World Trade - February 2009 - (Page 45)

Source management display on the Panjiva platform dashboard. they are purchasing. Many have never sent representatives to visit the factories making their goods, and even those that have often see their agents return with incomplete pictures, having been unable to communicate with local management, steeped as it is in a different language, management culture, and regulatory structure. Not everyone is taking things lying down. Supply chain risk management is a growing niche for consultants, while several large multinationals, ranging from Mattel to Cisco, have developed robust in-house risk management practices. Several others, including Nokia, Toyota, and FedEx, have banded together to form the Supply Chain Risk Leadership Council, which works with shippers, logistics firms, and government agencies to develop best practices for dealing with supply chain risk. One company, Alcan Inc., even conducts background checks on executives at potential business partners. But the vast majority of ﬁrms have neither the resources nor the willingness to perform such intensive analyses. Supply chain risk management is just one part of an even larger trend in the industry. As global supply chains become global supply webs, with multiple suppliers and multiple clients working together in a dynamic economic ecosystem, there is a growing need for ﬁrms that can facilitate and make transparent the thousands of decisions taken every day to make things run—from trade ﬁnance to compliance to social responsibility. An alumnus of the Boston Consulting Group and Harvard Business School, Green teamed up with MIT computer engineer Jim Psota in 2006 after hearing horror stories of naïve customers and poorly run suppliers. Indeed, there are more than 77,000 global suppliers in the apparel industry alone, and almost no source of objective information to separate the good from the bad. The global supply chain, “is a world that has been incredibly opaque,” said Green. “It is as far from transparent as you can get. I think the reality is, a lot of people have beneﬁted from that. There are middle-men who have been brokers who keep buyers and suppliers apart from each other. People are getting information and hoarding it and making money.” At the heart of Panjiva is a powerful set of computer programs that mine reams of government data for information on supplier shipments. That lets the company see which suppliers shipped on time, how loyal their customers were, and whether their output was increasing or decreasing—sudden spikes in either direction raise a red ﬂag, because they might indicate that either the supplier is taking on too many commitments or its output capacity is plummeting. An analysis of the Guangzhou Apparel Company, Inc., based in Nanjing, China, for example, reveals that the company has shipped an average of 25,663 kilograms of WWW.WORLDTRADEMAG.COM 45 http://WWW.WORLDTRADEMAG.COM

Table of Contents Feed for the Digital Edition of World Trade - February 2009

World Trade - February 2009 Contents Taking Stock in America Confronting Corruption in Latin America Supply Chain Watch Tradewinds Where's the Goods? Where's the Money? Hope on the Horizon Managing Fleets in Turbulent Times The Impact of China's Economic Slowdown on U.S. Supply Chains The Fuel Volatile Supply Chain Getting the Most from On-the-Fly Transactions Managing Supply Chain Risk by Managing China Sourcing Capacity OECD Global Economic Outlook for 2009 'Natural' Agricultural Monopolies No More

World Trade - February 2009

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