Supply Chain Management and Logistics Blog. Posts are about end-to-end supply chain management and logistics in a time of challenging disruption. Tom provides leading supply chain management and logistics consulting and advisory assistance based on real-world experience. He brings authority and domain expertise to clients. Email Tom at: tomc@ltdmgmt.com Check Tom's profile at: https://www.linkedin.com/in/tomcraig1/
Monday, May 26, 2014
SUPPLY CHAIN MANAGEMENT & COMPETITIVE ADVANTAGE
Many companies obsess on supply chain functions and their costs. They do not understand the supply chain process. As a result, they struggle with supply chain management and to deliver great customer service. They do not create competitive advantage and cannot figure why they struggle.
Sunday, May 25, 2014
LTD MANAGEMENT IN THE GCC SUPPLY CHAIN CONSULTING
LTD Management is a premier logistics and supply chain management consulting firm with both strategic and tactical capabilities. LTD is looking to raise its visibility and create a presence in the GCC. LTD's consulting is based on real world experience. Solutions That Work
LTD MANAGEMENT INDIA SUPPLY CHAIN CONSULTING
LTD Management has established a presence in India. Our consulting is based on real world logistics experience. If you have a supply chain need and would like our assistance, please contact us at info@ltdmgmt.com LTD Management--Solutions That Work
WORLD TRADE & EAST ASIA
And that means logistics and supply chains--
From World Economic Forum--
From World Economic Forum--
Forum Event
How can we strengthen trade in East Asia?
In 1848, the economist and philosopher John Stuart Mill wrote: “It may be said without exaggeration that the great extent and rapid increase of international trade, in being the principal guarantee of the peace of the world, is the great permanent security for the uninterrupted progress of the ideas, the institutions, and the character of the human race.”
This sentiment still resonates today, a time of heightened geopolitical tensions in Asia and elsewhere.
Last month, the World Economic Forum released the fifth edition of its Global Enabling Trade Report (GETR). Successful integration into the global economy depends on a number of measures and policies. These include steps to reduce border obstacles, such as tariffs and non-tariff barriers to improve market access, as well as efficient border administration, better infrastructure and telecommunications, and improved security and regulation.
There is mounting evidence that these measures, under the heading of trade facilitation, are becoming more important than tariffs and non-tariff barriers in determining trade costs.
The GETR reveals that significant trade barriers remain, preventing countries from reaping the rewards of international trade and accelerating their development. Not surprisingly, developing countries face the greatest obstacles.
The assessment ranks 138 economies on their ability to enable trade, and the list is topped by Singapore, Hong Kong SAR and the Netherlands.
ASEAN members span the entire ranking; behind Singapore, Malaysia sits in 25th place. Thailand is 57th, Indonesia 58th and the Philippines 64th. Myanmar, at 121st, is the lowest ranked ASEAN economy.
Other countries in the region suffer, to various degrees, from a lack of transport infrastructure and logistics, poor connectivity, red tape and corruption. The realization of the ASEAN Economic Community hinges on its capacity to ease these barriers to trade.
There are numerous ways to do this. Those aimed at improving market access are currently the subject of intense negotiations as governments try to balance the interests – often diverging – of various parties. Given the current fragility of the global economy and state of international governance, it is unlikely that any significant progress in market access negotiations will be made in the near future. Measures to address infrastructure bottlenecks and connectivity gaps are part of a broader development strategy.
By contrast, improving efficiency and transparency of customs procedures can generate sizeable gains relatively quickly, at a relatively low cost and using limited political capital.
This will benefit exporters and importers alike. It profits governments, too, as improved border administration results in increased revenues through better tax collection.
The World Trade Organization’s Agreement on Trade Facilitation, adopted last December in Bali, has created momentum for these reforms.
Reforming border administration is therefore one of the easiest ways to enable trade.
ASEAN and the world have much to gain. The relation between trade and growth, and in turn between growth and poverty reduction, is well established. A study carried out by the World Economic Forum in 2012 found that if all countries were to improve border efficiency and infrastructure to half the level of Singapore, then exports from South-East Asia would increase by around 12% and regional GDP would increase by 9%.
Another study estimates that the implementation of the WTO Agreement on Trade Facilitation could generate GDP gains in the area of $1 trillion by the end of the decade. In Asia alone, these gains would amount to approximately $450 billion.
For all its virtues, trade is not the answer to everything. While trade helps make the pie bigger, it is a government’s duty to ensure that these gains are equitably shared. It is also the government’s responsibility to ensure people are equipped with the skills to make the most of opportunities brought about by trade.
A century before Mill, Montesquieu, in The Spirit of Laws, observed that “peace is the natural effect of trade. Two nations who traffic with each other become reciprocally dependent.” In the current context, trade remains a means to create prosperity, opportunities and peace.
Author: Thierry Geiger, Associate Director and Economist, Global Benchmarking Network, World Economic Forum
This sentiment still resonates today, a time of heightened geopolitical tensions in Asia and elsewhere.
Last month, the World Economic Forum released the fifth edition of its Global Enabling Trade Report (GETR). Successful integration into the global economy depends on a number of measures and policies. These include steps to reduce border obstacles, such as tariffs and non-tariff barriers to improve market access, as well as efficient border administration, better infrastructure and telecommunications, and improved security and regulation.
There is mounting evidence that these measures, under the heading of trade facilitation, are becoming more important than tariffs and non-tariff barriers in determining trade costs.
The GETR reveals that significant trade barriers remain, preventing countries from reaping the rewards of international trade and accelerating their development. Not surprisingly, developing countries face the greatest obstacles.
The assessment ranks 138 economies on their ability to enable trade, and the list is topped by Singapore, Hong Kong SAR and the Netherlands.
ASEAN members span the entire ranking; behind Singapore, Malaysia sits in 25th place. Thailand is 57th, Indonesia 58th and the Philippines 64th. Myanmar, at 121st, is the lowest ranked ASEAN economy.
Other countries in the region suffer, to various degrees, from a lack of transport infrastructure and logistics, poor connectivity, red tape and corruption. The realization of the ASEAN Economic Community hinges on its capacity to ease these barriers to trade.
There are numerous ways to do this. Those aimed at improving market access are currently the subject of intense negotiations as governments try to balance the interests – often diverging – of various parties. Given the current fragility of the global economy and state of international governance, it is unlikely that any significant progress in market access negotiations will be made in the near future. Measures to address infrastructure bottlenecks and connectivity gaps are part of a broader development strategy.
By contrast, improving efficiency and transparency of customs procedures can generate sizeable gains relatively quickly, at a relatively low cost and using limited political capital.
This will benefit exporters and importers alike. It profits governments, too, as improved border administration results in increased revenues through better tax collection.
The World Trade Organization’s Agreement on Trade Facilitation, adopted last December in Bali, has created momentum for these reforms.
Reforming border administration is therefore one of the easiest ways to enable trade.
ASEAN and the world have much to gain. The relation between trade and growth, and in turn between growth and poverty reduction, is well established. A study carried out by the World Economic Forum in 2012 found that if all countries were to improve border efficiency and infrastructure to half the level of Singapore, then exports from South-East Asia would increase by around 12% and regional GDP would increase by 9%.
Another study estimates that the implementation of the WTO Agreement on Trade Facilitation could generate GDP gains in the area of $1 trillion by the end of the decade. In Asia alone, these gains would amount to approximately $450 billion.
For all its virtues, trade is not the answer to everything. While trade helps make the pie bigger, it is a government’s duty to ensure that these gains are equitably shared. It is also the government’s responsibility to ensure people are equipped with the skills to make the most of opportunities brought about by trade.
A century before Mill, Montesquieu, in The Spirit of Laws, observed that “peace is the natural effect of trade. Two nations who traffic with each other become reciprocally dependent.” In the current context, trade remains a means to create prosperity, opportunities and peace.
Author: Thierry Geiger, Associate Director and Economist, Global Benchmarking Network, World Economic Forum
INVENTORY TURNS & SUPPLY CHAINS
Inventory turns reflect how often a company is paid for its products. So 3 turns mean they are basically paid every 120 days. And, yet, so many firms have low turns and do little about it.
Saturday, May 24, 2014
UNITED STATES LOGISTICS
How would you grade the US at recognizing the economic impact of logistics? And the grade for supporting and investing in logistics infrastructure?
HANJIN SHIPPING & HYUNDAI MERCHANT MARINE & SUPPLY CHAINS
I said the number of major trade lanes container lines may go from 14 to 9. The beginning? Shippers need to prepare.
Long-troubled shippers have that sinking feeling
Click here to view original web page at supplychains.com
Hanjin Shipping and Hyundai Merchant Marine (HMM), Korea’s top two maritime shippers, are becoming troublemakers within their groups as liquidity crises create a drag on overall business.
Both shippers have been in the red for the past three years, along with the rest of the industry. Hanjin Shipping and HMM each had more than 710 billion won ($662 million) in net losses last year. They have announced restructuring plans that mostly involve the sale of assets, but their situations are deteriorating.
Credit rating firms announced Monday they have downgraded the ratings of Hanjin Shipping and HMM’s corporate bonds due to negative speculation on their competitiveness.
They also pointed to concerns about the “acceleration clause” in their corporate bond contracts that requires them to pay off the bonds immediately if their debt ratio exceeds 1,000 percent. Last year, Hanjin Shipping’s debt ratio was 1,444 percent and HMM’s 1,397 percent. If investors demand their money under the “acceleration clause,” the two companies have to repay the bonds immediately. In addition, both shippers’ short-term loans due at the end of this year are more than 3.1 trillion won.
Korea Ratings dropped Hanjin Shipping and HMM’s non-guaranteed corporate bonds from BBB+ to BBB-, while NICE Investors Service downgraded HMM from BBB+ to BBB.
In particular, Korea Investors Service (KIS) announced that it has dropped HMM’s credit rating from BBB+ to BB+, a junk grade.
“If the sale of HMM’s core business unit is completed, financial stability will improve somewhat and the company can expect positive results in the short term in the area of liquidity. But, in the long term, business stability and competitiveness can worsen,” the company said in a statement. “While the pressure of paying back loans is an aggravating factor, financial risks are getting bigger as HMM’s debt ratio is more than 1,000 percent.”
But what’s giving a headache to Hyundai Group - the nation’s 20th-largest conglomerate, led by Chairman Hyun Jeong-eun - is the impact of HMM’s credit rating plunge on the group’s other affiliates.
In lowering the credit rating of HMM, KIS said it also downgraded Hyundai Elevator and Hyundai Logistics’ corporate bonds from BBB+ to BB+, citing HMM’s situation.
KIS said that because Hyundai Group has a circular shareholding structure, one company’s financial risks can be transferred to others.
Hyundai Elevator, the nation’s largest elevator manufacturer, has a derivatives trading contract with financial institutions to protect Chairwoman Hyun’s management power from hostile shareholders.
In exchange for buying HMM shares, Hyundai Elevator must compensate financial companies under the contract if its HMM stock is worth less than when they bought it at the end of the contract.
The situation is no different for Hanjin Group, the country’s ninth-largest conglomerate.
According to finance industry sources, Hanjin Group will again sign a capital structure improvement agreement with creditors because of poor financial results in 2013. The group has been signing the deal annually since 2009.
Industry insiders suspect that the main reason for re-signing is Hanjin Group’s support for Hanjin Shipping, which is run by Chairwoman Choi Eun-young. Hanjin Group Chairman Cho Yang-ho is Choi’s brother-in-law.
Despite Choi’s attempt to operate Hanjin Shipping independently, Cho last year accepted an SOS request and decided to embrace the struggling shipper.
Through its core affiliate, Korean Air Lines, Hanjin Group already injected 250 billion won into Hanjin Shipping last year and will supply an additional 400 billion won by entering Hanjin Shipping’s capital increase and issuing new stock in the first half of the year.
To improve its financial soundness, KAL announced in December a restructuring plan to raise 3.5 trillion won by selling assets.
The company already saw its credit rating go from A to A- in a Korea Ratings’ evaluation in November, but industry insiders suspect it will drop again if Hanjin Shipping doesn’t make a significant improvement in its financial condition.
The two groups are complaining that the lower corporate bond credit ratings are making it more difficult for them to rebound. However, experts said the companies should not be bothered by the downgrade and urged them to stick to their financial restructuring plans.
“What’s more important than adjusting credit rating is whether these groups can actually follow their self-imposed financial restructuring plans and speed up the execution,” said Jeong Dae-ho, an analyst at KB Investment and Securities, in a report on Tuesday. “Investors should also look carefully whether they can get support for corporate bond conversion in near future.”
 | |
Both shippers have been in the red for the past three years, along with the rest of the industry. Hanjin Shipping and HMM each had more than 710 billion won ($662 million) in net losses last year. They have announced restructuring plans that mostly involve the sale of assets, but their situations are deteriorating.
Credit rating firms announced Monday they have downgraded the ratings of Hanjin Shipping and HMM’s corporate bonds due to negative speculation on their competitiveness.
They also pointed to concerns about the “acceleration clause” in their corporate bond contracts that requires them to pay off the bonds immediately if their debt ratio exceeds 1,000 percent. Last year, Hanjin Shipping’s debt ratio was 1,444 percent and HMM’s 1,397 percent. If investors demand their money under the “acceleration clause,” the two companies have to repay the bonds immediately. In addition, both shippers’ short-term loans due at the end of this year are more than 3.1 trillion won.
Korea Ratings dropped Hanjin Shipping and HMM’s non-guaranteed corporate bonds from BBB+ to BBB-, while NICE Investors Service downgraded HMM from BBB+ to BBB.
In particular, Korea Investors Service (KIS) announced that it has dropped HMM’s credit rating from BBB+ to BB+, a junk grade.
“If the sale of HMM’s core business unit is completed, financial stability will improve somewhat and the company can expect positive results in the short term in the area of liquidity. But, in the long term, business stability and competitiveness can worsen,” the company said in a statement. “While the pressure of paying back loans is an aggravating factor, financial risks are getting bigger as HMM’s debt ratio is more than 1,000 percent.”
But what’s giving a headache to Hyundai Group - the nation’s 20th-largest conglomerate, led by Chairman Hyun Jeong-eun - is the impact of HMM’s credit rating plunge on the group’s other affiliates.
In lowering the credit rating of HMM, KIS said it also downgraded Hyundai Elevator and Hyundai Logistics’ corporate bonds from BBB+ to BB+, citing HMM’s situation.
KIS said that because Hyundai Group has a circular shareholding structure, one company’s financial risks can be transferred to others.
Hyundai Elevator, the nation’s largest elevator manufacturer, has a derivatives trading contract with financial institutions to protect Chairwoman Hyun’s management power from hostile shareholders.
In exchange for buying HMM shares, Hyundai Elevator must compensate financial companies under the contract if its HMM stock is worth less than when they bought it at the end of the contract.
The situation is no different for Hanjin Group, the country’s ninth-largest conglomerate.
According to finance industry sources, Hanjin Group will again sign a capital structure improvement agreement with creditors because of poor financial results in 2013. The group has been signing the deal annually since 2009.
Industry insiders suspect that the main reason for re-signing is Hanjin Group’s support for Hanjin Shipping, which is run by Chairwoman Choi Eun-young. Hanjin Group Chairman Cho Yang-ho is Choi’s brother-in-law.
Despite Choi’s attempt to operate Hanjin Shipping independently, Cho last year accepted an SOS request and decided to embrace the struggling shipper.
Through its core affiliate, Korean Air Lines, Hanjin Group already injected 250 billion won into Hanjin Shipping last year and will supply an additional 400 billion won by entering Hanjin Shipping’s capital increase and issuing new stock in the first half of the year.
To improve its financial soundness, KAL announced in December a restructuring plan to raise 3.5 trillion won by selling assets.
The company already saw its credit rating go from A to A- in a Korea Ratings’ evaluation in November, but industry insiders suspect it will drop again if Hanjin Shipping doesn’t make a significant improvement in its financial condition.
The two groups are complaining that the lower corporate bond credit ratings are making it more difficult for them to rebound. However, experts said the companies should not be bothered by the downgrade and urged them to stick to their financial restructuring plans.
“What’s more important than adjusting credit rating is whether these groups can actually follow their self-imposed financial restructuring plans and speed up the execution,” said Jeong Dae-ho, an analyst at KB Investment and Securities, in a report on Tuesday. “Investors should also look carefully whether they can get support for corporate bond conversion in near future.”
MARKS & SPENCER -- SUPPLY CHAIN ISSUE
One of the problems mentioned is managing its extended supply chain with suppliers in Asia--
TWO paintings hang unobtrusively in a small conference room at Marks & Spencer’s headquarters in Paddington. One is a Monet riverscape; the other, by L. S. Lowry, a painter of England’s industrial north-west, depicts a town square. Marc Bolland, boss of the venerable retailer since 2010, sees in them a metaphor. M&S was coated with dust and yellowing varnish when he arrived. His is scraping those layers away to reveal the beauty beneath.
Many onlookers doubt he can. On May 20th M&S said underlying profit before tax in the year to March had dropped for the third year in a row, to £623m ($1 billion). Next, a rival with fewer stores and just one-third the sales, made more money in 2013. M&S’s share of the apparel market in Britain, still a lofty 11%, has declined steadily since the mid-1990s. To many Mr Bolland, a Dutchman with a background in supermarkets and beer, looks like the wrong man to woo shoppers back.
M&S has cultural as well as economic significance. “It is the British shop, as much part of our cultural heritage as the Women’s Institute, the BBC and the queen,” pronounced a column in the Daily Mail newspaper. That exposes it to the sort of abuse Britons often mete out to the institutions closest to them. A Telegraph taste-maker last year skewered a clothing line as “what a menopausal trade unionist would have packed as a delegate to conference in 1973.”
A style makeover is just the most obvious task facing Mr Bolland. He is grappling with what he calls a “15-year legacy of not investing” in technology and logistics. M&S employed no information-technology engineers and its international team spoke no foreign languages when he took over. Those are handicaps when your goal is to transform a chain of British shops into an international, multichannel retailer.
M&S has three problems that it cannot easily overcome on its own. The first is that its market share in clothing is still abnormally high. “It is difficult to find another retailer with that much share in its home market,” says Jamie Merriman of Sanford C. Bernstein, an equity-research firm. Second, shopping habits have changed and new rivals have sprung up to cater to them. Primark sells trendy outfits cheap enough to be worn a few times and then discarded. M&S’s promise of “quality and style” may be wasted on fast-fashionistas.
Finally, M&S sells its own sub-brands rather than labels that every shopper recognises. Lines such as Per Una and Indigo are supposed broaden M&S’s appeal beyond the 50-plus women who are its core customers. But they “don’t resonate with the consumer,” says Ana Santi of Drapers, a fashion-industry magazine.
Doubters were also gloomy about prospects for the firm’s other main business, selling food, recalls Mr Bolland. Yet M&S’s share of the grocery market and same-store sales rose for 18 consecutive quarters. It now gets more than half its revenue from food. That hints at what it can do in other merchandise, says the boss.
Yet the rag trade has little in common with the ragù trade. Bringing clothes from Asian factories to British stores involves supply lines that are more complex than those in the grocery trade, points out Tony Shiret, an analyst at Espirito Santo Investment Bank. Fashion trends are harder to anticipate than appetites. Mr Bolland has tried to fix how M&S buys and distributes clothing. A system based on independent “full-service vendors”, which designed the garments and held the inventory, is being scrapped. Now M&S plans to design the clothing itself and source it directly from manufacturers. That will help it respond more quickly to changes in demand, reduce markdowns and raise margins.
It is shifting some production from Asia to factories closer to home, which speeds up delivery and allows more experimentation with styles and colours. Dressing gowns are now made in Turkey rather than in Sri Lanka. A sprawl of 110 British warehouses is to become a sleek set of six, including a new one in Leicestershire dedicated to online shopping. This will cut the time needed to deliver a dress from port to shop from weeks to days.
Though late to e-commerce, M&S is now moving more boldly. It has swapped a clunky website using Amazon’s technology for one that marries merchandise to magazine-like content. M&S plans to offer later cut-off times for next-day delivery to make online shopping more enticing.
There have been hiccups—sales growth slowed on the new website and a planned distribution centre near London will now not be built—but all this should pay off eventually. Exane BNP Paribas, an investment bank, reckons that better logistics and sourcing will lift profit before tax by £65m a year by 2017. Profits from online operations will rise £100m. The “heavy lifting” is over, Mr Bolland suggested; M&S can scale back cash-draining investment.
Can the old master draw a younger crowd? Kayleigh Damen, a 28-year-old television producer, says that ten years ago she “wouldn’t have been seen dead” at M&S. Now, browsing the Pantheon store on Oxford Street, in central London, she spots “some young and trendy things”, including a “really wicked” pink jacket. M&S needs more like her.
Marks & Spencer
Magic or menopausal?
The turnaround of Britain’s biggest clothing retailer has far to go
- CloseSave this articleClick this to add articles to your Timekeeper reading list. Learn more »
TWO paintings hang unobtrusively in a small conference room at Marks & Spencer’s headquarters in Paddington. One is a Monet riverscape; the other, by L. S. Lowry, a painter of England’s industrial north-west, depicts a town square. Marc Bolland, boss of the venerable retailer since 2010, sees in them a metaphor. M&S was coated with dust and yellowing varnish when he arrived. His is scraping those layers away to reveal the beauty beneath.
Many onlookers doubt he can. On May 20th M&S said underlying profit before tax in the year to March had dropped for the third year in a row, to £623m ($1 billion). Next, a rival with fewer stores and just one-third the sales, made more money in 2013. M&S’s share of the apparel market in Britain, still a lofty 11%, has declined steadily since the mid-1990s. To many Mr Bolland, a Dutchman with a background in supermarkets and beer, looks like the wrong man to woo shoppers back.
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M&S has cultural as well as economic significance. “It is the British shop, as much part of our cultural heritage as the Women’s Institute, the BBC and the queen,” pronounced a column in the Daily Mail newspaper. That exposes it to the sort of abuse Britons often mete out to the institutions closest to them. A Telegraph taste-maker last year skewered a clothing line as “what a menopausal trade unionist would have packed as a delegate to conference in 1973.”
A style makeover is just the most obvious task facing Mr Bolland. He is grappling with what he calls a “15-year legacy of not investing” in technology and logistics. M&S employed no information-technology engineers and its international team spoke no foreign languages when he took over. Those are handicaps when your goal is to transform a chain of British shops into an international, multichannel retailer.
M&S has three problems that it cannot easily overcome on its own. The first is that its market share in clothing is still abnormally high. “It is difficult to find another retailer with that much share in its home market,” says Jamie Merriman of Sanford C. Bernstein, an equity-research firm. Second, shopping habits have changed and new rivals have sprung up to cater to them. Primark sells trendy outfits cheap enough to be worn a few times and then discarded. M&S’s promise of “quality and style” may be wasted on fast-fashionistas.
Finally, M&S sells its own sub-brands rather than labels that every shopper recognises. Lines such as Per Una and Indigo are supposed broaden M&S’s appeal beyond the 50-plus women who are its core customers. But they “don’t resonate with the consumer,” says Ana Santi of Drapers, a fashion-industry magazine.
Doubters were also gloomy about prospects for the firm’s other main business, selling food, recalls Mr Bolland. Yet M&S’s share of the grocery market and same-store sales rose for 18 consecutive quarters. It now gets more than half its revenue from food. That hints at what it can do in other merchandise, says the boss.
Yet the rag trade has little in common with the ragù trade. Bringing clothes from Asian factories to British stores involves supply lines that are more complex than those in the grocery trade, points out Tony Shiret, an analyst at Espirito Santo Investment Bank. Fashion trends are harder to anticipate than appetites. Mr Bolland has tried to fix how M&S buys and distributes clothing. A system based on independent “full-service vendors”, which designed the garments and held the inventory, is being scrapped. Now M&S plans to design the clothing itself and source it directly from manufacturers. That will help it respond more quickly to changes in demand, reduce markdowns and raise margins.
It is shifting some production from Asia to factories closer to home, which speeds up delivery and allows more experimentation with styles and colours. Dressing gowns are now made in Turkey rather than in Sri Lanka. A sprawl of 110 British warehouses is to become a sleek set of six, including a new one in Leicestershire dedicated to online shopping. This will cut the time needed to deliver a dress from port to shop from weeks to days.
Though late to e-commerce, M&S is now moving more boldly. It has swapped a clunky website using Amazon’s technology for one that marries merchandise to magazine-like content. M&S plans to offer later cut-off times for next-day delivery to make online shopping more enticing.
There have been hiccups—sales growth slowed on the new website and a planned distribution centre near London will now not be built—but all this should pay off eventually. Exane BNP Paribas, an investment bank, reckons that better logistics and sourcing will lift profit before tax by £65m a year by 2017. Profits from online operations will rise £100m. The “heavy lifting” is over, Mr Bolland suggested; M&S can scale back cash-draining investment.
The emporium’s new clothes
Less certain is whether it can seduce younger customers without putting off older ones. Earlier attempts, one of which involved hot pants, fell flat. A new style director has overhauled the clothing ranges; to show them off M&S has increased the mannequin population of its womenswear departments by 50%. It has axed one sub-brand (so far) and is giving each a more distinctive character. Some 60% of space is now given over to M&S Collection, a range of basic garments that exploits the pulling power of the main brand.Can the old master draw a younger crowd? Kayleigh Damen, a 28-year-old television producer, says that ten years ago she “wouldn’t have been seen dead” at M&S. Now, browsing the Pantheon store on Oxford Street, in central London, she spots “some young and trendy things”, including a “really wicked” pink jacket. M&S needs more like her.
Friday, May 23, 2014
SUPPLY CHAIN RISK & INSURANCE
Supply Chain risk / disruption is about much more than insurance. Insurance is a misdirection for supply chain risk assessment and mitigation.
GLOBAL FOOD SUPPLY CHAIN RISK
LTD Management has developed THE model for the global food supply chain risk assessment and identification. The actual supply chain is a black hole in the rules and regulations in the world. The model, framework, template, and program reflect LTD's practical supply chain / logistics knowledge and experience. If you are interested in learning more, please contact LTD at info@ltdmgmt.com
INVENTORY & SUPPLY CHAIN PERFORMANCE
I think inventory--turns and velocity--are good measures of how well or poorly a company's supply chain operates.
SEGMENTATION ANALYSIS SUPPLY CHAINS & 3PLs
Segmentation analysis is needed by companies for their suppy chains (and especially manufacturers) and by 3PLs for markets (which is different from market verticals).
INVENTORY, FORECASTING, SUPPLY CHAIN CYCLE TIME
A key to better forecasting and to improved inventory turns and velocity is cycle time compression. Longer cycle time challenges the accuracy of the forecasts and creates additional inventory as an uncertainty buffer.
Thursday, May 22, 2014
WAREHOUSING
Is there a better way to price / charge for warehouse services that is currently done? One that works for both the service provider and the customer.
OMNICHANNEL & SUPPLY CHAINS
The Omnichannel battle and its Supply Chain is getting more intense with Walmart's actions--
"We are planning to expand to about 1,000 employees in Sunnyvale," said Bao Nguyen, a spokesman with Walmart Global eCommerce, whose operations are headquartered in San Bruno.
At present, the eCommerce unit has about 550 employees in Sunnyvale at 600 W. California, Nguyen said.
"There is such a large concentration of engineers and technologies in Santa Clara County," Nguyen said. "They can be found all over the Bay Area, but there is a huge density of that talent pool in the South Bay. Sunnyvale and the South Bay are very important to us for recruitment."
Both of the Walmart eCommerce sites in Sunnyvale are within walking distance of an array of public transit, retail and restaurants.
"This is a very attractive location, given its proximity to Sunnyvale's downtown and the Caltrain station," said Jennifer Garnett, a spokeswoman for the city of Sunnyvale. Raytheon and Twitter are other businesses in the same office park where Walmart intends to expand.
Tenant improvements are underway in the offices to prepare the building for Walmart, which expects to move in sometimes this year. The lease was arranged through commercial realty brokerage Colliers International.
Sunnyvale has become a hot spot for tech expansion: Google, LinkedIn and Apple have leased large spaces over the past year or two that represent their first office operations in Sunnyvale. The Twitter lease represented the social network's initial outpost in the Bay Area beyond San Francisco, where the company has its headquarters.
"Large corporations are really interested in moving into Sunnyvale," said Chad Leiker, a broker with commercial realty firm Kidder Mathews. "That is putting a lot of pressure on rents and available space."
Brokers predicted more large office transactions would land in Sunnyvale in the coming weeks and months.
Walmart's digital operations in Sunnyvale and San Bruno are helping build the company's global e-commerce platform, its video-on-demand service and its mobile shopping services, Nguyen said.
Walmart plans to hire hundreds for big expansion of digital operations in Sunnyvale
SUNNYVALE -- Walmart's Global eCommerce unit intends to hire hundreds of tech workers in a big expansion of its operations in Sunnyvale.
The retail giant's eCommerce unit has struck a deal to lease about 107,000 square feet on West California Avenue near the corner of Central Expressway and Mathilda Avenue."We are planning to expand to about 1,000 employees in Sunnyvale," said Bao Nguyen, a spokesman with Walmart Global eCommerce, whose operations are headquartered in San Bruno.
At present, the eCommerce unit has about 550 employees in Sunnyvale at 600 W. California, Nguyen said.
Walmart will undertake a big expansion of its digital and e-commerce operations in Sunnyvale, where the retail titan already has about 500-plus workers. (Walmart photo)
Both of the Walmart eCommerce sites in Sunnyvale are within walking distance of an array of public transit, retail and restaurants.
"This is a very attractive location, given its proximity to Sunnyvale's downtown and the Caltrain station," said Jennifer Garnett, a spokeswoman for the city of Sunnyvale. Raytheon and Twitter are other businesses in the same office park where Walmart intends to expand.
Tenant improvements are underway in the offices to prepare the building for Walmart, which expects to move in sometimes this year. The lease was arranged through commercial realty brokerage Colliers International.
Sunnyvale has become a hot spot for tech expansion: Google, LinkedIn and Apple have leased large spaces over the past year or two that represent their first office operations in Sunnyvale. The Twitter lease represented the social network's initial outpost in the Bay Area beyond San Francisco, where the company has its headquarters.
"Large corporations are really interested in moving into Sunnyvale," said Chad Leiker, a broker with commercial realty firm Kidder Mathews. "That is putting a lot of pressure on rents and available space."
Brokers predicted more large office transactions would land in Sunnyvale in the coming weeks and months.
Walmart's digital operations in Sunnyvale and San Bruno are helping build the company's global e-commerce platform, its video-on-demand service and its mobile shopping services, Nguyen said.
UAE & GCC LOGISTICS & HUB
Oman, Bahrain,
Qatar, and Saudi Arabia have a big challenge. They need more than investing in
infrastructure, even railroads, to challenge the UAE for the logistics hub of
the GCC and MENA. LTD Management knows what it takes to be a successful
logistics hub and compete with the UAE.
UAE logistics market seen growing 15.4% to Dh99bn in 2015
It makes up around 6% of the UAE’s GDP, says Frost & Sullivan
The UAE logistics market is estimated to have reached $23.4 billion (Dh86 billion) in 2013, representing approximately 6 per cent of the country’s gross domestic product, according to consulting firm Frost & Sullivan.
Srinath Manda, Program Manager for Transportation & Logistics Practice, Middle East, North Africa and South Asia, at Frost & Sullivan, said the emirates’ logistics market is likely to grow 15.4 per cent to reach $27 billion (Dh99 billion) next year.
“With billions of dollars being invested in fast-track development of transportation infrastructure, the UAE, a dominant provider to global energy markets, faces unprecedented opportunities and challenges to retain its position as a world-class logistics hub… Total logistics market in the UAE for the year 2013 was estimated at about $23.4bn which includes the revenues from logistics services for domestic manufacturing, import-export trading, services and agricultural sector.
“This market represents approximately 6 per cent of the country’s gross domestic product (GDP) value for the year 2013. This total logistics market is expected to reach $27.0 billion in 2015 with a surge in import and export trade volumes and steady upward trend of local manufacturing,” he said.
In terms of functional segments, the total logistics market in the UAE comprises transportation services, warehousing services, freight forwarding services, and value added logistics services (VALS). Freight forwarding represents the largest share with about 62 per cent; transportation is the second largest contributor with about 18 per cent of total logistics revenues owing to significant distribution activity. The final two contributors to logistics revenue are warehousing at about 16 per cent and VALS, such as packaging and labelling, at about 4 per cent.
According to Frost & Sullivan, logistics services offer significant benefits and wider opportunities to the GCC economies. Overall, the sector is on a growth trajectory and is witnessing the mega trends that would help establish it as a prominent logistics hub. GCC benefits from two unique opportunities; strong growth of volume in the trade lane between Europe and Asia and steady growth and development of manufacturing activities in the driven by predominantly Saudi Arabia. Capitalising on the availability of world-class port infrastructure and developing the GCC-wide rail and surface transport capability are essential factors for future economic development of the GCC countries.
“The important elements making a strong and efficient transportation and logistics sector a strategic necessity in GCC are- enhancement of industry competitiveness, developing a multimodal logistics hub and supporting infrastructure like free zones around the port or airport, focussed investment in infrastructure and adjusting the policies and regulations to promote logistics sector development and synergy across all GCC countries,” Manda said.
The transport and logistics sector in the UAE enjoys a number of unique strengths, including its location, world class infrastructure, and a progressive non-bureaucratic Government that has played an active role in developing the sector. A positive economic outlook, corresponding population growth, and increasing potential for per capita consumption also foster the positioning of the Middle East as a core business market with the need for a stronger logistics sector, he added.
The logistics fraternity is in for interesting times, as railways will become the game changer in the GCC transportation and its consequent impact is seen on the UAE logistics market.
Srinath Manda, Program Manager for Transportation & Logistics Practice, Middle East, North Africa and South Asia, at Frost & Sullivan, said the emirates’ logistics market is likely to grow 15.4 per cent to reach $27 billion (Dh99 billion) next year.
“With billions of dollars being invested in fast-track development of transportation infrastructure, the UAE, a dominant provider to global energy markets, faces unprecedented opportunities and challenges to retain its position as a world-class logistics hub… Total logistics market in the UAE for the year 2013 was estimated at about $23.4bn which includes the revenues from logistics services for domestic manufacturing, import-export trading, services and agricultural sector.
“This market represents approximately 6 per cent of the country’s gross domestic product (GDP) value for the year 2013. This total logistics market is expected to reach $27.0 billion in 2015 with a surge in import and export trade volumes and steady upward trend of local manufacturing,” he said.
In terms of functional segments, the total logistics market in the UAE comprises transportation services, warehousing services, freight forwarding services, and value added logistics services (VALS). Freight forwarding represents the largest share with about 62 per cent; transportation is the second largest contributor with about 18 per cent of total logistics revenues owing to significant distribution activity. The final two contributors to logistics revenue are warehousing at about 16 per cent and VALS, such as packaging and labelling, at about 4 per cent.
According to Frost & Sullivan, logistics services offer significant benefits and wider opportunities to the GCC economies. Overall, the sector is on a growth trajectory and is witnessing the mega trends that would help establish it as a prominent logistics hub. GCC benefits from two unique opportunities; strong growth of volume in the trade lane between Europe and Asia and steady growth and development of manufacturing activities in the driven by predominantly Saudi Arabia. Capitalising on the availability of world-class port infrastructure and developing the GCC-wide rail and surface transport capability are essential factors for future economic development of the GCC countries.
“The important elements making a strong and efficient transportation and logistics sector a strategic necessity in GCC are- enhancement of industry competitiveness, developing a multimodal logistics hub and supporting infrastructure like free zones around the port or airport, focussed investment in infrastructure and adjusting the policies and regulations to promote logistics sector development and synergy across all GCC countries,” Manda said.
The transport and logistics sector in the UAE enjoys a number of unique strengths, including its location, world class infrastructure, and a progressive non-bureaucratic Government that has played an active role in developing the sector. A positive economic outlook, corresponding population growth, and increasing potential for per capita consumption also foster the positioning of the Middle East as a core business market with the need for a stronger logistics sector, he added.
The logistics fraternity is in for interesting times, as railways will become the game changer in the GCC transportation and its consequent impact is seen on the UAE logistics market.
GLOBAL FOOD SUPPLY CHAIN RISK
LTD Management has developed THE model for the global food supply chain risk assessment and identification. The actual supply chain is a black hole in the rules and regulations in the world. The model, framework, template, and program reflect LTD's practical supply chain / logistics knowledge and experience. If you are interested in learning more, please contact LTD at info@ltdmgmt.com
3PLs & LOGISTICS SERVICE PROVIDERS
3PLs and logistics service providers that have a real value proposition--one that is customer centric and is not about their business--have greater margins because less of their business is a commodity service. Those with no real value proposition have basically a commodity service and have to fight harder for margins and customer retention.
LEAN LOGISTICS
There are two steps to implement lean logistics. First is training for everyone in lean. Second is assessing the operation for waste. From those two, begin implementing the lean process. Lean is not a once and done activity. It is continuous.
Wednesday, May 21, 2014
SUPPLY CHAINS & INVENTORY
Besides A, B, C inventory, how many firms have FISH inventory-- First In, Stays Here?
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