Hey, I Outsourced My IT Needs, and I Didn't Save a Dime
Outsourcing may be commonplace, but it continues to confound IT executives' expectations. Take the common myth that companies outsource to save money. Not only is this not true in half the cases, but a recent survey shows that most companies aren't saving money by outsourcing.
Source: CIO Insight, http://www.cioinsight.com
Your Supply Chain Simply Not Designed with Risk in Mind
Companies are recognizing the severity of danger facing them by not addressing supply chain risk. For instance, more than two-thirds of the companies surveyed by Accenture said they had experienced a supply chain disruption from which it took more than one week to recover. Furthermore, the study revealed that 73 percent of the executives surveyed had a major disruption in the past five years. Of those, 36 percent took more than one month to recover.
Modern supply chains are susceptible to such disruption for two reasons: supply chains are not designed with risk in mind, and modern planning and scheduling are not robust enough to operate under conditions significantly different from those for which they are planned.
Why does it take companies so long to recover? Why are so many companies susceptible to disruption? Are sophisticated advanced planning and optimization systems useful?
The goal of MRP and ERP systems has always been to reduce inventory, improve customer service, and reduce cost by increasing the utilization of expensive equipment and labor. Unfortunately, these processes do not explicitly consider risk and have ignored key facts regarding the systems they try to control.
Source: CRM Buyer, http://crmbuyer.com
End Users Targets Now of RFID Patent Infringement Suits
Every few years, consumer demand for products based on a certain technology results in a wave of patent litigation. In the late 1990s, for example, improvements in the manufacturing of liquid-crystal displays and plasma-display panels caused sales to increase dramatically. As a result, the patent owners of the underlying technology sued the flat-panel display manufacturers to determine who owned the basic rights to that technology. Now, with the growth of the RFID industry, patent litigation involving the technology has begun.
Last summer, RFID World Ltd. filed suit in Texas claiming infringement of its patented RFID-based inventory-control system. What's interesting is that the lawsuit was brought against retailers and end users of the technology--including Home Depot, Gillette, Target and Wal-Mart--rather than against the manufacturers that make the technology.
Traditionally, end users were rarely sued by patent owners because they were either current or potential customers. But patent holders have begun suing end users for two reasons: The retailers arguably inflict the most pain on the patent holder because they represent the lost sale; and they are often quick to accept a license or settlement rather than face a long, disruptive and costly lawsuit.
Accordingly, all end users purchasing and employing RFID technology must acknowledge the likelihood of being sued for patent infringement and prepare for that possibility.
Source: RFID Journal, http://www.rfidjournal.com
Latest Customer Intelligence Tech Could Benefit Food Retailers
Understanding customers and their desires is the most important task in 2007 for food retailers. They must take advantage of next-generation customer intelligence technology to boost market baskets, increase consumer shopping frequency, and grab market share from competition.
While traditional loyalty programs often just reduce margins without delivering top goals, shifting to customer intelligence and segmentation lets food retailers localize assortments, personalize offers, and form deeper connections with customers.
Source: AMR Research, http://amrresearch.com
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Managed Crisis Response Solution from Cisco, IBM
IBM and Cisco are partnering to provide emergency crisis-response capabilities as an end-to-end managed service. The new IBM Crisis Management Services for Crisis Response service taps the experience of both tech titans, which have dealt with more than 70 major worldwide catastrophic events in 49 countries.
The companies say they are combining their advanced communications, collaboration, and coordination technologies with their satellite and wireless capabilities to help businesses, governments, and other organizations prepare for, respond to, and rapidly recover from disruptive events.
"Businesses and governments operating in today's environment require capabilities across all three phases of crisis: readiness, response, and recovery," according to Philippe Jarre, vice president, IBM Business Continuity and Resiliency Services.
Managed services marks a turning point in business continuity and resiliency services. Organizations have traditionally been forced to choose from an array of product-based solutions for crisis response with disparate components that must be integrated, according to Big Blue.
The IBM and Cisco solution packages hardware, software, services, and satellite-based capabilities as one service, essentially offering clients a one-stop, emergency-response network. The solution is designed to integrate into a client's daily operational fabric to act as a communications and information hub during times of disruption.
Source: BPM Today, http://www.bpm-today.com
The Silicon Valley of the East? Siberia.
Time passes slowly in Novosibirsk. In front of the opera house on Red Prospect, skateboard kids skid off the plinth of the Lenin statue. The tilting chimneys of roadside hovels, rusted auto husks and sludge-slicked bus shelters appear to have been slouching into poses over many decades.
At the boat hotel on the Ob River, the cook does not hurry with the kasha. The capital of Siberia, Russia's third-largest city, Novosibirsk in winter offers few explicit charms. But travel beyond the casinos of downtown, past wild dogs patrolling wild weeds, past Tajik road crews in orange jump suits, and a hub of activity rises from the woodland. Here, capitalist opportunity has overcome post-Soviet drear.
This is Akademgorodok--Academy Town--where Russian high-tech booms. This place, called the Silicon Forest, won't pass for Silicon Valley anytime soon. Private high tech has expanded from a $10m business a decade ago to a still-tiny $150m industry last year, with the number of firms growing 15 percent annually.
Source: Fortune, http://money.cnn.com Is 'Run It Until It Breaks' Your Plant Philosophy?
Once upon a time there was a manufacturing company that suffered failure of a major piece of equipment at one of its plants -- and everybody panicked. Multiple lines of production came to crashing halts for hours and machine operators stood around idly as maintenance technicians crawled around the equipment trying to figure out the cause of the breakdown and then repair it. A full day's production was lost. Delivery promises were broken. Eventually the maintenance personnel repaired the machine, and all was well on the plant floor -- until the next equipment breakdown. And the next. The fact is, poorly managed equipment maintenance can have a damaging ripple effect on an entire company -- lost production, spiraling inventory carrying costs, even injurious and potentially fatal accidents. Put the right procedures in place, however, and such ugly outcomes can become things of the past.
Source: Industry Week, http://industryweek.com
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No More Price Gouging, Parts Suppliers Tell Automotive OEMs
After years of having ever-lower prices dictated to them by automotive OEMs, auto parts suppliers are saying they've had enough.
A recent story in the Wall Street Journal confirms a trend: that a combination of weakened OEMs, new ownership and mindsets among parts suppliers, and economic fundamentals are changing the tables.
For more than a decade, major automotive manufacturers such as Ford and GM have relentlessly pressed auto parts suppliers for lower prices-- to the point in which few if any could consistently enjoy reasonable profitability. With many suppliers and just a few huge buyers, the OEMs held all the cards--or so it was perceived.
That seems to be changing.
Source: Supply Chain Digest, http://www.scdigest.com
Proposed Airfreight Security Laws May Run Off Some Companies
When auditors for the U.S. Congress looked at what a proposed law calling for physical inspection of all cargo shipped on passenger aircraft would cost, they came up with a final tab of $3.6bn over 10 years. That was just one measure of the high stakes behind the ongoing efforts in Washington to change the nature of security across the airfreight industry.
Many air cargo operators believe the costs could be far greater. In fact, some believe the real cost would be the very existence of some companies that could not cope with the changed economics that would come with far more stringent cargo requirements.
Source: Air Cargo World, http://aircargoworld.com
EMI Can Help Squeeze Little More Money from Your Equipment
Enterprise manufacturing intelligence (EMI) is critically important in "asset-heavy" industries like mining, power generation, and steel and oil production, where raw material is run through a lengthy process and then sold to other manufacturers, says Alison Smith, senior research analyst for manufacturing operations at AMR Research.
Since such companies are at the beginning of the supply chain, Smith says, there is little in the way of product mix, so production changeover is rarely the culprit in downtime. So, rather than relying on a manufacturing execution system to refine the production processes, as discrete manufacturers do, such companies focus on asset utilization and optimization. "Monitoring is huge. It's all about trying to squeeze a little more margin out of the commodity products by getting more out of the equipment," Smith explains.
Source: Managing Automation, http://www.managingautomation.com
BI, Data Warehouse Initiatives Plagued with Delays, Cost Overruns, Survey Finds
Efforts to eliminate time and cost overruns in business intelligence and data warehousing projects are mostly unsuccessful, according to a group of data warehousing professionals surveyed recently by Teksouth Corp.
The survey found that 62 percent of those surveyed factor delays and cost overruns into budgets for data warehouse projects. Teksouth is a services company in Birmingham, Ala., that helps businesses implement data warehouses.
Teksouth said that two-thirds of those surveyed have been forced to either scale back their project or request additional funding to finish it because of budget overruns.
Two-thirds of the respondents also said they have run into "unanticipated" problems while designing and implementing their data warehouse; while 44 percent of those said those problems had caused delays to projects.
Brad Marshall, Teksouth's director of commercial products, said that widespread reports about cost and time overruns continue to inhibit smaller firms from implementing data warehouses, even though they do understand the potential benefits.
Source: Computerworld, http://computerworld.com
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Sometimes You Just Have to Nurture Suppliers to Get Best Performance
Larry Schwerin, CEO of San Jose, Calif.-based Capella Photonics, has a very direct way of getting best-in-class performance from his suppliers: He goes straight to the CEOs of the supplier companies.
"I explain our grand view, our marketing dynamics, what we are doing, why quality is so important and what their role is," he says. And he doesn't just do it once. It's a regular part of his and his staff's supplier-management strategy. "We even visit our suppliers when we visit our customers," he says. "Top-level communication is important."
Communication is also a major part of the supplier-management practices at pharmaceutical giant Glaxo-SmithKline. Says Gregg Brandyberry, vice president of global procurement and operations: "We use supplier forums to explain to suppliers just what it takes for us to consider them best of class, the criteria we will measure them by."
Brandyberry and other GSK purchasing executives like Jeanine Johnson and John Bolla spend a good deal of time nurturing suppliers and helping them help GSK. "We want all of our suppliers to be best in class," says Brandyberry.
Source: Purchasing, http://www.purchasing.com
Business Uses Skype, But Is Skype Really Ready for Business?
Skype says business users grab 30 percent of its downloads, but is the enterprise ready for wider use?
There are many good reasons why Skype is slowly making its way into the corporate world: It's free, and you can forget about country codes, telephone numbers and long-distance bills. With a mouse click, you're talking, or even video-conferencing, with any of the 170 million Skype users worldwide. But there are also good reasons why corporate IT views Skype skeptically. For starters, it can be a bandwidth hog. Another problem: Most security products don't yet monitor Skype traffic, meaning that Skype's file-transfer capability may make an end-run around your company's firewall. Now Skype is vying to address these concerns.
Source: CIO, http://cio.com
The Top 25 Global 3PLs
Top logistics providers continue to grow in size and scope as current and potential customers look for partners who can do it all. Will these expanding 3PLs be able to meet their customers' far-reaching needs or are they in danger of becoming lumbering giants?
In the May issue of Global Logistics & Supply Chain Strategies magazine.
