Saturday, 2 July 2016

Chit Chat: Fashion Industry: What is Colour Forecasting?

Forecasting is complex and colour forecasting is no different. It’s also very intuitive and as a result,  there’s little information about the methodology involved. Colour forecasting involves teams that will try to predict the trends and work with forecasting colours, garment styles, accessories and fabrics that the consumers will be buying in the future, normally up to two years in advance. The data is evaluated to come up with the forecast that anticipates the colours that consumers will be seeking.

It is unclear as to whether the forecasters are the ones that create these trends or if they are actually predicting them, but the process remains complex regardless of this uncertainty.  Many employees with different roles within the fashion industry may be involved in the forecasting, including buyers and merchandisers, designers, sourcing personnel and range developers.  Colour plays an important role in the buying decisions of the consumer so it’s a vital part of the forecasting process and a very worthwhile activity.

The manufacturers use the predictions from colour forecasting as a data source and apply the results to come up with the seasonal colours for their ranges. Retailers often use the forecasting tool, helping them to come up with colour ranges.  The success of the forecast is shown through the sales that are made and the success of the products.

Friday, 1 July 2016

Why International Logistics?

There are many reasons for international logistics, such as labour shortages, costs in markets that are already established, low-cost production, new industrialised regions and the need to find customers in new markets that are demanding products or services.  The use of internationalisation of business also creates opportunities for learning.

Phases of internationalisation of operations have been created as a result of the drivers mentioned above.  This results in logistic pipelines that are associated with the phases. Each of the pipelines is different, depending on the companies and the markets involved.

Economies of scale are created through global sourcing thanks to multiple consolidation points that are created as the firms involved create their global networks.

Thursday, 30 June 2016

Corporate Social Responsibility in the Supply Chain: The need for companies to incorporate social responsibility into their supply chain design

Corporate social responsibility in supply chains deals with the social and environmental consequences that come as a result of the operations.  Firms need to work towards having a sustainable global supply chain, which is a lot harder than for focal businesses.  Global supply chains involve many more companies and have a wider reach, which makes things a lot more complex.

Corporate social responsibility (CSR) receives attention from political and public arenas.  Firms sometimes make the mistake of failing to be responsible, claiming it is not possible to see what happens in the supply chain on the other side of the world.  They often simply request their suppliers to be responsible and fail to change their own activities.  More progressive firms are using CSR as a market lever to build a respected brand that consumers appreciate and to expand their brand.

Corporate social responsibility includes:

  • Conducting audits of suppliers in order to spot areas that can be improved and to follow up on issues that have been previously discovered
  • Owning CSR initiatives using collaboration projects and running development sessions with suppliers
  • CSR involved in the decision making process
  • Paying premium for goods and services that do conform to CSR standards

Wednesday, 29 June 2016

Managing for Risk Readiness: The two levels of risk readiness and several specific steps to take

There are many risks in supply chains. Some common risks include breakdowns of transportation along with geopolitical risks or plant shutdowns and disasters. These risks have different impacts on revenue and customers, leaving the goods stuck in the upstream and empty distribution challenge.

In international logistics, there is a minimum of two levels where companies are responding to the risks, immediate risk readiness and preparing for risk in international supply chains structurally.

Immediate risk readiness includes four things:

·         Global sourcing and supplier rationalisation efforts are considered
·         Supplier hedges put into place
·         Inventory levels are increased to cushion any disruptions in the supply chain
·         Coming up with new transport scenarios and designing new networks

Structural risk readiness is an ongoing activity and firms now commonly have teams that dedicate their time to supply chain risk management. The activities that these teams undertake may involve creating contingency plans, risk protocols, being prepared for audits, training up staff and management and reporting the risk profiles to management.

Tuesday, 28 June 2016

Reverse Logistics: Factoring the Return Flow of Goods when Designing International Networks Reference

Reverse logistics is the goods flow that travels back up the supply chain. The reasons for reverse logistics include:

·         Repairs
·         Maintenance
·         Product returns
·         Recycling
·         Dismantling

Reverse logistics has an environmental component and service components and there are social responsibilities involved.  There are complications and activities that make reverse logistics different to forward logistics, such as:

·         Many to one distribution point
·         Less transparency and visibility
·         Complicated marketing and negotiations
·         Inconsistent inventory management
·         Speed no longer a priority in many cases
·         Common packaging issues such as damaged packaging
·         Non-uniformed product quality
·         Uncertain reverse costs
·         Forecasting is difficult as it’s hard to estimate what will be returned

Reverse logistics are not always incorporated into an international market. Many firms try to use the same system as the outbound distribution that isn’t always fit for purpose. There are often limited resources dedicated to reverse logistics and it’s not often seen as offering business value.

Monday, 27 June 2016

Organising for International Logistics: How can supply chains be better organised to meet the challenges of international logistics?

The three main elements of organising international logistics are:
·         Layering and tiering
·         Evolving role of plants
·         Reconfiguration processes

1.    Layering and Tiering
It’s important to consider a wide organisational setting along with the asset centralisation and localisation. Laying out the flow if information separately from the physical operations is used in global coordination and local operation.

2.    Evolving Role of Plants
The evolution of the role of plants focuses on achieving the targeted international capabilities of global efficiency, worldwide learning and local responsiveness, either separately or together. The way activities are performed and the changes in demand and location requirements all play their part.

3.    Reconfiguration Processes
A central issue is the required changes in international logistics pipelines. There can be large differences in reconfiguration paths across different companies, even where the companies use the same supply chain structure. The differences include:
·         Supply chain scope
·         Focus
·         Tendency
·         Timetable
·         Pace
·         Authority

Saturday, 25 June 2016

Chit Chat: How Does Crowdfunding Work?

Entrepreneurs are using crowdfunding as a way of raising finances. Crowdfunding makes it easier for the entrepreneurs gain access to funds without having to take out business loans or personal credit, approaching the bank or family and friends for funding. 

Crowdfunding provides a platform to reach a significant amount of investors and sharing the business plan and pitch to encourage investment. The idea is shared on a crowdfunding website (such as Kickstarter) and people can choose to send their own money if they wish.

There are normally two different types of crowdfunding, receiving rewards and equity crowdfunding. Receiving rewards is a traditional form of crowdfunding that provides investors with rewards as thanks for their investment. This could be a finished product or other merchandised based on the amount they invest.  Equity funding is when the investors become shareholders.

There are plenty of benefits to crowdfunding, these include:
·         You don’t need to worry about public speaking or creating a presentation.
·         You have a wider audience of investors
·         You can use social media to highlight your campaign and raise awareness
·         Your investors can be useful as they’re able to have a say and follow you on your journey

Three of the most popular crowdfunding websites to consider using are Kickstarter, Crowdfunder and Indigogo.

Friday, 24 June 2016

Challenges of International Logistics and Location: What are the risks in international logistics in terms of time and inventories, and how can they be addressed?

There are four main differences found in international logistics:
·         Extended lead time of supply
·         Extended and unreliable transit times
·         Multiple consolidation and breakpoints
·         Multiple freight modes and cost options

Extended lead time of supply
Long lead times are often quoted in order to efficiently manage the interface between production and sales teams in each of the different countries supplied. The long lead times buffer the factory so they are able to respond to local variations in the different markets.

Extended and Unreliable Transit Times
Time variations in international transport lead to increased inventory holding as this works to provide safety cover.

Multiple Consolidation and Break Points
Supply costs can be reduced by using consolidation. The economies of scale are achieved as the goods that are produced in different facilities are all put together to be transported to the common market.

Multiple Freight Modes and Cost Options
The freight mode options may change for each leg of the journey from the point of manufacture and the marketplace. These are air, sea, rail road and there are different options for each of these categories. Cost, availability and speed are all taken into consideration when deciding the freight mode to use for each leg.

Thursday, 23 June 2016

How can we picture the trade-offs between costs, inventories and lead times in international logistics?

Companies work to stay competitive on an international scale by reducing costs and improving services to their customers. There are two approaches that are commonly used, focused factories and centralised inventories.

Focused Factories
A focused factory strategy is when the company consolidates the production of products in specific factories. Each of the focused factories supply the product they produce on an international scale and they focus only on a limited segment of the product assortment.  The advantages include lowering the production costs through economies of scale and improved lead times. The disadvantages may include increased transportation costs and increased lead times because of the longer distances from the market.

Centralised Inventories
Consolidating inventories can bring cost saving benefits. The inventories are reduced to smaller numbers and the inventory management is coordinated across the supply pipeline.  By coordinating inventory, duplication is removed and the safety stocks are also reduced, saving logistics costs and lowering the distribution cycle times. Another benefit of centralised inventories is the ability to balance the demand peaks across regional markets using a central inventory.

Wednesday, 22 June 2016

Drivers and Logistics Implications of Internationalisation: What are the trade-offs between responsiveness to local markets and economies of scale?

Logistical implication of internationalisation

Internationalism has consequences for inventory, handling and transportation policies.  Centralising inventory over different countries can be advantageous as it can reduce inventory holding costs and inventory levels. The flip side is that product proliferation can increase because there’s a need to localise products and be able to respond to the opportunities to the local market.

Handling practices may differ depending on the country and there may be different regulations for transport and storage. The handling practices will need to be adjusted in order to fit in with the regulations and best practices can be implemented which will be of benefit to internationalisation.

Transport pipelines are expanded in order to cope with the different regulations in place within different areas and the different infrastructures while remaining focused on deliveries within time to market. These factors may drive localisation. However, global consolidation can be a driver for international centralisation.

Time to market
Global logistics pipelines are impacted by time-to-market and a couple of the major issues include inventory holding costs and product obsolescence. Product obsolescence is increased because of the time products spend in transit. Inventory handling costs can increase because of the lead times and delays that can occur at consolidation points and at customs and excise.

Global consolidation
Managers use global consolidation when they work to secure low-cost resources and make the best use of the assets. As a result, assets such as facilities and equipment are used to their fullest capacities and the economies of scale are maximised.

Risk in international logistics
International logistics have to consider the effects of the unexpected and how they will impact the supply chain so responses can be planned and managed. Risks include geopolitical threats, transport breakdowns and disasters.