QuickREAD

May 30, 2007

Supply Chain Webcast: Sourcing, Operating in Low-Cost Countries
Three top-level industry executives will discuss global sourcing and operating in low-cost countries (LCCs) in a webcast scheduled for May 31, 2007, at 2 p.m. EDT (11 a.m. PDT).
The quality of visibility, relative to what and how you source and manage the global supply chain, can make a huge difference to a company's ultimate success, according to R. Clint Dyer, senior vice president of operations for Hitachi; Manoj Kumar, director of the Supply Chain Innovation practice for PRTM Management Consultants; and Rich Becks, E2open's senior vice president of product management.
The three will discuss the following topics:
• Managing the inbound supply chain and engaging local and multinational suppliers
• Streamlining internal operations to maximize the benefits of low-cost country sourcing
• Ensuring efficient response times in the outbound supply chain, and
• Implementing a common process and information platform.
Register NOW, for the Sourcing and Operating in Low-Cost Countries webcast.

Outsourcing What? You're Going to Outsource What? Not all outsourcing goes overseas.
Some Wendy's franchises are outsourcing their drive-through order-taking to a central call center in Delaware.
I am not making this up. According to a story in USA Today, if you pull up to the drive-through station outside the Wendy's in Middletown, R.I., a person in Wilmington, Del., will ask if you want fries with that.
One of the more mind-boggling applications of outsourcing is about to be incorporated into the field of journalism.
An online California newspaper called Pasadena Now has just hired two reporters from India to cover Pasadena. They will be doing this without leaving Mumbai and Bangalore.
Among the things the Indian reporters will be doing is covering local government meetings by viewing them on closed-circuit television.
As someone who has sat through his share of municipal meetings over the years, let me just say this: Watching a planning and zoning meeting on closed-circuit television is the closest these guys will come to death and still have vital signs.
Source: CRM Buyer, http://crmbuyer.com

Uh, Tell Me Again...Why Is IT-Business Relationship Important?
You can't manage what you can't see, and even if you can see it, that doesn't necessarily mean you understand it. One of the overarching problems with IT today is that no company can make a business decision of any merit without kicking off some sort of related IT process. But truth be told, very few organizations have a real handle on the relationship between a business process, such an order to cash, and the underlying IT systems that power this type of transaction. And worse yet, if they did have visibility into the process, they would probably discover that they have four sets of different systems handling overlapping business processes.
Source: Baseline, http://www.baselinemag.com

Let Workers Participate in Making Decisions? How Radical!
Peter Drucker, who died in 2005, was known for suggesting that workers should take part in corporate decision-making. This was a startling idea when he introduced it, and it still is to many people. In fact, this idea has yet to be put into practice at many organizations. Drucker also said, "Don't ask what do we need to sell, but what do people want to buy?" What audacity, what nerve--and what a good idea.
Source: Managing Automation, http://www.managingautomation.com

Updated Management Plans for Your Remote Workers Yet?
Gary Laroy, a Michigan-based client delivery executive at Electronic Data Systems Corp., hasn't worked in the same state as his boss for many years. In fact, at any given time, he may have two or three different bosses under EDS's matrixed management structure. He hasn't ever received an official career road map from the company, nor has he ever expected one.
Laroy is among the millions of U.S. professionals who toil far away from managers, mentors and others whose approval and influence can make or break a career. As many as nine out of 10 employees now work at locations other than company headquarters, according to Nemertes Research LLC in Mokena, Ill. Moreover, 83 percent of executives--up from 57 percent last year--surveyed by Nemertes consider their companies to be virtual workplaces--defined as having employees who work away from their supervisors or work groups full or part time.But judging from a spot check of career experts, business executives, human resources managers and IT professionals, very few companies have updated career paths and management plans to reflect the increasingly decentralized nature of work, especially in IT. For the most part, IT professionals working in the wild are pretty much on their own when it comes to managing their careers.
Source: Computerworld, http://computerworld.com

Wages Up in India, and So Is Level of Competition It Faces
While India's IT prowess is indisputable today, the country is also a victim of its own success as it faces wage inflation and competition from Eastern Europe and China.
According to a recent industry report by India's National Association of Software and Service Companies (Nasscom), maturing socio-political attitudes and an appreciation of the proactive efforts by key stakeholders to further strengthen India's value proposition are helping to reinforce its position as the IT outsourcing destination of choice.
Nasscom is confident that India will remain an integral part of any major global sourcing strategy even as businesses around the world are exploring alternate destinations such as Eastern Europe to enhance their multi-country delivery capability.
The reasons for Nasscom's optimism: the growing impact of technology-led innovation, and the increasing demand for global sourcing as more companies choose to focus on their core competencies. And it is confident that India will achieve its target of $60bn in IT exports by 2010.
While India is uniquely advantaged to best address these opportunities, they are not lost to others. Timely, coherent and continued action is needed to ensure that India makes the most of these opportunities and maintains its lead, Nasscom noted.
Source: Business Week, http://businessweek.com

U.K. Retailer Vastly Increases Supply Chain Technology Spend
Marks and Spencer, a leading U.K.-based department store retailer, announced it had increases spending on supply chain related technology by about 290 percent in the past year, led by continued investment in RFID as well as in it distribution centers and point-of-sale systems.
In the last fiscal year, Marks and Spencer spent 114 million euros ($153m) on supply chain related technology, a substantial increase over the 39 million euros ($52m) the previous year.
Source: Supply Chain Digest, http://www.scdigest.com

Mergers & Acquisitions Usually Bring Together a Lot of Headaches
The Wall Street Journal (April 24) recently featured a front-page story on Procter & Gamble's acquisition of Gillette. This paragraph sums up not only this merger, but many others in the consumer products and other industries:
"Among all the products brought together in Procter & Gamble Co.'s 2005 acquisition of Gillette, two carried particularly high expectations because of their natural fit: the world's No. 1 toothbrush and the world's No. 2 toothpaste. But putting together Gillette's Oral-B and P&G's Crest turned out to be more complicated than it looked."
Anyone that has survived an M&A knows it is tough, grueling work. It's not a time for business as usual, but a perfect time to reach for that clean sheet of paper and craft the right supply chain response. The task is to design mergers properly up front.
Source: AMR Research, http://amrresearch.com

Asia-Based Freighters Chip Away at European Air Cargo Control
There is a rather downbeat air in European air cargo as the continent's carriers watch a new wave of freighter operators eat into their traditional market share on Europe to Asia routes.
The consensus of various industry experts is that some 1,000 to 1,500 tons of capacity has been added on China-Europe routes in recent months, mainly from Chinese and Middle Eastern carriers.
The carriers involved include Jade Cargo International, using its third freighter to fly from Shenzhen to Leizpig and Stockholm; Yangtze River Express starting a four times a week service from Shanghai to Luxembourg; and Great Wall Airlines, boosting its newly resumed services to Amsterdam from six to 10 weekly.
European carriers are also adding capacity. TNT now flies three times a week from Liège in Belgium to Shanghai, and Italy's Cargoitalia and Ocean Airlines are ramping up services to China. But there is little doubt that the European majors are feeling beleaguered.
"In the short term, we cannot deny that all the European carriers, including Air France-KLM, are faced with a new balance of capacity," says Michael Wisbrun, chairman of the joint cargo management committee of the Franco-Dutch airline. "If you look at the manufacturing orders and aircraft conversions, there is also no doubt that the drive of capacity is coming mainly from Asia."
All this is worrying for Europe's carriers because cargo out of Asia, China particularly, has been the honey pot for them in recent years--abundant, high-yield traffic driving their growth and profitability. If that market is eaten away by what European cargo managers have taken to dubbing low-cost Chinese competition, then the prospects could be worrisome.
Source: Air Cargo World, http://aircargoworld.com

Manufacturing Employment Dropping? Well, How Do You Define Manufacturing?
It should surprise nobody to learn that the number of U.S. workers employed in manufacturing has been on the decline over the past decade, with annual employment dropping from 17 million in 1997 to just over 14 million in 2006. Those are the hard, fast numbers that the U.S. Department of Labor's Bureau of Labor Statistics compiles, and for some industry observers, those are the only numbers that are relevant to a discussion of the future of manufacturing in the United States. But what exactly is manufacturing?
Source: Industry Week, http://industryweek.com

Smartphone Answers Airline Ground Service Provider's Reporting Need
One of the biggest challenges for mobile workers is matching an appropriate form factor (e.g. laptop, PDA, smartphone, or tablet) with a customized mobile application. Airline ground service provider Worldwide Flight Services (WFS) found itself in this position following a request from one of its customers. WFS is one of the largest ground handling companies in the world with more than 10,000 employees and operations at more than 115 airports around the world. The company provides cargo, ramp, passenger, and technical services to the global airline industry.
British Airways had been using the same manual invoicing and SLA (service level agreement) tracking system for many years and decided it needed to improve both processes. The airline company sent out an RFP to several of the ground handler companies it worked with, including WFS. The RFP required ground handling companies to describe in detail how they would handle electronic invoicing and streamline the SLA process.
One of the problems the airline wanted to resolve was inaccurate reporting on its SLA checklist. "There are more than two dozen metrics that airline ground transportation companies capture for each flight," says John Robinson, vice president of IT at WFS. "For example, first-class bags are required to be removed from the aircraft within minutes of arrival and available for passenger pickup. Not surprisingly, when companies use manual reporting methods, their performance ratings appear to be at or above 99 percent." Anyone who travels very much knows that 99 percent isn't reality. And, airlines know it's not reality, either.
Because of the job routines performed by many of WFS's ground service support personnel, carrying around a 5-to-10-pound tablet or notebook wasn't a good fit. Also, a pure PDA-based solution would require the workers to carry multiple communications devices such as cell phones and/or walkie-talkies, which would be a nuisance. WFS's research led it to a smartphone solution.
Source: Integrated Solutions, http://integratedsolutionsmag.com

Can Business Take Advantage of Municipal Wi-Fi Networks?
Utility workers armed with the latest wireless gadgets will be able to read electric meters remotely using Wi-Fi networks many cities are contemplating. Police and building inspectors can file and retrieve reports on the go. City employees carrying Wi-Fi phones can also reduce cellular phone bills. Maybe even business can tap into such Wi-Fi networks.
In fact, officials in St. Cloud, Fla., figured they were saving enough to pay for their network's $2.6m construction and estimated $400,000 annual operating costs. It's how they justified giving all residents free Internet access on the system.
Yet other municipal projects are counting on subscription or advertising revenues from residential usage. Some are in danger of failing if they cannot boost demand.
In cases where private companies are agreeing to finance the networks in exchange for rights to sell services or ads, the vendors have become more demanding of cities, insisting that they agree to spend a minimum amount for public safety and other municipal applications under arrangements known as anchor tenancy.That would guarantee a revenue stream to supplement what vendors might be able to sell to residents and businesses.
Source: Mobile Tech Today, http://www.mobile-tech-today.com

Metro Begins Three-Month Test of RFID Tags in Hong Kong
Metro AG has expanded the use of smart tags from its stores in Europe to key producers in China as the German retail giant moves to optimize its global logistics chain.
A three-month test, launched recently in Hong Kong, will require boxes and containers of products destined for Metro's distribution center in Unna, Germany, to carry RFID tags.
The pilot is part of the company's Advanced Logistics Asia (ALA) program, which kicked off last October. The goal is to have more accurate, real-time data that will help the retailer improve control over its international supply chain, resulting in lower warehousing costs and fewer out-of-stock situations, according to a Metro spokesman.
For the Hong Kong pilot, Chinese suppliers can either fit passive RFID tags to their shipments themselves or allow a consolidator to manage this process. The passive chips have no energy and a very short reading distance, the spokesman says.
Source: Computerworld Singapore, http://computerworld.com.sg

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100 Great Supply Chain Partners: It's All About Teamwork
GL&SCS readers nominate providers of logistics, technology, transportation and consulting services as "Great Supply Chain Partners." Testimonials and case histories show how these winning partners use teamwork to ensure their customers' supply chain success.
In the July issue of Global Logistics & Supply Chain Strategies magazine.