Global Supply Chain and Dealing with Trade Uncertainties

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Are you concerned about tariffs or other factors impacting global supply chains?  Per the Q2 2019 National Association for Manufacturers (NAM) survey, 56.0% of respondents cited trade uncertainties as top challenge.

In fact, trade uncertainties were the second most-mentioned concern facing manufacturers currently in the NAM Survey.  They also suggested that companies that are more upbeat about export growth are also more positive in their overall outlook. Clearly most manufacturers rely on trade to grow their businesses, so having a plan to mitigate trade risk is important.

Earlier this year, the CEO of Hellermann Tyton shared with the BizTimes that her company was very alert to the volatility of the macroeconomic world we live in. In fact she stated she believed the level of volatility was higher than any time she could remember in business.

So how do you best prepare for trade uncertainties disrupting your supply chain? We suggest the following three risk mitigation strategies:

  1. Invest time in careful preparation, risk analysis and contingency planning to ensure you have the best people in place to monitor your suppliers.
  2. For your critical suppliers, representing at least 25% of your supplier network, you should document the following items and review them quarterly:
    1. Their performance levels with regards to quality, schedule and price
    2. Identified risks such as the likelihood of these suppliers getting bought out, financial strength, the quality of your relationship with them and locations that could be impacted by tariffs or political unrest
    3. Document their length of time in business, how much research and development they do and if they are in danger of a buyout or merger
    4. Have suppliers answer these key questions in writing.
  3. Develop a specific risk mitigation action plan for each supplier to mitigate future risk including:
    1. A list of companies you could shift work to, if necessary
    2. Estimates of how long it would take to shift work
    3. An understanding of how much it would cost you

Overall, while most companies know the key is preparedness, many lack sufficient or current plans to handle global volatility due to tariffs, weather emergencies or political unrest. To prepare, you must make the effort now to determine if your organization can handle a major shutdown or break in supply chain.

At APICS Milwaukee, our mission is to help supply chain professionals be prepared for global uncertainties.

If you are interested in learning more about how we do this, we encourage you to attend our upcoming FREE Informational Breakfast on August 28th!  Breakfast attendees will get a chance to learn about how our chapter supports the Milwaukee area, hear from our instructors and other local supply chain professionals on how a partnership with APICS has helped their careers and companies.

APICS Milwaukee is the premier professional association for supply chain management, helping over 180 Milwaukee area companies represented by our members, with educational and networking opportunities. 

Is Your Purchasing System Optimized?

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Is your purchasing system optimized?  Per the Q2 2019 National Association for Manufacturers, 46.4% of respondents were concerned about increasing cost of raw materials.

Last week APICS Milwaukee conducted a Purchasing Workshop to share best practices and help ensure this key component of the supply chain is optimized. One tool we reviewed is how to develop a rating system to identify areas for improvement.  We shared the sample questions below as a good place to start to assess the key elements of purchasing. 

Overall, Purchasing as a category traditionally maintains purchase order priorities, reports status and monitors supplier capacity and performance to achieve quality, delivery and cost objectives.  Questions to consider are:

  1. Is there a purchase order status report?
  2. Is there a purchase order priority report?
  3. Is there a purchase order dollar commitment report?
  4. Is there a report to measure the rate of actual dollars received versus planned dollars?
  5. Have rules been established that provide direction in reacting to an unbalanced rate?
  6. Have purchase order closeout policies been implemented?
  7. Is there a procedure for reviewing purchase item lead times and updating the database?
  8. Is there appropriate use of blanket purchase orders so as to reserve vendor capacity, reduce costs and optimize delivery lead times?
  9. Is there an effective system for vendor selection on the basis of quality, delivery and price?
  10. Is there a routine in place to monitor actual material costs versus standard costs by supplier?

As you answer each question, you can leverage a simple scale like the one below to identify your strengths and weaknesses. Obviously you want to address the areas with the lowest scores first and work towards an overall score of 90+.

Rating

Comment

0 – 2

Indicates LOW levels of formal activity and work is needed.

3-5

Indicates MEDIUM levels of formal activity and accomplishment.

6-8

Indicates HIGH levels of formal activity and adequate coverage is nearly complete.

9-10

Indicates that the element is adequately covered and is functioning in a qualified manner.  Also, there is no significant improvement to be made at the current time.

 


At APICS Milwaukee, our mission is to help supply chain professionals at all stages in their careers and to help local companies continue to grow and reduce costs. 

If you are interested in learning more about how we do this, we encourage you to attend our upcoming FREE Informational Breakfast on August 28th!  Breakfast attendees will get a chance to learn about how our chapter supports the Milwaukee area, hear from our instructors and other local supply chain professionals on how a partnership with APICS has helped their careers and companies.

APICS Milwaukee is the premier professional association for supply chain management, helping over 180 Milwaukee area companies represented by our members, with educational and networking opportunities. 

Meet The APICS Milwaukee Board of Directors

Board members pictured left to right, Fred Kindelberger, Brian Bert, Gary Kerslake, Teri Giannetti, Kurt Horner, Tere Eckrose, Ed Haynes, Justin Wermske, Wes Parker, Shawn Rothe, Christine Campbell. Board members not pictured: Susan Dunn and Ross Hassler.

Meet the APICS Milwaukee new Board of Directors for 2019/2020!

At APICS Milwaukee, as a non-profit, we are very thankful for the volunteers serving on our Board of Directors that help to ensure we achieve our mission to serve local supply chain professionals at all stages in their careers.

Each year individuals are nominated and elected by active members. Board members hold their position for a period of one year, typically meet every month to oversee the various offerings and programs.

Our board members have extensive supply chain experience across industries and they are all passionate about providing world-class education and networking opportunities to the Milwaukee area.

Special thanks to our board members below for continued support to serve the local supply chain community!

  • Edward W Haynes, CSCP, President
  • Susan M Dunn, President Elect
  • Tere C Eckrose, CPIM CSCP, Treasurer and Secretary
  • Christine L Campbell, CPIM, Director of Education
  • Justin Wermske, Director of Student Relations
  • Gary Kerslake, CSCP, Instructor and Board Advisor
  • Fred J Kindelberger, Director of Programs/Breakfast Meetings
  • Ross B Hassler, CSCP, Director of Membership
  • Teri Giannetti, Director of Marketing
  • Shawn J Rothe, CPIM, Website Director
  • Howard W Parker, CSCP, Past President
  • Kurt A Horner, CPIM, Board Advisor
  • Brian Bert, Director of Programs

 


APICS Milwaukee is the premier professional association for supply chain management, helping over 180 Milwaukee area companies represented by our members, with educational and networking opportunities. 

We typically hold board meetings every month and everyone is welcome to join us to learn more about the work we do. More information on our BOD and upcoming meetings can be found on our website at www.apicsmilw.org.

Applying LEAN to Supply Chain

Photo Source: APICS Milwaukee Supply Chain Workshop 2019

Are you looking for opportunities to reduce costs? Would your team benefit if you could get more done in less time? These are proven benefits of leveraging LEAN principles and they apply to your supply chain as well!

At APICS Milwaukee, we see a LEAN supply chain as one that reflects the following:

  1. Continuous improvement of productivity
  2. Planned elimination of all waste
  3. Includes: Product design, conversion of raw materials, and delivery of the product to the customer

If you are considering applying LEAN principles to your supply chain, it’s all about differentiating value-added from non-value-added and eliminating the latter.  It is an operational philosophy that minimizes the resources used in all manner of activities.  Very importantly, customers define what is value-added.

Lean often requires using multi-skilled workers to keep the organization flexible and machines to keep it fast-paced. Long-term relationships with suppliers make it possible.

To implement a LEAN mindset in your supply chain, you should have the following objectives:

  1. Eliminate waste: Eliminate nonvalue-added in materials handling, inspection (perfect products don’t require inspection), inventory, and rework (get it right the first time).
  2. Meet customer demand: Make only products and services that customers want and only at the rate they want to use them.
  3. Increase velocity throughout the organization: High velocity increases turnover and faster order-to-delivery response.
  4. Reduce the need for cash: Less inventory and better productivity leaves more money as working capital (cash needed for daily operations).
  5. Increase inventory turns: Shorter lead times and make-to-order increase turnover.
  6. Gain market share: Competitive advantage from quality, low cost, and short lead times.
  7. Increase profitability: Volume can be added without adding resources.
  8. Develop the workforce: Better job design and training. Challenging work and responsibility.
  9. Produce perfect quality: Efficient processes and skilled workers produce perfect results.

If you’d like to learn more about LEAN Supply Chain, join us on August 20th for a workshop focused on the topic! Click here to register today.

Participants of our LEAN Supply Chain Workshop will learn about the following:

  • Principles of the Lean Supply Chain, including the importance of the “continuous improvement” company culture, what is value and non-value added and the identification and elimination of waste
  • Tools of the Lean Supply Chain, including value stream mapping, 5S and cellular manufacturing
  • Lean Supply Chain Assessment & Auditing

 


APICS Milwaukee is the premier professional association for supply chain management, helping over 180 Milwaukee area companies represented by our members, with educational and networking opportunities.  We look forward to helping you and your company apply LEAN concepts to your supply chain management!

10 Steps to Creating Strategic Alliances with Suppliers

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Are you responsible for purchasing in your organization? Do you currently view your suppliers as partners or strategic alliances?

Often the relationship between buyers and suppliers can be more adversarial versus a partnership, especially when each party is focused mainly on achieving their own cost or revenue goals.

APICS simply defines Purchasing as the term used in industry and management to denote the function of and the responsibility for procuring materials, supplies, and services. Purchasing managers have many options for achieving their goals and often the approach focuses on meeting short term objectives without considering longer-term benefits.

If you currently do not approach your suppliers as strategic alliances, at APICS Milwaukee, we’d suggest you are missing out on key benefits such as:

> Adding value to your products with insights and potentially customized solutions

> Enabling strategic growth with increased market access

> Financial stability with longer-term arrangements and the ability to adjust when needed

So how do you shift from a traditional buyer and supplier relationship to a strategic alliance? At APICS Milwaukee, we’d suggest the 10 step process outlined below.

  1. Align internally. Get similar departments across organizations connected to better understand each other’s goals.
  2. Select the proper partners with a long term approach.
  3. Negotiate a win/win deal that will help both parties achieve their goals.
  4. Establish ground rules for the alliance in terms of how to best interact.
  5. Appoint a dedicated alliance manager to maintain the partnership.
  6. Encourage collaboration!
  7. Engage in a collaborative corporate mindset.
  8. Manage multifaceted relationships.
  9. Conduct pulse checks.
  10. Plan for change.

Creating strategic alliances certainly takes effort. At APICS Milwaukee, we know they will pay off for you and your suppliers in the long run!

If you’d like to learn more about purchasing strategies, join us on August 6th for a workshop focused on the topic! Click here to register today.

Attendees of our Purchasing Workshop will learn about:

  • The role of purchasing within the organization and with contracts
  • Sourcing best practices
  • The purchasing cycle
  • The process for conducting a supplier visit
  • Reasons for outsourcing and how to manage supplier relations
  • Implementing product development programs
  • Purchasing’s role with sustainability and regulatory compliance

 


APICS Milwaukee is the premier professional association for supply chain management, helping over 180 Milwaukee area companies represented by our members, with educational and networking opportunities.  We look forward to helping you and your company improve your purchasing efforts! Visit our website at www.apicsmilw.org for more information.