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5 trends disrupting the traditional wholesale distribution model

Multichannel Distribution Specialists

Integrating Wholesale Distribution alongside In-Store, Online and Machine-to-Machine to let today's multichannel businesses increase efficiency and reduce costs while achieving flexible and agile control of the supply chain.

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Archive for April 2012

The Iron Lady was not for turning but Teeside steel sends supply chain into reverse

20th April 2012

A few weeks ago, we floated the idea that it might be time to return manufacturing to the UK, especially for consumption in the local market. This might be considered prophetic as steel making returns to Teeside this week; however even at BlueBridge One we are not quite that good…

…it turns out that the steel manufactured at Redcar steelworks by plant owner SSI UK is not for consumption in the local market, it is destined for export and consumption by the Thai automotive industry. The return of a heavy industry such as steel making to the UK is truly momentous and somewhat unanticipated. It is doubtful that the plant’s former owners, India’s steel giant Tata, saw the potential for this flip of the market when mothballing the plant 2 years ago. It transpires that Thai parent company and largest steel producer in Southeast Asia, SSI, acquired the plant at a good price.

This turns one of the phenomena that has characterised globalisation on its head - the shift of manufacturing from the developed economies of Europe and North America to the lower labour cost tiger economies of Asia-Pacific. The clear inference from this development is that it is cheaper to make steel in Europe and ship it to Asia-Pacific; if we follow this to its logical conclusion it may even signal that Asia-Pacific labour costs are approaching parity with Europe.

This really shows the need for a NetSuite cloud-based ERP solution that provides real time analysis and business intelligence from across the supply chain. Custom fitted by BlueBridge One, NetSuite enables control and mastery of supply side issues. The return of production to Redcar steelworks is a large enterprise level event; however who knows when the trickle down effect is going to hit wholesale distribution and we see mid-market manufacturing return to Europe as well?

If you want the full picture of what is happening across your supply chain so that you can master supply side issues and make better strategic decisions for your business, click here, register, and let BlueBridge One show you the possibilities with a 14-day FREE trial of NetSuite.

Apple-Foxconn manufacturing partnership puts supply chain in the CSR spotlight

12th April 2012

As we noted on the blog recently, Apple manufacturing partner Foxconn recently raised salaries 25% for some Chinese workers as part of a move to improve conditions. Apple is unfortunate in that its success puts it in the spotlight, but it is unfair to single it out; there can be little doubt that similar issues affect workers in supply chains across China’s manufacturing sector.

It is easy to look at the supply chain through a lens that focuses on efficiency and margin. However, the Apple-Foxconn story tells us is that there is a human dimension to cost across the supply chain that it is perilous to ignore. From the perspective of corporate social responsibility (CSR) it is simply unacceptable that the health & safety of workers is compromised in delivering products to meet consumer demand.

Apple products carry a premium price tag, and much cachet is attached to the product slogan “Designed by Apple in California”. But if we expand this to include the hidden sub-text, “Designed by Apple in California by the worlds most valuable corporation, built in China by workers whose welfare is of little consequence”, it starts to lose its attraction.

Raising workers salaries and improving conditions creates implications for Apple’s pricing model and the relationship with Foxconn:

  • Does it raise consumer prices to maintain margin?
  • Or does it reduce its margin expectations by swallowing the increased manufacturing costs that result from paying workers more?

If you faced this dilemma in your wholesale distribution business you would need to be certain that you have the latest real time data across your supply chain, coupled to the analytical and reporting tools to enable you to interpret the information.

NetSuite’s cloud-based ERP solution lets you get control of the supply chain and enables mid-market wholesale distributors to better understand and deal with business issues. BlueBridge One is a UK NetSuite 3 Star Award solution provider that focuses on integrating NetSuite ERP to meet the specific needs of customers.

Low cost manufacturing may be pivotal for delivering products at the best cost point to price sensitive consumer markets, but the ethical and CSR issues raised by this strategy may force many managing supply chains in a global market to deal with dilemmas similar to Apple.

If you want access to real time business intelligence from across your supply chain that helps you deal with the dilemmas that face your business, click here and register with BlueBridge One for a 14-day FREE trial of NetSuite.