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1、INDEPENDEN T P U B L I C AT I O N BYRACONTEUR.NET19/03/2023#0860“In this period of uncertainty,there is a definite risk to importers,distributors and retailers that poor-quality products could reach the UK market,with the attendant impact on brand reputation and potential legal action,”says Simon El
2、lis,financial reg-ulatory defence director at law firm Freeths.The liability doesnt disappear because the people doing the checks have.“As a business,if you import a product it may not have been tested as it came into the coun-try,”says Emile Naus,former head of logis-tics strategy at Marks&Spencer
3、and now a partner at tech consultancy BearingPoint.“You have to put checks in place.”For businesses,the threat is a significant one,reputationally,legally and in terms of the bottom line.And the problem isnt lim-ited to Europe.Its increasingly difficult to vouch for the safety of any items coming in
4、to the UK from abroad,particularly given that the interconnected nature of the global supply chain system means that goods which dont emanate from Europe may well pass through it on their way to the UK.Doing something about it is therefore necessary.Setting up parallel,independent checks of the supp
5、ly chain,including accounting for and tracking the movement of goods that come into your business,is increasingly important.Ellis advises that importers should“pay particular attention to the integrity of their supply chains to ensure that supplies originate from trusted sources which have a reliabl
6、e history of compliance”.That requires due diligence checks throughout the entire supply chain “as commercial sensitivities permit”.Under the radar:why the UKs imports are at risk after Brexit A lack of EU oversight means that its more important than ever for British businesses to take supply chain
7、monitoring into their own handswo-and-a-half years ago,the Brit-ish public was told that the EU Withdrawal Agreement was an“oven-ready deal”.Barriers to trade,which had become a bogeyman for those who opposed Brexit,would not be an issue.Industry could continue as normal without any supply chain dis
8、ruption.Today,that oven-ready deal looks under-done.For all intents and purposes and despite all the furore over checks on goods passing into the single market from Great Britain the EU now seems to have largely stopped carrying out inspections on goods going in the opposite direction,into Great Bri
9、tain.The latest negotiations about the Northern Irish border have dominated White-halls thinking,leaving supply chain stand-ards more generally to wither on the vine.“Northern Ireland at the moment is a constantly changing environment,with lit-tle beyond agreements in principle on data sharing,”says
10、 Andrew Thurston,customs duty consultant at accountancy firm MHA MacIntyre Hudson.The constant changes mean that nothing is nailed down or abso-lute.“At the moment,there is the risk that labelling might be wrong and importers might not be meeting the right standards,”he explains.It all adds up to a
11、problem for businesses which are reliant on global supply chains.Just take the food industry.“What Brexit has meant is that we have become divorced from the European food safety and food fraud monitoring systems,”says Chris Elli-ott,professor at the Institute for Global Food Security at Queens Unive
12、rsity Belfast.The irony for Brexiteers is that,despite their grousing about the EUs failings,it was to mainland Europe we had outsourced many of the vital safety checks on goods coming into the UK.And its not just food safety thats at risk as a result of the changes brought about by Brexit.Customs c
13、hecks dont just establish whether health and safety standards have been followed by manufacturers.They also help with aspects of compliance,tax man-agement and supply chain visibility.Losing all of those or replacing what was a wide-spread,well-working standard with some-thing that has less transpar
14、ency and over-sight may increase the liability for those selling goods imported into the UK.Jon AxworthyA journalist specialising in health,tech,science and the future.Adrian BridgwaterA specialist author,who writes about software engineering and application development.Laurie ClarkeA UK-based freel
15、ance journalist specialising in technology.James GordonA journalist who has written extensively on business,logistics and manufacturing.Rich McEachranA freelance journalist covering the intersection of business,technology and sustainability.Clara MurrayRaconteurs data journalist,who specialises in i
16、nteractive online content.According to Elliott,that is already hap-pening on an informal basis in the food industry,through a casual intelligence net-work.Food items are among the items most likely to see some element of mislabelling either deliberately or accidentally so the sector as a whole is al
17、ready highly attuned to the risks involved.Businesses look out for one another.“The big retailers,like food manufactur-ers and some of the food service companies,already cooperate and collaborate to an unbelievable degree,”says Elliott.A similar level of collaboration would be useful to try and inst
18、igate into other areas to ensure the integrity of items entering the UK.Ellis adds:“It would be sensible to carry out a review of existing due diligence,with a particular emphasis on the credibility of recent market entrants,the viability of pric-ing by suppliers and their warehousing and logistic o
19、perations.”Thurston recognises that adding extra steps and cost to your supply chain pro-cesses is something no company wants to do amid high inflation and dropping con-sumer confidence.But its necessary.“Look at the companies supplying those goods.Make sure they have due diligence in place and are
20、doing their own checks to make sure that those goods are going to meet the requirements,”he advises.“Make sure that there isnt a drop in standards.”It can,of course,be difficult to try to track back goods that you sell or handle through the entirety of the supply chain.Subcon-tracting and outsourcin
21、g mean that the companies youve entered into a contract with may not be the ones carrying out the service of shipping or supplying you with the items.But a root-and-branch investiga-tion is vital to ensure youre fully aware of all the risks involved and can head them off as and when issues arise.“If
22、 something goes wrong and has your name on it,youre still going to get blamed for it,whether thats fair or not,”says Naus.The past few years havent helped mat-ters.With workforces going remote,what might have been on-the-spot,in-person checks are now either not being carried out or are being moved o
23、nline,where theres less visibility over the entire set of processes involved.“You need to make sure that this is an important part of your auditing pro-cess,”Thurston says.“Its not something you just say,Well,well deal with that.”And its not solely about the companies moving your goods into the coun
24、try:its the people making them,too.“Its not just about importing,its the manufacturing process as well,”he says.“If youve got those controls in place,they will get that finished product to meet the required standard.”Doing something,rather than nothing,is now essential because the issue isnt going a
25、nywhere and theres seemingly little appetite within government to make a sub-stantive change,warns Elliott.“It is a bit of a time bomb because somebody will do something that is horrendous and will jeop-ardise the health if not the lives of some people,”he says.Distributed inPublished in association
26、 withAlthough this publication is funded through advertising and sponsorship,all editorial is without bias and sponsored features are clearly labelled.For an upcoming schedule,partnership inquiries or feedback,please call+44(0)20 8616 7400 or e-mail .Raconteur is a leading publisher of special-inter
27、est content and research.Its pub-lications and articles cover a wide range of topics,including business,finance,sustainability,healthcare,lifestyle and technology.Raconteur special reports are published exclu-sively in The Times and The Sunday Times as well as online at .The information contained in
28、 this publication has been obtained from sources the Proprietors believe to be correct.However,no legal liability can be accepted for any errors.No part of this publication may be reproduced with-out the prior consent of the Publisher.Raconteur Media/supply-chain-procurement-2023SUPPLY CHAIN&PROCURE
29、MENTF R I E N D S H O R I N GC O R R U P T I O NCY B E RS E C U R I T YWhy Joe Bidens latest trade policy wheeze wont workThe war in Ukraine is exposing British firms to dodgy practices Is your supply chain software a weak link in your defences?Chris Stokel-WalkerTContributorsBUSINESSES ARE SPENDING
30、 MORE ON CUSTOMS SINCE BREXITHMRC customs duty tax receipts,reported monthly,from 2008 to 2022C U S T O M SLead publisher Matthew McCullochSub-editorsGerrard CowanChristina RyderChief sub-editorNeil ColeDeputy reports editorJames SuttonReports editorIan DeeringHead of productionJustyna OConnellDesig
31、n and production assistantLouis NassDesignKellie JerrardHarry Lewis-IrlamColm McDermottSamuele MottaSean Wyatt-LivesleyEditorSarah VizardDesign directorTim WhitlockIllustrationCelina LuceyCommercial content editorsLaura BithellJoy PersaudAssociate commercial editorPhoebe Borwellraconteurraconteur.st
32、oriesraconteur-mediaHMRC,20232008500m200m300m100m200222009200000m0Amy NguyenA researcher and writer focusing on sustainable business,fashion and supply chains.Chris Stokel-WalkerA technology and culture journalist and author.Daniel ThomasA writer and edito
33、r with work published in The Telegraph,Newsweek and Fund Strategy.At the moment,there is the risk that labelling might be wrong and consequently importers might not be meeting the right standardsS U P P LY C H A I N&P R O C U R E M E N T 02Commercial featureWhat friendshoring means for global supply
34、 chainsThe Biden administrations latest geopolitical strategy is to prioritise trading with trusted allies.Butin a highly complex and interconnected world,would such a move even work?ree trade has never looked so sickly.Geopolitical tensions,including the US-China trade war and Russias invasion of U
35、kraine,have infected global trade relations.Coupled with the lingering disruption of Brexit and Covid-19,these rows threaten to severely disrupt global supply chains.The cure?Well,recognising that trade and geopolitics are inextricably linked,the Biden administration has created a new policy to trea
36、t the supply chain risk.The diktat,which it has named friendshoring,involves only trading with trusted allies.But the strategy raises several concerns.For a start,how does the US propose to dif-ferentiate a friendly country from an unfriendly one?In addition to its tradi-tional allies,the Biden admi
37、nistration has identified Brazil,India,South Korea,Japan,Indonesia,Vietnam and Malaysia as being trustworthy nations.But there are grey areas.Hungary,for example,is part of the EU,which is regarded as a friendly trading bloc in the US adminis-trations eyes.Yet US think-tank Freedom House only classe
38、s Hungary as being“partly free”,given Viktor Orbn and his governments frequent attacks on democ-racy,the rule of law,press freedoms and LGBTQ+rights.What does it mean,then,for the US to indirectly call Hungary a trusted ally,then?Even if the US can fine-tune who it con-siders a trusted ally,and if i
39、ts companies embrace the concept of friendshoring,can the emerging industrial powerhouses on the US list prove to be a viable substitute for Chinese manufacturing bases?Jose Arturo Garza-Reyes is professor of operations management at the University of Derby.He thinks that the aforemen-tioned countri
40、es“are rapidly becoming James Gordonpart of thetop 15 most competitive nations for labour-intensive commodity products”.In the short to medium term,he believes that“supply chain agreements formed with China can be replaced with agree-ments with these countries”.But in the long term he worries that f
41、riendshoring could create a world divided between free-market democracies and authoritarian regimes.Garza-Reyes is par-ticularly concerned that friendshoring could take the world back to similar trading characteristics last seen during the Cold War,creating trade blocs where some countries are align
42、ed to autocratic states such as China and Russia,and others to Western nations.“This could exacerbate the already high friction between these blocs,”he says,“making the friendshoring policy a danger-ous one.From an operational point of view,this would limit the partnerships and rela-tionships that c
43、ompanies can develop,pre-venting them from being able to procure the best products,services and raw materi-als at the lowest cost.Once again,from an operational perspective,this makes friend-shoring an undesired,but currently politi-cally necessary policy.”If a policy of friendshoring divides the wo
44、rld into separate trading blocs,it is unclear what economic impact it would have.One estimate from the World Trade Organization suggests that GDP could take a hit of up to 5%.Emily Benson is a senior fellow at the Center for Strategic&International Studies(CSIS)and agrees that this is a risk.But she
45、 says that the policy of friendshoring“does not necessarily preclude deeper market access for non-aligned nations”.She explains:“The US government is not saying that it will not allow goods into North America.Rather,what it is affirma-tively trying to do is build more partner-ships with countries th
46、at have critical inputs for US supply chains.”But perhaps the most important ques-tion of all is that with China deemed an unfriendly nation by the new policy,will global corporations like Apple,which are heavily reliant on China for manufactur-ing,up and leave?According to Bloomberg Intelligence,ar
47、ound 98%of iPhones are made in China,and it would take about eight years to move just 10%of Apples pro-duction capacity out of China.So how can the US administration per-suade companies with large Chinese man-ufacturing bases to relocate to friendlier climes?Options include offering subsidies or tax
48、 breaks to set up in countries which are considered trusted allies,placing tariffs on goods manufactured in China(as it did in the recent US/China trade war),or simply stopping US companies from buying from or selling to unfriendly nations.Benson,who co-authored a recent report called The Limits of“
49、Friend-Shoring”,com-ments that:“Its much more nuanced than that and highly sector-specific.Some in-dustries such as the defence sector,which demand total transparency and visibility across their entire supply chain,will open-ly embrace friendshoring.But other sec-tors,though,will find it more diffic
50、ult to uncouple themselves from their Chinese manufacturing bases.”But will tariffs succeed in encouraging companies to shift to friendlier nations?Dr Heather Skipworth doesnt think so.Skip-worth,an associate professor in supply chain management at the Cranfield School of Management,points to a stud
51、y she co-wrote two years ago which featured an interviewee from the automotive industry.This interviewee told Skipworth that“tar-iffs on steel and aluminium would need to be significantly higher than 25%to justify switching from a brake motor supplier in northern China to a domestic US supplier”.Ski
52、pworth adds:“In the end,our research revealed that it wasnt necessarily tariffs that persuaded companies to move their supply chains away from China.Instead,we identified three factors institutional pressures(which includes tariffs),supply chain mobility,and the perceived severity of the potential d
53、isruption risk as the keys to supply chain design.In my view,these characteristics could prove to be the main determinants of whether the friendshoring policy is followed.”But for Garza-Reyes tax breaks and sub-sidies may indeed have a role to play to“facilitate and support the reconfiguration of su
54、pply chains in the short and possibly medium term”.That said,he adds that the opportunity cost will be“an increased cost in the operation of the supply chains and the products,services and raw materials they procure”.In the long term,Garza-Reyes and Ben-son expect companies which have invested heavi
55、ly in China to see the bigger picture and move their supply chains elsewhere.As Garza-Reyes puts it:“I believe that most companies will still voluntarily fol-low this option as they know that doing business with companies from unfriendly nations increases the risk of serious dis-ruptions in their su
56、pply chains and their operations.”Benson agrees,adding that over time the cost of labour in China will become more expensive.“It may become more difficult for foreign companies to op-erate there due to a combination of higher labour costs and a more difficult political environment,”she says.“It is t
57、herefore in-cumbent upon companies to determine which locations are competitive in terms of lower production costs and other efficiency gains,such as IP protections and overall ease of doing business.”Such a shift would by no means signal the end of the global supply chain econ-omy,but it underlines
58、 the increasingly important role that state-led commercial alliances and regional partnerships will play in future trade discussions.The friendshoring policy is a dangerous one.From an operational point of view,it would limit the partnerships and relationships that companies can developDIVIDING THE
59、WORLD INTO TRADE BLOCS THROUGH FRIENDSHORING WOULD SERIOUSLY HURT GDPLong-term GDP effect of decoupling scenario in the global economy,percentage deviation from baseline projections World Trade Organization,2022Commercial featuretrategic decision-making in supply chain management is not easy.The job
60、 gets even harder when it concerns interrelated issues such as sustainability,climate risk and the circular economy,each of which brings its own target-setting and regulatory baggage.The pressure to adapt,especially in the fast-moving and complex worlds of ecommerce and omnichannel retail,can be int
61、ense,says Arco Berkenbosch,vice-president of innovation and devel-opment at Smurfit Kappa,Europes leading corrugated packaging company.“Coming out of Covid and into the war in Ukraine and then the energy crisis,it is painfully clear that agility is a vital ingredient that needs to be baked into the
62、end-to-end supply chain,as part of any recipe for future suc-cess.Innovation is in high and urgent demand right now,”he says.However,customers do not want any old innovation,at any cost.What they need is sustainable innovation that builds trust and credibility over time.“Brands and their products ar
63、e coming under scrutiny on sustainabil-ity on two fronts at once:business and consumer,”adds Berkenbosch.“NGOs and investors are checking up on cor-porate promises,while customers and shoppers are looking behind the logos to eco and ethical claims.”Being immediately accessible and vis-ible to all pa
64、rties,packaging is often the first product feature made to sit the sustainability test.So,what might determine a pass or fail?Responding to regulatory driversOne of the biggest drivers of innovation in Europe is the regulatory framework,in particular the European Green Deal and dedicated legislation
65、 on packaging and packaging waste.On average,each European citizen generates almost 180kg of packaging waste per year.So,the headline objec-tive of a new EU-wide set of rules,pro-posed in late November 2022,is that each member state should cut pack-aging waste per capita by 15%by 2040,compared to 20
66、18.Without action,total packaging waste is forecast to increase by 19%by 2030.Many of the measures aim to make packaging fully recyclable by 2030.By that date,the proposals would also shrink greenhouse gas emissions from packaging by over a third.In terms of the combined circular economy and climate
67、 agendas,this tightening of the legislative net both sets a global precedent and starts the clock ticking on compliance.It also carries major implications for the customers of a manufacturer such as Smurfit Kappa.When the demand impetus from corporate net-zero targets and land-fill reduction goals a
68、re added in,the business case rapidly becomes a business imperative.Choice without compromiseIn response,Smurfit Kappa has made transformative progress on packaging innovation to help align its value chain around a shared ambition to deliver better outcomes.Working towards at least net-zero-emission
69、s by 2050,the company has achieved a 41.3%reduc-tion in CO2 emissions since 2005.Crucially,its target of hitting 55%by 2030 will be third-party validated by the science-based targets initiative.On responsible sourcing,Smurfit Kappa can also evidence that 93.45%of its packaging solutions were sold to
70、 customers with chain-of-custody accreditation in 2021.These multiple benefits delivered against key specification criteria are not only good for the planet,but also good for business,explains Berkenbosch.“Packaging starts with the material;our paper and corrugated board is renewable,recycled and re
71、cyclable at scale.It is also biodegradable,should any accidentally end up in the natu-ral environment,”he says.“On top of all this,it is probably the most des-ignable option,being both affordable and adaptable to customer needs and increasing complexity.”There are clear win-win scenarios to be share
72、d between supplier and cus-tomer,too.Fit-for-purpose packaging is not only more sustainable in and of itself,but also optimises the supply chain sustainability of the product it protects.It can improve the deliv-ery efficiency and life expectancy of fresh produce,for example,therefore reducing food
73、waste.With almost limitless options availa-ble for customisation,however,com-plications can arise when choices are made that might ultimately com-promise sustainability.There could be coatings and finishes applied to materials to make them water-resist-ant,or enhance the thermal insulation propertie
74、s,for example.Design tweaks might change the weight of the packaging,the amount of air con-tained within it,or space between the units on a pallet.Each of these individual factors can start to influence and impact the sus-tainability score for a product,either knowingly,or unknowingly.This complex m
75、atrix of choices starts to raise ques-tions about how any business can hope to understand all the potential impacts involved.The answer is in the data.Building on data transparencySmurfit Kappa uses a combination of digital tools,data and analytics to help its customers manage their supply chain sus
76、tainability and deliver a superior consumer experience.In total,the group can access insights drawn from more than 100,000 supply chains in order to develop optimised and fit-for-purpose paper-based packaging solutions.Analysis shared across a range of metrics can help the customer save money,manage
77、 risk,boost circularity and cut waste,as well as shrink the carbon footprint of the entire value chain.In addition to benchmarking,Smurfit Kappa can also facilitate knowledge transfer across supply chains from dif-ferent market segments.This means that a confectionary brand could learn packaging les
78、sons from product lines as diverse as detergent and pet food.Given the pressure on packaging to innovate,Smurfit Kappa has also made a significant investment into its new Design2Market Factory,to help de-risk responsiveness,at speed.A game changer for companies in a race to release products on ecomm
79、erce platforms such as Amazon,this unique facility provides rapid prototyping for pilot production,industry-leading per-formance analysis and field-lab facili-ties under one roof.In all of this,though,trust is ulti-mately built on transparency,con-cludes Berkenbosch.“As businesses evolve to become m
80、ore sustainable,they must take their stakeholders with them that is sup-pliers and customers up and down the value chain.To do this,first they need reliable insights to make informed decisions.Then,to communicate with clarity and credibility,they need the data to back them up.This is where transpare
81、ncy matters,”he says.For more information please visit Packaging trust for turbulent timesWith the pressure on brands and supply chain partners to innovate around complex issues such as sustainable packaging,decision-makers need data they can trust Packaging starts with the material;our paper and co
82、rrugated board is renewable,recycled and recyclable at scale.It is also biodegradable,should any accidentally end up in the natural environmentSG E O P O L I T I C SF Mandel Ngan via Getty ImagesGlobal effect EUJapanIndiaUSRussiaOther developed nationsOther developing nations-7%-9%-10%-7%-4%-4%-1%-3
83、%ChinaR A C O N T E U R.N E T03BRITISH MANUFACTURERS HAVE GENERALLY HELD MORE STOCK,BUT MADE LESS PROFIT ON IT,SINCE THE COVID CRISISAverage stock holdings of small and medium-sized manufacturers in the UK versus their average gross-margin returns on inventory investment a profitability metric that
84、accounts for unsold stock from Q3 2019 to Q3 2022ONLY THE FOOD INDUSTRY HAS MANAGED TO EXTRACT MORE PROFIT FROM BIGGER INVENTORIESChanges in selected sectors average stock holdings and gross-margin returns on inventory investment between Q3 2019 and Q3 2022 365,7361%0%2%3%4%0100,000200,000300,000400
85、,000500,000600,000700,000730,681589,565549,229480,965485,713397,349369,195512,275468,272409,370385,085384,441Gross-margin return on inventory investmentAverage value of stock on handQ3Q4Q1Q2Q4Q1Q2Q3Q4Q1Q2Q3Q320022Sport,leisure andentertainmentAutomotive and auto partsEnergy and chemicalsP
86、lastic and rubber productsClothing and footwearConstructionBeveragesElectronics and electrical componentsFood050%100%150%200%-50%-100%58.9%93.7%18.9%-7.2%-41.6%-25%115.2%-36.7%89.9%-37.5%123.1%-46.3%174.1%-62%180.9%-81%56.7%-81.8%Unleashed,2022 Average value of stock on hand Gross-margin return on i
87、nventory investmentTHE GREATSTOCKPILE-UPGuarding against the unexpected has been the name ofthe game for UK procurement professionals since theCovid crisis.Firms are holding bigger inventories to mitigate the risk of further supply chain disruption,but that has its downsides,of course.Liquidity is k
88、ey when times are tough,for instance,and all that extra stock isntgood for cash flow.Its a delicate balance to strikeBIGGER INVENTORIES HAVE IMPROVED FULFILMENT TIMES,DESPITE WIDESPREAD SUPPLY CHAIN DISRUPTIONAverage fulfilment times among small and medium-sized manufacturers in the UK from Q3 2019
89、to Q3 2022(days)25201510Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q320022S U P P LY C H A I N&P R O C U R E M E N T 04Why subsidies wont solve the UKs chip shortagesSemiconductor industry bosses are calling on the UK government for financial support,partly in response to recent supply chain issues.But broa
90、d subsidies may not be the best strategyirst the pandemic slowed global trade and exposed the Wests over-reliance on China and Taiwan for its chips.Now semiconductor supply chains are at risk again this time from rising ten-sions between Washington and Beijing.The trade war between the two superpow-
91、ers has underlined the need for countries to boost domestic semiconductor manufactur-ing if they want to secure chip supplies.Last summer,the US signed into law the CHIPS and Science Act.The act establishes the Creating Helpful Incentives to Produce Semiconductors(CHIPS)fund,which pro-vides$52bn(48b
92、n)to help American com-panies to develop and produce chips state-side.Meanwhile,the European Union is looking to reduce member states depend-ence on imports with its European Chips Act,which the bloc hopes will double its global semiconductor market share from 10%to 20%by 2030.Demand for cars and el
93、ectronics has been cooling amid high inflation leading,if anything,to a temporary oversupply of chips but a handful of chipmakers,includ-ing Samsung,have pointed to a second-half recovery.Unfortunately,as countries vie for chip dominance and offer huge subsidies to incentivise domestic production,th
94、e UK is at risk of being left behind some of the faster-moving territories.Unlike the US and EU,which have already committed to splashing billions,the UKs semiconductor industry is being held back by a lack of direction.At the time of writing,the UK government hasnt yet published its long-awaited se
95、miconductor strategy.On 3 February,MPs on the Business,Energy and Industrial Strategy(BEIS)com-mittee called the delay“an act of national self-harm”.Just a few days later BEIS,which had been holding an inquiry into the UKs semiconductor industry for sev-eral months,was broken up as part of Rishi Sun
96、aks cabinet reshuffle.Semiconductors will now be overseen by the newly created Department for Science,Innovation and Technology.The concern is that the reshuffle could delay the strategys publication further.Industry bosses are becoming increasingly frustrated.supplies the top chipmakers,including T
97、SMC,with critical components and technology.It is an example of how small countries can have a big impact on the semiconductor supply chain through specialisation,says Lippett.White agrees about the need for the UK to specialise.He wants to see the government direct any financial support towards dev
98、el-oping and nurturing manufacturers of advanced semiconductors.As he puts it,traditional silicon chip manufacturing would require billions.Even then,that level of investment would be unlikely to lead to global success.On the other hand,invest-ing tens of millions in a particular type of chip,or com
99、ponents needed by the likes of TSMC,would go a long way.Failing to capitalise on this opportunity could be damaging too.“Domestic semi-conductor companies will either lose reve-nue to foreign competitors or potentially be forced to move abroad to survive,”warns Rohit Gupta,UK managing director at di
100、gi-tal solutions leader Cognizant,which works with manufacturers to streamline their supply chains.Relocating British operations overseas,to where production can be subsidised and operations are cheaper,wont necessarily translate into higher costs for UK custom-ers,but they could face longer lead ti
101、mes as a result.It would also make chips more sus-ceptible to the type of supply chain bottle-necks that the UK semiconductor industry is keen to avoid in the first place.This failure to invest in chip research and development could also lead to a brain drain and a loss of the talent that the UKs se
102、miconductor industry desperately needs.If the UKs chip scene stagnates,then the talent is far more likely to look elsewhere for roles that are better paid and which offer more opportunities for career progression.Inevitably,semiconductor manufacturers that are currently based in the UK could go wher
103、e the talent is.“All of this would weaken the UKs posi-tion in the global semiconductor ecosys-tem,”says Lippett.“The longer we take to start investing,the bigger the gap we will have to bridge between where we are and where we want to be,”he cautions.Even with the right investment in place,the UK w
104、ont be able to fix all the broken parts of the global supply chain.But it has to start somewhere and as soonas possible.“Its imperative that the government re-leases its semiconductor strategy soon,and that the strategy is backed by meaningful investment,”says Scott White,CEO of Cam-bridge-based Pra
105、gmatic Semiconductor.“This doesnt necessarily need to be at the same absolute level as,say,the US and EU chip acts.But it should be proportionate to the scale of the UKs economy.And it needs to provide support for capital expenditure in order to retain and grow domestic manufacturing.”The UK semicon
106、ductor industry is only a fraction the size of that in the US and coun-tries in Asia.More than 90%of the worlds advanced chips are procured from one company alone:Taiwan Semiconductor Manufacturing Company(TSMC).As a result,the global and complex nature of the semiconductor supply chain means that i
107、t is probably unrealistic that the UK could achieve chip autonomy.Mark Lippett is CEO of XMOS,a Bristol-based semiconductor company focused on the internet of things.He thinks the idea that an entire country or continent can become self-sufficient for the entire semiconductor value chain is a real c
108、hallenge.“The UK wont be able to develop a full supply chain to fulfil its semiconduc-tor needs.That is beyond the scope of even the US or Europe,”he says.Instead of splurging on subsidies to try to compete with other countries,perhaps the UK would do well to focus on providing targeted investment.T
109、hat might enable the UK to assert itself as a leader in technologies that others want to procure.Lippett points to interest in the Dutch firm ASML,which Rich McEachran The longer we take to start investing,the bigger the gap we will have to bridge between where we are and where we want to beCommerci
110、al featurePutting consumers at the heart of the supply chainAs consumer habits change,supply chains need to adapt to reflect the surge in online shoppinghe way we shop has changed,with people increasingly looking to the convenience of buying online rather than making a trip to the shopping centre or
111、 high street.And with this shift has come a parallel move towards direct-to-consumer(DTC)selling,a model which cuts out intermediaries and calls for a more consumer-centric supply chain.“Traditionally,the supply chain ended at the retail store that was where people went to shop,”explains Will Lovatt
112、,general manager at fulfilment solution specialist Deposco Europe.“But in a consumer-cen-tric world,that has changed,with shoppers now able to order through their chosen device and at a time that suits them.”Of course,if retailers,manufacturers and third-party logistics(3PL)compa-nies want to servic
113、e consumers via these DTC channels,the underlying fulfilment technology must be able to handle unfa-miliar workflows and volumes,as well as coping with a range of technical complex-ities.“Modern fulfilment technology has to be able to accept orders from all of these channels,all of the time,and have
114、 a real-time view of inventory across the whole supply chain network,”says Lovatt.Deposco has therefore developed a pur-pose-built,web-based platform to support global businesses operating their own fulfil-ment centres,as well as a growing number of 3PLs who take Deposcos solutions and offer them as
115、 a service to their end cus-tomers.The software helps firms to intelli-gently route their orders,giving a real-time view of the inventory across the whole busi-ness.This can help the company to optimise orders and bring products together effi-ciently from different locations.Many ecommerce systems h
116、ave grown as their customers have grown,says Lovatt,but this can be restrictive and often means they lack the IT architecture needed to support a truly global enterprise.And while other traditional legacy solu-tions may offer a similar level of order and warehouse management as Deposco,he says,they
117、cant react as quickly and help customers take advantage of the rapidly changing retail landscape.“Retail and ecommerce are fast-mov-ing and fast-changing,”continues Lovatt,“and we need to offer a service that is agile enough for companies to react and take advantage of new channels.Who,for instance,
118、would have predicted a few years ago that from a sales perspective,TikTok would have become the biggest social media ecommerce gateway?“This is one of the reasons we do a lot of work with 3PLs,because when they pick up a new customer,they need to start ser-vicing them as soon as possible,and thats o
119、ur specialism.”Lovatt also has an eye on boosting ware-house productivity.Traditionally,fulfilment processes were set up for bulk delivery to retail stores,and wholesalers didnt have the scale or flexibility to allow single items to be selected.Deposco offers a solution to this,with multiple strateg
120、ies able to react to different warehouse scenarios.“Theres plenty of anecdotal evidence about people walking 20km a day around a warehouse in order to fulfil orders.That may be good for their fitness,but its not good for company productivity,”says Lovatt.Some systems only allow for a single picker a
121、t a time to fulfil an order,but if that involves hundreds of different items,thats not efficient,he says.Deposco can introduce zonal strategies,with individu-als looking after certain areas of the ware-house,and software that will help to pick and sort across multiple users,with the final order bein
122、g consolidated into one customer-specific packed order.Deposco can also help clients meet their sustainability targets.“A well-man-aged supply chain means less waste and a smaller carbon footprint,”says Lovatt.Its also possible to achieve reduced over-stocks,fewer emergency orders and fewer products
123、 going out of date.“We also understand the dimensions of products,so we can pack intelligently into an appropriate sized package,which means vehicles arent carrying fresh air,”he adds.“Helping companies to make these small incremental changes can really add up.”For more information visit T Retail an
124、d ecommerce are fast-moving and fast-changing.We need to offer a service that is agile enough for companies to react and take advantage of new channelsS E M I C O N D U C T O R SF Bloomberg via Getty Images DEMAND FOR PERSONAL ELECTRONICS IS FORECAST TO DRIVE THE SEMICONDUCTOR MARKET FOR DECADES TO
125、COMESemiconductor market revenue worldwide,from 2020 to 2030,by application(in$bn)ASML,2023050100150SmartphonePersonal computingConsumer electronicsAutomotiveIndustrial electronicsWired and wireless infrastructureServers,data centres and storage2002502020202220252030This plant in Newport is already
126、manufacturing semiconductorsR A C O N T E U R.N E T05Tesla is now focused on the produc-tion of batteries which are c o b a l t-free.This new pivot could help reduce the cost of EVs.B u i l d-ing regula-tory pres-sure means that beyond the PR risks,firms do need to think care-fully about the legalit
127、y of their busi-ness practices.“The risks for corporates are increasing sub-stantially in this area,”explains Richard Reich-man,a partner at law firm BCL.While the reg-ulatory require-ments around this are fairly soft in the UK now,they are hardening,says Reichman.The Mod-ern Slavery Act and the Env
128、ironment Act are both being strengthened regard-ing supply chains.Other jurisdictions are going even further.France has introduced a Corporate Duty of Vigi-lance Law that requires companies to identify and prevent harm to human rights and the environment in their business practices.Now the EU looks
129、set to follow suit in strengthening its rules,says Reichman.“Its crucial to implement and review due diligence procedures to respond to the increasing risk,”he advises.Get the comms right too,and theres an opportunity for brands to stay on the right side of that threat.Tread carefully:the art of ESG
130、 disclosurehen Boohoo was accused of mod-ern slavery in 2020 because of the working conditions in one of its suppliers factories in Leicester,its share price fell by 18%,retailers dropped the brand and it was facing a possible US import ban.The case was an object lesson in the importance of supply c
131、hain due dili-gence and handling the communications around it effectively.Boohoo is far from the only high-profile UK firm to have been caught up in scandal affecting a supplier.Dyson is facing com-pensation claims alleging that working con-ditions in a Malaysian factory were unsafe and exploitative
132、.Tesco,meanwhile,is deal-ing with a class-action lawsuit brought by workers at a Thai factory that made gar-ments for its F&F brand until 2020.Companies have long been aware that the blowback from ESG-related failures in supply chains can eviscerate reputations,incur fines,trigger lawsuits and,in th
133、e most severe cases,end operations entirely.As consumers become more ethically con-scious and regulatory bodies strengthen their rules,the stakes are rising.How,then,should companies communicate their ESG due diligence and if the worst-case scenario arises where an ESG-related failure is dis-covered
134、 in the supply chain,how should they respond?“Transparency and honesty are crucial,”says Helen Ellis,head of consulting at Team Lewis,a marketing and communications agency.“Its important to own a mistake.Ultimately,it comes down to trust and hon-esty;its about trying to very quickly say,Yes,this has
135、 failed.Then its about com-municating and explaining what youre going to do differently going forward.”Alex Harrison,co-head of projects and energy transition at law firm Akin Gump,agrees.“Its not the crime.Its the cover-up.At its heart,ESG is about integrity.A com-pany that discovers a supply chain
136、 issue should look to be as open and honest as it can be about the problem.”But Harrison counsels against rushing out a statement,beyond acknowledging the problem and a willingness to respond to it appropriately.“A company may not have all the facts,or its suspicions may be disputed or unfounded the
137、 company may not be free to disclose all the information available to it for legal or regulatory reasons.”Instead,a balanced account of what a company does or does not know(and is able toshare),may be the best approach;what is paramount is not burying ones head in the sand.Perhaps more important tha
138、n acknowl-edging and communicating about the inci-dent itself is the action that companies take afterwards and how that is communicated.The widely publicised 2013 Rana Plaza dis-aster in Bangladesh,where an eight-storey commercial building housing five garment factories collapsed,was a major turning
139、 point for not just one company,but for the whole fashion retail industry.Companies banded together to create associations coordinating their efforts to address the problems highlighted by the incident.Some of the measures taken included overhauling supplier auditing practices,including broadening t
140、he scope of what was included in an audit to cover,for example,the safety of factory infra-structure and workers rights.Companies also started to invest more in their suppli-ers,transforming a purely transactional relationship into a more collaborative one.Talking publicly about the steps youre taki
141、ng to improve can be a good response in the weeks,months and even years following an ESG scandal in your supply chain.After all,the questions wont stop once youve made a commitment to improve:compa-nies will face scrutiny on whether they have followed through.Take the Boohoo example.“Boohoo quickly
142、sought to rebuild consumers trust,”says Ryan McSharry,UK head of cri-sis and litigation at international PR firm Infinite Global.“It launched a QC-led inves-tigation of its supply chain,hired an inde-pendent factory auditor and announced the creation of its own model factory that would demonstrate b
143、est practice in terms ofworkers rights.”A 2022 report highlighted progress in Boohoos work on its supply chain in terms of sustainability and ethical compliance.But two years on from the scandal breaking,activists and shareholders are still criticis-ing the company for alleged low wages,and the lack
144、 of repayment of historically under-paid wages.Some brands try to get ahead of supply chain-related accusations through com-plete transparency.But clumsy messag-ing can result in accusations of hypocrisy.When the self-billed ethical brand Tonys Chocolonely publicised 1,701 incidents of child labour
145、in its supply chain,it said that this openness was supportive of its aims of discovering and eradicating child labour and slavery in its business.Instead,the rev-elation led to criticism,such as from Ayn Riggs,founder of Slave Free Chocolate,who said that Tonys was“pitching virtue to con-sumers”whil
146、e engaging in bad practices.But transparency can only go so far.Mercedes-Benz has published informa-tion about its sourcing of cobalt the ele-ment used in electric vehicle(EV)batteries which is mined in the Democratic Repub-lic of Congo(DRC)under conditions which often violate human rights guideline
147、s.The company has claimed to be committed to the goal of only using“certified”mining sites that have undergone auditing but in practice it is incredibly difficult to avoid this problem when buying cobalt from the DRC.Whats the best way for communications teams to manage reputational issues in the su
148、pply chain?THE WESTS RELIANCE ON CONGOLESE COBALT IS BECOMING AREPUTATIONAL HEADACHETop countries for cobalt mining in 2022,in metric tonsUS Geological Survey,2023Laurie ClarkeP U B L I C R E L AT I O N SW Junior Kannah via Getty ImagesThe mining sector inthe Democratic Republic of Congo is poorly r
149、egulatedD5,900AustraliaF3,800CubaH3,000MadagascarL2,200ChinaBCDEFGHIJKLMB10,000IndonesiaE3,900CanadaG3,800PhilippinesI3,000Papua New GuineaM800USC8,900RussiaJ2,700TurkeyK2,300Morocco130,000The Democratic Republic of CongoA Transparency and honesty are crucial.Its important to own a mistakeCommercial
150、 featureor any firm with a sales pres-ence in multiple territories,keeping on top of receipts and invoices can be a near constant task.Software giant Citrix,which operates in APAC,EMEA and Japan,among other jurisdictions,employs a designated accounts payable department,as well as the latest travel a
151、nd expenses monitor-ing assistance.However,in a fast-mov-ing business,manually selecting and chasing VAT refunds across interna-tional transactions became increasingly difficult,says Judith DAguilar,global VAT director at the company.“We had a whole accounts pay-able department looking at manual exp
152、enses,choosing the invoices they thought were reclaimable and process-ing the expenses in a very manual way,”she says.“We had complaints because it took a long time for payments to be made to employees,who had to go back and get receipts where there were none.Sometimes AP staff didnt know how to cat
153、egorise expenses;that manual pro-cess is prone to errors and delays.”With these friction points,Citrix suspected that VAT refunds were slip-ping through the cracks.The company onboarded VAT IT to simplify processes and optimise recovery,only paying the firm a fee if funds were recovered.In the first
154、 year,VAT IT recovered$900,000(750,000)for Citrix.“We can now say we are maximising our reclaim for all these entities.We can also see what is being incurred from an expense perspective,as well as what is recovered and what is in the pipeline.”VAT IT specialises in identifying and reclaiming tax ref
155、und opportunities for international businesses using a mix of human and technological expertise.Operating like a VAT bounty hunter,the firm,which has 23 years of experience,only charges if it manages to recover money.VAT IT has pulled back as much as 10m in a single year for a client.Yet the number
156、of international businesses,both large and small,leaving cash on the table is growing in a rapidly chang-ing global climate,says Marc Sevitz,managing director for global opera-tions and enterprise at VAT IT.“Citrix is a great example.As a suc-cessful global software business,it has sales teams movin
157、g between coun-tries who stay in hotels and have travel expenditure that we recover VAT on,”he says.“Smaller businesses are also miss-ing important returns.If a firm gets back 200,000,that can make or break the business.In staffing costs,that 200,000 could mean five or six decent hires.How many sale
158、s or manufacturing staff is that,that could then help grow the business?Thats a whole evolution it might have left behind.”International businesses have faced significant upheaval in recent years due to the pandemic,Brexit and the war in Ukraine.This has often forced them to switch supply chains and
159、 be exposed to new territories and jurisdictions.This means many firms are not aware of the refunds they are leaving unclaimed,says Sevitz.“Brexit laws were such that it made it harder to recover VAT.The previous EU process was more digital,now the post-Brexit UK is much more manual.Saying to a busi
160、ness they have to do more paperwork forces extra time and extra mistakes.We see that in the money we reclaim for businesses,”he adds.Lockdown also forced people to work from home and while businesses have invested in new technology,many have cut costs in the subsequent economic down-turn,says Sevitz
161、.“Often one of the first things to go is finance teams.Businesses say they are going to do VAT internally and remotely across departments,yet none of whom are working in one office.Thats where mistakes get made.”VAT refunds can be uncovered in the most unusual of places.For instance,pharmaceutical c
162、ompanies often find themselves using millions of test tubes each one produced in two different territories:the glass vials in one juris-diction and plastic tops in another.A single fashion item may have but-tons,cotton or zips produced in mul-tiple places.This can mean VAT costs incurred at differen
163、t points have to be claimed back.Few firms are more vulnerable to this than a soft drink firm that sells 500 mil-lion bottles and cans across 28 coun-tries.Before the firm partnered with VAT IT in 2018,not only did it need to claw back money from across varying territories and products,it also neede
164、d to marry up any VAT analysis with an expense management process that was complicated and dependent on inflexi-ble technology.The international firm was able to simultaneously sync its existing tech-nology with VAT ITs VAT Cloud,a cloud-based platform that has real-time reporting capabilities.“VAT
165、Cloud easily extracts expense data from Chrome River and auto-mates,centralises and enhances the companys VAT recovery and compli-ance,”says a spokesperson from the company.“Refunds go straight back into the business,boosting cash flow for future investment.It is easy to standardise and centralise V
166、AT compli-ance when we originally thought it was a heavily localised function.Best of all is that VAT Cloud is easily accessible to our global VAT teams.”The VAT Cloud client interactive portal allows businesses to have a con-tinuous up to date view of their VAT claims process,what refunds are suc-c
167、essful,and what is happening with each invoice and expense.This visibility gives critical insight into funding.Alongside this technology,VAT IT has a strong human element,says Sevitz.“We are not just paper peddlers,we do not just take a firms invoices and give them to a VAT authority,we understand t
168、he process from end-to-end and know what to ask for.We have a team of 50 legal experts who work solely on under-standing whether complex transactions have a VAT recovery opportunity and if there are queries from the tax office we answer those as well.”Whether a business currently puts all its invoic
169、es and expenses in a drawer or a box,or uses an up-to-date digital expense management system,VAT IT can seamlessly collect them and imme-diately get to work,bringing value back into the business.As DAguilar at Citrix says:“VAT IT has led us right.It has recovered for us and weve never had an audit b
170、ecause the firm reclaimed something it shouldnt have.The company understands the rules,we trust them;its a win-win.”For more information visit The hidden opportunity in recovering VAT Businesses suffering due to rising costs and supply chain issues are often too busy to spend time clawing back VAT r
171、efunds from international transactions.But getting back these funds does not need to be costly or time-consuming The number of international businesses,both large and small,leaving cash on the table is growing rapidlyFS U P P LY C H A I N&P R O C U R E M E N T 06C-SUITE EXECS ARE CONFIDENT IN THEIR
172、FIRMS ABILITY TO HOLD OUT AGAINST CORRUPTIONBusiness preparations against the risk of corruption,according to C-suite members in the UKWhats more,these problems could be taking root right in front of you.As Chau-han points out:“Do you as a business know for certain that your purchasers wont use any
173、means necessary to find a supplier or to persuade a supplier to supply them?”The trend towards remote working after the Covid crisis has made these unwanted be-haviours harder to uncover.The repercussions for a business caught operating outside the law can be serious.“Bribery is a criminal offence u
174、nder the Bribery Act 2010,”continues Chauhan.“Commercial organisations can receive an unlimited fine and suffer other significant adverse consequences,including exclusion from tendering for public contracts and rep-utational damage if they are found to have failed to put in place adequate procedures
175、 designed to prevent bribery.“There is also a risk of imprisonment and further fines to senior management and in-dividuals if they are found to be directly re-sponsible for an offence.”With friends like thesehen Russian missiles and airstrikes began falling on Ukraine on the morning of 24 February 2
176、022,it triggered a devastating and destabilising domino effect that would first affect peoples lives and eventually the global economy.More than a year on,those economic ef-fects are still felt acutely by UK businesses with ties to Ukraine.Sanctions and supply chain disruptions have forced industrie
177、s from construction to motor manufacturing to scramble to find new suppliers,and a re-port by Moodys Analytics at the start of this year warned that the Russia-Ukraine military conflict now poses the“greatest risk”to global supply chains.All that disruption allows another threat to flourish too corr
178、uption.So says Chara de Lacey,who is acting head of business in-The conflict in Ukraine is increasing the risk of supply chain corruption.Its up to British businesses to make sure their processes are robust enough to fend it offtegrity at independent anti-corruption or-ganisation Transparency Intern
179、ational UK.“Conflict is a breeding ground for corrup-tion,with political instability,increased pressure on resources and weakened over-sight bodies creating a big opportunity for crimes such as bribery and embezzlement.”Thats bound to be a concern for British businesses with supply chain connections
180、 in the area.“The invasion of Ukraine and the conflict create challenges for UK firms sourcing from affected regions,”de Lacey continues.“Supply chain disruption and the shortage of key regional commodities is a risk for corruption,as businesses may try to justify paying bribes to access resources.”
181、A report by corporate intelligence group Kroll suggests that most C-suites are acute-ly aware of the threat that corruption poses to company integrity.As many as 49%of UK executives think the lack of third-party vis-ibility is the primary driver of an increased risk of bribery,corruption and opportu
182、nism.In practice,this illegality can take many forms,from contractors relying on kick-backs to government officials or state-owned enterprises to grease the wheels on the movement of goods,to a supplier sub-mitting a false invoice.“The Ukraine crisis has added huge pressure to achieving busi-ness co
183、ntinuity,”says Arun Chauhan,founder and director of Tenet,a law firm specialising in fraud and compliance.“Some may be tempted to bend the rules.”Jon Axworthy Do you as a business know for certain that your purchasers will not use any means necessary to find a supplier?C O R R U P T I O NWCommercial
184、 feature“We need to be efficient and,with our partners,we have the capacity to address widespread and common logistical chal-lenges,such as lack of warehouse space and long container dwell times at ports,but we cannot lose sight of the fact that sustaina-bility needs to be at the heart of everything
185、 we do,”says Abdulla.“This means we have to take on the big challenges surrounding energy,emissions and net-zero targets.”Over the decades,shipping and port oper-ations have contributed to emissions and Abdulla says that a top priority for DP World is to address the legacy of the industrys reli-ance
186、 on diesel.This means working on ship-ping that uses electrification and alternative fuels,such as hydrogen.The company has already made progress in this field,moving its Southampton terminals straddle carrier fleet to hydrated vegetable oil(HVO).Overall,DP Worlds European operations reduced their a
187、bsolute CO2 emissions by 20%last year,compared with 2021.“At Southampton,we started by convert-ing 10 ships and now were rolling it out for the rest of the fleet.This has already been successful because HVO is a commercially viable fuel,as well as being a responsible choice,”says Abdulla.One company
188、s journey from ports to global supply chainsDP World has long been known as a ports and terminals operator,but Rashid Abdulla,the companys CEO and MD for Europe,is working on ambitious plans to transition sustainably to end-to-end supply chainsefore the Covid-19 pandemic,global supply chains were la
189、rgely taken for granted and,for anyone outside the supply chain sector,frequently invisible.However,a series of shocks,including the pandemic,geopolitical crises and extreme weather events,mean that moving goods and ensuring the benefits of trade can be widely shared have become more complicated tha
190、n ever.For DP World,it became clear that the company needed to diversify and transform.The company is best known as a ports and terminals operator,starting from humble beginnings in 1972 as a single port Port Rashid in Dubai.Today,it is the largest supply chain solutions provider in the Middle East
191、and has an interconnected global net-work of over 350 business units in 75 coun-tries across six continents,made up a team of over 103,000 people.“We already have an impressive interna-tional business,but now is the time to use our expertise to move from being a traditional ports and terminals compa
192、ny to a genuine end-to-end supply chain enabler,especially in Europe,”says Rashid Abdulla,DP Worlds CEO and MD for Europe.An important step in this transition has been DP World acquiring Imperial Logistics and syncreon to increase capability in Europe,as well as markets further afield such as Africa
193、 and North America.In December 2021,syncreon became a wholly owned busi-ness of DP World,while Imperial Logistics was acquired in March 2022.“Imperial Logistics and syncreon are global companies with a huge reach in Europe and joining forces with them has helped us increase our market access,”Abdull
194、a explains.“But its not just a matter of signing acquisition deals and then watching market share grow our transition plans are focused on using technology for supply chain resil-ience and sustainability.”DP Worlds extensive international ports infrastructure has created a solid foundation for the c
195、ompanys expansion and transfor-mation,but Abdulla points out that we are living in an era of“ongoing disruptions to supply chains.”“This means we need to build supply chains that are not only well-equipped in terms of physical infrastructure,but for end-to-end movement of goods,”Abdulla continues.“W
196、e need to be prepared for anything that was an important lesson from the pandemic.Supply chains will keep being challenged by a range of events,such as geopolitical issues and weather conditions in Europe,so we cannot be complacent.”DP World commissioned Trade in Transition 2023,a report on trade tr
197、ends that highlighted the need for more efficient and affordable supply chains across Europe,with the Economist Impact-led global survey of more than 3,000 trade and supply chain managers.The report found that Europes GDP would be 0.2%lower than a business-as-usual scenario without the current infla
198、tion-ary pressures.“We see this as an opportu-nity to provide European companies with the streamlined supply chain solutions they need to come through the latest disruptions,emerge stronger than ever and build trade relations across the world,”says Abdulla.To be“prepared for anything”,DP World and i
199、ts partners are investing in digital tech-nology to build resilience along entire supply chains.In particular,supply chain visibility is a major priority for streamlining global trade,so everyone along the trade routes has the data they need to avoid disruption or manage it effectively when it is un
200、avoidable.Abdulla highlights the power of data when using digital technology to create transpar-ent supply chains,especially across inter-national borders:“When we use solutions,such as AI and machine learning,to make the most of the data,we can make good,quick and effective decisions in real time.”
201、He says that using this technology means that“multiple data points can be con-stantly analysed,accurate predictions can be made,everyone along the supply chain can be alerted immediately if any disrup-tions or changes occur and adjustments can be made.”“It is one thing to have large quantities of da
202、ta,but we can only offer the world-class service our customers demand if we work with the latest technologies to use data prop-erly,”Abdulla explains.“When we can take appropriate action and streamline operations Transitioning from being a traditional ports and terminals operator to a full-ser-vice
203、end-to-end supply chain company is a process that Abdulla describes as“enor-mous and exciting”.Already,DP World has provided complete logistical services within Europe.It moved a large quantity of produce from an island in the middle of the River Danube to its Constanta Port in Romania on behalf of
204、Al Dahra,the UAEs biggest agricultural feed trader.“Trade has the power to transform lives,not just business bottom lines,”says Abdulla.“Resilient,sustainable supply chains are key to successful,positive global trade,so DP World must change as the world changes.Our eyes are open to the challenges ah
205、ead,but we are confident we can make a real difference.”To read more from Rashid Abdulla visit on best practice interpretation of data,our customers will benefit from the cost sav-ings.This is especially important with the cost-of-living crisis affecting businesses,as well as households.”Another imp
206、ortant lesson from the pandemic was the importance of keep-ing people safe while maintaining conti-nuity of customer service.Abdulla says DP World was able to strike this balance during a difficult period for manufacturers and cross-border trade.“We didnt let our customers down,even when there were
207、serious restrictions on travel and movement,”he recalls.“By safely offering that continuity of service,our customers were able to keep operating and manufacturing goods,ensuring the revenue kept coming in during some of the hardest trading conditions we have ever experienced.I am really proud that w
208、e did not have any stoppages in any of the countries where we operate.”This confidence in its own competen-cies and its track record of adopting new technologies,along with the additional expertise and market access of Imperial Logistics and syncreon,has given DP World the impetus to include sustain
209、ability goals in its business plan.B Our transition plans are focused on using technology for supply chain resilience and sustainability Kroll,2021Whats the biggest corruption-related threat to your business?Is there sufficient board-level engagement with corruption risk?Have you conducted a bribery
210、 and corruption risk assessment in the past five years?49%Lack of visibility over third parties27%Employees actions24%Weak record-keeping84%Yes3%Dont know13%No77%Yes1%Dont know22%NoR A C O N T E U R.N E T07missing from a shop floor,there are numer-ous ways that disreputable vendors can exploit the s
211、train that many supply chains are currently under.Crucially,its possible to scale up or down the technological solutions according to the size of the business,so that the initial in-vestment is in keeping with the budget available.While custom models,which usu-ally require eye-watering investments,c
212、an be trained with a corporations own data,consortium models use data from multiple comparable companies so that smaller in-stitutions can share the model,hosted in the cloud,at a significant saving.But AI cant exist and operate inde-pendently.There is always a significant human element to map suppl
213、y chains because many suppliers will be resistant to the process.Interventions from personnel will always be required to keep mapping going down the chain.That might be to establish ground truths by way of physical visits under previously agreed audit clauses.Or simply ensuring that suppliers buy in
214、to what youre trying to achieve.To ensure total visibility,then,suppliers need to comply fully.And it is vital they un-derstand a businesss commitment to the task of rooting out corruption and willingly share the data needed.Ultimately,the companies that are best at mitigating risk are those that ve
215、t thor-oughly.But that becomes increasingly diffi-cult when the pressure is on to keep the sup-ply chain moving and outmanoeuvre the logistical fallout from the war.Here,though,the boardroom sets the tone.“Rigorous due diligence is essential to ensure responsible UK companies are not connected or co
216、ntributing to corruption through their business relationships,”warns de Lacey.“These checks will always be more effective when the UK companies carrying them out are genuinely committed to stopping corruption,rather than viewing this merely as a box-ticking exercise to sat-isfy legal requirements.”F
217、or John Glen,an economist at the Char-tered Institute of Procurement and Supply,the current focus on supply chains is a gold-en opportunity to tackle corruption.“Sup-ply chain and procurement are now front and centre of CEO thinking,and their voice in the boardroom has increased exponen-tially,”he s
218、ays.“In terms of tackling corruption,organi-sations must decide where and how they want to do business.It comes down to the ethics of individual leaders and managers,and organisations must attract leaders who have personal ethics that abhor corruption.At an organisational level,the business must the
219、n support the difficult corporate decisions that bake anti-corruption meas-ures into an organisation.”As the conflict in Ukraine rolls into its second year,the stakes couldnt be higher when it comes to conducting business with-out reproach.Its a timely reminder that now,more than ever,UK businesses
220、need to be mindful of the companies they keep.But what can British businesses do to fend off this risk?Legal experts maintain that one of the surest and simplest ways forbusinesses to ensure integrity from the outset is to focus on carefully drafted con-tracts and to encourage greater collabora-tion
221、 between their procurement,legal and compliance departments.“Its in these early encounters with po-tential third parties that you have the most power to mitigate risk,when they are still in competition with one another,”explains Penny Ward,a trade and commerce partner at international law firm Baker
222、 McKenzie.For instance,businesses might be able to take advantage of that competitive leverage to identify key risk areas in that third-party relationship and then tailor their procure-ment documents particularly their re-quest for proposals to address those risks.After all,at that early stage of th
223、e bidding process,most suppliers will realise that non-compliance will probably cost them the tender,making them more likely to agree to terms that will limit the possibility for corrupt activities further down the line.This should also help to fast-track contract negotiations,which can be useful wh
224、en youre trying to be as agile as possible in the search for new partners.Similarly,including a right-to-audit clause guarantees third-party transparen-cy,data disclosure and regular reporting in future.In some cases,it may even enable procurement staff to make unannounced site visits to warehouses
225、and offices.Of course,not all suppliers are new.Even with established relationships,its quite possible that previously sound working practices can fall prey to illegalities,as sup-pliers feel the pressure to deliver.One way to safeguard the existing supply chain and root out wrongdoing is to have it
226、 exhaustively mapped.Unfortunately,this process is far from a simple undertaking,as it requires total visibility of everyone in the chain.Whether youre a smaller operation with a shallow supply chain or a global corporation with a deep pool made up of thousands of suppliers,there needs to be a thoro
227、ugh understanding of every single player.While experienced personnel and risk management teams can set about identify-ing and reporting on transactions or pro-cesses which look shady,the number and complexity of the deals taking place in modern supply chains may mean that tech-nological solutions wi
228、ll be preferable.For instance,tools deploying machine learning to trawl for signs of suspicious behaviour may be a fairly efficient safeguard,backed up by automated verification of credentials and processes,and risk indicators to flag up potential issues.Fraud detection models can also be em-bedded
229、in platforms that monitor procure-ment,where they can further integrate with software that monitors the whole supply chain and centralises everything from con-tracts and purchase orders to expense re-ports and the all-important invoices.The sophisticated pattern recognition element of AI can then be
230、 brought to bear on this massive amount of data,shining a light on suspect behaviours and actions that clearly need some oversight from procurement and legal departments.Rolling out these kinds of tools will clear-ly require investment,but the rewards can be significant in terms of identifying value
231、-eroding behaviours.Whether thats underfilling trucks;delivering parts and passing them off as compliant when they are in fact not;or simply materials going Commercial feature0upply chains have suffered unprecedented disruption in recent years.Brexit,the Covid-19 pandemic,the war in Ukraine and a su
232、ccession of adverse weather events have caused extreme volatility in the price and availability of commodi-ties and products,including those with little history of scarcity or delay.Although the intense period of disrup-tion has ended,long-term uncertainty persists due to changes to supply chains.Se
233、cular super-trends such as the energy transition are also fundamentally alter-ing the nature of many markets,which means there will be no return to the pre-Covid approach to procurement.This disruption has pushed supply chain management to the top of the business agenda and put a spotlight on the ro
234、le of chief procurement officers(CPOs).Senior executives are increas-ingly aware of the need to prioritise investment in and support for procure-ment in order to protect supply chains and ensure business continuity.The aim is insulating the business from vol-atility as much as possible,mitigating th
235、e impact of rising costs and fulfilling delivery schedules.“CPOs have experienced a huge amount of uncertainty over recent years,”says David Becker,director of the risk solutions practice at cross-com-modity price reporting agency Fastmarkets.“Markets have become unpredictable.Prices have whipsawed
236、and input prices have risen well beyond what can be passed on to customers.There has been a growing shift in the methodology needed to do business in the current market environment.”Fastmarkets has seen how markets in commodities and energy that were relatively stable or slow-moving in the past have
237、 become more volatile and now require active management.Peter Hannah,senior price development man-ager at Fastmarkets,says the markets for the materials used in batteries exemplify the changes that have taken place.“For example,lithium prices could once be negotiated between a buyer and seller and f
238、ixed for up to a year,”says Hannah.“Everyone had more certainty.Now procurement teams have to manage market-orientated pricing mechanisms,which have become necessary to match up supply with demand.”This is all being driven by secular trends.The global energy balance is shifting away from fossil fuel
239、s,toward renewable energy and electrification.Demand for clean energy means that commodities such as lithium,copper and sustainable aviation fuel have a big role to play in the energy transition.The growth of the electric vehicle sector in particular has increased the size and global significance of
240、 the market,as well as its volatility.The price gyrations of recent years have required a more dynamic contracting approach,and most supply agreements have evolved to reference spot indices.“But with that youre much more exposed to the volatility of the market,”says Hannah.“Fortunately,with this cha
241、l-lenge also comes a more effective solu-tion.Exchanges have launched futures contracts for battery materials such as lithium and cobalt,which cash-settle on the basis of the Fastmarkets indices for those products.These financial instru-ments allow market participants the option to independently loc
242、k in future prices,hedging as much or as little exposure as required.“We see this becoming the norm in many of our markets as they develop,”he continues.“Risk management in less mature markets tends to be more geared around counterparty rela-tionships and sharing the risk burden.Then,as markets matu
243、re and become trickier to navigate,the toolkit for doing so often becomes more sophis-ticated accordingly.This has already played out across bulk materials such as iron ore,and is well under way in battery materials,forest products and biofuel feedstocks.”Fastmarkets provides access to price data th
244、at shows the market-reflec-tive value of each battery material,together with short-and long-term forecasts that give supply/demand balances and help businesses navi-gate market volatility.For instance,Fastmarkets Battery Cost Index gives in-depth insights into the cost of lith-ium-ion cell component
245、s,and a suite of risk management toolshelps reduce exposure to price volatility.The risk management toolkit has recently become much more sophisti-cated,according to Becker and Hannah.By deploying appropriate risk manage-ment tools,including derivatives,CPOs can hedge exposure to future price vol-at
246、ility and protect profit margins.This increases the certainty of cost budget-ing and cash flows;improves procure-ment,planning and inventory require-ments;and mitigates counterparty risk.Evidence of effective risk management also helps to secure financing for new projects or developments.Price repor
247、ting agencies such as Fastmarkets can be valuable sources of pricing data,forecasts and market analyses,giving businesses a strate-gic advantage in complex,volatile and often opaque markets.Commodity markets served by Fastmarkets are critical to the transition to a low-car-bon economy,including new-
248、gen-eration energy,agriculture,forest products,metals and mining.Access to up-to-the-minute market informa-tion,together with market intelligence,helps companies manage their supply chains,while also promoting healthier commodity markets.“It is positive for CPOs to have access to market information,
249、including spot prices and forecasts,”says Hannah.“But there can always be black swan events or things that you dont see coming.So,the key thing for CPOs is to have risk management strategies in place.”Fundamentally,Fastmarkets prod-ucts help businesses understand risks.These may certainly include pr
250、ice risks,but they also likely incorporate coun-terparty,geopolitical,technological and ESG risks too,to name but a few.Understanding these risks at a granular level is the key to addressing them.And the insights dont stop there.Fastmarkets products and services can also provide CPOs with risk manag
251、e-ment pointers,particularly regarding strategies to diversify their sourcing,make their contract structuring more flexible,and use derivative instruments where available.Becker explains that when carried out effectively,commodity risk management strategies can help to generate a more stable cash fl
252、ow.That,in turn,can breed greater investor confidence.The value of the business could even increase since investors will enjoy more consistent returns.And effective risk management can also encourage banks to lend more money to grow the business.These practices used to be the domain of large organis
253、ations with sub-stantial resources.But this is changing,given the increased complexity of mar-kets and the development of innova-tive,effective tools.“It is now possible for smaller organisations to leverage the market information and insight to their advantage,”says Becker.“In many ways,this is eve
254、n more important for them given the concentrated nature of their business.”For more information please visit CPOs diversify their risk management toolkitMore businesses are turning to price reporting agencies such as Fastmarkets for protection against adverse price movements and to identify new oppo
255、rtunities Commodity risk management strategies can help to generate a more stable cash flow.That,in turn,can breed greater investor confidenceSDEMAND FOR COBALT HAS SOARED IN RECENT YEARSCME Group cobalt futures volumes and open interestTHE RISE OF BATTERY TECHNOLOGY IS MAKING LITHIUM A HOT COMMODIT
256、YCME Group lithium hydroxide futures volumes and open interest5,00010,00015,000500400300200100020,000600Dec 20May 21June 2021Dec 2021Mar 2022June 2022Sep 2022Sep 2021Dec 2023Feb 2023Open interest(tonnes)Open interest(tonnes)Futures(lots)Futures(Lots)CME 2023,Fastmarkets 2023As demand for lithium gro
257、ws and the market becomes more volatile,the lithium futures market is following a similar path to the cobalt futures market.rganisations around the world are grappling with a constant flow of disruptions.This extended period of instability or per-macrisis presents particular chal-lenges for procurem
258、ent and supply chain professionals,especially when it comes on top of rising costs.But while political and business lead-ers can get distracted fighting one fire after another,we must not allow our-selves to be blind to other long-term issues which may be accumulating.For instance,if left unchecked,
259、unethical behaviours such as fraud,corruption and modern slavery could easily flourish during such a period of prolonged disruption.To take just the last of those issues,the anti-slavery charity Unseen estimates that there are more than 50 million peo-ple worldwide trapped within labour vio-lations
260、or being subjected to restricted movement.That includes more than 100,000 in the UK alone.As consumers and business leaders,we too often fail to stop and think about the circumstances of the people who supply the goods and services we consume.In 2015,the Modern Slavery Act was introduced in the UK.I
261、t both created the post of the independent anti-slavery commissioner and requires organisa-tions with a turnover of 36m or more to publish an annual statement about what they are doing to address modern-day slavery,including uncovering any slav-ery in their supply chains.At the time,the act was hail
262、ed as a groundbreaking piece of legislation but,roll forward to today,and we have to ask where that level of focus has gone.Take the appointment of the anti-slav-ery commissioner.The post has been vacant since April 2022,when Dame Sara Thornton moved on.After several failed attempts to recruit,the p
263、ost is now on hold.The role of the commissioner is crucial when it comes to challenging organisations and holding them to account for their failings.It is also vital in scrutinising new modern slavery leg-islation,something the government has promised this year.Ahead of that legislation,the govern-m
264、ent is currently reviewing the criteria for what constitutes a victim of traffick-ing,without the input of an independent commissioner.It is possible that the gov-ernment will seek to increase the burden of proof around trafficking,instead of accepting a simple suspicion that some-one is a victim of
265、 slavery.This is not the time to add layers of complexity,disadvantaging those seek-ing help.Organisations will be looking for support and guidance on how to tackle this issue from government,but also from other sources.After the Modern Slavery Act was passed,for example,the government launched the
266、Modern Slavery Statement Registry a publicly accessible database to which companies could upload theirmodern slavery statements in the name of transparency.This is not com-pulsory but organisations are“strongly urged”to do so.A quick scan of the statements on the registry shows that not enough compa
267、-nies bother.Whats more,the last report from the anti-slavery commissioner shows that many existing statements fail to meet the most basic requirements.Lets hope that the new legislation will force those who continue to sit on their hands to act.The Queens Speech last year indicated that submitting
268、state-ments to the registry is likely to become mandatory in 2023.However,it is unclear whether penalties for non-com-pliance will be enforced.One amendment to the original act,for instance,has proposed that the pen-alty for a company officer a CEO or a board chair could be a sentence of up to two y
269、ears in prison,or else the company might face a fine of 4%of global turno-ver,or a maximum of 20m.Punitive fines may well be the only way to get the laggards to take this seriously.Just as the Competition and Markets Authority is taking action against corpo-rate greenwashing and misleading envi-ronm
270、ental claims,social washing needs to be looked at too.Supply chains can be incredibly complicated,spanning multiple countries and continents.In these complex networks,there is always the potential for trafficking.Finding victims of modern slavery may not be easy,but that is no excuse for us not to p
271、ull every lever to try.Left unchecked,modern slavery could easily flourishMalcolm Harrison CEO,the Chartered Institute of Procurement&SupplyI N S I G H TO It comes down to the ethics of individual leaders and managersThe lack of government focus makes it all the more important for companies to step
272、up and prevent slavery in their own supply chains,says Malcolm Harrison,CEO of the Chartered Institute of Procurement&SupplyS U P P LY C H A I N&P R O C U R E M E N T 08that you dont need,are not.The good news is that there is a fairly simple process to identify risks within a tech stack.“Inventory
273、it,”advises Tim Mackey,head of software supply chain risk strategy at Synopsys Software Integrity Group.“If development teams and operations teams had a comprehensive inventory of all soft-ware in the business regardless of whether its custom code,contracted code,commer-cial code,a cloud service,or
274、open source downloaded from the internet then they can start to have the robust security discus-sions that are so vital.”Thats important because the elements of supply chain software that you integrated Protect thepackA full-scale hack against your supply chain software could easily spread the conta
275、gion far and wide.Businesses need to get serious about preparing for the worst and not just hope for the bestts no longer a case of if your busi-ness will be hit with an attack,but when.And supply chain teams are particularly vulnerable.Gartner predicts that by 2025,45%of organisations worldwide wil
276、l have experi-enced an attack against their supply chain software a threefold jump from 2021.The inevitability of such attacks means that businesses should be looking to priori-tise heading off this kind of costly disruption before it occurs.The alternative is not appealing.For instance,more than 18
277、,000 businesses and organisations were compromised by the 2020 SolarWinds hack.The damage was done via an IT management and monitoring tool in common use by firms worldwide.The SolarWinds attack is only one exam-ple of a software-based supply chain inci-dent where the hacking of a key piece of softw
278、are used by many organisations can have a ripple effect through supply chains.The 2014 attacks by the Dragonfly group of cyber attackers took several energy com-panies offline,although its believed that the initial targets were the pharmaceutical industrys supply chain.Recent research by AAG estimat
279、es that there were around 1.3 million ransomware attacks a day worldwide in the first half of 2022.“Ransomware is a booming industry that no one is rooting for,”says Joey Stan-ford,vice-president of privacy and security at Platform.sh.With cyber attacks proving more preva-lent,how do you head off th
280、e risk to your sup-ply chain?What can be done to safeguard the software your teams use day in,day out?Prevention is far better than cure as the starting point to defend your business against hacking attempts.Teaching supply chain teams how to iden-tify potential cybersecurity risks and avoid falling
281、 victim to them is a significant and important part of the process.If hackers cant access valuable information,they cant wreak havoc with it.An important first step is to highlight the risks that people need to be aware of and how to best respond.Regular training in cyberse-curity is likely to be to
282、p of your list.Beyond that,there are plenty of other things to do.Spring-clean your supply chain management platforms to ensure that everything you need is there but things Chris Stokel-Walker Commercial featureC Y B E R S E C U R I T YI Nitat Termmee via Getty Images It all depends on what access s
283、uppliers have to your systemsOF SOLARWINDS 300,000 CUSTOMERS33,000were using Orion,the inventory management and monitoring software affected by the hack.Of these customers.18,000are believed to have installed the malware-laced update“It all depends on what access suppliers have to your systems,what
284、data you share with them,and what are they installing on your network,”says Michael Smith,field chief technology officer of Neustar Security Services.“Threat actors are looking to access core data inside your systems and networks,ultimately to find a loophole which grants them access to other suppli
285、ers and partners networks and systems.Thats when it can become catastrophic.”As a result,procurement teams cant afford to be shy about demanding a high level of security from their suppliers and keeping them honest.“Suppliers or part-ners negligence can pose a huge risk to your company,especially if
286、 theyre not vet-ted appropriately,”says Smith.“Businesses must be able to trust that what they are pro-vided with will not create new vulnerabili-ties in their environment.”That might include inserting into your contracts the minimum level of providers security standards that would work for the busi
287、ness.Use regular reporting to check how well those requirements are being met.For something as critical as the supply chain,theres no margin of error for getting security wrong.Not maintaining safeguards around your supply chain software for even a moment can be catastrophic not just to your busines
288、s,but to the end users and cli-ents who rely on you to deliver items on time.Its better to be safe than sorry and to overcompensate for the risk of something going wrong than to hope that nothing will and then be caught on the hoof when the worst happens.into your system long ago and then forgot abo
289、ut are bound to be some of the more vul-nerable points of your infrastructure.Anna Chung is principal researcher at Unit 42,the Palo Alto Networks threat intel-ligence consultancy which advises Europol.She agrees that visibility over every bit of software in supply chain systems is crucial.“Improvin
290、g cybersecurity is the prime solution but even this is undermined unless you do some hard work to understand where and how software is used in your organisation,”she says.“Without that,you wont be able to embed security into how you use the software.”Chung adds that it is extremely important to know
291、 who developed the software youre using plus how its in-built security measures have been formulated.That traceability is vital knowledge if something goes wrong,so you can quickly bring the supply chain back online while identifying and quarantining the affected area.In general,single points of fai
292、lure can be particularly problematic for some-thing as crucial as supply chain software.For that reason,its often useful to rely on multiple vendors and providers to build in redundancy to your supply chain system although its essential in that case to prop-erly document who those are and why they a
293、re vital,to avoid the risk of ghosts in the machine.Spreading the risk in this way is one option to reduce the chance of a single breach ballooning into a terminal prob-lem for your supply chain.But committing to developing trusting relationships with suppliers can also be useful.SolarWinds,2020Digi
294、tal complexity:thriving in unpredictable timesAs retail becomes more complex,businesses need to be able to better manage their inventory to ensure they are optimising sales and offering a great customer experienceodays retail world is highly com-plex.With access to product better than its ever been,
295、consumers are choosing to shop across a range of channels,and opting to receive goods in more flexible and diverse ways.Complexity around multiple demand and fulfilment sources requires a real-time view of inventory data.But,for many businesses,its impossible to get this single view as the data sits
296、 in many different legacy systems.These systems often werent designed to aggregate stock data,control whats available to consumers or serve it up across available digital channels in real-time.In a global survey conducted by Incisiv and commissioned by Fluent Commerce,com-mercetools and Contentstack
297、 on the chal-lenges of managing a digital business con-ducted last year,three of the top five issues for ecommerce businesses were inventory related.These included store inventory inaccuracy,lack of inventory visibility and an inability to get the correct inventory infor-mation online.The benefits o
298、f a distributed order management systemA distributed order management system can help with this.This flexible technology architecture offers new capability that can be integrated to improve or replace existing systems.It enables retailers,direct-to-con-sumer brands and wholesale distributors to rece
299、ive an accurate real-time view of all their inventory data.This means they can increase fill rates,reduce cancelled orders and cut down on rejection rates which,in turn,offers consumers a better experience.The technology also enables businesses to be more efficient around order fulfilment,optimising
300、 operations to reduce delivery costs,be more profitable in fulfilment oper-ations and manage inventory availability and fulfilment processes by region or channel.This helps them to sell across a range of dif-ferent channels and marketplaces,enabling international growth while supporting local needs.
301、The ability to focus on areas where the business needs greater operational efficien-cies,scale or growth,bolting on the technol-ogy to support this,enables the delivery of projects at speed.Greater efficiencies also mean greater cost savings,says Jamie Cairns,chief strat-egy officer at Fluent Commer
302、ce,a global software company focused on inventory data management at scale.One high street retail client the company works with has experienced a 52%fall in call centre costs as a result of a reduction in their cancelled order rate.Cairns explains:“Retailers have challenges around over-selling and d
303、isappointing cus-tomers when stock is not available that not only lead to a negative customer experience,but also huge operational cost.In 2023,were looking at far more successful business cases being derived from operational efficiency than sales growth,so there are some signifi-cant cost benefits
304、to managing inventory and orders more efficiently.”Cairns encourages prospective customers to not just look at the capability of the tech-nology platform but at the ongoing opera-tional cost and set the time to value.By way of example,he cites a project with one of the worlds leading luxury fashion
305、brands.It took six months to roll out to 13 countries,as opposed to a two-year roll out that had been quoted by a large,legacy provider.“There was no degradation in capability or reduction in scope.Its just that modern software is easier to use,frankly,and quicker to get up to speed with thats one o
306、f the advantages we have.If we just approached the market in the same way that everyone had done it previously,I dont think wed have a business,”he adds.It is clear that a flexible,distributed order management system,like Fluent Order Management,can offer digital agility and a better customer experi
307、ence,while ensuring cost efficiencies across the business.“There are no failed business cases that weve expe-rienced,”says Cairns.“We have extremely loyal customers because theyre seeing great return on investment.”But what does the future hold?“Big inven-tory is the next phase of innovation in orde
308、r and inventory management,”explains Cairns.This means having an inventory hub that adds value to a range of systems,both on the cus-tomer experience side and in the planning and allocation.These could include updat-ing ad platforms with inventory availability to make them more efficient.But as the
309、market continues to rapidly transform,Cairns says,the proof will be in the pudding.For more information visit T A distributed order management system enables retailers,direct-to-consumer brands and wholesale distributors to receive an accurate real-time view of all their inventory dataCommercial fea
310、tureBringing logistics into the digital ageAutomation is making fulfilment and warehousing faster,more efficient and more cost-effective,says Jens Schmale,head of Swisslogs EMEA regionIn what ways have digitalised logistics been evolving since the pandemic,and how are these bringing better outcomes
311、for customers and consumers?One side-effect of the pandemic and the government-imposed restrictions on peoples movements was that they dramatically accelerated the pace of digitalisation in the areas of logistics and intralogistics.The sudden surge in ecommerce drove companies to make greater use of
312、 technology to efficiently manage their supply chains.Digitalisation has enabled greater visi-bility and control over supply chain pro-cesses,enabling businesses to respond more quickly to disruptions and ensure customer satisfaction.One of the most significant develop-ments has been the increased u
313、se of automation in intralogistics the organ-isation and control of material and infor-mation flows within an individual com-pany or an individual geographic site.Automated systems such as robotic pal-letisers and conveyor systems can handle very high volumes of goods quickly and accurately,reducing
314、 the risk of errors and improving overall efficiency.These sys-tems also help reduce the physical strain on workers and the risk of injury.Intralogistics is today seen as“pivotal”to the future of supply chain management and production planning.How is Swisslog taking this discipline forward?We have b
315、een at the forefront of intralogistics innovation for many years,and have a long history of devel-oping cutting-edge automation and software solutions for warehouse and distribution-centre operations.Most of our solutions are highly scal-able and adaptable,enabling businesses to optimise their suppl
316、y chains in order to respond to changing demand.Swisslog also pioneered the use of data analytics to maximise supply chain performance.Our SynQ software platform provides real-time visibility of supply chain oper-ations,enabling businesses to identify bottlenecks and inefficiencies in real time and
317、to make data-driven decisions to improve performance.Swisslogs new logo and corporate identity is intended to reinforce our posi-tion at the cutting edge of the digital and dynamic world of logistics and as a key shaper of the future of intralogistics.In what ways is Swisslog assisting supermarket c
318、hains with online grocery fulfilment and what are the benefits for consumers?We have developed a range of auto-mation and software tools spe-cifically for the e-grocery sector.These enable supermarkets to process online orders much more quickly and efficiently,ensuring their customers get exactly wh
319、at theyve ordered,when they want it.Swisslog also provides technological solu-tions suitable for use in micro-fulfilment centres small,automated distribution facilities located near urban areas,which allow supermarkets to fulfil e-grocery orders more quickly and efficiently.Our micro-fulfilment solu
320、tions are designed to handle high volumes of e-gro-cery orders,enabling retailers to speed up the flow of products,further enhanc-ing their ability to fulfil home deliveries on time and in full.The use of advanced robotics and software also ensures prod-ucts are handled and delivered safely and hygi
321、enically,reducing the risk of contami-nation or damage.Can you explain the specific role of robotic palletisers such as Swisslogs ACPaQ in helping retailers and other businesses improve their efficiency and cut costs?Swisslogs robotic mixed-case pal-letiser,ACPaQ,provides a highly efficient system f
322、or sorting and palletis-ing mixed-case orders.By automating the process,ACPaQ which stands for Automated Case Picking/Packing+SynQ cuts the time and labour required to fulfil orders that include a mixture of items,or what are known in the trade as SKUs(stock-keeping units),bringing sig-nificant cost
323、 savings,faster delivery times and improved customer satisfaction.Using intelligent palletising software,the ACPaQ system automatically works out which products should be at the bottom(the heavier items),and which at the top(lighter items).The system allows retailers to customise each pal-letised or
324、der to increase efficiency during in-store replenishment,reducing the cost of restocking shelves.What are wider challenges facing the industrial supply chain at the moment?Increased demand for ecommerce,rising transportation costs and labour shortages are all contributing to supply chain disruption.
325、These challenges can be overcome through the use of automated and digital technologies,ena-bling industrial supply chains to become more resilient,efficient and adaptable,to meet the evolving needs of consumers and businesses.For more information visit A C O N T E U R.N E T09Robotics and automationP
326、redictive and prescriptive analyticsSensors and automatic identificationAutonomous vehicles and dronesAIInventory and network optimisation toolsWearable and mobile technologyCloud computingBlockchain3D printingmaintenance and plan improvements,”says Kevin Britton,programme manager at Hemlock Semicon
327、ductor.“Were able to confirm where were doing things most effi-ciently and track our performance,which is a key enabler of being able to improve.And this data-driven approach extends to our continuous improvement process itself.”So,how can companies go about achiev-ing this?The first step surely has
328、 to be com-piling end-to-end data on the supply chain,from the initial supplier or the businesss own factory through to the end customer.“The challenge here is to bring enough data together to create that big-picture view of real-time situations and then be able to analyse the data to identify risks
329、 and poten-tial hiccups in the supply chain,”says Greg Sloyer,manufacturing industry principal at cloud-based data platform Snowflake.To make that happen,manufacturers will need to be open to sharing their supply chain data externally with partners,ideally in a secure and compliant way,Sloyer sug-ge
330、sts.Doing so enriches data sets,he argues,as it offers an end-to-end view of the supply chain and keeps everyone informed about whats going on.“Once this end-to-end view has been established,analytical technologies such as AI and ML can provide insights in the form of alerts,forecasts and business i
331、ntelli-gence recommendations,”Sloyer explains.“Insights such as these give businesses the luxury of agility,the ability to proactively spot a problem or predict an outcome and act on these insights quickly,based on an understanding of the real-time situation.”So,the advice for manufacturers centres
332、on the fact that while ML-powered supply chain management is possible,it will likely rely upon platform upgrades.Businesses less heavily engaged in manufacturing,onthe other hand,are likely to encounter a slightly different obstacle.Thats according to Bob de Caux,who is vice-president of automation
333、at enterprise cloud company IFS.He explains that while ML has indeed been employed effectively across practices such as inventory fore-casting and supplier relationship manage-ment,those use cases typically require lots of well-curated historical data.That need not be a problem if companies commit to building and maintaining those data sets.“The opportunities are now there to use ML in more of a r