A survey of more than 400 supply chain execs by IBM — resulting in a report called “The Smarter Supply Chain of the Future” — ranked topics in this order. Respondents were asked if the topic impacted them to a significant or very significant extent.

• supply chain visibility — 70%
• risk management — 60%
• cost containment — 55%
• increasing customer demands — 55%, and
• globalization — 45%

Execs who were surveyed also remarked that all five topics are critical areas in successful supply chain management.

The IBM study also offered a few specifics.

On the subject of supply chain visibility, the biggest problem is the lack of information sharing and collaborative decision-making. This is not the fault of technology; it’s the way many companies are organized.

Risk management: Supply chains have been stung with more regularity in recent years, from defective products to bankrupt business customers and vendors, natural disaster, and a host of other causes that can take a toll on your efficiency. To get a step ahead of this, it’s become more critical to build risk management into your basic daily functions.

Cost containment: It used to be that supply chains could take a “tortoise” approach in continually improving costs and cost control. But today’s fast-moving economy demands a “hare-like” strategy, reacting daily to whatever cost issues might arise.

Customer demands: Most companies do a great job now of collaborating with your suppliers. It’s time to take that a step further, the experts recommend, and build the same type of relationship with your customers — deploying joint forecasting, for example.

Globalization: It’s not the cure-all and end-all some said it would be. In fact, one-third of the execs responding to the IBM survey said supply costs have actually increased due to global sourcing.  The main issues are product quality and lead times.

Or, in this case, what comes first?

Companies are slow to warm to doing more B2B transactions over the Net, mainly due to security concerns. But it’s nearly impossible to resolve security concerns and put business minds at ease unless there’s enough transaction traffic driving the effort and establishing a reliable track record.

Raising the stakes and complicating this dilemma:

The whole situation plays out against the background of the Internet, where the legit businesses and enterprising hackers constantly jockey for the superior position.

It’s enough to make you long for the good old days, when cash was king and credit was paid off regularly.

Well, maybe not long for those days. But it certainly is much more complicated today, as the advantages of doing business over the Internet are balanced by new perils.

Basically, there are three types of losses a business faces when it begins transactions online:

• property loss or damage
• business interruption, and
• extra costs.

As cybercrime becomes increasingly lucrative, a worldwide black market for information has developed.

The attacks are growing more sophisticated as well, as cyberthugs try to sneak in your back door through your vendors and other businesses with access to your system.

It used to be that staying up to date on your browser’s security parameters and employing a commercial security service was enough to keep you protected.

It’s still important to stay on top of your browser’s security updates, but as the attacks have become more sophisticated, the defenses must keep pace.

Some of the recent counterattack suggestions include:

• Segmenting your company’s data into clearly defined zones, so certain breaches can be isolated and limited
• Training your people who are involved in areas where data theft is a distinct possibility. Less than 15% of breaches are detected by “insiders.”
• Acquiring “memory snapshots” to use in forensic investigations of cybercrime, and
• Limit how much information — and influence — can be accessed through “smartphones” or other devices that can easily end up in the wrong hands.

Just when you think the big picture is covered, cyberhoods start poking around the cracks to see if they can pry anything open.

Fortunately, the good guys keep coming up with good ideas to keep you — and your transactions — out of reach for ne’er do-wells.

This time around, there’s a wrinkle: A system that can encrypt cardholder data to protect it between the transaction terminal and the merchant host.

This is just the kind of innovation that businesses accepting magnetic-stripe cards have been hoping for, offering an additional security layer.

The company promoting the innovation bills it as an open standard for merchants and acquirers. It’s not necessary to purchase a proprietary decryption package in order to adopt it, or risk integrating new, unproven encryption technology.

For information, you can contact the company offering the product: Ingenico, at www.ingenico-us.com

While plenty of folks are still relying on other electronic check payment options, online bill-paying is certainly gaining momentum.

This can be valuable information for businesses seeking to widen their ability to accept on-line payments, or for other businesses that want to get on-board and handle more electronic check payments by taking them through the Internet.

Specific stats, according to The Electronic Payments Association (a/k/a NACHA):

• The transaction volume for on-line bill payments and similar actions grew 16.5% — 552.1 million transactions — in the final quarter of 2008 when compared with the final quarter of 2007 (474.1 million transactions).
• Not only is there significant growth over the previous year, it’s also a noticeable change from the previous quarter. The number of 4th quarter transactions in 2008 was up 5.6% over the number of 3rd quarter transactions.

One key factor in this growing trend, no doubt, is the improving nature of transaction security.

The better it gets, the more businesses you’ll see sign on.

When more businesses sign on, that naturally sends a message to other businesses that it’s effective.

Sure, most companies have the usual safety nets in place, such as limiting transaction amounts and requiring that at least two staffers are involved in every transaction.

But the smarter the security, the bigger the challenge for people possessed with rattling your cash cage from the inside.

We all know that the vast majority of people who have access to your company’s financial transactions are honest, decent, hard-working souls. They value their jobs and the stability of their employer.

Still, if the temptation exists and there’s even a hint of vulnerability, you could be in trouble.

These days, some of the kids will bust into something like your company’s financial records just to prove that they can do it.

The stakes and the risks have gotten even higher in this day and age, as economic pressures are forcing companies to cut corners in the name of doing more with less.

Some real-life shortfalls uncovered by security pros:

• Audit groups not trained to deal with fraud
• User passwords (necessary to transfer accounts) taped to a computer monitor
• Polling a number of employees on ways to commit financial fraud — and only one in 30 asked why the pollster would want to defraud the company
• Ease of use emphasized over effective security protocols
• Implementing “blank” passwords for easy access
• “I know my teams is loyal,” and,
• Who gets the audit reports? At one company, they were directed to the one person who was committing the fraud.

But just because electronic transactions are becoming more commonplace, you still can’t afford to let down your guard for even one moment when it comes to protecting a customer’s confidential information.

To help determine if you’re on the right page in keeping data safe, there are five key questions you can ask yourself about transactions that occur with your customers.

These questions are both a diagnostic assessment and a wake-up call. They apply whether you’re simply considering upgrading your transaction capacity, or even if you’ve already made the commitment and you could use a guide to setting it up.

Five questions:

1. How likely is it that one of the parties involved in the transaction would try to use a false identity?
2. What would be the fallout if the transaction data got into the wrong hands?
3. How much pain would a security breach inflict?
4. What type of information could be accessed by unauthorized parties?
5. What would be the impact if information being sent to you by a customer or a vendor was intercepted?

Good news: Security experts recommend four basic guidelines for helping to prevent these security breaches.

• Pay close attention to updates and patches for your computer’s security system, and implement as soon as they become available.
• Ask your own IT expert(s) to check your system security, when it comes to your Web browser and e-mail software.
• Passwords are critical. Choose longer passwords that have nothing to do with your name, your company’s name, etc. And be sure to change passwords often.
• Audit monthly statement — from banks and credit card providers — more closely than ever. This is often the first indication for many Purchasing & Procurement pros that something is amiss.

The best way you can stay in the driver’s seat is to make sure you have an organized plan of attack for working with suppliers, one that lays out your expectations and  emphasizes quality.

There are three areas to focus on that’ll help upgrade your relationships with suppliers:

1. Most companies treat poor supplier quality as collateral damage, part of the price of doing business. Here’s a painful stat: The cost of poor supplier quality (COPQ) take take a 10% bite out of an organization’s revenue.

It’s more than just faulty materials or goods. There’s a ripple effect — rework, slowed production, extra freight costs, warranty expenses when customers complain, and recall expenses when you have to ship it back from those customers.

So the first step — which many businesses don’t do now — is to track supplier quality, by logging to the bad (and the good), and what it ends up costing your company.

2. Once you’ve done your homework, you can approach suppliers about recovering the cost of poor quality supplies. In this case, many companies charge back the goods to the supplier. When enough product starts flowing backward, suppliers will take notice.

Experts point out that the bulk of costs stemming from suppliers providing poor goods is NOT the materials. It’s that collateral damage that really rings up the dollars. Finding a way to quantifying these costs will show suppliers just how deep — and costly — the problem is.

3. Finally, the best way to formalize your approach to solving these problems is to design your own supplier scorecard. Not only will you create a running evaluation of each supplier, it’ll also provide a solid framework of your expectations for these suppliers.

It strengthens your hand considerably when you sit down at the table with a supplier if you have a written list of problems and the costs incurred, along with a clear explanation of your expectations.

In many companies, that’s changed.

Now, people are starting to figure out that an efficient supply chain is directly linked to a company’s overall performance.

Successful supply chain operations usually have four aspects in common:

• Making decisions that benefit the entire company, rather than staying on the departmental level. Guidance for making these decisions can be found in Key Performance Indicators and Key Risk Indicators established for your individual company.
• Opening the doors and creating high visibility into all aspect of supply chain operations.
• Ensuring that all purchasing decisions are made strategically, and
• Getting buy-in from senior management to put a priority on supply chain performance, especially when it comes to involving other departments.

While this good news for supply chain pros, the brighter spotlight means that all you do will be more closely scrutinized.

What this all means is that today, it’s imperative that you create the time to take a step back and assess the big picture, despite the ongoing day-to-day pressure to perform.

That’s why the producers of Warehouse Management Systems are going to the trouble of pointing out silver linings, as a way of helping you prosper through a lean time.

Now’s a great time to upgrade your WMS or even buy a new one, they proclaim.

Figuring out what this means to you is a two-step exercise.

First, you need to determine if your current WMS is starting to hurt inventory operations more than it helps. That’s the first step in making a pitch to spend money in order to save money.

Three questions to ask:

• Are necessary supports and upgrades becoming increasingly expensive?
• Is your current WMS vendor up to par? Will it be able to support you over the next five years?
• Finally, does your existing WMS hamper your supply chain’s ability to remain competitive?

That leads into the second major step in evaluating your WMS.

Too many companies take the approach that a WMS is finished when it’s installed and up and running.

To get the most out of your WMS, it needs to be updated in conjunction with your operational needs.

But there are two critical areas that must keep up with the times. You need to take a step back and determine if you’re getting enough bang for the buck with your current WMS, in these two critical areas:

• Labor management. In many warehouses, labor is the biggest cost. Are you getting the most out of how workers are deployed, and how they spend their time? A WMS should be able to help improve labor efficiency in your warehouse.
• Slotting. A solid WMS should help you maximize your use of space, and help determine the most efficient travel routes for workers. Both of these pay off in the long run, by making the best use of space and of labor.

One of the biggest costs in transactions with suppliers and customers is the physical act of getting paid.

Most businesses still rely on the tried-and-true method of paper checks (and taking advantage of features like mail float time — or being frustrated by the same).

But there’s hard proof that moving away from paper and handling more transactions electronically is more efficient, easier to do, and even safer than using checks.

First, there’s the inherent complexity of the payment process itself. In a 2008 Aberdeen Group study, 76% of businesses described A/P operations as either complex or somewhat complex.

(A complex transaction, in this case, involves two or more banks and more than three payment types.)

Across the board — including Best in Class operations down to industry laggards, electronic payment processing costs were noticeably lower than handling paper-based checks.

• Best in Class companies spent an average of $10.84 on each paper-based check transaction, compared with an average electronic payment processing cost of $6.71 — a savings of 38%.
• Below average operations spent an average of $11.33 on each paper-based check transaction, compared with an average electronic payment processing cost of $8.42 — a savings of 26%.

OK, many of the Purchasing & Procurement folks already know there’s money to be saved by pitching paper. These are some stats to back it up.

But the biggest fear — one that hampers efforts to turn transactions into electronic time-savers — is that security can be compromised, creating chaos for all parties involved.

Here’s some ammo to help shoot down that argument.

When businesses experiencing payment fraud were polled as to the source of that fraud, here’s what they said:

• paper-based checks — 42%
• commercial cards — 33%
• ACH — 6%
• wire transfers — 4%

(Admittedly, there are more paper-based frauds reported because there are more paper-based transactions. But you get the idea.)