w w w . s c e m a g a z i n e . c o m - Supply Chain Europe
w w w . s c e m a g a z i n e . c o m - Supply Chain Europe
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www.scemagazine.com<br />
May/June 2009<br />
www.scemagazine.com ISSN 1742-447X<br />
the<br />
enemY<br />
Within<br />
The Impact of <strong>Supply</strong> <strong>Chain</strong> Fraud<br />
Defence<br />
Procurement<br />
A means to an end<br />
Air trAnsPort<br />
Lessons from Terminal 5<br />
After the recession<br />
Protect, survive and prepare for the upturn<br />
mobile solutions<br />
Latest thinking from Dexterra and Honeywell<br />
Make it … Store it … Ship it … Make it … Store it … Ship it … Make it … Store it … Ship it
www.marschner-kuehn.de<br />
Seeing details, understanding the big picture<br />
For the highest level of productivity<br />
in commercial distribution centres<br />
Transparency and surveillance ensure stable processes<br />
SICK sensor technologies: for every phase of the internal flow of goods from arrival to sorting,<br />
order picking, packaging and dispatch. With its comprehensive distribution expertise,<br />
SICK sees every detail in the automated goods handling process and optimises the supply<br />
chain as a whole through the use of efficient code reading systems based on laser, RFID<br />
and camera technologies.<br />
SICK AG | Waldkirch | Germany | www.sick.com
contents<br />
<strong>Supply</strong> <strong>Chain</strong> <strong>Europe</strong> gives its readers in-depth news and views on the ideas<br />
and solutions that are helping <strong>Europe</strong>an businesses improve their supply chains<br />
Vol. 18 no. 03<br />
20<br />
22<br />
Guest eDitoriAl<br />
06 Recession Raises Recruitment<br />
Bar to New Levels<br />
Steve Kaim-Caudle<br />
inDustrY insiDer<br />
14 Transforming your <strong>Supply</strong> <strong>Chain</strong><br />
Jochen Grosspietsch and Daniel Swan<br />
Air trAnsPort<br />
16 Going Live: Lessons from Terminal 5<br />
Peter Baker<br />
Defence<br />
Procurement<br />
20 A Means to an End<br />
Jamil Rashid<br />
After the<br />
recession<br />
22 Protect and Survive<br />
Simon Butcher<br />
retAil focus<br />
28 DCs Find a Voice<br />
James Hannay<br />
16<br />
mobile solutions<br />
30 How Can Mobility Solutions<br />
Best Serve the <strong>Supply</strong> <strong>Chain</strong>?<br />
Rikke Helms<br />
32 Hand in Hand<br />
Kevin Robinson with Andrew Donn<br />
risk mAnAGement<br />
36 Focus on Corruption<br />
Charles Carr<br />
suPPlier<br />
relAtionshiPs<br />
38 Identifying the Cost of Mistrust<br />
Mike Robinson<br />
WArehousinG<br />
40 Putting Stock in Worldwide<br />
Warehousing<br />
lccs<br />
42 Low-Cost Country Sourcing:<br />
The Past, the Present<br />
and the Future?<br />
Nader Sabbaghian<br />
38<br />
contents strap<br />
Distribution<br />
44 Crossing the Pond with TMS<br />
Andrew Austin<br />
cAse stuDY<br />
46 <strong>Supply</strong> <strong>Chain</strong> Optimization at<br />
Western Digital<br />
Thomas Wöhrle<br />
lAst WorD<br />
50 Making Your Mark<br />
Jean Louis-Evans<br />
reGulArs<br />
08 News and Analysis<br />
48 Calendar<br />
2009 may/June www.scemagazine.com<br />
30<br />
40<br />
44
4<br />
follow our lead<br />
Honeywell offers<br />
complete data collection<br />
solutions designed to<br />
meet your needs.<br />
Two of the leading companies in the automatic<br />
identification and data capture (AIDC) industry—<br />
Hand Held Products and Metrologic Instruments—<br />
recently combined to form Honeywell Scanning<br />
& Mobility. Together, we are pleased to deliver<br />
one of the broadest product lines in the industry.<br />
Our innovative bar code scanners and rugged<br />
mobile computers deliver solutions designed to<br />
reduce costs and improve efficiency, resulting in an<br />
impressive return on investment. Follow our lead<br />
and realize your full potential for profitable growth.<br />
For additional information, please visit www.honeywell.com/aidc/SCE,<br />
or call +31 40 2901 600 / +44 (0) 1 925 240055.<br />
© 2009 Honeywell International Inc. All rights reserved.<br />
Editorial<br />
Editor<br />
Sam Tulip<br />
samuel.tulip@btinternet.com<br />
Tel. +44 (0)1780 763 435<br />
Editorial Director<br />
Kevin Robinson<br />
kevin@via-medialtd.com<br />
Tel. +44 (0)1392 202 591<br />
Art<br />
Art Director/Production<br />
Paul Andrews<br />
paul@via-medialtd.com<br />
Tel. +44 (0)1372 471 549<br />
Sales<br />
Publisher<br />
Fred Winsor<br />
fred@via-medialtd.com<br />
Tel. +44 (0)1372 478 961<br />
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Circulation Manager<br />
info@via-medialtd.com<br />
Tel. +44 (0) 1372 471 540<br />
<strong>Supply</strong> <strong>Chain</strong> <strong>Europe</strong> is free to qualified readers.<br />
Reprints of articles are available (500 minimum).<br />
Via Media Limited<br />
Managing Director<br />
Simon Jones<br />
simon.jones@via-medialtd.com<br />
Tel. +44 (0) 1372 471 541<br />
Editorial Director<br />
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kevin@via-medialtd.com<br />
Tel. +44 (0)1392 202 591<br />
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KT10 0PD, UK.<br />
<strong>Supply</strong> <strong>Chain</strong> <strong>Europe</strong> has no link with the logistics consultancy of the same<br />
name based in Cheltenham, UK.<br />
Publisher endeavours to collect and include complete, correct and current<br />
information in <strong>Supply</strong> <strong>Chain</strong> <strong>Europe</strong>, but does not warrant that any or all of such<br />
information is complete, correct or current. Publisher does not assume, and<br />
hereby disclaims, any liability to any person or entity for any loss or damage<br />
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in any of the advertisements contained in the publication, and cannot take any<br />
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Copyright © 2009, Via Media Ltd All rights reserved. No part of this publication<br />
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UK (ISSN: 1742-447X).<br />
www.scemagazine.com may/June 2009
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guest editorial<br />
You want your<br />
solutions to<br />
have the<br />
best of both,<br />
right?<br />
2009 may/June www.scemagazine.com 5
guest editorial<br />
recession rAises<br />
recruitment bAr<br />
to neW leVels<br />
As casualties of the most serious business downturn of the last decade continue to mount, the issue of<br />
recruitment presents challenges and opportunities in almost equal measure.<br />
With victims of redundancy<br />
being in abundance after<br />
years of severe skills<br />
shortages in the industry, those in a<br />
position to recruit have the unaccustomed<br />
luxury of being able to be choosy and face<br />
a fantastic opportunity to bag high calibre<br />
candidates at affordable prices. For those<br />
logistics service providers (LSPs) who are<br />
themselves feeling the squeeze, getting<br />
the right person into a vacant role is not<br />
a luxury … but a necessity. Recruitment<br />
is expensive and getting it right first time<br />
has never been more important, leading<br />
some to invest more time and effort into<br />
the recruitment process and include<br />
online testing, presentations and extra<br />
stages of interviews. By contrast, some<br />
are delaying filling vacant positions to<br />
gain a few months of budgetary benefits<br />
— but whether this proves to be a false<br />
economy remains to be seen. Either way,<br />
the need to wring maximum value out of<br />
their investment in human resources is<br />
pressing. To fill the gaps created by leaner<br />
management structures, both new and<br />
existing managers need a broader skill<br />
set to cover more ground; for example,<br />
operations managers are now often<br />
expected to have client facing skills,<br />
whereas a shift manager may also be<br />
required to produce personnel plans. On<br />
a similar basis, major LSPs are developing<br />
techniques to better flex their existing<br />
management talent around their sites. For<br />
example, intranets are increasingly being<br />
utilized to allow managers looking for their<br />
next role to ‘peddle their wares’ within<br />
the business and to allow vacancies to be<br />
advertised internally. Better co-ordination<br />
between HR managers across sites/<br />
divisions is also assisting more effective<br />
redeployment and, in one case, a major<br />
LSP has recently appointed a dedicated<br />
‘Redeployment Manager.’ Training is<br />
6<br />
Steve Kaim-Caudle<br />
also playing a part: for example, first<br />
line managers are receiving ‘leadership’<br />
training to broaden their skills, whilst<br />
high achievers are being identified and<br />
given intensive training to accelerate their<br />
capabilities. For candidates, competition<br />
for management level positions is fierce;<br />
we recently received 70 applications<br />
in response to an advertisement for a<br />
London-based transport manager with an<br />
annual salary of £35,000. Amongst these<br />
applicants, a large number were either<br />
vastly over or under qualified. We and our<br />
clients have also seen a sharp increase in<br />
speculative CVs.<br />
To compete, managers are prepared<br />
to commute further (although high fuel<br />
prices during 2008 curbed this to some<br />
extent), in many cases staying away from<br />
home with family/friends or in cheap B&B<br />
accommodation during the week. They<br />
are also more willing to take on interim<br />
contracts to broaden their experience<br />
and keep the money coming in. And it is<br />
not just those from the logistics industry<br />
itself who are competing for the jobs — it<br />
is also the victims of the recession, both<br />
in manufacturing and on the high street.<br />
Whilst industry experience remains a key<br />
consideration for employers, many major<br />
LSPs are also looking for those skills<br />
more typically found within customer<br />
organizations, such as lean manufacturing,<br />
and are increasingly prepared to forego<br />
experience to obtain them.<br />
However, whilst times are undoubtedly<br />
tough for managers both working and<br />
seeking employment in the logistics<br />
industry, those with the right skills,<br />
attributes and attitude have a fantastic<br />
opportunity. Never has there been a better<br />
time for them to show their employer<br />
what they can do. Out of the recession<br />
will emerge a new breed of logistics<br />
professional — not managers but leaders<br />
who have not only survived but seized the<br />
opportunity to make their mark. Both for<br />
them and their employers, the adage that<br />
what doesn’t kill you makes you stronger<br />
will hold true. •<br />
For more information<br />
Steve Kaim-Caudle<br />
Managing Director<br />
Momentum Logistics Recruitment<br />
Tel. +44 1923 680 680<br />
steve@momentumlogistics.co.uk<br />
About the Company<br />
Momentum Logistics specializes in recruiting logistics<br />
professionals for management level positions, both<br />
permanent and interim, within the logistics and supply<br />
chain sector. Its consultants have first-hand experience<br />
of running operations in third party and in-house logistics<br />
functions serving retail, food, fashion, manufacturing<br />
and the public sector throughout the UK. The company<br />
provides a professional and tailored approach to the<br />
individual recruitment needs of its clients, which includes<br />
site visits to assess job responsibilities. All candidates<br />
undergo face-to-face interviews to establish suitability<br />
before short-listing. Clients include DHL Exel, Wincanton,<br />
Unipart, Bosch, Homebase and IKEA.<br />
www.scemagazine.com may/June 2009
Creative: RMP Advertising - Photos: FedEx.<br />
Specialist services to ensure healthy performance<br />
Precise transit times for blood samples are vital. The extreme fragility of EKG machines and other<br />
devices make careful handling imperative. Clinical tests must be kept below -50 degree C from pick-up<br />
to delivery. The integrity of packaging hazardous materials must be guaranteed. We understand.<br />
In the healthcare business, shipping worldwide takes more than planes and trucks, it takes dedicated<br />
people with a generous helping of experience and competence. Like customs know-how, special<br />
handling, up-to-date documentation and regulatory compliance.<br />
At FedEx, whatever your shipment’s size, weight or urgency, we provide all the expertise you need.<br />
For more information on specific FedEx Global <strong>Supply</strong> <strong>Chain</strong> Services or to arrange an appointment<br />
with a FedEx Healthcare Industry expert, email Sharon Percival at spercival@fedex.com. Behind a great Experience
news<br />
NYK Logistics Secures Pharmaceutical License<br />
NYK Logistics (UK) Ltd has successfully obtained a Manufacturers’ Import<br />
Authorization from the Medicines and Healthcare Regulatory Authority (MHRA)<br />
at its pharmaceutical centre of excellence in Northampton, UK. Supporting<br />
NYK’s activities on behalf of a number of major pharmaceutical customers, the<br />
175,000 sq ft facility provides temperature-controlled, high security storage in<br />
line with the latest Good Distribution Practice. In addition to the existing MHRA<br />
Wholesalers Licence at the site for the storage of product manufactured in<br />
<strong>Europe</strong>, the new license also now enables NYK to store product imported from<br />
outside the EU. NYK sought the license to enable the facility to be used as a<br />
“landing site” to support the release of new products, the first time the UK has<br />
been used for this activity by the company (www.nyklogistics.com).<br />
8<br />
Slimstock Offers 1,000,000 sku<br />
Inventory Management Tool<br />
Inventory management software capable of processing 1,000,000 skus in<br />
less than an hour is now available. Its developers, Dutch-owned Slimstock,<br />
say that the new-look tool, Slim4, has the potential to revolutionize the way<br />
retailers handle forecasting, demand planning, inventory control and purchase<br />
support. Dubbed ‘the complete inventory planning solution’ and already ranked<br />
as <strong>Europe</strong>’s front-running specialist supply chain software, Slim4 combines<br />
incredible processing power and versatility with ‘clinically crisp’ interface and<br />
overall ease-of-use, consistently effecting 25–30% reductions in inventory<br />
levels and investment, allied to measurable improvements in service levels.<br />
Says Slimstock’s Tim Murphy: “We’re saying that Slim4 will, not might,<br />
deliver better and more efficient inventory planning, increased service levels<br />
and lower inventory levels alongside higher margins, faster turnaround<br />
times, increased productivity and return on investment.” Slim4’s aggressively<br />
ramped-up processing power enables calculations involving more than a<br />
million skus in less than an hour – making it perfectly tuned to the specific<br />
demands of the retail industry. The capability is up to 20 times greater<br />
than most of the inventory management tools currently available. Yet, says<br />
Slimstock, developers are already working on 6 million sku capability for<br />
the next release. In use, Slim4 continually analyses sales of all items and<br />
determines boundaries in which the demand of each item fluctuates —<br />
with simulations clearly illustrating the impact of defined service levels on<br />
inventory. Implementation time is remarkably short with ‘go live’ guaranteed<br />
within 25 days. Taking sales forecast, required service levels, minimum order<br />
quantities and lead times as the starting point, Slim4 calculates safety stock<br />
levels and ‘up to order’ levels in a 12-month purchase plan. By establishing<br />
demand patterns, the tool automatically delivers the best ordering method,<br />
resulting in faster turnaround times (www.slimstock.com).<br />
Premier Foods Awards IT Contract to Capgemini<br />
Premier Foods has awarded a 5-year project for data centre and technical<br />
support of all its core business systems to Capgemini UK plc (www.uk.capgemini.<br />
com). The contract covers the 2009–2014 period and is expected to be worth<br />
approximately £9 million in total. In addition, for the first time, the scope of<br />
the contract has been extended to include the hosting of Premier Foods’ new<br />
SAP systems. Capgemini UK, which won the contract against bids from other<br />
leading multinationals, will deploy its Rightshore strategy, which makes its global<br />
resources available to UK customers, on behalf of Premier Foods and their<br />
famous brands, which include Hovis, Ambrosia, Mr Kipling, Sharwood, Batchelors,<br />
Quorn, Loyd Grossman, Oxo, Bisto and many others. Capgemini teams in the<br />
UK, Poland and India will work in collaboration to maximize service levels and<br />
cost-effectiveness for Premier Foods. Systems will run on hardware at Capgemini<br />
secure data centres in Rotherham and Bristol, with additional support from the<br />
company’s infrastructure management command centre in Krakow, Poland, and<br />
from a Capgemini development centre in Mumbai, India.<br />
Phil McCallum, Director of IT and Infrastructure at Premier Foods, said: “We<br />
have had a successful relationship with Capgemini for a number of years. By<br />
extending this to cover the hosting of all of our environments, both legacy and<br />
SAP, we are able to simplify and increase the resilience of services. Capgemini<br />
won the business with a flexible and effective bid allowing Premier Foods to<br />
evolve during the coming years in line with business need. Since selecting<br />
Capgemini, a well executed transition from previous data centres has been<br />
undertaken.” Capgemini is also working with Premier Foods on other business<br />
projects, including a new business intelligence system based on SAP, and a supply<br />
chain track-and-trace project for the company’s Hovis division. Anthoula Madden<br />
Vice President at Capgemini UK plc, said: “It is a privilege to work with a customer<br />
whose products are part of every British family’s daily life, and I am naturally<br />
delighted to see our long-term relationship with Premier Foods not only continuing<br />
but expanding in a number of exciting new directions.”<br />
www.scemagazine.com may/June 2009
TDG Achieves AEO Accreditation<br />
TDG (www.tdg.eu.com) has just been awarded Authorized Economic Operator<br />
(AEO) status, an internationally recognized quality mark that confirms that its<br />
role within the international supply chain is secure. It is one of only about 60<br />
companies in the UK that is fully registered to AEO. “We are delighted that we<br />
are formally considered to be a secure trader and a reliable trading partner,” says<br />
Dave Barron, TDG director of international services. “This AEO certification gives<br />
security to existing and potential clients that we are a reputable company, and<br />
is confirmation that we have customs controls and procedures in place that are<br />
both efficient and compliant.” The company’s year-long audit by HM Revenue and<br />
Customs (HMRC) not only included assurance that it has a satisfactory system of<br />
managing commercial and transport records, but also details of what elements<br />
it has in place to protect its business and supply chain against potential risks —<br />
whether human, physical or economic. Dave Barron continued: “TDG now has<br />
the opportunity to “fast-track” our shipments through certain HMRC safety and<br />
security procedures, as we have demonstrated the integrity and security of our<br />
operations. It is recognition of our knowledge and efficiency.”<br />
New Security and Consolidation<br />
Centre at Manchester Airport<br />
Norbert Dentressangle (www.norbert-dentressangle.co.uk) has successfully<br />
extended its contract with Manchester Airport Group (MAG). In 2006, MAG<br />
outsourced its logistics to Norbert Dentressangle. After 3 years of high service<br />
levels, MAG and airside retailers have decided to extend the contract. The<br />
consistently high service standards and flexibility have continued to nurture the<br />
support of the airport retailers. Volumes year-on-year continue to rise, which<br />
has created the need for a new larger facility. Norbert Dentressangle now<br />
consolidates deliveries from more than 20 retailers and caterers at its offsite<br />
warehouse. All goods are security screened using x-ray machines, which have<br />
been installed at the new site. Once the goods have been security checked,<br />
they are delivered directly to the retailer or to a secure storage area by security<br />
cleared drivers. Dan Myers, Business Unit Director at Norbert Dentressangle<br />
Logistics said: “We are delighted that MAG has decided to extend our contract.<br />
The decision reflects the high service levels of a heavily regulated solution<br />
to MAG’s logistic requirements. MAG requires a high level of security. There<br />
is no room for error. We have delivered an efficient and secure service that<br />
MAG has been happy to continue with.” Andrew Harrison, Manchester Airport’s<br />
Commercial Director said: “The move from the Bury site was seamless,<br />
and a great credit to the planning and operational ability of Peter Leigh,<br />
Contract Manager, and his team. We are thrilled with the new consolidation<br />
centre, which represents a real step forward in our partnership with Norbert<br />
Dentressangle and we’re looking forward to driving the volumes through the<br />
new centre in line with our strategy.”<br />
P&O Ferrymasters to Acquire Mov’on Logistics<br />
Leading <strong>Europe</strong>an logistics service provider, P&O Ferrymasters (www.<br />
poferrymasters.com), has reached an agreement to acquire Mov’on Logistics.<br />
The deal will strengthen Ferrymasters’ growing business in Central and<br />
Eastern <strong>Europe</strong> (CEE). Mov’on Logistics specializes in logistics, transportation,<br />
warehousing and general forwarding on routes to CEE. It has four offices,<br />
employing operational and sales staff in Poland (Gorzow), Ukraine (Kiev),<br />
Russia (Moscow) and Hellevoetsluis (the Netherlands). P&O Ferrymasters will<br />
retain 18 full-time equivalent jobs and the Mov’on Logistics operations will<br />
be integrated into the company’s <strong>Europe</strong>an office network. The Hellevoetsluis<br />
office will be combined with Ferrymasters’ Europoort operation. Bas Belder, P&O<br />
Ferrymasters’ Managing Director, said: “This is an investment in our company’s<br />
future. Opening up a gateway to Asia through Central and Eastern <strong>Europe</strong>,<br />
Russia and Ukraine is key to our future success and fits with our long-term<br />
objective to expand our service offering in this area. We have already opened<br />
new offices in Poland (May 2008) and Romania (February 2008) as part of<br />
this plan, and this deal will further strengthen our position in the next big<br />
battleground for business. Mov’on Logistics is an established and experienced<br />
company and will provide us with a solid platform on which to build our<br />
intermodal transport solutions and logistics services offering for our existing and<br />
potential customer base.”<br />
SeaZone Launches Marine Data Management Software<br />
SeaZone has launched an<br />
innovative software solution<br />
designed to greatly simplify<br />
the management of marine<br />
information. SeaZone’s<br />
GeoTemporal software allows<br />
easy import, processing and<br />
presentation of marine data<br />
from multiple sources. It then<br />
creates standard formatted<br />
data so that the information<br />
can be used in different Geographic Information Systems (GIS). Previously, only<br />
high-end specialist software programs had existed and offered limited data<br />
interchange capability. SeaZone GeoTemporal represents a second generation of<br />
software, allowing the management of a wide diversity of data with greatly improved<br />
levels of interoperability. This ensures that marine information can be made<br />
widely available for further use in GIS and other systems, such as 3D modelling.<br />
SeaZone GeoTemporal is aimed at marine surveyors, engineers, data managers<br />
and consultants and the software will replace ADPC Processing Suite, SeaZone’s<br />
current data management system. SeaZone GeoTemporal manages tidal datasets<br />
and other oceanographic information including data from instruments such as<br />
Acoustic Doppler Current Profilers (ACDPs) and datasets from modelling systems.<br />
The added flexibility allows users to quality control, analyse and present complex<br />
survey and environmental monitoring data and the software allows users to add<br />
custom tidal data and links to external databases. With accessibility extended to the<br />
GIS environment, the data will benefit from further processing, manipulation and<br />
dissemination (www.SeaZone.com).<br />
2009 may/June www.scemagazine.com 9
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We always have the ideal solution. DB Schenker can take on any order for you, economically and efficiently,<br />
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news strap<br />
Swisslog Awarded Major Order by Wärtsilä<br />
Wärtsilä, a leading provider<br />
of complete lifecycle power<br />
solutions to the marine<br />
and energy industries, has<br />
commissioned Swisslog<br />
to design and implement<br />
a new Central Distribution<br />
Centre (CDC) in Kampen, the<br />
Netherlands. The new CDC will<br />
allow Wärtsilä to centralize the<br />
logistics from its nine productspecific<br />
spare parts warehouses to a single, global distribution centre. “The CDC will<br />
enable Wärtsilä’s to improve its 24/7 customer service and realize cost savings,“<br />
said Tage Blomberg, Group Vice President, Wärtsilä Services. As general contractor,<br />
Swisslog will provide a turnkey CDC solution that covers design, realization and startup,<br />
including building construction and all material handling equipment. Swisslog will<br />
implement its own software products and warehouse control system, and will also<br />
be responsible for overall system integration. “This order for a greenfield distribution<br />
centre reflects Swisslog’s approach to integrated logistics solutions, which ranges<br />
from consultancy to general contracting, to realization and service. We thereby create<br />
clear benefits for the customer in terms of cost cuts and more efficient operations,”<br />
says Daniel Fink, President of Swisslog’s Warehouse and Distribution Solutions<br />
division. The CDC will comprise inbound and outbound logistics, technical quality<br />
control and heavy goods storage, as well as automated miniload and pallet highbay<br />
storages. Construction work, which accounts for a sizeable part of the project<br />
volume, is scheduled to start in August 2009. The spare parts from Wärtsilä’s nine<br />
warehouses will be moved to the CDC during 2011 (www.swisslog.com).<br />
DSV Enters the Latin American Market<br />
In co-operation with the LOS INKAS group of companies, headquartered in<br />
Santiago, Chile, DSV Air & Sea (www.dsv.com) has paved the way for its<br />
expansion into the Central and South American markets. Both partners have<br />
decided to enter into a joint venture (JV) to become a major player in this area,<br />
defined as LATAM. The initial milestone is to own and operate offices in all the<br />
important LATAM countries within a 2 year timeframe. The JV will be branded<br />
under the name DSV-GL and became operational on 1 April 2009 in Argentina,<br />
Chile and Peru. The JV will offer integrated forwarding and logistics services to<br />
its customers in the region, with special emphasis on airfreight, ocean freight<br />
and project forwarding. Jorgen Moller, CEO of DSV Air & Sea said: “Combining<br />
the overseas network of DSV with the in-depth know-how of our partner in<br />
LATAM significantly strengthens our position and capabilities in that region.”<br />
Peter Buerger, CEO of LOS INKAS, confirmed: “This JV with the prestigious<br />
DSV offers our LATAM customers global opportunities and is an ideal strategic<br />
fit to the LOS INKAS group of companies.” Christian Ryser, Regional CEO<br />
for DSV-GL LATAM added: “The Joint Venture will leverage the strengths of<br />
both organizations and provides a compelling platform from which to deliver<br />
world-class logistics solutions and a tremendous opportunity to better serve our<br />
customer base in the region.”<br />
12<br />
Food Safety: From Farm to Fork<br />
The certification body, NQA, is now positioned to provide the food industry — often<br />
a complex global network of supply chains — with a food safety solution that<br />
transcends international borders. NQA has received UKAS accreditation to provide<br />
certification against the internationally recognized food management system standard,<br />
ISO 22000:2005, which ideally places the global company in a position to assist<br />
organizations operating in international food chains. Head of NQA, Catherine Golds,<br />
commented: “Food safety is a critical issue that must be managed throughout the<br />
food chain, especially when a single food item can include multiple ingredients from<br />
several source countries. NQA’s global presence simplifies the certification process<br />
for food sector organizations operating internationally, as all food safety certification<br />
can be obtained from a single body.” The consequences of food-borne illness can<br />
be catastrophic, not only for the consumer and health services but also for retailers<br />
and other organizations in the supply chain. “The benefits of using an international<br />
certification body can be seen throughout the food chain,” explained Catherine. “An<br />
ISO 22000 certification from NQA provides retailers with the assurance of a standard<br />
assessed and verified by a well established and trusted organization rather than<br />
having to rely on a certificate from an unknown local company,” said Catherine.<br />
An important step in safeguarding food safety is the implementation of a structured<br />
Food Safety Management System (FSMS) that is incorporated into the overall<br />
management activities of the organization. The FSMS should address quality and<br />
legal requirements in addition to safety from contamination from physical, chemical,<br />
biological hazards. ISO 22000 provides an effective framework for the development,<br />
implementation and continual improvement of FSMS. The standard can be used by<br />
any organization that is directly or indirectly involved in the food chain, including farms,<br />
fisheries and dairies, processors of meats, fish and feed, manufacturers of bread and<br />
cereals, beverages and canned and frozen food. It also applies to supporting services<br />
such as food storage and distribution and suppliers of food processing equipment,<br />
additives, raw materials, cleaning and sanitizing products and packaging. Food service<br />
providers such as restaurants, fast food chains, hospitals, hotels and mobile caterers<br />
will also benefit from gaining certification and assuring customers of safe food<br />
preparation (www.nqa.com).<br />
Navman Wireless Wins Innovation Award<br />
Navman Wireless has<br />
been named as the<br />
winner of the prestigious<br />
Business Innovation<br />
accolade at the Sentinel<br />
Business Awards for its<br />
vehicle tracking software<br />
system. The UK-leader<br />
in telematics technology,<br />
based in Keele, is at<br />
the forefront of the<br />
current growth in vehicle<br />
tracking and mobile data<br />
development. “The company is at the very edge in its field and its latest<br />
Online AVL2 high tech product, launched last year, is yet another chapter in<br />
its long line of technological success stories,” said Central Tonight presenter,<br />
Bob Warman, who handed the BIC-backed award to Navman Wireless<br />
at a glittering ceremony. “The new development takes vehicle tracking<br />
technology to a new level, and was produced following in-depth client<br />
research to establish customers’ true business requirements.” OnlineAVL2<br />
has been described as “the next generation of vehicle tracking software”<br />
and provides companies that are managing fleets with radical and dynamic<br />
new ways of viewing driver locations. It integrates full aerial photographic<br />
images with traditional street level mapping to display, at a glance from any<br />
PC, the position of vehicles in relation to neighbourhood buildings, depots,<br />
car parks, etc. Its advanced functionality and improved user interface has<br />
also been the springboard for a raft of new telematics developments (www.<br />
navmanwireless.co.uk).<br />
www.scemagazine.com may/June 2009
agilitylogistics.com<br />
KRAFT FOODS HAS RUEDI SAEGESSER.<br />
When the demand for Milka chocolate soared in Kraft Foods’ (MEA)<br />
Algerian market, Agility’s Ruedi Saegesser answered the craving. Working<br />
closely with his customer to streamline distribution, Ruedi optimized<br />
order preparation, customs procedures, and supply chain solutions from<br />
their centrally located, energy-effi cient Bartenheim warehouse. With<br />
processes expedited from end to end, handling capacity tripled in one<br />
season, satisfying Kraft’s expectation and the market’s sweet tooth.<br />
KRAFT FOODS HAS AGILITY.<br />
Ruedi Saegesser<br />
Key Accounts Manager, Kraft Foods (MEA)<br />
Agility, Basel
industry insider<br />
trAnsforminG<br />
Your suPPlY chAin<br />
Some supply chains consistently achieve better results. How do these companies achieve superior performance?<br />
A<br />
supply chain executive has a difficult<br />
challenge to face: not only do they<br />
manage a complex topic that requires<br />
the ability to deal with probabilities rather than<br />
facts, they also need to co-ordinate activities<br />
across functions, often in the face of conflicting<br />
metrics, incentives and priorities. With the<br />
pressure in today’s environment — increased<br />
complexity, cash requirements, competition<br />
and customer demands — it is even more<br />
important to have a supply chain that delivers.<br />
Given this challenge, we embarked on a<br />
major research project last year, interviewing<br />
and analysing the supply chain practices<br />
of more than 60 companies in <strong>Europe</strong> and<br />
Better cost performance<br />
North America. The research assessed the Figure 1: There are true winners in all<br />
performance of the respondents’ companies<br />
dimensions - cost, service and inventory - in every sector.<br />
in more than 50 aspects of supply<br />
Zara, which has driven a competitive advantage tool. They leverage formal training, intensive<br />
chain management, including business through its responsiveness with short, reliable mentoring relationships and thorough<br />
processes, corporate culture, network replenishment periods. With this strategy, the performance evaluations to attract and retain the<br />
configurations, organizational structures, relatively high logistics costs are offset by lower talent to run a successful supply chain.<br />
strategy, supporting infrastructure and the<br />
capabilities of personnel. After interviewers<br />
plotted the executives’ responses on a<br />
scale of one to five (five was the highest),<br />
the results were organized into tertiles and<br />
compared with supply chain performance<br />
metrics provided by the respondents on<br />
cost inventory and service levels. Our aim<br />
was to answer two fundamental questions<br />
about supply chain performance:<br />
• What separates the best from the rest?<br />
• How does a company become one of the best?<br />
Does it Really Matter?<br />
In a word: yes. Across industries, we have<br />
consistently found that the front-runners offer<br />
significantly better service than the industry<br />
average — with noticeably lower logistics and<br />
inventory costs (Figure 1).<br />
What Separates the Best?<br />
When we examined the relationship<br />
between companies’ survey scores and their<br />
performance, six broad practices emerged as<br />
being significant.<br />
Strategic focus: Winners make supply<br />
chain strategy an explicit part of their business<br />
objectives. One example is fashion retailer,<br />
14<br />
Better service performance<br />
inventory and fewer markdowns.<br />
Segmentation: Leading companies reduce<br />
complexity by segmenting the supply chain to<br />
avoid “one size fits all” execution. For example,<br />
one consumer goods producer leveraged<br />
differentiated planning to concentrate on key<br />
accounts with high fluctuations to increase<br />
forecast accuracy while reducing costs by 20%.<br />
Optimized network: A high-performing<br />
supply chain regularly reviews its entire network<br />
— including production facilities and warehouses<br />
— to ensure that it delivers required service<br />
performance at the minimum possible cost.<br />
Lean value chain: Winners use standard<br />
methodologies, including lean manufacturing,<br />
to produce efficiently and effectively. However,<br />
“lean” is not purely a production topic, many<br />
successful companies are applying it across the<br />
supply chain. Lean warehousing, lean planning,<br />
and lean retailing all reduce waste, variability and<br />
rigidity in the supply chain.<br />
Integrated planning: Even flexible supply<br />
chains require systematic planning with clear<br />
allocation of responsibilities (who is responsible<br />
for what) and quality process inputs (historical<br />
data, market knowledge, etc).<br />
Talent management: Market leaders<br />
consider talent management to be a strategic<br />
Getting There From Here<br />
No single company in our survey could claim<br />
to have mastered all six of these differentiating<br />
practices. Many companies, however, have<br />
managed to achieve dramatic improvements<br />
in their own supply chain performance. Not<br />
surprisingly, both the programme design<br />
and its execution are critical for a successful<br />
transformation. When driving a supply chain<br />
transformation, winners do two things: they<br />
identify pain points and improvement levers<br />
that will close the gap between them and the<br />
“best;” then they design and execute an effective<br />
transformation programme. The reward is an<br />
optimal supply chain in terms of service, costs<br />
and inventory — and a sustainable competitive<br />
advantage. In the next articles in this series,<br />
we will look in more detail at the methods that<br />
successful companies have used to transform,<br />
sustain and enhance their supply chains. •<br />
For more information<br />
Jochen Grosspietsch is an associate principal in the<br />
Barcelona office of McKinsey & Company, and Daniel<br />
Swan is an associate principal in the Chicago office<br />
(www.mckinsey.com). For more detailed survey results<br />
or to do supply chain benchmarking for your company,<br />
please e-mail jochen_grosspietsch@mckinsey.com.<br />
www.scemagazine.com may/June 2009
AUSTRIA | BELGIUM | CZECH REPUBLIC | DENMARK | FRANCE<br />
GERMANY | HUNGARY | ITALY | LUXEMBOURG | POLAND | ROMANIA<br />
SPAIN | SWEDEN | THE NETHERLANDS | UK<br />
www.prologis.com<br />
looking for<br />
space?<br />
these companies<br />
already have<br />
Since entering <strong>Europe</strong> in 1997, ProLogis has expanded<br />
its presence in strategic distribution markets into<br />
15 <strong>Europe</strong>an countries.<br />
Whether distributing goods around the corner or across<br />
the world, customers rely on ProLogis’ ability to deliver.
air transport<br />
GoinG liVe:<br />
lessons from terminAl 5<br />
A key measure of success for any project must be what customers experience immediately after the ‘go live’<br />
date. When projects become fully operational, how often is there a negative impact on customer service?<br />
When it comes to large projects,<br />
there is a strong tendency for<br />
top management to focus on<br />
the state-of-the-art infrastructure that is being<br />
introduced, whether it is a new distribution<br />
centre, computer system or airport terminal.<br />
Although the long-term benefits of the new<br />
infrastructure may be unquestionable, this<br />
‘management focus’ can often deflect<br />
attention away from the customer, who,<br />
as the Terminal 5 opening showed, may<br />
be severely affected by the transfer of the<br />
ongoing operation. Sadly, the importance of<br />
the ‘go live’ period is a frequently neglected<br />
area of project implementations. In today’s<br />
rapidly changing markets, managers are<br />
increasingly focused on multidisciplinary<br />
projects to re-engineer their business to<br />
provide a competitive advantage. In fact,<br />
many managers may spend more time<br />
on project work than on traditional line<br />
management responsibilities. By their very<br />
nature, new projects tend to be exciting —<br />
at least in the first few months or years of<br />
their life. However, key project personnel<br />
are often seeking to move on before the<br />
project finishes. Whereas the initial design<br />
may be exciting, the operational detail of the<br />
go live phase may seem rather mundane by<br />
comparison, and is often passed to day-today<br />
managers near the end of the project.<br />
Unless the operational management has<br />
been the key driving force behind the project<br />
from its initiation, then there is a real danger<br />
that the go live phase will not receive the<br />
attention it deserves.<br />
While this decrease in interest may be<br />
happening at the project management<br />
level, senior management is obviously very<br />
interested in a new project reaching the<br />
commissioning stage, and looks forward<br />
to the benefits that this will bring. Again,<br />
however, the focus is likely to be on the<br />
overall design of the infrastructure and how<br />
this will eventually benefit customer service<br />
and profitability. The transfer of the ongoing<br />
16<br />
We compromised<br />
on the testing of the<br />
building as a result<br />
of delays in the<br />
building programme. if<br />
i was to pick on one<br />
issue that i would do<br />
differently ... it is that<br />
particular issue.”<br />
Willie Walsh, Chief Executive, British Airways<br />
Source: Minutes of evidence taken before the House of<br />
Commons Transport Committee (7 May 2008).<br />
operation is frequently regarded as a detail,<br />
not worthy of the same attention. Should this<br />
‘detail’ of transferring the ongoing operation<br />
be regarded more seriously by senior and<br />
project management teams? The experience<br />
of the opening of Terminal 5 would suggest<br />
that this should be the case and, in fact,<br />
this is supported by previous research<br />
at Cranfield School of Management into<br />
warehouse automation projects — many of<br />
which happened to involve similar sortation<br />
technology as the baggage handling systems<br />
at Terminal 5.<br />
Terminal 5: Success or Failure?<br />
It can be argued that Heathrow Terminal 5<br />
was an outstanding success, with the<br />
project reportedly completed on time and<br />
within budget. Awards have been given<br />
for its architectural design and the new<br />
terminal provides a platform for delivering<br />
higher customer service levels than<br />
were previously possible at Terminals 1<br />
and 4. Similarly, it could be argued that<br />
the planning for the go live phase was<br />
extensive and thorough with preparations<br />
including the following:<br />
• a 6 year construction programme<br />
• 400,000 hours of software engineering for<br />
the 17 kilometres of conveyors<br />
• 6 months of training staff and testing<br />
systems<br />
• 15,000 volunteers conducting 66 trials<br />
• 32 aircraft trials<br />
• baggage system tested (fully loaded) 20<br />
times prior to opening.<br />
Nevertheless, the go live was a customer<br />
and public relations disaster. As reported<br />
in the media, there were long queues and<br />
delays at the terminal, thousands of bags<br />
went missing (28,000 were not with owners<br />
4 days after opening) and many flights were<br />
cancelled (about 500 in the first 2 weeks).<br />
The backlog of baggage was so severe that<br />
many were forwarded to Milan and the USA<br />
for sorting and despatch to the last known<br />
www.scemagazine.com may/June 2009
addresses of customers. In addition, some<br />
insurance companies declared Terminal 5<br />
as a “known risk” and would therefore not<br />
compensate travellers for lost baggage.<br />
The corporate consequences were<br />
severe, with British Airways suffering a loss of<br />
reputation. The financial cost to the company<br />
was reported to be £16 million in the final<br />
5 days of March 2008 alone and traffic<br />
volumes in March/April 2008 were down<br />
from 5.6 million to 5.3 million passengers<br />
year-on-year (although, as always, this could<br />
be due to a mix of factors). As for the British<br />
Airports Authority, the bad publicity has<br />
stimulated debate concerning their control of<br />
the three major London airports. In addition,<br />
affected airlines and retailers have sought<br />
compensation. For example, passenger<br />
throughput at Terminal 5 was down from the<br />
projected 70,000 to 40,000 per day (owing to<br />
the postponement of the transfer of longhaul<br />
flights), resulting in a loss of business<br />
and some closures of airport shops. While<br />
the go live difficulties appeared to come as<br />
a surprise to all concerned, there have been<br />
plenty of warnings of this danger, not only<br />
from other airport openings (such as Denver<br />
and Hong Kong, which also had significant<br />
baggage handling problems) but also from<br />
many other large-scale projects. Some of<br />
these, such as the new distribution centres<br />
for Sainsbury’s were also well publicized, with<br />
the availability of goods in the shops being<br />
disrupted, their market share falling and their<br />
share price being affected.<br />
Cranfield Research<br />
Prior to the Terminal 5 debacle, a research<br />
study was conducted by Cranfield School of<br />
Management and facilitated by The Chartered<br />
Institute of Logistics and Transport (UK). A<br />
survey of 27 automation implementation<br />
projects was conducted to answer the<br />
following questions:<br />
• How often is customer service disrupted<br />
during the ‘go live’ phase of such projects?<br />
• What are the main reasons for disruption?<br />
• What lessons can be learned?<br />
The projects were all based at distribution<br />
centres that had implemented automated<br />
equipment, such as storage and retrieval<br />
systems (that is; computer controlled cranes<br />
for pallet or case storage), conveyors and<br />
sortation systems (similar technology to the<br />
baggage handling system at Terminal 5),<br />
order picking systems (such as automated<br />
dispensers) and unloading/loading equipment.<br />
Approximately half of these automation<br />
projects were in new buildings, as at Terminal 5,<br />
and about half in existing buildings. The results<br />
showed that almost 80% of implementations<br />
involved some disruption to the ongoing<br />
operation, with 33% experiencing moderate or<br />
extensive disruption (Figure 1).<br />
Minimal<br />
Disruption (46%)<br />
No<br />
Disruption (21%)<br />
Extensive<br />
Disruption (8%)<br />
Moderate<br />
Disruption (25%)<br />
Figure 1: Extent of disruption to the ongoing operation.<br />
Placed in this context, it should therefore<br />
not have been surprising that Terminal 5<br />
experienced difficulties at the time of opening.<br />
The survey also found that the sites that<br />
suffered from major disruptions tended to<br />
have much shorter ‘ramp up’ times, with only<br />
1 month being allowed on average for the<br />
full operation being transferred, whereas the<br />
other sites allowed an average of 3 months.<br />
Interestingly, the plan at Terminal 5 was for<br />
an initial 350 flights per day, followed by a<br />
further 120 long-haul flights within a month.<br />
The long-haul flights were later staged during<br />
a 7 month period, after the initial opening<br />
difficulties. The reasons for the disruptions, as<br />
quoted by the survey sites, were wide ranging<br />
(Figure 2), including the information technology<br />
2009 may/June www.scemagazine.com 17
air transport<br />
Factors Respondents (%)<br />
IT system 32<br />
Equipment installation 27<br />
Consolidation of sites 11<br />
Building construction 6<br />
Impact of new technology on people 6<br />
Failure of people to work on time 6<br />
Equipment not performing to specification 6<br />
Extended handover time 6<br />
Figure 2: Reasons for disruption to the ongoing operation.<br />
Service Level<br />
system, the equipment installation, the building<br />
construction and the impact of new technology<br />
on people. This range of reasons indicates the<br />
multidisciplinary nature of such projects.<br />
Operational Planning<br />
The key question that remains is whether<br />
company management is fully aware of<br />
the importance of operational planning and<br />
preparations for the go live period. In our<br />
survey, only one company mentioned they had<br />
a detailed plan for the ongoing operation and<br />
this company experienced no service level dip.<br />
In the case of Terminal 5, the Chief Executive<br />
of British Airways advised the Transport Select<br />
Committee that the building programme was, in<br />
fact, not 100% complete and this compromised<br />
testing. At the same hearing, the Chief Executive<br />
of the British Airports Authority advised that 28<br />
of the terminal’s 275 lifts were not operational<br />
on day one. It was reported that a discussion<br />
took place as to whether to scale down or<br />
postpone the opening but, presumably, it was<br />
18<br />
‘Go Live’<br />
Implentation Date<br />
Figure 3: Service levels dip, potentially arising from warehouse automation projects.<br />
Desired Level<br />
Original Level<br />
Time<br />
decided that the risk of a significant disruption<br />
was very low. With hindsight, the Chief Executive<br />
of British Airways stated that he regretted that<br />
decision and the one major lesson learned was<br />
that the planned 6 month testing period should<br />
not have been compromised. This should act<br />
as a valuable lesson for all management teams<br />
involved in major projects.<br />
Potential Risk to Customer Service<br />
The potential effect of automation projects on<br />
customer service levels can be depicted by<br />
a ‘service level dip’ (Figure 3). The intention<br />
of the project is often to improve customer<br />
service levels but, in the short-term, it needs<br />
to be recognized that there is a significant<br />
risk of a reduction in those service levels —<br />
unless the go live period receives the senior<br />
management attention that it deserves.<br />
Success Factors<br />
A key measure of success for any project<br />
must be what customers experience<br />
immediately after the go live date. There are<br />
three important lessons from our research<br />
and from the experience at Terminal 5.<br />
First, a key component of any project<br />
should be a detailed plan of exactly how<br />
the operation will continue through the<br />
go live period. This should include risk<br />
assessments of what could go wrong in<br />
this critical period and contingency plans<br />
for every potential eventuality. Secondly,<br />
the testing, training and commissioning<br />
programme should be seen as an essential<br />
part of the project. It is not something that<br />
can be ‘squeezed’ if other elements of the<br />
project overrun. Finally, the ramp-up of the<br />
operations should be realistic. ‘Teething<br />
problems’ and ‘snagging’ are normal in all<br />
large infrastructure projects and, therefore,<br />
the scale of the operation should be<br />
increased gradually so that these problems<br />
can be rectified without affecting customer<br />
service. Managers are frequently bullish<br />
about projects and, often, it is regarded as<br />
being negative to add a word of caution or<br />
realism to the discussions. A letter by Alan<br />
Braithwaite, visiting professor at Cranfield<br />
School of Management, to the Financial<br />
Times stated that: “T5 shows a troubling<br />
lack of corporate memory and learning,”<br />
as there have been many prior instances of<br />
such events. All managers need to consider<br />
how to incorporate these important lessons<br />
from the past into their projects. •<br />
For more information<br />
Dr Peter Baker<br />
Senior Lecturer in Logistics and <strong>Supply</strong><br />
<strong>Chain</strong> Management<br />
Cranfield School of Management<br />
Cranfield, Bedford MK43 0AL, UK.<br />
T. +44 1234 751 122<br />
peter.baker@cranfield.ac.uk<br />
www.som.cranfield.ac.uk<br />
www.scemagazine.com may/June 2009
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defence procurement<br />
A meAns<br />
to An enD<br />
Jamil Rashid explains why supply chain change programmes could be key to transforming how<br />
the whole defence and aerospace industry works.<br />
The UK aerospace and defence industry is working hard<br />
to raise the performance of its supply chains and, in so<br />
doing, accelerate its competitiveness within the global<br />
marketplace. Reduced auditing via recognized supply chain<br />
accreditation, a consistent approach to supply chain development<br />
and performance measurement, and improved supply chain<br />
relationships are all in the mix. A significant number of industry<br />
suppliers are now being consistently measured and assessed<br />
by most of the primes. This means that they are likely to have<br />
to undergo fewer audits, saving time through duplicated effort.<br />
For the same reason, the primes save resources … because the<br />
lower tiers of the supply chain are doing some of these audits<br />
on behalf of the industry. Although the primes are now working<br />
more closely together to reduce confusion in the supply chain,<br />
there is a much greater prize: changing how the industry works —<br />
how it is managed and how it communicates — transforming all<br />
business-to-business transactions, not just the supply chain.<br />
Focus on Leaders<br />
To fulfil this potential, the industry needs to focus far more<br />
time and energy on supply chain business leaders. One of<br />
the reasons why long-term improvements sometimes fail to<br />
materialize is that improvement plans between companies tend<br />
to be one-offs: once these initial plans have been implemented,<br />
it is unusual for further plans to be created that follow through<br />
to further improvements. Success will be truly demonstrated<br />
when the process owners are really working together, regardless<br />
of the involvement of improvement teams. And only then will<br />
businesses in the supply chain really talk the same language,<br />
which is so vital to creating sustainable improvement plans that<br />
will become a way of working.<br />
How to achieve this common language? Leaders need to<br />
sit down, clarify and document how the strategies of their<br />
organizations fit together and drive through supply chain<br />
initiatives, from the top down. Failure to take this critical step is<br />
why supply chain partners who are trying to do the same thing<br />
in their efforts to improve performance are, in reality, often poles<br />
apart in terms of their understanding and communication of<br />
strategy, planning and measurement. What you get is people<br />
talking very different languages — suppliers saying “but you don’t<br />
pay on time” and customers complaining that “you don’t deliver<br />
on time” — instead of having a consistent structure within which<br />
both parties are happy to operate to understand the real problem.<br />
Unstructured arguments just create barriers ... and the result is<br />
massive waste.<br />
20<br />
Develop Improvement Structures<br />
Improvement plans need to become a part of how businesses<br />
routinely communicate and will only be truly effective when<br />
they are central to the behaviour of managers at all levels of the<br />
organization. Again, this is where leaders have a critical role to<br />
play. They need to be involved, to ensure that all key continuous<br />
Case study<br />
A tier one UK aerospace manufacturer was experiencing longstanding poor delivery<br />
performance, despite several internal improvement initiatives focusing on manufacturing<br />
processes. An organization-wide business improvement process identified the supply of<br />
PCBs as the key factor influencing on-time delivery. Three critical suppliers were invited<br />
to join the project team, which created improvement actions focusing on the deployment<br />
of strategic stock, better forecasting and demand pull on high volume parts. Work orders<br />
launched on time increased from 50% to 80%; on time delivery improved by 10%; and<br />
communication (plus relationships) was improved. These are good results, but a closer<br />
look at the leadership behaviours of the three businesses concerned points to missed<br />
opportunities:<br />
• The three managing directors had very little contact after the initial improvement<br />
initiative. This is not untypical, because many business leaders see supply chain<br />
initiatives as a means to short-term improvements and industry recognition rather than<br />
a way of changing how the business works.<br />
• The improvement plans were not linked to the strategy of the businesses concerned,<br />
so actions were not given the necessary priority and there was poor understanding of<br />
the potential benefits to be gained.<br />
• The plans were not detailed enough, so people were not always clear on what they<br />
had to do, actions were assumed to have been completed when in fact they were not<br />
and the reasons why were not fully understood.<br />
• People seemed to be doing things because they were part of the ‘supply chain<br />
initiative,’ rather than something that the business really needed to do.<br />
• The leaders of the businesses seemed to have little detailed knowledge of how<br />
activities were progressing and it was evident that they did not review them on a<br />
regular basis.<br />
• The companies were clearly not convinced by each other’s knowledge of improvement<br />
techniques, purchasing methods, etc. Consequently, they did not focus their energies<br />
on working together to implement the most effective solutions. Although this is quite<br />
normal in many team environments, the teams never moved past the ‘storming stage,’<br />
which a true long-term relationship would demonstrate.<br />
Overall, none of the businesses or their leaders truly changed their behaviours in the longterm<br />
from a ‘supply chain perspective.’ Also, most of the improvements gained from the<br />
initial workshop programme were not rolled out as a way of working, because they were<br />
not embedded into the minds of the leadership as a way of working. Although those more<br />
actively involved in the project saw the need to cascade the programme throughout the<br />
organization, it was only seen as ‘the supply chain initiative.’<br />
Interestingly, in common with the vast majority of supply chain activities, the initiative<br />
was focused heavily on manufacturing, even though the assessments demonstrated<br />
many opportunities across the organization, some even more important to implement<br />
than the manufacturing element. How much more effective might it have been if, for<br />
example, the sales and development project teams had been involved, working together<br />
to develop long-term improvements?<br />
www.scemagazine.com may/June 2009
improvement plans need to become<br />
a part of how businesses routinely<br />
communicate and will only be truly effective<br />
when they are central to the behaviour of<br />
managers at all levels of the organization.<br />
improvement activities show clear links to strategy, that all<br />
key improvement suggestions are based on hard data and<br />
analysis (not assumption and gut feel) and that all key activities<br />
are planned in detail. Senior management needs to be there,<br />
imposing consistency, structure and detail to ensure on-time task<br />
completion. And the individual teams responsible for the lower<br />
level improvements need to develop highly visible plans that really<br />
demonstrate what needs to be done to achieve key milestones.<br />
The key indicators that demonstrate if a business is really<br />
serious — if it is really going to make this become part of<br />
the ‘way of working’ — is how well improvement plans are<br />
incorporated into the overall business plan and, crucially, how<br />
often the milestones are truly reviewed and pushed at a high<br />
level. The reality is that most organizations could do much more<br />
in both of these areas.<br />
Ask the Right Questions<br />
So, leaders need to create the management structure in which<br />
strict rules are applied and an environment in which teams<br />
understand the issues and can be helped to manage the<br />
implementation of the solution. And they need to ask the right<br />
questions. Are people clear on why they are doing what they<br />
are doing? Are managers really involving their teams? How<br />
are you measuring your activities? How are you linking these<br />
to your goals? Only when leaders get the right answers to the<br />
right questions will supply chain improvement partnerships<br />
truly work. The aerospace and defence industry is creating<br />
a strong platform to build on and is certainly heading in the<br />
right direction. But there are further challenges to embrace:<br />
above all, as the industry strives towards increasing global<br />
competitiveness in a very challenging market, supply chain<br />
improvements need to be seen as a way of making businesses<br />
as a whole work better — in a more structured and disciplined<br />
way. If it can rise to this challenge, the entire industry will benefit<br />
and the drive for a more effective supply chain will truly become<br />
a means to an end, not an end in itself. •<br />
About the Author<br />
Jamil Rashid is the founder of JARA, a consultancy that has delivered performance<br />
improvement programmes to FTSE 250 companies in the aerospace and defence<br />
sectors, and has close relationships with a number of significant industry bodies and<br />
academic institutions, including WEAF (West of England Aerospace Forum), SBAC<br />
(Society of British Aerospace Companies) and the Lean Aerospace Initiative led by the<br />
Universities of Bath, Cranfield, Nottingham and Warwick. For more information, visit<br />
www.jara-management.com or contact Jamil Rashid on +44 208 261 4591.<br />
2009 may/June www.scemagazine.com 21
after the recession<br />
Protect<br />
AnD surViVe<br />
Long supply chains may seem a liability in the current climate; but, warns Simon Butcher, we must not<br />
throw the baby of recovery out with the bathwater of recession.<br />
It is generally agreed that we are living in<br />
unprecedented times. Despite rumours<br />
of ‘green shoots,’ almost every index<br />
has been moving against commerce<br />
and business (see Figure 1). Sales are<br />
down, costs are generally up, risks — from<br />
defaulting partners to piracy on the high<br />
seas — have increased and while the<br />
nominal costs of working capital may have<br />
declined, finding a reliable source of funds<br />
is much akin to looking for hen’s teeth. For<br />
businesses with long supply chains — and<br />
‘long’ here is not just about geographical<br />
distance, it is also about time, although the<br />
former usually implies the latter — current<br />
adverse trends are exacerbated: long<br />
lead times, long transit times, large batch<br />
sizes and relatively inflexible manufacturing<br />
systems lead to high stock commitments,<br />
high inventories and strains on the physical<br />
and financial resources of all the partners in<br />
a supply chain.<br />
“Action this day,” as Churchill would<br />
have put it, is vital; yet, many business<br />
responses, such as attempting to change<br />
payment terms around the transport<br />
element, really amount to moving the deck<br />
chairs on the Titanic. Logistics cost is very<br />
rarely the crucial element of total supply<br />
chain cost. But if we are looking at more<br />
fundamental changes to our supply chains<br />
to survive the recession, we also need to<br />
consider how we will survive and succeed<br />
in the upturn that, at some unknown<br />
date, will follow. Recessions equalize us;<br />
we all face much the same pressure: in<br />
the upturn, the surviving firms or supply<br />
chains that can turn their businesses<br />
around quickly will be those that survive<br />
and prosper. In Figure 2, I’ve suggested<br />
how we can understand our current<br />
22<br />
supply chains, in terms of immediate and<br />
longer-term responses.<br />
If, for example, we have a lot of orders<br />
that have not yet been despatched, or<br />
even manufactured, by our partner in<br />
China (or any other Low Cost Country),<br />
there are several options. In order of<br />
magnitude, these range from the relatively<br />
trivial (changing payment terms, for<br />
example), through reducing order quantities<br />
or deferring orders up to the outright<br />
cancellation of orders. Assuming you can<br />
do this contractually, reduction, deferral or<br />
cancellation will have the most immediate<br />
impact on a business that is facing<br />
declining demand. But, what does this say<br />
about your positioning in the upturn? If the<br />
item is a ‘commodity,’ perhaps not very<br />
Figure 1: Most measures are moving against business in the recession.<br />
much! But, if you have nurtured a supplier<br />
and helped them to become in some sense<br />
dependent on your custom, whether in East<br />
China or West Bromwich, then the adverse<br />
impact on supplier relations may become<br />
a significant issue when you next wish to<br />
ramp up production.<br />
This scenario assumes that you can even<br />
spot the demand downturn sufficiently in<br />
advance. Suppose that your products or<br />
components have already been made or<br />
are even now in transit. Again, there are<br />
options. You could choose a slower transit<br />
route. Why airfreight when the need is no<br />
longer urgent? You could arrange to store<br />
finished parts or goods in the country of<br />
manufacture. You still have storage costs,<br />
but they are likely to be lower than those<br />
www.scemagazine.com may/June 2009
the model that appears to have just failed is predicted<br />
on demand that is predictable and steady or increasing.<br />
for storage in Western <strong>Europe</strong>. You might<br />
consider selling the now surplus finished<br />
goods in their country or region of origin,<br />
rather than bringing them to the West at<br />
all. Or, of course, seek another market;<br />
even in a recession, some countries are<br />
better placed than others and it may be<br />
possible, for example, to divert shipments<br />
to Latin America rather than Iberia. Of<br />
course, your downturn may have happened<br />
after your shipments have arrived. You can<br />
store these goods (with all the relevant<br />
charges and the risk of damage, decay and<br />
obsolescence) or sell on, perhaps at little or<br />
no profit, into secondary markets. (That, of<br />
course, carries its own risks; if consumers<br />
get used to finding your branded goods in<br />
low cost outlets, they may not be happy,<br />
come the upturn, when you try to reimpose<br />
your normal cost margins.)<br />
Figure 2: The biggest benefits are from actions early in the cycle.<br />
Given the above strategic choices, it<br />
should be obvious that small things such<br />
as changing your IncoTerms are not really<br />
relevant in the greater scheme of things.<br />
But perhaps more importantly, the figure<br />
works in reverse; whereas in a downturn,<br />
you want to be at the left hand side of<br />
the graph where the earliest and least<br />
damaging actions can be taken, to take<br />
advantage of an upturn you need to be at<br />
the right hand side — where goods are<br />
instantly available to meet new demand.<br />
If your strategy to meet demand involves<br />
ordering from a distant supplier, with whom<br />
you did not keep faith during the recession,<br />
you are unlikely to succeed.<br />
Planning for Recovery<br />
So, how do we avoid the extended (in<br />
time or distance) supply chain becoming<br />
an issue as sales and demand recover?<br />
First, we have to understand the problem.<br />
If the ‘cost’ (in inverted commas because<br />
this won’t show up on the typical balance<br />
sheet) of lost sales and the very real costs<br />
of shipping, repackaging/remarketing,<br />
obsolescence and so on are included, it<br />
may be that ‘low cost sourcing’ from, for<br />
example, Asia, isn’t so low cost any more.<br />
The model that appears just to have failed<br />
us is predicated on the idea that demand<br />
is predictable and steady or increasing.<br />
For several years of the next upturn, that is<br />
not going to be true — demand and sales<br />
patterns will be febrile, unreliable — yes,<br />
the ‘fashion’ element of demand may still<br />
be there, but not perhaps in the predictable<br />
volumes that we have become used to.<br />
And whatever patterns emerge, there will<br />
be a significant time lag between noticing<br />
2009 may/June www.scemagazine.com 23
after the recession<br />
Figure 3: Long supply chains increase the risk of lost sales.<br />
an upturn in demand and being able to<br />
respond. This is likely to be exacerbated by<br />
the damaging effects of the downturn. For<br />
example, many of your ‘cheap and cheerful’<br />
suppliers may have gone bust — precisely<br />
because they were cheap and cheerful:<br />
doubtless highly competent in meeting your<br />
current needs, but without the investment,<br />
in capital or intellect to match rapidly<br />
changing times.<br />
Logistically, this also applies. Shipping<br />
capacity, come the upturn, may be seriously<br />
shorted — carriers are postponing or<br />
cancelling new build commissions and<br />
scrapping older vessels (in itself not<br />
perhaps a bad thing). And even if ships<br />
are merely ‘laid up,’ it takes a long time to<br />
recommission and recrew. There will be<br />
under-capacity, which will drive up market<br />
rates. Domestically, much the same applies.<br />
UK figures in April suggested that HGV<br />
drivers were one of the largest classes of<br />
trade seeking to ‘sign on’ to unemployment<br />
benefit, and that is probably true across<br />
<strong>Europe</strong>. As the trade or profession has had a<br />
long-standing recruitment problem, many of<br />
those now out of work are towards the end<br />
of their careers, and may not re-enter the<br />
transport market even when things improve.<br />
Again, under-capacity will drive up rates.<br />
Figure 3 attempts to compare unit cost<br />
distributions between UK/EU supply chains<br />
24<br />
and those from China or similar countries.<br />
There are, of course, massive differences<br />
in many factors — cheap labour in China,<br />
lower inventory costs in <strong>Europe</strong> (because<br />
of the shorter supply chain time scales<br />
possible). Material costs are similar, as<br />
you would expect with most commodities<br />
traded globally (although China, particularly,<br />
appears to be using sovereign wealth to buy<br />
up, or at least pre-empt, future flows: who<br />
can blame them? It’s exactly what the UK<br />
did when we were top dog a hundred years<br />
ago!). The interesting bit is in ‘lost sales.’<br />
The expansion on the right of Figure 3 shows<br />
where this submerged rock of loss lies —<br />
generalized, obviously. Different businesses<br />
will have different patterns or orders, sales,<br />
manufacturing and inventory — but the point<br />
is that we can predict, with fair certainty,<br />
that just when companies believe they<br />
have clawed their way out of the current<br />
morass, they are going to find that they<br />
can’t capitalize on this because they have,<br />
in simple terms, failed to get the stock on<br />
the shelf. How do you avoid this schoolroom<br />
error? Essentially, by taking a holistic supply<br />
www.scemagazine.com may/June 2009
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after the recession<br />
Figure 4: Look at the whole chain – procurement process has much more impact than logistics technique.<br />
chain view that understands where both<br />
costs and delays build up, what causes them<br />
and how they may be overcome.<br />
The Agile <strong>Supply</strong> <strong>Chain</strong><br />
Agility has been a staple of supply chain<br />
preaching for a while, but I am unsure that<br />
it has been properly recognized. Typically,<br />
at least for supply chain professionals, this<br />
has meant using often-expensive resources<br />
(airfreight, for example) to maximize the ability<br />
to get merchandise into the market in which<br />
the demand exists. But, actually, as we can<br />
see in Figure 4, classical logistics activities<br />
have but a trivial impact on overall lead times,<br />
and are in many cases about as slick as it is<br />
reasonable to expect. Instead, we need to<br />
focus on procurement and manufacturing.<br />
This is where the gap between an emergent<br />
demand and the ability to supply that<br />
demand really lies. Of course, in an ideal<br />
world, procurement, manufacturing and<br />
logistics would all be part of an holistic<br />
supply chain ‘view.’ But, as we all know, that<br />
situation is still fairly rare. So, my advice is<br />
necessarily aimed at logisticians, and can be<br />
summarized as follows:<br />
• Your own logistical actions aren’t going to<br />
save the company: you need a co-ordinated<br />
response across the supply chain.<br />
• Take action now.<br />
• Don’t ship to market until the market is there.<br />
26<br />
classical logistics<br />
activities have but<br />
a trivial impact on<br />
overall lead times,<br />
or are as slick as<br />
it is reasonable<br />
• While you are managing for survival, plan<br />
for the upturn: if the notorious ‘green<br />
shoots of recovery’ appear, have you<br />
got stock in manufacture, in transit or<br />
in store, that can fertilize those shoots,<br />
and are the lead times such that you<br />
can capitalize on the upturn? Your<br />
competitors may have.<br />
• That suggests that it may be worth<br />
paying more (or at least not cutting back)<br />
on agility: look at the right areas of your<br />
supply chain, particularly suppliers and<br />
procurement; how do you commission<br />
suppliers, deal with them, pay them and<br />
keep them on your side.<br />
• Retaining future logistics capacity (even,<br />
perhaps, if payments seem excessive against<br />
current rates and activity) may be critical.<br />
And, finally, I am certainly not advocating<br />
that we abandon Far Eastern (or other<br />
LCC) supply sources; but we do need to<br />
drastically improve, with the suppliers’ cooperation,<br />
lead times, and this is absolutely<br />
the right time to be doing it. •<br />
Simon Butcher<br />
For more information<br />
Simon Butcher is a Principal at Crimson & Co.,<br />
supply chain consulting (www.crimsonandco.com).<br />
www.scemagazine.com may/June 2009
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2009 may/June www.scemagazine.com 27<br />
PM4i
etail focus<br />
Dcs finD A Voice<br />
Voice picking technology gives high returns for music and food distributors<br />
Zetes, the Auto-ID solution provider,<br />
has implemented a voice picking<br />
solution at Faber Music Distribution,<br />
one of <strong>Europe</strong>’s largest music distributors and<br />
a subsidiary of music publishers, Faber Music<br />
Ltd. The voice solution is the final element of<br />
a Warehouse Management System, provided<br />
by Solarsoft Business Systems, that also<br />
includes installing a wireless network, handheld<br />
terminals and truck-mounted terminals within the<br />
company’s distribution centre, in Harlow, Essex.<br />
Faber Music prints under its own imprint<br />
and also controls the <strong>Europe</strong>an print rights to<br />
Warner Brothers Publications and EMI music<br />
publishing, as well as distributing other music<br />
catalogues such as Alfred Publishing, Alfred<br />
Lengnick, Barenreiter, Josef Weinberger,<br />
Trinity College London, Peters Edition and<br />
the Hungarian publisher, EMB. Faber Music<br />
Distribution stocks in excess of 100,000 titles<br />
— each with its own unique Sku — and ships<br />
more than 3500 orders for sheet music and<br />
related products, generating in excess of<br />
46,000 order lines per month. The company<br />
sells to both music retailers and wholesalers<br />
worldwide, together with sales to the end-user<br />
through its website (www.expressprintmusic.<br />
com). Owing to ever increasing costs and<br />
a competitive market, Faber needed to<br />
examine ways of cutting costs and making<br />
the distribution centre more efficient. Voice<br />
picking, with its relatively short-term return on<br />
investment, provides a high impact solution by<br />
cutting pick times by at least 25% and virtually<br />
eliminating picking errors.<br />
John Hepworth, Managing Director of<br />
Faber Music Distribution, says: “The new voice<br />
system has had to be very flexible to make<br />
our rather complex business work, with orders<br />
being split into three parts — general stock<br />
orders, bulk picking and archive items — which<br />
are manufactured on demand. But, after careful<br />
design, implementation and testing, the system<br />
really works well for us. The other important<br />
issue in the current climate is efficiency — and<br />
switching to voice is even more significant,<br />
helping us to create a leaner machine. It means<br />
that we can get orders out to customers more<br />
quickly, ship stock faster into stores and be in<br />
a position to take re-orders more quickly too.<br />
Looking ahead, the voice system will also make<br />
28<br />
the warehouse more efficient, enabling us to<br />
reduce overtime costs during the year and<br />
operate a more flexible workforce to meet our<br />
busiest trading periods.”<br />
Faber’s picking system illustrates the<br />
benefits of voice-directed picking as a<br />
warehouse optimization solution for small to<br />
medium sized businesses (SMEs). After its<br />
eight pickers had used the Zetes/Vocollect<br />
voice system for just one week, Faber Music<br />
Distribution was able to see an instant increase<br />
in picking rates compared with its previous<br />
paper-based system. Now, a single picker<br />
can complete anything up to 200 order lines<br />
per hour compared with a previous average of<br />
50–70 order lines per hour. In addition, owing to<br />
a multipick solution, pickers can simultaneously<br />
pick 10 orders at a time, providing further<br />
productivity improvements. From the onset<br />
of the project, Faber’s warehouse operators<br />
were involved in the migration to voice and are<br />
equally enthusiastic about their new picking<br />
system, which has been customized to identify<br />
order lines according to their format: ‘copy’ for<br />
printed music, ‘CD’, ‘DVD’ or ‘Set’ for music<br />
sets and orchestral scores. The system also<br />
switches from descriptive identifiers — such<br />
as the abbreviated title for the majority of<br />
mainstream and English language publications<br />
— to item number identifiers that are used<br />
for foreign language publications and more<br />
obscure, international composers.<br />
“The users really love the new system<br />
and were very keen to start using it,” adds<br />
Hepworth. “It is human nature to avoid change<br />
and at the start we had a few, mainly older<br />
members of staff, within the team who were<br />
quite apprehensive. But once they started<br />
working with voice, all their concerns were<br />
allayed straight away — and they have said<br />
they wouldn’t want to go back to a paperbased<br />
system.”<br />
James Hannay, Managing Director UK<br />
and Ireland for Zetes, says: “Voice picking<br />
has traditionally been seen as the preserve of<br />
large companies running very high throughput<br />
warehouse operations. This implementation<br />
for Faber demonstrates the flexibility of voicedirected<br />
working, and proves that SMEs<br />
too can see an immediate efficiency and<br />
productivity return when they make the switch.”<br />
Faber Music Distribution is using Vocollect<br />
Talkman wireless headset and belt pack<br />
devices with the 3iV voice recognition<br />
software, supplied by Zetes. The voice<br />
system is integrated directly into Solarsoft’s<br />
integrated ERP solution and Warehouse<br />
Management System.<br />
The Co-operative Group, the UK’s largest<br />
mutual retailer — and its fifth largest food<br />
www.scemagazine.com may/June 2009
the co-op has seen<br />
much higher than<br />
anticipated returns,<br />
particularly for Zetes’<br />
voice system, with<br />
pick errors down by<br />
as much as 70%<br />
and picking rates<br />
improved beyond<br />
original business case<br />
estimations.<br />
retailer — is also expanding its use of voice<br />
picking technology. Zetes’ British subsidiary<br />
is a longstanding supplier to Co-op, and its<br />
voice solution will soon be supporting 1200<br />
warehouse users across six distribution<br />
centres (DCs) serving more than 4400<br />
retail stores. The Co-operative Group first<br />
implemented a voice picking system in its<br />
West Thurrock DC, in 2006. Since then,<br />
Zetes has implemented voice at three more<br />
Co-operative sites, with plans to extend usage<br />
to a further two DCs, by mid-2009, at the<br />
Thetford, Norfolk DC and a new site, due to<br />
be opening at Birtley, Gateshead, which will<br />
replace two older DCs.<br />
Zetes has worked with The Co-operative<br />
Group throughout the project, which included<br />
a complete overhaul of the organization’s<br />
WMS system and migration to a wireless,<br />
real-time infrastructure at each DC. Voice<br />
was selected as the right technology to<br />
enable faster picking because of the speed<br />
and complexity of their warehouse operation<br />
and high numbers of product lines stocked.<br />
Although The Co-operative’s business<br />
case for its WMS overhaul and voice<br />
implementation was built around a 3–4 year<br />
payback, the organization has seen much<br />
higher than anticipated returns, particularly for<br />
Zetes’ voice system, with pick errors down by<br />
as much as 70% and picking rates improved<br />
beyond original business case estimations.<br />
Operational and management performance<br />
targets are also being continually improved<br />
upon — beyond expectations — at live ‘voice’<br />
sites, and training of new users can now be<br />
completed in less than 4 hours. Zetes was<br />
selected as The Co-operative’s preferred<br />
voice technology partner because of its<br />
reputation as the Auto-ID system integrator<br />
with the most extensive voice expertise and<br />
pan-<strong>Europe</strong>an experience.<br />
Tim Edwards, Retail Logistics Business<br />
Projects Manager at The Co-operative, says:<br />
“Zetes not only matched our requirements<br />
regarding availability, cost and other critical<br />
criteria, it also understood our issues from the<br />
beginning and we were impressed by its proactive<br />
approach.” The Group is using Vocollect<br />
Talkman hardware and the 3iV Solution,<br />
implemented by Zetes. The voice system is used<br />
for all picking and marshalling activities across<br />
multiple warehouse environments, including<br />
ambient, produce, chilled and frozen areas.<br />
Alain Wirtz, CEO of Zetes, comments: “We<br />
are very pleased that such a highly reputed<br />
organization as The Co-operative Group<br />
recognizes the added value of our experience<br />
and ability to deliver large projects to major<br />
<strong>Europe</strong>an retailers. This project was an<br />
important rollout, which perfectly illustrates<br />
the advantages a company can get from 3iV<br />
Crystal as a voice solution — in particular<br />
that our voice solutions are adaptable for<br />
use within most warehouse environments.<br />
Pickers working in frozen areas will be very<br />
appreciative of the positive benefits of using<br />
a voice interface.” In addition, the voice<br />
system has proved very popular with The Cooperative’s<br />
multilingual workforce, who found<br />
it both easy to use and convenient to work<br />
with, in their native tongues. Edwards adds:<br />
“Voice technology allows us to ensure that<br />
our customers receive a timely and accurate<br />
service, and that’s what is most important to<br />
the business.” •<br />
More information<br />
Zetes Industries is a leading pan-<strong>Europe</strong>an company<br />
in Auto-ID, using both emerging and mature<br />
technologies (barcode, voice recognition, RFID,<br />
smartcards, biometrics). The Zetes group has its<br />
headquarters in Brussels, with subsidiaries in Belgium,<br />
Germany, France, Ireland, Israel, Italy, Ivory Coast, the<br />
Netherlands, Portugal, Spain, Switzerland and the UK<br />
(www.zetes.com).<br />
2009 may/June www.scemagazine.com 29
strap mobile solutions<br />
hoW cAn mobilitY<br />
solutions best serVe<br />
the suPPlY chAin?<br />
Rikke Helms looks at how mobile applications can help, not hinder.<br />
Throughout <strong>Europe</strong>, the recession is<br />
forcing companies across almost<br />
every sector to cut their workforces<br />
to compensate for lost revenues. Yet, at the<br />
same time, the onus on these companies to<br />
provide high quality customer service has<br />
never been greater. Greater competition<br />
and greater awareness have made<br />
customers more adept at migrating their<br />
business to the supplier that best meets<br />
their demands — whether it’s providing the<br />
cheapest product or delivering the highest<br />
standard of service. Customer relationships<br />
can now be made or broken by issues such<br />
as company response times, the speed<br />
of a sale — from order placement through<br />
to delivery — or the ability of couriers to<br />
answer questions or solve problems on the<br />
spot. And, of course, there’s also the fact<br />
that an inefficient supply chain will generally<br />
make a company less able to compete on<br />
price in the first place.<br />
Given these circumstances, businesses<br />
must look to examine their operations<br />
and identify any processes that could be<br />
streamlined to reduce costs and overall<br />
timeframes, with a view to passing on<br />
these benefits directly to the customer.<br />
Furthermore, field workers often play<br />
customer-facing roles, acting as sales<br />
representatives and ambassadors for their<br />
organization’s overall brand, making it crucial<br />
for such customer contact experiences to<br />
be made as satisfying as possible.<br />
Having the right staff is one key factor;<br />
yet, providing these employees with the<br />
best possible tools with which to do their<br />
jobs is just as vital. Businesses need to<br />
find new technologies that can make their<br />
services quicker and more consistent. With<br />
consumers being more tech-savvy than<br />
ever before, the days of the clipboard are<br />
numbered and the importance of conveying<br />
the impression of a modern, efficient<br />
organization cannot be underestimated.<br />
Consequently, in this environment of<br />
reduced workforces and increased<br />
30<br />
Rikke Helms<br />
low cost,<br />
customizable, user<br />
friendly mobile<br />
applications<br />
impact on many<br />
aspects of supply<br />
chain operations<br />
competition, many companies are now<br />
looking to mobile business applications as a<br />
means of improving employee efficiency and<br />
customer satisfaction, as well as delivering<br />
additional business benefits to optimize the<br />
supply chain as a whole.<br />
Examining the Apps<br />
Whereas, in the past, mobile applications<br />
were typically confined to industries such<br />
as manufacturing and energy, enterprise<br />
mobility is now being seen as a competitive<br />
differentiator across all sectors. Indeed, a<br />
raft of low-cost, customizable, user-friendly<br />
mobile applications can impact on many<br />
different aspects of supply chain operations<br />
by gleaning additional efficiencies from<br />
all field sales and field service workers.<br />
Furthermore, successful field working is<br />
naturally task-centric and event driven, and<br />
is dependent on the interaction between<br />
data from a wide range of sources. Through<br />
the use of these applications, delivered<br />
to a wide variety of handheld devices<br />
ranging from mobile phones to PDAs and<br />
BlackBerries, field workers are now able<br />
to perform processes such as invoicing,<br />
ordering stock and sending or receiving job<br />
updates and cancellations electronically, as<br />
opposed to the manual methods previously<br />
adopted. It’s all about following the flow of<br />
paper through an organization; wherever<br />
paperwork is currently required, a mobile<br />
application can be deployed in its place.<br />
Considering the amount of supply chain<br />
tasks that involve at least some timeconsuming<br />
paperwork — such as sourcing<br />
goods, deliveries or even compliance with<br />
regulatory measures — this represents<br />
potentially massive time and cost savings.<br />
It also translates to speedier product<br />
dispatching, more responsive customer<br />
service (thanks to improved internal<br />
information flow) and lower costs, in general,<br />
for customers. Management teams can use<br />
mobile applications to dynamically route<br />
their field workers to new jobs, based on<br />
location and service priority, as well as the<br />
skill set of the worker and the inventory or<br />
parts they possess. Updates can be rolled<br />
out on a group or individual basis, cutting<br />
out the need for a succession of phone<br />
calls, or the reliance on a prearranged,<br />
haphazard schedule.<br />
The use of mobile applications can also<br />
assist businesses in tracking the flow of<br />
finances throughout the supply chain.<br />
Field workers can now accurately track<br />
travel time and expenses, and payment<br />
cycles can be accelerated thanks to<br />
faster billing processes. This is possible<br />
through the automated documentation of<br />
services performed and products sold —<br />
invaluable to large companies previously<br />
reliant on the collective calculations of a<br />
large mobile workforce.<br />
www.scemagazine.com may/June 2009
Overcoming Mobility Hurdles<br />
One of the traditional drawbacks to mobility<br />
projects was the upheaval and disruption<br />
to workers that was experienced during<br />
deployment. Fortunately, the latest breed<br />
of mobile applications has been designed<br />
specifically with this in mind, reducing initial<br />
rollout time from months or years to weeks<br />
or days. The significant upfront investment<br />
required has also caused problems. However,<br />
there’s now a growing trend towards delivering<br />
mobile applications as managed services,<br />
allowing organizations to pay on a per-user<br />
per-month basis, meaning that if something<br />
isn’t working, it can very quickly be changed or<br />
modified — a much more palatable model for<br />
most companies, particularly given the current<br />
economic climate.<br />
Ensuring the end-user acceptance of<br />
new technologies is vital. Employees will be<br />
used to working to certain procedures, and<br />
so newly introduced mobility solutions that<br />
challenge the status quo can be viewed<br />
negatively. This is particularly true of field<br />
workers; their jobs are reliant on the use<br />
of devices whereby factors such as screen<br />
and keyboard size can create additional<br />
challenges. As a result, mobile devices<br />
and the applications running on them<br />
need to be as intuitive and easy to use as<br />
possible. Furthermore, many office-based<br />
employees already struggle to handle<br />
the quantity of information that they’re<br />
Virgin Media Case Study<br />
Virgin Media is the UK’s largest residential broadband provider, the largest virtual mobile network operator and<br />
the second-largest provider of pay TV and home phone. Formed by the merger of NTL and Telewest, and the<br />
acquisition of Virgin Mobile, the company has more than 14,000 employees and almost 10 million customers.<br />
The NTL and Telewest merger created a vast supply chain involving 2500 mobile technicians and engineers using<br />
different technologies and field processes, some of which were manual and paper-based. This presented the new<br />
company with the challenge of standardizing operations, to improve efficiency and remove the unnecessary costs<br />
of maintaining duplicate systems.<br />
As Virgin Media offers a host of different service packages to its customers, it is vital for its mobile workforce<br />
to be able to install, configure and activate the correct equipment at each customer’s home, as well as identifying<br />
and rectifying any problems on-site first time round. Virgin Media reviewed its existing application and platform<br />
solutions, and selected the Dexterra Concert platform as it offered the necessary security and flexibility to deliver<br />
mobile applications to its entire UK field staff. Based on the Dexterra platform, Virgin Media has developed its own<br />
application and deployed it on the field force’s semi-ruggedized Motorola Symbol MC70 handsets. The platform<br />
provides field technicians with the tools needed to perform all customer installations and on-premise maintenance<br />
automatically, achieving greater supply chain efficiency and increased customer satisfaction.<br />
All field staff are trained to provide telephone, broadband and digital television support from a single device,<br />
making real-time back-end integration a necessity to resolve customer problems on the spot. The application<br />
specifically enables employees to perform diagnostic tests and activate services. This information is fed into Virgin<br />
Media’s in-house customer management system, ICOMS, through the Dexterra platform, with the relevant data or<br />
diagnostics results then relayed back to the mobile devices. From a management perspective, the new solution<br />
provides Virgin Media with far greater insight into the status of current and outstanding tasks, as well as enabling<br />
the company to send out scheduling updates and job notifications … as and when they occur. “Using Dexterra’s<br />
platform, our technicians are now equipped with the necessary applications to complete each job on the first<br />
visit,” says Paul Buttery, Managing Director of the access division at Virgin Media. “This not only greatly increases<br />
internal efficiency and cost savings but, most importantly, it ensures ongoing customer satisfaction, which is key<br />
to our company’s continued success.”<br />
presented with each<br />
day; this is magnified<br />
on mobile devices. Instead of attempting<br />
to force-fit entire desktop applications<br />
onto these devices, bespoke applications<br />
can be developed that cherry pick data<br />
from multiple back-end systems, providing<br />
mobile staff with only the data required<br />
to complete their day-to-day tasks,<br />
leaving their devices as user-friendly and<br />
uncluttered as possible.<br />
Satisfied Workers,<br />
Optimized <strong>Supply</strong> <strong>Chain</strong>s<br />
By prioritizing employee buy-in and<br />
acceptance as a key issue at the outset,<br />
companies can take huge steps to ensure<br />
the smooth uptake of mobility solutions. After<br />
all, an important benchmark for success in<br />
mobilizing business processes is that the<br />
field worker believes that the solution is<br />
genuinely helping them do their job better.<br />
As technological improvements and reduced<br />
costs have helped to overcome traditional<br />
hurdles, the last few years have seen a<br />
significant increase in supply chain mobility<br />
rollouts, with more businesses than ever<br />
before looking to harness the benefits of<br />
mobile applications. Now, however, perhaps<br />
the biggest case for mobility is that with<br />
customer choice continuing to expand —<br />
against a backdrop of <strong>Europe</strong>an economic<br />
turmoil — improving supply chain processes,<br />
customer service and overall agility is not<br />
just competitively advantageous, it is now a<br />
competitive necessity. •<br />
For more information<br />
Rikke Helms is Managing Director of global sales,<br />
Dexterra (www.dexterra.com).<br />
2009 may/June www.scemagazine.com 31
mobile solutions<br />
hAnD in hAnD<br />
Following the acquisition by Honeywell of both Hand Held Products and Metrologic, the company is<br />
launching new scanning and mobile computing technology. Kevin Robinson spoke with Andrew Donn,<br />
Director, Northern <strong>Europe</strong>, at Honeywell Scanning and Mobility.<br />
AD: We’ve had two major acquisitions in the Honeywell Scanning and<br />
Mobility sector, which focuses on the Auto-ID industry, and this is very<br />
exciting for us. We’re merging two quite substantial companies, product<br />
portfolios and verticals, which will give us greater breadth and depth in<br />
the marketplace. Hand Held was acquired in December 2007 and was<br />
brought into the company’s Automation and Control Solutions (ACS)<br />
unit. Now, however, we’re positioned under the Security Group within<br />
Honeywell ACS.<br />
KSR: What inspired the acquisition?<br />
AD: Hand Held went out to market to look at who was interested<br />
and, at the time, Honeywell was looking closely at the Auto-ID sector,<br />
and had been doing so for several years. A lot of due diligence had<br />
been done on a number of companies before Honeywell acquired<br />
Hand Held. So, it was simply a matter of time before the decision was<br />
made to purchase one, and when Hand Held put itself up for sale,<br />
the timing was perfect. There were also a number of key elements<br />
that Honeywell was interested in, which positively influenced the<br />
acquisition decision: Hand Held had some very solid IP and owned<br />
its own manufacturing processes. And, in essence, the same factors<br />
applied to the Metrologic acquisition.<br />
KSR: This is quite a bold move during a recession. Is this part of<br />
Honeywell’s overall strategy?<br />
AD: Definitely, but I should point out that that the due diligence was<br />
done before the downturn. They see it as a long-term development<br />
and weren’t necessarily focusing on the short-term; they don’t see the<br />
recession as being a negative thing, they see it as a positive opportunity.<br />
They’re a very cash-rich company; they purchased several companies<br />
last year and are still involved in acquiring a number of organizations<br />
32<br />
www.scemagazine.com may/June 2009
eAr’s the GooD neWs<br />
More than 500 team members develop, produce and market the high-technology ear<br />
implant hearing devices of Tyrol-based manufacturer, MED-EL, and the subsidiary Vibrant-<br />
Medel. These medical devices are subject to the strict regulations of the US Food and Drug<br />
Administration (FDA) and EN 13485, which include seamless product documentation and<br />
traceability of every individual part throughout the lifecycle of the product. This process is<br />
now supported by a system, integrated by B&M, that uses DATAKEY ERP middleware and<br />
smart Honeywell Dolphin wireless mobile computers. The system reduces manual errors,<br />
eliminates paper documentation and increases the security of all logistics processes.<br />
FDA-Compliant Quality Assurance<br />
“The Medical Devices Act requires us to document every single implantable part from<br />
production through the entire lifecycle of the implant, as well as the patient’s life,”<br />
explains Dr Walter Fimml, IT Manager at MED-EL. “As more than 25 digits needed to<br />
be entered manually in some instances (5 or 6-digit S/N), errors were unfortunately<br />
introduced during the input of serial numbers. We must be certified according to ISO<br />
EN 13485, which is a lot of work.” An ear implant system consists of implantable and<br />
external parts. Implantable parts require sterile packaging, which is a challenging base<br />
for printing barcodes. The miniature component groups and parts must bear the serial<br />
number and be labelled in the appropriate local language to enable the patient to identify<br />
the package contents. The systems are shipped to hospitals and physicians in handy<br />
cases along with software and documentation.<br />
The components are transferred from the incoming goods department to the<br />
main warehouse, where they are either directly selected for production or for<br />
external partners. The products are prepared for dispatch in the warehouse. “Unlike<br />
conventional warehouses, the requirements for our warehouse are very high,” adds<br />
Fimml. “An advanced degree of responsibility and precision is vital for our shipping<br />
outside of the security business. They understand the financial climate<br />
and have learnt well from the recessions of the past; they know what’s<br />
needed to drive businesses forward and apply best practice throughout<br />
all their markets. It’s very different from the way that Hand Held and<br />
Metrologic have traded in the past, now having this meaty corporate<br />
entity behind them.<br />
KSR: Do you think that these acquisitions represent the<br />
resurgence of barcode scanning?<br />
AD: We’re looking at both barcoding and RFID applications, and<br />
consider them both to be good opportunities. Barcoding has always<br />
been a core focus for Honeywell Scanning and Mobility. The fact that<br />
we’re seeing more applications emerging from different verticals and<br />
different sectors means that that’s where we’re focusing our attention.<br />
We’ve got main areas that we’re focusing on — transportation and<br />
logistics from the Hand Held group of customers and products, and<br />
retail, with the Metrologic side of the business. We also see opportunities<br />
that we’re concentrating on in other verticals and we’ll always look —<br />
under the remit of Honeywell’s business practice, Voice of the Customer<br />
— to go out there and find out what’s happening in a particular market<br />
and see what the demands of our partners (new and old) are for new<br />
products. So, if it’s heading towards RFID, then we’ll further develop our<br />
product range to meet that demand. The acquisitions have given us that<br />
extra flexibility, because Honeywell has huge manufacturing expertise, to<br />
be a bit more diversified than we have been in the past.<br />
KSR: RFID seemed to be wandering in the wilderness for some<br />
time. Has anything changed?<br />
AD: In some verticals, there will always be applications for RFID out<br />
there; but, we don’t see it taking off quite as well as we — or, indeed,<br />
staff. Our warehouse team is made up of specialists, who conduct customer-specific<br />
configuration, assembly and electronic adjustment tasks for each order. In this<br />
context, they now benefit from the support of the B&M wireless data system.” B&M<br />
delivered Honeywell Dolphin 7850 wireless computers and connected them to the<br />
Navision Enterprise Resource Planning (ERP) system via DATAKEY middleware. From<br />
the DATAKEY control station, the warehouse manager can selectively issue picking<br />
orders, such as releasing specific orders to particular individuals, depending on the<br />
qualification of the team members.<br />
Serial Number Tracking<br />
The mobile data collection begins with incoming goods. Most of the supplied parts arrive<br />
in cardboard boxes that are already marked with barcodes or are labelled at the company<br />
upon arrival. MED-EL uses code 39 for box labelling. Boxes that are not already labelled<br />
are equipped with barcode labels after registration. The label printing is triggered directly<br />
from the mobile computer. One of the most outstanding features of the MED-EL warehouse<br />
is the great variety of products, most of which are stored in Rotomat systems. Currently,<br />
more than 6000 different products are kept in stock. There is also a storage area for<br />
auxiliary supplies and one for packaging and marketing material. When the implant leaves<br />
production, it already has a serial number and a documented manufacturing history. Before<br />
an ear implant customer set is assembled, the serial number is scanned. The scanning<br />
of the serial number plays a significant role in minimizing documentation errors. Except<br />
for China and Turkey, no other country explicitly demands barcodes on medical devices<br />
— even in the USA, no standard is expected to be adopted before 2015. “Naturally, we<br />
want to have a system that is sustainable and internationally recognized,” says Dr Fimml.<br />
“Therefore, we currently use the datamatrix code for all small parts. Should this code not be<br />
adopted as the standard in 2015, we will have to change it. Nevertheless, we will be able to<br />
draw on our long-standing experience and get started on the basis of an operable system.”<br />
CONSULT<br />
Design & Plan<br />
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Swisslog (UK) Ltd<br />
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B98 9DW<br />
Tel. +44 (0)1527 551 600<br />
wds.uk@swisslog.com<br />
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WE DELIVER THE BUILDING BLOCKS FOR OUR CUSTOMERS’ SUCCESS.<br />
2009 may/June www.scemagazine.com 33
mobile solutions<br />
the diversity of applications<br />
is becoming so vast and<br />
is more in-depth than ever<br />
as all manufacturers — would have liked. Regarding the wilderness<br />
years, I think it’s really just a case of driving ROI and getting a good<br />
return on the investment from each user application. If the ROI isn’t<br />
there, or if there are technical limitations, then we certainly won’t be<br />
making an investment. But we’re talking to a number of RFID resellers<br />
who are concentrating on the core issues and helping us to understand<br />
how we can diversify with them.<br />
KSR: What can Honeywell do for the struggling<br />
automotive industry?<br />
AD: We see the current economic climate as an opportunity. Some<br />
of our resellers are targeting the automotive industry and pushing<br />
them to approach the manufacturers and encourage them to step<br />
back and take a look at their own internal processes, and assess<br />
where we can apply 2D digital barcoding, tracking barcoding or<br />
datamatrix pin dot marking and coding onto the products to make<br />
those processes more cost-effective and streamlined. We’re trying<br />
to engage the vehicle manufacturers to say: where are the “holes”<br />
and where can we apply our expertise to provide solutions and<br />
reduce costs. They probably don’t hold as much stock as they used<br />
to, as cash is in short supply, so we can help them to have better<br />
accessibility to all their stock controls. The resellers are becoming<br />
more aggressive and taking a more proactive approach to finding<br />
out how they can help automotive manufacturers.<br />
KSR: And does the healthcare sector have its own particular set<br />
of hurdles to overcome?<br />
AD: Healthcare is one of our core focus areas, mainly because of the<br />
Hand Held Welch Allyn legacy. We have some good relationships with<br />
a lot of big system integrators, such as Mackenzie, and have products<br />
that are specific to the healthcare market that we’ve designed to<br />
address its very exacting demands: we have healthcare plastics on our<br />
mobility products and scanners so they can withstand the rigours of<br />
cleaning agents. We can apply these for applications within a hospital<br />
or to track surgical instruments in an operating theatre or for bedside<br />
management. It’s a key area for us to supply 2D digital barcode<br />
technology to pharmacies, throughout the healthcare supply chain, right<br />
up to the patient’s bed.<br />
KSR: What has Honeywell done to restructure its<br />
partner programme?<br />
AD: What we’ve done is taken the voice of our customers into<br />
consideration and examined what our current partners are looking<br />
for in the programme. We want to understand what the demands of<br />
large manufacturers are. As such, we’re taking a whole lot of best<br />
34<br />
Andrew Donn<br />
practices from both sides of the company and combining them into<br />
one programme. We’re currently rolling that out to all of our partners,<br />
who are very excited about what we’re showing them and what we’ve<br />
done so far. We’ve taken a very strong stance on our channel; we<br />
only supply through the channel and we’ve catered for a lot of the<br />
smaller scanning-only distributors by categorizing them under one<br />
level. This level is very clear to the market, to the distributors and<br />
the resellers and we are in frequent communication with a number<br />
of direct integrators and vertical leaders. We’re very excited with the<br />
programme; it’s taken a while to thrash the process out, but we feel<br />
that we now have a very positive programme that combines both<br />
companies and offers a huge product range to the partner base that<br />
we’re managing.<br />
KSR: How will these Auto-ID developments benefit the overall<br />
supply chain?<br />
AD: The diversity of the applications is becoming so vast and is<br />
more in-depth than it ever has been before. When we look at field<br />
force automation and delivery — of applications that require putting<br />
demands on the manufacturers to produce the right product for<br />
software houses and end-users — in terms of internal technology, force<br />
factor and reliability, Honeywell is concentrating on producing very high<br />
quality goods that will also represent what the customer wants So, I<br />
think the Auto-ID industry, especially on the mobility side, is increasing<br />
at a pleasing rate and will enable us to take a greater stake of the<br />
market share in this sector. •<br />
www.scemagazine.com may/June 2009
isk management<br />
36<br />
As the global economy slides further into<br />
recession and new fraud cases break<br />
in the news every week, cross-border<br />
supply chains face their greatest threat<br />
from fraud and corruption. Charles Carr<br />
discusses the red flags to watch out<br />
for and how putting thorough controls<br />
in place can give companies better<br />
protection from fraudsters.<br />
We live in a global marketplace. Many of the<br />
everyday products that we buy — including<br />
furniture, clothing and groceries — come from<br />
the other side of the world. More often than<br />
not, they come from emerging economies such as China and<br />
India. The complexity of the supply chains that allow us to order<br />
and receive products online, in the space of a few days, exposes<br />
many manufacturers and retailers to a host of corrupt practices.<br />
Recognizing the Threat<br />
Fraud and corruption proliferate in financial downturns.<br />
Individuals can take advantage of new opportunities for fraud<br />
whilst all the attention is focused on righting the economy.<br />
Often, it is employees who may feel concerned about their<br />
jobs, disgruntled at their remuneration or fearing redundancy.<br />
We refer to these types of fraudsters as seekers of personal<br />
gain — individuals who line their own pockets and believe that<br />
a company employing tens or hundreds of thousands won’t<br />
miss the relatively small amount of stock or revenue that they are<br />
siphoning off. By contrast, there are corporate “saviours” who are<br />
often the hardest to predict. They may be ‘cooking the books,’<br />
believing that they are acting in the best interests of the company<br />
or its employees.<br />
Increased business with emerging markets is positive for the<br />
world economy; however, there is a downside: transactions<br />
and operations with organizations in foreign markets can pose<br />
a greater risk of fraud. The kind of advice that businesses<br />
are seeking when entering foreign markets typically relates<br />
to fictitious transactions by local vendors, embezzlement by<br />
expatriate employees and the fraudulent use of confidential<br />
information and intellectual property. The type of corruption that<br />
we are seeing in this market includes bribes, bid-rigging, slush<br />
funds and kick-backs. Rather than companies becoming too<br />
cautious to take advantage of foreign opportunities, they should<br />
ensure that appropriate risk mitigation strategies are in place.<br />
Countries around the world plan how best to combat the<br />
financial crisis, with fiscal stimulus thought to be the way ahead<br />
for many economies; however, it seems that as fast as we may<br />
be trying to fix the global economy and ensure that this kind of<br />
downturn doesn’t happen again, we are plagued by the actions<br />
of corrupt individuals. Of the fiscal stimulus funds to be injected<br />
into global economies, it is estimated that as much as 10% or<br />
more may be lost to fraud and corruption without the use of<br />
appropriate policies and procedures.<br />
www.scemagazine.com May/June 2009
Focus on corruption:<br />
the iMpact oF Fraud on<br />
cross-Border supply chains<br />
Discovery and Recovery<br />
Preventing the transfer of the global proceeds of corruption should be the<br />
focus for all involved in investigating and preventing fraud and corruption.<br />
Legislation, including the 2005 UN Convention against Corruption and<br />
other measures has made a difference, but there is much more that<br />
needs to be done to address this problem. Today’s global financial<br />
system, particularly its speed, makes concealing money extremely easy.<br />
In particular, the vast sums of money often involved lets perpetrators<br />
engage in highly advanced money laundering. Corruption often comes<br />
from a high level — usually from powerful government officials who have<br />
allowed it to infiltrate domestic institutions. In asset freezing situations,<br />
many of these officials are allowed to preside over investigations —<br />
sustaining and harbouring corrupt practices.<br />
The investigative and legal processes necessary to recover funds<br />
deposited in foreign accounts are complex, requiring highly technical<br />
skills for those pursuing them; fraud perpetrators are often very clever<br />
individuals with specialist knowledge of the technological and financial<br />
systems they use to conduct their fraudulent activity. They can pose a<br />
significant challenge to those trying to outwit them.<br />
Blowing the Whistle<br />
It is often costly and time-consuming to investigate fraud and corruption;<br />
many cases take years to complete. Success may well depend on the<br />
funds available for the case. In countries where corruption is widespread,<br />
companies simply do not have the resources to fund comprehensive<br />
investigations of this scale. In fact, it is probably the absence of resource<br />
that allowed corrupt practices to infiltrate the organization in the first<br />
place. As with any crime, restitution is good … but prevention is better.<br />
From our recent work with clients, we expect to see an increase<br />
in whistle-blowers coming forward to talk to managers about what<br />
is happening ‘on the ground.’ With cost reduction becoming more<br />
important than ever, buyers, exporters and distributors are continuing<br />
to demand high quality at low prices and are also concerned about the<br />
risks, such as product contamination, that could hurt customers and<br />
damage company reputation. As a result of this, companies are ramping<br />
up on-the-ground supervision and audits. As companies start to see the<br />
real picture of their supply chain operations, they should prepare to hear<br />
feedback from workers … and take it seriously.<br />
Prevention is Better Than Cure<br />
Of course, it would be unwise to rely solely on whistle-blowers when<br />
huge sums of money and corporate reputation are at stake. There are a<br />
number of other processes that companies should adopt to tackle fraud<br />
and corruption, including the following:<br />
• Improved internal control: Employee information is crucial in any<br />
investigation; however, it is important that companies allow channels of<br />
communication and, also, that they ensure that this method is legitimate<br />
and reliable. For example, in a case wherein the details of a competitive<br />
bid had been leaked to an opposing bidder, causing the company to<br />
lose out on the new contract to their opposition, the use of an efficient<br />
internal control mechanism could prevent this situation. The company<br />
could have won the new contract, generating a major revenue stream.<br />
• Understanding business operations: Although merger and<br />
acquisition activity has reduced markedly, there are still businesses that<br />
are in a position to take over competitors. It’s important that during this<br />
process the operations of both companies are examined. Working with<br />
a past client, Kroll discovered an overlap in distribution routes in two<br />
merged businesses in the gas market. This affected the company’s<br />
trading software, resulting in an accounting adjustment of $12 million.<br />
• Fraud auditing: Specialized audits are the most important, low-cost<br />
action to address the larger opportunities for fraud presented by<br />
weakened internal controls. Kroll was asked to investigate reports that<br />
an employee of a fuel distributor was embezzling money. A statistical<br />
analysis of the supplier payments system not only found that 65% of<br />
errors were down to data entry, but that the remainder were from the<br />
registration of a ghost supplier receiving fraudulent payments totalling<br />
$3.5 million.<br />
• Asset recovery: Tighter credit conditions can reveal the weakness of<br />
underlying collateral. One of Kroll’s former clients had granted credits<br />
to a large distributor for years. Because of financial difficulties, the<br />
supplier suspended payments on the debt. It was subsequently found<br />
that goods provided as collateral were of lower value than originally<br />
estimated, and some did not exist at all.<br />
It’s important to remember that the onus is not only on Western<br />
corporates to clean up corruption. Companies from developing markets<br />
are now multinational businesses and also have to look at their own<br />
levels of corporate governance, and apply these procedures to operate<br />
effectively in the global marketplace.<br />
Combating Corruption as the Recession Continues<br />
There is no doubt that we are all living in uncertain times, and changes<br />
in market conditions will always alter the shape of fraud. In addition to<br />
the general macro-economic issues, such as liquidity and currency risks,<br />
critical investment-specific risks need to be taken into account when<br />
investing in and building supply chains in unfamiliar, foreign markets.<br />
Corruption is a greater risk in this downturn. Although we cannot control<br />
the global economy, companies can implement measures to best protect<br />
themselves from risk. In addition, transparency is key to combating this<br />
problem. This extends to the funding of companies to support them<br />
through the recession. It’s vital that governments and businesses are<br />
transparent about who is receiving money and what is being done with<br />
it. Emerging economies may offer developed markets real prospects<br />
for growth and investment opportunities compared with the developed<br />
world; however, without due diligence and sensible risk management, the<br />
dangers may well outweigh the possible gains. •<br />
For more information<br />
Charles Carr is Head of Fraud Prevention and Anti-Corruption at Kroll (www.kroll.com).<br />
2009 May/June www.scemagazine.com 37
supplier relationships<br />
identiFying the<br />
cost oF Mistrust<br />
Mike Robinson, director of Berkshire Consultancy, is a specialist in business process improvement<br />
and supplier management. In this article, he argues that businesses must resist the temptation to let<br />
today’s economic conditions create an environment of mistrust within the supply chain.<br />
Mike Robinson<br />
38<br />
Supplier relationships operate at their greatest level of<br />
efficiency when there is mutual trust between the service<br />
provider and the customer, but this confidence can be<br />
easily undermined. The tough economic conditions in which we find<br />
ourselves have created an extremely tense business environment<br />
and the pressure to demonstrate efficiency and a positive return<br />
on investment has never been greater. However, this pressure can<br />
manifest itself as an anxiety and nervousness that may be detrimental<br />
to the supplier contract, serving only to exacerbate existing problems.<br />
In a deepening recession, it is to be expected that customers will<br />
find themselves scrutinizing the value of contracts; but, as the pressure<br />
mounts, there may be a tendency for customers to slip into behaviours<br />
that can prove to be counterproductive. There is an understandable<br />
temptation to start ‘over’ monitoring the supplier’s progress to ensure<br />
that milestones are being met or to apply pressure to get improved<br />
services at lower costs. This can lead the supplier to feel that their work<br />
is being impeded as a result of reporting demands and being asked to<br />
justify their actions to an unnecessary extent. In addition, customers<br />
may be tempted to resort to an “I’m the boss” mentality and even use<br />
the knowledge that times are tight to ‘squeeze’ or even bully suppliers.<br />
This will lead to a lack of goodwill and, potentially, a breakdown in the<br />
relationship, with reduced trust and honesty between parties. The<br />
negative impact of this cannot be understated!<br />
Softly, Softly<br />
Trust is vital within the supplier relationship, as is the confidence<br />
to manage with a lighter touch. When trust exists, contractors are<br />
more innovative and better able to concentrate on getting the actual<br />
job done, rather than spending time ‘handling the client.’ If a lack of<br />
trust arises, parties will become dependent on time-consuming and<br />
unnecessary processes and reporting to ensure that their backs are<br />
covered, which ultimately means that the project will be less efficient<br />
and more costly. Moreover, by removing ‘the partnering’ nature of the<br />
relationship, a blame culture is more likely to arise; and, if problems<br />
do occur, they tend to escalate unnecessarily. As the understanding<br />
between parties deteriorates, objectives will diverge and the<br />
consequence will be a poorer, less efficient service.<br />
In the current environment, it is inevitable that contracts and service<br />
levels comes under increasing scrutiny, but if the pattern of behaviour<br />
www.scemagazine.com May/June 2009
described above sounds familiar, you should look carefully at both<br />
the cost and the cause of this mistrust. Why has this mistrust arisen?<br />
Is it really a consequence of the supplier’s behaviour or has your<br />
own anxiety resulted in a new, potentially damaging approach to the<br />
relationship? How much do you pay every day for monitoring the<br />
occasional inconsequential lapse? The value of a good relationship<br />
with your suppliers cannot be underestimated and most<br />
businesses work hard to ensure that this is in place at<br />
the outset. But partnering is most thoroughly tested<br />
only when the going gets tough, and it is imperative that<br />
customers resist the temptation to drift into a negative<br />
and detrimental style of supplier management. There<br />
is a perception that in a difficult economic climate,<br />
customers should ‘get tough’ with suppliers,<br />
and partnering principles can become a victim.<br />
It is entirely appropriate to remind the supplier<br />
that contracted obligations must be met, but<br />
this does include considering the customer’s<br />
obligations to the supplier.<br />
Contrary to popular opinion, it is rare<br />
that it is purely supplier failings that are<br />
responsible for a contract falling short of<br />
its promise. Both parties have a role to play<br />
in making the relationship work — and the<br />
more in tune with this obligation they are, the<br />
greater the end reward will be for all concerned.<br />
If companies wish to get maximum value out of their suppliers<br />
throughout this downturn, then it is essential that they continue to<br />
nurture the relationship and resist drifting into what are ultimately<br />
counterproductive behaviours. Organizations should keep faith<br />
with the approach developed during the good times and resist<br />
reactionary behaviours that will erode the trust that has been<br />
built. Taking a risk-based approach to contract monitoring<br />
can yield real benefits in terms of costs and performance.<br />
For instance, the customer and supplier agree to a new<br />
monitoring regime (what to check for, how often, to<br />
what tolerance) based on customer feedback (what<br />
matters) or statistics to date showing the ‘hot spots’<br />
in service delivery. Modifying the process around the<br />
stakeholders’ new understanding of what matters<br />
and what doesn’t can save monitoring costs for<br />
both parties. The consequence will be a more<br />
efficient contract and a trusted partnership<br />
— which in current times is exactly what<br />
companies should be seeking. •<br />
For more information<br />
Mike Robinson<br />
Director<br />
Berkshire Consultancy<br />
www.berkshire.co.uk<br />
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Corporate Express is one of the world’s<br />
leading suppliers of office products to<br />
a variety of businesses and institutions,<br />
serving as a one-stop-shop for office essentials<br />
via its e-commerce and distribution businesses.<br />
Acquired by the $27 billion office-products<br />
powerhouse, Staples, Inc., in 2008, Corporate<br />
Express employs approximately 18,000<br />
associates in 21 countries throughout North<br />
and South America, <strong>Europe</strong>, Asia and Australia.<br />
Global companies such as Corporate Express<br />
typically operate as a series of independent,<br />
geographically dispersed divisions, often as<br />
a result of expanding their global presence<br />
and product portfolios through acquisitions<br />
and mergers. Corporate Express <strong>Europe</strong>, like<br />
its parent company, expanded its presence<br />
with a multitude of acquisitions, which<br />
resulted in fragmented business systems as<br />
each acquired company maintained its own<br />
Enterprise Resource Planning (ERP) system<br />
and warehouse management solutions. To<br />
optimize supply chain planning and business<br />
40<br />
performance, Corporate Express <strong>Europe</strong><br />
sought technology that would enable it to<br />
improve global supply chain visibility and agility<br />
by taking a synchronized, cross-functional<br />
and strategic approach. “We recognized the<br />
need for a slick, uniform system to maintain<br />
and improve our customer service levels,”<br />
explained Jan van Noord, project manager<br />
Logistics, Corporate Express <strong>Europe</strong>. “With<br />
that understanding, our criteria consisted of<br />
finding a proven solution that could be rolled<br />
out across <strong>Europe</strong> and serve the needs of<br />
every country, as well as integrated with our<br />
enterprise-wide ERP systems.”<br />
Inventory Management Excellence<br />
To streamline its supply chain management<br />
processes, Corporate Express <strong>Europe</strong> turned<br />
to JDA Software’s Advanced Warehouse<br />
Replenishment (AWR) solution. The bestin-class<br />
solution provides accurate visibility<br />
into the warehouse, helping buyers to create<br />
accurate forecasted demand and order<br />
projections, as well as stable order patterns.<br />
AWR provides purchasing requirements for<br />
more stock by feeding a rich mix of data into<br />
Corporate Express’ ERP platform, which is<br />
then transferred to suppliers. By ensuring that<br />
the right product is delivered to the right place<br />
at the right time, Corporate Express <strong>Europe</strong><br />
is driving top-line growth and bottom-line<br />
savings. According to Van Noord, the decision<br />
to implement AWR was a simple one given<br />
that Corporate Express’ United States division<br />
was using it. “After evaluating the system in<br />
use in the United States ourselves, we were<br />
very pleased with the robust functionality of<br />
JDA’s AWR solution. We were also fully aware<br />
that most of our competitors were using AWR,<br />
including Staples prior to its acquisition of<br />
Corporate Express,” Van Noord added.<br />
Corporate Express <strong>Europe</strong> established a<br />
phased project plan to implement AWR in<br />
12 warehouses across 10 countries during<br />
a 3-year period, which coincided with the<br />
company’s phased ERP implementation.<br />
www.scemagazine.com May/June 2009
To date, AWR has been installed at the<br />
distributor’s locations in the UK, France,<br />
Italy, Austria and Spain, while its locations in<br />
Benelux and Ireland are on track for imminent<br />
completion. Subsequently, the company<br />
kicked off its AWR rollout in the Nordic<br />
countries in late 2008 and, once completed,<br />
Corporate Express <strong>Europe</strong> will implement the<br />
solution at its Germany-based warehouses<br />
in 2009. “AWR is a useful solution that can<br />
control the flow of incoming goods, but it’s<br />
reliant on the quality of information being fed<br />
into it. The system needs reliable lead times<br />
if it’s to accurately predict how much product<br />
must be delivered to the warehouse at any<br />
given time,” explained Van Noord.<br />
Corporate Express <strong>Europe</strong> continues to<br />
benefit from operational efficiencies as AWR is<br />
implemented in each location. “The solution is<br />
fully installed at our <strong>Europe</strong>an headquarters in<br />
the Netherlands. As a result, everyone across<br />
the business can now see what stock is<br />
available at that location,” explained Van Noord.<br />
“This has made the supply chain so much more<br />
transparent.”<br />
Realizing an ROI<br />
Once Corporate Express <strong>Europe</strong> completes<br />
the company wide implementation of AWR,<br />
it expects to benefit from improved supply<br />
chain visibility that will lead to an enterprisewide<br />
increase in productivity in each<br />
warehouse, a reduction in stock levels, better<br />
customer service and enhanced inventory<br />
management abilities. “Six months after AWR<br />
was implemented, our warehouse in France<br />
realized a 14% reduction in stock levels.<br />
There was also a 25% reduction in backorder<br />
lines owing to better product availability. In<br />
addition, availability has increased at our<br />
UK-based warehouses — although volumes<br />
remain the same, our stock levels are more<br />
balanced across the business,” Van Noord<br />
said. Corporate Express <strong>Europe</strong>’s associates<br />
have also commented on the solution’s ease<br />
of use. “Our buyers have found that placing<br />
orders now only takes a small percentage of<br />
their time,” Van Noord explained. “With AWR,<br />
they have more time to conduct analysis and<br />
manage supplier relations more effectively.”<br />
The company’s buyers now focus on<br />
improving the quality of data generated by<br />
AWR, as well as creating more accurate<br />
inventory plans. “It’s now a lot easier to check<br />
the number of products for any particular<br />
country and, when required, move stock<br />
from one warehouse to another for improved<br />
availability across <strong>Europe</strong>,” Van Noord<br />
commented. AWR produces suggested<br />
orders by calculating inventory quantities<br />
based on scientific forecasts that incorporate<br />
demand, lead time, profitability and service<br />
level goals. By utilizing information about<br />
supplier discounts when suggesting<br />
replenishment quantities, Corporate Express<br />
<strong>Europe</strong> is able to minimize ordering costs.<br />
The solution also evaluates and executes the<br />
purchasing needs of planned promotions<br />
and special events while automatically<br />
incorporating unique distribution centre needs<br />
and demands.<br />
“AWR optimizes costs and profit, not<br />
simply stock turn. For example, we have<br />
found that it can be beneficial to have more<br />
stock in the warehouse if it reduces overall<br />
costs from fewer deliveries or handling. The<br />
solution determines our ideal stock levels<br />
for optimizing profit by analysing data at the<br />
vendor level — instead of the item level —<br />
to create a best-case scenario,” said Van<br />
Noord. “We are very pleased with the results<br />
to date, and are looking forward to fully<br />
optimizing our business processes with the<br />
continued support of AWR.” •<br />
For more information<br />
JDA Software<br />
Tel. +1 800 479 7382<br />
info@jda.com<br />
www.jda.com<br />
2009 May/June www.scemagazine.com 41
LCCS<br />
loW-cost country sourcing:<br />
the past, the present<br />
and the Future?<br />
For decades, low-cost country sourcing (LCCS) has been one of the most popular sourcing strategies.<br />
Employing suppliers that operate on leaner budgets than those found domestically has been an obvious<br />
choice for organizations wishing to reduce operational expenses and make greater returns on investment.<br />
In the UK, there doesn’t seem to be an industry that hasn’t benefited in some way: from labour-intensive<br />
manufactured products made using Chinese labour to call centres staffed with low-cost English-speaking<br />
workers in India and IT work performed by low-cost programmers in both India and Eastern <strong>Europe</strong>.<br />
However, according to a recent IDG report by Simon Ellis, LCCS<br />
should be thought of as a shortsighted strategy for the longterm.<br />
Ellis suggests that the focus shouldn’t be on LCCS, but<br />
on Profitable Proximity Sourcing (PPS), which encourages organizations<br />
to look at “balancing cost and service, with greenness or sustainability<br />
increasingly playing a role in the decision making process.” Examining<br />
the supply chain in this way certainly shows that the initial savings<br />
associated with LCCS — without considering whether there may be a<br />
more cost-effective and ethical alternative in the long-term — can blind<br />
organizations. But this fails to take into account the developments and<br />
innovations that the countries that provide LCCS are undertaking, and<br />
that still make them excellent options for organizations in the West.<br />
Problems with Production: Who’s to Blame?<br />
This is not to say that there aren’t problems with sourcing from LCCS<br />
suppliers, and there are instances when problems arise, particularly in<br />
terms of the quality control of materials. For example, in August 2007,<br />
Mattel’s Fisher-Price division announced that it was recalling 1.5 million<br />
suppliers from low-cost countries are<br />
evolving and should not be discounted<br />
when it comes to the global sourcing<br />
of higher-calibre products.<br />
preschool toys because lead paint was used in production by one of<br />
the company’s suppliers in China. But rather than damning the supplier,<br />
the question arises as to whether adequate checks were put in place<br />
by Mattel to ensure that its high production standards were met. And as<br />
Mattel found out, it, not the factories, became legally vulnerable when this<br />
came to light, and the scandal damaged its brand significantly.<br />
Following the Mattel scandal, President Bush went on to raise product<br />
safety issues when he met with the Chinese President, Hu Jin Tao, at the<br />
Asia-Pacific economic summit. Other countries also discussed the need<br />
for stronger safety standards, implying that the problem was rife in all lowcost<br />
countries. The US administration was swift to assure that it believes<br />
countries such as China understand the concerns of the US and other<br />
Western countries, yet some outside experts questioned whether they<br />
42<br />
really do understand the extent of US consumer worries and whether<br />
they actually adhere to the standards required. This type of high-profile<br />
scandal is extremely damaging to low-cost countries, even though in<br />
this case it was the responsibility of Mattel to stipulate what processes<br />
should be used and to regulate their suppliers. When selecting<br />
suppliers in low-cost countries, Western organizations can be guilty of<br />
perceiving Asian suppliers as having low standards, therefore opting<br />
to source from Eastern <strong>Europe</strong>an countries. In fact, US imports from<br />
<strong>Europe</strong>an low-cost countries have begun to outpace those from both<br />
Asia and the Western Hemisphere in the noughties (Journal of <strong>Supply</strong><br />
<strong>Chain</strong> Management, September 2007).<br />
LCCS = Low Standards?<br />
However, this perception of low process standards in Asian low-cost<br />
countries is undeserved. Countries such as China are becoming<br />
evermore competitive as training schemes for labourers are now<br />
producing more highly skilled workers and factories that operate to EU<br />
and US standards, and all still at lower costs than Eastern <strong>Europe</strong>an<br />
production can deliver. Even tasks such as high-tech laboratory work,<br />
which were previously perceived as being too technical for these<br />
countries, are increasingly being catered for. At the end of September<br />
2008, Huawei, a Chinese firm specializing in telecoms solutions, had<br />
more than 96,000 employees, of whom 44% were dedicated to research<br />
and development. This is just one example of a supplier from a low-cost<br />
country competing on an international level and driving innovation within<br />
its industry, but there are many others out there.<br />
Overcoming the Challenges of LCCS<br />
So, it is clear that suppliers from low-cost countries are evolving and that<br />
they should not be discounted when it comes to the global sourcing of<br />
higher-calibre products. But this is not to say that it is an easy process for<br />
organizations to assign suppliers within these countries. Indeed, a 2007<br />
report from AMR Research points out that low-cost country sourcing<br />
readiness includes “understanding and dealing with the additional risk<br />
of cultural differences, currency, time zones, connectivity, distance,<br />
logistics constraints, language and political instability. Doing low-cost<br />
country sourcing right involves more than just looking at costs … and<br />
companies must revisit the strategy regularly.” As such, many mediumto-large<br />
sized organizations can struggle to get their sourcing right if<br />
they decide to tackle all of these issues themselves. One way to avoid<br />
these obstacles is to work with a consultancy that specializes in working<br />
www.scemagazine.com May/June 2009
within these countries and advising on global sourcing strategies. These<br />
consultancies are typically employed directly by the organization<br />
and are used for their extensive experience and expertise in the<br />
marketplace, as well as fully understanding the culture of the chosen<br />
country. They work with the organization to develop a thorough<br />
understanding of its strategic needs, required standards and ethical<br />
considerations. Armed with this information, these consultancies are<br />
able to negotiate with suppliers and stipulate what is expected from<br />
a contract, helping to forge stronger and more beneficial working<br />
relationships, through greater transparency on both sides.<br />
Furthermore, these consultancies often offer a dual-based service,<br />
whereby they have offices in both the home country of the organization<br />
seeking a low-cost supplier, as well as the low-cost country itself. This<br />
provides substantial benefits, as the organization is able to work with a<br />
local consultant in the same time zone, speaking the same language, to<br />
finalize the brief, as well as working with a consultant based in the lowcost<br />
country to do the operational hands-on work.<br />
If an organization has a ‘mature’ procurement department that<br />
has experience in identifying and working with suppliers globally,<br />
then a consultancy can act as an adviser and provide the support<br />
both technically and based on the specific needs of the organization.<br />
The consultancy can also help to create the processes for supply<br />
management after the contract is signed. An ‘immature’ procurement<br />
department with little to no experience can use the consultancy in all<br />
aspects of global sourcing and the supply chain that is created as a<br />
result. This includes analysis of opportunities, financial asset analysis and<br />
risk analysis, as well as negotiating with suppliers and soothing cultural<br />
diversities and ongoing support once the contract is signed.<br />
The Challenges for LCCS in 2009<br />
Global concerns such as increasing energy prices, political alliances<br />
and the import legislation of bodies such as the EU can also<br />
significantly affect how an organization sources. It is with these<br />
concerns that organizations need to decide where LCCS fits into their<br />
overall global sourcing strategies. For example, high transportation<br />
costs could mean that although manufacturing a product in Taiwan<br />
is cheaper, production in Eastern <strong>Europe</strong> is a more viable choice for<br />
a <strong>Europe</strong>an organization owing to the high cost of shipping. Other<br />
recent global changes have also affected sourcing. Increasingly, more<br />
consideration is being given by the EU and other governing bodies to<br />
issues such as green legislation, which can result in fines for the buyer<br />
if a product made using the wrong process is shipped into the region.<br />
As such, Ellis’ argument for ‘profitable proximity sourcing’ appears<br />
stronger but, again, many suppliers in low-cost countries are taking<br />
great strides to improve their green credentials. As such, opting for a<br />
low-cost provider can still meet these requirements.<br />
In 2009, as the credit crunch continues to bite, there will be an increase<br />
in this type of issues-based decision making. Sourcing from low-cost<br />
countries will be highly relevant as receiving a high return on investment<br />
is still a pertinent aspect of global sourcing. High-cost countries such as<br />
Japan who are looking to compete on a global level will find themselves<br />
threatened by their low-cost country neighbours and competitors<br />
whose production costs, particularly labour, are so low they make price<br />
wars almost unwinnable. Indeed, many organizations from higher-cost<br />
countries such as Japan will continue to shift their production to lowercost<br />
countries to stand a chance of competing on price.<br />
Up until now, these high-cost countries have always had various<br />
tactics in their armoury to fight off LCCS suppliers, such as relying on<br />
brand loyalty (which is hard to replicate for new entrants) and avoiding<br />
direct competition by moving into different market niches — again, to<br />
protect their margins from the ravages of competing on price alone.<br />
However, when there is an increasing global need to curb costs and<br />
the competing products are of increasingly high quality, producers in<br />
higher-cost countries are facing a headache. Indeed, many are relocating<br />
their own facilities to the low-cost countries. For example, Nike recently<br />
moved production from Britain to Eastern <strong>Europe</strong>. The logic is that if the<br />
workforce, capital equipment and infrastructure in that nation are good<br />
enough to produce high-quality products for the competition, then why<br />
not also source from there to take advantage of the cost savings and<br />
compete on a level playing field?<br />
Given that developing nations such as China and India are encouraging<br />
their larger enterprises to become global champions that are capable<br />
of moving higher in the value chain, these pressures will only intensify<br />
in coming years. As imports grow in both products and services<br />
and their quality rises, increasingly sourcing from these low-cost<br />
countries becomes the smart choice as part of an overall global<br />
sourcing strategy. Indeed, with China expected to produce half of the<br />
world’s chemical engineering graduates in the next 5 years and India<br />
producing more than 400,000 graduates in science and engineering<br />
each year, it will not just be basic manufacturing that is conducted<br />
by overseas organizations — driving high tech initiatives and R&D in<br />
these regions will be an increasingly attractive option as well. Highcost<br />
countries, especially those whose exports compete with low-cost<br />
countries, will be extremely threatened during the coming years, and<br />
with good reason. LCCS has been the focus for many organizations<br />
for many years and continues to do so. There is no reason that this<br />
will not be the case in the future as well. •<br />
For more information<br />
Nader Sabbaghian<br />
CEO, BravoSolution<br />
www.bravosolution.com<br />
Nader Sabbaghian<br />
CEO, BravoSolution<br />
2009 May/June www.scemagazine.com 43
distribution<br />
crossing the pond With tMs<br />
Can <strong>Europe</strong>an distribution models benefit from existing US transport management systems? Andrew Austin,<br />
Vice President, Schneider Logistics <strong>Europe</strong>, examines the possible application of a TMS designed for the US<br />
market, and proven to be successful there, to the freight distribution patterns that exist in <strong>Europe</strong>.<br />
Transport Management Systems<br />
(TMS) are software applications<br />
that are designed to manage and<br />
control the progress of cargo shipments<br />
through all stages of the supply chain. They<br />
enable all parties involved to co-ordinate<br />
their actions and ensure that the cargo is<br />
processed as quickly, efficiently and costeffectively<br />
as possible. TMS have been used<br />
effectively in the USA for some time, and they<br />
are increasingly becoming the norm in the<br />
American freight business; but do they work<br />
as well in <strong>Europe</strong>, and what would happen<br />
if <strong>Europe</strong>an freight businesses adopted the<br />
American model?<br />
The basic principle of TMS is ensuring that<br />
information is used effectively to underpin<br />
supply chain operations. But simply passing<br />
information through a system is not going<br />
to be effective unless the people involved in<br />
the supply chain act upon that information.<br />
TMS provides fast and effective methods of<br />
data transfer designed to enable each link in<br />
the supply chain to communicate effectively,<br />
collaborate and thus improve efficiency.<br />
Another important aspect of TMS is that they<br />
meet the growing demand from customers<br />
for visibility. Businesses are demanding<br />
greater visibility to maintain competitiveness,<br />
and global trade has increased the need<br />
for technology to support international<br />
transportation. Distribution systems have<br />
to keep pace with fast-changing market<br />
conditions and the burgeoning information<br />
revolution; not only do these systems have to<br />
44<br />
show the current position of cargo, they must<br />
also be able to give planned arrival times,<br />
condition, value and so on.<br />
Trends in information technology, driven<br />
by market demand, will inevitably shape<br />
the supply chain models of the future,<br />
whether operators like it or not. Factors<br />
such as customers’ needs to reduce risk in<br />
procurement, and to limit or reduce growth<br />
in overheads, will all increase the pressure for<br />
change. It is becoming increasingly necessary<br />
to integrate all sources of information, to<br />
encourage the development of collaboration<br />
from each supplier in the process, which in<br />
turn will affect the behaviour of those further<br />
downstream — including the end customer.<br />
So, it would seem that a change to a more<br />
IT-based system of transport management is<br />
becoming inevitable; but there are differences<br />
between the American and <strong>Europe</strong>an models<br />
that may mean that <strong>Europe</strong>an operators will<br />
resist adopting American-style TMS.<br />
<strong>Europe</strong>, for a start, is a much larger<br />
and more complex market than the USA.<br />
Traditionally, <strong>Europe</strong>an freight<br />
companies have competed<br />
with each other much<br />
more closely — on the<br />
doorstep, almost<br />
literally — and has a<br />
far greater number of<br />
small- to medium-sized<br />
operators than the<br />
USA. US companies<br />
are larger and have<br />
tended to invest heavily in technology, more<br />
successfully than their counterparts in <strong>Europe</strong>.<br />
TMS in the US have up to now been fairly<br />
straightforward, focusing on capacity planning<br />
and the flow of equipment; but now that it is<br />
competing in the global marketplace, TMS are<br />
becoming more complex and sophisticated,<br />
and therefore possibly more appropriate for<br />
the <strong>Europe</strong>an market. Indeed, globalization<br />
is in any case bringing the regions far closer<br />
together in practical terms, and it seems likely<br />
and desirable that they should both adopt a<br />
common — or at least compatible — system<br />
of transport management. There can be<br />
little doubt that this would ultimately benefit<br />
manufacturers and customers in terms of<br />
increased visibility and effectiveness when<br />
managing their shipments. •<br />
For more information<br />
Andrew Austin<br />
Vice President<br />
Schneider Logistics <strong>Europe</strong><br />
www.schneider.com<br />
www.scemagazine.com May/June 2009
<strong>Europe</strong>an magazine for supply chain<br />
professionals who are responsible for<br />
manufacturing, warehousing and logistics<br />
Each issue covers<br />
<strong>Supply</strong> <strong>Chain</strong> Leadership<br />
Logistics and<br />
Warehousing<br />
Manufacturing<br />
<strong>Supply</strong> <strong>Chain</strong> IT<br />
strap<br />
2009 May/June www.scemagazine.com 45
case study<br />
supply chain<br />
optiMization at<br />
Western digital<br />
Western Digital, the world’s second largest hard drive manufacturer, substantially increased customer<br />
satisfaction and reduced inventory by implementing a solution from ICON-SCM (Karlsruhe, Germany).<br />
Synchronizing supply and demand along the entire supply chain could reap additional benefits.<br />
To improve the planning process<br />
for its international supply chain<br />
and gain the ability to fulfil demand<br />
based on specific priorities, Western<br />
Digital decided to implement ICON-<br />
SCM’s planning solution. ICON’s solution<br />
replaced the largely manual process with<br />
an automatically generated plan that takes<br />
production capacities and demand priorities<br />
into account. “This capability is an extremely<br />
decisive success factor in a market that,<br />
although growing by approximately 15%<br />
per annum, has seen cutthroat competition<br />
during the last several years,” says<br />
Wolfgang Nickl, Vice President, Finance and<br />
Business Operations at Western Digital.<br />
Speed as a Decisive<br />
Success Factor<br />
The hard drive manufacturer now uses<br />
an integrated planning process across<br />
several factories. Throughput time was<br />
reduced by up to 2 days and the flexibility<br />
of price and production planning was<br />
significantly increased. “In our business,<br />
product prices drop by almost 25% yearly;<br />
at the same time, product performance<br />
doubles every 2 years. What matters most<br />
is speed, speed and more speed. What we<br />
absolutely don’t need in situations like this<br />
is excess inventory and to have our capital<br />
tied up,” explains Nickl. The only remedy<br />
is the efficient interaction of management<br />
processes, key performance indicators<br />
and system performance. Western Digital<br />
46<br />
Dr Michael Keppler,<br />
General Manager,<br />
ICON-SCM<br />
Wolfgang Nickl,<br />
VP, Finance &<br />
Business Operations,<br />
Western Digital<br />
had previously introduced two separate<br />
initiatives to implement a faster and more<br />
accurate planning process, aimed at higher<br />
profit margins in a market that’s becoming<br />
more and more complex. However, neither<br />
internal projects nor external software<br />
tools provided the anticipated results. The<br />
breakthrough came by teaming up with<br />
ICON-SCM.<br />
A High-Performance<br />
Planning Algorithm<br />
Implemented in April 2008, the ICON-<br />
SCP software now manages the supply<br />
of 250 customers across four different<br />
sales channels at Western Digital. By<br />
using this integrated planning process,<br />
the company receives a consistent and<br />
realistic plan that is based on capacity<br />
constraints and synchronizes all participants<br />
within the supply network. The material<br />
supply is based on demand priorities,<br />
Western Digital Corporation<br />
Western Digital, one of the storage industry’s pioneers<br />
and long-time leaders, provides products and services<br />
for people and organizations that collect, manage and<br />
use digital information. The company produces reliable,<br />
high-performance hard drives that keep users’ data<br />
accessible and secure from loss. WD applies its storage<br />
expertise to consumer products for external, portable<br />
and shared storage applications. WD was founded in<br />
1970. The company’s storage products are marketed<br />
to leading systems manufacturers, selected resellers<br />
and retailers under the Western Digital and WD brand<br />
names (www.westerndigital.com).<br />
www.scemagazine.com May/June 2009
taking into account various customers and<br />
sales channels and allowing for a flexible<br />
response to potential bottlenecks. Western<br />
Digital can now manage procurement,<br />
production and distribution to fulfil orders<br />
quickly, efficiently and reliably. The closedloop<br />
planning process ensures that<br />
customer orders can be fulfilled on the<br />
date promised and enables Western Digital<br />
to determine when new incoming orders<br />
can be fulfilled (Available-to-Promise,<br />
Capable-to-Promise). “The successful<br />
implementation of comparable solutions<br />
at other global leaders in the high tech<br />
industry made a very strong case for<br />
choosing ICON-SCM,” adds Nickl. “The<br />
unique planning algorithm ensures that<br />
during optimization there is almost no idle<br />
time.” A plan can be calculated in just<br />
minutes thanks to ICON-SCP’s extremely<br />
fast algorithm. “From the very beginning, we<br />
were extremely impressed with the speed of<br />
the ICON-SCM solution,” comments Nickl.<br />
A Positive Impact<br />
on the Bottom Line<br />
Within several months of implementing the<br />
automated supply chain planning process,<br />
Western Digital saw its profit margins rise.<br />
This can be attributed first to the forwardlooking<br />
planning logic that now enables<br />
more ship transportation than the typically<br />
necessary, yet expensive, express air<br />
transport. Second, the software allows<br />
Western Digital to favour those clients that<br />
result in higher profit margins. “Additional<br />
advantages can be gained through the<br />
optimal use of production capacities,<br />
the highest possible demand fulfillment<br />
and increased customer satisfaction<br />
resulting from setting accurate delivery<br />
expectations,” says Nickl. “We are achieving<br />
a considerably lower inventory at the end<br />
of the quarter and are able to adhere to<br />
maximum and minimum inventory targets.”<br />
Nickl also expects to achieve an increase in<br />
gross profit (the difference between revenue<br />
and production costs) by at least one<br />
per cent. With Western Digital’s quarterly<br />
revenue being almost $2 billion, one per<br />
cent represents enormous growth.<br />
ICON-SCM<br />
ICON-SCM provides high performance demand-supply<br />
planning and collaboration software that enables<br />
companies to drive profitability and unmatched<br />
flexibility across the supply chain. ICON-SCM’s<br />
innovative solutions combine unparalleled planning<br />
speed with optimization and collaboration with partners.<br />
Since 1992, ICON-SCM has created an outstanding<br />
competitive advantage for market-leading global<br />
technology and automotive companies who capture<br />
more revenue and increase inventory turns, service<br />
levels and productivity. Global market leaders such as<br />
Hewlett-Packard, Foxconn, Tellabs, Western Digital,<br />
Sanmina-SCI, 3M and Honeywell rely on ICON-SCM<br />
for quick what-if planning, closed-loop S&OP, supply<br />
liability management, order promising and fulfillment<br />
execution and supply chain collaboration. The company<br />
is headquartered in Karlsruhe, Germany, with offices<br />
in Campbell, California and Chennai, India (www.<br />
icon-scm.com).<br />
Integrating External<br />
Partners into the <strong>Supply</strong><br />
<strong>Chain</strong> Planning Process<br />
Based on its positive experience with<br />
ICON-SCM’s solution, Western Digital<br />
is now considering expanding and<br />
accelerating the automated planning<br />
process. The goals are to further improve<br />
customer satisfaction and the quality of<br />
the results of the forward-looking planning<br />
process. Western Digital and ICON-SCM<br />
are also working on integrating additional<br />
partners into the system to further shorten<br />
planning cycle time. “For example, demand<br />
from customers such as HP, Apple or<br />
Dell should be synchronized more often,<br />
automatically and with improved quality<br />
with Western Digital’s delivery promises,”<br />
adds Dr Michael Keppler, General Manager<br />
of ICON-SCM. “But for this to work, it is<br />
mandatory that companies think crossfunctionally<br />
and gain the support of top<br />
management.” The biggest advantage of<br />
a demand-driven supply network is the<br />
improved efficiency of the whole supply<br />
chain and higher competitive advantage of<br />
all partners involved. •<br />
For more information<br />
Thomas Wöhrle<br />
Journalist<br />
Baumeisterstraße 46i<br />
D-76137 Karlsruhe, Germany.<br />
Tel. +49 721 3504 076<br />
woehrle@logistik-presse.de<br />
2009 May/June www.scemagazine.com 47
calendar<br />
supply<br />
chain<br />
calendar<br />
oF eVents<br />
6–8 May<br />
World Retail Congress<br />
Barcelona, Spain<br />
Organized by Emap Ltd, UK<br />
T. +44 207 728 5000<br />
F. +44 207 728 5299<br />
ian.mcgarrigle@wordlretailcongress.com<br />
www.worldretailcongress.com<br />
12–15 May<br />
Transport Logistic<br />
Munich, Germany<br />
Organized by Messe München, Germany<br />
T. +49 899 492 0720<br />
F. +49 899 492 0729<br />
info@messe-muenchen.de<br />
www.transportlogistic.de<br />
13–15 May<br />
CSCMP <strong>Europe</strong> 2009<br />
Copenhagen, Denmark<br />
Organized by Council of <strong>Supply</strong> <strong>Chain</strong><br />
Management Professionals, USA<br />
T. +1 630 574 0985<br />
F. +1 630 574 0989<br />
cscmpadmin@cscmp.org<br />
http://cscmp.org<br />
21–22 May<br />
The 2nd Plant Managers Forum 2009<br />
Shanghai, China<br />
Organized by Martin Linking Business<br />
Consulting Company Ltd, China<br />
T. +86 28 6653 7055<br />
F. +86 28 6653 7033<br />
www.linkingbiz.net<br />
31 May–2 June<br />
Materials Handling & Logistics<br />
Dubai, UAE<br />
Organized by Messe Frankfurt GmbH, Germany<br />
T. +49 69 757 50<br />
F. +49 69 7575 6433<br />
info@messefrankfurt.com<br />
www.messefrankfurt.com<br />
48<br />
2–5 June<br />
SIL 2009<br />
Organized by El Consorci de la Zona Franca de<br />
Barcelona, Spain<br />
T. +34 93 263 8150<br />
F. +34 93 263 8128<br />
sil@el-consorci.com<br />
www.silbcn.com/sil<br />
8–10 June<br />
SCL <strong>Europe</strong><br />
Düsseldorf, Germany<br />
Organized by WTG Events, UK<br />
T. +44 207 202 7560<br />
F. +44 207 202 7600<br />
andrew.richards@wtgevents.com<br />
www.supplychain.eu.com<br />
9 June<br />
<strong>Europe</strong>an <strong>Supply</strong> <strong>Chain</strong><br />
Distinction Awards 2009<br />
Düsseldorf, Germany<br />
Organized by WTG Events, UK<br />
T. +44 207 202 7560<br />
F. +44 207 202 7600<br />
andrew.richards@wtgevents.com<br />
www.supplychainawards.com<br />
11–12 June<br />
Euro-Asian Road Transport Conference<br />
Almaty, Kazakhstan<br />
Organized by IRU, Switzerland<br />
T. +41 22 918 2700<br />
F. +41 22 918 2741<br />
iru@iru.org<br />
www.iru.org<br />
16–19 June<br />
Transporta 2009<br />
Poznan, Poland<br />
Organized by Poznan International Fair, Poland<br />
T. +48 61 869 2000<br />
F. +48 61 869 2999<br />
info@mtp.pl<br />
http://transporta.mtp.pl<br />
24–26 June<br />
Retail Asia Expo and Congress<br />
Hong Kong, China<br />
Organized by Beacon Events,<br />
Hong Kong, China<br />
T. +852 3105 3970<br />
F. +852 3105 3974<br />
info@retailasiaexpo.com<br />
www.retailasiaexpo.com<br />
5–6 August<br />
MATTECH 2009<br />
Miami, Florida, USA<br />
Organized by I.W. Enterprises, Inc., USA<br />
T. +1 941 320 3216<br />
F. +1 941 926 8193<br />
info@mattech.com<br />
www.mattech.us<br />
20–23 September<br />
CSCMP’s Annual Global Conference<br />
Chicago, Illinois, USA<br />
Organized by Council of <strong>Supply</strong> <strong>Chain</strong><br />
Management Professionals, USA<br />
T. +1 630 574 0985<br />
F. +1 630 574 0989<br />
cscmpadmin@cscmp.org<br />
http://cscmp.org<br />
21–25 September<br />
ITS World Congress and Exhibition<br />
Stockholm, Sweden<br />
Organized by Brintex Ltd, UK<br />
T. +44 207 973 6401<br />
F. +44 207 233 5054<br />
w.broadfoot@hgluk.com<br />
www.itsworldcongress.com<br />
29–30 September<br />
RFID <strong>Europe</strong><br />
Cambridge, UK<br />
Organized by IDTechEX, UK<br />
T. +44 1223 813 703<br />
F. +44 1223 812 400<br />
c.jennings@IDTechEx.com<br />
30 September–3 October<br />
Transport + Logistics<br />
Kiev, Ukraine<br />
Organized by Autoexpo, Ukraine<br />
T. +380 44 239 2704<br />
F. +380 44 239 2715<br />
office@autoexpo.ua<br />
www.autoexpo.ua/eng/ex/transport<br />
13–16 October<br />
SCM Logistics World<br />
Singapore<br />
Organized by Terrapinn Pte Ltd, Singapore<br />
T. +65 6322 2737<br />
F. +65 6226 3264<br />
stella.teo@terrapinn.com<br />
www.terrapinn.com/2009/scmlog<br />
14 October<br />
<strong>Europe</strong>an Outsourcing Awards<br />
Madrid, Spain<br />
Organized by Via Media Ltd, UK<br />
T. +44 1372 471 542<br />
F. +44 1372 472 862<br />
miranda@via-medialtd.com<br />
www.europeanoutsourcingawards.com<br />
26–29 October<br />
CEMAT Asia<br />
Shanghai, China<br />
Organized by Deutsche Messe AG Hannover,<br />
Germany<br />
T. +49 511 890<br />
F. +49 511 893 2626<br />
info@messe.de<br />
www.cemat-asia.com<br />
1–3 November<br />
SITL Dubai 2009<br />
Dubai, UAE<br />
Organized by Reed Exhibitions Companies, UK<br />
T. +44 20 8271 2134<br />
F. +44 20 8910 7823<br />
Hasan.algharbawi@reedexpo.ae<br />
www.sitldubai.com<br />
www.scemagazine.com May/June 2009
Attend <strong>Supply</strong> <strong>Chain</strong>’s Premier Event <br />
20-23 September in Chicago. Take Home<br />
Ideas and Tools that will Help Drive<br />
Improvements Within Your Organization.<br />
This conference will provide you best<br />
practices and solutions from leading<br />
supply chain practitioners and thought<br />
leaders that your organization can use to<br />
drive improvements.<br />
Choose from over 100 professional<br />
education sessions in 20 tracks including:<br />
transportation, warehousing, inventory<br />
management and demand planning, third<br />
party logistics, supply chain integration,<br />
and global infrastructure management.<br />
Representatives from over 40 countries<br />
and leading FORTUNE 500 companies<br />
will be attending.<br />
This year’s conference is in Chicago,<br />
an international logistics center easily<br />
accessed from <strong>Europe</strong>. For best fares<br />
be sure to book your flight early. For<br />
more information on Chicago, go to<br />
www.choosechicago.com/cscmp.<br />
Register before June 30 and SAVE<br />
$280 US! Network with over 3,000 like<br />
professionals. To register and see who is<br />
attending, go to cscmpconference.org.<br />
Keynote SpeaKer:<br />
Gary Maxwell, Senior Vice<br />
President of International<br />
<strong>Supply</strong> <strong>Chain</strong> for Wal-Mart<br />
Stores, Inc.<br />
The World’s Leading Source for the <strong>Supply</strong> <strong>Chain</strong> Profession.
last word<br />
Making your Mark<br />
Particularly in the current economic climate, the push to meet consumer demand for value-for-money<br />
goods is having a ripple effect throughout the supply chain. This is especially so for those businesses<br />
involved in supplying high-street retailers. The “pile it high and sell it cheap” mentality means that retailers<br />
are increasingly cutting out the ‘middle man’ in the supply chain to source their own-brand products<br />
directly from manufacturers in countries with lower production costs. This change in the traditional supply<br />
chain is creating a financial headache for the businesses involved, and could result in damage to their<br />
reputation on the high street and increased costs to their business in the long-term.<br />
Falling Foul<br />
There is a widespread assumption that CE marking stamped on a<br />
product by the manufacturer is proof of its safety. Retailers, or indeed<br />
other businesses in the supply chain, that buy ‘own brand’ direct from<br />
non-EU manufacturers run the risk of falling foul of this misunderstanding.<br />
What many don’t realize is that cutting out parts of the traditional supply<br />
chain changes their responsibilities under EU law. As retailers import<br />
more products from abroad, they must realize that it is they, and not the<br />
manufacturer, that is responsible for ensuring product compliance under<br />
CE marking regulations. The danger is the assumption that CE marking<br />
stamped on an own-brand product by the manufacturer is proof of its<br />
safety and, as a result, unsafe goods make it onto the shelves. This of<br />
course raises the spectre of prosecution, as in the eyes of the law there<br />
is no excuse for misunderstanding where the legal responsibility lies for<br />
ensuring proof of compliance.<br />
Incompetence Breeds Danger<br />
What companies do not understand is that CE marking is simply a<br />
manufacturer’s or an importer’s declaration that its product complies with<br />
EU directives. Less scrupulous manufacturers may not bother to test<br />
products, simply affixing the CE marking and signing the declaration of<br />
conformity. Owing to language issues, other manufacturers that mean<br />
well are misunderstanding the requirements of a complex set of directives<br />
— giving products that fail to meet these requirements a CE marking.<br />
Incompetence could therefore breed a dangerous situation for both the<br />
consumer who ultimately buys the unsafe goods and for the business<br />
that is prosecuted for failing to comply<br />
This isn’t an issue for ‘known brands.’ The manufacturers of such goods<br />
generally have commercial premises representing them in the EU and<br />
import their products directly into EU markets, meaning that they assume<br />
legal responsibility for complying with CE marking legislation. However, for<br />
retailers that sell cheaper goods on the high street and are experiencing a<br />
boom, even in these tough financial times, importing directly may lead to<br />
bust. It is bad news for those companies that source directly from abroad<br />
and fail to invest in their own tests of goods to prove conformity with the CE<br />
marking directives and stay on the right side of the law.<br />
CE marking replaced the old system of individual country requirements<br />
to enable the free movement of goods across the EU. It now simply<br />
provides a common set of standards to bring down barriers to entry<br />
between EU member states; those in the supply chain must remember<br />
that it is not proof of product safety. Another problem is that the<br />
surveillance of CE marking is left to each country and there is a great<br />
diversity in the level of funding and the approach each country takes.<br />
For example, UK Trading Standards tend to take a reactive approach<br />
50<br />
Jean Louis-Evans<br />
to investigating complaints, whereas French and German authorities<br />
systematically take products off the shelves to test against the CE<br />
marking directives. So, while there is a standard <strong>Europe</strong>an CE marking,<br />
there is still no single <strong>Europe</strong>an consumer safety mark. This necessitates<br />
those in the supply chain, who don’t wish to rely on the CE marking,<br />
to do their own supplementary safety testing. This means that ‘safe’<br />
products sold in <strong>Europe</strong> should carry both a CE and another safety mark<br />
such as the TÜV certification, German GS mark or French NF mark. In<br />
countries such as Germany or France, this actually helps retailers to sell<br />
goods as consumers look out for the mark.<br />
Further Frustrations<br />
However, this variety of safety marks bestowed by certified bodies is<br />
frustrating the <strong>Europe</strong>an Commission, which is pushing to introduce<br />
a single, EU-wide consumer safety mark. On the surface, this makes<br />
perfect sense, but the concern is that the EU currently appears to be<br />
considering a ‘watered down’ safety mark that, like CE marking, allows<br />
manufacturers to self-declare conformity. This will make quality marks<br />
no more valuable than CE marking. It will ultimately lead to a situation<br />
of Caveat Emptor or “buyer beware,” create another headache for the<br />
supply chain and potentially life-threatening confusion for consumers. •<br />
For more information<br />
Jean Louis-Evans is Managing Director of TÜV Product Service, one of the world’s leading<br />
experts on product testing, with 170,000 product certifications in circulation globally and<br />
13,000 employees worldwide.<br />
Octagon House, Concorde Way<br />
Segensworth North<br />
Fareham, Hampshire PO15 5RL, UK.<br />
Tel. +44 1489 558 100<br />
info@tuvps.co.uk<br />
www.tuvps.co.uk<br />
www.scemagazine.com May/June 2009
Extend the four walls of your warehouse<br />
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To learn more, please visit www.infor.co.uk/wms<br />
call +44 (0)121 6158000 and quote SCE<br />
email ukmarketing@infor.com<br />
Copyright © 2009 Infor. All rights reserved. The word and design marks set forth herein are trademarks and/or registered trademarks of Infor and/or related affiliates and subsidiaries. All rights reserved. All other trademarks listed herein are the property of their respective owners. www.infor.com.
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