networking at the enterprise level. Crossgate helps companies connect with any trading partner by joining the network once and linking with prebuilt business partner profiles. This is a full-service alternative, which eliminates the need for costly point-to-point integration. It lowers costs and enables further partner participation in B2B initiatives.

There is also a huge opportunity to improve internal communication and collaboration between co-workers and across functional groups and departments. We at SAP leverage SAP StreamWork to bring together people from different locations, regions and departments to “get everyone on the same page”. We use this collaboration tool to share documents and data, and collaborate with a structured approach with tools for brainstorming and decision-making.

It is not a case of IF social networks will have an effect on your business and associated supply networks. It is a case of WHEN.

As one of the executives on the CSCMP Panel commented “Five years from now we won’t be talking about social media in supply chain management–it will just be supply chain management”.

The advent of social networks is offering a whole new wave of opportunities. As ever, it’s what you do with these opportunities and how you manage them that will make the difference.

Richard Howells

Originally posted on Forbes.com

Food safety encompasses the origin, processing and packaging of food so that consumers don’t get sick from the food they buy. Increased food production, growing market demand and faster delivery are just three of the many challenges companies face in trying to keep food safe all along the food supply chain.

RFID increasingly provides the most effective means to solve these challenges and to ensure compliance with recently enacted legislation designed to protect consumers.

The MIT Enterprise Forum is bringing together key experts for a panel discussion of the major issues, technologies, and business cases surrounding the RFID-enabled food chain. Come and hear for yourself how RFID is making food safer and food-borne illness easier to trace.

Moderator: John Greaves, President and CEO, SSI

John Greaves has been actively involved in AIDC (Automatic Identification and Data Capture) including RFID for many years. His pioneering work in the area of global logistics, inventory management and the returnable transport Items sector with both active and passive RFID has led to the significant adoptions occurring in supply chains, health care and security.??He was the founding chair of the US RFID standards group, led the European Spectrum Initiative, was the leader of the GTAG program for EAN.UCC, and developed — among many significant RFID implementations worldwide — the one-tag-per-pallet UHF solution with CHEP.

Click here to register for this event!

On September 12, 2011, staff proposed additional modifications to the regulatory text in the Second Notice of Public Availability of Modified Text and Additional Documents and Information (Second 15-Day Change Notice). These modifications addressed comments ARB staff received in the first 15-day Change Notice and are the result of additional staff analysis and stakeholder engagement. The public comment period for the 2nd 15-Day Change Notice ended September 27, 2011.

On October 20, 2011, the Board adopted the final cap-and-trade regulation. As part of finalizing the regulation, the Board considered the related environmental analysis (i.e. functional equivalent document) and written responses to environmental comments. The Board also approved the adaptive management plan. The final regulation must be filed with the California Office of Administrative Law (OAL) by October 28, 2011.

The final rulemaking package will include the Final Statement of Reasons (FSOR). In the FSOR, staff will respond to comments received on the record during the initial 45-day comment period, comments presented at the December 16, 2010 Board hearing both orally and in writing, comments received during the first 15-day Change Notice and the second 15-day Change Notice. The Administrative Procedure Act only requires that staff respond to changes that are noticed. Once final, those documents will be posted on the rulemaking web page.”

See the California Environmental Protection Agency: Air Resources Board website for more details and resources.

As with every year, there are opportunities to learn new things and meet new people. Here’s a link to my recent tweetstream for shoutouts to some of the great people I met this year!

Held again in Philadelphia, this year’s event brought back memories of 2004, the year the old CLM: Council of Logistics Management became today’s CSCMP: Council of Supply Chain Management Professionals!

New of course, in it’s second year, is The CSCMP Supply Chain of the Future exhibition. And I’m pleased to report I did come across the retail & consumer products supply chain of the future but NOT at the exhibition (more on this later)

Those who know me are aware I’m active on Twitter both as @JeffAshcroft and @SupplyChainNtwk. Last year in San Diego we held the very first SCN Tweetup at CSCMP to which 3 people came. Happy to report this year we had a 100% increase in attendees and many, many more tweeting under the #CSCMP and #CSCMP2011 hashtags.

For the first time some social content was also included on Wednesday with @TerriGriffith (also presenting at our CCE2011 event in two weeks) and Adrian Gonsalvez sharing their insights. I am fascinated by the coming potential of social networking for supply chain improvement. Since 2009 I have been writing and presenting on the same, in fact Social is one of The Seven S’s of Supply Chain Management which highlights seven key trends emerging to support future state SCM.

So where did I see the Retail & Consumer Products Supply Chain of the Future you may be wondering? Well it was in the first and best session I attended this year including Del Monte, Ahold USA and a name you may not be familiar with yet, ES3!

In 1995 I lead a team which created a visionary company called Crosslink to deliver on the Efficient Replenishment benefits of ECR. Key to this success was very tightly synchronized multi-vendor product and data flows creating significant inbound transport & process savings and service improvements.

Suffice it to say I was more than pleased, and very excited, to hear what Ahold, Del Monte and ES3 have now created in York Pennsylvania. Based on complete product data synchronization this highly automated 110 foot high facility is a shared Supplier / Retailer storage and consolidation facility. On the outbound side the system automatically creates fully cubed mixed vendor and retailer owned goods to be shipped direct to store.

This facility eliminates the need for a retailer Distribution Center and savings have been pegged at 54 cents a case! Not chump change and funnily enough quite close to the projected 58 cents projected savings for a similar network called NonStop Logistics. NonStop was a consortium of major 3PL and Transport firms which proposed 29 similar facilities across the US in the 1990?s but never got off the ground.

It seems the powers that be for the CSCMP Supply Chain Innovation Award tend to agree with me. Ahold USA, Del Monte and ES3 were named as this year’s recipients and as you can see deservedly so! Not only does such a shared supply chain create savings and service improvements, it also represents the most sustainable supply chain model.

In my first Constellation Research report The Search for Synergy in Supply Chains I breakdown the component Types, Indicators and Facilitators of supply chain synergy. Part Two of this report is in process now including specific case studies such as ES3 demonstrating real world implementations validating these major synergy savings opportunities. These benefits are still on the table and available to those ready to join The Supply Chain Synergy Revolution!

See you at next year’s CSCMP in Atlanta Georgia where I have already proposed to chair a track called The Social Supply Chain!

Please ping me if you have any use cases for social networking in supply chain to share. Likewise if you have developed any socially enabled supply chain solutions please bring them to my attention. Until next year’s CSCMP and feel free to follow and reach out to me at anytime through @JeffAshcroft or @SupplyChainNtwk

Jeff Ashcroft

But so what? It’s just a little empty space, right?

Then you come across a pallet with two cases on it. One where there should be 30. Then it matters a little more. But what other options are there? You have to build your rack for the highest possible product height? Otherwise you have products you can’t accommodate.

Well, what if the height of the products on the pallet (or tray or whatever your load unit) is what determines where the bottom of the next level begins? We call this Dynamic Storage.

In Dynamic Storage your load unit is supported by load arms that are not constrained by the height of product that can be stored in an opening. These load arms extend a short way from the rack upright. Because there is not horizontal fixed beam across the face of the rack, you can use the load arms you need to place your products, providing the densest storage possible.

There are a variety of advantages for your distribution center with Dynamic Storage. The first and most obvious is that you save money by reducing your foot print. Without all the wasted space and standard dedicated pick faces for every load unit you optimize your storage. Dynamic storage helps you gain a 20% improvement in storage utilization.

In addition, to the space savings from having flexible storage areas there is also the advantage of no lost cube from fixed beam heights found in standard pallet rack.

You also have added flexibility. If packaging should change for an existing product in your distribution center, you can accommodate it. Even if your business changes, with Dynamic Storage your system can accommodate your new products. Your rack height change is as easy as taking one group of products out and putting them somewhere they fit better.

Interested in learning more about how Dynamic storage can help your company save money and improve storage?

Travis Baker

Contact me to learn more and discuss.

Take for example the BRIC nations and the impact this region has across the global economy. China surpassed Japan in 2010 as the world’s second largest economy, and the IMF predict it could exceed the U.S. by 2016. In fact, all of the BRIC countries are now in the top 10 economies, with Brazil at 9, Russia at 6, India at 4 and China 2nd. And all are predicted to move up the rankings by 2020.

As a result, more companies are investing heavily in countries like China and Brazil. Secondary markets like Vietnam and Turkey are also getting more attention. But these “emerging markets” are no longer dependable “low cost producers” anymore. This past summer in China, for example, labor disputes—and a spate of worker suicides—contributed to overnight wage increases of 20 percent or more in some Chinese cities. Bangladesh, Cambodia, and Vietnam experienced similar wage-related strikes and walkouts.

This increased cost of supply, accompanied by increased risk of supply means logistics costs and transportation delays from these far-flung regions is causing companies to re-examine their supply chains. There are signs of many companies questioning their off-shoring decision and consider near shoring or pulling back some or all production closer to home.

Rising incomes in developing countries also make them extremely desirable markets – and not just as manufacturing hubs. New strategies and tactics must be employed to efficiently serve these markets, whether with goods and services within the country or through global sourcing and logistics.

For example, Proctor & Gamble has taken near-sourcing to heart, stating that it will spend $1 billion in China over the next five years by opening a $70 million Beijing Innovation Center to develop products specifically for the Chinese market.

And these new routes to market must be rationalized with existing structures and cost pressures. In Brazil, for example, Nestlé is experimenting with the use of supermarket barges to sell directly to low-income customers along two tributaries of the Amazon River.
How technology can help

As competition increases, supply networks become more global and more organizations turn to outsourcing, whereby networked business environments are becoming the norm. To improve performance, most businesses are strategically partnering with suppliers and other supply chain participants to collaborate and share information.

This partnering can help bring products to market quicker, reduce production and logistics costs, drive market share, and increase sales, while maximizing ROI. But to enjoy these benefits, you’ll need to ensure you can support service levels and KPIs in a much more complex, networked environment. Robust, collaborative software functionality and enhanced supply chain visibility is necessary in order to develop and maintain industry coalitions that lead to new ways to drive more value to your customers.

Let’s look at some examples…

Collaborating with Contract Manufacturers – Conair Corporation develops, manufactures, and markets health and beauty products and kitchen and other electronic appliances. The company sources the majority of its products from contract manufacturers in the Far East. By implementing the SAP Supply Network Collaboration application, Conair automated work order collaboration, gained better supply chain visibility, and reduced operating costs through increased efficiency.

Collaborating with Suppliers – Lockheed Martin Aeronautics Company is the business area at Lockheed Martin Corporation focused solely on building military aircraft. The success of its newly awarded contract to build the F-35 Joint Strike Fighter for the U.S. Department of Defense, and the future success of its vast aircraft portfolio, hinged upon its ability to integrate its programs and effectively collaborate with a wide swath of global partners. Suppliers from all corners of the world had to exchange information with Lockheed Martin’s buyers and logistics managers efficiently and quickly.

As a final bit of perspective, the famous people below made collaboration their battle cry. Will you make it yours?

“It is the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed.” – Charles Darwin

”Alone we can do so little; together we can do so much.” – Helen Keller

“If everyone is moving forward together, then success takes care of itself.” – Henry Ford

”It takes two to speak the truth — one to speak, and another to hear.” – Henry David Thoreau

”If you have an apple and I have an apple and we exchange these apples then you and I will still each have one apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.” – George Bernard Shaw

Richard Howells

Editors Note: We’re pleased to introduce Richard Howells as one of our SCN Bloggers and we have now added him to our “Who Are the SCN Bloggers” and look forward to his ongoing contributions to the Supply Chain Network! Cheers! JA

Unfortunately since that time adoption, implementation and widespread use of these technologies and standards have not followed as quickly as many would have liked and in many industries there is a significant level of frustration with this inertia and lack of solid implementation progress.

The obvious question then becomes why is this happening, or not happening depending on your point of view? The answer to this is not simple, but in my mind it is a combination of complexity, high cost, capabilities and control that has been hampering this growth and widespread standards implementation.

The secret for setting these SCM standards free is to develop a model which addresses all four of the above negative forces resulting in a business environment which will support the rapid and widespread growth of these new SCM standards and technologies. Let’s review these negative forces and discuss some potential solutions and approaches to counteracting them to foster adoption and growth.

Cutting Through Complexity

Although the myriad details behind the unified application of these technologies and standards is somewhat complex, there is the potential of developing and delivering simplified education programs to educate non-technical business managers and leaders on the integrated vision and joint use of these technologies and standards.

By educating and mobilizing these mid and senior level individuals to drive the investment and commitment of the firm and leaving the complex technical details to those best equipped to deal with them, progress can then be made. Getting bogged down in an industry based on lack of vision, understanding can be easy to do in such cases but by simplifying and focussing on results this complexity can be tamed.

High Costs

Many of those personally committed and passionate about implementing these SCM technologies and standards don’t understand why the associated program memberships, registration numbers and onboarding/consulting fees need to be so high. Even more disconcerting for these individuals and their firms is paying these high fees for in some cases up to seven years and still not having proportionate success to show for it.

For the new SCM standards and related technologies such as RFID and Electronic Catalogues (GDSN) to takeoff requires critical mass widespread adoption, acceptance and proper use within an industry vertical. And although the pioneering companies and individuals in these industries are willing to pay high costs to get these initiatives started, the majority of companies will not or in some cases cannot allocate exhorbitant amounts to such endeavours.

In many ways, these SCM standards and technologies are like the first VCRS, they started out very complicated and expensive, but market adoption and sales exploded once the units were simplified and the cost came down.

Proceed to page two

Join supply chain management professionals from around the world in Barcelona to discover the key financial principles that influence and shape your supply chain. You’ll also learn new strategies for entering emerging markets, the role that business culture plays in forging collaborative relationships with suppliers and customers, and how information technology drives supply chain efficiency.

Mastering financial best practices and understanding how they impact your organization’s supply chain—and the ability to use them to your company’s advantage—will be the critical skill sets you will need to manage today’s unprecedented business challenges.

Keynote Speaker

Peter R. Williams, Vice President, Product Supply, Central and Eastern Europe, the Middle East and Africa (CEEMEA), Procter & Gamble

How to Win in Emerging Markets through Effective Supply Chain Management

Drawing upon his company’s experience in markets in Eastern Europe, the Middle East, and Africa, Peter Williams will talk about how we can make the difference between winning and losing through our approach to supply chain management. The scope of his presentation will include managing inbound flows, building local supply networks, and working in partnership with distributors and/or wholesalers. More details and registration information from CSCMP

In the first post, we looked at using spend analysis to gain visibility across enterprise-wide spend as paramount to identifying the opportunities to reduce costs and improve service.

Now we’ll look at the next regimen in the cure: analysis. Armed with the visibility into where the opportunities lie, you can move to using analysis to prioritize needs and execute on a clear plan.

Analysis requires more than just number crunching. To make the most of the information captured requires a mix of content, technology and skills, including:

Data analysis: fully automated spend analysis solutions can help you capture

• Spend aggregation
• Internal price benchmarking
• Variance analysis
• Price trend analysis

Category management: a top-down view that helps you

• Understand all the categories that make up enterprise spend
• Define which categories are critical and what are the best practices for managing category sourcing across the enterprise
• Standardize requirements and processes for managing categories

Supply market expertise: bring the outside in to help:

• Navigate business volatility, complex trading relationships and supplier performance degradation with broader market insight and expertise
• Get a head start on where you can push on requirements and SLAs by measuring supplier performance against market benchmarks

Analysis gives you what you need to make choices, pull the right levers and consistently improve the return on your supply strategies.

In our next installment, we’ll look at process as the way to streamline the execution of the strategy, allowing you to do more – quickly and effectively, even with fewer resources.

Paul Martyn

Want to learn more about how to avoid procurement malpractice? Check out the spend analysis white paper from industry expert Andrew Bartolini and BravoSolution here.