I just returned from a trip to Beijing, Shanghai, and Guangzhou to support the launch of Infor Process Essentials, a suite of ERP, supply chain, event management, and enterprise asset management solutions, for the Chinese market. China is one of our fastest growing markets and this was an important launch for Infor. China’s domestic process manufacturing industry is massive, and while we already have a number of customers there, the new capabilities and localization features address some needs for manufacturers in the Middle Kingdom.

China’s domestic market reflects some of the same trends that more industrialized countries faced a few decades ago, but at a greatly accelerated pace. There is a huge emerging middle class in China that has discretionary spending power, and they are demanding fresher products and more choices. This growth has led to some problems in food safety, which have shaken confidence for consumers both at home and abroad.

This month China rolled out a new food safety law, which has safety and recall standards and requires producers to list all additives. This is meant to protect consumers and China’s brand as a food producer. I’m no geo-political expert, so I don’t know how effective the government will ultimately prove at enforcement, but it’s undeniably a step in the right direction. Here’s what I do know: Food safety is challenging, and getting more complex every day. With increasing time pressures, regulatory complexity, and consumer requirements, it’s become more important than ever for companies to integrate quality and compliance into all aspects of their business to minimize the total cost of quality and compliance.

In China, this means implementing systems and quality processes that ensure product quality extends all the way to the retail shelf. Things like:

• Material quality—Complete definition and enforcement of non-allowable attributes and required attributes. Processes for supplier audits and supplier enablement.
• Integrated quality and HACCP capabilities—Full lot/sublot track and trace, shelf-life, and “best by” capabilities, and active HACCP monitoring and enterprise critical control point issue mitigation.
• Cold supply chain infrastructure and processes—More investments in cold storage and trucking.
• Forecasting—Producing the right products and reducing unsalables.
• Planning and scheduling—Planning to make more profitable proximity decisions and scheduling to react to disruptive events.

These are just a few of the processes that Chinese companies are coping with. While many of these companies are lagging behind in food safety, they are by no means alone in playing catch-up. The recent salmonella-tainted peanuts issue in the US showed us the importance of vigilance and that every company must take responsibility. The good news is that companies that make these investments in food safety, protect not only their brand and consumer health, but also realize increased profitability.

Posted by Rory Granros, Product Marketing Manager, Process Industries

It has been only months since the peanut contamination caused public outrage, hundreds of illnesses, and the downfall of a corporation. Unfortunately, I expect the number of high-profile recalls to increase in the future. There are a number of factors at play here, such as mega-farms and large retail outlets, which can amplify small problems to national proportions. Consumer demand for fresher foods and more outsourcing increases complexities and makes the need for greater vigilance more pressing than ever.

To manage this growing complexity, manufacturing companies need to have solutions in place that mitigate the risk of a recall and, if one is required, provide the ability to rapidly execute that recall to prevent public harm and brand damage.

Different types of enterprise software are involved in ensuring food safety in manufacturing. Below is a basic overview of some of the most important ones; the solutions aren’t necessarily presented in order of importance because of the unique drivers facing each business.

For a more in-depth view, P.J. Jakovljevic has an excellent post on the TEC blog that outlines Infor’s Product Compliance Strategy.

1) Enterprise asset management (EAM)
Companies that are serious about avoiding contamination in their products need to get serious about EAM. Proper maintenance of assets and facilities is critical. For example, one of the allegations in the peanut recall was that the bacterium listeria entered the food chain through a leaky roof over a storage container. Problems aren’t always this obvious. Preventative maintenance for complex equipment or complete routings should include sanitation and visual inspection of all adjacent areas. As part of the preventative maintenance process, Hazard Analysis and Critical Control Point (HACCP) documentation can be automated and support audits.

Congratulations to Mohawk Fine Papers, the number one ranked company on Computerworld’s list of the “Top Green-IT Organizations.”

What sets Mohawk apart is that its IT strategy for sustainability is “pervasive,” to quote Paul Stamas, vice president of IT for Mohawk. Their approach goes well beyond green IT measures like using energy efficient servers, to encompass using IT as an enabler to weave sustainable practices throughout the fiber of their operations.

The company has implemented green processes throughout its manufacturing, distribution, and facilities operations. Mohawk uses Infor ERP, supply chain, and enterprise asset management (EAM) solutions to help with this.

On Earth Day, I can’t think of a better sustainability role model than Mohawk Fine Papers.  As a company that is so dependent of natural resources, it’s taken a leadership role to make sure those resources will continue to be available for the next generation.

Read more about Mohawk’s commitment to sustainability, and view a video testimonial on how they are using Infor’s EAM software to reduce their energy consumption.

Posted by Rod Ellsworth, Vice President, Global Asset Sustainability

Last week, Dave Blanchard of IndustryWeek published an article that quoted me on supply chain performance measurement. It focuses on one of the big stumbling blocks of supply chain management: over-reliance on the minutiae of supply chain measurement—inventory levels, for example.

Inventory levels and local KPIs are important in specific contexts, but it’s more important for supply chain professionals to focus on the big picture. And one of the best metrics for that is the cash-to-cash cycle time.

As IndustryWeek wrote:

Cash is king, especially in a recession, and companies whose supply chain strategies contribute to shorter cash-to-cash cycles will be t he best positioned to win. Supply chain managers that can point to their positive contribution to this metric will also win appreciation from their C-level executives.

Posted by Andrew Kinder, Director of Product Marketing, Infor Supply Chain Management

The question on everyone’s mind today is: How will the global economic downturn impact green and sustainability initiatives? The easy assumption to make is that the only green that matters in a recession is the kind that you can put in your wallet.

In my opinion, the recession may signal a real beginning for sustainability. Leaner times are moving industry past the marketing of sustainability -the faddish, feel-good “green washing” that merely scratches the surface- toward initiatives that deliver real and immediate operational benefits. Companies get excited about ROI and profitability. There are ample opportunities within organizations for sustainability initiatives to deliver just that.

Infor recently commissioned a survey of manufacturing companies in the UK. Over half of the survey respondents said they had no plans to postpone their green investments due to the economic climate. In fact, 56% said they plan to increase their investments over the next 12 months. Even for companies that don’t see a direct operational benefit, many are moving forward because of the business risk associated with doing nothing.

Stephen Stokes of AMR Research pointed this out on a recent Infor-hosted webinar, “Carbon Management: The Business Imperative.”  Stephen is Vice President of Sustainability and Green Technologies at AMR, so he knows quite a bit about the subject to say the least. (I encourage anyone who needs a primer on the green transformation to download the webinar recording because Stephen offers many valuable insights.)

Stephen’s research (illustrated in the slides below) indicates that companies today are most concerned with real time costs, primarily energy. By 2010 though, risks from government regulations, carbon footprinting, and carbon trading grow significantly in the eyes of executives. Many of these same executives are moving now to stay ahead of legislation, which is already happening in places like the UK, Europe, and Australia.

What does all this mean for green technologies? In my opinion, it validates Infor’s approach from the beginning. Our view was that companies would invest in green technologies that provided tangible economic benefit and reduced business risk. These are primarily at the line of business level- energy efficiency in facilities, reducing fleet fuel consumption, reducing the carbon impact of your distribution network, and eliminating waste in manufacturing processes- through solutions like network design for the supply chain, enterprise asset management, and product lifecycle management. 

Dashboards and corporate-wide reporting efforts are important, especially longer term, but these kinds of broad technology initiatives are the ones that will struggle during the recession, in my opinion, because they don’t directly address immediate business imperatives. It’s much easier to sell management on sustainability projects with a clear ROI, ones that impact the bottom line or eliminate business risk, and then build on those successes.

For these reasons, I think sustainability is poised for a new beginning. And the real champions of green through the recession will be the plant managers, facilities directors, and supply chain professionals rather the corporate vice president of sustainability.

Posted by Andrew Kinder, Director of Product Marketing, Supply Chain Management

Hurricane Katrina, piracy off the coast of Somalia, a devastating earthquake in China. Most people assume headline grabbing events like these are the biggest risk to supply chains – but they are not.

Hurricanes, terrorism and cargo disasters are tragic on the human scale but longer term supply chain risk is born from more mundane sources such as rapid growth, global expansion, supplier consolidation, and product range proliferation.

In talking to our customers, I’ve found that real supply chain risks are a lot more predictable and manageable than most people would imagine. Below is an article I’ve written for our Supply Chain Executive Brief Newsletter, outlining how manufacturers and distributors can identify these risks and build chaos-tolerant supply chains to mitigate them.

Posted by Andrew Kinder, Director of Product Marketing, Supply Chain Management

How to Build a Chaos-Tolerant Supply Chain

Even without the recent turbulence in the capital markets, executive minds were already spinning with the relentless onslaught of events in the past year that have threatened to disrupt their continuity of supply.

An expanding list of globally scarce resources, rising energy and fuel costs, volatile and unpredictable demand, and increased international regulation are each taking their toll on profitability. Adding to this scenario are geopolitical events, terrorism, and natural disasters that create chaos despite the best strategic supply chain plans. For executives in manufacturing and distribution, tomorrow’s source of disruption will be another lesson in the management of uncertainty.

To effectively manage this uncertainty, executives must analyze and find actionable answers to the following key questions:

• Have the key sources of risk been identified and their impact assessed?
• Has the organization built chaos-tolerant supply chains that can absorb the knocks?
• Is risk management seen as a one-off exercise, initiated in response to an unexpected event, or are employees actively building risk mitigation into their everyday activities?

This article examines some of the key sources of risk and practical steps that organizations can take to mitigate supply chain disruption.