Global Logistics and Supply Chain Strategies - March 2008 - (Page 16)

New SAP Study Reveals Best Practices of Market Leaders in Customer Service and Product Supply A recent benchmarking study by SAP identifies exactly what companies must do in their supply chains to maximize profitability and win competitive advantage. The study, co-sponsored by the Americas SAP User Group, looked at 30 consumer products and high-tech original equipment manufacturers. The effort yielded a number of best practices among companies that outperform the marketplace in customer service and order lead times. The winners were able to balance customer service with inventories and cost, according to Kevin Flynn, industry principal for high-tech with SAP Americas. Four specific best practices emerged among the leaders, who were found to have alertbased exception messaging to track and monitor the entire fulfillment process; real-time vendor-managed inventory programs driven by true demand; accelerated transportation planning integrated with supply chain partners, and collaborative planning integrated with promotions. The payoff was substantial, Flynn said. Leading companies had a 7.6-percent advantage over others in on-time delivery performance (92.4 percent vs. 84.8 percent), and a three-day advantage in make-to-stock lead times (three days versus 11 days). Visit www.sap.com. More Bad News for the Economy: Deloitte Index Forecasts Weakness in Spending on Consumer Durables Deloitte Research’s Leading Index of Consumer Durables Spending declined in December 2007 for the fourth consecutive month—further evidence that the U.S. economy is in for a rough ride in 2008. Deloitte’s benchmark is actually brand new, although the firm has applied its insights retroactively to prior periods. It found that the index would have accurately forecasted changes in personal-consumption spending on durable goods 72 percent of the time between January 2004 and July 2007. “The index turned negative in September 2007 and has declined ever since, with an especially steep decline in December,” said Ira Kalish, director of global economics and consumer business with Deloitte Research. When the index moves in one direction for two or more months in a row, it has been shown accurately to predict trends in consumer durables spending, he said. “Consequently, the four-month decline in the index suggests that, in the next few months, there will be significant weakness in consumer spending on consumer electronics, furniture, appliances, cars, home-improvement products and other big-ticket items.” Visit www.deloitte.com/us/cpg. Shippers Are Paying a Bigger Share of Rising Fuel Costs, Transpacific Carrier Forum Reports Member lines of the Transpacific Stabilization Agreement (TSA) are convincing shippers to take on a greater share of carriers’ rising fuel costs, the group said. The lines are reporting “widespread success” in efforts to boost fuel surcharges. Ronald D. Widdows, TSA chairman and chief executive of APL Ltd., called the development “gratifying, as it indicates that customers understand the financial pressures affecting our industry and the need for carriers to make an adequate return in order to maintain levels of service the shipping community experts.” Shippers should expect to pay even more in the coming year. Up to now, TSA said, carriers have seen only partial recovery of their fuel costs, and the group’s objective for the 2008-2009 contracting season is the restoration of full, floating bunker-fuel surcharges, based on TSA’s own calculation formula. Along with that rise will come another round of general rate increases. TSA members are looking to add $400 to the base rate for a 40-foot container moving port-to-port and port-to-door from Asia to the U.S. West Coast, and $600 for each box moving intermodally or via all-water service to the East Coast. On top of that, shippers should expect to pay a peakseason surcharge, running from June 1 through Oct. 31, of $400 per 40-foot container. Visit www.tsacarriers.org. 16 MARCH 2008 http://www.deloitte.com/us/cpg http://www.sap.com http://www.tsacarriers.org

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Global Logistics and Supply Chain Strategies - March 2008 Editorial GL & SCS Exclusive FastForward Up Front The Green in Green Think Inside the Box Have a Second Look Can't Happen Here Opinion: Stay in the Black as Your Workforce Fades to Gray Opinion: Four Critical Steps to Managing Change in the Supply Chain Industry Voices

Global Logistics and Supply Chain Strategies - March 2008

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