@ Supply Chain Management


SCM Newz roundup

1. PeopleSoft co-founder launches his ERP Workday. This is a news story that I’m following (from Business Week where I think I saw it first).

Dave Duffield, the co-founder of PeopleSoft Inc., is hoping he can duplicate the success of his previous applications venture, although this time around, he’s focusing on hosted software.
Duffield and some of his former PeopleSoft colleagues Monday announced the general availability of the first of four planned suites from their new on-demand enterprise resource planning (ERP) software company Workday Inc.

This company should be something to watch and I’d be very interested in finding out how they take on the other ERP players and if there is something different in the way they do things.

2. Infosys counts on processes.

“It is like managing an assembly line spread across many locations, and to do that effectively, processes are critical,” said B.G. Srinivas, senior vice president and head of the company’s European business.
To make sure processes are followed, Infosys has developed applications for project management, budgeting and quality measurement. “When you have these tools online, and a person from any location can access the information, then a certain transparency gets built into the process,” Srinivas said.

Here’s something that is interesting that I (have heard about before) noted about their staffing strategy:

The company is also able to add more staff to a project quickly if the customer requires it. At any moment, between 76% and 80% of Infosys staff are assigned to a project, with the others forming a “strategic bench” of staff waiting to be assigned.

Now, that’s almost right when it comes to capacity utilization metrics (taken from a manufacturing or DC operations) and it looks like something that can be extended to other spaces as well.

3. Open-source ERP vendor hustles in SAP’s back yard. Now, that’s interesting, to say the least.

Synerpy allows businesses to download its business application software suite, avERP, free of charge and modify the product as they please. The product contains around 40% of the functions available in the offerings of large ERP vendors, including SAP, according to Brodner
The vendor makes money from selling various services, such as consulting, programming and training. At the high end, Synerpy generates around $1,893 in revenue per user, according to Brodner. “Customers are free to decide how much support they want,” he said. “There is no obligation; it’s up to them.”

It looks like they’re following the standard open source model and in an industrial application that is bound to be successful if they have a good product. On the one hand, you have SAP or SAP like firms that sell their multi-million dollar, multi-year and can’t tell you if you will really succeed software implementation and on the other hand you’ve got these small open source free software people who only sell consulting services. And its the latter that seems to really think that Enterprise related implementation are more service than anything else.

4. Is the Electronics Supply Chain in danger?
So leads the article from the EDN Network by Ed Sperling that recounts the current state of affairs in the global electronics supply chain. He notes the following good things that are happening or have happened:

The electronics supply chain has never been more effective at reducing the boom-bust inventory cycles.
Manufacturing is running leaner. Orders are being checked and re-checked to avoid the kind of double bookings that wreaked havoc in 2001.

So what’s the concern then?

Consolidation into regional monopolies, such as glass manufacturing in Korea, silicon on insulator substrates in Taiwan and consumer electronics manufacturing in China mean that natural disaster, political unrest and even breakdowns in local logistics could stall supplies that will have rippling effects across the electronics industry;
Communication throughout the supply chain, while a vast improvement over what existed prior to 2001, still is far from perfect. Distribution executives and foundries are in regular communication with suppliers and manufacturers-sitting squarely between the two, in many cases-but they don’t have insight into each other’s business;
Reliance on one or two vendors can greatly impact demand for finished goods and the exposure of companies to lawsuits if something goes wrong, as it did with Sony’s battery recall.

I think the first point is probably the most important one and customers of these foundries and OEMs have to be wary about adjusting their inventories to buffer such disruption and be at a moment’s notice to act proactively at the first sign of issues cropping up. The second point is a more structural issue that will get sorted out as the need becomes apparent – it will be competitively advantageous to do so. The third point is also a part of risk mitigation and is related to the design and procurement programs that one has in place but its something that hits you out of the blue. However, it will hit everyone out of the blue – the question is whether you’re ahead of your competitors or not.

5. M&S read to start national roll-out of item-lelvel RFID.

Marks & Spencer is planning to deploy item-level radio frequency identification (RFID) tags at almost all its clothing stores after successfully trialling the technology in selected stores last year.

Marks & Spencer is a rather large and established retailing chain based AFAIK out of the UK. Their RFID trial is bound to have an impact and its effect on M&S’s bottom line will be keenly watched.

Marks & Spencer started its item-level RFID trial at the beginning of the year when its spring/summer clothing ranges came into stores.
Two months ago the retailer announced that it had extended the item-level trial to include its autumn/winter clothing range. By extending the project for a second fashion season, Marks & Spencer almost doubled the number of tagged items, from 25 million to 49 million.

6. Forbes and McKinsey Quarterly report on Carrefour China: Lessons From A Global Retailer. During my Singapore living days, I used to frequent Carrefour by Suntec city and I thought that the word hypermarket was an apt description of how big the place was. Carrefour entered China in 1995 and since then,

it has become the largest. Today it operates 73 hypermarkets in 29 cities, from Urumqi (in the western reaches of the Middle Kingdom) to Harbin (near the Russian border) to Kunming (in the south). Carrefour also operates the Champion supermarkets and Dia convenience stores. Its 2005 turnover was about $2 billion (including value-added tax), making China Carrefour’s fifth-largest market. The company expects its sales in China to go on growing by 25% to 30% annually over the next five years.

Read more about the experiences of Carrefour in China at the linked site.

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Category: Supply Chain News


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November 2006