Wednesday, May 9, 2018

Surfing the Wave

‘Survey says’ 40 percent anticipate parcel delivery in two hours by 2028.
Disruptions to the supply chain of yesterday are coming at us faster than, well, products on an Amazon delivery line.
With e-commerce projected to generate roughly $4.5 trillion in retail sales by 2021, U.S. warehouse facilities won’t be able to keep up with fulfillment needs, claims Zebra Technologies in its Future of Fulfillment Vision Study, reported in Supply Chain 24/7. The average age of a warehouse in this country is 34 years, the survey says, with low ceilings, uneven floors and tight spaces, as well as a lack of technology to speed goods through it. 

In response to today’s online-buying, smartphone-wielding consumer who expects a seamless, faster purchasing journey, the study said 78 percent of logistics companies expect to provide same-day delivery by 2023, and 40 percent anticipate delivery within a two-hour window by 2028. Of surveyed retailers, 76 percent use store inventory to fill online orders, and 86 percent plan to implement buy online/pick up in store in the next year. Retailers are investing in retrofitting stores to double as online fulfillment centers and shrinking selling space to accommodate e-commerce pickups and returns. 

Next generation supply chains will reflect connected, business-intelligence and automated solutions adding newfound speed, precision and cost-effectiveness to transportation and labor. Surveyed executives expect the most disruptive technologies to be drones, driverless/autonomous vehicles, robotics, and wearable and mobile technology. 

Radio-frequency identification (RFID) technology and inventory management platforms are expected to grow by 49 percent in the next few years, offering item-level inventory lookup, improving shopper satisfaction and reducing out of stocks, overstocks, and replenishment errors.
The automated supply chain wave is coming, and shippers have two choices – surf it or be swamped.

Kirk Shearer
President & COO
(973) 726-2103

Wednesday, May 2, 2018

Care and Feeding of Truckers

Becoming a ‘shipper of choice’ leads to preferred treatment from carriers. 

The balance of power at the loading dock is shifting, or rather has shifted. Shippers long accustomed to calling the shots with motor carriers, and sometimes treating drivers as second class citizens, are now in the position of competing against one another to book an available truck at a reasonable rate. Supply, in the form of tractor trailers and truck drivers, has become scarce, and is not nearly enough to quickly haul all the freight on the market.

In this new environment, savvy shippers are doing what they can to be a “shipper of choice,” a term that reflects the reality that carriers do have choices, in what has largely become a trucker’s market, reported the Journal of Commerce. So what steps should you take to keep your friendly truck driver happy?

Perhaps the most important is to keep them moving. In the new ELD, or electronic logging device era, every minute counts for a trucker. With ELDs, carriers can easily determine how much time a driver was idle at the dock. Shippers that regularly detain drivers may find it difficult to reliably schedule pickups or deliveries. Industry veterans suggest shippers consider capital expenditures on their dock operations. Ease of access, with facilities designed for big trucks’ turning radius and dockage, parking, and clear signage help drivers get in and out.

Providing basic amenities to drivers goes a long way to being a preferred shipper. No access to bathrooms is a major complaint of truckers. A break room and refreshments, which can be vending machines, help alleviate the necessity of waiting for loading or unloading. Just as with Uber, drivers now have apps to rate shippers, and check on their next stop’s policies, facilities, hazards and restrictions.

Advance notice lets carriers plan their operations, and results in a better shipping experience for all parties. Flexible hours, allowing drivers to avoid rush hour traffic, allow them to maximize the allowable 660 minutes being tracked by their ELD. Avoiding surprises, and paying bills promptly, will cause your carriers to hang on tightly to you as a customer.

Kirk Shearer
President & COO
(973) 726-2103

Tuesday, April 10, 2018

'Flex'-ing its Muscles 2

Amazon disrupting package delivery along with everything else.
The newest player in the parcel delivery space came to a lot of people’s attention, in a foreboding way, thanks to the country’s most recent bomb scare.

In the aftermath of the rash of bombs in packages left at addresses in Austin, Texas, calls flooded in to local law enforcement agencies in cities across the country, as well as to UPS offices. Strangers, wearing nondescript clothing and driving vehicles with no insignia, had dropped off boxes at the callers’ or a neighbor’s door, and often snapped a photo of the scene before leaving.

To the concerned citizens’ relief, they found out these were not copycat crimes, but deliveries from Amazon Flex, the online giant’s foray into disrupting “last mile” package delivery the way it has so many categories of business in this country and around the world. In a business model similar to Uber that we described in this space last year, drivers work as independent contractors with flexible schedules, primarily delivering Amazon Now packages as part of the company’s same-day delivery service.

The new buzzwords for e-commerce success are “closer, faster, and efficient,” and Amazon has moved aggressively to give themselves a more intrusive retail footprint around the country, after driving many bricks and mortar competitors out of business. Along with purchasing whole foods and gaining their locations’ back-store space for local distribution, Amazon is reported to be targeting “big box” stores left vacant by closures and bankruptcies, such as that freed up by the recent demise of Toys R Us.

Ironically, those massive retail outlets once known as “warehouse stores” or clubs may now indeed become warehouses for Amazon. Omnipresent as they are online, the company that made Jeff Bezos the richest man on the planet, with a net worth of $112 billion, is chasing Walmart in physical access to American shoppers. Walmart has about 4,700 store locations, with 95 percent of U.S. population within five miles of one of them.

Amazon is relentless in developing innovative technology to increase efficiency in its supply chain. That focus can and should ‘deliver’ a message to the rest of us.

Kirk Shearer
President & COO
(973) 726-2103

Tuesday, March 27, 2018

Pencils Down

Human managers need to take advantage of machine capabilities. 

“Pencils down.”  

What your teacher used to say at the end of your test period is applicable to the implementation today of Artificial Intelligence, or AI, to supply chains in the modern business world. AI will be a potent force in supply chain management, but too many companies cling to outmoded, inefficient legacy approaches, asking human beings to perform repetitive or pattern-analyzing tasks that machines can handle routinely and reliably.

What’s more, the machines get better at it over time, and this is where the AI comes in. To fulfill their potential, AI systems will have to become smarter than, for instance, Siri and Alexa, and they will. But to be in position to reap the profound competitive advantages of a more efficient supply chain, businesses must put systems in place to collect the relevant data – to stop using pencil and paper for tasks that, when performed online and available via the cloud, will open up new worlds of visibility and savings.

In supply chain studies by the Tungsten Network, companies estimated they spend on average around 55 hours per week doing manual, paper-based processes and checks, 39 hours chasing invoice exceptions, discrepancies and errors, and 23 hours responding to supplier inquiries, or about 6,500 hours a year being thrown away by processing papers, fixing purchase orders and replying to suppliers.

Areas where AI can have an impact include Machine Learning for supply chain planning and warehouse management, building data sets independent of language barriers through Natural Language Processing, streamlining procurement-related tasks through Chatbots or related technology, working with the coming wave of autonomous vehicles, and using Predictive Analytics for carrier and supplier selection, and monitoring those relationships.

None of this implies a decreasing need for human guidance at the top. Setting the goals of the organization and measuring progress toward them continue to be the function of a company’s managers. But in today’s business environment, the only truly empowered manager is the one working with the information and efficiency that comes from utilizing the increasingly powerful digital toolbox available.

To achieve maximum success, we need to tap Artificial Intelligence wherever possible, while also taking advantage of the supercomputers we carry around in our skulls. 

Kirk Shearer
President & COO
(973) 726-2103
TOTALogistix, Inc.

Tuesday, March 20, 2018

War on Trade:

US imports, exports will decline this year if trade war becomes reality. 
Generally, there is some room between global politics and your supply chain.
Right now, though, the two may be heading for an uncomfortable intersection, as the prospects rise for the United States becoming embroiled in an international trade war following the imposition of stiff US tariffs on imported steel and aluminum.

The warning in Global Port Tracker, which is published monthly by the National Retail Federation (NRF), comes at a time when US imports are holding up relatively well during the traditional slow shipping period that follows Chinese New Year.

Spot rates in the eastbound Pacific provide an indication of the strength of containerized imports. Spot rates from Asia to the US East Coast at Lunar New Year were 14.4 percent higher than six weeks prior, compared to falling 8.4 percent in 2016, according to Drewry Shipping Consultants. This indicates that imports so far this year have been strong.

But if there is a trade war that causes consumer prices in the US to increase, imports to drop, and US exports to decline as trading partners respond with tariffs of their own on American goods, shipping activity is likely to drop markedly. In addition to inviting retaliation, said Jimmy Lyons, CEO of the Alabama State Port Authority, the proposed tariffs could make US exports more costly and less competitive. This could help to mitigate prices on container shipments from Asia, but only at the cost of a global slowdown in business activity that will not serve American companies well. 

"With steel and aluminum tariffs already in place, new tariffs on goods from China being threatened, and the ongoing threat of NAFTA withdrawal, we could very quickly have a trade war on our hands," said Jonathan Gold, NRF vice president for supply chain and customs policy.

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