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Infographic: How will smart technology impact manufacturing?

By Contributing Author | 02/16/2018 | 6:40 AM

Roadblocks for IoT Implementation

By Contributing Author | 02/09/2018 | 6:40 AM

By, Kristi Montgomery, VP of Innovation, Kenco Logistics.

Part II of III 

The Internet of Things (IoT) technology is disrupting all industries – from retail to healthcare and even the supply chain, but for all the benefits outlined in the first blog post, “The Future of IoT in the Supply Chain: It’s Complicated,” there are many roadblocks keeping IoT implementation in the supply chain from happening today.

These roadblocks are far reaching and very real – and they hinder the ability for IoT technologies to become widely and successfully adopted within the supply chain. However, by recognizing what these limitations are today, it will give us, supply chain leaders, an opportunity to set plans in place to overcome these challenges for IoT implementation in the future.

Roadblocks of IoT Implementation:

Standardization: One of the biggest challenges of implementing IoT devices within the supply chain is having a unified way for this technology to be integrated. Currently, there are no technology standards defined for how IoT devices will communicate – this includes network protocols, communication protocols, and data-aggregation. Without defined standards, we’re unable to figure out how data will be collected, processed, handled, stored, and summarized, leaving the industry wondering how these devices will handle unstructured data. And, once that data is collected, the next question will be: how will it deliver the data to tools that can analyze and store it? While nothing has emerged yet, it should be noted that there are several companies actively working on a regulatory standard. As we look at new IoT devices to implement, we should also consider how the standards and protocols may change in the future.

Security: Security continues to be a main concern for integrating and implementing emerging technologies. The fear around the ability to hack an IoT device is real, particularly because there is such a rush to bring emerging technology to the market that vendors often favor functionality over security. In addition to preventing access to the device itself, there are concerns about the security around the data being transmitted from the device. Questions we need to consider ensuring data is secure includes: Is it encrypted – if so, is the encryption strong enough? And, are industry standard best practices already built into the device around access control, authentication, and confidentiality? Of course, these aren’t the only questions to ask, but can set the basis for how we think about security and what steps we’re taking to protect our IoT devices as well as the data we obtain.

Privacy: Often, the promise of IoT is the ability for a single device to communicate with other internet-enabled devices, combining data and transmitting information to various parties. However, the collection of this information can also reveal data that may be sensitive to employees – like a truck driver’s location. While an employer may see it as a way to know exactly when deliveries will be made, but an employee may see it as an invasion of his privacy. In fact, beyond the data combination and transmission issue, there are legal requirements around such issues such as Personally Identifiable Information (PII) that require careful consideration before implementation. Some of these devices can be so small that an individual may not know that they are being tracked or assessed – a violation of privacy. And consider if the device is manufactured internationally – how can you be sure your company’s data is not being transmitted to the cloud and retrieved in an unfriendly country? The moral concerns around who is collecting data and for what purpose must be resolved before the widespread adoption of the technology.

Connectivity/Interoperability: With the overwhelming amount of data to be generated and transmitted through IoT devices as they gain popularity, the current communication infrastructure is another concern. Many devices are managed today through a centralized server-based network. But, when the number of IoT devices online reach the hundreds of billions, this will become a bottleneck and could cause entire systems to shut down for extended periods of time. Interoperability is another common roadblock the industry is facing. Device manufacturers are creating proprietary devices to limit the ability to connect these devices to brands other than their own; And with that, the data is inaccessible except through the closed system developed by the manufacturer. This creates an issue for companies to invest in IoT devices as they’re forced to work with one vendor, with no option to switch vendors or to seek enhancements to the existing functionality. Without the standards in place, devices can be designed poorly, even behave badly when exposed to the open network in an organization.

Compatibility: Many of today’s IoT devices communicate through a Web API, a much newer technology that is not available or compatible with legacy systems running on mainframes or industry-specific environments. Without the protocols for machine-to-machine communications in place, organizations are forced to spend on additional hardware or software to create channels between different IoT devices that have been manufactured by different vendors. The inability to directly communicate ultimately complicates the network’s capacity, speed and will increase downtime issues. Ensuring widespread capability of all IoT devices with the organization’s older technologies and systems will require an intermediary system that can help translate transmissions from devices to legacy systems.

Longevity: IoT, smart devices, and the like are today’s buzzword, but how long will these technologies actually stand the test of time? Given there are no standards in place for implementing emerging technologies, how much of the IoT infrastructure created will be rendered obsolete? Moreover, many device manufacturers are creating their own proprietary devices that only connect within its brand, but what if the manufacturer no longer exists? How will that affect your business? These questions are important to think through as your organization makes decisions about implementing devices as well as changing devices. There must be a secure way to decommission the devices and ensure that your data is not exposed nor are your networks compromised by devices that become obsolete. 

Data Usage: In larger enterprises, the amount of data collected and stored is already staggering, but IoT may increase that problem by a thousand-fold. With the nature of always-on devices collecting data in real-time and transmitting that data to another system, the issue of storing that data and the capacity required will quickly get out of hand. The investment in storage, whether internal or on the cloud can be prohibitive – the more devices that are online, the amount of data grows exponentially. Most organizations are not prepared for the glut of data that will result and are not considering the impact on existing infrastructure, system operations, and speed to operate – but they need to begin thinking about this for their IoT adoption to be successful.

Risk – Outages/Equipment Failures: Organizations today are mainly concerned with implementing and deploying IoT devices, but many have not considered the impact the need for internet connectivity will bring once devices are deployed. Unlike internal systems that can operate in a silo of your organization, these devices will require persistent internet connection to deliver on the promise of the real-time data analytics that drive decision making. But, what happens when the internet connection to your organization goes down?  Would your organization be able to function without those devices? If you are relying on them for mission critical business delivery, then the answer is likely no, requiring significant investment in backup systems and connections to ensure limitation of failure.

Conclusion:

With any new, innovative technology or device, organizations will always be interested in ways to implement and leverage the time savings or improved communication opportunities those devices may bring. However, there are many concerns to address and roadblocks to overcome to ensure these emerging technologies are more than just a trend. Instead, it’s identifying standards or industry-wide best practices that everyone follows so it goes beyond a trend and into the mainstream business routine.

 

KristiMontgomery

Kristi Montgomery, Vice President of Innovation, Kenco Logistics

Promoting transformational change in supply chain through delivery of innovation for customer-centric solutions

Like you, Kristi knows that innovation cannot just be a buzzword.  She is a dynamic explorer of strategic innovation that drives revolutionary change.  With 27 years of logistics and supply chain experience, she leads a dedicated team of specialists in Kenco Innovation Labs who identify, research, and prototype creative ideas with the potential to impact the supply chain. Collaborating with customers, entrepreneurs, and vendors from multiple industries enables Kenco to think “inside” the supply chain box and create unique, customer-driven solutions.  As the senior innovation officer, recognizing that no single approach works for every customer, Kristi leads research and development utilizing design thinking and open innovation to deliver business value for the 200+ customers that Kenco serves in North America.  Kristi is passionate about the relentless pursuit of innovation as an enabler of business growth and driver of strategic advantage. Executing on the innovation promise compels her to be a transformational agent of change.

Kristi received her BS in Organizational Management from Covenant College She is a certified Specialist in Design Thinking and Innovation as awarded by the Darden School of Business, University of Virginia.  She also received her Certified Information Executive designation from the Institute of CIO Excellence at the University of South Carolina.

Kristi serves on the Board of Directors for ChaTech, a non-profit dedicated to the promotion of technology and STEM education, is the Co-Chairman of the International Warehouse and Logistics Association Education Committee, and serves the industry speaking, participating as a panelist, and publishing articles promoting supply chain innovation.

What the World Would Look like Without Freight Brokers

By Contributing Author | 02/02/2018 | 8:22 AM

By Chandler Magann, Founder, Next Exit Logistics

As of October 2017, 83% – just a bit over four-fifths – of all shippers outsource their domestic transportation needs, according to the Council of Supply Chain Management Professionals. In the council’s 2018 22nd Annual Third-Party Logistics Study, researchers also found that a quarter of all shippers are using a 3PL to plan and manage transportation logistics, both foreign and domestic.

So consider, for just a short moment, what a world without freight brokers would look like for your bottom line, employee retention, and indeed for the long-term well-being of your organization. No doubt, it would not be a season of The Walking Dead, but a world without freight brokers would be slower, more expensive, and populated by a horde of very grumpy and dissatisfied customers, who are not zombies.

Put aside the fact that planning and managing transportation would be an additional logistics position. Instead imagine using your current personnel to take on the additional responsibility that is outside of their current expertise. The individual or team will need to learn a whole new set of required skills; they will need time to find, create and foster relationships with multiple carriers; and understand efficient routing, permitting, and more.

That person must remain continuously read-in to what freight is available when and to what location.  That staffer then must harmonize those data points to your supply chain processes, or else shipments will sit at the loading dock. If your employee cannot execute the transportation and delivery of your products, the result will be delays – the third rail in the age of e-commerce.

Without freight brokers, overhead costs will definitely increase. Remembering that 83% of shippers outsource their domestic transportation needs, same report states that current transportation expenditures cost roughly 11% of revenue. What’s more, shippers are spending just over half of their transportation budget on outsourced transportation services.

So, let’s reverse-engineer this equation. A single logistics planner’s annual salary, before benefits, according to Glass Door, averages $57,105 but can run as high as $80,000. If your needs dictate building out a transportation department, the overhead costs will exponentially grow, and encompass hiring costs, space, and management systems to incorporate tasks into the overall supply chain operation.

Shippers will also need to invest in a routing and scheduling software solution that can find and communicate with carriers; track and organize pick-up and delivery windows, truck capacities, and various load configurations (LDL, intermodular, etc.), and provide access to the carriers’ current safety records. This is important to reduce fuel costs, to negotiate the best rate possible, and to mitigate legal vulnerabilities through compliance, on top of getting the cargo to its destination on time.

I recently stumbled across a blog describing freight brokers as close cousins to the Devil himself. Funnily enough, at the top of the freight broker’s Seven Deadly Sins was lowering costs. As a freight broker myself, I am not ashamed in the least about finding transportation efficiencies for my clients, because my job is to represent the interests of my clients.

That said, there is a balance to be struck. The best freight brokers work with shippers and carriers to promote close, dependable and cross-functional relationships, wherein the outsourced services are integrated into the supply chain, just more efficiently and at a lower cost.

 

Chandler Magann opened a Texas sales office of his father’s company and worked out of a spare bedroom in his house. In January 2009, Chandler’s father sold his entire business to investors. It was then that Chandler founded the freight brokerage Magann Texas, LLC, which later changed to Next Exit Logistics in July 2009.

 

 

The next game changer? How crowdsourcing is transforming the face of final mile delivery

By Contributing Author | 01/26/2018 | 8:21 AM

By Itamar Zur, Veho Technologies and John Brown, Droppoint

 

The rapid growth of ecommerce and fast-changing consumer expectations require delivery companies to think and act out of the box. To win in tomorrow’s final-mile market, carriers will not only need to handle record peak volumes, but also master same-day, on-demand, and night-time delivery. How can delivery companies best capitalize on these trends while protecting their market shares from disruptive new entrants? We believe the answer lies in crowdsourcing.

While crowdsourcing is not a completely new phenomenon, few carriers other than Amazon have so far harnessed the model to final-mile delivery. A common conventional wisdom is that crowdsourcing works well in ride-sharing or point-to-point deliveries (as with restaurant delivery apps UberEats and Deliveroo), but that the model is unfit for large-volume distribution. We, however, hold a different view. Based on Amazon’s success with the model as well as our own experience, we believe that crowdsourcing presents one of the largest opportunities for package-delivery companies today. When properly understood and leveraged, crowdsourcing can yield major operational benefits, help provide exceptional customer experience, and enable delivery companies to better capitalize on the growing demand for final mile delivery.

 

The Economics of Crowdsourcing

Let us begin by addressing two misconceptions around the crowdsourcing model: First, that crowdsourcing is more cost-effective than traditional distribution models, since market rates for crowdsourced drivers are lower than those of professional drivers; and second, that crowdsourcing is disruptive to traditional delivery companies because it allows shippers to "cut the middleman" and connect directly with the driver. In reality, neither of these arguments is accurate.

In the U.S., ride-sharing platforms Uber and Lyft, or delivery platform Flex (Amazon’s final-mile crowdsourcing app) typically pay their drivers $18–25 per hour, depending on the market. Most on-demand restaurant delivery platforms pay about the same. While these rates are certainly lower than the hourly income of a unionized UPS or DHL driver, they are surprisingly comparable to what most regional carriers or local delivery businesses pay. Moreover, the competition for crowdsourced drivers — who are increasingly becoming the bottleneck for growth in the on-demand space — has constantly been on the rise. As a result, companies like Uber must spend heavily on marketing, referral fees, and other driver-retention bonuses to maintain and grow the size of their fleets. Crowdsourcing, in other words, is not always cheaper.

What about "cutting the middleman"? It is true that most crowdsourcing platforms have eliminated, at least to some extent, the role of the flesh-and-blood operator. However, the truth is that this has nothing to do with crowdsourcing itself, but everything to do with the automation technology that these companies have developed. For example, by leveraging machine learning algorithms, crowdsourcing platforms are able to automatically assign delivery tasks to drivers based on each driver’s real-time location and availability. These smart algorithms can also bundle delivery addresses to routes, determine the fastest way to complete a route, and provide the consignee with an accurate ETA and real-time visibility. All these tasks have been traditionally conducted by a dispatcher or operator, and their automation translates into higher productivity and margins. However, one does not need to run a crowdsourced operation to benefit from these technologies — as they work just as well with an employee-based delivery model.

 

Leveraging a Flexible Capacity Model

If cost savings or increased productivity are not the key benefits of crowdsourcing, then what makes it so attractive to Amazon and its retail rivals? the answer lies in the incredibly flexible nature of the model, and its scalability potential.

Compare carriers who utilize a "fixed" pool of professional full-time drivers, with Amazon Flex who utilizes a "flexible" pool of crowdsourced, part-time drives. When parcel volume spikes — as usually occurs during the holiday season — fixed-capacity carriers must extend their fleet and undertake the cumbersome process of recruiting and on-boarding temporary employees or contractors, who are not easy to find. Driver shortage has in fact become a major challenge for common carriers in recent years, not only during the holidays, but also on a weekly basis, as parcel volume and capacity needs tend to constantly fluctuate. Often this results in delivery delays, disappointed customers, and lost business opportunities. Amazon, on the hand, can instantly scale its capacity in times of high demand, simply by posting more routes on its Flex app to drivers who have already been vetted and are available for single-day tasks. This benefit also works at times of low demand: since Amazon does not have a contractual obligation to use its crowdsourced drivers, it can easily drop the number of active drivers whenever needed, and avoid the cost of underutilization. In other words, Amazon is much better positioned to "flex" its capacity and perfectly match its supply of drivers with demand for deliveries.

There are two other important benefits that make the flexible-capacity model highly attractive to Amazon. First, from a service-level standpoint, crowdsourcing allows Amazon to protect itself from last-minute dropout of drivers, and ensure that there is always a driver available for any delivery task. Amazon can do so because it only pays its crowdsourced drivers when assigning a route. Therefore, it can practically recruit and on-board an unlimited number of drivers without bearing high employment costs (and indeed — in the U.S. alone, Amazon has already on-boarded more than 100,000 crowdsourced drivers in only two years since launching Flex). Second, from a scalability standpoint, Amazon can easily launch new delivery markets, simply by turning on its app and enrolling new drivers, while circumventing lengthy recruiting processes. This is how Amazon has rolled out Flex to over 50 U.S. markets (and more recently — 7 new UK markets) in only two years. The scalability of crowdsourcing gives Amazon an immense competitive advantage over fixed-capacity carriers when capitalizing on the fast growth of ecommerce and need for final mile delivery.

 

The Customer Experience Advantage

Perhaps of the highest importance to Amazon, owning a flexible fleet allows the company to offer customers a variety of delivery services that fixed-fleet carriers traditionally found expensive to provide. Two-hour, same-day, and night-time deliveries are all made possible with crowdsourcing: Amazon can always find an available driver at any hour of the day, and enable the customer to choose her preferred delivery window while minimizing the likelihood (and cost) of failed delivery attempts. This gives Amazon another powerful way to delight its customers and further increase trust, loyalty, and customer lifetime value.

 

Can Crowdsourcing Be Harnessed by Traditional Delivery Businesses?

In light of these benefits, we believe that crowdsourcing should not be the sole domain of disruptive technology companies such as Uber and Amazon. Yet, implementing the model in more traditional delivery companies requires a change in mindset and proper investments in technology. The key to harnessing final-mile crowdsourcing is the need to simplify and standardize delivery tasks such that almost anyone could complete them in their own vehicle, just as well as a professional driver.

To demonstrate this latter point, take ride-sharing platforms, for example. Companies like Uber were able to replace taxi drivers with "anyone in their own vehicle" by leveraging the proliferation of GPS apps such as Google Maps and Waze. With GPS technology, an Uber driver does not need to know every street and shortcut like a professional taxi driver, yet she can still drive passengers to their destination just as effectively.

The implementation of crowdsourcing to final-mile delivery requires additional considerations. For one thing, GPS locations are not always accurate, especially outside of city centers. While an Uber driver can ask her passenger to show her the exact drop-off location, delivery drivers cannot do the same with packages. Second, delivery drivers must also learn how to enter buildings that require an access code; where to park the car on a busy street; and which commercial deliveries should be prioritized. To become efficient at running a delivery route, most drivers need a few weeks to learn and adjust. Unfortunately, this "adjustment period" is far too long for any gig-economy driver, who could simply opt to drive with Uber and start making money from day one.

                    To truly enable final-mile crowdsourcing, delivery companies must help
                    
drivers jump over the lengthy "learning curve." Rather than give the driver
                    
a manifest and expect her to figure out the route on her own, carriers
                    should provide the driver with technology that takes her step by step
                    through the delivery process and eliminates any opportunity for error.

The good news is that such technologies already exist in the market. Dynamic routing, geofencing, an online routebook to correct any GPS errors, and a photo database of all drop-off locations — are all features of smart mobile apps that provide drivers with easy step-by-step instructions. Live tracking, chat tools, and an instant settlement system can help operators gain control over any crowdsourced operation while removing unnecessary friction. These technologies can also be adapted for any kind of operation regardless of crowdsourcing. It is only a question of whether one is willing to make the investment, and there has never been a better time to make it.

 

The Bottom Line: It is time to re-think innovation

The benefits of crowdsourcing do not lead to the conclusion that companies should completely replace their existing fleets with crowdsourced drivers. After all, the cost of maintaining a large crowdsourced fleet can be cumbersome, and experienced delivery drivers will still perform better at customized, bulky, or "white glove" deliveries. Yet, we believe that carriers can no longer afford to ignore the success of crowdsourced programs like Amazon Flex, or else they risk being left behind. By understanding the economics, key benefits, and the technology required to harness crowdsourcing, carriers too can use the model as a means to complement their existing fleets, differentiate on customer experience, and better capitalize on the growing demand for drivers in the final mile.

 

About the writers 

John_Brown
John Brown is a former director of strategy and marketing at UPS, and the co-founder of Droppoint, with over 40 years of in logistics and supply chain management.

 

Itamar_Zur
Itamar Zur is the founder and CEO of Veho Technologies – a technology and crowdsourcing platform for final mile delivery. Veho is winner of the 2017 Harvard Business School New Venture Competition.

The Trucking Revolution: Long Haul Trucks & Logistics

By Contributing Author | 01/19/2018 | 9:58 AM
By Gavin Parnell, Go Supply Chain Consulting
 
Elon Musk and Tesla are paving a new future in logistics. Their applications in manufacturing make them a strong market contender for disruption.
 
Diesel trucks still have the advantage of range and ease of use. This can make or break some logistic routes, making them an obvious choice. Volvo and Scania have made good progress with biofuel alternatives, making their vehicles more competitive. 
 
Go Supply Chain have created an infographic comparing the new Tesla Semi to diesel trucks.
 
Tesla
 
The rush for the most efficient truck has started - only time will tell a winner.
 

GavinParnell

Gavin Parnell, BA (Hons) MSc. MILT MCIPS, is a Director of Go Supply Chain with over twenty years’ experience in logistics.  Since 2004 he has worked in consultancy with retail, FMCG, fashion and industrial clients.  Go Supply Chain works to improve clients’ supply chains and logistics operations through design and optimisation of distribution networks, warehouses, transport operations, inventory policies, international logistics and more.

Forklift Acquisition Options: Is Leasing or Buying Best for You?

By Contributing Author | 01/12/2018 | 7:54 AM

By Marcus Warner, Director of Strategic Accounts, NITCO

Leasing vs. buying. What’s the smartest way to go when your business needs a key piece of materials handling equipment? One of the challenges when weighing various leasing options against the benefits of purchasing a forklift outright is that the decision hinges on both financial and operational factors.

Companies with lighter workloads are sometimes encouraged to buy their materials handling equipment rather than lease; but so are large, profitable companies that have plenty of access to capital. So generally speaking, there is not always a cut-and-dried answer to the lease-vs.-buy question.

To determine what will work best for your company, it’s a good idea to seek input both from your accountant and from your forklift dealer. In addition to offering a diverse lineup of forklifts and materials handling equipment, top dealers will be equipped to provide detailed quotes and give you a clear breakdown on the financial benefits of leasing versus buying a particular lift truck.

Leasing

Forklift leasing can give you greater financial flexibility to adapt or grow your fleet as the needs of your business evolve. Large, growing firms tend to lease their materials handling equipment because preserving access to capital is crucial as they grow. Leasing can also ensure that your fleet features the latest in forklift safety and technology.

Some of the chief benefits of forklift leasing include:

  • Use the newest state-of-the-art equipment
  • Expend minimal cash upfront
  • Enjoy the benefits of a predetermined replacement cycle
  • Avoid the responsibility of ownership
  • Pay only for what you use

A trend in the materials handling industry is toward forklift leases with guaranteed service contracts. This helps the company budget a fixed monthly cost, knowing the equipment will be covered by warranty as long as it is operated within specified usage and properly maintained.

Here are several different types of forklift leasing options:

  • fair market value lease (also called a residual lease or operating lease) will generally have the lowest payments. But if you plan to keep the equipment when the lease concludes, you’ll pay its fair market value so this can be more costly in the long run.
  • full payout lease (also sometimes called a dollar buyout lease or capital lease) comes with higher payments, but you’ll own the equipment at the end of the lease term.
  • full-service lease works somewhat like a long-term rental in that you make a monthly payment and the forklift provider is responsible for reliability and repairs.

Typically, the monthly payment is reduced as you lengthen the duration of the lease. This means a longer lease may work best for those who are looking to keep the payment as low as possible. However, be sure not to extend the lease past the point where the benefits of a smaller payment are canceled out by increased maintenance costs.

Ownership

Obviously, there are distinct benefits to ownership as well. Your accountant can help advise you on whether the ability to claim deductions for depreciation and interest on a forklift purchase will end up delivering a net savings at tax time.

Many forklift lease agreements place limits on hours of usage (for example, 2,000 hours annually, approximately 40 hours per week) and can therefore end up costing extra. One advantage to buying outright is that it relieves the owner of such limitations on the equipment’s workload.

Buying may also make the most sense for a business that has lighter forklift usage and therefore expects a longer equipment life, according to one school of thought. For example, one scenario in which buying might make more sense would be when your company’s forklift usage is limited (perhaps less than 1,000 hours per year) and you can expect to operate the equipment for seven to 10-plus years while keeping maintenance costs under control.

Of course, companies of all sizes and workloads find it difficult to put a price on the peace of mind and pride of ownership that comes with purchasing new. Plus, bigger, busier companies are often swayed by the tax advantages.

But the decision to lease vs. buy a forklift really comes down to crunching the numbers. Requesting quotes for two or more lease term options can make a big difference in helping you determine when rising maintenance costs begin to offset the benefit of a longer-term lease. (The potential benefits of renting forklifts and materials handling equipment is a topic for another conversation.)

Ultimately, you’ll be best served by working with a forklift dealer who understands that part of the job is to roll up their sleeves to help you fully consider both the operational and financial sides of the equation. So before you make a decision, be sure to ask for detailed price quotes that provide the information you need to determine whether leasing or buying is best for your company.

 

MarcusWarner
Marcus Warner Is Director of Strategic Accounts at NITCO, New England's leading provider of forklifts, material handling equipment and warehouse solutions. Marcus directs the Strategic Accounts team in maintaining, developing and securing business with larger/high profile accounts in target industries.

A beginner's guide to forklift safety

By Contributing Author | 01/05/2018 | 12:52 PM

By Prospero Girardi, Director, Hitec Lift Trucks

A forklift truck is a dangerous piece of machinery, and it goes without saying that you can’t just hop into a truck with no training or experience and drive it away. Every operator must have training and be fully qualified to drive and operate the lifting equipment. The operator must also have completed a training course. This is not just for operator safety, but also for the safety of other staff.

PPE and Hi-vis clothing

In most working areas, you’ll need to wear a hard hat and safety shoes, and a hi-visibility jacket will be required to ensure you can easily be seen.

The clothing needs to fit well, without any trailing ties or accessories, to prevent accidents that occur as a result of clothing being caught in the machinery.

Before starting up

Check that your hands are clean and dry - grease or damp hands could affect your grip on the controls.

Equipment check

While you might use the same forklift every day, you should still do a check of your vehicle before starting it. Look at the tyres, controls, check the steering, the brakes and the mast, and look at any warnings.

If anything is damaged, don’t drive the truck. Follow your company procedures and report it.

Load check

Don’t move off until you have checked your load to make sure it is secure, stable and positioned properly across both forks. Check the height of your load and make sure it is within the permitted height for your work place.

Seating yourself correctly

There are steps and hand grabs on your truck to help you sit in the correct position. Once seated, fasten your seatbelt, and adjust your position to ensure you can comfortably reach the controls. Check your mirrors are in the right position to give you a good field of vision, and ensure you are fully within the cabin of the forklift.

When moving off

Look around you and check for any members of staff within range before driving. Keep to the designated paths for the forklift, and ensure you know the site rules, your truck’s height in relation to entrance and exit heights, and the speed limit.

While moving

Be aware of your surroundings and other people working nearby, and keep your distance from other trucks. You can control what you do, but you can’t control other people.

Watch for signs such as load limits and clearance heights, and take note of any bumps in the road, debris or loose surfaces and drive around them.

Think ahead and make sure that you have enough distances to stop safely.

When handling the load

Check that you can clearly see what you are doing and that you can see the racking that you are aiming for. If you need to, reverse the forklift for better visibility. If visibility is extremely poor, stop driving.

Be safe

Keep your body clear of the mast, especially when it is being lowered, to avoid serious injury, and do not let anyone stand or walk under the machinery or the forks.

When driving on a ramp, drive forwards up the ramp and down in reverse.

If you need to step away for a moment, don’t leave your forklift running and unattended.

Keep focused, and constantly watch out for people, obstacles and other trucks.

Finishing up


At the end of your job, follow company guidelines and park your truck in the designated area. Ensure your forks are lowered completely to the floor and make sure the park brake is on. Turn your forklift off, and take out the key.

As long as you keep safety at the forefront of your mind, concentrate on what you are doing and take constant note of your surroundings, you will be able to do your job safely and without incident.

Prospero Girardi
Prospero Girardi is the Director of Hitec Lift Trucks, a supplier of forklift trucks for hire and purchase, as well as a provider of forklift training, and many other materials handling products and services. 

Inventory Inaccuracy: That Three Percent Really Counts

By Contributing Author | 12/11/2017 | 2:57 PM

By Jonathan Gregory, RFID Program Manager, Checkpoint Systems

When it comes to employing RFID to ensure accurate retail inventory, the traditional focus has been on in-store use. That’s fine, except retailers often misperceive that implementations earlier in the supply chain aren’t as important. But every time a store receives shipments without using RFID to check their compliance, inventory accuracy decreases, with associated damages.

I don’t mean to imply that in-store use of RFID isn’t important, because it certainly is. Scanning incoming cartons at the shipping dock upon arrival and performing periodic cycle counts via RFID scanners can quickly and accurately provide store personnel with information about their stock. And that information is vital to ensure retailers know what they can sell in-store or ship elsewhere for omnichannel sales. But if a carton with the wrong merchandise arrives at the store and it subsequently takes weeks to receive the correct merchandise ordered, the impacts are far ranging.  Typical DC audit rates are around three percent, so it makes sense to use RFID to automatically audit 100 percent. In fact, why not detect and correct in-transit inaccuracies before they leave the DC, or even earlier?

Experience with retailers and brand-owners shows that DC processes, outsourcing arrangements and corporate concerns vary widely.  While some retailers spend the time to manually audit all received items at stores, (certainly a time-intensive investment that RFID-based receiving streamlines) others infer receipt without any check, risking (as seen in pilot research) erratic accuracy levels in some product categories (e.g. women’s intimates).  In all cases for all companies, in-transit accuracy enables higher store inventory accuracy with lower cycle count frequency.  Consider the increased efficiencies and omnichannel uplift when retailers justifiably have high confidence in the accuracy of incoming shipments from distribution centers. The retailer can lower safety stocks and narrow excess inventory assignments, which in turn lowers working capital.  Stores can market items that are in transit, or hold omnichannel shipments until in-transit items arrive, consolidating the number of packages per order.

Many retailers have already taken advantage of this. A great example of the use of RFID in distribution centers can be seen in Spanish retail giant Inditex’s use of RFID-supported inventory monitoring system, which is implemented from source to shopper, including through the use of RFID tunnels in DCs. You can see it here.

Logistical Impact

Perhaps the biggest, or most readily realizable, opportunity in ensuring inventory accuracy at the DC level is automated claims compliance. This is such an important issue that instead of taking the time to track and prove non-compliance, some retailers simply impose a blanket charge-back fee of about three percent to suppliers. I know of one major retailer that places a surcharge on all factory shipments based on the assumption that there will be a few percent of shipment inaccuracies. Over the course of the year, it adds up to millions of dollars.  Similarly, Wal-Mart’s “On Time In Full” policy charges suppliers or carriers a three percent COGS fee for early, late or short product deliveries, with a 95 percent compliance target and narrow delivery window.

There is a substantial recurring financial benefit to automating claims compliance.  The opportunity is so large, that one SVP of logistics commented that financial penalties would be too great, and contracts would have to be softened if claims from automated auditing were enforced.  This has already been proven in pilots, which show that when adding RFID-based automated inspection and correction at brand DCs, shipment inaccuracies are virtually eliminated.  This benefits both the brand owner and retailer, and results in retailer whitelisting of such items from ongoing manual audits. 

But what happens when DCs receive out of compliance cartons from contract manufacturers? With technology such as RFID tunnels, they can use the data for vendor scorecarding and to drive better planning.  They can quickly make adjustments to ensure shipments have the right SKU mix and quantities.  This can save suppliers non-compliance penalties and ensure retailers receive all their ordered merchandise on time vs. waiting weeks for non-compliant cartons to be replaced with the correct merchandise.

Additional value can be found when capturing and sharing item-level data collaboratively across the supply chain.  Consignment tracking is enabled.  A brand owner can observe the effectivity of promotions by tracking the specific items used in promotional kits.  Sharing in-store item visibility with brand owners enables brand-driven optimization analysis and replenishment.  Retailers can tap into data collected about the items history – such as using source data for DC auditing efficiencies (e.g. isolating audit evaluations to specific sources).

Generally, if one carton out of a large shipment is found to be non-compliant upon inspection, all cartons may then be redirected down to an area for manual inspection. Consider the time and resources tied up when one such 1,000 carton order comes through. But using RFID, a retailer may discern that the carton in question came from a specific source factory. As such, it may decide to only audit those cartons from that factory, instead of the entire shipment, saving time, labor, and throughput.  Being able to see beyond the immediate source and leverage supply chain history enables retailers to set up business rules to determine what happens when specific cartons arrive from specific factories or locations or contain specific merchandise.

Other Benefits

Brand owners have sought to protect their brands by tracking their products found in gray markets. RFID enables them to know exactly where their products went after leaving their factories or DCs, so when merchandise is found in the gray market, they know how it got there and can act on this information accordingly.  Likewise, luxury brands have a vested interest in knowing chain of custody for their goods because of counterfeiting, not just at the store level, but also at e-commerce retailers – where there is a propensity to mix genuine and knock-off items. In addition, consumers are increasingly interested in knowing where and under what conditions these products are made.  For these retailers, having this information available is indispensible.

Where Is this all Headed?

The next logical step is industry action in which cooperating retailers share non-proprietary item-level data, such as track-and-trace details.  They may also share aggregated information about suppliers, such as quality and shipment “ratings” of factories, similar to how retailers currently use credit reports on consumers. If these modern relationships seem farfetched, many retail competitors are already sharing SKUs that are most at risk for shoplifting. In this manner, they are able to prioritize protection for selected inventory and collectively lower their shrink.  Industry cooperation has also led to what previously might have seemed to be an unlikely alliance: Kohl’s is now accepting Amazon returned merchandise. It drives increased foot traffic into Kohl’s stores, while lowering returns costs.

Summary

RFID is a great solution, but underutilized in the supply chain.  As noted, by catching inaccuracies more easily and faster in the supply chain, it can improve omnichannel fulfillment, get promised inventory to customers earlier, reduce order cancels and reduce retail costs by consolidating order shipments (based upon higher confidence). Ultimately this can lead to improved item-level decision support as well as increased customer satisfaction, margins and sales.

 

 

 Gregory_mestre
Jonathan Gregory serves as RFID Program Manager at Checkpoint Systems,
a division of CCL Industries. He is responsible for driving various major retail-industry RFID implementations of the Checkpoint RFID solution.

Making Supply Chains More Efficient: What We are Learning in the Three-Tier Beverage Alcohol Industry

By Contributing Author | 11/27/2017 | 8:32 AM

By Peter Lijewski, Vice President, Supply Chain Management, Breakthru Beverage Group

In many companies, “Supply” is viewed as a department. However, I believe it should be viewed much more broadly because the supply chain is the core that underpins everything a company does. It’s so central to the success of a business that the efficiency and management of the supply chain can serve as predictors of a company’s success.  Supply chains that benefit from effective management, the right investment, and are enabled by a supportive culture where collaboration is fostered from end to end will thrive.  Supply chains missing these key elements are likely to become fragmented and increasingly inefficient

In the beverage alcohol industry, in which the supply chain is divided across the three-tier structure implemented after Prohibition, collaboration has long been a challenge. However, a combination of necessity due to the evolving tastes and demands of consumers and advancements in technology are making beverage alcohol industry supply chains smarter and more collaborative and, therefore, more efficient.

For example, demand sensing applications and predictive analytics can be integrated into part of supply chain management with incredible results. Depending on your perspective, the application of these types of tools may be enablers or disrupters.  We see them as enablers that allow us to become smarter, nimbler, faster and more precise. And in the beverage alcohol industry, this has become increasingly important.

While the marketing department may use social networks to promote brands, their supply colleagues can also monitor the comments and feedback to determine consumers’ future purchase activity. This allows us to adjust our plans much earlier than waiting for a retail signal to flow through traditional demand monitoring systems. This falls under the category of “demand sensing” where practitioners are using social media filters and other indirect causal factors (weather predictions, brand sponsorship, brand appearance in hit movies or songs) to predict a rise or fall in sales.

However, technology is not the only solution to creating a more efficient supply chain. Companies also need to collaborate effectively internally and with their customers and suppliers. Technology alone can’t create a more efficient supply chain.  It is predicated on a culture of mutual respect and reliance between supply and demand, and an understanding of the importance of unhampered information flow.  Effective companies are using cutting edge tools to enhance their culture and capabilities and are enabling the fulfillment of more products more quickly than their competition. And those that enable the right culture and relationships will ensure that these technologies are being leveraged to their fullest.

This requires investment in smart growth, great talent and an innovative outlook to everything a company does—particularly its supply operations.  We are on this journey within the alcohol beverage industry—reaching across the three tiers to become more responsive to consumers by being at the intersection of technology, its application, our business and our stakeholders.

Peter Lijewski headshot

Peter Lijewski has nearly 20 years of expertise in the Wine, Spirits and Beer industry. Peter has worked in a variety of areas including vineyard operations, bottling lines, customer service, demand and supply planning and more. Along with his extensive industry background, he’s held titles such as the Vice President of Supply and East Coast Operations, Vice President of Global Procurement, and Vice President of Supply Management for Constellation Brands.  His leadership capabilities were instrumental with the transition of Constellation’s acquired businesses and its distributor consolidation. Peter oversees the development and implementation of strategies for the integrated supply chain management at Breakthru Beverage.

4 Options to Consider When Relabeling Warehouse Racks

By Contributing Author | 11/15/2017 | 10:01 AM

By Neal Lulofs, Chief Marketing Officer, ID Label Inc.

Is it time to replace your barcode location labels?

Whether you work in a warehouse, distribution center, manufacturing site or third-party logistics (3PL) facility, it's not uncommon for warehouse racks to require relabeling from time to time. A number of events can trigger this:

  • You’re reconfiguring your rack set-up and flow to accommodate seasonal inventory changes or facility expansion
  • Your beams require a refresh after several years of wear and tear
  • Your existing barcode location labels are damaged, missing or peeling
  • You’re upgrading your warehouse management system or inventory control software
  • You’re converting some bulk storage areas to picking bays
  • New tenants are moving into a section of your 3PL facility

What Are Your Best Relabeling Options?

There are several viable options. The right choice for you depends on your specific needs and environment. Let’s look at four solutions worth considering.

  1. Beam Cover-Up Strip

Are your beams scratched, rusted or dingy? Are your existing barcode labels damaged, missing or peeling? Would you like to avoid the laborious task of scraping off old barcode labels before relabeling?

If any of these apply, then a base cover-up strip with an easy-release top lamination may be an ideal solution.

Look for a manufactured cover-up product with a durable, opaque construction that can be applied directly over old warehouse beams and barcode labels without any show-through.

A cover-up solution will help you avoid the time and expense of cleaning, scraping or painting older beams. Products like these can typically be manufactured in a color to match your existing racking, so it really makes your beams look like they’ve been newly restored.

ID Label Cover Up

  1. Magnetic Warehouse Location Labels

Barcode labels adhered to magnets are another viable option to consider, especially for warehouse facilities that reconfigure their rack locations or inventory with regularity. They’re also a good choice for freezer storage environments.

Magnetic labels are easy to move, don’t require scraping, don’t leave behind adhesive residue and they keep your warehouse racks looking neat, orderly and clean. They can be manufactured in a wide variety of colors and sizes for use on horizontal beams or as vertical totem labels.

On the other hand, magnetic labels can occasionally be knocked askew or to the ground – or can even accidentally adhere to metal lift trucks – during the picking and placement of pallets and cases.

One final point: magnetic labels are typically more expensive to manufacture than other barcode labeling options, but they have a long useful life that offers a good return on investment.

  1. Removable Warehouse Labels

If your beams are in good shape, consider using a preprinted, removable barcode label. Like the other options above, a removable label makes it easy to relabel rack locations. They are simple to install and offer location flexibility, without any need for scraping or cleaning to remove them.

Look for a removable label with an advanced adhesive that adheres tightly to different surfaces, but is easily removable without adhesive residue left behind.

It’s a good idea to test these labels for a length of time to be certain they are the right choice for your environment.

  1. Ultra-Durable Barcode Labels

Are your current rack labels easily damaged by daily encounters with lift trucks and warehouse traffic? Will your labels be exposed to direct sunlight or heat, or come in contact with harsh cleaning solutions or chemicals? Perhaps you’d simply like to move from low-quality, print-your-own labels to a longer-lasting, more durable solution.

Label durability is probably the most important requirement our customers have. Why? Because it’s critical that barcode location labels scan accurately every time. Errors can lead to manufacturing issues, shipping mistakes, product returns and other costly missteps.

There are many factors in the label-manufacturing process that affect durability, from the base stock to the top coating to the printing technology used. Be sure to work with an experienced label manufacturer that can deliver a proven solution to match your operational requirements.

Know Your Relabeling Options

Warehouse rack relabeling is an increasingly common occurrence in today’s rapidly changing, e-commerce-driven market.

When it comes to finding the right relabeling solution, there is no one-size-fits-all answer. “Cheap” solutions may turn out to be the costliest ones if the labels easily damage, fade or peel off.

Asking the right questions and understanding and testing your options in advance will help ensure you find the best product for your requirements.

Neal Lulofs 2

Neal Lulofs is chief marketing officer at ID Label Inc., one of the nation’s leading providers of preprinted pallet and rack labels, warehouse signs and installation services.

6 Reasons to Track Your Truck Fleet

By Contributing Author | 11/08/2017 | 6:16 AM

By Sam Sims, APR,  US Fleet Tracking 

Automation is one of the defining factors of our day and age. We rely on machines in the modern day, and GPS is one of the systems we’ve come to depend upon most frequently. GPS devices have come a long way and can tell us more about a vehicle than just its location. We can learn all the information we’d want to know about a car, truck, or other vehicle with GPS systems, including where it is, where it should be, and how long it’ll take to finish a route.  

Usfleettracking2

Optimize Routes

Use the GPS data from your fleet to make your routes more efficient. You’ll also be able to find areas that are troublesome and fix those problems through close analysis. Additionally, you can discover the shortest routes for your trucks by finding areas to improve fuel efficiency and work on reducing the amount of time your vehicles are idle. All this important and helpful information is only available when you have your fleet equipped with the proper GPS systems – and using this data will allow you to reduce each truck’s travel time, getting your goods from point A to point B faster, and using less fuel in the process.

Reduce Operation Expenses

GPS systems do more than just track your fleet’s location; these systems provide you with raw data on how efficiently each truck driver operates their vehicle. They monitor the engine status of each truck, tire pressure, and other necessary details. You can also keep track of the maintenance each truck needs before it turns into an issue, which can prevent a frustrating, time-consuming, expensive breakdown from happening. Overall, GPS systems can reduce downtime, which (you guessed it) will save you money.

Reduce Insurance Bills

Insurance companies like vehicles with GPS devices on them. The more protection you give your fleet, the less your insurance company is going to worry about your vehicles. You can even receive discounts on your premiums, simply by using GPS systems in your fleet.

Micromanage Your Fleet’s Resources in Real Time

You may not be able to drive every truck yourself…but you will have a wealth of data in your hands to make sure things run smoothly. You can use the data to plan where your resources are needed and when they’ll arrive. Truck GPS systems also deter vehicle theft. Knowing where the thief is trying to go can increase the chances that he/she will get caught and better ensure recovery of your assets.

A Happy Customer Is a Returning Customer

The world runs on a clock. Everyone expects business partners to hold up their end of the bargain in a timely fashion. Being able to answer your customers’ questions with accuracy and certainty is a sign of stability, control, and dependability. You may not be able to make your truck get there faster, but you can absolutely keep your customer in the loop.

Reduction in Paperwork

Having less paperwork to keep track of and fill out will improve efficiency in every way. There’s less chance of clerical errors appearing and less time spent digging around for the data you need. Automatically tracking your fleet with GPS systems gives you more time to solve the important problems and reduces the amount of time spent sorting through file cabinets.

Automating your data collection is the biggest plus to using GPS systems. With it, you have all the information you need at your fingertips. Use that data to improve the logistical system you oversee and your company’s overall performance.

 

Sims photo

Sam Sims, APR, has been a member of the US Fleet Tracking team since 2009, stepping into the role as full-time Director of Public Relations and Marketing just one year later. Sims’ primary role focuses on helping US Fleet Tracking achieve their objectives by creating and fostering communication between the brand and its target markets.

 

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

About One-Off Sound-Off

Welcome to "One-Off Sound-Off," a blog page devoted to guest commentary on all things supply chain. This is a space where industry leaders can share their opinions and expertise with the logistics and supply chain community. If you have an article or commentary you'd like to share, please consider sending a guest blog proposal to feedback@dcvelocity.com.



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