Business Distribution/wholesale

Distribution centers

The selling of goods to merchants; usually in large quantities for resale to consumers. Optimizing the Supply Chain Distribution centers cost millions of dollars to build and operate. Companies must buy land (or find a suitable existing facility), add utilities, install logistics equipment, and hire staff—all on the assumption that this facility will represent the best strategy for the ultimate goal-customer satisfaction. The key to the supply chain challenge, is to carefully go through a three-step process gathering current information, establishing future priorities and modeling different distribution network scenarios. What types of businesses are considered wholesale? Step 1: Gather information. You need a lot of data to determine an optimum distribution network. How many distribution centers optimize the network? Where should they be located? Which customers will the distribution center support? What inventory will it house? How much inventory? Essential information includes the location of current distribution centers, their capacities, and the volume going in and out. Also critical are profiles and locations of suppliers and customers. Are they shipping to other distribution centers, as they might be for a manufacturer shipping to a large retailer? Are they a retailer, shipping to their stores, like for a grocery retailer? Are there significant amounts of bulk goods? Are products very large (refrigerators, air handling units, furniture) or very small (pencils, books, computer hard drives)? Step 2: Establish priorities and set constraints. The second step in developing the network strategy is to understand the priorities of the company. They want to add one distribution center, or close three regional warehouses and open one larger distribution center facility. They also might have a location in mind that they want us to evaluate." Other priorities might be more general, such as designing a network that minimizes freight costs and reduces delivery times. They might also want to be located closer to Federal Express or UPS hubs, if that's how they are distributing their products. Constraints are also identified at this point. For example, in an ideal world, a company might best achieve its goals by adding three distribution centers but it can afford only one. Geography can also come into play: while the ideal location for a distribution center might be in the middle of State, if labor isn't available, the facility needs to be sited somewhere with a higher population density. At the strategic level, we look in a very general way at road accessibility, rail networks and labor markets," Dr. Q said. "Rail, for example, can be critical for some suppliers." Dr. Q continues, "Then, at the tactical level, more analysis can be performed on transportation optimization, labor market surveys, etc." Step 3: Run models and consider scenarios. Once information has been gathered and the priorities have been identified, it's time to plug all of the data into computer modeling software and let it run the numbers. CAST modeling software from Radical, which is specifically designed to model supply chain networks. The software provides fact-based answers to complicated questions by evaluating numerous data points. Generally we start by running a baseline model with all of the existing distribution centers, suppliers, and customers. Then we optimize this network, assuming no constraints. This gives us an idea of the best-case scenario, with no limitations. Then the team starts building in the priorities and constraints established by the company. If several scenarios have been discussed, each is run through the program. Then scenarios can be compared and ranked, with the best alternative usually becoming clear immediately. With smaller networks, we perform the analysis with MS Excel, MS Access, and simple map generators to provide the same, accurate results. Key Concepts of Lean Procurement There are four key concepts in most lean processes—center on people, postponement, optimization and eliminating waste: Center on People: Most current processes rely on narrowly focused employees who perform repetitive tasks. Lean thinking prescribes transferring the maximum number of tasks and responsibilities to those workers. This actually adds value to the process and usually incorporates some system for measuring the bottlenecks, enabling you to find the cause and ultimately the cure. Postponement: The idea behind this is simple: delay any efforts until they are absolutely necessary. Also referred to as pull, this concept is fundamental to lean efforts. If you do nothing but add value, then you should be able to add value in as rapid a flow as possible. If this is not the case, then waste builds up in the form of inventory or extra wasted steps in a process. Essentially, postponement means that nothing is done until an upstream process requires it. Optimization: This is the process of looking at the value chain as whole and measuring the contributions of each activity as it relates to the effectiveness of the entire chain, not just the output of one step in the process. Most business activities have dependants and dependencies; in other words, the output of one activity is typically the input of another. Most activities have customers, in the form of internal or external people who consume the output of the given activity. Most activities also have inputs that are dependant on the output of another activity before they can add value. Take, for example, the assembly line—the velocity of the output of the finished goods is equal to that of the slowest activity in the process. Eliminate Waste: Also known as "adding nothing but value," this is one of the most essential aspects of lean processes. For service organizations, it is typically the result of altering your processes in accordance with the other principles. The other way to accomplish this is to understand what value is, and what activities and resources are absolutely necessary to create that value. Once you have identified what value the organization or department provides, you are on your way to eliminating everything that is not critical in delivering that value. Think through your current processes and ask yourself if every activity adds value or if it is in place because "it's always been done that way." As a way to think about this, ask yourself who is the consumer of the service you provide. Put yourself in the shoes of that person or those people and examine how "customer-friendly" your process is and what parts of your process actually provide value to those people. Five Steps to an E-Synchronized Supply Chain Like no previous breakthrough, internet technology offers the potential for a single, universal mechanism of cooperation among companies. For any business process, the resultant implications are vast. But for supply chain management, they are awesome. Experts believe that the average multinational could capture $100 million in added value by mastering the "e-synchronized" supply chain. So far, no organization has assembled all the ingredients needed to make e-synchronization happen. And, ironically, those that have come close often are constrained by a shortage of trading partners with similar levels of sophistication. Yet companies that are figuring it out typically share several characteristics. They usually have a well-developed ability to collaborate within their own organization and have extended that ability to achieve similar levels of collaboration with other organizations. In addition, they are enthusiastic innovators—adopting web-based technologies to increase internal and external information sharing, and readily migrating to new technologies and processes that increase business effectiveness. For the rest of the world, however, five basic steps must be taken before e-synchronization becomes an endemic part of their business: Step 1: Master business fundamentals. The defining characteristic of sophisticated multinationals is the excellence of their conventional operations. Unfortunately, this is not the strong suit of most traditional multinationals, not because they lack awareness of this requirement but because of their inability to force through change. By contrast, the more sophisticated multinationals are operationally superior, partly because they needed that superiority to grow and partly because they are less constrained by traditional ways of doing things. Step 2: Learn to operate in the web-based world. Achieving e-synchronization has much to do with implementing on the web what the organization already has developed to achieve operational excellence. The caveat is that, without operational excellence, e-commerce and e-procurement are likely to achieve virtual chaos rather than enhanced performance. Step 3: Build new capabilities and relationships. One direct consequence of the web's ubiquity will be a loosening of long-term relationships between and among organizations in favor of shorter-term liaisons. In the e-synchronized world—where organizations all subscribe to the same set of standards—multinational corporations will come together in a series of brief cooperative engagements as expediency dictates. The key to success in this environment will be an ability to attract and assemble a portfolio of best partners. Step 4: Manage complexity in real time. No company can sidestep the challenges of increasing complexity and decreasing time scales. Although the e-synchronized world offers a solution in the form of sophisticated tools and processes, it also requires that traditional companies learn new ways of operating. Making the transition demands an ability to learn in teams rather than as individuals, to develop the skills required to collaborate with customers and suppliers, and to experiment liberally and learn from the experience. Step 5: Embrace change. Management's traditional role was to plan around the expected and then deal with the unexpected. More and more, however, the expected has become rare and the ability to optimize around the unexpected has become paramount. E-synchronization requires that companies make that leap without misdirecting their resources or business goals. A Step-by-Step Path to Best Practices The best way to keep improving is to embrace best practices. This means understanding your customers’ ever-changing requirements, having your operations and your costs thoroughly under control, getting the best return on investment, and realizing that you are never done with the job of continuous improvement. Best practices are not events or a one-time activity. Rather, best practices involve a never-ending process that encompasses: Providing the best customer service. Leveraging equipment to minimize labor. Having a healthy, safe, and trained work force. Using systems and processes to continuously track and control movement of materials. Developing processes that eliminate duplication of effort. Having specific operational methods to meet all operational requirements. Using a commonsense application of technology to meet changing needs while minimizing the impact of implementing new technology. Managing day to day to get the most out of all aspects of the operation. Meeting and exceeding all corporate and government regulatory requirements while being proactive in planning for future regulatory requirements. Having contingency plans for meeting future identifiable operation challenges. Step 1—Establishing the Baseline The process of best practices begins with the recognition that we can improve only that which we can measure. The first step is to select an aspect of the operation that we need to improve. Then we need to identify the parameters we want to measure. In the case of customer service, we would typically want to measure four parameters: 1. The correct product, which covers all characteristics of the product, including customer required shelf life. 2. A complete order, including all paper work, labeling, electronic submittals, etc. 3. On-time delivery. The customer does not care when it is shipped, only that it is received on time. 4. Perfect condition: no damage from the pallet and shipping container to the individual pack. For each of these factors, one has to develop analytical measures. For example, the correct product can be tracked by conducting statistically based auditing of orders. The baseline should be presented graphically and tracked to identify and quantify problems, as well as to track the impact of improvements. Step 2—Understanding the Goal The goal of best practices is to improve the entire operation. It is critical that improvements do not negatively impact other operations. For example, it does little to no good if improvements are made in receiving and in turn these improvements make the picking and shipping of product more difficult. The implementation of best practices requires that all members of the organization act as a single coordinated unit to identify and implement improvements. These are the characteristics of operational best practices in supply chain performance: Understanding the importance of customer requirements and satisfaction when considering any changes to the operation. Changes cannot reduce customer satisfaction, and ideally changes should improve customer satisfaction. Developing a strategic plan that defines the requirements of an efficient and effective distribution system for both the present and future. Periodically reviewing and revising the strategic plan to reflect changes in the marketplace. All changes should be made with strong consideration of the strategic plan Having proper utilization of supply chain providers, including suppliers, manufacturers, 3PLs, and wholesalers. Supply chain partners can provide support in areas and functions that are not within your company’s core competencies. In addition, supply chain partners can be used to handle peaks and unusual circumstances. For some organizations, supply chain partners are the best choices for the entire distribution process. For other companies, providers can assist in the introduction of new products or the creation of special packs. Conducting economic and qualitative evaluation of all potential improvements based on specific, weighted criteria. Nothing can kill a best practices program faster that the implementation of a change that is not economically justified or a change that has undesirable qualitative effects. Thus, all proposed improvements have to pass not only stringent economic analysis, but also qualitative analysis. When it comes to selecting and implementing warehousing technology, the first step is to define mission-critical functions and key business processes. Then select the technology solution that meets these requirements with little or no modification. Always keep in mind that the most important requirement is meeting customer satisfaction, both long term and during implementation. Step 3—Developing Best Practices Once the goals for the operation and measurements are in place, the understanding of all aspects of best practices must be identified. Key questions must include: What is the best use for the existing equipment? What modification will result in improved equipment utilization? How can we improve customer satisfaction? How do we eliminate duplication of effort? How do we handle peak requirements and what can we do to smooth out peaks? What changes can our vendors make that will improve the operation? What changes can we make to reduce vendor costs and thus prices? Are there alternate packaging materials and supplies that will improve customer satisfaction, reduce cost, and or improve the operation? What can we do to reduce utility costs? What improvements can be made to current software systems? What systems should be replaced or upgraded? What training will improve operations? How do we better meet our company and regulatory requirements? What are the proper safety practices? How can we improve ergonomics? What improvements can be made to maintenance? How will changes in one function impact other operations? What is the best use of supply chain partners? Where should unused raw material partials be stored? Where should auxiliary operations be located? What physical constraints affect decisions? How do we improve lot integrity? Step 4—Implementing Best Practices The critical factors in implementing best practices are selling, planning, training, and testing. Selling The key to implementing any change is to get everyone involved in making it a success. It is natural to resist change. Fully recognize that some changes may well make it more difficult to perform some jobs. Management can always just institute changes, but this leads to resistance and a lack of trust. It is better to take the time to explain why the change is being made and to enlist the ideas of everyone in the details of the improvement. Often, something as simple as adding some lighting will create a feeling that the change is everyone’s idea and everyone works toward success. Planning Few changes are as simple as they first appear. It is rare that a change does not require support from other functions and areas. And it is not uncommon for a change to limit capacity during start-up. Thus it is critical to plan for all changes in advance. With proper planning, all affected parties have an opportunity to prepare. One can be more confident that all new requirements will be accounted for and all required actions have been taken. Planning will show the impact of preparing and implementing the change on the throughput of the operation. Understanding the impact of throughput then makes it possible to avoid impacting customer service during peak periods. Training New ways of doing things require that everyone be trained. The first goal of the training is to make certain that everyone knows about the improvements, how they affect the operation, and—most important—how the people are affected. The training must then address how the new tasks are to be accomplished. It is highly critical that the training include what to do when the unexpected or unusual happens. The training program has to be developed with strong consideration of adult learning requirements. Operating personnel are best trained with less classroom work and more hands-on learning. Conclusion If you are standing still, your competition will surely pass you. The use of best practices is an excellent way to continuously improve your operation. To ensure success, the keys are the following: Have an analytical understanding of the current state of the organization. Use a teamwork approach to implementing changes. Consider the impact of changes on the entire facility and organization. Have an implementation plan that includes selling the change, planning for the change, and training affected personnel. “Change is Good: A Step-By-Step Path to Best Practices,” ractices.asp Four Best Practices in Lean Procurement Center on People: In purchasing, there are two distinct groups of people—employees and vendor/suppliers. When considering the employees, the most effective strategy used by lean organizations is to empower employees with strategic accountability to perform tasks themselves. With proper business rules in place, you can empower users to perform purchases with pre-set spending limits, release requests, and similar initiatives. With vendors/suppliers, relationships are key and you need to be able to measure the effectiveness of those relationships. You should have tools in place to measure the performance of these constituents. Postponement: The two most wasteful items in purchasing are ordering too early and ordering what's not needed. By centering on people and allowing them to make purchases, you've taken a big step in the right direction in correcting both these wastes—but only if the empowered users are also aware of the concepts behind lean thinking. Typically, companies without a process in place for purchasing will be the most wasteful. Organizations that have a purchasing process in place will be effective only if they educate their users on the best practices of purchasing. Automating the process also contributes to the effectiveness of postponement. By limiting the items and quantities available to be ordered, users must conform to the guidelines prescribed by the business. Another critical success factors is tying replenishment to inventory by integrating your procurement software with your inventory system so you can improve your inventory turn and limit the likelihood of building unnecessary and excessive inventories. Optimization: Even a world-class purchasing process can have bottlenecks. One of the most common is in the form of approvals. If every purchase requires the approval of a single person, that person can become a constraint on the process. Another common bottleneck is necessity of human intervention when suppliers/vendors submit responses to the RFQ/RFP process. By automating the submission process and eliminating the time-consuming effort of validating the incoming data, companies can streamline this very costly activity by providing online tools that allow trusted vendors to submit data that is validated through software. Yet another common bottleneck occurs when the purchasing department receives numerous inquiries requesting status information. By providing status information to requestors and vendors through web, interested parties are kept in the loop and the number of inquiries will decrease substantially. Eliminate Waste: By focusing on people, postponement, and optimization, you can effectively eliminate waste throughout the entire procurement process. However, eliminating waste in purchasing is not limited to just the efficiencies derived from the other principles in lean thinking. You should also examine all the activities that make up procurement for your organization. Doing this will help you identify superfluous steps that don't add value to the consumers of the process. Five Components of Supply Chain Management Supply chain management is the combination of art and science that goes into improving the way your company finds the raw components it needs to make a product or service, manufactures that product or service and delivers it to customers. The following are five basic components for supply chain management. 1. Plan. This is the strategic portion of supply chain management. You need a strategy for managing all the resources that go toward meeting customer demand for your product or service. A big piece of planning is developing a set of metrics to monitor the supply chain so that it is efficient, costs less, and delivers high quality and value to customers. 2. Source. Choose the suppliers that will deliver the goods and services you need to create your product or service. Develop a set of pricing, delivery, and payment processes with suppliers and create metrics for monitoring and improving the relationships. And put together processes for managing the inventory of goods and services you receive from suppliers, including receiving shipments, verifying them, transferring them to your manufacturing facilities, and authorizing supplier payments. 3. Make. This is the manufacturing step. Schedule the activities necessary for production, testing, packaging, and preparation for delivery. As the most metric-intensive portion of the supply chain, measure quality levels, production output, and worker productivity. 4. Deliver. This is the part that many insiders refer to as logistics. Coordinate the receipt of orders from customers, develop a network of warehouses, pick carriers to get products to customers, and set up an invoicing system to receive payments. 5. Return. This is the problem part of the supply chain. Create a network for receiving defective and excess products back from customers and supporting customers who have problems with delivered products. Procurement in Seven Steps Procurement life cycle in modern businesses usually consists of seven steps: Information gathering: If the potential customer does not already have an established relationship with the sales and marketing functions of the suppliers of needed products and services (P/S), it is necessary to search for suppliers that can satisfy the requirements. Supplier contact: When one or more suitable suppliers have been identified, Requests for Quotes (RFQ), Requests for Proposals (RFP), Requests for Information (RFI), or Requests for Bids (RFB) may be advertised, or direct contact may be made with the suppliers. Background review: References for product/service quality are consulted, and any requirements for follow-up services—including installation, maintenance, and warranty—are investigated. Samples of the P/S being considered may be examined or trials may be undertaken. Negotiation: Negotiations are undertaken, and price, availability, and customization possibilities are established. Delivery schedules are negotiated, and a contract to acquire the P/S is completed. Fulfillment: Supplier preparation, shipment, delivery, and payment for the P/S are completed, based on contract terms. Installation and training may also be included. Consumption, maintenance, and disposal: During this phase the company evaluates the performance of the P/S and any accompanying service support, as they are consumed. Renewal: When the P/S has been consumed and/or disposed of, the contract expires or, if the product or service is to be reordered, the company reviews its experience with the P/S and determines whether to consider other suppliers or to continue with the same supplier. Ten Steps to Supply Chain Success The move is on for enterprises of all sizes to collaborate, connect, and share information to improve supply chain efficiencies. Customers, suppliers, and distributors are evaluating and deploying dozens of component solutions that address specific aspects of supply chain management—design, planning, sourcing, scheduling, and execution. The common goal of each of these elements: supply chain optimization. Companies still sitting on the sidelines wonder whether optimization technologies are too complex or cost-prohibitive to implement. In truth, optimization solutions can be rolled out like any other new technology, with pilots that demonstrate a clear-cut path to return on investment (ROI). These guidelines for delivering tangible results are based on dozens of real-world manufacturing experiences with supply chain optimization. 1. Start at the source. The best place to begin optimizing the supply chain is during design and sourcing, where 80 percent of a company's supply chain costs are irretrievably locked in. For example, a company considering two prequalified sources for a component often chooses the supplier with the lowest purchase price, irrespective of other dimensions like lead time and quality. Why are these other dimensions important? The inventory costs associated with an inflexible supplier can nullify any of the original "lowest cost per component" savings. These complex interactions must be considered when designing and sourcing the best possible supply chain. 2. Are the objectives to reduce total cost, cut cycle time, or improve customer service levels? Optimize the supply chain to achieve these goals. 3. Remember that the whole is greater than the sum of its parts. Focus on total system performance rather than functional or departmental performance, particularly in complex, multi-enterprise supply chains. The most compelling benefits come to the company that treats its entire, end-to-end supply chain with a holistic—rather than local—optimization approach. Think of the supply chain as an interdependent network, not individual silos; enhancements will have a ripple effect that positively affects other areas of the company. 4. Plan for the unexpected. Factor in demand and supply uncertainty, and ensure the flexibility to test dynamic "what if" situations across the entire chain. Some of the more robust optimization models now accommodate this unpredictability, which is still outside the realm of daily planning and execution solutions. 5. Use reality as the basis. Make sure that the supply chain optimization strategy can handle real-world constraints, including policies, implementation barriers, or other organizational constraints. A solution that addresses 80 percent of inefficiencies in the supply chain and delivers benefits today is infinitely more practical than a "perfect" solution that, in reality, is impossible to deploy. Additionally, seek solutions that succeed with the data already on hand. 6. Appreciate that one small step is a giant leap. Understand the metrics for quantifying a rapid, demonstrable ROI. Build agreement about what "rapid" means at the outset. Pursuing shorter-term objectives that can significantly improve financial performance today drives endorsement for future initiatives and the savings to fund them. This tangible payback ensures visibility at the executive level, which increasingly considers supply chain performance as a strategic imperative because of its impact on the bottom line. 7. Open the lines of communications. Break down organizational barriers with online collaboration tools that enable more effective decision-making across the entire supply chain. An added benefit: this collaboration supports companywide sharing of transferable skills and knowledge. 8. Keep it simple. In order to deliver positive results, supply chain optimization solutions must be easy to use and implement. Ensure that the people who will use the system can understand it and are equipped to modify and update it as needs change. Leverage solutions that require minimal training and integration time; this yields faster results and frees up employees for higher-value projects. 9. Check that it plays well with others. The most effective supply chains ensure a comprehensive, integrated approach, from design through sourcing, ERP, and logistics. If beginning with a single best-of-breed solution, ensure that it will support other supply chain and enterprise applications already in place. 10. Know that the time is now. A poorly designed supply chain can be a real business risk to operations and to a company's position in the industry. The wrong inventory levels, suppliers, and contract terms can add unforeseen costs that multiply every day, severely damaging the bottom line. The Hidden Costs in Management Software I. The Changing Business Landscape In today’s ever-changing business environment, managing operations is like shooting the rapids of a raging river. Just as you’ve coped with one challenge, another crops up where you least expect it. You think you see a path to take clearly ahead, but in an instant the riverbed drops, rocks emerge, and it’s all you can do to keep your head above water. This is the nature of today’s unpredictable business landscape, and everyone’s in the same perilous boat. Especially for those responsible for warehouse and logistics execution, survival depends on the ability to respond quickly and efficiently to what lies ahead—and out of immediate sight. Industry analysts have been observing this turbulence for some time now. They are virtually unanimous in their assessment of the one constant factor in today’s business environment: change—accelerating change. Coping with change is posing difficult challenges throughout enterprise operations, and traditional solutions are proving woefully ill equipped to deal with the problems. The Sources of Change Typically the internet is seen as the principal driver of business change today, and there is no denying that the advent of the internet and emergence of e-business as a dominant business model have dramatically altered the nature of business relationships. But the changes businesses face go deeper and further than the means by which a company communicates with its customers and suppliers; they permeate virtually all processes within the supply chain. Collaboration is critical to success. Ubiquitous connectivity has ended the idea of the monolithic enterprise or “functional silo.” Silos are nothing if not dysfunctional in today’s competition. This means that market competition is no longer among enterprises, but rather among supply chains. As such, supply chain execution is at the heart of an enterprise’s commercial vitality. It also means that collaborative capabilities are increasingly critical, as companies have to give customers and partners access to their information and services in order to compete with the speed and responsiveness today’s markets demand. Those who have difficulty in adopting collaborative processes will struggle to meet the demands of new and emerging business models. Even when companies grasp these sweeping changes in dynamics, change poses a difficult challenge as they plan for the future. Why? Sometimes change is predictable, but very rarely so. The Difficulty of Planning for Change Just think back two years about all the changes that have occurred in your business—both planned and unexpected. You couldn’t have imagined the business challenges confronting you toda, escalating customer demands, increasingly complex distribution models, time-to-fulfillment pressures heretofore unimagined. Not surprisingly, trying to implement warehouse management systems (WMS) or supply chain execution (SCE) solutions in the face of such uncertainty has proved a costly and ongoing puzzle for most that have made the attempt. Consider the business challenges that have emerged in the last two years: Cost management While cutting costs can't be considered a new business challenge, the level of demand for cost reduction—and sources of that demand—have multiplied as supply chains have become more integrated and better understood as a source of competitive advantage. The emergence of e-business options such as online exchanges and e-procurement systems has given more leverage to buyers to make demands of their suppliers, not only for better rates but also for faster delivery. Inventory management With new business models emerging around internet-based collaboration, traditional models of inventory management are rapidly being transformed as customers look to minimize or eliminate inventory. Customers today may demand that you manage your inventory for them in their warehouses. This is not only a logistical challenge, but also an intellectual one: warehouse managers now need to think beyond their four walls. With inventory being kept at the customer site—within customer-defined acceptable levels—new tools are needed for accounting, for replenishing and decrementing stocks, and for determining order cycles on a regular basis. Order management Order cycle times are being condensed as order frequency has increased dramatically. Orders themselves are coming in smaller sizes, so goods once shipped in full pallets must now be handled in smaller parcel shipments. Customer service management All of this is occurring in an environment in which superior customer service is an expectation. Errors are unacceptable to the customer—and cannot be tolerated in an organization that wants to compete effectively. Accuracy is an increasingly critical determinate of profitability, in terms of both cost savings and revenue generation. In addition, customers expect their suppliers not only to deliver goods, but to provide value-added services as well. The Resulting Challenge While such demands paint a far different picture than the one observed two years ago, we know today to expect new challenges that will constantly alter that picture with ever-increasing speed. HighJump is one of the most interesting supply chain execution solution providers because its technology empowers companies to modify the system without the use of custom code. This is a very rare thing in the world of supply chain execution. II. Defining and Finding a Solution To fit your business today, the solution must address your core business issues and integrate easily with existing systems. To rapidly and cost-effectively respond to change, the solution must be inherently flexible—allowing you to meet increasing customer demands, build competitive advantage over time, and leverage technological advance, —rather than just try to keep up with it. The Conventional Approach Custom code is expensive, time-consuming and risky! Because no out-of-the-box solution can provide a 100 percent fit with the individual needs of every business, the conventional approach has focused on offering a predetermined set of configuration options to address a range of typical needs. However, this approach brings with it wasted investment in the form of unnecessary features and functionality gaps where needs are not met. These functionality gaps are bridged with custom code—a labor-intensive, time-consuming, and potentially exorbitant proposition. The situation is further complicated as any initial code-based modifications tend to make subsequent changes even more expensive, risky, and time-consuming, and because these solutions are not prepared for change in the first place. More often than not a perilous spiral occurs. Companies establish finite requirements and solution providers encase their solutions around those requirements. Six months later—which may be before these initial changes have even been completed—business needs have changed again and the system must follow suit. This means more custom code has to be written, tested, and implemented in what becomes a perpetual exercise. In addition, change in one part of the system may have unintended effects on other parts of the system, a likelihood that increases with the volume of custom code and the nature of its implementation. In this scenario, system upgrades become hugely problematic because all code changes must now be applied again to the new version. This threatens the very stability of the systems they are intended to improve. So what started as an effort to build a solution oftentimes becomes an effort to control a burgeoning nightmare—one with very real risks. An Alternative Approach: Proven Adaptability This new approach addresses business needs effectively by providing "adaptability tools" that eliminate the need for custom coding. This tools-based system provides building blocks based on business process components that can be easily reconfigured to respond to changing business requirements in a fraction of the time of conventional systems—and at a fraction of the cost. The results of this approach are remarkable, including: Dramatic cost savings Costs can be cut by a factor of two to 200, with system implementation and maintenance so efficient that HighJump upgrades can be less expensive than upgrades of legacy systems—and can be completed in as little as four hours. More rapid development time New functionality can be developed two to 200 times faster than with conventional systems. Better use of new technology New technology is easily leveraged without business disruption, avoiding the obsolescence that is built into many conventional systems. Software providers are continuously working to improve their technology so it can be quickly and inexpensively applied to your advantage. Mitigation of risk By eliminating the need for custom coding, HighJump minimizes the risk associated with change. As proof, HighJump Software has one of the highest success rates in an industry where implementation failures are far too common. The impact of such benefits has not been lost on key industry analysts: “HighJump is one of the most interesting supply chain execution solution providers because their technology empowers companies to modify the system without the use of custom code. III. The Challenge Ahead Change is real. It is a fact of business life. With today's increasingly intense and globally extended economic competition, change is creating pain in operations. This is happening so rapidly that companies face unplanned expenses to cover the excessive cost of labor and development time to upgrade their existing code-based systems. The challenge for those looking to implement efficient SCE and WMS solutions is to find a solution that is flexible enough to meet today's core business needs, yet can adapt quickly and cost-effectively as those needs change over time. If a solution cannot do that, it will change from a solution to a problem. In these times, customers must be more demanding of their solution providers. They must challenge them to prove they can accommodate change—and if they can provide such proof—demand to know what the costs of accommodation will be over time. Five Ways Supplier Collaboration Can Help Reduce Supply Chain Costs 1. Compressing Cycle Times The opposing forces of delivering "the perfect order"—having the right product in the right place at the right time—and cost containment through reduced inventory levels must be balanced in your inbound supply chain. Delivering the perfect order is a key metric all organizations are focused on achieving. It is a calculation of the error-free rate for all components of the fulfillment and distribution process, including order entry, warehouse picking, on-time delivery, shipping without damage, and final invoicing. The benefits of the perfect order are clear: increased customer satisfaction, higher customer retention, and lower cost of lost sales. Delivering the perfect order should be accomplished without excess inventory or increased costs in the form of expedited deliveries. Striking this balance requires collaboration and real-time coordination with your supplier network. Reducing your suppliers' cycle times is the best way to realize the benefits of delivering the perfect order without incurring additional inventory and delivery costs. Supplier collaboration solutions can reduce cycle times by creating an environment in which communication is automated, timely, accurate, and certain. These solutions provide the ability to efficiently communicate both current and forecasted demand requirements with suppliers and receive responses in real time. Additionally, supplier collaboration accommodates both system-to-system integration and web-based portals to allow for the accurate flow of real-time information and best practices. This drives further reductions in transaction costs. In an economic environment where the supply chain often extends to include international shipping, the impact on the order-to-cash cycle throughout the supply chain can be extreme. International and homeland security can introduce significant barriers to timely delivery in a process already complicated by multiple touch points and opportunities for delay. The ability to proactively monitor and effectively supervise the end-to-end process directly determines your ability to manage long replenishment times profitably. 2. Reducing Inventory Costs Whether your supply chain extends next door or across the ocean, the goal is the same: to optimize inventory levels and reduce the costs associated with carrying unnecessary safety stock. Supplier collaboration solutions create a tighter link between customer demand and your supplier network, allowing you to maintain high service levels while safely reducing inventory levels. With supplier collaboration, all stakeholders can automatically monitor inventory and demand levels to help ensure that variability in demand does not result in an unanticipated shortage. Working collaboratively with your supplier network to meet common customer demand allows for true supply chain synchronization, where cost is not simply pushed back into the supply chain to be passed on later, but rather is pushed out of the supply chain by allowing all links in the chain to plan based on timely, accurate information. Further reductions in inventory costs can be achieved through the ability to plan labor more accurately. Optimal staffing levels can be maintained based on actual quantities of inbound materials. Labor productivity can also be enhanced by using inbound visibility to plan the flow of inbound goods to require the least amount of handling possible, whether through cross-docking, flow-through, or sequencing for the shop floor. Likewise, supplier collaboration solutions minimize the cost of product obsolescence in the face of ever-shortening product lifecycles by regulating inventory levels according to demand. Supplier collaboration solutions can also be key in the successful conversion of inbound freight from prepaid to collect. Accurate shipment information can easily be obtained from suppliers to create optimal inbound routing and carrier assignment. With new government hours of service (HOS) regulations, accurate pick-up appointment scheduling has become a critical component in this process. Unbundling inbound transportation costs from material costs can also generate further savings by creating an apples-with-apples comparison of suppliers. Supplier collaboration solutions can also drive savings by keeping inbound routing requirements up to date across your supplier network where freight is not converted to collect. 3. Streamlining the Inbound Flow of Goods You are continually challenged with optimizing both resources and the flow of goods throughout your supply chain. Collaboration creates more accurate and automated receiving processes, which in turn reduce costs. Use of a supplier collaboration solution empowers all suppliers in your network with the ability to provide you electronic ASN information. This will significantly enhance your ability to accurately and efficiently receive inbound goods. Additionally, these solutions can automate receiving with support of supplier shipping, labeling, and bar coding. Supplier collaboration solutions support additional value-added services such as special packing and sequencing requirements. “Receiving ASNs from suppliers typically reduces time to receive a shipment at the distribution center between 30-40%, with a corresponding reduction in costs to receive while improving the physical flow of goods. Web-based supplier portals can enable companies to receive ASNs from suppliers much more easily, especially those without EDI capabilities. Many companies can justify their investment in a supplier portal from the savings in receiving costs alone.” 4. Streamlining the Flow of Information A supplier collaboration solution functions as a single, central repository for all information related to the inbound flow of goods. With the ability to reach all members of your supplier network regardless of the level of technology each has implemented, your supplier collaboration solution can serve as the system of record for all inbound material transactions. By centralizing this information and making it available through a web interface, you empower all stakeholders with an equal ability to participate in managing their respective segments of the supply chain. Duplicate orders and costly shortages can be prevented because stakeholders have access to accurate, current information. Sales can be enhanced by the ability to provide firm commitments on demand based on accurate item availability and inbound cycle times. 5. Facilitating Proactive, Automated Management by Exception Most companies are moving toward increasingly lean environments, with less need for buffer stocks. Production plans and customer service are dependent on the timely receipt of raw materials, components and finished goods. Unfortunately, the unexpected often happens and causes problems with these dependencies. Suppliers are suddenly out of stock, trucks are delayed, and suppliers ship short or late. The list goes on. The faster you are aware of these exceptions, the faster and more effectively you can react to assess the impact to your supply chain and take appropriate steps. These may include changing manufacturing schedules, expediting shipments, finding another supplier, and communicating with customers. Visibility, real-time notifications, and automated event management through the PO and in-transit process allow you to have this capability. Supply chain visibility demands automation and intelligence. As cycle times are compressed, visibility to potential performance issues must be intelligently and effectively elevated. Supply chain events such as shortages and quality issues must be automatically identified and elevated to the attention of managers or others who can work quickly to resolve them. Or better yet, they are resolved automatically. Supplier collaboration solutions should manage the tactical issues of goods and information moving through the supply chain, freeing managers to "scan the horizon" for larger issues. 6. Evaluating Supplier Collaboration Solutions Now that you have learned why supplier collaboration solutions are beneficial for your business, it is important to understand the variety of offerings on the market today. These solutions range in both price and functionality. It is essential that you carefully evaluate the unique requirements of your business to get a strong understanding of what you actually need and the budget you can allocate to the project. The following are key points for consideration: Adaptable connectivity and integration model A solution that offers the same level of connectivity to "Mom and Pop" suppliers as well as the largest organizations will help ensure that everyone in your network is operating with the same information. The materials coming from small suppliers are rarely less important than those arriving from large ones. Likewise, you will need to be able to support a variety of transports and protocols for your trading partners, including EDI, XML, flat file, and web. Support for real-time collaborative process management A solution that offers real-time collaboration empowers all stakeholders to participate in the process with current and accurate information. This creates an environment where exception conditions are automatically identified and solutions are quickly and effectively negotiated, with all parties informed and in agreement. Integrated supply chain event management As discussed previously, management by exception is a key way supplier collaboration solutions drive cost reductions throughout your supply chain. To maximize your ability to leverage this functionality, a solution featuring configurable, automated exception management is the best choice. Rapid implementation and simple user adoption Understanding the time frame and cost involved in system implementation and training is a critical step—and one many companies overlook in selecting supplier collaboration software. One component of the implementation process is the ability to integrate with your existing systems and often those of your suppliers. A solution with a configurable architecture will facilitate this. Another consideration for the implementation process is whether your vendor utilizes a best practices-based methodology. Ask potential vendors about their approach to implementation and how it will impact your business operations. The system should also be easy to use so that users can become proficient with its functionality easily and quickly. Check with your vendor to understand the training and technical support options available. Ease of configuration to meet changing requirements As with ease of implementation and training, configuration is an important element when it comes to evaluating and selecting supplier collaboration solutions. Your business, customer, and trading partner requirements are unpredictable, and it's impossible to know what sort of demands you'll face a month from now, much less a year away. Because of this, a system that easily and cost-effectively accommodates your changes will empower you to save money by performing modifications in house without involving your vendor. This type of configurable system will ensure that your long-term total cost of ownership is low. Secure, controlled access for all trading partners Ensuring the security of your information is a top priority for your company and your supplier network. Supplier collaboration solutions must provide multi-enterprise, role-based security to both functions and data. Each trading partner represents a unique relationship and level of authority that need to be reflected in its ability to access information. Conclusion Supplier collaboration is a fundamental component of supply chain optimization. It is essential to your ability to meet customer demands on an ongoing basis and maintain profitability through continual process improvements and cost reduction. Understanding the relevance of supplier collaboration solutions, the manner in which they should be evaluated, and the five ways they can help you immediately reduce costs within your supply chain is an essential foundation for long-term success 8. Off-Highway Vehicles - Issues regarding the environment and air quality continue to be under scrutiny. The push for more stringent air-quality regulations will impact the warehouse. Electric vehicles will take over as the preferred models in the warehouse, displacing non-electric vehicles. As this evolution occurs, manufacturers of electric rolling stock will respond with higher-power, higher-efficiency vehicles to facilitate this process. 9. Pace—Anyone with access to an e-retailer can now order product, specify their service requirements, pay for their order on-line, and track the order right to their doorstep. For distributors, this means that the pace of distribution must increase significantly to account for the reduced lead times, shorter product lives, increased inventory turnover, and greater customer expectations that are considered standard in the modern business-to-business and business-to-consumer marketplace. If a customer places an order today with next-day delivery, a company that picks and ships the order the next day won’t be competitive for long. The entire supply chain needs to keep pace, from vendor compliance to information and execution systems, in order to support the new economy that the Internet has enabled. 10. People—Total dedication to customer satisfaction. 11. Price—While service and quality are key factors in selecting a distribution partner, for many companies, decisions still comes down to price. Successful past relationships are no longer a good indicator of the future. Modern free enterprise demands efficient, effective and low-cost distribution. The goal of a successful distribution operation should be to operate within their core values at the lowest cost possible. The path to competitive pricing is to operate efficiently and flexibly at low cost—to offer low prices any other way is inviting failure. 12. Accountability—A successful distribution operation must have accountability. Accountability is made possible by effective leadership, clear communications and efficient systems and equipment to enable productive operations and a fulfilling work environment. Accountability requires that leaders make difficult decisions while maintaining the commitment of the organization. Accountability requires establishing standards, identifying improvement opportunities, and measuring performance. Also required is some form of a reward process that answers the inevitable question, “What’s in this for me?” Care must be taken that any rewards are tied to something that can be quantified as a true benefit to the organization; rewards without a basis will result in lack of credibility and a process that will ultimately fail. 13. Reverse Logistics—How to handle the products that are coming back into the operation as well as any returnable packaging that must be accounted for on a regular basis is a challenge. The decision on whether to accept the product, whether a refused shipment, an authorized customer return, or an unexpected return, must be planned for and communicated with the distribution operation as well as the receiving and handling process for the product or chaos will likely ensue. 14. Third-Party Logistics (3PL)—A growing number of companies are turning to 3PL organizations to handle the customer fulfillment portion of their supply chain. Companies that are accustomed to true partnering with customers and suppliers have less trouble migrating to the 3PL world and achieving the potential cost savings. The key steps are to conduct a comprehensive search for the right 3PL vendor, thoroughly review cost proposals and contracts to ensure there is financial benefit, and work with the 3PL to make their operation a seamless extension of your company. This may involve shared management, integrated execution systems, and a unified appearance to partners and customers. 15. Variety—Special packaging, unitizing, pricing, labeling, kitting, and delivery requirements are becoming the norm and must be addressed in any distribution plan. These tasks should be designed into the operation, not “tacked on” as a reactive afterthought. Many companies invest large amounts of capital setting up specialized packing or value-added services (VAS) lines with the mandate to gain competitive advantages and in hindsight gain little except increased costs and headaches. A few key questions need to be answered when setting up these operations: What is the benefit of the process? How will we recoup our investment? Can we charge the customer for these services? Is it better to outsource this operation? A simple review process can often provide justification to move forward and establish key design parameters to ensure that any “extra” requirements are integrated into the operation responsibly. Properly planned, these services can be a profit center, providing differentiation in a competitive marketplace while boosting the bottom line at the same time. List 2. Seven Ways to Customize Your Distribution Network and Reduce Costs To balance customers’ demands with the need for profitable growth, most supply chain managers have moved aggressively to improve their distribution networks. Consulting of more than 100 manufacturers, distributors, and retailers, they are doing it successfully by combining the following seven ideas into their strategies. 1. Segment customers based on the service needs of distinct groups and adapt the supply chain to serve these segments profitably. This equips a company to develop a portfolio of services tailored to various segments. For instance, one manufacturer of home improvement and building products told surveyors that it bases segmentation on sales and merchandising needs and order fulfillment requirements. You can also determine the services valued by all customers, not just by certain segments, and create segment-specific service packages that combine basic services for everyone. Segmentation is meant to maximize profits. Analyze the profitability of segments, plus the costs and benefits of alternate service packages, to ensure a reasonable return on investment. 2. Customize the logistics network to the service requirements and profitability of customer segments. This can be a source of differentiation in industries where the actual products are largely undifferentiated. For example, one paper company found radically different customer service demands in two key segments—large publishers with long lead times and small, regional printers needing delivery within 24 hours. To serve both segments well and achieve profitable growth, the manufacturer designed a multilevel logistics network with three full-stocking distribution centers and 46 quick response cross docks, stocking only fast-moving items located near the regional printers. Return on assets and revenues improved substantially, thanks to the new inventory deployment strategy. 3. Listen to market signals and align demand planning accordingly across the supply chain, ensuring consistent forecasts and optimal resource allocation. A photographic imaging manufacturer recounts how it had to cope with a production operation that stuck to a stable schedule, while the revenue-focused sales force routinely triggered cyclical demand by offering deep discounts at the end of each quarter. The manufacturer realized the need to implement a cross-functional planning process supported by demand planning software. At first, the results were dismaying. Sales volume dropped sharply, as excess inventory had to be consumed by the marketplace. But today, the company enjoys lower inventory and warehousing costs and a greater ability to maintain price levels and limit discounting. Channel-wide supply chain planning can detect early warning signals of customer demand. This made all the difference to a laboratory products manufacturer. Uneven distributor demand unsynchronized with actual end-user demand made real inventory needs impossible to predict and forced high inventory stocks. Distributors began sharing information on actual demand with the manufacturer and the manufacturer began managing inventory for the distributors. This coordination of manufacturing scheduling and inventory deployment decisions paid off, improving fill rates, asset turns, and cost metrics for all concerned. 4. Differentiate product closer to the customer and speed conversion across the supply chain. Manufacturers striving to meet individual customer needs through mass customization have discovered the value of postponement. They delay product differentiation to the last possible moment. According to the surveyors, the key to just-in-time product differentiation is to locate the leverage point in the manufacturing process where the product is unalterably configured to meet a single requirement. In addition, challenge cycle times: can the leverage point be pushed closer to actual demand to maximize the flexibility in responding to the demand? 5. Manage sources of supply strategically to reduce the total cost of owning materials and services. Excellent supply chain management requires an enlightened mindset, such as gain-sharing arrangements where everyone who contributes to greater profitability is rewarded. To do this, you need a knowledge of all commodity costs, not only on direct materials but also for maintenance, repair, and operating supplies, plus the money spent on temps, travel, utilities, and everything else. Only then can you approach suppliers in the most efficient way—soliciting short-term competitive bids or entering long-tern contracts. The savings that result can fund other initiatives. Consider how creating a data warehouse to store vast amounts of transactional and decision support data in annual negotiations consolidated across six divisions cut one manufacturer’s operating costs. In one year it was able to pay for a redesigned distribution network and a new order management system. 6. Develop a supply chain-wide technology strategy that supports multiple levels of decision making and gives a clear view of the flow of products, services and information. Today’s enterprise-wide systems must share information across the supply chain so that all partners can attain mutual success. 7. Adopt channel-spanning performance measures to gauge collective success in reaching the end user effectively and efficiently. First, service is measured in terms of the perfect order, as viewed by the entire supply chain, including the customer. Second, excellent supply chain managers determine their true profitability of service by identifying the actual costs and revenues of the activities required to serve an account. To facilitate channel-spanning performance measurement, many companies are developing common report cards. These help keep partners working toward the same goals by building a deep understanding of what each company brings to the partnership and showing how to leverage their assets and skills to the alliance’s greatest advantage. List 3. 12 Tips for Starting an Import/Export Business Thinking of starting an import/export business? 1. Many countries have set up offices (consulates or embassies) in foreign countries to promote the exporting of their goods. The consulates will supply you with industry directories and more. Embassies are located in a nation’s capital and consulates in other cities. In many cases, the embassy web site will contain directories and lists of manufacturers, as well as an e-mail link that you can use for sourcing. 2. To import or export goods, communicate with that country’s consulate situated in your own country. If you are uncertain what products the other country wants, you can obtain catalogues and lists of manufacturers. 3. Contact your country’s taxation department to ask about registration numbers or other procedures that you must follow. For example, if you are Canadian, you will need a Registration Number, issued by the Canada Border Services Agency (CBSA, www.cbsa-asfc.gc.ca). When you inform the CBSA of your plans to import or export, it issues an extension to your business number. This number is used on all related documents. For the United States, start with U.S. Customs and Border Protection, www.cbp.gov. 4. Find out about licensing requirements, if any. Many countries do not have licensing requirements for most products. However, if you are importing or exporting high-risk products (pharmaceuticals, liquor, chemicals, arms, certain food items, and certain articles of apparel), you might need a license. “I strongly recommend that people start out with low-risk items that can be easily traded and have fewer barriers— like dairy, are guarded by lobby groups in some countries. You will be faced with quotas and restrictions.” 5. Embargoes are trade barriers set up against other countries. Many countries have embargoes against Cuba, for example. First, contact your own government to determine whether there are restrictions or embargoes against the country you are considering. Next, contact that country’s consulate or embassy to see if there are restrictions against goods from your country. 6. Participate in the local Boards of Trades (Canada) or Chambers of Commerce (Canada and U.S.). In addition to networking, you have access to research libraries and other resources that will offer good trade information. 7. Use customs brokers. Businesses attempting their own paperwork can run into delays at borders. A custom broker’s service is well worth the fee you pay.” 8. Understand that in exporting there is no one solution to shipping and customs handling that will work in every situation. Every deal is different. Each company and each set of products will require a different set of services, or a combination of services. Engaging the services of a freight forwarder is one possibility. Freight forwarders arrange shipping and customs for goods going to other countries. “You have to shop for these services and do your research,” Henzel explained. “Ask a lot of questions. It’s no different than buying a piece of furniture. You shop around first.” 9. Be familiar with Incoterms, as posted to the International Chamber of Commerce (www.iccwbo.org/index_incoterms.asp). Incoterms are standard trade definitions that dictate the shipping and payment responsibilities of each party. The two companies involved negotiate Incoterms for each deal. The best-known Incoterms include EXW (ex works), FOB (free on board), CIF (cost, insurance, and freight), DDU (delivered duty unpaid), and CPT (carriage paid to). “You negotiate according to the Incoterme. You decide who pays for shipping, who pays for insurance, etc. 10. Consult your bank for information about letters of credit, the most common form of payment when trading internationally. With a letter of credit, you minimize your risk because the banks ensure that the goods are delivered before the money is exchanged. For an importer, a letter of credit reduces the risk of having to pay in advance for goods or to pay for goods that are inconsistent with the product description in the letter. For an exporter, there’s the buyer’s bank’s assurance that you will receive payment provided you ship the goods as specified within an agreed-upon time. 11. Participate in trade missions. Consult your Board of Trade or local Chamber of Commerce to discover what is available. 12. Look to the Web for information about international trade. Many web sites offer an array of information that you can access.The Import Export Coach.com (www.importexportcoach). List 4. Six Export Labeling Tips Effective labeling of your export goods can mean the difference between your goods reaching their export destination in one piece, reaching it damaged, or not reaching it at all. These labeling tips will give your packages a fighting chance on their journey abroad. 1. Label boxes and containers with required information. For export, this information includes, but is not limited to, country of origin, shipper’s mark, weight and/or volume information, cautionary marks and handling instructions (for instance, the word “glass,” the symbol of a glass, the words “this side up,” or the symbol of arrows pointing upward), consignee’s mark, destination and order number, and number of the package and size of the case if there are multiple boxes or containers. 2. Do not label boxes with information that is not required. If there is no need to specify the content of the box on a label, avoid doing so. Identifying valuable goods contained in a box is an invitation for thieves and vandals. Use coded marks to identify export goods unless local laws prohibit this practic 3. Do not use boxes or containers with old labels. Recycling is admirable; however, all old marks, addresses, or advertising must be removed or permanently obscured to eliminate confusion for handlers and carriers of your export goods. 4. Ensure labels are clear and permanent. Labels must be large enough to read and information must be indicated in the appropriate language. Labels for your export goods must also be waterproof and resistant to the elements. 5. Label more than one side of the box or container. Consignee marks as well as destination and transfer point marks should be applied to at least three sides of the package. If the postal service is handling your export shipments, it is a good idea to confirm shipping requirements with them directly. 6. Symbols have international appeal. Exporters can purchase self-adhesive labels with international carriage symbols. These are cautionary symbols providing carriers and handlers with instructions on the correct manipulation of your packages. There are commonly seen symbols, such as the wine glass (fragile) and the umbrella with the raindrops (keep dry). There are also more obscure symbols, such as the penguin inside a box (keep frozen) or the penguin inside a box with a diagonal line intersecting it (do not freeze). When an export shipment involves transfers through countries with different languages, symbols may act as the universal language that protects your goods. Labeling is a critical element in the export process. It is often the attention given to these mundane tasks that makes the difference between shipping success and failure. List 5. Ten Tips for Successful Exporters Exporting your firm’s products or services can provide you a valuable opportunity for growth. It takes a special approach, however, to access foreign markets successfully. Let’s look at several of the basic steps in becoming an export business success: Research your market. Learn about your competitors, their products, and their prices. Know the customers. How can you customize your products to meet foreign customers’ needs? Understand the concept of “many markets.” Every market has different demands. Know the market’s style requirements. Some customers don’t mind premium prices, as long as quality is superior. Learn the sales system and master the distribution network. Find the right sales and distribution channels. Be careful about requests for “exclusive rights.” Don’t expect your foreign customers to understand English. Be ready to translate your packages, instructions, and manuals. Learn to write clear communications. Make messages, letters, faxes, and e-mails clear, concise, and accurate. Visit the market. Learn firsthand! See your products in use. Collect competitors’ samples. Visit prospects. Urge your distributor or representative to set up three or four appointments each day for you with prospective customers. Be responsive and responsible. Answer questions promptly. Offer prices and delivery terms you can meet. Provide for local service. Fix or replace products. Foreign customers don’t want a cash credit. Arrange for export financing. You’ll have new needs for working capital, letters of credit, wire transfers, and currency exchange. You might want to utilize the SBA’s Guaranteed Export Working Capital Loan Program and arrange for foreign receivables insurance. Discuss the business with a reputable freight forwarder. You’ll need assistance with shipping. Don’t try too much at the beginning! Start with a bit of your product line, in a well-defined geographic territory. List 4. Supply Chain Trade Organizations Air Transport Association of America www.air-transport.org Alliance of Manufacturers & Exporters www.the-alliance.com American Association of Exporters and Importers www.aaei.org American Association of Port Authorities www.aapa-ports.org American Automobile Manufacturers Association www.aama.com American Forest and Paper Association www.afandpa.org American Furniture Manufacturers Association www.afma4u.org American Institute for Shippers Associations Inc. www.shippers.org American Management Association www.amanet.org American Petroleum Institute www.api.org American Plastics Council www.americanplasticscouncil.org American Powder Metallurgy Institute www.mpif.org American Short Line and Regional Railroad Association www.aslrra.org American Society of Transportation and Logistics www.astl.org American Trucking Association www.trucking.org Association for Manufacturing Excellence www.ame.org Association of American Railroads www.aar.org Association of Home Appliance Manufacturers www.aham.org Association for Manufacturing Technology www.mfgtech.org Association of Steel Distributors www.steeldistributors.org Automatic Identification Manufacturers www.aimglobal.org Automotive Industry Action Group www.aiag.org Canadian Pallet Council www.cpcpallet.com Chemical Manufacturers Association www.cmahq.com Collaborative Planning, Forecasting, and Replenishment www.cpfr.org Components, Packaging, and Manufacturing Technology Society www.cpmt.org Compressed Air and Gas Institute www.cagi.org Conveyor Equipment Manufacturers Association www.cemanet.org Council of Logistics Management www.clm1.org Customer Relationship Management Association www.crm-a.org Data Interchange Standards Association www.disa.org Education Society for Resource Management (formerly APICS—American Production and Inventory Control Society) www.apics.org Equipment Manufacturers Association www.cemanet.org The Federation of International Trade Associations www.fita.org Food Distributors International www.fdi.org Grocery Manufacturers of America www.gmabrands.com Hazardous Materials Advisory Council www.hmac.org Industrial Distribution Association www.ida-assoc.org Industrial Safety Equipment Association www.safetyequipment.org Industrial Truck Association www.indtrk.org Institute for Operations Research and Management Services www.informs.org Institute for Supply Management (formerly NAPM—National Association for Purchasing Management) www.ism.ws Institute of Logistics www.iolt.org.uk Institute of Packaging Professionals www.packinfo-world.org International Association of Lean Practitioners ialp.org International Association of Plastics Distributors www.iapd.org International Association of Refrigerated Warehouses www.iarw.org International Organization for Standardization www.iso.ch/iso/en/ISOOnline.openerpage International Society of Logistics Engineers www.sole.org International Standardization Organization www.iso.ch International Warehouse Logistics Association www.warehouselogistics.org Logistics Management Institute www.lmi.org Material Handling Equipment Distributors Association www.mheda.org Material Handling Industry of America www.mhia.org Michigan Trucking Association www.mitrucking.org National Association of Aluminum Distributors www.naad.org National Association of Manufacturers www.nam.org National Association of Pharmaceutical Manufacturers www.napmnet.org National Association of Printing Ink Manufacturers www.napim.org National Center for Manufacturing Sciences www.ncms.org National Electronic Distributors Association www.nedassoc.org National Industrial Transportation League www.nitl.org National Private Truck Council www.nptc.org National Safety Council www.nsc.org National Small Shipments Traffic Conference www.nasstrac.org National Wooden Pallet and Container Association www.nwpca.com Packaging Machinery Manufacturers Institute www.pmmi.org Paperboard Packaging Council www.ppcnet.org Powder Coating Institute www.powdercoating.org Society of Automotive Engineers www.sae.org Society of Manufacturing Engineers www.sme.org Steel Manufacturers Association www.steelnet.org Supply Chain Council www.supply-chain.org Transportation Consumer Protection Council www.transportlaw.com/tcpc Transportation Law Center www.transportlaw.com Truckload Carriers Association www.truckload.org The United States Council for Automotive Research www.uscar.org Warehousing and Education Research Council www.werc.org List 5. CAD Associations COE—CATIA Operators Exchange 401 N. Michigan Avenue, 24th Floor Chicago, IL 60611 Phone: (800) 263-2255 (toll-free), (312) 321-5153 Fax: (312) 527-6636 E-mail: coe@coe.org Web: www.coe.org GCAUG—Greater Chicago AutoCAD Users Group P.O. Box 101 Palatine, IL 60078-0101 Phone: (847) 272-0343, (847) 229-7468 Web: www.gcaug.com SVAPU—Silicon Valley AutoCAD Power Users P.O. Box 62515 Sunnyvale, CA 94086 Phone: (408) 395-0855 Fax: (408) 354-2496 Web: www.power.org VAUS—Vancouver AutoCAD Users Society Web: www.vaus.org WTAUG—West Texas AutoCAD User Group P.O. Box 5062 Midland, TX 79704-6062 Phone: (915) 756-4138 Fax: (915) 756-2866 Web: www.wtaug.cjb.net List 6. Manufacturing Associations AME—Association for Manufacturing Excellence 3115 N. Wilke Road, Suite G Arlington Heights, IL 60004 Phone: (224) 232-5980 Fax: (224) 232-5981 E-mail: info@ame.org Web: ame.org AMT—The Association for Manufacturing Technology 7901 Westpark Drive McLean, VA 22102-4206 Phone: (800) 524-0475 (toll-free), (703) 893-2900 Fax: (703) 893-1151 E-mail: amt@amt.org Web: www.amtonline.org MANA—Manufacturers’ Agents National Association One Spectrum Pointe, Suite 150 Lake Forest, CA 92630 Phone: (877) 626-2776 (toll-free), (949) 859-4040 Fax: (949) 855-2973 E-mail: mana@manaonline.org Web: www.manaonline.org MESA International (Manufacturing Enterprise Systems Association) 107 S. Southgate Drive Chandler, AZ 85226 Phone: (480) 893-6883 Fax: (480) 893-7775 E-mail: info@mesa.org Web: www.mesa.org NAM—National Association of Manufacturers 1331 Pennsylvania Avenue, NW Washington, DC 20004-1790 Phone: (202) 637-3000 Fax: (202) 637-3182 E-mail: manufacturing@nam.org Web: www.nam.org NCMS—National Center for Manufacturing Sciences 3025 Boardwalk Ann Arbor, MI 48108-3230 Phone: (734) 995-0300, (800) 222-6267 (toll-free) Fax: (734) 995-1150 Web: www.ncms.org NEMA—National Electrical Manufacturers Association 1300 North 17th Street, Suite 1752 Rosslyn, VA 22209 Phone: (703) 841-3200 Fax: (703) 841-5900 Web: www.nema.org SME—Society of Manufacturing Engineers One SME Drive P.O. Box 930 Dearborn, MI 48121 Phone: (800) 733-4763 (toll-free), (313) 271-1500 Fax: (313) 425-3400 E-mail: info@sme.org Web: www.sme.org TMA—Tooling & Manufacturing Association 1177 S. Dee Road Park Ridge, IL 60068 Phone: (847) 825-1120 Fax: (847) 825-0041 Web: www.tmanet.com List 7. Purchasing, Distributing, and Supply Associations ERA— Electronics Representatives Association 444 N. Michigan Avenue, Suite 1960 Chicago, IL 60611 Phone: (312) 527-3050 Fax: (312) 527-3783 E-mail: info@era.org Web: www.era.org ISA—Industrial Supply Association 1300 Sumner Avenue Cleveland, OH 44115-2851 Phone: (866) 460-2360 (toll-free) Fax: (877) 460-2365 E-mail: info@isapartners.org Web: www.ida-assoc.org ISM—Institute for Supply Management 2055 E. Centennial Circle P.O. Box 22160 Tempe, AZ 85285-2160 Phone: (800) 888-6276 (toll-free), (480) 752-6276 Fax: (480) 752-7890 Web: www.ism.ws MANA—Manufacturers’ Agents National Association One Spectrum Pointe, Suite 150 Lake Forest, CA 92630 Phone: (877) 626-2776 (toll-free), (949) 859-4040 Fax: (949) 855-2973 E-mail: mana@manaonline.org Web: www.manaonline.org NEMRA—National Electrical Manufacturers Representatives Association 660 White Plains Road, Suite 600 Tarrytown, NY 10591-1504 Phone: (914) 524-8650 Fax: (914) 524-8655 E-mail: nemra@nemra.org Web: www.nemra.org Publications and Organizations List 1. Recommended CAD Magazines AUTOCAD Magazin: Das CAD-Praxismagazin www.autocad-magazin.de CAD UserCAD User Magazine www.caduser.com CadalystCADALYST OnLine www.cadalyst.com CADInfo.Net—Automated Design, Documentation and Visualization www. cadinfo.net CADWire www.cadwire.net CATIA Community www.catiasolutions.com Computer-Aided Design www.elsevier.com/wps/find/journaldescription.cws_home/30402/description Desktop Engineering www.deskeng.com Digital Engineering Magazin—Engineering-Management Heute www.digital-engineering-magazin.de Engineering Automation Report Online www.eareport.com Multi-CAD Magazine www.multi-cad.com Pro/E Community—for the Pro/ENGINEER User www.proe.com List 2. Manufacturing Trade Magazines IndustryWeek www.industryweek.com Manufacturing Business Technology www.mbtmag.com Plastics News www.plasticsnews.com Advanced Manufacturing Magazine www.advancedmanufacturing.com Injection Molding Magazine www.immnet.com Manufacturing & Technology News www.manufacturingnews.com Ceramic Industry Magazine www.ceramicindustry.com CleanRooms www.cleanrooms.com Welding and Cutting www.welding-and-cutting.info Wire & Cable Technology www.wiretech.com thefabricator.com: complete online metal fabricating source www.thefabricator.com Powder and Bulk Engineering www.powderbulk.com The Journal: The Magazine for Manufactured & Modular Housing Professionals www.journalmfdhousing.com Findlay Publications (UK Manufacturing) www.findlay.co.uk Machinists’ Exchange Online www.machinist.com Screw Machine World www.screwmachineworld.com Manufacturing, Training, and Development Companies Tec-Ease www.tec-ease.com Offers technical training and materials for the manufacturing industry. Intelitek www.intelitek.com Provides solutions for teaching manufacturing technology. Manufacturing Management & Technology Institute (MMTI) www.mmt-inst.com Provides publications, courses, and consulting to support lean production implementation. Productivity, Inc. www.productivityinc.com Provides lean manufacturing training, consulting, books, learning tools, workshops, and more. Resource Engineering, Inc. www.reseng.com Self-paced SPC (Statistical Process Control) and FMEA (Failure Mode and Effects Analysis) CD-ROM training programs for manufacturing organizations. CyMation Inc. www.cymation.net Provides training in troubleshooting, control systems, maintenance, and operations to optimize manufacturing. Also offers to create user manuals and training documentation. Micro Manufacturing Systems www.micromfgsys.com Provides education, training, and consulting for Micro-MAX MRP and related programs. Sheet Metal Training Center www.sheetmetal-16.org A contractor and union cooperative program to prepare industry workers. Tooling University www.toolingu.com Offers web-based training focusing on industrial manufacturing training skills such as metal cutting and CNC machining. TII Technical Education Systems www.tii-tech.com Provides industrial technology training. John Klees Enterprise, Inc. www.johnklees.com Offers seminars on injection-molding technology. MasterTask Training Systems www.mastertask.com Provides CD-ROM and video training courses for machinists, CNC, and machinery operators. Courses cover measurement and quality control, and are suitable for in-plant or vocational training. Applied Performance Strategies www.aps-online.net Offers technical training for students and adults, documentation services, program design, and HR consulting and training. Best Manufacturing Practices www.best-manufacturing-practices.com Manufacturing process specialists offering online training courses, on topics including ISO 9000:2000 quality compliance, supply chain management, and strategic planning. Six Sigma Training www.six-sigma-training.org Features the eight basics of the Lean Six Sigma method of competitive manufacturing practices with self-paced CD-ROM seminars available. Industry Educators www.industryeducator.com Provides educational classes to support a wide range of manufacturing businesses at the production level. Eaton Fluid Power Training apps.vickers-systems.com/training/index.html Features certified hydraulics training instructors teaching industry-specific technology courses . List 4. Supply Chain Trade Organizations Air Transport Association of America www.air-transport.org Alliance of Manufacturers & Exporters www.the-alliance.com American Association of Exporters and Importers www.aaei.org American Association of Port Authorities www.aapa-ports.org American Automobile Manufacturers Association www.aama.com American Forest and Paper Association www.afandpa.org American Furniture Manufacturers Association www.afma4u.org American Institute for Shippers Associations Inc. www.shippers.org American Management Association www.amanet.org American Petroleum Institute www.api.org American Plastics Council www.americanplasticscouncil.org American Powder Metallurgy Institute www.mpif.org American Short Line and Regional Railroad Association www.aslrra.org American Society of Transportation and Logistics www.astl.org American Trucking Association www.trucking.org Association for Manufacturing Excellence www.ame.org Association of American Railroads www.aar.org Association of Home Appliance Manufacturers www.aham.org Association for Manufacturing Technology www.mfgtech.org Association of Steel Distributors www.steeldistributors.org Automatic Identification Manufacturers www.aimglobal.org Automotive Industry Action Group www.aiag.org Canadian Pallet Council www.cpcpallet.com Chemical Manufacturers Association www.cmahq.com Collaborative Planning, Forecasting, and Replenishment www.cpfr.org Components, Packaging, and Manufacturing Technology Society www.cpmt.org Compressed Air and Gas Institute www.cagi.org Conveyor Equipment Manufacturers Association www.cemanet.org Council of Logistics Management www.clm1.org Customer Relationship Management Association www.crm-a.org Data Interchange Standards Association www.disa.org Education Society for Resource Management (formerly APICS—American Production and Inventory Control Society) www.apics.org Equipment Manufacturers Association www.cemanet.org The Federation of International Trade Associations www.fita.org Food Distributors International www.fdi.org Grocery Manufacturers of America www.gmabrands.com Hazardous Materials Advisory Council www.hmac.org Industrial Distribution Association www.ida-assoc.org Industrial Safety Equipment Association www.safetyequipment.org Industrial Truck Association www.indtrk.org Institute for Operations Research and Management Services www.informs.org Institute for Supply Management (formerly NAPM—National Association for Purchasing Management) www.ism.ws Institute of Logistics www.iolt.org.uk Institute of Packaging Professionals www.packinfo-world.org International Association of Lean Practitioners ialp.org International Association of Plastics Distributors www.iapd.org International Association of Refrigerated Warehouses www.iarw.org International Organization for Standardization www.iso.ch/iso/en/ISOOnline.openerpage International Society of Logistics Engineers www.sole.org International Standardization Organization www.iso.ch International Warehouse Logistics Association www.warehouselogistics.org Logistics Management Institute www.lmi.org Material Handling Equipment Distributors Association www.mheda.org Material Handling Industry of America www.mhia.org Michigan Trucking Association www.mitrucking.org National Association of Aluminum Distributors www.naad.org National Association of Manufacturers www.nam.org National Association of Pharmaceutical Manufacturers www.napmnet.org National Association of Printing Ink Manufacturers www.napim.org National Center for Manufacturing Sciences www.ncms.org National Electronic Distributors Association www.nedassoc.org National Industrial Transportation League www.nitl.org National Private Truck Council www.nptc.org National Safety Council www.nsc.org National Small Shipments Traffic Conference www.nasstrac.org National Wooden Pallet and Container Association www.nwpca.com Packaging Machinery Manufacturers Institute www.pmmi.org Paperboard Packaging Council www.ppcnet.org Powder Coating Institute www.powdercoating.org Society of Automotive Engineers www.sae.org Society of Manufacturing Engineers www.sme.org Steel Manufacturers Association www.steelnet.org Supply Chain Council www.supply-chain.org Transportation Consumer Protection Council www.transportlaw.com/tcpc Transportation Law Center www.transportlaw.com Truckload Carriers Association www.truckload.org The United States Council for Automotive Research www.uscar.org Warehousing and Education Research Council www.werc.org List 5. CAD Associations COE—CATIA Operators Exchange 401 N. Michigan Avenue, 24th Floor Chicago, IL 60611 Phone: (800) 263-2255 (toll-free), (312) 321-5153 Fax: (312) 527-6636 E-mail: coe@coe.org Web: www.coe.org GCAUG—Greater Chicago AutoCAD Users Group P.O. Box 101 Palatine, IL 60078-0101 Phone: (847) 272-0343, (847) 229-7468 Web: www.gcaug.com SVAPU—Silicon Valley AutoCAD Power Users P.O. Box 62515 Sunnyvale, CA 94086 Phone: (408) 395-0855 Fax: (408) 354-2496 Web: www.power.org VAUS—Vancouver AutoCAD Users Society Web: www.vaus.org WTAUG—West Texas AutoCAD User Group P.O. Box 5062 Midland, TX 79704-6062 Phone: (915) 756-4138 Fax: (915) 756-2866 Web: www.wtaug.cjb.net Why wholesale? In Indonesia, dealers in wholesale of fabric buy goods directly from manufacturers or fabric importers, usually on credit system which can be upto six months. This fabric is often sold to retailers who then pass it on to the local stores and from there to the customer. Retail fabrics then are priced more than wholesale fabrics. So the customer pays inflated prices when he gets it from the local stores. The price at the local store is sometimes thrice as costly as the price at a wholesale store. Even if you get terrific discounts from the retail or local stores, when you buy wholesale fabric you really pay much less for the same fabric. However this is easier said than done, because wholesale dealers rarely advertise in the same way as local fabric stores do. The local supplier rarely parts with information regarding wholesale suppliers and hence the customer is always at the mercy of the local fabric store. How do I order wholesale? When you buy wholesale fabric, you need to do two things. Find the fabric that you like and specify the quantity that you want. Wholesale fabric can only be bought in bulk, the more you buy, the less you pay. The prices are very competitive. If you want to start a business, there is nothing like buying wholesale. While buying wholesale fabric over the Internet, information regarding the list of the fabrics that are available, their descriptions, the quantity of fabric on each roll, the different categories they fall into and the price list is forwarded. Wholesale fabric has to be bought by the roll. The fabric is not cut, is not measured and is not examined for quality. This being the case, some rolls may have more than the required quantity while some may have less. In spite of this, the competitive price ensures that you do not stand to lose.