Tag Archives: supply chain efficiency

8 Ideas To Have In Your Procurement And Supply Chain Tool Kit

Supply chains are under intense scrutiny right now. That increases pressure on supply chain leaders, but also creates new opportunities to do things better for everyone: companies, customers, and the planet. Top influencer Rob O’Byrne gives his take on where we’re at and what’s coming next.


Procurious founder Tania Seary recently talked with Rob O’Byrne, CEO of Logistics Bureau, and a top 10 supply chain social media influencer.

Here’s his take on where we are, how we got here, and what’s next.  



“Now, everyone knows how toilet tissue gets from factory to store.”

Not long ago, many of us struggled to explain supply chain management to our friends and family.

Now? The pandemic hit and suddenly everyone’s a supply chain expert, says Rob.

“Now, everyone knows how toilet tissue gets from the factory to the store, and it’s really put supply chain in the spotlight,” Rob says.

With that extra awareness comes an expectation that supply chains should work more efficiently — and that will change the way we all operate.

“We lost touch with local markets.”

Before we can make impactful changes, we need to understand how we got here.

Rob says the two biggest trends that shaped the pre-Covid era are centralisation and rationalisation.

Increasingly, large global players were centralising their supply chains through regional or global hubs.

Why? To improve management, visibility, and consistency — all of which are important for optimizing supply chain operations. But centralisation comes at a cost.

“The challenge is [these companies] are a lot more remote from their markets and sometimes you actually need to have a finger on the pulse,” Rob says.

“[You have] headquarters in one part of the world trying to dictate what happens in a supply chain in another part of the world. Sometimes they lose touch a little bit.”

Rationalisation led to similar challenges.

For all of the cost savings and visibility benefits, rationalising led to less contact with markets.

“[Companies] are tending to rely a lot more now on AI-based communication systems to talk with customers,” Rob explains.

Great for the bottom line, but frustrating for customers who often want to speak to an actual human instead of a bot.

“We can be in danger of alienating our market.”

“Companies still don’t understand the ‘cost to serve’ in their supply chain”

One of the greatest challenges right now in supply chain management is managing costs, says Rob.

And it’s more than “total cost of ownership.” It’s about knowing the end-to-end costs.

“So many companies still don’t understand the cost to serve across all the different channels in their supply chain. And that’s become even more critical during the pandemic because our distribution channels have changed,” Rob says.

“In the current climate, it’s really challenging because there’s so much expediting going on. We’re having to use different transport modes than perhaps we would normally.” 

Visibility is also a struggle.

“That really came to the fore during the pandemic because everything was moving so much more rapidly,” says Rob.

“Supply and demand peaks and troughs have been so much more severe. The visibility of that real demand was so important, so there’s a much greater need for improved demand planning and inventory management.”

“Forecasts are always wrong”

To illustrate that need, Rob points to the huge demand for one specific medication during the pandemic. 

Patients who used the drug to treat symptoms of a specific disease,  were stocking up, while other people were buying it because they thought it might fight the virus. Hospitals also stocked up because people who needed the drugs would need more if they caught the virus. Demand skyrocketed.  

“So I think that’s part of the challenge in terms of inventory visibility,” Rob points out. “It’s separating the true demand from the noise…that’s where we’re going to see much more sophisticated inventory management tools coming in the future.”

Although some companies still use spreadsheets for forecasting, “on the other end of the scale, there’s some really, really advanced tools being used and all of that is giving us much greater visibility of our supply chains.

“We can use the weather to predict food sales.”

One example is creating demand forecasts based on weather, not previous sales.

Companies can actually predict food requirements at a shopping mall food court by analysing parking spaces and the weather.

They harness data on parking space occupancy, (from those red and green lights) combine it with the weather forecast, and predict how many people will turn up at the shopping centre.

“That’s real forecasting,” says Rob. “It’s not looking at what we sold last month or the month before.”

“Less lean and more fat.”

Along with smarter forecasting, what does the future hold?

Rob says a rapid retreat from lean management might be on the cards for many businesses.

“Lean was all the fashion for the last 10 years or so,” Rob recalls. “And at the time it was probably the right thing to do for the right businesses and the right products.”

But that’s all changed now.

“I just wonder for a lot of supply chains whether it was a step too far when we’ve seen the fragility of our supply chains over the last six months or so,” Rob says.

Where you have the traditional supply chain like an automotive factory, lean and ‘just in time’ works really well, but where you’ve got volatile markets we’re starting to see the cracks appear.”

“I think we’re going to see a little bit more fat, certainly in terms of inventory, just to buffer for uncertainties.”  Because it will be a long time before market demand becomes anywhere near normal, and it may never look like pre Covid demand again, as alternative distribution channels become more popular.

Rob also says we can expect the decline of ‘traditional’ third-party logistics. 

“There are a lot of companies around that ‘uberised logistics’ – whether it be transport or storage, and I think we’re going to see third party logistics particularly moving much more towards the gig economy. There’s no reason why not.”

“There are people delivering to my home at the moment who are doing it a few hours a day, and that’s where third-party logistics is going.”

“Let’s not waste packaging.”

Rob also predicts swelling interest in circular supply chains.

“We’ve got to wake up and start making our supply chains much more sustainable in every element of the supply chain,” Rob says.

“We’ve paid lip service to it and there are companies around the world that we hold up and say, ‘Look what they’re doing; they’re amazing.’

“But I think generally as an industry we’re just not really very good at it. People think it’s about reverse logistics but it’s not. It’s about removing waste in our products too.” 

“Let’s not waste transport; let’s not waste packaging.”

“Supply chains aren’t competing against each other.”

Finally, Rob says supply chains have the opportunity to work together.

“We’ve been very slow in collaboration,” Rob says.

“I think in supply chain, a lot of companies have been fearful of sharing warehousing sharing transport – that physical end of the supply chain – because their competitors are going to see what they are doing.”

“We’ve had that mantra for years that supply chains compete, not companies. I don’t know that they do anymore.

“I think it’s more about brands and it’s about service. I really don’t see a reason why we can’t see a lot more collaboration in our supply chains.”

Rob O’Byrne is CEO of Logistics Bureau and one of the top 10 supply chain influencers on social media.

This interview is part of “The Future of Supply Chain Now” – a week of webcasts with the fresh opinions from the most influential people in supply chain. Brought to you by IBM Sterling Supply Chain and Procurious. Read more on Digitally Perfecting the Supply Chain and How Inventory Visibility will Drastically Effect the Customer Experience.

NEC to build world-first information platform for Global Pandemic Supply Chain

When a disease outbreak hits, even the slightest inefficiency in supply chains can lead to a catastrophic loss of human life. A joint initiative of The United Nations World Food Programme and NEC Corporation will greatly improve the supply chain response to the next pandemic. 

The 2013-2016 West Africa Ebola outbreak began in countries of Guinea, Liberia, and Sierra Leone, with smaller outbreaks occurring in Nigeria, Mali and Senegal. Imported cases led to infections being reported in the UK, Spain, Sardinia and U.S. before the outbreak was declared in June 2016. By this point, the World Health Organisation reported a total of 28,616 cases and 11,310 deaths.

According to the UN World Food Programme (WFP), the need for a streamlined and coordinated supply chain response was highlighted through the many challenges encountered during the West Africa Ebola outbreak. They included:

  • Severe warehousing and distributing capacity constraints
  • Limited visibility of the overall supply and demand of critical items
  • Access constraints caused by border closures
  • A lack of public-private sector coordination resulting in duplicate efforts and an inefficient response

Protective clothing (pictured above) is an example of a critical item that must get through to healthcare workers in outbreak areas. A full set of protective clothing includes a suit, goggles, a mask, sock, boots and an apron. Healthcare workers change garments frequently, discarding gear that has barely been used to minimise exposure to the virus. By October of 2014, Ebola suit makers including DuPont and Kimberly-Clark had tripled production to try to cope with demand as health workers used an average of seven suits per bed, per day. The World Health Organisation estimated that three million protective suits were needed over the course of the outbreak. Tragically, healthcare workers represented nearly 10 percent of cases and fatalities due to ebola.

New supply chain platform will save lives when the next pandemic comes

Supply chain logistics are a critical part of any emergency intervention. Inadequate logistics can lead to critical delays, cost lives and waste precious resources. NEC’s announcement of a new information platform, which will be part of the Global Pandemic Supply Chain Network, is expected to improve response times, find cost efficiencies and aid in continuous improvement.

The technology has been described as a “logistics visualization system that will enable end-to-end tracking of pandemic response items” – such as protective clothing – within a country facing an outbreak, helping to ensure quick and appropriate delivery of supplies to people in need. Other key functions of the system include reporting, analysis of supply chain inefficiencies, data integration with existing logistics systems and in-country warehouse management.

“It is widely recognised that the global health architecture could be reinforced with an improved supply chain platform to enable better preparation and faster response time for pandemics”, said a spokesperson for the Japanese Government, which committed US$1 million to the development of the new technology.

 Public/private collaboration driving results

Perhaps the most encouraging aspect of this announcement is the demonstration of how effective public and private collaboration can be in solving enormous challenges such as a global pandemic response. Aside from the key collaboration between the WFP and NEC Corporation, a framework for future pandemic response has been developed through an “unprecedented” level of cooperation between public organisations including the UN, WHO, UNICEF, the World Bank; and private sector companies including Johnson & Johnson, UPS Foundation, Becton, Dickinson & Co., and NEC.

 In other procurement news this week…

 White House trade advisor reaffirms administration’s trade goals

  • The U.S. is seeking more reciprocal trade arrangements with key countries to boost growth, reduce the trade deficit and reclaim American production capacity, according to Peter Navarro, director of the White House National Trade Council.
  • Speaking in Washington last week, Navarro singled out nations that have contributed to the current deficit problem, including Ireland, Vietnam, China, South Korea, Taiwan and Switzerland.
  • According to Navarro, the U.S. plan to reduce the trade deficit “is not based on higher tariffs, but rather getting our partners to lower theirs.”

Watch Navarro’s speech here.

Canadian federal procurement processes flagged for an overhaul

  • Addressing an event hosted by the Information Technology Association of Canada last week, Canada’s Public Services and Procurement Minister Judy Foote stressed the need for an overhaul of federal procurement processes to improve accessibility for SMEs.
  • At present, unreasonably complex processes and requirements are resulting in 8000-page responses to RFPs, which small businesses simply do not have the resources to undertake.
  • Ms Foote said that government procurement processes “have the ability to shift markets … (and) launch businesses.”

Read more at Ottawa Business Journal

 

Cloud, Not Laughter, The Best Procurement Medicine

A spoonful of Cloud makes the medicine go down. Healthcare patients in England could benefit from a move to Cloud eSourcing.

VGstockstudio/Shutterstock.com

This article was written by Daniel Ball, Director at Wax Digital.

Healthcare organisations are under constant scrutiny to deliver high quality care to patients. In England, it’s The Care Quality Commission which regulates all health and social care services to ensure fundamental standards of quality and safety are met.

The findings of its reviews are published to the general public. This puts organisations not coming up to scratch at risk of suffering from a negative public reputation.

Improving Quality of Care

However, help is at hand from The Healthcare Quality Improvement Partnership (HQIP). The organisation works with healthcare organisations to identify areas where quality of care can be improved.

The HQIP is an independent organisation responsible for managing clinical audit contracts on behalf of NHS England. It was launched to promote quality in healthcare, and, in particular, to increase the impact that clinical audits can have on healthcare quality improvement.

Commissioning and managing clinical audits means having to source a range high quality external experts to carry them out. To do this, HQIP recognised that best practice procurement tendering processes were needed to to run an audit.

HQIP saw the value in moving to an eSourcing platform so that it could speed up the procurement process. It knew that if it was able to source experts quicker and do away with paper-based, manual tender processes, it could save itself valuable time and resources.

Moving to the Cloud

HQIP decided to go with Wax Digital’s cloud based web3 eSourcing. This allows the organisation to publish tenders electronically and make use of existing templates. It also enables suppliers to submit responses online.

The system also offers a mix of automated and manual scoring facilitates, with subsequent contract awards also taken care of electronically via web3.

Its project management function also allows HQIP to plan its eSourcing activities so that all relevant information is stored in one central place, which can be easily accessed by system users.

Judith Hughes, interim Head of Procurement at HQIP said: “As we’d aimed for, Wax Digital web3 has greatly improved our processes. Moving away from paper-based tendering has significantly reduced the time it takes to review and award teams for projects.

“It has also helped further ensure our quality guidelines are upheld and we now have a much more efficient way of engaging with our suppliers and them with us.”

An increasing number of healthcare organisations can benefit from the speed and efficiencies offer by cloud-based software. Innovation starts within the supply chain. By rolling out eSourcing technology, HQIP enjoys a more efficient supply chain for audit management. This in turn can aid healthcare organisations meet required care standards, and improve the quality of service for patients.