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Tag >> supply chain
As companies start to look at their next round of cost-cutting and efficiency measures, with much of the low-hanging fruit already harvested, next-generation business intelligence and data analytics technology-integrated with a raft of other technology solutions--will provide the backbone to dig more deeply into processes and send and receive information in near-real-time for swift decision-making.
As the crisis progressed, many companies turned to internal cost cutting measures to reduce working capital expenditures and save cash.
Although corporate social responsibility and sustainability are big buzzwords right now, and have been for some time, actual efforts to implement sustainable practices within the supply chain have not been a priority for many companies over the past few years.
This is, of course, hardly surprising. Given the vast array of changing regulations, increased compliance requirements, and the need to simply focus on basics as markets floundered through some of the toughest economic conditions of the past century, any projects not deemed either necessary for compliance purposes or able to show a very quick return on investment were understandably put on hold.
Business disruptions from faulty supply chains are rampant, as my colleague Denise Bedell recently noted . Companies experience an average of five disruptions a year, according to a study from the Business Continuity Institute.
In the retail sector, those problems are especially high, an average of 10 per year. And the holiday season only serves to highlight that situation , along with the need for companies to do something about it, according to Linda Conrad, director of strategic business risk and global relationship leader with Zurich Global Corporate, a division of Zurich Financial Services.
Companies worldwide are struggling to come to grips with risks and disruptions in their supply chain, according to a survey by the Business Continuity Institute, which found that more than 70 percent of companies had a supply chain breakdown in the past year.
In addition, a significant piece of that disruption arose from outsourced IT and manufacturing processes – and the risk of supply chain disruption related to outsourcing is rising.
Posted by dbedell in volatility, supply chain, Nicolas Sarkozy, hedging, exports, energy, currency volatility, Commodity Futures Trading Commission, commodities, Christine Lagarde, agriculture
With French president Nicolas Sarkozy set to take over the G-20 leadership in November, he and French Finance Minister Christine Lagarde are clearly focused on an overhaul of commodities speculation practices in major developed economies.
On Monday, Lagarde reiterated this message in an interview on Europe 1 radio, calling on G-20 leaders to coordinate efforts to reduce speculation on commodities and currencies in order to better manage the extreme volatility seen in recent months—and indeed to reduce the wave of highs and lows that often drive these markets.
Outsourcing part or all of the trade finance function—and the supply chain—can provide great reward to the average corporate. Most big banks, along with many smaller service providers and trade-related market players, offer such services for corporates.
Companies are increasingly looking to hand off the parts of this function that are not essentially held in-house.
Posted by dbedell in web portal, UPS, Technology, supply chain, small and medium-sized business, Pfizer, large-cap company, IBM, contract management, Citi, Cash, biztech, Bank of America, AT&T
Small suppliers in the US will soon have an easier mechanism to bid for large corporate contracts, as a consortium of firms have announced the launch of Supplier Connection—a portal geared at simplifying and standardizing the application process for large corporate contracts.
The site, which is expected to launch early next year, is being set up by IBM, AT&T, Pfizer, UPS, Bank of America and Citi. To begin with, it will host applications for bids on their business, but will also open to other companies that want to sign up and participate as it grows.
The biggest transaction banks are on their way to providing fully integrated working capital solutions, but they still have some ways to go—particularly in terms of systems and processes integration.
Even before the crisis, companies recognized the importance of integrating trade, the supply chain, and cash management to have a holistic view on working capital across the organization.
Companies spend a great deal of time and effort on assessing and reducing external risks in their supply chain. But just as important is understanding and managing potential internal supply chain disruptions.
The problems that can arise from weak internal supply chain risk management are manifold. For instance, poor market analysis can cause a lack of preparation or flexibility in the face of sudden market changes. Having no policies in place controlling the release of information to vendors and third parties can reduce a company’s purchasing power or bargaining position, should business-critical information be released.
Mounting concerns over the euro highlight the importance of currency risk management for companies with operations or exposures outside their home country. One critical component of currency risk management is reducing foreign currency exposure by matching payment funds to the currency of the invoice when you have available liquidity in that currency—so-called payment currency matching. By doing this you reduce the impact of currency fluctuations between the date of invoicing and the date of payment, and you can better predict outgoing cash flows going forward. This is desirable for daily treasury and cash management payments, but also—and perhaps even more importantly—it is important in managing payments to suppliers.
Any global or regional liquidity management program—which brings together a company’s excess liquidity from different countries into a central account for credit and investment management--is aimed at reducing currency risk by ensuring that available local liquidity is used first to make local payments—thus creating a natural hedge by decreasing the amount of local currency that must be purchased to make local payments—before being swept into any regional or global liquidity accounts.
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