Industry news

The NHS has received fines totalling over £1 million within six months due to multiple data security failings.

The NHS also lost over 1.8 million sensitive documents through unsecured technology, ineffective document disposal and incorrect site publishing, according to a report from the Daily Telegraph.

A spokesman from the Information Commissioner's Office said: “The health service holds some of the most sensitive personal information available, so it's vitally important that patients' information is being kept secure.”

One of the most profound changes in the last decade is the dramatic shrinkage of product life cycles (1998: Hill and Jones: embryonic – growth – shakeout – maturity decline) which bear little resemblance to the world today which is defined by instant obsolescence.

For example, 50 per cent of annual company revenues across a range of industries are derived from new products launched within the past three years. This suggests that long-term product ‘cash cows’, which stay in a company’s portfolio for many years, are becoming a thing of the past.

The collapse of life cycles means that replacing a product or service line every two years is becoming the norm across many industries. Furthermore, if a business is not quick to introduce a product to market, it risks launching goods that have already been superseded by competitors.

This changing environment means that accurate demand planning and forecasting has never been more imperative, and businesses must take a more co-ordinated approach to supply chain management. I believe that key to this is the introduction of technology that enables organisations to quickly and effectively manage operations and gain a greater perspective over the entire supply chain

Strengthening the core

I strongly believe that businesses need greater awareness of every product in their portfolio, especially those that have been a mainstay of the product mix for a long time.

This awareness is even more critical in an environment where the increasing speed in which a product moves through its lifecycle means that demand can change dramatically. Subsequently, businesses must consider implementing technology that can accurately predict future requirements.

An accurate and timely demand plan is a vital component of an effective supply chain. Without this, it would be difficult to effectively allocate supply chain resources and produce correct forecasts, resulting in supply imbalances when it comes to meeting customer demand.

The provision of a complete and accurate picture of demand can be used to evaluate where the product resides in its life, influencing strategic and tactical planning. In addition, this data can provide managers with the control needed to effectively plan and manage each phase of a product’s lifetime.

For example, demand planning technology offers the capability to support the user when forecasting the demand of new, short-life or seasonal products and end-of life products. Demand planning technology also makes it easier for sales and logistic departments to analyse the supply chain, as well as optimise replenishment strategies as required. Just as important, managers can see how demand patterns will impact an entire supply chain.

The implementation of an effective forecasting process allows for a greater overview of demand profiles, consumer buying patterns, and other demand signals which can then be adjusted quickly to reflect market changes and buffer against shrinking supply chains.

In my firm opinion, technology is critical for businesses to manage shorter product lifecycles. By keeping forecasts accurate and timely, an organisation can ensure that the right products are available at the right times, thereby maximising margin contribution from the product’s introduction, maturity, replacement, substitution and retirement.

Maximising the end of life phase is especially important, as effective planning can enable a business to optimise its stock accordingly to ensure availability and limit surplus.

Inventing a new supply chain

Inventory is one of the most valuable assets a company has, but if you ask me, many companies fail to manage it effectively. And as the nature of supply chains changes due to shortening product life cycles, so must the policies used to manage and optimise inventory.

Technology support is becoming critical to selecting and executing a supply chain inventory programme. Companies should seek technology that allows them to optimise the positioning of inventory across the supply chain and that enables collaborative inventory processes with suppliers, helping to manage and forecast these relationships more effectively.

I feel the sophistication of supply chain management will continue to grow, with organisations increasingly using inventory principles along the entire life cycle of a product, for example to maximise the launch of a product, a re-brand, or demand variations due to seasonality factors.

A commitment to competitiveness

Shortening product life cycles make time-to-market critical, and so businesses must utilise technology to ensure a greater perspective and tighter control of the supply chain.

As a product proceeds through its life cycle the demand characteristics change, and organisations must be committed to changing the supply chain strategy to maintain competitiveness at a moment’s notice. This can be achieved through the use of forecasting and planning technology to monitor a product as it proceeds through its life; matching a product to the most appropriate supply chain strategy for the next stage of its existence.

Using technology to offset shortening life cycles can help managers avoid huge inventory losses and issues with excess orders. The understanding and careful evaluation of the effect of these factors enable the supply chain to become more efficient and in turn drive business competitiveness in the market.

The most successful organisations will have a strong grasp of shortening product life cycles within their industry and put strategies in place to allow them to adapt quickly to changing markets, enabling new sources of revenue to be generated. Businesses that fail to react will risk falling behind competitors, ultimately facing a struggle to remain relevant in a faster-paced world.

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The Knowledge Knowhow in Outsourcing event was introduced by NOA Board Member Adrian Quayle, who detailed the afternoon programme and introduced Jim Reed, Director of Procurement from the University of Nottingham.

Jim described the process of Knowledge Management throughout the Outsourcing Cycle. In his presentation Jim described how he promoted outsourcing knowledge in his role as director of procurement. In order to establish effective knowledge knowhow during the lifetime of an outsourcing contract promotion must begin during the draft and creation phase of a contract.

Before Outsourcing

End users must have an accurate picture of their business and what software and hardware they employ. Applications management must be up-to-date with a comprehensive understanding of architecture. SLAs must be in place and monitored while contracts with 3rd parties should be understand with reference to the new outsourcing contract and how this could implicate 3rd parties.

Users must know the current cost of providing the service and market research should be carried out in order to have an update view of the market, allowing for cost service delivery comparisons with the rest of the market. End-users must identify their experts on the contract and then ensure that the experts remain to give advice and guide the deal. Most importantly problems related to the contract must be known and either fixed or fixable so that users are aware as to how long and how costly the process will be.

During the course of Outsourcing

Knowledge must be continually gathered during the lifetime of the contract so that users understand their estate and how it is being run. The outsourcer must be kept up-to-date and understand and have access to the same knowledge that the end-user is using.

Software must be consistently monitored and assessed in order to ensure that uses are aware of what they have purchased and deployed and where efficiency and cost savings can be made. Effective benchmarking should be employed, so that service cost and performance is known and that gaps between your experience and that of others can be revealed and explored.

During Transition, Renewal or Exit

Effective exit plans should be put into place and tested, this should be carried out prior to the signing of the contract. This should be coupled with an understanding of any lock in clauses and any relationships with tier 2 suppliers.

Robin Young, COO and Martin Taylor, Director of Business Change and Technology introduced Mitchells & Butlers Change Programme: Good to Great, detailing the history and transformation of the company over 150 years and the value of data.

Developments of technology and culture have shaped the transformation of the business. Technology has become integrated, open-application and faster with IT now front-of-mind for CEO’s. Data acquisition has become more influential and advances in control methodology have created an image of a more relaxed approach, which is in keeping with the desire to retain control and data value while empowering suppliers.

Influencing the business strategy

Cost profiles should be migrated from a fixed to flexible cost profile with the ability to rapidly scale up or down according to acquisitions or disposals.

Mitchells & Butlers employed a new approach:

• Running cost optimisation > increased profitability

• Scaling flexibility > increased adaptability and innovation

• IT back-end standardisation > delivery support

• Transformation from fixed capacity and fixed cost > Increase power and allow for flexible costing

• Employment of small scale IT teams > increased accountability for business outcomes

Third parties should be monitored to ensure value and business outcomes should inform the creation of outsourcing contracts while front of house solutions should be customised to reflect customer requirements. IT capabilities and asserts of third parties should be explored in order to drive expertise and capability.

Mitchells & Butlers revealed their experiences of the programme and lessons learnt:

• Martin and Robin advised that an early start is advisable with an end goal in mind, along with an understanding as to what ‘Great’ feels like

• Resource needs should be assessed and gathered , this process should not be underestimated

• In order to maintain strong supplier relationships both sides should exchange extensive cross company knowledge

• This should include the acknowledgement of limitations of existing information such as out-dated contacts

• The implementation of a successful transformation project should not impact upon the customer experience

Stuart Mills and Adrian Chiffi from Logica presented The Good, The Bad and The Ugly, presenting a best practice overview focusing on both positive and negative outcomes, lessons learnt and what to avoid during a the lifetime project. The presentation looked at the transition of a Service Centre Service from northeast England to Wales within three months.

The project was achieved in the time frame while retaining knowledge, service levels and client perception. The ‘Good’ included the rapid transition, 90 per cent retention of all Centre SLAs and a reduction in complaint volumes. ‘Bad’ aspects were that the signed contract differentiated from the initial scope of the project proposed, documentation was irrelevant and the budget failed to meet requirements.

A dependency on third parties, unwillingness by the client to release control of services and assumptions in regard to the state consisted of the issues that were regarded as ‘Ugly’. Knowledge transfer was ineffective because a set budget was not specified upon in the bid, a delay in software delivery also prevented knowledge transfer, while key staff were unavailable at key planning stages.

Short cuts and risks should not be taken in key phases, in this example compromising over communications and knowledge. Forward planning and flexibility is needed with attention to detail and execution remaining critical to the success of a contract.

Sarah Riding from Mills & Reeve presented a legal perspective of knowledge management during the outsourcing lifecycle. She identified that a failure in planning was a guaranteed way to prepare for failure and that micromanagement can be effective in knowledge transfer.

In the exit phase it is not a case of one size fits all with knowledge transfer in the exit, variables including the circumstances of the exit and the replacement can all affect the process.

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The impact of Sandy on the US eastern seaboard could cost as much as $50 billion to the economy from damages and the loss of business.

The closure of the NY stock exchange has also limited US market trading. Currently the storm has caused 8 million homes to lose power, industries have also been impacted with oil refineries remaining dormant.

Both the New York Stock Exchange and the Nasdaq have said that they plan to reopen today.

The impact of Sandy on the US eastern seaboard could cost as much as $50 billion to the economy from damages and the loss of business.

The closure of the NY stock exchange has also limited US market trading. Currently the storm has caused 8 million homes to lose power, industries have also been impacted with oil refineries remaining dormant.

Both the New York Stock Exchange and the Nasdaq have said that they plan to reopen today.

Gartner has said that bank applications are restricting the industry, resulting in slow transformation and growth.

Gartner analyst Kristin Moyer, said: “Banks need to transform both their delivery models and architectures to remain profitable. Applications are preventing transformation in the banking industry because they are rigid and reactive.”

The analyst firm advised that the use of public and private web applications should be used by banks to deliver relevant transformation and move away from a rigid reactive delivery model.

KPMG have predicted that BPO will increase over the next six months as businesses react to the recovering economy.

A quarterly report from the professional services company found that 59 percent of outsourcers surveyed expected to meet increased demand, an increase of 8 percent from the previous report.

The survey also found that 45 percent of respondents have increased domestic outsourcing services.

Shamus Rae, head of the Shared Services and Outsourcing Advisory team at KPMG, said: ““It is encouraging to see that suppliers are more bullish about business prospects then they have been for some time, but while we are not exactly in recession, we are not quite celebrating a recovery either.”

Premier Foods has agreed to sell the Branston brand to Mizkan, a Japanese company for £93 million as the business seeks to reduce debts of over £1 billion.

The Branston deal comes after a previous deal to Mizkan in July which saw the sale of the Sarson’s and Haywards brands for £41 million.

The completion of the deal will have seen £370 million raised since March to reduce the company’s overall debt.

A new £75 million four year expansion project by Royal Mail is to create 1,000 jobs with the creation of new processing facilities.

New deports will be constructed in Cornwall, Chorley and Hampshire while other deports will be expanded under the program.

The move comes as Royal Mail looks to the increase its parcel processing abilities throughout the UK and overseas.

Employment Minister Mark Hoban said: "It is great news that 1,000 new jobs will be created across the country as a result of this investment. We've now got a record number of people in employment and these jobs will provide welcome opportunities for people who are looking for work."

American based Meritor are to invest £36 million in a factory situated in Wales in order to transform the parts manufacturing site.

The factory currently employs 450 workers and the development investment is designed to modernise a site that was constructed during the WW2.

Business Minister Edwina Hart said: "This important investment is very welcome, particularly during these challenging economic conditions and I should like to congratulate the company on the work undertaken to date that will enhance production efficiency and incorporate a range of low carbon environmentally friendly features."