QuickREAD

May 9, 2007

Hershey Kisses Some Chocolate Making Good-Bye
The Hershey Company and Barry Callebaut, the world's largest manufacturer of high-quality cocoa, industrial chocolate and confectionery products, will partner on a wide range of research and development activities with a focus on driving innovation in new chocolate "taste experiences, premium chocolate, health and wellness, ingredient research and optimization."
Barry Callebaut will construct and operate a facility to provide chocolate for Hershey's new plant in Monterrey, Mexico. Barry Callebaut will also lease a portion of Hershey's Robinson, Ill., plant and operate chocolate-making equipment at the facility. The partnership includes a long-term global agreement under which Barry Callebaut will supply Hershey with a minimum of 80,000 tons per year of chocolate and chocolate products.
The agreement will significantly increase Barry Callebaut's production capacity in the Americas. Over the next three years, production capacities will increase by 130,000 tons per year, with a significant portion of this production dedicated to supplying Hershey. The total investment by Barry Callebaut will amount to $50 million.
Source: Hershey's, http://www.thehersheycompany.com

I Have No Idea How Much I'm Spending for Things
Spend analysis is one of the most important parts of strategic sourcing. Before you can source anything strategically, you have to know how much you're spending, whom you're buying from, how much you are spending with each supplier and what parts, materials and other tools you're getting from each supplier. Theoretically, all that information should be easy to get. Realistically, it often isn't easy. The data can be spread around several departments within a company and can reside in several different databases that may not be compatible. On the following pages, you'll read how others get around these and other problems--and actions they have taken after analyzing their spend.
Source: Purchasing, http://www.purchasing.com

China's Auto Industry Considers Customer Service
The retail side of China's auto industry has traditionally been rather crude. While in developed markets a lot of emphasis is placed on customer service as the dealer is the first physical point of contact between carmaker and client, Chinese dealers focus on revenue.
"They are not looking at it in terms of service," says Philip Coquelle, director of automotive research at ACNielsen China. "You really notice this when you talk to consumers--they don't see any differentiation. This means the customer may buy one car but the next time they don't buy the same brand."
This is unsurprising given the immaturity of the market. Car penetration is still only 6 percent nationwide and 19 percent in the key consumption zones of Beijing, Shanghai and Guangzhou.
However, as the market develops and consumers become wealthier are exposed to a wider range of choices, the relationship between manufacturer and driver will become more and more important.
Source: Business Week, http://businessweek.com

Internet Commerce, Still Comparatively Small, Continues Growing
In 2006, the store channel contributed the most to global retail spend, accounting for 87.5 percent, while internet retail made up 8.6 percent. But by 2012, e-retail could account for 12.9 percent of total retail spending.
Source: CBR Online, http://cbronline.com

End-to-End RFID Enabled Supply Chain for Apparel Industry
A new facility that shows how radio frequency identification (RFID) can enhance supply chain management and in-store retail operations for garment manufacturers, brand owners, retailers and logistics providers has opened in Finland.
The Apparel RFID Solution Centre, thought to be the first of its kind in the world, is a joint venture between ADT, Salpomec and self-adhesive label materials supplier UPM Raflatac.
It demonstrates a complete end-to-end RFID enabled apparel supply chain, including source tagging, automatic goods reception, an RFID-based sorting system, replenishment and store inventory management and point of sale analytics and security.
Source: Just Style, http://www.just-style.com

EU Law Looms for Chemicals Industry--and Downstream Users
On June 1, 2007, the Registration, Evaluation, and Authorization of Chemicals (REACH) directive, the European Union's environmental testing law, will go into effect. Are you ready?
REACH specifically applies to all chemical substances that are manufactured in or imported into the EU for ownership or further conversion into finished products. But it's not just manufacturers and distributors of chemicals that will have to respond. All downstream industries that use chemicals in their end products exported from the EU will be increasingly affected as further legislation follows in 2008, 2010, and 2013.
This year's legislation lays the foundation for working through a backlog of chemicals for which there is little data on health and environmental impacts. An estimated 65 percent of chemicals cataloged by the EU in 1981 don't meet the EU's minimum requirements. New chemicals and new uses/applications will be felt for many years to come, and REACH carries massive ramifications for chemicals and downstream industries, including risk to the business and supporting IT. Some pundits have already termed this as "the chemical industry's Y2K," and while there isn't the same midnight do-or-die scenario, we can't help but agree with parallels in terms of scale.
Source: AMR Research, http://amrresearch.com

IT Strategic Planning in Entrepreneurial Companies: an Oxymoron?
A lot is being said lately about the importance of strong CEO/CIO relationship and IT-business alignment. This relationship is often tested when IT prepares its strategic plan. It is apparent that the IT strategic plan should be aligned with the strategic plan for the entire company, otherwise efforts to align IT with the business would fail and CEO/CIO relationship would get strained. But does a corporate strategic plan always contain sufficient information for IT planning?
CIOs of entrepreneurial companies know that the challenges they face are somewhat specific, and that lack of an adequate corporate strategic plan is one of them. These companies do not have much experience with strategic planning, nor do they feel the necessity for it until certain point of company growth. This is understandable since the leaders of these companies have been busy establishing and growing the business from ground zero. Strategic planning has not been their focus yet.
Source: CIO, http://advice.cio.com

You Have No Idea How Catastrophic a Downed Computer Network Is
Do you know how much it would cost your company if your computer network went down? If you add up all the costs, you might be shocked. Infonetics Research found that overall downtime costs for U.S. businesses averaged an astounding 3.6 percent of annual revenue. Most companies have little or no idea how much IT downtime could cost their business specifically. According to a recent survey, two-thirds of 400 enterprises quizzed by Forrester Research could not provide a number related to the financial cost to their business for such a critical circumstance. Many organizations monitor the effects of application-related failures from a technical or fault-diagnostic perspective but fail to relate any problems to an organization's bottom line.
Source: Industry Week, http://industryweek.com

Web Analytics Now Powering Enterprise Marketing Initiatives
Web analytics tools, traditionally stand-alone products used to measure Web site hits, are increasingly being integrated with other key tools to become the "brains" behind enterprise marketing efforts, according to a report released this week.
Phil Kemelor, an analyst at CMS Watch, a consulting firm that evaluates content management technologies, says the company's survey found that many large companies are integrating Web analytics tools into applications like e-mail campaign software and keyword bid-management tools in the hopes of using them to plan, run and adjust Internet marketing activities.
However, he says, the Web Analytics Report also concluded that many workers involved in such efforts lack the expertise and training to use the tools effectively.
Source: Computerworld, http://computerworld.com

Businesses Increasingly Interested in At-Home Call Center Workers
Kim Perez threw in the towel on commuting three years ago. Now, Perez gets to work by climbing a dozen stairs in her sweats to a desk in her bedroom. The mother of three works as a home-based customer service agent and sets her shifts in half-hour blocks, around school schedules and PTA meetings.Working from home has long been attractive to some. Now, there's a growing number of American workers who crave control over their schedules, hate their commutes, are frustrated with high gas costs and want to become home-based customer service agents.
Experts say the industry has hit a growth spurt: The number of home agents will triple between 2005 and 2010, predicts Stephen Loynd, manager at IDC, a Framingham, Mass., research concern. Almost anyone with a broadband Internet connection, a computer and a phone can get up and running.
There's pent-up demand from companies, too. Instead of sending call center work overseas, a growing number of consumer products and services companies, from Office Depot to Walgreens, are outsourcing work to virtual call center firms.
People who would never dream of taking a job in a brick-and-mortar call center now are choosing to become home agents. Loynd says the trend has benefits. "People working from home are less apt to quit their jobs."
Source: CRM Buyer, http://crmbuyer.com

The Customer's Service Policy: No Customer Service, No Business
The late comedian George Burns once said: "The most important thing is sincerity. If you can fake that you've got it made." When it comes to caring for customers, too many businesses are trying to fake it, and their customers know it.
You know what I mean: companies that hide behind voice mail with no live operator option. Poorly trained, unempowered, and uncaring employees. Web sites without live customer contact information. Inflexible policies that fail to allow for unusual-but-legitimate needs.
Even more aggravating are companies that provide poor customer care while spouting meaningless advertising and marketing mantras about how much they value their customers.
Entrepreneurs need to remember that most customers have their own policy: when a company doesn't deliver real customer care, they deliver their business to another company.
The pervasive environment of pretend customer care is a huge opportunity for every entrepreneur in every industry. Entrepreneurs whose businesses deliver real customer care will be recognized and rewarded by loyal customers who are tired of the posers and the fakers.
Source: CRM Daily, http://www.crm-daily.com

Business Intelligence's Day Is Coming. Yeah, Right.
The day is coming when all employees will use business intelligence tools. Sound familiar? BI vendors have been forwarding this vision for years, though it remains mostly a vision.
BI remains the province mostly of data-analysis specialists because companies don't see the business case in equipping every employee with number-crunching tools. Usability, the time and expense of training, and up-front and ongoing costs were cited as barriers to BI adoption in an InformationWeek Research survey of 500 business technology professionals conducted in March. Just one in four respondents say their companies provide BI tools to more than a quarter of employees, the same level as in last year's survey.
Another problem is that too much work is required to customize BI tools for specific types of users, says Mark Smith, president of Ventana Research.
Source: Information Week, http://www.informationweek.com

Many Finance Execs Overcome Reluctance to Send Work Offshore
Frank Cocuzza's first visit to an outsourcing vendor in India seven years ago left him intrigued but not ready to jump. "Nice story," the senior vice president of finance for Penske Truck Leasing Co. recalls thinking. "But we weren't going to trade our processes for a nice story." Eighteen months later, Cocuzza flew back for a second look, stuck around for a five-day visit, and left dazzled. The vendor's 600-person workforce had swollen to 3,000, service offerings had been expanded, and best-practice processes were in evidence everywhere. "We came away so impressed with what they had built that we realized we needed what they were doing," Cocuzza recalls. He soon began shipping bits and pieces of his finance operation to the outsourcer, which was then a subsidiary of General Electric Co. but is today an independent company operating as Genpact. It now handles some 40 different finance processes for Reading, Pennsylvania-based Penske, including collections, various accounting and financial-reporting activities, and even on-demand data analysis for the business units.
Penske's experience mirrors that of a growing segment of Corporate America.
Source: CFO, http://www.cfo.com

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Retail ROI: Return on Inventory
Fast turns, proper placement and continuous product flow are just some of the factors that go into inventory performance, a profit-determining metric for retailers. Improving Return on Inventory requires sophisticated inventory management techniques as well as rapid-response solutions from transportation and logistics providers.
In the June issue of Global Logistics & Supply Chain Strategies magazine.