Tesla Supply Chain Issues and Lessons!

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Tesla article and permission to publish provided by http://argentus.com.  

Back in 2016, we posted about Tesla’s ambitious plan to ramp up production of its consumer-grade Model 3 electric car to 500,000 vehicles a year by 2020. At the time, pretty much every analyst agreed that was an ambitious target for a manufacturer without solid experience mass-producing vehicles at that scale.

In the two years since, Tesla’s CEO Elon Musk has issued a number of other bold predictions. He’s championed a whole host of emerging technologies. He’s made the world feel like the future could resemble a sci-fi novel – were he to deliver on the herculean tasks of sending humans to mars, shifting the world to solar power production, and figuring out how to directly connect computers to human brains.

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The Amazon Effect is the New Walmart Effect!

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Blog post originally published at  http://veridiansol.com.  Permission to publish here provided by Jason Rosing.

In 1994, Amazon.com founder Jeff Bezos read a statistic that the Internet had been growing at 2300 percent annually. He fashioned that changing tide into a business plan that has been breaking barriers across supply chain and e-commerce that has left an indelible mark.

Beginning with booksellers, the e-commerce giant has expedited the closure of many retailers and threatens to redefine the standards of shopping in a digital world. Retailers are forced to lower prices, optimize their systems and processes, and reduce profit margins in favor of competition; meanwhile, Amazon continues its trek toward dominance.

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Lean in the Back Office … Why is it so difficult?

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Implementing a Lean program on the Manufacturing floor, in a Warehouse operation, or in a Distribution Centre is challenging enough.  There are a series of process steps in which materials are transformed or moved in some fashion.  Try implementing Lean in the Back Office.

And your Lean program has at its core the objective of making these operations as efficient as possible. But when you try to apply these same Lean principles to the support organizations, or the back office, you are likely to experience a wide range of reactions.

So why is it so difficult to implement, and sustain, a Lean program in the Back Office of your organization?

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Do You Want Inventory Turnover Breakthrough? Define and Manage The Levers!

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Taking a holistic approach in order to achieve Inventory Turnover Breakthrough results meant that I needed to consider the End To End Supply Chain.  As I thought through this approach there was really no other way if we were to achieve significant improvements to help the entire business in a short period of time.

In thinking about the End To End Supply Chain it was necessary to define all of the aspects that impact Inventory levels.   In short I needed to be able to manage:

  • All of the levers that control the rate at which Inventory is brought in to the company
  • All of the levers that control the rate at which Inventory moves through the company
  • And all of the levers that control the rate at which Inventory moves out of the company
Continue reading “Do You Want Inventory Turnover Breakthrough? Define and Manage The Levers!”

An Acquisition Gone Wrong! A Coup D’Etat in the Boardroom!

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The CEO called an emergency meeting in the Boardroom.  The President of our Division, myself, the prior owners of a company we had just acquired, and one of our major shareholders/board members were to attend.  The sh*t had hit the fan with our latest acquisition.

It had only been a few months since the acquisition had been completed.  This was certainly long enough for the honeymoon period to be over.  But now it looked like we were quickly heading for a divorce.

What went wrong?

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Blockchain Continues to Make its Way into the Supply Chain World!

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Blockchain continues article provided by http://argentus.com.  Argentus is a boutique recruitment firm focused on Supply Chain and Procurement.

A few months back, we wrote about Blockchain as an emerging technology and tool for Supply Chain transparency.

It’s a pretty incredible technology that stands to reshape big aspects of the economy in general and Supply Chain in particular – but it’s also pretty difficult for the common person to understand, which doesn’t help matters.

But Blockchain is coming, and it offers the potential to shake up Supply Chain and Logistics like few other technologies coming down the pike.

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Value Stream Mapping the Future State Process!

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Unchaining Change Leadership

We had completed value stream mapping the current state processes across some very significant business processes in the company.  It took a fair amount of time even though we had the active involvement of subject matter experts and leaders from every functional organization.

When all was said and done the current state involved hundreds of process steps, almost 200 pain points, and dozens of iterative, repetitive loops.  The company was just being introduced to Lean process improvement techniques.  And as challenging as it was to reach a common understanding of what the current processes were the difficult part was about to start.

How were we going to define and map the Future State process?

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Characteristics of a Barrier Busting Culture!

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When you embark on driving any kind of Game Changing Transformation you will most likely also need to change the Culture.  As the saying goes, “the definition of insanity is doing the same thing and expecting different results”.  So in order to get different results you may have to break through barriers and drive different behaviours from what are inherent in your current Culture.

Your organization is an ecosystem of policies, practices, processes and procedures that are the result of decisions, beliefs and  behaviours.  Over time much of this generally gets accepted as the way it’s always been done and is not open to challenge or to change.  Therein sacred cows, whether real or perceived, can become obstacles to making the changes needed to derive different results from the status quo.

So how do you change your Culture to achieve Game Changing results?

Continue reading “Characteristics of a Barrier Busting Culture!”

6 Trends to Make Supply Chain Managers the Heroes of Their Company!

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Supply Chain heroes article originally published by, and permission to publish here provided by, Adam Robinson on  https://cerasis.com

Supply chain leaders and heroes will face the year with uncertainty and opportunity. Digital technologies are becoming more prevalent in basic supply chain functions, and changes in legislation are likely to spur dramatic changes that will result in the need to reevaluate supply chain strategy in both domestic and international locations.  How can they be heroes?

Similar to the supply chain maturity curve of technologies, as explained by Steve Banker of Forbes, supply chain managers should consider how top supply chain trends will influence operations in the coming year.

Continue reading “6 Trends to Make Supply Chain Managers the Heroes of Their Company!”

The Amazing Supply Chain of Your Morning Coffee!

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Coffee article written by Julia Severins and originally published on http://allthingssupplychain.com  .  Permission to publish provided by David Weaver.

Even though modern coffee machines offer an attractive variety of caffeinated drinks like cappuccino or latte macchiato, for me it is a simple cup of black coffee that helps kick-start my productivity when the clock strikes 8 am.

This “kick-start”, or boost aspect of coffee was randomly discovered between the sixth and the ninth century. A widespread tale sets the scene in the kingdom of Kaffa, in Abyssinia – which today is Ethiopia – where a shepherd one day observed that his sheep were unusually cheerful after eating white blossoms and red cherries from a previously unknown plant. Further, it is said that the shepherd told monks from the nearby monastery about his new discovery, but they tagged the beans as “Devil´s work” and hurled them into a fire. The delicious smell that rose from the pit of the fire brought on the idea of roasting the beans.

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Seasoned Leadership in Action™! An Interview with David Cefai, CIO at IMax!

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At Supply Chain Game Changer we believe in sharing experiences and expertise from people in every industry and from across the globe.  As such we have introduced our “Seasoned Leadership in Action” Interview series at Supply Chain Game Changer.  This interview is with David Cefai, CIO at IMax.

Continue reading “Seasoned Leadership in Action™! An Interview with David Cefai, CIO at IMax!”

Creating the Culture to Break Barriers!

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In my experience when you embark on driving any kind of Game Changing Transformation you will most likely also need to break barriers and change behaviours if not the Culture.  As the saying goes, “the definition of insanity is doing the same thing and expecting different results”.  So in order to get different results you may have to break through barriers and drive different behaviours from what are inherent in the current Culture.

Your organization is an ecosystem of policies, practices, processes and procedures that are the result of decisions, beliefs and  behaviours.  Over time much of this generally gets accepted as the way it’s always been done and is not open to challenge or to change.  Therein sacred cows, whether real or perceived, can become obstacles to making the changes needed to derive different results from the status quo.

Having your Call to Action in Place, A Project Name and mandate, and a Holistic Approach are critical.  But the “X” factor that you also need to have a strategy for is Cultural Change.

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Which is Better? Amazon FBA or 3PL?

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Amazon FBA article by Dona Dimaculangan of 3P Logistics at https://www.3p-logistics.co.uk/.

E-commerce is defined as the buying and selling of products or services exclusively through electronic channels. If you’ve made an online purchase through eBay, Shopify, Amazon, and other platforms, then you have made your purchase via an e-commerce site.  More and more people spend their time browsing on the internet and the more likely they are to buy stuff online.

Admittedly, the e-commerce industry is booming. Retail e-commerce sales in the United States are projected to grow at a fast pace in the coming years, going from 322.17 billion U.S. dollars in 2016 to just over 485 billion US dollars in 2021.

Why You Need Order Fulfillment Services

 If you’re looking for a business that will eventually get you out of your 9-5 job, or looking to expand your existing business, having an online presence and web-based store could fulfill this goal. For beginners in the e-commerce trade, what do you need to do to get more sales, with a lot of online businesses competing for customers’ attention?

Amazon

Customers want products that will give the best bang for their buck with speedy delivery, and good after-sales support. Here’s where the different companies offering order fulfillment services come in.

What is an Order Fulfillment Service?

 Order fulfillment is defined as the steps involved in receiving, processing and delivering orders to end customers. A fulfillment service is defined as a third-party company that provides these order fulfillment steps on behalf of another party, such as an online seller.

Let’s look at the pros and cons of using either Amazon FBA (Fulfillment By Amazon) or a 3PL for your fulfillment needs.

Fulfillment By Amazon

 FBA, or Fulfillment By Amazon is a business model wherein e-commerce sellers on the Amazon Marketplace, big or small, can have their products stored in any of Amazon’s giant warehouses, pack and deliver them to customers, handle customer support, and returns.

FBA Pros
Expertise and Reach

 Amazon has one of the most advanced e-commerce fulfillment service in the world, can help you scale-up or grow your business and as of the last measured period, the source estimated 90 million paying Amazon Prime subscribers in the United States, up from 63 million in June during the previous year.

Amazon Prime customers are eligible for 2-Day Shipping, Free Shipping and other benefits. If you sign up your products for Amazon Prime, your products are eligible for free shipping, too.

Customer Service and Returns

FBA handles customer service and returns. Listings are displayed with the Prime logo, so customers know that Amazon handles packing, delivery, customer service, and returns.

They handle the fulfillment services side of the business and saves your time, so you can focus on the other aspects of your business.

Multi-Channel Fulfillment

With Multi-Channel Fulfillment, you can fulfill orders from other sales channels using your inventory stored in Amazon order fulfillment centers. Single-source your inventory to streamline your fulfillment operations, manage your inventory through an online user interface and can direct Amazon to return your inventory in e-commerce fulfillment centers at any time.

Cons of using FBA
Customization

Little to no order customization. Sellers must comply with existing Amazon .processes.

Branding

Items are shipped in Amazon boxes. Sellers can ship in generic boxes which may cost extra.

Warehouse Pricing

Storage fees are generally higher compared to 3PLs and usually rise during holidays.

Higher order handling fees for non-Amazon orders.

Communication

Solutions are based in standard processes which may pose little opportunity for dialogue.

Conflict of interest

The fact that Amazon may actually be a competitor to the seller. Amazon is in the business of selling, they just happen to offer shipping services. For Amazon, it’s free product and market research, and they’re making money off you.

Third Party Logistics (3PL / TPL)

Third–party logistics in logistics and supply chain management is a company’s use of third party businesses to outsource elements of the company’s order fulfillment services.

Pros of Using 3PL
Customization

Boxes/bags and all internal packaging are customized to a specific brand. Processes are adapted to your business’ operation and specification.

Warehouse Costing

Attractive storage costs that is variable. Customer pays storage space on a given month. Some 3PLs even offer free warehouse storage for a limited time.

Communication

Has onboarding processes, frequent communication before and after product launch. Collaborative approach is encouraged.

B2B (Business to Business)

Certain 3PLs can handle both B2B and B2C (Business to Consumer) fulfillment, resulting in one e-commerce fulfillment partner for all sales channels.

Cons of Using 3PL
Finding a Trustworthy 3PL company takes time.

Not all 3PL providers are created equal. It takes time to find a good company to work with from the beginning. Once you find someone you can trust, you can rest assured that your goods are being properly cared for. The initial search could be stressful but it will all be worth it once you find a reliable 3PL company.

Bad Service Reflects on Your Company

An inefficient 3PL provider could make your company look bad. Your customers do not care who is in charge of getting the product to them. All they care about is the end result. It is very important to look for a good distribution center early on to avoid customer-satisfaction issues in the future.

Amazon FBA or 3PL in Conclusion

Order Fulfillment Services are a crucial part of your business and a major factor in determining its success or failure. Whether you entrust your fulfillment services to FBA or a 3PL, there is a greater chance that you will be in good hands – these are fulfillment experts, after all.  The key difference is you as the owner,  – what do you want for your brand and what kind of customer experience you want to give to your consumers.

If you are happy to use Amazon’s existing system and tap into their wide customer reach, FBA may be a perfect fit for your company.  If, however, you would like more control over your order fulfillment services, partnering with a 3PL could be the best solution. Make sure your order fulfillment service provider is experienced with the type of operations you need before you entrust them with your reputation.

Originally written for Supply Chain Game Changer and published on March 8, 2018.

CEO Insights on Value Realization from Customer Success!

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Unchaining Change Leadership

Customer success article was created by Kia Puhm, CEO at K!A CX.  Kia’s site is  thedesiredpath.com.

The Toronto Customer Success Executive Breakfast is a forum whereby local industry leaders get together over breakfast to discuss the still young and rapidly evolving field of Customer Success.

Co-hosted by Natasha Narayan and myself, and Sponsored by Gainsight, senior executives in this field are invited to share their knowledge and expertise amongst their peer group in an intimate and highly interactive setting.

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Seasoned Leadership in Action™! An Interview with Paul Kretz, Head of SCM at Church & Dwight!

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Paul Kretz
Paul Kretz, SCM at Church & Dwight

At Supply Chain Game Changer we believe in sharing experiences and expertise from people in every industry and from across the globe.  As such we have introduced our “Seasoned Leadership in Action™” Interview series at Supply Chain Game Changer.  This interview is with Paul Kretz, Head of SCM at Church and Dwight.

I first met Paul at Celestica.  He left to purse other interests but our paths crossed again later on.  I was at a company that had just implemented a new WMS system in the Distribution Centre.  The system cutover  was a disaster.  And the operation had been run without true Warehouse Management experience as well.  As I looked to recruit a new leader I was looking for a someone who could lead change.

I toured my final two candidates through the Distribution Centre, including Paul.  Their reactions would help me decide who to select.  The other person seemed overwhelmed and lost while looking at the mess in the warehouse.  It wasn’t clear what they would do.  Paul looked at the disastrous situation like a kid in a candy store.  He saw opportunity at every turn.  And instead of  being intimidated by the situation Paul was motivated and inspired.  I found my leader!

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