RFID technology makes restocking retail stores easier

on Wednesday, October 31, 2012

RFID technology makes restocking retail stores easierSome of the latest technological developments are making it easier for retailers to know when it's time to restock a product, track their logistical operations and better serve shoppers. One of the newest trends retailers are jumping on is radio-frequency identification, or RFID chips. These tiny devices can be attached to a product and track goods all throughout the retail supply chain.

Logistics efficiency
Products that contain RFID technology make it easy for retailers to keep an eye on their goods as they flow through manufacturing facilities, shipping sites, stockrooms and store shelves - in fact, they can be traced until they're headed out the door with customers. This means tracking shipments is suddenly much easier, especially in the unfortunate event of a recall or missing shipment.

Inventory management
Using RFID devices also makes it easier for merchants to know exactly what they have in stock at all times. Because products that contain the technology are easily tracked, a retailer will be able to determine if they aren't getting enough of a product, or if they're experiencing problems with theft every time they restock a popular good.

RFID can serve to alert retailers when they're low on a product and ensure they order it before it completely sells out. This prevents companies from encountering inventory shortages or surpluses from requesting too many or too few popular products. Being able to better track inventory will help to ensure merchants are using the best retail procurement strategies they can.

Customer management improvements
There are plenty of companies that are beginning to see the value in RFID technology and using the devices in the products to streamline their processes and help consumers. Wal-Mart has already gotten started using the solution to manage retail logistics, clothier American Apparel has used it to reduce theft and J.C. Penney is also working on implementing the devices on their products. Penney's CEO Ron Johnson has publicized plans to use RFID when the company begins to revamp its checkout process in 2013.

This checkout process will use the RFID devices to make the purchasing experience easier and shorter. The company plans to combine its use of RFID technology with iPads and iPods to ensure customers can avoid long lines and shorten the traditional purchasing process.

Even though the technology typically costs more than traditional barcode tracking technology, many retailers seem to feel it's worthwhile and can help them work more efficiently. By being able to keep an eye on shipments, know when to order goods, restock in a timely fashion and heighten the consumer experience, it's likely even more merchants will start using RFID technology in their stores.
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Some Upside to Sandy’s Destruction

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The now historic storm, Hurricane Sandy, swept through the North East and devastated many coastal and inland communities. New York subway stations are flooded, casinos in Atlantic City are closed, and many people along the east coast are still without power. Though this storm has left residents upset and distraught, at least it has somewhat affected the one thing that I’m sure has caused everyone in the US much headache in a positive way – gas prices!

Since the hurricane has shut down highways and air travel across the east coast, according to oil analyst Tom
Kloza, "We’re going to see prices move lower". RBOB gasoline futures were down a half percent in afternoon trading yesterday and the national average for unleaded regular gasoline was $3.53. Although $3.53 is only a penny lower than Monday, it is 11 cents cheaper than last week and Kloza believes prices will continue to be lower than what they were a year ago at this time.

The storm hit South Jersey Monday evening and then turned upward to New York and then New England. The storm also merged with another storm and impacted Maryland, Delaware and some areas of the Midwest. This caused a halt in traffic on Monday as many city governments pleaded with the public to stay indoors until the storm passed. As a result, many schools and businesses were closed on Monday and Tuesday. Toppled trees and flooded highways also contributed to this. The decrease in travel demands ultimately led to a decrease in fuel costs. According to the Huffington Post, Sandy also hit during a time of year when gas prices are relatively lower than other months like July and August.

With Thanksgiving weeks away, demand for travel and gas will probably not see much of an increase until then. Even with a spike in price, analysts believe they will be short lives. We all hope so.
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Midwest's natural gas may boost manufacturing

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Midwest's natural gas may boost manufacturing Consumers often hear news stories about oil from the politically unstable Middle East or to the north in Canada or Alaska, but few may be aware that there are massive quantities of natural gas in the heartland of America. The Midwest is slowly seeing growth in oil production, and the discovery of this natural resource could bring manufacturing back to several states in the region.

Growing through the region
For years, manufacturers have moved out of the Midwestern states - the cost reduction seen by moving production facilities overseas was too great to ignore. However, with new technologies such as fracking (a common name for hydraulic fracturing) that make oil extraction much easier, some manufacturing plants may be headed back to the Midwest to take advantage of a plentiful supply of natural gas and the ease of sourcing that comes with being located by a major oil refinery.

With the latest techniques allowing oil companies to access natural gas in areas where old processes were impossible, the fossil fuel industry has the potential to surge in many areas of the Midwest. The production of this resource is on the rise in parts of Ohio, West Virginia and western Pennsylvania. North Dakota is also experiencing a huge boom due to natural gas discoveries.

Fossil fuels could bring back manufacturing
With the amount of natural gas being discovered in the Midwestern region of the country, it's no surprise that some manufacturers are considering returning to the area to do business - especially those that rely heavily on fossil fuels to produce their goods. Companies that make products such as fertilizers and chemicals often rely on natural gas in their manufacturing process, while companies that make goods such as glass and steel use quite a bit of the resource for energy to power their facilities.

Moving companies near major oil sources in the Midwest may help companies to keep their costs lower and could simplify the sourcing process. While the direct material cost for natural gas may remain the same, shipping and logistical expenses could be drastically reduced when a plant is located next to a gas production facility.

Even though green technologies like wind, solar and geothermal energy may be the way of the future, for many companies these are currently not a viable option. The abundance and cheaper production of natural gas have made this resource a major player in the future of manufacturing throughout the Midwest.
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iPad Mini Sold Out

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Below is a guest blog post written by Reese Jones, a tech and gadget lover who frequently authors quick tech tips and mobile-specific news, from O2, to tech-related DIY.

The highly anticipated tablet from Apple is now sold out after pre-orders came in a downpour. In just about 20 minutes, initial stock supplies of white models of iPad Minis sold out the fastest after pre-orders began, with black models holding out a bit longer. Consumers who wish to order the device will now have to wait a couple of weeks to get their hands on the new device.

 The iPad Mini is literally a “mini version” of the iPad, offering the entertainment experience and innovative features in a scaled version. The 7.9 inch tablet, weighing only 0.68 pounds, boasts a dual-core A5 chip with crystal-clear responsive graphics. Its multi-touch experience is set to compete in the tablet competition.

 Apple set iPad Mini loose to deliver the best experience to people, and they don't want to cut corners in order to do that successfully. Its pricing required aggressive moves to compete in the 7-inch tablet competition. It's less about making profits, and more about catering to the needs of the tech-savvy.

 In Apple's online store, only the Wi-Fi iPad Mini version is available for pre-order with two-week shipping. Its official launch date on the market is set this Friday, November 2, with a suggested retail price starting at $329. The package with Wi-Fi and LTE will only be available starting in the second half of next month. Because of the pre-order's sell-out, it is still uncertain if it will affect iPad Mini's launch in retail stores and stock levels.

 The black and white iPad Minis are identical in technical specifications. The only difference is that people consider the white version as an exclusive release. Take, for example, the white version of iPhone 4 which was released to the market a year after its black version. In comparison to other Apple products, the first stocks of iPhone 5 sold out in about an hour and pre-orders of 3rd generation iPad took a couple of days to sell out.

As for how the iPad Mini sold out in a short time, it may have been more interesting than Apple's other devices or Apple only released very limited amount of the white version and a bit more of the black version.

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Online shopping may not be the future of retail

on Tuesday, October 30, 2012

Online shopping may not be the future of retailThe internet has changed the way the retail world functions. Consumers are now able to shop from their kitchen tables, at work or while on the train, enabling them to check out products and reviews online and shop at their leisure. Merchants have experienced changes from online shopping as well, and some who embrace online stores have the potential to see cost savings. However, not all retailers are focusing on internet sales.

Changing some retail markets
Consumers are shopping online for a variety of reasons - they're pressed for time, the goods they seek aren't available in local stores or they simply prefer to avoid long lines and crowds by shopping on the web.

Retail stores have experienced big changes since implementing online stores, especially those that have a large amount of internet sales and put a high focus on their online shopping experiences. With the advent of e-commerce, stores can keep fewer goods at individual locations and more in storage facilities. This means they are often able to reduce logistics costs by shipping most finished products to several facilities rather than hundreds of stores across the country. Retailers are also sometimes able to reduce their operational expenses. If enough shoppers are purchasing products online, it limits the need for additional in-store staff members, and cuts down on visual merchandising costs and rents for large retail spaces.

Some merchants not advancing
Even though online shopping is successful for some retailers, it hasn't caught on with all merchants. Forbes reported that Pier 1 Imports has focused more on their brick-and-mortar profits than their digital sales. After shutting down their e-commerce department for about five years, it has only recently reopened its online shopping center. The company isn't opposed to web shopping, but it has doubled down on its store sales, and the strategy has worked positively for its sales.

Pier 1 tries to keep its online store as similar to browsing in-person as possible, and it has seen impressive growth from this strategy.

There are plenty of other stores that also believe traditional in-store shopping is what customers prefer, and even though lots of people are shopping online, many do prefer to browse in person. Data from ShopperTrak reported that at this point, only 8 percent of retail sales are the result of e-commerce. The difference can be seen in the experience of interacting with staff, watching demonstrations, checking out visual displays and being able to touch products. These are all reasons consumers like the in-store experience. This means that while many merchants appreciate the potential of online sales, it doesn't appear as though physical stores will be losing business any time soon.
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Poll suggests supply chain sustainability still an issue

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Poll suggests supply chain sustainability still an issueSustainability is an important issue for many companies. Businesses often to try to keep their supply chains as environmentally friendly as possible - this strategy can reduce operating expenses, cut manufacturing costs and boost an enterprise's reputation as a sustainability leader. However, recent research indicates that making the steps necessary to achieve more green supply chains isn't always as easy as it seems.

The BSR/GlobeScan State of Sustainable Business Poll 2012 gave some insight as to where sustainability stands in corporate supply chains and why it's at the level it is. Sixty-one percent of companies surveyed revealed that combating climate change is one of their top three sustainability issues to address in the coming year.

Major concerns
Companies listed a variety of concerns in regards to the sustainability of their supply chains. Internally, the majority (71 percent) hope to address the issue by better managing energy in business operations. Forty-three percent hope to better optimize their supply chains, and others hope to improve product design, change up business travel and reduce carbon output that occurs during construction.

However, there are obstacles in the way that prevent some companies from taking the sustainability steps they'd like to. The study revealed that businesses claimed the biggest challenge they face is working with all of their business units to implement green policies throughout their supply chains. Companies with larger and more complex supply chains may face even more issues in regards to this problem, as they must work with more departments, suppliers and logistical issues. Additionally, many businesses have supply chains that they are unable to track - while a company may be able to monitor its own purchasing and manufacturing strategies, it may have no idea if its suppliers and their contractors have implemented any green initiatives.

Another major concern for businesses is their ability to make changes while still making an impact. Companies that decide to implement green strategies need to ensure their efforts will pay off in the end and save costs while still retaining maximum productivity.

What can be done
Some companies are working hard to determine what their suppliers and manufacturers are doing in regards to environmental sustainability and have developed programs to make this possible. Others are merely requesting information from their suppliers, and still more are in the process of figuring out strategies such as procurement auditing or strategic sourcing to ensure their contractors comply with ethical, corporate or even federal guidelines.

However, there's no easy solution to this issue. What works for one company may not work for another, making it hard for corporations in different industries to mimic one another's sustainability initiatives.
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Hurricane Sandy, other storms disrupt supply chains

on Monday, October 29, 2012

Hurricane Sandy, other storms disrupt supply chainsDestructive weather and natural disasters have the ability to hugely disrupt important company supply chains and wreak havoc on production schedules, profits and logistics operations. With Hurricane Sandy set to cause massive destruction along the East Coast, many local companies may be wondering how they'll survive, and those with operational facilities in the area may be looking to determine how their companies will take the hit.

Delays could cost companies
The high winds, downpours and flooding that the hurricane is scheduled to bring may cause severe damage to local communities. These elements can also damage structures, and some corporations with manufacturing capabilities on the East Coast may find their production processes delayed by days. Many residents of coastal towns have evacuated, and some may not be back for work until later in the week. Plenty of businesses have been temporarily shut down and employees are staying with their families. This means some companies could be out of luck - if they have no manufacturing facilities elsewhere, they could be stuck for several days and experience production delays and potential product shortages down the road.

Even after the storm is over, that doesn't mean manufacturing companies are in the clear. Widespread power outages are expected, and plants may not have the capability to power up for days until fallen lines are restored.

Delays aren't just limited to manufacturing - they may also apply to logistics operations, depending on how hard the storm hits. Flooded streets and roadblocks such as fallen trees or scattered debris could cause problems in the trucking process, and because most flights along the East Coast have been cancelled, those relying on air shipments may also experience delays. Companies that heavily rely on transit through this area could find that their products aren't being delivered on time. They may also experience problems obtaining raw materials that are stuck in holding areas while the storm passes.

Raw material shortages
Companies that rely on natural gas also may experience problems with the storm, as oil and gas refineries could see a huge hit from Hurricane Sandy. With their production impacted and shipping stalled, companies in need of fossil fuels could see procurement problems, and need to quickly implement new sourcing strategies to find new, affordable fuel suppliers. Because supplies may diminish, prices could rise in the next few days, meaning businesses will need to find ways to cut expenses to enjoy more cost savings, or bite the bullet and wait out the damage to return to their original suppliers.
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Ford to cut costs in Europe

on Friday, October 26, 2012

Ford to cut costs in Europe After recently reporting that it anticipates a $1.5 billion loss in Europe this year, Ford Motor Company will take steps to attain more profits in the market. The brand has struggled in European countries, and by shifting its focus to new products, and implementing strategies to reduce manufacturing costs it hopes to succeed on the continent.

"Using the same One Ford plan that led to strong profitability in North America, we will address the crisis in Europe with a laser focus on new products, a stronger brand and increased cost efficiency," said Alan Mulally, Ford's president and CEO. "We recognize the impact of our actions will have on many employees and their families in Europe, and we will work together with all stakeholders during this necessary transformation of our business."

Introducing new products
Ford has plans to bring 15 new models to the European market in the next five years, and the company will put a focus on the SUV, a vehicle that's increasingly popular overseas. This means Europeans will finally be introduced to the famous Ford Mustang for the first time. The corporation also has plans to completely redesign and expand its commercial vehicle lineup.

Aside from new models, the company will also boost its focus on desirable technology in its products. New cars will see a boost in smart technological advances, such as parking assistance, SYNC in-car connectivity and EcoBoost engines.

Slashing costs
Because of the massive losses Ford has dealt with in Europe, it needs to find ways to achieve significant cost savings in order to stay competitive and profitable. The company announced that new vehicle sales in Western Europe have reached a near 20-year low, and demand has dropped more than 20 percent since 2007. This has resulted in the need for it to introduce several initiatives to reduce spending and better manage production.

To keep from over producing vehicles dealers can't sell due to low consumer demand, Ford will cut down on its manufacturing and reduce the amount of inventory at dealerships. By putting more of a focus on low stocks, the company can save its plants from manufacturing more cars than it can sell.

To increase cost-effectiveness on the continent, Ford has announced plans to close and move several manufacturing facilities. The company also plans to cut about 500 jobs in the region, and revealed that salary cuts will hit about 13 percent of its European workers. These cuts are necessary for the company as it transforms its business on the continent and hopes to slash unnecessary expenses.
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Retailers expect strong online sales this holiday season

on Thursday, October 25, 2012

Retailers expect strong online sales this holiday seasonMany merchants may be interested in upping their retail buying, as several studies suggest that online shopping will be up this holiday season, resulting in strong online sales. As people increasingly have access to technology, they can shop in their homes or even while on-the-go. The advent of smartphones and tablets has boosted online sales, because consumers can find and research the goods they're seeking while they're in the car, on a train or even in bed.

Studies indicate e-commerce will thrive
A survey from Chase Paymentech revealed that almost six in 10 retailers with online shopping services anticipated increased sales during the Christmas season when compared to last year. Nearly half expect their e-sales to be better than before the recession hit in 2007.

A survey released earlier this month by the National Retail Federation (NRF) showed similar optimistic results. The NRF's online organization, Shop.org, anticipates holiday web sales will be up 12 percent this year. It was reported that online shopping is growing more quickly than in-store shopping, and retailers will need to take note of these changing trends in order to keep up with the competition.

What online sales mean for stock
Stores are offering all sorts of options for online shoppers these days -  ordering an item online and picking it up in the store, having an item shipped from a physical retail location or shipping a product from a distribution center are all common now, and they've changed the ways merchants handle their inventories.

Many stores are beginning to ship customers their items directly from a nearby retail location rather than sending it from a distribution center halfway across the country. This allows merchants to use the most cost-effective retail procurement strategies and have items shipped to their busiest stores instead of distribution warehouses.

Offering consumers the option to pick their item up in-store can benefit both the customer and the retailer. Buyers who purchase their product online but want it instantly can get the gratification they seek by merely dropping by their local retailer and picking up their product. Retailers also like this option because it allows them to store items at a store rather than distribution center and skip the shipping process entirely.

Because online sales are becoming so popular, they are changing the way the retail market operates, especially during the busy holiday season. With customers already getting started on their winter shopping, retailers are getting prepared for a storm of online sales and are keeping their inventory stocked at high-traffic stores.
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More supply chain problems for Apple

on Wednesday, October 24, 2012

More supply chain problems for AppleAfter rumors of an iPhone 5 shortage due to Apple cutting ties with supplier Samsung, the tech giant may now have another concern about its production capabilities - this time with the just-announced iPad Mini.

Apple recently announced its intentions to release a smaller version of its hit iPad, which will ship out to consumers on November 2. Demand is expected to be high, as loyal Apple customers typically order their products before they hit store shelves and this new, cheaper alternative to the iPad has been hotly anticipated for months already.

Potential shortage
Even though Apple avoided a shortage on iPhone 5, its strained relationship with Samsung could result in problems with the iPad Mini. The two companies have been battling over intellectual property rights, and because Samsung was previously a large Apple components supplier, that could result in disaster for the thousands of customers worldwide seeking to get their iPad Minis as fast as possible. Reports of Apple expanding its supplier base for iPad Mini parts have surfaced, causing concern regarding timely production of the new gadgets.

Even though Apple often limits the supply of a new product to build interest and get press, the iPad Mini shortage could go beyond the intentional Apple gadget restrictions and cause a problem for the company during the holiday season.

New suppliers
It's looking more likely that Samsung will no longer be one of Apple's top suppliers. Tech Eye reported that while Samsung provided the company with 15 million LCD panels in the first half of the year, that number is thought to have fallen to a mere 3 million during the third quarter. It is expected to drop even lower during the last few months of the year - to only 1.5 million units.

To make up for the lack of Samsung-produced products, Apple is seeking out new suppliers to handle the massive demands for parts. AUO and LG Display are thought to be picking up the slack and providing Apple with more LCD panels for their iPad Minis. However, AUO is already having problems producing the 7.9 inch panels for the products, and sent out just more than 100,000 of them in September.

Working with new partners can be a challenge, especially for Apple, which is attempting to rework its supply chain in the midst of a product launch. As it begins to work with these new suppliers, Apple will need to determine the procurement best practices that will help it avoid unintentional product shortages and a stalled supply chain.
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Procurement risks highlight need to prepare for the worst

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Procurement risks highlight need to prepare for the worstThere are plenty of risks involved in a company's procurement strategies. While it's difficult to eliminate all problems entirely, it is possible to reduce the issues so they don't pose an enormous threat to the future of a business. Sometimes it is impossible to know which elements are a risk until it's too late - in this instance, it's always a good idea to have a backup plan for potential disasters.

Security an increasing concern
The security of a supply chain is important to a company's bottom line, and fixed procurement strategies are essential to making sure operations run smoothly. When a business is hit with unexpected news about a disaster or unrest in an area it has interests in, the situation can be unsettling.

Companies with interests all over the world need to keep track of what's going on in many different places at once, and it can be hard to assure nothing will get in the way of a smooth supply chain. However, disruptions do happen - and when they do, businesses without a backup plan can face serious consequences if they don't know where else to source their raw materials from.

Smaller companies often hit the hardest
Procurement strategies may seem to be running smoothly, but until a natural disaster hits, a war breaks out or a terror attack shuts down an area, it's impossible to be entirely sure of how resilient purchasing strategies really are.

When an event does occur and previous procurement policies are no longer an option, it's often small and midsized businesses that suffer the most. Unexpected disasters like earthquakes, floods and hurricanes can put a huge dent in productivity if a business sources materials from a hard-hit area that can no longer supply a raw material. While global corporations have the money and resources to put into finding a new supplier or material quickly, it often takes a much longer time for smaller companies to do the same thing. Having a plan for where to turn if something should happen is critical to preventing product shortages and losing sales to competitors.

Because things can go wrong at the drop of a hat, it's critical for businesses - especially smaller companies without unlimited resources - to develop backup plans in case their suppliers are no longer able to send them the goods they use in their products. Without a proper procurement backup plan, an entire supply chain can be stalled and put a dent in a company's quantity of goods on the market, as well as its reputation.
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Massive supply chains may result in leaks

on Tuesday, October 23, 2012

Massive supply chains may result in leaks Having a large, well-established supply chain may seem like a dream come true for some companies that are struggling to get their sourcing, manufacturing and shipping in order. A large network may increase the ease with which a business can get its finished goods to market, but it also ups the chance that corporate secrets, new designs or product updates will be revealed before a company is ready to release the information.

The risks of globalization
When working with contractors, manufacturers and logistics companies all over the world, a company lacks the ability to control leaks. While employees at the center of the operation's headquarters may keep their mouths shut, workers putting the products together or shipping the goods may snap a photo or post the information online, which can be hugely detrimental to a business' bottom line, especially if they count on the element of surprise to boost sales. 

One example of leaks due to a massive corporate supply chain is consistent rumors of new Apple products. The company puts a huge focus on secrecy at its U.S. facilities, but fails to keep the lid on its plans overseas, and the leaks quickly make their way back to the U.S.

"Apple's security practices are targeted at making sure U.S. employees don't leak stuff, but everything comes out of China now," an anonymous Apple employee told Ars Technica. "I think Apple's secrecy mode is really outdated."

Leaks come from everywhere
With the increasing access to technology across the world, it's becoming harder to contain leaks, especially when many manufacturing facilities are located thousands of miles away in Asia. Workers often have access to their own mobile devices and internet connections, and it's easy for them to snap a picture of a new product or write a blog post about the latest product they've started working on.

Even if employees are kept in the dark about the actual finalized product, they can still leak information that may not get out in a smaller supply chain. Workers could snap a picture of a new material being used in the manufacturing process, leak information about new strategic sourcing initiatives or even give away critical information about procurement strategies.

Although workers close to home are often blamed for leaks, it can't be disputed that outsourcing work puts a major dent in a company's ability to keep secrets. The larger its overseas operations become, the harder it is to control information and keep details private.
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Halloween set to be big for retailers

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Halloween set to be big for retailersEven though the Christmas season is traditionally a huge time of year for most retailers, some merchants may be seeing some increased sales early this year. Halloween is right around the corner, and consumers are taking notice and splurging on costumes, decorations and treats for the holiday.

According to the National Retail Federation (NRF), seven in 10 Americans plan to celebrate Halloween this year - a record total of 170 million people. This huge number makes the holiday an ideal time for merchants to up their retail procurement, whether they plan on selling candy or costumes.

Many are spending more
"By the time Halloween rolls around each year it's safe to say Americans have already spent two months preparing for one of the fastest-growing and most widely loved holidays of the year," said NRF president and CEO Matthew Shay. "Retailers know that when it comes to Halloween, new costume ideas for children, adults and pets, and the latest in home and yard decor top people's shopping lists. We expect retailers to stock their shelves well ahead of time to capture the attention of eager holiday shoppers."

Consumers do indeed appear to be spending more at their local retailers. The NRF reported that customers will spend an average of $79.82 on Halloween costumes, snacks and decorations. This is an increase over last year's $72.31, and merchants need to be prepared for an influx of customers finishing up their Halloween shopping in the coming week. Some stores may have increased their retail buying for this year, because the past several years have all showed strong Halloween sales, despite the shaky economy.

According to the NRF's survey, more people will be decorating and dressing up for the holiday this year, meaning merchants will need to have more goods in stock to satisfy customers searching for Halloween products. In addition to decor, costumes and candy, shoppers are also seeking supplies for holiday parties, costumes for their pets and goods such as bags for their children's candy.

Countdown to the holiday
With Halloween fast approaching, many stores are having sales to get rid of any merchandise of which they have a surplus. Because products such as candy and costumes are hugely reduced after the holiday, some stores are cutting prices slightly now to lure in customers who may still need their Halloween goods. However, with such strong sales so far, it doesn't appear as though most retailers will lose money holding large sales on their Halloween goods after the holiday.
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IT supply chain integrity a major concern

on Monday, October 22, 2012

IT supply chain integrity a major concernA recent study revealed that supply chain integrity will be one of the top three security concerns by 2017. The report, titled "Living in a Works Without Trust: When IT's Supply Chain Integrity and Online Infrastructure Get Pwned," was conducted by Gartner Maverick Research and highlights the concerns many companies have about their security in the future.

"IT supply chain integrity issues are real, and will have mainstream enterprise IT impact within the next five years," said Neil MacDonald, research vice president and Gartner fellow. "Enterprise IT systems must begin to make changes today to protect their systems and information in a world where all IT systems are suspect."

Cost reduction may contribute to concerns
As companies race to find the lowest manufacturing costs possible, they may put themselves at risk for encountering security issues. By sending manufacturing operations all over the world, companies take chances with the integrity of their products. There have been plenty of news stories about counterfeit electronics entering the market, and malware or counterfeit hardware being installed on computers before they ever reach consumers.

It can be hard for businesses to prevent these types of issues. When a company is outsourcing its manufacturing to China, yet sourcing parts from all over South America and Southeast Asia, it's sometimes impossible to find out where the security breaches are coming from and how to stop them.

Hardware not the only problem
While some companies are finding problems with the hardware in their goods, it's not the only place security issues can occur. Because the world's technology is increasingly relying on software products rather than hardware, companies need to watch out and ensure the quality of the software they're bringing to the market.

Stopping the problem
As companies continue to seek out the greatest cost savings they can, staying on top of product integrity is increasingly important. Considering the number of security issues many large corporations have experienced with their products in the past few years, it seems that no technology can rest assured thinking its supply chain is perfectly fine. Because the risks increase as a supply chain becomes more complex and spreads all over the world, it can be hard to stop a problem once it starts.

"IT supply chain integrity issues are expanding from hardware into software and information," said Gartner's research vice president Ray Valdes. "This has significant implications for businesses, governments and individuals moving forward in a world where the integrity of the IT supply chain is no longer completely trustable, and where all layers of the IT stack will be targeted for supply chain compromise."
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Trucking theft on the rise

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Trucking theft on the riseTrucking piracy has become a major issue for retailers and suppliers in the past few years. Companies face the challenges of dealing with increased gang presence, the relative ease of breaking into trucks and trailers to access goods and a seeming lack of concern from law agencies, all of which have turned trucking piracy into a huge industry.

CFO magazine reported that trucking theft results in about $30 billion in losses each year, and unfortunately, this number is only set to grow even larger. Truck cargo is continuing to succumb to theft, and it's becoming difficult to stop the rampant problem. Thieves know they can make enormous money by gaining access to a valuable load - pharmaceuticals, electronics, tobacco, alcohol and luxury goods can be worth millions of dollars,  making these trucks some of the most alluring targets for pirates.

Focusing on theft
Companies are beginning to develop new ways to deter this theft that is costing them greatly. While there are plenty of people who oversee the transportation of goods along the way of the supply chain, focusing on the truck driver is one of the most efficient and important ways to go about stopping theft.

Getting drivers on the side of a company is key to ensuring a valuable load of cargo is safe. While these employees typically undergo rigorous background checks and screenings, many businesses are looking to provide extra incentives to drivers who ensure the safe delivery of goods.

Preventing driver involvement
While retail logistics may be complicated enough, things get even more messy when it comes to keeping track of multiple cargo loads in different areas of the country. That's one reason businesses are trying to get ahead and work with drivers to prevent piracy.

The driver is often one of the most important people in a company's supply chain, as they're responsible for the safety of a truckload of goods that may be worth millions. While most drivers carefully get their products to their intended destinations safely, there have been incidents that call for concern about truckers on the part of businesses. This is especially true if a third-party carrier is transporting the products, because a company no longer has control over a truckload of material.

For those loads that can be controlled, companies are taking big steps to ensure their drivers take all the correct steps to prevent theft and don't partake in any thievery themselves. The source reported that drivers are often specifically instructed not to stop near high-theft areas, and their treks are carefully planned and closely watched to keep an eye on precious cargo at all times. By monitoring drivers and keeping an eye on logistical operations, companies can attempt to deter theft and decrease the losses incurred at the logistical level.
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Defining Value is not as Difficult as Stakeholders Try to Make It

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As a sourcing or procurement professional, if you have ever worked with a stakeholder on a project where the supplier was highly service oriented (or a heavily favored incumbent), you’ve probably heard the following:

“We know we could get a better price, but this supplier just provides so much value. You can’t put a price on value.”

Well, actually you can put a price on value. It’s 12 cents per widget. In all seriousness though, value is not as hard to define as stakeholders may want it to be. They want value to equate to service levels. But as described in the illustration below, it is a factor of both service level and cost.



Using this formula, you can see that as service levels go up, and cost stays the same, overall value increases. At the same time, if service level stays the same and cost goes down, value will increase.

Conversely, if service level goes down and/or cost goes up, overall value declines.

Think about buying a car. Cars traditionally rated top of the line in terms of value are rarely those with the highest cost, nor the most bells and whistles. Instead, they are the ones with the right level of features, including safety, reliability, fuel economy, etc, for the given price. They are not the cheapest cars on the market, nor are they the highest price. Maybe I’m not in the right social circles, but I have never heard someone to refer to a Porsche or a 7-series BMW as a “Best Value” vehicle. Mitt Romney may beg to differ.

Yet in business, non-savvy buyers often consider the suppliers with the highest price the ones that can provide the most value. Why is this? Probably because they are confusing value with service levels, relationship, or the overall good feeling the get with when receiving support from a given supplier. As sourcing professionals, it’s our job to shift the conversation away from the intangible “value” they describe, to the more tangible value – which is a factor of both the service level a vendor provides, and the cost they charge to provide it. Without both, your stakeholder doesn’t have a solid business case for vendor selection.
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Retail logistics now focus on same-day delivery

on Friday, October 19, 2012

Retail logistics now focus on same-day deliveryCompanies have long fought to make their products the most appealing to consumers and boost profits. But with more people shopping online, it's becoming harder to tempt customers simply with low prices. Because many merchants offer price-matching or very similar costs for the same goods, retailers are struggling to get noticed, and they're jumping on the same-day delivery trend to keep buyers purchasing their products.

Several retail giants have announced that they will attempt to enter the same-day delivery market to increase customer satisfaction and boost sales. Amazon recently confirmed rumors that it will begin offering same-day shipping in certain markets, but did not indicate when the plan would be implemented. Wal-Mart has also created a plan to allow for same-day delivery, which is scheduled to last through the holiday season, according to Supply Chain Digest. EBay is now getting ready to try out a same-day service in selected areas, if test programs run smoothly.

The challenges of same-day delivery
Same-day delivery could be a tricky program for retailers to debut, as it calls for big changes throughout merchant supply chains and logistics operations. Optimizing retail buying, storage and transit planning will need to be altered drastically for some companies in order to make same-day delivery a success.

Logistics Viewpoints addresses some additional concerns these retailers face as they struggle to beat one another to the top and gain more customers. Same-day delivery is drastically different than standard, or even next-day, delivery options, and it will likely require merchants to revise their logistical operations. Retailers implementing these programs may find the need to expand or work with other companies that provide fleet delivery services, inventory-storage in new locations or couriers to ensure goods get to customers on time.

Aside from potential changes to a merchant's logistics, the same-day delivery option raises other questions. It isn't likely that retailers would be able to offer the shipping option on every single product, so deciding which goods would be a part of the program could make a difference in its success. It also calls into question the cost of this special service - while consumers generally already pay more for faster shipping options, some customers may find that the increased fees for same-day arrival aren't worth the shorter wait for their product. While it will take time for retailers and consumers alike to become accustomed to the same-day option, it could have a serious impact on how merchants store their goods and manage their logistics.
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Supply chain flexibility a necessity

on Thursday, October 18, 2012

Supply chain flexibility a necessityMany corporations are looking to cut costs any way they can, whether it's by implementing strategic sourcing policies, changing up logistical operations or trying to lower direct material cost. However, many corporate decision-makers may be surprised to learn that cost reduction isn't the only thing that's critical to a successful business - in fact, a flexible supply chain may be even more important than slashing spending.

While corporations have long subscribed to the theory that cheaper is better, the modern world calls for more malleable supply chains that can better adjust to market demands. While saving money is important, being able to optimize purchasing, manufacturing and shipping is vital, even if it's sometimes a little more expensive.

Global problems highlight need for change
Problems occur throughout large supply chains that stress the need for more flexibility. Natural disasters, resource scarcity, unexpected events or sudden changes in consumer demand can all force a company to change up its strategies, and for a corporation with a more rigid supply chain, quick adjustments may be difficult.

"The emergence of new markets, material shortages and fluctuating transportation prices all represent challenges in the center of gravity in the supply chains," said Martin Christopher, a marketing and logistics professor at Cranfield School of Management, according to The Load Star. "In the past, the best supply chain decisions represented the lowest cost to shippers, but the best decisions might be those that keep the most amount of options open, even if they are not the lowest cost."

Can flexibility increase growth?
There may be more benefits to keeping plenty of options open besides the ease of dealing with volatile global markets. The ninth annual Global Survey of Supply Chain Progress found that corporations are continuing to make changes to operations in order to keep up with new demands, but those who lead in implementing the changes see the highest benefits. While optimizing a supply chain for flexibility may not seem like the most cost-effective option, it seems as though it can increase profits if done properly.

Those that see the most benefit and growth from supply chain changes are corporations that respond to markets and retain flexibility. Companies that were able to quickly and easily change the amount of products manufactured and keep up a high level of visibility through their supply chains saw cost reductions compared with corporations that weren't able to adjust to the market in a timely manner. The survey showed that companies whose supply chains yield to demands more easily see higher growth and profits, making flexibility a legitimate concern for many businesses.
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Businesses can increase profits with smart supply chains

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Businesses can increase profits with smart supply chainsObtaining raw materials, manufacturing them and turning them into consumer products, then getting them distributed to consumers can be quite a challenge, especially if a business wants to do it in the most efficient way possible. Many companies have in place systems that don't optimize these processes to their full extent, and this could be causing them to miss out on better spend management techniques and smoother operations.

A recent study by the University of Arkansas and Virginia Tech University found that inefficient processes can be eliminated with the use of the "Physical Internet." This concept suggests that when products are stored and shipped in a shared network, manufacturers, retailers and the transportation industry would see improvement in their operations.

"Our results indicate that the Physical Internet represents a virtuous cycle in which manufacturers, retailers and transportation providers all benefit in terms of increased profit margins and smaller environmental footprints," said Russ Meller, industrial engineering professor and director of the Center for Excellence in Logistics and Distribution. "The transportation network that is anticipated to emerge will also create better network design and customer service and will help address the problem of driver shortages and turnover."

Cost reduction for participants
Even though some businesses prefer to handle their own operations, from procurement to manufacturing to distribution, the study shows it would be more profitable for companies to give up some of that control in order to enjoy greater cost savings. Research suggested that if just 25 percent of the U.S. supply chain participated in a system such as this, the participants would increase profits by $100 million. This could mean companies may be able to decrease the price of their goods to lure in even more consumers with increasingly competitive prices.

More efficient supply chains
Supply chain optimization is also a major factor this study took into account. It found that businesses participating in a more efficient system would increase inventory storage points closer to a company's customers, improve customer service and create transportation systems that make more frequent, shorter runs. This would develop a large supply chain that runs more smoothly than the individual systems most corporations currently have. Consumers would be better served, increasing customer satisfaction, and companies could benefit from the optimized storage points, shipping routes and less complicated logistical operations.

"The technology to make this happen is currently available," said Meller. "All parties, including the consumer, will benefit. Now we need industry partners to pilot a mini-Physical Internet and allow us to share those results with others in the industry."
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Credit card transaction fees source of concern for retailers

on Wednesday, October 17, 2012

Credit card transaction fees source of concern for retailersRetailers across the country have opposed credit card swipe fees that take the money that could otherwise work toward their bottom lines. A class-action lawsuit between merchants and Visa, Mastercard and many banks has highlighted the concerns these businesses face as they attempt to change the "swipe fee" policies.

Lawsuit questions swipe fees
An antitrust lawsuit filed in 2005 alleged that companies such as Visa and Mastercard set up the card transaction fees with big banks to charge merchants a small fee each time a customer swipes a credit card. Retailers claim this fee forces them to raise their prices to cover the cost of the transaction fee, and ultimately hurts their businesses.

According to NBC, a proposed settlement to the lawsuit would require Visa, Mastercard and the large banks involved in the scheme to pay about $6 billion to the millions of retailers represented in the suit. It would also lower the swipe fees U.S. merchants pay for eight months, which is estimated to cost the credit card companies an additional $1.2 billion. Merchants would also be able to charge Visa and Mastercard users a "checkout fee" to regain the swipe fee where permitted by law. However, it's uncertain that many merchants would even charge this fee because they would risk alienating customers with the additional expense.

Settlement dispute may take more time
However, The New York Times revealed that the settlement may be facing opposition from the majority of the merchants represented in the suit. Many came out voicing concerns that the deal fails to address the serious issue properly and would make it impossible for retailers to charge the checkout fee if they desired.

"The current payments system is so convoluted," said Dawn Sweeney, the National Restaurant Association's president and chief executive, according to The New York Times. "The average restaurateur has no idea exactly what they are paying and why they are paying large amounts to accept credit and debit cards, which are necessary in today's marketplace. The proposed settlement does not address those issues. And after digging into the details of the proposed agreement, we have serious concerns that rather than correct those fundamental flaws, it cements those flaws for decades to come."

At this point, The New York Times reported that 10 of the 19 plaintiffs oppose the settlement the lawyers have negotiated. When a deal is reached, it may very well change how credit card transaction fees are handled and alter the way retailers price their goods and conduct business with consumers.
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30 Tips to Save Money!

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It’s hard to believe that the holiday season only a couple months away. In preparation for the “spending” season, I have put together several quick tips on saving money. Even if you focus on integrating a few of the tips below into your everyday life, you will begin to realize the savings add up. 


Shopping: 
  1. Name brand vs. Generic:  Let’s face it, almost all products now have a generic brand that are typically made with the same or similar ingredients. Try switching to generic products such as paper products, cereal, baking ingredients, cleaning products etc. to see if you are able to notice a difference. 
  2. Shop in season groceries: Buying in season fruits and vegetables can save you money and also benefit from fresher produce. 
  3. Bottle your water:  Instead of buying cases of water each week, buy a reusable water bottle and fill up your water whenever possible. If you prefer not to drink tap water, invest in a Brita or water filter system to purify water before drinking.
  4. Buy in Bulk:  If there are certain items that you use frequently, try buying in bulk to save money.
  5. Pack your lunch:  Although the majority of restaurants typically have lunch specials, eating out every day can have a big impact on your wallet. Imagine saving up to $1,000 packing your lunch a few days a week.
  6. Skip that morning Starbucks:  Stopping for coffee every morning can quickly add up. For example, if you stop at Starbucks and get a $4 latte 5 days a week, you can save up to $80/month or $960/year.
  7. Buy online: Amazon sells almost everything, not just books. Amazon typically has very competitive pricing and offers free shipping.
  8. Sign up for reward programs: Many stores, restaurants and hotels have email reward clubs that often send you coupons and discounts. Even if you don’t frequently visit those stores or restaurants there are typically coupons that make it worth your visit. One tip about this though is to create a generic email address that you can use to store all your reward mailings.  
  9. Use coupons: Try buying the Sunday paper and cut out coupons for items such as groceries. Not only does this save you money but you can also try new items that you would not frequently buy. 
  10. Take advantage of deals: Sites such as Groupon and LivingSocial always offer deals on restaurants, vacations, doctors, and more. For example, many restaurants may offer a $15 Groupon which is worth $30 worth of food!

    Habits:
  11. Stop impulse buying:  This is one of my biggest weaknesses. If I see something I want, I have to have it. Instead of impulse buying, try setting goals and reward yourself with that item whenever you achieve a goal. For example, if you are looking to drop a few pounds, for every 5 pounds you lose, reward yourself with a small gift.
  12. Don’t splurge on an expensive item: When you are in the market for something that is rather pricey, do not buy the first one you see. Instead try waiting a couple days and see if you are able to locate a cheaper item online or in a different store.
  13. Do Holiday shopping after the holidays: Many stores have sales after the holiday season, not only can you save gifts for next Christmas, you can also stock up gifts for birthdays, Mother’s Day, Easter, etc.
  14. Go through your closet:  I’m sure many of you have piles of clothes in your closet that you never wear…try going through the clothes and taking them to a consignment shop for a few extra dollars.  
  15. Carpool:  If you live close to a coworker or friend, try carpooling a couple days a week to save on gas as well as costs for your car.
  16. Quit unnecessary habits: If you are a frequent drinker or smoker, try to limit your intake for a week and see how much money you are able to save. This may then persuade you to quit your habits.
  17. Unplug appliances when not in use: You may not think leaving appliances plugged in all day will really add up, several energy studies have shown that unplugging appliances when not in use can save approximately $100 per year.
  18. Buy refurbished: When searching for a new electronic such as a computer or laptop, try researching refurbished items first. A refurbished product can be anything from an unopened item a customer had second thoughts about, to an item that was missing an accessory which was sent back to the manufacturer for missing parts which was then replaced, tested and repackaged.  
  19. Use Red Box or Netflix: If you tend to watch a lot of movies, buying a movie directly through your cable provider can cost up to $5 for a new release, try using Red Box for $1 rentals or invest in Netflix for unlimited rentals of movies and television shows for $8/month.   
  20. Start a change jar:  Add any leftover change or dollar bills that may be leftover in the bottom of your purse or in your wallet into a change jar. You’d be surprised how fast the money will add up.  
  21. Consider if you really need a pet: I am a dog lover, but your furry friends can definitely damper your finances with food, veterinarian, and grooming costs. If you are in need of extra money or are not financially stable at the moment, skip on buying a pet until you are fully able to take on the extra costs.
  22. Skip the gym membership: Gym memberships add up over the year and can be an expensive (but also good) habit. Before paying for a gym membership try working out at home or going for walks.
  23. Use cruise control: If you have a long highway commute, try using cruise control to save on gas. 

    Bills:
  24. Hide your credit cards: I very rarely use my credit card for purchases unless it’s an emergency. Try removing your credit card from your wallet so it is not easily accessible.  
  25. Pay credit cards: Always pay the full/max balance on your credit cards, the interest charge is equivalent to giving away free money.
  26. Skip banking fees!: Some banks penalize customers if they overdraw from their accounts. One way you can get around this is having overdraft protection from your savings account, or some banks eliminate fees if you transfer a certain amount to your savings account each month.
  27. Always ask for fees to be waived: Any time you sign up for a service or installation, it never hurts to ask if the fees can be waived. Many companies will work with potential customers to provide them with a competitive price.
  28. Consolidate your student loans:  Looking at my 9.5% interest rates makes me cringe, speak with your loan provider to consolidate loans into a lower interest rate package. Even reducing the interest rate 1% on a $10,000 loan can save you $100 a year.    
  29. Use automatic debit for school loans: The majority of loan providers offer automatic debit options that can lower your interest rates, also you won't have to worry about missing a payment.
  30. Bundle Cable and Internet: Many cable and internet providers offer a more competitive rate if you bundle services rather than purchasing separately. If you have a land line phone, you can also look into bundling all 3 services.

While some of these tips will provide instant money, other suggestions may offer year round strategies for greater savings potential. Although it may be hard to adapt all the above tips into your everyday lifestyle, try to focus on a select few tips and see how much you are able to save in a week. After that week you will be able to see how much you are actually able to save and will encourage you to continue to be a master at savings!  
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Financial Ecosystems and the Future of Cash Flow Visibility

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Aberdeen Group released a new whitepaper entitled “Beyond Payables: The Evolution of the Modern Financial Ecosystem” in which authors Chris Dwyer and Ankita Tyagi define “financial ecosystem” as a combination of accounts payable, accounts receivable, trade finance, and global payment management. Once considered “the costs of doing business,” the authors redefine these departments as a strategic tool of value.

The survey conducted as research for this whitepaper concluded that 78% of respondents believe one of the top priorities for the financial ecosystem as a unit is to improve visibility into cash flow and cash management. Dwyer and Tyagi indicate that there is an interconnected reliance between financial functions and the failure to manage these “traditional workflows,” reducing executive insight into cash flow.

According to the Beyond Payables research study, less than half (45%) of organizations are currently managing their financial ecosystem in a centralized manner. However, the study indicated that over 70% of companies expect to centrally-manage their A/P, A/R, trade finance/trade partner management and global payment management departments in the future.

“This finding proves that financial executives, realizing how these processes are already inherently-linked via complex workflows, are prepared to encompass these attributes under a centrally-managed program/division to improve operational performance and achieve a much-heralded state of extraordinary cash flow visibility.”

The second half of the Beyond Payables survey split respondents into two groups, “leaders” and “followers” based on aggregate performance scores. Over 50% of leaders indicated financial ecosystem capabilities to include standardized payment processes, visibility into all stages of electronic payment processes, documented processes for payments shared internally and externally, and cross-functional coordination of payments between procurement, finance, treasury, and IT. Less than 50% of the follower group indicated capabilities in these areas. It was also reported that CFOs in leading organizations were 72% more likely than those in following companies to hold a large portion of responsibility for cash flow analysis.

The key takeaways from Aberdeen’s Beyond Payables whitepaper include:

  • Place emphasis on how aspects of the modern financial ecosystem are linked and managed as a means of pinpointing gaps and opportunities for improvement.
  • Support management of this ecosystem with specific enablers, such as payment factories, full A/P automation, and trade financing tools
  • Put the power of liquidity and cash flow analysis in the hands of the CFO
  • Maintain a strategic outlook for managing the financial ecosystem
 Read the entire whitepaper, available for free on Aberdeen’s website.
  
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Oil supply facing changes

on Tuesday, October 16, 2012

Oil supply facing changes The oil market is expected to see plenty of changes in the coming years, due to restrictions on imports from certain countries, a growing demand for renewable energy and increased fuel development projects from different areas of the world. The supply chain is already changing as nations change up their procurement strategies to slash costs and cut trade agreements with certain countries.

Less oil coming from Iran
Iran, formerly one of the top oil exporters, has recently seen crippling international sanctions put a huge dent in its largest industry. Growing worldwide concerns about Iran's nuclear program have led most countries across the world to believe the nation is attempting to develop nuclear weapons, a claim Tehran denies. This belief has led many Western nations to cut economic ties with Iran and ban oil imports from the country.

The European Union just imposed a new set of sanctions on the country to increase economic pressure on the Iranian government. These new restrictions forbid EU banks from conducting business with Iranian banks unless the transactions are authorized for humanitarian aid. The EU hopes these sanctions, which cut off oil imports from Iran, will pressure it to stop its nuclear program.

The United States government has also taken steps to stop the import of Iranian oil. Sanctions already restrict oil purchases from the country, and, like in the EU, transactions with Iranian banks are closely monitored and in some cases impossible.

New procurement ideas
With Iranian oil an unlikely option, companies looking to purchase it are having to look to new sources to keep their businesses running. Fox Business reported that other Middle Eastern countries are increasing oil production to fill the void left by Iran. Iraq has ramped up its oil industry, and BP announced a plan to return some of its production to Libya after the country's dictator fell last year. Companies can use strategic sourcing practices to avoid getting their oil from countries run by totalitarian regimes or nations unfriendly to U.S. interests.

While the Middle East has long been a huge source of oil used around the world, other countries are tapping into their oil reserves to become energy independent and boost their exports. Fox Business reported that much of the growth in the oil supply industry is expected to come from the Americas in the next few years. New technology has allowed the U.S. and Canada to obtain more of the valuable export to use domestically and sell. The source revealed that U.S. oil production has reached its highest level since 1995.

Imports down in the US
Oil imports in the U.S. are reaching a new low - the country imported less oil in 2012 than in the past 15 years. Several factors could be leading to the lessened demand for oil, including increased production at home. With companies in the U.S. managing to increase production with new technology, there's less of a reason to purchase oil from other countries.

High prices at the pump have also lessened the demand for oil in America. With prices through the roof at some points, many are now driving more fuel-efficient vehicles, utilizing public transportation, walking and biking to save money on gas. Green technology has also led to a decreased need for oil in the country. With electric vehicles, solar power, wind power and other renewable sources providing inexpensive and plentiful energy, people are beginning to invest in new technology that doesn't call for oil. Fox Business reported that global demand for oil has been revised down - while the International Energy Agency previously estimated demand would grow at an average of 1.2 million barrels per day over the next five years, the number has been changed to 1.1 million barrels.

With the uncertainty across the globe, rising prices and new oil sourcing strategies, the world may become less dependent on the Middle East for oil supplies in the next few years.
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Cost reduction could save companies in a down economy

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Cost reduction could save companies in a down economy Cutting back on expenses may help companies that are struggling to make it in the uncertain economy. Reducing operational costs, implementing strategic sourcing policies and slashing unnecessary expenses could be key to business survival while the market continues to perform erratically and the fiscal cliff looms ahead.

Reuters recently reported that several large corporations, including Caterpillar, United Tech and FedEx, have commented that the world's economic growth is slowing down. The companies are preparing for some underwhelming growth until the market picks up once more.

Hard times
Companies that are struggling to stay afloat are announcing budget cuts to keep their doors open. Even large global corporations are considering slashing expenses in order to stay profitable or experience any kind of growth.

While the global economy slows, the United States is also faced with a fiscal cliff that has many business owners worried. If Congress can't agree on a budget deal, $600 billion in automatic spending cuts and higher taxes will be automatically implemented in January. Because some companies are fearful of what the future will bring, they're already getting a head start on cutting their excess costs and trimming budgets in every area possible. This will help them prepare for the uncertain economic future they face if no deal is reached.

Cost cutting measures important for some
Some corporations fearful of what the future will bring are implementing serious budget cuts to remain profitable while they wait for the economy to improve. Reuters reported that FedEx revealed a plan to slash costs over the next four years. The company doesn't expect to keep up with its current growth rate and needs to cut back - the air-express operation will be lowered by about $1.7 billion. Even with these drastic cost savings, Reuters reported that analysts still expect FedEx's profits to remain flat in 2013.

Manufacturers aren't expected to fare much better than FedEx. Wall Street has lowered its expectations for the industry from 3.7 to 1.9 percent earnings growth. If the numbers hold true, the sector's growth would be severely restricted.

However, not all businesses expect the sluggish economy and fiscal cliff to hurt their bottom lines, and haven't announced plans to drastically cut spending. The source reported that General Electric expects its growth to expand next year, citing a high demand for jet engines, electric turbines and other equipment.
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Increased sales could boost retail buying

on Monday, October 15, 2012

Increased sales could boost retail buyingSeptember was a strong month for retailers across the country. Retail sales jumped 1.1 percent, to $412.9 billion - one of the biggest increases since October 2010.

Even though most categories saw significant improvement, electronics and appliances and automotive sales saw the largest increases in sales. It is thought that the electronics industry was boosted by the release of the iPhone 5. With strong retail sales and a recently reported decline in the unemployment rate, consumers are eager to spend this season. Their confidence has also been boosted to a five-year high, according to a Thomson Reuters and University of Michigan survey, which may be contributing to the increased spending.

An increase in consumer purchasing could lead to retail outlets changing up their buying strategies. While many retail stores kept inventories low while unemployment was high and sales were struggling, an increase in spending could force them to stock up on consumer goods, especially for the upcoming holiday season. This increase in retail buying could jump-start sluggish raw material providers, manufacturers and logistics operations. After two months in a row of more than 1 percent growth, things are beginning to look up for retailers relying on increased consumer spending.
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Web Hosting Servers - Crucial Points for Your Business

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The following is a guest post by Karen Gomez.

Is a 30 percent discount from your vendor on goods and services for a limited time a good enough offer to counteract hundreds or thousands of dollars lost from that same vendor?

That's the not-so-hypothetical question faced by hundreds of website owners questioning the offer made by web-hosting firm GoDaddy to its customers after an hours-long server outage in September.

After the outage, some disgruntled customers felt that a short-term 30 percent discount offer wasn't enough, and started to look for new web hosting companies. At least one class-action lawsuit was even filed against GoDaddy.

Many small businesses started to consider a change in web hosting companies after the GoDaddy outage. With a plethora of companies offering web-hosting services, from basic hosting to more secure VPS hosting services, it should be a pretty easy switch for small businesses to move their web host. And in most cases, it is- but you have to know what type of hosting services your sites will need, and what kinds of questions to ask. Here are some tips to begin the process.

 Uptime is Better

Guaranteed hosting uptime is an absolute must for website owners. Many web hosts measure the efficiency of their server running successfully without going down as uptime. So if a server has an uptime of 95 percent, it basically means that all sites on the server will have guaranteed 95 percent live uptime and about 5 percent downtime.

This was the key basis of the GoDaddy lawsuit. The claimant said in the filing that GoDaddy violated its terms of guaranteed uptime to its customers. If your web host cannot deliver a written guarantee of 95 percent or higher, then you should definitely look around for more web host options on the web.

Good Customer Support

In the event of any kind of server outage, you need to have prompt, action-oriented customer support from your web-hosting company. When your site is down, you're losing sales from customers, and it's imperative that your customer support have a plan in place for server outage. Some web hosts keep a B-server ready if the main server goes down. In some cases, you need 24-7 support.

E-Commerce and Shopping

Using web hosts that support your e-commerce functions and payments is an important step for any business. It's better to pay more per month for strong hosting customer support, rather than paying for cheaper hosting with a company that won’t provide you with assistance or information outside of standard working hours.

Bandwidth and Storage Space

Bandwidth is the term for the amount of data downloaded from a server to a site visitor's Internet point. When new pages are clicked, more data is downloaded from the host server. Basically, more site visitors and more page clicks on your site means higher requirements of bandwidth.

It's worthwhile to know any bandwidth limit on certain web hosting packages. Some companies put a limit on bandwidth, and if you exceed the limit, you have to buy more space. An unplanned controversy might arise that spikes up the traffic to your site, and drives it over the limit. You'll be paying extra to keep your site afloat during this heavy trafficked period. This might add up over time and can put the budget of a startup or small business in jeopardy. However, new trends in cloud computing allow website owners to scale the size of information needed. So if size is an issue for your website, whether too much or too little, cloud computing may be a viable option.

Be sure to research your options and the rules to follow (and those rules not to follow) in choosing your next web host.
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Disney cuts ties with controversial suppliers

on Friday, October 12, 2012

Disney cuts ties with controversial suppliersThe Walt Disney Company recently announced that it will change its paper sourcing strategies immediately to take action against the controversial manufacturers it previously worked with. The announcement comes as a major victory for the Rainforest Action Network (RAN), which has been vocal about Disney's sourcing practices. The corporation released a statement detailing its new sourcing strategies, meaning it will no longer do business with several large paper suppliers in Asia that engage in questionable environmental policies.

Disney has been in the controversial battle over its lack of strategic sourcing since RAN published a scathing report about the company's paper procurement several years ago. It was revealed that Disney obtained much of its paper from companies that have been criticized for endangering the Indonesian rainforest and contributing to the destruction of the habitat, which is reportedly declining at a rate of about 2.5 million acres each year. A new company policy revealed that the corporation will no longer source its paper from these suppliers and will seek alternative manufacturers to ensure it protects the environment.

A new strategy
The corporation released its new paper sourcing strategy, in which it makes a greater commitment to strategic sourcing and environmentally friendly policies. Its new policy stated that Disney will cut down on paper use overall, increase its purchasing of recycled paper and steer clear of paper that comes from at-risk forests.

"We commend Disney for adding its voice to the growing chorus of companies demonstrating that there's no need to sacrifice endangered forests or animals in Indonesia for the paper we use every day," said Rebecca Tarbotton, RAN's executive director. "This policy will have a particularly important impact in Indonesia, the primary place where rainforests are still being cut down for pulp and paper."

New policy far-reaching
Because Disney is an enormous global corporation, it will take time for the company to fully implement the new paper sourcing policies. Because of the complex structure of the business and its far-reaching brands, the plan will be put in place in two separate stages. The first stage will ensure Disney brand products and their packaging will be made with ethically sourced paper products, and the second stage will concern getting independent licensees to implement the program.

Disney is such a large company with so many departments and global operations, this new strategy will have a profound effect on the company's supply chain. The sourcing strategy doesn't just apply to books - it will also impact packaging on children's toys, napkins and menus on cruise ships, maps in theme parks, the pages in magazines, printed goods for networks like ABC and ESPN and even film studio products.

The new policy brings attention to the company's need for supply chain oversight and management.

"Transparency in the supply chain is very challenging," said Robin Averbeck, the force behind RAN's Disney focus, according to The Guardian. "The pulp comes from a forest to a paper mill to a broker to a supplier to Disney. When a company has Disney's enormous global reach, its arms are so long they often don't know what their hands are doing."

To better keep track of where its paper is coming from, Disney plans to carefully monitor its paper use. The company has pledged to develop a tracking system to ensure no at-risk rainforest woods are used to manufacture or package its products. According to Publisher's Weekly, this strategy includes random audits, fiber tests and verification processes. With these new systems in place, Disney can ensure consumers its products are more environmentally friendly.
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UK retailers see major waste reduction

on Thursday, October 11, 2012

UK retailers see major waste reductionMultiple grocery retailers and large food corporations in the United Kingdom have slashed expenses by reducing supply chain waste. These companies, including Sainsbury's, Marks and Spencer, Coca-Cola and Tesco, have managed to reduce their waste by 8.8 percent. The companies have managed to get far ahead of their 5 percent goal for waste reduction.

The Waste and Resources Action Program recently released the results of the Courtauld Commitment Phase 2, which had three main objectives: to reduce grocery packaging, to cut UK grocery waste and to reduce product waste in the grocery supply chain.

The project was not mandatory, but many companies vowed to make their packaging more sustainable and limit food waste, helping them save resources and see greater cost savings. Even though numbers released last year indicated the companies were not on track to meeting their waste reduction goals, the latest numbers show the efforts over the past year have been effective.

Because household waste is not monitored, it is impossible to say if this goal was met. However, with companies continuing to slash their packaging costs by using fewer materials, it appears likely that household grocery packaging waste could diminish.
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