New Report Shows Irish Consumers Prefer Shopping In-Store to Online

 

More shoppers are buying less online than one year ago. So says the findings of a report published on the Checkout Ireland website today. Irish consumers still prefer to buy groceries in-store than online despite investments by retailers to expand their service offering.

Online shopping versus in-store shopping

According to the latest Consumer Intelligence Report from Empathy Research, one of the main reasons for not shopping online is the preference for the bricks and mortar offering with some also stating their concern they would not receive the exact products upon delivery.

Despite the increasing use of e-commerce sites in Ireland by consumers, the rate of online grocery shopping is not as high as expected. However, retailers, such as SuperValu who have been rolling out this service in the last 12 months, continue to invest more in online operations.

Over 70% of the 505 survey respondents said they have never ordered groceries online for home delivery, with two in five saying they actually order less than one year ago.

While smaller retailers, such as c-stores, offer a local delivery service, the larger brands primarily concentrate on big urban centres. One of the top three reasons for not shopping online, according to this survey, is the unavailability of the service in their area. As such, there may be potential for some retailers to tap into this category.

Over three in five (61%) of participants mentioned having a preference for visiting a supermarket as the main reason why they would not order online groceries. This is a key finding and for supermarkets, it is imperative to understand the nature of these preferences.

I want to acknowledge Checkout and Empathy Research for permission to quote from the report.


Posted on January 24, 2012 in Report by
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Boeing Outsource When Lacking Skills

 

OutsourcingThe epic Dreamliner project instituted by Boeing changed the way many businesses look at supply chain management permanently. Although Boeing recorded several glaring problems, such as a 3-year delay in delivery of their first aircraft, the changes to their manufacturing and delivery process have fundamentally changed the future operations of their business for the better.

From the outset, the Dreamliner eschewed the traditional engineering goal of greater speed in favour of increased efficiency and economy. The lynchpin of this design was to be the use of carbon reinforced plastic composite materials for nearly 50% of the aeroplane, including the wing and fuselage.

As good as the idea was however, Boeing lacked the skills and equipment required for creating carbon composite components, fundamental to the success of the Dreamliner. The manufacturing of these parts was therefore outsourced to contractors who had the requisite abilities.

This shift to outsourced component construction required a paradigm shift in the Boeing supply chain and the way it was managed. To allow for free data interchange between supply chain members, Boeing implemented a ‘collaboration hub’ that kept stakeholders fully informed of manufacturing progress.

As the project progressed, the contractors encountered a number of problems which delayed the project as a whole and required direct intervention by Boeing. As roles were adjusted and responsibilities shifted around the supply chain, the implementation of the collaboration began to prove its worth by providing a single point of reference for every stakeholder. Production information was available in real time allowing for tweaks and balances at each supplier (of whom there were over 50).

Boeing took the brave step of starting a project which they themselves could not complete, but choosing a supply chain management system which would not only underpin the project, but adjust according to circumstances. Applying this scenario to your own business, how could a radical supply chain alteration benefit you? Is your current supply chain management system flexible enough to cope?


Posted on January 23, 2012 in Supply Chain, Supply Chain Management by
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Boeing Tighter Supply Chain Integration for Success

 

Keeping a close eye on the supply chain is essential to ensure raw materials are successfully converted into saleable goods, but is observation enough to succeed? Boeing’s epic Dreamliner project demonstrated that tighter integration of the supply chain constituents was absolutely essential in order for the first of the new aircraft to be delivered.

The Dreamliner was born out of a desire for greater efficiency both in the aircraft itself and in the construction process behind it. Boeing took the previously unheard of step of outsourcing the manufacture of the aeroplane components to 50 specialist subcontractors and used a central supply chain management portal to keep tabs on progress. The idea was that the components would be created simultaneously at various plants and then delivered to Boeing for final construction in a three-day window.

Such a deadline requires that members of the supply chain be working in synchronisation with each other and that they are fully informed about progress at each point. As problems arose during manufacture, partners were kept abreast with delays and developments allowing them to adjust their own processes to compensate.Boeing Tighter Supply Chain Integration Success

The collaboration hub also allowed Boeing to keep a tight handle on supplier progress and provided a mechanism by which they could address issues with contractors as and when they arose. At certain points during the project, Boeing was forced to step in and reclaim certain responsibilities to ensure the project continued on track.

The stated goals of the Dreamliner project were impossible to achieve without close integration between suppliers, subcontractors and Boeing themselves. Close communication and working practices made the dream a reality where many industry pundits had predicted disaster.

Collaboration between suppliers has often been seen as an evil necessity, rather than a genuine route to success. The eventual success of the Dreamliner was hard won, but the lessons learned by Boeing will shape the way they work with subcontractors permanently.

How would your business benefit from tighter supply chain integration? What would you need to change to make it a reality?


Posted on January 20, 2012 in Supply Chain, Supply Chain Integration, Supply Chain Management by
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How Boeing’s Customer’s Customers Inspire Their Success

 

For manufacturers it is often tempting to think in terms of satisfying our immediate customers’ needs – after all they are the ones paying the bills. But what if we considered the needs of our customer’s customers?

Boeing Passenger Zone

Source: Boeing

This is precisely what Boeing did in the run up to the release of their new Dreamliner aircraft. Widely recognised for its incredible efficiencies and revolutionary manufacturing process, the Dreamliner is also the result of extensive market research undertaken by the plane builder.

Traditionally, aircraft manufacturers build the shell of the plane and tweak the cabin innards to suit their customers, the airline. In this scenario, the needs of the passenger tend to be considered last – something Boeing regarded as fundamentally wrong. In 2000, at the start of the Dreamliner design process, Boeing instituted their Passenger Experience Research Center (PERC). This analysed the psychological and emotional responses of passengers to air travel. The research took the form of various focus groups as well as a look into the medical effects of flying.

Using the data gathered through PERC, Boeing managed to address a number of the passengers’ wants through clever design. The Dreamliner is intended to help passengers fall in love with flying again by helping them reconnect with their earliest positive emotions. The high tech carbon composite fuselage also allows for greater control of the internal cabin environment recreating atmospheric conditions closer to Earth and thereby reducing many of the negative health effects associated with long haul flights such as headaches, itchy eyes and dry noses.

By considering the needs of their customers’ customers, Boeing have created an aircraft which passengers actually want to fly in. The application of the results of extensive customer research has therefore made the Dreamliner easier to sell to airlines too.

All of this raises the question, how could your business improve by considering the needs of customers further down the supply chain?

 


Posted on January 18, 2012 in Supply Chain Management by
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Boeing Prove Direct Integration Is Not Everything

 

During late 2011, Boeing finally began shipment of their latest aircraft, the 787 ‘Dreamliner’. Three years late and massively over budget, the Dreamliner has had a troubled route to market but Boeing executives are convinced that the changes the technological and manufacturing advances made during the project, coupled with their new approach to supply chain management will reap major benefits in the future.

Prior to the Dreamliner, Boeing bought parts from suppliers before assembling the finished aircraft themselves. The 787 project however required suppliers to design and build major sections of the aircraft before delivering them to Boeing. The ultimate goal was to reduce the final assembly time by Boeing to just three days.Supply Chain Management in Boeing

To make this ambitious plan a reality, Boeing implemented a collaboration hub which would bring together all 34,000 suppliers involved with producing parts for the Dreamliner. The system allows suppliers access to real time data to ensure that every single part is assembled in the correct order and delivered on time; with a three day assembly window, timing of deliveries is critical so that everything is in place at the right time.

The centralised data system means that every member of the supply chain is immediately aware of any potential delays and can adjust their assembly and delivery schedules accordingly. As the primary buyer, Boeing are able to gain an instant overview of the entire supply chain, so that parts are only ordered as requested and helping to speed payment of invoices between suppliers.

One of the most notable aspects of Boeing’s new supply chain management platform is that it is not reliant on every supplier having the same ERP systems in place in their businesses. Instead of using a proprietary EDI format to join inventory and accounts systems, the new Boeing platform collects and retains information in the online hub.

Although Boeing’s new cloud-based supply chain management system has revolutionised the way that the business operates in terms of efficiencies and future cost savings, there remains room for improvement. Using a platform which allows for transparent data transfer between ERP systems would further reduce complexity and potential data duplication between onsite systems and Boeing’s portal. Time will tell whether Boeing’s supply chain management system undergoes such an evolution.

 


Posted on January 17, 2012 in Cloud Computing, ERP, Integrated Supply Chain Management Platform, Supply Chain Integration, Supply Chain Management by
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Proverbs and Supply Chain Management Innovations

 

If you have worked in business for any length of time, you are bound to have heard of the importance of ‘not re-inventing the wheel’; not trying to do redesign Supply Chain Management Innovations something which has already been achieved. In some respects there is a small amount of wisdom in the proverb, but if your business is not trying something new, how does it differ from the competition? What makes your supply chain any better? What can you offer your customers that they cannot get elsewhere?

Albert Einstein summed up the dilemma perfectly, ‘Insanity: doing the same thing over and over again and expecting different results.’

When assessing our supply chain management systems, there are undoubtedly lessons that can be learned from the experiences of similar organisation or even our competitors. But in the unwritten rulebook of business process analysis, nowhere does it state that just because something worked for ABC Ltd, it will work for your company. If you blindly replicate the implementations of other businesses, you may gain the same advantages they did, but you will also repeat the same mistakes they did.

At the end of the process you are in no better or worse position than when you started because you are in exactly the same place competitively as when you started.

Consequently the delivery of supplies and services must be new and innovative or no one benefits in the long term. Neither your business, its partners nor its customers will be any better off if your supply chain management system does not reinvent the wheel.

The global financial downturn has forced many businesses to think more creatively about their futures giving credence to yet another old adage – ‘Necessity is the mother of invention’. Your business and its processes need to change, so why not be inventive? Why not break the rules and reinvent the wheel?

 


Posted on January 16, 2012 in Innovations, Supply Chain Management by
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How flexible is your supply chain management system?

 

Recent events have caused many companies conducting business internationally to carefully consider and reconsider their supply chains. The extensive flooding in parts of Thailand has had a well-documented effect on the supply of hard disk drives, leading to a worldwide shortage of several devices.

Fire alarmMajor computer component manufacturer Seagate has run into problems with building new disk drives because not only was the plant responsible for assembling them flooded, so too was another supplier who built the motors for each drive. Even when the Seagate assembly plant was reopened, the motor manufacturer’s was still underwater. This dual layer of failure has encouraged other businesses to look carefully at their own risk management procedures, going two or three layers down their component suppliers to identify the potential for a similar problem in their own companies.

For those organisations which successfully complete their risk awareness surveys, identification of potential points of failure is only the start of the remedial process. Backup component suppliers need to be sourced for failover in the event of a supply chain disaster, as does the capacity for a change to the business process system which underpins it.

And herein lies another potential pitfall. An in-house maintained system could lack the flexibility required for an emergency transition or workflow alteration leading to additional delays and costs on top of those incurred by the original failure. Again the option of business process outsourcing and hosted supply chain management systems tend to offer a significant benefit over their in-house counterparts.

The cloud-based supply chain management system allows for a ‘pay-as-you-go’ approach, with subscribers paying for exactly what they need, when they need it. Additional functions or capacity can be added or removed centrally as requirements change, allowing for a highly flexible approach to potentially crippling disasters. The promise of flexibility could mean the difference between organisational survival and destruction. Can your current system meet the challenge?


Posted on January 13, 2012 in Business Process Outsourcing, Cloud Computing, Supply Chain Management by
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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?

 


Posted on January 11, 2012 in Supply Chain, Supply Chain Management by
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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.


Posted on January 9, 2012 in Business Process Automation, e-Invoicing, Smart Admin by
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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.


Posted on January 4, 2012 in Cash Flow Management, Supply Chain, Supply Chain Management by
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