It’s almost hard now to recall a time when GPS devices were not ubiquitous. A key reason for the rise of this new category of consumer electronics—the Portable Navigation Device—goes back to TomTom’s first stand-alone PND, the TomTom GO. When it was introduced in March 2004 it marked a turning point in TomTom's story and helped drive a new way to drive for millions. The GO met a need for a portable fit-for-purpose navigation device that was simple to use, affordable and one of the best solutions on the market.
As demand grew, the company underwent a significant phase of extremely rapid growth and looked to ModusLink as a supply chain partner to help support their expansion. By closely working together, an optimal execution structure was established allowing both parties to focus on their core competencies and most importantly, allowing TomTom to focus on continued innovation and growth in their market.
Over the last ten years (time sure flies!) this working relationship is made stronger by the commitment of both companies to drive an extensive integration of supply chain and logistics activities. For example, by utilizing the same ERP platform, planning methodology and aligned design for manufacturing, we’ve been able to create a long-term, flexible and cost-competitive supply chain.
Flexibility, commitment, growth – the hallmarks of any great relationship. TomTom – thanks for your continued trust!
-Remco Fontein is a ModusLink Business Manager based in Apeldoorn, Netherlands
We have some great writers and very useful detail on this blog. As a writer myself, I certainly appreciate clever phrasing or the well-chosen word. So I might debate the idea – from a philosophical standpoint – that a picture is worth a thousand words.
But the fact is, if you want to communicate simple concepts quickly, pictures and numbers work and work well. To that end, we’ve created a new infographic that includes a few words here and there, but helps tell our story at a glance.
And speaking of brevity, consider following us on Twitter.
Is it one of those terms you hear but aren’t exactly sure what it means? Is it like digital rights management? Well, sort of. DRM refers more to copyrights and authorized sharing of documents and files, while entitlement management belongs squarely in the enterprise software space.
Think of it this way: the number of times you can burn a CD of purchased songs on your iTunes library is controlled by DRM. Your ability to access an Oracle database at work or your ability to access the Quicken help desk based on your one year subscription is controlled by entitlement management.
Software companies have a product to sell, but obviously not a physical product in the traditional sense. Once it’s purchased, the product is made available to the buyer on media like a CD (less common now than 10-12 years ago) or via direct download online. The CD option is easy, but how can you prove you bought the product so you can download it? This is important, basic inventory management for both the buyer and the seller and you were probably given a code or a key that unlocks your right to download the program. It’s a bit like buying a new sofa and then having to drive to the warehouse and show your receipt to pick it up. In the software world, this verification system is a big part of getting products to market.
But software is clearly an interactive product and what the buyer clearly expects with this purchase is an initial transaction, followed by an ongoing relationship with the seller of some kind—usually in the form of updates, patches, support, upgrades, discounted subscription renewals and the like. And this is where managing the life cycle of the purchased product can become a bit more complicated for both parties.
The best entitlement management software solutions not only grant initial access to the purchased product, but they help the seller and the buyer automatically and seamlessly manage all subsequent interactions to the benefit of both—neither party suffers missed opportunities. Additionally, truly robust entitlement management systems are able to easily track entitlement data across multiple parties, for example the purchase history and rights of a distributor or a Value Added Reseller, in addition to the ultimate end customer, are documented and managed. Stay tuned – we have an interesting case study on ModusLink’s Poetic entitlement management solution coming soon.
SEPA, the so-called Single Euro Payments Area, is a combined effort of the EU governments, the European Commission and the European Central Bank to create one integrated payments market across Europe for all organizations or individuals making or receiving payments. By replacing today's fragmented national payment systems with a single set of SEPA standards, organizations and individuals will be able to make payments to anyone within the area through their existing bank account using standardized payment methods.
The European institutions have agreed on a deadline of 1 February 2014 for the phasing out of domestic credit transfers and direct debits, and moving to SEPA. Banks will only be able to accept SEPA credit transfers and SEPA direct debits. This deadline applies to all EU member states in the Eurozone, whereas member states outside the Eurozone have until 31 October 2016 to migrate to SEPA. An important feature of SEPA standardization will be the move from present day account numbers to a new account ID in the form of the International Bank Account Number (IBAN) and the Bank Identifier Code (BIC). Systems need to be adapted to be able to process SEPA payments and adjusting direct debit mandate forms.
SEPA will enable consumers to pay domestically and cross border throughout the whole of Europe. Customers will be able to pay invoices and directly debit accounts in the SEPA area from a single bank account improving customer safety and security. Additionally they will be able to reach all accounts SEPA-wide from one home country account. It is also expected that a uniform payments market is beneficial to competition, which can result in better products, greater efficiency and lower costs. The European institutions hope to have created an environment for enhanced competition in the provision of payment services rules to benefit both organizations and individuals.
For small to medium enterprises, SEPA promises to offer faster settlement and its simplified processing will improve cash flow and reduce costs. For large merchants and corporations, common standards enable the assembly of one standard platform for payments in the whole of Europe resulting in major savings.
The two main SEPA products are the Credit Transfer and the Direct Debit. Each of these product schemes will impact companies' financial supply chain in multiple ways. For businesses, the challenge of migrating to SEPA will be to complete the integration process without any loss of information or control.
SEPA Direct Debit requirements will impact collections, credit and risk and mandate management. It includes restructuring of existing direct debit processes and procedures, in which all mandates are migrated to SEPA standards. There are two versions of SEPA Direct Debit; the B2C and the B2B. The differences however are rather minor.
Here is a basic list of the steps which will need to be taken:
- Banking and accounting software must support the technical messaging standards used for SEPA Payments (ISO20022 - XML)
- Get the BIC/IBAN of all your customers and suppliers
- Print your BIC & IBAN on ALL your business papers (not only for cross-border business)
- Identify any optional or AOS (Additional Optional Services, which are services a bank can offer in addition to those in the SEPA Rulebooks) that have been implemented in your country
- Consolidate the local and cross-border payments in one SEPA system
Are you ready? Remember, transactions in old formats will not be processed by the banks after February 2014. In other words: if you are not ready, you can’t pay or be paid anymore.
To enable merchants to be ready from day one, ModusLink has partnered with P4 Solutions to process SEPA transactions in a secure manner. This involves risk management, a white labelled payment page for the online customer with authentication features like signature, SMS, PIN-TAN, email and quality call, transaction processing with the bank and management of the various e-mandates on a secure e-mandate server, as well as format reconciliation and bank file generation.
I have held previous positions where there was a separation between packaging engineering and logistics. “We design what the customer wants, then it becomes logistics’ responsibility to calculate and figure out the method and costs for moving it around.” Over the past year at ModusLink I have had several dimensional weight projects come across my desk that show how these two disciplines are so clearly interrelated.
For those not familiar with the term “dimensional weight,” let me explain. When carriers ship parcels by air, there are two different ways to cost the freight. These two categories are actual weight and dimensional weight. Actual weight is basically that—the actual weight of the item. In order to avoid losing money by shipping air in a too-large container, carriers will also calculate the dimensional weight of a parcel. This is often done with a formula such as (length x width x height)/constant. The two numbers are compared and the one that is larger is what the carrier will charge.
In the submitted case study for our most recent Green Supply Chain Award, our client was using a stock package for shipments that were predominantly orders for a single phone, although the box could accommodate more. As a result, they were shipping unnecessary amounts of air and being hit by the larger dimensional weight shipping costs. By designing size-appropriate packaging, ModusLink was able to have shipments charged at actual weight. This relieved the client of the dimensional weight surcharge for over 90% of their orders.
Another benefit with this redesign is the elimination of unneeded bubble wrap. Not only is this a material and labor costs savings, but the lack of excess packing material also gives an improved out of box experience. By removing bubble wrap, which the customer ultimately has to throw away or try to reuse or recycle, and reducing the shipping box’s size, our client was also able to achieve a reduction in the carbon footprint for the packaging by decreasing the CO₂ generated to produce the packaging materials.
Combining packaging engineering with logistics is the smart approach. In this case, it checked all the boxes (pun intended) and provided a package that was less costly to ship, less costly to source, measurably more sustainable, easier to assemble and a better experience for the customer.
-Tyler O’Neill is a packaging engineer at ModusLink
While developed markets continue to command a significant share of global online retail sales, they show signs of saturation. To find new growth avenues, online merchants should consider looking beyond their domestic and developed markets.
However, when planning international expansion, online merchants should thoroughly consider how a broader e-business strategy will fit within their existing value-chain, specifically in areas of customer service, finance operations and logistics. The challenge is to balance consumer preferences and expected purchase experiences against the cost of increased complexity in back-office operations.
Global expansion will increase the complexity businesses face. Diverse government structures, unique social and business cultures, and an ever-changing array of legal requirements and compliance policies make it difficult to overcome country-specific challenges.
Online shops must be fully localized in terms of language, terms and conditions, pricing, check-out process and culturally preferred payment methods. Add the complexity of various import taxes (sales tax, VAT, GST) and foreign exchange and repatriation rules that need to be carefully attended, and it’s clear that a business may need to consider a country-by-country strategy. The online shopping experience continues long after payment and includes shipping, customer support and possible returns or repairs. All these factors need to be adjusted to the local flavors. A “one size fits all” approach will not be successful.
Of the various challenges, the complexity of government-based monetary policies can quickly become an organization’s biggest headache. Even very attractive emerging markets, for example Brazil, pose this problem. In fact, multifaceted tax, import and repatriation rules can be some of the most difficult issues to untangle and manage over the long-term.
E-Commerce taxation is a complex and dynamic field, as governments’ modify tax regulations to cater to ever-changing public policy needs. In the past decade, administrations have struggled to agree on tax treatment for cross-border transactions. In the context of international e-commerce, this complexity is compounded as online merchants have to deal with the differing tax treatments of multiple countries. For online merchants, the risk of non-compliance can be direct penalty cost, as well as indirect cost in terms of reputation damages and for those reasons it is imperative to carefully manage this element.
Consider as an example, the changes the European Union has introduced to its VAT rules as a way to level the playing field when selling cross border e-services (e.g. downloads). Currently the applicable VAT rate is based on the merchants’ locale. However, in 2015, both EU and non-EU merchants will have to collect applicable VAT rates based on the consumers’ residence. For instance, the applicable standard VAT rate in Germany is 17%, compared to 21% in the Netherlands. Assuming product pricing is the same in both countries, Dutch consumers currently have a higher incentive to buy from an online merchant based in Germany, but this will change. The online retailer has a rather large responsibility to its consumers and countries where it does business and must understand and appropriately apply these changes to its model.
The critical difference between you and your competitors isn’t always about who offers the better product or service, but the experience customers have throughout the end-to-end purchasing event. A prerequisite for you to be successful is to fully understand the characteristics and regulations of the markets you are targeting. This positions your business to operate at a more professional level, with less risk of consumer dissatisfaction with a transaction. As a result, there is potential to gain a competitive advantage by developing an optimized payment mix in combination with a competitive e-commerce model.
Choosing the right partner can be the make- or-break decision that determines success in expanding your global footprint. An experienced partner can not only to help you tackle country- and industry-specific challenges, but also to help you grow as your e-commerce strategy evolves. In some cases, going a step further beyond payment transaction basics and outsourcing the primary elements of financial management operations, the supply chain and e-commerce processes provides the optimal solution, empowering you to focus on your core business. After all, e-commerce success is more than just payments.
When expanding your e-commerce strategy, look for a partner that is ready and able to extend your market reach, offering localized shopping experiences such as regional payment options and processing, multilingual contact center support and deep knowledge of local logistics, import and export complexities.
I’ve written before on our company’s work with the EICC. (Reminder, that’s the Electronics Industry Citizenship Coalition.) What I love about being so engaged with this group is that the work leads to valuable, measurable and visible results.
A lot of very dedicated people from the top electronics companies in the world are involved in ensuring we as a global industry not just meet the minimum criteria, but continually improve efforts around the use of natural resources and providing safe, healthy working conditions. EICC membership is currently at 89 companies, 40% of which we are proud to call clients!
Last fall, I led a sub team from the EICC’s Validated Audit Program (VAP) workgroup that created the EICC Facility Recognition Program. I officially launched the program at the EICC membership meeting in Taiwan last March.
We wanted a way to recognize those facilities managed within the EICC framework that took the extra effort to complete the entire VAP audit process, including what may be the most important phase – implementing corrective actions where necessary. This is no easy task and completion really shows a deep level of commitment and transparency in the electronics supply chain. And it’s not a “one and done” scenario, because the recognition is valid for a maximum of 2 years, ensuring the continuous nature of continuous improvement.
To date, the EICC Facility Recognition Program has recognized 10 global sites including facilities in the US, Mexico, the UK, Thailand, the Philippines, Hungary and Malaysia. Companies receiving recognition include Seagate, International Rectifier, Onsemiconductor, IBM, Ureblock and ModusLink. ModusLink currently has 3 facilities that have earned recognition: Raleigh, NC, and Miami, FL in the US, and Penang, Malaysia.
You can read more about the EICC Facility Recognition Program and other details on the coalition in the 2012 EICC Annual Report.
-Blake Cambey is a Regional Quality Manager at ModusLink
No, it’s not a reference to what is quite possibly one of the worst jokes ever (you know the one about the excellent farmer.) I’m talking about excellence in the global 3PL market, which is clearly vast and varied. There are specialists in every geography and vertical and no matter what anyone’s marketing materials might say, there can never be a single one-size-fits-all solution. There are, however, a few supply chain service providers who exceed expectations and go far beyond the basics to fully integrate with their customers’ business operations and help them drive top-line company goals.
The highly knowledgeable editors at Inbound Logistics take on a yearly task to uncover these strategic leaders in the industry and ModusLink has just been highlighted as one of their 2013 Top 100 3PL Providers. There’s no single metric. A lot of factors go into the selection including diverse operational capability, ability to mitigate rising costs, experience, skill in managing risk and disruption, security and an overwhelming amount of regulation and compliance, quickly changing market demands.
In addition to all of these, one of the key metrics we hold ourselves to as a core value is strategic vision on behalf of our clients.
Felecia Stratton, Editor of Inbound Logistics stresses, “Tactical operational results are fundamental to 3PL value, but so is the strategic vision of experienced logistics providers. IL readers say they appreciate 3PLs that are consultative, proactive, take the lead in sharing best supply chain practices, and help to drive enterprise business process improvement.”
This is our goal for clients and why we are honored to be chosen as a supply chain service provider by the top names in high-tech, consumer packaged goods and other intense, global and quickly-changing industries.
Corporate Social Responsibility or “CSR” today goes far beyond a feel-good message. As my colleague Doug Cutler discussed in a recent article for Supply & Demand Chain Executive magazine “it is in many cases a fundamental business requirement for ModusLink as a supply chain provider to be heavily engaged in the same environmental, health and safety programs as our clients.” The fact is more and more companies are looking at global CSR-based initiatives like EICC and incorporating those principles not only into their own operations, but also into their supplier requirements.
This is obviously moving large numbers of companies in an excellent direction toward real and measurable improvements in ethical and environmental standards. And in many cases, there can be clear synergies between CSR initiatives and business-driven initiatives.
For example, we recently worked with Toshiba Electronics Europe on a packaging redesign (you can read the full case study here.) The engagement resulted in a best of both worlds situation.
The company experienced clear bottom-line cost savings by overhauling its memory products’ packaging—in some cases with up to 80% less material. By carefully taking stock of the environmental impact in all aspects of their business, Toshiba naturally measured the sustainability impact of this efficiency project. The company can report that not only did they save considerable money by reducing materials use and improving the shipping density of their products, they also realized a 31% reduction in annual CO2 emissions as a result.
I believe this will become a norm as enterprises begin to routinely think about operational improvements and CSR initiatives in tandem. What better place to start than with your supply chain?
Last month, ModusLink was recognized by our customer AMD for their annual Supplier Excellence Awards. And to channel a gracious Oscars contender, “it was an honor just to be nominated.” But truthfully, this wasn’t just any industry award—it garnered more excitement and held a bit more meaning. Why? The answer is pretty simple: the kudos came from a client.
Like any company, ModusLink doesn’t exist without our customers. They are the reason we work so hard each day. We genuinely want to help them run their supply chains in the most economical and sustainable way possible. So when we are publicly recognized for our good work, we get excited. A “thank you” is certainly recognition enough, but a trophy sure makes our day!
Here are three reasons why I believe customer awards are the best kind of recognition to receive:
1. Validation from the People You Work With Everyday
This is the primary reason we love these awards. Customer awards are a direct and public acknowledgment of the collaborative work we do for our clients every day, and that’s special. When a customer gives out an award unprompted, it shows the appreciation they have for the energy, attention and work you put into their business. Industry awards are great validation for a company’s vision and services, but customer awards are ultimately about the people and the work they do.
2. Building Existing Relationships
Winning a customer award offers a great chance to reinforce the existing relationship. It’s a great opportunity to talk about expanding your existing partnership and look at additional ways a new service expansion of the partnership can benefit other aspects of your customer’s business. At ModusLink, many of our longest and best partnerships are built this way. By starting small and demonstrating competency in one area, you gain the trust to help with more.
3. Finding New Relationships
Customer awards are a great way to build relationships with prospective clients. Companies are just like people—they want to work with a proven winner. When others see the good work you’re doing, they’ll want to bring that same success to their business. Often, this third party validation holds the most weight in a company’s decision on awarding new business.
Have you won a customer award recently? What did it mean to you? We'd love to hear your thoughts.