| As per Wikipedia, inventory consists of the goods and materials held available in stock by a business. Inventory Management is the process of managing inventory in an effort to insure that a business has the goods and materials available when it needs them, but does stock the goods and materials it does not need, or stock materials too far in advance of the actual need due to the associated cost with warehousing the materials.
Advanced inventory management, also referred to as inventory optimization, is becoming more common as companies look to lean their operations and supply chains. These strategies include Just-in-Time inventory management, Vendor Managed Inventory, advanced forecasting, and even donating excess inventory. The reality is that inventory, whose carrying cost can often exceed 30% of the product value, is expensive, and better management can greatly reduce the overhead costs, as well as the depreciation losses associated with holding too much inventory. For additional information on inventory management and inventory reduction strategies, refer to the following posts: |
Category Archives: Glossary
Green Supply Chain
| As per an article published on the Material Handling Industry of America (MHIA) website by Patrick Penfield of the Whitman School of Management at Syracuse University, the Green Sustainable Supply Chain can be defined as the process of using environmentally friendly inputs and transforming these inputs through change agents — whose byproducts can improve, or be recycled within, the existing environment. This process develops outputs that can be reclaimed and re-used at the end of their life-cycle, thus creating a sustainable supply chain.
The idea behind a Green Supply Chain (or a Sustainable Supply Chain, or a Green Sustainable Supply Chain) is to reduce costs while improving the environment. Green Supply Chains, which are often based on Green Purchasing (or Environmentally Preferable Purchasing), offer a host of benefits to their owners, including strong brand image, customer satisfaction, reduced risk, cost reduction, and increased shareholder value. As such, they are valuable assets to their possessors. Companies with green supply chains often have green operations. IT, Office suppliers, buildings and maintenance, transportation, food, energy, and manufacturing can all be greened with a little thought and a bit of elbow grease. The Green Purchasing* wiki-paper offered a number of tips on how to identify software and systems, office suppliers, building improvements, transportation alternatives, food choices, energy sources, and manufacturing alternatives that are cost effective and environmentally friendly. For some perspectives on green purchasing, green sourcing, and the green supply chain, refer to the following posts:
* The e-Sourcing Wiki was created and maintained by Iasta, which was acquired by Selectica in 2014 (which renamed itself Determine in 2015). It was retired by Determine (which did not actively maintain it) before Determine was acquired by Corcentric in 2019 |
Global Trade Management
| As per the e-Sourcing Wiki* paper, that gives us an introduction to global trade, global trade management can be defined as the practice of streamlining the entire life-cycle of global trade across order, logistics, and settlement activities to significantly improve operating efficiencies and cash flow. It encompasses global sourcing, e-Procurement, import and export management, document creation, global trade agreements, supply chain finance, regulatory compliance, trade document creation, global taxation, risk management, and global logistics and can be a very involved activity for some multi-national enterprises.
Global trade management is important for a number of reasons. Poor global trade management can cost a company dearly, as it can end up paying more duty, fees, taxes, and even fines than it would if the process was well managed, which it isn’t at many companies. A recent Global Data Mining# study found that error rates in global trade processes approach 10% to 20% in many companies and that the effective control of global trade processes is often 100 times to 200 times worse when compared to accounts payable processes. Global trade management is an involved process, which, as per the wiki-paper, can take fourteen or more steps for imports and exports and require 35 documents between 25 parties that need to comply with over 600 regulations and more than 500 trade agreements, as per this article in Supply Chain Digest that noted that the complexities of global trade require a new generation of transportation management. For more insights into the aspects of Global Trade, refer to the other glossary entries on the component functions, and the following blog posts.
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Global Sourcing
| According to Wikipedia, Global Sourcing is a term used to describe strategic sourcing in a global setting where the goal is often to exploit global efficiencies in the delivery of a product or service. It’s often associated with a centralized procurement strategy for a multi-national wherein the central buying organization attempts to extract an economy of scale through amalgamation and standardization of it’s global buying activities.
Although often mistaken for low cost country sourcing, it’s not the same as low cost country sourcing is just one aspect of global sourcing. Other instantiations include best cost country sourcing, where an organization tries to take advantage of producers with higher quality or unique services and not just lower labor costs. For some insights on global sourcing, see the following posts on Sourcing Innovation. Sourcing Innovation
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e-Sourcing Software
| As per Wikipedia, (Strategic) Sourcing can be defined as a systematic corporate/institutional procurement process that continuously improves and re-evaluates the purchasing activities of a company. It is one component of supply chain management. While most organizations implement strategic sourcing initiatives for the purposes of saving money, other reasons for implementing strategic sourcing include improving supplier performance and minimizing risk.
Generally speaking, it’s a multi-step process, and while the specific steps will vary depending on the services or solution provider you engage, all of the processes tend to have the following commonalities:
e-Sourcing is the electronic implementation of the sourcing cycle, and e-Sourcing software refers to the software products and platforms that support the sourcing cycle. e-Sourcing software is typically associated with e-Auction and e-RFX software, but it also includes spend analysis, strategic sourcing decision optimization, contract management, online marketplaces, and (virtual) supplier networks. For more information on the basic e-sourcing cycle and e-sourcing best practices, see the Strategic e-Sourcing Best Practices* wiki-paper. For a distinction between e-Sourcing and e-Procurement, see the post on how it’s sourcing and procurement. For some general strategies, see the Sourcing Innovation post archive on this blog. And for more information on each of the primary supporting technologies, see the appropriate glossary articles. * The e-Sourcing Wiki was created and maintained by Iasta, which was acquired by Selectica in 2014 (which renamed itself Determine in 2015). It was retired by Determine (which did not actively maintain it) before Determine was acquired by Corcentric in 2019 |