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Archives for June 2018

Five Trade Compliance Risks

By Contributing Author | 06/22/2018 | 12:39 PM

By Jeff Flanagan, Senior Solution Consultant, Precision Software

Obstacles are inherent when your business is involved in global trade. At or near the top of the list are international trade regulations, which are complex and dynamic, changing constantly as financial and political landscapes shift around the globe.

Compliance can be a heavy burden — sort of like hitching a few tons of iron ore onto every cross-border shipment your business makes. The worldwide tangle of laws, rules and guidelines is necessary for each country to protect its interests, but even accepting that regulations are inescapable doesn’t make logistics or supply chain management any easier.

With fines, sanctions and the loss of customers among the potential penalties for noncompliance, it’s beneficial to understand the risks associated with international shipping processes. Here are five key areas of risk to consider pertaining to global trade compliance.

1. Denied Party Lists

These are lists of companies, individuals or organizations that other parties cannot conduct business with, as determined by a U.S. agency or foreign government. Such lists exist because doing business with the denied party may be deemed a threat to national security, or the denied party may have a track record of corrupt business practices, etc. To reduce the risk of noncompliance in this area, check that your trading partners — potential and existing — are not on such lists. Be aware that these lists can change frequently, adding to the burden.

2. Documentation

Compliance in other areas can all be for naught if mistakes are made in what can be a voluminous amount of paperwork. Shipping documentation, export declarations and perhaps even product codes must meet the requirements of the country of your shipment’s destination. Being detained by customs won’t serve your bottom line or your reputation well, so do not ignore documentation details.

3. U.S. Authorities

There are certain conditions for which your shipment will be subject to U.S. trade law, regardless of your location. These include any transactions made in U.S. dollars, any transactions involving an individual from the U.S., and any businesses that bank in the U.S. Being in compliance in these circumstances means following U.S. regulations.

4. Hybrid Sanctions

In stark contrast to an outright ban against doing business in or with a specific country is determining whether you can conduct business with an entity in a country subject to hybrid sanctions. Some scope of certain commercial activities may be permitted, while others are not — making compliance a complex undertaking at best.

5. Supply Chains

If you have an international supply chain or customers, your global trading partners also must be in compliance with regulations in the countries where you do business. Their violations could result in penalties for your business even if your business isn’t fully responsible for the wrongdoing.

Compliance grows more challenging as global trading expands. Mitigating risk requires extensive research into worldwide regulations — which can tax your business’s resources — but having export controls in place to meet requirements is essential to avoid fines and penalties that ultimately would exact a higher toll on your business.

Automated international trade compliance software is an option that could save your business time and help you control costs. In part, this type of software uses available data to carry out functions such as screening for denied party list entities, checking documentation requirements for specific countries and other tasks.

 

Jeff Flanagan is Senior Solution Consultant for Precision Software, a trusted leader in global trade and transportation execution. He has been in the supply chain execution industry for 35 years in support, implementation, project management and sales consulting. 

Most ROI Calculators Are A Sham: 3 Red Flags To Look For

By Contributing Author | 06/20/2018 | 6:10 AM

By John Schriefer and Marjorie Loresch, Lucas Systems

Technology buyers should be skeptical of vendor ROI claims. The same goes for online ROI calculators that purport to show how a new solution can pay for itself in the time it takes to read this blog. Skepticism is warranted, but there is real value in tools that can help you realistically estimate how a given technology or solution can impact your operations and improve your financial results.

With that in mind, here are three red flags indicating that a vendor's "ROI calculator" is a sham.

1) Faulty Math

You'd be surprised how many ROI calculators out there equate percentage gains in productivity with percentage decreases in labor costs/requirements – for example, that a 15% increase in productivity results in a 15% reduction in labor costs. That’s just not correct.

Here's a simple way to check the math:

If you insert a 100% productivity gain into an accurate calculator, you should see a 50% decrease in labor costs (NOT a 100% decrease in labor). This makes sense, because essentially you're saying that your team will be able to do twice as much work in the same amount of time. If workers can do twice as much, you need half as many of them. It all adds up.

If you insert a 100% productivity gain into a faulty calculator, it may indicate that you will reduce 100% of your labor costs, which is obviously not right – you’re still going to need some people to pick products. Next, insert more than 100 for your productivity gain and your calculator will suggest that you will need negative labor hours (whatever that is!) to complete the same amount of work. Seems like a sweet deal, but it's literally too good to be true!

The error is less noticeable on smaller percentages, but it's still there, overstating the effect of productivity gains on your labor costs.

2) Overly Broad Savings Assumptions

Unfortunately, many ROI calculators suggest productivity or accuracy improvements without giving you a way to assess the range of benefits you would see in your operation. In some cases, they hard-code an expected outcome (e.g., future accuracy rate) into the calculator, assuming the result will be the same across all processes and operations.

In other cases, the calculator may give a wide range of possible improvement (e.g., 10-100% picking productivity gains) without providing context for what would cause you to fall on the high or low end of that range, or how exactly the technology will help you achieve those improvements.

A useful calculator will provide some guidance for you to estimate your improvements and allow you to adjust the input to the calculator to reflect your situation.

At the end of the day, a simple calculator will not be able to provide a detailed, operation-specific improvement estimate. That requires a much deeper dive into your process and current state. But some calculators do provide a good starting point for understanding where your gains will come from and how to make reasonable estimates of potential improvements.

3) Calculating ROI Without Cost

The definition of Return on Investment (ROI) is the amount of the return or net benefit of an investment relative to the investment cost. Although cost is a necessary input to a true ROI calculation, many vendors' "ROI calculators" don't mention cost at all.

It’s not uncommon for providers of complex technology solutions not to include solution costs on their website, so it’s not surprising that many so-called ROI calculators fail to include solution cost. But it’s simply misleading to call a calculator without cost inputs an ROI Calculator. Without cost, what you are really calculating is potential benefit or savings – assuming the math is right and you can adjust the inputs based on your circumstances.

A Final Word

Estimating benefits is a key step in making the case for any new technology investment, so tools that can help you do that have real value. Simple online savings calculators can get you started, especially if they illuminate specific ways a given solution or technology will impact your results. Armed with credible savings estimates, you can make a decision whether or not to move forward with a given solution or vendor.

But beware of vendor “ROI Calculators” that don’t really calculate ROI, use faulty math to project savings, or are based on unsupported savings assumptions. Vendors that make these obvious errors aren’t really helping you build a business case. And they are reinforcing the notion that buyers should take all vendors’ savings and ROI claims with a very large grain of salt.

Batteries with Thin Plate Pure Lead (TPPL) Technology Make Fast and Opportunity Charging Even More Cost-Effective

By Contributing Author | 06/18/2018 | 6:00 AM

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

With more and more material handling operations switching to electric lift truck fleets, the adoption of fast charging and opportunity charging battery systems is growing. Industry consensus says that despite limitations like shorter battery life and weekly equalization requirements, fast and opportunity charging can help multi-shift operations save time and money.

However, industry consensus hasn’t kept up with advances in lead acid battery design. Batteries featuring Thin Plate Pure Lead (TPPL) technology are making fast and opportunity charging systems even moreefficient and cost-effective. To understand why, consider the differences between conventional charging, fast charging and opportunity charging:

Conventional Charging

Charging a lift truck battery overnight – including eight hours of charging and eight hours of rest – is known as conventional charging. Ideal for single-shift operations, conventional charging charges the battery at a 16-18% rate of charge over the first four to five hours, then tapers off until the battery reaches a 100% State of Charge (SOC).

When conventional charging is used in multi-shift facilities, it can be expensive and maintenance-intensive, as it requires one battery per shift, per vehicle, plus battery change-outs  and weekly equalization charges.

Fast Charging

As the name implies, fast charging is muchfaster than conventional charging – batteries can be charged in as little as two to four hours. To enable this speed, fast charging replenishes the battery at a 50% rate of charge the entire time. Unlike conventional charging, fast charging keeps the battery at a maximum of 85% SOC, but it still requires a weekly equalization charge to take the battery to 100%.

This option is best for three-shift operations, as it eliminates the need for extra batteries and battery swaps in between shifts, not to mention battery changing rooms. It does shorten conventional lead acid battery life, so new batteries will have to be purchased more often.

Opportunity Charging

Opportunity charging is just that – the ability to charge the battery during breaks, lunch, between shifts or whenever there is an opportunity. This method charges the battery at a 25% rate of charge and maxes out at an 85% SOC. As with conventional and fast charging, opportunity charging requires a weekly equalization charge.

Opportunity charging delivers many of the same benefits as fast charging, but it is best suited for two-shift operations in which the battery can make it through the second shift with short charges during lift truck downtime.

TPPL battery technology

Lead acid batteries with TPPL technology make the benefits of fast and opportunity charging even more beneficial. A TPPL battery can be charged at rates of up to 100%, with no risk of damage from overheating. The ability to fast charge at such a high rate can eliminate battery change-outs even for some three-shift operations. And unlike the shortened battery life that results from fast charging a conventional lead acid battery, a fast charged TPPL battery will actually last up to three years longer – with no watering requirements or weekly equalization charges. The result is a fast and opportunity charging solution that’s more reliable and cost-effective than ever.  

 

 

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.

Add Color to Make Your Warehouse Labels Stand Out and Be More Effective

By Contributing Author | 06/15/2018 | 6:00 AM

By Meegan Johnston, ID Label

It's no surprise to warehouse managers that barcode labels improve tracking, reduce errors, lower costs, aid in inventory management and boost worker productivity. But perhaps you haven't considered what role a label's design and color play in these outcomes.

In fact, in a warehouse environment, the use of color can play a significant role in a label's effectiveness.  

First, the right use of color makes a label stand out so it's easier for workers to see from a distance. In addition, an integrated system of colored barcode labels aids in improving processes for slotting, picking and overall inventory management.

ID Label 1

Colored Warehouse Labels and Multilevel Racking

The true benefits of colored barcode labels are most apparent in warehouses with large, multilevel rack systems.

For many ID Label customers, we design a uniform system of colored barcode labels to mark and identify tiers consistently throughout a warehouse or across a network of distribution centers. For instance, level 1 might be black, level 2 blue, level 3 green and so on.

This is highly effective when it's integrated into your WMS or inventory management software. It helps reduce put and pick errors and improves operational efficiencies.

This approach can be used on both horizontal and vertical warehouse labels.

Multicolor Production Capabilities

Today’s advanced digital inkjet presses can produce multicolor barcode images of astounding quality and durability.

ID Label’s presses feature integrated ultraviolet LED curing, laminating and die-cutting for printing high-quality, extremely durable, sequentially numbered and completely finished barcode labels in a single pass.

Bottom line: You don't have to operate a million-square-foot warehouse to reap the benefits of a colored labeling inventory system.

Meegan JohnstonMeegan Johnston is an ID Label business development manager.

A Closer Look at How Amazon’s Warehouse Wearables Will Change Data Capture

By Contributing Author | 06/13/2018 | 6:00 AM

By Don White, VP of Enterprise Solutions, Snapfulfil

Recently, supply chain tech experts have been abuzz with news that Amazon would change the way we measure warehouse performance. The eCommerce giant secured two patents for its warehouse wearables – armbands that track employee movement and direct the picking process sans barcodes.

Reactions to the concept were generally positive, even as some commentators suggested the new tech might face resistance from those who see it as an invasion of workers’ privacy. The pros for employees far outweigh the cons, however. More information about resource performance is always valuable in fine-tuning warehouse processes and inventory management, and these wearables could save employees time and effort as they move through the warehouse.

Here are a few ways Amazon’s wearables could help managers drive efficiency and conserve resources – and how they signal the future of warehouse operations:

A new (short)wave of technology

The technology required to manage the supply chain isn’t cheap – take, for instance, the more expensive internet speeds required to maintain smart warehouse equipment. Amazon’s wearables relieve some of this burden by remaining independent of Wi-Fi, leaving much needed bandwidth available. Instead, ultra-sonic and shortwave technologies drive the haptic feedback feature (the buzzing of a bracelet when close to the intended inventory item to be picked, for instance).

Don’t be in two places at once

Warehouse management technology can track item location and provide the data necessary for employees to reorganize inventory layout. Most solutions can only provide static product location, however, and fail to account for relative spatial tracking of slots, inventory and the labor resource’s hands – requiring significant monetary and resource investment that often gets overlooked.

Because Amazon’s wearables could track employees’ locations relative to each other and the items they’re picking, this technology could be the beginning of cutting-edge warehouse labor management. The possibilities are endless – from heat maps (associated with activity in a location over time) to comparative routing and de-conflicting associated with managing labor and locations and order fulfillment to disallow two resources from needing access to the same location at the same time, or in re-routing a person to avoid a forklift path.

Taking measurement to a granular level

WMS technology, until now, has focused on learned capabilities – how we can improve the speed at which staff moves through the aisles or efficiency during putaway processes.

With Amazon’s wearables, we’ll be able to measure something much deeper – intrinsic capabilities. Time and motion studies have been evaluating the impact of movement on efficiency for quite some time. Researchers will now have the discrete detail of observation

and measure that will lead to improved performance: ranges of acuity in hand/eye coordination and even dexterity can now be correlated to measures in individual performance.

Thinking about warehouse improvement sooner rather than later

Even though the possibilities for Amazon’s newest technology are endless, there are a few bugs to work out. Amazon has yet to disclose how soon their employees might wear this new technology – so it could be a few years before Amazon’s creation significantly impacts the supply chain.

While we’re waiting to see how Amazon’s next-level tech develops, warehouses can take steps now to prepare for increased demands on the supply chain. Warehouse management systems provide greater visibility into the numbers behind your most complex tasks – making it easier to adjust non-efficient processes.

Bottom line: There’s quite a bit to be excited about with Amazon’s latest innovation. But don’t forget – your operations demand efficiency now.

Don WhiteDon White has more than 15 years’ experience implementing and managing solutions for the supply chain. He currently serves as Vice President of Enterprise Solutions at Snapfulfil North America.

Supply chain dynamics creating new applications for loop sorters in cross-docking

By Contributing Author | 06/11/2018 | 6:00 AM

By Brad Radcliffe, VP of Sales—Sortation and Distribution, BEUMER Corporation

A proven technology for achieving high efficiencies in the parcel industry is finding similar effectiveness for distribution centers and warehouses where a change in dynamics is justifying the cost of implementing a high level of automation.

Exploding transportation costs, an increasing number of SKUs, rising labor costs and the lack of available labor all have shifted the ROI formula for equipping DCs with high-speed sortation systems. Within the supply chain, companies are most concerned with managing skyrocketing transportation costs that are largely a result of the increase in less-than-truckloads dispatched to accommodate just-in-time deliveries to retailers. Keeping full truckloads moving and reducing the amount of inventory in transit are the greatest challenges.

More and more, today’s DCs resemble parcel facilities where a high number of packages need to be moved quickly and efficiently in a cross-docking environment. Manual labor and fork trucks can no longer handle the volume of product that arrives in bulk on pallets and must leave as caseloads with minimum dwell time. Automated loop sortation systems—in the same or smaller footprint with considerably fewer people—can sort 40,000–60,000 cartons an hour all day long. Some companies have been able to replace up to three facilities with intensive labor requirements with one automated facility.

At the heart of the supply chain transformation is the desire to achieve a lower Days Sales in Inventory. For example, global healthcare giant GSK in 2013 reported a DSI of 53.7 days. By reducing its DSI by five days (or 10%), the company realized a savings of $67.6 million annually. For mega retailers like Walmart, Target and Walgreen’s, there are huge savings for every day of inventory that can be cut.

High-speed loop sortation systems are an ideal solution for companies with regional DCs serving 2,000 or more retail locations. A secondary market is 3PLs that are building consolidation networks for smaller retailers that don’t quite have the volume, but they need the service to be competitive.

To achieve ROI on automated, high-speed sortation in a cross-dock facility, a minimum of 10,000 packages an hour is a good rule of thumb. Volumes in many DCs have risen to 600,000 to one-million packages a day. A huge volume, along with a large sort complexity, makes ROI go through the roof.

Automated systems with high-speed induction and sorting capacity can easily handle the complexity of pulling inventory from multiple vendors, and even reserve stock, to achieve full truckloads. Sorters are smart enough now to fill trucks as quickly as possible and typically in conjunction with the customer’s business rules about how they want to distribute those inbound items across their RDC or store network.

 

Brad RadcliffeBrad Radcliffe has been with BEUMER Corporation since 2016, leading the North American Sales and Application Engineering teams focused on developing "Best in Class" solutions for the Parcel and Warehouse/Distribution industries. He is responsible for developing integrated solutions that are flexible, modular and sustainable. His career experience includes design engineering, supply chain optimization, project management and business development. Radcliffe has a B.S. in industrial engineering from the United States Military Academy, West Point, New York.        

How Predictive Analytics Are Changing Supply Chain Logistics

By Contributing Author | 06/08/2018 | 6:00 AM

By Avery T. Phillips

Supply chains make or break a business, as the Target Canada fiasco painfully demonstrated. Distribution challenges were one big reason cited for the catastrophic failure of the expansion effort.

For many businesses, from retail to manufacturing, a breakdown in supply chain or inefficiency in restocking can impact financial stability. Supply chain isn’t exactly a sleek or sexy application of analytics technology, but advancements in recent years can go a long way to protecting vital infrastructure.

How Predictive Analytics Works

Predictive analytics is the result of a number of different advances in how we collect, handle, and analyze data. Specifically, predictive analytics is the answering of several questions related to data:

  • What is the most important data to collect?
  • What does it tell us about previous performance and problems?
  • What improvements can we make based on that data?
  • Which patterns does the data reveal?
  • Can the data be used to predict patterns in the future?
  • Can the data be used to create patterns that are beneficial to the company?

The difference between a whole bunch of data and analytics is knowing what your data is, what you need it for, and how you can apply it to improve the efficiency and profitability of the company. Performing these functions often requires the building of complex systems and algorithms, but the results can be well worth the investment.

Analytics, in the end, is about decision making. It’s about empowering business owners to make decisions based on the best available information, based on facts and analysis.

What Does Predictive Analytics Have To Do With A Supply Chain?

Supply chains are large, complex beasts. They are often comprised of several entirely different companies that produce, quality control, and transport goods. Sometimes they intersect with law enforcement bodies if the chain crosses borders. Predictive analytics can demystify these complex processes and present a business with clear information about the effectiveness of all the links in a supply chain.

Supply chains are inherently vulnerable. Facing regulatory and social pressure about sustainability, concerns about cyber security, and an increasingly difficult retail market, many companies have been slow to catch up with the new circumstances of supply chain management.

Predictive analytics presents solutions to so many of these modern woes. For one thing, they can be used to automate order filling based on the ebb and flow of demand for specific goods. These concerns aren’t just seasonal anymore, supply chains are being taxed by an on-demand economy and high turnaround expectations of consumers. Data can be used to streamline the entire inventory process and solve other supply chain challenges.

Further than that, however, businesses can use data about all of the links in a supply chain to identify weaknesses and potential issues. From technology that analyzes the efficiency of trailer loading, to technology that tracks the location of goods in real time, business owners and the managers of supply chains are being empowered to make decisions about small details that have big consequences. Weak links in the chain can be identified and replaced. Delivery timing can be optimized, and the efficiency of a chain can really be put through its paces once you start collecting and analyzing data in real time.

On-demand isn’t a perk anymore, it’s an expectation of consumers and business clients. Embracing the technology of big data and predictive analytics isn’t a matter of getting ahead, it’s a matter of not falling behind. Take the example of Target Canada to heart, and watch other organizations who don’t pay enough attention to their supply chains.



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.

E-Commerce Shipping: Why Customers Want ‘Buy Online Deliver From Store’

By Contributing Author | 06/04/2018 | 6:00 AM

By Jamie Gottlieb, Content Manager, Roadie

A “Buy Online Deliver From Store” model surprises and delights customers by saving them time, improving delivery windows, and offering flexibility.

Retailers view their e-commerce shipping service as an extension of their business. The quality and flexibility of their delivery solutions play a direct role in the decision-making criteria for their customers and overall success.

51% of shoppers prefer to shop online. That’s why retailers work to enrich the buying experience from sale to delivery. Most recently, retailers have turned to Buy Online Deliver From Store (BODFS) to meet customer expectations. This solution optimizes last-mile delivery by shipping from a store or warehouse to the customer that same day.

Why Choose ‘Buy Online Deliver From Store’

As online retail booms, customer expectations of convenience and low-cost delivery grow as well. Most retailers offer click and collect, but it still requires customers to pick up their item.

A “Buy Online Deliver From Store” model, however, surprises and delights customers by saving them time, improving delivery windows, and offering flexibility.

And a growing number of consumers are willing to pay for that convenience. According to a McKinsey study, 30% of consumers consider home delivery important. And another 25% of customers are willing to pay premiums for same-day or instant delivery.

For customers, there are many reasons to love a Buy Online Deliver From Store model:

  • They don’t want to drive long distances to pick up an item.

A 30-mile drive feels like a hike and takes too much time. By giving customers BODFS as an option, businesses remove store distance as a purchase barrier.

  • They can’t fit oversized items into their car.

Your customer bought an item only to realize they’ll need a bigger car or will have to wait 2-3 weeks for traditional shipping. But what if you could deliver to their home that same day? A Buy Online, Deliver From Store (BODFS) shipping solution can fulfill delivery — no matter the item’s size and shape.

  • They’re not at the mercy of ironclad delivery schedules.

Sometimes your customer buys an item and needs it now. Convert stores into fulfillment centers, and businesses can offer same-day home delivery.

E-Commerce Shipping Helps Gain Ground on Big Box Retailers

Convenience is king — and big box retailers know it. Companies like Walmart and Home Depot have transformed retail stores into fulfillment centers. And for customers, it’s making the purchasing process a whole lot easier.

Retail giants aren’t the only ones who can gain a competitive advantage through an e-commerce shipping solution. If businesses implement BODFS — even on a much smaller scale — same-day and next day delivery becomes a reality for their customers. In turn, that convenience and speed builds customer loyalty and drives future sales.

 

Jamie Gottlieb is the Content Manager at Roadie, the only collaborative delivery network with over 60,000 pre-qualified drivers covering all 50 states. Roadie has made deliveries in more than 9,000 cities nationwide — a larger footprint than Amazon Prime.

Trucking Capacity: Are You Managing With a One-Size-Fits-All Strategy?

By Contributing Author | 06/01/2018 | 6:00 AM

 

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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