Monthly Archives: June 2010

New and Upcoming Events from the #1 Supply Chain Resource Site

The Sourcing Innovation Resource Site, always immediately accessible from the link under the “Free Resources” section of the sidebar, continues to add new content on a weekly, and often daily, basis — and it will continue to do so.

The following is a short selection of upcoming webinars and events that you might want to check out in the coming weeks:

Date & Time Webcast

11:00 GMT+05:00

Risk Management

Sponsor: Nest Software


11:00 GMT-07:00/MST/PDT

Growth of Legal Process Outsourcing: Implications for Law Firms, Their Clients, and LPO Providers

Sponsor: Vantage Partners


11:00 GMT-04:00/AST/EDT

Streamlining Contracting Policy and Process

Sponsor: Ariba


10:00 GMT-04:00/AST/EDT

The AstraZeneca Exclusive – The Secret to Securing 94% Payment on Time and Still Optimising Working Capital

Sponsor: Ariba


14:00 GMT-04:00/AST/EDT

Security Experts Offer Recommendations on How to Keep Up with Rising Threats and Increasing Compliance Requirements

Sponsor: Perimeter E-Security


12:00 GMT-04:00/AST/EDT

The ABC’s of Effective Sanctions Compliance

Sponsor: AML Services International


15:00 GMT/WET

Scotland: Discover Europe’s Premier BPO Location

Sponsor: SSON


11:00 GMT-04:00/AST/EDT

Spreadsheet Controls: Who’s in Control — You, Or The Spreadsheet?

Sponsor: MorganFranklin


11:00 GMT-04:00/AST/EDT

Translation Technology In the Cloud

Sponsor: Forrester


12:00 GMT-04:00/AST/EDT

Anatomy of a Brand Campaign – How Davis Health Listened to Customers to Re-Build Their Brand

Sponsor: Mountain State Marketers

Dates Conference Sponsor
2010-Jul-12 to


Lean & Green Summit: From Compliance to Innovation

Savannah, Georgia, USA (North-America)

Lean & Green Summit
2010-Jul-14 to


Mattech 2010

Miami Beach, Florida, USA (Africa)

Mattech 2010
2010-Jul-18 to


World Congress 2010

Fort Lauderdale, Florida, USA (North-America)

2010-Aug-6 to


The 2010 Academy of Management Conference

Montreal, Quebec, Canada (North-America)

Academy of Management
2010-Aug-9 to


CompTIA Breakaway 2010

San Antonio, Texas, USA (North-America)


They are all readily searchable from the comprehensive Site-Search page. So don’t forget to review the resource site on a weekly basis. You just might find what you didn’t even know you were looking for!

This will be the last regular upcoming events post until the fall conference season when webinars and events pick up again. In the interim, please access the Resource Site directly.

Trade Optimization Hits Mark for CFO’s Top 2010 Concerns

Today’s guest post is from Matt Gersper, founder and president of Global Data Mining, who will be hosting a webinar on Trade Optimization on Thursday, July 15, 2010 from 2:00 pm to 3:00 pm, EDT.

New government regulations and ineffective supply chains are costing U.S. businesses millions of dollars in unnecessary fees and expenses, destroying company profits and eroding global competitiveness. Understanding risk factors associated with international business transactions can help companies estimate the financial impact these risks may have on their business and provide a framework for fixing the problems and restoring lost profits.

Draining the Supply Chain

For financial executives, the impact of supply chain risks, trade policies and regulations is a major concern. A recent study concluded international trade effectiveness and “hanging on” to the company’s hard-earned cash are top concerns for CFOs in 2010.

There are four main risk factors adding unnecessary costs to international transactions every day:

  1. Government regulations
  2. Delays in the supply chain
  3. Inadequate internal and external controls
  4. Inaccurate or obsolete information
Top Internal and External Concerns for CFOs

A study by APQC and Global Data Mining revealed a typical U.S. bound international supply chain performs perfectly less than 10 percent of the time, internal controls for cross-border transactions are 200-times worse than a company’s accounting controls, and a McKinsey study estimates cross-border volume will be increasing seven-fold in the next 15 years. These conditions create chaos in many supply chains and cause delayed shipments while adding millions of dollars of unnecessary costs and creating unknown risks for companies.

Stop the Bleeding

Optimizing global trade effectiveness and improving supply chain speed can inject trillions of dollars into the national economy this decade. That translates into billions of dollars for states and millions of dollars annually for U.S. businesses.

It is time for business executives to quantify unnecessary trade costs, understand the significant financial opportunities available by optimizing global trade business processes, and take action to return these costs to the company’s bottom line.

According to an AberdeenGroup study of 233 enterprises, “A $1 billion company that imports a third of its goods can free between $10 million and $40 million in cash by better controlling its basic global trade processes“. The specific areas recommended for improvement are: trade agreement management, sourcing opportunities, foreign trade zone utilization, and supply chain finance strategies.

Independent analysis by Global Data Mining of more than $178 billion in U.S. imports has consistently supported the conclusions reached by the AberdeenGroup. Applying the Aberdeen metrics to the $1.9 trillion in annual U.S. imports would create an annual cash infusion into U.S. businesses of between $58 and $232 billion. Imagine the impact this would have on U.S. jobs and in strengthening the economy. In comparison, the total funds for the American Recovery and Reinvestment Act of 2009 awarded in 2009 was only $183 billion. And only $54 billion was actually paid out.

Big Brother

The new Importer Security Filing regulation, commonly referred to as 10+2, gives the U.S. government additional powers to confiscate a company’s cash . Customs and Border Protection’s (CBP) recent publication, “Trade Strategy for Fiscal Years 2009-2013,” should be a wakeup call for every CFO. Astonishingly, the CBP report lists “Enforce U.S. Trade Laws and Collect Accurate Revenue” as its number two strategic goal ahead of “Advance National and Economic Security.”

In Q3-10, CBP will begin to issue fines for non-compliance and there will likely be more frequent holds on shipments for non-compliance. An important study by the National Association of Manufacturers estimates the ISF regulation will create a permanent 2.8 day delay in supply chain speed. If the entire nation suffers the 2.8 day delay, it would be the equivalent of a $27 billion to $43 billion tax on U.S businesses, using the Purdue University Study cost model for supply chain delays.


To put the cost in perspective, it is virtually the equivalent of doubling the import tariffs that manufacturers now pay to bring products and components into the United States“.

John Engler, president National Association of Manufacturers


To make matters worse, a recent study by PricewaterhouseCoopers found that supply chain disruptions destroy shareholder value and corporate profitability. The study showed the market is quick to punish companies that report supply chain disruptions. On average, affected companies’ share prices dropped nine percent below the benchmark group during the two-day announcement period.


Poor controls, government interference and regulations, supply chain disruptions and bad information negatively impact the bottom line. Companies cannot effectively compete on the global stage with outrageous supply chain costs, fines and market-based penalties of this magnitude. Financial executives must stop the money drain by identifying hidden and unnecessary costs and then take action to optimize business processes and return those costs to the company’s bottom-line.

Thanks, Matt!

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Three Great Tips for Redesigning Your Logistics Network

A recent article in Logistics Management contained 6 Network Redesign Tips designed to help you reduce distribution costs. The following three tips are particularly relevant regardless of the type of supply chain you operate:

  • Being Green Can Bring More Green

    If it’s truly green, it saves you money. If a solution that purports to be green increases costs, then you can be sure it’s another example of greenwashing, because truly green solutions reduce the requirements for energy, water, and other natural resources, which ultimately decreases costs. Examples given in the article include replacing high-intensity discharge lights with energy-efficient fluorescent lighting, installing solar panels, and utilizing fans for air circulation, but there are dozens of ways you can reduce costs. See the green and sustainability archives for other items.

  • Get Creative With Transportation

    As per the article, start by finding ways to eliminate empty miles and increase truckload utilization, but don’t stop there. It’s not just plane, train, and truck … there’s also bus and even automobile. Busses often have empty space and are used in some countries regularly to haul small loads, and sometimes you should off-load your smaller shipments to Fedex and UPS who use smaller, energy efficient vehicles.

  • Create an Off-Shore, On-Shore, Near-Shore Blend for Flexibility

    The last thing you want to do, as a result of a supply disruption in your factory half-way around the world, is expedite multiple shipments by air that would normally go on a single ocean carrier. Not only does this send transportation costs sky-high, but it can also increase your carbon footprint. (Yes, ocean carriers, which aren’t subject to the same clean-air requirements of land-based vehicles, are dirty … but your footprint is often just a fraction of the carbon-produced as you’re sharing the load with dozens [or hundreds] of other shippers. However, if you’re filling multiple planes worth of merchandise, that carbon footprint adds up fast.) However, if you also sell into foreign markets, the last thing you should be doing is on-shoring everything. The best strategy for today’s multi-national is a blended strategy. This will minimize disruptions and costs.

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Want More Supply Chain Profits? Take a Page from David Suzuki’s Notebook.

David Suzuki recently gave the keynote at SAP Canada’s Sustainability in Business Summit. ComputerWorld has been kind enough to put the most relevant part of his keynote on the web on the site. In brief, he says nature has to be the bottom line, and he’s right.

Think about the following facts:

  • Every time you use a gallon of water, that costs you money.
  • Every time you use a watt of energy, that costs you money.

    And now that carbon tariffs are coming on-line, it costs you even more.

  • It costs money to mine raw materials.

    Which get more expensive as supply decreases.

  • It costs money to produce and distribute products.

    Energy costs, carbon costs, and oil costs.

  • It costs you money to dispose of waste.

    No one wants a landfill, and someone has to hall it away.

  • It costs you money to dispose of end-of-life products.

Now, if you would design for recycle:

  • You’d use less water producing every component you re-used.
  • You’d use less energy producing components.
  • You’d need less raw materials, as you’d be getting them back every time your customers upgraded.
  • Production would cost you less.
  • You’d have less waste to dispose of.
  • You wouldn’t have to worry about disposing of end of life products.

    They’d be recycled into next generation products.

Plus, your profits would soar as your green brand gained share in the minds and hearts of consumers everywhere. So take a page from David’s notebook. Put nature first and watch your bottom line improve. Going green saves green.

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Summer Brings More Permanent Vacations for the Oompa Loompas!

When we last checked in on the Oompa Loompas, we found that there was No Valentines Day for the Cadbury Oompa Loompas who were sacked only one week after Kraft promised not to close a factory and lay them off. And to add insult to injury, Kraft beat estimates and posted a higher-than-expected quarterly profit for first quarter — which I’m betting would have been more than enough money to keep the plant operating and the oompa loompas employed.

And now the Hershey Oompa Loompas are feeling the pain. Despite the fact that Hershey stock recently hit a high on sweet sales, with a better-than-expected sales volume first quarter that resulted in a raise in its full year forecast, and that Hershey expects to save $60 Million to $80 Million annually from its “Next Century” modernization program to enhance its supply chain, it just announced that it is going to trim 5% of its workforce.

At this rate, you have to wonder if there are going to be any oompa loompas left to enjoy the Orange County Chocolate Festival that is coming up this November. Personally, I don’t know what the problem is. Considering that the industry’s revenue for 2009 was approximately 4.9 Billion in the US alone (Reuters), you’d think they’d be able to keep the oompa loompas employed! And now that new research has determined that a little chocolate might cut cholesterol, you know sales have nowhere to go but up!

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