The Infosys global supply chain management blog enables leaner supply chains through process and IT related interventions. Discuss the latest trends and solutions across the supply chain management landscape.

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November 17, 2010

Apple-Foxconn: Strategic partnership or a hard-to-get-out-of relationship?

It all starts with a desire to forge a long term partnership. The supplier impresses you (the customer) with his ability to do what it takes to exceed your expectations - ramping up volumes at a push of a button; reducing time-to-market; pushing cost down or not flinching to make capital investments just so that you get the desired quality....and then comes a day when you realize that the long term partnership has morphed into a dependency that you cannot get out of; at-least not without a painful divorce proceeding. Was Apple in this frame of mind when Foxconn attracted a spate of negative publicity recently?    

Continue reading "Apple-Foxconn: Strategic partnership or a hard-to-get-out-of relationship?" »

Posted by Amit Tambi at 3:20 PM | | Comments (1) | TrackBacks (0)

August 31, 2010

Neodymium: Toyota's pain and China's gain

For years China has been looked down upon by global manufacturers in US, Japan and Europe as merely "Low-cost" source. The global manufacturers had looked at China to supply something that is non-strategic and only valued by the price tag of the item. There was no emphasis on the uniqueness of China in terms of its source. It was felt that something that is easy to develop, but is price sensitive, can be transported to China and get developed there. This way the transportation changes and additional inventory costs due to longer lead times, would be offset by China's low cost of production. But Neodymium and a host of other Rare Earth Elements (REE) are going to complete change how the world views China. These REEs, the essential "protozoa" of 21st Century products, has China in the driver's seat to fuel growth. From Hybrid cars, Electric Vehicles, Mobile phones, Laptops, portable x-ray units to missiles.... all depend on REEs. And China has a 97% monopoly in production of these elements.

Continue reading "Neodymium: Toyota's pain and China's gain" »

Posted by Sudripto De at 9:10 AM | | Comments (0) | TrackBacks (0)

August 13, 2010

How to Control Proliferation of SKUs?

One of the current biggest challenge faced in supply chain management is explosion of number of SKUs. It is very common scene that total number of SKUs are 50 to 100 times the number of "Real" product offerings. By "Real" product, I mean, a product which customer buy to satisfy some of their needs. SKU is something which is created out of "Real" product so that it can be sold to a customer in a specific market place. There are many reasons for which multiple SKUs are created from same "real" Product. Some of them are listed below.

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Posted by Nikhil B at 6:35 AM | | Comments (4) | TrackBacks (0)

March 31, 2010

Human Factor in Supply Chain Risk management

Supply chain risk management professionals have been designing and developing tools and techniques for capturing data, conducting an assessment and then taking mitigation actions. There have been complex mathematical formulae and statistical estimation techniques, as well as detailed business rules for any decision support system for supply chain risk management. There would be enlightened debates among the academics and the researchers about the distribution algorithms to be adopted and the forecasting models to be deployed for define an accurate picture of the future. They would enable classifying the risk sources and the risk drivers to come out with the right assessment of risk. But in this milieu of mathematics, statistics, rules and regulations one critical aspect is given the back seat…. the human factor. It is rightly said the risk appetite of an enterprise is inverse of the risk averseness of its decision makers.

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Posted by Sudripto De at 8:49 AM | | Comments (0) | TrackBacks (0)

February 26, 2010

How do you protect yourself from small supplier’s BIG issues?

This blog of mine is different from the rest. Here I am not going to analyze data, neither am I going to profess inferences….. I am going to ask you about your opinion on certain very key factors which impact risks in supply chain. I was in a discussion with the Head of Supply Chain of a large manufacturing house, and some of his views on managing suppliers for their supply chain intrigues me.  That is the reason I am looking out to seek your opinion on some of the aspects of supply chain.

Continue reading "How do you protect yourself from small supplier’s BIG issues?" »

Posted by Sudripto De at 5:03 AM | | Comments (1) | TrackBacks (0)

December 7, 2009

Supply Chain Traceability in the Automotive Sector: Need for “back-to-basic” solutions

As automotive sector carries on through the roller-coaster ride of plummeting and rising sales, the regulations which impact the industry are growing stiffer by the day. These regulations insert a lot of pressure on manufacturing and supply chain functions to maintain clear track of the operations, value-adds at each stage and the ensuing responsibilities of each stakeholder in the automotive value chain. As cost pressures on today’s scenario are foreboding on these regulatory pressures, OEMs (Original Equipment Manufacturers) and suppliers would be least interested to spend any extra dollars on establishing any new traceability solutions. This leaves most OEMs and Suppliers vulnerable to traceability gaps in their supply chain which enhances their risk exposure. In such circumstances it is imperative that OEMs and suppliers return back to the basics to device low-cost traceability ideas from their legacy infrastructure.

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Posted by Sudripto De at 4:42 PM | | Comments (1) | TrackBacks (0)

November 8, 2009

Supply Chain 007

Suspecting supply chain waste

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Posted by Shan Latheef at 3:44 AM | | Comments (0) | TrackBacks (0)

October 14, 2009

“Bye Bye CPFR; Welcome CFT-R”…..say the Supply Chain managed organizations

Manufacturing and retail enterprises have been working since the middle of the last century on collaborations in supply chain. CPFR (Collaborative Planning, Forecasting and Replenishment) had emerged as the basic mantra for success for organizations thriving on supply chain to drive efficiencies and synchronized operations. But this supreme position of CPFR is being challenged by another buzz-word, vastly accentuated by the economic downturn. This is “risk management”. Suddenly you see everyone talking about risk. Interestingly, in risk management again the complete planning-to-execution-to-monitoring cycle requires collaboration across various business functions. This led to the need for the next generation mantra – CFT-R (Cross Functional Team for Risk).

Continue reading "“Bye Bye CPFR; Welcome CFT-R”…..say the Supply Chain managed organizations" »

Posted by Sudripto De at 6:37 AM | | Comments (0) | TrackBacks (0)

October 12, 2009

Supply Chain Security Risk

In a recent report from AMR on Supply Chain Risk Trends, supply chain security topped the list of the risks which have seen the biggest growth of the year. This is indicative of the problems faced by global supply chains involving long lead times and transits. Economic recovery seems to have reduced the risk perception around volatile energy / transportation costs and Supplier failure.

Continue reading "Supply Chain Security Risk" »

Posted by Mitul Shah at 4:46 PM | | Comments (0) | TrackBacks (0)

August 26, 2009

Supply Chain “Proverbs-to-ponder”

IDENTIFYING CAUSES FOR UNSUSTAINABLE BEHAVIOR

Efforts for sustaining supply chain benefits have been under fire. Business requires supply chain programs for implementing their strategies. Variability, especially uncertainties in operations dim the chances for even the best solutions to return results in a consistent manner. Sustainability, is taking center-stage for CXOs and I see them scramble for ideas that have demonstrated results.

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Posted by Shan Latheef at 4:02 PM | | Comments (2) | TrackBacks (0)

August 5, 2009

How risky is present Supply Chain risk assessment?

Assessment of Supply Chain risk is gradually evolving as the critical core competency for organizations struggling to cement their footprint. Most organizations especially the public listed enterprises have developed ways and means to identify enterprise risks and develop strategies for mitigating the same. But when it has come to supply chain risk assessment, the vision is blurred by parochial operational silos which deploy separate techniques for risk assessment. Even the spectrum of supply chain risk is limited to supply and distribution functions. The “Big Picture” image gets lost and this leads to huge risk of erroneous prioritization, procrastination and delayed action. One of the major causes of this scenario is the challenge of a system in place which enables a “comprehensive risk assessment”.

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Posted by Sudripto De at 4:19 AM | | Comments (3) | TrackBacks (0)

June 1, 2009

Fearing supplier bankruptcy? Take the steady steps for procurement collaboration with your competition

In my previous blog I had touched on the “Why” aspect of a supplier platform strategy to avert the impact of supplier bankruptcy. In the market similar trends are taking place where manufacturers are coming together to develop a common procurement platform for sourcing from a common supplier pool. Such a step should be fraught with a lot of caution, as it is not an omnibus solution. Instead of just hurrying up the myriad steps to reach the goal and announce the collaboration success as media hype, a step-by-step approach with attaining stability after each step is necessary. That is why you will see a lot of “yes-no-yes-no…..” iterations in the media about a lot of superficial collaborations being floated. Probably that is the reason you would hardly see much in the media about such platform strategies already in place among many Japanese manufacturers, as they feel that media announcements will only follow once a critical mass is attained.

Here I explain “How” manufacturers are trying to solve the complex puzzle of the platform strategy.

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Posted by Sudripto De at 1:52 PM | | Comments (0) | TrackBacks (0)

May 13, 2009

Is your Supply Chain catching a Flu?

Swine Flu once again reminded the world about how brittle our supply chains can get. Canada suffered a loss of $515 mn during SARS outbreak in 2003. Avian Flu caused damage of $10 bn to Asian countries. Mexico is losing $57 million a day due to cancellation of business events, travels and reduced consumer demand.

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Posted by Mitul Shah at 12:35 PM | | Comments (0) | TrackBacks (0)

April 30, 2009

How can manufacturers cope with bankruptcy risk of their suppliers

The Buyer in manufacturing unit is under a lot of stress. On one side is the pressure to reduce cost on raw material and bought-outs. On the other is an emerging risk of suppliers closing shop and disrupting supplies. Many buyers are adopting strategies like hurried stockpile or bailing out their suppliers. But are these right approaches? In a way, is the risk not getting shifted from the suppliers to the manufacturers? Is there a way out of this mess?

Let us take the scenario where a manufacturer-X is on the verge of getting bankrupt. All the Class-A suppliers (suppliers whose revenue share for this manufacturer is above 65% of their total revenue) would be having a high probability of getting bankrupt. Think about the buyers from other manufacturer -Z who sources from this supplier. As panic grips, this buyer would suddenly jack-up his schedules to avoid any eventuality.

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Posted by Sudripto De at 6:35 AM | | Comments (0) | TrackBacks (0)

March 30, 2009

Supply Risk – Increasing importance in a weak economy

In my last post on this blog I had talked about Supply Chain being a strategic lever in a declining economy. I had indicated that one of the key areas for companies to focus was in managing Supply Risk in a robust manner to accommodate shrinking capacities and supply failures.  I think that Supply Risk is a fairly complex variable which is not always looked at unless an enterprise faces “supply failure”. In this posting I wanted to try and disaggregate Supply Risk to a degree and provide a framework to think about it.

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Posted by Saurabh Agrawal at 7:02 AM | | Comments (5) | TrackBacks (0)

March 23, 2009

Intellectual Property Infringement – One of the Top Supply Chain Risk

A very interesting article titled  Managing the Biggest Supply Chain Risk of All: Constant Change by Noha Tohamy of AMR Research rightly points out – that the biggest supply chain risk of all time is constant change.

The article also mentions that although being a manufacturing hub of the world, China contributes to the most risk to global supply chains, 9 out of top 15 risks. The top of the list is Intellectual property infringement followed by quality failure risk and security breach issues.

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Posted by Mitul Shah at 1:57 PM | | Comments (0) | TrackBacks (0)

Supplier Bankruptcy – A Real Risk during Recession

Recession is here. Slower demand, shrunk liquidity and increasing pressure on cost is here. Auto industry has suffered from severe decrease in the demand which has resulted into steep production cuts. Suppliers get paid 45 to 60 days after delivering parts, and this may cause a wave of failures in March and April, when the nearly total shutdown in U.S. auto production at the start of the year starts to hit their balance sheets hard. To other industries also, recession presents increased credit risk and a very real risk of supplier insolvency. In my opinion, supplier bankruptcy causes two different kind of risks.

Continue reading "Supplier Bankruptcy – A Real Risk during Recession" »

Posted by Mitul Shah at 12:12 PM | | Comments (3) | TrackBacks (0)

November 18, 2008

Where do I start Supply Chain Risk Management in my supply chain?

Implementing Supply Chain Risk Management (SCRM) is as much about changing the mindset of people, as much it is state-of-the-art tools and processes. I firmly believe that if every person operating within the supply chain is made aware of the risk associated with each decision, half the distance to success is traversed. Ability to foresee and assess the impact of the risk is probably the toughest thing to instill across supply chain, rightly so, for multiple reasons.

Continue reading "Where do I start Supply Chain Risk Management in my supply chain?" »

Posted by Mitul Shah at 10:34 AM | | Comments (1) | TrackBacks (0)

November 13, 2008

Five 'I's' of Supply Chain Visibility

While reading a thought provoking blog on a speech by David Allen, famous author of “Getting Things Done”, I could not help but find a corollary between capabilities, what he calls as five “I’s” , of  personal productivity software and an ideal supply chain visibility solution. A day in life of an executive is a quite interesting corollary for Supply Chain. There are constraints, demanding customers, reluctant suppliers and unforeseen meetings/happenings that continuously disturb the meticulously planned schedules. Executives pay a lot of attention to their personal planning gadgets and hire great assistants who help them maximize their day’s worth. Just goes to explain how much would be the worth of a supply chain visibility solution that allows the supply chain managers similar control over their processes.

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Posted by Amarpal Sanghera at 5:14 AM | | Comments (2) | TrackBacks (0)

November 6, 2008

Managing risk for sustainability

Many companies are focusing on supply chain sustainability—looking beyond pure financial results to minimizing the environmental and societal impacts of operations. Ultimately, sustainability is an effort to preserve the long term operations of a company, its supply chains, and its community. Building a sustainable supply chain requires a keen focus on long-term strategies; maintaining a sustainable supply chain requires a focus on operational excellence and management of risks in the supply chain. In fact, effective risk management is an essential component of any sustainability strategy.

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Posted by Taylor Wilkerson at 8:17 AM | | Comments (0) | TrackBacks (0)

October 3, 2008

Globalization trends in Supply Chain … Its just getting riskier! Are we seeing a turn-around in supply chain thinking?

Reasons such as low cost of resources and labour and favorable exchange rates have driven globalization of supply chains with many manufacturing and retail companies moving their sourcing strategies eastward for several years now. Well, do we see the paradign change now? The venerable Supply Chain Management Review is carrying out a survey (http://www.scmr.com/article/CA6594832.html) on US becoming a low cost country sourcing hub! And why not? The last few years have seen the risky side of low cost country sourcing from China and the far east catch much business and media attention. From toys to milk products, multiple product recalls and severe brand reputation damage are taking their toll (Reputation and Financial Damage) and are forcing companies to rethink their sourcing strategies.

Continue reading "Globalization trends in Supply Chain … Its just getting riskier! Are we seeing a turn-around in supply chain thinking?" »

Posted by Sandeep Kumar at 11:36 AM | | Comments (4) | TrackBacks (0)

September 1, 2008

Supply Chain Risk Management

Attended two interesting conference last month. “Next Generation Manufacturing Supply Chain and Digital Economy Research Collaboration” – organized by by Engineering and Physical Sciences Research Council, UK and European Union. Another one was “Supply Chain World – Asia Pacific Conference” organized by Supply Chain Council. Following were the ‘hot’ topics among supply chain practitioners and academicians.

• Supply Chain Risk Management (SCRM)
• Green Supply Chain
• Skill shortage in Supply Chain

Continue reading "Supply Chain Risk Management" »

Posted by Mitul Shah at 11:02 AM | | Comments (5) | TrackBacks (0)

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