We all know the old saying about nothing being certain but death and taxes. I’d take that one step further – another certainty is that company leaders can improve efficiency, net income and shareholder value by integrating tax planning with supply chain planning.

Since supply chain planners determine where products are sourced and made, along with when and how they are distributed to markets and what volumes of goods are moved across borders, operational decisions directly impact a company’s tax obligations. And, frequently, tax planners influence these same decisions for tax effectiveness reasons.

Tax Effective Supply Chain Management (TESCM) integrates tax planning with supply chain planning in order to maximize success in both areas. 

Corporations that operate internationally can be obligated to pay over 20 different types of taxes. These include corporate income, property and real estate, sales and VAT, payroll, customs, assets, and many others. Cash management, currency conversions, and transfer pricing also impact taxation. And guess what? Supply chains impact all of these.

Recently, Tompkins Supply Chain Consortium released the Tax-Effective Supply Chain Management (TESCM) survey report on how companies view TESCM, as well as their level of comfort and use of TESCM principles in supply chain decision making. Survey demographics contained large and small organizations with international and domestic scope.

As an organization extends its global reach, tax complexities naturally increase. TESCM reduces future risks of increased costs and taxes while promoting greater supply chain efficiency.

As a whole, TESCM is multi-faceted and complex, and it requires close collaboration among supply chain operations, tax, finance, sales and marketing professionals. So how do you begin implementing TESCM in your company?

Learn to speak the same language. Supply chain professionals talk in terms of operations processes and functions; tax and accounting professionals discuss transactions, structures and entities. Working together, the best of both worlds can be combined in your decision making and provide the results your company needs to succeed in this challenging global economy.

Are you currently using TESCM? If so, are you satisfied with the results? If not, how do you see it being integrated into your organization in the near future?

Go!Go!Go!

More Resources

Consortium Report

Globally Expanding Companies Incur Multiple Taxes

Supply Chain Strategy

Photo Credit: John-Morgan  

I wasn’t even sure what an “eReader” was a few years ago when I first saw someone using one at an airport. It wasn’t a laptop, it wasn’t a phone, and it certainly didn’t look like the paperback book that I had just purchased.

Now, eReaders are commonplace and go by a number of different names – including Kindle, Nook, iPad, and of course, the more simple aliases of tablets or smart phones that act as readers.

The other day, I read that about 11 million Americans are expected to own at least one digital reading gadget by the end of September 2011 (this month). Even more amazingly, it has been reported that U.S. eBook sales grew 183% in the first half of this year compared with the same period a year earlier.

But is it enhancing our reading habits? Are we getting any smarter at all? Well, I’m not sure about this last question. I do know that preliminary research shows that eBooks aren't replacing old book reading habits – only enhancing.  People who buy eReaders tend to spend more time than ever with their noses in a good book.

Amazon, the largest eBook seller, says its customers buy 3.3 times as many books after buying a Kindle, a figure that has grown in the past year as prices for the device have steadily fallen.

I’m an avid reader, as are many other CEOs and those in the supply chain field. So, I was excited this year when Tompkins Press decided to take our publications a few steps further into the digital world.

If you’re interested in a complete “supply chain library” available in eBook format, it can be found here. You can also download a few complimentary chapters and register to win a free Kindle.

Are you using an eReader these days? If so, has it affected your reading habits?

Go!Go!Go!

More Resources

Tompkins Press Bookstore

Photo Credit: goXunureviews

It happens to me almost every week. I get a call from a firm (private equity or a company that makes and ships products) explaining that they did a deal a year ago … and now it is not working out. Could we help?

Typically, these are “add-on” deals and someone has now realized that the supply chain is an important part of the deal. Their integrated supply chain is not working, and they want to know why this is so and how it can be fixed.

Of course, I am happy to help, but DARN, it would have been so much better for all involved to avoid this “one year later” call and get it done right the first time!!

It is my very strong belief that the supply chain is so important that it should be a key consideration, beginning with the due diligence and all the way through acquisition and integration of the supply chains. Unfortunately, what happens more often than not is that the M&A process is so time compressed and the initial aspects of integration are so hectic that the whole topic of supply chain is not even addressed.

Then the light blub finally goes on – a year after the deal was completed someone says, “This supply chain is broken, we need help.”

What normally occurs during this hectic year is that many decisions are made that may or may not be on the right supply chain path. Questions such as these are likely to arise:

• Do we use Company A or Company B’s order entry system?
• Do we use Company A or Company B’s S&OP process?
• Do we use Company A or Company B’s distribution operations?
• Do we use Company A or Company B’s sales team?
• Do we use Company A or Company B’s IT?

They are missing the point. The interesting thing here is that when Company A buys Company B, then the correct answer is often to not use what Company A has done or what Company B has done.  The combined Company AB is a different organization from Company A or Company B, and it is quite possible that the new supply chain has different requirements from what either Company A or Company B had previously.

So, three big points to come away with here:

1. It is very important for the supply chain to be considered during due diligence and in formulating the strategy for the acquisition.
2. It is very important that an objective view of the supply chains of the two separate firms be understood, but even more important that the requirements of the combined supply chain be fully understood and addressed.
3. It is very important that decisions about supply chain integration be reached quickly and communicated widely soon after the acquisition is announced in order to accelerate the integrated supply chain.

For more reading on this topic, check out Tompkins’ position paper on Integrating Supply Chains From Business Combinations.

Go!Go!Go!
 

More Resources

Merger and Acquisition Strategy

You Shouldn’t Spell ‘Due Diligence’ Without ‘Supply Chain’

Mergers and Acquisitions in the Service Supply Chain Industry

We all know that a key priority for supply chains is to provide customers with what they want when they want it. In fact, it is the sole reason that many companies even exist.

At the same time, companies are striving to keep their working capital low and their customer service high. This is why it is so important to develop an effective approach to inventory management.

As total logistics costs as a percentage of sales are declining, it is a fact that most companies succeed by reducing inventory levels.

Since inventory can be a tricky concept to understand universally, learning how to manage inventory effectively is essential to your supply chain’s growth and success. Believe me, improvements will show in your overall operations.

I’ve listed below the Top 25 Ways to Lower Inventory Costs, and you can check out the full article, written by our inventory guru, Ralph Cox, in Supply Chain Management Review.

1. Base cycle stock on economics
2. Reduce order transaction costs
3. Lower inventory holding costs
4. Base safety stock on customer service
5. Forecast routine demand based on statistics
6. Forecast future one-time events based on past events
7. Think postponement
8. Rationalize SKUs
9. Reduce acquisition lead times
10. Implement joint procurement
11. Minimize purchase minimums
12. Get downstream forecasts and send forecasts upstream
13. Don’t stock it, or if some stocking is required, at least not everywhere
14. Cross-dock customer shipments
15. Extend payment terms
16. Take advantage of price/quantity breaks
17. Transfer instead of purchase
18. Liquidate
19. Use merge in-transit
20. Exploit collaborative Planning and Replenishment ( CPFR)
21. Use vendor-managed inventory (VMI) and vendor stocking programs (VSP)
22. Estimate reserves accurately
23. Maintain accurate inventory balances
24. Implement a Sales and Operations Planning (S&OP) process
25. Measure performance

Ralph also participated in a recent webcast in which he provides a concise overview of how to cut inventory costs.

Post a comment below if you have any thoughts on the Top 25, or we’d like to hear from you if you have any inventory questions that you would like to throw at me or Ralph.

Go!Go!Go!

Jim

 More Resources:

25 Ways to Lower Inventory Costs

10 Proven Ways to Cut Your Inventory Costs

Inventory Management: Minimizing Cycle Stock and Safety Stock for Increased Shareholder Value

Evolution to World-Class Inventory Management

Executive Reporting: Understanding Inventory Performance Over Time

Photo Credit: images_of_money

Has your supervisor ever asked you to compile information on an upcoming project? I’m 100% positive that everyone would answer “yes” to this question.

The big variable is the time element. You may be told that the information is needed by tomorrow morning, and yet you have multiple projects you’re working on that are all equally important. And these projects most likely have “now” or “tomorrow” deadlines.

Thus, the question arises, “What do you choose to do?”
Well like everyone else, I have my moments where I feel forced to give a “yes” or “no” answer. Most of the time, it’s a “yes.” Whether it is a friend in need or an employee who has way too many things on his or her desk to accomplish, we usually feel compelled to help.

While searching for an answer to the question, I found this post from the popular leadership blog Getting Things Done: Three Questions To Ask Yourself When Faced With Saying Yes Or No. This post is especially helpful because it emphasizes those times that you should shift priorities to help someone, and other times when you simply should say no.

Below are three questions from the post to help you make a decision on which direction to take:

• Do you have the capacity to say yes?
• If you say no, do you know how to articulate why effectively?
• Are you the right person for the job?

I would add a fourth question to this:

• Is there such thing as a “maybe” answer? In my opinion, there should never be a “maybe I can help you” moment, because this only confuses the other party and lacks good communication. To be effective, we must give a yes or no answer, knowing that we can accomplish the task, or that either we’re not the right person for the request, or too overwhelmed with other projects at the moment.

There you have it, folks: To help eliminate stress in your personal and work life, it is important to have the courage to tell someone that you can or cannot accomplish the goal they desire – whether it be your supervisor, employee, family member or friend.

Explaining why you can’t give 100% to what they are asking and offering different solutions will always be of help. In return, you’ll be respected for your honesty and forthrightness.   

Go!Go!Go!

Jim

More Resources 

Bold Leadership for Organizational Acceleration (now in eBook format!)

Organizational Excellence: Optimizing Speed and Productivity for Increased Shareholder Value