Global Supply Chain

August 31, 2010.  Blinco Systems meets with Gellert Global Group and unveils Blinco’s vision and development roadmap through 2012. At the interactive meeting, discussions included BSI’s new 3rdwave Covergence Eco-System including 3rdwave GCM web apps, extended 3rdwave Visualization Station capability, and 3rdwave Collaboration capabilities.

Executives and management from the Gellert Global Group of companies were excited by the very easy to use UI of the new 3rdwave GCM web solution, its 360 visibility of items across the global supply chain, and its ability to integrate supply chain collaboration and graphical anlytics and dashboard KPIs.  John McLennan, CIO for the GGG stated that the meeting provided a “view forward that enables the GGG to confidently map their technology and solutions requirements with a dynamic browser native enterprise capability while insuring that their client server legacy solutions are maintained and their significant investment protected.”

Blinco Systems emphasized that the roadmap to the future for the Gellert Global Group included protection of their legacy solution and the substantial investment they had made while providing the new, more flexible development model and UI for future development.

I just attended the Supply Chain and Logistics Summit down at Stone Mountain, GA. During my meetings I met with V.P.s and Directors from large public companies and smaller privately held firms. Most were for profit but in one instance the company was a not for profit 3PL.

My obvious reason for attending was to mine sales opportunities; however a high motivator was to gain insights to the current issues and drivers that are top of mind with supply chain professionals. While the profiles of the organizations were dramatically different and the metrics they use to measure their success varied, a similar theme was evident.

A key, if not the key, challenge for most senior supply chain executives is their lack of a singular view of all the products, players and actions across their supply chain. They lack the fundamental ability to easily see what is happening and the downstream impact on the organization’s supply chain objectives.

While there are many very competent supply chain solutions that support operational silos, there are very few solutions that enable convergence of the information to provide senior management the visibility at the level needed to make more educated decisions, and operations with the information to execute their functions easily and efficiently. Dwight Klappich, analyst and research Vice president at Gartner, recently quoted in an interview in Inbound Logistics presented this view: “While process orchestration and optimization within functional silos has delivered value in many cases, the next wave of value will require cross-silo process integration, namely the ability to orchestrate an end-to-end process such as order-to cash.”

Supply chain execution convergence is:
• the integration and synchronization of data from all partners in the supply chain,
• converting that data into meaningful information,
• making it visible with situational context,
• supporting organizational decision-making,
• and, providing the infrastructure to act.

From a global supply chain perspective convergence is vital to effectively carry out “organization” level supply chain objectives while supporting the functional silos with operational infrastructure. Without convergence of supply chain operations and information, managing global external partners is sub-optimized and internal operations are relatively less efficient and effective.

The concept of supply chain execution convergence is easily understood and resonates very well with global supply chain professionals. The challenge is how to accomplish it?

May 26, 2010

Blinco Systems Inc. is proud to be selected as a leading supply and demand chain solutions provider in 2010.

The Honor:

Supply & Demand Chain Executive has identified leading providers of supply chain services and technologies who are customers/clients achieve supply chain excellence and prepare their supply chains for the post-recessionary return to growth. Based on submissions to the “100″ from end users and solution providers, the editorial staff of the magazine has compiled a list of leading supply and demand chain innovators.

“Our goal with this year’s ‘100,’ as in the past, is to highlight a broad range of solutions and services targeted at a variety of industries, addressing the needs of companies of varying sizes, and assisting in the transformation of a diverse mix of the functions that make up the supply chain,” added Reese.

After receiving nomination forms, the Supply & Demand Chain Executive editorial staff identified applicants that best fit the stated criteria for the “100.” Final recipients are featured in the cover story of the May/June 2010 issue of Supply & Demand Chain Executive, as well as online at www.SDCExec.com/SDCE100.

In the Logistics Management magazine issue of 05/19/2010 Michael Levins (editor) published parts of interviews he conducted with four (4) supply chain analysts on current trends in Supply Chain Execution.  While a vast majority of the respondents to the Logistics Management 2010 Software User Survey are using some variation of supply chain software, the analysts imply that there is still a way to go for Supply Chain Organizations to achieve synchronization across their supply chains.

Of the four interviews, the interview that resonated most profoundly with me was with Dwight Klappich, Analyst and Research Vice President at Gartner.  He puts forward the concept of Supply Chain Execution (SCE) Convergence as the next iteration for companies that are moving toward supply chain execution excellence.  In a nutshell SCE Convergence is the cross functional integration and synchronization of processes, sub-processes and activities within the organization.

Dwight acknowledges that although companies have been able to gain improvements within silos from their current SCE solutions, achieving greater levels of excellence and the resulting benefit require the orchestration of end-to-end processes like selling, buying, making -to which could be added – accounting, finance, inventory control, transportation management, and compliance.

However, in order to achieve SCE Convergence, companies will have to significantly stretch themselves beyond what their current SCE systems offer.  SCE Convergence is achievable through a multi-functional supply chain architecture that supports the company’s end-to-end supply chain processes (operations), manages supporting data and information, and provides a comprehensive 360 degree view of the entire operation in an on-demand environment.

SCE Convergence requires system(s) that are designed to integrate, orchestrate, and enable (all) the processes and sub-processes that make-up the Supply Chain.  SCE Convergence enables operators across the supply chain to access information (push or pull) that is critical to fulfilling their functional responsibilities, provides managers with a comprehensive and contextual view of their sphere of responsibility, and supports organizational decision making and action.  SCE Convergence provides senior management with command and control of their business by providing information that is meaningful and actionable.

SCE Convergence is not new in practice.  However, few in the supply chain have successfully implemented SCE Convergence solutions because the mainstream ERP applications and the newer SaaS solutions have not approached the supply chain in a holistic, integrated manner.

Few truly supply chain organizations have implemented comprehensive supply chain execution solutions.  Those companies that have been successful have what Dwight calls SCE Convergence solutions that enable operators to work within their silos and insure that the validated information required for management planning, decision making and action is available when needed.

True SCE Convergence solutions enable companies to manage the entire Cash-to-Cash cycles within the context of their ERP solutions or independent of them.  They enable the streamlining of processes, the optimization of fulfillment with inventory, the control of costs, and the increase in compliance within one orchestrating software application.  True SCE Convergence provides the framework for intercompany integration and extra-company synchronization.

Stanford University professors Warren Hausman and Hau Lee and TradeBeam associates Graham Napier and Alex Thompson released, in October 2009, a detailed study on Global Trade Management (GTM) focusing on the complexity of the global trade environment.  In the report they detail  the >100 processes related to a global transaction and the value proposition for managing the processes efficiently and effectively.  The report,  “How Enterprises and Trading Partners Gain from Global Trade Management” is chock full or process flows, charts and formula that provide extensive insight into what is actually required to affect a global trade transaction.  For any practitioner or student aspiring to excellence in the area of  GTM, this document is a must read .

Their conclusions as to the benefits – translated into % savings in annual costs and % increases in annual profits for both importers and exporters – should be enough to make any senior executive involved in Global Trade Management take note, if not immediate action.

• Dollar savings amounting to 1.7% in Annual Sales for Exporters
• Dollar savings amounting to 0.6% in Annual Sales for Importers
• Benefits amounting to 28% increase in Annual Profit for Exporters (assuming profit = 6% of sales)
• Benefits amounting to 10% increase in Annual Profit for Importers (assuming profit = 6% of sales)

The downside of mismanaged global trade management exposes a company to direct costs (such as fines for non-compliance), and hidden costs (such as greater inventory safety stock, increased product obsolescence, lower productivity, higher customs fees, lost opportunity for duty-drawbacks and supplier/logistics claims.

To achieve the annual savings and benefits, requires IT-enabled solutions that streamline the processes required to execute complex, simultaneous global trade transaction.  To streamline the import and export processes requires two (2) vital capabilities:

1. The ability to seamlessly integrate processes across the internal organization and external partners, and
2. The ability to seamlessly synchronize information between the required actors so that they can efficiently execute their work and insure that shipments move effectively through the multiple processes.

The challenge in optimizing the global trade management environment is primarily that of streamlining complex processes.  With the myriad of cross-functional and cross-company interactions necessary to execute GTM streamling processes is virtually impossible without enterprise IT-eneabled GTM support.   IT-enabled GTM support will enhance organizational effectiveness and efficiency by enabling:

• operators to execute their work efficiently with minimal reliance on outside resources for their supporting information (streamline process)
• partners to share critical information collaboratively in (near) real time – suppliers, customers, 3rd party logistics providers, warehouses, customs, and financial institutions
• seamless information sharing across internal silos,
• total visibility of product and financial transactions across the entire global supply chain,
• full total cost control,
• comprehensive compliance management – regulatory and business,
• user centric analytics and reports, and
• real-time collaborative capabilities.

Global Trade Management is a relatively new discipline.  Over the passed several years several “GTM” solutions have matured and are deployed as a Software as a Service (SaaS) offering.  However, these GTM solutions while supporting some GTM functionality, and in some instances extended GTM functionality, all are still somewhat specialized in their offerings and are dependent on larger ERP systems for the core business processes.  In order to achieve GTM excellence requires an enterprise-wide approach.   However, even with the interfacing of the current SaaS GTM offerings most of the ERP solutions do not have the robust functionality required to provide a comprehensive solution.   The journey is most often difficult and costly and the results deliver less than promised or expected.

Because of the unique orientation of enterprise Global Trade Management, there are still very few IT-enabled solutions that provide ture  enterprise capability.  The enterprise level GTM solutions are provided mostly by small and mid-size solutions providers and not the large GTM “best of breed” or enterprise solutions.  This simple reality presents the most fundamental challenge to a company achieving  GTM excellence – dealing with a small or mid-size enterprise-capable GTM  solution provider.

The recent study  by American Shipper magazine and AAEI, “ISF Benchmark Study: Achieving Complaince – Against All Odds”, presents some revealing benchmarks when it comes to meeting ISF compliance requirements on January 26, 2010.

The benchmark study highlighted 5 key areas that separates winners from the general population of importers:

• Will be ISF compliant by the January 26, 2010 enforcement date.

• Have a high level of confidence that their ISF filings are timely, accurate and complete.

• Keep total cost of ISF compliance below $100K per year.

• Pay <$25 per filing.

• Make amendments to contracts and service agreements to incorporate ISF compliance.

The ability to meet CBP ISF compliance is predicated on several key elements:

1. Having a system in place that helps the importer assure the suppliers are providing the ISF information in a timely manner that does not delay shipment cycle time.  The survey highlighted that delay in shipment cycle time due to ISF information reporting was a major concern for importers with the implied additional cost associated with a delay.

2. Being able to capture ISF supplier information electronically or through an electronic facsimile.  The ability to easily validate information and where necessary request amendments or updated ISF information quickly.

3. Preparing the ISF filing without, or with minimal, manual intervention.

4. Submitting the filing electronically to Customs or a Customs Broker.

5. Monitoring ISF filings status to insure CBP compliance.

To be a winner requires the ability to manage the entire process efficiently and economically.  Winners have software  solutions that streamline process and integrate information flow to ensure   data flows from suppliers and is convertedto meaningful information without significant manual intervention.  The system is able to validate the information to insure that all required data elements are recieved.  The solutions provide alerts if there is incomplete information requiring attention.  Finally, the system should automate the conversion to the ISF details for electronic transmission to the defined filing system.

However, achieving winner status is not likely achievable without a supporting IT infrastructure that provides  supplier PO shipment planning and execution visibility and the ability to monitor ISF information submissions.

Blinco Systems has implemented 3 systems with clients that are considered large (and approaching mega) filers by CBP.  Each client had their ISF solution implemented within 60-90 days and have achieved >99% accuracy on their filings within the time constraints required to comply with CBP.  Furthermore, with full visibility into their suppliers’ shipment schedules and ISF filing performance, they have experienced virtually no degradation in shipment cycle time due to the information flow.  Finally, and most importantly our clients have been able to fully automate the ISF process and reduce costs dramatically (<$5.00 per entry).

A quick slice of news from Procurement Leaders in the article “Experts warn firms losing sight of operations due to supply chain outsourcing” highlights the “Rule of Unintended Consequences”.  In this case, the outsourcing of either or both manufacturing and supply chain activities to 3rd parties was intended to increase efficiency and reduce total cost across the supply chain while relieving the company of supposedly non-core competencies and streamline operations.  In theory this works well.  However, as many organizations are discovering, without adequate systems in place to provide the capability to command and control an outsourced environment, the unintended consequences often lead to a significant lack of responsiveness and a meaningful increase in inventory and cost across the supply chain.

Outsourcing supply chain activities does not mean outsourcing responsibility for supply chain performance.  The issue of visibility is an important (but not the only critical) element in gaining control over the supply chain.  However, visibility into outsourced operations is more difficult than it might first appear because of the number of participants that must be monitored and the shear breadth and differences of activities  that must be executed across the supply chain.

It is important to realize that in the context of supply chain management, visibility is an outcome of information.  Because of the complexity of all but the most simple supply chains, it is virtually impossible to maintain a manual system and achieve a reliable and  meaningful level of supply chain visibility. Therefore, it is imperative to have systems in place that can capture the information from all the required sources and put it into a context that is meaningful to the user.

While I fully agree with Andre Pino, Marketing Director of Acsis, that “… new automated data collection and collaboration technologies can provide visibility and restore the management control over their demand-supply networks and minimise disruptions and operational errors”, the effort to achieve world class capability is not simple.  To achieve the results that he alludes to implies the ability to:

• collect and validate the information from all participants across the supply chain,
• distribute it seamlessly and make it visibile to the individuals who are responsible for monitoring and managing the supply chain,
• enable real-time collaboration with all required parties (both internal and external) for information sharing and problem resolution,
• and support action as required

True operational visibility across an outsourced supply chain will only be achieved if the organization has systems in place that synchronize information from multiple sources.

Narendra Mulani who heads up the Accenture Supply Chain Management service line wrote in the August edition of Logistics Management on Operational and Technical Excellence in the supply chain.   He highlighted six (6) areas where supply chain masters excel:

• Order Capture enabling a fulfillment team to view the status of available inventory (on the floor and incoming) to support order scheduling and fulfillment
• Inventory Management which provides insight into inventory availability and supports the allocation and reallocation of inventory to optimize order fulfillment and customer relations
• Warehouse and Transportation Management that automates warehouse processes and supports automated management of rate quoting, equipment constraints and lead-times with carriers
• Reverse logistics and Returns management to improve faulty products and services
• Technology and Data Integration to leverage information across the entire fulfillment system, and
• Analytic tools that support sophisticated collection and analysis of information and improve decision-making.

Today, with the available technologies there is little excuse for companies not achieving operational and technical excellence.  There are small, medium and large software providers of sophisticated integrated fulfillment solutions at solutions at almost all price points that bring supply chain excellence capability to virtually any organization that wants to see their business excel.  The benefits to achieving excellence can be readily supported with a return on investment analysis.

The journey to achieve operational and technical excellence in the supply chain might appear daunting but with the right partner and commitment to the outcome the results are very achievable and the rewards exceptional.

David Brousell, the editor of Managing Automation, in his July/august editorial A Walk in the Clouds challenges the hype surrounding cloud computing and the significant benefits it supposedly delivers.  After presenting several commonly understood benefits of cloud computing he warns to reader against simply accepting these benefits as truths.

Cloud computing, SaaS models, and other forms of 3rd party solutions for IT solutions have a significant amount of hype liberally sprinkled among the real facts.

The major motivation for going down the path for the 3rd party solutions exists for several reasons.  Firstly, operations has found that it is often easier and faster to get a solutions they require by subscribing to a 3rd party solution rather than waiting for their IT group, who may or may not be able to get the project funded or have the resources to execute it.  Secondly, operations and IT have found that 3rd party subscriptions are an off-balance sheet expense and therefore often escape the regorous scrutinity of the finance group.  Thirdly, operations believes that the best of breed cloud or SaaS solution will be an easier implementation.  Fourthly, operations and IT often mistakenly believe that they can easily enter or exit from a cloud supplier relationship.

Like you intimate, the deliverable is often less than the expectation.  Depending on the requirement of the client, the benefit of the lower cost and complexity of entry for cloud or SaaS computing is often exceeded within 2 years of implementation.  The supposed ease of exit from a supplier is often more complex and inflexible that the contractual terms might imply.

The challenge for the client is to fully understand their requirements and commitments before entering into a cloud or SaaS relationship.  Unfortunately, most clients during the acquisition phase will often maximize the obvious short term benefits and minimize the long term costs.

The next wave in global commerce will integrate and synchronize the supporting technologies, people and processes to create a comprehensive platform that responds quickly to the dynamics of the global environment whenever meaningful change occurs. Command and control over global commerce will mature as visualization, collaboration and execution competencies evolve and are tightly integrated to provide one version of the truth through multiple user-defined views. The integration of these three components enable management, operators and strategic partners to quickly view both the activity and financial impact of global supply chain events, draw the appropriate inferences from the information, collaborate with each other for optimal decisions, and implement action to resolve the issues.
1. Visualization tools provide the personalized views needed by all involved actors as to what is happening across the global supply network, ranging from event monitoring, workflow and exception-based alerting to highly sophisticated BI and Reporting tools. The more simple visualization tools provide the operator or manager insight into statuses but limited context. More sophisticated reporting and BI tools add the layers of increasing contextualization to the information with the value-add of dynamic orientation.
2. Collaboration tools built on web 2.0 structures, allow users to create teams/communities on-demand, around specific issues or projects that are contextualized by the integrated visualization components. The collaboration tools will go beyond traditional document sharing to enable virtual meetings among knowledge holders and actors that drive solutions that will optimize results across the entire supply chain.
3. Execution management refinement will continue to drive and streamline global commerce. The newer global commerce management execution tools bring together the vital components of global sourcing and distribution, global trade management, global financial management, trade compliance, global logistics, and total cost management in a tightly integrated and synchronized environment insuring full organizational control.
Today, many of these tools exist in one state or another. The visualization tools are maturing quickly with strong capabilities to view and contextualize information through sophisticated analytics, dashboards and scenario capabilities. Collaboration tools are still relatively immature, and their adoption has been limited. Execution tools while highly developed are mostly fragmented among many offerings and don’t provide one control-centric platform. In only a few cases are these three components tightly integrated and synchronized to provide the optimum value proposition.
The next wave in global commerce management will bring together these three basic components to insure many views (visualization) of one truth (standardized information) can be quickly shared among an authorized community of stakeholders (collaboration) to deliver solutions for the timely action required for optimal resolution. When visualization, collaboration and execution capabilities are tightly integrated and synchronized, organizations will achieve full command and control of their global activities and drive the promised values.