IndustryWeek Forums http://forums.industryweek.com These are the Weblogs, discussion boards and forums for IndustryWeek -- Leadership in Manufacturing en Sat, 04 Jul 2009 04:22:07 GMT vBulletin 60 http://forums.industryweek.com/IWImages/misc/rss.jpg IndustryWeek Forums http://forums.industryweek.com Only two companies to achieve growth in the IPC industry http://feeds.penton.com/~r/IWCompleteForum/~3/jHWplFwNs5k/showthread.php Fri, 03 Jul 2009 14:26:45 GMT According to the financial reports released by global industrial PC suppliers as of May 31, EVOC remains in the rank of the world's top three. In Q1 2009, most IPC companies showed a 20-30% negative growth. As one of the only two companies to achieve growth in the industry, EVOC grew by 11.48%, ranking No. 1 in growth rate.

Statistics in April and May indicated that compared with the same period of last year, most IPC companies experienced negative growth, and the whole industry is suffering from the combined effects of a general economic downturn. On the one hand, the direct impact of financial crisis on IPC industry is about increased difficulty in funding and getting loans, which has made some companies run out of cash. On the other hand, almost all the down-stream industries of IPC (including transportation, industrial automation, medical care, electric power, environmental protection, petrol chemical, banking, network security and video surveillance) are suffering from ripple effects of the crisis, and have reduced production and demands for industrial computing products.

Despite the impact of the global financial crisis upon the IPC industry, both Kontron and EVOC showed optimistic views on their current situation and future development. CEO of Kontron Ulrich Gehrmann said, “Particularly in times of crisis, cost-effective and high-performance innovative systems such as those developed by Kontron can be worthwhile investments for industry. This is because outsourcing offers benefits, can result in rapid savings in companies' unit costs, and cut working capital, thereby resulting in higher liquidity and equity ratios, which are very important factors in these times.”

The sales revenue of EVOC in the first quarter of 2009 was US$29,870,000, 11.48% up from last year’s US$26,790,000. The two-digit growth rate achieved during the crisis greatly inspires people in the industry. Ms. Amy Pan, Global Sales Director of EVOC Group said, “This achievement can be attributed to the interaction and integration of EVOC’s R&D effort and global marketing. EVOC always focuses on product innovation, and fine-tunes its R&D plans and strategy according to the market feedbacks. These two points secure EVOC’s position as the market leader in terms of product R&D and technological innovation. In addition, EVOC’s exploration in overseas market is progressing smoothly, and EVOC has established its name in Europe, North America, Middle East and South-east Asia. Increasing demands for EVOC products from some incremental markets and improvement in market conditions are the positive factors that can explain EVOC’s sales performance.” ]]> saiyo http://forums.industryweek.com/showthread.php?t=6051 http://forums.industryweek.com/showthread.php?t=6051 Supply chain risk management tips for hurricane season http://feeds.penton.com/~r/IWCompleteForum/~3/bN3uFWmcM_M/showthread.php Thu, 02 Jul 2009 18:45:28 GMT Justin Fogarty over at Supply Excellence has reminded us in this blog post (http://www.supplyexcellence.com/blog/2009/06/25/hurricane-season-are-you-and-your-suppliers-ready/) that hurricane season is again upon us. While this year’s hurricane season is forecast to be near or below average, there... Justin Fogarty over at Supply Excellence has reminded us in this blog post that hurricane season is again upon us. While this year’s hurricane season is forecast to be near or below average, there is still a 48% risk of a major storm hitting the US. Justin’s blog includes steps from Rachel Rutoski’s post which provides excellent advice for companies looking to reduce risks from natural disasters. I’ve summarized her advice here:
  • Get proactive, rather than reactive. Establish contingency plans BEFORE the event happens
  • Do the Math. Figure out what alternative transport modes / routes will cost. This will help make decisions quickly
  • Beware the Bullwhip effect. Understand the downstream implications of a disruption
  • Have a game plan for natural disasters
One thing to remember. If a natural disaster does strike, your company won’t be the only one scrambling to re-route traffic out of the affected area. Make sure your contingency plans include contracts with alternate carriers or previously defined alternate routes so that the switchover happens quickly and doesn’t get bogged down. Also, be sure to account for the extra cost …if shipping companies are near capacity or if you are making emergency route changes, you may need to pay a premium to get your goods moved.
Justin’s article focuses on the impact of a natural disaster on transportation through that zone. A more significant impact can occur if your supplier’s business is in that area and is impacted by the disaster. A National Association of Manufacturers (NAM) Survey reported that 32% of respondents said that damage caused by Hurricane Katrina in 2005 affected their ability to ship products to their customer. To mitigate this risk, companies need to understand what parts are critical (sole sourced or long lead time parts that are used in higher volume / value end items) and whether suppliers of those parts are in high risk areas. Those parts that are critical and at risk should have a contingency plan. Contingency plans could include the following;
  • holding a buffer inventory or the part at risk
  • identifying or developing alternate sources for the critical part.
  • identifying alternate parts used in an assembly
  • identifying substitute items that could be sold in place of the items that can’t be built
Similar to transportation contingencies, it’s too late to develop a plan if the event has already happened. Make sure that you identify the risks and develop contingencies now, before the disaster strikes.

What contingency plans do you have for this year’s hurricane season? Post a comment back and let us know!

John Westervled is a Product Manager for Kinaxis, provider of the on-demand RapidResponse service that empowers multi-enterprise manufacturers with the collaborative and integrated demand-supply planning, monitoring, and response capabilities. ]]> 21st Century Supply Chain Randy Littleson http://forums.industryweek.com/showthread.php?t=6041 http://forums.industryweek.com/showthread.php?t=6041 The effects of stimulus spending on the manufacturing and distribution environments http://feeds.penton.com/~r/IWCompleteForum/~3/paXF2wXXK8c/showthread.php Wed, 01 Jul 2009 14:52:36 GMT The current collapse in the US housing market and the ensuing financial crisis which lead to one of the worst recessions in the post War era, has prompted governments of all stripes to significantly increase spending. What the short and long term implications of these actions are not fully known at... The current collapse in the US housing market and the ensuing financial crisis which lead to one of the worst recessions in the post War era, has prompted governments of all stripes to significantly increase spending. What the short and long term implications of these actions are not fully known at this time, but can be extrapolated based on past events and economic theory. How these unfolding events affect manufacturing and the supply chain will have a very significant impact on the future profitability all companies involved in this space.
What we can foresee happening is the massive amount of deficit spending by countries already financing government debt will place greater demand on the public and private debt markets. The implications for long term interest rates and inflation are not good. With so much demand chasing a finite amount of financing, long term rates are bound to begin rising. Add in the inflationary effects of ‘quantitative easing’ (governments printing money to flood the financial system), and the need to raise interest rates even further to hold inflation down becomes apparent.

What does this mean for the supply chain and its contribution to a company’s health and ability to grow earnings? As interest rates rise, the cost of borrowing will rise with it. This will have a direct impact on the carrying cost of inventory, which in turn will have a direct impact on a company’s bottom line, and its ability to compensate it employees and shareholders. In order to mitigate these negative consequences, companies will be forced to reduce their carrying costs dramatically, which means reducing the levels of inventory they will be able to carry. However, in an expanding economy stimulated by government intervention, demand will begin increasing, putting companies in danger of stock outs or lost sales.
Company management must therefore strive to reduce these risks as much as possible, and in order to do so, best of breed sales & operations planning (S&OP) tools will be essential. Due to the uneven recovery anticipated, correctly reacting to and meeting supply shortages and demand fluctuations will be critical to a company’s ability to satisfy the customer and generate profits. The ability for corporate planners to leverage all the data in the companies supply chain (not just a few ERP ‘silos’) and collaborate within the entire supply chain will directly affect the operations performance of all units of the business. Add to that the significantly greater cost of transportation and longer lead times inherent in an outsourced supply chain, and the ability to plan and execute to ever more restrictive inventory guidelines while maintaining order fulfillment goals becomes even more challenging.

A good S&OP solution should include four key features :
  1. Ease of combining disparate data sources into a single unified whole
  2. The ability for multiple users located in different areas and parts of the supply chain to interact in a collaborative way
  3. The ability to simulate and determine optimal scenarios in order to arrive at the best plan possible
  4. The ability to execute on the plan once it is derived, and fine tune it to meet changing circumstances
These necessary S&OP systems cannot be implemented in a day, so the time to prepare for the coming increased supply chain turbulence is now, before your company is caught in a downward performance spiral it cannot get out of.

Martin Buckley is an Integration Consultant for Kinaxis, provider of the on-demand RapidResponse service that empowers multi-enterprise manufacturers with the collaborative and integrated demand-supply planning, monitoring, and response capabilities. ]]> 21st Century Supply Chain Randy Littleson http://forums.industryweek.com/showthread.php?t=6031 http://forums.industryweek.com/showthread.php?t=6031 Supply chain growing in popularity http://feeds.penton.com/~r/IWCompleteForum/~3/A8jMgfqrikg/showthread.php Wed, 01 Jul 2009 14:50:40 GMT There is a very interesting post at Supply Chain Management Review entitled “CFOs: Survival trumps profits, supply chain growing in popularity (http://www.scmr.com/article/CA6667712.html?nid=3935)” that highlights a number of issues related to supply chain management, the first being that supply... There is a very interesting post at Supply Chain Management Review entitled “CFOs: Survival trumps profits, supply chain growing in popularity” that highlights a number of issues related to supply chain management, the first being that supply chain management is almost always related to reducing direct costs, though I have to admit to being surprised that in the current economic climate as many as 37% of the respondents are focussed on increasing profit. While it is hardly a surprise that the majority are focussed on cost reduction, nevertheless this post illustrates a primary reason why so few companies have gone from using supply chain management as a defensive weapon (cutting costs) to an offensive weapon (revenue and margin attainment), namely the mutual lack of understanding between Finance and Supply Chain. While the authors state that “Finance departments … don’t understand supply chain management enough”, I think this is a 2-way lack of understanding.

I can count on two hands the number of times, in 20 years of working in supply chain, that the results of a supply chain plan were truly evaluated in both operational and financial terms. Similarly, I have yet to meet a CFO who truly understands the operational consequences of mandating a 5% reduction in inventory, for example, including that there will likely be customer service consequences and, therefore, revenue consequences.

The consequence of this lack of understanding is reflected in the observation that “about two-thirds of the respondents don’t yet see the strategic value in supply chain management.” Encouragingly the post goes on the state that “The solution … is integration … then the suspicion disappears.”

There is nothing better to promote integration between Finance and Supply Chain than a common set of numbers in the same tool so that the operational consequences of any changes made by Finance are visible immediately to both Finance and Operations. Similarly, all operational decisions should be evaluated in financial terms too, and made visible to Finance. All too often I see Finance working off of complex spreadsheets with models that do not incorporate any aspects of the supply chain, and supply chain planning tools that do not evaluate the supply chain in financial terms. Without these capabilities, it is very difficult to promote and sustain the level of integration necessary to achieve collaboration, not simply enforced cooperation.

Trevor Miles is the Director, Product Marketing for Kinaxis, provider of the on-demand RapidResponse service that empowers multi-enterprise manufacturers with the collaborative and integrated demand-supply planning, monitoring, and response capabilities. ]]> 21st Century Supply Chain Randy Littleson http://forums.industryweek.com/showthread.php?t=6021 http://forums.industryweek.com/showthread.php?t=6021 Help Wanted: Must Already Have Job http://feeds.penton.com/~r/IWCompleteForum/~3/RONvae-bXAM/showthread.php Tue, 30 Jun 2009 21:02:38 GMT As if being laid off wasn't enough of a burden, it turns out that many employers prefer to only interview people who already have jobs, the thinking going that if you've managed to hang onto your position this long into the recession,you must be a top performer. According to an executive recruiter interviewed by the Wall Street Journal, many companies say they "prefer to fill positions with 'passive candidates' who are working and not actively seeking a job." How's that for a Catch-22?

I guess that's good news for those of us who still have jobs -- our companies think of us as having "significant value," at least if the WSJ is to be believed.

Meanwhile, for those who are out of work right now, USA Today has put together an interactive map that highlights exactly when jobs in a number of sectors, including manufacturing, are likely to rebound in every major city. Unless you're living in Rust Belt city dependent on automotive (sorry, Flint, Mich.), the prognosticators believe that manufacturing jobs will start coming back within a year, i.e., third quarter 2010. Exactly how the unemployed will be voting in the mid-year elections of 2010 will, of course, be a cause for concern for both political parties. ]]> Chain Reactions David Blanchard http://forums.industryweek.com/showthread.php?t=6011 http://forums.industryweek.com/showthread.php?t=6011 <![CDATA[Best Practices in Tooling & Fixtures]]> http://feeds.penton.com/~r/IWCompleteForum/~3/4z9K2tIgLro/showthread.php Tue, 30 Jun 2009 15:09:09 GMT I received an inquiry that I am sharing here in the hopes that our readers may be able to offer some help. In part the request says: We are starting to work on the control of tooling and fixtures. The task is monumental since currently the tooling drawings are really not controlled well. ... I received an inquiry that I am sharing here in the hopes that our readers may be able to offer some help.

In part the request says: We are starting to work on the control of tooling and fixtures. The task is monumental since currently the tooling drawings are really not controlled well.

And the question is: Do you have best practices or procedures in the area of tooling control that we can learn from?

Any assistance you can provide is greatly appreciated. ]]> Manufacturing Talk Jill Jusko http://forums.industryweek.com/showthread.php?t=6001 http://forums.industryweek.com/showthread.php?t=6001 Nigeria + Gazprom = Manufacturing Branding Fail http://feeds.penton.com/~r/IWCompleteForum/~3/fotLLs4iMBw/showthread.php Mon, 29 Jun 2009 21:03:37 GMT The Russian energy giant Gazprom in a 2.5 billion dollar joint venture with Nigeria’s NNCP (Nigerian National Petroleum Company) just formed a firm with the ill advised name “Nigaz.” The name is apparently a conjunction of the first three letters for each of the parties involved in the transaction (“Nig” and “Gaz”) but unfortunately closely resembles an invective that has come under intense negative public scrutiny in the US for some time now.

There’s little doubt that the joint venture with the NNCP was a savvy business move for the Russian company. According to Isaac Ugbabe at examiner.com, Gazprom and the NNCP are cooperating to build refineries, power plants, and possibly a trans-Saharan pipeline between Nigeria and Europe that would increase Europe’s dependence on Russian natural gas, hence increasing Russia’s growing political power and clout in Europe.

What the Russian energy giant doesn’t have, apparently, are informed PR consultants. Or maybe they're not at all concerned about the US market. (Or maybe we just haven't seen the ads yet?)

Although it's an unfortunate linguistic coincidence, they're not the first, nor will they be the last, manufacturer to walk into a colloquial language trap -- a list by Graham Smith (excerpting from Matt Haig’s book “Brand Failures”) at Logo/Identity/Design touches on some of the more egregious examples of international “Branding Failure.

*A translation error of a Parker Pen ad ended up promising Mexican consumers that it would not "leak in your pocket and make you pregnant"
*Chevrolet couldn’t sell its Nova in South America because “no va” is translated there as “doesn’t go”
*In Brazil, "Pinto" (Ford) is slang for "small penis"
*Pepsi's "come alive with the Pepsi generation" in Taiwan ended up as “Pepsi will bring your ancestors back from the dead.”
*Kentucky Fried Chicken’s Chinese add campaign slogan “finger lickin’ good” played as “eat your fingers off”.
*Perdue Chicken’s slogan “It takes a strong man to make a tender chicken” is translated as "It takes an aroused man to make a chicken affectionate" in Spain.
*Coors' slogan “turn it loose” was perhaps the most unfortunate of all -- colloquially, it read in Spain as “suffer from diarrhea”.

There are a couple of other instances that are as hilarious as they are a stark reminder that in today's global age, money spent on quality, globally-minded PR is never a waste. ]]> MFG 2.0 Brad Kenney http://forums.industryweek.com/showthread.php?t=5971 http://forums.industryweek.com/showthread.php?t=5971 Fox News gets court OK to lie http://feeds.penton.com/~r/IWCompleteForum/~3/nVQyiRrofps/showthread.php Fri, 26 Jun 2009 20:07:21 GMT http://www.ceasespin.org/ceasespin_blog/ceasespin_blogger_files/fox_news_gets_okay_to_misinform_public.html This all fits in to the ever greater role of corporations shaping public perception to shape the political landscape in order to regulate the economy in their favor and thereby transfer... http://www.ceasespin.org/ceasespin_b...rm_public.html

This all fits in to the ever greater role of corporations shaping public perception to shape the political landscape in order to regulate the economy in their favor and thereby transfer wealth from the rest of society into their own coffers. ]]> rbrooku http://forums.industryweek.com/showthread.php?t=5941 http://forums.industryweek.com/showthread.php?t=5941 Are you change ready? http://feeds.penton.com/~r/IWCompleteForum/~3/lC4UJT2M34U/showthread.php Fri, 26 Jun 2009 10:51:39 GMT I was just reading a draft of David Oppenheim’s (a Kinaxis consultant) new white paper (we’ll announce availability and provide a link when it’s published on this blog) and there was one line that jumped off the page and caught my attention. David wrote, “*we know that change is the only constant,... I was just reading a draft of David Oppenheim’s (a Kinaxis consultant) new white paper (we’ll announce availability and provide a link when it’s published on this blog) and there was one line that jumped off the page and caught my attention. David wrote, “we know that change is the only constant, and yet our processes treat change as the exception instead of the rule.”

I think this is at the heart of many of the challenges that manufacturers face today. Think about it this way - most supply chain professionals grew up in an era where there was less global competition, less outsourcing and less volatility. Product lifecyles were shorter and customers were less demanding. These are obviously all relative statements, but when I talk to people across manufacturing industries, there seems to be broad concensus that we live in more challenging, complex and volatile times. Because of this heritage, most business processes, and the tools to support them, were designed for this type of environment. That is, they were optimized around the notion that if you built a solid plan and were good at executing that plan, you’d win.
But as David accurately points out, today more than ever, change is the only constant. Despite this reality, most organizations haven’t adapted to this new reality. Why? Because that’s the way we’ve always done things.

Ask yourself this. Does your organization think first about how to manage things when they go according to plan (which quite frankly is the easy part) or first about how to manage things when they don’t go according to plan? My experience is, as David points out, it’s usually the former. And, there’s the disconnect. Today’s environment is dominated by dealing with exceptions, yet supply chain processes are still optimized for a largely exception-free world.

Randy Littleson is a Vice President for Kinaxis, provider of the on-demand RapidResponse service that empowers multi-enterprise manufacturers with the collaborative and integrated demand-supply planning, monitoring, and response capabilities. ]]> 21st Century Supply Chain Randy Littleson http://forums.industryweek.com/showthread.php?t=5931 http://forums.industryweek.com/showthread.php?t=5931 You Can Take My 401K, But Leave My 72 Dozen Bottles Of Beer Alone http://feeds.penton.com/~r/IWCompleteForum/~3/EnJTA2MaqIQ/showthread.php Fri, 26 Jun 2009 02:51:44 GMT Saw a "sad" story at Reuters that details how the recession is affecting hardworking (and apparently hard-drinking) Canadian brewery workers at Molson. According to the story:
Molson retirees in the province of Newfoundland will see their monthly allotment of beer fall from six dozen a month to zero over the next five years.

Current workers will see their allotment drop from 72 dozen bottles a year to 52 dozen.
What other job would give you 72 dozen bottles of beer a year as part of your employee benefits program? I can't decide which is worse -- giving employees tons of free beer, or taking it away.

And this might not be the end of the story, as the unions involved "have launched grievances in Montreal and Vancouver, where the allotment is less." So, crack a cold one, and stay tuned. ]]> MFG 2.0 Brad Kenney http://forums.industryweek.com/showthread.php?t=5911 http://forums.industryweek.com/showthread.php?t=5911 <![CDATA[Big Name Execs Weigh in on Labor's Future]]> http://feeds.penton.com/~r/IWCompleteForum/~3/qKUW3wjouQs/showthread.php Thu, 25 Jun 2009 21:37:41 GMT The future of the U.S. manufacturing workforce was a popular topic for industry executives at the National Summit economic forum that took place in Detroit last week. Most of the comments were related to how academia and manufacturers need to work together to create the next generation of... The future of the U.S. manufacturing workforce was a popular topic for industry executives at the National Summit economic forum that took place in Detroit last week.

Most of the comments were related to how academia and manufacturers need to work together to create the next generation of skilled workers. Others, such as American Axle & Manufacturing CEO Richard Dauch, touched on hot-button labor relations issues.

The following are some of the workforce-related comments that top executives touched on in their speeches. (As a matter of full disclosure, I did not attend all of these speeches. Some of the comments were plucked from their speech transcripts.)

Chip McClure, chairman, CEO and president, ArvinMeritor:

"Manufacturing labor costs will always be a moving target, running from one low-cost country to the next -- whether it's Mexico, China, Vietnam or the next emerging low-labor-cost hot spot. As wages increase all over the world, along with transportation costs, our competitive position in the U.S. will improve. But manufacturing is not a sprint for cheap labor. It's a marathon that takes an increasingly sophisticated workforce and government policies to generate continued growth."

"For U.S.-based international companies, outsourcing has helped us become more competitive; reducing labor costs as well as providing a new customer base abroad. Almost uniformly, large U.S.-based multinationals report that their growth now relies on penetrating new foreign markets."

Steve Ballmer, CEO, Microsoft:

"The best guarantee of success for our young people and strengthen our economy is to make sure that they not only get a great high school education, but that they actually can finish a four-year technical or community college. That is incredibly, incredibly important for people."

Richard Dauch, Chairman and CEO, American Axle & Manufacturing:

"When it comes to labor, our leaders must remember that the secret ballot is the cornerstone of the democratic process. As leaders -- as Americans -- we must do everything within our power to defend that right. It must be protected. One person. One vote. Privately."


Keith Nosbusch, chairman and CEO, Rockwell Automation (in a press release):

"The public and private sectors need to invest in advanced technology that will lower costs, increase productivity and make U.S. manufacturing competitive globally. This investment is the best way to create enduring, higher-wage manufacturing jobs that can compete against other economies with lower costs of doing business."

"A $50 billion investment in retooling factories would create 250,00 direct manufacturing jobs in the U.S., support an additional 725,000 indirect jobs, and generate up to $120 billion in revenue resulting from increased demand for products," said Nosbusch, citing a study by the Apollo Group.

"We also need an education system that will train workers to operate these smart factories and produce engineers who develop innovative manufacturing solutions for the future. This needs to start with a better preschool to college STEM (science, technology, engineering and mathematics) talent development pipeline." ]]> Workforce In Progress Jon Katz http://forums.industryweek.com/showthread.php?t=5901 http://forums.industryweek.com/showthread.php?t=5901 The Great Comeback, Part 9: Organizational Analysis http://feeds.penton.com/~r/IWCompleteForum/~3/DLA1BgRxzuY/showthread.php Thu, 25 Jun 2009 14:21:32 GMT This key aspect in planning for The Great Comeback is like the whole ball of wax. Organizational Analysis involves a total review of all internal processes to define a company’s strengths and weaknesses, both during the recession, as well as while on the road to recovery, and on to growth and... This key aspect in planning for The Great Comeback is like the whole ball of wax. Organizational Analysis involves a total review of all internal processes to define a company’s strengths and weaknesses, both during the recession, as well as while on the road to recovery, and on to growth and prosperity.

There are several major processes within an organization that require this type of analysis that will eventually lead to a Comeback Plan. My expertise, and thus the focus herein, lies in the supply chain processes: Supply Chain Design – Buy – Make – Move – Store – Sell.

Major processes requiring review during the Organizational Analysis include:

1) Supply Chain Design: Marketing design, manufacturing design, supply design, organizational design and network design. Depending upon the scope and complexity of your organization, the time to plan organizational enhancement will vary from 1 month to 8 months, and implementation time can vary from 2 months to over 2 years.

2) Buy: Strategic sourcing, establishing joint ventures, and merger and acquisitions. Planning time: 1 to 6 months and implementation time: 1 month to 1 year.

3) Make: Manufacturing strategic master plan for facility upgrades, new existing facilities or new non-existing facilities, as well as outsourcing of manufacturing. Planning time: 2-6 months and implementation time: 4 months to 2 years.

4) Move: Domestic freight bid, global freight bid, create core carrier program, transportation transformation, outsource transportation and transform from Move-Store into more of a Flow Model via crossdocking. Planning time: 1-6 months and implementation time: 2 months to 1 year.

5) Sell: Demand planning, sales and operations planning, inventory management and reverse logistics. Planning time: 2-4 months and implementation time: 1 month to 8 months.

6) In addition, to support these processes, the related supply chain technology needs to be reviewed to include: warehouse control system upgrade/replacement, manufacturing control system upgrade/replacement, WMS, TMS, supply chain visibility, demand planning, forecasting, MES and ERP. Planning time: 1-4 months and implementation time: 2 months to 2 years.

The Organizational Analysis should answer questions such as:

Costs: Are my supply chain costs competitive?

Operations: How do my operating characteristics compare to my peers (e.g., freight terms, modes, contract relationships, etc.)? What operating characteristics are found most often in the best performing supply chains?

Performance Measurement: How do my peers measure supply chain performance? Where do they stand in developing measurement processes? What are their goals? Where do they stand in achieving those goals?

Organization: How does my organization structure compare to my peers? Are some organization structures more effective than others? Where is control for key functions vested?

Collaboration: How much real collaboration is there today with suppliers and LSPs? What is being done on performance scorecards, incentive programs and innovative contractual relationships?

Outsourcing: Where and why do my peers use outsourcing? Does outsourcing result in lower overall costs and better service?

Technology: What technologies are my peers using in their supply chain operations? What is working and what is not? Is there a correlation between the use of technology and the supply chain effectiveness? What are the near-term priorities in technology?

Value: How do my peers demonstrate the contribution their operation is making toward overall corporate goals?
Security: What are my peers doing on security? Is there something I should be doing that I am not?

Supply Chain Network: How does the design of my inbound supply chain network compare to my peers? Is my network more or less efficient? More or less reliable?

Certainly, to do this level of analysis well, a formal process of Benchmarking and Best Practices is highly recommended. The process supported by Tompkins Associates is the Supply Chain Consortium: http://www.tompkinsinc.com/consortium/

The application of the Benchmarking and Best Practices resources of the Supply Chain Consortium to your Organizational Analysis will:

Allow you to measure your performance against best-in-class companies and identify improvement opportunities.

Help you understand how your operating practices compare to your competition and impact your ability to gain competitive advantage.

Broaden the thinking of your management team to include issues beyond their immediate responsibilities.

Provide breakthrough insights by looking across performance measures, processes, roles, responsibilities, goals, vendor and customer relationships and infrastructure requirements.

Define scorecards with key performance indicators, data collection processes, goals and reporting formats to track supplier, carrier and third-party service provider performance.

Help prioritize improvement opportunities and build consensus behind the opportunities that are most important for you to address while on the road to recovery and onto growth and prosperity.

The conclusions to be reached from the Benchmarking and Best Practices review will be a list of potential process upgrades.

In addition to the Benchmarking and Best Practices potential process upgrades, leadership needs to encourage the organization to proactively develop innovations that will facilitate the organization’s comeback. These innovations can then be added to the list of potential process upgrades.

For each potential process upgrade, a cost/benefit analysis and a determination of lead time will need to be established. The output of the Organizational Analysis includes tabulation of the scope, benefits, implementation cost and lead time, and projected savings for each process upgrade.

This tabulation will feed the fifth and final step of developing your Comeback Plan to be presented in the next blog post. You should be well on your way to your Great Comeback, but keep reading.


Jim
Tompkins Associates
 ]]> Gaining a Supply Chain Edge Jim Tompkins http://forums.industryweek.com/showthread.php?t=5891 http://forums.industryweek.com/showthread.php?t=5891 In praise of the local hero http://feeds.penton.com/~r/IWCompleteForum/~3/IDWOaZb2e1Q/showthread.php Thu, 25 Jun 2009 13:00:18 GMT In his white paper entitled Four Steps to Take Now to Prepare for the Recovery: Strategic Supply Chain Management Strategies to Maximize Operations Performance Over the Long-Term (https://www.kinaxis.com/supply-chain-solutions-company/perspectives.cfm?formID=download144), John Sicard talked about... In his white paper entitled Four Steps to Take Now to Prepare for the Recovery: Strategic Supply Chain Management Strategies to Maximize Operations Performance Over the Long-Term, John Sicard talked about the need to empower people to collaborate. He quotes Stephen Haeckel, ‘Adaptive Enterprise’; “Human skill in recognizing patterns and thinking creatively about unanticipated challenges will continue to mark the difference between successful firms and unsuccessful ones.”

I couldn’t agree more. In virtually every one of my consulting engagements, whether in electronics or semiconductor manufacturing, aerospace, industrial equipment, or most recently, pharmaceuticals, I’ve found one (and sometimes more) key individuals in the supply chain planning function who really understand the business, think creatively, and see opportunities for improvement. These are the Local Heroes in the organization. As well as understanding the products and customers, they seem to know everyone, and they have a pretty clear picture of whom to go to for help with any issue. They’re usually the ones entrusted with the task of creating that monster spreadsheet that the head of Operations just can’t live without. You know the one: that report that’s usually named after the VP himself or has some other catchy name— everyone’s go-to report. Just look at the detail in one of these, as well as the number of exceptions flagged, and you’ll begin to understand the number of complex factors they’re weighing as they try to pin down the supply plan: ever-changing demand, supply disruption issues, increasing costs, and supplier problems.

These key individuals will never be replaced by planning systems. The real challenge is to make them more efficient at what they already do well. How do we do that? What’s really needed?
First of all, I think they need to be spared the task of assembling all of the raw data on the current situation. How often is a creative idea shot down now because someone points to a single incorrect number manually entered on a spreadsheet, and assumes that all conclusions are therefore suspect? Everyone needs to see the same base numbers and have confidence that they’re right. This has to be easy.

And I think they need visibility of the whole supply chain in this raw data, not just their own local plant. Outsourcing is so very prevalent now, that it’s a given that data must be shared with all partners.

Then they need tools to help them document their ideas for change in a structured way. The ability to simulate various scenarios so that they can share probable impacts with everyone involved–whether internal or external to their own organization—is critical. One of my customers broadly categorizes these as “What-Is” and “What-If” simulations. He uses the term “What-Is” for everyday events that need analysis on a regular basis. What do we do when that demand comes in later than forecasted? What happens when we move those two orders out to provide capacity for this new high runner? The list goes on and on. But then there are the “What-if” questions that are perhaps longer-term and more strategic in nature; they must also be analyzed proactively to have potential strategies in place. What if this supplier goes out of business? What if we close these three plants and outsource some of this production? What if we add a new production line?

And lastly I think they need the tools to share the results of these simulations, to let others know what their assumptions are, what alternatives are being considered, how the alternatives are being evaluated.

I’m sure all you Local Heroes can relate to some of these issues. Your role as front-line planners is not a simple one. I’d love to hear more about what kinds of systems support you need to help you do your job better. What capabilities would bring you the most benefit? What gaps should we be working to fill?

Jane Marshall is a Business Consultant for Kinaxis, provider of the on-demand RapidResponse service that empowers multi-enterprise manufacturers with the collaborative and integrated demand-supply planning, monitoring, and response capabilities. ]]> 21st Century Supply Chain Randy Littleson http://forums.industryweek.com/showthread.php?t=5881 http://forums.industryweek.com/showthread.php?t=5881 Sourcing in China? Might not be such a good idea. http://feeds.penton.com/~r/IWCompleteForum/~3/3lrNVxVPhzg/showthread.php Wed, 24 Jun 2009 17:41:09 GMT AMR Research recently published an article that about a study they have been working on which indicates that companies are starting to look near shore when making sourcing decisions. In the study, risk was one of the key drivers for this trend. Companies surveyed identified the following risks in dealing with China.
  • Intellectual property infringement
  • Product quality
  • Regulatory compliance
  • Supplier Failure
  • Commodity price volatility
The article goes on to point out that many companies are planning to increase on shoring activity (an interesting shift from a few years ago!).

Supply chain risk isn’t the only issue driving this trend. Over at the IBF Blog, Tom Wallace, in a recent post, discussed a Business Week article that identified that the China price advantage has eroded from 22% to 5% cheaper at the port of entry. This is driven by the increase in prices China charges for their goods and increasing transportation costs. As Tom points out, higher risks in addition to the reduced savings makes it difficult to rationalize the other costs of doing business in China;
  • Longer, more variable lead times (which drive the need for higher inventories)
  • Quality concerns
  • More complex engineering change logistics
In addition to Tom’s comments, what we’ve seen is that visibility and control over the supply chain can be a challenge and communication can be difficult due to language barriers. And let’s not forget the “green factor”. Moving goods around the globe simply isn’t environmentally friendly. Also, China’s record on environmental issues isn’t exactly stellar either.

I have to admit, as an “old manufacturing guy”, I would be happy to see the on shoring trend continue. While this may come with a slightly higher cost for our gadgets and clothes, I think it’s better for us, better for the environment and maybe even better for those living in China.
What do you think? Do you currently outsource to China? Have you been reviewing your outsourcing strategy?

John Westerveld is a Product Manager for Kinaxis, provider of the on-demand RapidResponse service that empowers multi-enterprise manufacturers with the collaborative and integrated demand-supply planning, monitoring, and response capabilities. ]]> 21st Century Supply Chain Randy Littleson http://forums.industryweek.com/showthread.php?t=5871 http://forums.industryweek.com/showthread.php?t=5871 China Runs Out of Things to Issues Commemerative Coins About http://feeds.penton.com/~r/IWCompleteForum/~3/nJewbj8uMaA/showthread.php Wed, 24 Jun 2009 02:16:24 GMT China issues commemorative coins to mark issuance of 1st commemorative coin 30 years ago

http://english.people.com.cn/90001/9...4/6683803.html

OK, they can't figure out something else to honor? ]]> Non-manufacturing Topics Frank Chloupek http://forums.industryweek.com/showthread.php?t=5861 http://forums.industryweek.com/showthread.php?t=5861