Keys to Auditing Local and Long Distance Telecommunications Services

on Saturday, September 29, 2012

Auditing local and long distance services is challenging for a variety of reasons.  This is especially true where local/LD is decentralized, which tends to be the case within most organizations.  There are numerous hurdles to work past such as: who are the carriers, what are the services being provided, where are the services being invoiced, is local service invoiced separately from the local distance and if so are the invoices going to the same place?  Other considerations to think about include: Do I need everything I am paying for?  Am I using what I am paying for optimally?  Are there other services available that would better suit our business?  The list goes on, and it is difficult to identify where and how to begin to answer these types of questions, but there are a few strategies and key factors to consider when approaching this type of telecommunications audit.

One of the most significant challenges about local/LD auditing is that the spend is typically spread extremely thinly across many facilities, carriers and invoices with very little record keeping along the way to ease management.  Further, many of the services are ordered and/or intended to be disconnected, ad hoc which means even more small invoices and even less clarity about the service.  Likewise, when a circuit or line or feature is no longer needed, how often is it appropriately disconnected and sought through to ensure it stops billing within the next bill cycle?  Not often.  So there are many many invoices out there with relatively small overall costs attached and so the reward for the audit effort required to cleanup this type of spend appears marginal.  However, small pieces add up.  In most cases, circuit and line inventory can be reduced by 35% and may even go as high as 90%+ which adds up to significant savings and substantial reduction in management burden.

In order to achieve results like those mentioned above, a thorough and carefully managed audit is required.  The key elements of a telecommunications audit are:

  1. Data gathering:  This is the most critical step as it identifies the services you are paying for provides you with the information required to make decisions about how to cleanup inventory.  The data you are looking for includes: carrier invoices, contracts, customer service records, internal records of lines (faxes, modems, alarms, conference bridges, monitors, users, etc.), list of extensions, PBX programming including trunk groups, routing patterns, and ARS tables.  Additional information that can supplement this is carrier usage reports and  tone and tag completed by the LEC onsite to physically show where lines come into the building.

  2. Inventory identification: This process involves creating a table of services which demonstrates the circuits, lines, trunks, usage, features, costs, and invoice/account information of all telecommunications services you are being billed for.  This will provide a detailed snapshot of your services from which you can create network diagram.

  3. Network diagram: The network diagram allows you to visually process which services are in place and where.  This supplemented by the inventory begins to tell the story of how your various services are working together and where there may be superfluous services or where services can be used better.

  4. PBX vendor:  If there is no onsite or internal PBX expert to help with an audit, it is worth engaging your vendor of choice to assist with providing and reviewing the programming of your PBX(es) for cross reference with your network diagram and inventory.  This can sometimes uncover services which are billing but are not connected to equipment.  Likewise, your vendor can help to double check your inventory against the services that are delivered to, and cross connected at the DMARC.  It's possible services are not even entering the building or are not connected to anything once inside of the billing.

  5. Usage analysis: Finally, it will be important to observe the quantity of users are each location as well as the usage coming from that location to better understand your trunking requirements.  There are strategies for trimming back your inventory to better suit your usage trending which rely on this type of information to optimize your configuration and spend.

By involving the above factors in your audit, you very well can identify significant savings and  decrease the time and resource required to manage your telecom spend and infrastructure significantly.  In many cases, telecom spend that has not been audited in 3 years can result in over 40% savings.  For help auditing your local and long distance telecommunications spend, contact Source One Management Services, LLC.

 
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Cellphone Survival

on Friday, September 28, 2012

While people have cut back on dining out, entertainment, and clothing there is no sign of people cutting back on cell phones.  The Labor Department reports spending on phone services increased more than 4% from last year.  Many people own smartphones which means they are spending on average $100 a month per phone. If you have a family with multiple smartphones, you are probably paying a lot more than $100 a month. The Wall Street Journal notes that some families may be paying as much as $4,000 for cell phones which can potentially be more than their cable TV and internet bill.  But the wireless carriers aren’t upset over your bill and they are not worried about how you are going to pay for it.  US wireless carriers brought in $59 billion in 2011 which is up from $22 billion in 2007.  The wireless carriers’ revenue will continue to increase with their revised data plans, faster networks, and improved phones.  Most people want to keep their smartphone so many are willing to cut back on going out for dinner and drinks to help cut some of their costs to pay for their phone.  Some people also look to prepaid phones to help them save costs.  If you are really good at managing your smartphone usage, you can also consider reducing your data plan and relying on free wifi.  Then you have your extremists who are willing to give up their phones. That’s definitely too far for me, and it seems like its too extreme for most since more than 88% of Americans having a cell phone. I know that I fall into the category of looking elsewhere to cut back costs.  What would you do?
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Campbell Soup announces plan to cut costs

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Campbell Soup announces plan to cut costsCampbell Soup Company recently announced new plans to rework its United States supply chain to enjoy greater cost savings. The company plans to restructure its production, develop new product lines and improve efficiency to boost sales and slash expenses.

Production changes coming
One of the biggest changes the food company announced was its new plans for production. Campbell's has decided to shut down its oldest plant, built in 1947 and located in Sacramento. The company said that the age of the plant combined with the high production cost there made it more cost-effective to shift manufacturing elsewhere. The plant is scheduled to be closed in stages and should be fully shut down by July 2013. After that, production will be shifted to North Carolina, Ohio and Texas, where manufacturing costs will be more affordable.

In addition to closing the canned-soup production facility, the company is also scheduled to close its New Jersey spice facility in by March. Spice sourcing will not be an issue after the plant is closed - the company has another facility in Wisconsin that will take over responsibility for all spice production.

Boost revenue with new products
Along with the company's aim to slash production costs, it will also attempt to increase sales with new product lines. Campbell's plans to release more than 50 brand-new soups and sauces this year, hoping to tempt younger shoppers with new flavors. The company is also switching up its packaging, and will not sell the new goods in its classic cans. Instead, the soups will be sold in tubs and bags, making them easier for younger, on-the-go consumers to transport.

Significant savings
Even though the adjustments will cost an anticipated $115 million, these plans will save the company a significant amount of money in the long run. It is estimated that once the changes are fully implemented, they will provide Campbell with pre-tax savings of about $30 million beginning in 2016.

"As we position Campbell for profitable growth, we must continue to optimize our U.S. plant network and diversify our manufacturing capabilities," said Campbell president Mark Alexander. "We expect the steps we're announcing today to improve our competitiveness and performance by increasing our asset utilization, lowering our total delivered costs and enhancing the flexibility of our manufacturing network."
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'Made in the USA' can save manufacturing costs

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'Made in the USA' can save manufacturing costs As it becomes increasingly expensive to outsource business to other countries, American companies are embracing the "Made in the USA" trend. Investing at home instead of on foreign shores can boost a company's productivity, and cut costs for businesses concerned about rising production prices.

Inventory management
With clients shopping online and in stores, it's important to manage inventory wisely and be able to quickly increase or pull the plug on certain products. When a product isn't selling well, a management team doesn't want to be stuck with a massive amount of inventory that has yet to be shipped from across the globe. When production facilities are located in the U.S., it's easier for businesses to move through the product quickly and make room for goods that will sell well.

While a product can arrive in days, or even hours, from across the country, it can take weeks for products to be shipped from overseas. Asking clients to wait a day before receiving their item is easier than asking them to wait three weeks while it is shipped from Asia. Managing inventory and stock is much easier when a company doesn't have to worry about shipping time, complicated logistics and miscommunications that can lead to serious delays.

Trend forecasting
When your products are made at home, it's easy to take advantage of local trends. When certain goods become more popular, it's easy to have them made quickly and ready to sell in no time. Consumer demand may rise sharply if a product becomes particularly popular, and it's much easier to manage production levels when a company's manufacturing is close by. It's easy to predict a trend when a business owner is local, and an L.A. company may be able to determine what they need before their supplier in China does.

Cutting costs
Moving production back to the U.S. doesn't just help with inventory management and make it easier to change orders quickly. It's also saving companies money on their production.

Many countries in Asia used to be known for their cheap labor and inexpensive supplies, which made it common for business to move their manufacturing facilities there. In the past few years, the cost of doing business in these traditionally inexpensive countries has been rising. This has made the U.S. a more attractive place to do business, and companies are noting the decreased costs and slowly moving their production back to the U.S.
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The Secret to Increased Sales are all in…..the Eyes?

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Consumer-products companies are utilizing new technology to better understand what shoppers really like. For decades, companies have conducted countless shopper focus groups to get feedback from real consumers and adjust the products accordingly with the hope of improving sales.

After a lot of research, they found that consumers are not a very reliable source of information in regards to their own actually preferences. They found out that many focus-group subjects try not to hurt the tester's delicate egos by telling them their product sucks and overestimate their likeliness of buying pre-packaged liver, pickle, and cranberry sandwiches.

Psychology and marketing researchers have found that people often don’t even realize what draws their eyes to certain products or how they actually feel about a product. They also often overestimate the likelihood they are going to buy something while ignoring other similar products or what they can afford. In a survey a lot of people might say a convertible Lamborghini is awesome and they are going to buy one, but how many actually do?

The big corporations of so many familiar consumable products, Proctor & Gamble, Kim-Clark, and Unilever, have been utilizing eye-tracking technology to find out what really grabs shoppers’ attention.

They created a “heat map” by measuring how long and how often test shoppers looked at specific products. Researchers used computer screens rigged with retina-tracking cameras to test new packaging. Where the test subjects looked at a product, the map would be highlighted in green. This would continue on a range from yellow to red on the map the longer they looked at a product.

By measuring how long the shoppers’ looked at different designs, they could determine what caught the shoppers’ attention the best and what the most common viewing starting point would be. One of their goals was to determine which designs grabbed shoppers’ attention within the first 10 seconds of viewing – which is a vital window in the shopping experience.

This technology is helping these companies come up with much better designs for their products as well as the optimum shelf layout and product placement. This would then increase the sales of those products.

So rest assured that next time you pick up that 12 oz. bottle of lemongrass infused extra sensitive acai scented shampoo with quinoa protein, thousands of hours of time, a boat load of money, and the latest technology determined what the bottle looked like and that it was exactly where you would see it best. So basically you had no choice but to buy it.
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Chocolate companies under scrutiny for sourcing practices

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Chocolate companies under scrutiny for sourcing practicesThe Hershey Company has recently been targeted for its sourcing methods in a letter signed by a group of natural food retailers, consumer groups and human rights organizations.

The letter was sent after the Fair Labor Association reported that one of the world's largest chocolate-growing regions, the Ivory Coast, continues to use child labor. Thousands of child workers on these farms are slaves or victims of trafficking, according to the U.S. State Department.

Hershey has not ignored consumer concerns about product sustainability and ethical sourcing. The company had two of its chocolate lines, Scharffenberger and Dagoba, certified by Rainforest Alliance. They have also committed to spend $10 million investing in sustainable chocolate research in Western Africa by 2017.

Sustainability and ethical sourcing have long been concerns of consumers. Critics of Hershey cite other chocolate companies and their commitments to strategic sourcing practices. By 2020, Hershey competitors Mars and Ferraro plan to have 100 percent ethically sourced cocoa. Nestle is currently working with the Fair Labor Association to see if it can improve its cocoa procurement strategies in Africa.

The local grocers that signed the letter expressed dismay over the issue, and voiced concerns about continuing to carry any Hershey products until the chocolate company boosts its efforts to ensure fair trade standards are met.
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Universities save money with green technology

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Universities save money with green technologyIn a time when university budgets are tight, administrators are doing everything they can to save money. While some schools are raising tuition rates or cutting programs, others are trying to develop innovative strategies to deal with lower university funding. One of the latest ways administrators are slashing costs is by implementing green energy sources.

Saving money and resources
With energy prices rising and concerns about the environment increasing, more people are turning to green energy solutions to cut expenses and pollution. Using renewable energy can be especially cost-efficient for universities, which often have multiple large buildings and dormitories to power.

One of the latest projects will take place in Kalamazoo, on Western Michigan University's campus. The school has new plans to install a solar system on the roof of the recently constructed Sangren Hall. In a true cost-cutting fashion, the school is using the leftover construction money to fund the project, rather than hiking tuition and fees. The school plans to bid the contract out for the best price, and officials hope to have reached a deal with a contractor by December.

"Adding the solar panel scope will lower the annual operating costs of the building for many years to come," WMU's Office of Sustainability director, Harold Glasser, told Michigan Live. "For Sangren, we indicated it was going to be a very energy efficient building and strive for a low operating cost to save taxpayers and WMU money each year."

A growing trend
Across the country colleges are taking the necessary steps to become leaders - in both cost cutting and green technology. Universities are increasingly using green technology to power their classrooms, laboratories and dorms.

WMU isn't the only school that wants to save money by powering its buildings with green technology. Ohio University recently announced a new energy performance contract that should save the school more than $38 million in water and energy expenses over 15 years.

The project will include HVAC improvements, pipe insulation, interior lighting retrofits and water conservation strategies.

The University of Iowa may also see the implementation of green technology in the near future. State senator Rob Hogg wants to spend more than $3 million on new solar technology so the school can enjoy energy savings of about $100,000 per year. Besides the cost savings, he also stressed that the project would create jobs and reduce carbon emissions.

It remains to be seen if the University of Iowa project will move forward, but in the meantime, higher education institutions across the nation are finding that green technologies can help save their strained budgets.
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The iPhone is a better concept than it is a product…

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The iPhone 5 is a fantastic product, there is no doubt about that, but I will not waste my time talking about the slick new look, or the bigger screen or the more efficient operating system. Quite honestly, I don’t care for iPhones that much, they are great phones and all, but to me they are just still phones; maybe I don’t have the technical expertise to operate it to its full capacity or the technological savviness to take advantage of all its features, and you know what, that’s Ok with me. What I do appreciate about the iPhone (from the first generation to the freshly released fifth installment) is the effect that it has had as a marketplace game changer.

As a consumer I’ve witnessed the iPhone do marvelous things, and again I’m not talking about the gadget wirelessly synchronizing with my car which allows me to call my family while its GPS guides me trough the city, (although I must admit, that is pretty impressive); but what strikes me the most is its capacity to affect consumer behavior in such a compelling way; it amazes me how one product can drive Apple’s competitors to adapt their business model not only to compete but to survive.

The iPhone 5 release took Apple’s stock value to over $700 a share (less than ten years ago the price was closer to $6), and made it the largest company by value today with a Market Cap of $656 billion. I mean, what kind of product does this? Let’s be serious, any product that generates mile long lines of people anxious to get a hold of a phone, must have a sound market strategy behind it. When I see those lines outside the stores every year or so, I realize that what Apple is selling is not a phone, but a concept; a way of living, I would even dare to say that what they really sell is an identity.

Everything behind the iPhone’s positioning in the market can be traced to pure consumer behavior and market strategy, where everything comes down to the person, not the item. Realistically speaking, widgets are just the means that companies use to sell a concept that satisfies a need much more profound than - in this case - making calls. Now, I’m not making any groundbreaking discoveries here, everyone knows all companies operate the same way, what is amazing here is the amazing effect that Apples’ market strategy has. A strategy that was tested with the iPod, perfected with the iPhone, and is now replicated with the iPad. Again, is not what you sell is how you sell it what makes/breaks the deal.

Let’s think about that for a second, while most companies pay special attention to R&D, and marketing, and budgets, there is no more powerful tool than a well designed strategy, Steve Jobs said it best when he said: “Is not asking them what they want and then making it, is making it and then telling them that they want it”.- To me that is the most accurate definition of strategic innovation.

I don’t need to have an iPhone or any other prime product to realize they represent much more than what the do; products are “great” because they work and because they make you feel good, which means that if you can find a way sell “satisfaction”, no matter what widget you use to sell it, because as long as it works, you will sell a lot of it…
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Universities boosting revenue by courting out-of-state students

on Thursday, September 27, 2012

Universities boosting revenue by courting out-of-state studentsBecause many state schools have struggled with higher education budget cuts, they're seeking out new ways to boost revenue and increase the amount of money they bring in annually. One of the latest ways they're attempting to do this is by increasingly reaching out to out-of-state students.

Out-of-state students pay more
Universities are seeking to add more out-of-state students to increase their annual revenues. Students who don't reside in the same state as the university they wish to attend typically pay higher tuition and fees, making them valuable to state colleges.

San Diego State University, a part of the California State University system, has recently jumped on this trend. The school decided to implement an admissions freeze for the upcoming spring semester, but this freeze applies only to California residents. Out-of-state students can still be granted admission if their program of choice has space available.

Recruitment becoming more common
Colleges across the country are seeking to benefit from students who will pay more in annual tuition. It's not just out-of-state students that are highly desirable - international students are recruited by state schools as well. A 2011 survey revealed that more than half of public university admissions officers were actively seeking students who could be charged a higher rate.

More frequent recruiting is building the number of non-residents attending public universities. The Huffington Post reported that at the Universities of Michigan, Virginia and Wisconsin-Madison, roughly one-third of students come to the schools from out-of-state or internationally. At the University of Iowa and Penn State University, that number is close to half. University budget planning is relying increasingly on students who pay higher tuition rates.

A controversial move
While some support public universities seeking more out-of-state and international pupils, others are dismayed at the move.

Naysayers claim this trend will hurt state residents who support their local universities and favor those who have the money to pay more. Supporters claim that increasing revenue by admitting more out-of-state students will benefit the entire campus population. University of California, Berkeley, chancellor Robert Birgeneau challenged the theory that non-resident students are hurting residents, and told the Huffington Post that in-state pupils benefit "using the resources provided by the increased tuition paid by our out-of-state and international students."

Because state university funding has been cut drastically over the years and the economy remains uncertain, schools are continuing to actively recruit out-of-state and international students to increase revenues and boost enrollment.
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Coca-Cola helps deliver AIDS drugs

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Coca-Cola helps deliver AIDS drugsWhen AIDS advocates in Africa noticed that Coca-Cola products were available in remote African villages, it sparked the idea that perhaps the company's supply chain experts could assist in delivering life-saving drugs to AIDS victims. The drugs are typically hard to come by, especially in the outlying regions of poor countries. In some regions, it is not uncommon for the drugs to take 30 days to get through a nonprofit's supply chain before arriving at their final destination.

Seeking help from a global supplier
In 2009, the Global Fund to Fight AIDS, Tuberculosis and Malaria asked Coke for assistance improving the organization's supply chain. The company agreed to help with a project in 2010, and the corporation worked with the Global Fund, Tanzania's Medical Stores Department, the Gates Foundation and Accenture Development Partnerships to get life-saving drugs to far-flung villages in Africa.

"What we noticed was that Coca-Cola's products always seemed to get to every remote region, and we thought that if they could get their products there, with their support, maybe we could, too," said Gabriel Jaramillo, the Global Fund's general manager, according to the Daily Beast.

Improving supply chains
The drug supply chain hasn't been perfected, according to a study from the Yale School of Public Health. However, it has greatly improved access to medication in rural regions. Ill patients now have an 80 percent chance of receiving the correct medication, up dramatically from only a 50 percent chance two years ago. While the old delivery systems took a month to get drugs to the correct area, supply chains have been optimized and delivery time is now estimated at merely five days.

Coca-Cola isn't doing all the work for the project - they give expert advice and input, but Tanzania's Medical Stores Department is chipping in and having its employees learn the basics of supply chain management, logistics and distribution. However, the project doesn't only involve learning about how supply chains operate. All the partners are working to develop infrastructure in poorer developing areas, so Coke products and medications can more easily get where they're needed most.

Due to the success of this program, it has expanded to Ghana and Mozambique, where supply chains are still too underdeveloped to get rural residents the drugs they need. By working with one of the world's largest distributors, groups looking to expand access to AIDS medication have developed a new system to better serve ill patients in remote regions.
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Low meat supply could raise prices

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Low meat supply could raise pricesThe drought that plagued much of the country this summer will likely result in higher meat prices at the supermarket. Because many crops fared poorly during the dry growing season, prices were raised accordingly, and hog farmers struggled to get enough affordable feed for their livestock. The drought has impacted prices throughout the food supply chain, and rising costs don't appear to be slowing down.

The impact of the drought
Because the hot, dry summer led to a corn shortage, corn prices have shot up this year. Many farmers use corn to feed their hogs and cattle, and have been hard-pressed to afford enough food for the animals. Bloomberg reported that corn prices reached a record high of $8.49 a bushel in Chicago in mid-August. Many farmers have decreased the size of their herds just to ensure they can feed their livestock as their direct material cost continues to rise.

To shrink their herds and save money on feed, farmers are sending more animals to be slaughtered. Excess pork on supermarket shelves has caused prices to drop for now, according to Bloomberg, and prices are down more than 8 percent for the year. The temporary excess slaughtering is causing a momentary surplus of pork for consumers, but this trend is not likely to last.

Pork shortages possible
Because hog farmers are cutting their herds to save money on feed, they are sending more breeding-aged females to be slaughtered. Fewer of these young females could mean that farmers have a difficult time boosting their herd numbers once corn prices drop back to a normal level.

Traders are expecting fewer pork supplies next year, and lean-hog futures for July delivery are up to more than 97 cents per pound, Bloomberg reported. The USDA also anticipates a pork shortage, and estimates that per-capita supplies will be at the lowest level since 1975.

Prices rising
The anticipated pork shortage will mean consumers are paying more for their meat. Higher pork and beef costs will raise consumer grocery bills even more, as shoppers are already suffering from record high food prices. This may also mean that in addition to more expensive groceries, consumers may also be paying more for meat dishes at restaurants.

"If you got sticker shock on pork, you'll have a heart attack when you look at beef," said C. Larry Pope, Smithfield Foods' CEO, according to Bloomberg.

As pork supply remains high for the moment, some consumers may want to stock up before limited products and higher prices hit their local grocery stores.
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Innovative Healthy Living

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Today, people use mobile applications for almost anything; socializing, games, cooking, gambling, reading, movies, just to name a few.  Individual organizations are developing applications of their own to market their products or service offering, attract new clientele, and help their customers.
 
A perfect example of this is WebMD’s launch, only a few days after the long waited AppleiPhone5 was introduced, of an application called Pain Coach that assists people in managing, tracking, and monitoring chronic discomfort in the body.  An article in eWeek.com explains “the app helps people manage chronic back pain, neck pain, nerve pain, migraines, osteoarthritis, rheumatoid arthritis and fibromyalgia (a chronic disorder consisting of widespread pain, tenderness and muscle and connective tissue stiffness usually associated with fatigue, headaches and sleep disturbances). The app also sends tips from physicians to users' iPhones on how to manage the pain.”
 
The app acts like a journal where people track their daily routines including activities, meal choices, medications, and any problems that occur.  This can be reviewed with physicians in order to assist in developing better lifestyle behaviors that should lead to feeling better, both physically and mentally. 
It is amazing to me how technology has advanced and what new innovations companies come up with to improve society, promote healthy living, and to better oneself overall.  The number of wireless users continues to grow along with applications available for any age group and in any industry; “the number of people using mobile devices such as the iPhone to access health resources like WebMD's apps grew 125 percent in 2011 from the previous year”. 
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Limited lithium supply could impact battery production

on Wednesday, September 26, 2012

Limited lithium supply could impact battery productionLithium is seen by some experts as the future of hybrid car batteries. Current electric vehicles typically use a nickel metal hydride battery, but high-performance lithium will likely take over soon. Because it is the premier choice for rechargeable batteries, this natural resource is rapidly depleting. With more electric cars in production and more electronics using lithium, it may be difficult for suppliers to keep up with future demand for the resource.

Resources scarce
As more drivers become concerned about high fuel prices and damaging vehicle emissions, they are increasingly purchasing hybrid or electric vehicles. However, while many people stress about fossil fuel-guzzling cars depleting scarce natural resources, not many seem concerned that hybrid car batteries are quickly using up much of the world's lithium.

Ona Egbue, an engineering management doctoral student at Missouri University of Science and Technology, is studying global lithium supplies, and how a shortage will affect global supply chains.

"Batteries make up 23 percent of lithium use and are the fastest growing end use of lithium," said Egbue, according to Phys.org. "However, there are issues associated with the present supply chain of raw materials for battery production, particularly the security and supply of lithium."

Just a few countries in the world have lithium reserves, and Egbue told the source that more than 90 percent of global lithium supplies are in just four countries. Most of the metal reserves are located in China, Chile, Argentina and Australia.

Suppliers could create shortages
Because lithium resources are limited to just a few places, creating strategic partnerships is key for battery manufacturers. Lithium procurement has become increasingly difficult in some places, such as Bolivia. While the country boasts significant lithium reserves, diplomacy between Bolivia and the U.S. has reached new lows. This strained political relationship has resulted in uncertainty as to how long the U.S. will have access to Bolivian resources.

With just a few countries supplying manufacturers with much of their lithium, scarcity could become a problem. Because there are limited suppliers, countries could potentially restrict their lithium resources, causing the direct material cost to skyrocket.

As electric cars and rechargeable batteries increasingly use lithium supplies, the availability of this resource dwindles even more. Companies concerned about limited sourcing options may look into other technology to create high-performance batteries with a more sustainable, easy-to-access material. In the future, resource scarcity or high costs could force manufacturers to develop alternatives to lithium-ion batteries.
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Campuses trying to cut expenses

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Campuses trying to cut expensesThe State University of New York has noticed major savings after a shared services agreement cut costs for multiple campuses. Multiple campuses have worked together and the service sharing initiative has saved millions of dollars. As university funding has been cut nationwide, higher education spending has become a serious concern for administrators. By having campuses work together to save money, SUNY has noticed significant benefits.

Sharing services to scale back on expenses
The shared services initiative aimed to increase collaboration between campuses and cut down on unnecessary spending. The money saved will be put back into the school's various campuses. Since the program was implemented last August, the campuses have worked together to determine where they could cut some overlapping services and merge others to save limited funds.

According to the source, Zimpher estimated savings of more than $2.5 million in the first year of the program. The saved money was funneled back into academics and more than 30 new faculty members.

"The SUNY campuses have made remarkable progress in this inaugural year of our shared services initiative - truly realizing the capacity of SUNY's systemness by sharing the costs associated with administrative salaries, IT functions, procurement and more - and freeing up funds for what matters most, our students," said Nancy Zimpher, SUNY's chancellor, according to local NBC affiliate WKTV.

New programs in the works
It's not just a select few campuses getting onboard with this agenda to save money. Twenty-seven different campuses are involved in a new plan to implement a comprehensive elevator and escalator maintenance service. Prior to the agreement, each campus was responsible for its own services, potentially costing the schools more money. By cutting the number of contracts from 27 to four regional agreements, the schools expect to enjoy significant savings.

Several different campuses are leading an initiative to save money on printing, according to the source. With the amount of mailing colleges do, obtaining letterhead and envelopes at a low cost is extremely important. SUNY Fredonia and SUNY Geneseo will begin receiving their printed goods from Alfred State College, as SUNY looks to expand the agreement to other campuses.

Procurement and services are not the only way SUNY campuses are enjoying enormous savings. SUNY Delhi and Cobleskill have created joint cabinets with shared presidents, vice presidents and several shared faculty members. Cutting back on administrative costs is helping these schools to scale back on their expenses even more, and the campuses plan to continue their initiative to cut costs even further.
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CFO.com and Source One Partner for Cost Management Seminar

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Source One Management Services, LLC and CFO.com have partnered to present "Cost Management; Eliminate Procurement Practices that Increase Costs and Risk" as an hour-long webcast on October 3, 2012, at 2:00 p.m. EST.  Instructors Bill Dorn of Source One and Richard B. Lanza of Cash Recovery Partners, LLC will address an audience of financial executives on the risks of common procurement practices and how they can lead to increased costs and risk for an organization. 

“Partnering with CFO.com allows us to draw the attention of financial executives to the growing risks in their supply chains and how misconceptions can expose an organization to risk and excess costs. Our real-world examples demonstrate how supposed best practices are actually the worst practices for your business and will provide insight and tangible solutions to improving efficiencies and reducing risk,” said Bill, Vice President of Operations for Source One.

Based on over twenty years of experience in their respective industries, Bill and Richard will identify the difference between traditional "best practices" and actual procurement best practices that can lead to cost savings and reduced risk.  This course is specifically designed for CFOs, controllers, internal auditors, business owners, and business unit managers who should be examining their organizations' procurement practices for risk and potential fraud.

“As a leader in the fraud detection industry for over twenty years, I’ve seen the havoc imposed by traditional procurement practices. Webcast attendees will learn how to identify and prioritize the red flags of corruption and potential noncompliance as well as the reporting tools that, when properly applied, can help detect fraud,” said Richard, President of Cash Recovery Partners.

To register for this event, visit the CFO webcast page

CFO Publishing is a recognized news source by financial executives who visit www.CFO.com for daily news, benchmarking tools, buyers' guides, special reports, and educational seminars. The website features educational webcasts on a variety of topics to help their readership learn about new accounting standards, recent capital-raisings, risk management, and professional career development. Recent online editions of CFO magazine are also available to CFO.com visitors.
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Study shows auto execs concerned about natural disasters

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Study shows auto execs concerned about natural disastersA new report by Interchange Europe has revealed that automotive executives are increasingly concerned about natural disasters interrupting their carefully planned supply chains.

With unexpected disasters hitting all corners of the world, it is likely for global corporations to see their procurement, shipping or raw material supply interrupted at some point. Hurricane Katrina, volcanic ash in Iceland, the earthquake and subsequent tsunami in Japan and severe flooding in Thailand are several examples of unexpected events that took a toll on companies with interests in these areas.

Because it's probable that many global corporations will encounter a supply-chain-crippling event at some point, many automotive executives are attempting to plan for such an occurrence. It can be hard for a company to constantly keep up with potential disasters, which means executives need to be prepared and update plans consistently.

"No one was prepared for the flooding and I think the lesson we take away from this for the future is contingency plans have to be kept fresh," said Samnuek Ngamtrakulchol, GM Thailand's human resources chief, of the recent flooding in the country. "You can't put them away in the drawer and think they are done because things change all the time."
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Consumers may see iPhone 5 shortage

on Tuesday, September 25, 2012

Consumers may see iPhone 5 shortageDue to unforeseen difficulties in the Apple supply chain, those who are seeking a brand new iPhone 5 could potentially have a hard time finding one in the coming months.

The Wall Street Journal reported that because of an unexpected increase in pre-orders for the product, Apple's suppliers are struggling to keep up with demand for more components. While pre-orders for the iPhone 4S numbered 1 million, requests for the latest model were more than double that - on the very first day the product was available for pre-order.

Because the iPhone 5 uses a new LCD screen technology, it is harder to manufacture in large numbers. Some component suppliers fear a screen shortage, which could result in fewer products on the shelves. The source reported that even though Apple uses multiple suppliers for its iPhone screen procurement, a hold-up at one of its Asian screen manufacturing facilities delayed production for weeks.

Apple has experienced product shortages with some of its previous electronics launches, so a limited iPhone 5 supply would not be unheard of. Despite rumors of a shortage, Bloomberg reported the company could sell 10 million of the latest phones this weekend. With high sales numbers and unrelenting consumer demand, there is a possibility the screen supply shortage could make the phone difficult to find in the coming months.
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Microsoft PCs infected on the way to consumers

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Microsoft PCs infected on the way to consumersMicrosoft researchers recently discovered some of the brand's computers manufactured in China were infected with malware. While finding a laptop with a virus is not uncommon, these computers were loaded with the software before they ever hit the consumer market. Because no customers ever used the computers, experts have determined they were infected at some point in the Microsoft supply chain.

Virus-infected electronics
The computers were preloaded with software that would allow hackers to access sensitive information. By turning on a microphone or webcam, the cyberthieves can monitor what a user is doing with their computer, and obtain passwords and confidential financial information.

Richard Domingues Boscovich, the assistant general counsel for the Microsoft Digital Crimes Unit, revealed in a company blog post that 20 percent of the PCs a Microsoft research team purchased in China were infected with malicious software before they were ever sold.

Many industries, including the electronics field, rely on the inexpensive parts and labor in China to cut down on manufacturing costs. Large companies that build more products with many parts, such as computers, have complicated supply chains in the region. These complex chains mean the viruses could have come in parts from a wide range of suppliers.

Microsoft isn't the only one having problems getting untampered with electronics to consumers. Several years ago, multiple U.S. government agencies purchased Cisco routers from China to handle their web traffic, according to the Huffington Post. The routers were fake, and included software that could allow hackers to access government systems. The Pentagon's supply chain was also found to have counterfeit electronics, which were purchased for use in Air Force cargo planes and helicopters.

Supply chains still rely on China
Despite the cybersecurity risks and counterfeit goods running rampant, large companies are often still choosing to manufacture their goods in China.

"It's one of the toughest cybersecurity challenges out there," said Tom Kellerman, Trend Micro's vice president of cybersecurity, according to the Huffington Post. "There's not really a solution unless you start to only build computers in the USA again."

It seems that many companies find the cost savings of operating in China more beneficial than moving their production to another country. But because electronics supply chains are so complex and include a vast number of suppliers, it is almost impossible to stop viruses from being loaded onto goods overseas.

As companies deal with more associates and complexity in their supply chains, the risk for counterfeit goods and security concerns is heightened. Boscovich told the Huffington Post that distributors, resellers and suppliers need to implement strict security policies to ensure their products are virus-free and weed unreliable partners out of supply chains.
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Tata Motors considers expanding production overseas

on Monday, September 24, 2012

Tata Motors considers expanding production overseasTata Motors, the parent company of Jaguar Land Rover, is thinking about expanding its production facilities and building manufacturing facilities in the Middle East and across the world. The company is developing global expansion plans in an effort implement cost savings measures and better serve its worldwide market.

Middle East may be a new production hub
Saudi Arabia is one country that has caught the attention of Tata Motors chairman Ratan Tata, according to Autocar India. The largest aluminum manufacturing plant in the world is currently being built in the country, giving Tata Motors a potential new supplier for the material it needs to build it luxury vehicles.

"This smelter could make the production of aluminum in Saudi Arabia very competitive," Tata told the magazine, according to Fox News. "So taking a really long-term view, if we put an assembly plant there with a large press shop, given our commitment to aluminum in our products, we could have an interesting business case which we are examining today."

Fox News reported that this aluminum facility is expected to provide companies with the world's most affordable aluminum, which could significantly cut Jaguar Land Rover's direct material cost if the luxury automaker chooses to use the plant as a supplier. It would also increase the ease of aluminum procurement for the auto giant. The plant would benefit both Jaguar Land Rover and the Saudi Arabian economy. The country is attempting to diversify its economy, which currently relies heavily on oil, and develop its automotive industry.

Global expansion
As the company sees a continued demand for its vehicles in new markets, it is looking to increase its presence across the globe. Various nations have demanded more of the company's vehicles, making it more cost effective to begin production in new corners of the world.

The Middle East isn't the only region where Jaguar Land Rover may be expanding its production facilities. The company launched a plan to open a manufacturing plant in China, pending approval from the Chinese government. Low manufacturing costs have lured companies to China for years, and this would be Jaguar Land Rover's first production hub in the country.

Aside from China, the Jaguar Land Rover also has plans to construct an assembly plant in Brazil. The company's CEO, Ralf Speth, said the project is currently on-hold due to regulatory problems, The Guardian reported. The company already has other assembly plants in India and Kenya as part of a cost saving global expansion plan.
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Corporations addressing ethical sourcing concerns

on Friday, September 21, 2012

Corporations addressing ethical sourcing concernsRepresentatives from Wal-Mart, Philip Morris, Coca-Cola and other large corporations recently met with labor advocacy groups and government officials to discuss labor standards within their supply chains, the Huffington Post reported.

Meeting to discuss standards
The meeting was proposed to address strategic sourcing and fair labor practices. It was sponsored by Wal-Mart, human resources giant Manpower Group and anti-human-trafficking organization the Katie Ford Foundation.

The workshop was not open to members of the media, and most corporations did not disclose their participation. However, a Wal-Mart spokesman told the Huffington Post the corporation has had long-standing involvement and dedication to ethical sourcing and labor practices.

"Wal-Mart is committed to strong ethical sourcing standards for suppliers and we have worked diligently to help ensure the products we sell are produced in a way that provides dignity and respect for workers in our supply chain," Lorenzo Lopez told the source in an email. "As part of this commitment, we are looking to develop a program for suppliers that will include education, training and resources to help ensure compliance with our standards."

Corporations under scrutiny
As consumers have become more aware of labor practices around the globe, there has been more of an incentive for large corporations to develop and publicize their ethical sourcing practices and fair labor standards. In order to keep manufacturing costs low, employees sometimes work in less-than-ideal conditions.

Some labor groups have been openly critical of the treatment workers are exposed to, and it has left some multinational companies scrambling to repair their images. Oxfam and the Farm Labor Organizing Committee released a report that slammed working conditions in the North Carolina tobacco industry last year, leaving consumers questioning the industry's policies.

Change for the future
Labor advocacy group Verite coordinated the event, and CEO Dan Viederman told the Huffington Post that the event consisted of "a group that potentially can achieve concrete change."

Many corporations already have ethical sourcing and worldwide labor practice guidelines they promote. Wal-Mart, for instance, lists standards for its suppliers and conducts ethical sourcing audits in an attempt to ensure its supply chain is free of substandard labor practices. PepsiCo also has publically stated its commitment to responsible sourcing and social responsibility.

Consumer attention and labor organization criticism has already led some large corporations to make changes to their supply chains, source strategically and invest in guidelines for their suppliers. With continued pressure, more companies may begin to make similar changes to promote their corporate social responsibility.
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Universities try to boost revenue with double degree programs

on Thursday, September 20, 2012

Universities try to boost revenue with double degree programsUniversity funding has seen substantial cuts over the past few years, and colleges are working hard to find ways to attract students to their schools and increase tuition revenue. Because they want to be seen as offering the best possible value, some universities are allowing students to earn two separate degrees for the cost of just one diploma.

Undergraduates taking on graduate coursework
While some students in the past chose to double major in order to get the most for their money, modern college students are taking advantage of new college policies that allow them to earn two separate degrees.

Stanford University, Northwestern University, Harvard University, Emory University, Claremont McKenna College and Brandeis University have developed new programs allowing students to pursue both an undergraduate and graduate degree in just four years. Because many of these schools assess tuition by semester rather than credit hours, it usually does not cost students any more than they would expect to pay for their bachelor's degrees.

Students, drawn in by this deal, are often thrilled about the possibility to earn a graduate degree for just the cost of their undergraduate tuition. Even though they typically need to take extra classes each semester and participate in summer sessions, many students see the opportunity as too good to pass up, which is precisely what universities have been hoping for.

Double graduate degree programs increasingly popular
Other schools have developed double graduate degree programs to attract students that have already earned four-year diplomas. Increasingly popular are J.D./M.B.A. programs, which allow students to earn degrees in both law and business management in a timely fashion. Schools such as Northwestern Illinois University and Columbia University emphasize that their accelerated programs allow students to earn both degrees in a much shorter time frame than pursuing them separately. While obtaining a J.D. and M.B.A. separately could take five years, some universities are stressing that their three-year double program is a better value.

Institutions are stressing the value of their M.B.A. programs and some schools offer joint programs in fields other than law. Education, medicine, public policy and environmental studies are just a few of the fields for which schools are creating dual M.B.A. programs.

Universities have struggled to attract new students as tuition rates have skyrocketed and the economy has remained uncertain. As more young adults hope to one day attend graduate school but are deterred by the cost of college, offering a two-for-one deal is a way for universities to boost enrollment.
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Melting Arctic ice may lead to new shipping routes, natural resources

on Wednesday, September 19, 2012

Melting Arctic ice may lead to new shipping routes, natural resourcesAs the Arctic ice melts, nations across the globe are getting ready to take advantage of the plentiful natural resources and new shipping routes. The melting has the potential to benefit these countries greatly, and they are eager to explore the possibilities the region has to offer.

New shipping routes opened
The large sheet of Arctic ice has long hindered shipping efforts across the globe. Because this ice is melting at a rapid rate, it is creating new shipping routes. These shortcuts have the potential to get raw materials and goods to their final destinations much faster than they could have arrived in the past. The shorter distance also means suppliers can enjoy greater cost savings, as they spend less on fuel.

Valuable resources unearthed
Just as important as the potential new shipping routes are the increasing discoveries of valuable mineral deposits in Greenland. The shrinking ice cap has revealed large amounts of rare metals and minerals across the island.

Many of these natural minerals are crucial to manufacturing technological goods such as cell phones and military guidance systems. The new discoveries could lead to more efficient sourcing practices for companies with production facilities close to the Arctic and a lower direct material cost.

It is estimated that more than 20 percent of the planet's oil reserves are in the Arctic. With this statistic in mind, oil and gas companies are exploring potential new reserves further north. Some drilling corporations hope to benefit from big new oil discoveries as the ice continues to melt. This could reduce the cost of energy needed to ship goods across the world.

Many countries have Arctic interests
Countries from across the globe have been paying more attention to Arctic nations as shipping routes open and valuable minerals are unearthed. The New York Times reported that in the past year and a half, Greenland has seen an increase in diplomatic visits from the U.S., China, South Korea and the European Union. China is hoping to see a benefit from the discovery, and is investing in mines in Greenland as a goodwill gesture.

"We are treated so differently than just a few years ago," said Greenland's vice premier, Jens Frederiksen, according to The New York Times. "We are aware that is because we now have something to offer, not because they've suddenly discovered that Inuit are nice people."

In the past few years, multiple countries have applied to join the Arctic Council at permanent observer status. This would allow them to present their opinions about Arctic issues, but they would be prevented from voting on important issues. Countries are pressing for inclusion in the council to increase their Arctic presence and potentially access the new benefits the region has to offer.
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Source One Selected to Present “Huge Savings Now Possible with Collaborative Sourcing” for Education Industry Buyers and Suppliers

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On October 2, 2012, Bill Dorn and Joe Payne will speak to an audience of CFOs, procurement managers, IT managers, and strategic suppliers for higher education institutions at the 2nd Annual Unimarket User Conference - Unimarket NOW at the Westin Baltimore Washington Airport Hotel outside of Baltimore, Maryland.  In the morning, Bill and Joe will participate in a panel discussion, "Strategic Alignment with Suppliers for Mutual Benefit."  In the afternoon following the panel discussion, both will present "Huge Savings Now Possible with Collaborative Sourcing."


"With funding cuts passed down from the Federal and State levels as well as college and university students' increasing price sensitivity to tuition hikes, the higher education industry needs to evaluate its current processes and how the schools will handle their shrinking budgets.  Our presentation will provide techniques to help education procurement professionals create collaborative relationships with other institutions and suppliers and leverage these partnerships in the buying process," said Bill, Vice President of Operations for Source One.

Co-authors of "Managing Indirect Spend: Enhancing Profitability Through Strategic Sourcing," Bill and Joe are both experienced speakers having spoken to numerous business leaders across many industries on a variety of sourcing and procurement topics.

If you are interested in meeting with Bill and Joe while they are in the greater Baltimore, Maryland area, please contact mmiller@sourceoneinc.com to schedule an appointment.

A leading eProcurement company, Unimarket serves as a major player in the higher education industry as a multi-tenant Software-as-a-Services (SaaS) providing software to help streamline procure-to pay operations and achieve cost savings. The Unimarket NOW conference will include panel discussions and presentations by leaders in higher education procurement pertaining to online spend management, significant savings opportunities, and cloud-based procurement software. For more information about Unimarket and this event, visit the conference website for further details.
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Colleges focus on marketing departments to boost enrollment

on Tuesday, September 18, 2012

Colleges focus on marketing departments to boost enrollmentUniversities nationwide are struggling to attract new students, as low job-placement rates and the high cost of college deter potential pupils from enrolling. University funding for state schools has been cut, and private colleges are no longer seeing the amount of donations they once did. Because higher education has become less affordable over the years, schools are working hard to bring in more students to boost revenue.

Bringing in marketing experts
With enrollments slipping, colleges are spending more money than ever on their marketing departments. While large corporations have long relied upon chief marketing officers to run their advertising campaigns, universities are now beginning to hire their own CMOs. The Wall Street Journal reported that at the 2011 American Marketing Association's Symposium for the Marketing of Higher Education, attendance was up to 727 people, compared to just 393 in 2001.

The source revealed that colleges are bringing in marketing experts from the corporate world to attract new students to their schools, and run their marketing departments more like businesses than universities. Purdue University has marketing executives who came to the school after working with large companies such as State Farm Insurance and Limited Brands.

'Branding' a school
Rather than just selling a school's good points, college marketing departments are creating unique identities for their universities. Their job is to connect the messages from each of the school's departments and create a coherent, clear marketing strategy to boost the university's reputation.

These departments are responsible for creating a message that reaches across the entire campus. Marketing plans often have to include a variety of platforms to reach potential students. They usually include strategies such as updating social media pages, mailing brochures and creating commercials.

Creating an identity for a school has to do more than get potential pupils interested in the university's culture. Marketing departments need to work to get parents involved, while assuring students of their independence. Trying to lure in pupils is sometimes a difficult balance because students want to make their own decisions, but parents want to stay in the loop.

The backlash
There are some who feel that academic institutions should not be treated as businesses and have no need for marketing departments unless they are providing their customers with a faulty product. Entrepreneur Peter Thiel told The Wall Street Journal that universities are no longer focused on higher education, and instead are worried about sales.

"If you need large marketing budgets, it suggests that something has gone wrong with the substance of the product. ...how many nonprofits spend this much on marketing?" he said to the source.

While some may dispute the need for university marketing departments, many colleges are finding that big-budget marketing efforts are working. By creating a special identity for their school, colleges are able to draw new pupils into the university's unique culture.
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It’s 2012; Do you know who your suppliers are? – A quick look into C-TPAT.

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In recent days, our company has had the opportunity to take a close look at a trending certification program that for many businesses is not only becoming a best practice but an essential piece of its corporate governance. I’m referring to C-TPAT, a voluntary partnership between established corporations importing into the United States and the U.S. Government throughout the Customs and Border Protection (CBP) agency. We have learned a lot over the last month, and for a company like ours, this type of Government-Business partnership is worth talking about. Why? Well, because C-TPAT is all about supply chain optimization!

C-TPAT is a program created by the Department of Homeland Security in 2002 to minimize risks and threats on cargo moving through or entering the United States. C-TPAT stands for Customs Trade Partnership Against Terrorism, and it was created as a direct response to the ever increasing complexities on maintaining cargos secure and compliant. The reality is that these complexities were (and still are) nothing more than a wide variety of risks that became too frequent and feasible that could no longer be ignored.

On one hand companies (importers) suffered from product tampering and contamination, drug (and people) smuggling, supply disruption, theft, and so on…and not only that, even if their cargo was clean they still had to face long waiting hours at the borders in order to clear it, which resulted in storage fees, penalties, overcharges but most importantly production delays and supply chain disruption. On the other hand you had CBP, the government, whose problems were different, screening every shipment and cargo was not only inefficient but costly as well. So what happened? Both the government and importers started to understand that some sort of collaboration between them had to exist if they ever wanted to fix this situation for their mutual benefit. The solution came about and CTPAT was born; one of the most comprehensive strategic partnerships between businesses and the government created so far.

CTPAT presented the basic argument of letting suppliers to self-assess their supply chain, evaluate their suppliers and resolve their internal security issues by following and complying with a standardized set of requirements and regulations and proposing their own solutions. Based on their supply chain risk and the company’s plan to mitigate CBP would review and admit them as a member of the C-TPAT program. Initially the company would be welcomed as at Tier I but after some time and the depending on a second validation of their risk level and controls, the company would be eligible to a higher Tier II or Tier III status that would grant them even more benefits. Depending on the tier these benefits would potentially allow the applicant to become a trusted importer, thus expediting cargo screenings, minimizing audits and reviews, reducing costs associated with these practices and aligning resources to join other global programs.

So what are the advantages to C-TPAT? Well, the answer is twofold, for one is a voluntary compliance program that grants the many benefits previously discussed, and two, it has global reciprocity, which means that certified C-TPAT companies are also recognized and eligible for the AEO programs of the European Union, Australia and Japan as well as the Singapore Customs Secure Trade Partership program, to name a few.

So what does an importer need to do to achieve such a reputable certification? Well, among other things and many forms to fill out, the applicant would have to follow the C-TPAT recipe, which is properly referred to as the “5 Step Supply Chain Security Risk Assessment Process” and consists of the following:

1. Mapping Cargo and Business Partners.
2. Conducting a Threat Assessment.
3. Conducting a Security Vulnerability Assessment.
4. Preparing an action Plan to address vulnerabilities.
5. Documenting How the Security Risk Assessment is Conducted.

Each one of these steps is a key constituent of the risk assessment process for the C-TPAT program. While you may not know how to conduct this five step assessment, there are many companies out there now who specialize if conducting it for you, and bring your company into the program.

While there is a set of tangible benefits of being C-TPAT certified (at any tier) it also requires a major commitment on maintaining a compliant and closely regulated supply chain, from suppliers and brokers, to consolidators and distributors. C-TPAT has truly become one of the best regarded certifications for global supply chain and is an element of corporate social responsibility and citizenship, it is the quintessential strategic partnership between a business and the government and is just a great definition of a best practice.
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Sustainability a growing concern for businesses

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Sustainability a growing concern for businessesSupply chain optimization has long been a concern for businesses, but lately supply chain sustainability is an equally important issue. Companies work with suppliers across the globe to ensure they're getting the best deals on their raw materials. However, recent concerns about environmental sustainability have some businesses reworking their procurement and manufacturing processes to ensure their practices are sustainable.

Sustainability a growing problem
There are many sustainability issues facing businesses today. Environmental issues such as climate change, pollution and wasteful use of natural resources are concerns for many. Other problems involve human rights abuses and political turmoil. Because there are so many aspects to this growing movement, it can be difficult to put into place policies that will solve all sustainability issues.

Advocacy group Ceres determined that because this issue is gaining traction with the public and governments across the world, it may encourage more companies to jump on the bandwagon and publicize new sustainability efforts.

"With the regulatory, reputational, legal and operational risks associated with sustainability issues rising, companies must understand how every one of their suppliers is performing on key environmental, social and governance metrics," wrote Ceres corporate program director Amy Augustine.

Concerns leading to new business practices
Implementing sustainable business practices can be a great public relations move, but it is hard for some global corporations to measure their results. Enormous companies often work with multiple suppliers, and it can be difficult for them to gauge another corporation's sustainability practices. Corporations that have huge global supply chains may even find it difficult to monitor their own sustainability.

Ceres conducted a yearlong survey to determine the best practices in supply chain sustainability. Out of 600 major U.S. corporations questioned, more than 70 percent took minimal or no steps to ensure their suppliers had policies regarding environmental or human rights policies.

However, more industries and individual companies are coming up with techniques for evaluating suppliers and determining if they can ensure the sustainability of their materials and processes. More businesses are publicly committing to increasing sustainable practices, such as cutting down on water use, installing green technologies, improving worker conditions and using green materials.

The "greening" of supply chains may be hindered by the complexity and lack of transparency throughout the system. However, more companies are working diligently to ensure their sourcing strategies, shipping methods and materials are more sustainable than in the past.
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Companies cut costs by going green

on Monday, September 17, 2012

Companies cut costs by going greenBusinesses are increasingly concerned about using renewable materials in their production processes, and not just because they're environmentally friendly. More frequently, corporations are strategically sourcing green products to save money.

The 2012 Corporate Renewable Energy Index listed more than 300 companies based on their renewable resource procurement practices, and surveyed the businesses on why they used such tactics.

The report discovered that more businesses are starting to ensure more of their materials are green or renewable. Even though not all companies are employing strategic sourcing to obtain green materials, many are slowly beginning to procure these goods, which can cut costs for corporations.

Many businesses are also often employing green techniques throughout their production processes. After they've procured green goods, they use renewable energy resources to power their facilities. Green energy, such as hydroelectric power, solar power or wind turbines, allows producers to cut down on manufacturing costs.

The CREX report predicted that this trend will only continue, as companies look for ways to be socially responsible and save money. Some businesses are also motivated to use renewable energy or source green materials because of government incentives. The report noted that policymakers have the potential to influence the future sourcing choices of some companies with taxes or business incentives.
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Government pushes strategic sourcing

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Government pushes strategic sourcingPresident Barack Obama's administration has increased the pressure on government agencies, requesting that they adopt strategic sourcing policies to obtain greater savings.

Federal Computer Week reported that Joe Jordan, an administrator for the Office of Federal Procurement Policy, said low budgets may be encouraging agencies to source strategically in an attempt to save money. However, he mentioned many agencies are reluctant to give up control of their decisions.

Not all government agencies are hesitant when it comes to updating their procurement policies. Some have embraced it, while others are behind the curve. According to the source, Jordan said various agencies are at vastly different points when it comes to their sourcing strategies.

The administration recently upped its interest in agency sourcing. During a September meeting, the President's Management Advisory Board's Strategic Sourcing Subcommittee determined that an administration mandate for sourcing vehicles may be a way to ensure agencies obtain their vehicles appropriately. The matter has yet to officially be decided.

At the meeting, the subcommittee also suggested that agencies review a book detailing some strategic sourcing best practices to ensure they are taking the appropriate steps to save money wherever possible.
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Nintendo to reduce conflict mineral use

on Friday, September 14, 2012

Nintendo to reduce conflict mineral useAfter a recent study by the Enough Project ranked Nintendo last among electronics companies ending their use of conflict minerals, the company is publicly taking steps to reduce the minerals in its new electronic devices.

Conflict minerals include tin, tungsten, gold and tantalum. These materials are mined in dangerous regions such as the Democratic Republic of the Congo, and armed groups often profit from forcing workers to mine the goods for little pay. CNN reported that the International Rescue Committee estimates 5.4 million people have died as a result of the civil unrest since 1998.

Many electronics rely on these minerals to function correctly. Because most electronics companies are not directly involved in the mining process, they obtain the products from other sources. The Enough Project requests that corporations audit their procurement processes to determine if conflict minerals are being used in their products. Electronics companies that undertake stringent responsible mineral sourcing practices, such as Intel and HP, ranked highly on the Enough Project's report.

As consumers become more aware and concerned about the products used to make their goods, they are putting pressure on companies to commit to responsible sourcing. The group Walk Free planned to protest at Nintendo's recent event announcing the launch of the Wii U. They were unable to hold a protest, but did form an online petition protesting what they saw as Nintendo's weak stance on conflict minerals.

Nintendo has stated that it is committed to social responsibility and revealed that it has an agreement with its partners that aims to eliminate the conflict minerals from its products. Nintendo said that its suppliers will not use conflict minerals in the company's 3DS, Wii or Wii U in order to stop the human rights abuses in the Congo. Although Nintendo outsources the manufacturing and assembly of  its products, its production partners have agreed to implement strategic sourcing practices in order to avoid conflict minerals.

It is unclear whether Nintendo will perform any sort of procurement auditing to ensure conflict minerals do not enter its supply chain.

The company's latest corporate social responsibility report details the steps Nintendo takes to ensure social responsibility across all platforms. These steps include reducing water use, recycling materials, producing energy-efficient products and working to eliminate certain chemicals from their goods.
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Procurement technology to gain traction

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Procurement technology to gain tractionA new study revealed that organizations are becoming increasingly aware of and seeking out technology that can be used to help manage their businesses. This technology includes popular supply management software, as well as newer cloud-based applications.

Companies are beginning to implement this new technology to give them an overview of their vendors or suppliers, as well as their own performance. The systems give businesses the ability to better trace supplies and shipments.

Special software or cloud technology allows them to stay on top of industry and consumer demands. They can use the latest breakthroughs to handle vast amounts of information more easily. Orders, billing, shipping and storing products can all be located in the same place when a company implements this new technology.

When using technology to determine procurement best practices, cloud-based systems come with several drawbacks. Businesses need to carefully consider how they would deal with security issues or the event of a system collapse.

Even though cloud technology is shunned by some companies, large corporations such as Pfizer are using it to help them keep track of their entire supply chains. If an organization needs to connect with a vast number of suppliers, it can be simpler to implement cloud technology for every business involved rather than require a large number of companies to use the same software. Some are drawn to cloud-based systems because they can easily track their procurement practices and determine how to improve them.
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Pfizer reveals cloud-based technology

on Thursday, September 13, 2012

Pfizer reveals cloud-based technologyPharmaceutical giant Pfizer has engaged in supply chain optimization by utilizing cloud technology to create a more efficient system, according to the Financial Times.

The source reported that for more than a year, Pfizer has been reworking its IT network to implement this technology. The company and its partners are working with a cloud technology that allows everyone involved to connect to the system, which gives Pfizer a virtual model of its supply chain and transportation systems.

This new development will assist Pfizer in its role as one of the world's leading drug providers. With the cloud technology fully implemented, the company is able to track or trace any shipment across the globe.

"Right now, there's a map that shows all of our origins and destinations, and we have got complete track and trace (capabilities) over anything that is moving inside those lanes from a logistics perspective," said Pfizer's vice president, Jim Cafone, according to the Financial Times.

Pfizer chose to have its hundreds of partners connect to a cloud-based system, rather than demanding each company implement the same planning software. With this technology, Pfizer is able to quickly add or remove partners.

The cloud-based system may also assist the company in its cost savings efforts, because it allows Pfizer to quickly handle disruptions and see exactly where losses or problems occur.

Cafone told the Financial Times that the system was necessary because the company's supply chain was becoming increasingly intricate. Keeping track of the Pfizer's partners became just as important to the company.

"After the Wyeth acquisition we looked at the complexity of our network and realized that we not only needed to manage the tapestry of internal manufacturing and logistic sites, we also needed to manage and really understand what's going on with our external trading partners," he said, according to the source.

Pfizer's supply chain is especially complex because it deals with both the patented and generic drug markets. While the generic drug market typically sees a focus on efficiency and cost-focused shipping, the patented medications require the company to respond quickly and sometimes require an investment in more expensive, specialized logistical tactics.

Supply chain management has become a concern for the company, as it oversees thousands of drug shipments. The new program will assist Pfizer in ensuring that its supply chain operates in an efficient manner.
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New and Improved Procurement Value Survey!

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In conjunction with renowned supplier discovery and product sourcing expert, ThomasNet, Source One has released a new and improved Procurement Value Survey to  collect information regarding the current perception of procurement's value within organizations.  The new version has revamped questions with more respondent-friendly functions and capabilities.

The 15 minute survey discovers perceptions of internal procurement departments, their perceived value, and how savings initiatives are used and measured. While respondents remain anonymous in the final survey results, participants will receive a copy of the survey findings and will be entered into a drawing to win a Google Nexus 7 internet tablet. Please see the Survey Terms and Conditions for details on the drawing.

You can also take the survey via our Facebook Page and share the survey link with your peers.
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'Insourcing' becoming more popular

on Wednesday, September 12, 2012

'Insourcing' becoming more popularAfter years of sending jobs overseas, companies are beginning to bring them back to the U.S. as part of their cost savings strategies. Many businesses that previously had their manufacturing hubs in Asia have found that the rapidly rising costs make it less effective to produce their goods there than in the U.S.

Businesses that have manufacturing centers in Asia are becoming increasingly concerned about rising shipping costs. It is becoming expensive for companies to have their goods made on one continent, then shipped across the world to be sold. While energy prices at home have dropped, it makes sense for businesses to bring production back to the States and enjoy the much lower cost of delivering goods.

Manufacturing costs in Asia are also on the rise. While many companies previously shifted their manufacturing overseas to reduce money spent on employee labor, it is no longer cost effective for some businesses to keep spending money on foreign workforces. As worker wages in Asia continue to increase, many countries are no longer the low-cost production havens they once were.

Shipping costs and labor wages are not the only reasons American companies are bringing production back home. The Wall Street Journal reported that a survey by Massachusetts Institute of Technology professor David Simchi-Levi revealed companies have more motivation for insourcing their manufacturing.

The survey showed that one reason companies are eager to bring production back to the U.S. is to be able to get goods to the market more quickly. Rather than waiting on shipments from across the globe, their products will be closer to where they eventually need to be. Businesses also cited intellectual property protection as one of their reasons behind the insourcing trend. Many businesses also named customer service issues, such as faster response to orders and higher quality products, as reasons they would like to produce more goods in the States.

Several large companies have made recent announcements about their insourcing efforts. Google announced that its Nexus Q would be manufactured in the U.S., something not commonly seen in the electronics industry. Coffee giant Starbucks recently built a manufacturing center in Georgia and sourced a line of mugs from an Ohio ceramic manufacturer. Caterpillar, General Electric and Ford have also jumped on the insourcing bandwagon and publicly committed to bring jobs back to America.

As more American companies consider the perks of taking production back to the U.S., foreign businesses are also considering the cost of doing business in the country. Japan's Yaskawa Electric recently made the decision to built a new plant in Illinois rather than China. More businesses are finding that insourcing can be a way to step up cost reduction efforts, as the global manufacturing market continues to change.
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