Arby's to change up supply chain

on Monday, December 31, 2012

Arby's to change up supply chainSandwich chain Arby's announced it will take the necessary steps to eliminate gestation crates from its supply chain. The company is just one of many to recently publicly commit to more sustainable and humane procurement tactics and animal welfare.

Gestation crates losing popularity in food supply chains
The practice of using gestation crates has been well-documented in the food industry, where pigs are often kept in small stalls for most of their lives, and typically unable to even turn around. According to Sustainable Food News, those producers who engage in the practice claim it keeps pregnant sows from fighting. However, in recent years many large food companies and retailers have decided to remove the use of gestation crates in their supply chains. Companies such as Oscar Mayer, McDonald's, Safeway, Costco, Target and Wendy's have vowed to eliminate suppliers who use the practice from their supply chains, as the crates have been shown to contribute to negative publicity and poorer animal health.

"Arby’s is committed to only working with suppliers who have policies in place to work towards the elimination of gestation crates on sow farms," read a statement on the company's website. "We believe there are more humane and sustainable alternatives to gestation crates and are actively collaborating with our suppliers to implement solutions that align with our company’s commitment to animal welfare.

New policies put in place
The practice of keeping pigs in gestation crates has already been outlawed in some states, requiring producers in those regions to find new ways to keep their sows from fighting.

Arby's has been applauded by animal rights activists, veterinarians, consumers and the Humane Society of the United States (HSUS) for the move, and may find the move to other procurement practices to be quite a smart public relations move, even if it doesn't allow the chain to enjoy the cost savings it may have when purchasing pork from producers who used gestation crates.

"The Humane Society of the United States applauds Arby's for closing its doors to pork producers that aren't eliminating gestation crates," stated Josh Balk, corporate policy director of farm animal protection for the HSUS. "If you're a pork producer without plans to move away from gestation crates, you've nearly run out of buyers willing to purchase your products. It’s time to change."
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Eurozone crisis could impact supply chains

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Eurozone crisis could impact supply chainsThe ongoing economic crisis in the Eurozone could have an affect on supply chains that rely on European suppliers, manufacturers or markets in the coming year. Many countries in the European Union have been burdened with unsustainable debt loads, high unemployment and bailouts, which could make businesses around the world hesitant to continue partnering with European companies or relying on these markets in the coming years.

The economic crisis seen in countries that use the euro has also led to concerns that the currency could collapse. The EU's single-market system could result in an unraveling economy for countries that rely on the euro. Those that don't, such as the United Kingdom and Poland, could pull even further back and see the consequences on their own economies if this were to occur.

Europe's crisis could hurt businesses
Businesses that rely on European based companies for their procurement may find that the cost of purchasing goods from the market could become prohibitively expensive, especially when greater cost savings can be achieved by purchasing raw materials or manufacturing consumer products in emerging markets in Asia. They may begin using tactics such as strategic sourcing to help cut down on expenses while also guaranteeing their products are delivered in a timely fashion. Others may find that relying on European companies to handle their logistical operations may also become more expensive as countries in the Eurozone seek increased revenue and many have debated raising on taxes on the wealthy and businesses.

Companies that sell consumer goods may also determine that the European market could no longer be as profitable as it once was. With high unemployment numbers that continue to rise in many countries, European consumers without jobs or income may now be unable to purchase new products, cutting into a company's profits and limiting its sales on the continent.

With businesses across the globe being pressured to cut costs and minimize risks in the countries in which they operate, some companies could be pressured to find new suppliers or limit sales in Europe to focus on markets with more growth. Others may find themselves pressuring their European partners to cut expenses to ensure their EU projects remain a profitable part of their business models and are not cut out of their supply chains.
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Resource scarcity could impact supply chains

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Resource scarcity could impact supply chainsWith growing global populations and increasing resource use by businesses, a variety of industries could face shortages of essential materials in the not-so-distant future. Seemingly abundant natural resources such as water, minerals and energy could rapidly deplete in the coming years, resulting in problems for business supply chains across the world.

As these natural resources become increasingly scarce, it could become difficult, if not impossible, for some corporations to continue using the amount they currently believe necessary to keep up with consumer demand, enhance production or transport merchandise across the globe.

Preparing for resource scarcity in the future
For companies whose procurement strategies include purchasing in-demand, limited resources, resource scarcity could cause limited production or even merchandise shortages in the future. Without the materials necessary to manufacture products, a corporation may find itself lacking the ability to remain profitable and successful with its current product line and could find itself unable to keep up with its current production levels in the near future.

To prevent such problems in the coming years, companies should begin taking the steps necessary to ensure their production and procurement is not interrupted and profitable goods remain on the market even if resource shortages become a reality. Some corporations may want to begin investigating more sustainable strategies that limit water use, cut back on natural gas consumption, implement a strategic sourcing policy or rely less heavily on other resources that are rapidly depleting. This will ensure that if limited natural resources ever begin impacting businesses and production strategies, a company will already be using less and be able to better adjust to such scarcity.

Some companies have already started to take such steps, while others are implementing green energy as not only a cost savings strategy but also a way to protect a business from resource limitations in the future. Those companies already starting to use solar, wind or geothermal power in their production facilities protect themselves from the possibility of limited energy sources like coal and gas in the years to come, while some are using greener logistical tactics to be certain their goods will always be able to get to market for consumers. Still more are taking the initiative to reduce the use of potentially scarce materials in their products to guarantee future shortages will not limit their ability to produce their most profitable goods and hurt revenue.
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Recycling the Christmas Tree

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Like many other people now that the Christmas Holiday is over it becomes time to take down the tree. Currently I live in a community that does not offer Christmas tree pickup, so I’m stuck looking elsewhere to dispose of it. Not wanting to just throw it in the garbage and leave it to rot in the local landfill, I began to look elsewhere. Many large cities like Philadelphia and Chicago are offering Christmas tree recycling programs. The program is very simple, locations are set up around the city for tree drop off, and in turn the city recycles the trees by mulching them. The mulch is then available to city residents for free. 

However, for me none of the location drop offs were very convenient, and it got me thinking. What if large companies offered Christmas tree recycling programs for their employees? I mean as far as convenience goes you can’t really beat just dropping your tree off in the parking lot outside of work.  Not only is it a win for the employees but it’s a win for the company as well. It’s a fairly low cost way for companies to boost their sustainability programs. With the nation looking for more and more ways to go green it is an excellent public relations move and fairly simple way for companies to decrease their carbon footprint. Hypothetically each tree an employee brings in is a tree saved from the landfill.
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A More Humane Food Supply Chain

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America is more eager than ever to be closer to the sources and farming practices behind our food.  The factory farming prevalent throughout America's food supply chain for both animals and vegetables comes under a lot of scrutiny for everything from spinach salmonella outbreaks to the pink slime controversy.  One subject that is less talked about than chemicals in our food or food borne illnesses is the treatment of animals used for food.  I will leave the vegetarian/vegan debate for another time, because in reality animals will always be used in some capacity as a food source.  Activists and other animal rights groups know this reality, and as a result are working tirelessly to raise public awareness about humane food animal practices.

Corporate restaurant supply chains are taking notice that consumers will no longer take their business to places that do business with farms utilizing inhumane practices.  It's sad that it takes bad PR or profit as motivation for some companies to make the right decisions in their supply chain.  Regardless, making changes reactively for poor reasons is better than not making changes at all.  

The humane society began their campaign against battery cages for egg laying hens back in 2005, eventually pressuring companies from Wendy's to IHOP to switch from caged hens to cage free.  Since then, they have run  numerous other similar campaigns, such as working to eliminate pig cages (gestation crates) for pork production.  Arby's announced just last week that they are eliminating pig cages from their supply chain.  Last April, Burger King announced their plans to eliminate pig cages as well as to use eggs from cage-free hens, a plan that will take five years to implement.

On a personal level, the best way to support products from animals raised humanely is to know more about the supplier. Talk with your grocer about the products being sold.  Buy from small family farmers who have proven that they have met specific guidelines.  Check labels and look for Animal Welfare Approved, Certified Humane, or Free-Farm Certified products.  


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Top Ten Tech Bombs in 2012

on Sunday, December 30, 2012


2012 brought many exciting new gadgets in the technology world.  Unfortunately, where there is success failure is also inevitable. Some were more obvious than others; Apple Maps for example was much hyped up and turned out to be nothing to brag about. Luckily for Apple the iPhone 5 was not as much of a disappointment so I don’t think they’ll be going broke anytime soon.  Another highly anticipated event this year was the Facebook IPO, it started the day at $38 a share to go soaring to a whopping $38 a share.  Eventually the stock dropped to $18 a share and has since balanced out at about $28 a share according to cnn.com. Again, I doubt Mark Zuckerberg is starving today but it goes to show you that things do not always go as expected. Sean Parker’s latest and greatest was a new chat tool called Airtime, any idea what I am talking about? Probably not since it too was not all it was hyped up to be. 
Personally I am a big fan of the online coupon deals, Groupon and Living Social being at the top of the list. However even though they all started at the top of their game in the beginning of the year, they experienced a significant decline as the year went on.  Nexus Q, a media streamer for Android, was Google’s big downer for the year.  Not having enough exposure it fell on deaf ears when released in June. They said it hasn’t completely been dumped yet but I would not try to run and get one, they are listed as unavailable on the Google online store. 
SOPA was not one of Congress’s best laid plans afterall. While the Stop Online Piracy Act had good intentions, it went too far. And apparently Google, Facebook, Reddit, and Wikipedia, among others, had enough clout to put the kibosh on SOPA.  CNN also notes that the next wave of social media apps were to include the ability to meet strangers, social discovery apps they were coined as. And while the idea certainly seems like a good idea, more often than not users, mostly female, found the concept to be less than appealing.  Its one thing to use technology to keep in touch but is it really necessary to use it to meet people in the same room!? Come on people make a little effort would you?

Another app failure was Color, a photo sharing mobile app.  Unfortunately, it was a complete failure out of the gate, as most of these instances above were. Instagram seemed to get it right though so its certainly wasn’t about a failed concept.  While Zynga still remains one of the most popular gaming app companies it too is seeing a drop in profits.  One of main reasons for the downturn for the company was the purchase of Draw Something.  It was fun for a minute and then most users lost interest, including myself.  Zynga dropped $180 million on the game.

And the last major tech failure cited by CNN for 2012 is the ever increasing amount of stupidity brought about by Twitter and its tweeters.  They make note that the site gave many celebrities and companies the opportunity to make total jackasses of themselves. If you ask me stupidity will find a way to emerge no matter the outlet available so I wouldn’t call that one a tech failure.

So what’s to come for 2013? Who knows but I’m sure it will be filled with some exciting events creating great wealth for some and putting many others on the chopping block.
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New Realtime Wireless Cost Management Solutions

on Saturday, December 29, 2012

By now most are familiar with Telecommunications Expense Management (TEM) and the related Wireless Expense Management (WEM) and Mobile Device Management (MDM) tools that are out there.  Traditionally, these tools are best employed by organizations with large or complex spends.  In order to get the most bang for your buck with these tools and services, it's imperative that the spend under management has been groomed and meticulously implemented.  Then, users can take advantage of the vast inventory, bill audit and device management tools as well as the multitudes of other features commonly offered by most providers nowadays.  And, if you have a large or complex spend, this can bring simplicity to your world and aid in managing and maintaining your services, keeping end users happy, and give you confidence you are not overspending.

In the wireless world, there has always been a caveat to this tools that many don't even consider but can be significant for organizations with many users or users who travel internationally: the data used by most tools is outdated.  That may not sound right at first, after all, most TEM/WEM providers have data available immediately as the carriers make it available or within a few days, so how would that be outdated?  Well, what if a user is travelling with an inappropriate or inadequate international plan on their phone?  You won't discover potentially massive over-billings until it's far too late.  Or, what if you have been trying to cut your pooled minutes as close as possible to your typical profile but an exceptionally busy month puts you way over?  There are new tools that can provide realtime data.  For example, apps for mobile devices that force international roamers to use VoIP as a preferred calling method and expense management tools that gain realtime usage data which allows you to identify potential overages as their happening and adjust your plans accordingly to avoid overage charges.  

With all of the options for telecommunications and wireless expense management, it can be difficult to know where to get started in reigning in your spend and what tools to use to manage the results you produce.  To learn more about how to reduce and control telecommunications costs, contact Source One at www.sourceoneinc.comwww.sourceoneinc.com
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Frugality in the New Year

on Friday, December 28, 2012

As 2012 comes to an end we realize that cutting costs with coupon and sale shopping, Do It Yourself projects for the home, and overall frugality in every day life has become the new craze. In the past people would flaunt their expensive purchases like new cars, technology, custom home improvements and other superfluous purchases to prove their self worth to friends and neighbors.

The economical hard times of this past year resulted in more people showing off their “great deals” and cheaper buys to express how smart and thrifty they are now; and people do regard these traits.

To be so admired in the New Year consider these cost effective suggestions below:

Brand Name Products and Comparison Shopping
Target, like other department stores offers low-cost skin care items and makeup that compete with “name brand” products with the same compound at much lower prices. They also offer designer clothing that is customized to their price point and consumer buyer.

Refurbished Buys
Technology like TV’s, video games, and cell phones to name a few, have good and sometimes longer warranties than new products and are available at an extremely discounted prices.

Online Shopping
There are always great deals and a variety of manufacturer goods available at electronic commerce stores like Amazon but don’t forget to check out online marketplaces like eBay and Craigslist.

Sale Circulars
Don’t forget to check out upcoming sales both in-store and online and check your paper for coupons.  For example, right now there are so many stores offering 50 percent off holiday items so why not stock up for next year!

Get ready for the New Year and next time you are out shopping ask this questions before making a purchase "Do you want to be admired for being a spendthrift or “Spendthirfty”?"

Happy Holidays!
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Domestic manufacturing strong in the Midwest

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Domestic manufacturing strong in the MidwestManufacturing in the American Midwest has increased, according to new data from the Federal Reserve Bank of Chicago's Midwest Manufacturing Index. The numbers reveal that the rate of production in the region jumped 1.6 in November to a seasonally adjusted 93.7 after October numbers dropped 1.1 percent.

Data indicated all four sectors expanded in November. Regional auto sector production jumped 3.6 percent, regional steel sector output increased by 0.9 percent, regional machinery sector production gained 0.2 percent and the resource sector output climbed 0.7 percent.

The benefits of domestic production
As offshore manufacturing often offers manufacturing operations lower operating costs and the chance to pay less in wages, many companies have taken their production overseas in recent years. However, it has become more popular for businesses to come back to the U.S. in recent months and the Midwest may be where some are moving their new domestic facilities.

While some companies choose to enjoy the low manufacturing labor costs in Asia, others are looking for options in the American Midwest. Being in the heart of the country can allow corporations to get their goods to market more quickly and adjust production in a timely fashion, rather than waiting weeks for shipments from across the world or waiting days to ramp up orders from overseas.

Considerations for domestic manufacturing
However, there are concerns and challenges for those looking to nearshore their operations and move to the Midwest. Different states can offer businesses incentives or deter them from setting up facilities with laws and industry regulations.

Businesses concerned about high labor costs or getting involved with union labor may look to "right-to-work" states in the Midwest when determining where to place their operations. Michigan and Indiana recently passed such legislation, which may prove to be an effective way for the states to attract more manufacturing plants and companies. Those looking for plenty of access to multiple logistical routes may look to Illinois, as being near Chicago gives them the opportunity to take advantage of transit options such as airports, railways, major trucking routes and ports.

However, companies looking to save the most on labor may consider Iowa. According to Crain's Chicago Business, the state was ranked as having the most cost-efficient labor expenses, making it another contender for those considering moving their operations to the Midwest.
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Google to See Increased Competition in 2013

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Over 15 years ago, Google altered the way the internet was used and is now one of the most visited websites in the United States. Google has also had much success with their Android phones and mobile applications. Although Google is currently ahead of the competition, there are a few competitors eyeing their position on top.

It doesn’t surprise me that Google is one of the most used search engines, approaching 90% of search market share in many countries. Anytime I or even my friends and family need to find information on a particular subject, we "google" it. I love the simplicity of the site and they always generate good search results. However, I don’t like the idea of knowing that Google tracks and monitors my searches and I’m sure that many others feel the same. Google has also been the subject of investigations based on their invasion of user privacy. In response, companies have drafted new data protection legislation.

Start-up companies like Duck Duck Go will use this issue to their advantage. They don’t track user history or information, allowing users to feel more comfortable using their site. Their site is very simple and easy to navigate just like Google’s and over the last year, the company has seen triple the amount of search engine queries. In addition to the search engines, Google will continue to compete with Apple and Microsoft in terms of their share of the phones and mobile application market.

Remaining at the top takes a lot of work. Google will have to be increasing mindful of current market trends and user satisfaction in order to remain above the competition.
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Get your Cup of Coffee for a "Steel"

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Almost all of us got a gift card or two for the holidays – whether we wanted them or not. We get them from Bob the office co-worker, Aunt Cecilia, or people that know us just well enough that the feel they need to get us something but not enough to know what we like. Of course everyone would just prefer getting the cash, but yet every year we’re given them. To battle this, we have seen numerous gift card swapping sites pop up where you can trade, buy, or sell gift cards.

Many of us have probably one time or another received a Starbucks gift card. It is a pretty easy gift card to use considering there are over 1,100 Starbucks stores in the U.S. and they plan on opening at least another 1,500 in the next few years, probably across the street from existing ones.

Well this year the company decided to release an exclusive gift card made of….steel. That’s right, a stainless steel gift card that weighs about 8 pennies. The cards are specially etched steel and cost $450. It comes preloaded with $400, which will get you about 82 grande lattes or 57 cups of their new Costa Rica Finca Palmilera – that’s right, do the math - $7.00 for a cup of coffee. That will actually get you about 2 gallons of gas right now.

So as smart (or evil) as the Starbucks executives are, they decided to only release 5,000 of these steel cards. Despite its high price, the steel gift card was a huge success. People wanted these status symbols so much that they sold out within minutes. The only way to purchase them now is through eBay and other on-line markets. The amazing part is not even that people were willing to spend $50 on “packaging.” The amazing part is that people are so desperate for these exclusive cards that they are now selling on eBay for over $1,000!

So should we be blaming Starbucks for this or the people that bought the cards? I guess this is a great example how some people have more money than they do brains. It’s expensive being stupid.
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What some of the big tech companies looked like in 2012: winners and losers.

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This year has been very different from others, not because the world was “supposed” to end and it didn’t but because in the world of technology (which incidentally, rules our life), we have never seen so many big companies change so dramatically. By trying to stay competitive or even alive, companies have implemented big changes so fast that it seemed as though they were gambling decisions. Personally, I don’t recall ever seeing so many companies issuing apologetic statements after taking a bad strategic move. At the same time, I don’t remember ever seeing so many new amazing products and ideas being developed. Taking financials aside, let’s look at a few of those companies who made an impact in 2012 in one way or the other:

Apple
• Wins – the company has never had the footprint it has now, every Mac store looked busy throughout the year on a daily basis and their brand recognition is stronger than ever.
• Losses – besides the fact that Jobs is no longer the head of the company, Apple suffered a big paradigm switch; it went from innovation to imitation. The company hasn’t wowed the crowds by launching a new product; instead it has focused on releasing new versions of the iPhone and iPad (including the iPad Mini for Kindle lovers). Another fail was the release of their own operating system with poor mapping capabilities.
• Balance – Apple is going through a rough patch.

Facebook
• Wins – over one BILLION users this year. By far the largest social network ever created. Facebook has found the ways to connect people like no other network. Facebook keeps growing and is doing it fast.
• Losses – their IPO, which created great anticipation in the financial markets and it did not produce the expected results. Constant changes to privacy policies have become a weakness to the company, such fast growth has proven to come with challenges in balancing happy users with regulations compliance.
• Balance – Facebook is growing but learning from mistakes, this year wasn’t great.

Microsoft
• Wins – new technology, including tablets and Windows 8. While facing fierce competition, Microsoft has proven that it still has what it takes to be a tech giant. Microsoft has consolidated itself in the consumer products domain as well as is the business industry.
• Losses – it’s a late bloomer in a market that has been dominated by Google, Amazon, Apple and even Samsung (which by the way had a great year).
• Balance – despite reacting late, this was a good year for Microsoft; its new technology had received positive feedback and has been a dominant player in the videogame industry.

Another company that is worth mentioning Instagram, who observed such explosive growth that is was subject to a prompt acquisition by Facebook for $1Billion. Not too long after the fact, it faced severe criticism for changing its privacy policies just like its new parent company Facebook who by the way, hasn’t figured out a way yet to generate profit from Instagram.

There is a handful of other companies that are worth discussing, a few that come to mind include Netflix, Amazon, Samsung, Sony, Google, Yahoo, and Twitter. For the beginning of 2013, I will review what we can expect from some of these industry titans over the next year.
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Ford to increase domestic manufacturing

on Thursday, December 27, 2012

Ford to increase domestic manufacturingDomestic automaker Ford recently announced plans to increase its production supply chain in the Midwest by investing in manufacturing facilities in Michigan.

Increase in American investment
The increase in domestic capabilities comes as part of Ford's plan to invest $6.2 billion in its American plants by 2015. As part of this plan, the company aims to create 12,000 new hourly jobs by 2015. According to NBC News, part of Ford's plan is to develop more flexible manufacturing operations that allow factories to better adjust to global markets and changing consumer demand.

The company has plans to spend more than $773 million to increase its manufacturing capabilities in the state. It will use the investment to purchase new equipment and expand its plant capacity in six of its current facilities. These investments may spur job growth in the area, as it is expected to create more than 2,300 new hourly positions and will allow the company to keep an extra 3,200 employees on its payroll.

Ford's investment plans include $59.4 million for stamping press line expansion at its Michigan Assembly Plant; $305 million for plant modernization efforts and other machinery updates at its Dearborn Stamping Plant; $161 million for new equipment to build Ford Fusions and another production plant at Flat Rock Assembly; $86 million for more equipment to increase axle manufacturing at Sterling Axle Plant; $87.7 million for machinery to produce more transmissions at Van Dyke Transmission and $74.7 million in equipment investments for transmission expansion at Livonia Transmission.

The latest company to increase American manufacturing
Even though many companies have moved their operations overseas in order to benefit from lower manufacturing labor costs, it has become more popular in recent years for some businesses to shift their production back to U.S. shores. Ford is only the latest company to jump on this trend, with its plan to increase investment and create more American jobs by 2015.

"Even as we wrap up an incredibly busy year of capacity expansions and product launches, we are continuing to look to the future," said Jim Tetreault, Ford vice president of North America Manufacturing. "These investments, many of which are already underway, will ensure our southeast Michigan manufacturing facilities can support our aggressive growth plans."
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Slow Mississippi River traffic hinders supply chains

on Wednesday, December 26, 2012

Slow Mississippi River traffic hinders supply chainsSupply chains across the country may be being held up as a drought holds back traffic on the Mississippi River, one of the country's busiest waterways. Barges have been delayed due to low water levels and the situation could impact a plethora of companies who rely on the river to transport raw materials or finished products.

A potential solution in the works
The water in the Mississippi River is severely limited, as the drought that has plagued the Midwest for months continues on. Low water levels have been a problem for some time now, and Illinois lawmakers have stepped up to try to determine how to best handle the problem and ensure business can carry on as usual.

"We've been preparing for this since early summer, which means continuous collaboration with our partners the U.S. Coast Guard and the navigation industry to help provide a safe and reliable channel on the greatest, navigable watershed in the world," said General James Peabody, division commander of the U.S. Army Corps of Engineers Mississippi Valley Division.

Peabody explained that in order to make it possible for barges to once again navigate the river without a problem, limestone will need to be removed from the waterway. Workers are currently removing submerged rocks to make the low water levels less of a hindrance to business.

However, the excavation of the rocks may also be halting some supply chains. Those that do choose to ship their goods via the river will find that river traffic is currently halted from 6 a.m. to 10 p.m., meaning orders may be delayed even further.

Reworking supply chains because of the drought
Even if the excavation allows barge traffic to flow more normally in the coming weeks, some companies are still choosing to alter their supply chains and avoid barge shipments on the Mississippi for as long as possible. The low water levels have contributed to barges only being able to carry 60 to 70 percent of their normal loads, according to Bloomberg, limiting the amount companies can get to consumers via the river.

More industries are turning to other forms of transit, and rail and trucking operations may see an uptick in business due to the trouble on the Mississippi. Other companies may employ more strategic sourcing techniques to ensure the goods they procure aren't shipped via the river, as it could take longer to receive them, throwing off production cycles and potentially limiting future quantities of finalized products.
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Supply chain disclosure varies between companies

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Supply chain disclosure varies between companiesAccording to a new report from analyst firm Verdantix, some electronics companies headquartered in Asia take greater strides to report the environmental achievements in their supply chains than others.

The data revealed that companies like Apple, Dell and Hewlett-Packard take more initiative to report their sustainability measures than Canon, Panasonic and Samsung. The report took into account data from 12 different companies and indicates some of these corporations are much more concerned with such reporting and environmental achievements than others.

These companies often take into account different initiatives when conducting such reporting, however, most of them take the time to investigate their suppliers' materials. Many also take into account waste production and pollution, allowing the report to determine which companies are more thorough or consistent than others.

Many fail to report on some important issues
However, not all companies take the time to report on issues that are becoming more important to consumers, investors and government bodies. According to the report, Canon, Microsoft and Toshiba fail to report on air pollution, giving the public little knowledge of the amount of greenhouse gases produced by the corporations' vast supply chains that reach across the globe. Similarly, Apple, Canon, Panasonic, Sony and Toshiba were reported to not audit the energy use of their suppliers, making it unknown what - if any - sustainability steps their suppliers take to reduce energy use, limit pollution or use renewable sources such as solar and wind.

While most audit energy use, only half of the corporations were reported to investigate water consumption of their suppliers. Only Dell, HP, LG, Microsoft, Nokia and Samsung took the steps to examine water use, which indicates that they could be the only companies able to regulate water waste and turn to processes that may reduce consumption, an environmentally friendly strategy and potential cost reduction tactic.

Potential benefits to auditing and reporting
While some companies may see audits and reports as time consuming or wasteful, other corporations may find valuable insight by conducting such projects. Companies that take the steps to learn about the processes their suppliers or manufacturers use may discover that they are able to enjoy greater cost savings by implementing green energy, which can in turn lower the direct material cost for a purchasing company and bring in even more business. Those that fail to oversee their supply chain operations thoroughly may waste valuable opportunities such as this or even miss out on the chance to work with companies or investors that require high sustainability standards.
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Supply chain surpluses can be risky

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Supply chain surpluses can be risky Many companies focus on ensuring their supply chains will survive in the event of a disaster that limits procurement, production or shipping, and have alternative strategies planned in the event that a glitch limits their capability to continue to serve consumers. However, having a supply chain surplus can be just as large of a problem for some enterprises.

Creating oversupply has risks
Having an oversupply of materials or finished products can be financially risky for any corporation that sells consumer goods, especially merchandise that has a short shelf life or is quickly outdated and replaced with newer models, such as electronics.

Businesses that fail to properly forecast consumer demand or plan to get ahead with a larger supply of goods could be risking profits with this strategy. If a company has too many components or merchandise consumers aren't buying, the business is missing out on potential sales and has also lost money in the purchasing, production and shipping process. Similarly, if a corporation purchases too many parts or has too many devices made, technological advancements could be made before the initial run sells through, meaning the firm will be left with a surplus of products consumers no longer find desirable as they seek a newer model.

Some corporations may be lured into creating a surplus of product due to a previously successful model that sold out quickly, low direct material cost or by watching a competitor's similar merchandise become a hit with consumers. These scenarios could cause some to believe oversupplying is the right tactic to bring in huge profits and gain new customers. However, these could be poor reasons for a company to determine it needs a supply chain surplus.

Vast quantities can sink an industry
In some industries, oversupply doesn't just have the potential to bring one company's profits down - it has the potential to sink prices for many corporations. The Wall Street Journal reported that vast oversupply of raw materials ranging from crude oil to copper to cotton are resulting in dropping prices, lowering the forecast for such commodities in the coming months.

The source reported that enormous stores of crude oil have resulted from increased domestic production due to new technology and industry exploration. With such a surplus and still-low demand across the globe, U.S. oil futures are down 13 percent, which could spell trouble for many companies in the industry.
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Will the NHL lockout put the league (and their fans) on ice?

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As we enter the final week of 2012, National Hockey League fans are already peering into 2013 and seeing few signs of the lockout between the league's owners and players coming to a conclusion anytime soon. Millions of puck heads from Vancouver to Boston are holding out hope for a settlement that will have their favorite teams back on the ice in time to save the season. Sadly however, the further along the talks have proceeded, the more it appears the two sides are drifting further apart.

What went wrong?

There are plenty of opinions in the sporting media about which side is at fault. The league is blamed for putting teams in cities that can't or won't support them. The players refuse to accept the fact that they don't have the type of national television contract or the type of exposure that the NFL or Major League Baseball receives to finance the multi-million dollar salaries they believe they deserve. 

Regardless of how, or to whom, blame is assigned, there is a lesson here for everyone when it comes to negotiating. Never let the perfect be the enemy of the good. Even the most seasoned negotiator never gets everything they want in a deal. Whether you’re buying a car or trying to create multi-million dollar labor agreements, you must be willing to bargain and compromise. The key is to be prepared and to know exactly what your goals are in the negotiation. Determine ahead of time what you would be willing to sacrifice to achieve those goals. And try to have a "Plan B" in mind rather than forcing yourself, or the other party, into ultimatums which almost always lead to a breakdown of the deal. 

The NHL owners and their players are learning the hard way when you let hard line negotiating tactics get in the way of compromise. During this lockout, reports estimate that the league has lost over half a billion dollars in revenue. That is money that neither the league, nor their union, will ever have a chance to recoup. 

What deal would you offer to bring the NHL and the players together?



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Supply chain may be increasingly reliant upon big data and networks

on Monday, December 24, 2012

Supply chain may be increasingly reliant upon big data and networksWith many enterprises looking to implement business cost reduction strategies and increase efficiency, more companies are looking to the web to provide potential supply chain solutions. In the search for both these elements, some businesses are turning to big data and supply chain network information that is accessible via the web. In the coming year, it is possible more firms will turn to such technology to ensure their supply chains are as effective as possible.

Many companies are turning to risk aversion tactics such as web supply chain models or "3-D" supply chains, platforms that share data with various enterprises via the web. These IT-based networks allow enterprises to ensure top efficiency and with an internet-based hub of information and better track their global operations. Others are beginning to use big data to more effectively track, organize and analyze their company information to increase productivity and profitability.

Benefits of supply chain optimization through new systems
Keeping all procurement, manufacturing and logistical information in one place can make it simple for companies to easily access information in the event of a disaster and determine how and where their supply chains will be affected. This can allow a business to better recover from an unexpected disaster and ensure it gets back on track in a timely fashion. It can determine for what length of time its suppliers or logistical operations will be impacted, allowing an enterprise to determine which alternative procurement or shipping alternatives will be most effective and allow for the greatest cost savings.

Even without disastrous occurrences, a business can still benefit from the use of big data or web-based models of its supply chain. Having all of this vital information in one place can allow a company to determine how its strategic sourcing policies are working and how it can better them to further reduce costs. It can also be useful in the logistical process as companies attempt to determine which shipping methods are the quickest and most cost effective.

Having an established platform that tracks all shipments and purchasing also can help companies and their suppliers work better together, establish stronger relationships and ensure their supply chains run smoothly. This can also cause companies to develop stronger or beneficial relationships with their top competitors if they use any of the same suppliers or producers, relationships which can be beneficial to both parties.
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Fiscal cliff could threaten US manufacturing

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Fiscal cliff could threaten US manufacturing Even though many reports have claimed domestic manufacturing is on the rise, the increased production seen in the U.S. could be impacted by the impending "fiscal cliff." If the federal government fails to reach a budget and deficit reduction deal by the end of December, this cliff - a combination of tax hikes and deep spending cuts - will be implemented automatically.

Growth could be hindered by fiscal cliff
As the economy struggles to recover, manufacturing in the U.S. has hit a new high, despite companies often enjoying lower operating costs by moving their operations overseas. Reuters reported that the sector grew at the fastest pace in eight months this December and showed continuous signs of improvement through the end of the year. The preliminary manufacturing Purchasing Managers Index jumped to 54.2, a rise from November's reading of 52.8.

However, this growth could very well be stunted if no agreement is reached the country goes over the fiscal cliff. The Congressional Budget Office reported that if this worst-case scenario occurs, the economy is at risk of falling back into a recession and the outlook for business in general is not bright. The report estimated that budget cuts and taxes would shrink the nation's GDP by 0.5 percent in 2013, and unemployment would rise to roughly 9 percent in the second half of the year.

This would have a tremendous impact on the manufacturing industry and cause many companies to cut back on production and potentially lay off employees they cannot afford to keep on.

Decline likely if spending cuts and tax hikes implemented
Daniel Meckstroth, the chief economist at the Manufacturers Alliance for Productivity and Innovation (MAPI) told Industry Market Trends magazine that even though the manufacturing industry is set to expand by 2 percent in 2013, the fiscal cliff could cause production to instead decline by 1 percent.

Government contractors would see large cuts in their contracts, requiring them to cut production and staff, while other companies may find that they are unable to pay higher tax rates while still remaining profitable and experience a subsequent decline. This could result in fewer companies and individuals being able to purchase the very goods U.S. manufacturers are currently making and hinder the domestic production supply chain.
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Railroads may play large role in 2013 supply chains

on Friday, December 21, 2012

Railroads may play large role in 2013 supply chainsMany companies have been experiencing slow growth as the economy wavers and the "fiscal cliff" approaches, and some business leaders are looking for ways to implement cost savings while still expanding their enterprises and getting their products to consumers. As they are seeking ways to enhance their profit margin and still get merchandise to market, some may be considering changing up their logistical strategy to include railroad transport.

Rail executives anticipate growth
Many in the locomotive industry expect 2013 to be a profitable and busy year for freight trains across the U.S. and Canada. Several executives reported focusing on market diversity, keeping up quality service and remaining productive as their strategies to encourage growth and pick up new consumers in the coming year, according to Progressive Railroading.

Claude Mongeau, president and CEO of rail giant Canadian National Railway (CN), told the source that even though it is too early to make any clear projections, he assumes the rail industry will grow faster than the economy or base markets.

Increased rail shipping expected
The recovery of the U.S. economy will play a large role in the success of railroad operators. As the housing market begins to improve, builders are finding an increased need to procure materials that are often shipped across the country by rail. Similarly, the natural gas boom being experienced in several parts of the nation will call for increased shipping options.

Companies looking to change their logistical operations and make the switch to railroads may choose to do so because it is a cost-effective strategy for their supply chain. Others may be drawn to the potential rail offers in getting their goods to market or to the next link in their supply chains, such as ports or highways.

Improving operations to encourage growth
In a separate interview with The Globe and Mail, Mongeau stressed the importance of being efficient and how prompt and reliable service would also help to increase growth.

Many railroads are making changes to their operations and procedures to encourage businesses to utilize their services and reap the benefits. Progressive Railroading reported that Canadian Pacific recently launched faster transit options connecting large cities. BNSF is expanding its network to ensure it can reach an increased number of destinations and ensure its customers are able to get its products to market.
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Apple, HP mobile devices changing tech supply chain

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Apple, HP mobile devices changing tech supply chain Frequent technological updates and new devices are causing changes within global supply chains, as tech leaders such as Apple and Hewlett-Packard aim to remain competitive and stay on top of the market. With new tablets and mobile technology being released on a regular basis, many companies have had to determine how to increase the popularity of their products and streamline their supply chains to keep processes running smoothly and cost efficiently.

More competition
With more consumers looking to purchase mobile gadgets, many additional companies have attempted to break into the market with new products and competitive prices. While Apple has retained a great deal of consumer loyalty and significant portion of the market share with its popular iPhone and iPad products, other firms have been attempting to overthrow the technological giant and develop their own hit products. Hewlett-Packard, Google, Microsoft and Amazon have all released devices designed to compete with Apple products at consumer-friendly price points.

Not all demand for tablets, smartphones
While tablets and smartphones have remained popular throughout 2012 and strong sales are expected to continue in 2013, companies are altering their supply chains to provide consumers with other in-demand goods as well. Many companies are working on or releasing mobile PCs featuring touchscreens and ultra-slim designs - some of the features that appeal to tablet users.

"With the changes taking place in the mobile PC segment, existing supply chain relationships could be disrupted due to competitive conflicts," noted Jeff Lin, value chain analyst at research and consulting firm NPD DisplaySearch. "For example, Samsung Display plans to improve its mobile PC customer portfolio by reducing its share in Apple and increasing support to captive brands and other external customers, like Amazon and Barnes & Noble."

The shift in production and development of new products will require many companies to revise their procurement strategies to receive the lowest costs on in-demand items necessary for the production of their merchandise. By using strategic sourcing techniques, a corporation can enjoy greater cost savings, potentially increasing its competitive edge and be better able to compete with other mobile technology companies. The number of enterprises embarking on new strategies to attract consumers with mobile devices could also change how suppliers and manufacturers provide major players with the materials and components necessary to produce their products before they hit the market.
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Retail supply chains still feeling heavy holiday shopping

on Thursday, December 20, 2012

Retail supply chains still feeling heavy holiday shoppingRecent data released by digital information analyst comScore revealed that holiday shoppers are increasingly turning to online shopping, especially late in the season. This information may be important for merchants considering ending their holiday procurement strategies, slowing their logistical operations or making changes to their online promotions before the holiday season is over.

The data from comScore showed that online shopping for the first 46 days of the holiday season shot up 13 percent in 2012. Over the course of the entire season, consumers have spent more than $35 billion on the web, and over the last week, merchants made $7 billion in online sales, setting a new record for ecommerce.

"We expected this past week to be record-setting and it clearly was, with an impressive spending total of more than $7 billion – an average of more than $1 billion in spending per day," said comScore chairman Gian Fulgoni. "This current week, which kicked off with Free Shipping Day on Monday the 17th, will be critical in making up some ground on a season-to-date growth rate that remains below initial expectations at 13 percent following a prolonged post-Cyber Monday lull. With many retailers extending their free shipping offers into Tuesday and Wednesday of this week, we just may see the sort of late-season jolt needed to push growth rates back into the mid-teens."

Big sales still expected
Even though the 13 percent growth rate was slightly below expectations, retailers do have the opportunity to make up for any missing sales. The latest results from the Consumer Reports Holiday Poll indicate that many Americans are not quite finished with their holiday shopping and still in the market for last-minute gifts. The data revealed that about 132 million citizens are still in the process of completing their Christmas shopping.

The report showed that consumers have thus far spent a median of $350 on holiday gifts, only 70 percent of the $483 a previous Consumer Reports poll indicated shoppers would spend this season. This hints that there is quite a bit of room in customer budgets to finish their shopping and perhaps spend slightly more than they intended, especially if merchants keep up special holiday deals, such as those like free shipping or deep discounts many online retailers offer. Merchants may expect to find their stores more crowded days leading up until Christmas, as more procrastinators seek out last minute purchases for loved ones and may consider keeping holiday supply chain optimization strategies in place until after the holiday.
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Anticipating supply chain problems

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Anticipating supply chain problemsMany corporations have had to work around a disaster that greatly disrupted their supply chain, such as Hurricane Sandy, which hit the East Coast in late October. While many businesses may aim to keep their supply chain management as smooth as possible, unexpected events do still occur and wreak havoc on carefully planned sourcing strategies, manufacturing operations and logistical operations.

A recent piece on the Harvard Business Review makes the point that if it is possible for storms and other natural disasters to be predicted, companies should be able to work around those disruptions and keep their supply chains free from severe consequences. While it may be impossible for a business to avoid every problem that comes its way, it can develop strategies that can help to prevent serious disruptions and potentially result in long-term cost savings.

Developing a plan
Should a natural disaster occur, a company's supply chain team should be prepared and develop a plan with suppliers, manufacturers and transportation providers to ensure a viable backup plan is in place. Without a secondary plan that can be utilized during emergencies, a company may find itself unable to procure raw materials necessary for manufacturing, resulting in potential product shortages, or incapable of getting its product to market, which can be devastating for an organization's profits.

When news of an impending disaster hits the airwaves, a company should take action and determine which aspects of its supply chain could be impacted, and how it can work around these problems to ensure it does not face severe consequences.

Continued improvement
A company should continually seek to better its processes and determine which practices are deficient and could lead to further problems in the event or a disaster. New technology, such as big data and cloud developments, can serve to help a business gather more data and have access to more information than ever about their supply chains, processes and expenses. These new tools can assist a firm in making better supply chain decisions and determining where any inefficient processes are and how they can be resolved.

Supply chain professionals need to be prepared for events such as winter storms, hurricanes, floods and other weather events that can result in lost profits and disrupted business, which can have a significant and long-lasting impact on an organization.
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Samsung Chromebook - Does the pricetag meet expectations?

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Over the past few weeks I became interested in finding a durable, lightweight and relatively cheap laptop to use for mostly for web-browsing and to keep around the house. I decided to look into Samsung’s Chromebook to see if the notebook offered what I am looking for.

The Chromebook is offered at a competitive price of $249, but does the low price cut quality and performance?

In simple terms, a Chromebook runs on Google’s browser-based, cloud-focused Chrome operating system, if you’re familiar with using Gmail, Chrome, Google+, this laptop offers a similar user experience and usability. The focus of this laptop is to offer an inexpensive product that can be used to quickly browse the web and  provide an easy to use interface for a various number of users. While the laptop offers quick web browsing capabilities, the offline access and storage is limited. The Chromebook is available in a 3G or WiFi model.

I have outlined a few brief key features of the Chromebook below:

·       Lightweight construction with a thin 0.69 inches, 2.5 pounds and an 11.6 inch display

·       Features include: HDMI out port, one USB 3.0 port, USB 2.0 port, headphone/microphone jack, and a card reader

·       Built in WLAN and Bluetooth 3.0

·        16GB of internal flash memory, which is may be limited for some users but Samsung offers 100GB of free Google Drive storage(usually $60 per year)  for two years which is a handy place to keep applications, documents and music available from anywhere

·         2GB of RAM allows for quicker web browsing and document viewing

·         Full QWERTY keyboard that has been modified to optimize web browsing experience

o   Includes dedicated icons for Gmail, Google Search, Google Drive and YouTube

·         Basic file manager to view contents of a USB flash drive or SD card

·         Battery can last up to 5 and a  half hours

·         Front facing camera, reviews have indicated a lack of quality


Overall, the $250 price tag is attractive for many people who are looking for a basic computer for web browsing, emails as well as a spare laptop to keep around the house or for travel. From my perspective, this laptop seems to be best suited for non-technical individuals, which may be ideal for your parents, grandparents or younger siblings.  Do you feel that Samsung's marketing strategy that a Chromebook is 'for everyone' is an ideal approach or do you think the product will quickly fade?
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Apple's Supply Chain Workforce Monitoring Expands

on Wednesday, December 19, 2012

In an effort to pursue better working conditions, Apple has made it a priority to address the issue of excessive work hours in their supply chain. Despite the allowances that some local laws permit in terms of not having any maximum amount of hours employees can work, Apple has taken proactive, voluntary steps to ensure compliance with basic labor standards. According to Apples recent supplier responsibility pages update, 88% of November workweeks were less than the 60 hour maximum allowed by Apple’s code of conduct, with the majority of excess work hours assigned on a voluntary basis during peak periods.

Apple has historically had decent numbers in maximum total work hours per week being at or below the 60-hour threshold, with a high of 97% being reached earlier this year in July and August of this year. Being the first technology company to be admitted to the Fair Labor Association (FLA), Apple’s transparency and 3rd-party auditing of its supply chain workforce are a responsible first step towards protecting its workers. As a part of that initiative, Apple continues to monitor its workforce by implementing weekly supplier data checks on hours worked for over 1,000,000 (one million) employees worldwide, up from 900,000. These voluntary undertakings towards pursuing responsible labor practices come on the heels of an expanding program geared towards addressing environmental and working conditions.

As the workforce for all major suppliers increasingly relies on a global infrastructure, it’s increasingly important that companies pursue responsible and ethical labor practices even when not mandated to do so. American leadership has historically been determined in part by efforts to promote human rights and a culture of equality in our domestic and international approaches. Business ethics should be no exception to this rule, and making sure labor practices are transparent is a key first step in that direction.

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Amazon smartphone manufacturing in the works

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Amazon smartphone manufacturing in the worksFor more than a year, there have been rumors of an Amazon smartphone making an appearance on the market, and it would appear that these rumors can now be confirmed. A recent report in the Taiwan Economic News revealed Amazon is indeed working on its own smartphone, and it is being manufactured by Foxconn, an offshore manufacturing facility used by technology giant Apple.

The gadget, which is reportedly scheduled to be released in the second or third quarter of 2013, is anticipated to sell for between $100 and $200. The low price point makes it a potential top competitor for rival Apple's iPhone. Amazon has been a vocal proponent of keeping its costs of manufacturing low to ensure its devices are available to consumers at affordable prices.

The report revealed that the initial production was for only 5 million devices, indicating that the company may be hesitant to break into the smartphone market with a huge release. However, several sources report that if the device is anything like Amazon's wildly popular Kindle tablets and e-readers, it can be expected to perform well with consumers.
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Global supply chains could struggle in 2013

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Global supply chains could struggle in 2013Global supply chains often depend on the health of the economy, which can make it difficult for companies to have cost-effective, efficient operations. As the economy is slow to recover, global supply chains could face a variety of struggles, according to a recently released report from commercial information provider Dun & Bradstreet (D&B).

"Recovering from the Great Recession of 2008 continues to challenge global economies," said Paul Ballew, chief economist at D&B. "Against that backdrop, the speeds at which companies are shifting business operations, as they continue to restructure, create more efficiency and adaptability to better anticipate future economic conditions. In fact, according to our statistics, business financial health today tops pre-recession levels. Unfortunately these business gains are inhibited by social and political pressures at home and abroad, underscoring the interdependency of today's global economy."

Worldwide problems could impact supply chains
Businesses will face challenges in the coming year, according to a year-end report from D&B. While the U.S. economy has shown signs of improvement in recent months, its slow growth and large public sector debt could cause businesses there to falter.

As businesses in Europe deal with a currency crisis and the problems with multiple Eurozone countries, 2013 could be ominous. Uncertainty surrounds companies doing business in the area, and a currency collapse could have an enormous impact on supply chains in that region of the world. High unemployment rates could slow demand for goods, decreasing production, the need for raw materials and changing logistical operations.

Global growth is also a concern for companies that have worldwide supply chains. According to the D&B report, the situation in Europe has put pressure on China, once an economy growing at a rapid pace. With decreasing demand for its cheaply manufactured goods and uncertainty in its own economy, financial problems in China could escalate and have a negative impact on other nations.

Working around global concerns
"While significant concerns remain across every global economic region, 2012 proved to be a year in which businesses continued to adapt to the realities of a sluggish and prolonged recovery," said Ballew. "This should serve them well as they navigate the challenges and risks associated with 2013 and beyond."

Companies concerned about the impact of global markets on their supply chains may be eager to employ cost savings techniques, such as strategic sourcing or green initiatives that will cut energy expenses. Having a firm handle on supply chain management is also essential to keeping an organization's operations successful.
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A Look Back at Source One's 20th Year in Business

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As this milestone year comes to a close, Source One Management Services, LLC fondly looks back on 2012.

A year of celebration.
Source One, founded in 1992, was proud to celebrate its 20th Anniversary this year.  To celebrate this momentous occasion, Source One produced a multimedia presentation depicting the history of the company's strategic sourcing and procurement expertise.  Evolving from its simple beginnings as an advocate for buyers into a leading procurement services firm that provides cost savings for leading global companies, Source One looks forward to further growth and success in the future. 

A year of recognition.
In the beginning of 2012, Joe Payne, Source One's Vice President of Professional Services, was honored with Supply & Demand Chain Executive's Pros to Know award.  This honor recognized Joe as a thought leader helping to shape the supply chain industry and advancing the discipline. 

The company as a whole was also recognized for the seventh consecutive year by Supply & Demand Chain Executive magazine for its work as a procurement solution provider leading companies to supply chain excellence with the Supply & Demand Chain Executive 100 award. 

Source One was also the proud recipient of a brand new award, the Green Supply Chain Award, for helping customers meet their green or sustainable supply chain goals.  Source One's team of procurement experts were recognized for their work in helping a national retailer identify suppliers of green products to enhance the client's already socially conscious business practices.

A year of shared knowledge.
After the 2011 release of "Managing Indirect Spend: Enhancing Profitability Through Strategic Sourcing," the authors and their colleagues have been in high demand to share their sourcing expertise with the rest of the industry. In early fall, Joe Payne and Bill Dorn were asked to present "Huge Savings Now Possible with Collaborative Sourcing" to an audience of education industry buyers and suppliers. The two speakers also participated in a roundtable discussion entitled "Strategic Alignment with Suppliers for Mutual Benefit" at that same event.

Bill Dorn partnered with CFO.com to host a webcast even entitled "Cost Management: Eliminate Procurement Practices that Increase Costs & Risk" which was presented to an audience of financial executives. 

Diego De la Garza, Source One's Liaison to Latin American Markets, was requested to provide two webinars to his Alma Mater, the Universidad LaSalle's School of Business in Mexico City, Mexico.  The audience of students and staff attended Diego's video conference where he provided his professional perspective on business and career development.

A year of old and new.
For the past five years, Source One has partnered with Corporate United, the nation's largest group purchasing organization, to develop new category offerings.  Impressed by Source One's professional staff and superior performance, a new supplier agreement was founded for telecommunications management services.  The new offering provides Corporate United members with three unique telecommunications solutions backed by 20 years of experience with strategic sourcing and telecommunications.

Source One excitedly looks to 2013 to offer new opportunities for growth and success.
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Cuts in Apple's iPhone supply chain spark worries

on Tuesday, December 18, 2012

Cuts in Apple's iPhone supply chain spark worriesMany investors are worried about their Apple stock after the company's cuts in its enormous supply chain prompted analysts to lower their expectations. A recent Forbes article referenced a report from OTR Global, which estimates that the company's iPhone 5 will not manage to hit Apple's sales expectations. This could call for better spend management techniques within the company, as well as more accurate estimates to avoid future production cuts and the subsequent investor panic that may follow.

Apple has made production cuts in its Asian supply chain in light of lower-than-expected sales of both the latest iPhone and iPad. Forbes reported that UBS analyst Steve Milunovich cut his estimates for the company and reduced his target from $780 to $700.

His reasoning for those actions largely rests on the cuts Apple recently implemented. Supply chain checks predict the rate of production for iPhones has fallen compared to other releases, and Milunovich claimed that his Chinese sources do not anticipate the iPhone 5 will have the same runaway success as its predecessor, the iPhone 4S. He also voiced concerns about the iPad Mini and its impact on the original iPad and the company's growth estimates in the current global financial situation.

Not all worried about the supply chain
However, some think the cuts have been blown out of proportion and are nothing more than speculation. Speaking about the cuts and subsequent investor warnings, Topeka Capital Markets analyst Brian White declared "the doomsday scenarios painted over the past week are inaccurate."

White claimed Apple's cuts in production should come as no surprise, as the popularity of the company's products is evident in their continued success with consumers. He also noted that yield issues have required Apple to cut their rates of material procurement, potentially causing some of the production cuts.

He also made the point that the latest iPhone's availability worldwide is more impressive than the release of the previous model, the iPhone 4S. White revealed that Apple is scheduled to have the latest device available in 101 countries during the first 91 days of its release, a larger number than the 92 countries in which the iPhone 4S was available in the same time frame.

It remains to be seen how these procurement and production cuts will impact Apple's global supply chain and affect availability and consumer demand in the coming months.
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No Apple ‘doomsday’ for Christmas – iPhone demand remains high for the holidays

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Apple remains resilient despite concerns over recent supply chain cuts

Recent supply chain cuts for the iPhone 4S and the iPhone 5 by Apple (AAPL) have prompted some analysts to seriously question the health of the company in the wake of decreased parts orders in the month of December. Such cuts have caused some to suspect that a massive decline is on the horizon for Apple, speculating that a ‘doomsday’ scenario is imminent for the company. While some would intuit that December should have seen a surge in orders for iPhone parts by Apple due to increased demand for the holidays, Topeka Capital Market’s Brian White contends that “the doomsday scenarios painted over the past week are inaccurate”, adding that "Actually, we are a bit surprised that these cuts didn't occur sooner."

White’s explanation is that some Apple partners are having trouble building enough components for the iPhone 5, (due to yield issues) such that Apple has been forced to make cuts from other suppliers. It may be comforting for Apple investors that those cuts only occurred in the beginning of December, while November and October remained without cuts. This could be indicative of a ramping up of production in anticipation of the holidays, with the new phones being made in the fall to be ready for sale in December, and the cuts taking place in December because the seasonal demand has already been met. Regardless, the signal sent to investors as a result of the supply chain cuts has had a chilling effect on perception of Apple investor confidence, despite most quarterly projections remaining mostly unchanged and Apple stock trading up 1.19%.

The steady sales for the iPhone 5 and iPhone 4S continue to demonstrate resiliency, which should quell any unrest in the wake of the recent supply chain cuts. With over 2 million iPhone 5 units selling in just the first three days of being available, demand for Apple phone products remain high. While the question remains as to why the announcement of the decision to make supply chain cuts would come at such a seemingly untimely juncture, the resiliency and reach of Apple are simply too bolstered by global demand that the announcement of cuts will have only a minor impact at best. Wells Fargo analyst Maynard Um put it eloquently when responding to Apple doomsayers, proclaiming triumphantly that ‘the Mayan apocalypse is not upon us,’ and for potential investors, it seems that it’s not upon the Apple or the iPhone, either.

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Siemens works to achieve cost savings in supply chain

on Monday, December 17, 2012

Siemens works to achieve cost savings in supply chainEngineering and electronics giant Siemens recently unveiled plans to increase its supply chain efficiency, and the plan aims to save the company €3 billion in operational expenses by 2014. The corporation has developed a strategy that will work on its supply chain management, alter procurement tactics and implement green technology.

In 2008, the corporation first implemented a company-wide supply chain management system under the leadership of Barbara Kux. Since that time, the company has managed to change up some of its strategies, but it plans to work even harder to ensure its operations are working together to achieve maximum savings. With Kux's recent announcement that she will leave the organization when her contract expires in December, there are questions as to how the company's supply chain savings program will continue and remain successful.

"The €3 billion target is only possible because of what I have set up in the last four years," she told the Financial Times. "I'm very confident, I know exactly what can be done … I can tell you that the €3 billion will be delivered. We are set up to achieve that."

Procurement strategies changing
Part of Siemen's cost cutting strategy involves altering current procurement practices. The company revealed that while less than 30 percent of its purchasing was aggregated in 2008, that number has shot up to 55 percent, slashing expenses.

Where the company sources from is as important as its procurement strategies. Siemens revealed that it has stepped up its purchasing from emerging countries. While it acquired 20 percent of its volume from these countries in 2008, that number has jumped to 26 percent.

Other plans to save
The company isn't only focusing on procurement and sourcing strategies - it is also looking into ways to save on product development. This "design-to-cost" method being considered would increase the partnership between the supply chain management and product development teams and ensure products are developed in the least expensive manner possible.

Also important to Siemens' goal of saving €3 billion in supply chain operations is the further integration of the supply chain management function into all of the company's operations. The supply chain management team would work with each of the organization's sectors to determine how additional savings could be achieved.
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