The supply chain management industry has been getting a boost, as more logistics companies look for more efficient technology and cheaper means of freighting.
According to market watchers, the global economic downturn has cut the bottomlines of many logistics firms by about 30 per cent in the last year as export traffic slowed.
Some of these firms have been turning to supply chain management services as a solution.
Richard Owens, CEO, Global Customer Solutions, DHL, said: “We have been very involved and we have seen the demand for services rise more than 100 per cent in the projects that we have done.
“They (logistics companies) see this is as a way to refine their processes, take cost out, and refine their mode of transportation. We are now seeing companies that haven’t used anything but air freight … now looking at sea freight.”
While other industries may be taking a breather, logistics firms are seeing potential business growth from the IT and biomedical industry - with more patents coming online and companies looking for more innovative product offerings to lure in consumers. Such growth is also seen to be raising demand for supply chain management services.
For logistics firms, experts said that they need to think longer term because of the evolving landscape and changing customer demands.
“Well, the landscape needs to change, logistics companies need to be more innovative, and of course it needs to change from the demand of customers of logistics companies,” said Rod Strata, industry principal, Transportation & Logistics, SAP.
“Because in many cases logistics companies are the architects of global trade, what we will see is different offerings. We will see some logistics companies transform with much greater service offerings which will transform their profit margins to double-digit growth going forward,” he added.
According to experts, some upcoming trends which logistics firms need to be mindful of going forward, are climate change, as customers demand lower carbon routes. Global developments, such as China’s increasing position as a technological leader, could also alter trade flows.
Next generation supply chain management, B2B integration and EDI - http://www.perceptant.com/
Wednesday, 21 October 2009
Supply Chains Don't Have To Be Taxing...
One of the areas that doesn’t get enough attention in supply chain is taxation. Whether its because we think that taxes are unavoidable or we don’t know how to get rebates or avoid them in the first place, they are too often seen as a cost of business. While its true that taxes are more certain than death (as you don’t know when you’ll die but you know you’ll get taxed until you do, and then when you do), it’s also true that they can be minimized.
Last year, Supply & Demand Chain ran a great pair of articles on the tax efficient supply chain, that I covered in this post on the tax efficient supply chain. Since then, I haven’t seen much, until this article on how to benefit when the supply chain meets tax which presented ten characteristics of a tax efficient supply chain structure and ten leading practices of companies with tax efficient supply chains.
The practices, in particular, are worth pointing out:
1.Implement limited risk structures following a business change.
Having to make big transfers to cover losses can incur “transfer” taxes related to incoming revenue. Furthermore, if the unit or division the money is coming from is separate or in another country and profitable, you might still have to pay taxes on the “profits” in that business, division, or country and get taxed twice.
2.Align the tax and transfer pricing structure with the locus of strategic decision making.
If your operations aren’t in synch, the corrections you have to make after the fact could have tax implications.
3.Focus resources on primary risks and view Advance Pricing Agreements (APAs) as key tools for minimizing the impact of tax audits.
Good documentation is the key to a successful audit (as long as you have been truthful on your taxes).
4.Document the business case for restructuring when the decision is being made.
Be sure to detail compensation or indemnification payments to restructured entities, or risk being taxed and fined after the fact.
5.Consider applying for an APA in one or more countries.
This will protect you from double taxation in two or more tax jurisdictions.
6.Be sure your documentation includes the responsibility profiles of limited risk entities.
You don’t want your efforts to look like a tax evasion scheme. While it’s perfectly legal to take steps to minimize your tax burden, attempting to alleviate your fiscal responsibilities completely is a different story.
7.Perform an annual review.
Insure that you are documenting revenue and paying taxes consistent with all agreements and laws that are in place. Document the findings. If you ever need to show “reasonable care”, this is how you’ll do it.
8.Establish procedures for tax authority audits.
Be prepared and responsible. It will help.
9.Keep informed of tax developments in each operating country.
Being proactive will save you a lot more than if you are reactive.
10.Talk to Peers and Experts.
Talk with companies that have implemented Tax Efficient Supply Chains and expert consultancies (and global tax firms) that have helped.
Next generation Supply Chain Management, B2B Integration and EDI - http://www.perceptant.com/
Last year, Supply & Demand Chain ran a great pair of articles on the tax efficient supply chain, that I covered in this post on the tax efficient supply chain. Since then, I haven’t seen much, until this article on how to benefit when the supply chain meets tax which presented ten characteristics of a tax efficient supply chain structure and ten leading practices of companies with tax efficient supply chains.
The practices, in particular, are worth pointing out:
1.Implement limited risk structures following a business change.
Having to make big transfers to cover losses can incur “transfer” taxes related to incoming revenue. Furthermore, if the unit or division the money is coming from is separate or in another country and profitable, you might still have to pay taxes on the “profits” in that business, division, or country and get taxed twice.
2.Align the tax and transfer pricing structure with the locus of strategic decision making.
If your operations aren’t in synch, the corrections you have to make after the fact could have tax implications.
3.Focus resources on primary risks and view Advance Pricing Agreements (APAs) as key tools for minimizing the impact of tax audits.
Good documentation is the key to a successful audit (as long as you have been truthful on your taxes).
4.Document the business case for restructuring when the decision is being made.
Be sure to detail compensation or indemnification payments to restructured entities, or risk being taxed and fined after the fact.
5.Consider applying for an APA in one or more countries.
This will protect you from double taxation in two or more tax jurisdictions.
6.Be sure your documentation includes the responsibility profiles of limited risk entities.
You don’t want your efforts to look like a tax evasion scheme. While it’s perfectly legal to take steps to minimize your tax burden, attempting to alleviate your fiscal responsibilities completely is a different story.
7.Perform an annual review.
Insure that you are documenting revenue and paying taxes consistent with all agreements and laws that are in place. Document the findings. If you ever need to show “reasonable care”, this is how you’ll do it.
8.Establish procedures for tax authority audits.
Be prepared and responsible. It will help.
9.Keep informed of tax developments in each operating country.
Being proactive will save you a lot more than if you are reactive.
10.Talk to Peers and Experts.
Talk with companies that have implemented Tax Efficient Supply Chains and expert consultancies (and global tax firms) that have helped.
Next generation Supply Chain Management, B2B Integration and EDI - http://www.perceptant.com/
Friday, 9 October 2009
Johnson & Johnson provide sustainability practices for the pharmaceutical industry
Incorporating sustainability into operations and the supply chain is an important focus for pharmaceutical companies. While the complete definition of sustainability includes social, environmental and economic impact, the emphasis in this analysis will be on the incorporation of environmentally favored approaches.
http://www.perceptant.com/blog/?p=148
http://www.perceptant.com/blog/?p=148
Marks and Spencer benefits from supply chain management improvements
Marks and Spencer has attributed “continuing improvement in performance” to better stock control, sourcing and supply chain management.
The retail giant’s second quarter trading statement reported that it is continuing to manage costs tightly, although “better than planned volumes” are expected to lead to an increase in full year operating costs of 0 per cent to one per cent, excluding bonus. Capital expenditure for this year is still expected to be around £400m.
http://www.perceptant.com/blog/?p=153
The retail giant’s second quarter trading statement reported that it is continuing to manage costs tightly, although “better than planned volumes” are expected to lead to an increase in full year operating costs of 0 per cent to one per cent, excluding bonus. Capital expenditure for this year is still expected to be around £400m.
http://www.perceptant.com/blog/?p=153
Wal-Mart: One size does not fit all across a Global supply chain…
Fascinating article that highlights “what’s good the goose in not necessarily good for the gander” when it comes to global supply chain management strategy. Perceptant (http://www.perceptant.com) has for a long time advocated that geography, in-county tax, export and logistics rules as well as local employment practices impact supply chain’s in very different ways on a country level. What are your views and thoughts?
http://www.dcvelocity.com/articles/20091008cscmp2009_walmart_supply_chain/
http://www.dcvelocity.com/articles/20091008cscmp2009_walmart_supply_chain/
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