Staffing and Compensation issues in Human Resources


1. These days HR application are becoming a key strategic contributor to business, it has become a much sought after function for job aspirants today. However, several HR professionals complain that finding a job within the HR domain is not an easy task. Here's what some top leaders have to say about this 'ironical' perception...

These are people who get us our jobs, organize lucrative induction sessions, introduce us to the right mentors, address issues related to employee grievances and ensure our journey into any organization is a smooth one. HR professionals are no longer just doing backend jobs, but are now considered active decision makers too in subjects related to business. The creativity and innovation that they bring to the table in matters concerning recruitment, the inventive approach they harbor towards people management and experiments that they conduct to ensure retention and employee motivation, are a few factors that led to the transformation of HR from being a timekeeping function to a key strategic contributor to business goals.

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Several aspirants are keen on starting a career in HR as it throws many lucrative opportunities. Career analysts point out that the demand for HR jobs will increase in the future and the median annual income for careers in HR too will shoot up. However, in India, it has been observed that getting a job in the HR department is not an easy task. Also, people already in HR who are seeking out for a change find it difficult to grab a good opportunity as not many vacancies are advertised as openly as the rest.

Why is it so difficult for HR professionals to find a job for themselves?

"Most organizations work on an average ratio of 100:1 which means, for 100 employees, there is a one HR personnel that is hired. Also, the size of the HR department depends on the culture and size of the organization. The trend also seen these days is that of organizations resorting to technology and outsourcing HR transactions. However, in certain industry verticals, the number of HR personnel required is more because of the size of the organization and high levels of hiring and attrition that take place."

However, I believe that it is difficult for HR professionals to find a job, but feels finding a 'suitable' job is tough. "An organization may grow multiple folds, but a good ratio of an HR team in any organization will be less than 1 per cent for large organizations and 1 to 1.5 per cent for medium and small organizations of the total strength of the organization. Hence, if you compare the availability of opportunities compared to other professions, the openings are very less," he explains.

HR Consultant states that he is not too sure how true this perception is. "When we finished our MBA around 25 years ago, HR heads of different companies were not very well known. But now, there are some very big names and people have become like brands in HR. Therefore, we have seen recognition of HR as a function itself taking place very significantly in the past 10 years or so. And also, even in terms of what these people get paid and the kind of responsibilities they shoulder, there is a very big change from what it was earlier; therefore, I am not very sure whether getting jobs per say has become difficult for them. But what is important to realize is that the quantum of jobs in HR is basically less," he asserts.

There are seven management functions of a human resources (HR) department: staffing, performance appraisals, compensation and benefits, training and development, employee and labor relations, safety and health and human resource research. The HRM staff in larger organizations may include human resource generalists and human resource specialists too. As the name implies, an HR generalist is routinely involved with all seven HRM functions while an HR specialist focuses his/her attention on only one of the seven responsibilities. So, has the trend changed from hiring generalist HR people to hiring specialist HR managers? "While at a middle management level, specialist skills maybe required, at top and operational levels, generalist skills are preferred. Specialist HR professionals might be in demand for a phase when that particular industry vertical is growing, but it is always the generalist professionals who are more in demand as they have the expertise of working with various industry verticals. Also, in terms of individual goals, every HR professional aspires to head the HR department of an organization and one can only do that by being a generalist equipped with the knowledge of all HR domains,

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These terms are used normally at the entry- and middle-levels where people do undifferentiated jobs, which are largely transactional in nature. "If you look at HR outsourcing, then certainly, it requires a certain level of specialization. But, if you look at the bulk of jobs, about 60-70 per cent of them are in functional HR. For a person working in HR, you have to know everything. You can't afford to be a master of just one area, as at some point, it will hamper your growth. Hence, if you are getting into an organization, it is best to have a wide range of HR exposure," he states.

This goes by the maturity of the organization. In large organizations, each sub-function of HR will have accountability for that particular vertical and it is important to have specialists in those areas, whereas in small organizations, generalists can play multiple roles within HR. For example, we created a specialist role for performance management recently in order to link the scorecard approach to Performance Management System (PMS). All that we did was move an HR generalist to own this process and groomed him/her to be a specialist in PMS," he explains.

So, what is it that HR professionals should keep in mind in order to crack it through some good jobs? "In my opinion, before seeking an opportunity in HR, it is important for aspirants to understand the underlined purpose of this function "HR professionals at junior levels should be open to working in various HR sub-domains and should not restrict themselves to one particular sub-domain. As they climb up the organizational ladder, they should look at some form of specialization at the middle-level and again, generalize at a senior-level."

So, if you were finding it difficult to crack it through that HR job, apply these tips and you are sure to land yourself a great job soon! But remember honestly there are no jobs in Hayatabad Industrial state ,Peshawar Universities as there is no concept of hiring HR specialist for there staff & employees !


S Tahir Mehmud Kiani -Assignment # 11

Senior Management Role in Corporates

Senior management in transition (View Comments)

It is said if you join a good company but you leave a bad boss. Personal influence goes a long way in making companies what they are. Often, it is only one or two people at the top that guide the entire organization. A CEO, with his charisma and leadership abilities, exercises personal power, lending the company much of its brand worth

They say you join a good company but you leave a bad boss. Personal influence goes a long way in making companies what they are. Often, it is only one or two people at the top that guide the entire organization. A CEO, with his charisma and leadership abilities, exercises personal power, lending the company much of its brand worth. Infosys is akin to taking the soul out of a human body. Thus, when key persons leave an organization, the impact is bound to be enormous.

At the senior level too, not all persons have the same degree of impact on the organization. There are two types of CEOs in the company. One is called the insider CEO, who has worked in the company for many years and has grown within the company. The second is the outsider CEO who is hired by a company to run it professionally. If the latter leaves, the impact is less pronounced if he is not extraordinarily brilliant. He might have come in with a given target and task but an insider has his own fan following of 10-15 years. If he suddenly decides to leave and take up another job, then the company will definitely face the brunt."

The positives and the negatives

Senior management drives the ship of the organization towards achieving a well defined long term vision. As the composition of senior management changes, the shakiness can be experienced by the entire cast and crew riding the ship. A leaving CEO, for one, can take away a lot of employees with him to a different organization. It is now the loss of a single person, but of multiple employees, some of whom may be key senior persons. The negatives are felt by the existing employees too. The morale of existing employee can suffer great damage if the senior person leaves without warning and the problem is not addressed quickly. The magnitude of impact also depends on what kind of hold the person has on the company. HR should manage the transition well and reveal the right information to the right people at the right time. Transparency with caution is critical."

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At the same time, fresh management in place of the existing one has its own benefits. Organizations often need a fresh face and a new perspective. People who know too much about the company might not want to take even the necessary risks. Thus, a stagnant company looking for growth might fill a senior post with a person known for growth.

Preventive and Curative action

Usually senior managers don't just wake up one morning and decide to leave. Their actions are guided by rational considerations. Hence, the impact should be analyzed well in advance to minimize any damage. The most common reason why senior managers may quit is to start their own ventures. Since senior managers handle critical challenges and occupy critical positions in organizations, it is important that their departure be planned properly. One of the ways is for them to remain associated with the company even after officially leaving, through a mentorship arrangement. Mentors not only help the organization, but also the individual who has left and the successors who might need handholding."

Among other preventive measures, it is important that the company identifies and clearly defines the roles of those at the top. Key people constitute the leaders who strategize business plans. Therefore, successful organizations define their roles and have a system of frequent assessments. They evaluate the imperatives appropriate for meeting any challenges arising out of the void created by the departure of senior managers. Conscious effort should be made to evaluate the most suitable candidates who have been identified and adequately trained to eventually replace the managers. Collective decision making process, empowerment of employees, job rotations to provide exposure and understanding of the business plans, relevance and significance of team building, interpersonal relationships, effective integration of system, delegation of authority with proper control, periodic performance appraisal and feedback system, grievance procedure and manpower planning in consonance with business plans are some of the most effective tools that will help to deal with the impacts of senior managers leaving the organization."

Additionally, senior managers themselves need to take preventive action in time. Every departing senior manager should indulge in careful planning and developing leaders from within. Even in case of an insider CEO, it is critical to create redundancy by creating multiple levels of heads, departments and taskforces and allowing different people to lead these taskforce, such that one person may outshine the others can later take control."

Whatever the route, even in the most difficult situations, quick and intelligent handling by senior officials, the board and the government can prove to be a boon for the entire organization. No damage is done as long as the transition is smooth and well planned!

So you be a core expertise of any Organization which you serve ,Be bold & intelligent to grasp the essentials of good HRM specialist, always start from lower Niche.


S Tahir Mehmud Kiani -Assignment # 3

HR - On a change mode

Global HR practices

HR - on a change mode (View Comments)

1. Transforming HR to manage the changing business landscape was the resonating theme at the Asia Pacific HRM congress presented by Ascent in Bangalore on 18 and 19 of this month.- When the world is moving at such a fast pace are our organizations ready for change? Are we going to be tinkering around the same old things and old concepts or are we going to be volatile and readying ourselves to accept or cope with the new generation workforce? The challenge for HR in this scenario lies in developing new facilitative culture that innovate new wave people products and practices to support the change.

2. Developing an effective employer branding strategy' emphasized the importance of employer brand and the significance of managing it. He also discussed various strategies on how firms can do employer branding more proactively. According to Mosley, the most important brand in most people's lives is not a product or service. It is their employer brand. "The employer brand relationship provides a focal point for aspiration, engagement, advocacy, loyalty and trust. From the perspective of a current or a potential employee employer brand is what people most associates with you as an employer," added Mosley.

3. New threshold to HR competencies HR issues need to be addressed at different levels within an organization. "Institutional level, organizational level, leadership level, corporate level, senior and middle managers level and workers level to bring about a culture which fosters dynamic growth and excellence in an organization, yet there has to be continuity in all these to keep the mobility of the organization.

4. More than half of the employees choose their company based on its brand image. So organizations must build a brand that highlights integrity, stability, growth and innovation during a crisis. "The economic slowdown offers a unique opportunity to improve your strategic position through employment branding. Employer brand is an ongoing everyday experience that stretches from brand awareness through the entire cycle.

Managing people has become imperative part of an organization. HR should become obsolete and HR departments in today's form should be closed down and line managers should start managing people. HR must become an advisor to the line managers. "In such a situation HR will be forced to raise the bar to become a subject matter expert. This will be the robust model that will happen in every organization in the future.

SUBJECT: Business Analysis & Forecasting

S Tahir Mehmud Kiani -Assignment # 4

supply chain mgt

1. Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies. It is said that the ultimate goal of any effective supply chain management system is to reduce inventory (with the assumption that products are available when needed). As a solution for successful supply chain management, sophisticated software systems with Web interfaces are competing with Web-based application service providers (ASP) who promise to provide part or all of the SCM service for companies who rent their service.

Supply chain management flows can be divided into three main flows:

The product flow

The information flow

The finances flow

The product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. The information flow involves transmitting orders and updating the status of delivery. The financial flow consists of credit terms, payment schedules, and consignment and title ownership arrangements.

There are two main types of SCM software: planning applications and execution applications. Planning applications use advanced algorithms to determine the best way to fill an order. Execution applications track the physical status of goods, the management of materials, and financial information involving all parties.

Some SCM applications are based on open data models that support the sharing of data both inside and outside the enterprise (this is called the extended enterprise, and includes key suppliers, manufacturers, and end customers of a specific company). This shared data may reside in diverse database systems, or data warehouses, at several different sites and companies.

By sharing this data "upstream" (with a company's suppliers) and "downstream" (with a company's clients), SCM applications have the potential to improve the time-to-market of products, reduce costs, and allow all parties in the supply chain to better manage current resources and plan for future needs.

Increasing numbers of companies are turning to Web sites and Web-based applications as part of the SCM solution. A number of major Web sites offer e-procurement marketplaces where manufacturers can trade and even make auction bids with suppliers.

Learn more about Supply chain management software selection for manufacturers

Manufacturing capacity planning and production scheduling process: Find out how Oracle E-Business Suite SCM software provides supply chain capacity planning. Learn how to use Oracle SCM software in the production scheduling process.

Manufacturing supply chain strategy: KPI and execution in process industries: Learn manufacturing supply chain strategy and execution best practices for process industries and find out about key manufacturing KPIs.

SAP remains the supply chain management software leader: The supply chain management (SCM) software market continues to grow and SAP and Oracle remain the market leaders.

Look at cost, services when evaluating 3PL transportation technology: Manufacturers can use third-party logistics (3PL) providers to outsource their transportation technology needs.

Getting started with integrating supply chain management (SCM). The global positioning system (GPS) software: Manufacturers can integrate their SCM with a global positioning system (GPS) to gain access to enhanced tracking data. SCM GPS integration usually starts with logistics services.

Integrating supply chain management (SCM) and global positioning system (GPS) FAQ: SCM can work with a global positioning system (GPS) to create a powerful logistics data network. Here are some answers to frequently asked questions about SCM GPS integration.

Supply chain management (SCM) electronic data interchange (EDI) integration improves communication in manufacturing environments: While EDI isn't typically integrated directly with SCM, the two can work together through an ERP system. SCM EDI integration leads to better communication with suppliers.

Integrating supply chain management (SCM) and electronic data interchange (EDI) FAQ: Integrating SCM with electronic data interchange (EDI) can help manufacturers transmit data on orders. To accomplish this,


- A data warehouse is a central repository for all or significant parts of the data that an enterprise's various business systems collect. The term was coined by W. H. Inmon. IBM sometimes uses the term "information warehouse."

Typically, a data warehouse is housed on an enterprise mainframe server. Data from various online transaction processing applications and other sources is selectively extracted and organized on the data warehouse database for use by analytical applications and user queries. Data warehousing emphasizes the capture of data from diverse sources for useful analysis and access, but does not generally start from the point-of-view of the end user or knowledge worker who may need access to specialized, sometimes local databases. The latter idea is known as the data mart.

Applications of data warehouses include data mining, Web mining, and decision support systems (DSS).

What is supply chain management?

Supply chain management (SCM) is the combination of art and science that goes into improving the way your company finds the raw components it needs to make a product or service and deliver it to customers. The following are five basic components of SCM.

1. Plan-This is the strategic portion of SCM. Companies need a strategy for managing all the resources that go toward meeting customer demand for their product or service. A big piece of SCM planning is developing a set of metrics to monitor the supply chain so that it is efficient, costs less and delivers high quality and value to customers.

2. Source-Next, companies must choose suppliers to deliver the goods and services they need to create their product. Therefore, supply chain managers must develop a set of pricing, delivery and payment processes with suppliers and create metrics for monitoring and improving the relationships. And then, SCM managers can put together processes for managing their goods and services inventory, including receiving and verifying shipments, transferring them to the manufacturing facilities and authorizing supplier payments.

3. Make-This is the manufacturing step. Supply chain managers schedule the activities necessary for production, testing, packaging and preparation for delivery. This is the most metric-intensive portion of the supply chain-one where companies are able to measure quality levels, production output and worker productivity.

4. Deliver-This is the part that many SCM insiders refer to as logistics, where companies coordinate the receipt of orders from customers, develop a network of warehouses, pick carriers to get products to customers and set up an invoicing system to receive payments.

5. Return-This can be a problematic part of the supply chain for many companies. Supply chain planners have to create a responsive and flexible network for receiving defective and excess products back from their customers and supporting customers who have problems with delivered products..

For a more detailed outline of these steps, check out the nonprofit Supply-Chain Council's website.

What does supply chain management software do?

Supply chain management software is possibly the most fractured group of software applications on the planet. Each of the five major supply chain steps previously outlined is comprised of dozens of specific tasks, many of which have their own specific software. Some vendors have assembled many of these different chunks of software together under a single roof, but no one has a complete package that is right for every company. For example, most companies need to track demand, supply, manufacturing status, logistics (i.e. where things are in the supply chain), and distribution. They also need to share data with supply chain partners at an ever increasing rate. While products from large ERP vendors like SAP's Advanced Planner and Optimizer (APO) can perform many or all of these tasks, because each industry's supply chain has a unique set of challenges, many companies decide to go with targeted best of breed products instead, even if some integration is an inevitable consequence.

It's worth mentioning that the old adage about systems only being as good as the information that they contain applies doubly to SCM. If the information entered into a demand forecasting application is not accurate, then you will get an inaccurate forecast. Similarly, if employees bypass the supply chain systems and try to manage things manually (using the fax machine or spreadsheets), then even the most expensive systems will provide an incomplete picture of what is happening in a company's supply chain.

Supply Chain Management Definition and Solutions

Supply Chain Management (SCM) topics covering definition, objectives, solutions and the impact of globalization.

What is supply chain management?

What does supply chain software do?

What is the relationship between ERP, CRM and SCM?

What is the goal of supply chain management software?

What is supply chain collaboration?

What are the roadblocks to installing supply chain software?

What is the extended supply chain?

What is the impact of globalization on the supply chain?

How has radio frequency identification (RFID) technology affected the supply chain?

What is the impact of responsible sourcing, environmental sustainability and the "green" movement on the supply chain?

What effect are on-demand software and software-as-a-service (SaaS) product offerings having on supply chain management?

What is the relationship between ERP, CRM and SCM?

Many SCM applications are reliant upon the kind of information that is stored inside enterprise resource planning (ERP) software and, in some cases, to some customer relationship management (CRM) packages. Theoretically a company could assemble the information it needs to feed the SCM applications from legacy systems (for most companies this means Excel spreadsheets spread out all over the place), but it can be nightmarish to try to get that information flowing on a fast, reliable basis from all the areas of the company. ERP is the battering ram that integrates all that information in a single application, and SCM applications benefit from having a single major source to go to for up-to-date information. Most CIOs who have tried to install SCM applications say they are glad they did ERP first. They call the ERP projects "putting your information house in order." Of course, ERP is expensive and difficult, so you may want to explore ways to feed your SCM applications the information they need without doing ERP first. These days, most ERP vendors have SCM modules, so doing an ERP project may be a way to kill two birds with one stone. In addition, the rise and importance of CRM systems inside companies today puts even more pressure on a company to integrate all of its enterprise wide software packages. Companies will need to decide if these products meet their needs or if they need a more specialized system.

Applications that simply automate the logistics aspects of SCM are less dependent upon gathering information from around the company, so they tend to be independent of the ERP decision. But chances are, companies will need to have these applications communicate with ERP in some fashion. It's important to pay attention to the software's ability to integrate with the Internet and with ERP applications because the Internet will drive demand for integrated information. For example, if a company wants to build a private website for communicating with their customers and suppliers, the company will want to pull information from ERP and supply chain applications together to present updated information about orders, payments, manufacturing status and delivery.

What is the goal of installing supply chain management software?

Before the Internet came along, the aspirations of supply chain software devotees were limited to improving their ability to predict demand from customers and make their own supply chains run more smoothly. But the cheap, ubiquitous nature of the Internet, along with its simple, universally accepted communication standards, have thrown things wide open. Now, companies can connect their supply chain with the supply chains of their suppliers and customers together in a single vast network that optimizes costs and opportunities for everyone involved. This was the reason for the B2B explosion; the idea that everyone a company does business with could be connected together into one big happy, cooperative family.

Of course, reality isn't quite that happy and cooperative. But today most companies share at least some data with their supply chain partners. The goal of these projects is greater supply chain visibility. The supply chain in most industries is like a big card game: the players don't want to show their cards because they don't trust anyone else with the information, but if they showed their hands they could all benefit. Suppliers wouldn't have to guess how many raw materials to order, and manufacturers wouldn't have to order more than they need from suppliers to make sure they have enough on hand if demand for their products unexpectedly increases. And retailers would have fewer empty shelves if they shared the information they had about sales of a manufacturer's product in all their stores with the manufacturer. The Internet makes showing your hand to others possible, but centuries of distrust and lack of coordination within industries make it difficult.

During the last few years most companies have gotten over the trust issue. In many cases "gotten over" is a euphemism for "have been bullied into sharing supply chain information from a dominant industry player." Want to sell your goods in Wal-Mart? Better be prepared to share data and adhere to Wal-Mart's data-exchange standards. (For more on this topic, see "How Wal-Mart Lost Its Technology Edge.")

The payoff of timely and accurate supply chain information is the ability to make or ship only as much of a product as there is a market for. This is the practice known as just-in-time manufacturing, and it allows companies to reduce the amount of inventory that they keep. This can cut costs substantially, since you no longer need to pay to produce and store excess goods. But many companies and their supply chain partners have a long way to go before that level of supply chain flexibility can be achieved.

What is supply chain collaboration?

Let's look at consumer-packaged goods for an example of collaboration. If there are two companies that have made supply chain a household word, they are Wal-Mart and Procter & Gamble. Before these two companies started collaborating back in the '80s, retailers shared very little information with manufacturers. But then the two giants built a software system that hooked P&G up to Wal-Mart's distribution centers. When P&G's products run low at the distribution centers, the system sends an automatic alert to P&G to ship more. In some cases, the system communicates down to the individual Wal-Mart store, allowing P&G monitor the shelves through real-time satellite link-ups that send messages to the factory whenever a P&G item swoops past a scanner at the register. Within the last couple of years, the relationship has expanded to include radio-frequency identification (RFID) technologies to gain even more insight into ridding inefficiencies in the supply chain.

With this kind of minute-to-minute information, P&G knows when to make, ship and display more products at the Wal-Mart stores. There's no need to keep products piled up in warehouses awaiting Wal-Mart's call. Invoicing and payments happen automatically too. The system saves P&G so much in time, reduced inventory and lower order-processing costs that it can afford to give Wal-Mart "low, everyday prices" without putting itself out of business. (For more on Wal-Mart's supply chain, see "How Wal-Mart Lost Its Technology Edge.")

What are the roadblocks to installing supply chain software?

Gaining trust from your suppliers and partners

Supply chain automation is uniquely difficult because its complexity extends beyond a company's walls. Employees will need to change the way they work and so will the people from each supplier that a company adds to its network. Only the largest and most powerful manufacturers or retailers (i.e. Wal-Mart) can force such radical changes down suppliers' and partners' throats. Most companies have to sell outsiders on the system. Moreover, one company's goals in installing the system may be threatening to their suppliers, to say the least. For example, Wal-Mart's collaboration with P&G meant that P&G would assume more responsibility for inventory management, something retailers have traditionally done on their own. Wal-Mart had the clout to demand this from P&G, but it also gave P&G something in return-better information about Wal-Mart's product demand, which helped P&G manufacture its products more efficiently. In order for a company to get its supply chain partners to agree to collaborate, business leaders and supplier relations managers have to be willing to compromise and help partners achieve their own goals.

Internal resistance to change

If selling supply chain systems is difficult on the outside, it isn't much easier inside. Operations people are accustomed to dealing with phone calls, faxes, spreadsheets or hunches scrawled on paper, and will most likely want to keep it that way. If management can't convince front-line operations people that using the software will be worth their time, they will easily find ways to work around it. Senior executives cannot disconnect the telephones and fax machines just because they have supply chain software in place.

Many mistakes at first

There is a diabolical twist to the quest for supply chain software acceptance among employees. New supply chain systems process data as they are programmed to do, but the technology cannot absorb a company's history and processes in the first few months after an implementation. Forecasters and planners need to understand that the first bits of information they get from a system might need some tweaking. If they are not warned about the system's initial naiveté, they will think it is useless. In one case, just before a large automotive industry supplier installed a new supply chain forecasting application to predict demand for a product, an automaker put in an order for an unusually large number of units. The system responded by predicting huge demand for the product based largely on one unusual order. Blindly following the system's numbers could have led to inaccurate orders for materials being sent to suppliers within the chain. The company caught the problem but only after a demand forecaster threw out the system's numbers and used his own. That created another problem: Forecasters stopped trusting the system and worked strictly with their own data. The supplier had to fine-tune the system itself then work on reestablishing employees' confidence. Once employees understood that they would be merging their expertise with the system's increasing accuracy, they began to accept and use the new technology.

What is the extended supply chain

The extended supply chain is a clever way of describing everyone who contributes to a product. So if a company makes text books, then its extended supply chain would include the factories where the books are printed and bound, the company that sells the paper, the mill where that supplier buys their stock, and so on. It is important for a company to keep track of what is happening in its extended supply chain because a supplier or a supplier's supplier could end up having an impact on you (as the old saying goes, a chain is only a strong as its weakest link). For example, a fire in a paper mill might cause the text book manufacturer's paper supplier to run out of inventory. If the text book company knows what is happening in its extended supply chain it can find another paper vendor.

What is the impact of globalization on the supply chain?

Just in time manufacturing isn't the only way companies have used their supply chains to reduce cost. Manufacturing in developing countries is substantially cheaper than in the United States because of the low cost of labor. For example, the hourly wage for China's manufacturing and production workers is less than one dollar per hour. But foreign manufacturing brings with it another set of challenges. It isn't as easy to set up real-time data sharing with a factory in, say, China as it is with a factory you own in the United States. And the sheer distance that overseas goods need to travel-not to mention the number of vessels they need to travel on- to reach the U.S. increases the chance that they will get delayed. The bottom line is that foreign manufacturing brings back a lot of the uncertainty that supply chain systems were designed to eliminate. The good news is that technology capable of tracking shipments throughout the world is getting better. The bad news is that a lot of this technology is still pretty expensive, that some of the places a company would want to deploy it don't have the necessary infrastructure in place, and, well, there isn't a piece of technology out there that can make up for the whim of a Chinese customs official. Furthermore, labor costs in some places are so low that IT automation and monitoring projects may add more to costs-in terms of software, hardware and still-precious (and unreliable) bandwidth-than they save in productivity. Hence, some low-tech or commodity products may not be worth monitoring at all until they hit a ship in a foreign port.

In the meantime, the best bet for companies is to use whatever systems they can to gain as much visibility into the global supply chain as possible. It may be impossible to replicate the just in time model on a global scale, but by applying technology , and by choosing the supply chain partners who have the capability to share data with operations, a company can get many of the benefits of just in time while paying low foreign prices.

How has radio frequency identification (RFID) technology affected the supply chain?

RFID (radio frequency identification) tags are essentially barcodes on steroids. Whereas barcodes only identify the product, RFID tags can tell what the product is, where it has been, when it expires-essentially whatever information a company wishes to program. RFID technology generates mountains of new data about the location of pallets, cases, cartons, totes and individual products in the supply chain. It produces oceans of information about when and where merchandise is manufactured, picked, packed and shipped. It creates rivers of numbers telling retailers about the expiration dates of their perishable items-numbers that will have to be stored, transmitted in real-time and shared with warehouse management, inventory management, financial and other enterprise systems. In other words, as RFID technologies in the supply chain spread into the operations of more manufacturers, parts suppliers and retailers, they will transform the supply chain as we know it today.

Another benefit of RFIDs is that, unlike barcodes, RFID tags can be read automatically by electronic readers. Imagine a truck carrying a container full of widgets entering a shipping terminal in China. If the container is equipped with an RFID tag, and the terminal has an RFID sensor network, that container's whereabouts can be automatically sent to Widget Co. without the truck ever slowing down. It has the potential to add a substantial amount of visibility into the extended supply chain.

Right now, the two biggest hurdles to widespread RFID adoption are the high cost of building the infrastructure to manage RFID data and a lack of return on investment (ROI) for many midsize and small manufacturers working in today's supply chains.

What is the impact of responsible sourcing, environmental sustainability and the "green" movement on the supply chain?

If the technological side of supply chain management wasn't hard enough, the new "corporate social responsibility" (CSR) movement inside 21st century organizations and IT departments adds another layer of complexity. Broadly defined, CSR initiatives for companies include such strategies as being able to show environmental sustainability (i.e. reducing the carbon footprint), responsible sourcing from a wide range of global suppliers, and how "green" an organization is.

On-demand and SaaS software offerings have gained market share in the customer relationship management (CRM) product space and are making in-roads in the enterprise resource management (ERP) arena. The reasons why companies are now purchasing those SaaS solutions rather than traditional on-premise software solutions (such as faster implementations) will be the same rationale as to why companies will purchase on-demand/SaaS SCM services in the future. In fact, many vendors now offer mature SaaS SCM offerings because of their efforts with Web-based electronic trading exchanges of the past; it's just a matter of time before companies, their supply chain managers and IT staffers feel comfortable with a SaaS package. Just as with SaaS CRM and ERP, there are important security, ROI, integration, and pricing questions that the SaaS SCM vendors need to iron out before the software delivery mechanism takes off

Wal-Mart announced in fall 2008 that all of its suppliers-including the thousand located in China-would have to be in compliance with laws and regulations relating to rigorous social, environmental and energy efficiency mandates. Wal-Mart's suppliers would even have to attest that their suppliers received high ratings on environmental and social practices.

What effect are on-demand software and software-as-a-service (SaaS) product offerings having on supply chain management?

So how does that affect supply chain management? Visibility. In order to prove that a company has lowed its carbon emissions, isn't dumping hazardous materials into rivers and doesn't buy its materials from suppliers that employ underage workers, company leaders need to be able to gain insight into and track the actions of their suppliers, and their suppliers and their suppliers-all the way down the chain into some good and not-so-good parts of the global economy. This ability also becomes critical when tainted goods need to be identified and found quickly in a supply chain, before the goods spread throughout a country's population.