Business Strategy Alignment — April, 2009

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Risk Management Comes to the Forefront of Supply Chain Management Strategy, According to New IBM Study
"Faster, cheaper, better"--that has been the mantra of supply chain managers for some time now. But a new study of 400 chief supply chain officers by IBM finds that risk management has become an equally important consideration. The growing complexity of fulfillment processes, caused in large part by companies' heavy reliance on offshore suppliers and contract manufacturers, has executives worried about all of the additional things that can go wrong. Many of those glitches can have a serious impact on corporate bottom lines, business partnerships, customer relationships and even consumer health.

Respondents to the IBM survey cite recent headlines, such as the salmonella-tainted peanut butter which caused nine deaths and made hundreds ill earlier this year, and the deadly contamination of infant formula in China last fall. Such scenarios have prompted executives to take a fresh look at risk management, IBM says. What's needed, the respondents say, is better visibility of data, coupled with...
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Supply Chain Organization Models That Drive Success
To ensure success in your supply chain operations, an important factor to consider is your organizational alignment. When the right organizational model is matched, for example, to the business model, strategy, culture, and governance, operational benefits will be realized. This document presents the different models along with both their merits and shortcomings. This white paper aims to provide you with information to help make decisions about your supply chain organization model and highlights factors to ensure success in choosing one.

Centralized Organization Model: In a centralized supply chain organization, a corporate-level purchasing department makes decisions and exercises control over purchasing throughout the organization. Centralized organizations are able to leverage corporate spend and drive standard sourcing, process, and technology decisions, resulting in economies of scale that improve spending power and enhance operational efficiencies and knowledge sharing. Other benefits include a streamlined purchasing organization, corporate purchasing expertise, and a consolidation of the supplier base.

However, in complex, distributed enterprises, complete centralization is not always practical or even desirable. Organizational politics, tax considerations or regulatory requirements often require local procurement of some categories of spend that logically could be centrally purchased. In addition, centralized procurement groups often report high incidences of unapproved (maverick) spending, process and policy circumvention, and uneven supply measurement and performance. A centralized supply chain organization is best suited for organizations with...
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Training Folks to Work in the Cloud Can Be a Bit Pricey
One of the selling points for moving software into the cloud is that it is supposedly hassle-free: no hardware, no software and presumably no huge staff of IT employees. The latter is certainly true--but that is not to say companies can stop investing in their IT human resources just because...
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Plan Carefully to Avoid Storm Clouds
Implementing a cloud-hosted application may be vastly less complicated than implementing on-premise software, but that doesn't mean it's a walk in the park. There are plenty of ways a cloud-based implementation can go south, and companies can best avoid them by planning carefully before taking flight.
Indeed, planning an implementation for the cloud environment is...
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Recession, Other Forces Cause Everyone to Rethink Their Supply Chain Strategies

Companies are searching for the right combination of smart cost cuts and small, strategic investments to get them through the current recession and position them to succeed when the economy rebounds. The question everyone is asking: What will be the new normal?

In the midst of a brutal global recession and huge uncertainty around everything from commodity prices to supplier viability, companies are faced with making critical supply chain decisions--decisions that will help them not only get through the current downturn but that will position them to outperform the competition when recovery comes.

Strategic and tactical choices made today will have implications far beyond the immediate throes of this crisis, says Greg Cudahy, global head of the supply chain strategy practice at Accenture, a New York-based consulting firm. Studies by Accenture of the 1990-1991 recession show that companies that made smart and strategic cost cuts and investments during that contraction far outpaced average performers when recovery came.

That lesson is further underscored by assessing companies that are suffering least today, says Cudahy. "Attention to the supply chain marks the single biggest difference we are seeing in performance between companies in the current recession," he says. Businesses that used the time since the last recession to strengthen supply chain strategy and improve execution...
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Making the Business Case for Green
In making the business case for green initiatives, companies need to look at revenue levers as well as cost levers, says Dr. Diane Mollenkopf, associate professor at the University of Tennessee. She explains that companies need to integrate with suppliers and customers as well as across internal hierarchies to implement a green strategy that is more than "a flavor of the month."...
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An FTZ May Be in Your Future. Or Not.

Legislative changes in 2000 and 2005 make it highly beneficial for some companies to import through a foreign  trade zone. But is an FTZ right for every company? And should every location in the country have its own FTZ?...
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