Tuesday, 31 January 2017

What are the pros and cons of dropshipping? – Part 3

Last Friday we focused on all the pros that come hand in hand with dropshipping. Today, we’re examining the cons.

Lower Margins
Lower margins are considered to be the biggest negative of dropshipping. The margins are even lowered further when working in a competitive niche. The costs involved in getting into dropshipping means many people use it as a way to set up shops and start selling. They often invest only small amounts of money; some have poor quality websites and no customer service, but potential customers will still refer to them to compare prices. Commonly, the consumer will pick the lowest price they can find. Profit margins can easily disappear when competing. To reduce the problem, it’s advisable that you pick a suitable niche for dropshipping.

Issues with Shipping
When you use dropshipping you have no control over the inventory. The supplier is the one who keeps the supplies and you have to rely on them to satisfy the demand for your customers. The suppliers have many other customers and they have their own suppliers too. Their inventory levels change daily and can result in products being out of stock when the customers place an order. Customers can find this frustrating; especially if they have paid for the goods before learning that they will have to wait for them to come back in stock. One way to get around this is to use systems that link the inventory levels to your website, ensuring stock levels are updated in real time automatically. However, not all drop shippers have this technology and some systems aren’t reliable.

Issues with Supplier
Problems can arise with dropship suppliers.  Technical issues and communication errors may happen and you will need to work hard to solve problems together and keep your customers happy.  You’ll be the one making the apologies and fixing the issues, even if it was the fault of the supplier.

Monday, 30 January 2017

What are the pros and cons of dropshipping? – Part 2

Last Friday we focused on all the pros that come hand in hand with dropshipping. Today, we’re examining the cons.

Lower Margins
Lower margins are considered to be the biggest negative of dropshipping. The margins are even lowered further when working in a competitive niche. The costs involved in getting into dropshipping means many people use it as a way to set up shops and start selling. They often invest only small amounts of money; some have poor quality websites and no customer service, but potential customers will still refer to them to compare prices. Commonly, the consumer will pick the lowest price they can find. Profit margins can easily disappear when competing. To reduce the problem, it’s advisable that you pick a suitable niche for dropshipping.

Issues with Shipping
When you use dropshipping you have no control over the inventory. The supplier is the one who keeps the supplies and you have to rely on them to satisfy the demand for your customers. The suppliers have many other customers and they have their own suppliers too. Their inventory levels change daily and can result in products being out of stock when the customers place an order. Customers can find this frustrating; especially if they have paid for the goods before learning that they will have to wait for them to come back in stock. One way to get around this is to use systems that link the inventory levels to your website, ensuring stock levels are updated in real time automatically. However, not all drop shippers have this technology and some systems aren’t reliable.

Issues with Supplier
Problems can arise with dropship suppliers.  Technical issues and communication errors may happen and you will need to work hard to solve problems together and keep your customers happy.  You’ll be the one making the apologies and fixing the issues, even if it was the fault of the supplier.

Saturday, 28 January 2017

Chit Chat: General Office Etiquette – Part 5 – Office Appointments

Informal office appointments are usually different to the group meetings. However, they can be equally as valuable and productive. Here are some of the courtesies that should be observed for office appointments.

  • Where to Meet – Choose a private space that is comfortable and also psychologically. If you work in a busy work space it’s better to book a private meeting room for your appointment to avoid any problems on the actual day.
  • Arrive Early – Be prepared for your visitor to arrive early. If you’re not ready, be sure to make them feel comfortable while you get prepared.  Greet the visitor, offer a chair and ask if they’d like something to read and drink until you’re all ready to go. Do make sure that you will be ready for the set time of the meeting.
  • Late Arrivals – Your visitor might be late and you may no longer be able to hold the meeting because of this. Accept their apology and book another time to hold the meeting. If you need to leave the office, ask the receptionist to explain and reschedule the meeting on your behalf.
  • Be on Time – If you do keep your visitor waiting you should apologise and ask if they would like to reschedule if it’s more convenient for them.
  • Always walk your visitor out at the end of the meeting. If you’re in a rush, politely end the conversation by offering to continue the discussion later on and explain that you need to go to another appointment.


Friday, 27 January 2017

恭賀新禧 !! Happy Chinese New Year !!


新年新氣象 👲 偌亞奧國際
同人祝大家在雞年

心想事成  身體健康
一本萬利  貨如輪轉
大吉大利  恭喜發財

Royale International  👲 wishes all our friends & families abundant of happiness and prosperity in the Year of the Rooster!!




What are the pros and cons of dropshipping? – Part 1

Before getting involved in dropshipping, it’s important to know the pros and cons. By being educated you’ll be able to see if dropshipping is the best choice for your business.  Today we’re focusing on the pros.

Less Capital – One of the main pros to dropshipping is less capital. You can launch your business without a large injection of capital as you don’t have to buy the stock up front or pay out for warehousing and staff.  You don’t have to make a single purchase until you receive the first order. The main cost involved is setting up your website, but there are even platforms out there that let you do this for free. However, it’s better to pay for a more professional set up than using the free versions.

Easy to Get Going – You free yourself up from having to rent or buy warehousing, managing the warehouse, packing orders and shipping orders. You also don’t have to worry about tracking inventories for accounting, handling any returned items or deal with inbound shipments. It’s a lot easier to simply start selling to your customers without spending time or money on the areas we’ve just mentioned. Anyone can do it!

Low Overheads – Expenses are kept to a minimum as you don’t have to buy storage space or any stock. Lots of people simply use a laptop to run their business and have very low overheads to cover each month. It’s a lot cheaper than having a brick and mortar store and even a traditional eCommerce store.

Flexibility in Location – You can sell your products from anywhere in the world. The only thing you need is an internet connection.

Better Product Selection – Customers can be provided with a larger choice regarding stock and variations as you don’t have to purchase any stock up front. You can add any products your supplier has to your website and not have any costs to worry about. You’re able to be a lot more flexible than an eCommerce store that has to hold and ship their own stock.

Easy Scaling – You’re able to scale your business a lot easier than when compared to traditional eCommerce stores. The reason for this is because the level of business isn’t directly related to the work you do. You don’t have to worry about spending time dealing with shipping or customer service so they extra work doesn’t increase at the same rate when using dropshipping.

Return on Monday when we’ll be looking at the cons of dropshipping.

Thursday, 26 January 2017

ISO 9001:2015 certificate in Germany

Congratulations to our offices in the Düsseldorf & Frankfurt on the fulfillment & awarded with the ISO 9001:2015 Quality Management System certificate.














What are the differences between a normal eCommerce business and a business using the dropshipping model?

Some of the differences between a retailer using a dropshipper and an eCommerce business are as follows:

  • Operation margins – This is the ratio that companies use to measure the pricing strategy and the operating efficiency.  It’s the proportion of the revenue that is left over once all costs have been taken off.
  • Operational logistics – There’s no need to carry inventory or ship products when using dropshipping. This means you’re able to run your business from anywhere and you don’t have to worry about running a warehouse or replenishing stock or coordinating the shipping.
  • Costs – Traditional eCommerce business has many additional costs compared with a dropshipping, such as warehousing, staff, handling, customer service and shipping.  As a dropshipper you only need to worry about taking the orders and sending them over to your supplier.
  • Profit velocity – It’s quicker to make profits when carrying your own stock as profit margins increase when bulk buying products and selling them at higher prices.
  • Barriers to entry – High startup costs are one of the barriers to entry. These and other barriers make it difficult for new competitors to enter the market. It’s easier for those using dropshippers to gain entry.


Wednesday, 25 January 2017

What is dropshipping and how does it work?

 Some retailers choose to use dropshipping as it is a way they can sell to the public without having to actually hold any of the stock. Retailers sell their products by sending the orders they receive over to their dropship supplier. The supplier is then responsible for shipping the product and processing the payment. The retailer is then sent any difference between the amount they make for the product and the amount you charge for it. 

Retailers never get the product or handle them so there aren’t any payments for handling or processing to worry about.  Some suppliers do let the retailers handle the payment process and some allow the retailer to find their own shipping company and form a contract with them. However, by choosing own shipping company and processing payments the retailer is defeating the purpose of using a dropshipper in the first place.

Tuesday, 24 January 2017

EBusiness in Supply Chain

Information is now considered to play an important role in competitive strategies. The benefits are as follows:
  1. Improving the efficiency of order processing
  2. Reducing costs by using just in time inventory management
  3. Securing trading partners
  4. Making it easier to customise products and services
The standardization of internet applications and the use of low cost public network infrastructures have resulted in interorganisational networks being applied in various ways. Making it easier for organisations to use electronic transactions has helped to reduce costs in gaining access to large amounts of suppliers and customers.  No longer are organisations only tied to their existing trading partners, the electronic marketplace provides new links that can be used.  In time, as the new e-business services and networks grow, it’s likely that organisations will be debating which governance structure is best to use. It will be important to identify the relationship between strategic characteristics of the relationship and the governance structure.


Monday, 23 January 2017

Why Supply Chain Management is a Major Concern of eBusiness

 
The primary focus for supply chain integration for eBusiness is cost based rather than customer service focused.  The main aim is to reduce costs out of the chain for all businesses, regardless of size of the sector.  Research also discovered that customers were putting pressure on suppliers to get the price of the supply chain down as much as possible.

Failing to Support Customer Service
·         A five stage evolutionary process has been identified when e-businesses adopt supply chain strategies. The five stages show the improvements in the supply chain, paying particular attention to customer facing processes, followed by the internal operations and ending with supplier facing operations.   Customer access is improved because of the CRM support and sales order automation, but customer service is lacking as an organization and suppliers need to be aligned to create a suitable fulfillment capacity. By failing to do so, the supply chain is not efficient.

E-Strategy
·         The commonly used e-strategy is top down. CEOs deliver motivation for eBusiness adoption but processes and implementation is passed to cross functional teams.  There are also lots of initiatives that are not coordinated in the organisation and poor project management.

E-Procurement
·         Many organisations are adopting e-procurement but not many see it as a strategic function. E-procurement has many cost benefits but it needs to be fully understood for the cost benefits to be experienced in the organisation. E-procurement needs a strategic approach to gain the most advantages.

Supplier Capability and Integration
·         Integrating internal and supplier systems is one of the main barriers to integrating the supply chain.  Supplier readiness and capability is found by most organisations to be a major constraint.

Saturday, 21 January 2017

Chit Chat: General Office Etiquette – Part 4 – Trouble Free Meetings


Meetings are very effective for businesses as they can be used as a tool to get things done and build rapport with the company. However, poorly managed meetings can simply be a waste of everyone’s time. Here are a few tips on how to create trouble-free, effective meetings in the workplace.
  • Invitations – send out invitations to the meeting to all employees using a computerized system
  • Sensible scheduling – take into consideration the time of day and how inconvenient these times may be for the employees
  • Give employees plenty of notice so they’re able to plan ahead and get organised
  • Send out the meeting agenda or give an idea of the topics that will be covered in the meeting in advance
  • Allow for segmentation of the meeting – allow people to leave once their area of concern has been covered
  • Let employees know if attendance is compulsory and check the replies

Seating Politics


It is tradition for the leader of the meeting to take the head of the table. However, if you have important guests the senior representative of that company is given the center seat at the table, facing the door with the staff sat alongside. The host company sits opposite.

Meeting Manners
  1. Be punctual
  2. Inform the leader if you’re running late
  3. Enter quietly if you arrive late and don’t interrupt
  4. Don’t whisper to your neighbours
  5. Be quiet and courteous
  6. Turn off mobile phones or inform the leader that you’re awaiting an important call if applicable
  7. Eat before the meeting to avoid embarrassing rumblings
  8. Discuss don’t argue
  9. Stick to the agenda
  10. Only ask necessary questions
  11. Don’t point fingers

Video Conferences

Video conferences are more common these days but it’s still important to follow etiquette rules:
  1. Dress formally for the meeting
  2. Make eye contact but don’t sit too close to the screen
  3. Only exit the room if absolutely necessary
  4. Use nameplates for all attendees
  5. Have a contingency plan in case of technical issues
  6. Speak loud and clear but don’t shout
  7. Use names when directing questions
  8. Don’t speak over people
  9. Avoid rustling papers and keep background noise to a minimum
  10. Turn off your phone
  11. Organizers should still provide an agenda, inform attendees of who will be present and introduce all attendees
  12. Start and end on time



Friday, 20 January 2017

Rebounding with New Strategic Moves in Logistics

 
Today we’re looking at examples of rebounding with new strategic moves in logistics.

  • A firm wants to differentiate themselves from their competitors. Using their experience they focus on taking over distribution of materials that compliment or are different from their own range and these products also have different manufacturers. This act of diversification can transform the company, creating an opportunity to expand geographically and deliver to new regions.
  • A third firm is in the logistics industry. They used innovation and alliances combined with their own skills to provide just in time deliveries. From there, they’re able to rebound on diversification by informing their customers that they can offer assembly operations in their warehouses for the parts that they previously managed. They then assemble the parts and deliver them quickly, as when needed to the production lines. Through this new service, they become part suppliers as well as logistic providers.
  • Rebounding is when the firms act on opportunities that come from taking the first steps in their chosen strategy. They capitalize on the new opportunities, revisit and reformulate their strategy and make use of the new information that has been gathered.



Thursday, 19 January 2017

Combination of articulated strategic moves in logistics

  • Having in-house or outsourced logistics relates to the company working to reduce their logistics costs and the overall costs of supply.  The company may want to differentiate or make alliances or perhaps even diversify or expand, or a combination of any of those goals. 
  • Integrators may use their knowledge of alliances and complementarities to integrate their operations. For example, they may be offering to dispatch parts on a just in time basis, diversifying from their original focus. Other companies may be using differentiation and combining it with a cost reduction objective. They focus on being efficient and use the channel assembly business model so part of the assembly is transferred to resellers. From there, multi-channel differentiation needs to be integrated with alliances.
  • Another example of articulated strategic moves is the express customization service that is combined with innovation. The innovation comes in the form of offers and the process, offering differentiation through the service provided and they’re able to expand because of this mission.
  • Combination itinerary is a deliberate move that uses lots of strategies that are first conceived as being independent from one another. The integration of these strategies might be synchnronised but they can also be spread out, but the itinerary is always created before the initial strategic move is started.

Wednesday, 18 January 2017

Possible spin-offs from a strategic move in logistics

Tracking and Tracing Services

Tracking and tracing services are the result of logistics innovation created by multiple express delivery services. It is a differentiation approach that was working to help create a modern image without large costs. Technology enables tracking, making the services more reliable while being able to control risks and reduce inventory size and the costs involved as well as reducing production cycles.

Diversifying

Diversifying logistics as a new profession allows for cost reduction possibilities to benefit the products. Spin-offs aren’t foreseen, they are always looking to decrease the complexity of the organization and they are less intensive than more deliberate strategies. Firms need to be reactive in order to spot any spin-offs that come as a consequence of strategic moves.


Tuesday, 17 January 2017

What are Three Strategic Action Itineraries in Logistics?


Logistics isn’t the only strategic factor. For example, logistic strategies often involve marketing and informatics. The strategies are not concerned with one result or goal either, they are more combined. There are three strategic action itineraries that can be shown in logistics, which are as follows:
  1. Aiming a main strategy but gaining advantages that come as a result of spin offs from the primary strategy.  The company is able to identify other possible strategies that become apparent because of the main strategy that is in place. These new strategies were not apparent before the introduction of the primary strategy.
  2. The company begins by concentrating on multiple strategies right from the start. They create a new logistics system and the new strategies can be spread out as a result of the new system. They may not begin working on all of the other strategies at once, but they are aware of them and know they will become a focus in the future.
  3. The company creates one or more strategies and has a new logistics system and they notice they’re able to rebound from where they currently are. New strategies can then be built from that point, ones with different goals.



Monday, 16 January 2017

What are typologies of possible logistics strategies?

Here are some generic strategies that are used in logistics. The strategies are focused on expansion and diversification. Others logistic strategies below are more concerned with maintaining the current level of activity.
  1. Cost leadership which is focused on reducing the costs of the logistics
  2. Differentiation, focusing on the quality of the logistics services provided
  3. Innovation, which is a strategy for logistics support for innovation
  4. Alliance, to use logistics as a source for alliance
  5. Professional expansion, focusing on using logistics to support the new profession integration
  6. Mission expansion, to use logistics as a support for expansion
  7. Diversification, diversifying using logistics




Saturday, 14 January 2017

Chit Chat: General Office Etiquette – Part 4 – Lodging Complaint

Complaints in the workplace vary in importance. Some complaints are considered to be minor and can be settled without much difficulty. Other complaints may require more sensitivity. Excessive complaining can become a problem.

Should I take my complaint to the boss? Think about how serious the complaint is and if it really needs the attention of the boss. You can also consider how urgent the complaint is and if it can wait for a later time when the boss isn’t as busy.

Should I be the one to raise the complaint? The person who complains should the person who is in the best positon to make a case for the complaint.

Is it better to make the complaint in person? Should you write a memo detailing your complaint or would it be better to talk about it face to face? Think about the type of boss you have, are they a listener or a reader.

Do I have documented support for my complaint? Documented problems are necessary for serious complaints such as sexual harassment or theft. Make a record of incidents to support your claims detailing dates, times and the events that took place.

Have I got a solution to the problem? It’s always a sensible idea to have solutions for the problems that you’re complaining about. However, it’s also important to let the boss take control in solving the problem.

Working conditions are often a cause of complaints in the workplace. Think about the best place to complain if you’re unhappy with the work conditions. It could be the boss, or co-workers. Present the problem in a better way (a m emo for non-serious complaints, for example) or call a meeting for more serious problems. Serious problems with conditions that pose a risk should be brought to attention immediately.

Complaining about your co-workers is a sensitive area and many issues can be dealt with between the two of you. However, more serious problems such as sexual harassment or racism will require taking it to the boss.  Always ensure that the complaint is not a personal issue and that it is valid. Hold a meeting with the boss stay calm and inform them of the problem, using your documentation if applicable.

There may be occasions when you’ll need to go around the boss. He may be abusive or is not considering your cause. Go to human resources and they will give you the information you need about how to go about raising the complaint strategically.

Friday, 13 January 2017

How conceptual approaches formulate logistics strategies? – Part 4


Cost leadership, logistics strategy
This is a strategy works to reduce logistic related costs. Some of the approaches that are used include:

  • Reducing the size of inventories along with the cost of invested capital
  • Using cross docking facilities that are provided by logistics suppliers and stopping the direct supply of outlets internally
  • Decreasing outlet inventory and Increasing daily deliveries using the cross docking facilities


Strategic Logistics
Using logistics and reducing overall costs

  • Using a network of continental, local and multi-regional warehouses
  • Using cross docking sites
  • Reducing purchasing costs by using the above and increasing the ability to stock large quantities of imports and buying for less from suppliers
  • Daily processing of fresh products, delivery following day after orders are placed and consolidated
  • Reducing suppliers and therefore reducing supplier costs
  • Using just in time deliveries
  • Eliminating qualitative and quantity checks


Differentiation logistics strategy
This approach is used to improve the quality of the logistics service being provided

  • Rationalising logistics to guarantee delivery times
  • Customising products, improving quality and complete deliveries
  • Automated central warehouses for daily deliveries


Innovation logistics strategy
Supporting innovation with logistics

  • Offering two day delivery service that depend on physical and information flows
  • Automation of sorting centres
  • Exchange of information with suppliers using EDI networks
  • Using the just in time model for production planning
  • Monitoring the supply chain with EDI
  • Offering customisation to customers



Thursday, 12 January 2017

How conceptual approaches formulate logistics strategies? – Part 3 Logistics Strategy Formulation


There are three classic concepts of strategy that are used to express the strategic formulation of logistics:

  • The profession
  • The mission
  • The objectives


In order to formulate a logistics strategy the managers need to outline the varieties of movement that they produce, how it’s produced and where they’re directed along with the needs that they satisfy. Additionally, they must consider the performance objective and the target level. This formulation is able to identify several logistics business units. Some of them support the overall strategy of the firm, and others are drivers of strategic logistics.  The formulation is then developed to the choice of logistics business units and the solutions are adapted to reach the objectives. Logistics only runs efficiently if it’s internally linked with the other functions and if it’s integrated externally with the entire supply chain. Therefore, it’s important for logistics strategy to be integrated with other strategies while strategic logistics makes use of the levers presented by the other functions.


Wednesday, 11 January 2017

How conceptual approaches formulate logistics strategies? – Part 2 Logistics Competence



What are the three interrelated dimensions of logistics competence?

There are three interrelated dimensions of competence that logistics relies upon: action, expertise and knowledge. Action deals with the way to perform logistics processes. Expertise is the resources that are related to the action, which includes:

  • Methods
  • Procedures
  • Technologies
  • Engineering
  • Organisational routines


All of the above are extremely influential for the quality, efficiency and reliability of the logistics process, they are also important for competitive advantage.

Knowledge relates to the information that must be collected, analysed and integrated during the formulation of strategy.  Knowledge includes the senior management experience along with the general management culture of the firm. Knowledge helps businesses to survive, grow and adapt. It’s also a driver behind companies investing in skills and research and development. The skills and development can then be converted into the logistics network. There’s also a need for competent information management. Information is vital for the development of logistics. It must be collected, communicated and processed. The information gathered is used to develop new strategic directions.


Tuesday, 10 January 2017

How conceptual approaches formulate logistics strategies? – Part 1



Logistics strategy starts with the company’s main strategy, then moves on to the definition of the logistics strategy that will be used to reach the overall objectives. Therefore, we think of logistics as a support system that is used to achieve global strategy. The logistics strategy is a subset of the company’s overall strategy. It requires a top down approach, so the control of the flow of materials and the goods along the supply chain is the keys of success.

Logistics opens up new strategic lines of action too. In order to come up with these new logistics lines, it’s necessary to reverse the approach and use strategic logistics instead of logistics strategy. Strategic logistics are the visualisation and the development of strategic actions that are only possible thanks to competent logistics. Logistics is now playing a strong role in competitive advantage and this has called for a change in the strategic games being played by the industries, or the need to adapt to new strategies. Therefore, it’s now necessary for logistics to be thought about right at the point of coming up with the firm’s overall strategy being created, instead of after.

Monday, 9 January 2017

Why we need to formulate logistics strategies?


Commercial and industrial businesses work by using systems of operation processes that become strategic. In modern times, these businesses have to deal with environmental pressures and ensure they have rapid responses in a busy world. Therefore, the processes have to be carefully coordinated and fully integrated as part of a defined strategy. They need to gather information through operations, integrate the data and come up with plans of action and ensure the guidelines to deal with uncertainty and environmental instability.

Strategies allow businesses to meet their objectives and take the most of any opportunities that open up. Logistics and supply chain management is a priority for businesses today. Logistics is the flow of goods and materials thanks to virtual information flows. It’s down to logistics that companies begin thinking about complete supply chains. They work to improve their own performances while improving the entire chain and benefiting the broader process. By working collaboratively, companies within the supply chain are linking flows and securing the final delivery, with fewer errors, providing better value and saving money along the way. They are considering environmental factors and finding solutions to uncertainty to serve their end customers.  Strategy formulation is one way to en sure the smooth flow of information and materials to benefit the entire supply chain.

Saturday, 7 January 2017

Chit Chat: General Office Etiquette – Part 3 – Requesting & Offering Help

By offering help to others, you’re more likely to receive help. Being generous with others increases the chance of generosity being returned to you. So, if you see someone snowed under with work, offering to help is certainly beneficial for both of you. Always say thank you when someone offers help and think about how you could express thanks in other ways when someone really goes out of their way to lend a hand. Giving a card or a small gift or buying lunch are a few ideas to consider. 

New Recruits

Always be prepared to help out any newcomers.  It’s easy to forget what it’s like being new, but try to remember how you felt and any questions you need to answer at that time. Be forgiving, but within reason. Provide answers to their questions and give tips and advice. However, don’t divulge all the latest office gossip, newcomers will be getting to know everyone and you don’t want them to pass a negative judgement on you.

Your Job Role

Some companies still expect assistants to perform tasks such as making coffee, while others have moved with the time. Check your job role to see if personal services such as shopping for superiors are included. Perform your job role and consider the personal tasks carefully before you raise a complaint. Only raise concerns if the personal jobs eat into your work time and if they are happening frequently enough to be considered a nuisance.

Friday, 6 January 2017

Time Compression in a Global Supply Chain

Today we’re going to show how time compression can be used in a global supply chain. There are numerous applications that can be applied across a variety of supply chain principles. We’ll be using two product types as examples. The first is a product that has low margins but a stable demand and the second is fashion, with variable demand but potential for higher margins. A supply chain for the fashion garment needs to be agile and have a focus on mitigation over reducing costs.

End user focus is a supply chain design that can be used as it’s flexible. End user demands are used to work out the logistical requirements using horizontal channels. One of the main aspects of any supply chain demand is the inventory positioning, which depends on variabilities in demand and supply, along with the lead times. The types of inventory can be worked out by using these factors.  An agile channel example could have inventory that is held close to the retailer, but in an unfinished form, so some assembly then takes place at a location with a short lead time.

Vertical boundaries in a supply chain are used when the owners of the supply chain have different legal entities and are under different organisations. The boundaries need to be designed into the channel once the make-buy decision has been made and also after the process design and outsourcing best practice.

The ownership of the inventory is a concern and there needs to be conflict resolution installed in the supply chain, working towards building partnerships. Cooperation and coordination are essential at a generic level. The use of system based exchange of data and information has transformed how supply chains operate.

The inbound supply also needs attention as it sustains manufacturing. The costs are often included in procurement costs so working out the logistical costs can be difficult. Non value adds costs and safety stocks can occur so mapping the inbound supply chain is beneficial from a time, cost and value add perspective.

Thursday, 5 January 2017

What are the benefits of time compression?

As a general rule of thumb, the longer time that it takes in a supply chain, the greater the risk of under or over forecasting demand. There’s a big risk of markdowns with large stocks of inventory and a risk of losing sales due to lack of stock in small inventories. Time compression works on the premise that if the lead times are compressed, the cycle stock is also reduced and the forecasting period is reduced too. This improves forecast accuracy and reduces the risk of over and under stocking.

There are other benefits of time compression, which are as follows:
  1. Productivity increases thanks to reduced cycle times
  2. Work in progress reduces thanks to reduced cycle times
  3. Business turnover is increased
  4. Potential to increase prices thanks to improved lead times for the customer
  5. Reduced number of cancellations caused by lengthy time cycles
  6. Increased cash flow
  7. Changed orders decrease
  8. Market share can be increased thanks to being faster and more reliable
  9. Attracting profitable customers thanks to having a response advantage in the marketplace
Time compressed suppliers benefit from growing faster than their competitors. They are able to increase profits and cope with the level of demand. Their competitors are the ones left with the customers who want to pay less and who are prepared to wait in order to save themselves money.  Time compression gives companies the ability to create an agile and a lean supply chain.


Wednesday, 4 January 2017

Customer Focus in Time Compression Approach

Different service needs are found in the different product and market sectors. Channels with distinct logistical capabilities are used to meet these individual needs. If this wasn’t the case, a single channel would be used and some customers would be overlooked while others were overserved, resulting in negative effects on costs, customer service and profitability.

There are two basic supply chain approaches. One is agile and the other one is a lean supply.  There are many products that fall into each category. A good example of an agile supply chain product is fashion and a lean supply chain is commonly used for industrial chemicals. Some products require a good mix of both approaches.
  • Products that have variations in demand patterns need to provide flexible supply operations in order to reduce the risks that come with volatile markets.
  • Products with stable demand that is more predicable have cost focused supply approaches that have lower unit costs thanks to the stricter management control and large economies of scale



Tuesday, 3 January 2017

What is the technology advantage using time compression approach?

There are many reasons to apply technology in business. The application of technology needs to consider the individual business circumstances and the needs of the customers who use that business to ensure there is a competitive differentiation. 

Focusing on the time-based impact will lead the company in the right direction to the ultimate goal. There are many technologies that can be used to achieve time compression, they include:
  • Robotics
  • Computers in manufacturing
  • CNC machines
  • WMS
They are all technologies that reduce time for activities but they have to be considered holistically to ensure that the technology is useful and suitable for the supply chain. For example, some of the automated systems are not able to cope successfully with variations in demand. Time compression approach gives a focus for the application of technology by considering the seven strategies that we mentioned last week.


Monday, 2 January 2017

Quality Advantage in Time Compression Approach

Time compression requires a quality based approach, it requires the quality of the product to meet the customer’s needs. If the quality doesn’t meet these needs, there is a risk of losing customers and goodwill. 

This will cause problems for sales, marketing, and manufacturing, costing time to find solutions for the lack of quality and to build up a customer base once more. By investigating time wastage it’s possible to find root causes of problems. This is why time should be a focus on improving quality.

Quality is essential not just for the customer but also for the company. This is the total quality management (TQM) approach, which also look into waste elimination. There is a need of a holistic approach for TQM in order to work effectively. Time compression plays a role in providing this approach as it uses simple measures that are visible to the entire supply chain.