Companies often find new ways to manufacture products more efficiently. It’s a straightforward way to increase profit margins. With all the attention on the product, however, some company executives fail to see that cost-cutting success is often lost in logistics and supply chain -- the delivery end of their business -- such as in shipping, inventory and fulfillment.
According to Hannah Kain, CEO at ALOM, this is a common situation that led her company to focus on perfecting general supply-chain and fulfillment efficiencies. ALOM is a global supply-chain management service and solutions company based in Fremont, California that helps Fortune 100 companies manage their suppliers, inventory, shipping, marketing and more. The company also knows how to drive a passion for quality within the workplace culture, earning the 2017 Bay Area News Group’s Top 100 Workplace Award for the fourth consecutive year.
As a frequent speaker on supply chain innovation and best practices for a variety of industry conferences, the latest being the CSCMP EDGE conference in Atlanta, Georgia, Kain often speaks on trends and new technologies that can help improve efficiencies and reduce risk. We had an opportunity to speak one-on-one with Kain, and asked how California manufacturers can get a handle on the growing complexities of the modern supply-chain.
Dan Sanchez: How did you come to focus on the supply-chain and the variety of services ALOM offers?
Hannah Kain: I started in manufacturing, working at a number of companies where we had adjoining activities and was fascinated on how things come together. It wasn’t until the 1990s that I worked with a company that did something similar to what we are doing now at ALOM. I figured it was a new industry that needed to be developed. In 1997 I gathered some supply team specialists and we began doing things like making custom portals on the web and staying in touch with new technologies and innovations to improve inventory and customer fulfillment. We’ve kept doing this and have become global leaders in the field.
Sanchez: What are the common trends across industries in supply-chain management?
Kain: Competition and the idea of chasing the cheapest unit cost. The trend is to move [manufacturing] to where it’s less expensive to operate. But it is not always the best strategy. Although the manufacturing costs may have come down, not all costs are always factored in. Nobody goes in and analyzes on how to maintain the same quality while making that transition. The risks associated with that depend on the products and where they are distributed. In situations where manufacturing is taken overseas, the supply chain must be very strategic, as it now becomes part of the company’s risk profile. Things like natural disasters, use of child labor, unsafe working conditions and more, can backfire on companies.
Sanchez: You often speak about transparency within the supply chain? What do you mean by that?
Kain: We are in a fast-paced society where customers want their products quickly, and often search to find where they can get their products in a timely manner. For example, online, customer’s expectations are greater now. In the past they had to wait four to six weeks to get a product. Now they expect overnight shipping. Within retail sales, customers want to see if stores have units in stock. All this has led to a demand for inventory transparency. This can only be done with technology that keeps track of inventory, allowing retailers to know what’s available from manufacturers, how soon they can get it, and if it’s ready for shipping.
Sanchez: What types of technologies are available that can improve the supply-chain for manufacturers?
Kain: In a fast-paced environment manufacturers need to track products by the minute, not days. We run our proprietary customer portals (Compass), supplier portals (Sonar) and employee portals (Radar) that tells what employee’s tasks are, and allows managers to track everything in real time. In addition, Compass allows customers to see what products are in stock and when they can expect them to be shipped. This type of visibility is a must in managing the modern supply chain. It can be used in sourcing, shipping, manufacturing and can provide alerts to track what’s happening. At ALOM for example, we use a lot of production optimization tools and we also have suppliers that have very advanced visibility tools. Knowing where products are on the production line and in transit streamlines efficiency.
Sanchez: There’s also a lot of talk about Blockchain. Is this something that manufacturers can use to streamline finances through the supply chain?
Kain: Blockchain is a series of new software ecosystems that has been used by Bitcoin (digital assets). It’s based on everyone having the same trusted network so that transactions flow much more freely. This can improve inventory receipts and financial transactions, but I believe it is about four to five years down the road for most companies. Right now, IBM is the only major player in the arena.
Sanchez: What would you recommend to California manufacturers to start doing now to make improvements to their supply chain?
Kain: Look at where technology is going and how it will impact your product and services. Don’t fall behind. On a tactical level, you can always do a complete cost and risk analysis. Be part of the innovation economy.
Dan Sanchez is editor of CompanyWeek CA. Reach him at firstname.lastname@example.org.