What is your suggestion?

on Tuesday, June 30, 2015

The CFO of a leading US food manufacturer is asking employees to present ideas for cost savings to help their organization continue to be successful and profitable. Employees can approach this request in various ways and their answer can show their strategic thinking and speak to their level of commitment to the company and their future career.

There are employees that may present ideas that are directly related to their department. This suggestion is valuable and can result in cost savings however it may not be considering all aspects of the organization. Employees utilizing this approach may find that is easier to provide a limited suggestion because they may not feel like they have the expertise in all facets of the company to identify areas of opportunity, they may have limited time to dedicate to providing ideas, or visibility may be limited into the supply chain to suggest solutions that would impact the bottom line. There will be other employees that will spend their time developing suggestions by looking for overall process improvements in the company's supply chain, identifying suppliers and contract relationships that have not been evaluated in some time, and developing actions on implementing solutions that would benefit the company.

A possible suggestion may be based on one aspect of the company, their raw materials. This company's raw materials include agricultural products that are produced at company owned facilities in California. Due to the impact of the current drought, you could evaluate the agricultural products grown in California and the impact of the drought on the company’s input supply and costs. California is a main source of food supply for the US and the restricted water supply hinders production impacting all of us. This company has production facilities outside of California and may consider shifting production and developing a diversification plan to grow a variety of products necessary for their finished goods at a facility. This may include investigating other growing methods to alleviate potential supply shortfalls or expanding their production facilities to outside farms that can produce their products. While this potential opportunity does have an overall impact to the supply chain it will most likely require a significant amount of upfront work to research and develop an action plan. Implementation of shifting production will also require significant planning to avoid any gaps in production.

Another employee suggestion may be a more comprehensive approach and requires a clear action plan to gain buy in from the CFO. This suggestion is to have an outside party evaluate the entire organization by reviewing spend categories, supplier contracts, and processes to identify areas of opportunity. In addition, having a third party conduct this analysis and benchmark the company's information provides a path for establishing an action plan on how to tackle savings opportunities and process improvements. The assessment provides a clear case for the CFO to determine next steps to implement sourcing events, supplier negotiations, or scope improvements across multiple categories and departments in the company. An overarching suggestion that shows you can apply resources and experts where you need them to show your value to the CFO and the organization.
Share/Bookmark

Sourcing from Mexico, the 5 things we have learned so far.

on

So, while it’s been several year since I began participating on global and nearshoring initiatives for many companies, I have failed to share some of the learnings I’ve experienced that keep being brought up to my attention every time I talk about (or engage in) nearshoring projects. So here are a few basic, yet paramount, lessons to consider on the matter:

1)  The economy is thriving.

Despite the difficult environment driven by a muddy oil dependent economy (over 30% of the government revenues comes from oil exports) which has had a negative impact on Mexico’s currency and buying power (i.e. imports), Mexico has continued to prospect fairly positive growth. The reason behind investor confidence is primarily the set of economic reforms that the government is expected to legislate in critical areas such as telecom and energy. It’s no surprise that many investors are already realizing value in some sectors and fostering exports for the economy.

2)  The right conditions to Nearshore could not be better.

ü  Not only is Mexican labor lower than China’s on many industrial sectors, but is also steady. Let’s not forget that one of the main reasons companies move to China and south East Asia in the late 80’s and early 90’s was driven by low wages in those countries, this no longer being the case brings back an advantage to Mexico.
ü  Mexico is moving toward an entrepreneurial economy and the level of competency is rising rapidly. Mexico is producing graduates in engineering and technology at higher rates than Canada, Germany or Brazil and flooding the market with specialized professionals and skilled labor. In addition, many universities, both private and public, are becoming competent business incubators, providing scholarships and offering executive education programs to business executives.
ü  Infrastructure has never been sounder. From railroads to ports, to industrial clusters that support the already established automotive and aerospace industries, companies can move their products much more efficiently and securely through the country and beyond its borders.

3)  Suppliers’ online presence is still floundering.

One big challenge that we’ve faced when conducting nearshoring engagements is identifying the right suppliers by browsing the web. Many of us will agree that one of the primary struggles is to navigate websites that are dated, unclear, overly complex (in that they will provide too much irrelevant data and too little quality information), or simply in-existent. While some supplier sites may indicate otherwise, these continue to be the exception, and when trying to conduct a comprehensive supplier base for sourcing initiative, using the web to identify competitive bidders continues to be a challenge.

4) Communication is paramount.

Possibly the more time consuming phase of the sourcing process is keeping suppliers engaged. Ongoing communication is necessary to establish the goals and objectives of the initiative from the get go but also to re-educate them constantly. Suppliers in Mexico will easily assume that a project has been cancelled or they are no longer in consideration if communications halt for a period longer than what they may consider reasonable, and they are unlikely to follow up on their own. Technical aspects such as spam filters may further complicate the flow so ongoing reassurance and instance is important. This process alone will reinvigorate the relationship (and to their eyes) legitimize the business opportunity.

5) There are still many questions.

How is the social instability and drug cartels going to impact our initiative? How mature is the industry in Mexico to be able to support our requirements? What will be the advantages from a logistics and tax perspective?... and many more legitimate questions are brought up to our attention everyday, all of which are resolved based on the unique scope of the initiative. The fact is that a lot of companies do understand the benefits and advantages of nearshoring, so is not a matter of Why? anymore, is a question of Where to begin?


There is so much to say and so much yet to be discovered, the reality is that the nearshoring phenomena is gaining momentum, as we continue to unravel its uniqueness and as the practice evolves we will continue to provide our advice on how to make your initiatives competitive and sustainable.
Share/Bookmark

Controlling the Controllable with Suppliers (Part I): Effective Forecasting & Planning

on


When working with your suppliers there are certain things that are in your control and certain things that are not. It is of paramount importance to identify those variables in which you (the customer) have control over, and what effect your expertise and your relationship with the supplier will have on pricing. In my experience, the top three “customer-controllable” factors that will have the strongest impact on cost include: 1) effective forecasting & planning, 2) an understanding of vital requirements and accompanying regulation of superfluous demands, and 3) monitoring compliance. When these three best practices are optimized, my experience has shown it will result in lean, efficient, and symbiotic relationships between customers and suppliers. Here I will talk about the first best practice: Forecasting & Planning.

Accurately forecasting consumption and demand of products/materials from your suppliers and communicating it, enables effective planning and allows the supplier to run a lean operation with rapid product turnover. However, when suppliers and customers are not aligned on expected volumes, delivery schedules, and appropriate run sizes (in the case of custom materials), excesses and shortages of product may occur that will have detrimental consequences to pricing and service levels. If there is an excess of inventory, this inherently takes up warehouse space in which the supplier absorbs this cost. If a supplier is consistently experiencing this with a customer, they typically will hedge the cost of extra or “flex” warehouse space and will absorb that risk in the form of higher unit pricing.

On a recent packaging project I participated in, a similar situation to the one I describe here took place  in which the supplier had over a thousand units of finished goods taking up shelf space in their warehouse because the customer ordered a years’ worth of expected inventory and only ended up using half. Oftentimes a misstep in forecasting is a result of demand shifts, product recall, or other uncontrollable factors from the buyer’s perspective; however, sometimes they result from conscious decisions that are well-founded in their making, and tight controls should be placed in a similar circumstance. For example, if a buyer over commits to volumes in order secure competitive material prices a supplier will often stipulate large run sizes. In other words, the supplier agrees to the customer’s price demands by running larger quantities of product at once. This results in efficiencies from the suppliers’ standpoint and the ability to order materials from their supply chain in bulk (thereby lowering material costs). The higher cost of this practice to the customer comes from larger run sizes exacerbating the inventory levels (over ordering) in a situation where forecasted usage may have been slightly off. Again, though the intention of securing cost savings was well-founded in this example, the customer agreed to terms that exposed them to compounding risk as run sizes go up, only worsening the inventory that could potentially be stuck in the suppliers’ warehouse which drove up unit pricing in the first place.

During our market evaluation and sourcing effort, we realized that consistent poor forecasting practices were the primary driver for higher pricing from the incumbent supplier when compared to the alternate suppliers’ pricing in the market. As a result of our RFP and supplier optimization efforts, the obsolete inventory was bought out scrapped, or repurposed in order to take the first step towards fixing the problem. The long term issue however, i.e. the mistrust in accurate forecasting by the supplier and bulk run sizes indirectly initiated by the customer still needed some fixing.

This situation had transpired for over 15 years, where the customer would approve large run sizes in which they thought they were getting a “sweet” deal. Once it was identified that there were recurring forecasting and planning issues, which were being magnified by the large run sizes, the solution was clear. By implementing a forecasting and ordering best practices program (optimum inventory triggers, smaller run sizes, enhance forecasting capabilities, and consistent communication, etc.) excess warehouse space issues were resolved and true lower cost initiatives that offered a sustainable warehousing model were enacted and resulted in a win-win scenario for both the customer and supplier.
Share/Bookmark

A Different Kind of Digital Sourcing, Part 1: Know Your Fingerprinting Requirements

on

There is a good deal of (perhaps reasonable) concern these days about the upswing in electronic biometric data collection and its uses with respect to our private lives potentially becoming not-so-private anymore. In some contexts, however, the technology is still a necessity and not likely to disappear any time soon (if anything, it’s more likely to keep moving forward in increasingly unsettling ways).

Fingerprint collection is one such technology. Fingerprinting is commonly required by law for the purpose of checking someone’s criminal history in certain situations, such as pre-employment or licensing for individuals with access to vulnerable populations or sensitive information. Whether you are working in the healthcare or financial industries or you are a Department of Defense contractor needing clearance, your employees may have to undergo this process before they are considered fit to work and finding someone to provide those fingerprinting services is not as straightforward as it used to be. The practice of fingerprint-based background checks will only continue to gain popularity as technological advances lead to easier collection and submission, and plenty of companies are stepping up to get a piece of the action. Simultaneously, more and more law enforcement facilities are doing away with the fingerprinting services they offer to the public, so the days of simply heading down to your local PD or sheriff’s department are coming to an end in many states.

Turning to private third-party vendors is the growing trend, but the world of fingerprint processing can be more complex than many expect. Whether or not the FBI is surreptitiously collecting and hoarding all of our prints NSA-style as some might fear, they are still going to require a fresh set to be submitted for any record check and doing a little homework before you have your employees get printed can save not only time and money, but a good deal of frustration.

Know Your Requirements

The most important thing you can do before you begin is get a solid understanding of what you need. While the prints themselves generally stay the same and your criminal record (or lack thereof) may not be likely to change too often, the reason you need the prints can make all the difference in terms of processing as well as price. It should also not be a surprise that there is usually too much red tape involved for government agencies to share your prints or background check results amongst one another, so do not fall into the trap of thinking that being printed for one requirement will absolve you from having to do it again later for something else.

Below are some of the key questions you should be able to answer about your fingerprinting needs:

  • Why is fingerprinting required? Believe it or not, the government does have rules in place concerning justifiable reasons for requesting fingerprint-based background checks. You cannot typically demand your employees to have this done on a whim. You may be able to conduct other types of background screening simply with employee permission, but the FBI require permissible purposes unless the applicant is requesting the information for themselves and merely handing their results over to you (at which point you open yourself up to the possibility of tampering).
  • Who is requiring the fingerprinting to be done? This is typically some state or national government agency. It is not enough for an applicant to say their employer told them to do it. If you know the answer to this one, you can contact the agency or look at their website to gather other pertinent requirements.
  • How do the prints need to be processed? The agency in question may have requirements about both the method of fingerprint collection (electronic vs. ink) and the submission (electronic vs. mail). Live scan is the term for electronic fingerprint collection, and it is generally the preferred method to produce higher quality fingerprint images. Many entities are also making the switch to electronic submission, which is more complicated than dropping fingerprint cards in the mail, but it can speed up the process exponentially.
  • Do you know your ORI number? This may not always be necessary, but knowing the ORI (Originating Identifier) or its equivalent and any other relevant numbers required for fingerprint transmission can really help you get straight to the heart of your needs when talking to a potential vendor. It will also ensure that your fingerprints get to the right place.

Other useful information to gather includes timelines, whether any other paperwork or a photo needs to be included with the submission, and how (and to whom) background check results are returned. You will also want to confirm what the base fees are that go to the state and/or FBI for the checks they run, so that you can easily identify what portion of the price is added by the vendor.

Once you understand your own requirements, the next step is selecting the right vendor that meets your needs. In my follow up piece, I will explain some of the key considerations to help guide the selection process. 
Share/Bookmark

Reining in Telecom Tail-Spend

on

Most organizations employ an 80-20 management approach for their voice and data telecommunications spend. That is 80 percent of their spend is with the top 20 percent of their suppliers, and conversely, 20 percent of their spend is with the other 80 percent of their suppliers within the category. That 20 percent of tail-spend typically goes unmanaged due to a variety of factors: it’s tactical and low value, inadequate resources exist to manage it, there is limited visibility into it, among others. But even with a keen awareness of these concerns, many organizations fail to see that development of a program to address these challenges would translate into opportunities for significant cost reduction and go-forward management efficiencies.

The first natural objection to focusing on that last 20 percent of tail-spend would be that it’s only a small piece of the overall category spend, it’s tactical, and it will perceivably take a lot more work than the other 80 percent to rein in and control. But that’s precisely the reason that it should be your company’s focus within the telecom category. Things move quickly in telecom. Services are ordered and disconnected all the time. Contracts are all over the place, invoices are for small amounts and are difficult to understand, and so unused services bill at un-discounted, tariff rates without anyone noticing. The problem is all of these small invoices add up to costs that can be easily significantly reduced once you understand what you have. What’s more, telecom tail-spend is often the place where you can find and recovery money due to billing errors. So, of course focusing on the top 80 percent of your spend makes sense at first, but that spend is highly visibly and much more thoroughly managed than the tail-spend and it’s for that reason we have actually had clients realize more savings within their tail-spend than the top 80 percent of spend.

The biggest challenge to taking on telecom tail-spend is finding the time and resource to do the due diligence and create the visibility necessary to make better decisions about the services you’re buying and utilizing. Some may be able to plan it as a special project, but there are almost always more mission critical needs that take priority. Most hire outside help, but the risk there is that many consulting firms also focus on the top 80 percent of your spend and want little to do with the rest. So vetting partners is critical and really drilling into their approach to your challenges and how much involvement they will require from your team will help you to make the right decision. From that point on, they can create visibility and your team can develop a plan for how to address your tail-spend. Typically, services fall into a few buckets: they are unused and can be decommissioned, they can be replaced by other services available at a location (e.g. POTS and PRIs with SIP, Internet via the WAN, etc.), they can be consolidated under existing primary carriers, they can be optimized (i.e. configured to get the most value for your dollar and potentially eliminate other services), or some combination of these. All of these adjustments almost always result in reduced cost accompanied by simpler management and better visibility.

While data gathering is occurring, your team can determine some basic metrics to better understand and rationalize the connectivity requirements to each location. After auditing a few locations, this will provide you with a gauge to quickly assess whether or not you are overspending at a particular location or on a particular service. Further, having a standardized approach in mind as you embark in this process will allow you to consider your current state as it relates to your desired end state vs. trying to look at your current state and then plan from that point forward. Depending on your industry or operation, the metrics may vary but some examples would include metrics based on staff quantity, users, or location category (e.g. warehouse, business office, call center, etc.). These will not only give you an idea of the services and costs you should have for each location, but they’ll also help you to place each cleanly into your roadmap.

When it comes time to execute, all of your decisions will be based on the hard-earned due diligence done during data gathering and discovery. Based on this and the parallel planning you’ve completed, you should be able to gain an upper hand in managing your spend by increasing the amount of spend with your top 20 percent of your suppliers and reducing the number of suppliers supporting the bottom 20 percent of your spend. The savings and cost recovery you will have realized will be well worth your efforts and the impact of your consolidation and rationalization efforts will make controlling costs into the future much easier.
Share/Bookmark

Disaster recovery in the supply chain

on Monday, June 29, 2015

Disaster recovery in the supply chain

An old adage tells us: "Nothing is certain in life except death and taxes." And while this is true, one could also posit that disaster in an inevitable part of life as well. Not to sound too morose or morbid, but disasters happen and they touch almost everyone in this country, either directly or indirectly. A tsunami in the Pacific Islands may disrupt production of a certain material, which then halts a garment factory because it  no longer have the fabric that it needs to continue making its most popular item of clothing. Then the supply can't meet the demand and no one purchases the other products from the store... and the list of repercussions goes on and on.

Even though we may not have to know what it's like to have a tsunami destroy our homes and communities, people around the globe are still indirectly affected. And much like companies have disaster plans in place to get back to work after their databases get destroyed or infiltrated, all other enterprises, procurement services and supply chain managers should have a backup plan in the event of a disaster.

How does a company mitigate disaster?
To make a long story short, the best way to circumvent a disaster is to not put all of your eggs in one basket. According to SpendMatters, it may be more expensive in the short term to have as few production sites as possible, but it certainly doesn't pay off when one of those factories or locations experiences a detrimental blow. The best plan of attack (or rather, recovery) is to have production spread across multiple locations. In the event that one place goes down for whatever reason, you can spread out its allocation among the remaining factories while everyone attempts to rebuild the first factory in question.

While it does seem as though this might be a pessimistic view, optimism can only get you so far when your production has come to a halt.

The source noted that diversification and thorough disaster planning are some of the best practices to reduce the impact of a disaster on a given supply chain. Spreading out your production is not only safe, but it puts your company in contact with other suppliers and procurement specialists, and it never hurts to have multiple associates on your side in the event of an emergency.

Continuity is key
After you've ensured your staff are all safe and accounted for, the next step is to get your other locations to pick up the slack. And while TechTarget reported that it's next to impossible to form a fool-proof strategy that will make for a seamless transition, it's important to stay as consistent as possible. The companies to which you supply your merchandise have contracts that they are responsible for fulfilling. If everyone works together, and is transparent in their shortcomings, businesses may find a new normal until the original business model is up and running again.

It can be really hard to come back after a disaster. But the main thing is to try to return to the former state of operations in order to satisfy contracts and keep up business relationships. And while not every business will survive a disaster, it is sometimes possible to make the most of a bad situation and stay afloat even in times of hardship. Getting a disaster recovery plan in place is not only a prudent decision for the sake of the business, but also for your peace of mind. 

Share/Bookmark

A glimpse into the restaurant supply chain

on

A glimpse into the restaurant supply chain

Restaurants are a luxury in our society. From fast-food chains and diners to the new fast-casual restaurant and fine dining - people have a lot of options and flavors from which to choose. Sometimes these choices can be overwhelming, and deciding on a place for dinner can cause a fight, but Americans are lucky to live in a society where they can pick a style of food and go enjoy a different kind of cuisine every night if that's what they want.

As far as the restaurant supply chain is concerned, there are many cogs in the machine that make a given eatery operate. Some rely on linen services while others need large quantities of oil and the list of options could go on. As with many other industries, restaurant supply chains are trying to keep up with the changing times and deal with whatever new change comes in their direction.

Here's a glimpse at some of the issues and evolutions that are currently affecting dining services across the country.

1. Scrambling to find solutions
Breakfast joints, bakeries and bourgeois eating establishments around the globe are feeling the pain from the increasing price of eggs. The H5N2 virus, known colloquially as avian flu, has wiped out 44 million egg-laying chickens, which comes out to roughly 13 percent of the flock that supplies eggs for grocery stores and supply warehouses, noted Nation's Restaurant News. Chickens raised for meat, however, have mostly been spared from the virus.

As a result of this, egg prices have risen significantly across the country. The average price per dozen as leapt up by 70 percent, going from $1.19 to $2.03 for a paltry 12 eggs, as reported by NRN. Some suppliers are considering importing eggs from other places because they are worried that restaurants won't have the ingredients they need to make their food and sustain business. The source indicated that getting foreign foodstuffs into the country is a long and difficult process and it can take years to pass through all the proper inspections just to let it on to American soil.

Experts believe that this round of avian flu came through as flocks of Canada geese passed through areas to move south for the winter, NRN continued. Luckily, as the weather warms, the virus goes defunct and it stops functioning altogether at around 85 degrees Fahrenheit. Hopefully as the summer continues the country can get rid of the flu and work on increasing the hen supply.

2. On-demand food is on the rise
Restaurant delivery is not a new concept, but the locations that offer takeout and delivery options are certainly evolving. According to U.S News and World Report, an increasing number of eateries are adding takeout and delivery options to their business models. Many restaurants - ranging in food offerings, size, quality and location - find success with marketing themselves as places that offer take-away or delivery. 

Recently, family restaurant chain Olive Garden found that it could come back after multiple quarters of losses by building up its takeout service, noted Fortune. Originally, higher-ranking staff figured that they could get more people in the door by offering two-for-one deals and all-you-can-eat-style lunches. However, this was not as big of a draw as they hoped, but the chain did see a glimmer of hope in takeout. Now, even though its numbers haven't increased very much, consumers are very fond of the idea of ordering out and taking it back to their homes. 

And for people who want to eat Olive Garden food but don't want to dine in the building or drive to pick up their takeout orders, larger cities are seeing Uber services pick up food from restaurants that don't deliver and driving them to the customer, reported Engadget.

3. Changes in fast-food chains
Just like many industries around the country and across the world, fast-food chains are experiencing pressure from the economy and their clientele to better themselves or else. Food Business News recently reported that while more people are employed and enjoy decreases in gas prices, they aren't exactly flocking to just any old restaurant. Customers want to get their most for their money and that doesn't mean more to eat, it means better quality and more healthy food options. These days, consumers want antibiotic-free chicken and GMO-free ingredients going into their food. As long as these needs are met, the restaurant industry can expect a boost in revenue.

And as people's expectations for the ingredients change, so will the dining experience. More customers are drawn to the fast-casual style of food. People enjoy building their meals, like deciding what does into a burrito or choosing a two-for-one option, FBN noted.

As suppliers rush to keep up with the growing demand, we can expect the restaurant supply chain to satisfy the appetites of owners, chefs and diners alike.

Share/Bookmark

The next generation of last-mile delivery

on

The next generation of last-mile delivery

Perhaps it's because of the advent of the Internet or the integration of smartphones into our daily lives, or maybe it's just a sign of the times, but people are very keen on getting things instantly. While it's pretty amazing that we can search for things on our pocket computers and get breaking news updates directly to our lock screens, as a culture we are very opposed to delayed gratification when it comes to certain aspects of our lives.

Take our delivery choices as an example. We are so keen to get our ordered goods to us as soon as possible that we're sometimes willing to pay exorbitant overnight shipping fees just to get a sweater or blender on the doorstep before the next day's sunset. Overnight shipping is impressive in and of itself, but it appears that the idea is being taken over by same-day delivery services and alternative shipping methods that get your products to you as quickly as humanly possible. What is the last-mile delivery landscape going to look like in the next few years?

The changing tides
When it comes to getting our products when and how we want them, many people will not be too hung up on the delivery method as long as the item in question reaches its final destination on time and in one piece. According to MarketWatch, the millennial generation has fewer loyalties to established companies such as FedEx and UPS, as these delivery methods are traditionally slower than other expedited approaches. Thanks to newer technologies like smartphones and applications such as Uber, people are finding a way around supposedly outdated methods and opting for innovative and faster delivery options.

The source noted that legacy delivery services haven't had as much revenue coming in as they have in years past, though newer companies like Amazon have needed to increase their shipping prices or take them at a loss to keep customers happy. The online shopping giant isn't throwing in the towel quite yet, however, as there are some experiments in the pipeline that should impress even the most impatient of consumers.

Is 'On My Way' is on its way?
Amazon.com may be trying out a service that uses ordinary citizens with cars to make deliveries for physical stores in a given area, reported The Wall Street Journal. The service, known internally as "On My Way" can be seen as the Uber of the delivery world. Much like the driving service, it's speculated that these couriers would be notified via an application to pick up an item from a store and deliver said purchase to the customer's home or business. While Amazon declines to make any comments about the reality of this service, this does pose many questions both in favor and against the possibility of "On My Way."

For instance, would couriers need to get a background check before they can make deliveries? And what's to stop them from stealing the packages instead of delivering them to the customer? Only time will tell to see if the "Uberfication" of delivery services will become a reality, but it does seem to satisfy a need that consumers have and have had for quite some time.

Bundles of nerves or parcels?
This prospect of a new kind of distribution method may be making officials at legacy companies sweat a little, though Vice President of FedEx Mike Glenn doesn't seem too worried about Amazon's service and similar ventures even taking off the ground.

"Research has indicated time and time again that a uniformed person with proper identification showing up at your doorstep is an important issue for customers," Glenn stated, reported BusinessInsider  "Consistency of customer experience is very critical in that regard."

So either executives at these companies are confident in their client base and their read of human behaviors or they're just keeping cool to quash any excitement about the service. Either way, it doesn't seem that these legacy delivery services will be going out of style anytime soon. However, it will be interesting to see how these seasoned enterprises respond to the changing tides and importance of technology in the last-mile delivery in the supply chain. Perhaps drones will take off after all or we have yet to encounter the new thing that will improve our last-mile delivery and satisfy our instant gratification needs.

Share/Bookmark

Sourcing Lead Prospectors, Part One: Determine the Marketing Strategy

on

Marketers are constantly looking for ways to reach their target audiences with their companies’ messages in the most cost-effective manner. Direct contact by email, phone, or fax can be efficient ways of doing so. However, contacting your audience directly means having the necessary information by which to contact them, such as phone numbers and email addresses, which most lack. Lead Prospectors, such as Zoominfo and Data.com, can provide extensive lists of contacts with contact information (for a fee), which marketers can then utilize to send their messages. 
There are a myriad of lead prospectors in the market today, and knowing which to choose is not always intuitive. In this blog series, we will review the many points to consider when looking to source a lead prospecting company. There are several questions you should ask before sourcing one, beginning with your own marketing strategy and campaign.

Who is the target audience?

You must first have an idea of who is looking to buy your product in order to reach them; that probably goes without saying. You are going to need to provide potential prospectors with parameters around your target market in order for them to give you a list that will effectively meet your needs. Market Research is going to be essential, so try to get as much information on your customers as you can and develop a list of primary demographics.

What will be the key identifiers?

This goes hand in hand with the previous question. After you have determined your audience’s demographics, you need to hone in on the more detailed identifiers that can not only be matched by lead prospectors, but are also most cost effective to target. For example, say you are a pizza shop owner looking to expand your reach to new customers; you may want to start by targeting people who like Italian food in your area. Food preferences are not likely to be data that lead prospectors will capture. However, many do capture addresses. So, if you were looking to buy a list of contacts to start an email campaign, you would want to use location as the indicator which prospectors could match their database against. Prospectors will typically house identifiers such as address, title, and company, which are more useful for B2B marketing campaigns. When sourcing prospectors, be sure to give them your key identifiers so that they can give you an idea of how well they can meet your needs.

How am I planning on reaching them?

The planned method of sending your message will also help determine the information you need from a prospect list, as well as the volume of contacts. If you are planning on calling or faxing your audience, you will need numbers. If you are planning on emailing your audience, you will need email addresses, obviously. What may not be obvious is the length of the list you will want. Emails are a fairly impersonal way of sending a large volume of messages (with the appropriate technology) without expending a large amount of manpower. That is fine for low-cost, high-volume products (e.g., pizza, household products, retail), but high-cost, low-volume products (e.g., automobiles, home remodeling, heavy machinery) often require a more personal touch. Direct contact by phone may work better than emails in those cases, however they are more labor-intensive. For email and fax campaigns, a longer, broader list will be ideal; for phone campaigns, a shorter, more focused list will likely be what you want. Source your prospectors according to those needs, as well.

Once you have these questions answered, you will be ready to start sourcing prospectors, which leads us to the second half of the process. In part 2 of this series, I will explain what to consider when purchasing the ideal list for your strategy.

Share/Bookmark

Just how healthy is the health care supply chain?

on Friday, June 26, 2015

Just how healthy is the health care supply chain?

A typical healthy person doesn't always think about the state of his or her health until something happens and the body's status takes a nosedive. When we arrive at the hospital, we expect that our doctors and nurses have everything they need to make us and our loved ones better, or at the very least, comfortable during the duration of the stay. Ideally, facilities would be well-equipped and staffed properly, and all procedures would go smoothly. Of course, we don't live in an ideal world and occasionally, hospitals and clinics have to make do with what they have.

However, there are some ways to better the health care industry, starting with the supply chain. Once we can improve the health of this specific supply chain, we will be able to focus on improving the lives of the patients who benefit from it.

Supply chain struggles 
As with many supply chains across a wide array of industries, there are many challenges that hospitals and suppliers face when it comes to the health care supply chain. In a recent opinion piece penned for SupplyChainBrain, Vice President of Sales for Chicago Tag and Label Don Amato outlined several challenges that specifically plague the health care industry's supply chain. Amato noted that the excruciatingly precise nature of labeling, tracking and tracing is necessary for the job, but it is painstaking and often time consuming, a luxury that some patients don't have.

Big challenges that hospitals and supply chains face are keeping inline with expiration dates and preventing counterfeit machine parts and medications from entering into the health care facility. Counterfeit items could be stopped before they've even left suppliers if the supply chain conducted regular audits of different manufacturing plants. Should a fake part make its way into a hospital and malfunction while in the process of working in a machine on someone, the company itself would be responsible for the repercussions, and that could get expensive very quickly.

Expirations are an entirely different story, and while the impending dates cannot be avoided, there is a way to maximize use before products need to be thrown out, misusing time and money in the process.

Operating on the supply chain
Health care facilities waste a lot of money every year by throwing out expired products. Not only is this a poor use of resources, but it could potentially prevent the facility from purchasing something else that might save someone's life. Since this is such a problematic issue, RevCycleIntelligence sat down with Steve Kiewat, vice president of supply chain operations at BJC HealthCare, and he asserted that better transparency from end to end may help save billions of dollars by eliminating the excess expenditure of precious resources due to expiration.

Kiewat noted that hospitals may be able to eradicate waste altogether if the industry can find a model of supply and demand that takes time of year, location and the size of the patient base into consideration and determines how much of what medication or product is necessary at that time. Kiewat has high hopes for such a model and believes that if hospitals and suppliers collaborate, we might be able to find a medium that keeps hospitals perfectly stocked without putting anyone's life in danger or wasting money by throwing away expired products.

Of course, we still have a ways to go before such a goal is accomplished, but it's vital that these challenges are addressed and we stop needlessly squandering our resources. People have enough to worry about when it comes to health, they shouldn't have to focus on other issues like how their health care's supply chain functions.

Share/Bookmark

Forget hijacking, hacking is the new airplane threat

on

Forget hijacking, hacking is the new airplane threat

These days, it seems as though there's a major security breach or large-scale hack at least once a week. While the attacks are varied and the volition behind them is just as diverse, neither enterprises nor governments are safe from the ever-present threat of a hack. It appears that hackers have no limits on what they can access, as even the most secure government websites and databases have been compromised in the past few months.

It's also come to our attention that cars with sophisticated software systems are at risk to be taken over by a remote party. And if that isn't frightening enough, hackers have begun interrupting flights by hacking into planes and causing problems for the pilots and air traffic controllers while giving passengers quite a scare. How will this new and unsettling development affect the supply chain?

Mile-high worries
Many people have a fear of flying and these new reports of commercial aircrafts being hacked by its own passengers will not instill confidence in the aero industry. The most recent incident of airplane hacking took place in Warsaw, Poland, near the end of June. According to IndustryWeek, the Polish airline LOT canceled 10 flights after an attack on the airline's ground operations system that left more than 1,400 stranded at the Frederic Chopin Airport.

Fortunately, no one was hurt in this incident, but there are growing concerns over aviation and IT security. Wired recently reported that security researcher Chris Roberts, now under strict surveillance by the Federal Investigations Bureau, claimed to have hacked into an aircraft of which he was a passenger and issued a "climb command," which caused the aircraft to move laterally in the air. According to the researcher, these actions are only possible if the autopilot on the airplane is disengaged, but it still remains to be a concerning issue.

Of course, Roberts was simply investigating whether or not these types of attacks were possible and did not intend for anyone to get hurt, but the prospect of a single person infiltrating the airplane's system and controlling the craft from the comfort of his or her seat is one about which no one wants to think. How will the development of remote plane hijacking affect other aircraft, perhaps ones that carry cargo in the supply chain?

Weak links in the supply chain?
It's become increasingly evident that security systems don't necessarily keep unauthorized parties from accessing databases or software programs, but they do deter them for a period of time. Efforts to keep passengers and property safe should be a priority for aviation security experts. Other than the tragic potential loss of life, there is also an untold amount of money at risk should cargo planes be exposed to hacking threats. 

While this will not directly impact manufacturing, but it could very well throw a wrench in sourcing efforts, procurement and delivery stages of the supply chain. Of course, it's easy to muse about the "what ifs" and worst case scenarios of such situations, but we need to figure out the first few steps of prevention and response should these ideas become reality.

In the meantime, the aviation industry has to assuage many fears as it is with threats of terrorism  threats and freak accidents, but that perhaps is part of the price we have to pay for a plane ticket.

Share/Bookmark

Source One Round Up! June 26, 2015

on

Source One Round Up: June 26,2015 

Here is a look at where Source One experts have been published this week!

Blogs
Why You Should Hop Back on the Direct Mail Train
There’s no denying that in today’s digital age, you would be hard pressed to find someone who doesn’t have at least one internet connected device. And while advertisers and marketers have turned their attention to digital campaign strategies, direct mail is still the old reliable in the marketing space.

Driven by different goals and measures for success, Marketing and Procurement teams do not always see eye to eye. However, an alliance between these two groups could mean major strategic benefits for an organization overall.

Be sure to also check out Part I and Part II of the Digital Agency Landscape Series.
Share/Bookmark