Saturday, 30 July 2016

Chit Chat: What are the Parts of a Goal Statement?

There are two parts of a goal statement. The first concentrates on the accomplishments the employees need to achieve. 

The second part is the criterion that is applied to determine if the employee has achieved the accomplishments.  Here’s an example: The employee needs to reduce overall spending by 10%.  The “reduce overall spending” is the first part and the “10%” is a metric that will determine if the employee is successful in achieving the goal. 

The second part is required to ensure the goal statement isn’t too vague.  Not all goals can be easily quantified as the criterion cannot always be measured. However, making a goal demonstrable can be applied. Having a goal that can be approved makes it quantifiable.

Friday, 29 July 2016

Lean Thinking: What are the principles of lean thinking, and how can they be applied to cutting waste out of supply chains?- Part 1

Lean thinking relates to the aim of eliminating all waste in the business. It works to remove waste in order to enrich the value to the customer. The end customer shouldn’t be responsible for paying cost, time and quality penalties of any processes that are wasteful in the supply chain.  There are four principles of lean thinking that are used to achieve the fifth principle that is seeking perfection:
  • Specifying the value – Specifying value from the customer perspective
  • Identifying the value stream – Identify the processes in the supply chain
  • Making value flow – Minimising the risk of delays, reducing inventories and defects and downtime in the supply network
  • Pull scheduling – Making in response to signals from the customer that indicates that they need more
  1. Overproduction waste
  2. Waiting and delays
  3. Inappropriate processes
  4. Inventory that is needed
  5. Motions that aren’t required
  6. Defects and damage
  7. Transportation waste

There are seven wastes, which are as follows:
Companies need to work back from the customer up the supply chain. The first processes to follow include ordering to replenishment, ordering to production and product development. Waste needs to be found within the processes, the root causes found and then eliminated.

Thursday, 28 July 2016

Just in Time (JIT): How can just-in time principles be applied to other forms of material control such as reorder point and material requirements planning?

Just in time systems work to satisfy actual demand. Companies create a production system that’s able to work with the just in time process.  Material requirements planning (MRP) is used in ordering parts that will be used directly to manufacture the end products. 

It is a downstream link between demand and manufacture with the upstream supply. MRP answers the questions how many? and when? However, MRP is centrally controlled and while being based on pull scheduling logic. It does instruct the processes to make more parts even if the customer is not capable of accepting them. MRP does adopt the push scheduling characteristics and it isn’t sensitive to day to day issues on the shop floor. It’s excellent for planning but not very good at control.

JIT pull scheduling is good at handling stable demand for regularly made parts. The problems at shop floor are considered and it will not flood the next part of the process with parts that are not required. JIT pull scheduling isn’t able to predict the requirements for the future, especially for parts used in products that have variable demand.

Wednesday, 27 July 2016

Just in Time (JIT): What are the implications of just-in-time for logistics?

Just in Time is used to remove waste in the supply chain and improve the quality of the business processes.  It’s an approach to material control that sets into motion once a customer’s signals that more supplies are required. The goods are then produced and delivered just in time to be sold to the customer. 

It’s a principle that flows upstream throughout the network in the pull system. A push system is when the providers send the materials in response to a pre-set schedule and doesn’t pay attention to whether the next process requires them. The companies that use the just in time system work to meet the actual demand by developing a system that is able to work with the demand.

Some implications of just in time for logistics include:
  • Problems dealing with natural disasters that may impact the supply chain        unexpectedly.
  • Unable to cope with large rises in demand.
  • Less investment is required for inventory holding costs as less inventory is required
  • Problems can be spotted quickly and corrected saving money and time delays in production
  • Suppliers unable to deliver the goods on time can impact the rest of the supply chain
  • Investment is required to update the information technology and systems in the company to coordinate deliveries, material and information flows
  • Outsourcing may be required

Tuesday, 26 July 2016

The Supply Chain “Game” Plan: What are the implications for planning and controlling the supply chain as a whole?

Poor coordination results in a supply chain that experiences amplification of changes in demand from upstream, known as the bullwhip effect.  While the demand at the tills may stay the same, the demand on the suppliers is uncertain and unstable.

To cope, the manufacturers can hold back the stocks. Inventory levels will be inconsistent and the supply chain as a whole will feel the impact. There are four causes of the bullwhip effect that are most common:

·         Updating demand forecasts
·         Order batching
·         Price changes
·         Rationing and shortage gaming

Controlling and planning the supply chain requires coordinated material flows over the complete supply chain. Attention to detail, planning and execution is required. The supply chain needs to be coordinated to work harmoniously across each and every party.

Monday, 25 July 2016

The Supply Chain “Game” Plan: What are the key steps in planning and executing material flow and information flow between partners in a supply network?

A focal firm positioned in a network can have multiple connections with lots of supplier and customer companies. Demand for upstream processes can be random and it is independent as it’s not affected by the actions of the focal firm. Dependent demand is fixed by the firm’s actions.

One of the ways the question of how many parts to make is answered has traditionally been to reference the economic batch quantity formula. The same type of principles is also used to determine how many parts at a time to order in economic order quantities. These are known as the EBQ and EOQ respectively and both assume that the parts are used uniformly and the other batch is ordered when the stock falls below the re-order point.
There’s a buffer tick line that lies below the reorder level. The buffer stock is a safety net that will cushion any variables in demand and the lead times. Therefore, the reorder point includes the buffer stock and the forecast demand.

Saturday, 23 July 2016

Chit Chat: What is Performance Goal and what are the specific/measurable goals?

Performance goals are statements that describe the things an employee needs in order to contribute to the success of the business. The statements normally describe the results that are required rather than how the goals will be achieved.

There isn’t a right format that is used for performance goals. There are different ways of writing goals but the wording used is usually a balancing act. The goals should be as specific as possible as this means the manager and employee will have a common and shared understanding about what the performance goals mean.  Generalising performance goals opens up opportunities for confusion and misunderstanding.

Specific goals are needed and the goals need to be measured. However, there isn’t any measurement criterion that can be applied to determine if the goal is met. We also want to include a criterion that can be used to measure if the employee has been achieved the goal and if the end of month report has been submitted.  The balancing act is that specific goals can narrow down the goals as they are so specific, so when using very specific goals there needs to be many different goals included to ensure all goals are met. The problem is, setting so many performance goals can be time consuming and frustrating.

Friday, 22 July 2016

The Supply Chain “Game” Plan: What are the key steps in planning and executing material flow and information flow within the focal firm?

The three key steps in planning and executing material flow and information flow within the focal firm are as follows.

  • Long term – Supporting decisions regarding capacity provision. These strategic decisions answer how much capacity is required, when it’s needed and what type of capacity is needed.
  • Medium term – Matching supply and demand with plans that are refreshed each month.
  • Short term – day to day demands are met. This may involve making weekly production plans and there could be multiple changes that may have an impact on the medium term planning.
An MPC system includes the front end section that matches demand and resources. The front end modules can be summarised into demand management, resource planning, sales and operations planning, master production scheduling and material and capacity planning.  The back end of the MPC execution system is the outputs from the material and capacity plans are instruction sets for the suppliers, manufacturing, and distribution. The schedules are in various forms such as purchase orders and work orders and shipping orders.

Thursday, 21 July 2016

How can logistics costs be better represented?

Here are three examples of how logistics costs can be better represented.

One of the best ways to describe logistic costs is by using different methods of allocating costs to products. The purpose of the variety of allocations is to learn more information about the cost base of logistic operations and to help make better decisions.  An example of this is DPP, direct product profitability, which tries to allocate logistics costs of products by considering how they use the fixed resources.  Another method is converting the discretionary costs such as the product availability into engineering costs.

ABC, activity based costing works to understand the factors that drive costs and also how the costs are incurred by the logistics processes across the supply chain and the organisation. This is a process based view of costing that works to improve decision making in logistics.

Past methods of financial measures aren’t suitable for modern logistics decisions as logistics is a lot faster than it once was. The balanced measurement portfolio is required, one that takes into account all the needs of the various stakeholders in the business. The balanced measurement portfolio is also extended over the supply chain with the supply chain operations reference model.

Wednesday, 20 July 2016

What is the “value” in the context of the supply chain?

Here are three examples of value in the context of the supply chain.
  1. Return on investment (ROI) is used to measure the shareholder value. The ROI encourages the logistics management to stay on top of costs, working capital and fixed assets.
  2. Logistics is becoming more concerned with the flow of funds and the flow of materials and information.  Logistics is cross-functional and it addresses the various management processes of plan, source, make, deliver and return.  These processes are repeated over the supply chain.
  3. The traditional cost accounting isn’t useful for logistic decision-making. The reason for that is because it’s not sensitive to the processes and cost drivers. The traditional cost accounting has a tendency of understating profits on the high-volume products and also overstates the profits on the low-volume/high variety products.

Tuesday, 19 July 2016

Supply chain operations reference model (SCOR): What are the five distinct management processes and the three levels of SCOR model?

The five distinct management processes of the three levels of SCOR model are:
  1. Plan: This process is planning demand and supply based in a system that will include activities including but not limited to resource planning and long term capacity.
  2. Source: The process of acquiring materials using a sourcing system that includes various activities including vendor certification and contracting.
  3. Make: The process of executing production using an overall production system. This includes activities such as shop scheduling. Value added activities are also included under this type of process too.
  4. Deliver: This includes all the day-to-day task of management, includes managing demand, warehousing, transportation, orders, commissioning, and installation. These activities are set within the overall delivery management system and it will include rules and management of delivery quantities.
  5. Return: Returning the goods that need to be repaired, replaced or the materials need to be recycled.
The three levels of the SCOR model are:
  • Level 1: A wide definition of the plan, source, make, deliver and return management processes that are then used to establish the competitive objectives.
  • Level 2: Defining the core process categories that could be scenarios of a supply chain – for example, making to order, engineering to order.
  • Level 3: Provides the process breakdown that is required to describe each of the elements that comprise the categories of level 2. This is the level where performance metrics are established.

Monday, 18 July 2016

A balanced measurement portfolio: Balancing the needs of all stakeholders. - How can a balanced set of measures of performance be developed in order to address stakeholder satisfaction and stakeholder contribution?

Balancing the need of the stakeholders is important, but so is the need to balance the financial and operational measures of performance and between history and the future.  The traditional cost accounting systems have shortcomings as they’re focus more on the needs of the stock market. Modern systems need to have a better balance between financial and operations and the history and future.  Creating a modern performance measurement system is needed to find the balance.

Supply chain management and balanced scorecard

A cross supply chain measures need to have the following characteristics:

·         Be easy to understand
·         The total number not to exceed 10
·         Representative of an important casual relationship
·         Have an associated target
·         Can be shared over the supply chain

Eight measures that meet the characteristics above are:

  1. On time in full, outbound – measures the fulfilled customer orders that are complete and on time and that conform to the specification
  2. On time in full, inbound – measuring the supplier deliveries are received, fully complete and on time that conform t o the specification
  3. Internal defect rates – measure of the process conformance and control
  4. New product introduction rates –  measure of the responsiveness of the supply chain when new products are introduced
  5. Cost reduction - measure of the process improvement and the sustainable product
  6. Stock turns – measure of the goods flow in the supply chain
  7. Lead times – order to delivery – measuring the responsiveness of the supply chain
  8. Financial flexibility – measure of how simple it is to structure the supply chain for financial gain

Saturday, 16 July 2016

Chit Chat: Fashion Industry: What is the Colour Forecasting Methodology?

Forecasting methods different between different fashion editors that all work to predict what the desires of the customer will be through observing behaviour and mood. The basic forecasting methodology has never been explained fully. The processes involved are often shared but the methodology of each of those processes has not been described.

There’s a set criteria for the colour combinations, amount of colours and the illustrations that are being used to explain the story. Brain storming is a vital part of the process as it’s used to identify the natural evolution of fashion but there’s no recording to show how this is achieved. The forecasters like to focus on the evolution of colour and how colour changes from season to season. This information is then shared with the yarn and fabric and fibre manufacturers as the new colours that are coming have to harmonise with the current wardrobe so they can be successfully mixed and matched to promote sales.

Commercially, colours need to change dramatically in order to update the new season looks, but not too fast so that consumers can afford to replenish their wardrobes. Colour forecasting has to work together with the sales data and a colour forecasting tool so their consumer demands are accurately met.

It might be possible to create a scientific methodology to be used to train upcoming colour forecasters using three key areas: exploration, evaluation and analysis and gathering all this information together into a concept of fashion marketing.

Friday, 15 July 2016

A balanced measurement portfolio: Balancing the needs of all stakeholders. - Who are the key stakeholders in a business, and what needs to be achieved in order to satisfy them?

Balancing the needs of all stakeholders is necessary. There can be multiple stakeholders including the employees, customers, suppliers, government, community and the shareholders. Balancing the needs of all stakeholders is necessary. The interest of each group varies.

  • Shareholders generally have a passing interest in the company. They usually keep their shareholding providing they see a competitive return on their investment. They like high dividends, profitability and the business growth.  Failure to see a return will see the shareholders turn against the management.
  • Employees will generally have a long term commitment and they care about job stability, satisfaction in the job and competitive wages.  If their goals aren’t met, they may feel negative about the company, lack motivation and recruitment may prove to be problematic, industrial action may also be taken.
  • Customers are extremely important as it is their demand that pulls materials through the supply chain. Customers have freedom of choice and so may choose to buy elsewhere if they’re not happy.
  • Suppliers care about benefits such as being paid on time, long term business and being involved in the development of new products. Higher prices, delays in the supply and sanctions are a result of unhappy suppliers.
  • Local community is interested in the company as they’re a local employer. Any problems regarding long term commitments to the region and civic responsibility can lead to environmental disputes and problems getting planning permission.
  • The government is interested in the company as they create value in the economy and their contribution to employment and as a revenue source. Failing to meet the laws of the government could lead to prosecution and the business closing.
Balance is required in order to manage the potentially conflicting interests of each of the stakeholders.

Thursday, 14 July 2016

Activity –based costing (ABC): How can costs be allocated to processes so that better decisions can be made?

Cost information can be used together with timely information, which is a benefit of costing logistic processes. The two can be used to give opportunities to identify the activities that create value or waste. The Cost-Time profile is a graph that plots cumulative time against the cumulative cost for a collection of discrete activities that form a process or a supply chain together. There are two sources that are used as outputs in the CTP:

  • Activity times – using the time-based process mapping
  • Activity costs – the process costing system underpinned by the activity based costing
ABC works to achieve an equitable distribution of the overhead costs to activities.  The data in the chart can then be used to create cost-time profiles. It records the process in time and cost terms. The horizontal and vertical lines need to be interpreted correctly. The long horizontal lines happen when there’s a small increase in total costs caused by a long running activity. Steep vertical lines happen when the costs are absorbed over a short processing period.

Wednesday, 13 July 2016

Activity – based costing (ABC): What are the shortcomings of traditional cost accounting from a logistics point of view?

The drive behind activity based costing is allocating indirect costs by sharing them out to the products when direct labour is difficult to manage. Direct labour costs rarely apply to a substantial portion of product costs today so it’s not uncommon to see overhead rates of 500% on direct labour. Small changes in direct labour can result in massive changes in the product costs.

Activity based costing does recognise that the cost of overheads is caused by activities, holding products in store for example. Therefore, ABC works to break down the business into the major processes, storage, distribution and manufacture. Each of those practices is then broken down into activities. So the distribution process includes activities such as picking, packing, loading, transport and delivery. There has to be a cost driver for each of these activities.  When the cost driver is recognised it’s then necessary to discover how many units of that cost driver are present in that activity and what the cost per unit for the cost driver is.

It’s difficult to implement ABC as it’s necessary to understand the discrete processes within a business where the links between functions are not easily understood. Cost drivers can also be difficult to identify as they require you to look at each activity in a fresh way and there may be more than one cost driver for each of the activities.  However, challenges aside, logistics and ABC are connected and they do go hand in hand and logistic managers have the skills to understand, apply and analyse ABC.

Tuesday, 12 July 2016

How can logistics costs be represented? Three different ways to divide up total costs

The third way of analysing costs is to take into consideration how easy it is to allocate them. Some things can be quite easy to cost, whereas others require a lot more attention and analysis, mainly due to the fact that they are hard to cost using the current methods. Therefore engineered costs and discretionary costs are used in order to divide the costs up.

Engineered costs are those that have an input-output relationship that is clear to understand. The cost benefits are measurable.  Discretionary costs are those that don’t have a clear input-output relationship. This is when the cost is clear to see but the benefit output isn’t clear to see.

To quantify the competitive impact of a chosen course of action, it’s necessary to overcome the challenge of converting discretionary costs into the engineered costs.  The cost drivers that can be used when using the quality conversion as a discretionary cost into the engineered quality costs are as follows:

·         Prevention – comprising costs of measures to prevent defects
·         Appraisal – comprising costs that are incurred by detecting the defects
·         Internal and external failure – The internal costs that are associated with not getting things right the first time, scrap and reworking and the external failure costs are those that come when the product has reached the end customer, such as returns, refunds and claims on the warranty

Monday, 11 July 2016

How can logistics costs be represented? Direct/Indirect

Another way of analysing total costs is by using direct and indirect costs. Direct costs can be applied to specific products, labour and materials for example. Indirect costs are the costs left over from direct costs, they’re also known as overheads. Overheads can include things like rent rates and salaries.

The directness of costs relates to the extent to which costs can be allocated directly to a product. Direct and indirect costs are useful as they help us to decide the full cost of a service or a product when there are more being offered.

Direct product profitability (DPP) is a method that’s used to get a good view of how fixed costs behave by product. It’s commonly used in the retail industry as a way of understanding how logistic costs behave for each of the products. This is achieved by allocating the fixed costs by making assumptions about how the costs are incurred by products as they move through the logistics systems. A good DPP system needs to take into account all the differences in the way the products are sourced, produced, developed, sold and distributed.

Saturday, 9 July 2016

Chit Chat: The Importance of Colour Forecasting

Colour and trend forecasters sell trend packages to the industry. The products of the fabric producers are the raw materials that are needed by garment manufacturers in order to produce garments to sell to consumers. The manufacturers product is arguably more important than the colour forecaster products, which can be dispensed if the manufacturer takes control of the colour forecasting process.

Colour forecasting can be undertaken by the manufacturers. When everyone on the high street uses the same colour forecast it can lead to a lack of variety for the consumers. Colour forecasting and trend forecasting are often seen as a marketing technique that drives sales through seasonal colours and fashions. Therefore, forecasting colour can be seen as a driving force of fashion that encourages sales yet has no effect on improving quality. This can then cause price rivalry and potentially have a detrimental effect on the textile and fashion industry.

Currently, the accuracy of the forecasting is inspiring confidence, but marketers and designers are appearing to be a lot less certain of their own judgements. They follow promoted trends that are more likely to be successful.  However, predicting trends doesn’t mean that the needs and wants of the consumer are being met and it doesn’t necessarily create sales on the high street.

Friday, 8 July 2016

How can logistics costs be represented? Reference Fixed and Variable

Fixed and variable costs are one of the common ways of representing costs.  The total cost is constant but the way costs are analysed are different. Analysing in different ways helps to gain more information about the cost basis of the business in order to manage the business more efficiently.

Fixed costs usually stay the same as the volume of activity varies whereas variable costs do change as the volume of activity changes. Fixed costs include warehouse rentals, which are charged on a time basis. When the activity increases, perhaps adding more warehouses, stepped fixed costs are usually applied and the same relationship would still apply if the warehouses were closed and the volumes were reduced.

Variable costs include other things such as direct materials, which are ordered depending on demand. When the demand increases, more materials are purchased. When there isn’t any activity zero costs apply but the costs will increase in line with volume.

When we add variable and fixed costs against a range of volume (so the fixed costs remain fixed) and add sales revenue we can create a break-even chart. The break-even point is when the sales revenue line crosses over the total cost line. Anything above this point is profit and anything below is loss.  Contribution is the fixed costs plus any profit made and is useful for making decisions. When high contribution per units is indicated the business is more volatile and risks increase.

Thursday, 7 July 2016

Where does value come from? Different views of value and how it can be measured using return on investment. – Financial Ratios and ROI Drivers

There are two main drivers that underpin ROI; increased profitability and increased asset utilisation. They are key determinants of increasing shareholder value and it’s necessary to understand each of these drivers when coming up with the supply chain strategy for the company. Financial ratios are based on historical data but they have advantages that balance out the limitations:
  • They can be used as a motivator for setting performance targets
  • Used to track performance
  • Used as a comparator for an industrial sector
  • Comparing an organisation with another
  • Early warning indicator
  • Can be used to compare in-house operations with outsourcing alternatives
A way to monitor working capital and the cash to cash cycle is with financial ratios in relation to time. The key time related ratios include:
  • Average inventory turnover
  • Average settlement period for debtors
  • Average settlement period for creditors
Reducing working capital can be beneficial for ROI. Supply chain decisions have a direct impact on assets and costs and they have an impact on both the drivers for ROI. It’s vital to understand the trade-offs that are key to increasing value.

Wednesday, 6 July 2016

Where does value come from? Different views of value and how it can be measured using return on investment. – ROI

Today we’re continuing our look at adding value and ROI. 

We’ll begin with cash and debtors which is one of the elements of working capital.  A main goal needs to be reducing the time between the receipts of orders from the customer and receiving the cash. By reducing the time the company is able to become more competitive as lead times are reduced and improves the cash position of the company.  This allows the business processes for sales and distribution to become integrated and waste free. The debtors can be reduced using controls such as regular reviews and solving problems such as sending out incomplete invoices.
  • Creditors, the people the business owes money too, are usually the suppliers in the supply chain. Planning the material and distribution requirements to improve the flow of parts in the supply chain.
  • All goods that are moving inward need to be checked, checking the delivery dates, prices and the quality to avoid starting the credit cycle before it’s necessary.
  • When the supplier is a smaller company the cost of capital might be higher than it is for your own company. In this case it can be beneficial to negotiate paying early and getting a share of the money that the supplier pays in interest to the bank.
Value generating assets include transport, facilities and distribution and they form the focus of supply chain management. These all contribute to the high fixed costs for the operation as the costs don’t change much and they are volume sensitive. Many businesses respond to this by outsourcing but keeping their core capabilities in-house. It is common to outsource transport and warehousing to third party logistics providers.

Tuesday, 5 July 2016

Where does value come from? Different views of value and how it can be measured using return on investment – ROI

The main objective in business is to create shareholder value. Return on Investment is used to measure shareholder value.  The aim is to finish the year with more money than at the start and if the extra money has come from profit then the management has been able to improve the productivity of capital and it can be classed as successful.  ROI is measured as the profit before interest and tax as a percentage of capital employed.

Sales can be improved with excellent customer services that exceed the expectation of the consumer. Services like this make the company more valuable to the customer. One of the ways customer services can be improved is by ensuring the supply chain is responsive.

Costs can be reduced by making improvements to the bottom line. Ways to reduce costs include optimising the manufacturing, distribution costs and the inventories while still providing excellent customer services. Efficient customer response has been shown to cut out non-value added products and inefficient promotional activity in recent studies, reducing costs by 6%.

Working capital is the combination of cash, debtors and inventory less creditors. Inventory is one of the major assets of the business and it can be used to buffer supply and demand. However, inventory can also be the cause of problems such as the need for resources to allow for storage, obsolescence and it ties up money. One of the main goals for the supply chain needs to be to reduce the use of forecasting, increase real demand and replace the inventory with information.

Return tomorrow when we’ll continue our look at ROI.

Monday, 4 July 2016

What are the logistics implications of internationalisation and how do we organise for international logistics?

There are many benefits of global sourcing. It helps firms find more labourers and to save money thanks to reduced production costs and so on.  However, focal firms still have to take into consideration the complexities that are involved in sourcing on a global scale and the related operation costs. The complexities are varied but they include increased shipping costs and longer shipment times. These complications have to be taken into consideration when focal firms work on their internationalisation strategies.

Unfortunately, many firms overlook the risks and the complications when they take their first steps into global sourcing. The low costs are often too attractive, resulting in complications that can come at a high price.

Organising international logistics involve coming up with solutions for tiering and layering the supply network. Plant roles many be modified to become more flexible locally and all sourcing, production and distribution strategies must be rationalised. It is important that firms do not neglect their local markets while working on an international scale.

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.