@ Supply Chain Management


SCM Newz roundup

1. State of Washington Considering Restrictions on RFID Technology
SC Digest reports on an effort by a lawmaker from the state of Washington to restrict the use of RFID technology. He has introduced an “Electronic Bill of Rights”,

that would put significant restrictions on the use of RFID in an effort to protect consumer privacy

So what is the scope of this legislation?

The proposed bill would outlaw the collection, storage, and disclosure of information gathered through radio frequency identification technology without notifying consumers. The bill states that all companies using active and passive RFID devices would have to either disable the devices or gain consumer consent.
The measure would prohibit companies from mandating that consumers have RFID tags for service or refunds. It would also prohibit people and companies from scanning or reading the devices to identify consumers without first obtaining consent.

Firstly, I didn’t think that companies really wanted to know how many cans of Coke are in your fridge at this present moment? Assuming ofcourse, they’re able to differentiate that from the number of crushed/used coke Cans that are in your garbage. Such a level of granularity might be quite important for marketing purposes but I would think that its efficacy would decline on an operational level as far as the consumer is concerned. Nevertheless, who knows what an innovator would come up with in order to invade a consumer’s privacy? But isn’t it within the purview of the consumer to punish such a firm by not consuming such a product?

2. Supply Chain Strategy: Home Depot says it’s Ready for Supply Chain Transformation
SC Digest reports on a new initiative by Home Depot with regards to its supply chain.

In the face of slowing sales growth and a slumping stock price, home improvement retailer Home Depot plans to increase investment in logistics infrastructure by $900 million, with a big focus on inventory management and improved central distribution.
The comments came from Home Depot execs at the company’s annual meeting for financial analysts.
The moves clearly reflect in part the impact of Home Depot’s VP of Supply Chain Mark Holifield, who came to the post after a similar and well-respected stint at Office Depot.

Hey, I’m all for supply chain improvements but this is a joke. Just look at the news item itself. In the face of slowing sales growth and a slumping stock price, what does Home Depot plan to do? Improve its supply chain? What is wrong with this firm?
Anecdotally, Home Depot’s sales growth is slowing because Home Depot sucks at selling. Is sales growth slowing because of the lack of the proposed solution below:

improved inventory management, implement a system that will provide better visibility and control over products delivered to the home, improve visibility of product flow from suppliers all the way to the store shelf, and cut order-to-delivery lead times, and improve inbound distribution.

What is Home Depot smoking? And on the same note, what is Lowes doing right?

3. Haldex Reduces Inventory, Increases Productivity with ERP Solution
SDExec.com reports on Haldex, a leading automotive supplier, that has deployed an ERP solution from Avanade Inc that has helped Haldex improve its inventory situation as well as raising productivity. (Avanade Inc.’s press release is here).
As the article reports,

By supporting key elements of Haldex’ lean transformation program, the company said the solution has helped it to reduce inventory by up to 35 percent, increase productivity up to 50 percent and drive improvements in product quality by up to 25 percent.
“Given the global manufacturing market today, we believe that lean manufacturing is a key component of our strategic survival,” explained Donovan Dean, chief information officer, Haldex, “and the Avanade Automotive solution is a core component in our implementation strategy. Any medium to large manufacturer should evaluate Microsoft Dynamics AX and the Lean Enterprise Management capabilities from Avanade to improve throughput costs, lead times and quality.”
In 2003, Haldex designed a corporate methodology, known as The Haldex Way, to streamline manufacturing processes using lean manufacturing principles and practices. A holistic solution, The Haldex Way called for a pull-based business model, so that products would be manufactured based on customer demand rather than forecasts.

An automotive supplier is going lean and using ERP as well – now, that’s a combo that needs to be explored. Who knows – you might hear of the Haldex Way in the near future.

4. High tech gets low grades
DC Velocity reports on a Aberdeen study that finds

companies in the automotive, aerospace and defense industries say they’re just not satisfied with their existing supply chain technology. A recent research report from Aberdeen Group, Globalization: The Turning Point for Packaged Supply Chain Applications, indicates that a whopping 80 percent of companies in these industries aren’t happy with what they have.

And what is the principal problem?

A big part of the problem appears to be lack of flexibility. Half of the survey respondents reported that their legacy IT systems and custom-built applications cannot keep up with their changing business processes. “The vast majority of automotive, aerospace and defense companies run major parts of their supply chain operations on custom or in-house developed technology,” says Nari Viswanathan, a research director for Aberdeen’s supply chain group. “Many of these companies are now looking to their ERP vendors or other packaged software providers to help them with the technology needed to enable supply chain transformation and more flexibly [adapt] to changing business requirements.”

Are the software providers listening?

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Category: Supply Chain Management, Supply Chain News


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March 2007