Transportation and supply chain costs significantly impact companies' financial performance. CFOs rely on logistics and supply chain professionals to cut expenses and enhance efficiency. There are opportunities for CFOs to collaborate with supply chain leaders to optimize performance, identify risks, and deliver significant financial savings through transportation strategies informed by insights and analysis. When CFOs and logistics leaders work together they can mitigate supply chain disruptions and see benefits like improved speed, service, and customer satisfaction.
Executive Summary
The term ‘supply chain finance’ has different definitions on each continent. In Europe, it is often used to describe ‘tax efficiency’, or the design of the supply chain to reduce the burden of taxation of cross-border shipments. In many procurement organizations the term is often used to describe the use of favorable capital rates to finance downstream trade. In this study the focus is on the management of costs by either effectiveness of a Supply Chain Finance team or Supply Chain Center of Excellence, Sales and Operations Planning (S&OP) processes, Cost-to-Serve Analysis and Supplier Development efforts.
For the supply chain leader, managing costs is job one. It is easier said than done. The supply chain is a complex system with interrelationships between growth, inventory, cost and complexity. Cross-functional processes, organizational focus, and access to data are critical to align and maintain cost effectiveness in this complex system called supply chain. We term this model the Supply Chain Effective Frontier. This is shown in Figure 2. When companies operate on the Supply Chain Effective Frontier they maximize the value of the firm . We measure value by either Price to Tangible Book Value or Market Capitalization.
Figure 2. Supply Chain Effective Frontier
As will be shown in this report, managing costs is a struggle for most companies. While 88% of companies have implemented Enterprise Resource Planning (ERP), the hard work of process evolution and maturity continues. In this report we share the current state of supply chains in managing costs, and then take a look at the processes and organizational design factors to evaluate the impact on cost management.
This document summarizes the preliminary results of an inventory optimization study conducted by Supply Chain Insights LLC between February and May 2015. It finds that nearly half of respondents have advanced inventory optimization software, most commonly SAP, and nearly half are satisfied with their current software. However, areas needing improvement include strengthening sales and operations planning maturity, increasing leadership understanding of inventory issues, and better adherence to inventory targets. The document also examines cross-functional alignment challenges and trends in increasing business pain points related to factors like demand volatility, risk management, and the speed of business.
Compliance at a Crossroads: One Step Forward, Two Steps Back?Accenture Insurance
Compliance functions face increasing demands from growing regulations and complexity, while resources are constrained. To maintain its strategic role, Compliance must (1) clarify its remit between advisory and control roles, (2) improve resource utilization through technology and collaboration, and (3) prioritize high-quality data and technology to support its work. Decisive action is needed to navigate choices around transforming capabilities with limited investments.
Supply Chain Metrics That Matter: Improving Supply Chain Resiliency - 18 MAR ...Lora Cecere
Executive Overview
Ask any supply chain leader which metrics are the most important to deliver, and the most common answers are operating margin, inventory turns, and revenue growth. In our plotting of industry results for the Supply Chain Metrics That Matter reports, we could see that certain industries had greater variation at the intersection of operating margin and inventory turns than others. We wanted to know why.
The supply chain is a complex system. It is growing even more so. Supply chain leaders are charged to deliver reliable results on The Effective Frontier for costs and inventory cycles. Failure to do so can result in termination. The Effective Frontier is depicted in Figure 1.
It is a juggling act. There are finite trade-offs and the metrics are interrelated. Each company is operating at a different potential. A new technology can elevate the frontier and improve the company’s ability to operate at a higher level of performance. Often when companies attempt to drive down costs they will elevate inventory. When complexity increases, it can have an adverse effect on both operating margin and inventory turns. It is a continuous balancing act which has been made easier through the evolution of Advanced Planning Systems (APS).
Progress happens in small increments. It happens over the period of many years (three to five). We believe that reliability of results at the intersection of operating margin and inventory turns is a characteristic of supply chain excellence.
We are trying to understand who’s done it best. It is for this reason that we have been studying these patterns for the last two years. What can we see? Over the last decade, industry progress has been quite different. In Table 1, we list the performance of five industries (The industries are listed from the most to the least profitable as measured by operating margin). Companies have become more efficient, but not necessarily more effective. Note in this table that all manufacturing industries have significantly improved revenue per employee, but only one of the industries has improved both operating margins and inventory turns.
What Drives Inventory Effectiveness in a Market-Driven World? Summary ChartsLora Cecere
Survey Details: The research for this report was conducted from February 12 – October 8, 2015. Surveys were conducted among Manufacturers, Retailers, and Wholesalers/Distributors/Co-operatives with $250M+ in revenue and who use (and are familiar with) inventory optimization software (n=64). Respondents were evenly split between those using basic (ERP or ERP+APS) and advanced (software in addition to ERP/APS) software. All surveys were conducted by Supply Chain Insights.
Objective: To understand the impact of inventory optimization software on supply chain excellence. NOTE: inventory optimization software was defined as “any form of ERP (Enterprise Resource Planning), APS (Advanced Planned Software), or sophisticated inventory planning tools.”
Highlight: Companies who use advanced software are more likely to be satisfied with their software, to be effective at making inventory decisions and to drive a return on investment for their software.
The evolution of integrated supply chains into global operating modelsTristan Wiggill
Brad Householder discusses the evolution of integrated supply chains into globally integrated operating models. Pressure is mounting on supply chains due to lack of clarity, complexity, and misalignment. Management teams are squeezed between priorities. Moving beyond integrated supply chains, companies implement globally integrated operating models for nearly 50% higher sales growth and over 20% higher profitability. Three keys to success are having a coherent capabilities-driven strategy, integrated business planning for fact-based decisions, and segment-tailored operating models.
The survey of SSON's global membership identifies 7 key characteristics that are driving the second wave of finance transformation:
1. Knowledge-based teams are becoming more common, with nearly 60% moving in this direction.
2. Data-driven business intelligence is a growing capability, with 3/4 of shared services implementing BI teams to drive insights.
3. Despite potential benefits, only 11% have defined master data management processes, while many are still assessing solutions.
4. Technology priorities include automation, data analytics, and collaboration tools to support mobile workers.
5. While outsourcing remains relevant, most rely primarily on in-house capabilities and analytics.
6. More are leveraging global business services
Executive Summary
The term ‘supply chain finance’ has different definitions on each continent. In Europe, it is often used to describe ‘tax efficiency’, or the design of the supply chain to reduce the burden of taxation of cross-border shipments. In many procurement organizations the term is often used to describe the use of favorable capital rates to finance downstream trade. In this study the focus is on the management of costs by either effectiveness of a Supply Chain Finance team or Supply Chain Center of Excellence, Sales and Operations Planning (S&OP) processes, Cost-to-Serve Analysis and Supplier Development efforts.
For the supply chain leader, managing costs is job one. It is easier said than done. The supply chain is a complex system with interrelationships between growth, inventory, cost and complexity. Cross-functional processes, organizational focus, and access to data are critical to align and maintain cost effectiveness in this complex system called supply chain. We term this model the Supply Chain Effective Frontier. This is shown in Figure 2. When companies operate on the Supply Chain Effective Frontier they maximize the value of the firm . We measure value by either Price to Tangible Book Value or Market Capitalization.
Figure 2. Supply Chain Effective Frontier
As will be shown in this report, managing costs is a struggle for most companies. While 88% of companies have implemented Enterprise Resource Planning (ERP), the hard work of process evolution and maturity continues. In this report we share the current state of supply chains in managing costs, and then take a look at the processes and organizational design factors to evaluate the impact on cost management.
This document summarizes the preliminary results of an inventory optimization study conducted by Supply Chain Insights LLC between February and May 2015. It finds that nearly half of respondents have advanced inventory optimization software, most commonly SAP, and nearly half are satisfied with their current software. However, areas needing improvement include strengthening sales and operations planning maturity, increasing leadership understanding of inventory issues, and better adherence to inventory targets. The document also examines cross-functional alignment challenges and trends in increasing business pain points related to factors like demand volatility, risk management, and the speed of business.
Compliance at a Crossroads: One Step Forward, Two Steps Back?Accenture Insurance
Compliance functions face increasing demands from growing regulations and complexity, while resources are constrained. To maintain its strategic role, Compliance must (1) clarify its remit between advisory and control roles, (2) improve resource utilization through technology and collaboration, and (3) prioritize high-quality data and technology to support its work. Decisive action is needed to navigate choices around transforming capabilities with limited investments.
Supply Chain Metrics That Matter: Improving Supply Chain Resiliency - 18 MAR ...Lora Cecere
Executive Overview
Ask any supply chain leader which metrics are the most important to deliver, and the most common answers are operating margin, inventory turns, and revenue growth. In our plotting of industry results for the Supply Chain Metrics That Matter reports, we could see that certain industries had greater variation at the intersection of operating margin and inventory turns than others. We wanted to know why.
The supply chain is a complex system. It is growing even more so. Supply chain leaders are charged to deliver reliable results on The Effective Frontier for costs and inventory cycles. Failure to do so can result in termination. The Effective Frontier is depicted in Figure 1.
It is a juggling act. There are finite trade-offs and the metrics are interrelated. Each company is operating at a different potential. A new technology can elevate the frontier and improve the company’s ability to operate at a higher level of performance. Often when companies attempt to drive down costs they will elevate inventory. When complexity increases, it can have an adverse effect on both operating margin and inventory turns. It is a continuous balancing act which has been made easier through the evolution of Advanced Planning Systems (APS).
Progress happens in small increments. It happens over the period of many years (three to five). We believe that reliability of results at the intersection of operating margin and inventory turns is a characteristic of supply chain excellence.
We are trying to understand who’s done it best. It is for this reason that we have been studying these patterns for the last two years. What can we see? Over the last decade, industry progress has been quite different. In Table 1, we list the performance of five industries (The industries are listed from the most to the least profitable as measured by operating margin). Companies have become more efficient, but not necessarily more effective. Note in this table that all manufacturing industries have significantly improved revenue per employee, but only one of the industries has improved both operating margins and inventory turns.
What Drives Inventory Effectiveness in a Market-Driven World? Summary ChartsLora Cecere
Survey Details: The research for this report was conducted from February 12 – October 8, 2015. Surveys were conducted among Manufacturers, Retailers, and Wholesalers/Distributors/Co-operatives with $250M+ in revenue and who use (and are familiar with) inventory optimization software (n=64). Respondents were evenly split between those using basic (ERP or ERP+APS) and advanced (software in addition to ERP/APS) software. All surveys were conducted by Supply Chain Insights.
Objective: To understand the impact of inventory optimization software on supply chain excellence. NOTE: inventory optimization software was defined as “any form of ERP (Enterprise Resource Planning), APS (Advanced Planned Software), or sophisticated inventory planning tools.”
Highlight: Companies who use advanced software are more likely to be satisfied with their software, to be effective at making inventory decisions and to drive a return on investment for their software.
The evolution of integrated supply chains into global operating modelsTristan Wiggill
Brad Householder discusses the evolution of integrated supply chains into globally integrated operating models. Pressure is mounting on supply chains due to lack of clarity, complexity, and misalignment. Management teams are squeezed between priorities. Moving beyond integrated supply chains, companies implement globally integrated operating models for nearly 50% higher sales growth and over 20% higher profitability. Three keys to success are having a coherent capabilities-driven strategy, integrated business planning for fact-based decisions, and segment-tailored operating models.
The survey of SSON's global membership identifies 7 key characteristics that are driving the second wave of finance transformation:
1. Knowledge-based teams are becoming more common, with nearly 60% moving in this direction.
2. Data-driven business intelligence is a growing capability, with 3/4 of shared services implementing BI teams to drive insights.
3. Despite potential benefits, only 11% have defined master data management processes, while many are still assessing solutions.
4. Technology priorities include automation, data analytics, and collaboration tools to support mobile workers.
5. While outsourcing remains relevant, most rely primarily on in-house capabilities and analytics.
6. More are leveraging global business services
1. Demographic changes, especially the aging of America and growth of ethnic markets, were seen as the most significant industry trends according to survey respondents.
2. Work site and bank sales channels were also viewed as opportunities for growth.
3. Translating strategy into effective expense management and technology use remains a challenge for some companies, despite most having clear strategic visions.
James J Okarimia
Managing Partner
Aligning Finance, Risk and Data Analytics in Meeting the Requirements of Emerging Regulations
Banks must meet more (and more varied) regulations today than ever. The sheer scale and scope of banking regulations, including Dodd-Frank, Basel III and IFRS, pose challenges to all financial institutions, from the smallest bank to the largest financial services enterprise.
Transforming the Global Enterprise -- A C-Level Perspective on Contract Manag...Emptoris, Inc
Transforming the Global Enterprise -- A C-Level Perspective on Contract Management’s Impact to Bottom-Line Performance Across the Organization
For more information, please visit:
Emptoris website: http://www.emptoris.com/
Emptoris blog: http://emptorisinc.blogspot.com/
YouTube channel : http://www.youtube.com/emptoris
Research Study: The Strategic Finance GapSafe Rise
This document summarizes the findings of a research study about the strategic finance gap. It finds that while the role of senior finance professionals is becoming more strategic, they are still bogged down by routine tasks like monthly reporting due to outdated financial management systems. This limits their ability to innovate and provide strategic insights to the business. The document recommends that companies implement modern cloud/SaaS systems to better integrate financial data across departments and locations. This would streamline routine tasks and allow finance professionals to focus more on strategic decision-making.
Organisations spend heavily on technology, people skills and consulting to understand billions of bits of data, but they still lack clear visibility and insight.....
The document provides an overview and evaluation of 14 governance, risk, and compliance (GRC) platform vendors. It finds that Enablon, Nasdaq BWise, MetricStream, Rsam, SAP, SAI Global, and EMC/RSA lead in the market based on having strong current offerings and strategies addressing future needs. It also finds that LogicManager, Protiviti, Thomson Reuters, Wolters Kluwer Financial Services, IBM, Resolver, and Navex Global are competitive due to their strong offerings, if sometimes more focused on specific solutions. Overall, the GRC platform market has matured but vendors still need to focus more on customer needs, industry expertise, and guidance over just
Lets understand the GRC market well with Ponemon analysis- FixNixFixNix Inc.,
This document summarizes the results of a study on governance, risk management, and compliance (GRC) practices. The study found that GRC activities are most commonly centered in IT departments and that the largest barriers to effective GRC are a lack of collaboration and resources. It also found that establishing a clear GRC strategy and assessing risk are seen as most essential but are still challenges for many organizations. Ensuring security of data shared with third parties and complying with privacy regulations were cited as the top privacy-related issues.
The document discusses strategic considerations for evaluating enterprise performance management (EPM) solutions. It notes that while transactional processing needs have largely been met, companies now need agile EPM strategies to provide business users with information to support better decisions. When evaluating EPM solutions, companies should look beyond vendor claims and roadmaps to real-life examples of integrated platforms that can meet both current and future needs, as the wrong choice could result in significant penalties. Choosing a solution should be based on business needs rather than vendor alignment, as EPM represents a strategic investment separate from transactional systems.
Businesses face a multitude of challenges in today’s environment. The overall speed of business is constantly increasing. Decisions are made within minutes and channels are diversifying rapidly. Perhaps most importantly, face-to-face interaction has started to become a luxury, rather than a necessity or consequence of everyday behavior.
Today’s consumer and how contact data affects relationships - An Experian QAS...Steven Duque
This document discusses a study on how data quality affects customer experience. Some key findings:
1) Businesses are motivated to improve data quality to increase efficiency, enhance customer satisfaction, and enable better decisions. However, many still struggle with inaccurate contact data.
2) On average, businesses believe 17% of their customer data may be inaccurate, most commonly due to incomplete, outdated, or duplicate records. Inaccuracies waste an estimated 12% of departmental budgets.
3) Improving data quality can positively impact the customer experience across channels by preventing errors, consolidating duplicate records, and enabling personalized outreach. But accuracy must be established before leveraging data analytics.
The State of Logistics Outsourcing; 2014 Third Party Logistics StudyDennis Wereldsma
In the 2014 18th Annual Third Party Logistics Study, survey results showed the continuing, positive
overall nature of shipper-3PL relationships. Both parties view them as being successful, and
shippers are seeing positive results again this year: an average logistics cost reduction of 11%,
average inventory cost reduction of 6%, and an average fixed logistics cost reduction of 23%.
Shippers agree that 3PLs provide new and innovative ways to improve logistics effectiveness, and
that they are sufficiently agile and flexible to accommodate future business needs and challenges.
Despite ongoing churn in shipper-3PL relationships, in general shippers are increasing their use
of outsourced logistics services, and shippers and 3PLs are now about equally satisfied (70% and
69%, respectively) with the openness, transparency and good communication in their relationships.
Broken links: Why analytics investments have yet to pay off, sponsored by ZS, draws on the survey findings, interviews with senior corporate executives and desk research to explore the current state of sales and marketing analytics.
Administering Physician Compensation in 2016 and Beyond: What You Need to Con...Isaac Ullatil
There is a compelling need among physician enterprises to more efficiently track and measure the success of their physician compensation plans against organizational goals and objectives. We emphatically believe that physician leaders need to focus more on leading their organizations and less on the administrative components of their position. To that end, new generation applications should alleviate the challenges healthcare leaders face in the administration and management of physician compensation.
This document summarizes an IBM executive report on using business analytics to gain competitive advantage. It discusses how analytics can help organizations understand customer behavior, risks, and regulations to inform strategic decision making. The report finds that while technology barriers to analytics are decreasing, organizational culture challenges remain, such as integrating data across departments and establishing a leadership mandate to make decisions based on facts. It recommends that organizations lay the foundation for fast responses, extract value by aligning objectives with integrated data, and use predictive analytics to detect opportunities. When applied to understanding customers, risks, and regulations, analytics can help optimize performance in today's complex environment.
Burgess CFO Solution White Paper Final 2.1.16Jared Lorinsky
2015 saw a wave of mergers and acquisitions between healthcare payers and providers. CFOs of these organizations face challenges in managing multiple claims platforms and payment models during mergers. When selecting reimbursement technology, CFOs should be actively involved to choose solutions that can accurately predict reimbursement spending, reimburse claims, and analyze payment trends. The CFO should assess technology's financial impact rather than just operational benefits, and seek a long-term partner rather than just a vendor. Active involvement of CFOs in technology selection is critical to effectively manage cash flows during healthcare payment reforms.
The document summarizes the results of a 2007 survey of 163 companies regarding their use of business intelligence (BI) and enterprise performance management (EPM) software. The survey found that midsize companies primarily rely on spreadsheets to support EPM processes and have greater investment needs for budgeting/planning and management reporting solutions compared to large enterprises. For midsize companies, ease of use, price, and vendor stability are the top evaluation criteria. Executives also play a significant role in software selection decisions for midsize businesses.
The document discusses key trends in digital marketing and lessons learned from 2012. It analyzes data from marketing surveys to compare the practices of "Top Performers" to "Everyone Else". Top Performers are more likely to invest in marketing automation and focus on personalization. While adoption of automation grew in 2012, many organizations still rely on outdated batch email campaigns. The document recommends simplifying automation implementation and focusing on people, process and strategy in addition to technology.
AR management is key to healthcare billing company’s profitability and sustainability. To set themselves to eliminate
revenue leakage, billing companies must begin an active assessment of where they stand with current service provider
experience and what future improvements are needed.
Road to Financial Transparency White PaperJeff Lovett
This document discusses strategies for CFOs to improve financial transparency and reporting through next-generation finance system architectures. It outlines key challenges CFOs face in meeting demands for increased transparency and analytics while reducing costs. The document then describes three building blocks for next-generation financial reporting: an accounting hub to reconcile transactional and general ledger data, a calculation engine platform to enable custom metrics and cost/revenue allocations, and hierarchy management to allow multi-dimensional analysis of business data. It argues that a centralized data repository integrating various financial and operational data sources is needed to achieve transparency and efficiencies.
Imagine the Supply Chain of the Future - 21 OCT 2014Lora Cecere
Executive Overview
When we ask companies to imagine the supply chain of the future, they have to start with what they have today. Most companies today are stuck, and find it hard to conceive the supply chain of the future. To free their thinking they have to learn from the past, to unlearn what they believe is a world of best practices, and establish methodologies to imagine the supply chain of the future. Changing traditional paradigms is a starting point.
For most, the journey is not easy. As shown in Figure 1, the terms most commonly used to describe the supply chain today are traditional, tactical, and cautious. Today there is significant room for improvement, with only one in three supply chain leaders feeling that what they have now is working well. Most of the supply chain processes are inside-out which is a barrier to sensing demand and building demand-driven or market-driven processes.
The incentive to change lies in balance sheet performance. When we analyze financial balance sheet performance for the period of 2006-2013, we find that nine out of ten companies are stuck at the intersection of the two critical metrics of operating margin and inventory turns. Publicly-held companies are unable to power improvements in both metrics for more than two consecutive years. For most, improvement has become an OR condition with companies making improvements in one of the two metrics, but not both together. This is an area of frustration and disappointment for business leaders that want to leverage supply chain technologies and processes to deliver both cash and cost savings to the organization. As growth slows, this shift is more important. In this report, we share highlights on the research gathered for our recent conference, Supply Chain Insights Global Summit.
Conquering the Supply Chain Effective FrontierLora Cecere
Conquering the Supply Chain Effective Frontier - A Handbook for the Value Chain Leader to Manage Trade-offs in Defining Supply Chain Excellence
Supply chain practices are nearing their third decade of maturation. The term supply chain excellence is bandied about by leaders, consultants and technology providers, but there is no alignment on what it means.
Conventional systems of measurement for supply chain excellence are problematic. In this report, we share insights gained during interviews with 75 supply chain pioneers. Based on their feedback we created a new framework, that we define here as the Supply Chain Effective Frontier, for supply chain leaders to use to determine supply chain excellence. This methodology is based on publicly available financial balance sheet data grouped into four sets of supply chain ratios: growth, profitability, cycle, and complexity.
We believe that supply chain excellence is best defined as the alignment of the supply chain team to deliver results to meet and exceed the requirements of the business strategy. This requires a clear vision and cross-functional coordination and alignment over a multi-year road map. It needs to be holistic. A supply chain is a complex system with increasing business complexity. The analysis needs to facilitate a clear understanding of trade-offs embedded in day-to-day decision making. It is this clarity that we find missing in many teams that we work with, and it is for this reason we wrote this report.
1. Demographic changes, especially the aging of America and growth of ethnic markets, were seen as the most significant industry trends according to survey respondents.
2. Work site and bank sales channels were also viewed as opportunities for growth.
3. Translating strategy into effective expense management and technology use remains a challenge for some companies, despite most having clear strategic visions.
James J Okarimia
Managing Partner
Aligning Finance, Risk and Data Analytics in Meeting the Requirements of Emerging Regulations
Banks must meet more (and more varied) regulations today than ever. The sheer scale and scope of banking regulations, including Dodd-Frank, Basel III and IFRS, pose challenges to all financial institutions, from the smallest bank to the largest financial services enterprise.
Transforming the Global Enterprise -- A C-Level Perspective on Contract Manag...Emptoris, Inc
Transforming the Global Enterprise -- A C-Level Perspective on Contract Management’s Impact to Bottom-Line Performance Across the Organization
For more information, please visit:
Emptoris website: http://www.emptoris.com/
Emptoris blog: http://emptorisinc.blogspot.com/
YouTube channel : http://www.youtube.com/emptoris
Research Study: The Strategic Finance GapSafe Rise
This document summarizes the findings of a research study about the strategic finance gap. It finds that while the role of senior finance professionals is becoming more strategic, they are still bogged down by routine tasks like monthly reporting due to outdated financial management systems. This limits their ability to innovate and provide strategic insights to the business. The document recommends that companies implement modern cloud/SaaS systems to better integrate financial data across departments and locations. This would streamline routine tasks and allow finance professionals to focus more on strategic decision-making.
Organisations spend heavily on technology, people skills and consulting to understand billions of bits of data, but they still lack clear visibility and insight.....
The document provides an overview and evaluation of 14 governance, risk, and compliance (GRC) platform vendors. It finds that Enablon, Nasdaq BWise, MetricStream, Rsam, SAP, SAI Global, and EMC/RSA lead in the market based on having strong current offerings and strategies addressing future needs. It also finds that LogicManager, Protiviti, Thomson Reuters, Wolters Kluwer Financial Services, IBM, Resolver, and Navex Global are competitive due to their strong offerings, if sometimes more focused on specific solutions. Overall, the GRC platform market has matured but vendors still need to focus more on customer needs, industry expertise, and guidance over just
Lets understand the GRC market well with Ponemon analysis- FixNixFixNix Inc.,
This document summarizes the results of a study on governance, risk management, and compliance (GRC) practices. The study found that GRC activities are most commonly centered in IT departments and that the largest barriers to effective GRC are a lack of collaboration and resources. It also found that establishing a clear GRC strategy and assessing risk are seen as most essential but are still challenges for many organizations. Ensuring security of data shared with third parties and complying with privacy regulations were cited as the top privacy-related issues.
The document discusses strategic considerations for evaluating enterprise performance management (EPM) solutions. It notes that while transactional processing needs have largely been met, companies now need agile EPM strategies to provide business users with information to support better decisions. When evaluating EPM solutions, companies should look beyond vendor claims and roadmaps to real-life examples of integrated platforms that can meet both current and future needs, as the wrong choice could result in significant penalties. Choosing a solution should be based on business needs rather than vendor alignment, as EPM represents a strategic investment separate from transactional systems.
Businesses face a multitude of challenges in today’s environment. The overall speed of business is constantly increasing. Decisions are made within minutes and channels are diversifying rapidly. Perhaps most importantly, face-to-face interaction has started to become a luxury, rather than a necessity or consequence of everyday behavior.
Today’s consumer and how contact data affects relationships - An Experian QAS...Steven Duque
This document discusses a study on how data quality affects customer experience. Some key findings:
1) Businesses are motivated to improve data quality to increase efficiency, enhance customer satisfaction, and enable better decisions. However, many still struggle with inaccurate contact data.
2) On average, businesses believe 17% of their customer data may be inaccurate, most commonly due to incomplete, outdated, or duplicate records. Inaccuracies waste an estimated 12% of departmental budgets.
3) Improving data quality can positively impact the customer experience across channels by preventing errors, consolidating duplicate records, and enabling personalized outreach. But accuracy must be established before leveraging data analytics.
The State of Logistics Outsourcing; 2014 Third Party Logistics StudyDennis Wereldsma
In the 2014 18th Annual Third Party Logistics Study, survey results showed the continuing, positive
overall nature of shipper-3PL relationships. Both parties view them as being successful, and
shippers are seeing positive results again this year: an average logistics cost reduction of 11%,
average inventory cost reduction of 6%, and an average fixed logistics cost reduction of 23%.
Shippers agree that 3PLs provide new and innovative ways to improve logistics effectiveness, and
that they are sufficiently agile and flexible to accommodate future business needs and challenges.
Despite ongoing churn in shipper-3PL relationships, in general shippers are increasing their use
of outsourced logistics services, and shippers and 3PLs are now about equally satisfied (70% and
69%, respectively) with the openness, transparency and good communication in their relationships.
Broken links: Why analytics investments have yet to pay off, sponsored by ZS, draws on the survey findings, interviews with senior corporate executives and desk research to explore the current state of sales and marketing analytics.
Administering Physician Compensation in 2016 and Beyond: What You Need to Con...Isaac Ullatil
There is a compelling need among physician enterprises to more efficiently track and measure the success of their physician compensation plans against organizational goals and objectives. We emphatically believe that physician leaders need to focus more on leading their organizations and less on the administrative components of their position. To that end, new generation applications should alleviate the challenges healthcare leaders face in the administration and management of physician compensation.
This document summarizes an IBM executive report on using business analytics to gain competitive advantage. It discusses how analytics can help organizations understand customer behavior, risks, and regulations to inform strategic decision making. The report finds that while technology barriers to analytics are decreasing, organizational culture challenges remain, such as integrating data across departments and establishing a leadership mandate to make decisions based on facts. It recommends that organizations lay the foundation for fast responses, extract value by aligning objectives with integrated data, and use predictive analytics to detect opportunities. When applied to understanding customers, risks, and regulations, analytics can help optimize performance in today's complex environment.
Burgess CFO Solution White Paper Final 2.1.16Jared Lorinsky
2015 saw a wave of mergers and acquisitions between healthcare payers and providers. CFOs of these organizations face challenges in managing multiple claims platforms and payment models during mergers. When selecting reimbursement technology, CFOs should be actively involved to choose solutions that can accurately predict reimbursement spending, reimburse claims, and analyze payment trends. The CFO should assess technology's financial impact rather than just operational benefits, and seek a long-term partner rather than just a vendor. Active involvement of CFOs in technology selection is critical to effectively manage cash flows during healthcare payment reforms.
The document summarizes the results of a 2007 survey of 163 companies regarding their use of business intelligence (BI) and enterprise performance management (EPM) software. The survey found that midsize companies primarily rely on spreadsheets to support EPM processes and have greater investment needs for budgeting/planning and management reporting solutions compared to large enterprises. For midsize companies, ease of use, price, and vendor stability are the top evaluation criteria. Executives also play a significant role in software selection decisions for midsize businesses.
The document discusses key trends in digital marketing and lessons learned from 2012. It analyzes data from marketing surveys to compare the practices of "Top Performers" to "Everyone Else". Top Performers are more likely to invest in marketing automation and focus on personalization. While adoption of automation grew in 2012, many organizations still rely on outdated batch email campaigns. The document recommends simplifying automation implementation and focusing on people, process and strategy in addition to technology.
AR management is key to healthcare billing company’s profitability and sustainability. To set themselves to eliminate
revenue leakage, billing companies must begin an active assessment of where they stand with current service provider
experience and what future improvements are needed.
Road to Financial Transparency White PaperJeff Lovett
This document discusses strategies for CFOs to improve financial transparency and reporting through next-generation finance system architectures. It outlines key challenges CFOs face in meeting demands for increased transparency and analytics while reducing costs. The document then describes three building blocks for next-generation financial reporting: an accounting hub to reconcile transactional and general ledger data, a calculation engine platform to enable custom metrics and cost/revenue allocations, and hierarchy management to allow multi-dimensional analysis of business data. It argues that a centralized data repository integrating various financial and operational data sources is needed to achieve transparency and efficiencies.
Imagine the Supply Chain of the Future - 21 OCT 2014Lora Cecere
Executive Overview
When we ask companies to imagine the supply chain of the future, they have to start with what they have today. Most companies today are stuck, and find it hard to conceive the supply chain of the future. To free their thinking they have to learn from the past, to unlearn what they believe is a world of best practices, and establish methodologies to imagine the supply chain of the future. Changing traditional paradigms is a starting point.
For most, the journey is not easy. As shown in Figure 1, the terms most commonly used to describe the supply chain today are traditional, tactical, and cautious. Today there is significant room for improvement, with only one in three supply chain leaders feeling that what they have now is working well. Most of the supply chain processes are inside-out which is a barrier to sensing demand and building demand-driven or market-driven processes.
The incentive to change lies in balance sheet performance. When we analyze financial balance sheet performance for the period of 2006-2013, we find that nine out of ten companies are stuck at the intersection of the two critical metrics of operating margin and inventory turns. Publicly-held companies are unable to power improvements in both metrics for more than two consecutive years. For most, improvement has become an OR condition with companies making improvements in one of the two metrics, but not both together. This is an area of frustration and disappointment for business leaders that want to leverage supply chain technologies and processes to deliver both cash and cost savings to the organization. As growth slows, this shift is more important. In this report, we share highlights on the research gathered for our recent conference, Supply Chain Insights Global Summit.
Conquering the Supply Chain Effective FrontierLora Cecere
Conquering the Supply Chain Effective Frontier - A Handbook for the Value Chain Leader to Manage Trade-offs in Defining Supply Chain Excellence
Supply chain practices are nearing their third decade of maturation. The term supply chain excellence is bandied about by leaders, consultants and technology providers, but there is no alignment on what it means.
Conventional systems of measurement for supply chain excellence are problematic. In this report, we share insights gained during interviews with 75 supply chain pioneers. Based on their feedback we created a new framework, that we define here as the Supply Chain Effective Frontier, for supply chain leaders to use to determine supply chain excellence. This methodology is based on publicly available financial balance sheet data grouped into four sets of supply chain ratios: growth, profitability, cycle, and complexity.
We believe that supply chain excellence is best defined as the alignment of the supply chain team to deliver results to meet and exceed the requirements of the business strategy. This requires a clear vision and cross-functional coordination and alignment over a multi-year road map. It needs to be holistic. A supply chain is a complex system with increasing business complexity. The analysis needs to facilitate a clear understanding of trade-offs embedded in day-to-day decision making. It is this clarity that we find missing in many teams that we work with, and it is for this reason we wrote this report.
State of Transportation: Where Are We on the Vision of Automation? - 7 NOV 2012Lora Cecere
For the purpose of this report, transportation management is defined as technologies that automate and improve decision making in domestic and international logistics.
This report is based on a quantitative study conducted between August 16th, 2012 and October 9th, 2012. The summary reflects responses from 75 respondents from 55 companies active in transportation freight decisions. The goal of the study was to understand how business complexity and maturity have affected the deployment and development of supply chain technologies to improve transportation management. The study contrasts the views of line-of-business transportation solution users and providers of the technologies.
The quantitative study results are enriched with insights from Supply Chain Insights’ work on supply chain ratios and interviews with business leaders to validate and clarify the results.
Driving Supply Chain Excellence Report -18 June 2015Lora Cecere
Executive Overview
Growth is slowing and the complexity in today’s supply chain is unprecedented. No two centers of excellence are the same, and no two supply chains are alike. There are different drivers and obstacles to building and running a Center of Excellence. However, if done right, the organization rates itself as more aligned, proactive and agile. The high-level results from our study are shown in Figure 2.
Figure 2. Centers of Excellence Infographic
Based on our qualitative interviews with clients, we find that these seven drivers to build a Center of Excellence:
• Increase in the Importance of Supply Chain Management. As growth slows, and the global multinational organization matures, more and more companies are interested in driving supply chain excellence. The reasons are many; but, at the top of the list is improving reliability in the face of volatility. How so? Demand volatility is increasing and supplier viability is growing more fragile. Driving reliability in global operations in the face of these challenges is fundamental to defining and executing supply chain excellence.
• Building of Global Teams and the Development of Supply Chain Talent. With the shortage of students from academia, and the retirement of the first- and second-generation supply chain pioneers, more and more companies are developing and executing programs to build supply chain talent. There is a shortage of mid-management talent with pressure on planning job retention. There is a limited supply of supply chain knowledge workers: leaders that are technologically savvy, analytical problem solvers, and astute in business processes.
• Continuation of Work on Enterprise Resource Planning (ERP). When companies complete a large ERP project, there is a strong impetus to get the value from the investment and ensure technology usage. The focus of the Center of Excellence often becomes an extension of the global implementation team.
• Metrics and Implementation of Analytics. While the management of supply chain excellence sounds easy, it is not. The management of order-to-cash and procure-to-pay processes and the supply chain execution processes are easier because they are well-defined. Most companies struggle with the definition of planning and the use of new forms of analytics.
• Network Design and the Orchestration of Flows. Most companies start on their supply chain design journey to save costs in logistics. With the increasing cost of transportation, and the fragility of freight networks, network design for transportation and logistics networks is paramount. One client likened it to “minting money.”
• Testing of New Technologies. Cloud technologies. Supply chain operating networks. The Internet of Things. 3D Printing. New forms of analytics. The list of technology and process disruptors could go on and on. While most companies feel stuck in their existing, and more traditional, processes they want to understand and explore technology
The document discusses collaborative outsourcing models for freight management. It describes collaborative outsourcing as partnering with an outside provider to take on labor-intensive transportation tasks while maintaining strategic control. This allows companies to focus on strategic planning while leveraging an expert provider's scale and technology. Key aspects include immediately lowering costs through benchmarking and optimization, achieving sustained savings through continuous improvements, deploying advanced technology at no direct cost, and gaining industry expertise to inform supply chain strategies.
Conquering the Supply Chain Effective Frontier - 27 NOV 2017 - ReportLora Cecere
Executive Overview
Over the course of the last decade, retailers made more progress on costs and inventory turns than manufacturers. In the rush for technology adoption, we commonly find companies overstating what is possible because they are not clear on the historical trends, and often mistakenly coached to overcommit by industry consultants to justify technology investments.
In studying supply chain metrics, we find that each industry has a definitive pattern. Few are linear. To set reasonable goals, the definitions need to be very industry specific. That is the goal of this report.
In developing supply chain strategy, one of the first objectives is defining what is possible. This involves delineating the metrics, establishing reasonable targets, and rates of improvement. In the review of strategy documents for clients, we find that most companies are not clear on any of these critical sets of assumptions. This report is designed to help. We start with the definition of metrics and then share industry progress for the period of 2006-2016. This report ends with recommendations and conclusions.
• Report Details: This report is based on the analysis of orbit chart charts showing year-over-year supply chain performance at the intersection of operating margin and inventory turns for twenty industries for the period of 2006-2016. The goal is to help supply chain leaders to understand what is possible.
• Objective: As supply chain leaders attempt to define supply chain excellence, they need guidance on industry supply chain performance and overall trends for benchmarking. The goal is to help supply chain leaders make better decisions.
• Hypothesis: Each industry is unique and a good supply chain has different characteristics based upon the specific industry it is in, the product it creates and the customers it serves. Our aim is to help supply chain leaders understand relative industry performance. As shown in this report, each individual industry is charting a unique path on supply chain performance.
Executive Summary
No two supply chains are alike, but supply chain leaders across all industries face common challenges. The supply chain is becoming more strategic—an engine of growth and the driver of new business models—to drive new opportunities. For supply chain leaders, it is no longer just a discussion of cost and inventory management.
However, frustration abounds. Companies struggle to improve balance sheet results in the face of rising complexity and slowing growth. While all companies have improved revenue per employee, this efficiency improvement has not translated into operating margin improvements; and while cash-to-cash cycles have improved, it is not due to improvements in inventory positions. Most companies feel stuck, as if they are being held hostage by traditional supply chain practices.
Table 1. Industry Progress Across the Last Decade
In this report, we highlight the current state of supply chains—the supply chain organization, technologies, and process evolution—to enable supply chain leaders to take the next step in their strategy development. This report reflects the current state of supply chains, and is designed as a foundational document for supply chain leaders to build their 2015 strategies.
Understanding the Supply Chain Organization
Improving corporate performance is the driver of today’s supply chain organization. Increasingly, supply chain leaders are adopting new business models—ecommerce, digital business, and growth in new economies—to drive the top line.
Today, for the leader, it is about more than cost management. Instead, it is about the management of a portfolio of metrics to drive corporate performance. The supply chain is a complex system, with increasing complexity, and an increasing importance of driving balance sheet results. It is not easy. Improvement is hard work, and many are stuck. When we analyze financial balance sheet performance for the period of 2000-2013, we find that nine out of ten companies are stuck at the intersection of the two critical metrics of operating margin and inventory turns. Cash flow has been improved through elongating payables, and most companies are struggling to improve inventory in the face of complexity. This is an area of frustration and disappointment for business leaders who want to leverage supply chain technologies and processes to deliver both growth opportunities along with cash and cost savings to the organization.
The reason why? Today, the supply chain organization is traditional, tactical and cautious (see Figure 2). Most leaders would like to have a supply chain that is more agile and proactive. This is not possible with the current state of technologies and processes. To make the shift, companies need to reinvent the supply chain. The processes need to be redesigned outside-in with open sharing through business networks. These new forms of business networks, with many-to-many data models supported by canonical infrastructure, a
The document discusses how supply chain analytics can help CFOs better manage challenges like market volatility, regulatory compliance, and enabling growth while ensuring profitability. It argues that greater visibility into the supply chain through data and analytics can help CFOs improve forecasting, reduce working capital requirements, boost cash flows, and mitigate risks. It provides examples of how supply chain analytics have helped companies optimize inventory levels, enhance supplier relationships, and provide real-time visibility into the end-to-end supply chain process. The document advocates for combining analytics with industry expertise and technology to drive "industrialized analytics" and embed intelligence into business processes.
Article discussing the potential for realignment of insurance strategies to focus on differentiating factors that may or may not include legacy systems replacement. Should legacy systems be outsourced and insurance resources reapplied to strategically unique areas?
The document discusses strategies for optimizing supply chain management (SCM) costs. It argues that the most effective strategy combines process design, analytics, and technology. First, organizations should analyze their logistics processes in detail to identify cost leakages and opportunities for improvement. Second, analytics tools can help analyze network design, routes, and costs to simulate different scenarios. Third, technology should be selected based on its ability to simplify processes and expedite exception handling. The document contends that only an integrated approach combining process redesign, analytics, and technology can consistently reduce costs and risks for complex global supply chains.
Strategic sourcing involves continuously evaluating a company's purchasing activities to reduce costs. It aims to identify cost reductions, automate sourcing processes, centralize processes, and improve supplier management. Top challenges include lack of spend data visibility, limited resources, and reluctance to adopt standardized processes. Standardization of processes and use of technology like e-sourcing, spend analysis, and contract management tools can help drive savings and spend visibility. The modern strategic sourcing program requires linking sub-processes like these to realize identified savings opportunities.
Driving a Customer-Centric Supply Chain - 7 NOV 2016Lora Cecere
Report Details: The research for this report was conducted via an online survey from August 12 - October 14, 2016. Surveys were conducted among Manufacturers, Wholesalers/Distributors/Co-operatives and Third-Party Logistics Providers (n=56).
Objective: To determine how companies build a customer-centric supply chain and how well it is working for them.
Highlight: In this study, 80% of companies have a customer-centric strategy; yet the majority (54%) state that there is room for improvement to drive performance changes in their supply chain. Companies struggle to drive alignment and build constancy of purpose.
3PL Service Provider Management for LinkedInScott Leydin
- The document discusses the three phases of the outsourcing lifecycle: establishment, management, and development.
- The establishment phase involves selecting a provider and transitioning operations. Key factors include clearly defining requirements, service levels, and performance measures.
- The management phase requires monitoring the provider's performance through reporting and regular meetings. This ensures control over operations and identifies areas for improvement.
- Developing the relationship involves collaborating strategically with the provider to develop solutions and achieve common goals. Open communication and respecting each other's expertise helps foster a strategic partnership.
The document discusses the benefits of outsourcing channel marketing administration (CMA), including increased operational efficiency, cost reduction, and improved productivity and partner relationships. Outsourcing CMA allows companies to focus on core business operations while experts handle administrative tasks like lead qualification and sales development. This can increase qualified leads by 50% while reducing costs by 33%. The document also notes that most companies do not adequately measure cross-channel marketing activities or prioritize converting qualified leads, representing lost revenue opportunities.
These case studies touch on subjects that all FMs know are central to our role, wherever you operate in the world, and pretty much whatever your role: procurement, innovation, technology, sustainability, talent management and health and safety. It’s quite a diverse list of subjects,
but there are common themes running through all six case studies. All these organisations seem to have worked out a similar formula for success that could be applied in any business, sector or region. Read More!
Supply Chain Metrics That Matter: A Focus on the Retail Industry - 16 FEB 2017Lora Cecere
Report Details: This report is based on analysis of financial balance sheet and income statement data within the Retail industry, for the period of 2006-2015. The data is collected from YCharts.
Objective: To use financial balance sheet and income statement data to better understand the state of Grocery Retailers' and Mass Merchants' supply chains and to determine which companies’ supply chains did the best on the delivery of a portfolio of metrics over the last decade.
Highlight: During the Great Recession retailers faced strong declines in spending. It was a critical time, but for many it was an opportunity to emerge stronger. Those who redefined their stores for the dollar-conscious customer or built new and innovative formats while driving supply chain innovation, drove strong balance sheet results. Others learned that doing traditional retail more efficiently was not enough.
2. 2
Transportation and supply chain costs significantly impact
a company’s financial performance. CFOs rely on logistics,
purchasing and supply chain professionals to cut expenses
and enhance efficiency. A well-organized supply chain has
the power to increase income while lowering operating costs
and capital applications.
CFOs and supply chain professionals view transportation
and its associated costs differently. CFOs cite cutting costs
and improving efficiency as their number one priority, while
supply chain leaders want to focus on improving product
and/or service quality. If communication among departments
and leadership is unsuccessful, a CFO cannot fully know the
financial impact of the supply chain.
CFOs can develop and apply transportation strategies where
decision making is reinforced through insights and analysis.
That way, there are opportunities to identify and manage risks
to optimize performance. Transportation is a big element
in logistics costs, so efforts between a CFO and logistics
professionals can deliver significant financial savings.
CFOs are aware that supply chain management effects
the bottom line. Concerns like decentralized management,
poor visibility, misguided inventory stock and underutilized
technology could be improved in most companies.
The bottom line will increase when leadership collaborates
on supply chain initiatives. CFOs have an opportunity to
become heavily influential on supply chain decision making
if they aren’t involved already. There are many profitable
changes that can be implemented with a CFOs leadership
influence and financial expertise.
When CFOs and logistics leaders work together they can
mitigate supply chain disruptions and will see the benefits of
improved speed, service and customer satisfaction.
Internal business collaboration is dependent upon tactical
and professional elements. Filling the gaps in communication
among business leaders allows for higher performance and
ultimately, core capability. As business models continue to
evolve, managers and executives must communicate and
utilize data in order to make sound business decisions.
When there is strength in the financial state of the supply
chain, more business divisions can thrive.
One of the main goals of collaboration is convergence.
The flow of information among internal and external forces
should create one strategy across the entire enterprise,
enable the best outcomes and identify inconsistencies
INTERNAL AND EXTERNAL
COLLABORATION MATTERS
THERE ARE MANY
PROFITABLE CHANGES
that can be implemented with
a CFOs leadership influence
and financial expertise
3. 3
to improve and maximize the job function. It’s more than
focusing on relationships, it’s about collaborating to achieve
desired results and exchanging data in order to eliminate
complications and improve productivity.
Increased collaboration between freight and finance will likely
involve new metrics and standards for evaluating operational
decisions. If you’re not measuring it, you cannot control it.
As one CFO put it, “without transparency to the total cost, it’s
difficult to uncover the best opportunities to save.”
Once a business has achieved a considerable amount of
convergence, they can effectively collaborate with outside
companies like a manufacturer or supplier. Supply chain
collaboration isn’t fast or simple, but there’s a potential
for huge return on investment if done properly. Many
businesses today have supply chain partners who have
overcome many of the same obstacles and can provide
valuable insights.
At the heart of these obstacles is support from company
leadership. A CFO who is heavily involved in supply chain
decisions should easily be able to develop, monitor, and
grow business partnerships while leading the supplier
relationship management strategy. According to a recent
study from Peerless Research Group (PRG), 57% of
companies use a formal supplier relationship management
strategy, and 49% believe it is very or extremely effective.
Many arrangements fail due to a lack of support and
resources from leadership, but having a formal plan can
prioritize business partnerships. Supply chain collaboration
requires a large investment of work and capital. If a
company doesn’t put their full effort towards a partnership it
will fail.
Another common obstacle to successful supply chain
collaboration is trust. If two companies don’t trust each
other, there’s no point in forming a partnership. The
key to a trustful, beneficial relationship is to utilize each
organization’s strongest assets toward the collaboration,
rather than try to fill holes in their own supply chain
strategies. That way, two companies who have differing
strengths can combine for results like improved speed,
service and customer satisfaction all while reducing costs.
Ultimately, convergence of information within a company,
along with information-sharing in supply chain collaboration,
can lead to visibility outside a company’s own four walls.
Many businesses plan to broaden visibility outside of their
own walls, but supply chain and supplier partners aren’t
sharing important information, like inbound shipment
data. This type of information can significantly increase
efficiencies and reduce costs in the supply chain.
57%of companies use a
formal supplier relationship
management strategy
49%believe it is very or
extremely effective
4. 4
The biggest obstacle most organizations face when trying
to optimize their supply chain is end-to-end visibility, yet
it is often cited as the most important aspect. Visibility in
the supply chain gives a company better knowledge on
orders and goods in real time, which leads to smarter, more
informed financial decisions and better customer service.
Visibility offers a real chance to reduce the uncertainty
that increases safety stock. Companies with poor visibility
will not have a good idea of how much safety stock they
should have. When supply chain managers have access
to accurate, real-time information, interruptions or glitches
within the supply chain can be responded to quickly, which
keeps the buying cycle and business schedule moving
forward. This reduces wasteful buffers of safety stock.
Unfortunately, CFOs do not typically have visibility into
transportation decisions. Therefore, it is difficult to estimate
cost control, budget and cost allocation.
Developing better cost control, budgeting and distributing
is dependent on centralized management and merged
technology. In the PRG study, 80% of supply chain
professionals say centralized management is very or
extremely important for supply chain visibility. This is
because many, almost two-thirds of those in the survey,
have found that a lack of cohesion in supply chain decisions
comes from organizational structure. Responsibilities are
broken up between business units which makes the flow of
information and the decision making process slower. These
“silos” of information and power are what supply chain
technology aims to fix.
System integration is the biggest hurdle in achieving full
visibility. It is not simple to integrate systems, since entering
data or sharing files is sensitive to business, but it is
necessary for full supply chain visibility. Many companies
use supply chain visibility systems, warehouse management
systems (WMS), and transportation management systems
(TMS) to achieve visibility. However, 58% of companies say
their software systems are not well integrated, and 77%
cited this as the most important or one of the most important
factors in a supply chain with good visibility. Well-integrated
software is fundamental to achieving visibility and being able
to make quick, accurate supply chain decisions.
Incorporating a TMS is one way a company can gain
control over transportation decisions and costs. With this
technology a business can effectively optimize moves to
ensure consolidation and routing and decide on the best
mode for shipping goods. Visibility gained through supply
SUPPLY CHAIN
VISIBILITY IS KEY
80%of supply chain professionals
say centralized management
is very or extremely important
for supply chain visibility
TRANSPORTATION
MANAGEMENT SYSTEMS
(TMS) ARE A MUST
5. 5
chain software, like a TMS, will strategically reduce supply
chain costs.
The logistics involved in shipping materials is complex.
Managing outbound and inbound loads is demanding. Most
companies use a TMS or a third party logistics company (3PL)
for these tasks. According to HighJump Software, a TMS can
save a company up to 30% on its transportation costs.
Operating with a TMS in place offers a monetary competitive
advantage. Using this transportation technology shows bids
from a network of carriers as well as prices, lanes and more.
Take advantage of the selections; find routes and prices
that best fit your needs. Instead of being complacent with a
given carrier, look at what the competition can offer. Through
a TMS, final decisions are supported by analytics and data,
showcasing the most cost-effective conveyance to inform
basic transportation choices.
A TMS can drive savings other than finding best lanes
and modes. A study from ARC Advisory Group showed
that around 67% of companies saw significant customer
satisfaction improvements after implementing a TMS.
Businesses also saw improvements in warehouse
efficiencies, delivery capabilities, cash flow improvements,
and inventory reductions.
A TMS can also improve supply chain functions other than
reducing costs. In the ARC study, participants cited the
following non-monetary TMS benefits:
Better understanding of the cost to serve customers or
better cost allocation at the product level
• Smaller transportation department
• Improved sustainability
• Access to more carriers and better long
term planning
• Fewer warehouses
• Better compliance to health, safety and environmental
programs related to transportation
A TMS gives your company data and visibility to make
smarter transportation and supply chain decisions. Most
systems are able to be fully integrated with other supply
chain visibility software, making a TMS just one piece of
the puzzle.
Great strides have been made in transportation
management technology. However, running a system in-
30%potential
transportation
cost savings
from using a TMS
67%of companies
saw significant
customer
satisfaction
improvements
after implementing
a TMS
6. 6
house puts your company in the software maintenance
and training business. This usually involves an upfront
investment in integration and implementation, as well as
commitment to a technology that might not fully fit the
evolving needs of your company. With the help of a 3PL, a
company can see significant cost savings when choosing
the best transportation mode and analyzing the decisions on
a TMS.
Inventory levels drive supply chain costs.
Excess inventory can be wasteful and lean inventory
can negatively impact operating margins; each resulting
in added costs. With an overstocked inventory, you are
susceptible to higher carrying costs with the need for
more capacity and a less desirable product. Using a lean
inventory approach could result in situations where you are
forced to deal with issues like poor customer service, out-of-
stock products and expedited shipping expenses. Balanced
inventory valuation positively impacts business’ bottom
line. So, the key to proper inventory levels that maintain or
reduce overall costs and budgets is discovering a balance
between supply and demand.
Generally, inventory is given value at the price paid and
market value. Inventories are typically the largest current
asset of a business, and measuring properly assures
accurate financial reporting
To find the right balance, focus on metrics at the most
functional level and continue searching for improvements.
When a company optimizes inventory, reduces excess stock
and earns a better cash flow, fiscal benefits follow.
From a financial perspective, inventory is an element of
working capital. Drops in working capital related to inventory
carrying costs may cause higher freight charges and lower
customer satisfaction.
Current events are responsible for supply chain interruptions
and challenge inventory levels. Because of unexpected
disruptions, many companies have safety stock. It is vital for
organizations to find the right balance between having too
much and too little safety stock. Too much can cause high
holding costs of inventory and may cause some products to
spoil or expire while in the warehouse. Too little stock can
cause a loss of sales and customer satisfaction.
Matching supply to demand is an essential element in
eliminating unnecessary costs. Work together to minimize
inventory throughout your supply chain and drive waste out.
THE VALUE OF INVENTORY
MANAGEMENT
When a company optimizes
inventory, reduces excess stock
and earns a better cash flow,
FISCAL BENEFITS FOLLOW
7. 7
The omni-channel supply chain is becoming increasingly
important for retailers. According to a recent study by
eMarketer, e-retail sales totaled $40 billion in 2013 and
continue to grow quickly. Customers are interacting with
brands through a variety of channels and want more control
over delivery dates and returns processes.
Consumer demands are driving changes in the supply
chain. Keeping up with current trends could require
partnering with new carriers, gaining visibility into new
divisions of business and making adjustments to inbound
and outbound shipment management processes.
For example, having a click and collect strategy has become
very important since typically more items are available
online than in retail stores. In fact, a Pew survey found 72%
of smartphone users use their device in store to compare
prices, view product options and look up product reviews.
This completely changes how a company values their store,
where they ship products, and how they ship them.
The omni-channel experience strives for the best customer
experience across every channel. Supply chain strategy and
technology implementation must focus on optimizing the
customer experience and buying cycle. In a recent survey
from Kewill, 29% of customers will stop shopping with a
retailer if their order is incorrect, and 62% of customers are
much less or less likely to shop with a retailer if their order is
delivered late. An inefficient omni-channel strategy will lose
customers, damage the brand, and quickly decrease the
bottom line.
Speed of delivery is one of the most important components
for organizations to fulfill in the omni-channel experience.
E-Retail shoppers won’t wait a couple of weeks for their
items anymore; customers want their items for next-day or
same-day delivery, which can strain a company’s supply
chain. Retail Systems Research (RSR) conducted a survey
of companies with successful supply chains and 54% said
the ideal strategy would be to fulfill demand for any channel
from any distribution center, however, only 24% of those
surveyed said they can actually do this.
Automating processes is a good way to improve efficiency.
In the Kewill survey, 44% of companies still manually
enter data for all of their shipments. This increases errors,
staffing, and slows overall productivity. Using a TMS, if not
a full range of supply chain visibility software, is necessary
for omni-channel operations. The Kewill survey found that
omni-channel supply chains usually fail due to slow order
processing, poor visibility, lack of carrier intelligence, or
$40Btotal e-retail sales in 2013 and
it continues to grow rapidly
44%of companies still
manually enter data
for their shipments
OMNI-CHANNEL SUPPLY
CHAIN CHALLENGES AND
OPPORTUNITIES
8. 8
a bad returns process. All of these can be addressed by
automating processes.
Returns processes are important in the omni-channel supply
chain. For most retailers, customer returns are a nightmare,
eating profits and ruining customer satisfaction. The returns
process can be a competitive differentiator if it is organized
properly. Many customers now want to order several items
online and return the ones that don’t fit or aren’t the right
color. If this process is easy for them and for the retailer, the
customer experience will be good, the brand will be promoted
positively, and a company will have saved money from
automating and streamlining the returns process. Once again,
omni-channel fulfillment is all about the customer experience.
The problem with many supply chains is the decision
making power is too divided. There needs to be more
influence from financial leaders to organize a supply chain
that can handle omni-channel demands. In the RSR survey,
CFO’s said they may influence about 40% of decisions in
supply chain design, even though they have the potential to
be involved in 70% of the decisions.
The future of commerce is omni-channel and many have
already adapted to the method. Each channel has unique
demands. In the retail experience, shoppers look for a
combination of online and in-store experiences. They shop
on their phones during the day and on their tablets at night;
shipping costs and return policies are critical components of
the process.
Supply chain management should improve customer
satisfaction and reduce operational challenges. When
looking for savings and more productivity in the supply chain,
contact an expert to maximize opportunities and visibility.
At PLS, our team of experts can be as involved with your
supply chain initiatives as you’d like them to be. Whether
we advise you on different carrier options or fully implement
centralized technology, we are here to make your business
more successful. Our goal is to identify cost savings, create
better labor practices and increase overall revenue through
a better customer service experience.
WE HAVE EXPERTISE
70%of supply chain decisions
could involve CFOs
40%of decisions currently
involve CFOs