Monthly Archives

March 2018

Logistics best practices

Best Logistics Practices in the Supply Chain You Need to Follow to Save Money

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The supply chain manager has a number of important tasks to handle in order to ensure a steady and reliable supply chain. We already mentioned them in our previous article, but this time, let’s focus on the fourth step of that supply chain management process – deliver, or perhaps better known as logistics, why is it so important and also to give you some best logistics practices that should help you better manage this step and reduce spend.

Why Logistics Plays a Key Role in the Supply Chain?

It won’t matter if all the other processes, including planning, sourcing suppliers, procurement, execution and so on are perfectly done. If you don’t have raw materials, if you are unable to obtain them, if they are late, the whole supply chain can break and the cost the final customer will have to pay will increase dramatically.

It would be nice and much easier if materials needed for production could appear out of thin air, or if you could somehow teleport your final product to the final consumer, but that just ain’t happening.

And this is where logistics comes in. How your company handles this process will, in large part, determine the final cost of the product the customer has to pay.

Here are some best practices you need to follow when it comes to logistics:

1. Make Demand Predictable for Carriers by Consolidating Your Shippments

One thing that carriers and suppliers really don’t like is when a buyer asks for new shipments, but on tighter schedules. And, when at the same time, the buyer asks for lower costs, you can hear the grumbling.

So what can you do? Make demands for shipments more predictable by consolidating them. That way, carriers can place their shipments on “fast lanes”, save money themselves, reduce shipment times and everybody is happy.

2. Outsource Logistics

Logistics requires having a fleet of vehicles, be that trucks, ships or something else, but it doesn’t end there. It can be a very complicated process, that is best left to a 3rd party carrier that is well-versed in this sort of business than trying to do it yourself. Believe us, you won’t be saving any money by running your own logistics.

3. Give Carriers More Lead Time

Giving carriers extra lead time can mean the world to them. If you could increase their lead time to 72 hours, that will help them better anticipate and manage freight movement. In the end, a simple act of providing information about the next shipment to the carrier, will result in lower costs for your company and for the customer as well.

4. Use Cloud-Based and Big Data Analytics Whenever and Wherever You Can

Both cloud and big data can pay dividends in logistics. Cloud-based analytics can help you faster adapt and respond to changes, while big data analytics can guarantee real-time management of not just logistics, but the supply chain as a whole.

5. Keep an Eye on the Nature and its Fury

Nature is one factor you need to account for, as it can quickly surprise you. Natural disasters happen and they can affect your shipments. While you can’t fight nature, not if it’s really determined, you can minimize the risks by diversifying carriers and using alternative shipping routes. This way, you can make sure, sunny, rain or snow, the materials will get to you.

6. Plan for Both Cyber-Threats and Terorism

It’s unfortunate, but we don’t live in a 100% safe world. Both cyber-threats, such as malware, spyware or hackers and terrorists can derail your supply chain, especially logistics. Don’t leave anything to chance and ensure that you are actively working on reducing these risks by employing good cyber security and following counter-terrorism laws, as per the Customs-Trade Partnership Against Terrorism.

Conclusion

Procurement and logistics often go hand-in-hand and together are key parts of the supply chain. By following these 6 best logistics practices, you can ensure faster shipments and lower costs as a result.

Do you know any other logistics best practices? Share them with us in the comments below and don’t forget to subscribe your email to receive early access and updates to Purchase Order Plus.

Supply chain management process steps

What does Your Supply Manager do Every Day? Supply Chain Management Process Revealed

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Here’s a question, do you know what your supply manager is up to when you’re not looking? Don’t worry, I’m not saying that you should watch him  like a hawk and make sure all your supplies are still there, but rather how much do you really know about what he is doing to ensure a successful and cost-effective supply chain management process?

If I am to guess, not a whole lot. Which is why I created this article to help you better understand the supply chain management process, along with its five steps. Hopefully, with that, you’ll also have even more respect for all the hard work and help from your supply manager.

What’s in the Supply Chain Management Process?

Now, your supply chain management process or SCM can look anything you want really. This will depend a lot on your industry, market you are in, company culture, supply manager and a bunch of other things. Of course, you probably want it to be as simple and effective as possible.

Which is exactly what the Supply Chain Council went for when they created their  Supply Chain Operations Reference model or SCOR.

SCOR was created with the idea to help businesses of all sizes standardize and improve their SC processes and includes best practices every supply manager needs to follow to identify and resolve problems in the supply chain.

The model includes five steps or stages:

  1. Plan
  2. Source
  3. Execute
  4. Deliver
  5. Return

Let’s take a closer look at each stage.

Step 1: Plan

Now goal gets achieved without first making a good plan. The first step of a supply chain management process is planning, which involves creating a viable strategy that will return the maximum results, i.e profit or ROI.

This step poses a question to the company:

Should we manufacture the product or component ourselves or should we purchase it from a supplier?

From here, you get to decide whether to:

  • Manufacture domestically
  • Manufacture internationally
  • Buy from a domestic supplier
  • Buy from an international supplier
  • Outsource manufacturing

And these are just five options, with lots more in-between. But it’s essential to get this first stage of the supply chain management process right, because your decision here will influence the later four stages heavily.

Step 2: Source

The second step of a SCM process involves finding the best and most reliable suppliers. This will ensure the production process goes without a hitch. Building a strong and lasting relationship with suppliers is crucial. Any mistake by the supplier will reflect on you as well.

This stage includes constant assessment and revision of the supplier’s performance and making sure they meet your requirements.

Step 3: Execute

In this stage, the supply manager probably has the most on his plate. He needs to ensure all stages, from designing, producing, testing and packaging of manufacturing a product that will ultimately arrive in the customer’s hands go without problem.

To do that, the supply manager needs to schedule all of these activities and then monitor their performance closely. The goal here is to achieve maximum efficiency and nothing below.

Step 4: Deliver

The finished product won’t matter much to the customer unless you deliver it at the right time, right place and in the right quantity.

This is why logistics plays a huge role in the fourth stage of the supply chain management process. Anything can go wrong once the product leaves the manufacturing facilities, whether in the warehouse, with the third-party carrier, or with the invoicing and payment systems. To ensure things go smoothly this close to delivering the product to the final customer, the supply manager can needs to monitor logistics and keep track of everything using modern online logistics tools.

Step 5: Return

Finally, in the last stage of the supply chain management process, the supply manager needs to deal with defective or damaged products, replacing them, authorizing and providing refunds for them.

Needless to say, your company needs to listen carefully to every query and complaint by the customers and respond quickly. This is usually the stage which can hurt your organization the most, especially if you refuse or don’t acknowledge the return or refund quickly enough. Then you can say goodbye to that customer.

Conclusion

Having an over complicated supply chain management process helps no one. Not your organization, not your customers or supplier, no one. The SCOR model on the other hand ensures that your products get in the customers satisfied hands.

Do you have any questions or comments about this supply chain management process? Let us know in the comments below and don’t forget to sign up for early access to Purchase Order Plus software.

Best accounting software for Mac and Apple

Top 6 Accounting Software for Mac and Apple Users

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PC and Mac users are often at odds with each other, with each side claiming superiority over the other. One thing that PC users can boast in conversation with their Apple-loving nemesis is the bigger variety of software that they have at their disposal. For example, PC users can choose from quite a number of accounting apps, while their Mac friends don’t have as many options.

That is not to say, however, that there aren’t plenty of accounting software for Mac users to choose from. In this post we’ve selected with we believe are the top 6 accounting and invoicing apps for Mac, based on their features, UX, customizability, cost-effectiveness and other criteria.

1. Xero

Xero is one rare thing that both PC and Mac users can agree that it is good, as it works great on both platforms. It is choke-full of functionalities, but at the same time has a simple layout, which makes the task of using it less daunting, particularly for non-tech savvy and first-time users.

In addition, Mac users will be happy to hear that they get all the features their PC counterparts do as well, which often isn’t the case.

Pros:

  • Simple layout
  • Can use Xero mobile to track your account in real-time
  • Can easily integrate a 3rd party app. For example, Purchase Order Plus is an add-on software for Xero mobile which allows better tracking, easier approval, reporting and cashflow control for purchase orders in your company. You can sign up for early access here.

Cons:

  • There’s no option to create new business documents
  • No option to add a digital signature

2. AccountEdge

AccountEdge comes in two versions – AccountEdge Basic for $99 and AccountEdge Pro for $399, for a single-user licence. Each additional workstation will cost you another $249 and for a package of five workstation you need to pay $999.

If you are running an ecommerce business, AccountEgdge can be integrated easily with Shopify. This software includes all the usual features you might expect in an accounting software, but with an additional option to sync it with the cloud (for a fee though), track your commissions, monitor your inventory and prepare taxes.

Pros:

  • You can purchase the entire platform in one lump sum instead of paying monthly fees or subscriptions
  • Can connect with Shopify and other 3rd party apps
  • Includes a 30-day free trial

Cons:

  • A lot of the really useful features (like cloud syncing) have to be paid additionally and don’t come with the basic version
  • One workstation is $99, but if you want more workstations (for your accountant or employees), that will cost you a lot more

3. Quickbooks

Quickbooks is a good option whether you’re doing accounting in-house or via cloud and offers a seamless payment for SMEs. The interface is also one of the easiest to use when it comes to accounting apps (both Mac and PC) and you can use 3rd party apps and widgets with it.

Pros:

  • Cheap
  • User-friendly interface
  • Easy to integrate 3rd party apps

Cons:

  • Needs more features to be useful for larger companies
  • Sometimes gets double entries
  • Security is not the highest if you use an online version

4. ZohoBooks

Zoho offers an entire suite of SaaS applications and online productivity tools, including a CRM platform, document editing tool, online chat, mail client, IoT management platforms and more. Their online bookkeeping software ZohoBooks is just one of them.

ZohoBooks itself offers a wide variety of nifty features, including capturing all expense receipts in one place, bulk payment accepting, automated banking and more.

Pros:

  • Good price
  • Automated banking
  • Easy to set up and send invoices

Cons:

  • Doesn’t create PDF files
  • Good if you’re a freelancer. small or medium business, but won’t be of much use to larger businesses

5. GnuCash

GnuCash is actually an open-source project, but don’t let that deter you from using it. Updates are coming out every three months and it’s been like that for the past 20 years or so. It’s compatible with Mac OS, but also Linux and Windows.

There is a tradeoff however. It’s not for someone who wants an easy-to-use, one-click-solves-the-problem type of software. GnuCash can be overwhelming for first-time users (but you’ll get the hang of it quickly), but if you like to keep every little detail under control yourself, it’s definitely for you.

Pros:

  • Open-source, with updates every 2-3 months
  • Free
  • User-friendly (it’s basically made by users)

Cons:

  • Okay for freelancers, individuals and small businesses, but if you run a larger business look elsewhere
  • Not for beginners

6. xTuple PostBooks

Another open source accounting software for Mac, but unlike the previous one, xTuple is an ERP software, meaning you can do a lot more than just accounting with it. If you don’t need an entire ERP system, then you can go for xTuple PostBooks, which includes not only accounting, but also CRM, sales and inventory functions.

xTuple PostBooks is free, but just like with GnuCash, perhaps not the perfect solution for beginners.

Pros:

  • Open source
  • Customizable and easy to use once you get the hang of it
  • Offers custom reporting

Cons:

  • Slows a bit if you’re using larger files
  • Report-making is not the easiest
  • Customer relationship management could use some more functions

Conclusion

There you have it. 6 Best accounting software for Mac. Whether you’re a small, medium or large business, you’re sure to find what you need in one of these.

Do you have any questions or comments? Let us know in the comments below and don’t forget (if you haven’t already) to subscribe for early access and updates to our Purchase Order Plus add-on software for Xero.

Always get an Advanced Shipping Notice before receiving delivery

What is an Advanced Shipping Notice? Best Receiving Practices

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Most businesses want two things – more sales and fewer costs. You want products on shelves in your store or in the warehouse faster and to avoid being out of stock. Because of this, your company needs to pay close attention to its inventory and to reduce losses as much as possible. One thing that can help you here is an advanced shipping notice or ASN.

In this article, we’ll discuss what are advanced shipping notices, what do they consist of typically and what would be the best practices to follow when receiving ASNs.

What is an Advanced Shipping Notice?

An Advanced Shipping Notice is a notification of an upcoming delivery sent in advance of the shipment to the buyer by either a supplier or the 3rd-party logistics company. The ASN is sent in an electronic format over the Internet, either as in an electronic data information (EDI) or extensible markup language (XML) format.

In order of sending, the ASN is sent before both the shipment and the invoice, following a delivery, although many buyers have a non-acceptance policy for shipments for which they haven’t received an ASN before it.

What Does an ASN Include?

What an Advanced Shipping Notice will include largely depends on the shipment itself and on the requirements of the buyer, but it usually includes the following items:

  • What item(s) are in question
  • Their quantity (how many items)
  • When will they be shipped (date and time of the delivery)
  • Physical characteristics of the shipment (weight, type of packaging, how many packages)
  • How will the items be transported
  • Information about the carrier
  • Location information
  • Pallet codes

Of course, besides these informations, the buyer can request additional ones from the supplier or the 3rd party logistics company.

Best Practices to Follow When Receiving ASNs

When receiving an Advanced Shipping Notice or the delivery itself, the receiving personnel should adhere to the established written policies of their company. These policies should also be sent to the supplier or the 3rd party logistics company in order for them to understand why their shipments might be returned.

On Warehouse Level:

  • Require an Advance Shipping Notice (EDI 856) before the delivery
  • Require a Shipment Status Message (EDI 214) prior to delivery
  • Request an appointment to be scheduled
  • Scan cartons when receiving products

On Store Level:

  • Don’t let your sales personnel deal with receiving products. Instead, have different people to receive the shipment.
  • Take deliveries only through authorized doors. For instance, don’t use the same door your customers are using.
  • Don’t bring anything to the sales floor before it is properly received and checked
  • Set up policies in case of incomplete purchase orders (PO)
  • Make sure the supplier is certified before carton-receiving their deliveries
  • Establish a policy for non-readable barcodes
  • Establish a policy for receiving “closed” POs. Closed Purchase Orders are those POs that no longer need to be modified in any way.
  • Set a time limit for receiving direct store deliveries into the inventory system. This shouldn’t exceed 24 hours from the time of delivery.

Conclusion

An Advanced Shipping Notice (ASN) is an important electronic that ensures better inventory management, tracking deliveries and relations between buyers and suppliers. As such, if you are not already receiving them, ask your supplier to start sending them to you before deliveries.

Do you have any questions about Advanced Shipping Notices? Let us know in the comments below and don’t forget to sign up for early access to our Purchase Order Plus software and make receiving, authorizing and sending POs over mobile devices much easier for your team.

How to negotiate with suppliers

How to Negotiate with Suppliers that are Playing Hard to Get

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In many industries and markets, the buyers are at the mercy of suppliers. Let’s say there are only two or even just one supplier in your geographical region or market. That supplier has the power to increase their prices and margin at any time, because they know that you haven little choice but to go along with it. Effectively, they have built a monopoly and are setting the prices.

This can be caused by a number of things, such as:

  • It could be the buyer’s own fault. By forcing prices down, the buyer may have kicked out most of the suppliers out of the market, leaving only a few, which now have more power.
  • Or, it could be the case of “big fish eats small fish” and one or few suppliers simply eliminating their competition.

Still, that doesn’t mean you can’t do something about it. In this post we’ll show you how to negotiate with suppliers that are giving you trouble.

Revise Your Buying Paterns

For this to work, the entire company and its departments must work in unison. This strategy is not an easy one to pull off, and can have long-term consequences.

There are two ways to alter your demand:

  1. Buy less. If you’ve been purchasing from a single supplier for a while now and your purchases have been large, you are setting yourself to be dependent on this supplier and they know it. Sit down with your purchasing and procurement teams and figure out if you really need to buy so much from this supplier. Is there a way to reduce your demand. Or, can you find an alternative product and shift the volume away from your main supplier? Ideally, this new product will have a lower cost.
  2. Solidify your purchasing orders. Perhaps the easiest option and one that is least dicey is to solidify your purchasing orders. One option, if you are purchasing from a large supplier that is driving margins high, is to band with other smaller buyers, that have the same problem and threaten to stop purchasing from that supplier. One less buyer is not something they will likely miss, but 5 or 6 of them should be enough to make them think.

Offer the Supplier New Value

Why not, instead of having a buyer-supplier relationship, which can often be strenuous, you two can have a much more productive, strategic partnership?

You can do this by providing new value to the supplier like this:

  1. Reduce their price risk. The supplier may have a limited capacity of a certain item you are ordering and any increase in your order may raise red alarms from them (and their price with this). What if, instead, you could offer that supplier a long-term contract, for a few concessions? The supplier will likely be happy that they have locked the buyer for a multi-year contract.
  2. Open them doors to new markets. Perhaps the supplier tried to enter a new market, but failed. Maybe your company already has a way in that can show to the supplier. What are few concessions in exchange for a new market opportunity?

Bring in a New Supplier

Changing a supplier, especially one with which you’ve already established a connection, is a tricky endeavor. However, it may sometimes be necessary, if all of the options from above fail you.

The two options you have at your disposal are:

  1. Vertical integration. In case there are no readily available suppliers, in your market or in other markets, you can partner with a company that has some of the assets you are looking for. This is a bit risky as first you have to convince a new company to enter a joint venture (JV) or a strategic partnership with you and second, the supplier needs to see your partnership as a credible threat (they may call your bluff or simply ignore it).
  2. Bring in a supplier from another market. Let’s say your market is controlled by one or two major suppliers. If they are unwilling to lower their prices, perhaps bringing in a new supplier from an adjacent market can make them shake in their boots. Especially if this new supplier comes with innovative methods that the current suppliers are not ready for. Well-entrenched suppliers are often unwilling to change, because why should they? You can use this against them.

If All Else Fails

If none of these tactics work and the supplier won’t budge, the last resort is to suspend your purchase orders from this supplier or threaten litigation. Keep in mind that these options will only work if the supplier needs you more than you need them.

Which option would you choose to negotiate with powerful suppliers and why? Do you know any other way to do this? Let us know in the comments below what you think is the best way how to negotiate with suppliers that are playing hard to get and don’t forget to sign up for Purchase Order Plus early access, which allows you to create, approve and send your purchase orders on any device.