Treat Suppliers Like Partners

One thing that plays a major part in a Supply Chain is sourcing. Sourcing can be tricky at times based on cost and deliverable time tables. Most major companies source from a third party when developing their products. Reason being that the cost to produce the goods does not fit the businesses needs.

This can be a major positive for the company as well as a major negative at times.

 

Positives:

1.) Cost

2.) Space

3.) Liability

Negatives:

1.) Time

2.) Reliability

3.) Accuracy

 

One thing is for certain, all vendors and manufacturers should be treated like partners. Terms should be defined way in advance. If the vendor does not meet the standards of the agreed upon terms they should be held accountable for next gen products and or cost relating to the original scope.

 

 

 

 

 

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‘Hanjin Shipping Co.’ Files Bankruptcy

       The West Coast port, historically speaking, has always been the highest volume port in the continental US. The reason why is quite self explanatory……. Asia! Yes, Asia. Asia, historically speaking, always has the most production facilities in the entire world. It’s biggest importer, you guessed it, the United States of America.

       As of late, however, there has been a slight decline in inbounds from Asia. The Long Beach Island ports have seen a decrease in 15% of its volumes while Oakland has decreased by nearly 5% in September.

       The reason is primarily due to Hanjin Shipping Co.’s sudden bankruptcy. Hanjin Shipping Co was said to be Koreas largest shipping carrier. At one point Hanjin Shipping Co was managing 100 million tons of cargo per year. Hanjin was known globally as the “7th Largest Container Carrier”. The reason why Hanjin could not become sustainable with its profits is due to its lack of man power and adherence to its competition. This bankruptcy could cause a major ripple affect. Many consumer goods companies are forced into using different carriers and prices could subsequently rise. Oil prices can be on the verge of rising as well with the big hole in demand.

SAP Taking On Internet Of Things

Internet Of Things.This seems to be the hot word these day. Internet Of Things (or IOT) is a proposed development of the Internet in which everyday objects have network connectivity, allowing them to send and receive data. Many companies, around the world, are making this their forefront for innovation in regards to their growth and development. Just recently SAP, a global pioneer in Supply Chain, has announced a $2.2 Billion Dollar investment into IOT. Its unclear on what route SAP wants to go with the big investment, but many reports say that SAP is looking to build IOT related add-ons and applications

 

I personally like the idea. Given the expenses that typical consumer goods companies spend on a daily basis to optimize their supply chain, I think that this will help production costs and anticipate future issues. One idea SAP has played around with in the past is integrating 3D Printing and their standard MRP interface. If SAP includes IOT into the mix of things, the idea of having a full autonomous supply chain can become a reality.

A basic layout can look somewhat like the below:

1.) Consumer buys goods from online eCommerce site

2.) Company becomes low in their stock cover and is forced into an out-of-stock situation

3.) SAPS MRP then becomes receptive to the sale and the OOS situation

4.) Communication is automatically sent to the 3D printer to produce more units

5.) Once units are produced the freight forwarder and brokers are notified on the MRP that goods will be shipped soon and to anticipate the shipment to the warehouse

6.) Goods are received in full and warehouse becomes fully replenished

 

 

 

 

 

 

 

 

 

Samsung’s Production Woes

       After much speculation Samsung has put their supply chain in the middle of a production fiasco. A recent recall has led Samsung to stop its production of the Samsung Galaxy Note 7 indefinitely for the second time. It has been almost a month since the initial recall of the Note 7 due to customers complaining about phones overheating and explosive behavior. Samsung has been quoted saying that this is due to “battery issues.”
       Personally I believe that Samsung should have done a better quality assurance check before releasing the Note 7 to the public. Given the production costs being rather low in their 3rd party battery manufacturing facilities, based near HQ in South Korea, one can assume that the outsourced supplier manufactured the batteries with low cost components. This is understandable, given the volume that Samsung produces the manufacturer probably felt that this was the only way for this battery to be produced. It’s on Samsung to provide the necessary testing and QA checks to ensure that the end consumer is safe.
       After the second production cord being cut, investors are becoming very speculative towards Samsung as their stock tumble 4% in 24 hours. While on the other hand, Samsung’s biggest rival , Apple, sees a increase of 1.9% on the news with shares going higher and higher up.
       Samsung is said to absorb over $2 Billion in losses due to this unsuccessful nightmare. Samsung must rebound from this disaster by owning up to the real issues and what they will be doing in the future so that they can have a chance against Apple.