Edited by Lucia Piedra, MBA & Jhon-Pol Orillosa, BA
|Do you have a Supply Chain Ecosystem?|
In global commerce, supply chain management (SCM) provides the directives into how products and services would flow from their points of origin or intermediary tiers to the point of end-use or consumption. To understand SCM, we must address that in trading global schema, businesses thrive on specialization and split market approach. Businesses rely on SCM to maximize their gains as they do not want to pay full time employees and stock material that may not sell due to the ever-changing project scopes. In turn, they allow purchasers and managers to create a flow of logistical planning to effectively outsource specific jobs from different vendors (B2B) by engaging into spot buy acquisitions often needed immediately or with strict time frames.
What’s it all about? Businesses that sell computers are perhaps the best example of SCM. Hardware and software are not typically manufactured in the same way so therefore we are talking about 2 different specializations that are occurring in mid process prior to the actual computer assembly. Specialization came about as early as post industrialization when the division of labor or split markets became such a prominent activity to mass produce parts, instead of making a whole product from beginning to end. The idea is to eliminate manufacturers from spending too much time on making finished products and rather focus on easier to make components that can be assembled when all is accumulated from different places of origin. The key here is time and more production time means steeper monetary expenditures for employee overhead, while having less supply or inventory. While a company makes the hardware for computers somewhere in Singapore, another company is mass producing the software in Hong Kong. The assembly house, somewhere in Silicon Valley then takes over to create the furnished computers and ultimately ships them to the computer sellers. SCM has taken us a long way in commerce, as opposed to still making turkey sandwiches from scratch, which takes about 9 months to a year to process (farming the grain, raising a turkey, making the bread, etc.…), by then, consumers would have starved to death. It is basically the same concept with SCM, lead time is the key and it compliments globalization well. Purchasers like Sr. Buyers are the pivotal key players in SCM, and they determine specific approaches to spot buys. They account for budget allocations for certain projects and they let suppliers or service providers to bid on that project. Typically, the vendor who quotes the cheapest price and the shortest lead time wins the bid and thus gets the order. When a raw material’s presence is needed to perform a series of value-added processes, purchasers would normally line the vendors in the sequence of order the processes are to be applied and this could get much trickier for the SCM. For example, if a raw metal must be procured, saw cut, heat treated, anodized, machined, and assembled, in that exact sequence, the material then would have to go through 6 different sites before final product can be attained. This is entirely different from making computers, because PC components can be manufactured independently from one another, just like the example indicated above. Work is being done on PC components simultaneously in different locations. When a material’s tangible presence is needed for workers to perform add on processes to it, SCM are somewhat bound to the lead time guarantees made by vendors and if one vendor lags, everyone gets affected in the chain, which often happens in every SCM driven industries. “For example, the on-time delivery of prefab is usually hampered by supply chain uncertainties. And tardiness delivery, often witnessed in the prefabricated construction project, is a major cause of project time and cost overrun (Mok, Shen, and Yang 2015).” (Zhai, Y., Zhong, R.Y., Li, Z., & Huang, G., 2017).
SCM is facing a problem as a result of lead time disruptions due to either human errors or back logs of processors caught in mid chain. One of SCM ways to mitigate this risk from recurring is the broad nomenclature called hedging. Hedging is, by definition, the assignments of conditions and exceptions on acquisitions to allow certain limitations and qualifications. Hedging can take on many forms and there is not one exclusive practice, SCM would apply unilaterally. Specific projects require a potent form of hedging in order to meet project requirements.
“For managers, the major challenge is what mechanisms can be adopted to hedge the risks and minimize losses or maximize profits. A spectrum of flexibility contracts have been demonstrated as incentive mechanisms for coordinating the agents’ decisions and improving the profit of all supply chain parties.” (Luo, J., Zhang, X., & Jiang, X., 2019)
One of the most common form of hedging is to assert strict qualification criteria for approved suppliers. Nowadays, project managers and purchasers are encouraged to source more suppliers that that can handle multiple processes, instead of one. This way there are less hands getting involved in the supply chain therefore shortening the lead time. As a causality, suppliers that specialize in one process get excluded in the outsourced list and may have to compete by offering more products or specialized services in return. What this form of hedging really does is create a cut-throat competitiveness among suppliers and if every supplier keeps adding processes, then SCM is really taking a leap back from what SCM is supposed to do, support specialization and not have suppliers be occupied with doing complex jobs. “Various initiatives applied by managers to enhance supply chain efficiency, e.g. reducing supply base, just-in-time (JIT) inventory, vendor-managed inventory, outsourced manufacturing, etc., increase the possibility of supply chain vulnerability (Chopra and Sodhi 2004; Tang 2006a, 2006b; Tang and Tomlin 2008). Supply Chains now operate in a business environment with unprecedented volatility and competition (Merzifonluoglu 2015) and face an increased likelihood of disruptions.” (Namdar, J., Li, X., Sawhney, R., & Pradhan, N., 2018). The flow of chain should be in a pass-through phase modality, by which everyone can benefit from each other. Cutting budgets on the projects is also a form of hedging and that is to encourage SCM to exclude high end suppliers that may offer speedy services.
Why do we care?:
Hedging is quite alarming, and it allows managers to dump all or most of their workload and responsibilities to the outsourced to vendors. Not everyone is suited to handle multiple tasks, especially on bigger projects that require a lot of supervision, thus hedging puts extra weight on the middle tiers as they also must assume SCM roles and they too must outsource extra tasks just to push out products on time. In a way, SCM has taken a more unconventional approach on leveraging as they spend much of the time coming up with newer forms of hedging, instead of managing the chain. Mitigating risks and opportunities has become of focal concern for the big hitters as they want to improve, however, hedging is also capable of severing ties to long time partnerships. Partnerships that assisted the big hitters to be in the state they are in now. Undermining these partnerships is somewhat crude to the investment put forth by the loyal suppliers, hoping to specifically maintain the recurring projects from the bigger primes.
What to do and how to fix it:
SCM must focus back on determining the weakest links in the chain, instead of applying hedges to the overall schema of operations, because evidently it is unfair for the stronger links to be working twice as they have done before. SCM must not put so much pressure on logistics as lead-time is understood to change based on the time work is to initiate, as all quotes are also subject to changes prior to the time of sale transaction.
SCM must understand the human aspects in business and account for the natural occurrences that are considered “acts of god”. Just because one company fell through a ditch does not mean it should be blacklisted from the chain, there are corrective and preventative actions that can be issued to assist the supplier in understanding the complexity of a specific process, which probably why this company ran into a non-anticipatory delay. Ignoring the insights and not giving suppliers a chance to give their own rationale would create knowledge gap within a specific chain, which cannot be resolved because the problem was never addressed to begin with. Simply put, SCM must do the due diligence of researching the realistic complete turnaround of a fully furnished product to decrease unrealistic expectations or identify problem projects as well.
Moreover, businesses in manufacturing today are operating with a broader network of interlinked Multinational Corporation entities, which allows for the dissolution of linear supply chains. Supply chain ecosystems now include multi-processing entities that influence and impact the flow of information on goods and services they provide as a value proposition.
For the past decade organizations looking for the best suited supplier, have been using techniques that entail the use of robust analytics like fuzzy AHP; which takes into consideration quantitative and qualitative elements in evaluating vendor alternatives combined with Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) for selecting ideal suppliers (Data Science, 2010). Consequently, providers who have caught on have been consolidating their resources and solidifying their engagements with partnerships to provide improved options for their customers.
Improvement options consist of things like purchasing raw material from a mill rather than multiple brokers or engaging with a company like IMS that can house material in a climate-controlled environment and distribute it to your production line (JIT) just in time as you need it. Another option is using processors that have multiple services rather than moving your parts around from place to place and looking for partners with the same vision, mission or common culture or goals is just the beginning. Small changes to less flexible supply chains can significantly decrease your logistic time and increase your on-time delivery metrics.
For those looking for a vigorous change of pace, reinvention or want to take on new business without necessarily taking on the problems of hedging your current AVL and do not know which direction you want to go, feel free to address your SCM queries with International Metal Source Sr. Executives which have over a decade of experience with SCM management. After careful analysis of where you are today and where you need to be tomorrow, you will enjoy using your creativity to build new ways of handling your supply chain or reorganizing it. You will also be comforted by the vast web that can support your businesses’ every need in the already well-developed ecosystem IMS has built. IMS360 will help reinvent your mindset to adopt the most advanced technologies, applications, and human resources within the industry today. To find out more email email@example.com.
|Social Media- Resource & Security|
Trending: In the US – but not in other countries, including the UK – political campaigns have the option to target people based on their political leaning which will no longer be allowed by Google beginning in 2020 (MSN Money, 2019). Facebook said it will add more prominent labels on debunked posts on Facebook as well as on Instagram and put labels on top of what is deemed “false” and “partly false” photos and videos but will still run ads containing misinformation (AP News, 2019). Twitter has sought to more aggressively monitor its network for malicious political activity since the 2016 presidential election and to be more transparent about its investigations, publicly releasing data about state-backed influence operations since October.
As relative spatial and temporal reductions had been made possible by technology for the global communities, streamlined integration of data became susceptible to illegal accesses and usages. People feel more unsafe nowadays to exchange their information on social media or even trust individuals or MNC exposures virtually. In a professional setting, the leak of false information on social media becomes the main fear when engaging in e-commerce social media. Some of the examples cyber-attacks cause are but are not limited to the following; cybersquatting, typo squatting, drive-by attack, phishing, password attack, SQL injection attack, and more. Using firewalls, intrusion detection software, and antivirus shields, will provide layers of barriers against digital infiltration and unwanted solicitations of viruses. Encrypting data is useful for sending mass sensitive information to selected recipients. Numeric passwords or catch phrases are required to open these files, which are not usually sent along with the file. Recipients usually had to go through an ID verification to receive the passwords. Two-phased authentication prevents unauthorized use of devices in administrative sites. It detects biometric signatures in two steps, in any two combination of retinal scans, digital fingerprints scans, digital swipe, etc.…, which some are already common in mobile devices.
International Metal Source’s presence on social media is access-controlled and it moderately serving to guide viewers to gain informational awareness that pertains to what it does as an MNC metal processor, which includes; posting frequent newsletters; images of our finest work on metal; marketing (long term) and advertising (short term) along with other useful intel on metal applications. Our website can be used as a port for the relay of material queries, which will allow for speedy response from one of our dedicated staff members, as it is connected directly into our general inbox. We are actively on watch for files and data that are considered solicitations that are common to carry virus and we make sure that they get purged off our system before they can corrupt our IP infrastructure. We take pride on how we assigned each computer for each of our staff, each with assigned two phase biometric imprint for PC log ins, which deters unwanted users from illegal postings of falsified information, photos, or video feeds. We also encourage everyone to do the same with their mobile phones and other gadgets that contain private data. If you are seeking for metal information that is 100% legit, useful and approved through general IMS consensus, feel free to check out any of our social media affiliations if you seek assistance or just wanted to view some of our trending works in progress on either Facebook; twitter; LinkedIn; Instagram; or our website.
Logistic Tips For The Holiday
Expected raw material, on freight boards are the bread and butter of our site’s operations and it is just natural that we would go out of our way to connect ourselves to freight dispatchers to gain insights on their whereabouts. Sometimes, logistical mishaps occur whether in route to destination or in docking stages. Delays through natural calamities and other severe acts of nature would tend to hold our shipments in transit, and we would not necessarily know about these delays until we do our due diligence of checking up on them. Logistic staff here at International Metal Source, understand how this shipment tracking can be a tedious task for our clients and that is why we utilize a live streaming logistical update system on all our orders in order to notify our clients whether their shipments are on track or being held up. Moreover, our logistics system is tied into our shop traveler system, which means that we also give real-time logistic information on in-house and external processes that are applicable to your material.
On another note, there are those days when we find our material lost in transit or even missing from our packages. These may be rare occurrences, but they do happen, specifically on holiday blocked schedules when material gets bounced in and out of dispatch due to failed delivery attempts. Some of the common causes of lost packages arise from human error or lost identification labels on packages. International Metal Source encourages everyone who has experienced this kind of faulty shipment in the past to take photos of the package condition as soon as they reach the destination, whether they are in good or bad shape. It is a good practice to implement, since pictures can be used as evidence for establishing a strong case for loss shipment claims. International Metal Source has compounded layers after layers of security protocols to ensure that if there is any tampering on packages upon arrival, we would easily detect them. Taking pictures before shipping protects IMS from loss shipment liabilities and protects customers valuables from logistic tampering such as; repacking, mislabeling, and misleading dimensional identifiers. We also initiate instantaneous recovery for replacement material as soon as we are notified about a loss in commodities. When you trust us to ship for you, you can bank on the fact that your material is always protected.
To view the most recent 2019 HAPPY HOLIDAYS NEWSLETTER, go to: https://mailchi.mp/8ef794ac7c2d/imsnewsletter-happy-holidays-2019