May 17, 2020

The Power of Analytics, Part One

Supply Chain Digital
MSR eCustoms
Analytics
Power of Anal
Freddie Pierce
3 min
The role of procurement in companies is continuing to expand. Guest author William Gindlesperger takes a look at how the 2012 purchasing landscape will look
By Marc Roy, VP, Global Business MSR eCustoms Fourteen years ago, two young men by the name of Larry and Sergey collaborated on a search engine called...

By Marc Roy, VP, Global Business MSR eCustoms

Fourteen years ago, two young men by the name of Larry and Sergey collaborated on a search engine called BackRub. Their ambitious mission was to “organize a seemingly infinite amount of information on the web.” They decided that BackRub needed a new name to reflect their goals, and chose a play on the word “googol”, the mathematical term for the number represented by the digit 1 followed by 100 zeros. It’s catchier than ten duotrigintillion. And so, Google was born.

However, to be more accurate, Larry and Sergey’s goal was actually to try to organize the infinite amount of data on the web. Data is factual measurements or statistics, which are used as a basis for reasoning, discussion or calculation.  Information on the other hand, is the knowledge gained from investigation, study or instruction.  Information is what searchers or ‘Googlers’ learn from the search results. Because of Google’s simple user interface and indexing algorithms, people are able to easily access the data, and glean from it the information they needed.

Unfortunately not all data problems can be solved with Google. Businesses around the world generate huge volumes of data.  History has shown us the difficulty of extracting information from the data.  Access to data is not equivalent to the use of decisional or actionable information that can be extracted from the data. Gaining visibility into the process has meant sifting through dozens of tabs of transactional data. Traditionally, reporting has been slow and cumbersome, taking weeks to analyze and submit to senior management.  Business leaders often didn’t have the information needed to make critical decisions in a timely manner. This left companies in the position to only react to situations as opposed to proactively prevent them.  As ever though, technology is changing the game.

Business Analytics software is creating buzz in the corporate world as an opportunity to solve problems, improve outcomes and predict trends in many aspects of a business.  Across multiple industries, Business Analytics is demonstrating the ability to take statistical data and transform it into meaningful, actionable information.

The Power to Problem Solve

The data used in Business Analytics can come from either an external or internal source, but just like Google indexed data for users, technology can unleash the information to analyze the figures provided. Some companies choose to go the internal programming route, but there are inherent dangers when depending on one person to build a platform from scratch.

The London Fire Brigade discovered this the hard way when the principal analyst building their R statistical programming environment left. The project to identify high risk areas using statistical analysis lost steam until 2008, when the organization implemented its London Safety Plan, a three-year initiative to analyze at-risk locations.

The problem they sought to solve was not to predict the number of fires, but rather identify areas that are higher risk than other.  Ultimately they selected to purchase existing analytic software to be more manageable and flexible than their previous efforts. Their analysts integrated external data like demographic data on income and geographic information to assess the risk of fire happenings. By identifying at-risk neighborhoods, they were able to target their prevention awareness to areas that needed it the most.

Come back tomorrow for Part Two of the series!

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Jun 16, 2021

EU and US agree end to Airbus-Boeing supply chain tariffs

supplychain
Boeing
Airbus
tariffs
3 min
Supply chains embroiled in Airbus-Boeing dispute will no longer be impacted by $11.5bn tariffs imposed on food and beverage, aircraft and tobacco

The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic. 

Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years. 

It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC. 

The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn. 

In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products. 

Boeing-Airbus dispute by the numbers  

  • The dispute began in 2004
  • Tariffs suspended for 5 years 
  • $11.5bn worth of goods affected by tariffs
  • $3.3bn in duties paid by businesses to date 
  • 15% levy on aircraft and 25% on non-aircraft goods suspended

Both sides welcome end to tariffs 

European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.

“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.

Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”. 

The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."

This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.

Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”

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