Earlier this month, Clarkson University’s Global Supply Chain Management (GSCM) program presented its 17th annual Executive Seminar, delivering state-of-the-art education to corporate professionals.
“We are pleased that our executive seminar continues to attract supply chain professionals from several highly respected global companies,” said Professor Farzad Mahmoodi, the Joel Goldschein ’57 Endowed Chair in Global Supply Chain Management and director of the program. “It’s a strong endorsement of the quality of our faculty and the relevance of our curriculum.”
The annual, four-day, on-campus program attracted participants from Amazon, Toyota, Stanley Black & Decker, Xerox, Lockheed Martin, Verizon, Corning, Raymond Corporation, Entegris, Par Technology and Indium.
The participants came to Clarkson from 12 states: California, Colorado, Connecticut, Illinois, Indiana, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York and Ohio.
In addition to lectures by faculty experts, the seminar utilized a highly interactive format that employs team and hands-on activities, including simulations and negotiations exercises. Participants also benefited from networking opportunities with industry professionals and Clarkson faculty.
The event was attended by Thilawa SEZ Management Committee Vice Chairman Cho Cho Win; Ambassador Extraordinary and Plenipotentiary Embassy of Japan in Myanmar Tateshi Higuchi; Myanmar Japan Thilawa Development Limited (MJTD) Chairman Thein Han; Mitsubishi Corporation Chief Representative for Myanmar Mitsuo Ido, Yusen Logistics Co., Ltd.; Kenji Mizushima; Yusen Logistics (Myanmar) Co., Ltd. President Yasuhiko Nojima; and Yusen Logistics (Thilawa) Co., Ltd. President Tatsuhiko Saeki.
“This logistics center will be a cornerstone of our logistics business in Myanmar and an important part of our global network including the connection to surrounding countries,” said Kenji Mizushima, President, Yusen Logistics Co., Ltd.
“We can provide full logistics service from this center which has 6,300 ㎡of warehouse space, including temperature control and bonded areas, together with an assembled vehicles yard area. We will contribute to the development of the Myanmar economy by providing high-quality logistics service that meets our customer’s needs.”
The logistics facility is in the Thilawa SEZ in Yangon District, covering an area of approximately 6,300m2 out of a total area of 30,000m2.
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The market for supply chain management (SCM) software, maintenance and services continued its growth in 2016, generating more than $11.1 billion, a 9% increase over 2015 revenues, according to the research firm Gartner.
That total includes applications for supply chain execution (SCE), supply chain planning (SCP) and procurement software. Since the market’s 2% decline in 2009, the market has posted double-digit growth in four of the past six years, according to Gartner. The SCM market is expected to exceed $13 billion in total software revenue by the end of 2017 and exceed $19 billion by 2021, Gartner forecasts, with software as a service (SaaS) enabling new growth opportunities.
“It continues to be a good year for the supply chain overall,” says Chad Eschinger, managing vice president of Gartner. “The Cloud-based segment grew 20%, which is consistent with what we’ve seen in recent years.”
The push for Cloud capabilities also fueled some of the acquisition activity over the last year. Eschinger cites examples such as Infor’s acquisition of GT Nexus, Kewill’s acquisition of LeanLogistics, Oracle’s acquisitions of LogFire and NetSuite, and E2open’s acquisitions of Terra Technology and, more recently, Steelwedge.
“Broadly speaking, we’re seeing cyclical consolidation,” Eschinger says. “For some companies it’s a land grab, for others it’s an effort to add functional and technical underpinnings to go to the Cloud or provide a fuller complement of Cloud capabilities.”
Suite vendors are increasingly inclined to offer end-to-end solutions, Eschinger says, tying in customer relationship management capabilities, replenishment, network design, clienteling and more. In addition to supply chain efficiency, these solutions are also aimed at improving and standardizing the consumer’s experience.
“The Amazon effect continues to wreak havoc in retail and for manufacturers selling direct-to-consumer,” Eschinger says. “Everyone wants real-time visibility into inventory, so data and the associated analytics continue to be front and center for most organizations.”
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Driven by new technologies and e-commerce growth, changes in the global supply chain are expected to impact industrial real estate for the foreseeable future.
Since 2012, Amazon has been aggressively expanding its logistics and shipping services worldwide, disrupting traditional supply chain operators with direct competition for their business.
Chinese “e-tail” giant Alibaba, meanwhile, has deployed technology that cuts into a portion of third-party logistics (3PL) operator profits.
Alibaba’s “One Touch” platform automates export-related services, such as customs clearance and logistics, to make it cost-efficient for small/medium-sized merchants to participate in the global marketplace.
Cyclical and structural factors, including overcapacity in the container shipping industry and greater use of technology in manufacturing, retail and logistics industries, are also disrupting the sector.
Automation and robots are replacing manufacturing, logistics and warehouse workers. A survey by PwC found that 59 percent of all U.S. manufacturers are using robots for some tasks.
A recent report from real estate services firm Colliers International analyzes how these changes are impacting the logistics landscape. The report also looks at the impacts on industrial and logistics properties.
Report author Bruno Berretta, associate director with Colliers International who leads the firm’s pan-European research activities, says that Amazon Prime has entered the logistics market to take control of its supply chain and improve delivery times. He notes that unofficially Amazon is becoming a 3PL service to third parties.
The company is making a big push to establish a logistics network, opening smaller distribution facilities near customers, according to Berretta, who suggests that Amazon is likely to start competing with traditional 3PL services as it opens new markets.
Additionally, Amazon wants to reduce shipping costs, which have a big impact on profits. The Colliers report notes that in 2015 Amazon spent $11.5 billion on shipping costs, which equated to 10 percent of its global sales. By delivering its own goods and using technology to streamline deliveries, the company estimates it would save $3 per package, or $1.1 billion annually.
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Companies are re-thinking their go-to-market strategies and, as a result, making different choices about how they locate, design and operate their distribution networks.
This has created a new landscape for supply chain real estate, according to a report published by DHL. Global and regional supply chains are changing, as they adapt to the new realities of commerce and competition.
The findings are part of The New Landscape of Supply Chain Real Estate report, which has been authored by Lisa Harrington, President of the lharrington group LLC, in collaboration with DHL.
The report states that while a healthier global economy fuels the demand for supply chain real estate, it is not the only driver.
Four other forces are at work, and they are having a transformational effect on companies’ distribution center networks.
- The e-commerce revolution
- Globalization and right-shoring
- Mergers and acquisitions
- Technology innovation
“The face of global supply chain networks is changing,” said Harrington, author of the report.
“Gone are the days of operating a static real estate portfolio and tweaking it every five to seven years. Business is too dynamic and the stakes are too high.
“The fact is, the way companies manage their supply chain real estate portfolios has morphed from a tactical/operational concern to a strategic differentiator. Supply chains that operate more nimbly and at lower cost don’t just save money. They drive growth.”
Read more at New DHL report reviews supply chain real estate
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The modern supply chain is becoming more complex by the day. Businesses continue to struggle with keeping their supply chain under control but hidden risks still pose a significant threat to the industry. Even with all the new technologies making their way to the industry, businesses must be aware of these hidden risks and understand how to react appropriately.
Businesses of all kinds must keep supply chain visibility, cyber risk and natural disasters in mind at all times. All of these factors or even just one could have a significant impact on a company’s bottom line. In this current edition of the ‘Challenges and Solutions’ series, we will take a close look at the most troublesome issues in the supply chain and how businesses can avoid or plan for these risks.
Advancing technology is making its way into the supply chain, forcing businesses to constantly change systems. New services that provide an “Uber-Like” freight experience require supply chain managers to constantly hone their talents and adapt to these kind of digital disruptions. Not only with the Internet of Things be transforming the supply chain end to end, the way people utilize technology to create new processes will need to be monitored. The challenge is keeping supply chain managers and procurement professionals up-to-date and trained with all these new advancements.
Finding a solution can be challenging at first. It will take some time for a business to discover the right process that works for them. There is no one answer fits all, rather a unique, business specific training program must be developed. Some solutions may include putting together a team in charge of locating the latest supply chain innovations and coming up with a plan to train the rest of the staff. Others could be outsourced training programs funded by the organization whose employees will be taking part. Continuous training will be vital in order to remain effective in this transforming industry.
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In 2014, during a routine check from the Ministry of Health in the U.S., it was found that only 55 percent of vaccines were stored and transported in the temperature conditions that ensured the medication maintained its quality. To put that into perspective, every baby born receives vaccines to prevent diseases such as small pox and measles. If only 55 percent of those vaccinations maintain safety requirements, that creates a situation where a majority of babies don’t get the quality dosage and medication they need to protect them from diseases.
To overcome this challenge, organizations are turning to technology. More specifically, the Internet of Things (IoT) is making it possible to ensure the safer transportation and delivery of medications. Dutch pharmaceutical services company, AntTail, is paving the way for building innovative IoT applications that more effectively track the conditions of medications while in transit.
The team at AntTail built an IoT application using the Mendix low-code application development platform. The application collects sensor data from medication shipments to provide information on temperature, as well as send push notifications to patients with reminders on when to take the medication.
One of the barriers for creating IoT apps is the requirement of many disparate technologies. AntTail uses a central router as a hub for all of the sensors, collecting the data when there is a connection and storing the data when there is no connection to ensure that no data is lost. The Router uses Vodafone’s Managed IoT Connectivity Platform as a way to connect to AWS, and has a Java service running that puts the data into Hadoop.
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When an E.coli outbreak at Chipotle Mexican Grill outlets left 55 customers ill, in 2015, the news stories, shutdowns, and investigations shattered the restaurant chain’s reputation. Sales plummeted, and Chipotle’s share price dropped 42%, to a three-year low, where it has languished ever since.
At the heart of the Denver-based company’s crisis was the ever-present problem faced by companies that depend on multiple suppliers to deliver parts and ingredients: a lack of transparency and accountability across complex supply chains. Unable to monitor its suppliers in real time, Chipotle could neither prevent the contamination nor contain it in a targeted way after it was discovered.
Now, a slew of startups and corporations are exploring a radical solution to this problem: using a blockchain to transfer title and record permissions and activity logs so as to track the flow of goods and services between businesses and across borders.
With blockchain technology, the core system that underpins bitcoin, computers of separately owned entities follow a cryptographic protocol to constantly validate updates to a commonly shared ledger. A fundamental advantage of this distributed system, where no single company has control, is that it resolves problems of disclosure and accountability between individuals and institutions whose interests aren’t necessarily aligned. Mutually important data can be updated in real time, removing the need for laborious, error-prone reconciliation with each other’s internal records. It gives each member of the network far greater and timelier visibility of the total activity.
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A leading expert claims that the flower industry could save hundreds of millions of dollars just by ensuring supply chain efficiency in the lead-up to Mother’s Day.
Shipments in the floral industry spike ten-fold in the lead up to Mother’s Day and an estimated $2.6 billion is expected to be spent in 2017 even though it’s estimated that 40 per cent of flowers are never even sold.
David Bairstow, Product VP at location specialists Skyhook, reckons that incorporating the internet of things into the cold supply chain could result in massive savings.
He said: “Supply chain is an industry born out of economies of scale. The same applies to the cost of implementing IoT, as scale increases, return on investment increases. It costs pennies to ship individual flowers; however, using supply chain insights to increase efficiencies and reduce waste, can quickly pay for itself.
“Factoring in that the 40% waste due to unsold flowers amounts to $1.04 billion, it is evident that there is massive scope for improvement. If introducing IoT into the cold supply chain leads to decrease in waste by even 10%, that would result in more than $100 million of savings.”
Companies like KaBloom are constantly optimizing the day-to-day supply chain over time to achieve the most efficient path to the consumer. They see a ten-fold increase in volume on days like Mother’s Day and Valentine’s Day and their supply chain remains largely the same, except for the increased volume on those holidays so if the day-to-day efficiencies are optimized, the likelihood of failures happening on the busiest days can be drastically reduced.
In conjunction with the announcement, o9 released an eBook titled, “Who Gets the Cheese?”
Aptly named after one of the greatest business books of all time (Who Moved My Cheese?), this resource details one of o9’s systems for optimally allocating resources across initiatives and brands at consumer goods companies.
Founded by executives, practitioners and technologists that have led supply chain innovations for nearly three decades, the o9 team has been quietly developing a game-changing Augmented Intelligence (AI) platform for transforming Integrated Planning and Supply Chain processes.
The team has deployed the AI platform with select clients, including:
- Bridgestone Tires
- Asian Paints
- Restoration Hardware
- Party City
- Del Monte
- Aditya Birla Group
- Ainsworth Pet Foods
Speaking on behalf of o9 Solutions, Co-founder and CEO Chakri Gottemukkala said, “While executives we work with hear the buzz around technologies for data sensing, analytics, high performance computing, artificial intelligence and automation, they are also living the reality of slow and siloed planning and decision making because the enterprise operates primarily on spreadsheets, email and PowerPoint.”
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