by Fronetics | Feb 11, 2016 | Blog, Strategy, Supply Chain
Supply chain management is more than just a series of transactions; it is a valuable, strategic business process.
Change is inevitable, and, in healthcare supply chain, it is crucial. The most progressive healthcare organizations across the country now acknowledge that supply chain management is more than just a series of transactions; it is a valuable, strategic business process.
These organizations have researched this expanding avenue to improve their services and cut costs, leading to new supply chain strategies for the coming year. But many in this industry hesitate to accept the evolving role of healthcare’s supply chain and the value it holds. They fail to utilize the data or act upon it, and this carries a cost for both the organization and their patients.
And costs are a rising concern. It is estimated that healthcare costs nationwide will reach $4.8 trillion by 2021, according to the Centers for Medicare & Medicaid Services. Supply chain inefficiencies could be a contributing factor, but optimizing logistics provides a remedy.
The Force of Data Awakens
It is a pretty simple concept: The more you know, the better your decisions. As the healthcare industry continues to evolve, data has been crucial in helping organizations pinpoint ways to cut costs, improve patient care, and end wasteful methodology. And according to a Supply Chain Digital report, the vast majority of healthcare organizations have yet to tap into the full potential of the complex data available to them.
The power to improve efficiencies in a healthcare organization can be found through:
- Recognizing the supply chain is a powerful force of change: Supply chain management and analytics are no longer after-thoughts. Once their value across an organization is realized, those focused on strategy and cost-effective measures will consider tomorrow’s supply chain of great importance.
- Seeking more data with greater detail and complexity: As organizations gather more data — and that data becomes more granular, down to patients and their outcomes — in-depth analysis will achieve an unprecedented understanding of where real value is hidden throughout all departments.
- Allowing the supply chain to guide consistency in care: Everyone benefits from standardization and consistent care, especially the patients. Tapping into the valuable data from the supply chain and using it to determine the best pricing and treatment strategies for the best outcomes for patients is a key component. All of this will encourage inefficient and wasteful processes be eliminated, saving time and money.
- Implementation of product scanning, electronic ordering, order accuracy controls: Healthcare providers, distributors, and manufacturers have been challenged by an unacceptable amount of errors in the procurement of medical devices and treatment supplies, according to Inbound Logistics. Old systems requiring a manual ordering process can result in ordering errors, product shortages, or the delivery of products that are incorrect or even expired. Improving efficiency in the healthcare supply chain facilitates the elimination of costly errors and supports higher standards of patient care.
- Aligning physicians with the value of supply chain data: A partnership must be formed between the supply chain and physicians to target more efficient processes for their patients and to seek supply chain guidance regarding product price points, alternatives, and outcomes.
- Utilizing analytics to improve service and reliability: Healthcare supply chain data will be leveraged for predictive analytics. Essentially, supply chain professionals will use data to better predict and respond to products needed with greater speed and less instances of delays in service. Knowing these inventory challenges ahead of time also enables providers to seek alternatives if a product is discontinued or backordered.
There is an awakening in the healthcare industry as more organizations realize that their strategic business plans can be guided and improved by a myriad of complex supply chain data available. Across the healthcare continuum, there is a demand to look at business from a new perspective, seeking innovative methods to reduce costs and improve patient care.
This is achievable when healthcare organizations and their supply chain providers form an alliance, based on mutual goals and incentives, to leverage more analytical data to improve both patient care and operational efficiencies.
by Fronetics | Sep 10, 2015 | Blog, Marketing, Social Media, Strategy, Supply Chain
Are you ready to harness some of the $1 trillion dollars social media can bring the value chain yearly?
There are over 3 billion internet users on Earth, or nearly half the world’s population. The growth of worldwide internet users from 2000- 2015 was 753%. In developing economies the percentages are much higher: Africa’s users grew by 6958.2%, the Middle East’s users grew by 3,358.6% and Latin America/Caribbean’s grew by 1684.4%. There are 1.5 billion social media users worldwide.
Many people use social media for personal purposes, but more and more people and companies are using social media for business purposes. Leveraging social media makes sense: customers, leads, competitors, partners, and employees are using it. Is your company? When browsing Facebook you’ve noticed that the power drill you were researching from Home Depot online is popping up on the edge of the page, or maybe it’s the latest version of a cell phone, or a pair of shoes. It feels like these items are following you. They are. These companies are following you. They’re using social media to entice you, to engage with you, to connect with you.
Facebook saw 1.49 billion active users in the second quarter of 2015. They highlight some of the success stories on their website, pointing to small, local companies and large, international companies. One such large company, Europe’s largest consumer electronics retailer and German behemoth, Media Markt, engaged in a cross-media campaign for nearly a month in 2013 in order to “boost brand resonance and anchor its message firmly in people’s minds.” They used Facebook’s newsfeed to promote and highlight a specific television ad, and they also purchased various kinds of Facebook ads. According to Facebook, “Media Markt reached nearly half of Germany’s online users with their ‘Germany’s craziest flat share’ campaign on Facebook, with the platform being 2.4 times more efficient than all other media used.”
Doing a campaign and buying ads on Facebook are not necessary for you to achieve marketing goals. Here are some ways in which supply chain managers should be using social media:
Communicate
Communication through the senses are what humans crave. Social media allows leaders to communicate using several of the senses to reach a broad community. Companies can use language, images, and sound. Even touch is involved. Click here, scroll over here. Advertise your blog posts, highlight your latest news, announce a new product launch, indicate arrivals and departures of shipments, share small or sweeping changes in service, supplies, practices, locations, etc. Are you concerned that weather may impact deliveries? Update customers to potential delays, interruptions or threats to service.
Social media creates a community. Comments and feedback allow for a certain sense of intimacy. Allowing for a two-way street can help employees, clients, and partners to feel engaged and invested. It might also end up being fun! UPS is a logistics company that has used social media by using both humor and human interest stories to accrue followers and gain loyalty. Its focus on employees heroes who go above and beyond encourages other employees and endears followers.
The best part of social media communication is that it’s live and active, it’s bright and visual. There’s room for humor and gravity, information and emotion, objectivity and subjectivity, facts and anecdotes. Social media reaches both males and females, with 73% of males engaging with social media, and 80% of females.
Educate
Education is one form of communication, and a very important one for your current or potential B2B and B2C clients, your employees, as well as others in your field. Do you have a lecture you want to share from an industry conference? Do you have a new product launch? Have you found a more efficient process that can benefit the industry or attract attention from potential clients? Social media is fantastic platform for education, and establishing your knowledge and credibility.
Monitor
Keeping an eye on your supply chain peers and competitors is a smart. Monitoring is its own form of self-education. What are your competitors’ areas of strength? What appear to be their challenges? Have they missed a pocket of social media that you can fill? Do they seem to be tailoring to a certain customer, or courting a potential business partner? Additionally, researching the reputations and electronic footprints of potential clients, suppliers, prospective employees and business partners could teach you a lot before signing a contract.
The supply chain makes the world go round. In order to be one of the leaders in the chain, it’s important to remember that internet users make up nearly half of the world’s population and that social media is on the rise. Don’t miss that boat.
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by Fronetics | Sep 3, 2015 | Big Data, Blog, Data/Analytics, Logistics, Strategy, Supply Chain
Big data is, well, big. The term has gotten lots of buzz the past few years. But it’s big in other ways as well. According to McKinsey big data is defined as “datasets whose size is beyond the ability of typical database software tools to capture, store, manage, and analyze.” A 2014 Forbes article has 11 other helpful definitions.
With current technologies, there are increasing amounts of information to be gathered and exchanged in the world, creating more opportunities for businesses to harness that information and chart a course or tweak processes based on that information. According to an Accenture study, “97% of executives report having an understanding of how Big Data analytics can benefit their supply chain, but only 17% said that they have implemented it in at least one supply chain function.”
In a Boston Consulting Group article, Making Big Data Work: Supply Chain Management, the authors suggest three high-potential opportunities for supply chain management to take advantage of big data. Their suggestions help parse through the complicated, overwhelming network of big data. As they suggest, “with so much available data and so many improvable processes, it can be challenging for executives to determine where they should focus their limited time and resources.” Let’s have a look at the authors’ ideas, as gathered through research, on how to “increase asset uptime and expand throughout, engage in preventive maintenance of production assets and installed products, and conduct near real-time supply planning using dynamic data feeds from production sensors and the Internet of Things.”
Visualizing Delivery Routes
Big data, in the form of geoanalytics, can be used to better manage supply chain routes and help reduce transportation costs by 15-20%, especially when other partner companies are trying to coordinate deliveries. “The companies learned that they shared similar patterns of demand. Vehicle-routing software also enabled rapid scenario testing of dozens of route iterations and the development of individual routes for each truck. Scenario testing helped the companies discover as much as three hours of unused delivery capacity on typical routes after drivers had covered their assigned miles.” Real-time data from live traffic feeds, combined with past data helped to create new forecasts and eliminate wasted time.
Pinpointing Future Demand
In today’s volatile marketplace, relying on sales predictions can be risky and inaccurate, at best, a disaster at worst. According to the BCG article, advanced languages can now work together to create a most accurate forecast, freeing up sales people and their precious time to combat other issues and convert leads. “Advanced analytical techniques can be used to integrate data from a number of systems that speak different languages—for example, enterprise resource planning, pricing, and competitive-intelligence systems—to allow managers a view of things they couldn’t see in the past.”
Simplifying Distribution Networks
The European consumer goods company profiled in the BCG article, used advanced analytics to downsize from 80 factories across 10 countries, down to 20 factories. The distribution network shrunk, and efficiency and savings increased, the latter by 8%. Working with big data can help examine a diverse amount of information never before analyzed. Taking complex data and knowing how to handle the data can turn complexity into simplicity.
Marcelo Simiao, Lean Manager— Operations at Munters, seems to concur with the findings, and believes big data can make sweeping changes.
“Companies are struggling with today’s greater demand volatility. The Order-to-Delivery processes have been the focus of many improvement projects and lean initiatives that aim to reduce costs and improve response times. But most of today’s organizations have their supply chain functions fragmented into several different departments, creating process improvement projects that have results limited to the data they have at hand. This approach often doesn’t deliver value to the end customer. Big Data is changing this scenario by integrating the voice of the customer, sales and the entire supply chain. This integration and thorough data analysis allows organizations to align all of their focus on key projects that are not limited by functions, will improve customer satisfaction, and deliver results directly into the company’s bottom line.”
by Elizabeth Hines | Jul 13, 2015 | Big Data, Blog, Data/Analytics, Strategy, Supply Chain
Analytics is good for business — as long as you can make sense of it.
Does your business suffer from a case of data overload? Or do you steer clear of new investments in supply chain analytics because you are afraid they could yield more data than your business can handle? You are in good company.
Several recent surveys indicate companies either are wary of advanced analytics tools or say they have failed to leverage the technology. The issue does not seem to be a lack of knowledge of its existence or potential impact — end users are generally well informed — but how to absorb the data effectively and apply it across the entire organization.
According to a Telematics Update, for example, vendors would be wise to spend less time on their sales pitch and more time presenting the data in a digestible format, ensuring compatibility with the end user’s legacy systems, and aligning the solution with the end-user’s key performance indicators.
The challenge is also captured in an Accenture survey in which only one in five companies said they are “very satisfied” with the returns they have received from analytics. And it’s not for lack of trying. Two-thirds of companies have appointed a chief data officer in the last 18 months to oversee data management and analytics, while 71 percent of those who have not created such a position plan to do so in the near future.
This passage from Accenture’s survey report hits the nail on the head:
Companies wanting to compete more aggressively with analytics will move rapidly to industrialize the discipline on an enterprise-wide scale, redesigning how fact-based insights get embedded into key processes, leading to smarter decisions and better business outcomes.
Most organizations measure too many things that don’t matter, and don’t put sufficient focus on those things that do, establishing a large set of metrics, but often lacking a causal mapping of the key drivers of their business.
As the survey suggests, the move away from an isolated approach to an integrated cross-functional model may be the key to squeezing the most out of supply chain analytics. According to Deloitte, the key to delivering strategic insights is creating asingle authoritative data set from which all business units can draw information.
However, only 33% of the Accenture survey respondents said they are “aggressively using analytics across the entire enterprise.” Instead, highly customized data is often collected for units within the organization. A spending forecast by procurement may look nothing like its counterpart coming out of logistics. The inconsistency in reporting makes it hard to share the knowledge, and that takes us back to square one: lots of data and little useful information.
Jerry O’Dwyer, a principal with Deloitte Consulting, summed it up this way in a 2012 post:
If you are performing analytics in different areas of the supply chain — for example, spend analytics or demand planning — you may be missing opportunities that an expansive approach can yield. For companies of all kinds, in-depth supply chain analysis offers an opportunity to create increased value throughout their operations.
Let’s hear it: What do you think companies need to do to put analytics to effective use?
Fronetics Strategic Advisors is a leading management consulting firm. Our firm works with companies to identify and execute strategies for growth and value creation.
Whether it is a wholesale food distributor seeking guidance on how to define and execute corporate strategy; a telematics firm needing high quality content on a consistent basis; a real estate firm looking for a marketing partner; or a supply chain firm in need of interim management, our clients rely on Fronetics to help them navigate through critical junctures, meet their toughest challenges, and take advantage of opportunities. We deliver high-impact results.
We advise and work with companies on their most critical issues and opportunities: strategy, marketing, organization, talent acquisition, performance management, and M&A support.
We have deep expertise and a proven track record in a broad range of industries including: supply chain, real estate, software, and logistics.
by Jennifer Hart Yim | May 20, 2015 | Blog, Manufacturing & Distribution, Strategy, Supply Chain, Warehousing & Materials Handling
This article is part of a series of articles written by MBA students and graduates from the University of New Hampshire Peter T. Paul College of Business and Economics.
David Chadwick is an MBA student at the University of New Hampshire with a background in retail store management and electrical engineering.
If technology continues to advance, humans may be obsolete in the supply chain as a result of both automation and RFID utilization. Both technologies have been introduced into the supply chain over the past decade, resulting in a major shift in performance and costs. While automation is a process which can navigate product throughout facilities, RFID can improve efficiency dramatically as well as being the major driver for the elimination of human involvement in the supply chain.
RFID (Radio Frequency Identification) is a form of extremely low-power data communication between a RFID scanner and an RFID tag. The tags are placed on any number of items, ranging from individual parts to shipping labels. The RFID tag itself consists of a microchip and antennae, usually without a battery to power it. The tags can be printed using special printers, which wirelessly load the identifying information to the tags. The information on the tags can be used for a wide variety of tasks. When an item goes through the RFID scanners, information is read from the tag, which could include any amount of information, such as:
- Order ID number
- Product bin location
- Order status
- Serial numbers for individual product components
- Location logs
The information is not limited to just holding ID and serial numbers. Since the information can be updated and transferred through any RFID receiver when in range, it can be joined with other software to update databases, send information online, and more. The amount of information that RFID can provide can be matched with order management systems to track shipment and stock locations automatically as the products move through warehouses and trucks. Powerful receivers can also track the exact location of products within a warehouse in real time, instead of relying on time and location logs to determine the location. This has been a major benefit to UPS, who’ve had RFID tracking chips in their warehouses for over ten years.
The largest problem facing supply chain management today is the potential for the occurrence of devastating errors. These errors could lead to trucks leaving product behind, not stocking to capacity, losing product, or delivering to the wrong locations. There are numerous reasons for such errors to occur, but the most common factor in their inception is human error. Much of the errors faced result from manual inspection and control over product flow in warehouses by humans. Many systems still operate using written data tables and checklists, which can be written incorrectly. Despite major advancements in technology over the past decade, the digital world is being sourced by analog supply chains. This is an aspect which RFID control can create beneficial change.
RFID can lead to completely autonomous warehouses and distribution centers. This can be seen in current warehouses with high levels of automation, where picking machines transport bins of product to a central sorting area to be boxed, before returning to their location. Zebra uses this technique to ensure product location accuracy as a means of reducing lost merchandise. Zebra places a great deal of importance on product visibility and transparency as well as accuracy in locations. Implementation of RFID into this system can ensure that both the correct product and the correct quantities of product are collected at both points, thereby eliminating errors seen in traditional analog supply networks. Coupled with the potential for self-driving trucks and the ever expanding internet of things in the cloud, product information can be tracked at all stages of shipment and storage, increasing accuracy, efficiency, and accountability. Where warehouses and receiving departments had to endure a certain amount of shrinkage of products in the past, a fully utilized RFID-enabled supply network can determine exactly where product is at all times, ensuring that theft is discovered immediately and enforced.
While the reduction of human interaction in the supply chain and warehouses in general can be eliminated with enough technology, it is uncertain to what degree this technology will be implemented in all aspects of supply chain management. While there are huge benefits to operating in such a system, the major negatives include high initial costs and restructuring costs associated with implementing this network into existing, analog networks. Humanity may not be completely removed from the supply chain in the future, but this technology, as well as more advanced techniques for automation, will increase the efficiency and reduce the costs required to operate these newer supply chains dramatically while significantly reducing errors and inefficiencies.
