QuickREAD

June13, 2007

Web Analytics Must Be Great--I'm Spending a Fortune on It.
You may be spending plenty on a Web analytics solution, but are you really using it to its fullest potential? How about up to half of its potential? Is the ROI on your Web analytics software greater than the monthly or yearly fees you pay for it? If you are like most companies, the answer to all three of those questions is an unfortunate and resounding, "no!"
New research sponsored by the Web Analytics Association shakes the foundation of Web analytics mindsets. Among the most surprising findings, 69 percent of analytics users and practitioners don't believe that the majority of those who come in contact with Web analytics data understand its significance. Another 13 percent weren't sure. What's more, 47 percent of the 856 Web analytics users and consultants surveyed said the software is "somewhat difficult" and another 9 percent said it was "extremely difficult" to use.
Source: CIO Today, http://www.cio-today.com

Effectively Manage Supply Chains by Effectively Managing Demand
In order for a company to effectively manage its supply chains, it must effectively understand--and manage--demand. Unfortunately, often there is little attention paid to the art and science of forecasting future demand. Often the entire process consists of asking the salespeople what they think they will sell next year--a number that is usually influenced by their natural inclination to "manage expectations."
Another common forecasting disaster is when the forecast is simply determined by the firm's financial targets. In this scenario, the forecast is created to assure Wall Street that financial targets will be met, without regard to the existence (or lack of existence) of true demand in the marketplace. Excellence in forecasting future demand requires a disciplined process that combines analysis of historical demand (statistical, or quantitative forecasting) with careful analysis of expected changes in future demand patterns (judgmental, or qualitative forecasting). This excellence also requires a spirit of collaboration among those functional units that are responsible for generating and managing demand, as well as the discipline that comes from strong metrics and performance rewards.
Source: Industry Week, http://industryweek.com

As It happens, Offshoring Does Hurt U.S. Productivity
Whenever critics of globalization complain about the loss of American jobs to low-cost countries such as China and India, supporters point to the powerful performance of the U.S. economy. And with good reason. Despite the latest slow quarter, official statistics show that America's economic output has grown at a solid 3.3 percent annual rate since 2003, a period when imports from low-cost countries have soared. Similarly, domestic manufacturing output has expanded at a decent pace. On the face of it, offshoring doesn't seem to be having much of an effect at all.
But new evidence suggests that shifting production overseas has inflicted worse damage on the U.S. economy than the numbers show.
The short explanation is that the growth of domestic manufacturing has been substantially overstated in recent years. That means productivity gains and overall economic growth have been overstated as well. And that raises questions about U.S. competitiveness and "helps explain why wage growth for most American workers has been weak," says Susan N. Houseman, an economist at the W.E. Upjohn Institute for Employment Research.
Source: Business Week, http://www.businessweek.com

Is Your R&D Model Old-School or New? It Makes a Big Difference.
Inside many organizations is an outdated R&D model dating back to the industrial era that doesn't work in today's globally connected world where technologies can be copied and commoditized in a nanosecond. A tech company can spend billions developing a new chip only to have its investment wiped out when a major customer chooses to go with a cheaper version. Ditto a multibillion-dollar investment in a new pharmaceutical drug that vanishes on the day the U.S. Food and Drug Administration rejects it.
The old model has kept R&D siloed within many organizations, unintegrated with business functions, particularly sales and marketing, and therefore not aligned with business strategy. As a result, R&D processes are unable to keep up with the pace of changing customer demands and can't churn out high quality products at a rate needed to meet that demand. "Companies have this disconnect between the senior executive/CEO level in charge of the business strategy and R&D," says Andrew Buss, director of strategic innovation with Archstone Consulting, an advisory management consultancy in Stamford, Conn. "R&D is a black hole where they pour money in and they're just praying that one day something comes out of it."
Source: Chief Executive, http://chiefexecutive.net

Can 'Smart Fridge' Overcome Consumer Resistance to RFID?
Radio frequency identification technology is crucial for the retail industry's future, but there is still a lot of resistance to it among consumers, according to Gerd Wolfram, managing director of IT at European retailer Metro Group.
Like U.S.-based Wal-Mart Stores Inc., Metro is a major backer of using RFID to improve supply chain efficiency and avoid stock outages. In fact, Wolfram calls RFID the "key technology" at Metro.
Historically, the technology of choice for identifying items coming off a truck to the store has been barcodes, but that requires a person to be in the line of sight of the objects being scanned. In addition, barcoding can only identify a range of products. It doesn't allow for the identification of, for instance, a single bottle of soda. RFID, on the other hand, can identify separate objects. Metro is already using the technology in its supply chain processes to automate checks on the flow of inventory.
But the logistical benefits are only a beginning, he says. In five to 10 years, Wolfram envisions consumers owning a "smart fridge" with an RFID reader embedded in it that can automatically monitor the contents inside. If someone puts a bottle of milk inside, for instance, the smart fridge might wirelessly communicate that to a nearby PC or send a message over the internet to let the shopper know that it's there.
Source: Computerworld, http://computerworld.com

Business Process Outsourcing to India Is a Growth Industry
If you thought that offshoring to Indian suppliers was largely restricted to IT applications development and maintenance (ADM), think again. Leveraging the success of the offshore delivery model for IT ADM, India-centric BPO suppliers are rapidly gaining a foothold in the offshore BPO market. Indian BPO suppliers are consistently making headlines by expanding delivery network, adding to their client base, and announcing steep growth in revenues. Suppliers are offering a wide range of service offerings across horizontal BPO, vertical-specific BPO, and knowledge process outsourcing (KPO) to partner with buyers across multiple areas.
Source: Outsourcing Journal, http://www.outsourcing-journal.com

There Must Be a Way to Ease the Pain of Application Development
One of the sad truths about application development in corporate America is how much of what really happens is a hit-or-miss proposition.
First, some executive agrees to sponsor the application, which then results in months of interviews with business analysts from the IT department who are trying to wrap their minds around the everyday processes that drive the company's business. Months of mind-numbing conversation then usually result in a specification that gets delivered to the application developers, who then dutifully code whatever was handed to them.
Then comes the big day when the application gets launched with great fanfare, only to fall back to Earth like a lead balloon because the users of the application can't make heads or tails of the thing concocted by the business analysts, who in turn blame the developers for not understanding what was intended versus written in the original specification. This usually results in developers, with clipboard and stopwatch in hand, spending a lot of time with end users trying to figure out what went wrong with the application, or why the performance of certain application activities is roughly equal to the speed of molasses.
Does it have to be this painful?
Source: Baseline, http://www.baselinemag.com

Everywhere You Turn, It's Collaboration Time
Aberdeen reports that collaboration is on the upswing again. So, what is supply chain collaboration?
"It can be anything from picking up a phone or faxing a spreadsheet to conducting business with your trading partners electronically," says Beth Enslow, Aberdeen's senior vice president of enterprise research. "What's important is that you're exposing more information than before to your trading partners. In turn, you're asking them to use that information to do more than in the past for you, whether it's inventory management, manufacturing, transportation or product design. It's a rethinking who does what pieces of the process."
The concept, of course, never went away. But following the economic downturn in 2001, collaboration projects certainly moved to the back burner at many companies. That is clearly changing, Aberdeen says.
Source: Modern Materials Handling, http://www.mmh.com

In a Complex World, CPG Companies Must Work More Closely with Retailers
Consumer goods marketers are struggling to keep up with unprecedented levels of change--from an explosion in the number of media choices to the growth in size and importance of major discount retailers. Recent McKinsey research combined a survey of marketers at 20 leading North American consumer goods companies with a review of their relative market shares, growth rates, and new-product sales, as well as other metrics. Some leaders appear to be coping with today's challenging environment by experimenting with new media, novel approaches to gathering insights about consumers, and more collaborative relationships with retailers, among other things.
Source: McKinsey Quarterly, http://www.mckinseyquarterly.com

Nokia Shows What's Attractive About Manufacturing in India
While the government dithers about how to solve a crisis that has developed over India's controversial Special Economic Zones, a few companies are showing how small zones can spread development and attract foreign direct investment, without falling into the clutches of politicians, bureaucrats, and protesters.
In southern India, for example, Nokia, the Finnish mobile handset company, is leading the development of an electronics hardware zone where, along with eight of its suppliers, it will mop up more than $200m investment and employ some 20,000 people within two years.
Source: Fortune, http://ridingtheelephant.blogs.fortune.com

Boeing Bets a Lot on Its Supply Chain Making the Dreamliner a Success
Boeing can't afford to have anything go wrong with its groundbreaking 787 Dreamliner aircraft. The 787 program represents the company's best bet for regaining competitive territory lost to arch-rival Airbus, which, in 2001, surpassed Boeing as the world's largest manufacturer of commercial aircraft. Even before full production, the relatively light, fuel-efficient 787--which is designed for long-range, point-to-point travel and sells for $160m per plane--has attracted 514 orders from airlines around the world, making it the fastest-selling commercial airplane in history, according to Boeing.
The success of the Dreamliner hinges on a new business model and a multi-tier, collaborative global supply chain network. Will these massive process changes hold the new aircraft back or allow it to soar?
Source: Managing Automation, http://www.managingautomation.com

Fourth of Retailers' Web Site Traffic Comes from Search Engines
Retail web sites get 25 percent of their traffic from search engines, according to an online competitive intelligence service. And the more information retailers provide on the Web, the more likely customers will shop at their stores and return to their sites.
Search engines increased their role in sending visitors to shopping and classified Web sites by 0.7 percent from May 2006 to May 2007, and Google sent the most traffic, according to Hitwise figures released this week. A separate survey announced this week that shoppers are more likely to shop in traditional stores and return to Web sites of retailers that provide complete product information online.
Google accounted for 15.6 percent of upstream shopping and classified visits, marking an increase of 8.7 percent since May 2006, according to Hitwise. One-word searches, including domain and URL searches, accounted for 23.7 percent of search terms sending traffic to shopping and classified Web sites. A 20 percent increase in one-word searches since May 2005 points to growing use of search toolbars as a primary means of navigating the World Wide Web, Hitwise reported.
Source: Information Week, http://www.informationweek.com

Invaluable Company Information--on a Memory Stick?
An increasing amount of valuable business information is being stored at the 'edge' of the corporate network on laptops, PDAs, home computers, and USB memory sticks. As this data is typically collected and generated by customer- and partner-facing employees, it tends to be high in commercial value; yet one would hardly think so judging by the way organizations often fail to protect and secure it.
Source: CBR Online, http://cbronline.com

Click here to subscribe or renew your subscription to Global Logistics & Supply Chain Strategies magazine

100 Great Supply Chain Partners: It's All About Teamwork
GL&SCS readers nominate providers of logistics, technology, transportation and consulting services as "Great Supply Chain Partners." Testimonials and case histories show how these winning partners use teamwork to ensure their customers' supply chain success.
In the July issue of Global Logistics & Supply Chain Strategies magazine.