Tag Archives: network

China’s Cainiao Is Revolutionizing How Goods Get Delivered. Will the Rest of the World Follow Its Rules?

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In this picture taken on November 6, 2020, an employee works in the warehouse of Cainiao Smart Logistics Network, the logistics affiliate of e-commerce giant Alibaba, in Wuxi, China's eastern Jiangsu province, ahead of Singles' Day, also known as the Double 11 shopping festival - the world's biggest shopping event - which falls on November 11.

In this picture taken on November 6, 2020, an employee works in the warehouse of Cainiao Smart Logistics Network, the logistics affiliate of e-commerce giant Alibaba, in Wuxi, China’s eastern Jiangsu province, ahead of Singles’ Day, also known as the Double 11 shopping festival – the world’s biggest shopping event – which falls on November 11. Photo by HECTOR RETAMAL/AFP via Getty Images

It might not be the slickest thing on four wheels, and it definitely won’t win any time trials, but Chinese logistics firm Cainiao’s new Xiao G delivery cart could be the future.

Every hour, the three-foot by five-foot automated vehicle picks up packages from Cainiao’s depot in Hangzhou—a city of 10 million people in China’s booming east—and tours a nearby neighborhood. Locals in pajamas pop down to meet the driverless cart at their nearest delivery point and type in a reference number. A door in the vehicle’s side pops open and the customer’s parcel can be retrieved. Xiao G heads onto the next stop, weaving ponderously through traffic via 360-degree sensors.

“It sends a message to customers after setting off and another when it arrives at a pick-up point so they know to come down,” says Cainiao engineer Long Fei. “Some models allow customers to drop off as well as pick up packages.”

In terms of innovations in logistics, Xiao G may not be as earth-shaking as the shipping container or the cargo jet. But it is the most visible aspect of a stealthy revolution powered by Cainiao, which was founded in 2014 and whose name means “rookie” in Chinese. The $10 billion subsidiary of e-commerce behemoth Alibaba says it is poised to transform worldwide trade.

How your purchases could be delivered in the future

The Xiao G is part of Cainiao’s plan to create a single ecosystem for all logistics firms across the world to plug into, allowing for the seamless transfer of goods between companies and jurisdictions. Just as myriad smartphone makers all operate on Google’s Android, Cainiao envisages thousands of independent logistics firms can operate within its system, sharing everything from labeling standards to customs information.

“What they’re doing is bigger than it appears to be,” says Jeffrey Towson, a private-equity investor and a professor of investment at Peking University in Beijing. “It might be the single most important thing happening in China’s digital space.”

Cainiao is far from a typical logistics firm, but is an open platform that allows for collaboration with 3,000 logistics partners and 3 million couriers—including the top 15 delivery firms inside China and 100 operating internationally. This enables merchants to choose the most cost- and time-efficient delivery option, based upon real-time data crunching of optimum firms and routes.

For consumers and manufacturers, this means a typical, 1 kg package can be sent anywhere in China within 24 hours for around 30 cents. The goal is to deliver it anywhere in the world within 72 hours for $3. (Currently, a DHL envelope under 0.5 kg from Shanghai to London costs around $100 and takes typically 5 days.) That stands to be a life-changing boon to coffee-growers in Peru, textile-weavers in Chad, medical instrument producers in Bangalore and everyone in between.

How the COVID-19 pandemic pushed logistics innovation

By putting sensors in everything—along with cameras in every warehouse and GPS on every truck and package—Cainiao aims to digitize the logistics process from top to bottom.

In China, the implications are vast for the $1.94 trillion e-commerce sector, currently the world’s largest and three times the size of its U.S. counterpart. Some 64 billion parcels were sent last year domestically but current delivery networks are piecemeal, inefficient and wasteful. Wander any Chinese city or town and it’s common to see gangs of smoking delivery drivers sorting through heaps of crumpled packages on the street. Packaging is also obscenely wasteful: order a 0.1mm protective film for your smartphone screen and you could find it turning up in a shoebox-sized carton packed with air pillows and styrofoam.

So there’s enormous scope to boost profits, and safeguard the environment, though savings on fuel, packaging and unnecessary storage. E-shipping labels alone save over 400 billion pieces of paper and offset a billion kilograms of carbon emissions annually, according to Cainiao. And then there is the cost. “China will process 70 billion parcels this year,” says Wan. “What if you can shave just one cent off each one?”

Wan is used to thinking big. After earning a doctorate at the University of Texas at Austin, he spent nine years at Amazon, eventually reporting directly to Jeff Bezos as director of global logistics strategy. He says Seattle “still feels like home” and credits Bezos for instilling an ethos of “let’s raise the bar and exceed expectations.”

Read more at China’s Cainiao Is Revolutionizing How Goods Get Delivered. Will the Rest of the World Follow Its Rules?

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How a Unified Logistics Approach Drives the Customer-Centric Supply Chain

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How a Unified Logistics Approach Drives the Customer-Centric Supply Chain

How a Unified Logistics Approach Drives the Customer-Centric Supply Chain

No matter the hurdles of 2020, Logistics was up for the challenge. It kept production running and critical supplies flowing while adjusting to the shocks in demand and supply patterns and delivering essential goods.

The industry has already begun its transformation into a pull paradigm. To adjust to a new logistics footprint, operations are catering to smaller and more frequent shipments, while increasing its stronghold in eCommerce. With shippers and Logistics Service Providers (LSPs) attempting to increase their capabilities for market share gain, gone will be reactive bulk handing, serial execution, and long planning cycles.

Now it’s time for logistics to up its game — again.

How can it morph from inside-out, efficiency-focused to a model that’s outside-in and centered around the customer experience? We believe the future of logistics is unified logistics, where shippers and LSPs can seamlessly plan, optimize, and orchestrate across nodes and networks, resulting in consistently higher customer service levels and efficiencies.

Let’s discuss the aspects that make unified logistics a reality.

Boundaryless Orchestration

Existing logistics systems are usually configured with static, pre-setup actions, and often lack advanced visibility. Even if visibility exists, the functionality does not allow timely execution. Warehouse systems may not be able to consider transportation information and vice versa.

Upstream Supply Chain Knowledge

Traditionally, transportation systems lack order visibility and updated supply chain plan information. In the warehouse, traditional distribution and fulfillment operations rely on aggregate and longer-term forecasts to plan labor schedules. The inventory positions in warehouse systems are determined by historical patterns and longer-term forecasts, causing operations to be reactive.

Digital Ecosystem and Network

The historic approach to collaboration and point-to-point integration won’t create an easy path to real-time communications for carriers and LSPs. Now with access to the digital network, shippers can tap into carrier networks, take capacity into considerations for order promising, and select last-mile delivery providers. Before, the carrier selection process was highly manual and used static rates, and now shippers can perform Dynamic Price Discovery to view freight rate quotes from carrier marketplaces.

Unified Logistics, powered by our Luminate Logistics and Luminate Platform solutions, arms shippers and LSPs with the ability to seamlessly plan, optimize, and orchestrate supply chain execution. They can gain consumer confidence by truly delivering the right product, to the right place, at the right time — even if the lot size is small.

Read more at How a Unified Logistics Approach Drives the Customer-Centric Supply Chain

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COVID And Now Hurricane Laura

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COVID And Now Hurricane Laura

COVID And Now Hurricane Laura

The U.S. Texas and Louisiana Gulf coast region is this evening undergoing mandatory coastal evacuation procedures in the wake of Hurricane Laura, now a Category Four storm with catastrophic strength.

Peak winds are forecasted to be as high as 150 miles per hour (240 kilometers per hour) accompanied by a possible 15-foot water surge at time of landfall with forecasters now warning of lethal flooding and wind damage. Reports point to the potential of upwards of billions of dollars in potential property loses.

Hundreds of thousands of people are reportedly at risk.

As if the COVID-19 disruption was not enough, multi-industry supply chain management teams must now prepare for whatever affects come from this major storm

From a supply network perspective the threatened area includes the epicenter of U.S. oil refining and petrol-chemical facilities, along with the major port areas of Houston and New Orleans. Facilities that are in the path of the storm are already closed and making appropriate preparations including the largest refinery complex in the United States, Saudi Aramco’s Motiva refinery.

Comparisons are already being made to Hurricane Katrina that occurred in 2005 or Hurricane Harvey that occurred in 2017, each storm of similar magnitude which resulted in upwards of $150 billion in property damage, loss of life and multi-days of industry supply chain disruption.

Read more at COVID And Now Hurricane Laura

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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

10 Ways Machine Learning Is Revolutionizing Supply Chain Management

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Machine learning makes it possible to discover patterns in supply chain data by relying on algorithms that quickly pinpoint the most influential factors to a supply networks’ success, while constantly learning in the process.

Discovering new patterns in supply chain data has the potential to revolutionize any business. Machine learning algorithms are finding these new patterns in supply chain data daily, without needing manual intervention or the definition of taxonomy to guide the analysis. The algorithms iteratively query data with many using constraint-based modeling to find the core set of factors with the greatest predictive accuracy. Key factors influencing inventory levels, supplier quality, demand forecasting, procure-to-pay, order-to-cash, production planning, transportation management and more are becoming known for the first time. New knowledge and insights from machine learning are revolutionizing supply chain management as a result.

The ten ways machine learning is revolutionizing supply chain management include:

  1. Machine learning algorithms and the apps running them are capable of analyzing large, diverse data sets fast, improving demand forecasting accuracy.
  2. Reducing freight costs, improving supplier delivery performance, and minimizing supplier risk are three of the many benefits machine learning is providing in collaborative supply chain networks.
  3. Machine Learning and its core constructs are ideally suited for providing insights into improving supply chain management performance not available from previous technologies.
  4. Machine learning excels at visual pattern recognition, opening up many potential applications in physical inspection and maintenance of physical assets across an entire supply chain network.
  5. Gaining greater contextual intelligence using machine learning combined with related technologies across supply chain operations translates into lower inventory and operations costs and quicker response times to customers.
  6. Forecasting demand for new products including the causal factors that most drive new sales is an area machine learning is being applied to today with strong results.
  7. Companies are extending the life of key supply chain assets including machinery, engines, transportation and warehouse equipment by finding new patterns in usage data collected via IoT sensors.
  8. Improving supplier quality management and compliance by finding patterns in suppliers’ quality levels and creating track-and-trace data hierarchies for each supplier, unassisted.
  9. Machine learning is improving production planning and factory scheduling accuracy by taking into account multiple constraints and optimizing for each.
  10. Combining machine learning with advanced analytics, IoT sensors, and real-time monitoring is providing end-to-end visibility across many supply chains for the first time.

Read more at 10 Ways Machine Learning Is Revolutionizing Supply Chain Management

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Supply Chain Network Optimization Technology is Ripe for Disruption

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Something struck me after spending a few days in Phoenix at Gartner’s Supply Chain Executive Conference.

Supply Chain Network Optimization is key to running an efficient and profitable operation today.

But while the market has changed, network optimization hasn’t actually advanced much since the 1990s. Yes, there are lots more features and a big increase in computing power. Yet, network optimization is still just a richer version of the 90’s experience.

Analyzing the Software Market

Network optimization software has become a big business that’s experienced exponential growth. There has been a strong adoption of boxed solutions that are feature rich with many bells and whistles.

What I heard at the Gartner conference is growing frustration with these large packages that have become cumbersome to use, too difficult for the average supply chain expert, lack flexibility and have high price tags. Sound familiar?

So what is the alternative? First, we need to go back to the original purpose. Supply Chain teams shouldn’t be overly focused on technology. Instead, they should have their eyes set on the desired outcome.

Supply Chain teams want a supply chain network that runs in an optimized fashion, with signals that indicate when and where to invest in future infrastructure. The network optimization tool should just be a means to an end.

So why hasn’t it become easier and cheaper to have an optimized network? Why are companies investing more and more in this focused discipline?

Read more at Supply Chain Network Optimization Technology is Ripe for Disruption

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Using Blockchain to Secure the Medical Supply Chain

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Imperial Logistics leverages One Network’s Real Time Value Network cloud solution to manage the entire distribution process and help ensure the delivery of clean drugs to patients using Blockchain.

One Network Enterprises, the global provider of multi-party digital network platform and services, has announced that leading logistics provider Imperial Logistics is using One Network’s cloud platform to provide an end-to-end fulfillment backbone that manages the entire distribution process of essential medical supplies.

The solution includes serialization and authentication of critical drugs such as antimalarial medications.

By establishing One Network’s Real Time Value Network™ (RTVN) and serialization and tracking solutions for country-wide fulfillment, Imperial Logistics is safeguarding the distribution of medication.

The solutions enable Imperial Logistics to increase visibility and security throughout the global pharmaceutical manufacturing and supply chain process.

“Counterfeit or contaminated medication that contains the wrong or no active ingredients has long plagued the global, pharmaceutical supply chain. New regulations are coming into effect around the globe and mandates such as mass serialization and ‘track-and-trace’ are quickly becoming the worldwide standard for regulators,” said Dr. Iain Barton, Healthcare Strategy Executive at Imperial Logistics.

RTVN’s chain-of-custody and serialization authentication capabilities enable Imperial Logistics to track the control, transfer, management, and distribution of antiretroviral and antimalarial medication and supplies in real time, as they flow throughout the supply chain all the way to the individual patient.

The solution will also be used to comply with incoming national regulations in South Africa and other countries.

Read more at Using Blockchain to Secure the Medical Supply Chain

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The Partnership for Supply Chain Management Implements One Network’s Control Tower Solution

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One Network Enterprises, a global provider of multi-party digital network platform and services, recently announced that The Partnership for Supply Chain Management (PFSCM)—a nonprofit organization providing global procurement and distribution services for low- and middle-income countries—has implemented One Network’s Supply Chain Control Tower solution to advance its end-to-end supply chain visibility.

According to spokesmen, PFSCM has a long history of innovating and driving fundamental improvements in the performance of global health supply chains.

Spokesmen added that it is migrating critical requisition, order, and transportation management functions into its existing One Network Real Time Value Network (RTVN) decision-making supply chain suite.

“Our goal is to strengthen, develop, and manage secure, reliable, cost-effective, and sustainable global supply chains to improve the lives of people in underdeveloped countries,” said Richard Owens, PFSCM Director. “By extending One Network’s Control Tower capabilities on our RTVN, we can provide real-time visibility, digital collaboration, and advanced analytics to move to true data-driven decision-making. Our collaboration with One Network is central to PFSCM’s digital transformation and provides us the foundation we need to drive the next wave of innovation within global supply chains for public health.”

In an interview with SCMR, Owens said that PFSCM first conducted an internal evaluation of its existing systems, plus a landscape analysis of what potential solutions existed before making the deal.

“The evaluation produced six scenarios, consisting of different combination of three systems,” he said. “The first recommendation was to go with One Network, which was accepted first by PFSCM’s management team, and then by PFSCM’s Board, who approved the project budget last September.

Read more at The Partnership for Supply Chain Management Implements One Network’s Control Tower Solution

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ONE Blockchain Platform to Provide Enhanced Transparency and Security for Supply Chains

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One Network Enterprises, the global provider of a multi-party digital network platform, today announced a new, flexible and cross-industry Chain-of-Custody solution built on its Real Time Value Network (RTVN).

By providing serialization and tracking across complex supply chains that involve multiple parties and hand-offs, this latest offering leverages the powerful capabilities of Blockchain to help mitigate threats such as product diversion, counterfeiting, grey market distribution, spoilage, substandard products, and unauthorized introductions.

“The global implications of substandard, falsified, and counterfeit and substandard products are huge,” said Ranjit Notani, CTO of One Network.

“While some of the compromises in traditional Blockchain solutions must make the difficult choice between confidentiality, single-version-of-the-truth, and a lack of scalability, ONE Blockchain is fully integrated into One Network’s global fulfillment backbone offering a completely secure application with fine-grained confidentiality at all levels, while maintaining a single, trusted record for every transaction without requiring any expensive integration into supply chain operations.”

The new Chain-of-Custody solution was developed to deal with the realities of today’s supply chains where end-to-end serialization – from raw materials to consumers and beyond – is not an all or nothing proposition.

Accordingly, the solution is designed to increase the lengths of chain-of-custody segments until the segments merge to form a full end-to-end secure chain.

The Chain-of-Custody solution supports serial tracking, lot tracking, hybrid tracking, lot splitting, tracking through consolidation and deconsolidation, tracking through blending and discrete mixing, hierarchical IoT operations, partial chains-of-custody, and targeted recalls.

Read more at ONE Blockchain Platform to Provide Enhanced Transparency and Security for Supply Chains

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How LLamasoft Is Designing Success For Customers’ Supply Chains

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Ann Arbor, Michigan-based supply chain design software business LLamasoft is considered one of the fastest growing technology companies in North America. The company was founded by Don Hicks and Toby Brzoznowski in the late 1990s, and offers a number of innovative solutions that help some of the world’s best-known brands make smarter, faster decisions about their supply chain operations.

Its flagship software, Supply Chain Guru, is used for optimizing and simulating supply chain network operations and modeling potential changes based on performance, costs and risks. Last year, LLamasoft released Supply Chain Guru X, the newest generation of its software, which enables companies to build living models of their end-to-end supply chains. Customers can easily visualize inefficiencies, optimize for significant improvements in cost, service and risk, and test hundreds of potential scenarios for continuous supply chain improvement and innovation. Also released was Demand Guru, a new solution that empowers companies to improve their supply chain design and strategic business initiatives by incorporating powerful causative demand modeling.

In 2012, LLamasoft raised $6 million in funding, led by MK Capital. Nike also became a strategic investment partner that year, taking a minority share in October. Jumping forward to 2015, LLamasoft had a big year – acquiring IBM’s LogicTools supply chain applications business, raising $50 million in Series B funding from Goldman Sachs to fund expansion and R&D, and acquiring South Africa-based Barloworld.

Several months ago, TPG Capital, the investment group behind companies like Uber, McAfee and Airbnb, invested over $200 million in LLamasoft after seeing great promise in the company and fully understanding the value its technology delivers to customers.

Today, LLamasoft counts among its 700 customers companies such as Michael Kors, Land O’ Lakes, Johnson & Johnson, and Wayfair. The company estimates that it signs 30 to 40 new clients per quarter. When I asked Brzoznowski if he could share some of LLamasoft’s customer success stories, he pointed out a few recent examples of customer use cases including Michael Kors, U.S. Silica, Hewlett-Packard and Johnson & Johnson.

Read more at How LLamasoft Is Designing Success For Customers’ Supply Chains

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