Despite the advances in cloud computing and software as a service (SaaS) solutions, many procurement departments still use legacy spreadsheets to manage complex business processes. Excel can be easily customized and offers many benefits, but its lack of integration, collaborative features and real-time capabilities limit its potential in today’s digital supply chain. In many cases, exclusive reliance on Excel can leave procurement departments with inaccurate data forecasts and even a loss of data or spreadsheet operation. Procurement leaders must take a close look at their needs and explore new ways to enhance the management of their data and make the most of it to drive speed and efficiency.
Under Armour Inc.’s long history of hitting big sales targets may have had more to do with manipulating its supply chain than reaching consumers. The sports apparel company leaned on retailers to take products early and shifted contract terms for shipments pulling business from future quarters to mask slowing demand for the company’s athletic apparel. Federal investigators are investigating the company’s revenue recognition, a probe the U.S. Attorney’s office in Baltimore is now coordinating with a civil securities fraud investigation by the U.S. Securities and Exchange Commission. The questions go to the heart of business relationships between suppliers and retailers that can sometimes become a tug-of-war over shipments, inventory and the high-stakes accounting behind supply chains. One former employee says it was common to pull forward orders to book revenue, but “once this starts it doesn’t seem to stop.”
Unnecessary spending on supply chain products and related operations reached $25.7 billion in 2018, according to a Navigant study of 2,127 hospitals. Hospitals had an opportunity last year to cut their supply expenses by 17.4% on average, which translates into an average $12.1 million in dollar savings, up 22.6% from 2017. That’s an amount equivalent to the salaries of 165 registered nurses or 50 primary care physicians. The numbers vary significantly by region and hospital type, with for-profits and rural facilities tending to be more efficient than larger academic healthcare systems.
The rapid growth of sales by Chinese suppliers on Amazon.com Inc.’s marketplace is raising concerns about the safety and labeling of products that effectively sidestep oversight by going direct to consumers. The worries have grown as the e-commerce company has aggressively recruited Chinese manufacturers and merchants to its site adding thousands of items that compete with American independent sellers by squeezing down prices and seeming to cut corners on materials and U.S. rules meant to protect consumers. Consumers and businesses with safety and intellectual-property grievances have found it hard to hold Chinese sellers accountable—in part because Amazon doesn’t require its sellers to provide their locations to the public on its U.S. site. Former Amazon employees say concerns about Chinese listings arose several years ago when the Amazon team saw increasing patterns of fraud, counterfeits, and unsafe products as local sellers flocked to the platform.
Traditionally, financial losses from returns have been considered a painful, but irreducible part of doing business. Now, however, the retail business faces an uncomfortable fact. "Our data shows that return rates in e-commerce are anywhere between two to eight times higher compared to purchases made in brick-and-mortar stores, but normally it’s about five times higher for the same item,” said Rob Zomok, president of Inmar Supply Chain Network. While e-commerce still represents only a minority of retail revenue, it is set to grow relentlessly, eventually accounting for the majority of consumer purchases in at least some categories. The bad news, therefore, is that returns are going to increase, not just in real terms, but as a proportion of sales. In the U.S. alone, Statista estimates return deliveries will cost $550 billion by 2020, 75.2% more than four years prior — and that number doesn’t include restocking expenses or inventory losses.
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