Category Archives: Supply Chain & Logistics

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A Day in the Life of a Supply Chain Manager

By Morgan International Staff Writers 

Perhaps you are considering a career in supply chain and are wondering exactly what the day to day entails. At a high level they are responsible for all of the steps required to produce a product/service and get it to the customer. Some would argue that their role does not stop there, but also extends in the case of some products to their appropriate disposal. However for our example let’s take a Supply Chain Manager with responsibility for a product set. Let us look at a typical day:

9am:10am – Review emails from suppliers, many of which are likely to have come in through the night if the supply chain is global in nature. Take a look at the meetings in the diary for the day ahead and ensure all preparation has been done.

10am:11am – Meet with internal stakeholders to agree a strategy for a negotiation with one of the materials suppliers later in the afternoon. Agree parameters for each variable due to be discussed and agree who will take the lead role.

11am:11.30am – A one to one with the head of Supply Chain to discuss ongoing projects, priorities and pipeline work. A discussion is had over maintaining the quality delivered by suppliers whilst making cost reductions in the coming year.

11.30am:12.30pm – Work through your upcoming contract renewals and begin emailing stakeholders and arranging meetings to agree the terms of potential renewals or whether you might go out to tender. Working through the detail carefully so that you do not miss any termination dates.

12.30pm:1.30pm – Working lunch with a current supply to discuss their performance and to run through the balanced scorecard.

1.30pm:3.30pm – Supplier negotiation to agree the terms of a new deal, working through a number of contractual clauses and having a final price conversation.

4.30pm:5.30pm – Back to the desk to speak with the legal team about a number of points that came out of the supplier negotiation and to take their advice. Then back to emails to see what has come in through the day and reply.

5.30pm:6pm – Have a look at what is in the diary for tomorrow and do any prep that you won’t have a chance to do in the morning.

In Summary

The day to day role of a Supply Chain Manager is very varied with tasks ranging from very tactical, to extremely strategic. This is what makes the role interesting and exciting – there is never a dull day!

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How to Successfully Tier a Supply Chain

By Morgan International Staff Writers 

As an organisation grows, it is typical for the number of suppliers they do business with to also grow. As with any type of relationship, to be effective it must be nurtured. The issue arises when there are simply too many suppliers to be successfully managed by the buying organisation. An effective strategy is to tier the supply chain. How can this be done in a robust way?

  • Assess the risks

Consider which of your vendors present the most risk to the production of your product/service. These are your tier 1’s. You need to manage them closely, perform the most due diligence on them, and look to grow a strategic relationship. Your tier 1 vendors should be your most trusted, and therefore you may decide to ask them to manage your tier 2 vendors. Any vendor that could cause you significant reputational damage should be a tier 1.

  • Insist on visibility

Many companies rely on their tier 1 suppliers to manage their tier 2’s and maybe the tier 3’s. Of course some have a waterfall model whereby the tier 1’s only manage the 2’s, the 2’s manage the 3’s, and so on. Devolving management does not devolve responsibility. A good approach is to implement a global supplier database and insist on it being kept up to date with various pieces of important information. For example you may ask for tier 1’s to formally manage supplier performance of 2’s and update summaries of metrics and meetings to the database.

  • Maintain your culture

Just because a tier 1 supplier is managing a tier 2, does not mean that you don’t want the tier 2 supplier observing your company values and culture. A key way to permeate company culture is to hold events for all suppliers where you update them all on your vision and strategy. Also ensure you still communicate important news to the entire supplier database.

In Summary

For many organisations it is not feasible to manage the entire supplier base appropriately. Therefore a good option is to tier the supply chain – however this must be done in a robust fashion, and should never involve attempting to devolve ultimate responsibility.

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4 Ways to Reduce Supply Chain Waste

By Morgan International Staff Writers 

As competition becomes fiercer than ever, organisations are closely examining their supply chain with the aim of reducing costs. In fact specifically reducing waste has become a fundamental aspect of any cost reduction program. We are going to look at 4 specific areas to investigate in the hunt to reduce supply chain waste.

1. Product design

Review the design of the product and identify if and where raw materials can be reduced, or perhaps be swapped out for cheaper alternatives that still satisfy quality requirements. This also extends to the way in which the product is manufactured due to the design, and the packaging it is sold in.

2. Manufacturing process

Just as the product is designed, so should the manufacturing process be. Each part of the production process should be carefully considered to reduce the waste of raw materials. Where waste is unavoidable, it is prudent to examine if it can be recycled or used elsewhere. This point is inextricably linked with the first, whereby the product design and production process should be optimised.

3. Improve quality

Quality should be built into the product design and the production process. The aim of quality management is to minimize the waste of raw materials, avoid rework and of course deliver a high quality product. Quality inspection is a key requirement as it not only identifies product that should not make it out of the factory, but it also highlights key issues that can and should be rectified.

4. Speak to your employees

Who knows your product and its manufacturing process better than those producing it? They will almost certainly know where there is avoidable waste. Speak to your employees and ask for their recommendations. This can be done in focus groups as this tends to encourage a debate and spark ideas.

In Summary

If there has previously been no real consideration of waste within an organisation, the best approach is likely to be to kicked off with a waste reduction program and implement the review as outlined above. There will of course be a cost implication of undertaking this, but done robustly, it will most likely pay off through cost savings from reduced waste.

 

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How to STOP Supplier Mistreatment

By Morgan International Staff Writers 

In any relationship, personal or professional, there is a balance of power. In positive and productive supplier relationships, neither party abuses a power imbalance. Put simply, the larger organisations should not bully smaller organisations. However very often the giants do come under fire for alleged supplier mistreatment. For example, Amazon are facing a €10m fine from the French Ministry for the Economy for supplier mistreatment. Amazon are not alone – each year many businesses face fresh accusations. So how do we prevent supplier mistreatment?

What about Strategic Relationships?

Over the past few years there has been extensive conversation about a move from transactional and tactical buyer/supplier relationships, to long term strategic unions. The argument has been that the benefits from the latter will outweigh the former. But in a time when customers are demanding products faster and cheaper – is it of any great surprise that some organisations are pushing their own suppliers harder than ever?

360 Responsibility

Large organisations who abuse their power to bully smaller vendors should be penalised. In some countries that action will be taken through the courts. In other countries there is legislation protecting the construction of unfair contracts in the first place. This is a useful deterrent. So the government and regulators have a fundamental role to play. Second, organisations of all sizes must continue to be educated about productive relationships with each other. But thirdly, and perhaps somewhat controversially, as customers we must support organisations doing the right thing.

In Summary

Supplier abuse has been happening since trade begun. There is no one answer to stamp it out. It requires action and responsibility from a number of parties. Within organisations of all sizes, where possible it is important to have a Supply Chain Manager overseeing the construction of contracts to ensure they are robust, and most importantly fair.

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Climate Change: The Important Role of Supply Chain

By Morgan International Staff Writers 

Al Gore said “Solving the climate crisis is within our grasp, but we need people like you to stand up and act.” In fact if you read what many of the key proponents of climate change say, they talk about individuals taking responsibility, because as a collective humans are typically waiting for somebody else to be the one to make the change. However, we can easily conclude that the biggest global businesses have a disproportionately large role to play in reducing their emissions. But, how do we hold them accountable? There are various global initiatives and legislation to limit climate change. Furthermore at a micro level, customers must take responsibility for supporting businesses who are environmentally responsible, and walking away from those who aren’t.

But what about supply chains?

This is a very interesting point as the supply chain has an incredibly important role in either reducing or increasing the emissions that an organisation is ultimately responsible for. It starts with the buying organisation deciding upon their expectations in terms of emissions. Usually this is written down in some kind of corporate social responsibility policy. Then all vendors within the supply chain are expected to comply with these standards as a minimum. Very often this is covered contractually and adherence is audited on a periodic basis.

The good news

There are organisations such as BP who are standing up and fighting against climate change – in fact BP are viewed as one of the fiercest corporate opponents. They have formulated specific actions and policies to address climate change. In fact, according to research by Influence Map, almost half of the world’s top 100 companies are actively trying to subvert climate change. This is being done through a combination of lobbying, advertising, and influencing.

In Summary 

Supply chain managers undertaking professional qualifications will obtain robust knowledge of promoting corporate social responsibility through the supply chain. However we must recognise that they may only implement this with support from the organisational leadership team.

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Top 5 Traits of a Supply Chain Leader

By Morgan International Staff Writers 

The most successful supply chain leaders typically exhibit a number of common traits. These are our top 5:

  • Avoid analysis paralysis

There is a lot of data to review in the bid to make a decision. For example during a tender process there will likely be stacks of papers with offers from the bidders. It is important to work diligently through the information but to avoid analysis paralysis and never move forward to a decision. A good way to do this is to have structures for decision making. In our tender example a pre-agreed scoring matrix is a good idea.

  • A skilled negotiator

A fundamental aspect of the role of any supply chain leader is the art of negotiation. This is a skill that can be learnt through courses, training, and practice. However it is evident that some supply chain professionals do have more of a natural aptitude for negotiation than others. Typically they exhibit attributes including active listening, persuasion, and utilising the art of silence. They also look to create win win situations as opposed to a win for them and a lose for the other party.

  • Honest and ethical

Leaders should set an example and that should be one of honesty, integrity, and good ethics. A supply chain rife with corruption will ultimately fail, either due to customers finding out and taking their business elsewhere, or because there is a legal infringement and the authorities step in.

  • A robust technical foundation

The best supply chain leaders will have a strong academic foundation which very often includes the CSCP professional qualification. This provides an excellent basis to further a career in leadership.

  • Put the right things first

There will always be a lot to do – contract renewals, new negotiations, disputes to manage. The skill is in prioritising what is most important to the organisation at that point in time and directing resource to that.

In Summary

Each supply chain leader will have a slightly different mix of skills that allow them to be successful. However the 5 skills above are in our opinion among the most important and typically found in those that stand out in the industry.

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5 Steps to Measure Supply Chain Performance

By Morgan International Staff Writers

Most organisations appreciate the importance of measuring the performance of their supply chain, but the question remains, what's the best way to do that? We've got it covered with these 5 simple steps:

1. Decide what you want to measure

There is no point in measuring something if the information will not help you make better business decisions. Within the supply chain, it is useful to consider that metrics fall within the following 3 main categories – cost, time, and quality. Try to cover each of these specific areas.

2. Decide upon the specific measures

All measures need to be clear and specific. It is fundamentally important that it is agreed how the measure will be taken, when, and by whom. It is very common for an organisation to want to understand how many orders they receive accurately from their suppliers. A specific measure would be the percentage of orders received correctly within a specific ‘time period’. Remember that good performance measures will drive good behaviours. Consider a balanced scorecard that combines both quantitative and qualitative measures.

3. Measure

At this stage the measurements of performance can be taken. In your planning in stage 2 you will have set out how they will be taken, the frequency, and by whom. It is of course important to have metrics that are easy to collect. Consider how collection could potentially be automated.

4. Report

Design a way in which to report the metrics that provides valuable information to decision makers. Keep in the forefront of your mind that metrics are gathered to enable positive change within the supply chain.

5. Review

This step is one of continuous improvement and recognises that metrics as initially designed may not be appropriate or indeed provide the management information that it was thought they would. Therefore the validity and usefulness of metrics should be reviewed regularly and altered as appropriate.

In Summary

Performance of the supply chain can make or break an organisation. Therefore measuring its performance is critically important to not only be aware of any issues, but also to identify areas for improvement. Want to improve your supply chain & logistics know-how? Why not consider professional training to take your skill set to the next level!

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Supply Chain Salaries in the UAE

By Morgan International Staff Writers

For those working in supply chain already, or interested in pursuing a career in it, the details of the Cooper Fitch 2018 salary guide for the UAE is likely to be very interesting. At a macro level, they have estimated GDP growth of approximately 3.4% which is based on IMF forecasts. They are optimistic about slight salary improvements across the board. However, what about supply chain specifically?

Growth in the manufacturing sector as a result of foreign direct investment has increased demand for supply chain professionals in the UAE. With the influx of FDI also comes increasing supply chain complexity due to globalisation – therefore making the nature of the roles more interesting. Unsurprisingly it also means that organisations are seeking candidates that have demonstrable experience of managing many layers within a global supply chain. This is a distinct departure from prior years when local and regional experience was more in demand.

In terms of the availability of talent, there is not a supply chain shortage. However employers are very clear in their requirement for category and direct industry experience. Unsurprisingly as businesses push for competitive pricing from suppliers, an understanding of bids, negotiation, contracts and tenders is desired. Furthermore, employers typically prefer candidates who have the ability to speak and read Arabic.

Salary increases within the procurement community are expected to be 2-3%. Let’s now take a closer look at salary levels across supply chain roles in the UAE.

All of the salaries listed below are for candidates with 0-3 years’ experience and are in AED.

  • Supply Chain Manager                      22,000-32,500
  • Supply Chain Director                       35,000-40,000
  • Supply Planning Manager               20,000-24,000
  • Materials Manager                               15,000-21,000
  • Category Manager                                19,000-24,000
  • Buyer                                                           6,000-12,000
  • Procurement Manager                      22,000-30,000
  • Procurement Director                      35,000-42,000
  • Contracts Manager                              23,000-29,000
  • Logistics Manager                                15,000-19,000

 In Summary

The outlook is strong for supply chain professionals working in the UAE. For those just starting their careers it is worthwhile to seek roles which will provide experience of complex global supply chains, with plenty of opportunity for running tender processes and negotiating commercials with suppliers.

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Top 4 Supply Chain Trends of 2018

By Morgan International Staff Writers 

As logistics is primarily powered by technology, it should come of no surprise that we are predicting significant change within the logistics space in 2018. These are our top 4:

Data-driven logistics

We will see a huge increase in the number of organisations adopting big data algorithms and smarter analytics to enhance their process efficiency and as a result shorten delivery times. In 2018 we will increasingly see this paired with geotagging.

Blockchain

A blockchain supply chain is an impenetrable way to store price, date, location, quality, and all relevant information needed to effectively manage the supply chain. The use of blockchain improves traceability and lowers potential losses due to the counterfeit market. It is early days for blockchain use in supply chains – but this is one to watch in 2018 and the coming years.

 

More drones and smart-glasses

The use of drones for deliveries has been on the cards for a while. In fact Amazon has been trialling it throughout 2017. Expect to see the use of unmanned aerial vehicles increase, and also the use of smart glasses to make deliveries easier through hands-free route searches.

 

Internet of Things (IoT)

You might be growing tired of reading about the IoT but it will continue to be present on these lists for a few years to come. The reason for that is it offers a huge amount of potential for positive step change within the logistics arena. Through RFID, GPS and other connected senses, shipping is becoming more efficient through increased traceability.

 

In Summary

The logistics business is being transformed by technology such as blockchain, IoT, unmanned aerial vehicles, and data analytics. Bar blockchain, the other trends made many of the lists in 2017. The big difference in 2018 will be that organisations will be moving from the trials they undertook in 2017 to implementation programmes.

 

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Improve You Inventory Management in 4 Simple Steps

By Morgan International Staff Writers 

It does not matter if your business is online, has a physical presence, or a mix of the two – inventory is the lifeblood of your business. When inventory is mismanaged the repercussions can be huge. It can cause reputational damage with customers, lose you sales, and may even mean you have to write off product that you can’t sell. The fundamentals of inventory management are simple – you need enough stock to satisfy demand in the right place and the right time, but not more stock than you need. Many businesses have sunk from having their cash tied up in warehouses full of stock that they can’t shift. So how do you get this right? These are our top 4 tips:

  • Hire a supply chain professional

There are some great candidates out there who are professionally qualified to manage complex inventories. They will produce and implement a suitable strategy based on the particular demand patterns of the organisation and the product/service in question.

  • Be organised

This seems very simple but it is probably the most important tip. You should know where your inventory is, how much of it you have, what anticipated demand will be, and so on. You must have full transparency and current data at all times. The best way to do this is by using technology.

  • Monitor in real time

There is some brilliant technology available that can be used to monitor supply and demand. The possibilities of this software is huge – one good example is that it can be used to order stock within given parameters depending on what has been sold. It can also be used online so that customers know what is available to order, and what they might need to wait for. It is a great way to not disappoint customers.

  • Don’t run out of stock in demand

The ‘in demand’ bit is key. Don’t run out of stock that you have demand for. You can’t sell what you do not have and that is a missed opportunity for cash into the business. This is a fine art as you do not want to hold unnecessary stock. By implementing tips 1-3, you are far more likely to be successful at mastering this tip.

In Summary

Inventory management is an art. Getting it right has alluded many organisations for years. However by being methodical, utilising technology, and hiring some great supply chain professionals, the chances of being successful are greatly increased.