QuickREAD

April 4, 2007

Spread Risk Management Around--Don't Go It Alone
The unique nature of supply chain risk management lies in the fact that stakeholders and risks are distributed across multiple, highly independent organizations. Consequently, the risk management process should also be distributed across the supply chain.
Proactive discovery and visibility of risks is the key to effective risk management. While it's human nature to avoid exposing potential problems to trading partners, fact-based information collection tools can make risks visible and facilitate effective mitigation efforts.
Project managers will often observe that common risks were effectively managed; it was the unexpected risks that caused the biggest problems.
In practical terms, the most effective approach for addressing supply chain risk is for stakeholders throughout the supply chain to work together to identify potential risks and propose creative solutions.
Source: CRM Buyer, http://crmbuyer.com

Europe Best at Leveraging IT to Drive Economic Growth, Study Says
The sixth annual Global Information Technology Report, prepared by the Geneva-based World Economic Forum and French management school INSEAD, presents a snapshot of how well 122 countries leverage information and communications technology to drive economic growth.
The stunning result of the 2006 study: Five of the top 10 countries on this year's list are Nordic, and eight are Northern European. Singapore is the sole representative of Asia in the top 10. And the U.S. fell six places this year, from No. 1 on the 2005 list, due to what the report calls "relative deterioration of the political and regulatory environment."
Source: BPM Today, http://www.bpm-today.com

RFID Seminar at SIL Exhibition in Barcelona
The 9th Annual International Logistics and Material Handling Exhibition (SIL), scheduled for June 5-8, 2007, in Barcelona, will present a seminar on radio frequency identification technology sponsored by IDTrack (the European Association for Sure & Secure Identification). The so-called RFIDmed seminar, is set for June 6 and will focus on fleet management, operations, transport and return on investment. To be held in the Vía M2 Exhibition Center, Hall 3, entrance to RFIDmed is free to those attending the SIL exhibition. For more information, visit http://www.silbcn.com/sil/.

Is Anyone Left in Eastern Europe to Work for You?
Hundreds of thousands of young Eastern Europeans are moving to Western Europe in search of better money, better career prospects and better lives. Things are moving too slowly for them back home and a growing number are unwilling to stay.
When Poland, the Czech Republic, the Baltic states, Hungary and Slovakia joined the European Union three years ago, their accession triggered an exodus of hundreds of thousands of people from Eastern Europe who made their way to the United Kingdom, Ireland and Sweden--the countries that immediately opened their borders to immigrants from the new member states. Countries that share borders with Eastern Europe, like Germany and Austria, on the other hand, have shielded themselves from the flow of employment-seeking immigrants by means of interim rules that remain valid until 2011.
The Labor Ministry in Warsaw estimates that 2 million out of a total of 38 million Polish citizens are currently seeking their fortunes outside their home country. Ireland alone is home to 196,000 Polish workers. More than 60,000 Latvians and tens of thousands of Lithuanians have also turned their backs on the Baltic in search of opportunities for a better life they couldn't find at home. It's a mass migration on a minor scale.
Those leaving Eastern Europe belong to the most economically important layers of society. Most of the immigrants are younger than 35, and one-fourth have completed their higher education. They want more money, a nicer apartment, to establish a career faster, better daycare and schools for their children, good universities and well-equipped hospitals. One consequence is that both Poland with its 14 percent unemployment rate and Slovakia, where the rate is 13.3 percent, now suffer from a lack of qualified workers.
Source: Business Week, http://businessweek.com

In Eastern Europe, It's Off to the Hinterlands to Find Cheap Labor
If you're a Bulgarian programmer, a Romanian network-systems engineer, or a Czech enterprise-software specialist, life is good. Salaries for information technology workers in Central Europe are rising by double digits annually as multinationals such as Hewlett-Packard, SAP, and Dell dive into the region, soaking up what was supposed to be a deep pool of math and science graduates willing to work for a third of what their Western European counterparts are paid.
As it turns out, the supply of qualified labor is proving surprisingly finite. And it's not just IT. specialists, but also managers, accountants, engineers, and more. Call-center managers or IT directors in Poland can cost companies more than $100,000 a year including benefits, while even call center operators cost up to $23,000, staffing company Adecco says.
So big companies are paying more and migrating to the hinterlands to find good, low-cost labor.
Source: CRM Daily, http://www.crm-daily.com

Heavy-Load Airfreight Industry Growth May Be Bursting at the Seams
When Alexey Isaikin, president of Russia's Volga-Dnepr Group, told the International Air Cargo Forum last fall that he expects the market for outsized airfreight to reach $7.2bn in the next quarter century, the forecast by some measures was a rare understatement of the growing profile of the business.
Many industry experts forecast the project air cargo business will grow at a roughly 7 percent annual rate over the next 20 years, well ahead of the 6.1 percent average annual growth for the overall air cargo industry forecast by Boeing. Isaikin says the expansion will push the niche business from some 1.5 percent of the overall air cargo market today to around 7 percent of global airfreight by 2030.
And by other measures, including the value of the goods being shipped, the operations now largely built around the hulking AN-124s built in what was then the Soviet Union, the larger economic impact around the world may be far greater.
Myron Stokes, managing member of Florida-based Global HeavyLift Holdings, notes studies conducted by Boeing and the U.S. Air Force of 17 projects showed a total value of $400bn for operators of outsized air cargo aircraft. "And when you add in those (projects) that were not studied, the aggregate value exceeds $1tr," he said.
Source: Air Cargo World, http://aircargoworld.com

Product Lifecycle Management far from Reality for Many Industries
The virtual rollout last December of Boeing's 787 Dreamliner passenger aircraft was a dream come true for devotees of product lifecycle management (PLM). Instead of spending years and pouring millions of dollars into creating a physical prototype of the plane and the production line, Boeing took a chance on PLM technology to design the plane and simulate and validate its entire manufacturing process. Boeing claims the exercise will dramatically cut development costs and help it meet its aggressive rollout schedule. Pundits have lauded the 787 Dreamliner virtual introduction as a shining example of how PLM can take flight beyond engineering and drive efficiencies and business process change throughout an entire organization.
While Boeing may be airborne with a broader vision of PLM, the view on the ground is much less lofty. To be sure, manufacturers in industries from aerospace and defense to automotive and consumer packaged goods have made serious strides in leveraging pieces of PLM to streamline many of their engineering processes. There are dozens, even hundreds, of success stories of companies achieving quantifiable results by shortening development cycles, promoting parts reuse, and gaining efficiencies in engineering change orders. Yet, the broader picture of PLM--as a "one version of the truth" set of technologies and business processes for all product-related information, throughout the entire lifecycle--has been somewhat more difficult for manufacturers to digest. Despite pioneers like Boeing, few manufacturers have tackled wide-ranging PLM initiatives that take into account the information and business processes surrounding sourcing, customer requirements, production, or in-field maintenance. Manufacturers are not ready to take off in this direction for a variety of reasons: Some are grounded by legacy systems they're not ready to replace, others are hindered by integration projects they're not ready to take on, and all are still trying to understand the organizational and cultural changes necessary for making cross-functional, enterprise PLM a reality.
"Companies have been tremendously successful and have seen tremendous payback in deploying individual solutions, from pure design packages like CAD to computer-aided engineering tools for crash simulations and stability testing," explains Peter Schmitt, vice president of marketing and business development for DELMIA at Dassault Systemes, the maker of the PLM platform at the heart of the Dreamliner 787 rollout. "What we haven't seen to the extent we'd like to is integration -- going to the next level, where companies combine all the individual solutions and embrace them in a unified manner."
Source: Managing Automation, http://www.managingautomation.com

Any 'Rules' About Enterprise Software You'd Like to Break?
What "rule" about software pricing, maintenance, quality, implementation, negotiations, or usability have you been told you have to live with--but would rather not? Here's one: Software must always be financed from the capital expenditures budget, rather than operational expenses. How about this one: Software should utilize a floating license solution when used on multiple systems. Here's another: Customers should expect that every new release of a product will run significantly slower than the previous release. This one's a lot like the last one: Customers should expect that bugs that have been present in a particular product for at least two years will not be fixed.
And these aren't all, there are whole lot more such "rules" where these came from.
Source: Optimize, http://optimizemag.com

Macys.com Targets Visually Impaired Online Shoppers
People who have a difficult time seeing will have an easier time shopping at Macys.com since the retail giant updated its site with new IBM technology that customizes the way the Web pages are displayed.
IBM's Easy Web Browsing technology, which can be downloaded by online shoppers at no charge, is designed to magnify, speak, or alter browser content for shoppers with impaired vision. It allows users to choose the size and color of Web page content or they can choose to hear the text read aloud.
Source: Information Week, http://www.informationweek.com

Rwanda: An African Success Story in the Making?
Rwanda is known as the "Land of a Thousand Hills" but it was not the lush landscape that appealed to Joe Ritchie, the founder of a Chicago investment firm called Fox River Financial Resources, and his partner Dan Cooper. He and Cooper toured the country and met government and business leaders. They decided that President Paul Kagame, a former guerrilla fighter, was open, honest, business-savvy and, unlike some African leaders, serious about fighting corruption.
"We came away saying, this is the most undervalued 'stock' on the continent and maybe in the world," Cooper says. "Here's an African nation that's reaching out, not to governments so much, but to corporate America. They want to work. They want U.S. business to bring innovation to their country."
Source: Money, http://money.cnn.com

Dow Chemical CEO Knows the Value of the Supply Chain
When CEO Andrew Liveris talks about restoring a long-term luster to Dow Chemical, he predictably ticks off objectives concerning product innovation, joint ventures and financial discipline. But in the same breath, he'll also mention the company's value chain--maybe his delight at Dow's growing footprint in China, its selection to construct a world-scale new complex in Saudi Arabia, or even the company's new project to help build a safer railroad car in the U.S.
Liveris leaves no doubt that the management of its global value chain has moved front and center for Midland, Mich.-based Dow. It's "critical," he says, to "proactively use the supply chain to advantage by being the best in class and setting the new standard, or the new regulation, or being the best supplier to a customer and getting a premium for that--or, at a minimum, not losing business."
Source: Chief Executive, http://chiefexecutive.net

AMR: User Interface Will Soon Outgrow Its Eye Candy Image
The user interface (UI) will evolve into a pervasive layer for user interaction in the next five years, extending established enterprise systems to users in their work environments--wherever they happen to be. The new UI will also serve as the platform for enterprises to deploy and tie together an emerging array of personal, group, and community productivity and collaboration tools.
While the new UI won't be a simple, thin façade, it will seem simple to end users, insulating them from the complexity of numerous internal and external applications. As such, it will no longer be trivialized as eye candy by IT developers.
Instead it will be an intrinsic part of every company's software architecture. It will allow end users a persistent, consistent, and personalized means of accessing, contributing, and delivering information across internal and external sources; structured and unstructured systems; and business, personal, and community services.
By allowing people and communities to engage in new ways, the new UI will be the crucial mechanism for ensuring their ideas, expertise, and knowledge contribute more directly to enterprise performance.
Source: AMR Research, http://amrresearch.com

Huge Growth Seen for Wireless Sensor Technology
Analyst firm ARC Advisory Group projects wireless sensor technology will be the fastest-growing segment of the wireless market in the next five years, according to Harry Forbes, senior analyst. "Right now the sensor part is very much the smallest part of what the [wireless] market is, but we consider it to be the fastest-growing," he says. Overall, the wireless market is expected to grow at a compound annual growth rate of 26 percent over the next five years, according to an ARC study.
Source: Industry Week, http://industryweek.com

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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.