Batching – An Enemy Disguised as an Ally

For-profit businesses have a simple task – make profit. Well, maybe not that simple to attain, but simply put for a business to make profit all it needs to do is to generate revenues that are greater than its expenses (and if the business is interested in sustaining the profit making, it needs to ensure that it grows, and therefore that its revenues grow faster than its expenses).

The nature of these two forces is quite interesting, and one of the characteristics they have is absolutely opposite. While revenues generation is subject to high uncertainty and somewhat out of the business control, cost is highly certain and almost fully under the business control. This core difference leads to a fundamental difference in the way management treats the two; we hope for revenues and we ache costs.

Are you still using Min-Max in your Inventory Management?

Some policies and practices that are prevalent in management are seriously counterproductive to the cause of companies, nevertheless they stay the norm. I used to be surprised whenever I stumbled against such practices with my clients, asking myself how is it that given the knowledge generated and advancements in technology companies stick to these practices that are keeping them away from the objectives they want to achieve. We term these practices as “disabling procedures”.

This article, is not about the reasons for the continued existence of these practices, it is about one of these practices that is common in the supply chain arena. A practice that delivers more damage than good and that is a major contributor to the exact phenomena it is supposed to be solving. This is the “Min-Max” practice.

Collaborative Demand Planning Technology

A very interesting research on one of the key areas of the future of supply chains - collaboration. Please read the attached article, and join our discussion group on LinkedIn. 

Enjoy!!

Mickey
http://www.clresearch.com/research/detail.cfm?guid=5E16D35D-3048-79ED-9931-DD15E8AEF724

Invitation to a new Supply Chain Manager's Forum

We are happy to announce the launch of the a new FORUM for Supply Chain Managers, Operations Manager, Logistics Manager, Purchasing Managers, and CIOs

Organized by People and Computers.

The forum is a platform for its members for study studying, getting exposed to advanced knowledge and technologies, sharing experiences, and networking.
The first forum meeting is scheduled for May 28, 2013- among the presenters in this meeting, will be:
- VP Supply Chain of Keter, 
- VP Supply Chain of Strauss Group, and
- VP Supply Chain of Osem/ Nestle Israel.

We would be very happy for you to join the forum, please find more details through the link below:

http://ciscmo-forum.events.co.il/save-the-date

In Modern Retail Replenishment, Once a Day Isn't Enough

This is a very interesting discussion about the frequency of delivery to retail outlets. It seems that there is an evolution towards increasing the frequency to more than once a day. This naturally presents a variety of new challenges, that require rethinking the approach to supply chain operations and collaboration. A post on these challenges and the resulting approach will be published on this blog, soon. For the time being, please enjoy this article:

In Modern Retail Replenishment, Once a Day Isn't Enough

ISM - Publications - Inside Supply Management - A Shift in Sourcing Strategies

Supply management organizations are moving from a low-cost-country strategy to a best sourcing plan that focuses on value, total cost of ownership and a changing world.

ISM - Publications - Inside Supply Management - A Shift in Sourcing Strategies

Mickey's SC Transformation Article in PC Magazine

PC Magazine publishes Mickey's article on "The Unavoidable Transformation of Supply Chain Management" http://www.pc.co.il/?p=114414
 (**article in Hebrew, for English version please see blog entry posted on the 13th of March, 2013 or click link -> "The Unavoidable Transformation of Supply Chain Management")

Excellent Supply Chain can still do much Better

"Nature Line" is an interesting FMCG producer. It has two product ranges that are leading brands; one is a hair treatment and the other edible oil. The company, under any evaluation criteria, is exceptional. It has a loyal and steady work force, extraordinary business performance, delivers consistent growth and enjoys high appreciation from all of its stakeholders. It also has a brilliantly operating supply chain, with low inventories and high availability across a huge supply and demand network. The company has always been driven by the un-compromising quest to be better and is accustomed to finding ways to sustain its uniqueness. Nevertheless, it was not prepared to the findings and ramifications of adopting a different perspective on their supply chain. A perspective that revealed meaningful lost opportunities and clear pathways to capitalize on these opportunities, leading to impressive business effects.

The Evasiveness of Inventory - Whether you have it or not you still Loose Sales

Rishi is a market leader in the men’s fashion market in India. It designs, produces and sells several top brands in a chain of more than 500 stores it owns, plus thousands of stores of other retailers. It enjoys a high market position and maintains its leadership for many years now. Still, in spite of the company’s success in keeping its leading position and delivering top line growth year on year (slightly above the market rate of growth) the company has not been successful in more than 20 years to deliver meaningful profits (it mostly makes a small loss, and occasionally a small profit). A management decision to focus on supply chain for achieving business performance improvement lead to the exposure of a few exceptional opportunities that through a few simple changes in their IT system and operational procedures resulted in a nice growth in sales and mainly a dramatic improvement in profitability and consumer satisfaction.

The Unavoidable Transformation of Supply Chain Management

The business world is experiencing volatility in levels it never used to - Cycles of economic growth, crisis and recovery are more frequent, unpredictable and ever more influential. This, together with the effects of globalization and natural catastrophes (such as in Japan and Thailand) as well as man-made ones sharply enhances the volatility experienced.  

Even this is enough to sound overwhelming, but in order to complete one mustn’t omit, in parallel there are a few more revolutions worth mentioning happening. They happen in different locations at different paces and at different times, but it is clear that they are here and that they are without doubt expanding everywhere. The Consumer Revolution- Today’s consumers are more technologically advanced, informed and knowledgeable, more connected to a wider community of consumers, more demanding and have higher awareness to well-being, health and sustainability. The Information Revolution- Today information is generated in rates never experienced before (recent studies estimate that every few minutes the amount of information generated is equal to the whole of the information generated since the beginning of the universe). And finally The Regulatory Revolution – Social trends, urbanization, care for the planet and quality of life leads to increase regulatory intervention in areas it never took part of before.

In-light of these realities, towards the end of 2012 a few surveys were conducted to evaluate how they affect supply chain management. This article brings the key findings of these surveys done by PwC, SCM World, Bloomberg Business week Research Services and CSC that combined surveyed thousands of managers in hundreds of organizations representing different markets, multiple industries and a variety of business realities.

Welcome Supply-Chain Practitioners

Supply-Chains are key enablers for realizing business strategies, satisfying customers, delivering value to stakeholders and gaining competitive edge. At the same time they are complex, involve many companies in various disciplines and are mostly beyond the immediate control areas thus optimizing their performance, through effective network synchronization is a major challenge in many fronts. And, this is exactly why we are so excited about them.

This blog intention is to be a stage for sharing knowledge, experience and tools among supply-chain practitioners as a small contribution to the global effort of creating lean, agile and sustainable synchronized demand networks. 

We hope you enjoy it and invite you to take active role in shaping it by providing your feedback and thoughts.