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Terms used in Supply Chains give the wrong perception

New terms and perceptions The disciplines that engage with supply chains receive a continual upgrade to their vocabulary. New terms are added and promoted without much thought about their meaning and more importantly about perceptions by executives at the peripheral of supply chains. An example has been the recent use of the term Command and Control in relation to obtaining … Read More

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New terms and perceptions

The disciplines that engage with supply chains receive a continual upgrade to their vocabulary. New terms are added and promoted without much thought about their meaning and more importantly about perceptions by executives at the peripheral of supply chains.

An example has been the recent use of the term Command and Control in relation to obtaining Visibility through supply chains. What would be your reaction be if told to use ‘Command and Control for end to end visibility through the supply chain’? The reaction from Learn About Logistics is to ask the speaker for an explanation of what the sentence actually means.

Meaning of terms in the statement

Command and Control is a function of ‘top down’ organisation structures, such as the military and organised religions, (e.g. the Catholic church). The main features are a vertical ‘chain of command’, with stated authority and responsibility for discipline. There are defined policies, procedures and processes which articulate why and how an action shall be done. When a supply chain organisation is structured as Command and Control, it tends to be inflexible, rigid in procedures and unresponsive to customers and suppliers.

The ideal Supply Chain organisation has a horizontal structure that aligns the Supply Chain group (Procurement, Operations Planning and Logistics) with the flows of items, money, information and data. It is easier for a horizontal structure to be flexible and pre-empt or respond to changes in the supply network. However, ‘flexible’ and ‘agile’ does not mean a ‘free for all’. Controls are exercised at the point in the process which separates satisfying customer orders from planning operations. This is the point at which customer orders are accepted and reserved; final product specifications are defined and the last point from which inventory is released. 

End to End: From where to where are the ‘ends’? The diagram below illustrates an organisation’s ‘core’ supply chain. This is the extent of knowledge about supply chains used by the great majority of organisations and is their actual ‘end to end’. However, the ‘extended’ supply chains extend from the tier 1 suppliers and customers to their suppliers and customers and so on to the farms and mines from where raw materials are obtained. They have their own supply chains for inputs to operations. At the other end are the places at which the end users purchases the item. So, where are the two ‘ends’?

Supply Chain – the Core

Also, within your organisation’s core supply chains, are contract manufacturers and Logistics Services Providers (LSPs), which are defined in the table below. These businesses have their supply chains, from which a disruption may affect a shipper.

LSPs in a shipper's Supply Network

Within the ‘goods movement services’ group are ports. A recent report identified that a very high percentage of global tier 2 ports do not have capable systems and communication facilities for transmitting data about ship and cargo movements.

Within the ‘materials business services’ group are suppliers of ‘materials handling support services’ – pallets, wrapping, strapping etc. For pallets, the expectation is that when a business requires additional pallets they can be purchased or hired – that is, until they are not available! A recent media report noted that in the US, the price of wooden pallets has risen 400 percent and availability is tight, such that suppliers are unable to complete additional orders at the peak of agricultural harvest. The cause is attributed to both demand and supply factors.

As pallets are unlikely to be included in a Bill of Materials (BOM), prospects for their supply would not be known until the disruptions actually happen. So, does ‘end to end’ have another ‘end’ within LSPs?

Supply Chain Visibility: This is the capability to locate an order or an item’s in-transit location within a supply chain, ideally in close to ‘real-time’; achieved through IT technologies that enable ‘track and trace’ of orders and items. The capability to track a parcel is established. To ‘trace’ an item (Supply Chain Traceability) is to establish the item’s provenance through its supply chain. That is, substantiating and recording claims made about an item, concerning such aspects as its origin, material properties and types of labour used.

An earlier blogpost discussed the two aspects of Visibility – to ‘see’ (i.e. track) and to ‘map’. Supply Chain Mapping identifies the flow of items, money, information and data through the nodes and links of each supply chain within an organisation’s Supply Network. It incorporates Supply Market Intelligence (SMI); the process of creating a supplier capability for each supplier and their markets, including the extent of power or dependency. Mapping is a continuous process, as additional details that enhance understanding are obtained.

Also associated with visibility is Supply Chain Transparency. This refers to whether and then how an organisation will disclose information concerning its supply chains (including sourcing) to relevant parties, including customers. The extent of an organisation’s Transparency is defined by: what data will be supplied and in which format; to whom will it be given; under what circumstances; when or how often and using which technology.

Within each shipper organisation is Operational Visibility: This is the capability to provide Visibility within their operations to identify the status of any order or item. This may involve an interconnected IT network of commercial and technical systems that have Industrial Internet of Things (IIoT) sensors monitoring machines, as discussed in a previous blogpost.

Supply Chains and Networks

The supply chain, which is a singular term, is often used, for reasons unknown, to denote the plural. An organisation will typically have more than one supply chain, therefore the term used should be supply chains. When discussing an organisation’s supply chains, the better term is supply network. This recognises that a supply network is part of a larger ‘complex adaptive system’ (CAS), that adapts and organizes itself without a single entity managing or controlling. Researchers have identified that an organisation’s supply network is not a system that can be planned, managed and controlled.

While all businesses would like to have total Visibility of their supply network, this ultimate goal will not happen soon, if ever. However, any delay provides opportunities for organisations to address the challenges within their own organisation that hinder the adoption of Visibility. These include the lack of co-operation, co-ordination and collaboration within organisations to ensure an achievable supply chain plan; ineffective use of data and information; the lack of synergy between IT applications and the inability to predict and prepare for risks in supply chains.

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Commodity strategist predicts Bitcoin ETF could get the nod in US next month

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Bloomberg Intelligence Commodity Strategist Mike McGlone believes it is only a matter of time before the U.S. Securities and Exchange Commission (SEC) approves the country’s first Bitcoin exchange-traded fund (ETF).

In an interview with Stansberry Investor host Daniela Cambone on Sept. 21, McGlone asserted that Canada is extending a competitive lead over the United States after approving Bitcoin ETFs from 3iQ and Coinshares in April.

He emphasized that capital is flowing from the U.S. to Canada’s institutional crypto products, including from Cathie Wood’s Ark Invest. However, he believes that lawmakers in the United States will not want to miss out for much longer.

When asked about a timeframe on potential U.S. Bitcoin ETF approval, McGlone said it could happen “potentially by the end of October.” He maintained that it was likely to be a futures-backed product first, adding that it would open a “legitimization window for a massive amount of money inflow.”

McGlone also reiterated the latest report from Bloomberg Intelligence that stated Bitcoin prices hitting $100,000 was a possibility this year, and this would be driven by the approval of an ETF.

Crypto YouTuber Lark Davis shares McGlone’s price targets, observing that in previous bull markets in 2013 and 2017, the latter quarters saw huge price rallies.

Related: Canadian Bitcoin ETFs quickly hit $1.3B in AUM while US acceptance lags

The SEC is currently yet to approve a crypto ETF despite the number of applications it has received from prospective issuers continuing to mount.

Earlier this month, multinational financial services firm Fidelity Investments, lobbied the SEC to approve an ETP arguing that Bitcoin markets have already reached maturity under the regulator’s own standards.


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Source: https://cointelegraph.com/news/commodity-strategist-predicts-bitcoin-etf-could-get-the-nod-in-us-next-month

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TA: Ethereum Topside Bias Vulnerable If It Struggles Below $3K

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Source: https://www.newsbtc.com/analysis/eth/ethereum-struggles-below-3k/

Ethereum settled below the $3,000 support zone against the US Dollar. ETH price could resume its decline unless there is a clear break above the $3,000 resistance zone.

  • Ethereum started a fresh decline below the $3,100 and $3,000 support levels.
  • The price is now trading below $3,000 and the 100 hourly simple moving average.
  • There is a major bearish trend line forming with resistance near $3,000 on the hourly chart of ETH/USD (data feed via Kraken).
  • The pair could resume its decline unless there is a clear break above the $3,000 resistance zone.

Ethereum Price Remains At Risk

Ethereum started another decline from the $3,100 resistance zone. ETH traded below many important support zones near $3,000 and the 100 hourly simple moving average, similar to bitcoin.

The price even broke the $2,800 support level to move further into a bearish zone. A low is formed near $2,651 and the price is now correcting losses. There was a break above the $2,800 and $2,850 resistance levels.

The price recovered above the 23.6% Fib retracement level of the recent drop from the $3,105 swing high to $2,651 low. An immediate resistance on the upside is near the $2,880 level. There is also a major bearish trend line forming with resistance near $3,000 on the hourly chart of ETH/USD.

Ethereum Price

Source: ETHUSD on TradingView.com

The trend line is close to the 50% Fib retracement level of the recent drop from the $3,105 swing high to $2,651 low. A close above the $3,000 resistance could start a decent recovery. The next major resistance might be near the $3,105 level. A clear break and close above the $3,105 level could start a steady increase. The next major resistance sits near $3,135 and the 100 hourly SMA.

More Losses in ETH?

If ethereum fails to correct higher above the $2,880 and $3,000 resistance levels, it could start another decline. An initial support on the downside is near the $2,800 level.

The next major support seems to be forming near the $2,650 level. A downside break below the $2,650 support zone could lead the price towards the $2,550 zone. The next major support is near the $2,500 level, below which ether price might decline towards the $2,420 support zone.

Technical Indicators

Hourly MACDThe MACD for ETH/USD is slowly losing pace in the bullish zone.

Hourly RSIThe RSI for ETH/USD is still below the 50 level.

Major Support Level – $2,650

Major Resistance Level – $3,000

Source: https://www.newsbtc.com/analysis/eth/ethereum-struggles-below-3k/

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Evergrande crisis: Buy the dip or bail? Pundits weigh in

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As the prospect of Chinese property giant Evergrande defaulting on $305 billion worth of debt looms, pundits are weighing in on how the firm’s bankruptcy could impact the legacy and crypto markets.

Speculation as to whether the real estate investment giant will default has coincided with a downturn across the crypto and stock markets, leaving many analysts divided on whether traders should be buying the dip or looking to take profits in preparation of further bearish momentum.

At the time of writing, Bitcoin (BTC) is down by around 13% since the downturn started on Sept. 18, while the S&P 500 is down by 1.7% and the Hang Seng has dipped 2.8% within the same time frame.

Some are asserting that Evergande’s possible default could represent another Lehman Brothers moment — citing the major investment bank’s 2008 declaration of bankruptcy on $600 billion worth of debt that kicked off the Global Financial Cris.

However, speaking at the Greenwich Economic Forum on Sept. 22, Bridgewater Associates co-chairman and co-CIO Ray Dalio downplayed the significance of an Evergrande default and suggested that the debt is “manageable.”

Dalio admits that while investors will be stung, he thinks that Evergrande’s debt won’t cause structural damage, as the Chinese government may swoop in to restructure the firm and strike deals with the company. He said:

“[The] Lehman moment produced pervasive structural damage through the system that wasn’t rectified until the Treasury came across in terms of its borrowing and then the Fed came across with quantitative easing, but this is not that kind of a shake-up.”

Ming Tan, a director at the credit rating agency Standard & Poor’s (S&P) predicts the Chinese state will intervene to restructure Evergrande.

Speaking to Financial Times on Sept. 20, Tan speculated that said restructuring is likely to see the “profitable parts of [Evergrande’s] business bought up by rivals,” with its debt obligations likely to be underwritten by either a consortium of commercial Chinese banks or the local central bank directly.

Influencer Lark Davis also isn’t too concerned:

Not everyone is so optimistic. The host of CNBC’s Mad Money show, Jim Cramer asserted Evergrande’s debt issues will likely impact the crypto market because nearly half of the reserves backing the leading stablecoin Tether (USDT) are held in commercial paper

Cramer urged for investor caution while Evergrande awaits a verdict on a potential government bailout, stating:

“I know the crypto-lovers never want to hear me say sell, but if you’ve got a big gain as I did, well, I’m begging you: Don’t let it become a loss. Sell some, stay long the rest, then let’s wait and see if China changes its attitude toward an Evergrande bailout.”

While Tether has denied holding any commercial paper issued by Evergrande, analysts have warned that the fallout from an Evergrande restructuring could have significant impacts on the broader commercial paper markets.

“Tons of Chinese businesses stand to get crushed by this fiasco, and they have Evergrande exposure, and that could spell real trouble,” said Cramer.

Marty Bent, a podcaster and the co-founder of Great American Mining, also sounded alarm bells in his Sept. 20 newsletter.

Bent suggested that an Evergrande default will unveil how “exposed the Western world is to China’s economy” via investments in the large real estate players, their debt instruments, and the debt issued by the Chinese Community Party (CCP).

“Evergrande is going under and it is dragging other large real estate developers in China down with it. The world is witnessing another Lehman moment,” he said.

Bent questioned the assertion that Evergrande is likely to be bailed out by the government, noting the party’s recent push to rein in Chinese capitalism and tighten regulations on the real estate market.

“The CCP has come out and stated that they do not plan on backstopping the real estate developers who are currently plummeting toward bankruptcy. It will be interesting to see if they keep this posturing as things get worse,” he said.

The podcaster also noted that while he unsure how the fallout from Evergrande will impact Bitcoin in the short to medium term, he is “thankful” he can hold Bitcoin as a hedge against the fiat-backed global financial system.

Related: ‘Extreme fear’ as Bitcoin falls below $40K … and then bounces

The share price of Evergrande has been steadily declining during 2021 as its credit woes have mounted. After opening the year at roughly $14, the price sits now at $2.20 — a loss of more than 84%.


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Source: https://cointelegraph.com/news/evergrande-buy-the-dip-or-bail-pundits-weigh-in

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