Author Archives: Teddy Nee

The USC Marshall Center for Global Supply Chain Management stages “Covid-19: What’s Next?”

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The USC Marshall Center for Global Supply Chain Management stages “Covid-19: What’s Next?” live webinar on Wednesday, April 8, with the intention of bringing a new perspective to the crisis.

Webinar series part 2 features Jonathan Rosenthal, CEO of Saybrook Management, along with Chris Cookson, EY’s leader of U.S. West Supply Chain Operations.

The first session of “Connecting the World Through Networking Education and Advanced Research (NEAR) convened on March 4th, one of the most compelling presentations was made by Noel Hacegaba, deputy executive director of administration & operations at the Port of Long Beach.

He noted at the time that blank sailings in the transpacific with 20 percent of scheduled carrier calls curtailed, was having a negative impact across the supply chain.

“This led to concern that with a higher concentration of ship calls coming as a consequence, would lead to a mini-peak season every time,” he said.

Hacegaba, added that Long Beach was anticipating “a boomerang effect” – a surge of cargo that would create new challenges for the port’s supply chain partners.

That has yet to be realized, however, as the port continued to feel the economic effects of COVID-19 in March with more canceled sailings and a decline in cargo containers shipped through the nation’s second-busiest seaport.

Terminal operators and dockworkers moved 517,663 twenty-foot equivalent units (TEUs) last month, a 6.4% decline compared to March 2019. Imports were down 5% to 234,570 TEUs, while exports increased 10.7% to 145,442 TEUs. Empty containers shipped overseas dropped 21% to 137,652 TEUs.

Overseas health concerns over the coronavirus caused 19 canceled sailings to the Port of Long Beach during the opening quarter of 2020, which contributed to a 6.9% decline in cargo shipments compared to the first three months of 2019.

“The coronavirus is delivering a shock to the supply chain that continues to ripple across the national economy,” said Mario Cordero, Executive Director of the Port of Long Beach. “We’re definitely seeing a reduction in the flow of cargo at San Pedro Bay, but the ports remain open and operating, and we are maintaining business continuity.”

The frequency and intensity of cleaning efforts have been increased on the docks, at port offices and other common areas, in order to maintain the health and safety of dockworkers, truckers, terminal operators and others.

Read more at The USC Marshall Center for Global Supply Chain Management stages “Covid-19: What’s Next?”

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Coronavirus Pandemic Turns U.S. Food and Beverage Supply Chains on Their Heads

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Coronavirus Pandemic Turns U.S. Food and Beverage Supply Chains on Their Heads

Coronavirus Pandemic Turns U.S. Food and Beverage Supply Chains on Their Heads

Current U.S. food supply chains are facing a severe emergency due to the current health situation, so how can these companies meet crisis-level fulfillment goals while avoiding introducing pathogens into an already stressed food supply chain?

Food and Beverage Supply Chains

Our current coronavirus-world has turned food and beverage supply chains on their heads, highlighting the importance of supply chain visibility and meeting U.S. FDA Food Safety Modernization Act (FSMA) guidance.

FSMA aims to prevent and mitigate food-borne illnesses, which, according to the FDA website, under “normal” conditions, sicken about 48 million Americans annually – a significant public health burden.

But current U.S. food supply chains are facing a severe emergency due to the current health situation – store closings, social distancing, self-isolation, and panic grocery buying.

Food and beverage manufacturers are scrambling to fulfill orders.

How can these companies meet crisis-level fulfillment goals while avoiding introducing pathogens into an already stressed food supply chain?

FMSA Guidelines for Short- and Long-Term Food Safety

If your company is responsible for manufacturing, processing, packing, transporting or storing raw or finished food products or beverages and must comply with food-borne pathogen reduction requirements, consider the following steps.

They’ll ensure your customers receive non-damaged, top-quality foods:

  1. Familiarize or refamiliarize your personnel with existing FSMA guidelines that define safe food management criteria.
  2. Explore the recent FSMA draft guidance, “Mitigation Strategies to Protect Food Against Intentional Adulteration: Guidance for Industry” to ensure your food materials remain in compliance with government guidance. This newest guidance covers necessary written actions, training, procedures, and steps to take if mitigation strategies have been incorrectly implemented–including corrective steps to identify and correct a problem that has occurred and measures to reduce its recurrence. Corrective actions must be documented and are subject to verification.
  3. Employ tools that ensure you bypass common food contamination problems by providing overarching supply chain visibility and optimal shipping and handling decisions, so you can deliver the highest-quality food products as soon as possible while remaining compliant.

Read more Coronavirus Pandemic Turns U.S. Food and Beverage Supply Chains on Their Heads

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Huawei’s European factory to boost supply chain efficiency

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Huawei's European factory to boost supply chain efficiency

The China-based tech giants, Huawei, is set to build a factory in France to produce 4G and 5G wireless equipment to accelerate supply chain efficiency.

According to analysts, the new facility will allow Huawei easier access to its telecommunications carriers in Europe, while also easing concerns over alleged spying for China’s government.

Stéphane Téral, executive director of telecommunications research at IHS Markit, commented: “At this stage of the mobile industry, it is critical for Huawei to have a radio communications factory somewhere in Europe to relieve the pressure on the existing ones in China. “We clearly see firsthand the disruption the coronavirus crisis is creating.”

It is expected that the factory will produce €1bn worth of products annually, while also creating 500 jobs.

It is thought that the company chose France due to the country’s ideal geographic position, mature industrial infrastructure as well as its highly educated talent pool. Peter Liu, vice-president analyst at Gartner, said: “The European facility will improve Huawei’s efficiency because the company will be able to integrate itself into the supply chain in Europe.”

The news follows Huawei’s launch of its 5G Innovation and Experience Centre in London which encourages increased collaboration between businesses and innovators in the development of 5G ecosystems. Victor Zhang, Vice-President of Huawei, added: “With the opening of our 5G Innovation and Experience Centre in London we, as a leader of 5G, are taking another important step. What we have opened today will enable true collaboration amongst UK businesses and technologists and showcase the huge potential of 5G applications for both the private and business sectors.”

Read more at Huawei’s European factory to boost supply chain efficiency

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What Are the Benefits of Supplier Quality Audits?

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What Are the Benefits of Supplier Quality Audits?

What Are the Benefits of Supplier Quality Audits?

While you want to trust and count on your suppliers, do you really know for sure that they have the proper procedures in place, that the procedures are being actively applied, and that their employees follow their established procedures?

Supplier quality audits are the process of verifying that each of your suppliers is adhering to both industry standards as set by the law and independent organizations, as well as your own company and brand standards.

Audits are widely recognized as a pertinent part of doing business.

While there are many reasons for this practice, here are the six biggest benefits of performing supplier quality audits.

1. A Reduction of Risk

A significant amount of risk accompanies extended supply chains, outsourcing, and globalization. The risks include:

  1. Quality
  2. Safety
  3. Business Continuity
  4. Reputation
  5. Cost Volatility
  6. Supply Disruption
  7. Non-Compliance Fines
  8. Safety Incidents
  9. And More

2. Better Contractor Management and Business Relationships with Suppliers

Your business can gain ground when costs are reduced, contractor management is streamlined, brand reputation is protected, and long-term profitability is achieved. This is easier done when the following tasks are taken care of efficiently:

  1. Supplier Prequalification
  2. Supplier Audits
  3. Worker Management
  4. Insurance Monitoring
  5. Analytics

3. Expert Guidance on Safety and Sustainability Performance

While you already have strategies in place to manage the health, safety, and behaviors within your own organization, how do you know your suppliers, contractors, and vendors are similarly motivated?

Supplier quality audits actively foster an aligned culture of health and safety through:

  1. Contractor Prequalification
  2. Document Management
  3. Auditing
  4. Employee-Level Qualification and Training
  5. Insurance Verification
  6. Business Intelligence

4. Closer Alignment with Your Compliance Standards

Your business is under pressure to maintain compliance with:

  1. Country-specific regulations
  2. Industry standards and regulations
  3. Corporate policies and standards

5. Better Procurement Decisions

Procurement teams are under a lot of pressure to find, qualify, monitor, and manage suppliers, all while lowering the cost of doing so. With supplier quality auditing, procurement managers can make better and more cost-effective procurement decisions by:

  1. Mitigating risk through communication, evaluation, selection, and monitoring services.
  2. Gaining unprecedented visibility into safety statistics, risk profiles, and historical data.
  3. Reducing lead time and improving efficiency with ongoing guidance and support throughout the procurement process.
  4. Maximizing data quality on the entire supply chain.

6. Sustainable Business Practices

Today, an organization committed to improving the environment through sustainable growth is required to meet both regulatory requirements and societal expectations. Managing the long-term value of your company and its brand is party dependent on properly managing the environmental, social, financial, and economic impacts throughout its supply chain. All of this can be done more easily with thorough supplier quality audits.

Read more at What Are the Benefits of Supplier Quality Audits?

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Warehouse Drones: Real-Time Inventory Tracking by Air

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Using the Right Technology For Your Inventory Management

Using the Right Technology For Your Inventory Management

Warehouse Drones for Inventory Identification

Accurate and reliable data is essential to efficient and effective business operations.

Inventory management represents a significant portion of assets in a business.

Therefore, managers and other decision-makers need to accurately and timely know how much inventory there is and where it is located in order to make effective budgeting, operating, and financial decisions.

Companies that carry a significant amount of inventory are continually looking for innovative logistics solutions to improve the overall efficiency and effectiveness of their inventory checking process.

While some companies stop operations to carry out a full physical inventory check, others perform more targeted checks, with cycle counts in areas that deal with high-value or high-volume products.

Regardless of your approach, it often means that there is a team of individuals roaming the warehouse manually checking for inventory.

This can be time-consuming, expensive, disruptive, require equipment (people lifts), and exposes people to safety risks.

Most important of all, inventory accuracy is never guaranteed due to the verification process being manual, coupled with the time taken to execute.

Inventory Robotics: Automated Cycle Counting

Automatic identification and location of hard-to-reach inventory in warehouses

PINC’s UAS (Unmanned Aircraft System) is called PINC AIR, Aerial Inventory Robots™.

This warehouse drone solution allows companies to apply drone technology, coupled with advanced optical, RFID, and barcoding sensor capabilities, to significantly improve the operational effectiveness and efficiency of warehouse inventory cycle count.

The warehouse drone can be ordered by the operator to perform automatic inventory checks throughout the facility, accurately identifying inventory in put-away locations, at the frequency of your choosing.

Moving the process of information capture into the air provides on-demand checks of logistics inventories and avoids the time, expense, and risk of using a people lift to access difficult to reach locations within the warehouse.

Using extensive optical sensors, the inventory drone can navigate, identify inventory, determine inventory location, and fly safely in a warehouse environment.

The power in the drone inventory management solution lies within the sophisticated software capabilities that provide three-dimensional mapping, navigation, inventory identification, and location accuracy. Indoor flights do not require FAA approval.

Read more at Warehouse Drones: Real-Time Inventory Tracking by Air

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DHL: transforming logistics with startup partnerships

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DHL large electirc vehicle

DHL large electirc vehicle

Supply Chain Digital gets an insight into DHL’s partnerships with startups to drive digitalisation and sustinability within the business.

When it comes to innovations at DHL, the company values its partnerships both big and small. In recent years many startups have entered into the logistics industry. Markus Kückelhaus, VP of Innovation and Trend Research at DHL raises the question of why?

“The logistics industry is a very fragmented sector that is still catching up. Which is why this industry is interesting to startups,” says Kückelhaus who highlights that due to the industry’s small attempts at digitalisation, in addition to growing investments into logistics, there has been an increase in opportunities for startups.

Effidence

Founded in 2009, Effidence is a French research and robotics startup that develops collaborative robotic solutionsin logistics and agriculture. DHL has partnered with Effidence to develop its ‘follow me’ robotic trolleys.

Locus Robotics

Founded in 2014, Locus Robotics is an American robotic technology company that develops warehouse solutions to improve productivity. DHL has partnered with Locus Robotics to develop its Aisle picking robots.

University of Aachen

Established in 1870, the University of Aachen strives to drive innovative discoveries that impact global challenges. The German university partnered with DHL in 2012 on a new initiative to combat global warming. DHL worked with the university to develop its own electric vehicles as part of its mission to achieve zero carbon emissions by 2050. Currently DHL has 10,000 electric vehicles out on the roads aiming to replace all 55,000 global vehicles in its fleet to electric.

Read more at DHL: transforming logistics with startup partnerships

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SEE ALSO:

  1. DHL – the world’s leading contract logistics provider
  2. DHL’s innovation center driving digitalisation and sustainability
  3. DHL: Talent management within logistics
  4. Read the latest issue of Supply Chain Digital here

EU Launches Estimated €400M Blockchain, AI Fund to Avoid Lagging US, China

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https://www.shutterstock.com/image-photo/eu-flags-front-european-commission-brussels-162128453

A new fund has been set up with the aim of preventing the EU falling behind nations like the U.S. and China on blockchain and artificial intelligence (AI) innovation.

The European Investment Fund (EIF) and the European Commission have together put up €100 million (over $110 million) for a dedicated investment scheme that will make capital available to AI and blockchain projects via VC funds or other investors, EIF, an EU agency set up to indirectly fund SMEs, said in a blog post on Wednesday.

With the “cornerstone” funding in place, the EIF said private investors are expected to bring up to €300 million ($331 million) into the fund, while the total could rise further from next year, with national promotional banks being able to co-invest under the scheme.

Sifted reports that the fund could ultimately raise up to €2 billion ($2.2 billion) under the InvestEU Programme.

According to the post, the EU already spends plenty on blockchain (expected spending for 2019 is $674 million), but that is mostly directed toward research and proof-of-concepts.

The U.S. is the biggest spender, with a $1.1 billion expected spend, and China is second with $319 million, according to cited numbers from the International Data Corporation.

The new fund is aimed to address the fact that not so much is spent in the EU on developing “larger scale projects.

“Investing in a portfolio of innovative AI and blockchain companies will help develop a dynamic EU-wide investors community on AI and blockchain. By involving national promotional banks, we can scale up the volume of investments at a national level,” the EIF said.

Read more at EU Launches Estimated €400M Blockchain, AI Fund to Avoid Lagging US, China

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OM in the News: Amazon Marries Drones and Intermodal

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Amazon patent graphic for railroad sourcing

Amazon patent graphic for railroad sourcing

“Amazon wants its inventory everywhere”, writes Supply Chain Dive (Nov. 8, 2019). It is expanding its network of fulfillment locations with a focus on intermodal containers. Intermodal-based fulfillment, as Amazon’s patent application describes it, would allow the company to fulfill orders from rail, truck or ship. Here are the steps in the patent:

  • 1. Load intermodal container with inventory.
  • 2. A robotic system picks and loads items onto drone.
  • 3. Launch and retrieval system puts the drone in appropriate position for take-off.
  • 4. Drone departs container through opening in the roof.
  • 5. Drone travels to a customer’s home, delivers package.
  • 6. Drone meets back up with the container at a pre-calculated rendezvous point.
  • 7. Variety of sensors track container’s location.

But wait, drones need new batteries, their propellers might break, and without a human in the loop how does this operation keep running smoothly? Amazon thought of this. One of the details included in the patent application is a maintenance container where drones can have a robotic technician replace propellers or batteries. Amazon says containers could be loaded with inventory before the launch of a book or video game in anticipation of demand spikes, placing inventory in locations where it expects orders.

To compete with brick-and-mortar locations, Amazon wants to cut down on delivery time making it just as convenient to hit order on the marketplace as it is to drive down the road. But this requires a complex network of inventory in fulfillment and sortation centers across the country. It has already promised one-day delivery for a variety of SKUs. Amazon claims drones will enable 30-minute delivery. Making this happen will not just require drones, but a vast web of SKUs across the country.

Read more at OM in the News: Amazon Marries Drones and Intermodal

Resilient Supply Chains in a Politically Uncertain World

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Resilient Supply Chains in a Politically Uncertain World

Resilient Supply Chains in a Politically Uncertain World

The Resilient Supply Chain

Today, the supply chain world iterates faster than at any other point in history. Disruptions – whether related to climate change, trade wars, or a no-deal Brexit – are a given, and black swan events aren’t surprises anymore. We know that the next event is coming fast and supply chains will have to react. So why have we not burned that understanding into our business DNA? Why are we still trying to leverage strategies developed 50 years ago and technologies unaligned to today’s needs?

What I mean is that every supply chain, everywhere, should be prepared at a moment’s notice to shut down, pivot, and spin up whatever operations it needs to, wherever it needs them. I’m of the strong opinion that if supply chain professionals reframe their thinking and look at uncertainties as opportunities then they will thrive. This thought came to me while reading an article on US trade disputes with China, or maybe it was an article on Brexit.

While I understand how conflicts arise, I have a hard time accepting why they are as adversely impactful to supply chains as they are. Contingency planning should cover for every possibility, and the overreliance on any single supplier or region is not smart business anymore. If the year was 1492 or 1839 or 1979, I could understand the desire to optimize a linear supply chain. That’s not the case today. With the advent of cloud technology and the reality of global markets – fallout from any one country’s instability or trade war can be mitigated.

Three Legs of a Resilient Supply Chain:

  1. Availability: For systems to work they need to be ON. As long as power and cloud servers exist, then a supply chain cannot be existentially threatened.
  2. Operational Flexibility and Configuration: Facilities available on a single network eliminate siloes and allow for customized configuration.
  3. More Control: Control is based on visibility, on knowing and seeing exactly where inventory is all the time.

What About Lost Goods?

Declare them lost, minimize losses, and deal with the repercussions.

Over the last two generations, western economies relied on an uncompetitive market to produce goods. Since 2010 the world has effectively been relying on an industrial monopoly.

It may have seemed like a good idea to rely on a single, cheap source of manufacturing fifty years ago. However, by choosing this path, countries damaged their own manufacturing economies.

They also exposed themselves to the exclusive possession and control of that same, supplier. That’s when the system naturally started to collapse. And that’s when the world began to see price-fixing and currency manipulation, among other signs of deterioration. What would you do if you ran a monopoly?

A dearth of suppliers is what companies are now contending with. There is no easy way out.

Read more at Resilient Supply Chains in a Politically Uncertain World

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The pros and cons of ‘supply chain finance’

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Coca-Cola does it. So does the global consumer goods group Procter & Gamble and discount store chain Walmart. In Australia, Telstra and construction group CIMIC are into it.

All are using an increasingly popular scheme known as “supply chain finance” to pay the companies that provide them with goods and services.

The old-fashioned method of paying invoices is simple. A company orders goods from a supplier. The supplier delivers them and issues an invoice with a due date, such as 30 days’ time. The company pays the supplier within 30 days.

Suppliers who have delivered their goods but want to get paid earlier than 30 days have also for many years had another option: approach a bank and sell 80 per cent of the invoice (typically the maximum the bank is prepared to buy) before the due date. The bank later collects the invoice payment.

This is known as debt factoring; the bank or financier that buys the invoices is called a factor.

In recent years, a third option has emerged. With the help of banks and financiers, big companies take the initiative and suggest payment options to their suppliers, giving the companies more control over when and how they pay invoices.

This latter scheme is most commonly known as supply chain finance or, more specifically, “reverse factoring” – a technical term commonly used by ratings agencies to differentiate it from conventional debt factoring.

Reverse factoring compared to normal payment terms

Reverse factoring compared to normal payment terms

In reverse factoring, the big company hires a bank such as JPMorgan or a financier such as London-based Greensill Capital to make agreements with its suppliers. The supplier gets to choose exactly when it wants to be paid the full amount of money it is owed, with payment dates as soon as 10 days after goods and services are delivered.

Banks and financiers team up with technology groups such as Taulia and Oracle, which insert technology known as enterprise resource planning software into the accounting systems of their customers.

Read more at The pros and cons of ‘supply chain finance’

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