American multinationals consolidate European distribution centres in the Netherlands

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Flowers on demand at FloraHolland

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Breda is home of the new top institute for supply chain

Its Logistics and Supply Chains innovation programme will focus on in-depth research and development in three thematic areas related to international developments: the so-called Cross Chain Control Centre (4-C), service logistics and the coordinating role of interchanges. The idea is for this top institute to become a communal home base for the best researchers and instructors in the field of supply chain management, with the objective of further developing academic knowledge that has been recognised as forwardthinking by the global community.

The focus will be on innovation and contributing to the success and sustainability of logistics chains. The top institute must eventually be in a position to measure itself against such renowned business schools as INSEAD and IMD, while also bundling the specific know-how and expertise of the Netherlands and positioning it better internationally.

Henry_Hudson arrived in 1609 in America and founded New York

Luckily, the 400th anniversary of Henry Hudson’s arrival in America is being celebrated in both the Netherlands and the US this year. All of the VOC’s power lay in the hands of a collective: the Assembly of the Lords Seventeen. Nobody had the last word and there was no single final authority. It was the start of successful decision-making by consensus, the so-called polder model.

With a worldwide supply chain network, the VOC controlled practically all trade and shipping to Asia for two centuries. It built numerous outposts along the way, including on the Cape Peninsula (now Cape Town) and in Batavia (now Jakarta). The VOC never engaged in colonisation, remaining instead, in the words of Dutch historian Geert Mak, ‘a trading company: powerful and forceful, to be sure, but nevertheless a business, which had just happened to set up operations on the edges of Africa and the Indonesian Archipelago’. The Dutch ability to adapt to the local culture enabled the VOC to become the only trading company to obtain a trading post on the Japanese island of Dejima.

The Dutch were also far ahead of their time from a financial perspective. Amsterdam ship owners held shares in dozens of ships, instead of being sole owners. During the VOC years, Amsterdam was the financial capital of the world. In 1609, two institutions crucial to trade were established there: a commodity exchange, a unique trading place for all merchants, and an exchange bank, which profoundly modernised the international flow of money by converting every conceivable currency into indexed certificates. These financial institutions adeptly served the needs of global trade and shipping: supply chain and finance of which we can be proud.

Martijn Lofvers, Editor-in-Chief & Publisher Supply Chain Magazine
martijn.lofvers@springer.com

Stephan Satijn

What worries me more is the response of the market itself. The current situation provides opportunities for those who aim to benefit from short-term goals. They will immediately go out in pursuit of squeezing another company dry. As always, it will be a safe bet for the short term but a potential loss for the future, when markets will recuperate.

My organization, the Holland International Distribution Council, has more than twenty years of experience in helping North American companies establish their business in Europe. We advise efficient ways for setting up businesses enabling them to get the maximum effect with the most propitious organization. With tailor-made advice and mediation services, we help build a solid foundation for developing a strong business in Europe.

It will not be easy to navigate against the tide but there are still plenty of safe routes. It might be painful on occasion, but there are proven ways to ride the storm. Lance Armstrong said once: ‘Pain is temporary. It may last a minute, or an hour, or a day, or a year, but eventually it will subside and something else will take its place. If I quit, however, it lasts forever.’

I hope to see you soon in Europe.

Stephan Satijn is Vice President Logistics at Holland International Distribution Council (NDL /HID C).
s.satijn@hidc.nl

Responding to the credit crunch

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Chain of Crises?

But now with the credit crisis, this domino effect may easily occur downstream as well. Mahender Singh, head of research for the Supply Chain 2020 project at MIT’s research institute in Boston, recently made this crystal clear to a large hall filled with supply chain professionals. ‘Liquidity might be a problem for your supplier, which has big impacts in the supply chain. Inventory is going to cost me more. It’s a string of events: from oil prices to trade barriers to a financial meltdown.’

The imponderables are mounting as fuel prices remain highly volatile affecting the longer supply chains of production outsourced to the Far East. Because of increasing transport costs more and more companies are turning to bulk transport. Larger order quantities subsequently result in higher inventory costs. All this seemingly challenges supply chain professionals who are responsible for drawing up the annual budget on behalf of their management board. But it also provides opportunities.

Beth Enslow, analyst at insurance adviser Marsh, says that top managers are concerned, more than ever before, about risks in the supply chain. They want to safeguard their company against becoming the next Mattel or Boeing. ‘The Chief Financial Officers and the treasurer are happy to invest some extra money in order to prevent bad things happening to their brand and being pounded in the financial markets. They don’t want their picture in the Wall Street Journal.’

Now, with today’s uncertainty, the time has come to invest in flexibility: various procurement, production and distribution options. Supply chain professionals can prevent chaos.

Martijn Lofvers is Editor-in-Chief & Publisher Supply Chain Magazine
martijn.lofvers@springer.com

Ralf Seifer and Daniel Seifert

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Supply Chain come-back

In my past experience, I witnessed a financial department double within a year while the Supply Chain and other departments were dying for resources to provide the services they needed to provide. Financial reporting and cash flow forecast went from monthly to weekly to almost daily to satisfy the banks that the company was able to pay off the debts it was loaded with. On the positive side, I saw a new managing director challenge this status and get agreement on a longer term growth path, which required additional resources across all departments. And through the Supply Chain Movement I’ve been made aware of private equity owned European companies like Leaf International (confectionary) that have invested the last three years in S&OP processes, reducing inventory, obsoletes and increasing customer service. Isn’t that what it’s all about?

Although we have to realize the Supply Chain is just providing a service and works as an enabler in most companies, it can’t be treated as a ‘given’. A Supply Chain is not something which is just there and will automatically work. It needs maintenance, analysis, enthusiasm and innovation to continuously improve and satisfy the customer’s ever changing demand in an intelligent way. Now that companies are being sold back to owners who have longer term views and broader interests, let’s hope the Supply Chain can benefit and make a strong come back.

As a Supply Chain manager it’s great to be pushed and challenged for a certain period of time to provide services to your company and to satisfy the customer with limited resources. It makes you inventive and come up with solutions you would otherwise never think about. It makes the Supply Chain more effective, leaner and smarter. But it is so much more rewarding to be taken serious and get enough resources to create and implement a Supply Chain vision which supports the companies’ future growth path a Supply Chain from which the company can benefit for years to come.

Niels van Hove,  S&OP Manager Cheese, National Foods

Strategies and tactics by Raschid Ijioui, Heike Emmerich and Michael Ceyp

The book concludes with a number of interviews about the use of SCEM. These make it clear that while the term SCEM is not often used as such, many elements of it are embedded in underlying processes. At Ford, for instance, SCEM is embedded through the use of EDI with both internal and external partners. The important thing is to create transparency and to monitor business processes – and this book provides plenty of pointers for that.