With collaborative working and cost efficiency remaining key themes on the NHS agenda, the foundation stone of NHS Supply Chain’s strategic sourcing programme is working with suppliers to identify opportunities that drive efficiencies across the supply chain and deliver results.  The programme will focus on a number of key areas, such as packaging optimisation to reduce costs and material waste, trailer fill to reduce product miles, and supply chain optimisation.

“The launch of the strategic sourcing programme follows a number of successful pilot programmes that have evidenced strong savings opportunities for suppliers,” explains Jonathan Kaye, Head of Strategic Sourcing at NHS Supply Chain.  “For example, we recently worked with one supplier of clinical waste containers to redesign the packaging of a selection of their product range.  This reduced packaging and transport costs by 63 per cent, as well as saving 46 tonnes of paper and a quarter of a tonne of plastic. 

“It’s about delivering benefits across the board.  Suppliers gain from the supply chain expertise within our business and the wider DHL to support the introduction of efficiencies that will help them reduce costs.  In turn, this will help to ensure that NHS trusts who purchase from NHS Supply Chain framework agreements are working to meet their own strict savings targets.”

In addition to cost efficiencies, NHS Supply Chain’s strategic sourcing programme has the potential to deliver significant benefits in terms of sustainability.  With the launch of the Department of Health’s consultation and engagement programme to develop a new Sustainable Development Strategy for 2014 – 20, this is in harmony with current government policy on carbon reduction.

“Maximising delivery capabilities will reduce vehicle miles and support carbon reduction targets, whilst cutting down on the amount of product packaging used, through packaging optimisation projects, will reduce the amount of material waste generated across the supply chain” continues Jonathan.  “It’s about taking a holistic view of the supply chain and identifying where we can work together with suppliers to drive efficiencies that deliver benefits all around. 

“The opportunity for suppliers to then replicate these improvements across other product areas and supply chain routes offers huge potential for suppliers to take the lead in driving efficiencies for customers.”

The award was presented to Julian Amesbury, Commercial Director at Q8Aviation, at the IATA Fuel Forum in Berlin on 8th May.

Fadel Al-Faraj, General Manager of Q8Aviation, comments: 'It is a great pleasure to win this award again, particularly as we have been chosen by those who matter most - our airline customers. Our team at Q8Aviation is committed to continuous improvement in all aspects of our service and we will continue to push for even higher standards in future.'

The seventeenth Armbrust Survey attracted nearly 100 responses from airlines representing around 75 per cent of the jet fuel bought and sold worldwide. In a rigorous questionnaire, airlines were asked to rank fuel operators against five service criteria covering the whole range of business activities from operational quality through to price and backroom support.

Armbrust's International Director, Keith Carter, says: 'I was delighted to announce that Q8Aviation has been voted into the number one spot for the third year running, with clear daylight between them and their competitors. It shows a real commitment to the industry. I would also like to thank everyone who contributed to the Survey, ensuring that it continues to be the premier measure of overall performance in our challenging business.'

The Armbrust Aviation Group acts as a consultant to airlines, airports, fuel producers and distributors, and government agencies; it publishes the monthly Jet Fuel Report.

About Q8 Aviation

Q8Aviation is a fast-growing dynamic company and one of the world's leading marketers of aviation fuel. As a subsidiary of a major oil producer, Kuwait Petroleum Corporation, it has the unique claim of a service that stretches 'safely from well head to wing tip'. It operates a jet fuel service at many of the world's leading international and regional airport.

Various supply chain technologies work well to increase efficiency and reduce cost; but it requires the application of business intelligence solutions to take performance to the next level, according to Grant Marshbank, chief operation officer of VSc Solutions, and speaker at the upcoming annual SAPICS Conference.

“Business Intelligence Solutions are not new to South African organisations, but the approach of focusing on the supply chain whilst effectively integrating with any system – whether internal or external - redefines the potential value of what can be achieved,” he says, referring to a case study on Parmalat that will be presented at the SAPICS 2013* conference in June. 

As supply chain consultants to dairy giant Parmalat, the distribution solutions for Parmalat SA include best of breed routing and scheduling software, as well as planning software that allows for fast and effective daily distribution planning and visibility.

Whilst these solutions gave Parmalat an effective framework to manage its distribution, the addition of the Business Intelligence solution resulted in exponential efficiency gains and cost savings. “The potential value-add was only realised when the implementation of the Business Intelligence solution took the integration of these solutions to the next level,” says Marshbank.

According to Marshbank, most businesses operate against a set of measurable KPIs that are often run from various data centres and compiled into numerous spreadsheets. “This process is time consuming and is potentially inaccurate,” he notes.

However, by applying a business intelligence approach, an effective solution results that enables one to automatically extract data from any source (in any format) and populate such data into any array of formats/locations. “When coupled with powerful Web solutions and data warehousing tools, the result is a powerful integrated Business Intelligence solution,” he says.

“The Parmalat Business Intelligence solution allows KPIs to be viewed per annum, month or selected date range, as well as on a national, distribution centre or even employee level. The solution also provides analytical capabilities where users are able to drill down to the lowest level of detail on any dashboard, report or data set queried.”

Marshbank says the integrated Business Intelligence solution is relevant to any organisation regardless of size. “Integrated supply chain solutions today are undoubtedly the key to making inspired business decisions in the future,” he concludes.

*The presentation by Willem Schoeman (Parmalat National Distribution Manager) and Grant Marshbank (VSc Solutions COO) at the 35th Annual SAPICS Conference & Exhibition 2013 is entitled: Integrated Distribution and Business Intelligence Solutions:  A Practical Example. 

These wingtip devices, which are arrow-shaped surfaces attached to the tip of each wing, enhance the overall efficiency of the aircraft, saving fuel by reducing drag while also lowering noise emissions by improving take-off performance. The modifications will save UPS more than six million gallons of fuel each year and reduce carbon dioxide emissions by more than 62,000 metric tonnes. UPS estimates approximately a four percent fuel savings on each 767 flight.

UPS continues to lead the industry in sustainable business practices," said David Abney, UPS chief operating officer. "With the widest portfolio of services in the industry, we are constantly looking for ways to reduce emissions, and drive down operating costs so our customers have the solutions they need to compete in a global economy. These winglets are a perfect example of sustainability in action. They are good business and good stewardship."

UPS currently operates 54 of the 767 aircraft with five on order. The company plans to have winglets on all 767 aircraft by the end of 2014. Winglets are already installed on UPS's 747, and MD-11 fleets, and the A300-600 has a similar device called a wingtip fence.

The modifications will add approximately five and a half feet of span to each wing, and each winglet is 11 feet tall. Aircraft weight will increase by nearly 3,000 pounds due to the weight of the winglets and the extensive structural reinforcement of the wing structure. Even at this size and weight, the winglets will still reduce the amount of fuel used per flight.

Winglets improve the aerodynamics of the wing by extending the length of the wing and reducing the amount of drag, which is the force that opposes an aircraft's motion in the air.

The winglet project is a sustainability initiative implemented by UPS Airlines. The company already operates one of the cargo sector's youngest and most fuel-efficient air fleet, and is working to reduce its carbon intensity an additional 20 percent by 2020 from a 2005 baseline. Other highlights of the airline's fuel conservation efforts include computer-optimized flight routes, aircraft taxi time management, and alternate-fuel ground support equipment.

We believe there is always some way you can improve, and we're applying that spirit to our environmental efforts," said UPS Airlines President Mitch Nichols . "This is a great example of how we can use existing technology to save money, lessen our impact on the environment and serve our customers more efficiently."

Dubbed LEAD ATA, the program will provide exclusive educational opportunities to candidates, which are designed to highlight how the regulatory and legislative process affects the trucking industry and the role ATA plays in shaping both.

"In the 80 years since ATA was founded, we have always relied on industry leaders to be our spokesmen and our examples of what trucking means to the country," said ATA President and CEO Bill Graves. "LEAD ATA will help us nurture and cultivate our next generation of leaders and ensure that the legacy those giants have left us is entrusted to sure, steady hands."

The program, which is sponsored by PeopleNet, will also demonstrate the many tools available to industry executives through ATA. Each year, a new class will be accepted into LEAD ATA to cultivate the federation's future ATA leaders.

"This industry and ATA have given me many opportunities to demonstrate leadership," said Kevin Burch, ATA vice chairman and president of Jet Express, Dayton, Ohio. "Participants in LEAD ATA will be given important leadership tools that they can use to guide this association and industry into a promising and prosperous future."

"PeopleNet is honored to be a part of LEAD ATA. Building strong leaders for the future will ensure that our industry remains healthy, vibrant and forward-thinking," said PeopleNet President Brian McLaughlin of the company's three-year commitment to LEAD ATA. "This program is a unique opportunity for individuals to advance their skills and networks with an eye on taking transportation to the next level. We look forward to collaborating with ATA on the program moving forward."

About the ATA

American Trucking Associations is the largest national trade association for the trucking industry. Through a federation of 50 affiliated state trucking associations and industry-related conferences and councils, ATA is the voice of the industry America depends on most to move our nation's freight. 

CN Police Chief Bobby Walker said: “Disobeying railway crossing signals or trespassing on railway property is dangerous and illegal. We cannot tolerate that individuals put their lives and those of others at risk. Through a combination of education and enforcement, we aim to change attitudes and behaviors towards rail safety. We must reduce injuries and fatalities on or near railway crossings, tracks, and CN property.” 

CN Police will be out in full force during Rail Safety Week, conducting safety initiatives at commuter stations, CN intermodal terminals and railway crossings in the United States and Canada. CN will visit commuter stations to target a larger audience of rail users, particularly parents who will be urged to pass on safety information to their children. 

For more information about the CN safety blitzes in your area, click here. 

Railway Casualties

In 2013, there were 2,802 grade crossing and railway trespassing accidents in the United States, causing 683 fatalities, according to the Federal Railroad Administration. More than 50 per cent of trespassing incidents resulted in fatalities. 

CN has been promoting railway safety for more than 25 years through its All Aboard for Safety community education program. Every year, CN Police officers make hundreds of All Aboard for Safety presentations and talk to more than 300,000 children and adults at schools and community events in the United States and Canada about the importance of safety and the dangers of walking or playing on or near railway tracks. Part of the strength of this program is the collaborative relationship with major community safety partners Operation Lifesaver and Parachute. 

In today’s uncertain environment, it has become increasingly important for businesses to guarantee that when a customer wants to make a purchase, their supply chain is efficient enough to ensure that the item they want is available.

If a business can’t fulfil its customers’ requirements, they are likely to turn to the nearest competitor who can sell the item immediately. The threat of not being able to meet demand is therefore a key concern within the supply chain.

The current economic environment is forcing many firms to drastically cut stock levels. For example, in the summer of this year, reports showed the UK manufacturing industry drastically cut back stock orders due to the continuing decline across a range of sectors, a factor which is taking the toll across the global market.

Some businesses have taken this philosophy too far and have stripped away strategic buffers which protect the supply chain from risk factors. Companies that take stock cutting measures to extreme levels are leaving themselves at risk of not being able to fulfil normal orders if there is a disruption in the supply chain.

Supply chain stomach ache

Ever-changing environmental factors such as natural disasters, the upheaval of financial markets and commodity prices are difficult to avoid. The ensuing impact on availability cannot go unnoticed. Therefore, businesses must take a far more comprehensive view of the supply chain in order to better understand, anticipate and plan for a changing environment.

However, in my experience, many organisations continue to rely on legacy systems or ‘gut feeling’ to identify trends and make supply decisions. It is my belief that this outdated method will begin to be phased out in 2013, as forward thinking organisations realise that the only way to achieve a fully holistic view of the supply chain and to manage it more effectively is to adopt intelligent process management systems. Businesses can use this intelligence to take immediate action to ensure optimal stock levels are reached and availability is maximised.

By using these intelligent tools to effectively optimise inventory, firms can ensure they maintain availability and service levels, whilst also protecting liquidity as optimal inventory levels can be reached, even in volatile markets. 

Utilising the benefits of technology for inventory optimisation becomes even more imperative when working within environments that can change at speed, which may leave businesses struggling to meet availability requirements.For example, a recent study by INFORM revealed that 83 per cent of respondents advocate the importance of good forecasting tools to bring security to unpredictable markets.

Modernising the supply chain

Supply chain management will become an ever pressing focus for businesses across the board. Proactive organisations will respond with more co-ordinated approaches to supply chain management, adopting technology that enables them to quickly and effectively manage operations and gain a greater perspective over the entire supply chain.

Inventory management software tools will aid this process, allowing for reduced planning efforts, abetter overview of consumer buying patterns and coordinated management of entire the supply chain network. Organisations will utilise these technologies to obtain vital information that will enable them to adjust quickly to reflect market changes, ensure availability and enablecustomers’ expectations to be met – adding value in the process.

New Year, new supply chain

The sophistication of supply chain management will continue to grow as businesses face increasingly difficult conditions and look to balance lean supply chains while maintaining availability and high service levels.

Companies will also be forced to look at all activities through the lens of liquidity; exploiting technology to reduce stock and procurement expenses while freeing up additional liquidity at the same time.

Although this is a careful balancing act, it is vital to guarantee availability, and maintain optimal customer service levels. By ensuring that the optimal inventory is held in the right place at the right time – customer satisfaction can be guaranteed.

Now is the right time for businesses to re-evaluate their approach to supply chain management. Those who successfully implement advanced intelligent inventory planning tools will begin to make the supply chain work for them and will reap the rewards.

Written by: Dave Alberts, Director, Crimson & Co

Above Market Planning, a strategy which centralises aspects of planning across markets has been implemented in some form or another by most global businesses and has become in vogue in sectors like FMCG and Life Sciences.

The drive for tax benefits, supply chain efficiency, and the need to deploy skilled resources has driven varying degrees of centralisation, as businesses view the resultant disruption and high one off costs as a price worth paying. Despite this, the level of standardisation required to make the strategy work is seemingly at odds with the growing complexity of what’s going on in the end markets. 

Above Market Planning is simple in concept and involves a single point of decision making either centrally, regionally or a combination of both. It has been adopted by many global organisations to meet a variety of different requirements such as:

• Optimisation of multi-national planning decisions
• Concentration of scarce skills
• Tax efficiencies
• Leveraging benefits from low cost locations
• Using supply chain management to extend channels and the services to customers

Amongst these, there is an overly dominant influence to achieve tax efficiencies by creating degrees of over-centralisation, which may actually have inhibited cost effectiveness.

Another dominant influence has been the scarcity of good planning people, which has resulted in the consolidation and centralisation of skills. Unfortunately for many organisations, this has only provided short-term benefits - as all the existing talent eventually clusters into a small number of very expensive locations, which then become talent hotspots. 

As we increasingly need to provide more demanding servicing to new geographies and new customers, in new ways, is this approach still appropriate? Or, should we be adopting a more subtle approach to centralisation that does not sacrifice customer intimacy in pursuit of supply chain efficiencies?

The overall advantages of Above Market Planning are considerable, especially when the approach is viewed as a way of effectively deploying the supply chain strategy. But, given the need for more differentiated service and more market intimacy, should we roll back this strategy?

For many, Above Market Planning organisations have become centralised and bureaucratic operations, overly focused on meeting or, frequently, failing to meet formal service measures, having lost much of their desire to serve the customer.

In retrospect many of the expected advantages of Above Market Planning have not materialised, but the last thing that is needed is another general re-organisation. What is needed is a change in attitude and alignment. Above Market Planning organisations need to become more customers orientated - starting with the people in them.

So, is Above Market Planning a Universal panacea? Well obviously not. But it is still a very valid operating model. The central challenge is how these organisations can turn themselves into entities that balance mechanical efficiency, either regional or globally, with the need to delight customers and sell more products locally.

For more details on how to correct the Above Market Planning model, contact Dave Alberts, Director, http://www.crimsonandco.com/

These packages offer marketers an optimised workflow process and a single source partner to manage the specification, sourcing, production, kitting and fulfillment of all necessary materials and tactics associated with their projects.

The supply chain packages will initially be delivered through Standard Register’s existing delivery network and later transition to their new 350,000 square foot Centre of Excellence.

This new facility will provide Standard Register customers more flexible delivery options and improved speed-to-market for communications projects, services and solutions.

Located in Jeffersonville, Ind., part of the greater Louisville, Ky. metropolitan area, the facility is expected to be operational early in the third quarter of 2013.

Marketing Supply Chain Solutions Director, Mark Keeton commented:

“The Marketing Supply Chain package approach allows marketers to focus on strategy, analytics and content creation, rather than tactical marketing operations. These customisable solutions are designed to meet a customer’s specific objectives and manage everything from vendors and shipment tracking to logistics coordination on their behalf.”

Packages for product launches and promotions support the development and creation of product packaging, sales materials and retail point of sale materials, while packages for events support the development and distribution of branded materials, digital content and promotional items.

These offerings combine technology, supply chain management and logistics services, and enable companies to accomplish project objectives and create consistent branded messaging more efficiently.

About Standard Register

Standard Register is trusted by the world’s leading companies to advance their reputations by aligning communications with corporate standards and priorities. Providing market-specific insights and a compelling portfolio of solutions to address the changing business landscape in healthcare, financial services, commercial and industrial markets, Standard Register is the recognised leader in the management and execution of mission-critical communications.

Written by Ty Bordner, VP Product Management and Solutions Consulting at Amber Road

Global multi-sourcing (the practice of obtaining identical merchandise and components from more than one international supplier) has risen in profile recently, following a renewed focus on risk management in the supply chain. Whether you are considering or already undertaking a global multi-sourcing strategy, it is important to weigh the qualitative and quantitative factors against what your company can reasonably support.

Many supply chain professionals are adopting multi-sourcing as a part of a retail supply chain resiliency strategy or to optimise sourcing decisions. By multi-sourcing, organisations can insulate themselves from risk factors such as storms, port closures and labour disputes.

While multi-sourcing is straightforward in theory; organisations accustomed to working with only one vendor per item may have to make some adjustments. Here are some questions to help determine whether multi-sourcing is the right choice for your company.

Consider your level of risk tolerance

Similar to an investment strategy, a multi-sourcing strategy should take into account the level of risk the organisation is willing to accept, based on the likelihood of supply chain disruption for a particular item. An analysis of how difficult or easy the item is to obtain versus how important it is to the overall supply chain is a good first step to determining whether to find multiple sources for the item.

Can you afford the risk?

What would the effect be on your business of not being able to obtain the product? This is closely related to the concept of risk, but adds a quantitative aspect to the analysis. If a particular item is not available, what is the effect on revenue? Would you lose customers? Would employees be laid off? Would you close factories or plants? Or, as with Superstorm Sandy, would you miss a key window to bring seasonal items to your retail shelves? With the results of your quantitative analysis, you can determine its worth to the organisation to have the item available from additional sources.

Sourcing a comparable cost

Do other suppliers offer the same product at a comparable cost? Can they provide it if your primary supplier can’t? If you determine that alternative suppliers are necessary, then set about finding them. As with qualifying any supplier, ensure they can meet your deadlines at an acceptable total landed cost, not just product cost. These other charges to be considered include freight, insurance, duties and taxes; preferential trade programs; and countervailing or anti-dumping duties. Perhaps it is worth it to pay a premium to the alternative supplier to guarantee availability. Just make sure the alternative supplier won’t also be affected by the same factors that could disrupt your primary supplier. Choose suppliers from a different region, and use a different port of entry.

Can you manage multiple suppliers?

Can your organisation manage relationships with multiple suppliers? Whether you opt for multiple suppliers for backup purposes or as part of your overall sourcing strategy, determine whether your organisation is prepared to manage multiple vendors for the same item. It’s typically not enough to have a supplier simply waiting in the wings in case of disaster, since if there’s no relationship they may not want to come to your rescue. Be prepared to nurture the relationship with all your suppliers so you won’t go begging in times of real need. Organisations also must administratively manage their suppliers, effectively storing information in a manner that enables streamlined and easy sourcing decisions.

Finding the right system

Using an international supplier management system as part of a global trade management (GTM) system enables companies to inherently and intuitively approach the complexities of multiple sourcing at the product level. Companies should look for a solution that allows them to store information about multiple sources and account for all the permutations in a single product record in a single repository. The system should also be able to perform import cost calculations and check regulatory compliance for all relevant country of import/country of export combinations.

Consider whether your existing or future system does the following:

-          Landed cost — Products sourced from different suppliers have unique landed costs, since they will be coming from different countries. Freight, insurance, duties and taxes all play a role in determining landed cost. There may also be preferential trade programs, countervailing or anti-dumping duties in place between some of these countries to take into account.

-          Compliance — each country has different import regulations. Examples include rules around chemical composition, components, labelling requirements and subtleties in product classification. Agencies other than Customs may be involved, and each government has its own set of import filing forms.

-          Logistics — getting your merchandise from source to destination is no small task, especially if regular trade routes are disrupted. Each shipment must be rated and booked, and multiple land and sea carriers will need to be managed and tracked.

Your supply chain can build or destroy your brand. By evaluating your needs and potential changes that you may need to undergo to accommodate multi-sourcing, your organisation can determine if this strategy is the right solution to keep your supply chain in top shape.

According to the study, manufacturers place a high value on trust in partner relationships and there is a great deal of consistency in the characteristics that define a "trusted" partnership, and in the behaviors that can tear down trust even in long-standing relationships.

The results illustrate that OEMs have a very clear understanding of the value of trust in the supply chain, and a very clear set of definitions for how suppliers can build - and damage - trust:

• 72 percent of those surveyed rank trust in supplier relationships as very important
• Nearly 3 of 4 respondents said that the most critical attribute in establishing trust was a supplier's commitment to establishing metrics and milestones of success at the outset of a project
• 88 percent said that the single most damaging thing a supplier can do to trust is fail to report when a scheduled milestone slips

Other factors for building trust cited in the survey include understanding the customers' business and proactive problem solving. Behaviors that damage trust include a failure to meet expectations or promises and making changes without advising the customer.

Rob Olney, president of ETM Manufacturing sees trust as critical in successful supply chain partnerships. Olney, working with customers such as computing giant EMC2 Corporation and start-ups like solar mounting system leader, Panel Claw and American Innovation Research Corp., has identified a step-by-step process for earning, nurturing and repairing trust with customers.

"One compelling lesson from the past few years has been that lowest-cost suppliers that don't keep their promises can be very expensive partners if rework costs and schedule delays effect customer satisfaction scores and market penetration," said Olney.

"In an economy where there's little or no margin for late delivery or poor quality, trust in your partner is no longer a nice to have - it's a critical factor in competitive advantage," he continued. 

Laboratoires Pierre Fabre, the second largest independent French pharmaceutical company, has 42 branches, markets its products in more than 130 countries and employs approximately 10,000 people worldwide. Pierre Fabre’s activities cover all aspects of healthcare - from prescription medicines and family health products to natural healthcare and dermo-cosmetics.

Christophe Ettviller, logistics director at Laboratoires Pierre Fabre SA, said, "With three separate and diverse operating divisions, multiple product brands and a global footprint, Laboratoires Pierre Fabre’s supply chain must manage a significant degree of complexity and continually adapt to an ever-changing market environment. Within that context, it was imperative for us to standardise our supply chain processes so we could in turn enhance the service experience for our customers and maximise operational efficiency."

The pharmaceutical industry is one of the most demanding in terms of logistics, with unique requirements such as expiry dates of products, batch management and the need for traceability in the form of an audit trail. The supply chain network needs to facilitate an improved logistics operation throughout Laboratoires Pierre Fabre’s global business, as well as ensure safety and product compliance.

The implementation project is already underway at Laboratoires Pierre Fabre’s 130,000 sq. ft. Ussel warehouse in Corrèze and will soon progress to a second, 860,000 sq. ft Pierre Fabre Dermo-Cosmétique warehouse based in Muret in Haute-Garonne.

Henri Seroux, managing director at Manhattan Associates France, commented, "This customer success reinforces our reputation as being able to offer the most comprehensive supply chain solutions available for addressing the complex issues associated with the healthcare and pharmaceutical industry."

The Manhattan SCOPE solution components that will be deployed as part of this project will leverage Manhattan’s Supply Chain Process Platform to deliver cross-application optimisation and integration. This means Pierre Fabre group will be able to run its supply chain operations with less cost and effort while leveraging best-of-breed supply chain software to improve performance and efficiency.

Over one third of Unilever’s total supply chain is now sourced sustainably, following the success of the company’s Sustainable Living Plan launched in 2010. The company has exceeded its interim milestone of 30 percent to achieve an impressive 36 percent sustainable sourcing in its supply chain.

In a run up to the review of its Sustainable Living Plan, Unilever has highlighted the range of initiatives that it has used to combat a number of the future environmental risks that could impact businesses, including climate change, water scarcity,unsustainable farming practices and rising populations, amongst others.

Marc Engel, Chief Procurement Officer said: “Half of the raw materials Unilever buys are from the farming and forestry industries, so ensuring a secure supply of these materials is a major business issue. However, sustainable sourcing is not only about managing business risks, it also presents an opportunity for growth, allowing brands to stand out in the marketplace”

Profit through sustainability

The company highlighted its positive results for 2012, following the recent announcement of €51 billion in annual sales for 2012., which goes some way towards realising Unilever’s vision of ‘doubling the size of its business whilst reducing its environmental footprint and improving its positive social impact’.

Investing in farmers

In a statement online, the company highlighted a number of investments in sustainable farming, following progress made by Unilever in sourcing cocoa, sugar, vanilla and sunflower oil in more ethical and sustainable ways.

The company now follows a number of certifications to ensure its products come from sustianble sources, such as Rainforest Alliance certified cocoa and vanilla bean and GreenPalm certified palm oil, in addition to working with suppliers to improve the traceability of sunflower oil and sugar.

For cocoa, 43% was sourced sustainably by the end of 2012. And 64% of cocoa for Magnum was sustainably sourced through Rainforest Alliance certification. To achieve certification, Unilever has been working with supplier Barry Callebaut to run farmer field schools with 20,000 small farmers across West Africa. The schools work with local farmers to build skills and knowledge around sustainable cultivation practices. Then the farmers spread the knowledge through the community.

Engel said: “Investing in smallholder farmers is critical: so far 450,000 have been trained. If smallholders have access to training, better quality seeds and fertiliser they can significantly increase their yields. We know we cannot do this alone which is why we are forming strategic partnerships with suppliers through our Partner to Win programme, NGOs and other stakeholders.”

The recent ‘2013 Procurement & Strategic Sourcing Data Survey’, which was compiled in partnership with Vantage Partners, revealed that the majority (65 percent) of CPOs focus on using competitive pressure to get maximum value from suppliers, rather than using collaboration to achieve the same results (35 percent).

“Chief Procurement Officers are challenged with the task of driving savings and delivering critical resources with maximum value,” said Paul Mandell, Founder & CEO of Consero. “Our survey reveals a conflict for Chief Procurement Officers, who want to obtain the best overall value, yet often rely on competitive pressure rather than collaboration. Procurement officers should communicate to senior management that pursuing unreasonable short-term savings can be destructive to long-term value.”

Pressure on CPOs

The role of the CPO is a challenging one, according to the survey results, which revealed that 45 percent of respondents feel they do not have enough resources to manage the procurement function effectively, and a significant minority (34 percent) experiencing a budget decrease.

Controversially, nearly half of surveyed participants claimed that social responsibility and sustainability were ‘not important’ or only ‘slightly important’

 “These findings are indicative of economic weakness, as a significant portion of respondents say they lack sufficient resources to manage effectively, and many companies continue to put issues like sustainability and social responsibility on the back burner,” said Mandell.

About

The 2013 Chief Procurement Officer Data Survey, presented in partnership with Vantage Partners, LLC, was comprised of 16 questions that were posed to a group of Fortune 1000 Chief Procurement Officers who were in attendance at an invitation-only event hosted by Consero in January 2013. A total of 42 responses were provided.

The new partnership will allow Nike to provide screening tools made by bluesign that will allow them to select more sustainable dyes, detergents and chemicals for their supply chain, removing the need for costly and time consuming individual factory assessments.

The new technology will allow Nike to conduct the screenings at an unprecedented scale and pace, removing the need for Nike to screen its 800 worldwide factories individually, which would have taken a number of years along with significant investment.

Using one tool, bluefinder, a supplier can access pre-screened and more sustainable textile preparations (dye systems, detergents and other process chemicals used in the manufacturing process), which enables suppliers to effectively manage restricted substances and provides the opportunity to increase water and energy efficiency.

In addition, Nike will also be provided by another tool, the bluesign® blueguide, which gives Nike access to 30,000+ materials produced using chemicals from the bluefinder at facilities that have undergone rigorous assessment.

Other brands using bluesign tools include Lululemon, North Face, Patagonia, REI, and Black Diamond.

Nike, which introduced a Restricted Substances List in 2001, based on the most stringent worldwide legislation plus a number of voluntarily restricted substances, is pursuing an integrated strategy encouraging textile manufacturers and chemical suppliers to pursue positive chemistry while also working to eliminate hazardous substances through its internal processes and policies.

NIKE, Inc.’s VP of Sustainable Business & Innovation, Hannah Jones, calls the partnership a significant step in the company’s sustainable materials strategy: “Nike is committed to catalyzing a major change in the world of materials, driving for the elimination of hazardous substances and innovating new, sustainable materials. To shift to a palette of entirely sustainable materials

The retail landscape is changing as more and more brick and mortar stores offer consumers the ability to order products on line; some even ship products on the same day. This boom in electronic commerce has squeezed distribution operations to the point that distribution networks must be revamped and expanded.

Current distribution models include:

• Traditional Distribution– Vendors ship products to retail distribution centers where the products are stored until orders need fulfilled. Orders are then picked and delivered to the stores.
• Crossdock Distribution Centers– Shipments from inbound suppliers are moved directly from the loading dock to outbound delivery trucks. Very little storage is needed, as products never touch a shelf or the floor.
• Vendor Direct to Store Delivery– Vendors ship goods directly from their own facilities to retail stores, by passing retailers distribution center.
• Hybrid Distribution– Mix of any of the above delivery methods.
• Direct to Consumer– Many small orders sent to many consumers every day.

However, even these distribution models are changing as most retailers today are faced with shipping smaller quantities more frequently, either direct to stores or direct to customers.  Retailers that do not fully grasp this change and adjust their strategies will disappear, and the ones who do step up will see substantial value creation. 

Shipping individual orders to customers or retail stores requires speed and accuracy. Distribution operations management has realized that they must add new technology in order to meet customer delivery demands and to bring customers’ real benefits and value. These technologies include high-speed conveyors, high-speed sortation systems, robotic palletizers, picking & packing solutions, etc.

Choosing the right equipment

There are an almost unlimited number of conveyor systems designed for the retail distribution center. Choosing the right conveyor based on the operation and volume is key to success.

Outside of the standard transportation conveyor, there are several types of conveyors that offer special features for retail distribution, including: combiners, merges, spiral conveyors, sortation conveyor, etc. 

Handling and distributing retail apparel typically calls for specialized equipment, especially in the case of hanging garments. Called Garment On Hanger (GOH) systems, these specialized conveyors use overhead rail systems that move trolleys filled with apparel over great distances, through changing elevations, and along complex paths.

High-speed sortation systems

High-speed sortation systems are the key to the efficiency of state of the art retail distribution centers. Sorters can use pivot arms, diverters, pushers, etc. to sort the items on a conveyor. The right sortation solution depends on the product you’re moving and your need for speed. Sortation systems automatically sort products as they move through a facility. Sliding shoe sorters are designed to meet the growing demand for high shipping volume, increased accuracy and smaller order sizes. Sortation rates can go up to 450 cartons per minute. They reduce the manual labor needed to prepare for palletizing, packing, shipping and other industrial operations. Sortation systems can increase efficiency and provide more accurate fill rates, lower return rates and operating costs. All of these benefits add up to lower prices and faster delivery to the consumer.

Picking & Packing Equipment

Paperless picking & packing solutions can be either voice-directed or light directed. Pickers receive instructions via an audible voice system telling them which items to pick and where to put them. Voice-directed systems work best for slow-moving inventory and sequential transactions. Light-directed systems provide instructions via an illuminated light panel. These allow simultaneous transactions and work best for fast-moving inventory. Paperless picking & packing systems produce nearly 100% accuracy levels, increase productivity, lower distance travelled amounts, and reduce costs.

Print/Pack Equipment

Use print-and-apply labeling systems that print labels on the fly, and offer in-motion weighing and manifesting, as well as semi-automated or automated sealing/taping stations, all of which eliminate touches.

Palletizers

Palletizers make the stacking of cartons much easier, reducing labor costs, and providing a safer work environment. Palletizers are available to handle different types of containers, including cases, totes, bales, trays, etc. Robotic palletizers perform precise, repeatable patterns in a variety of rates, such as 100 cases/minute. 

Deploying this equipment in a distribution center requires a knowledgeable material handling systems integrator with years of experience in the retail environment. Typically, these integrators are non-biased about equipment and they know which works best in what environment. Look for an integrator that will perform needs assessments, systems design, engineering, installation, and support to meet the new retail landscape.

Despite a number of initiatives by outsourcers which are designed to audit the safety procedures and working conditions at the factories abroad, auditing suppliers is commonly a box-ticking exercise to determine the facilities and working conditions at a factory hundreds of miles away, offering little or no insight into the actual conditions and the perspective of the workers.

However, this is all about to change, according to HR experts Lindsay Soulsby and Stuart Shaw. Over the past few months, the brother and sister duo founded mine the gap!, a new business strategy which uses modern technology to close the communication gap between buyers and suppliers using a unique three-point plan.

HR consultant Soulsby was working with Wal-Mart when she came up with the idea for what would later become her new business.

“I was talking about delivering further training programmes for HR colleagues within Wal-Mart’s food supply chains across the UK when a discussion cropped up about how they audited their supply chains. I realised assessment of their suppliers was very much based around compliance, which typically included supplier self-assessment with some face-to-face visits. When I subsequently spoke with many suppliers it was obvious that both parties were quite frustrated by the process. “Suppliers don’t really understand how to approach the employees like Wal-Mart would, to discover how engaged they are, what their culture is like etc. These processes are non-existent, so there was a moment where we thought, surely there is an opportunity here for HR assessments to be used more widely in the auditing process?” she explained.

The company’s three point business plan to aims to address issues at both the buyer and the supplier’s end, incorporating a phone and web-based survey that captures, analyses and contrasts the views of both managers and workers in the supply chain, in addition to an exit interview service for supply chain workers and an anonymous whistleblower service which allows vulnerable factory staff to raise concerns. The information collected is then fed into a supplier feedback service, giving suppliers the chance to share their experience of the buyer relationship, in addition to providing accurate information on working conditions at the suppliers’ factory.

“Buyers rely heavily on suppliers around the world to provide their services and this tool has been accommodated to actually leverage technology to monitor labour standards.

“In countries where organisations aren’t as mature from a HR perspective, we need to have very fundamental platforms that cover labour standards; by combining the three elements we are providing them with a range of tools that lead them to more HR best practice, but can also recognise where they currently are at the moment,” explained Shaw.

Soulsby and Shaw recognise that suppliers don’t appreciate the auditing process in its current state, as it is a process they often have to undertake several times a year, and can often be seen as a sign of mistrust from the buyer. Often, with little understanding of how the audit affects their custom, suppliers don’t appreciate how the audit can be useful to embed change in their workplace. 

“What’s new about this is we’ve got a worker, a HR and a supplier focus. Although the suppliers are passing buyer compliance audits on a regular basis, and they often share the cost for that, with this sort of data this provides them with a very powerful internal as well as external marketing tool, which they can share and use to attract in buyers for the first time.

“The suppliers will be able to say ‘We have a very engaged workforce, we deal with turnover, we deal with risk, and we deal with conflict. This is our data.’ Its well beyond compliance, it means suppliers are standing on their own two feet as opposed to being told to stand on their own two feet,” explained Shaw.

The duo hopes suppliers will adopt this process as a benefit to them, and eventually empower suppliers to use these tools to supply information themselves as opposed to the buyer initiating change.

“One of the biggest key points is the mindset of buyers, which is currently significantly audit compliance driven. Although they recognise our system is the way forward, there is still a natural tendency for them to focus on how the tool can meet compliance requirements, so it’s an interesting evolution. The key is for the supplier to recognise the significant well proven concept that an engaged workforce is a more productive one,” said Shaw.

According to Soulsby and Shaw, they have had an overwhelmingly positive reaction from more than 100 brands who have approached mine the gap!, where businesses are displaying an appetite to move away from an audit driven framework.

“Buyers recognise they can’t continue to promote the number of audits they’ve done on their website when the media headlines continue to outline horrendous exploitation. That’s not to say that change is not going to be evolutionary. To get workers to actually raise their hand and say what they feel and the concerns they have, is going to be quite a change to them.”

Over the course of the next year, the duo hope to begin phase one of their business, using the ‘Supply Chain Mining Programme’ which will allow buyers to work with suppliers to improve their practices. In phase two, Soulsby and Shaw hope that suppliers will come to them directly to buy the services on offer as good practice, allowing buyers to see the data and thus removing the need for audits.

The role of the auditor will then develop from compliance to change agent, says Soulsby, who is in the process of collaborating with a number of charities and brand watch agencies who will provide ‘Action Plans’ to target any malpractice in the supply chain.

“We work in a way that is systematic and quantifiable. This tool will give information straight from the horse’s mouth, so it offers more information than has been available before. It’s up to the companies how they use that information, but we will help in collaboration with other charities and NGO’s to formulate a plan of action to tackle issues. It’s a very powerful way to meet, if not exceed, legislation such as the Californian Transparency Act but also create a new dialogue with consumers.

In a statement released on Thursday, the company announced the sale of 75 percent of its interests in CSX World Terminals Hong Kong Limited (CT3), which operates berth 3 of the Kwai Chung Container Terminal and ATL Logistics Centre Hong Kong Limited (ATL), a logistics centre located alongside CT3. DP World will manage its remaining stake in the companies in a strategic partnership with buyer Goodman Hong Kong Logistics Fund.

 In addition, DP World is selling 100 percent of its interest in Asia Container Terminal Ltd (ACT), which operates Asia Container Terminal 8 West (CT8) to Hutchison Port Holdings Trust, in a transaction which closed yesterday.

These are the latest in a number of overseas asset sales by DP World, which sold stakes in port businesses in Belgium and Yemen in September 2012. Part of the troubled Dubai World conglomerate, DP World was excluded from its parent company’s multibillion dollar restructuring.

Sultan Ahmed bin Sulayem, Chairman of DP World said:

“We believe Hong Kong will continue to be a very interesting market however, our presence was small relative to the market. This reorganisation, forming a strategic partnership and partially monetising some assets, allows us to realise value and recycle capital into new, fast growing opportunities in other markets.”

DP World, the third biggest port operator said its net gain will be $151 million because some money will go to repay shareholder loans. The company plan to re-invest the capital received from the two transactions.

The extreme volatility of the global food market presents a vulnerability to organisations that must be addressed. It is expected that70 percent more food will be needed to feed the world within the next 40 years[1], as the world population continues to increase, purchasing behaviour evolves, and consumers demand a wider range of food products. As a result, the rise in consumption will place even more importance on able supply chains that can meet worldwide food demand.

At the present time, however, many organisations are not equipped to ensure efficient supply amid the challenges that lie ahead within the food market.

For example, the sheer pressure on the supply chain to meet the demands of a rising world population means that some businesses struggle tofulfil their customers’ requirements. In these cases a customer is likely to turn to the nearest competitor who can sell them the item immediately. The threat of not being able to meet food demand is therefore a growing concern within the supply chain industry.

Food for thought on the supply chain

Businesses must assess their approach to the way inventory is held within the supply chain. At present, the current economic environment and decline of major industries is forcing many firms to drastically cut stock levels.

Some businesses have taken the lean philosophy too far, having stripped away risk management procedures which protect the supply chain from unforeseen events that could disrupt global supply chain operations. Companies that take stock cutting measures to extreme levels are leaving themselves at risk of not being able to fulfil normal orders when risk factors such as natural disasters and fluctuating commodity prices occur.

Furthermore, growing world population will present availability challenges in the future. Businesses must take a far more comprehensive view of the supply chain in order to better plan for a rapidly increasing market. The only way to achieve this is to adopt intelligent process management systems. Businesses can use this intelligence to take immediate action to ensure optimal stock levels are reached and availability is maximised.By using these intelligent tools to effectively optimise inventory, organisations can ensure they maintain availability

Alongside this, organisations must develop closer relationships with suppliers. This will prove essential to meeting future demand, which will require swift, radical and coordinated action by multiple partners. To develop close ties, tools such as decision support systems should be utilised. These systems are rapidly forming an integral part of strategic and tactical planning, and are a valuable tool to build relationships with suppliers.

Technology is the main course

As organisations re-assess their strategies to plan for capable supply chains, businesses will begin to carefully deliberate their technology investment priorities, and consider technologies which can help to identify information which indicate future shifts in demand.

This is critical, as food shelf-life is limited and a number of factors, including distribution and storage, can increase the likelihood of spoilage. As the population increases, more food stock will also need to be bought and stored, increasing warehouse costs and the potential for waste.

Intelligent tools can help businesses plan efficient supply chains which can meet global demand quickly, while ensuring peak stock levels remain available so food is not needlessly wasted. These technologies also allow a greater overview of demand profiles, consumer buying patterns, and other demand signals. This is essential as it allows businesses to identify trend curves in popular food goods, and manage their supply chain accordingly.

It can also enable organisations to plan for seasonality; an ice cream producer may consider increasing inventory in summer to meet high demand, but could be taking a risk when recent summers have proved some of the wettest on record. Intelligent systems enable a greater long-term perspective, so businesses can forecast more accurately, optimise inventory, and reduce costs as a result.

Digesting a new supply model

I believe supply chain management will become an ever pressing focus for businesses which do not wish to remain vulnerable to the volatile nature of the market. Proactive organisations will adopt technology that enables them to analyse demand and quickly and effectively manage operations if patterns change.

Organisations with a holistic view over the supply chain will be better placed to take advantage of new consumers and market openings that will emerge, which in turn, may create fresh business opportunities. To survive in tomorrow’s world, companies will be forced to develop a long-term vision so as not to be left exposed in the volatile food market.

48 percent of British firms are failing to vet their supplier, with only six percent adding that they would re-tender if they discovered their suppliers were not compliant.

The study polled procurement managers and directors from a range of firms across the UK. The study found that while midmarket firms are often less likely to have robust processes and systems in place to counter bribery risk, companies at both ends of the spectrum appeared complacent when it came to vetting their suppliers for compliance with the Act.

Ernst & Young’s study found that although 60 percent of firms with a turnover of £5m to £50m currently vet their suppliers to assess whether their business practices comply with UK Bribery Act, 16 percent of these midmarket firms would ‘do nothing’ if their suppliers fail to comply. Moreover, 60 percent of firms that do not currently vet their suppliers reported that they are not planning to implement any anti-bribery programmes in the future.

Only 40% of larger firms (with a turnover of more than £50 million) would remove suppliers from their supply chain if they fail to comply with the Act.

John Smart, Partner at Ernst & Young said:

“Following recent concerns over food contamination, there has been much focus on supply chains and how much companies know about suppliers and agents acting on their behalf. In cases where bribery and corruption are discovered, the consequences for companies under the law may be serious. It’s worrying to see that businesses are failing to make sure that their suppliers are complying with the UK Bribery Act, especially as the Act came into effect over a year and a half ago.

“Many directors are still unaware that they can be held personally accountable for any failings in this area. This means that senior managers and directors risk significant prison terms and large fines for non-compliance in which they are personally involved, even if the breach is caused by the actions of a third-party supplier.”  

Additional findings from the research include:

• Almost a quarter (24 percent) of firms believe that taking on a new supplier will incur the most risk to supply chains;
• Only 48 percent of firms carry out third- party due diligence in their supply chain;
• 12 percent of firms would ‘do nothing’ if they found out that their suppliers failed to comply with the Act;
• Less than half (44 percent) of firms with a turnover from £5m to £50m carry out third party due diligence