Intel's new Atom chip costs one fifth the cost from Intel's other chips and required a new supply chain design with substantially reduced costs. They achieved this by revaluating every assumption and focusing on ways to reduce inventory levels. 

For its traditional chips, Intel operated on a nine-week order cycle time with with many order changes from their customers which led to higher inventory levels and sub optimized factories.  Intel focused on shifting to a make-to-order model with firm orders accepted and then delivered in two weeks instead of nine.

One of the challenges that Intel faced with this paradigm shift was overcoming the instilled industry perceptions about the make-to-order model.  With the success of this initiative, Intel is now looking at implementing the new approach to the traditional chip's supply chain.

http://www.scdigest.com/ASSETS/ON_TARGET/09-11-04-3.PHP?CID=2911

Tesco, a supermarket giant based in the UK, has set a goal of  cutting the carbon footprint of its entire supply chain by 30% by 2020 as part of long-term plans to become a zero-carbon business.  Sir Terry Leahy, Tesco's chief executive, said that the supermarket giant would focus on consumer behavior as it aims to become a zero-carbon operation by 2050.

Tesco is not only working with their suppliers to reduce packaging but also has modified their Buy One Get One Free program to a Buy One, Get One Free - Later in which consumers can pick up the free product in the future when it is needed.  They also publish the carbon footprints of 114 products on their labels and is aiming to work out the carbon footprints of 500 products by the end of the year.

Leahy said: "Of course, we are taking action because it is the right thing to do, because we don't want our children and grandchildren to face the chaos of climate change.  Other measures announced by Tesco today include using green systems and technology as well as support for a universal accountancy standard for carbon in products and services to provide a basis for carbon co-operation between businesses and promote carbon numeracy among consumers.

Companies like Tesla Motors are re-thinking their manufacturing outsourcing strategy and looking at near-sourcing their crtitical components.  Tesla just shifted production of their 1,000 pound batteries from Thailand to near their facility in California.  With volatility in fuel costs and overall high freight costs, there has been a shift towards "reverse globalization".  Another factor in this trend comes from increased strength in Asian currencies which has made outsourcing to be less attractive to manufacturers.  How will the trend of near-sourcing affect you and it makes sense to evaluate whether this strategy makes sense for you. 

A recent AMR Research study shows that although companies are not currently measuring their greenhouse gas emissions, they expect increased focus on green initiatives in 2010. The report surveyed 313 corporations and showed greenhouse gas emissions will be the leading initiative for 20 percent of the respondents in 2010, a higher priority than any other initiative.

The report acknowledges the recession as a factor in affecting environmental awareness and companies are linking sustainability to driving continuous improvement and adding to the bottom line. When asked to identify the most important factors when it comes to going green, the leading response was “Business Opportunities”. Sustainability as viewed by companies has shifted from a nice to have to a need to have.

http://www.amrresearch.com/Content/View.aspx?compURI=tcm:7-43922

Despite the lower spending levels at most companies and tough ecomomic climate, companies realize the benefit of investing in a transportation solution can reduce costs.  According to a recent Aberdeen survey, nearly 70 percent of companies for the firm’s second quarter 2009 AXIS report on TMS say that they currently have a mandate from management to make technology recommendations for transportation-related solutions with 54 percent of respondents planning to adopt a related solution in the next 18 to 24 months.

AMR Research also has a new report that discusses the robust TMS savings that firms that invest in a transportation solution are receiving.  According to AMR, TMS solutions offer considerable savings potential including "freight budget cost reduction, route and mode optimization, more competitive delivery options, and reduced network inventory levels".

I wrote in June about how there is tremendous interest in transportation procurement tools since companies are looking for the opportunity to reduce costs given the tough ecomomic conditions.  I recently read a report that cites that Transportation Procurement remains hot and shippers are putting more of their freight spend out to bid with the savings averaging 12%. 

Transportation procurement does not require a large software investment and can be ideally managed with a software-as-a-service (SaaS) solution that automates and standardizes the procurement process. Companies generally utilize a transportation procurement tool at a tactical level where the focus is on a select number of lanes instead the entire network.  There are a number of SaaS vendors in the marketplace including i2, JDA, LeanLogistics, Manhattan Associates and MercuryGate. 

Given the cost pressure that organizations have been under recently, the adoption of Transportation Management System (TMS) software has been strong.

The number of companies that are utilizing a TMS has risen from 28% two years ago to 38% today. It is remarkable that still only 38% of companies have a commercial TMS package which shows that there plenty of growth potential for the software vendors.  The volatility of fuel prices and the desire to reduce costs has spurred investment in TMS solutions which can reduce freight costs from 5%-30%.

http://www.scdigest.com/assets/On_Target/09-06-30-3.php