Breakthrough Negotiations Workshop for Global Co-Creative Negotiations

Our workshop has been in global deployment for three years in over 12 countries across North and South America, Europe and Asia. The lessons and learning are transferable across all cultures. Our program is tailored to customs and cultures for each location.

BVG  has  incorporated negotiation  techniques  from  top academic  research  Universities  such as  Harvard,  Wharton, Columbia and  others (30+).

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Supply chain execs expect ‘near-shoring’ trend

In the article by "Supply Chain News" published below, The University of Tennessee survey of 240 executives show a response by 52% of the firms that "near-shoring" is in their planning.  Transportation cost was quoted as the primary reason to bring these operations back to the US.

By Chuck Crumbo
Southeast Supply Chain News
ccrumbo@scbiznews.com
Published July 12, 2011

KNOXVILLE, Tenn. -- Slightly more than half of business executives participating in a survey of global supply chain trends expect firms that have outsourced manufacturing to begin moving back toward the United States in the next two years.
The survey by World Trade 100 and the University of Tennessee found 52% of 240 executives from various companies think “near-shoring” will increase for industry in general.

J. Paul Dittmann,
 executive director
 of the
UT Global
Supply Chain Institute

But the study also showed 11% of the executives thought outsourcing or off-shoring would decline for their companies over the next two years.

“This no doubt reflects the debate going on in firms regarding the future of outsourcing,” wrote J. Paul Dittmann, executive director of the UT Global Supply Chain Institute, in the July edition of World Trade magazine. “For those who expect near-shoring to increase, higher transportation cost was by far the most common reason cited (61%).
“In addition, the length of a global supply chain resulting in late deliveries also was cited as a significant reason to consider in-sourcing.”
Dittmann said that the survey — the first of its kind by the institute and trade organization should find out if firms were reducing their reliance on global off-shoring and do more near-shoring.
Nearly three-out-of-five respondents cited the low labor costs as the primary reason to continue off-shoring, Dittmann said, and when companies consider increasing their production capacity, 33% explored off-shoring.
This revelation, though, contradicts the growing concerns about the risk in off-shoring or outsourcing, Dittmann said in the article. Just slightly more than half of the executives (52%) said that they analyze and quantify risk in making decisions about outsourcing work. That means, Dittmann said, 48% do not analyze risk.
Most companies consider unit freight costs when making decisions about outsouring, but only 48% weigh inventory costs.
“Inventory of course almost always increases significantly when production is outsourced,” Dittmann said. “And, for most firms, inventory represents a major cash flow challenge as well as a major expense.”
Other survey highlights:

• 53% of executives think about potential disruptions in their supply chain when making a decision about outsourcing.
• 52% of respondents said they are “very or extremely concerned” about quality of outsourcing.
• 43% said their greatest fear is that the economics of the outsourcing decision will change.
• 59% use domestic talent to managing global relationships.
• 49% rely on hiring people who already have that expertise.

Dittmann said the survey’s results answered some questions and raised others, “but hopefully provide much food for thought for firms managing a global supply chain.”

Air cargo profits take off - Article from Logistics Management

Air cargo profits take off

While the world’s airlines are posting an impressive revenue rebound, air cargo analysts claim that volatility caused by too little or too much capacity in the market has resulted in wide swings in rates and overall carrier performance.

By Karen E. Thuermer, Contributing Editor
November 10, 2010

While the height of the global recession in 2008-2009 saw the airline industry facing unprecedented declines, the dramatic upturn that began in the 4th Quarter of 2009—driven by shipper needs to restock depleted inventory—only draws more attention to the air freight market’s volatility.

At first glance, the news appears positive for the carriers. International Air Transport Association (IATA) projects that for 2010, global demand for both passenger and cargo service will expand by 11 percent.

IATA forecasts 2010 yields for cargo to grow 7.9 percent, sharply higher than the 4.5 percent previously projected. As of September, IATA now expects the airline industry worldwide to generate net profits of $8.9 billion in 2010, up from its previous forecast of $2.5 billion. Certainly, current airline revenue figures are impressive. In the United States alone, Delta Airlines posted a $467 million second quarter 2010 profit, part of the cumulative $1.45 billion profit reported by the top nine U.S. passenger airlines for that period—and a dramatic turnaround from their net loss of $556 million a year ago. However, the IATA maintains that this recovery is not sustainable and only reflects a post recession rebound; in the meantime, the organization does commend the industry for managing its assets with tight capacity over the past 12 months.

Any way you slice it, it’s time for a reality check. The IATA warns that even with this year’s improvement, yields are still 8 percent below the pre-crisis levels of 2008. In addition, doubts linger about how long this cyclical upturn will last. “This year is as good as it gets,” says Giovanni Bisignani, IATA director general and CEO. “It will be the peak of the cycle and 2011 will be a much tougher year.” Bisignani’s reasoning for the slow down in the air is directly related to the forces that have kept the current rebound rather tepid: government stimulus monies are ending; new jobs haven’t been created; and consumer confidence remains low. “Even if it is sustainable, the profit margins are so razor thin that even increasing profits 3.5 times only generates a 1.6 percent margin,” he adds. This is below the 2.5 percent margin of the previous cycle peak in 2007 and far below what it would take just to cover the industry’s capital costs.“The bounce that we saw this year was to restock inventories,” Bisignani adds. “Now consumer spending needs to support demand.”

Click here to download PDF article

Air cargo profits take off - Article from Logistics Management

Landstar / Business Value Logistics Provide Supply Chain Management Service to Global EMS Market

Landstar Supply Chain Solutions and Business Value Logistics announce their new Supply Chain Management Venture.  The relationship is formed to introduce the new Landstar Supply Chain Solutions Business to the Electronic Manufacturing Services market.  The A3i Integration subsidiary of Landstar Supply Chain Solutions is providing the Oracle based TMS and GTM solution in a Software as a Service format.  For more information  visit the Business Value Logistics Blog .

Accenture wins major energy supply chain contract

The energy convergence program is designed to incorporate DLA's energy supply chain business into its enterprise resource planning architecture, which Accenture introduced in 2000 via the business systems modernization contract.

By SCMR Staff
September 12, 2010

The U.S. Defense Logistics Agency (DLA) awarded Accenture a four-year, $73 million contract to integrate DLA’s energy supply chain into its enterprise business system (EBS) program. The energy convergence program is designed to incorporate DLA’s energy supply chain business into its enterprise resource planning (ERP) architecture, which Accenture introduced in 2000 via the business systems modernization (BSM) contract.



Under BSM, Accenture developed a SAP-based ERP architecture, replaced two of DLA’s major legacy systems, and integrated seven of DLA’s supply chains. In 2007, Accenture began work on EBS, bringing more efficient, effective and reliable supply chain support to the U.S. military services. Energy, which includes all fuel commodities and related business processes, is the eighth and final component of


“Bringing energy into the EBS environment is DLA’s final step in achieving a leading-edge logistics system. We look forward to helping DLA and DESC continue providing for America’s armed forces through an efficient, reliable and speedy supply chain that meets the ever-changing needs of DLA’s customers,” said Lisa Mascolo, managing director, Accenture’s U.S. federal practice.


Working with both DLA EBS personnel and Defense Energy Support Center (DESC) fuels managers, the Accenture team will integrate a client-specific oil solution to meet DESC requirements. Accenture’s solution will streamline operations, integrate financial activities and reduce systems support cost. Additionally, it will provide DLA with total asset visibility and reduce customer wait times – a critical feature for military personnel worldwide. When the energy integration is complete, DLA will have added more than $18 billion in traceable items to its fully integrated logistics supply chain.

DLA provides 100 percent of food, fuel, medical supplies, clothing/textiles, construction and equipment to U.S. service men and women in 126 nations. The agency averages 54,000 requisitions and 8,000 contracts per day, and manages 520,000 shipments annually. EBS has enabled DLA to re-direct shipments in-flight, all within one system with real-time monitoring of the processes and transactions.

Story from ThomasNet Industrial Market Trends

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How Many Suppliers are in the Global Supply Chain? Anecdotal evidence that a significant number of suppliers have "gone bust" over the past year abounds. How many are left? New research suggests much fewer than just two years ago.Procurement departments continue to wrestle with maintaining supplier viability. In the U.K. alone, there has been a 47 percent increase in the number of public-sector suppliers that have collapsed in the first half of 2010 over the same period in 2009. According to research from accountancy firm Wilkins Kennedy this week, 168 businesses in health, social services, education and defense collapsed in the first six months of this year, up from 114 in the first half of last year.

Throughout the entire global supply chain, just how many suppliers remain?

"The [...] overall number of relevant and highly used suppliers is significantly smaller than many believed," according to Mike Anguiano, chairman of CVM Solutions, a provider of supplier management solutions.

New findings of a multi-year analysis of suppliers to Fortune 1000 companies, conducted by CVM, indicate that there are approximately 4.9 million unique suppliers in use by Fortune 1000 companies. Of these, only 309,790 (6 percent) were used by two or more companies in 2009. That is 15 percent less than the 366,356 in 2008.

The study, announced this month, also shows that the number of suppliers is decreasing at a faster pace in the first half of 2010 than previous years, although the full scope of the decline will not be evident until the end of this year.

As the number of highly used suppliers has continued to decline since 2008, the remaining suppliers may struggle to support increasing customer demand throughout the coming years, the findings suggest.

The study's data further highlights other declines in the supplier base. For example, the number of unique supplier families dropped from 93,038 in 2008 to 62,976 in 2009, while the number of small and diverse businesses dropped from 1.15 million to 851,699 during the same period. These figures were based on the total population of common suppliers.

CVM points to continued challenges for small and diverse businesses. "Fortune 1000 spending with small and diverse businesses is under pressure, as the number of these suppliers continues to decline," the study says.

While the overall number of suppliers is trending downward, CVM also noticed that, despite the disappearance of certain suppliers, new ones are being added.

"This trend leads us to believe that there is a Darwinian effect occurring in the supply chain as Fortune 1000 companies cut weaker suppliers and replace them with stronger ones," Anguiano said in an announcement of the findings.

Ultimately, supplier consolidation continues to increase, as evidenced by the smaller number of unique supplier corporate families. According to CVM, the two key reasons for this trend are that smaller independent suppliers are being discontinued or going out of business and mergers are reducing the number of parent companies as larger firms acquire smaller suppliers.

Last year, companies were advised to monitor their suppliers' financial health more closely than usual. This effort should continue today, according to CVM.

"The worldwide economy continues to struggle, resulting in ongoing shrinkage in the overall number of suppliers," CVM adds. "As this trend continues, Fortune 1000 companies must be diligent in managing their suppliers."

Related

Spotting a Troubled Supplier

Auto Part Suppliers Rebound as Vehicle Sales Recover

Resources

CVM Solutions Sees Darwinian Effect in Fortune 1000 Supplier Base

CVM Solutions, Aug. 10, 2010

Public Sector Suppliers Suffer Surge in Insolvencies as Government Cuts Take Hold

Wilkins Kennedy, Aug. 23, 2010

Read the full article here:

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Port Tracker report calls for 15 percent annual volume increase and a new peak month - Article from Logistics Management

Port Tracker report calls for 15 percent annual volume increase and a new peak month - Article from Logistics Management
By Jeff Berman, Group News Editor


August 06, 2010

Following last month’s report which noted import cargo volumes at U.S.-based retail container ports would begin to decline in the coming months, the most recent Port Tracker report by the National Retail Federation and Hackett Associates notes that 2010 volume is pegged to hit 14.5 million containers for a 15 percent annual increase.



July volumes are expected to rise 1.38 million TEU, or 25 percent, and August volumes are expected to rise 14 percent year-over-year at 1.32 million TEU, according to the report.



Port Tracker indicated that U.S. ports handled 1.32 million TEU (Twenty-foot Equivalent Units) in June, which is the latest month for which data is available, for a 4 percent gain from May and a 30 percent year-over-year gain. This marks the eighth straight month to show a year-over-year improvement after December 2009 snapped a 28-month streak of declining volumes through November 2009.



This year began with sequential gains in December and January, followed by a decline in February. March volumes—came in at 1.07 million TEU (Twenty-foot Equivalent Units), which was up 7 percent from February’s 1.01 million TEU and 12 percent year-over-year. April volumes at 1.15 million TEU—were up 7 percent from March and 16 percent year-over-year. And May hit 1.25 million TEU followed by June’s 1.32 million TEU.



The ports surveyed in the report include: Los Angeles/Long Beach, Oakland, Tacoma, Seattle, New York/New Jersey, Hampton Roads, Charleston, and Savannah.



The report’s authors said that the large double-digit increases in June and July can be attributed to backlogs that accumulated due to a lack of shipping capacity brought on by ship owners removing capacity during the recession, followed by them taking their time bringing them back online when economic activity picked up.



They added that many retailers may actually be transporting more merchandise earlier in the year to avoid further bottlenecks, explaining that this could lead to July becoming the peak shipping month in 2010 as opposed to October, which is more common.



“Shippers and importers have sort of moved ahead of the market by buying early partly out of fear that there was not going to be enough capacity later on, and it seems that they have gotten a head start,” said Ben Hackett, president of Hackett Associates, in an interview. “This is what really drove the May-July figures.



Hackett added that he believes the container shortage is close to an end, with carriers putting vessels back into service that are charged with bringing back empty containers from Europe and North America. And the amount of empty containers moving out of U.S. ports is higher through the first six months of 2010 than it was for all of 2009, according to Port Tracker.



And with various economic indicators taking steps backwards in recent weeks, Hackett pointed out that consumer confidence appears to be moving in lockstep with that trend, as current levels—since June—are in line with August 2009.



Even though the Port Tracker report maintains that July may turn out to be the peak shipping month of the year, Hackett noted that does not mean there will not be growth in the coming months.



In fact, year-over-year projected growth rates are still in double-digits, with July and August projected to hit 1.38 million TEU (25 percent increase) and 1.32 million TEU (14 percent increase, respectively. September is expected to hit 1.32 million TEU (16 percent increase, and October is slated for 1.31 million TEU (10 percent increase. November and December are projected to hit 1.19 million TEU (9 percent increase) and 1.12 million TEU (2 percent increase), respectively.



“We aren’t back to where we were two years ago and consumers aren’t convinced that the recession is over quite yet, but 2010 is clearly going to finish better than last year,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “In the meantime, retailers are monitoring demand very closely and hoping to see increases in employment and other areas that will boost consumer confidence. Cargo numbers this summer are showing unusually high percentage increases, but that appears to be an indication of shortages in shipping capacity earlier in the year rather than sales expectations.”