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How Infrastructure Deficits Affect Supply Chains

By Contributing Author | 10/08/2018 | 7:34 PM

By Avery Phillips

 

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Your supply chain is only as good as each moving piece. If one link in the chain is broken, your company could lose thousands of dollars in revenue quickly before the bleeding stops. Budget constraints are often the cause and also the solution to supply chain deficits.

Most supply chains across the U.S. rely on government-run and maintained assets such as freeways, shipping ports, and railways. The problem is that you have no control over the upkeep of these assets, and if dangerous bridges or unsafe highways prevent drivers from reaching their destinations, you lose money. Reports all over the internet complain of truck drivers who refuse to drive through Chicago and New York because of deteriorating highways unsafe for big rigs.

All across America, city budgets are misused and underfunded, with supply chain assets being a low priority on the totem pole. Unlike the Port of Los Angeles that has been modernized and updated to meet consumer needs, most ports around the country have decaying bridges and equipment that need to be updated or replaced to accommodate larger cargo freight vessels. All of this adds to the complexity of your supply chain.

The Budget Solution to Supply Chain Deficits

With government offices changing hands like a game of musical chairs, supply chain infrastructure often gets lost in the mix. Focuses on technology, new road construction, and social impact initiatives take center stage and our highways, ports, and air freight transports all suffer. As they deteriorate further, the repair costs skyrocket —  so when budget talks resume, the issue is again delayed.

It will cost about $189 billion to fix the infrastructure deficits across the country. The U.S. Department of Transportation admits that a long-term solution has yet to be proposed and approved. Even more alarming is The American Society of Civil Engineers (ASCE) gave America’s infrastructure a D+ in their most recent evaluation.

The U.S. government wastes billions on unnecessary technology, social security tracking for deceased Americans, credit card abuse, unused airline tickets, and Medicare costs. Approximately $25 billion would be available to fix America's infrastructure and improve highways and ports if the budget were adjusted to use these wasted funds. Not to mention the secondary benefits of saving costs associated with accidents and liability claims when these deficits cause injury or death.

What Can Be Done to Fix the Problem

Current funding for infrastructure comes from taxes and fossil fuels, and this worked well up to a point. However, with emerging technologies and increased use, a better solution is needed. One proposed solution is to fund infrastructure maintenance with user fees, per vehicle, per mile and pass on the cost to the beneficiaries of those improved road conditions. Another helpful option would be to force large trucks to use managed lanes combined with intelligent transportation systems (ITS) to reduce congestion and improve tracking efficiency of supply chain vehicles.

CED.org offered up this interesting solution: the government should allow privately-funded vendors to repair and maintain highways and ports. State agencies could then focus on new construction for roads and bridges and reduce their labor force to save money. The money saved could be funneled into management positions to oversee the private contractors.

A lot of infrastructure problems fall under state-level budgets, so a more consolidated approach to the issue as a nationwide transportation system is needed. First, a collaboration between government, third-party vendors, state highway planners, and federal agencies is a must. A combined approach would start the process moving forward to fix these issues that are not going away but only getting worse as time passes.




Avery-Phillips-bioAvery T. Phillips is a freelance human being with too much to say. She loves nature and examining human interactions with the world. Comment or tweet her @a_taylorian with any questions or suggestions.

Lead acid batteries look poised to keep the electric lift trucks coming

By Contributing Author | 09/28/2018 | 6:32 AM

By Harold Vanasse, Senior Director of Marketing, Motive Power Americas for EnerSys

 

Don’t look now, but the move from Internal Combustion (IC) lift trucks to electric lift trucks continues for the material handling industry. Maybe you’ve heard promising reports about facilities switching from IC to battery-powered machines and saving money. You may not have heard that market analysts also see a brighter, “greener” future ahead for electric lift truck fleets. Navigant Research predicts electric forklift growth through 2020. Technavio expects overall market growth for forklift batteries to grow at nearly 9% from 2018-2022.

Of course, it’s currently about 50% cheaper to power and move an electric forklift vs. an IC forklift, so the rise of electric forklifts isn’t really a surprise. What some do find surprising is that the switch from IC to electric forklifts doesn’t (yet) involve emerging energy-efficient battery technologies like Lithium ion or Hydrogen fuel cells. Instead, lead acid batteries are leading the charge across warehouses and Distribution Centers (DCs) – and they’re already a much greener option than you might think.

99% of all lead acid battery materials are RECYCLED

According to the Battery Council International, more than 99 percent of all battery lead, plastic and electrolytes is recycled. In fact, lead batteries are something of an unsung environmental success story, as they are the most recycled product in the United States1. Look how they compare to products that typically come to mind when one thinks recycling:

Product                                              Percentage of materials recycled2

Lead-acid batteries                            99%

Corrugated Boxes                               92%

Steel Cans                                          71%

Newspapers/Mechanical Papers          71%

Major Appliances                                62%

Aluminum Cans                                  55%

Mixed Paper                                       44%

Tires                                                   40%

Selected Consumer Electronics            40%

Most new lead acid batteries contain 60 to 80 percent recycled lead and plastic3, both of which are reclaimed from spent batteries at strictly regulated recycling facilities. Roughly speaking, here’s how lead acid battery recycling breaks down by component materials:

Plastic

Plastic battery covers and cases are crushed into plastic pellets, which are then used to manufacture new cases and covers.

Lead

Battery grids, posts and terminals are melted down, producing lead ingots and lead oxide. Recycled lead is used to make new battery grids, while recovered lead oxide is used in new battery manufacturing.

Electrolyte

Sodium sulfate crystals are separated from used electrolyte (diluted sulfuric acid) and can be used to manufacture textiles, glass and more. Neutralized electrolyte can be reclaimed and reused for new battery manufacturing, or otherwise safely managed.

It’s a closed-loop lifecycle that can continue indefinitely. The millions of lead-acid batteries now starting vehicles, or powering industrial applications, have been, and can continue to be, recycled many times. It makes lead acid batteries an inherently “green” solution in terms of saving money and resources.

About Harold Vanasse

Harold Vanasse is Senior Director of Marketing, Motive Power Americas for EnerSys, the global leader in stored energy solutions for industrial applications. While serving in a variety of roles over the past 20+ years, Vanasse has been influential in bringing innovative solutions to the material handling industry.

 

1https://batterycouncil.org/page/RecylingStudy, published in 2017; originally from Advancing Sustainable Materials Management; 2014 Fact Sheet, Environmental Protection Agency, Nov. 2016

2Advancing Sustainable Materials Management; 2015 Fact Sheet, Environmental Protection Agency, published July 2018, https://www.epa.gov/sites/production/files/2018-07/documents/2015_smm_msw_factsheet_07242018_fnl_508_002.pdf

3https://www.epa.gov/smm, via http://large.stanford.edu/publications/coal/references/epa/, via http://large.stanford.edu/publications/coal/references/epa/ http://large.stanford.edu/publications/coal/references/epa/

Automatic Dimensioning: A Game Changer across the Supply Chain

By Contributing Author | 09/24/2018 | 6:37 AM

By Justine Clark, Transportation & Logistics Marketing Manager, Europe, Honeywell Safety and Productivity Solutions

 

Today, the most visible impact of e-commerce has been the need for efficient delivery of more packages in increasingly varied shapes, sizes and weights. This trend has been one of the key drivers behind the industry’s almost universal adoption of dimensional (DIM) weight-based pricing in recent years. The impact of this fundamental transformation has been felt across the supply chain and especially at the ‘first mile’, where speed and accuracy have become the industry’s mantras. As more parcel companies and warehouses are looking toward space optimization and more economies of scale, this is where automatic dimensioning technology can be a game changer. 

Traditionally, the freight cost of a parcel has been determined solely on actual weight, however DIM weight means that the cubic size of the parcel becomes part of the equation. This approach has been the norm in air freight for many years, but it wasn’t until 2013 that - with more and lighter packages in circulation than ever before - it started penetrating the ground transport space. Since then, virtually all major parcel carriers worldwide have adopted DIM weight, seizing the opportunity to improve their profitability. In fact, the global parcels market grew from just over US$310bn in 2016 to almost US$350bn in 2017 [1].

At the first mile of the supply chain, however, many shippers and warehouses have found themselves carrying the cost of this exponential growth. Over the past five years, the price of postage has increased by an estimated 33 percent [2]while warehousing operations have become more complex and costly.   

One obvious reason for this trend is that not only do shipping companies and warehouses need to process growing numbers of parcels of different sizes and shapes; they also need to measure them, generally relying on tape measures. Bearing in mind that, on average, 10–15 seconds are needed to measure each package manually, the consequences can be far reaching and impact supply chain productivity and accuracy.

As shoppers turn to e-commerce and omnichannel offerings, the lines between online and ‘brick and mortar’ retailers and logistics are blurring, with shops operating as mini distribution centers and shipping companies delivering directly to customers. Clearly, slower operations – which ultimately mean slower deliveries – can negatively affect the customer experience, which is now seen as a business priority by the vast majority (67 percent) of supply chain professionals [3]. A retailer’s reputation and revenues could suffer as a result.

Another challenge that comes with manual measurement is ensuring accuracy. Inaccurate volume measurements mean that shipping companies and warehouses may pay carriers more than necessary, potentially loosing revenue. They can also have a negative impact on customer experience, as customers are not charged the correct amount.

Manual processes can also be detrimental to operational efficiency as, without proper measurements in place, it is virtually impossible to accurately plan for how many and what size vehicles are needed to move packages from parcel locations to hubs. In addition, with the huge increase in parcels and cartons shipped, carriers realize that they are exceeding their space constraints first before exceeding weight constraints.  As today it iscostlier to buy or rent warehouse space, companies are forced to maximize their current space.

This is where automatic dimensioning comes in.

Today, there are solutions available on the market that deploy 3D depth-sensing technology to measure the three dimensions of parcels of any shape and size instantly and with extreme precision. Some of these solutions are so advanced, that they can calculate the overall dimensions of a package in less than a second and to within 5 mm (0.2 in) accuracy.

One of the clear benefits of such auto-dimensioning technology is that, with the correct length, width and height information on hand, shippers and warehouses are able to pay carriers and charge customers the correct amount. It also helps reduce the time and costs carriers incur when having to retroactively charge shippers for incorrect measurements. This avoids revenue losses, while strengthening the relationship between shippers, carriers and customers.

Automatic dimensioning can also have a significant impact on productivity. With immediate measurement calculations, around 15 seconds per package can be saved, which can greatly increase the overall worker productivity at a distribution center. Potentially, a shipping company could save enough time to handle 5,700 more parcels over 24 hours.

These dimensioning solutions, when used in warehouses,parcel shops and shipping drop points, can result in higher customer satisfaction for shoppers. Queue times can be shortened as the store clerk or shopper doesn’t have to spend extra time manually measuring a parcel. As an added benefit, the automatic dimensioning system can capture an image of the parcel before it is shipped in order to verify the condition in case of a damage claim.

Finally, with automatically-calculated parcel dimensions on hand, shippers and warehouses can accurately estimate the correct number of vehicles and space per vehicle that is needed to transport packages from drop off locations to hubs. This improves the distribution center’s overall efficiency, helps to cut costs and reduces the environmental impact of inefficient shipments.

These are just some examples of how automatic dimensioning can transform the parcel shipping industry and have a positive impact in distribution centers and warehouses. With e-commerce continuing to grow [4], it is clear that this technology is here to stay. Expected to grow at a compound annual growth rate (CAGR) of 15 percent, automatic dimensioning is already one of the key drivers behind higher levels of productivity and accuracy across the entire supply chain.   

 

 

HON_Justine Clark 2017Justine Clark is the Industry Marketing Manager, Transport and Logistics, Europe for Honeywell Safety and Productivity Solutions. In her role, she is focused on identifying market trends and ways for mobility and data capturetechnology to solve current and future customer needs. An experienced marketer, Justine previously held various marketing positions at DHL Supply Chain.

 

References

  1. apex-insight.com/global-parcel-delivery-market-2018
  2. http://www.mhlnews.com/transportation-distribution/dimensional-weight-pricing-problem-or-solution
  3. https://www.getconvey.com/wp-content/uploads/2018/03/EfTransport-Convey-Whitepaper-FINAL.pdf
  4. https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/

 

 

How ELDs Could Give You a Competitive Advantage

By Contributing Author | 09/20/2018 | 6:19 AM

By Will Salter, CEO, Paragon Software Systems

What if the villain of the ELD Mandate story turned out to be a hero?

Like Severus Snape in Harry Potter and the Deathly Hallows, ELDs may well be demonized unfairly. Sure, the zero-tolerance enforcement of drivers’ Hours of Service limitations is widely recognized as removing truck capacity from the market. Installing ELDs takes time and money.

But ELDs could actually turn out to be a surprising force for good. The trick for turning bad to good in this story is to mine the rich data from ELDs and use that power to create unprecedented levels of efficiencies in truck operations.  

Already, full enforcement of the ELD Mandate has brought some unwelcome surprises.  Among these are reports of transit times increasing, as truckers over-estimate the hours needed to complete a given run, in order to avoid Hours of Service (HoS) violations.

In other words, fears of failing to accurately calculate the amount of time needed to complete a delivery are driving greater inefficiencies into freight operations.

Oh great, more inefficiencies

Freight delivery by truck can be a notoriously inefficient business. According to the National Private Truck Council, more than a quarter of US trucks are driving around empty. Even when they're not empty, truck trailers are 36% under-utilized, according to Department of Transport statistics quoted by Homayoun Taherian of Cnergistics.

With the ever-encroaching capacity crunch and driver shortage already hitting hard, the industry can ill afford to let the villain of inefficiency take even greater hold.

The good news is that what may seem to be a force of evil can actually turn out to be a hero. ELDs, by their nature, provide reliably accurate data on truck-driving activities -- including hours driven, idling time and slow traffic. When that data is put to good use, it not only prevents these new inefficiencies creeping in; it reduces other, existing, inefficiencies in the system.

In fact, ELDs – or rather, smart use of them – could end up saving fleet operators so much time and money, they could actually generate a competitive advantage as compelling as catching the Golden Snitch in a game of Quidditch.

Here’s how.

Big data, big benefits

More, richer data is good, but you need help to extract value from it.Routing and scheduling software is hungry for real-life data about road conditions, habitual delays at customer sites and other issues that tend to cast a bad spell on any route plan, and ELDs have plenty of data for the taking. In fact, implementing advance routing and scheduling software that can make the most of this new flood of ELD data can introduce across-the-board savings of 10-30 percent into your freight operations.

Feeding ELD data into routing and scheduling automation software means you can create transport plans that are based on true availability for all of your drivers. This removes the need to manually manipulate the data to ensure HoS restrictions are adhered to.

The drivers’ data entry is fully automated, saving time and eliminating data entry errors while still protecting his or her privacy. Because the software crunches that information to make the most of it, you end up with increasingly accurate estimates of how long a drop will actually take.

For example, you might have planned for a 20-minute stop at a delivery location, but your driver’s ELD tells you the stop is consistently taking 90 minutes. Feeding that data back into future plans improves the routing, plain and simple. The same goes for identifying patterns in idling time, slow traffic and delays. Or, where a driver might typically be using less than the maximum HoS on a particular route, the routing plan will automatically add a delivery leg, or move the driver to another route that maximizes use of the allowance. This is a powerful way to utilize all of your assets to the full. Driver hours are limited; trucks can operate 24 hours a day.

Helps keep drivers happier, too

As an additional benefit, with more accurate route plans, you can push drivers’ hours on the road to the absolute maximum, confident they won’t get stranded with a load at the end of their ten- or 11-hour shift. That means you’ll be maximizing each driver’s earning potential within the HoS limits while helping them avoid fines – an important factor in retaining them.

Clearly every ELD device is different, but companies that have invested in systems that collect HoS data as well as information such as loading time and fuel usage will gain near-magical benefits. This includes the ability to record actual route execution and compare that with the routing plan, to look for and address anomalies.

Driver wages are high, the cost of diesel is going through the roof, fleet operators face a far more competitive market, with more goods hauled and more demand for vehicles than ever. There’s a hell of a lot of competitive pressure out there to make the most of your freight-hauling resources. Villainous as they may appear, ELDs, in conjunction with routing and scheduling software, could turn out to be the Severus Snape who is secretly acting in a beneficial role, helping ensure precious driver resources don’t go to waste.

 

WillSalterWill Salter is CEO of Paragon Software Systems, which offers routìng and scheduling software to companies operating delivery fleets in over 60 countries. Since taking on the role of CEO in 2002, Will has remained focused on the transportation industry’s need to squeeze the maximum value out of assets and resources. He was named a Provider Pro to Know by Supply & Demand Chain Executive magazine in 2017.

 

The 10 Most Common Reasons New Freight Brokers Aren’t Successful

By Contributing Author | 09/18/2018 | 6:25 AM

By Eric Weisbrot, chief marketing officer, JW Surety Bonds

 

Starting a new business is exciting for many, as it lays the groundwork for creating opportunities that are not readily available in the normal nine-to-five grind. That excitement extends to those wishing to start a business in the transportation and logistics industry, particularly because of the high growth rate in the marketplace. Licensed freight brokers have a significant chance of making a name for themselves in the industry as experts predict an increase in the demand for intermediaries to help keep up with the shipping rush. However, just because the opportunity for successful freight brokerage businesses is ripe does not mean everyone who tries will succeed.

Being a successful freight broker from the start requires business know-how as well as specific insight into the industry as a whole. Here are the top 10 reasons new freight brokers miss the mark, and how prospects in the market can set the stage for success.

Not Allocating Enough Capital

Nearly all new businesses require some amount of capital on hand to open the doors, even when the business operates mostly through digital communication and phone calls. Freight brokerage businesses do not have steep requirements for getting started from a financial perspective, but some startup costs must be considered. Freight brokers need to have enough set aside for registering a new business, getting the right equipment and technology tools to manage workflow, and securing a bond, insurance, and cash reserves. Those who fail to plan for these necessary expenses cannot last long in the freight brokerage business.

Misunderstanding Business Requirements

Being a freight broker is appealing to many because it does not require extensive resources or knowledge. However, having a legitimate freight broker business does have specific business requirements that cannot be overlooked. Some freight brokers new to the industry bypass the licensing mandates, either on a state or federal level, while others completely overlook the need to get a freight broker bond. Both of these aspects of the business are necessary components to operate legally, and successful freight brokers follow these rules closely.

Ignoring the Importance of Industry Experience

Having a few years of experience in transportation and logistics goes a long way as a freight broker. Some individuals see the opportunity in the market and assume starting a freight brokerage is as simple as acquiring a leads list, a laptop, and a reliable phone. However, successful freight brokers need experience in the industry to thrive for the long term. Experience can be garnered in several different areas, including trucking, business management, and logistics, but the bottom line is that some level of understanding of the market is needed.

Not Making the Right Connections

Successful freight brokers take time to cultivate strong business relationships, many of which originate from their experience in the industry. Those who are newer to the freight brokerage or transportation business may find it difficult to make these connections right away. However, participating in online forums, talking about opportunities and challenges with carriers and shippers, and being open to new business relationships with other freight brokerage firms is beneficial in overcoming this obstacle.

Avoiding the Tech Train

In transportation, technology is looked upon as either a helping hand or a barrier to overcome. New freight brokers who wish to be successful in launching their business need to embrace the right technology tools from the start. Several digital solutions for managing a freight brokerage business exist, as do technology platforms for business management needs like accounting and payroll. Implementing these resources is necessary in order to be successful over time.

Failing to Market

A significant aspect of operating a freight brokerage business is the ability to market services and solutions to the masses. According to the most recent data, there are more than 13,000 licensed freight brokers operating in the United States, meaning competition is high. New freight brokers should have strategies in place to market their business, whether that is through online, print, or other media outlets.

Leaving Prospects Hanging

Freight brokers who start out with immediate success may find themselves overwhelmed by the number of prospects asking for their help. One of the challenges in being a new, successful freight broker is implementing systems to manage lead flow over time. Fortunately, many lead-management tools are available that can help create a sustainable process for keeping in contact with prospects as they materialize.

Incorrect Pricing

It is often difficult for new freight brokers to set their rates correctly the first time. They either price their services too low and lose out on potential profits, or they create an unrealistic price that pushes them out of the running for new business. Staying up to date with industry trends in pricing and freight rates is beneficial in setting the right price initially and as the business grows.

Avoiding Additional Education

Freight brokers who lean too heavily on their industry experience or previous success may ultimately fail because they overlook the importance of ongoing training and education. Freight broker training courses exist at many colleges and universities around the country, as well as several online schools. Staying up to date on current operations procedures, shipping and carrier needs, and pricing and marketing tactics through freight broker training can make a substantial difference in success or failure as a broker.

Not Doing the Work

Finally, new freight brokers miss the mark in operating a successful, profitable business because they do not put in the time and effort needed. The brokerage business requires constant lead sourcing and follow-up, as well as staying on top of the progress of each job. Additionally, freight brokers need to put in the work of operating their business in line with state and federal regulations over time. Failing to exert the energy required to keep up with all the aspects of a brokerage business will lead to a less-than-successful business.

Avoiding these common mistakes as a new freight broker will help ensure your business stays operating successfully both now and in the future.

 

Eric WeisbrotEric Weisbrot is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry under several different roles within the company, he is also a contributing author to the surety bond blog.



We don’t hold the key to the next great supply chain innovation. Everybody does.

By Contributing Author | 08/13/2018 | 7:56 AM

By Kevin Heath, Senior Vice President and Chief Procurement Officer at Georgia-Pacific

 

Technology has had more impact on supply chain-related operations during the last 10 years than it has in nearly a century. The supply chain is evolving, spurred by data collected in our warehouses and factories through the Internet of Things, giving us deeper insights into the most detailed processes.

With technology, we can drive maximum efficiency in nearly all elements of manufacturing and fulfillment.  But to fully realize its potential – to find solutions to tomorrow’s problems today – we need to collaborate. 

The world’s supply chain requires radical reinvention, but we have a tendency to only look for solutions within our own teams. This approach worked when robotics and automated guided vehicles were still on the drawing board – a change to warehouse operations years down the road. That doesn’t work anymore.

Now, the supply chain is expected to organize, track and deliver goods faster than ever and with more accuracy, but often with fewer resources. The Fourth Industrial Revolution hums along, and if we don’t adapt to it, we’ll be left behind. We can’t do it alone. The tools to create our next great supply chain innovations are already here, they’re just dispersed throughout our industries.

Consider these three benefits of working together to address supply chain challenges:

1. Gaining a point of view outside your sector

The similarities between the behind-the-scenes operations of an airline and a restaurant might not be apparent at first. However, logistics play a key role in putting a plane on the runway and a chicken sandwich on your table.

Georgia-Pacific manages one of the nation’s largest supply chains, moving paper, pulp and building materials through an extensive network of manufacturing operations, warehouses and re-load facilities before they reach the store shelves.

An airline, a restaurant and a pulp and paper company have the same goal – deliver a better customer experience faster and cheaper – which lends itself to a collaborative effort. When companies across industries partner to address a supply chain challenge, they can get insights they wouldn’t typically get from internal work teams. One company might have mastered augmented reality in inventory picking, while another has successfully employed robotics for packing. When we share these ideas without fear of losing a competitive advantage, we drive a more efficient supply chain.

2. Condensing time-to-market

Using the ‘silo’ approach – assigning our own work teams to solve our individual supply chain challenges – could eventually result in ideas that positively impact our supply chain operations. However, market demands are forcing us to step up the pace. Warehouses and factories need answers now, not five years from now. We need innovations that can move past the conceptual phase and become publicly accessible quicker.

By taking a collaborative approach, we can prove that two heads are better than one. If one partner has already figured out how to address a development roadblock, we can move through the ideation process faster, effectively determine what’s not feasible and focus our efforts on solutions that could be deployed in a much shorter time frame. 

3. Getting everyone involved

Teamwork has always been a crucial ingredient at successful companies. As workplace structures become less rigid – and as a new generation of supply chain professionals who are accustomed to working collaboratively rises through the ranks – encouraging team problem-solving can better prepare your organization for addressing tomorrow’s challenges.

When we come together across industries to develop new innovations, we set an example for teamwork. Such projects also give team members a chance to collaborate and network with their peers – from established companies and start-ups –as well as an opportunity to see how their contributions power the solution. It’s an opportunity to change company culture for the better.

The future of supply chain is now

Supply chain management is increasingly important in today’s businesses, but it’s also increasingly complicated. It’s time to lay to rest the idea we’re best served by going it alone. Collaboration on supply chain products across industries can lead to solutions we never would have considered, and it can bring those products to life faster.

So, leave your silos and start looking for the people and places that can help you think differently about your supply chain challenges.  You might find solutions where you’d least expect them. 

 

Kevin HeathKevin Heath joined the Georgia-Pacific leadership team in 2017 with his promotion to SVP, Chief Procurement Officer. Before that, he spent 12 years as Vice President of Strategic Sourcing & Procurement, Capital and MRO for the company. Prior to that, Kevin worked in several GP operations and held various roles including Engineering & Maintenance Business Leader. Kevin received his bachelor’s degree in Power Engineering Technology from Maine Maritime Academy, and his Master in Business Administration from the University of Washington.

How IoT Devices and Smart Sensors Are Helping Enable a New Era of Food Security

By Contributing Author | 08/10/2018 | 6:35 AM

By Mike Allen, Channel Manager – Eastern and Midwestern Regions at Advantech

 

The FAO states that one-third of all food produced each year is wasted. Lost or spoiled in subsequent stages throughout the supply chain—from storage to packing to transport and beyond—roughly 1.3 billion tons of food never reaches consumers.

Precise and constant refrigeration temperatures are critical when ensuring the safe delivery of perishable products such as produce, dairy and meat, as well as medicines. And while spoilage alone is an urgent problem in the global supply chain,insufficient temperature control can lead to more than waste; it can also create the perfect environment for the kinds of pathogens and micro-organisms that threaten public health, particularly when tainted products go undetected and are consumed by the general population. The CDC reports that foodborne illnesses affect 48 million people and result in some 120,000 hospitalizations and 3,000 deaths, with a total cost to the U.S. estimated at $77.7 billion annually,according to a new study calculated by Ohio State University consumer science professor Robert Scharff and published in the Journal of Food Protection.

With a sharp focus on sustainability, governments, researchers, retailers and enterprises are committed to improving processes by setting higher standards, increasing regulations and developing new technologies to reduce waste—and help the UN achieve a goal of “Zero Hunger” by 2030. In addition to new innovations being tested, such as the use of compressed natural gas in cold chain system tractors and the swapping of Freon for ammonia as a storage refrigerant, the implementation of advanced sensor technology is surging ahead in the cold chain system. Particularly with the U.S. Food and Drug Administration's (FDA) Food Safety Modernization Act (FSMA), which regulates the sanitary transport of food, shippers and carriers, smart sensors hold great promise to reduce food spoilage and mitigate losses while increasing profitability for all stakeholders.

Pharmaceutical and consumer goods companies, which face the significant challenge ofdifferent temperature requirements and disparate optimal ranges for multiple products, are increasingly utilizing sensors and Internet of Things (IoT) technology not only to monitor temperatures in cold chain in real time, but also to assist in tracking shipments and detecting equipment and vehicle malfunctions, among other things. In fact, in a 2017 survey from Deloitte and MHI, supply chain industry leaders identified sensors as one technology enabling an “always-on supply chain.” Of the 900 respondents, 43 percent indicated their companies relied on sensor technologies embedded in devices to track in-transit cargo location, monitor carrier performance, identify vulnerabilities for theft or tampering and monitor shipment temperature, shock and vibration.

The research firm Gartner predicts 20 billion IoT devices will be in use by 2020, with mass adoption of sensors encouraged not only by the proliferation of these devices, but also several other significant factors including a sharp drop in price, low barrier to entry, ease of implementation and capabilities expanding to enable longer battery life, greater durability and more data storage. All of which reduce the financial risk for implementation while providing greater supply chain visibility. In addition, enterprises are developing more feature-rich sensors. Recognizing that stability is key to food security, cost-effective, end-to-end solutions in each sector of the supply chain—from port to warehouse to trucking to retail delivery—have been designed to support the entire cold chain ecosystem. From in-vehicle computing boxes for logistics and fleet management to hand-held temperature readers and hand-held computers with long-range scanners that can be used with powered vehicle mount cradles, IoT devices and smart sensors are enabling a new era of cold chain intelligence. With a complete spectrum of embedded computing platforms and abundant domain know-how available, enterprises can do more than just ensure proper temperatures are maintained for the duration of food and perishables transport. They have the capacity to optimize and modernize warehouse design and retail monitoring—from remote locations as well as on premises—while ensuring that every product moves from the point of production to the point of purchase efficiently and with its integrity intact.

Better visibility across every inch and mile of the supply chain has the potential to drive growth for businesses while contributing to a healthier planet. Whether a company takes incremental steps toward digitization or moves full steam ahead to achieve a competitive advantage, the ultimate goal is to ensure a seamless supply chain process, with reliable insight into personnel, fleet, product and storage, as well as access to impeccable and accurate environmental control to ensure the highest quality. As the supply chain, cold storage and distribution industry moves into the future, and the market segments that rely on cold chain services become increasingly diverse and geographically spread, new technologies that strengthen every link will continue to emerge. With an economic potential of the global cold chain market alone predicted to reach $234.49 billion in 2020, stability is a necessity to achieving success—and ensuring the wellbeing of nine billion human beings.

 

Mike AllenMike Allen brings over 25 years of direct sales, sales management and channel management experience in the automated identification and data collection industry. He understands the technology and hardware capabilities and more importantly, how to address the pain points of various industries and vertical applications. He has experience in various industry sectors including transportation/logistics, automotive, oil and gas, utilities, manufacturing, warehousing/distribution, consumer goods and retail. Mike began his career in the Automated Information and Data Capture (AIDC) space managing key accounts and growing specific geographic territories for various manufacturers and providers of automated data capture equipment and solutions. Before joining Advantech, Mike worked with a provider of mobile device analytics to OEM’s and to managed services providers. Prior to that he worked with a global consulting and systems integration company where he was the lead for mobile data collection and strategy for major engagements globally.

Improving the Retail Supply Chain With Reusables

By Contributing Author | 08/08/2018 | 6:59 AM

By Ray Robins, national account manager, ORBIS

ORBIS blog
 

Are you tirelessly working to find a solution to optimize your retail supply chain? If so, you’re not alone. Retailers everywhere are searching for the best ways to serve consumers faster, safer and more cost-effectively. And as new solutions are considered, packaging shouldn’t be overlooked.

The rise of e-commerce and retail omnichannel is changing how retailers are approaching and thinking about consumer satisfaction. Fulfillment centers are now open 24/7, order demands are evolving with omnichannel, and errors and lag time are less tolerated. To help solve these challenges, supply chains are introducing automation.

In fact, many new fulfillment centers are almost completely automated to accommodate late hours, reduce errors, meet order quantity and introduce new capabilities. With added automation, supply chains need standardized packaging that delivers repeatable performance. For many retailers, this is the missing link to an efficient and effective retail supply chain.

Reusable, standardized packaging — such as totes, bulk containers and pallets — can work directly with automated systems in three key ways to better move and pick products:

1. Pick orders efficiently

Supply chain totes add unimaginable value to automated systems for their versatility and functionality. There are a wide range of reusable totes — attached lid, nest-only, stack-and-nest, and those that include dividers or feature hopper fronts — that align with different automated systems.

These reusable plastic totes are primarily used to pick online orders in fulfillment centers. Totes compatible with dividers, for example, are seeing an increase in usage. The use of dividers allows there to be multiple SKUs maintained in a single tote, increasing density within the network. 

Because each automated system is different, a one-size-fits-all approach is outdated. Totes should reflect the specific requirements of each system for a fully optimized supply chain. A supplier with custom capabilities can design, engineer and manufacturer reusable packaging that meets the precise needs of an automated system, including dimensions, materials and features.

2.Keep systems moving

As convenient as automated systems are, shutdowns are possible when met with unideal conditions. However, plastic reusable packaging features consistent dimensions and a smooth structure to fit properly with equipment, unlike warped and inconsistent packaging. It also is free from dust that can cause glitches and slowdowns once accumulated on equipment. Additionally, the sleek exterior allows automated label readers to easily decipher codes.

3. Minimize product loss

While moving along the supply chain, packaging can face harsh conditions. Clashes with other packaging and unpredicted equipment interactions are possible. Plastic reusable packaging is manufactured for more durable product protection, keeping goods safe. Also, some reusable plastic packaging suppliers offer identification options, so packaging can be tracked and accounted for at all times.

The good news is that reusable packaging’s benefits pertain to all parts of the supply chain. Picking, fulfilling, distributing and merchandising all require efficient processes. Like automation, mobile options can help move product faster and safer at retail. Innovative distribution pallets, for example, efficiently cube out in trucks, can be moved to the retail aisle without down-stacking — and with fewer touches — and help with omnichannel orders.

Retailers today are striving to be efficient and consumer-experience role models. Material handling decisions are important to achieving those goals throughout the retail supply chain, so don’t let packaging slow you down. Find the best solution for your automated system with a supplier that can help by answering questions and solving challenges along the way.

Is a Tightened Labor Market Driving Up Your Operational Costs? Consider Exploring Warehouse Incentive Programs to Increase Retention

By Contributing Author | 07/18/2018 | 6:02 AM

By Tom Stretar, Vice President and Labor Management Practice Leader, enVista

 

The speed of today’s supply chains, coupled with macro behaviors, are causing organizations to seriously consider incentive compensation as part of their overall associate compensation strategies. The Bureau of Labor Statistics recently reported that warehousing jobs experienced year-over-year uptick in the number of quits, making it one of the top industries having to cope and plan for unemployment. Just last year, there were 25,000 more quits in the industry itself [1], and some companies are even having to retrain 50 plus percent of their workforce to lessen the amount of quits.

We are seeing three key contributing issues to this trend.

Companies in large metropolitan cities are appearing in the lower percentiles of wage rates.

Bigger metropolitan areas and some of the tightest labor markets, such as Seattle, San Francisco and Minneapolis, are currently building in mandatory minimum wage increases to payroll, with amounts being adjusted based on employee headcount. These much-anticipated improvements in incomes are expected to take effect by 2022 and 2024.

By raising wages, cities are hoping to attract employees, because let’s face it, with an unemployment level that is the lowest it’s been in many years, it’s hard to motivate people to look for work other than presenting a decent number attached to the dollar sign.

The Amazon effect is causing a need for flexible workforces, including temporary and seasonal associates.

The Amazon effect is comprised of two parts. Yes, it offers employment opportunities, but at what cost? Amazon has long been known for its ability to attract employees from some of today’s largest and longest-standing retail operations.

As one of the few retailers that can afford to cut overhead costs, offer savings to customers, operate same day shipping all while decreasing profit margins, it’s a recipe for traditional retail disruption.  

Traditional retailers can’t afford to keep up with Amazon’s operations and what it’s able to pay and promise its employees in wages and growth potential. This is exactly what contributes to the key stakeholder’s decision to either cut hours and reduce payroll or even completely close the doors on brick-and-mortar and other online retail operations all together, giving into the “Amazon effect.”

Increase in omnichannel operations

Increased omni-channel capabilities mean increased complexity and activity. The window of order orchestration is getting shorter and shorter to meet customer expectations and provide the positive buying experiences customers expect. Combined with holiday shipping and continued e-commerce growth, the increase in need for labor programs will continue to be a strategic issue that logistics and human capital professionals will need to address as part of the recruitment, retention, and compensation programs of the future to compete.

In conclusion, whether you’re finding or retaining warehouse workers, the costs add up from departure costs, to additional advertising and recruiting and new training once onboard. Make it easier on your entire workforce and consider a warehouse incentive program. The programs have been proven to be a popular option for improving productivity and retention by as much at 15 to 30 percent, with labor expense ranging from 20 to 70 percent of a company’s operational costs [2], every company should avoid absorbing those costs by any means necessary.

 

Tom Stretar_headshotTom Stretar is Vice President and Labor Management Practice Leader at enVista, bringing more than 20 years of supply chain consulting experience in marketing, sales and implementation of complex supply chain improvement programs. Tom joined the enVista team in June 2009, following more than 16 years of service at JDA (formerly RedPrairie Corporation). During Tom’s career, he has personally developed or managed the delivery of more than 250 labor performance management programs across North America and Australia and is Green Belt certified in Lean Six Sigma. 

 

 

 

 

[1] Economic News Release: Job Openings and Labor Turnover, Bureau of Labor Statistics, DECEMBER 2017 https://www.bls.gov/news.release/jolts.nr0.htm

[2] Economic News Release: Employer Costs for Employee Compensation, Bureau of Labor Statistics, September 2017 https://www.bls.gov/news.release/ecec.nr0.htm

U.S. Infrastructure Needs the Tools of Logistics

By Contributing Author | 07/16/2018 | 6:30 AM

By Dr. John Brown Miller, past professor of civil engineering at MIT, chair of the ABA Section of Public Contract Law, and is an expert on infrastructure procurement.

 

In 1987, Hong Kong burst onto the world’s infrastructure stage with a series of 30-35 year build/operate (life cycle) projects for tunnels, rail, water, and ports. When Hong Kong rejoined China in 1997, much of the colony’s core assets had been rebuilt, with dramatic life cycle cost savings and higher levels of service. Procurement contracts put the risks of producing and operating these facilities on the private sector provider. For many projects in the program, Hong Kong also put revenue risk on the private sector provider (and its lenders and investors).[1] 

The results shattered American infrastructure dogma in three ways:

  • On-time, on-budget results are more likely when private sector capital is at risk;
  • Competitive life-cycle procurement attracts new technologies and methods that produce savings of 30-40%; and
  • Governments should avoid committing massive amounts of funds on large, complex projects without allowing the private sector to independently verify (through competition) that such projects make technical and economic (life-cycle) sense.

Hong Kong ran a Chinese bull through America’s infrastructure shop. The contrasts were stark. Here, publicly funded projects are routinely late and over budget—yet, only taxpayer dollars are at risk. Here, federal policy requires separate, full design before a separate competition for construction—while new technologies and methods are pushed away. In the United States, designers have no contractual obligation to the cost of operation—even though that’s when 90% of life-cycle costs are incurred. The result: Large, complex projects—like California’s High-Speed Rail—are not verified through competition in the private sector. Private sector teams do not independently verify that the large public projects make technical and/or economic sense.

Since Hong Kong’s success, the proper role of American government in public infrastructure is contested. The Life Cycle Cost Influence Curve below summarizes lessons learned from thirty (30) years’ experience with competitive life cycle delivery.[2]

First, early thinking about of Life Cycle Cost and long-term Levels of Service has a profound impact on outcomes. The blue line tracks Level of Influence on Life Cycle Cost over Time. Infrastructure owners have one opportunity, beforeDesign begins, to exert Very High Influenceat a Very Low Cost. The impact of this influence is shown as the difference (35% at the end of the cycle) between the red and green lines that compare High and Low Range Life Cycle Cost. Costs between the red and green lines are Avoidable. These funds need not be spent if the project is properly configured and controlled. Costs below the green line are Unavoidable – and will be spent once construction begins. Then, it is very hard to influence life cycle costs.

 

Dr. Miller chart1

Second, the quality of the Configuration process in the first few months determines the Life Cycle Cost Curve. Poor Configuration will produce Avoidable Costs that are three (3) times the total cost of initial Design and Construction. Pennies spent during Configuration, and nickels spent during design save dollars over the life cycle. There is always room for better design, better equipment, and high-quality materials, once life cycle performance is in view.

Third, the range of outcomes—between good and poor stewardship—is surprising. This is where the tools of Enterprise Risk Management[3](ERM)—“open system logistics”—are urgently needed to help public owners deliver high levels of infrastructure service at low life-cycle cost. In Hong Kong, teams used logistics to plan across the life cycle. Logistics can supply the tools necessary for Owners to use asset condition, as well as revenue and expense history, to properly configure projects. Public owners need new tools to be in position to perform the right activities, at the right time, in the right place, at a competitively verified price.

 

Dr. John Brown Miller HeadshotDr. John B. Miller is a global expert on infrastructure with an eye on efficiency and value. He has a thirty-five year focus on bringing practical business, legislative, and contractual solutions to the world’s burgeoning public infrastructure needs.

He was a reporter on the American Bar Association’s 2007 Model Code for Public Infrastructure Procurement project (MCPIP), which provides “best practices” in procurement to America’s 90,000 state and local governments. The Code is designed to help officials, vendors, and contractors ensure integrity in infrastructure delivery and finance, while helping taxpayers receive real value for money. The competitive principles in the Code have been adopted by many hundreds of state and local jurisdictions. He has consulted for the United Nations on best procurement practices.

Dr. Miller offers a practical combination of good procurement practices with enterprise risk management (ERM) to produce unique opportunities for massive gains in value for money. This combination creates the flexibility governments, vendors, and contractors need to get effective action, at the right time, in the right place, at the right cost – across entire public infrastructure networks.

Dr. Miller was professor of construction management and civil and environmental engineering at MIT, writing two textbooks in the field of infrastructure delivery and finance. He and his clients have been involved in some of the largest public infrastructure projects/networks in the world. He is an elected fellow of the American Bar Association, its Section of Public Contract Law, and the American College of Construction Lawyers, in which he has served in leadership positions. He is a prolific writer in this space, with more than 100 scholarly articles and case studies, and numerous invited presentations in every corner of the world.

 

[1]Hong Kong’s success renewed interest in much older project delivery and finance practices. My MIT textbook, Principles of Public and Private Infrastructure Delivery, covers America’s 200-year experience with life cycle delivery and the Hong Kong experience in Chapters 3 and 5, respectively.

[2]The Life Cycle Cost Influence Curve is based on our research program at MIT’s Civil Engineering Department between 1995 and 2003. The Curve extends the work of Prof. Boyd Paulsen (on design and construction) by adding Operations, Maintenance, and Repair – to cover the entire Life Cycle.

[3]By ERM, I mean the processes and logic of ISO 31000_2009(EN) Risk management – Principles and guidelines. Risk management includes the coordination of activities that direct and control the effect of uncertainty on complex collections of facilities, equipment, and supplies, involving ongoing operations, multiple people and firms, over long periods of time. ERM is “open-system” logistics (or supply chain management).

The Retail Revolution Starts with a Revolutionized Supply Chain

By Contributing Author | 07/13/2018 | 8:00 AM

By Guy Courtin, VP Industry & Solution Strategy, Infor Retail

 

The industry-wide integration of smart technologies has drastically altered e-commerce. No longer is the online shopping experience limited to Safari or Chrome platforms. Now, AI-enabled products such as Alexa and Siri allow the consumer to browse and purchase goods, hands free. Welcome to the age of voice commerce.

Recent announcements show that voice-driven technology will soon become commonplace in a myriad of industries. Wireless speaker company Sonos recently partnered with Amazon to insert Alexa’s AI capabilities into its product. Apple TV embedded voice commands, via Siri, into its latest remote control capabilities, allowing users to scan Netflix or Hulu’s massive libraries with a simple ask. And the latest versions of cars have included voice recognition capabilities to play, stop, or skip a song, call a friend, and even find a better traffic route. While the market may seem saturated with AI and machine learning-driven products, the trend is just beginning.

Machine learning technologies, and specifically voice-recognition capabilities, have the ability to revolutionize industries. So, how will they alter the retail supply chain?

  • Mastering the game of product placement: A recent article fromHarvard Business Review discusses how voice-commanded digital assistants will affect product marketing, as this smart tech will likely recommend products from its own brand. Go ahead, ask Alexa to order paper plates and disposable cutlery for that upcoming family reunion. Amazon-branded instead of generic products will most likely end up on your doorstep. Similar to when businesses listed their organization’s title with “AAA” to increase visibility in the yellow pages, companies now need to ensure their AI engines work with digital assistants to be top of mind for user orders. As these orders become more complex – moving from “please order me carpet cleaner” to “how do I remove stains from my rug?” – a more strategic AI engine should recognize the ask and still promote its product for purchases. The power of a good AI engine will prove vital in getting better placements, as the role of digital assistants increases in importance for consumer buying behavior.
  • A more intelligent supply chain: The ability of smart technology to connect the dots between a customer’s spoken, open-ended question and an order will jump start the supply chain in new ways. A constant difficulty for supply chain professionals is identifying the point of demand – and this will only get harder as customer questions become less pointed, focusing less on the words themselves and more on the intention behind them. Oftentimes, the easiest point of demand to recognize is the transaction, which can set off the supply chain process. But, AI engines can classify intention as demand, starting the process much earlier. When the consumer asks the above question about rug stains, the supply chain can get started on gathering the potential products he or she may order: stain remover, rug protector, maybe even a new rug! The more that consumers rely on these digital assistants for everyday tasks, the more data the technology can gather – data that can be used to predict future behaviors and identify purchasing patterns.
  • It is all about the context:An enhanced and smart AI engine is especially vital when retailers take into account the context in which consumers purchase their products. Items cannot have simple and bare-bones descriptions as to their ingredients, materials, etc.; the more thorough and detailed the description the AI engine has access to, the better for ensuring each product is matched correctly to the consumer’s needs and past purchases. Consider the previous example for a rug cleaner: has this customer ordered a rug cleaner in the past, and if so, was it an organic solution, or the cheapest product available? Does the consumer need a specific rug solution, which likely would be higher priced? Should they be buying a rug protector in tandem with the cleansing solution, as this is a repeat purchase? Companies must use smart, machine learning technology to engage with the information surrounding the customer’s ask, especially as this sort of contextualized understanding becomes the norm in connecting the consumer with the product.
  • With great information comes great responsibility: Of course, as much as gathering this data benefits the supply chain and the consumer, it also places greater responsibility on companies to guard it. This is exemplified by the fact that the customer subconsciously submits data to the digital assistant, typically within the privacy of their own home. Data issues have been a hot topic lately, as companies such as Equifax and Facebook deal with security breaches of the customer data they have collected. When companies are consistently gathering user data, they are creating an environment easily targeted by outside forces. Companies need to be strategic in how they manage this information, and balance gathering data to contextualize orders with ensuring confidentiality. Once retailers identify the line that cannot be crossed, being transparent with consumers about how information is being used will be key to creating brand loyalty and building trust in the company-customer relationship.

Voice commerce is a critical step for retailers, as they continue to reduce friction for e customers. This road has been traveled before – order online and pick up in store, two-day shipping, and one-click shopping have all proven successful in making life easier for the consumer while increasing brand loyalty. Voice commerce is the obvious next step in the modern retail revolution. But, as we continue to leverage existing and new technologies to improve the shopping experience, we must respect the great power that brands are beginning to harness and ensure that it produces only positive results.   

 

Guy CourtinGuy Courtin is Vice President of Industry & Solution Strategy for Infor Retail and Fashion, a role in which he also drives thought leadership for the team. Guy has more than 15 years of experience in the high-tech industry, with expertise in the supply chain arena. Prior to Infor, he was a vice president and principal analyst at Constellation Research, covering how digital disruption was impacting supply chains. Previously, Guy was vice president of research for SCM World, where he spearheaded coverage of supply chain service providers.

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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