QuickREAD

September 20, 2006

Partners May Require You Join C-TPAT, But There are Benefits in Doing So Voluntarily
While some companies volunteer to be Customs and Trade Partnership Against Terrorism (C-TPAT) members, others have made participation and/or compliance with C-TPAT security standards mandatory for their suppliers and partners. Ultimately, widespread adoption and participation will help companies speed low-risk shipments across borders and through ports of entry while preserving the security of global trade.
C-TPAT requires that corporations assume responsibility for the security of the supply chain well in advance of the normal legal responsibility (when the company takes possession of the goods). Customs is asking companies to take on the burden of ensuring and monitoring security practices and their execution all the way from origin, through transit, to the ports, and delivery to final destination. The three tiers of status are as follows:
• Tier 1—Requires a company to file an attestation that it has performed a risk analysis of its supply chain and has taken steps to mitigate any vulnerabilities.
• Tier 2—Requires the attestation be validated by customs officials.
• Tier 3—Customs has determined that these companies continuously follow supply chain security best practices (Customs and Border Patrol reports there are 154 Tier 3 members, and 32 percent of all members are completely validated).
The more advanced a company progresses in C-TPAT status, the more benefits it can receive, mostly in the form of expedited flow of shipments through customs. One consumer goods company said it slashed imported container inspections to a mere 0.66 percent from 7.60 percent. That, however, isn't the only benefit found.
Benefits beyond customs
Companies have found that joining C-TPAT often results in discovering outdated procedures, uncovering areas that need rework for better efficiency, or both.
While performing the required supply chain assessment for C-TPAT membership, most companies are able to streamline their operations and gain increased visibility into multi-enterprise activities. This increased visibility allows companies to create a continuous improvement scenario in which they can highlight inefficient processes, removing additional unnecessary costs and complexity.
C-TPAT can also help companies optimize the management of assets and inventories, while at the same time enhancing security. Enhanced security practices and increased supply chain performance mitigate the risk of loss, damage, and theft. They also reduce the likelihood that potentially dangerous elements get introduced into the global supply chain.
The fact that C-TPAT program participation enhances supply chain efficiency while increasing security should help speed its adoption across industries.
Source: AMR Research, http://amrresearch.com/

Should You Outsource Your Wireless Project, or Should You Build It In-house?
So, you've decided to go wireless. After doing the research and looking at others' successes, you're confident that arming your field workers with the right mobile solutions beyond e-mail can increase their productivity and reduce your operational costs. With the compelling economics of such a move, you expect a measured improvement in your company's top and bottom line. But how do you make it happen? What is the best way to go mobile beyond e-mail? Both outsourcing this process and building a customized in-house solution offer advantages and disadvantages. It's important to consider a number of issues to help you make the right choice for your organization in the short and long term.
The first of many steps to make your mobile project happen is to define the needs of your business and specify which operational processes you want to improve. For example, you may want to allow mobile professionals the ability to interact with work order systems while in the field. Or you may want to have new and updated “content” automatically pushed to these employees so that they always have the latest work-specific information, such as price sheets, installation manuals or sales collateral at their disposal.
Source: CIO, http://www.cio.com/

Spreadsheets Are Most Common Way to Analyze Corporate Data, But They Are Big Security Risk
In the wake of multiple high-profile laptop thefts and data breaches, some IT shops are launching new initiatives to ensure that sensitive corporate data stored in spreadsheets and business intelligence tools remains secure. The security efforts are taking on a new urgency as more workers gain access to business intelligence tools and spreadsheets used for BI functions.
Several recent high-profile incidents have involved unsecured spreadsheets.
Users and analysts said that spreadsheets are often the most common method used to analyze corporate data and are increasingly used as a front end to more advanced BI systems. However, in most cases the ubiquitous application and the more traditional BI tools have not yet received the same security scrutiny as transactional systems and Web applications.
Source: BPM Today, http://www.bpm-today.com/

On-Demand Software Project Isn't Completed Overnight, and It Isn't Fully Customized to Your Business Model
No matter the level of enthusiasm for moving to an on-demand management solution, if such a change is on the horizon for your organization, it is not an overnight process—and it's not necessarily abrupt, either. “It's a change management process,” says Mike Rager, director of enterprise spend management at Diebold in Canton, Ohio. Instead of trying to transition users to a new system all at once, Rager recommends taking a few high-end users off your internal, installed application (“flag-wavers”) and have them use the on-demand technology first. If they feel it helps them do a better job, they become key internal proponents of on-demand and can help sell the benefits of the technology to other users.
It's important to stay grounded, however, when talking about on-demand technology—it's not all roses. As the software is hosted and maintained by the provider, don't expect to fully customize it to fit your business model, says David Schneider, director of logistics at automotive service chain Pep Boys in Philadelphia. Rager agrees that the lighter input on software changes, as well as concerns about personnel training, were concerns for him when considering on-demand. “How do I get my people trained and how do I continue to train people—because there's a cost associated with that,” says Rager.
Source: Purchasing, http://www.purchasing.com/

Refrigeration Systems Manufacturer's Lean Initiative Led to Electronic Kanban
Creating the refrigeration systems for the supermarkets, convenience and specialty stores, commercial/industrial applications and food service applications is a complicated manufacturing process, and one that is at the core of the business of Hussmann Corporation, an Ingersoll-Rand company.
The diverse nature of the product and its manufacturing process at one Hussmann facility required raw materials purchased by Hussmann to be sent to an outside processor, which created challenges for inventory management and control. Those challenges resulted in regular stock-outs and were negatively impacting on-time deliveries to customers.
To address these issues, Hussmann's commitment to lean manufacturing led it to explore the application of kanban principles well beyond its own facilities. By implementing electronic kanban, which automates and enhances the manual kanban manufacturing approach pioneered by Toyota, Hussmann gained visibility into its inventory levels at its outside processor. Additionally, this pull-based system reduced inventory, ended stock-outs, reduced lead-times and opened up floor space previously used for inventory storage.
Source: Industry Week, http://industryweek.com/

There's No Going Back with the Wal-Mart RFID Project
Wal-Mart Stores says it will add another 500 stores to its radio frequency identification, or RFID, initiative by the end of the fiscal year, bringing the total number of stores using the technology to more than 1,000.
RFID technology reduces excess inventory and inventory shortages, also known as out-of-stocks. Wal-Mart has more than 3,900 locations in the United States.
Wal-Mart said it continues to work with its next 300 largest suppliers, which are expected to begin shipping test cases in October. These suppliers will go live with their shipments in January 2007, bringing to more than 600 the number of supplier companies using RFID technology in concert with Wal-Mart.
Source: CRM Buyer, http://crmbuyer.com/

Is There Only One Way to Manufacture Something Efficiently and with Quality?
In two plants 7,000 miles apart, two workforces make the same products for the same company. But how they go about the business couldn't be more different. Who's winning this China - U.S. competition?
Source: Fortune, http://money.cnn.com/

Despite Katrina-Caused Shortages, PVC Pipe Maker Uses Business Intelligence Tool to Keep Going
Many companies still haven't recovered from last year's hurricanes. United Pipe & Supply Co., however, managed to keep growing despite supply shortages.
The storm shut down chemical plants along the Gulf Coast that produce the plastic resin used for making PVC pipe. For most pipe dealers, that meant coping with soaring prices, if they could even find pipe to buy. United Pipe & Supply, however, found it could use its business intelligence software to maintain its supply lines by ordering only the exact items it needed at a given point in time.
"I did some quick analysis in FileMaker and made some decisions on how much product to purchase, from whom, where to ship it from and how to keep track of that," says Dan Kraxberger, purchasing vice president. He customized a report to generate a critical-items analysis. He then sent the analysis to each vendor, so they knew exactly which items were most needed. The data was continually updated based on vendor feedback. "Where everybody else was asking to just ship them everything, we were saying that if you can just ship us these items, it will work out," Kraxberger says.
As a result, while competitors were running out of stock, United Pipe was able to keep its regular customers supplied. Instead of a disaster, the company had record-setting months during that time period.
United Pipe & Supply has transformed many aspects of its business operations using BI software. The company's pretax profit margin increased from 1.5 percent in 2003 to 4.7 percent in 2005, and in the past two years, its income before tax has risen from $2m to $8.2m.
Source: Computerworld, http://computerworld.com/

Is Anybody Listening? WiFi Presents Many Security Problems.
Bob Egan worries about WiFi. And he wonders why no one is listening to him. Egan, the author of a WiFi security report and director of emerging technologies at Boston-based analyst firm TowerGroup, says that "WiFi security is a problem that just won't seem to go away," despite years of media coverage detailing the need for firms to secure the popular wireless networks.
The biggest issue: Many CIOs address WiFi security by banning wireless networks altogether. But WiFi is so easy and cheap to install, individuals are bypassing the IT shop and hooking up access points on their own. Add to that the fact that the average consumer now has WiFi connectivity in their laptop or smartphone, and "saying 'no' is perhaps the most dangerous thing to do," says Egan. "Even if an organization doesn't officially support WiFi, it probably exists on their campus. CIOs have to take appropriate measures to secure the enterprise."
Some dangers are pretty obvious. Say, for example, the sales department deploys a renegade wireless-access point without IT's knowledge, and a prospective client comes in for a sales call—carrying a WiFi-enabled smartphone. It wouldn't take much to create a private tunnel into corporate systems, says Egan, where sensitive data could be accessed.
The problems with WiFi don't end with security. "Let's say you're a small business in an office building, and another company moves in that's also using WiFi," says Egan. Because of the interference that's created with additional wireless traffic, "all of a sudden, your network performance is being affected." Home Depot Inc. dealt with a similar issue last year, adds Egan, when kids entering the stores with wireless gaming devices interfered with the stores' point-of-sale and inventory systems.
Source: CIO Insight, http://www.cioinsight.com/

Scorecard Gives Chrysler Group Single Report on Performance of 4,200 Dealerships in U.S., Canada
The Chrysler Group has developed a monthly scorecard that tracks the performance of more than 4,200 Chrysler, Dodge and Jeep dealerships in the United States and Canada. Freda Bane-Prastitis, director-dealer relations and development, says the scorecard is aligning the manufacturer and its dealers around shared goals.
“We wanted one view of our dealerships across the key metrics that are important to our business, including sales, service, parts, finance and customer satisfaction. We had a multitude of reports in each area, but we didn't have one report that had all the key metrics.
“The first scorecard was a PDF-based report that had to be manually updated every month—meaning human beings had to actually cut and paste information into a view. It was a static report with no drill-down capability; it was a quick fix, but it really didn't meet our needs.
“In mid-2004 the scorecard was turned over to my team, and the directive was to make it interactive and automated.
“The dealers, our field force managers and our executives here in Detroit can drill down on the metrics. If you want to look at a dealership's retail sales, for example, you can see the trend for the current year, you can look at their past year's sales and you can find out if they're selling more or less of a specific model, so you can troubleshoot if they're having a problem in a particular area. It's a 1,000-point system, and we assign points based on where each dealership falls on each of the 37 metrics we track.”
Source: Intelligent Enterprise, http://www.intelligententerprise.com/

Fixed/Mobile Convergence: Carry the Enterprise PBX in Your Pocket
One of the hotter convergence topics of late is fixed/mobile convergence—the ability to merge wired and wireless telecom resources so that users can have what amounts to their desktop phone in a handheld device in their pocket.
It sounds like a simple concept, but FMC requires lots of technical stitching on the part of the carrier or vendor to smooth out the seams between the wired and unwired worlds. There are multiple variations of FMC from which an enterprise can choose, which makes the right FMC decision more difficult.
But once the networks are stitched and the decisions about whether to opt for a carrier managed service or enterprise-centric FMC implementation are made, the benefits are manifold, industry experts say. They include the ability to be reached through one phone number wherever you are—at your desk, around campus, roaming about or at home—as well as reduced enterprise telecom costs by, for example, bypassing international mobile roaming charges when making cross-border calls.
The end game with FMC, observers say, is to equip workers with what amounts to the enterprise PBX in their pocket.
Source: CIO Today, http://www.cio-today.com/

If You're Not Recognized for Preventing Problems, There's No Sense in Preparing for Disaster, Is There?
Mark Hillman, senior research analyst for AMR Research in Cambridge, Massachusetts, says that in a recent survey on the preparedness of companies for a pandemic-type event, only 43 percent of firms reported having a general risk management process in place, and only 22 percent have an existing supplier reliability or continuity plan. "If the pandemic influenza never materializes, then that's great, but something else will happen that will ultimately affect the supply chain," says Hillman. "Every year in the last five years, a potentially catastrophic event has occurred, whether it was SARS, the Asian tsunami, the Long Beach port strike or Hurricanes Katrina and Rita."
While the impacts of these events may differ, it is likely that a supply chain partner will be affected, potentially setting off a chain reaction. Mike Fath, a partner in the operations risk management practice at KPMG in Cleveland, Ohio, explains that the barrier to addressing risk issues is the lack of a clear return on investment. "Executives do not receive credit for preventing problems; they are recognized for leading their organizations to achieve superior financial performance," he says. "Thus, there is a significant issue in the preparedness of companies to step up to the problem, to understand and analyze where supply chain risks exist, and to determine how they are going to spend and invest to manage those risks."
Source: Institute of Supply Management, http://www.ism.ws/

Slap-and-Ship RFID, for Those on a Budget But Who Must Meet Compliance Requirements
When Conair Corp. began its slap-and-ship RFID deployment, it was striving to do so in the most cost-effective manner. The company knew there would be an outlay of funds for technology, but it didn't want that outlay to continue as technology changed. And RFID technology, if it does anything, changes. “When we started implementing for the January 2005 Wal-Mart compliance deadline, technology standards weren't established,” says Ben Albence, corporate director of warehousing and distribution for Conair. “There were constant changes as technologies were upgraded, such as 36-bit tags becoming 96-bit. We were worried that we'd be continually making RFID hardware purchases to accommodate the technology.”
Conair purchased RFID printers for its radio frequency needs. The printers include a verifier that queries the tags in the labels they print to ensure the code in the tag is correct. One of the key reasons Conair chose the printers was the condition manufacturer extended to upgrade printers as the technology changed under its Technology Investment Protection plan, lessening Conair's liability. “If the technology changes, we're not faced with funding an upgrade,” says Albence.
Conair didn't arbitrarily decide to go the slap-and-ship route. Rather, it took into account the reason it was developing RFID (for compliance) and whether any additional benefit could be realized. Conair, which sells hair and personal care appliances as well as hair accessories, also owns the Cuisinart kitchen appliance brands. Conair's significant customers are split by product line: Conair products go to Wal-Mart, Target, and drugstore chains such as Walgreens and CVS; Cuisinart products go to Federated Department Stores (e.g. Macy's); Kohl's; Bed, Bath, and Beyond; and Linens-n-Things. It would not make sense to deploy RFID across its operations when only one product line required it. “I'd previously worked in the pharmaceutical industry, so I knew the benefits RFID could provide in terms of lot tracking and life cycle visibility from production to distribution,” says Albence. “But we're not technically a manufacturer—99 percent of our inventory is manufactured overseas and sent to our five DCs [distribution centers]. We don't need those benefits.” Conair receives the product from its manufacturers in full pallets, which it typically shipped to retailers the same way, but with a pallet tag containing shipment information and PO (purchase order) numbers.
Source: Integrated Solutions, http://integratedsolutionsmag.com/

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