Supply Chain

Billentis e-Invoicing Report 2013

We are half-way through 2013 and it has already been a busy year. The interest in electronic invoicing is greater than I have seen before, from corporates, SMEs and government alike, so perhaps it is appropriate to reflect on the annual Billentis report mid-year. I recommend this report to any company considering e-Invoicing, while it gives plenty of industry data it also focuses on how to build a business case and how to be successful in your project. This year’s report has again emphasised the value that e-Invoicing provides and has also revealed some interesting market trends. I am occasionally questioned about the cost savings data this report presents on moving from a paper to electronic process. In all honesty I have a consistent reply. “I have seen higher and I have seen lower”, the Billentis numbers for me are right in the middle, and if you take the time to look through the document they are broken down by individual process – so they can also be adjusted to work with the reader’s automation maturity. Focusing on the business-to-business side of the data, we are reminded once more that e-Invoicing represents a savings opportunity of between 60-80%, which can represent 1-2% of turnover. With a break-even period of between 6-18 months, do you need to read any further? Well ok, if you insist. Adoption of e-Invoicing globally continues to climb, with a 4% rise to 20% of global invoice volume predicted to be electronic in 2013. This corresponds with another recent global e-Invoicing market report predicting growth at a CAGR of 24.2 percent over the period 2012-2016. There is more confidence in the e-Invoicing market, with many companies now treating it as a mainstream activity. The report highlights that there are now many solutions available on the market with innovative roll-out models which are attractive to companies of all sizes. European industries highlighted with the highest invoice volumes are healthcare (7%), logistics (6%) and retail (6%). The public sector receives a particular focus. Regular readers of my blogs will know that I continue to predict increased adoption by governments and the report backs this up. With recent mandate announcements from Italy & Turkey, re-invigoration in Spain, 2013 deadlines in Latin America and the European Commission announcing an update to the procurement directive that incorporates (almost) mandatory e-Invoicing – the report gives good insight into the opportunities and challenges here (my favourite quote being “Evading taxes is almost a national pastime in many countries”). Banks offer e-Invoicing services in various countries but the report reveals that in Finland e-Invoicing adoption in 2012 only saw a 20% increase in banking platforms, with 52% preferring non-banking service providers. Again, I have discussed the role of banks in e-Invoicing in the past and even though they maintain significant relationships with SMEs there has been no ‘killer app’ to unlock this potential. Supply Chain Finance (SCF), with a $1.3 trillion global market for receivables, continues to offer significant opportunities. Companies are looking to monetise receivables and payables to provide liquidity within their supply chain and this is where banks come into their own. By working with e-Invoicing service providers, or by simply capitalising on existing e-Invoicing programs, banks are able to finance the supply chain in innovative ways. e-Invoice formats continues to challenge. The report highlights the largest volumes of e-Invoices generated are PDFs attached to emails, this is supported by the 2013 Sage France survey ‘SMEs and e-Invoicing’ which revealed that of 28% of SME respondents operating within the (French) B2B sector, 83% are issuing e-Invoices by using a simple PDF document sent by e-mail and only 5% are using some form of electronic data interchange. However, new technologies and interoperability amongst service providers are set to tackle these challenges. Finally, and appropriately, the report gives us the catalysts for AP/AR automation. Without revealing too much, as I recommend you read the report, the challenges Finance face today and what initiatives can be taken to address them; Regulation and compliance requirements Improve quality and relevance of trading partner master data Improve operational efficiencies and working capital Environmental impact Invoice data validation Improved purchase order compliance Reduce trading partner administration costs As the author states: “e-Invoicing and process automation might be THE answer for today’s challenges in the market. It is the enabler to significantly cut costs, to improve working capital and to increase the elasticity of costs”.      

Read More

German Automotive Industry to Move From VDA to Global EDIFACT Messages

The global automotive industry has grown around a collection of regional B2B standards, primarily covering documents and communication protocols. The key automotive regions even had dedicated networks built to service the automotive companies within these locations. The regional networks; ANX in North America, ENX in Europe and JNX in Japan have been operating for many years, providing connectivity for both car manufacturers and their suppliers. At GXS we support all the major regional standards and we also provide an interconnection between these regional network infrastructures. But, technology moves on and the internet has started to change the dynamics of how companies work with each other. Over the last decade the automotive industry has globalised their operations into every major economy around the world and hence more and more trading partner related work is undertaken outside of a car manufacturer’s home market or region. This has meant that automotive companies have had to build increased flexibility into their IT infrastructures to support operations in these new countries. As these companies worked more globally, so there became a need to try and use common standards across the various regions. This simplifies the trading partner on-boarding process and helps to remove complexity from an automotive manufacturer’s B2B infrastructure and associated supply chain. The German automotive industry has been the most proactive in terms of globalising their car manufacturers and suppliers, with China being the key market to expand into. As these companies globalised their operations over the past decade they found that the traditional VDA message set was too restrictive in terms of supporting truly global logistics flows and hence why the German automotive industry is collaborating on a project to introduce a new Global EDIFACT Message set that will simplify global trade. In earlier blog entries I highlighted how OFTP2 is likely to become the global standard for B2B communications across the automotive industry and how the Global Transport Label was introduced to simplify the shipment of goods across country borders. In a similar manner I believe that the new Global EDIFACT Messages are going to help simplify and standardise the cross-region exchange of business documents to support global production operations. I first heard about the Global EDIFACT Message initiative in December 2012 when I attended the ODETTE conference in Berlin. VW, BMW, Hella and Bosch jointly presented a session at the conference on how they were working together and in partnership with VDA to offer support for the Global Message Set. The new messages are based on the JAIF Global Message Guidelines for the Automotive industry, developed and published jointly by AIAG (USA), ODETTE (Europe) and JAMA/JAPIA (Japan). Work on this initiative started a couple of years ago and the first three messages have been released and are starting to be implemented. VDA4938 is probably the most recognised of the new message formats as it relates to Global Invoicing, an initiative to remove paper based invoices from the supply chain and at the same time help introduce faster payments to suppliers. The key reasons for implementing these new messages are to: Enable support for the current, complex processes while maintaining support for the legacy processes, where possible Use future proof message formats Enable global facilitation of VDA recommendations Reduce effort for development, maintenance and support Reduce complexity, increase stability and avoid errors The messages that have been developed so far and those still under development are listed as follows: Even though there is a VDA number associated with each message, this merely helps to identify as a VDA recommendation for implementing each Global Message and there is extensive documentation available from the VDA website to describe each message. The intention is that these messages will be used across both large and small companies and to support the latter group of companies, these messages will also be included within the auto-gration initiative being driven by ODETTE in Europe. I will expand more on what auto-gration actually is in a future blog entry. So in summary it is hoped that these new Global EDIFACT Messages will help to reduce the technical complexity of working with global trading partners and provide a platform to develop more standardised business processes to support manufacturing and logistics operations in any region around the world. GXS already offers support for all key messages being used across the automotive industry today and we will be looking to offer support for these new messages as well. We will also look to establish a simple VDA to Global Message Migration Service to help companies make the switch to the new messages. I will provide more information on this initiative at a later date. In the meantime GXS plans to host a webinar on the Global Message Set, more of an educational event, to provide more detailed information on this particular project and provide the latest status updates for each message. I will publish further details of this webinar in the near future.

Read More

How B2B Solutions Provide the ‘Cornerstone’ to Improved Supply Chain Resilience

In my previous blog entry I discussed how Supply Chain Directors need to focus more on improving resilience across their supply chain and logistics networks. According to a report from Accenture the correct and increased deployment of ICT infrastructures can contribute significantly towards improved supply chain resilience. GXS offers B2B solutions and services that can provide the flexibility and scalability that Supply Chain Directors need to minimise disruptions across their supply chains. In fact, cloud based B2B integration solutions can provide a key ‘cornerstone’ towards developing a highly resilient end to end supply chain. In terms of helping to build increased supply chain resilience across a supply chain, B2B solutions can help in three very distinctive ways: Provides Flexibility – one of the challenges faced by companies during a period of disruption is ensuring that business related transactions supporting production or other processes continue to flow across the extended enterprise. If disruption occurs then an alternative path may have to be identified quickly to allow transactions to flow uninterrupted to their intended destination. In terms of a B2B infrastructure, companies should ensure that if disruption occurs and data centre resources become impacted they can instantly fail over to an alternative data centre location. If no other data centre is available then some form or disaster recovery process should be in place to ensure that transactions can be recovered as and when the data centre comes back online. GXS Managed Services, GXS’ outsourced B2B environment, utilises a highly available, dual continent data centre infrastructure that provides immediate failover and back up to an alternative data centre, should supply chain disruption occur. Using state of the art storage devices and network routers GXS can ensure that your business critical transactions can get from A to B with no interruption or delay. In addition, the GXS Managed Services environment is highly scalable and flexible allowing your B2B infrastructure to expand or contract as your business requirements change. Many companies are beginning to spread their production risk by manufacturing goods in more than one country, so that if one plant gets impacted then production can be quickly ramped up at the other locations. In a similar manner, GXS Managed Services provides an environment to spread your B2B risk so that you can continue working with your trading partner community during a period of disruption. Companies managing their own B2B environments via software based solutions will not enjoy this level of flexibility or reliability. Enhances Visibility – The manufacturing sector is probably the most global in nature when compared to other industries and having true end to end visibility across a supply chain is an important requirement to ensure production lines do not get disrupted. Whether sourcing parts from suppliers in China, Brazil or India, having end to end visibility of all shipments can make a big difference to the smooth operation of today’s production lines. In fact in the automotive sector, Just-In-Time production techniques depend on the timely delivery of parts and any delay with delivery can result in severe penalties for those suppliers concerned. So when an unexpected earthquake or flood occurs, having visibility of what is happening across your supply chain becomes more important than even before. You may need to identify alternative sources of inventory, quickly identify goods in transit so that they can be re-routed to an alternative location or you may need visibility into cross border related shipments. GXS Active Logistics provides a single, cloud based, platform to monitor all global shipments irrespective of the logistics carrier or the form of transport being used for the shipment. Being able to monitor shipments across multi-modal transport networks anywhere in the world and keep track of shipments as they pass through busy container ports such as Dubai or Singapore can have a major impact on your supply chain operations. GXS Active Logistics also allows key performance indicators (KPIs) to be monitored across your 3PL providers and hence you have the ability to identify points of weakness across your supply chain. Many companies have established control towers across their operations to monitor supply chain shipments and GXS Active Logistics forms a strong foundation for such an environment. With so many disruptions occurring across today’s supply chains, these visibility control towers are doubling up as crisis management centres and they become the go to point of contact during a period of disruption. Improves Communications – One of the key areas where B2B tools can help minimise supply chain disruption is in supplier management, otherwise referred to as community management. After all when some form of disruption strikes you need to make sure you can remain in contact with your trading partner community or identify alternative sources for production materials very quickly. Community management tools increase resilience in two key ways. Firstly they can help establish what can best be described as a centralised B2B contact directory, typically a self-serving environment where all contact information for a particular supplier can be held. As a condition of doing business with some companies, suppliers will be forced to enrol through a workflow driven registration process to ensure that they provide all the relevant contact information. Secondly, community management tools help to improve command and control processes across the supply chain. They also allow you to quickly assess the state of your supply chain in terms of identifying which suppliers have been impacted following a period of significant disruption. As suppliers provided their contact information during the registration process, community management tools allow companies to send out mass communications to a trading partner community with ease. You could also ask suppliers to complete online assessments to allow you to monitor the state of your supply chain. If one supplier gets impacted in some way then alternative suppliers can be identified quickly due to having an up to date contact database. Dual sourcing of key components is becoming a popular method of combatting supply chain disruption and community management tools help to orchestrate the selection of alternative suppliers with ease. Community management tools help to minimise risk across a supply chain. Companies deploy Microsoft office for creating business documents, they implement ERP systems for managing production and business processes. Community management tools help to establish a dedicated IT infrastructure to help assess, manage and mitigate supply chain risk. When was the last time your company undertook a risk assessment of your supply chain? how long did it take to complete? did every supplier participate in the assessment? The ability to assess the state of your supply chain via simple to use community management tools helps to bring a significant competitive advantage during a period of supply chain disruption. GXS Active Community is a community management tool that can help to build greater resilience to future supply chain disruptions. GXS Trading Grid®, the world’s largest cloud integration platform, has traditionally focused on moving data from one location to another. GXS Active Community on the other hand has been designed from the ground up to manage the people-based interactions across a supply chain, an area that many companies tend to forget when extending or restructuring their supply chains. From establishing a centralised contact database for your trading partner community, through to deploying some form of assessment or survey, GXS Active Community improves the way in which you engage with your suppliers on a daily basis. Whether working with contract manufacturers in China, distributors in Eastern Europe or third party logistics providers in South America, GXS Active Community provides a single global platform that can help improve the flow of information across an extended enterprise. It is one thing being able to deploy these B2B tools to help build increased resilience but when disruption strikes a supply chain there needs to be a co-ordinated approach to resolving any potential issues that arise. One increasing trend that I have noticed on professional networking web sites such as LinkedIn or Xing has been the emergence or rise of the business continuity manager role. This person becomes the go-to employee during a period of disruption, they become the central person who is responsible for steering a company through a period of supply chain disruption. Sometimes referred to as the ‘Masters of Disaster’, these people are key to making today’s supply chains operate efficiently and seamlessly. The ability to proactively monitor supply chains and almost sense when disruption is likely to occur has become a key competitive weapon that companies have been keen to implement. Increasing regulatory compliance has also made the business continuity manager more visible in today’s extended enterprise. In the same way that a conductor controls an orchestra, the Master of Disaster will use the B2B tools at their disposal to monitor global supply chains and take appropriate action before major disruption can impact the business. Have you appointed a Master of Disaster yet? In summary, in order to build increased resilience across a supply chain, companies need to address both the physical and digital supply chain issues. They need a B2B platform that is scalable, flexible, secure and available 24x7x365 days per year. If B2B solutions are deployed correctly and in a proactive manner then they can offer your business a significant competitive advantage, being unprepared or responding to disruptions as they occur is generally bad for business. If you would like further information on why companies should be thinking about building further resilience into their supply chains, then please review THIS WEBINAR, which discusses some of the topics covered in this and my previous blog entry in more detail.

Read More

Why Increasing Resilience Has Become a Top Priority for Supply Chain Directors

Global supply chains and transport networks form the backbone of the global economy, fuelling trade, consumption and economic growth. When these supply chains get disrupted in some way it can potentially have major repercussions for companies and more importantly the global economy.  Disruption to supply chains can prove very costly, as highlighted recently by significant flooding in Europe.  According to research conducted by Accenture, significant supply chain disruptions have been found to cut the share price of impacted companies by as much as 7% on average. What these disruptions have highlighted is that Supply Chain Directors need to basically shift their focus from reactive to proactive risk management. The global economy has been severely impacted by numerous natural disasters in recent years. Over the past 24 months there has been a significant shift in the type of disruption which has impacted global supply chains with extreme weather now the number two most common type of supply chain disruption. There have been a number of examples of significant natural disasters and extreme weather to hit global supply chains over the past couple of years. European Floods – 2013 – Significant rainfall in Eastern Europe had a major impact on manufacturing companies.  For example Porsche had to temporarily close their factory in Leipzig, Germany after floods in the Czech Republic halted the supply of Cayenne bodies which are built in the VW plant in Bratislava. Hurricane Sandy – 2012 – This hurricane was the most powerful and deadliest to hit the North Eastern Coast of the United States causing over $68Billion in damage to buildings and infrastructure across 24 states. Hurricane Sandy prompted the worst fuel shortages in North America since the 1970s Japanese Earthquake/Tsunami – 2011 – The earthquake brought severe devastation to utility infrastructures and the resulting Tsunami brought longer term disruption to global supply chains due to many factories being flooded causing production to be suspended Thailand Floods – 2011 –High tech supply chains were severely impacted by the floods in Thailand which resulted in the disruption in the supply of key components such as hard disk drives to the computer industry. The impact of the floods persisted into early 2012 with more than 1000 factories being impacted and subsequent insurance claims reaching $20Billion. As a direct result of the floods, Thai GDP growth projections decreased from 2.6% to 1%.  Flooding will continue to be a common theme as 25% of Thailand’s provinces were affected by flooding in 2012. As many global economies start to recover from a major economic downturn it is in each country’s interest to ensure that it is business as usual when disaster strikes.  Increasing supply chain resilience was one of the key themes of the annual meeting of leading countries belonging to the World Economic Forum in January 2013.  Building extra resilience into a supply chain should be on every CEO’s agenda, especially if they operate a truly global supply chain across manufacturing hubs located in Japan, Europe, North America, South America and China.  But what exactly is resilience?, one quote taken from Accenture’s recent report from the 2013 World Economic Forum states that “Resilience is the ability of a global supply chain to reorganize and deliver its core function continually, despite the impact of external and or internal shocks to the system”. Another more succinct quote –  ”The ability of a system to return to its original or desired state after being disturbed”.  Minimising supply chain risk through increased resilience has become one of the top priorities for Supply Chain Directors around the world. Many operational based changes have been implemented to try and remove the potential for risk impacting a global supply chain, for example: Near shoring – sometimes referred to as reverse globalization, initially started to happen in 2009 as a way of shortening logistics networks. Increased wage rises in China followed by the recent natural disasters caused many companies to think about relocating manufacturing capacity back to their home market. For example Caterpillar moving production of their small bobcat excavator from Japan back to North America Establish a global plant floor – this is a term coined by the analyst firm IDC, and describes how manufacturers are spreading their production capacity to other plants located in different parts of the world. This is so that if disaster strikes again and one manufacturing plant is taken offline  they can switch to an alternative plant to maintain production capacity. Dual sourcing strategies – constant disruption over the past couple of years combined with a need to source from the Far East has led to many companies thinking about implementing dual sourcing strategies. So if disruption occurs across a supply chain then the manufacturing company can quickly switch to an alternative provider of components/parts. Over the past 12 months concerns have remained about external threats to supply chains and systematic vulnerabilities such as oil dependencies and information fragmentation. Additionally, growing concern around cyber risk, rising insurance and trade finance costs are leading supply chain experts to explore new mitigation options. There has been so much disruption across global supply chains in recent years that Accenture research indicates that more than 80% of companies are now concerned about supply chain resilience.  Risk management must be an explicit but integral part of supply chain governance and to achieve this Accenture made the following recommendations: Institutionalise a multi-stakeholder supply chain risk assessment process rooted in a broad based and neutral international body Mobilise international standards bodies to further develop, harmonize and encourage the adoption of resilience standards Incentivise organisations to follow agile, adaptable strategies to improve common resilience Expand the use of data sharing platforms for risk identification and responses So far we have only covered risk management across the physical supply chain but as more traditional supply chains evolve into digital supply chains then risk management will need to be applied to this area as well. For example the increasing growth in eBook sales and the use of 3D printing techniques promises to shorten at least some of the linkages in the physical supply chain. With more information being transmitted digitally, there is a greater chance of cyber risks hitting global supply chains and participants across a digital supply chain will have to demonstrate that they can master digital resilience as well as physical resilience. Given the exponential growth in non-physical supply chain flows, their inherent cyber risks must be understood and incorporated into overall resilience approaches. In addition to introducing operational based changes, supply chain directors should be looking to improve their ICT based infrastructures as well. According to Accenture, if configured correctly then, ICT infrastructures can provide significant resilience gains through four main channels, analytics, data and information sharing, scenario modelling and pre-programmed responses. The corner stone of IT based resilience is data and information sharing. Business continuity is enabled through access to real time data followed by rapid dissemination of data driven supply chain fixes. However information sharing infrastructures depend on a resilient core network, appropriate communication tools and an element of redundancy. Combined, this requires an ICT infrastructure that is flexible, scalable, secure and re-routable. In my next blog entry I will describe how the implementation of B2B tools and services can help provide the afore-mentioned cornerstone to improved resilience against future supply chain disruptions.

Read More

Building “Mini Cooper” apps: How ISVs use BPM PaaS to build Smart Process Applications

Blog Post by Hans De Visser (@Hans_de_Visser) From my previous blog you may recall that I described how the cloud is a catalyst for innovation and differentiation by applying theprinciples of Mass Customization in IT. I used the example of the Mini Cooper which’ personalization optionsgive you that feeling like “hey… never seen this one before”, every timeyou come across one. BTW: Mini doesn’t sponsor me, and I myself drive a pretty non-descript grey MPV. The concept just intrigues me and here is why: Last week we held a webinar with John Rymer from Forrester and UdayVijayan from Excel Software about Building and Delivering the nextgeneration of cloud-enabled business solutions. John Rymer started off describing the challenge of softwaredevelopers (both at ISVs as well as in Enterprises) where 78% of themfeel that the pressure of delivering faster and 79% feel that thepressure of delivering more has made work harder. One of the key reasonswhy cloud platforms are chosen is actually to deliver fast. John continued to explain that faster time to market means twothings: Fast delivery requires possibility of customization and promptupdates & changes must be “designed in”. So if you’re building applications on a cloud platform it’s prettykey that the platform supports you with the options for continualimprovement. Here’s the bullet-list that John shared with us on thewebinar. It strikes me that these eight options are all related to thequestion in how far SaaS applications can be tailored / customized /personalized without loosing the advantages of economies of scale and lower unit cost that come with the cloud. In other words can I build “Mini Cooper” apps that have that appealand the options for customization, personalization and tailoring theuser experience at affordable cost? Needless to say that the more support you get out-of-the-box from thecloud platform, the easier it will be for an ISV or Enterprise to takeadvantage of those options at minimal cost and burden. So far the theory. Uday Viyayan, founder and CEO of Excel Softwaredelivered the second part of the webinar, and it intrigued me that theyare applying exactly these principles leveraging the Cordys platform. Excel Software are based out of India and focus on building applications for Supply Chain Management, MRP and Finance. They startedthe journey to migrate their applications to Cordys as while ago andjust recently launched one of their core applications called MedicoOnline as a SaaS application. Uday explained how they were pushing the Cordys platform to theextremes to validate whether the concept that they wanted to apply could actually stand the test. Medico Online deals with sales and distribution in thePharmaceutical, Food and FMCG industries and many of Excel Softwareclients require seamless integration of Medico Online with their ERPback-end. For example: Excel built a single transaction on Cordys thatcould write more than 72 (!) transactions into the client’s global ERPsystem without compromising on any of the system controls – in fact,adding far richer domain specific functionality to the ERP. Here’s apicture of the approach that they took: While explaining the concept using the picture above Uday unveiled apretty interesting view on the architecture of the application. Rather than choosing a “classical” 3-tier architecture, Excel Software leverages the Cordys platform to build their applications in a 5-tierlayer. The three tiers of UI, Application Logic and Database are extendedwith a Process tier and an Integration tier. The two additional tiersare used as and when relevant, so you’re not forced into astraightjacket here. The Process tier allows you to build in flexibility and collaborationby design, particularly when combined with business rules and business activity monitoring (option 3, 4, 5 & 6 from John’s list). The Integration tier supports you to establish seamless integration with other applications and or services from the cloud and on premise. From a design time perspective we offer design artifacts for all the“tiers” in one integrated andbrowser based Collaborative Workspace(CWS). The Collaborative Workspace also covers the application life cyclemanagement aspects for deployment and upgrades of applications. Here’swhere the other options (1, 2, 7 & 8 ) that John mentioned come toplay. Applications in Cordys are collections of various artifacts that aremanaged through the Cordys Application Packaging functionality in CWS.Application packages can be deployed on tenant-level or sub-tenant level(the latter are called organizations in Cordys). Cordys supports organization-level styling and customizations, on thelevel of individual design artifacts. So this gives an ISV andEnterprises all the flexibility to do application configuration andpersonalization up to the level of schema extension while leveraging thestandard application that is shared across organizations / tenants. Cordys manages the dependencies within the standard applications andbetween the standard and customized artifacts on organization level,respecting those customizations during upgrades. For Excel Software this translates to very tangible benefits. The CEOshared that Excel Software reduced TCO substantially and moreimportantly this approach has accelerated Time-to-Market by 5 times forthe implementation time of their applications. This is what I meant with the closing remark in my last blog thatwe’re seeing ISVs adopting this approach with great results. I encourageyou to watch the on-demand webinar, which is available on the Cordyssite. Click here to read more and watch the webinar. I will unveil more of the platform secrets that enable speed toproduction and continual improvement options in a next blog about CordysCloud and the benefits of multi-level multi-tenancy. Stay tuned.

Read More

Supply Chain Management Transformation: Technology Shifts the Focus from Process Efficiency to Adding Strategic Value

Cost shedding and process optimization are the typical drivers of supply chain technology purchases. No surprise there. However, according to Gartner, a shift is taking place. Now supply chain managers recognize technology as a strategic asset, linking said drivers with value creation. I came across this notion last month at the 2013 Gartner Supply Chain Executive Conference in Phoenix. The theme was simple: to achieve supply chain management success, enterprises must adopt technologies with real time, analytic and predictive capabilities. The goal is to formulate strategies in which the supply chain function and enterprises’ value proposition tie together. Additional conference insights included: The desire to reduce integration costs is accelerating SaaS adoption Visibility and event management (alerts, notification, etc.) technologies are critical compliance levers Due to today’s business climate, supply chain managers are embracing solutions with favorable financing options, such as subscription or transaction based services By 2016 more than 40% of new business logistics application purchases will be cloud based OpenText has a host of services specializing in supply chain data integration to improve process speed, performance, reach and profitability. Click here to read more; it might help earn your seat at the table where C-level executives make strategic decisions.

Read More

Journey to a New User Interface

Good User Interface Design is highlysubjective. It falls in the category of “I’ll know it when I see it.”Yet, it is a critical part of every development effort. I am workingwith several people on a project to come up with a new interface for ourDigital Asset Management product and I want to share this fascinatingjourney as a diary of how we get there. At OpenText we arefortunate to have some UI Design experts with a background in behavioralpsychology. They have been busy interviewing users to create detaileddossiers to help understand the “typical” user. These profiles, calledPersonas, are based on the various roles of people within anorganization who interact with the software. Our meeting discussedthe information gathered from interviews with users andcapturing thatin the personas. We then can start to map out the tasks, concerns, andpriorities for the persona; what they care about and what they need todo get the job done. We discussed “Barb” the job owner. She coordinatesprojects and campaigns making sure the work is assigned and completed ina timely manner. It was interesting how much information has beencaptured about Barb. In just looking how to initiate a new project thereare many steps. Barb interacts with people and the software-notifications and responses, automatically using templates to createproject and folder structures, and all the associated reporting anddashboards to allow her to track projects, assign tasks, and monitorprogress. Some of the questions are how does Barb prepare the campaignor project for different market segments and channels? Who needs thisinformation? How does she collaborate, review and approve created works? Thefirst stage of the journey is discovery, and a major part isinterviewing and understanding the users. There are many roles thatinteract with the software, with many different needs and differentpriorities. Digital Asset Management is used for creative workflows,campaigns and projects, distribution and delivery; it is an integralpart of the digital media supply chain. The next stage is creatingsome wire frames for the UI and drilling down on the technology for apresentation layer. I’m just a layman, I am not a user inteface expert.However, I do use lots of different UI’s and I know a good one when Isee it.

Read More

Model Railway Industry Begins to Run Out of Steam in the Far East

When I was growing up I had no end of boy’s toys, Meccano for testing my engineering skills, Airfix kits for testing my patience with assembling intricate model aircraft and ships, Scalextric to hone my racing skills and then there was my Hornby model railway layout. I somehow persuaded my grandfather to convert the loft space in his house into a huge model railway layout with trains running everywhere and with the inevitable derailment taking place on a regular basis! Due to some supply chain related issues in the Far East, Hornby has recently made some changes to their global supply chain. Hornby has been enjoying a revival in recent years, seeing their traditional toys competing with games consoles such as Sony’s PS3 and Microsoft’s XBOX. Encouraged by their parents, today’s generation of children have been taking an interest in Hornby’s range of products. Hornby recently announced their financial results for the 12 months to 31st March, with a loss before tax of £3.4m on turnover of £57.4m.  Compared to the previous year, pre-tax profit was down 96% while turnover was down 10%. Last year Hornby invested a considerable amount of money in producing Olympics related memorabilia which sold in relatively low numbers and was hampered by supply chain related issues in the Far East. So these two factors alone would have had a major impact on Hornby’s profits for the year. Over the years Hornby has acquired many businesses, including Airfix to supplement their existing Scalextric and model train related products.  In addition Hornby also acquired Humbrol paints, a key requirement for painting Airfix model kits and finally Corgi. Hornby has grown very quickly in recent years and inevitably they now face a challenge of reducing operational costs in order to boost profitability.  I use to live less than ten miles away from the Hornby factory located in Ramsgate in the UK, and when I went past with my parents I always wondered what it would be like inside their factory. I think at that time it was every school boy’s dream to be shown around the Hornby factory, unfortunately I never had that privilege. Like a child going into Willy Wonka’s Chocolate Factory, I never had a golden ticket to go inside! I am sure the inside of Hornby’s factory today looks very different to thirty years ago, especially as Hornby have moved much of their production to China.  Initially enticed by very low labour costs, Hornby looked to boost their operational profits so that they could go on to acquire other leading companies in the toy industry, as highlighted earlier. For many years this strategy worked, until unrest started to spread across the Chinese worker population.  This has been a major problem for many companies looking to reduce their manufacturing costs by moving production to China.  Strikes and a 15% increase in wages in China have hampered supply chains around the world and in the case of Hornby it was also severely affecting the quality of their products.  In fact Hornby were so disappointed with the quality of the ‘Quickbuild’ Airfix Kits being manufactured in China that they have decided to move production back to the UK.  All future Quickbuild Airfix kits will now be made at a factory in the South of England and their glue based kits will continue to be manufactured in India, for now. Many western companies have spent the last ten years moving production to the Far East however today near-shoring of production has become a growing theme across the global manufacturing industry, with companies moving production back to their home markets or other key manufacturing hubs such as Brazil and Mexico.  I think it says something when it has been recently reported that some Chinese manufacturers have moved production out of their own country and established a manufacturing operation in Thailand or Vietnam for example. Some would argue that western expansion into China is about to run out of steam and I personally believe that it will be China that continues the global expansion of the manufacturing industry into other emerging markets, assuming they can resolve some of their quality related production issues. Due to the unrest in some of the Chinese based supply chains, we are now seeing unprecedented investment in Brazil and Mexico and Ferrari said that Mexico is likely to become the ‘new China’ from an automotive industry perspective. When entering new markets many companies will have tunnel vision in terms of spending too much time focussing on the new manufacturing plant and not enough time thinking about how they will on board new trading partners. In addition they will need to think about how they will extend their B2B platform into the new country as well, what B2B standards will they need to support?, what will the communications infrastructure be like? and can they scale the B2B platform to match the demand of their production lines? It is one thing getting the green light to enter a new market but it is another to remember about looking after the needs of your trading partner community.  Many companies hit the buffers when trying to work out how to scale their B2B platform effectively when they should be focused on the main job in hand, in Hornby’s case looking after their manufacturing processes so as not to disrupt production. Hornby is certainly taking the right steps to help minimise any future disruptions across their supply chain. GXS Managed Services is an approach that many companies have used to manage international expansion.  It also offers the flexibility and scalability to fine tune your B2B platform according to the demands of the business. Whether expanding into new markets or moving production back to your home country, GXS can help keep your business on track.  In the same way that a rail network connects remote train stations, a B2B network such as GXS Trading Grid helps to connect with remote trading partners.  To learn more about GXS in manufacturing take a look at the slideshare presentation below. If you would like to avoid your supply chain looking like a train wreck then please look out for a new webinar that I will be releasing in the next few weeks relating to how cloud B2B integration helps with international expansion projects. B2B Challenges Across the Manufacturing Industry from GXS    

Read More

Marketplaces and The New Sell Side of Retail

Not every retailer is enjoying high levels of success with online sales.  In fact, many are abandoning their storefronts altogether – particularly small and midsize retailers.  Instead these companies are choosing to sell through third party marketplaces.  In the US, mega-retailers such as Walmart, Sears, Best Buy, Amazon.com and Barnes & Noble each allow other retailers to list their merchandise on their sites. Why would a retailer use another retailer’s website rather than their own?  Suppose you are a small shop with a unique variety of merchandise.  To draw new customers to your website you will have to invest in online advertising or hope to be found on Google searches.  Both of these are challenging propositions for small and midsized retailers.  However, by listing on a large retailer’s marketplace your products are now exposed to a much larger base of customers who regularly visit the site.  And you will appear in relevant search results on these high-traffic sites. While there is an obvious benefit to the marketplace model, it does come with several implications for retailers that choose to sell through these sites.  These retailers effectively become suppliers.  I will refer to them here as marketplace suppliers.  As a result, they must comply with all the business processes and technology requirements of large chains such as Walmart, Sears and Amazon.  In other words, marketplace suppliers now have a “sell-side” to their business in addition to the traditional “buy-side” they manage to acquire merchandise from their vendors. Consider the sell-side B2B e-commerce requirements for marketplace suppliers.  Marketplace suppliers must be able to upload their product catalogs electronically to the retailer.  They must be able to update pricing information electronically as frequently as it changes.  They must be able to provide up-to-date information on inventory availability and order lead times to the retailer.  They must be able to receive purchase orders electronically from each sale that occurs on a marketplace.  And they must be able to provide shipment status updates back to the retailer throughout the lifecycle of an order. Marketplace sales are just one of several examples of this new sell-side of retail.  To increase distribution certain retailers have now started to market their private label brands through other retailers.  For example, Sears Holdings now sells its popular Craftsman, Diehard and Kenmore brands through other retail chains such as Orchard Supply Hardware, Ace Hardware, Summit Racing Equipment and AAFES.  (Of course, Sears subcontracts some of the manufacturing of these products to companies such as Johnson Controls, Whirlpool and GE). International expansion is also driving a sell-side for retailers.  More and more chains are licensing their brand names to foreign operators in emerging markets such as the Middle East and Northern Africa.  In each of these scenarios, these retailers now must effectively act like suppliers and operate a sell-side to their business.

Read More

Top 5 Tips to Success in International Expansion

Are you just too busy to find the time to read the recent report “A rush and a push and the land is ours” about the challenges companies face as they look to escape slow growth at home and expand abroad? If so, below are my top 5 tips from the report. Companies are accelerating their expansion ambitions, looking to capture new sales growth away from home in new geographies that are demonstrating rapid growth. While the opportunities far outweigh the threats there are challenges in managing a global or multi-country enterprise. ONE: Global supply chains need to be both agile AND robust A global supply chain needs to be agile enough to react and serve multiple markets, depending on business needs, but it must also be robust enough to withstand changing local demands. Under increasing pressure to buy globally, but think locally, many companies are finding a need to balance global aspirations with increasing consumer demand to reduce product-level mileage in the supply chain. This has been particularly prevalent in FMCG, one such example is where growing consumer demand for an ethical approach is reshaping the way supermarkets and clothing retailers manage their suppliers across the supply chain. At the same time, however, consumers expect to see an ever-increasing range of goods available for them to choose from, driving demand for supply chain development that includes near sourcing. Supply chains need to be more dynamic and move away from the traditional push and pull model, need to be more responsive to customers not just in terms of products, but sourcing, manufacturing, transport, animal and environmental welfare, and treatment of employees. It’s a big ask, so no wonder my top tip number 1 is an agile, robust global supply chain. TWO: Traditional IT systems struggle with complex, extended supply chains No company can grow faster than its supply chain infrastructure, so knowing the effective range or limitations of your supply chain, is critical to expanding. In much the same way that IT has helped to enable companies to source goods on a global scale, those same supply chains now need to manage the complexities of distributing not just westwards but to locations all around the world. There are different approaches to achieve this, from working domestically within foreign countries, direct or in an extended way, or enabling a truly global, operation using a complex network of hub and spoke fulfilment. Making everything speak the same “language” in a supply chain that is both flexible and reactive is vital to creating a healthy supply environment that works on a global basis, able to span multiple time zones and numerous legislative trading areas. The reality that needs to be faced is that traditional Enterprise Resource Planning cannot always handle the demands of a non-linear, global supply chain, one that is multi-faceted, operating in a complex environment of multiple suppliers. In sectors where just-in-time is necessary, this becomes even more challenging. In summary, top tip 2 recommends you take the time to revisit your IT systems and assess them for suitability. THREE: Connectivity is critical for visibility and agility Number 3 in my top tips shouldn’t be a surprise, but maybe you have fallen into the trap of thinking that connectivity is just the “plumbing”, if so, this report suggests you think again. A supply chain that is ‘connected’ will increase both visibility and agility throughout the chain, but ensure that you have applied right level of process integration. (Without it, you run the risk of disparate or silo systems). Cloud has a potential role here; it can become a key supply chain management tool, offering visibility over the full end-to-end process. While some experts will continue to argue at how much real-time data you really need in the supply chain, the true power of the Cloud is just starting to be realised in distribution, already showing potential in helping silo systems talk to each other. FOUR: You need supply chain harmonisation to keep your suppliers along for the ride Top tip 4 and it is time to remember your suppliers! Extending your business processes beyond the ‘walls’ of your own systems can add a significant burden on your suppliers, some of whom may not be well equipped to deal with it. Harmonising your supply chain process has become increasingly important recently, and is likely to prove business critical for you in the future. Also, don’t forget to ensure that you will be able to make sense of the data when you get it. Some companies have already spent time mapping out their supply chains (or at least are trying to, it’s not quick or easy for most). They look at everything from physical process to supplier interaction in order to locate weaknesses and target strengths to leverage, not just to squeeze out cost efficiencies but also to prepare and plan for supply chain disruptions. FIVE: You might expect most companies to be there already, in truth they aren’t I leave you with a recent quote from World Economic Forum Founder and Executive Chairman, Klaus Schwab, who succinctly sums up the situation that we find ourselves in. “Across every sector of society, decision makers are struggling with the complexity and velocity of change in an increasingly interdependent world. We need to explore and develop new conceptual models which address global challenges. The more complex the system, the greater the risk of systemic breakdown, but also the greater the potential for opportunity.” So, what is international expansion to be for your company? If this blog persuades you to find the time to read the full report after all, you can download it here and you can also read what other companies have to say about it.

Read More

Going global: Feel the fear and just do it!

Only a few years ago, global retailing was regarded as the exclusive domain of only the largest of retailers. Now, trading on the internet has given heart to even mid-size companies who are following up their digital ambitions with physical stores, whether directly managed or through local partners. This whole process has been accelerated by the lack of opportunities at home, as the economy continues to remain flat and recovery isn’t predictable in the short term. With the confidence borne of trading online, (which in itself brings significant challenges in terms of language, culture, delivery, local regulations and customs barriers), retailers are now building supply chains that will service a growing store estate, which for some is highly dispersed. Retailers in this report are taking advantage of rapid growth in locations including Nairobi, Accra, Singapore, Bahrain and Brasilia. Recognising the wider challenges, they are feeling the fear, but are doing it anyway. The supply chains the leaders are building now are agile, collaborative, transparent, all-embracing, and inclusive – able to bring in suppliers of all sizes and types. The technical challenges inherent are significant, given that many traditional ERP systems cannot provide this level of flexibility and openness, but the model for a global, extended supply chain is well-established and demonstrating value for the companies looking beyond the flat home economy to new opportunities wherever they may lie.

Read More

Google and Amazon – Now Battling for Share of the B2B e-Commerce Market

Amazon.com and Google (along with Facebook and Apple) have been at the forefront of the innovation curve over the past five years as they battle for supremacy in the technology sector.  Both companies have challenged Apple with new tablet devices (Amazon’s Kindle Fire and Google’s Nexus).  The two are competing head-to-head in the cloud computing segment with Amazon’s EC2 offering and Google’s Cloud Platform.   Another area that you might be surprised to learn that these two titans are now battling over is B2B e-commerce.  Both Google and Amazon have announced major initiatives to attack the multi-trillion dollar market for business-to-business purchases in the past eighteen months. Amazon was first to move with the announcement of its Amazon Supply initiative about a year ago.  Amazon Supply traces its roots to the B2B portal Smallparts.com. Although Amazon acquired Smallparts in 2005 it only rebranded the site in 2012 as Amazon Supply.  Currently Amazon Supply is branded as a “beta”, but the site boasts an impressive catalog of over 750,000 items.  Merchandise is available in a broad range of categories from power and hand tools to janitorial and sanitation supplies.  Much like other wholesale distributors, Amazon offers conveniences such as lines of credit for buyers and technical support for all products.  Shipping is available to over 50 countries.  Companies can order online or via the phone, which is atypical for Amazon. Customers enjoy many of the same conveniences that exist for consumer users of Amazon’s sites.  In fact, you can use the same account to order from Amazon Supply and the traditional Amazon e-commerce site.  Prime customers get free two-day shipping on all orders.  Sales tax is not collected in most US states.  And buyers enjoy a generous 365 Day return policy. Not to be outdone by Amazon, Google responded earlier this year with the introduction of its “Shopping for Suppliers” service.  The Beta program is limited to only a handful of supply categories in the electrical components, test and measurement sectors.  Google Shopping for Suppliers aims to win over procurement and office managers by bringing the simplicity and comprehensive search function Google is known for to B2B purchases.  Pricing starts at $1000 per year, payable via Google Wallet of course. Google’s model is very different from Amazon’s.  Google is operating a supplier discovery service to connect buyers with new suppliers.  Supplier Shopping is not processing orders; managing inventory; offering credit or processing returns.  There is very little in the public domain about Google’s strategy at this point.  Most of the information on Google’s site is focused on providing instructions to vendors.  Google appears to be taking extraordinary efforts to confirm that each listed supplier is a legitimate business.  For example, US based companies must submit a scanned version of the company’s business license, articles of incorporation, CEO/COO letter of authorization and a copy of the latest phone bill (to verify corporate address).  I suspect the goal is to prevent fraudulent businesses from diluting the value proposition, but I also cannot help but wonder if Google also has ambitions of building a master directory of all the vendors that sell into a particular category. Google is also collecting quite a bit of product item attribute data as well.  A minimum of five attributes are required – name, photo, description, category and special order abilities.  Additional optional attributes such as color, temperature, part number, product specification, minimum order, pricing per unit, lead time and website link can be entered as well.  Having an authoritative source for product master data on the web has become an increasing problem in a world of mobile apps that rely on item attribute information obtained through a QR code lookup.  Will Google make use of the data beyond its discovery site?  Only time will tell.

Read More

SME e-Invoicing Adoption in Europe – Part 2

The Role of Service Providers One of the biggest complaints about B2B and perhaps  true in the early days is that this method is too expensive for small and medium companies, and that these B2B programs were all driven by larger customers who essentially  left  their trading partners with little choice about participating. I’m not sure that the statement is 100% accurate. It is true to say that some companies initiate their e-Invoicing programs with a ‘mandate’ to their suppliers that they must use a certain tool, or service provider, however I can also give plenty of examples where large companies offer their SME suppliers a range of different solutions, and incentivise their suppliers through early payment (if electronic), or supply chain finance. It is also true to say that this method has been the most successful to date in increasing e-Invoicing adoption. However, the world is changing. Not all service providers are aimed at large corporate customers; many are now focused on providing solutions that specifically target the SME market, including the major accounting solution providers. But these solutions need to be able to connect SMEs to their larger customers. In the majority, SME solutions are commercial; an SME could face an up-front investment of anything from €50.00-€3,000 depending on the complexity of the solution and process. But the transaction fees will be less than the price of a stamp, and given enough time and volume – the system will pay for itself. Commerce in action. Why should an SME pay to e-Invoice? Each of these solutions has been researched, developed and offered to the market by private enterprises. Each solution has involved a level of investment, and therefore requires a return on that investment in some shape or form. There are some solution providers who claim ‘free’ e-Invoicing for SMEs. In many cases, the large buyer pays so that SMEs adopt quickly but my personal thoughts are clear: Somewhere, somehow… somebody pays (even if through taxes) and it is well to remember Zuckerberg’s quote, “If you’re not paying for the product, you are the product”. Others disagree. Of course SMEs can engage in electronic invoicing by themselves. A recent report from Sage France highlighted that the majority of SMEs in France are currently sending e-Invoices via email as PDF attachments. This is both encouraging and disheartening at the same time. It is a positive thing that these companies have thought to remove paper from the process, but essentially a PDF is ‘digital paper’ – in that it does not contain structured data that can be easily imported and processed through their customer’s systems. In fact, many companies that receive these PDFs print them to paper… and as we discussed in my previous post, innovative service providers are now offering solutions that can extract data from modern PDFs. Another factor to consider in the PDF scenario is tax compliance. Under the new rules in Europe, it is still unclear as to whether this method meets the requirements of 2010/45/EU as implemented by each member state. Do SMEs care? Probably not, it is doubtful they examine the intricacies of doing business electronically – they just do it, but this can have tax and process consequences for their customers. This leads me to another complaint I hear about service providers. They confuse the e-Invoicing marketplace on tax compliance and use ‘scare tactics’ to win business. It’s a perspective I guess, but not one that I subscribe to, much of my life is spent assuring my customers that they and their suppliers, will be tax compliant if they use our solutions. The hardest part of this is interpreting the current rules over every 27 member states and working with tax consultants to ensure certainty in tax matters. Far from confusing the landscape, I think that the majority of service providers work very hard to provide clarity – and to ensure their customers meet the expectations of tax authorities. In my previous post I discussed the power of the network effect for SMEs. However, with different corporates joining different networks does this mean some SMEs have to use multiple e-Invoicing service providers when issuing to different customers? How networks interoperate has been a topic of discussion for years, with telecoms being an historical example, but the interoperation of B2B networks is more challenging due to the complexity of processes, standards and tax regulation. Service providers are coming together in industry associations and working to ensure challenges around the interoperability of networks is overcome. Another set of service providers that should not be overlooked is banks. While some have attempted to enter the B2B market selling to corporates they have met with varying levels of success. But all SMEs have banking relationships, so can banks leverage this relationship further? In the Nordics banks are very successful in consumer e-Invoicing, as direct debit is not widely used and a consumer can log into their on-line bank account, view and pay their bills. This model could potentially be used across the B2B SME community and banks could also have a larger role to pay in early payments through different supply chain finance models. It seems to me that B2B service providers are providing valuable services and solutions that help companies to do business electronically. Essentially, a service provider ‘does what it says on the tin’ – it provides a service, which, if it does not provide value, will not be purchased. This is how commerce works and how private individuals acquire wealth by starting their own companies. I think this is important to understand; within the European Union there are moves to fundamentally alter the way that business is done electronically. The European Commission has invested €millions into large scale pilot programs that compete with private companies in the B2B space with a value proposition that is ‘free’ (again, nothing is free, your tax Euros are funding it). Competition is one thing, but governments are thinking of mandating the use of these LSPs – this ‘federalisation’ of industry is why my next blog will discuss the role of government in SME e-Invoicing.

Read More

Payments, SEPA and the Berlin Wall – EBA Day 2013

Last week I attended the Euro Banking Association’s EBA Day 2013 in Berlin, a pan-European conference focussing on cross-border payments, collaboration between banks and payment infrastructures, partnerships and innovation. The city and the venue’s location were highly symbolic of the conference themes. The Berlin Estrel Convention Centre is located on the edge of the cold war era demilitarised zone, with three original sections of the Berlin Wall still standing in the hotel’s courtyard. Another big concrete wall is about to be demolished within the next few months, this wall was constructed of domestic payment schemes, rules and laws. The SEPA and PSD wrecking balls from the European Commission will now provide the cross-border payments harmonisation that will enable corporates, banks and infrastructures to maximise their business outcomes. If you missed this conference, you can view the full agenda and speaker’s list here, and watch interviews of key speakers and experts on the EBA Day TV here. The most valuable session, in my opinion, was “The future payments and transaction banking landscape”, delivered by Patrick Dixon. According to his study, it currently takes a consumer like you or me about three seconds to be annoyed by a slow loading web page. It takes both of us about five seconds to decide to hit the “back” button when faced with a slow experience. Those five seconds can lead to 95% loss of patience with Bank clients, be it a consumer on a mobile app, a treasurer on a banking portal or a wealthy investor stuck on an automated personal banking switchboard. Patrick Dixon believes that the future of Banking, not just payments, will thrive around monetising customer’s personal emotions and habits. If they want to deliver, Banks, Mobile Network Operators and phone manufacturers should team up to provide an end-to-end service, wrapped up with Big Data analytics, and focus their efforts around packaging a total “turnkey” personalised solution that includes both Banking products (accounts, cards, services, payments) and mobile services (handset, voice, data, identity). In summary, EBA day 2013 was a great occasion for networking; I and the rest of the GXS team there had the opportunity to meet with many of our global clients to discuss the challenges and opportunities of Payments. I am already looking ahead to this conference next year and my personal expectation is to be able to walk through each bank’s lessons learned from the SEPA migration and understand where some may have tripped up. The re-unification of Germany and lifting the Iron Curtain was a lot more complex than just breaking down a single concrete wall; the next iteration and broader scope of the Payments Services Directive, as well as future SEPA rulebook are going to be the new operating frameworks for all players. Why do I say this? Well, my colleagues and I are already helping Financial Institutions, Corporates and Payments Processors to transform this first generation of “tactical compliance” into long-term and strategic operational excellence. If you want to know more about how we are doing this, I’d love to talk to you about it!

Read More

A rush and a push and the land is ours

The title for this blog and newly launched report comes courtesy of The Smiths, a 1980’s alternative rock band. Not that I was a big fan but the title fits with the current interest with companies on international expansion. The thought of expanding your business into a BRIC (Brazil, Russia, India, and China) market may seem intimidating, however, a closer look at the challenges reveals one startling truth; the opportunities are significant and available to those who can capture them. Many European retailers, whether they are trading up or down, are operating in increasingly sluggish domestic markets, characterised by low growth, intense competition and ever more demanding consumer expectations. As a result, many are now accelerating their expansion ambitions, looking to capture new sales growth away from home in new territories that are demonstrating rapid growth. International expansion was once considered the province of the multinational giants, but the opportunities are so strong that even mid-market retailers and brands are making moves, viewing it at the very least as a necessary survival strategy to secure their domestic position. Spurred on by the relatively low-risk attractions of reaching new customers that are buying online, many firms are now refining their balance of sales channels, whether physical or digital, and finalising which territories to target. Despite the significant challenges involved in embracing a multiplicity of local variables including; partner relationships, workforce management, government regulations, physical distribution, local culture and economic factors – the good news is that there is now significant best practice on which to draw. Increasingly integrated global supply chains are enabling companies to leverage new cost efficiencies. This latest report examines the major challenges in building a supply chain to support a global business. Download a copy and read more from companies including: Tesco, TM Lewin, Boden, Phase Eight, Crew Clothing, Martec and Planet Retail.

Read More

OK Glass, How Can You Help Improve Supply Chain Visibility?

Unless you have been living under a rock or staying with the Flintstones over the past few weeks you may not have heard about the next big consumer electronics device called Google Glass. For years Apple has dominated the spending power of today’s tech savvy consumers, but is the tide about to change in favour of Google and their new piece of ‘wearable’ kit? Google Glass has only been out for a few weeks in the US and they have not even released the developer kit yet to allow new apps to be created but already many industry analysts are speculating that this could potentially be a game changer in the competitive consumer electronics industry and provide an edge for Google over their arch rival Apple. Time will tell I guess, but YouTube is beginning to get flooded with videos of how these glasses work. Given there are so many videos available I won’t go into too much detail in this blog post except to say that the most important aspect of these glasses is the tiny screen that allows the user to view different types of information. So it got me thinking, how could something like this work in the context of the supply chain?, could it make our lives easier in terms of how we interact and work with a trading partner community or access B2B related information?, analyse Big Data?, will it compliment the many business apps that are now being released for tablet devices? or will it herald the introduction of a new generation of apps? I guess we have become so use to how we interact with today’s mobile apps on phones and tablets, Google Glass provides a way to do things very differently. Given the wearable nature of this device, even though they currently cost around $1500, I think they would be ideal for the transportation or logistics industry. Tesco has just opened one of their largest distribution centres in the UK, similar in size to twelve football pitches and having twelve miles of racking. I am sure Glass could help to speed up the location of specific goods in the warehouse and even use projected satellite navigation images to guide the ‘pickers’ to a specific storage bin or pallet. Perhaps combining augmented reality with the image seen in Glass would allow goods to be ‘visually marked’ so that they can be found immediately. What about if you are expecting a delivery of new products?, the image below shows a view from within Glass, selecting Trace Shipment would let you know exactly where a shipment is whilst moving across a supply chain. Locate Part in Warehouse would guide the picker to the localtion of the goods. Any delays and a video conference could be setup with the 3PL provider to discuss the progress of a shipment. Once the package has been tracked down you may want to Scan Bar Code to view further details on the shipment. You may want to run a quick inventory check or you may want to query when the next shipment is due. From a retail store perspective, Glass could be used to examine specific products, may be placing a request to get empty shelves filled up by instructing Glass to Scan QR code. If stock levels are getting low and the primary supplier has run out of stock then you could search the procurement platform to Locate Alternative Supplier and place an order directly with them instead. Now there is a bit of work to do behind the scenes to get something like this up and running, developing a suitable logistics related app, integrating the API with your back end business systems, through web services. But I wouldn’t be surprised if something like this appears at some point in the future, who knows may be the augmented reality solution that I discussed in an earlier blog would compliment Glass in some way ? I will be discussing further supply chain related applications for Google Glass in future blog entries.

Read More

Track and Trace – There’s Nothing Fishy About It

During the recent GS1 Retail and Food Service Conference, I was genuinely excited to hear all about the University of Wolverhampton’s work on farm to fork traceability. Guest speaker Robert Newman, Professor of the Computer Science’s team, was certainly engaging, but it was only half way through that the possibilities of the study he was presenting were revealed. The horse-gate scandal has clearly given this the focus it deserves, and I hope desire from retailers to utilise this potential and demands from consumers drive the adoption. Imagine walking into your local supermarket now and seeing a QR code tagged to a fish on the fish counter. If you scan the code you are taken to a website that has traced the fish from “farm to fork”. In the case of our fish it registers where it was caught, the vessel it was caught by, the date/time it was landed, the time of transport, the ambient temperature of its journey, the hand-off to a distributor, delivery to the retailer, more temperate monitoring and finally the day it hits the retail ice. I was half expecting Professor Newman to tell me what Freddie the fish had eaten for lunch, and I suspect if it was a farmed fish, then the website could capture that data as well! As a consumer, this is awesome, and I can’t see any catch to it, no pun intended. I think it could catch on and in a big way with consumers, I know that I’d love to know this information so wouldn’t you? As a retail specialist I am thinking, wow, could this one be the one that breaks the bank? Not because it’s complicated but because the touch points in the chain are enormous. That said, the downward price drives for electronic communication over the past 5 years, and strong standards across food retail mean that even an individual vessel (as in our example of Freddie the fish), could participate via a small business EDI solution like GXS Freeway to communicate with both the retailer and the third party data collection point. I could name at least two sourcing solutions today that could cope with this data collection along the supply chain with minimal tweaking so suddenly it doesn’t look too daunting. The cost is in the communication and roll out to the supply base. More hearts and minds than bits and bytes. For the bits and bytes GXS has an automated supply chain roll out service Active Community to keep those costs as low as possible, coupled with Active Intelligence for checking data, data quarantine for authorisation or rejection workflow and we are pretty much there. I guess it’s just a case of who is sufficiently customer-centric to want to be first in providing this visibility into Freddie the fish and his journey to the supermarket fish counter?

Read More

How EDI ASNs Enable Warehouse Cross-Docking

The ASN is a useful document if you are looking to support cost-saving business processes like Cross-Docking. Cross-Docking is a logistical practice of transferring materials from an incoming truck or railcar directly into an outbound vehicle. As the products spend no time being stored, shipping costs are reduced and inventory costs are minimized. So, how does the ASN help this process?  It provides distribution centers and warehouses with the data they need for advance planning of the shipping and receiving processes.  Without the data, Cross-Docking would simply not work. Here are some of what I consider to be key benefits of Cross-Docking: Accelerated Speed-to-market – handling is minimized and products spend no time on the warehouse floor, so overall end-to-end time is reduced. Bottom Line Improved – because the products spend no time as “inventory”, storage requirements are reduced, and inventory, Labor and other associated costs are decreased. Increase of Retail Floor Space – Because shipments arrive in a timely way, fewer inventories need to be held, so space can be apportioned to the retail floor. Better Customer Service – Because the end-to-end time is minimized, customer costs are minimized while service levels are maximized. The Cross-Docking Process The process of Cross-Docking is relatively straightforward, so let’s spend some time examining its flow.  Cross-Dock Process First, the supplier receives an order, which may supply several stores or company locations. The supplier then sends an advance ship notice (ASN) to the distributor when products are available. The ASN describes what is being shipped before the products arrive at the distribution center. Next, using the ASN information, the distributor’s warehouse management system (WMS) determines what is to be done with the incoming products once they arrive. The products can be directed to the outbound door in order to ship to the retailer; they can be directed to another trailer for combination with products from other manufacturers; or they may be temporarily stored in the warehouse.  The products are shipped, received at the distribution center and unloaded; product barcode information is automatically scanned and verified against the information provided from the ASN; products are then loaded according to the barcode information.     The ASN is one of the key components necessary to make the entire process a fast, automated one rather than a slow, error-prone, manual one.  So, how do you optimize ASN’s and cross-docking? Electronic Purchase Order Collaboration – enable 100% of suppliers to receive electronic purchase orders. Large suppliers may be enabled via traditional EDI, while small and medium-size businesses may be enabled using other technologies, like web forms. Advance Ship Notice (ASN) and Bar Code Labels – enable 100% of suppliers with the capabilities to send ASNs via EDI or web forms. Look for solutions that also allow you to generate and print the bar code labels for shipments. Data Quality Management – the ASN is one of the most complex supply-chain EDI transactions, so look for a service that helps to collect, clean and feed logistics information to Warehouse Management Systems (WMS). A rules-based engine can help by validating data across all trading partners and integration channels with both standard and customer-specific rules, ensuring every message contains required information and valid system codes. Inbound Visibility–by combining the ASN and shipment status EDI message you can get visibility into inbound shipments via dynamic ETAs (estimated time of arrival).  This kind of visibility service can be extended so real-time notification about the progress of an expected shipment is available throughout the supply chain. Click here to read this case study to learn how a major US retailer leveraged ASNs and cross-docking to save more than $1 Million.

Read More

Why SAP Consolidation Projects Should be on Every CIO’s Agenda

Last week SAP hosted their Sapphirenow conference in Orlando, a conference that I was fortunate to visit this time last year. It was quite clear last year that SAP were making a very big push towards promoting their cloud, mobile and data analytics based services. Then just after the show they announced that they would be acquiring Ariba. One of the highlights of the show for me was seeing what HANA could do. Now this is not a name of a robot out of a 1950s sci-fi film, it is actually the name of SAP’s in memory database. HANA is expected to be at the core of SAP’s product offerings in years to come and the intention is to move customers onto a common ERP platform that will allow their customers to ‘fully’ take advantage of the power of HANA. Perhaps SAP’s new direction provided a distraction to many CIOs over the past year especially as a recent report by the Indian service provider HCL, shows quite clearly that many companies still have a significant way to go in terms of getting onto a single instance of an SAP ERP platform. Their report contains some interesting statistics from a survey of 225 global CIOs. For example only 6% of those CIOs surveyed use a single SAP instance and 90% of the CIOs expect HANA to play a big role moving forwards. On average it was found that survey respondents had five separate instances of SAP and increasing complexity still further, some 39% stated that they were running more than six instances. There are many benefits of running a single SAP instance but the most important one is cost, it was estimated that on average up to 25% could be saved. So with this in mind, why should GXS have an interest in this potential opportunity for SAP instance consolidation? Well put simply we believe that B2B helps to complete ERP as it provides secure and highly reliable connectivity to an external trading partner community. When a company is thinking about SAP consolidation, this will also provide the best opportunity for integrating to a B2B platform. SAP environments are incredibly complex and the last thing you want to do after upgrading users to the latest version of SAP is to then interrupt business and production processes once again. Implementing an outsourced approach to managing the integration between SAP and your B2B platform will help to ensure that your business realises even greater levels of return on your investment. Cloud, mobile and HANA may provide a good incentive to upgrade and consolidate SAP instances but integrating seamlessly to a trading partner community should also be high on a CIO’s agenda. Here at GXS, our B2B outsourcing environment has been implemented across many companies from a variety of different industry sectors. We have undertaken many SAP integration projects in recent years and in fact we recently renewed our SAP Netweaver certification which will provide peace of mind when companies are looking to upgrade their SAP platform. GXS supports version 4.2 and version 6.0 of SAP. So now that every CIO across the world has seen that a single instance can save considerable amount of time and money, I expect we will see a mad rush of SAP consolidation projects taking place. After all, they are keen to simplify the user experience, make SAP more widely available via the cloud and accessible via mobile devices and more importantly undertake data analytics. But when a CIO diverts resources to undertake a SAP upgrade or consolidation project, it means that the B2B platform could be exposed. For example who would undertake the on-boarding of new trading partners? Who would create any required document maps or who would undertake any trading partner connectivity that may be required to support an important customer project on the other side of the world? Well help is at hand. To learn how GXS Managed Services can help your business then please click here to review our on-demand webinar – “How B2B Completes ERP” or alternatively visit GXS’s SAP integration web page for further information.

Read More

Retail Supply Chain to Healthcare, Where do you start?

Most definitely with the GS1 organisation. Bringing the relevant entities together to agree a standard before you start is the right way to success. If you add a plan-execute-review process to underpin it, it should work smoothly and offer a stable, standardised platform for everyone involved in your supply chain to move forward in the same direction. This includes the suppliers who will need to adopt a new process and the technology partners who will need to ensure that their solution can be used by everyone involved. I’ve spent more than 10 years now bringing people together to discuss standards, or a standard collaborative way of working in the retail fashion and general merchandise sectors. Generally, I have been more focused on business standards rather than document level standards (such as PO’s, Invoices, ASN’s etc). There are formats agreed and administered by GS1 already, after all for these. The type of standards I’m talking about are different, one example could be colour. You could already have a lifestyle description of a colour that “might “work on the shop floor but not in the merchandise department or at the supplier site or with the receivers or even in the stores if/when they open up the boxes. It could be that “Midnight Moon” is blue but who knew? Having a standard colour number code that people recognise is just one way to manage this scenario, or a pantone colour pallet (like a paint colour chart) perhaps. This kind of scenario has been discussed many times in my experience, but actually getting agreement to change things, with businesses that have been doing this for years is hard. It can literally take a decade to get a standard agreed. In contrast, Image standards are just being driven into town in the USA now with my GXS colleagues there. They have been working tirelessly with a group of well-known retailers and suppliers to set the standard and trial their efforts. GXS is synchronising product data between the retailers and suppliers and this now includes Image data, helping to find agreement on standards for information like size, shape, angles of images, file formats, how to determine internal vs externally images etc. A GXS led customer team was formed, and now the retailers can take it to the next level, involving more companies and helping GS1 form the next standards chapter. So my advice to all of healthcare is start with a standard, even a standard in its infancy is more manageable and less costly than everyone making paths in different directions.

Read More