Logistics Software

Why Open Door Logistics (ODL) software is a game changer in the logistics Industry

Logistics software can be classified into two categories, the primary one being software designed for the purpose of keeping the manufacturing process running smoothly, while the other is meant for the purpose More »

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Interview with Mr.Jon Northorpe, Director of SCM at TTG Australia

In an exclusive chat with International Institute for Procurement and Market Research (IIPMR), Mr. Jon Northorpe, Director of SCM at The Thought Group, Australia speaks about the latest trends in Supply Chain More »

bread

Supply Chain of Bread Manufacturing

Liked by kids as well as adults, Bread is one of the most consumed food products across the world. Here is a interesting video showing end to end of supply chain process More »

Doug Fraser

How to Leverage Procurement to Realize Cost Savings

Doug Fraser lecturer at International Institute for Procurement and Market Research (IIPMR) speaks about how to leverage procurement to realize cost savings. More »

Top 8 Contract Negotiation Strategies

Top 8 Contract Negotiation Strategies

There is fascinating correlation between your Negotiation and long term success of an Organization. In some jobs, the human touch and essence is essential. In others, it seems to be a drawback, More »

IIPMR Certification Reviews

Interview with Mr.Shyam Rao, Head – Center of Excellence at Infosys

Listen to Mr.Shyam Rao, Head - Center of Excellence at Infosys speak about the latest buzz in Supply Chain, the demand for Certified Professionals and how cloud computing is changing the Supply More »

Bindiya

Bindiya Vakil, President of Resilinc talks about Supply Chain Risk

It is a common practice among the Supply Chain Experts to always focus only on  the products or services that contribute more than 80% of their spend. They go a long way More »

Demand forecasting, Price forecasting, Market Research,

Demand forecasting for brewery company with 85 per cent accuracy

In this video Mr.Sury Balasubramanian, Founder and CTO, Gaea Global Technologies, Chennai (www.gaeaglobal.com) explains how by looking at past data his company was able to accurately predict the demand seasonality. This will More »

ariba

National Bank of Canada on Procure-to-Pay

Jacque Lavoie, Director, Center of Excellence, National Bank of Canada speaks on procure-to-pay at Ariba LIVE 2012 Las Vegas at Caesars Palace. Ariba, Inc. is the leading provider of collaborative business commerce More »

brooke

Interview with Brooke Krenn, Senior Manager of Procurement Systems at Cox Enterprises, Inc.

A problem that most of the companies face today is managing multipe ERP systems. So what is a quick solution to the nagging complexity and implementation in moving from one ERP to More »

Why Open Door Logistics (ODL) software is a game changer in the logistics Industry

Logistics Software

Logistics software can be classified into two categories, the primary one being software designed for the purpose of keeping the manufacturing process running smoothly, while the other is meant for the purpose of providing data to be used by managers. The term “logistics” itself refers to the management of all the resources involved in any process, and logisticians are the ones who analyze this data and come up with solutions that can increase productivity. Logistics software generally involves the interaction of transportation, inventory, materials-handling, manufacturing, and even distribution, fleet management, vehicle routing and sometimes even data security.

However, some of them are designed specifically for the production of goods, while others are created for the maintenance of operations and warehousing.

Although there are multiple types of software available in the market today, most of term are built with proprietary technology and is usually offered as Software as a service (Saas) either through a monthly subscription payment model or a one-time payment that offers a life time access to the cloud version of the software.

Open Door Logistics Logo

 

 

 

 

 

 

Open Door Logistics Studio (ODL Studio) is a software that distinctly stands out in this landscape. Because it is built specifically for vehicle route optimization and is completely open source and can be downloaded for free.

Dr. Philip Welch

 

ODL was founded in 2014 by Dr. Philip Welch, an expert based out of Melbourne Australia who specializes in the application of modern artificial intelligence techniques-particularly computational intelligence-to transport logistics problems.

 

 

Here are some of the screenshots from the tool:

ODL Screenshot

 

 

 

 

 

 

 

ODL Screenshot 1

 

 

 

 

 

 

 

ODL offers the following 3 products:

ODL Live

 

 

 

 

 

 

It is a Cloud-based engine for real-time vehicle route optimisation and intelligent appointment booking. It can be used to schedule on-demand deliveries, taxi services, field force etc.

ODL Live is available on a monthly subscription. The subscription lets you host the system yourself – stay in control of your mission-critical systems by running on your own cloud servers (AWS, Azure etc).

 

ODL Studio

 

 

 

 

 

It is a Desktop-based application for non-realtime vehicle routing and territory mapping/management that is available to download for absolutely free of cost.

With ODL Studio, you can generate your delivery routes for the day, review them and then print them out in a report. You can also view your customers on a map and design sales territories around them. All data is held in a simple Excel spreadsheet.

ODL Studio is available for Windows, Mac and Linux desktops.

You can download ODL Studio here: https://www.opendoorlogistics.com/downloads/

ODL Connect

 

 

 

 

 

 

ODL Connect is a command line interface for ODL Studio, designed for easy integration into your backend systems. You can schedule your daily routes to be generated automatically (e.g. using Linux Cron). Pass data between ODL Studio and your ordering processing system using simple text files or Excel spreadsheets. Please note ODL Connect runs on either Linux or Windows servers.

For more information, please visit: https://www.opendoorlogistics.com/

1 vote, 5.00 avg. rating (83% score)

Interview with Mr.Jon Northorpe, Director of SCM at TTG Australia

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1. Please brief us about your profile at The Thought Group?

The Thought Group is a niche supply chain consulting company based in Melbourne Australia.  With extensive experience of operating across both Australasia and Asia we seek to provide a more practical and hands-on approach to supply chain issues ranging from project management and procurement through to interim management.

2. What are the significant milestones achieved under your leadership at The Thought Group?

We have been operating for over five years and have an established base of national and multinational clients.  During this time we have provided services for strategic network re-design, the design, development and delivery of several distribution centres and facilities and the improvement of supply chain costs.

3. What are the key challenges that companies face today in their supply chain?

We see that few companies are able to differentiate between cost and value.  Typically most companies believe that the establishment of best cost in the components of the supply chain means that ultimately this will deliver best value.  In most cases our experience shows that when the factors of best cost combine they rarely deliver best value.

4. There seems to be lot of buzz that cloud computing may replace traditional ERP tools used in supply chain? Do you see any benefits of cloud computing in supply chain?

The key benefits we see in cloud computing is the ability to share more data, more freely, more easily.  Typically data collation has been difficult working in multi-site, multi-region environments.  The use of cloud based technology for supply chain analysis assists in better data collation that ultimately delivers more accurate results in a timelier manner.

5. Do you use any tools to manage or monitor Supply Chain Risk?

We use traditional supply chain network and forecasting tools but rarely utilise them to manage risk.  People are sceptical about the ability of these tools, especially inventory forecasting tools, to manage supply chains regularly manually intervening and over stocking supply channels.  Whilst conscious about lead times and inventory levels supply chain risk, in our region, appears to relate predominantly to relationships with end-customers and retailers purely based on DIFOT measurement.

6. SAP acquired Ariba, IBM acquired Emptoris and Oracle acquired Endeca. Do you think this trend of acquiring spend management companies will continue?

ERP companies believe that these type tools will better assist with spend management processes.  The key issue however is that they typically, given the “lag” nature of many supply chain functions, only record the spend after it occurs and our view is that if the correct processes are in place within a business these systems become a further step in the process rather than a useful management tool.

7. Do you see any significant changes happening in the near future in supply chain management?

The supply chain industry is a world full of buzz words and technology.  RFID, route optimisation, network re-engineering are all currently hip and trendy but ultimately everything comes down to hard-nosed operational logic.  In many cases the fundamentals lie with the people inside the business and the knowledge they retain.  Companies often choose to run supply chain re-engineering processes that disengage these people in favour of technology.  Our experience has shown that, without relevance to the knowledge that many of these people hold inside a business, the tools used in the processes rarely deliver a viable outcome and become expensive toys.  We believe more human interactive tools will need to be the way of the future to better assist in planning and maintaining the supply chain.

8. There was a lot of hype and buzz about the usage of RFID in tracking consignments but it really never took off since scalability was a problem and not many companies could afford it. Do you see that changing?

How much data can an individual/business collate and use?  RFID technology generates significant volumes of data much of which is worthless.  RFID, in specific applications, performing specific tasks, is of value however there is a need to decipher the real need versus the supposed want for the application of the technology.

9. Do you use services of any of the firms listed below to analyze your spend or optimize your supply chain?

  1. Zycus (www.zycus.com)
  2. Ariba (www.ariba.com)
  3. Endeca (www.endeca.com)
  4. Emptoris (www.emptoris.com)
  5. Global eProcure (www.gep.com)

We are a small consultancy that typically sees these tools used by large corporations to manage spending through PO Management systems.  Our limited exposure to several of these systems has not been good

10. Currently Green Supply Chain Management and Carbon credits seem to be hot topics within Supply Chain. What are your thoughts?

We have seen and heard of green initiatives in the supply chain for the last 15 years.  Our view is that, until recently, these were buzz words that, when push came to shove in negotiation, were discarded in favour of lower cost.  The introduction of a carbon tax here in Australia has changed thinking, potentially only temporarily, but ultimately a customer’s propensity for green comes down to cost, nothing else…

11. In today’s scenario, Companies scramble to achieve cost savings in procurement and use market research to help in their decision making process. Have you used any of these companies that are known to offer procurement intelligence services?

  1. Smart cube (www.thesmartcube.com)
  2. Denali Intelligence (www.denaliintelligence.com)
  3. Infiniti Research (www.infiniti-research.com)
  4. Global eProcure (www.gep.com)

We have not worked with any of the above companies nor seen much evidence of them in the Australian market.

12. Today it’s all about saving costs in procurement. Companies are aggressive in achieving cost savings. Due to this supplier’s profitability has dropped. Do you think this sets a bad precedent for new suppliers to enter the market?

Many companies appear to believe that “squeezing” lower cost from a supplier delivers better value. Our approach and experience suggests that most companies need to work smarter, not harder and this will drive more value than just pure cost reduction exercises.

13. Strategic Sourcing plays a key role in helping companies achieve costs savings. At the same time companies are staggering for want of new strategies. This is because they are unable to find new strategies every year and run out of ideas. So is savings possible every year?

Our broad experience has shown us that the use of smart, practical thorough processes in day-to-day operations will deliver better value than most strategic sourcing programs.  Sourcing typically relies on examining historic data and measuring it against actual and future cost, this strategy seems to be just reducing historic costs opposed to developing a better understanding of the value that can be created by looking more inwardly.

14. Reverse Auctioning is extensively used to procure products at the best cost. What are some of the other ways to reduce procurement costs?

Again, our experience is companies need to work smarter and not harder.  Better planning and analysis of the actual costs incurred rather than the costs associated with what people believe they have spent appears to deliver better benefits in the supply chain arena.

15. With global demand rising for supply chain professionals and a shortage of trained manpower, how do you think this situation can be rectified?

Employment, at all levels of the industry is a major challenge facing almost every employer and sector.  The supply chain, like most industries has a sexy and not so sexy side.  In the not so appealing areas of the industry companies have typically, at an operational level, been able to develop people from “off the floor” and train them in all aspects of the supply chain.  With these more functional areas of the industry becoming seen as less attractive places to work, the opportunity to “harvest” these staff has become harder and the need to import talent from other areas has become an even harder challenge.    At the other end of the scale, the ability to attract analysts and graduates is seemingly relatively easy, that is until they become exposed to a business environment that typically operates seven days a week, 24 hours a day.

The critical issues for the industry therefore are creating an environment that offers stability and longevity for all levels of employee.  The introduction of handling systems and operational tools is critical to this development however the maintenance of practical skills, especially in transportation and warehousing is just as critical to the development of a broader skills base.

Either way, there is no quick fix.  Employers must, to optimise their supply chains, invest heavily in their people in order to create a level of depth and retention.

 

1 vote, 4.00 avg. rating (73% score)

Supply Chain of Bread Manufacturing

bread

Liked by kids as well as adults, Bread is one of the most consumed food products across the world. Here is a interesting video showing end to end of supply chain process of Bread manufacturing.

 

1 vote, 5.00 avg. rating (83% score)

How to Leverage Procurement to Realize Cost Savings

Doug Fraser


With more than 15+ years of experience in International Procurement, Mr.Doug Fraser currently works as Head of Procurement at Carribean Development Bank. He has handled strategic sourcing at Japan, United Kingdom, Vietnam, Cambodia, Philippines and Brazil. Let us watch his lecture that delves in to the different aspects of how Procurement can be leveraged to achieve Cost Savings.

0 votes, 0.00 avg. rating (0% score)

Top 8 Contract Negotiation Strategies

Top 8 Contract Negotiation Strategies

There is fascinating correlation between your Negotiation and long term success of an Organization. In some jobs, the human touch and essence is essential. In others, it seems to be a drawback, and in a field of supply chain it boils down to a thin line of human emotions and business objectives and hitting the optimum tune is a serious task.

Some of the greatest success stories were fueled by robust& accurate negotiations.

Well, before we enter into what may be a robust strategy to negotiate to ensure certain tangible and intangible benefits, it is highly important to understand the true meaning of Contract, negotiation and strategy independently.

Top 8 Contract Negotiation Strategies

What is a Contract?

A contract is a legally binding or valid agreement between two parties. It is only obligatory if the agreement contains below fundamentals:

  1. offer and acceptance;
  2. an intention between the parties to create binding relations;
  3. consideration to be paid for the promise made;
  4. legal capacity of the parties to act;
  5. Legality of the agreement.

What is a Contract

What is Negotiation?

One of my favorite elements at the round table includes negotiation. The ability to negotiate powers numerous business outcomes. We negotiate for our existence, in our jobs, compensation and growth, with stakeholders, we negotiate in our personal lives as welland if you’re in a field like Procurement/Supply Chain, negotiation is inevitable.In a competitive environment it is critical to your success. Negotiation without intend can handicap your business goals.

What is Negotiation

 

Why Negotiate?

Negotiation is a bridge by which differences are settled. It is a process by which mutually accepted solution is reached while avoiding incomplete business deals.

In any difference, business’s aim to achieve the best possible ending for their situation. However, the objectivity of being just, pursuing mutual benefit and developing a relationship are the keys to a successful negotiation.

Stages of Negotiation:

Strategies of Negotiation

What is Strategy

The term strategy has been getting the center stage for many years in a row with various corporate leaders and research institutions, yet, there is no decisive definition.

Nodoby really knows what strategy is

 

Major reason being different organization’s/people echo different views about most acceptable definition of strategy.

For instance, for some people it is a method of evaluating the forthcoming to safeguard against the uncertainties of the future, accordingly plan your present and develop a roadmap to march on it according to designed blueprint.

According to Gerry Johnson and Kevan Scholes, authors of “Exploring Corporate Strategy,” say that strategy determines the direction and scope of an organization over the long term, and they say that it should determine how resources should be configured to meet the needs of markets and stakeholders.

Additionally, according to Michael Porter, strategy is a framework to define and communicate an organization’s unique position, and determine how organizational resources, skills, and competencies should be combined to create competitive advantage.

All explanations can be summed up to explain strategy as a high level plan to achieve business/personal objectives under conditions of nebulousness.

Well, so what it takes to engage into meaningful, efficient and a contract which fosters long term mutually benefit relationship??

I have broken down this topic in two segments i.e. legal/commercial aspect and Pricing factors which forms the heart and soul of a contract.

Below I have listed 8 of the most strategic contract negotiation tactics. Some of these may seem little complex and advances strategies, but they’re proven to work across all commodities, components, products, services and industries.

Legal/Commercial aspect of a Contract:

The business world revolves around contracts. If you do not effectively understand a contract detailing the terms and conditions of your agreement, sooner or later you will be outwitted.

a)      Know your Contract terms and Conditions:

I strongly believethoroughly understanding terms and conditions of the contract you are getting into gives you immense competitive advantage when you sit at the negotiation table.For e.g. you pay one time fee and use the terms and conditions again and again.

Below are few important clauses on the agreement which directly or indirectly has a positive impact on your financials/business/goodwill.

a.1) Ownership/title- For all software, documentation and other intellectual property developed under the Agreement which is not Supplier Owned Modifications (“Buyer Owned Modifications”), Supplierneeds to transfer all rights, and title and interest hence saves recurring expenses otherwise which a company would have paid for using the same services which was developed/procured by the money funded by them.

a.2) Limitation of Liability –I can’t stress enough how important it is to make your supplier liable to pay under the agreement for indirect, punitive and consequential damages arising from fines & penalties, any breach in obligation. It definitely reduces the risk of uncertainty for the buyer.

a.3) Assignment Clause -The Agreement should be assignable or otherwise transferable in whole or in part by buying organization to any one of his subsidiary hence avoiding paying for the same scope of work being used by the parent company, hencesaves lot of cash flows.

a.4) Pay Terms -More number of days to pay your dues, higher is the money saving factor which can be calculated using the formula,

[(Total PO price/Contract Amount )/365 ] *  No of days saved

b)Kraljic Matrix – No business can allow its procurement to lag behind than other departments in recognizing and modifying to global markets and highly volatile economic changes where reducing cost is a necessity. Kraljic model can be used to change your traditional procurement practices to a strategic business unit.

Kraljic's Supply Matrix

The model involves four steps:

1)      Purchase classification.

2)      Market analysis.

3)      Strategic positioning.

4)      Action planning.

Start by categorizing all of the commodities, components, products, and services that you procure according to the supply risk and potential profit generation of each,

Strategic items (high profit impact, high supply risk)

Leverage items (high profit impact, low supply risk)

Bottleneck items (low profit impact, high supply risk)

Non-critical items (low profit impact, low supply risk)

This model helps you to distinguish where your products/services are classified in terms of supply risk and revenue contribution and also recognizes the level of competitive advantage between you and your supplier. Once you know this, you can select an apt purchasing approach.

C) Emotional Intelligence:

What is Emotional Intelligence

One of the biggest blunders Buyers make is to assume that the course of negotiation is easy and logical one. But the spirit of negotiation is emotional essence. Generally, decisions are made out of fear, ego, attitude, need, future actions and so on. Successful negotiation materializes only when you clearly distinguish business and personal objectives, based on facts and not feelings. Always use language which displays mutual concern such as “we should” or “we can”, instead using statements like “I want this pricing by hook or crook”.

D) Don’t reveal your lower an upper limit -

Looking to Negotiate

It’s critical to know your margin ahead of time. You need your research to be based on accurate and precise facts and figures, this will only provide huge moral support with added confidence, making you look more well-informed at the negotiation table. It also reduces the chances of you over committing and under delivering. By realizing your boundaries it will definitely help you make educated decisions and you can leverage your maximum range of spending/saving to you benefit, so it is very vital to know where to stop & where to push.

If supplier gets a hint of your lower and higher budget, supplier can easily manipulate the contract in his favor and may you lose out on the competitive advantage.

Pricing Factors of a Contract

a) Spend Analysis to get better pricing- Organizations should use spend analysis to fuel their buying practices, reduce costs, and provide leadership with improved overview of their spending habits and patterns, which in turn can be used to develop a well-studied purchasing approach and develop an extremely advantageous pricing contract system. Spendanalysis should include the identification, automation, cleansing, grouping, categorization, and analysisof all spend data forthe goods and services procured by the organization.

With the operation of regular Spend Analysis, purchasing should aim to use the data to:

Spend Management

  • Improved contract obedience
  • Eliminate duplicate suppliers. (Reduction depends on previous efforts.)
  • Use contract pricing to create savings
  • Reduce material and service costs through informed strategic sourcing strategies based on the data
  • Meet regulatory reporting rules

b) Always ask for Breakup/split cost – This may sound and look like a very basic strategy, but it primes to lot of financial gain and generates liquid cash. Request the supplier to give a comprehensive cost breakup of the good/product/services being procured. This opens up a big window to identify cost saving opportunities. As a company, search and identify your supplier base if another supplier can provide the particular good/product/services which is going to be used in the original purchase at a reasonable price, then it totally changes the way you negotiate with your preferred supplier. Additionally, it does put pressure on the preferred supplier to offer his best price and the fear of losing a contract, suppliers tend to come up with best suitable alternatives for the buyer to choose from.

Also, it gives an opportunity to the Buyer the leverage or share the risk of a single contract with two or more suppliers.

C) Benchmarking your prices- Benchmarking can be used as a valuation tool, which measures the prices of a particular goods or services by taking into consideration quantity, value and time. It can be used to understand level of rates or prices can be charged for a particular goods and services.

Besides discovering the genuine criteria in terms of the purchase price, price benchmarking also includes ascertaining all the reasons behind the price.

There are four striking features of price benchmarking,

i)   You do not over pay for any goods or services being procured.

ii)  By benchmarking your prices, you can make sure that you are offering your final end users prices at or near the industry standard.

iii) Helps you to understand what consumers are willing to pay for a particular goods and services and what are the crucial traits creating the value.

iv)  Study what prominent companies within the industry are able to charge to for the same goods and services.

D) Always ask for add on services - It is okay to ask your supplier for add on services for any given purchase.  For e.g. you are buying a new software you may ask supplier to train you on it for free. It doesn’t impact your original pricing but leads to additional cost avoidance.

However, it may be subjected to size of your contract, product goods/services being procured.

There are several different formats and styles of negotiations, and which one you use depends on a multitude of factors such as the strength of the relationship, the urgency of the situation, the complexity of the issues, and the content of the negotiation.

Finally, always answer this questions before you start negotiation – What end result you want? How important is this collaboration for your success? What are you willing to give up in return? These are important thoughts and beliefs that may evolve over time.

Always use your judgement and keep your organization objectives in mind, it might help you to know and understand things which you can let go and things which are non-negotiable.

2 votes, 4.50 avg. rating (82% score)