Supply Chain

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    

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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.

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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.

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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.

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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.

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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.

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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!

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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.

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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.

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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?

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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.

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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.

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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.

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Healthy Retail

I was struck with a sudden feeling of good health at the GS1 UK Conference in Coventry last week. In particular, I was struck by how many companies were asking in-depth operational level retail supply chain questions. Of course I’m excited by this kind of thing, it’s hard to get me to stop talking about supply chain most of the time I am told, but the reason I was struck this time was because I wasn’t surrounded by retailers as I usually am. I was at the GS1’s UK Healthcare Conference! Healthcare representatives from a host of companies joined other GS1 member organisations and the focus of the day was clear, efficiency through change and automation. I heard some great stories from Southampton University Hospital about their stock control and visibility drives with their use of 2D bar codes for patient identification. I don’t know why I was surprised with a call for £20bn of savings needed before 2015; the NHS is at its most fiscally strained for 40 years. Add to this an aging population, the increase in funding required to just maintain the current position, and this shows the true scale of need for this efficiency drive. The idea of other industry sectors looking to the Retail sector for expertise to improve supply chain efficiency is a smart move I believe. If the retail sector had an advanced, fully functional model to draw from 30 years ago when we started “thinking smart” we would all be much further ahead than we are today! The retail supply chain remains one of the most sophisticated and efficient supply chain models in place today, so it makes sense that healthcare looks at this. Healthcare can also bring good ideas to the table as payback. It’s how we have fuelled innovative minds inside retail anyway, looking at how other people have approached similar problems from different perspectives. Collaboration across sectors isn’t new. Whilst RFID is now being used in more and more networks, this concept wasn’t a retail technology to begin with. It was first used in World War II bombers as a way of confirming friend or foe and counting them back in after missions. That old RFIF tag couldn’t have been attached to a silk dress, not by a long shot! The technology changes have been driven by retail needs and now look likely to appear in the healthcare sector as well so that everyone can share the resulting benefits. I was reminded the other day during a discussion with a colleague about our past retail experiences, that maybe even the floor level micro merchandising program trials we conducted at the Arcadia Group in the mid 90’s would be used by all retailers now if we’d had a good model to start with. What was striking for me from our discussion was our inability to be proud of retail’s achievements. We both just came up with another list of ways we could improve things now with new technology or different processes. And that was it, right there! One reason why the retailer supply chain model is so strong is that I’ve never met anyone working around retail supply chain that’s truly happy with the way it all works today. You will always see programs and drives across every retailer, across every department, asking the question “how can we make it better” rather than happy just to watch it work. If healthcare takes on this retail ethos, as well as the model, in the long term, they simply have to be a success in my view.

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B2C Electronic Commerce Battlelines Moves to the Supply Chain

Earlier this week Quidsi, a subsidiary of Amazon.com, announced a new program called Familyhood Plus that bears a close resemblance to its parent company’s Prime offering.  Quidsi, which translates to “what if” in Latin, is an umbrella company that sits atop numerous popular web brands such as Soap.com for health, beauty and household essentials;  Wag.com, a pet specialty site; YoYo.com for toys and games; and Bookworm.com for children’s books. Unlike Prime, Quidsi’s pilot program will start with no annual fee.  However, participants must agree to receive certain marketing programs and to try shopping on new sites.  But those which do participate will receive free shipping on up to 90% of the merchandise on Quidsi’s portfolio of sites. When you ask retailers how to gain a competitive advantage in the cutthroat e-commerce marketplace, most will talk about aggressive pricing strategies, flexible return policies, user-friendly websites and highly-targeted marketing campaigns.  You rarely, if ever, hear a mention of supply chain and logistics in these discussions.  But these days, more and more competitive advantage is being gained by retailers such as Quidsi that can deliver the product the fastest to the consumer.  In fact one of the reasons why so many consumers continue to purchase items in stores that could be found cheaper online is the immediate gratification that comes with taking possession of the item after the checkout. In late March, Walmart announced that it had started to place lockers in some of its brick and mortar stores.  Consumers can order online then go to a nearby store to retrieve the items.  Lockers avoid the need for the consumers to wait in line to speak to a store clerk. Amazon began introducing lockers last summer to stores ranging from Staples to 7-Eleven in metropolitan regions such as Washington DC, New York City and San Francisco.  Google went a step further when it acquired BufferBox, a Canadian operator of lockers in major metropolitan areas throughout North America. The competition to offer more aggressive delivery schedules is not limited to the US market.  The stakes have been raised considerably in the United Kingdom over recent years.  For example, Argos now offers 90-minute delivery via a shuttle service for deliveries in the greater London area.  Next offers delivery the following day for orders placed by 10PM.  Ocado offers shoppers to specify grocery delivery windows of within one hour. Logistics and the supply chain become particularly valuable when they can impact the volume of sales a retailer can handle.  GSI Commerce, a unit of eBay, which provides fulfillment for brands such as Godiva and Aeropostale, has been able to use improvements in distribution center operations and transportation management to increase its holiday sales volume.  GSI guaranteed Christmas Eve delivery for any orders placed before 11PM on December 22nd of last year.  That is eight hours after Amazon.com’s cut off time of 3PM on the 22nd.  An increase of just an hour during this last minute shopping window can increase sales by up to 10% for an online retailer.  GSI’s extended holiday shopping windows were made possible by re-engineering the picking and packing processes within its distribution center.  Warehouse efficiencies have become a critical differentiator in the online commerce market.  In fact, some retailers are pursuing mergers and acquisitions with hopes of leapfrogging the competition.  For example, Amazon.com acquired a maker of robotics systems for distribution centers named Kiva Systems.  These robots speed through giant warehouses moving inventory from shelves to workers to accelerate order flow.

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Overcoming the Hurdles to Advance Ship Notice (ASN) Success

In my last blog entitled, The Advance Ship Notice (ASN) — 20/20 Vision we discussed the many benefits produced by the use of ASNs. However, there are also barriers to that success that must be overcome before the goal can be realized. One of the biggest challenges to ASN success is the level of supplier and carrier participation. If a company has less than 100% of its suppliers and carriers participating, the benefits are not optimized. It is difficult to help each supplier and carrier implement and test ASN without investing in resources for this onboarding process. The second challenge is the day-to-day management and support of suppliers and carriers. ANS business rules should be enforced and exceptions need to be identified and dealt with. Finally, ASN data accuracy is key. Otherwise there will be delays, lost productivity, and customer service shortfalls. Suppliers must be trained to send accurate, timely and complete documentation for the process to function. Regardless of size, many companies partner with a B2B service provider to help them facilitate their ASN process. A service provider should have the following attributes: A proven track record of success – choose a provider that has lived in this space for many years and has the customers to prove it. The right products – You may use EDI, but not all of your suppliers and carriers will. Choose a service provider that has solutions for either. They should be able to manage the complexity of your business process and grow with it. They should be able to configure business rules that help manage your supply chain and catch exceptions before they occur. The right services– choose a service provider that can help with your supplier and carrier onboarding, training, and day-to-day support. Exceptions occur in even the best-planned systems and a good provider can help you deal with those issues swiftly and surely. Other services include: Daily identification and analysis of messages with data quality issues Support for resolution of issues, including testing on the fixed issue Continued updates to trading partner’s functional and technical maps Development of a monthly results scorecard for management What ASN challenges are you facing?   Let me know, as I would be interested to hear more…

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INFOGRAPHIC – New B2B Managed Services Study

In an earlier blog entry I highlighted some of the results from a new B2B Managed Services study by Stanford University’s Supply Chain Management Forum. The blog entry highlighted some of the results relating to how B2B Managed Services supports international expansion projects. Overall, the study looked at the how B2B Managed Services is being adopted by global companies today.  To support this study I have just produced the following infographic which conveniently summarises the key results from the study.  For a full explanation of these results and to download your own copy of the study please CLICK HERE.    

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Reconsider Your B2B Strategy – Reason 8: Business Divestiture

The current economic environment will continue to see a high degree of divestment activity as some organisations look to grow and others to focus on their core competencies. Divestitures impact all areas of a company and the measurement of success is achieving effective business continuity while transitioning business processes, data, people and IT systems. The Challenge There is often a year’s ‘phase out’ for the divested organisation to move from one organisational structure to the next. This is hardly sufficient time to select and implement new systems such as an ERP or supply chain solution. Organisations that have spent years integrating and consolidating their business processes and IT systems can find themselves with just 12 months to de-couple and transition them. 2 Key Areas to Review in Your Company (click on the links to learn more): The Supply Chain IT Systems The Role of B2B Managed Services Within divestitures, B2B Managed Services can play a key role. It can be an interim solution during the transition period to ensure business continuity, or a longer term solution providing specific services such as electronic invoicing with partners, as well as ensuring any transition of supply chain, financial or ERP systems remain invisible to your trading community. For more information, including further benefits and a checklist visit www.b2boutsourcing.co.uk or click here to contact GXS. If you missed any of the previous blogs in this series, click on the link to view now: Cost Reductions Customer Integration New Markets & Channel Adoption ERP Integration Business Consolidation Business Modernisation Workforce Optimisation

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How Connected Cars Could Drive Real Time Aftermarket Supply Chains of the Future

This recent blog entry about the connected car led me to extend the thinking a bit further. The connected car will completely change the way in which both the consumer connects with their car and the car connects with its surroundings. The so called ‘internet of things’ is starting to paint a picture of what life will be like when connected devices can interact with each other but what about if they could also interact with a supply chain and hence potentially form a closed loop parts ordering system for rectifying potential faults that may arise in a vehicle? So imagine the following scenario for a few moments…… A vehicle’s on board computer, or ECU, detects a significant change in flow rates across a water pump. The low flow rate has reached a certain level that could lead to failure. In fact what has happened is that the O-ring seal has a very small split causing water to leak slowly from the cooling system. To compound the issue still further the low level coolant bulb has blown in the instrument cluster so the driver has no way of knowing that the water pump is about to fail. So how can the connected car help? The flow rate information is sent, via the car’s internet connection, to a central service centre where a database compares the flow rate information received with known failed water pumps from the same manufacturer. The service centre confirms that the O-Ring is about to fail within the next 200 miles and they decide to order a new seal from their supplier and it will be delivered to the nearest repair centre to where the car owner lives. The central service centre also checks the online maintenance schedule of the repair centre and identifies a slot when the seal could potentially be replaced. Once the part has been ordered and the repair slot reserved, the service centre sends the repair information directly to the car owner, either as an email or directly to the car’s infotainment system. The owner is then made aware that the pump is about to fail, a new seal has been ordered and a repair slot has been reserved at their nearest service centre. For the car owner concerned they are not worried about how the replacement part was automatically ordered but for me this brings together the physical and information supply chains. In North America, the ‘OnStar’ service has been used for many years to connect cars to a central service centre to help diagnose problems or call for assistance. A cloud based telematics and service environment can potentially change how manufacturers repair and service vehicles. It could also revolutionise the way in which car manufacturers conduct vehicle recalls, such as the airbag recall experienced by four of the Japanese car manufacturers recently. Therfore service centres will be informed of a problem with a vehicle before the driver becomes aware. The RAC, a leading vehicle recovery service in the UK, recently announced that they would be offering a service that would connect a ‘black box’ to a car’s ECU so that if a problem occurs, the RAC can proactively inform the driver of an impending problem. The RAC clearly realises that the cloud telematics market is potentially large and by offering this service they can retrofit into older cars that may not have any form of internet connection. We are seeing some demand now to integrate with Dealer Management Systems, essentially the back office platform that a car dealer uses to manage their inventory and order spare parts. (This integration process provides the ideal opportunity to link the physical and information supply chains together). So with more and more cars being launched with internet connectivity, is there an opportunity to integrate to a back end B2B platform to take care of the parts ordering process via traditional EDI transactions?, well of course there is. Companies have been automating their ordering processes via the exchange of EDI or electronic business documents for many years. The cloud based telematics system potentially allows the consumer to be integrated with an automated ordering process and hence aftermarket supply chain. This in turn helps to improve efficiencies, reduce repair/spare part inventory levels at a dealer but more importantly improves customer loyalty and brand loyalty. In closing, I guess in the perfect world the next step would be to have an autonomous car drive itself to a service centre whenever a problem was detected, but I will leave that thought right there for the moment! I will continue the discussion about the future internet of things in future blog posts.

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The Advance Ship Notice (ASN) — 20/20 Vision

While hindsight may be 20/20, when applied to an enterprise supply chain, it’s not as impactful as foresight. In order to reduce supply chain costs, particularly around logistics, we need the ability to see beyond our walls, and that is precisely what Advance Ship Notices (ASN) give us. So, what is an ASN? An ASN is an electronic document sent ahead to the receiver that details the soon-to-be-delivered shipment of goods from a supplier, third-party logistics provider (3PL), or fulfillment agent. The document usually contains the same information found in the original purchase order (PO), plus logistics information like carton ID’s, content descriptions, and transportation specifics. Widespread use of ASNs facilitates business initiatives like Efficient Customer Response (ECR), Just-in-Time Inventory (JIT), and Cross-Docking. ASNs coupled with carton barcodes provide the biggest impact on the supply chain. The former provides a “heads up” on the contents of the shipment, and the latter enables that information to be used for quick routing of those products. For retailers, wholesalers, and others on the receiving end of goods, the ASN and barcode combination provides substantial benefits including: Receipt Planning – Because the ASN arrives before the goods do, logistics and operational staff can plan for delivery and schedule accordingly. Fast and Accurate Stock Receipt – Because contents can be quickly identified using barcodes and matched with PO numbers, item numbers, and quantities, data quality is higher and received goods are processed faster. Warehouse Carton Routing – The receiver’s warehouse management system (WMS) can often use the label to route cartons internally through automated conveyor systems.     Shippers will also benefit from ASN use. Here are some examples: Product Tracking – Because freight carriers scan bar codes upon acceptance, transfer points, and delivery, shipments can be tracked en route. Loss Claims – All parties know the contents of each shipment, so missing cartons can easily be tracked, and claims can be made accordingly. This advance notice of a loss also enables replacement content to be expedited, so customer service is improved. Faster Distribution – Because the products are moved quicker through distribution centers, they arrive on the sales floor in less time. Supply chain visibility is a critical element of effective supply chain management and ASNs contribute significantly to this goal. According to Auburn University’s 2011 ASN Study, “The benefits of quality ASN data are many, including increases of 20-40% in receiving productivity, support for flow-through DC processing, the ability to pre-allocate merchandise to stores, improved supply chain visibility, and other enhancements to supply chain performance.” For additional information on ASNs in the retail supply chain check out some of these posts  as well.

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