Tuesday, 31 March 2015

Supply chain strategy on consumer electronics industry part 1

Consumers are placing higher demands for devices that cost less and perform better than before. As a result the life cycles are reduced and this is causing rapid obsolescence. New products are reaching the market quicker than ever, increasing the amount of promotions and marketing.

CE manufacturers now have to focus on tightening their forecasting sourcing, inventory management and distribution strategies.  To compete, they must refine their supply chain management and introduce a more sophisticated approach.  The challenges are:
  1. A need to form a collaborative supply chain, following the outsourcing trend and the vertical integration of core competences.  Collaborating with retailers is al so essential along with the integration of real time data sharing.
  2. Supply chain risk management.
  3. Supply chain planning that is able to respond to the demands of the market.
  4. Reverse logistics and sustainability. The fast paced changes in technology are causing a growth in e-waste management. Responsible management of returns is a must and products need to have a reduced package footprint, use non-hazardous materials when possible and products need to come with safe disposal guarantees.
  5. Social media have had an impact on the demand for electronics with consumers. Social media provides a way of monitoring demand and can be used for feedback and marketing purposes.
  6. Digital supply chain makes use of devices, sending content to smartphones and other devices that consumers use to get online.

Monday, 30 March 2015

Ecommerce in the China Market

Ecommerce is taking off in China right now, so much so it is believed that the China ecommerce market will be worth more than the UK, USA, Japan, Germany and France markets combined by the year 2020. These figures are connected to the number of people who are using the Internet either via their computers (600 million) or smart phones (500 million).

There have been several failed attempts at breaking into this market by foreign firm such as eBay, but there also have been some successes as foreign firms connect together with Chinese firms to form a lucrative team. A good example of this is Shoprunner, who partnered with the Alibaba Group who are going to assist their expansion into China.

Ecommerce has opened up the doors for firms to target consumers in lower-tiered cities without the need to open physical stores. The consumers are becoming web savvy and are now feeling more confident to look online to make their purchases as their trust grows. They are driven by cost advantages and are now making price comparisons online before making their purchases. Convenience is also proving to be a factor of the success of ecommerce in China.

In a recent survey conducted by KPMG on 10,200 respondent’s online luxury buying trends, the average spending habits on luxury goods is approximately RMB $1,515 (US$243) with significant increases due to customer age group. Those under age 20 years spend approximately RMB726, 25-29 years old spend about RM1, 657 and for those that are 45-49 years, they spend approximately RMB2, 108.  Furthermore, men on the average spend more (RMB2, 163) than women (RMB1, 314) on individual items but women spending more overall.  According to the findings, the most popular online luxury products are purchased are as follows: cosmetics (51%), women’s shoes (39%), women’s apparel (36%) and lastly accessories (34%) and bag (34%).

Saturday, 28 March 2015

Chit Chat: 2015 European Sporting Goods Trends - Part 1

Let’s take a look at some of the sporting goods, trends we expect to see during 2015.

Outdoor Exercise

The appeal of the great outdoors will continue to attract new audiences looking to get fit in the open air. They have a wide choice of activities to choose from, from running the trails, climbing hills and mountains, skiing to simply being outside and being active. This is a trend that is expected to be a part of the sports industry growth in the future.


Running is similar to the outdoor exercise, but it deserves to have a segment all of its own. There is a close link between health, sports and the running mark et. The growth in running is expected to be in niche areas of the exercise, off road running, extreme events and trail running will continue to boom in the years to come, especially in Europe.


Cycling remains popular, especially in the UK and again, it’s a sport growing thanks to the interest in outdoor sports and activities. There is an increasing demand for electric bicycles and a need for clothing in this area

Friday, 27 March 2015

A Look at China Logistics Part 2

More and more global companies are taking advantage of the demand for logistics in China and hence the foreign investment has been increased. Some of them are building logistic facilities in the country while some are making use of the facilities already in place. Yet, many warehouses are behind the times and have outdated tracking system s which don’t meet the need of modern retailers. Instead, they have low-tech warehouses and insufficient raised loading bays which slow down the processes, causing problems throughout the rest of the supply chain.

There are also some restrictions on the foreign investments in the transportation and logistics industry. Such restrictions force many foreign companies entering logistics in China to partner up with domestic firms. And there are restrictions regarding the use of the transportation channels which cause many of the trucks end up returning without loads.

China’s logistics need to expand in order to keep up with the demand. As the logistic market grows and consolidates the service providers are more likely to offer better services and diversify their offerings:
  • Sourcing
  • Warehousing
  • Inventory management
  • Testing
  • Packaging
  • Distribution
  • Delivery

Thursday, 26 March 2015

A Look at China Logistics Part 1

The logistics providers in China are struggling to cope with the unquenchable demand, which mainly caused by the increase in domestic consumption, improved infrastructure and the increased interest in industrial property development in China, being placed by the largest retailers. China has the second largest economy in the world and has a high demand for logistics. However, China may need to invest approximately $2.5 trillion in developing logistics further in the next 15 years as the country has the infrastructure which, however, require upgrading and shipping to remain valuable.

Logistics in China is considered to be young and immature due to the fragmentation and competition in the market. Millions of trucking firms own just one truck and they are all competing in the same market. Local companies normally use an average of 12 transportation providers and 5 warehousing providers. Hence, in such environment, switching transportation service providers is so common that it makes the market becomes highly competitive.

If businesses are willing to pay more to find the right providers, they will be more likely to receive a reliable, complete and flexible service. The growth in demand for logistics is also attributed to the rise in ecommerce. China is embracing ecommerce and a high demand for warehousing and distribution. If companies continue to outsource to 3PL, the cost of hiring and training staff and obtaining the large facilities and expensive equipment will be required to satisfy the demand of the consumers. In other words, companies need to make large financial investments if they decide to do everything in-house.

Wednesday, 25 March 2015

Supply Chain for Draft Beer

The supply chain for draft beer needs to be focused heavily on reverse logistics. Keg theft and the management of the float (the keg inventory) are essential parts of the unique supply chain. Kegs cause problems for the brewing industry as they are storage containers that have also become a very valuable commodity. As a result the reverse logistics within the supply chain can be difficult for the brewers and the distributors to stay on top of.

Kegs belong to the brewer and are only lent through the supply chain all the way to the customer level. The distributors of the beer kegs have to manage large inventories of these kegs and the customers, such as bars, must also store many kegs on their property in order to serve their customers. When the kegs are stolen or lost the distributor is charged for the loss, causing financial problems for the supply chain. Kegs are being intentionally not returned by some and are a target for theft by others due to the high metal prices driven by developing countries in construction and manufacturing sector. 

The manufacturing cost of a keg is approximately $150 with a scrap value of $40-$60 depending on the metal value the keg contains. The typical deposit charge to customer may be as little as $10 and is refunded back to the customer once the keg is returned intact, but by selling it to a local scrap dealer, they may get double, triple or quadruple the cost of their deposit. These losses and thefts are frequent, costing an estimated loss of $52million in the US beer industry alone!

The beer industry supply chain needs to combat the loss of kegs by using technological solutions and ensuring the forward and reverse supply chains is effectively managed.

Tuesday, 24 March 2015

Why find a 3PL on the Expansion of Brewery Distribution Networks?

Many brewers decide to use the expertise of third party logistics when they expand into new markets. There are many reasons why outsourcing is a sensible choice for brewers, such as:
  1. 3PL have the expertise and understand the challenges that are found in the beverage industry
  2. 3PL has the technology and the solutions that are required
  3. 3PL is able to grow with the brewer, accommodating the changing needs of the future as the business expands
  4. They have resources and a distribution network that is already fully established, including the workforce.
  5. No large amounts of capital are required by the brewers to start expanding the distribution network as 3PL offer payment options.
  6. They’re able to maintain quality and make improvements.
  7. They can help with the safe disposal of unstable beverages so as not to harden the environment or reputation of the brewer.
  8. 3PL have numerous services that the brewer can use such as: freight management, keg scanning, consolidated distribution etc.

Monday, 23 March 2015

Points To Consider When Expanding the Brewery Distribution Networks

They need to use expert logistics in order to deliver the products to the markets on time and in good conditions and many challenges need to be overcome in order to achieve this.
  1. Keg management – kegs need to be quickly returned and filled so reducing the cycle time is the goal.
  2. Optimising transportation – The kegs need to be distributed and returned. Consolidating the distribution is the most efficient method to use.
  3. Speed – An excellent response time is required in order to cope with customer demands.
  4. Technology – Up to date technology is required for an effective and cost efficient and responsive supply chain.
  5. Quality management – Quality is essential. Product temperature, safe delivery during transit, along with a commitment to reducing the carbon footprint of the product is essential.

Saturday, 21 March 2015

Chit Chat: 2015 Hospitality Industry Trends - Part 3

Staying ahead of the game is the goal of all businesses and the hospitality industry is no different. In order to stand head and shoulders above the competition there is a great need for companies in this industry to understand the requirements of their new consumers. They have to be able to respond to the new trends and the different consumer behaviours that arise, which will involve:
  • Acting quickly to jump on new markets as they emerge
  • Understand all of the different needs of the different generations
  • Make sure the branding is current and relevant
  • Embrace social media
  • Use multi-channels and be mobile phone friendly
  • Invest in talent so the employees have the knowledge and skills to deliver on a global scale
  • Offer price, quality, convenience and have strong branding
  • Develop integrated IT systems
  • Improve cost management with the use of management tools for improved efficiency
  • Be prepared to adapt quickly to unexpected events

Friday, 20 March 2015

Follow up Shots at the White Collar Boxing!!

We have a new batch of photos uploaded to our Facebook on the White Collar Boxing Event. For details come to our Facebook and "like us!

What are the challenges in expanding the Brewery Distribution Networks?

Craft beers are enjoying a growth spurt in the marketplace; they increased by 15% volume in 2012 and have continued to grow ever since. 

However, as they grow and demand for craft beers continues, the brewers have to face new challenges in reaching new markets and satisfying the demands, while continuing to brew their product.

Brewers find that their supply chains become increasingly complex when they decide to expand and target new markets.  They require sophisticated logistics management in place to keep up with the demand of the market consisting of:
  • Asset management
  • Inventory control
  • Customer service
  • Transportation
Managing all of these different factors is essential and the learning curve can be steep for the small time brewers. This is a major challenge, along with keg management, such as tracking the kegs and ensuring they are being distributed in the right amounts and the product is not spoiled during the distribution process. Time, resources and expertise are a must, and these are something that must be considered before aiming to target new markets.

Thursday, 19 March 2015

How to tackle the Bulkiness on Spirited Supply Chain?

Spirits, like wine and beers, are heavy, whether sold in large containers or in bottles. Weight therefore poses a challenge in the supply chain that needs to be overcome. Overweight charges need to be avoided by loading containers or trailers with as much product as possible without reaching the limits. There are strategies that can be implemented to deal with the bulkiness:

Move beverages in large quantities for the part of the longest journey and bottle at the destination ready for distribution.

In Europe many of the wineries use a contract bottling system that allows third parties to bottle for producers rather than bottling on site.  Using flexible tanks made from plastic in large containers as the plastic weighs less than glass bottles

Wednesday, 18 March 2015

White Collar Boxing Event Followup

On Saturday March 14th, our very own Scott Morson took part in the IPP white collar boxing evening held at the Intercontinental Hotel in Tsim Sha Tsui. The event raises money for the Children’s Surgical Centre in Cambodia http://www.csc.org.

Happy to report that Scott came through his fight in one piece and also victorious, defeating his opponent convincingly in the three round bout. The grueling 3 month training program clearly paid dividends as Scott delivered left jab after left jab to rattle his opposite number and the judges verdict was quite rightly a unanimous one.

Well done to Scott on this great achievement and we look forward to the next time one of the Royale International plucks up the courage to step into the ring!

What to consider in a Fine Wine Supply Chain?

The following factors need to be considered in order to create a perfect wine supply chain:
  • Knowing when to bring a new product to market. It can take 60 days for a wine delivery from Argentina to reach the US. It’s important to keep an eye on the supply and demand to be ready for new products to take off.
  • Watching the economy. Drinking patterns do change depending on the amount of money consumers have available.
  • Temperature control during transportation.  Wine is sensitive to temperature changes and can end up spoiled on route to the customer. Temperature control is vital in drinks logistics as both heat and cold temperatures need to be managed with temperature controlled containers and warehouses.
  • Export issues need to be avoided by understanding and working with the rules, laws and regulations of each country of origin.

Tuesday, 17 March 2015

What Makes A Perfect Wine Supply Chain?

The wine supply chain is heavily affected by fluctuations in demand along with the multitude of government regulations that need to be navigated regionally and globally. Supply chains vary in different locations around the globe where the products are sold which adds to the complexity. Other challenges include the types of wines, the range of price tags, the target market and the market size.

A perfect wine supply chain has to be agile and pay close attention to the demand and expected demands of the products, especially new lines. They need to consider the temperature control of the product throughout the entire supply chain, make use of technology to ensure the product doesn’t spoil, regardless of where it’s heading or how long it will take to get there. Coordination is therefore required throughout the chain in order to avoid costly issues with overstocking or under-stocking.

Monday, 16 March 2015

How Bullwhip & Beer Make the Supply Chain Difficult?

The concept behind the supply chain management is quite simple. Customers place an order and then you manage your inventory and order enough materials from your suppliers so you’re able to meet the demands of your customers. However, there are many problems that can result in an inefficient supply chain. One of the main problems can be caused by the lack of coordination between the suppliers, manufacturers, customers and sales teams. 

They all have control over their parts along the chain, yet each of them has an effect on the chain as a whole. If one of them is not ordering enough or ordering too much, it will cause issues for all. The coordination issue, combined with the Bullwhip Effect, is not just about communication. For example, manufacturing and procurement can wreak havoc with delays in supply chains having perfect communication. Thus, this may make overstocking or shortage or even worse.

Beer making supply chains can be affected by demand fluctuations. Customers may order a certain number of cases this week and their demand may suddenly increase next week. The supply chain can be adjusted to ensure the demand can be met without over or under-stocking in the process. Reducing the bullwhip effect can be achieved using the following methods:
  • Collecting point of sale data, electronic data interchange and vendor managed inventories, and ensuring the supply chain is aware of these figures
  • Encouraging vendors to reduce batch ordering and place smaller orders
  • Avoiding price fluctuations
  • Reducing hoarding by allocating the demand of the customer based on their past orders

Saturday, 14 March 2015

Chit Chat: 2015 Hospitality Industry Trends - Part 2

One of the essential tasks facing operators is the adoption of the online world. The brand needs to be available on multiple channels and deal with any changes that are introduced into those channels, quickly. Social media will continue to have a big impact on the hospitality industry in 2015. The decision making processes will become fully integrated into social media and transparency will be required. Brands need to see this new transparency as an opportunity to communicate with the customer.

The recession and tight household budgets have had their effect on the hospitality industry, and is expected to continue throughout 2015.  While luxury hotels have been hit hard, there has been a great opportunity for value brands and low cost travel opportunities to grow. Luxury hotel brands are expected to begin making a recovery, although their target audience will have to be concentrated on their core clientele.

Economic uncertainty will have an impact and continue to pose risks and challenges for the industry. These include: pandemics, terrorism, oil process and economic uncertainties. A further challenge is satisfying the consumer’s expectations regarding social awareness and the environment.  Customers will pay more in order to holiday with green hotels, provided the value is still offered.

Friday, 13 March 2015

The Most Important Person in Your Supply Chain

The most important person in your supply chain is the individual who is responsible for pitching your brand to the retailer. They are the sales reps, the ones who are taking samples out to potential customers and selling the brand. They often have a very short time period to pitch the brand and get the selling points across. If the sales rep is successful they will be able to achieve new accounts.

Each sales rep is responsible for managing and obtaining new accounts in their set areas. They often have between just five and twenty minutes to make the sales. They have to cope with any design floors or packing issues and get the benefits across to the customer in order to seal the deal. With old customers their challenge is to increase orders or encourage reordering to keep the account alive and progressing.

Thursday, 12 March 2015

Consumer in the Business Supply Chain

One of the biggest differences in how business operates in recent years is the improved quality of products and services offered in order to keep customers happy and satisfied. It is believed that the Internet is playing an important role in helping businesses to win the battle over quality verses quantity and how the business manages its supply chain efficiency.

All businesses have to understand their consumers and what they expect from the firm so the level of quality can be altered to suit their expectations. The business then needs to analyse the efficiency of their supply chain and ensure they are not using outdated processes.  There are new rules that need to be followed:

·         Public relations is more public than ever before because of opinions and experiences being shared on the Internet
·         Warehouses and distribution have to be run efficiently and waste needs to be cut
·         The business needs to be genuine and authentic as customers want the real deal
·         Reputation is built on happy customers, not on awards. The customer should be seen as the boss.

The customer must be considered throughout all processes, from designing to delivering the goods to the end consumers.

Wednesday, 11 March 2015

How to Align Supply Management and Competitive Strategy?

The two biggest challenges faced by supply chain managers are choosing the right supply chain strategy and determining the right level of competency that is needed.  There are four supply chain strategies that support the competitive strategies:

1.     Efficient
2.     Responsive
3.     Risk hedging (Responsive)
4.     Agile (Effective)

Mapping the Customer Strategy to the Supply Chain Strategy

·         Product leadership is supported by using the effective supply chain strategy
·         Price leadership is supported by an efficient supply chain strategy
·         Service leadership is supported by the responsive supply chain strategy
·         Multiple target markets and customers are supported by the agile supply chain strategy

Concentrating on the competitive advantage of the business is necessary while planning the supply chain. Supply chains need to be efficient and effective in order to achieve the maximum contribution to the firm.

Tuesday, 10 March 2015

Chit Chat: White Collar Boxing™ Hong Kong

The Royale International Group is proud to be a part of this year’s sponsor for the upcoming White Collar Boxing charity event in Hong Kong to be held at the Intercontinental Hong Kong on 14th March 2015 at 6:30 pm.

The Royale International Group’s Mr. Scott Morson (aka Scott “The Shot” Morson) will be competing in bout 5 against Yves “The Cobra” Luk.  All proceeds will go to the Children’s Surgical Centre (www.csc.org) in Cambodia - a charity that provides free, life-changing medical operations to those who cannot afford healthcare.

White Collar Boxing™ is an event generally consists of men and women from the “white collar” profession who with little or no prior boxing experience go through a twelve week series of intense boxing training to compete.  The first white collar boxing event was held in 1988 in Brooklyn and since then spread worldwide. The Hong Kong event is organized by the Singapore based Vanda Promotions. The Vanda Boxing Club has trained over 390 White Collar boxers in the past few years and is often used as a pre-fight training camp for boxers in Asia, US and Europe.  

For more information, please click HERE

The Difference between Forward and Reverse Logistics in Retail

Supply Chain Characteristics
Forward Logistics
Reverse Logistics
One to many distribution (factory to several distributors/retailers)
Many to one distribution (Product are collected from several retailers and taken back to one central processing centre/factory)
Distribution costs
Typically manufacturers track these costs regularly
Most manufacturers do not have any idea about these costs
Forecasting is simple scientific approaches can be developed based on past sales
Forecasting is very difficult as it is difficult to predict a future
Logistics infrastructure
Logistics equipments like fork lift are designed for handling finished goods like cartons
Logistics equipment are not designed for handling returned/torn down items – chances of losses during handling is high here
Pricing is uniform – generally every manufacturer has defined MRP (max. retail price)
Pricing can be complex and be based on several factors like age, condition, chances of re-usage, etc.
Product packaging
Product packaging uniform for particular type of products
Mostly packaging is damaged or non existent
Product quality
 Consistent uniform quality (Product go through several quality check before going out from factory fate)
Non consistent, non uniform quality (Products of different age and different quality comes back)
Supply chain network
Typically network consists of factories, warehouses, distribution centers, etc
Typical network consists of collection centres, grading centres, re processing centres, etc

Source: Supply Chain Management for Retailing

About e-procurement implementation

The most straightforward method of implementing e-procurement is by mirroring the current practices. However, by doing so, many of the new technology benefits cannot be achieved. Therefore the most sensible option is to introduce new processes and undertaking re-engineering the processes. This can be a challenge, but it is the best way to see the full extent of the benefits of using the new system.

Getting people to change the way they carry out business processes can be a difficult task. It takes training or a change in management and implementation will also have an effect on the supplier management, catalogue management and project management.  The different systems that e-procurement is implemented into include:

·         Stock control
·         Electronic catalogues
·         Email and database workflow systems
·         Online ordering
·         Account systems
·         Integrated e-procurement systems

Making the decision to buy a new system rather than trying to work with the current system, is the most sensible option when implementing e-procurement.

Monday, 9 March 2015

What are the risks and impact of e-procurement?

There is a low adoption rate of e-procurement in the UK and throughout the rest of Europe. The risks and the impacts help to explain why large companies are slow to make use of this new technology.

Organisational Risks
The cost savings that are gained through e-procurement are a better use of time and resources. This means employees need to be transferred to a different department or location or made redundant.  The manager will need to be prepared to explain the benefits of the new system to the company and deal with the resistance caused by the threat of redeployment or redundancies.

There is an additional risk that the originators of the e-procurement become empowered throughout the business. They may purchase their items directly rather than using the purchasing department, which is known as maverick purchasing. This type of purchasing often happens when the items are not necessary or have a high cost.

Failing to Save
The return on investment could end up being lower than expected or forecasted once the e-procurement system has been introduced.

There are risks that the technology may not be sufficient to cope with the new e-procurement system and companies also find it difficult to know what model they should or could implement into their existing financial systems.

Saturday, 7 March 2015

Chit Chat: 2015 Hospitality Industry Trends - Part 1

The hospitality industry trends need to be able to keep up with the changing attitudes and behaviours of the consumer.
  1. They will become consumer led using the following methods in the next one to five years:
  2. Improving consumer engagement. Traditionally the hospitality industry focuses mainly on the physical product. Now the industry is beginning to recognise customers who want the brand promise to be consistently delivered. The experience needs to hit the brand promises and offer value.
  3. A transparent price point will play a part in improving the experience for the consumers.
  4. The Baby Boomer generation is an established market, especially in the UK and the US. They 
  5. are between 45 to 64, the affluent have time and enjoy travel. This market is expected to be in control of a significant amount of the wealth and spending.
  6. Lifestyle brands will become a competitive force in the industry. They are able to make good revenue per room with low conversion costs.
  7. Recruitment trends need to change along with rewards for employees to improve the retain rate in the industry.
  8. In emerging markets the middle classes are expected to rise and the increase in demand will rise along with it. This segment of the population in countries such as India and China will have more disposable income to spend on hospitality and travel. This market is expected to grow, increasing opportunities for the hospitality industry, but the mature markets shouldn’t be pushed to the sidelines.

Friday, 6 March 2015

What are the drivers of e-procurement?

The main driver of e-procurement is saving money. For example, BT implemented e-procurement from 95% of their goods, reducing the average transaction cost by £16 in less than 12 months.  The cost savings are achieved thanks to the efficiency of the e-procurement process.  Time is saved as employees are able to source products, place orders and reconcile the deliveries with the invoices a lot quicker than using the traditional procurement method. Automation also saves time and result in savings for the company.

The other drivers include the reduction of the cycle times between the order and the use of the suppliers. Ordering goods become more flexible using e-procurement too, as the buyer is able to source different suppliers based on the best value.  As a result of the time and cost savings the company can focus more time and energy on adding value to products and services, in order to increase the revenue for the firm.

Thursday, 5 March 2015

Who are the participants in online procurement?

There are typically eight types of participants in the online procurement processes:

  1. Traditional Manufacturers – producers of items that are sold to corporate customers
  2. Direct Sales Manufacturers – Sell their manufactured products directly to the end customers
  3. Value Added Procurement Partners – They sell the products and services to businesses. Travel agents are a good example.
  4. Online Hubs – B2B revenue generators - Industry specific vertical portals
  5. Knowledge Pros – Create the information products
  6. Online Based Information Services – Producing original or unique information and providing it to the end users.
  7. Online Retailers – Start-ups and established retailers using multiple sales channels using the Internet to sell their goods to their customers.
  8. Portal Communities – Gather information from online information services and create a personal experience for their users.

Wednesday, 4 March 2015

What are the types of procurement?

There are many different types of items that are obtained by procurement. For example a business to business based firm will buy a wide range of products including stationary for in the office and raw materials for manufacture of products. Others may buy items as well as different services including catering, consulting and training, along with furniture and the usual office essentials and equipment. There are a couple of procurement categories that are used in product related procurement and non-production procurement: 
  • Spot sourcing meets the immediate need often without the use of regular suppliers
  • Systematic sourcing is commonly associated with long term contacts with regular suppliers and negotiated contracts.
For frequently procured items, the e-procurement method helps to make rebuys (both straight and modified) a lot less time consuming.

Tuesday, 3 March 2015

What is e-procurement and e-purchasing?

Procurement involves obtaining items from suppliers, transportation, warehousing and goods-in as well as purchasing.  E-procurement is the act of sourcing items for the right price, making sure they are delivered at the right time, in the right amounts from the correct source and at the right quality level. It uses EPS, the electronic procurement system to automate the processes and connect links with suppliers and workflow systems.  The processes involve online data entry forms, scanning documents and emailing colleagues and suppliers.

E-purchasing is basically the same as e-procurement on a slightly smaller scale.  It is the combined use of using Internet based and electronic technology to enhance the purchasing and supply management of the company.  It has many benefits, including:
  • Improved evaluation of the end to end trading cycles
  • An efficient and cost-effective way communication method
  • Real time sales information is available
  • External and internal sources of information are easily attainable
  • Payment systems can be streamlined
  • Using the Internet to improve and acquire sources and suppliers

Monday, 2 March 2015

What are the differences between supply chain and demand chain management?

Retail markets are proving to be quite a challenge for many businesses. Customer demand and expectations change rapidly and the volatile markets also create many problems such as shorter product life cycles. One of the ways companies are managing to survive this volatility is by using the demand driven supply chain. The main difference between the supply chain and the demand driven supply chain is the focus on the expectations of the consumers.

Demand driven supply chains help companies to remain competitive. It extends on the traditional forecasting by concentrating more on the change in the markets and makes sure it can quickly implement demand driven changes that are required in the following departments:
  • Ordering
  • Production
  • Shipping
In order for a demand driven supply chain to work good coordination and cross functional collaboration between everyone in the supply chain is essential so that demand changes can be resolved quickly and efficiently. As well, communication is also vital, data sharing and the communication channels need to be up and running.

The company should invest in the required resources and tools to ensure that the IT capacity is adequate and the data is secure. In all, the demand driven supply chain is similar to vertical integration in many ways. However, the processes and characteristics align to ensure that it is based on the changing demands of the customers.