Who has benefited most Globalization? Developed industrialized countries continue to benefit most from globalization because increasing globalization generates the largest GDP per capita gains for them in absolute terms. Did we really win?

The study shows that the richest one per cent of the population are the big winners in the changing global economy, increasing their share of income between 1990 and 2015, while at the other end of the scale, the bottom 40 per cent earned less than a quarter of income.

Globalization involves the increased integration and interdependence of the global economy. Since the 1960s, there has been an increased rate of globalization, which has been demonstrated by rising trade, rising exports as % of GDP, greater movement of labor and capital, and an increased interdependence of the global economy. Large corporations such as retailers and freight forwarders have benefited, Even home values increased as foreign investors cam in.

Globalization has benefitted some countries more than others. In particular, South East Asian countries, such as Vietnam, Korea and China have seen a growth in living standards due to their export boom.

In the developed world – the US, the UK and the Eurozone, globalization has been a mixed blessing with some sectors of the economy (e.g. service sector) experiencing rapid growth, but some unskilled workers have been left behind as former manufacturing sectors decline due to greater global competition.

That does not mean the everyone in the developed country benefited, there a large sector of small businesses that had to shut down as they could not compete in such a market. Have you ever wondered where you favorite mom and pop store is? Well, it just could not compete. Later on the large corporations raised their prices.

There were many losers especially in the less developed countries where some economists claim that poor people have benefited. If you look closely, you will see that in many poor countries workers are working under sub humane conditions, the one making the money are the elite in those countries not the people and off course the mega corporations.

We should also remember that pricing did not really come down with Globalization, because we buy more things does not mean we need them. The prices of essential items did not really go down, just check your nearest supermarket.

And we should no forget about shipping costs. Freight rates have increased and do contribute to price increases. It is just not worth it anymore to invest in foreign countries. The problem we are facing now is that if we decide to bring manufacturing back, we need to wait few years for the factories to start producing.

In my opinion, globalization might have served a purpose in the beginning but just like every other policy, it lacked oversight. Some may have benefited but in the long we paid a a hefty price when it comes to our values and beliefs. The normal hard working people have lost.

Let us know what you think. e-mail us

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Inflation

Logistics

Supply chains have been disrupted by the Novel Corona Virus due to flaws in the design, lack of planning and inflexibility. This disruption could have been avoided or at least mitigated if supply chain managers were more proactive and had a vision of the future rather than focusing on the bottom line regardless of the practices.

By definition, supply chain involves the management of the three most important resources of an organization: Inventory, Money and information. When key information pertaining to the Corona Virus were not conveyed to parts of the supply chains, there was no viable reaction to the spread of the Corona Virus. No preparations made to continue shipping products by protecting shippers and manufacturers.

Factories could not have enough raw materials or components brought in from other regions or countries to start production since International freight Forwarders were crippled by the Corona Virus. There was a long-term impact on the Shipping Companies.  Many freight forwarders have permanently closed their doors especially the smaller ones with the personal service to its clients.

Not having raw materials to produce finished products because there were not people to work in the factory combined with lack of failure to deliver the finished product, if available, to the end user resulted in shortages in many commodities.  Even when the finished products were available, they could not be delivered reliably to the end user. No to mention that most of non-essential products were not being shipped as more preference was given to PPE products.  Amazon is a perfect example. They focused on Personal Hygiene products and stopped shipping other items even if they are available which prompted some of their third party sellers to use 3PL companies to fulfill their orders. This has revitalized the regional Fulfillment Centers.

How to design better supply Chains

1. Information is key. Had information about the corona virus and the ways to mitigate the spread used in the design of the supply chains, we would not have witnessed such shortages.
2. Emergency plans should always be in place to combat any disruptions just like we have emergency plans in the case of hurricanes. These plans might involve adding extra locations or using different shipping routes or changing the procurement practices.
3. Design smart Supply Chains with more flexibility and transparency.
4. Locate and utilize multiple sources for products, do not put all eggs in one basket.

Impact of Corona Virus on many producers

During the height of the Corona Virus infections, many milk producers had to throw away the milk because they did not have enough storage facilities. Instead they should have plans to make cheese instead of throwing it away. Produce loaded on export containers had to be discarded as vessels did not ship. Excess produce could have been distributed to communities or even frozen and canned.

This is all due to improperly managing the information which is essential for the effectiveness of supply chains. Some businesses have closed down permanently unnecessarily.  Which will impact the economy.

Supply Chain consultants better learn from this experience and design ethical supply chains that focus on efficiency and sustainable practices and not only the bottom line .

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Supply Chain Consultants

Third Party Logistics Providers

International Shippers

e-commerce Fulfillment

The term logistics remains an enigma, many people associate the term logistics with shipping. By definition logistics is the movement of goods or services from point A to point B however, the definition fails to add on all the other activities needed to facilitate such movement including custom clearance, drayage and final delivery to point B

To make matters more confusing, we have terms such as supply chain and procurement that are used in its place of logistics.  Too set the record straight, logistics, shipping, transportation, etc. are part of the supply chain umbrella and then came the term “third party logistics” which people somehow associate with warehousing.

The first 3PL companies started it out as freight forwarders who opened warehousing and delivery and then expanded to other services.

Any warehousing company or trucking company can call itself a 3PL that is why you need to check the services that company offers.

A true 3PL company offers a multitude of services such as:

1. Ocean and air freight services
2. Inland transportation
3. Order fulfillment or pick and pack
4. Warehousing services
5. Cross dock services
6. Customs clearance
7. Packaging services
8. Inventory control

Lately, many associate the term 3PL with order fulfillment.

Now, keep in mind that not all 3PL companies are created equal. In reality, only a few of the 3PL companies that show up on search engine searches are a true 3PL company; most of them just offer warehousing services.

A 3PL company should be able to take over your day to day fulfillment needs.

After a careful research you will find out, hopefully not the hard way, that only a few can deliver a solution.

A true 3PL company should be able to pick up the goods from your vendor and deliver them to the end user transparently with a continues flow of goods and information.

In a time where online shopping is blooming, thanks to Amazon, many small to medium size companies are outsourcing their fulfillment services to 3PL companies taking advantage of their expertise and off course cutting the operational cost.

Accounts receivable turnover is the number of times per year that a business collects its average accounts receivable. The ratio is intended to evaluate the ability of a company to efficiently issue credit to its customers and collect funds from them in a timely manner.  A high turnover ratio indicates a combination of a conservative credit policy and an aggressive collections department, as well as a number of high-quality customers. A low turnover ratio represents an opportunity to collect excessively old accounts receivable that are unnecessarily tying up working capital. Low receivable turnover may be caused by a loose or nonexistent credit policy, an inadequate collections function, and/or a large proportion of customers having financial difficulties. It is also quite likely that a low turnover level indicates an excessive amount of bad debt.

Formula

Accounts receivable turnover is calculated by dividing net credit sales by the average accounts receivable for that period.

Accounts Receivable turnover ratio : Net Credit Sales / Average Accounts Receivable

The reason net credit sales are used instead of net sales is that cash sales don’t create receivables. Only credit sales establish a receivable, so the cash sales are left out of the calculation. Net sales simply refers to sales minus returns and refunded sales.

The net credit sales can usually be found on the company’s income statement for the year although not all companies report cash and credit sales separately. Average receivables is calculated by adding the beginning and ending receivables for the year and dividing by two. In a sense, ther is a rough calculation of the average receivables for the year.

Analysis

Since the receivables turnover ratio measures a business’ ability to efficiently collect its receivables, it only makes sense that a higher ratio would be more favorable. Higher ratios mean that companies are collecting their receivables more frequently throughout the year. For instance, a ratio of 2 means that the company collected its average receivables twice during the year. In other words, the company is collecting is money from customers every six months.

Higher efficiency is favorable from a cash flow standpoint as well. If a company can collect cash from customers sooner, it will be able to use that cash to pay bills and other obligations sooner.

Accounts receivable turnover also is and indication of the quality of credit sales and receivables. A company with a higher ratio shows that credit sales are more likely to be collected than a company with a lower ratio. Since accounts receivable are often posted as collateral for loans, quality of receivables is important.

Whether the accounts receivable turnover ratio of 10 is good or bad depends on the company’s past ratios, the average for other companies in the same industry, and by the specific credit terms given to ther company’s customers.

It is important to note that the accounts receivable turnover ratio is an average, and averages can hide important details. For example, some past due receivables could be “hidden” or offset by receivables that have paid faster than the average. If you have access to the company’s details, you should review a detailed aging of accounts receivable to detect slow paying accounts.

Example

Krystal’s Electronics Shop is a retail store that sells Electronics. Krystal offers accounts to all of her main customers. At the end of the year, Krystal’s balance sheet shows $20,000 in accounts receivable, $75,000 of gross credit sales, and $25,000 of returns. Last year’s balance sheet showed $10,000 of accounts receivable.

The first thing we need to do in order to calculate Krystal turnover is to calculate net credit sales and average accounts receivable. Net credit sales equals gross credit sales minus returns (75,000 – 25,000 = 50,000). Average accounts receivable can be calculated by averaging beginning and ending accounts receivable balances ((10,000 + 20,000) / 2 = 15,000).

Finally, Krystal’s accounts receivable turnover ratio for the year can be like this.

AR Turnover Ratio : $50,000 / $15000 = 3.3

As you can see, Krystal’s turnover is 3.33. This means that Bill collects her receivables about 3.3 times a year or once every 110 days. In other words, when Bill makes a credit sale, it will take him 110 days to collect the cash from that sale.

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http://www.budgesource.com

End to end Logistics Solutions ensures the comprehensive completion of work and is typically managed within a specified timeframe. Internal procedures at a company often lay out a process for end-to-end management using the most efficient and timely approach to manufacture goods or complete a service.

With end to end logistics planning, you wouldn’t need to worry. You will be able to respond quickly to road disruptions, vehicle breakdowns, port congestions, brutal weather conditions, and driver shortages. But responding to disruptions is just one small part of the big prize.

Our work identifies the most effective supply chain for your individual products by exploring every option available end-to-end. We build our solutions around our core services of Air Freight, Ocean Freight and Logistics to facilitate a seamless execution.

How do our end to end logistics solutions work:

Let us assume that you distribute Televisions in the USA, The following outlines our activities to make sure your product is delivered in a timely manner:

Contact your vendor to make him aware that we will be handling the shipment.

Inspect the goods to make sure they meet your requirements.

Make the booking and ship cargo to our warehouse

File for customs clearance complying with regulations.

Deliver to our warehouse

Verify quantities, Check labels

Receive into our inventory management system.

Deliver Products to your customer as per your request

Handle returns if necessary.

We work with different types of businesses handling a wide range of products. We help our customers focus on sales and marketing while making sure the products are delivered on time.

Our philosophy is to eliminate as many layers and steps as possible to optimize performance and efficiency. We insure the comprehensive completion of work within a specified timeframe. As a result, our services are sought by many companies small to large.

Contact us for more details

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4PL Companies

7PL Companies

In many organizations the opportunities to reduce inventory costs are often not addressed at all or are not completely exploited. If your organization needs help taking money out of inventory there are strategies you can employ today that will provide payoff.

Some of these strategies address having less active inventory, others how you acquire active inventory, and still others require transferring inventory or relying on vendors for better inventory management. Regardless of which you choose to explore, proactive inventory management policies will make a difference in your operations.

Here are Some Strategies:

1. Base Cycle Stock on Economics: For purchased products, getting a handle on your acquisition transaction costs will either reduce average inventory or allow for reducing purchasing and receiving labor. For manufactured products, if production equipment changeover costs are in a similar state, getting them in place will either reduce average inventory through shorter runs or allow for reducing changeover and receiving labor through longer runs.
2. Reduce Order Transaction Costs: In the office, use the computer to generate purchase orders (POs), EDI for PO transmission, advance shipping notices (ASNs) to reduce expediting, and historical vendor performance to prioritize expediting to lower purchasing costs. In the manufacturing plant, pre-planning; pre-staging of needed parts or materials; use of special tools or equipment; changeover initiation prior to completion of the previous run; teamwork and work-division; maintaining equipment temperatures; and minimizing QA / QC work all reduce cycle stock inventory. In the distribution center (DC), pallet manifest-based receiving processes, counting scales, statistics-based inspection and checking, bar code scanners for data entry, certifying key vendors to eliminate receiving functions, and stocking forward storage locations first and reserve locations second can all reduce purchase transaction costs and cycle stock accordingly. Purchase transaction costs are not normally SKU-specific. However, reflecting any extraordinarily low receiving costs associated with specific SKUs will serve to reduce inventory for them. The opposite, of course, is also true.
3. Lower Inventory Holding Costs: Improve space utilization in leased, contract, or public warehouses (or to minimize or delay expansion of owned facilities) through narrow aisle handling equipment, mezzanines, layout, or more appropriate storage modes.

The Supply Chain Management Processes

Supply chain management is the management of relationships in the network of organizations, from end customers through original suppliers, using key cross-functional business processes to create value for customers and other stakeholders.

supply chain management is being recognized as the management of key business processes across the network of organizations that comprise the supply chain. While many have recognized the benefits of a process approach to managing the business and the supply chain, most are not clear about what processes are to be considered, what sub‐processes and activities are contained in each process, and how the processes interact with each other and with the traditional functional icons.

The supply chain Processes

Customer Relationship Management
Customer Service Management
Demand management
Order Fulfillment
Manufacturing Flow Management
Supplier Relationship Management
Product Development and Commercialization

Supply Chain Planning is an amalgamation of all the planning processes across various business planning functions such as Materials Requirement Planning, Sourcing and Distribution Network Planning, Inventory Planning, Financial Planning, and so on.

Manufacturers need to collaborate with suppliers, distributors and retailers to manage a balance between supply and demand. To achieve this, Collaborative Planning, Forecasting, and Replenishment (CPFR) model has been adopted by many manufacturers.

Learn More at http://www.pomanagement.com

Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies. It is said that the ultimate goal of any effective supply chain management system is to reduce inventory (with the assumption that products are available when needed). As a solution for successful supply chain management, sophisticated software systems with Web interfaces are competing with Web-based application service providers who promise to provide part or all of the SCM service for companies who rent their service.

Supply chain management flows can be divided into three main flows:

The product flow
The information flow
The finances flow

The product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. The information flow involves transmitting orders and updating the status of delivery. The financial flow consists of credit terms, payment schedules, and consignment and title ownership arrangements.

There are two main types of SCM software: planning applications and execution applications. Planning applications use advanced algorithms to determine the best way to fill an order. Execution applications track the physical status of goods, the management of materials, and financial information involving all parties.
Some SCM applications are based on open data models that support the sharing of data both inside and outside the enterprise (this is called the extended enterprise, and includes key suppliers, manufacturers, and end customers of a specific company). This shared data may reside in diverse database systems at several different sites and companies.

By sharing this data “upstream” (with a company’s suppliers) and “downstream” (with a company’s clients), SCM applications have the potential to improve the time-to-market of products, reduce costs, and allow all parties in the supply chain to better manage current resources and plan for future needs.
Increasing numbers of companies are turning to Web sites and Web-based applications as part of the SCM solution.

Supply chain management (SCM) is the combination of art and science that goes into improving the way your company finds the raw components it needs to make a product or service and deliver it to customers. The following are five basic components of SCM.

International 3PL understands your needs for supply chain management and will work with you to achieve your goals