Monthly Archives: January 2012

Supply Chain Management Improvements – Where does your customer fit in?

No matter what analysts say, vendors advise or your gut feels, improvements to your supply chain are a potential waste if they ignore the most important factor. If the benefits to your customer are not considered when implementing supply chain management improvements, you must ask yourself, why bother?

Although changes to the supply chain can make a business more efficient, reduce costs and raise employee morale, if the customer is not the overall beneficiary, your business may not actually realise any significant benefits. One of the first tenets is that the customer is king, thus they must be at the centre of everything you do, including innovations.

The Customer is King in the Supply Chain Management Improvements Process

Consequently any supply chain enhancement should go through planning from your business’ point of view and again from that of a customer. Try and define how the change benefits  your customer, and better still assign it a definite value. If you cannot, carefully consider whether you are implementing the correct innovation. An innovation that offers no value to your customers is probably not worth the investment required to implement it.

The demand for improved margins come from many different groups with shareholders leading the charge. Often many businesses choose to make efficiencies as a way of offering dividends rather than re-investing the savings for future development. Worse still these efficiencies often come at the cost of customer service. Any benefit to the customer in this situation is an afterthought, or even an unexpected side effect.

Customers who find that they are low down in their suppliers priority list are therefore right to feel aggrieved, especially if profits appears to be taking priority over their needs. In their position, why would they not seek out a supplier who appears to be more interested in them?

Supply chain management provides many, many benefits but if they do not offer similar advantages to your customers, can you really justify them?


e-Invoicing, Beyond the PDF – Part 2

As discussed in the first part of this article, electronic invoicing can be as simple as simply emailing a PDF version of the traditional accounts paperwork to a customer. However, this reliance on email comes with a risk that the invoice may be lost or delayed. This time we look at how Dumping Double Entry benefits your customer, and therefore you too.

How it usually works

Although the concept of buying and selling is simple, the paperwork associated with the process tends to be more complex than expected. A customer sends a purchase order when they want to buy a product from your business. Your company delivers the item and an invoice to the customer. Somewhere along the line, the invoice is paid and everyone is happy. Except it never quite seems to work like that.

e-Invoicing, Beyond the PDF 2The order is manually entered onto your system upon receipt of the purchase order, and an invoice is also created manually when the goods are despatched. When the invoice is received, your customer must then manually enter the details into their accounts system, whether you send a paper copy or a PDF attachment. All the information in the entire purchase process is entered twice  – once into your customer’s accounts system and once into yours.

This duplication of data entry leaves plenty of room for human error. The accounts clerk at your customer’s business accidentally enters the wrong line item total when processing your invoice and suddenly everyone is chasing everyone else to identify where the problem occurred. All the while, the outstanding invoice remains unpaid.

How it could work

Celtrino’s Smart Admin platform prevents this issue from ever occurring because all the data is only ever entered once. Your client submits their purchase order from their accounts system to Smart Admin, which converts the data and enters it directly into your accounts system. You in return submit an invoice directly from your accounts system via Smart Admin and it is entered automatically into theirs.

Because the invoicing data is correct at the point of entry and manual intervention minimised, there should be no more need for chasing up invoices because the details have been transcribed incorrectly. You and your customer therefore both save time and money. And no chasing up, means shorter delays to payment.

Deloitte CFO Survey: Cash and Costs and Improving Supply Chain Management Efficiency In 2012

A question that keeps popping up here at Celtrino is what’s going on in the minds of the CFO community and in particular, if CFOs are aware of the cost and cash flow benefits of improving their supply chain management efficiency.

Deloitte’s have just published their CFO Survey which is a quarterly survey of Chief Financial Officers and Group Finance Directors of major UK companies. Now in its 5th year, the survey provides another insight into the thinking of the CFO’s and their intended spend patterns in 2012.

The report returned seven key findings:

  1. The biggest concern for UK CFOs in 2012 is the risk of a break-up of the euro. CFOs attach a 37% probability to one or more members of the Single Currency leaving the euro in 2012.
  2. CFOs are pricing in a UK recession and expect the economy to remain weak for a prolonged period.
  3. 87% of CFOs believe this is a bad time to be taking additional risk onto their balance sheet.
  4. The profits cycle is turning. 70% of CFOs expect corporate margins to decline in 2012.
  5. The major priorities for large corporates in 2012 are reducing costs and increasing cash flow.
  6. Financial stress is affecting the supply of credit to large corporates. Credit availability has deteriorated at the fastest rate since the credit crunch in September 2008.
  7. Despite the risks, CFOs see opportunities to expand market share and acquire assets at discounted valuations.

    Deloitte CFO Survey

    Source: Deloitte

According to the report, “Despite the uncertainties 48% of CFOs think troubled times create new opportunities. One-third see opportunities to acquire undervalued assets; 30% think weaker competition provides a chance to expand market share; 19% believe that a difficult economy gives them a chance to implement overdue changes to their businesses. And some foresee new sources of demand. 12% of CFOs plan to develop new offerings to meet needs created by a difficult macro environment.”

Close on 20% of CFOs envisage the conditions to be favourable to affect transformative change to business processes that are either out-of-date or simply inefficient.  As the supply chain is now such a critical component of a company’s performance and very survival it makes perfect sense for CFOs to examine ways to improve the effectiveness and efficiency of how to manage B2B trading activities.

For those 87% of CFOs that believe this is a bad time to be taking additional risk onto their balance sheet, they should consider improving supply chain management efficiency as it is relatively risk free.

A key note about transforming inefficient supply chains is that it both reduces costs and improves cash flow. That’s a powerful addendum to the Deloitte survey for every CFO to take note of.