May 17, 2020

D&B tackles country-wide insolvency rates

Supply Chain Digital
Dun & Bradstreet
Risk Management
Risk Management
Freddie Pierce
3 min
Dun & Bradstreet’s report on insolvency rates within each country gives suppliers a heads up in risk management practices
Before you read this, check out the upper-right hand corner of this page to view this article in our digital reader. Trust us, it's way cooler! The...

Before you read this, check out the upper-right hand corner of this page to view this article in our digital reader. Trust us, it's way cooler!

The innovative minds at Dun & Bradstreet have done it again. Seeking to find future economic data relating to insolvency (or bankruptcy) rates from the world’s major countries, the research firm released its Global Business Failure report, detailing countries fairing well (and not so well) in the current economic climate.

The study pinpoints exactly where supply chain managers want to source their supplies from in the immediate future, and which areas they should look to avoid.

JIM LAWTON ON SUPPLY CHAIN DISRUPTIONS IN JAPAN

“The nerve that this is hitting for people is that five years ago, nobody paid any attention to supply risk,” Jim Lawton of Dun & Bradstreet said. “2007 really put this on peoples’ radar screens.”

The study aims to take looks at insolvency rates in each country, which Lawton thinks is sometimes a better indicator than looking just at the bankruptcy likelihood of a company. Having dual sources of supply does no good when they’re located in the same country and an event like the Japan disaster takes place.

“Time after time after time, senior procurement professionals are realizing that their ability to meet Wall Street’s expectations is at risk as a result of the countries that they’re doing business with,” Lawton explains.

Satminder Ramewal was part of the Dun & Bradstreet Country Risk team that helped put together the report, which lists Australia, Portugal and the United Kingdom as danger zones when looking for suppliers.

“The cost-cutting measures that the UK government has started to implement are not going to help growth, and that’s going to cause bankruptcy in the UK to rise,” Ramewal said, citing the report.

Lawton explains, however, that these high-risk zones don’t always need to be abandoned altogether.

“Obviously you want to avoid the risk if you can, but in some situations, you don’t have a choice,” Lawton said. “If there are compelling reasons to do business there, make sure you have plans in place to protect your company.”

Examples of protection strategies include monitoring the situation, asking suppliers for their individual financial solvency and building additional inventory to use should a situation arise.

Not every country is showing significant sourcing risk, however. Germany’s export-driven economy is thriving, driving down insolvency rates.

“Because (Germany’s) economy is quite buoyant, the number of bankruptcies is going to be less, because everyone is benefitting there as a whole,” Ramewal said.

Canada has also shown a falling insolvency risk, making it another prime location from which to source materials.

The bottom line, however, is that a nation’s economy can make doing business with them a more friendly, less complicated procedure.

“If you think about the best places to get sources of supply, there’s a lot of consistency between where you would want to be doing business with and the country’s economic outlook,” Lawton said. “With a strong economy comes infrastructure improvements and judicial competency. If I can’t litigate against potential breaches of contract, then that contract is worth less than the paper it’s written on.

“Countries like Germany are the types of countries that you want to be looking at from a sourcing perspective.”

Click here to download Supply Chain Digital’s iPad app!

Share article

Jun 21, 2021

Pandora and IBM digitise jewellery supply chain

supplychain
IBM
Pandora
omnichannel
2 min
Jewellery retailer Pandora teamed with IBM to streamline supply chains as sales of hand-finished jewellery doubled across ecommerce platforms

Pandora has overhauled its global supply chain in partnership with IBM amid an ecommerce sales boom for its hand-finished jewellery. 

The company found international success offering customisable charm bracelets and other personalised jewellery though its chain of bricks and mortar retail destinations. But in 2020, as the COVID-19 outbreak forced physical stores to close, Pandora strengthened its omnichannel operations and doubled online sales. 

A focus on customer experience included deploying IBM’s Sterling Order Management, increasing supply chain resiliency and safeguarding against disruption across the global value chain.

Pandora leverages IBM Sterling Order Management as the backbone it its omnichannel fulfilment, with Salesforce Commerce Cloud powering its ecommerce. Greater automation across its channels has boosted the jeweller’s sustainability credentials, IBM said, streamlining processes for more efficient delivery. It has also given in-store staff and virtual customer service representatives superior end-to-end visibility to better meet consumer needs. 

Jim Cruickshank, VP of Digital Development & Retail Technology, Pandora, said the digital transformation journey has brought “digital and store technology closer together and closer to the customer”, highlighting how important the customer journey remains, even during unprecedented disruption. 

"Our mission is about creating a personal experience and we've instituted massive platform changes with IBM Sterling and Salesforce to enable new digital-first capabilities that are much more individualised, localised and connected across channels and markets,” he added. 

 

Pandora’s pivot to digital 

The pandemic forced the doors closed at most of Pandora’s 2,700 retail locations. To remain competitive, it pivoted to online retail. Virtual queuing for stores and virtual product trials via augmented reality (AR) technology went someway to emulating the in-store experience and retail theatre that is the brand’s hallmark. Meanwhile digital investments in supply chain efficiency was central to delivering on consumer demand. 

“Consumer behaviour has significantly shifted and will continue to evolve with businesses needing to quickly adapt to new preferences and needs,” said Kareem Yusuf, General Manager, AI Applications and Blockchain, IBM. “To address this shift, leading retailers like Pandora rely on innovation to increase their business agility by enabling and scaling sustainable supply chain operations using AI and cloud.”

Yusuf said Pandora’s success was indicative of how to remain competitive by “finding new ways to create differentiated customer experiences that protect their enterprises from disruptions to help mitigate risk and accelerate growth”. 
 

Share article