E2open will be sponsoring a workshop with Barkawi Management Consultants on Thursday, June 27, at the 2013 European Supply Chain and Logistics Summit in Berlin, Germany.

In the workshop titled State of the Art Information Exchange to Empower Successful Collaboration with Suppliers, Alexander Nedelchev, President Corporate Development of the leading supply chain consultancy Barkawi Management Consultants, will discuss how strategic partnerships with companies like E2open can yield significant business value by enabling cloud-based supplier collaboration. 

Attendees will learn the key requirements for advanced supply chain collaboration, as well as how organisations can enhance supply chain performance from a business perspective. The workshop will also explore the development of meaningful key performance indicators (KPIs) as part of a cross-company continuous improvement programme.

Now in its fifteenth year, SCL Europe 2013 is the only multi-streamed supply chain management event of its size, gathering more than 300 supply chain and logistics professionals each year. At this year’s event, attendees will receive in-depth industry insight and analysis from leading supply chain and logistics industry experts. Attendees will also get an exclusive, first-hand view of the projects that are helping to define the next generation of supply chain excellence and innovation in Europe.

More than 35,000 trading partners, with over 108,000 unique registered users, currently participate in the E2open Business Network, which allows participants to access and share data and execute business processes in a secure, real-time manner.

As a leading provider of strategic, cloud-based solutions for collaborative execution across global trading networks, the E2open Business Network also provides collaboration tools and analytics so that customers can make more informed and efficient decisions. 

E2open is also a lead category sponsor of the summit.

Martin Wegner is the man with a plan. The Vice President of Solutions and Innovation at DHL, he is responsible for the development of a range of futuristic projects at DHL’s state-of-the-art Innovation Centre, he spends his time focusing on the potential of logistics technologies, working on sci-fi gadgets,, revolutionary concepts and challenging new business models.

As the person in the know when it comes to future logistics, Wegner has provided a unique insight into two of the most influential devices on the market; RFID, the technology of now, which will impact the industry in the immediate future, and 3D printing, which is expected to revolutionise the supply chain over the next decade.

Following a range of projects and investment into RFID solutions, DHL has been working with a number of retailers and warehousing companies to ensure that RFID will feature increasingly in the retail and warehousing industry in order to promote the merits of RFID when it comes to transparency and inventory efficiency.

In the past five years, DHL have worked with a range of major companies such as METRO Cash & Carry in France and Sony Electronics to demonstrate the efficiency and capabilities of RFID for textiles, foods, beverages and electronic products.

Following this research, the company is working with a number of major retailers to increase RFID uptake from next year, as they recognise the benefits of control in their supply chain, in addition to theft-reducing and anti-counterfeit capabilities as Martin Wegner, Vice President, Solutions and Innovation at DHL explained.

“RFID is a technology with an abundance of opportunities in a number of processes. There might be more applications for consumers in the near future using RFID as basis, e.g. anti-counterfeit, e-commerce and after-sales tools combined with easy-to-use mobile devices.”

Complementary system

However, it is important to think of the system as complementary, according to Wegner. In order to take the system further, he believes that RFID should not be considered to be a barcode replacement.

“We should stop thinking about replacing the barcode by an RFID tag without changing the setup of processes. This will probably never pay off. We need to think about changing the processes in a way that follows the customers’ need for more detailed information where it is the case. But we should push these changes wherever RFID (and no other technology) helps to make a process more profitable,” he explained.

With an RFID device already on the market, DHL is playing a huge part in pushing forwards this technology as a solution for inventory management and supply chain standardisation. However, it is important first to develop a set of standards; something which DHL is working closely with the standards implementation firm, GS1, to achieve.

Advancing capabilities

With over 350 patents for products being developed at its innovation centre, the team at DHL believe we are far from utilizing the full potential of RFID applications which are able to interact with other devices, allowing active communications between goods and logistics providers.

One further technology at the centre of DHL’s innovation programme is 3D printing, which is set to revolutionise the way the supply chain operates, reducing the need for mass-produced manufacturing, transportation and storage. Potentially posing a threat to numerous businesses in the Supply Chain Sector, DHL is researching and developing ways to incorporate this new device into its service offering.

“It is inevitable that 3D printing will have an impact on global supply chains. At the moment, the technology and business applications are not mature enough yet,” explained Wegner.

“In certain industry sectors we will see a shift from central to decentralised production, from intercontinental shipping to more regional and domestic distribution. With our network of research partners and manufacturers, we have managed to get a comprehensive overview of where 3D printing is today and this will enable us to keep track of any new developments which open up new opportunities for our business,” he continued.

Driven by consumers to fulfil the need for more individualised consumer products, 3D printing offers a wide range of new opportunities which the industry will need to catch up with. According to Wegner, 3D printing shops for consumers or virtual warehouses to print spare parts on demand are visions that one day will become reality.

Developing the service offering

With an ever-increasing investment in complementary technologies, DHL are investing more and more into the development of value-added solutions for their customers to ensure they remain at the cutting edge of developments. According to Wegner, this focus is taking an increasingly important role in DHL’s global operations, where it will remains for years to come.

“Our business has always been a complementary one. Nowadays, being a logistics provider means more than just transporting goods and items. It’s more about covering and improving the entire supply chains of our customers, the transportation of data, security aspects, offering value added services such as assembling goods and exploring new technologies. The world has become faster and therefore logistics had to become faster and more complex,” he concluded.

Inventory management – the great balancing act

In the current economy, businesses are constantly looking for ways to protect their profit margins. This leads to an inventory management high-wire act; on one hand, consumers demand maximum availability but on the other hand, storing high levels of stock increases costs.

Many businesses opt to store stock across central, regional and local distribution centres to help ensure item availability and offer quick delivery times to consumers. Various risks within supply chains, such as fluctuating demand, results in inventory managers holding safety stock to guarantee availability. However, by holding high levels of stock to protect the network from uncertainty, businesses often have a vast amount of redundant inventories which can have a major impact on the profit margin.

Businesses should not accept this loss of capital as part and parcel of the supply chain, especially when a more strategic approach to inventory management can reduce costs and therefore support competitiveness.

Multi-echelon optimisation

The multi-echelon approach is the best solution for maintaining cost-effective inventory management across multi-level supply chains. This method takes a bird’s eye view of the entire network and optimises the total inventory, rather than looking at each warehouse as a separate entity.

Through considering the entire network, businesses can take into account varying levels of risk as well as warehouse costs to determine whether it is more cost-effective to store stock at the start of the supply chain or closer to the customer. By strategically shifting stock to the optimal location, businesses can reduce uncertainty and thus the requirement for safety stock.

Whereas the relationship between distribution levels is usually largely determined by rigid lead times, multi-echelon optimisation uses lead times as an adaptable variable that can be increased or decreased as required. While the network structure will remain unchanged, the connections between distribution levels become completely flexible. As a result, multi-echelon makes it possible to create and analyse a variety of inventory configurations in order to identify the optimal inventory situation.

At each level of the network there is normally a high requirement for availability as each node is under pressure to deliver to the next level on time. However, the requirement for availability is not constant at every level and thus there is potential for stock shifting.

For example, just imagine if your customer willingly extended the lead time, giving you more time to respond to the order. This would provide greater room to manoeuvre, reducing both uncertainty and the need for safety stock. A multi-echelon achieves similar results through reducing pressure on the supply chain.

By ensuring stock is in the most appropriate location, businesses can hold the minimum amount of stock while still guaranteeing maximum availability. Multi-echelon optimisation inventory can reduce inventory by up to 20 per cent, freeing up capital previously tied up in redundant stock.

In the complex, multi-channel supply chains of today, each customer has different needs. Therefore, flexibility within the network is more essential than ever. In using lead times as an adaptable variable rather than a restriction within the supply chain, multi-echelon makes it possible to create the optimal inventory situation. I believe the age of multi-echelon optimisation is upon us. Therefore it is imperative businesses take steps towards implementing this innovative concept in order maintain a competitive edge. 

Despite calls for supply chain rationalisation in recent years, networks have become increasingly complex with more locations and continued SKU (Stock Keeping Unit) proliferation.

For planners, market uncertainty has compounded the problem, making forecasting the most challenging in decades. Fortunately, the amount of supply chain data available to manufacturers, both from their operations and from trading partners, has also grown exponentially. Within these masses of data, each individual data point contains small but valuable information about the current state of demand that can be unlocked to provide the most likely prediction of future demand for any planning horizon. 

Since the advent of Holt-Winters exponential smoothing in the 1950s, there has been little innovation in the fundamental techniques used to forecast demand.  During that time, many areas of the economy, such as the Internet, mobile communications and social media have undergone transformational change, sometimes more than once. 

While computer platforms used for forecasting have grown faster and more powerful, the underlying algorithms remain essentially unchanged. Most forecasting software in use today was designed for hardware capabilities of 30 years ago.  It’s time to upgrade planning software to take advantage of today’s technology. 

Developing the right tools

At a recent conference, Kellogg summed this issue up by explaining that there is a difference between simply having tools and having the right tools. They stressed that predicting demand is about making the right choices, and that includes tools, processes, and partners. To succeed, companies need the right tools. This transformation is already underway with automated pattern recognition software that uses better math and more data to sense demand, without relying on the assumption that history will reoccur.

In contrast, traditional forecasting engines use time-series methods founded on the premise that history does indeed repeat itself. This is rarely the case, even for stable products with long shipment histories. Promotions are effective at driving sales, but introduce complexity by distorting past shipment distributions. Innovation in the form of new products has no history whatsoever, which is problematic for time-series techniques since they require a minimum of two years data for the most basic analysis. 

With up to 50 percent of items for consumer products companies having less than two years of history, this can be challenging. Even small product changes like a new colour, scent or package size require labour-intensive mapping to get meaningful results.  Additionally, changing consumer preferences in response to economic pressures, new mobile technologies or weather-related disruptions like Superstorm Sandy all combine to make last year’s shipments a poor predictor of future sales. 

 Automation is the answer

Automation is at the heart of any system that senses demand. The sheer scale of data at multinational manufacturers quickly surpasses human capabilities to process, let alone comprehend.  For example, a manufacturer selling 500 items through Walmart’s 3,800 stores receives almost 2 million new data points every day through Retail Link – just for its North American business with Walmart.

This requires an army of planners to manage if forecasts are updated on a regular basis. More often, planners focus their limited resources on important fast-moving items and high-profile promotions because they don’t have time to do everything. Findings from an annual forecasting benchmark study,encompassing one third of consumer packaged goods volume in North America, confirm this reality.

Forecast error for the slowest-moving products (which represent 80% of all items but only 20% of volume) is 1.6 times higher than for the fastest-moving products (2% of all items representing 20% of volume).  While understandable from a human resource perspective, this prioritisation creates less than ideal business results considering the large capital investment in inventory for 80% of a company’s items. Addressing this gap is a clear opportunity for automation. 

Unlike their human counterparts, software that senses demand using automated pattern recognition algorithms is particularly well-suited for the computationally-intense and mind-numbingly repetitive tasks of crunching data and finding correlations for the entire business. 

At some of the world’s largest companies, near-term forecasts are updated daily and published directly into supply planning systems to adjust manufacturing and deployment in time to respond to unexpected lifts or downturns in markets.  For long-term horizons, automated pattern recognition provides companies with a better starting point for their demand planning process. 

Its robust statistical baseline removes the need for planners to individually tune and curve-fit each model, reapply forecast adjustments from prior reviews and account for mathematically-complex interactions like promotion cannibalisation or similar item matching.  This frees planners to focus on important business areas that require human knowledge like strategic planning and promotional activities.

By upgrading demand prediction software to do what machines are capable of today, companies are breaking free from the traditional time-series methods that have held back industry in recent years.  It is an important step towards realising the promise of the digital supply chain and the future of demand planning – paving the way for better planner and S&OP productivity, better cash flow and return on capital with less unnecessary inventory and the competitive advantage of an agile supply chain that can quickly respond to unexpected market opportunities. 

A Stanford report has found that 96 percent of respondents are planning to expand their B2B e-commerce programmes, expecting increases in the number of customers, suppliers and business processes.

More than 60 percent of respondents anticipate an increase in their B2B Integration budgets to take advantage of the average cost savings of 40 percent technology provides in the order-to-pay process. More than half of respondents showed at least a 40 percent reduction in their order processing costs by using B2B integration technologies while others noted the same amount being saved d with shipment management and EDI/XML-based invoicing.

GXS, a leading provider of B2B integration services broke news of the report from the Stanford Global Supply Chain Management Forum titled, “B2B Integration: Business Value and Adoption Trends.” With funding provided by a gift to the university from GXS, the report offers insights into the latest trends and business value of B2B integration technologies.

 “The increasing investment and adoption in B2B integration underscores its importance for companies. As the demands of managing global supply continue to grow, the complexities of connecting and collaborating electronically with global business partners grows increasingly vital,” said Steve Keifer, vice president of marketing at GXS. “The survey findings reinforce the importance of integrating B2B e-commerce operations for today’s companies to effectively operate their supply chains.”

 Additionally, the survey found that, currently, a third of best-in-class companies were shown to exchange more than 60 percent of messages using structured messages (EDI, XML, Swift) rather than portals requiring manual keying. The survey also asked participants to estimate changes in transaction volumes over the next three years with 97 percent expecting B2B transaction volumes to increase. The majority foresee an increase of up to a quarter.

 A growing number of companies have noted the potential business value of B2B collaboration in this highly competitive and distributed marketplace and are taking steps to improve electronic communication capabilities. This research aims to gain insight on the latest trends and business value associated with B2B integration technologies and results indicate the market is investing in increasing e-commerce programs and B2B integration efforts.

Report findings are based on a survey of nearly 100 users in North America, Europe and Asia, representing different industries including manufacturing, retail, financial services and logistics.

For any business, especially a small one, shipping costs, from local to national to international, can dig in and take up a big part of the budget.

Though business owners may not be able to avoid costly shipping all the way around, there are some ways to ship smartly and save on at least some of the cost. If owners can save even a small percentage of shipping costs and transportation, that all goes towards more money in the owner’s pocket and less going out the door with the shipments.

Think about some of these shipping considerations to help you save money in your business’s shipping and transportation logistics:

1. Choose who you will work with for shipping – USPS, UPS, FedEx – and then make sure you work with them to find the best methods for your business, your product and your shipping needs. Some companies like to have two providers to work with, but you should definitely choose one that you can get to know on a personal basis. Think about convenience as well; one across the street will save you time and money than working with one across town.

2. Recycle packing materials - This may seem like a no brainer, but packaging can add up in a big way. Save the packages you receive and adapt them to what you need to pack up.

3. Entrepreneur advises working closely with the small business specialist from your provider. They can help decide things like how to ship – air or ground which depends on distance and size/weight of package. They can also help with the timing of when to ship to avoid express fees. Entrepreneur adds that those who don’t work closely with their carrier can spend around 40 percent or more on shipping fees than the business owners who do work with their providers.

4. Be clear with your customers. If you are charging shipping on their purchase, let them know, and let them know how much it will be for each kind of shipping. If shipping is included in the price, make them aware of that as well. No customer wants to see a surprise delivery charge tacked onto the purchase price.

5. Consider letting someone else do it. If your business has grown and it’s gotten too much for you to go and ship every package, outsource it. There are companies out there to handle your shipping practices and you can focus on other aspects of your businesses, like getting those orders that need to be shipped!

Once your shipping needs begin to take off, you know it’s a good thing.

But as your business grows, you may need to adapt your shipping needs and methods.

Stay on top of it and work with your partners and customers to make sure you are continually maintaining the best prices and most efficient practices.

Heather Legg is a writer who covers topics related to small business, hiring and Steve Wynn.

DHL, the world’s leading logistics company, was presented with seven awards at this year’s Reader’s Digest Trusted Brand Award.

For the fifth consecutive year, it received the Gold Award in the ‘Airfreight/Courier Service’ category in Asia. Among its other accolades secured were the Platinum award in the ‘Airfreight/Courier Service’ category in Singapore and the Gold award in Hong Kong, India, Malaysia, Taiwan and Thailand.

The award is based on a survey conducted with over 8,000 consumers across seven markets in Asia. Scores are assigned based on trustworthiness and credibility, quality, value, understanding of customer needs, innovation, and corporate social responsibility. Brands that clearly score above their competitors receive a Gold Trusted Brand Award while those who score three times or more that of the nearest competitor receive a Platinum Trusted Brand Award.

 “As an international trade facilitator, we recognised that the company's success lies not only in listening to what our customers want, but, more importantly, acting on it quickly and effectively,” said Jerry Hsu, CEO, DHL Express Asia Pacific. “With over 40 years’ experience in serving our customers in Asia Pacific, our rapid growth in this region can be attributed to the trust and rapport we have built with them.

“In return, we have continuously invested significantly into our air network connections and service offerings, including the opening of our biggest express hub in Asia Pacific at the Shanghai Pudong International Airport in 2012. By delivering best-in-class services for our industry, DHL is dedicated to the success of our customers.”

Launched in 1999, the annual Reader’s Digest Asia’s Trusted Brand Award aims to identify brands in Asia that have gained prominence and confidence among consumers.