ISM Silicon Valley

Descartes Systems Group (TSX:DSG) (Nasdaq:DSGX) hit a milestone of 35,000 connections on its federated Global Logistics Network (the "GLN"). Descartes' GLN is a cloud-based technology platform comprised of a dense trading network and application services, used by organizations seeking to optimize their operations. Companies that connect to Descartes' GLN are able to collaborate with their trading partners using one technology platform, significantly reducing operational costs and accelerating time-to-value.

Descartes' strategy is focused on uniting trading partners and connecting them through one federated network, allowing for easy communication, collaboration and access to application services. Descartes' GLN is the technology platform that enables organizations and global trading partners to connect and collaborate in a secure and reliable way. Last month, Descartes hit a milestone of 35,000 connections on its GLN.

balance between efficiency and resilience is the key trade-off faced by supply chain managers, according to a recent research paper from the Economist Intelligence Unit (EIU), the business-to-business arm of analyst firm The Economist Group. Based on interviews with supply chain executives from Whirlpool Corp., Coca-Cola Co., Home Depot, Inc. and other companies, the paper highlights supply chain problems in the aftermath of the extraordinary swings in demand over the past two years.

According to a major IBM survey this summer, more than half of global business leaders believe their enterprises are not adequately prepared to handle a highly volatile, increasingly complex business environment. Based on a survey of 1,500 chief executives from 60 countries and 33 industries worldwide, IBM found that while eight in 10 CEOs expect the global business environment to grow significantly more complex, only 49 percent believe their organizations are equipped to deal with it successfully — the largest leadership challenge identified in IBM's eight years of research.

"[N]ow is the time for companies to reassess supply chain processes to ensure that progress towards efficiency does not boost the potential for failure in the face of economic, operational or environmental disruptions," EIU concludes.

Companies across industries are adjusting to volatile market conditions and reduced demand, leading executives to focus on cost reduction. The procurement and supply chain function serves as a key lever for improved cost performance, and many companies have launched initiatives focused on cost optimization.

Look Beyond Strategic Sourcing Companies often focus their efforts simply on strategic sourcing, but strategic sourcing alone cannot drive sustainable benefits. A limited focus on strategic sourcing may initially reduce costs for the buyer, but it may not ensure long-term realization of those benefits. More importantly, if executed in a manner where cost is the only focus, strategic sourcing can result in damage to a supplier relationship that may become critical in times of supply constraints. Instead, the focus should be on enhancing long-term value obtained from suppliers rather than on simply finding the lowest price.

Business attitudes across the globe — jarred by the European sovereign debt crisis, sagging consumer confidence and continuing market fluctuations — are vacillating between confidence and caution, and volatility is likely to remain a permanent feature of the global business environment. While the financial crisis revealed key vulnerabilities of an interconnected global economy, it has also provided a needed catalyst in helping organizations create more dynamic, resilient and responsive supply chains to. A clear majority of leading industrial companies still see cost as their main priority while managing supply chains, despite emerging evidence that excessive focus on cost has damaged relationships. A majority of the leading industrial manufacturing companies have created supply chain models that appropriately balance agility, sensitivity to risk, quality and cost. They plan to enter into more long-term contracts with fewer suppliers — with cost being the key driver for much of the collaboration. Read our report to find out how leading companies are adapting their business models and employing new supply chain tactics to manage risk while capitalizing on opportunities.

Lee Ayling, managing director at sourcing consultancy Equaterra, says "outcome based" is a term that can mean many things to many people and is as a result difficult to define. "But I do think that suppliers have done better if they have a more outcome-based ideology," he says.