MHI Newswire

There are a lot of factors that determine success in the omnichannel marketplace. But retailers are discovering that their logistics and fulfillment operations are consuming a larger share of the oxygen in omnichannel conversations than ever before.

According to a UPS Pulse of the Online Shopper survey, consumers want more flexibility in shipping and fulfillment, including the ability to select delivery dates and times, and to reroute packages based on personal preferences. The demand for flexible shipping options reached a new high in 2013, when 44% of shoppers abandoned carts due to an estimated delivery time—a sharp increase over 2012.

MHI will conduct its annual state of the industry press conference during MODEX 2014. Scheduled topics include:

• An economic update on the material handling, logistics and supply chain industry 

• MHI Annual Industry Report and trends shaping the industry 

• MODEX 2014

• ProMat 2015

• Major 2014 Industry initiatives

Freezing temperatures. Record snows. Planes grounded. Factories shuttered. Traffic snarls. Truck movement halted. Shelves are empty. It is a bad winter, and shipments are five to ten days late. Most manufacturers are helpless. They do not know the status of shipments. 

Today, supply chain outsourcing is a reality. Companies are dependent on each other. They flows are more  intertwined than ever before. In a recent study, 90% of manufacturing companies report having some level of outsourcing. Thirty percent outsource 40% or more of their manufacturing. Logistics levels of outsourcing are higher than manufacturing. Fifty-five percent outsource at least 40% of their logistics on a volume basis. So when, the snow falls and traffic snarls, and the cadence of the supply chain shifts, the manufacturer cannot see. 

U.S. manufacturing activity accelerated in February at its fastest pace in nearly four years due in part to growth in new orders, an industry report showed on Thursday.

Financial data firm Markit said its "flash" or preliminary U.S. Manufacturing Purchasing Managers Index rose to 56.7 in February, its highest since May 2010, compared to 53.7 in the final reading for January. Readings above 50 indicate expansion.

As the supply chain goes, so goes the country, to coin a phrase, and in this era of stagnant-at-best economic growth, there’s the very real sense that it’s mainly thanks to the skills of the men and women piloting the supply chain that the United States is as resilient as it is. Indeed, during the depths of the recent Great Recession, when most companies were retrenching into survival mode, a number of prescient companies proactively sought out and hired top supply chain talent. Having a foundation of excellence built on the best talent is, according to Ted Stank with the University of Tennessee, "the number one requirement for transforming a supply chain."

Top supply chain talent, Stank explains, have four critical competencies: global orientation, leadership skills, technical savvy and superior business skills. To those four characteristics, we would add a fifth: resiliency.

Today's complex and connected supply chain translates into quick communication with partners. At the same time, it creates huge opportunity for data leakage and security issues that need to be addressed proactively in supply chain systems.

 

"Every enterprise is connected in some way to its partners in the supply chain and must allow access to communicate back and forth," Bala Venkat, chief marketing officer at the applications security vendor Cenzic, told us. "That exposes third-party applications. Unfortunately, we see a high level of confusion about what application security is. Too often, it gets confused with network layer or secure socket layer security."

A tectonic shift under way in the global oil trade is increasing the average distance traveled by a typical barrel of oil. This is likely to push shipping rates higher and benefit shipping companies as well as shipbuilders.

 

The U.S. energy boom is largely responsible for the shift, as sharply higher domestic production of oil and gas is moving the country off its perch as the world’s largest oil importer even as Asian appetites for hydrocarbons continue to rise—a good thing for traditional U.S. suppliers, including Latin America and West Africa, who are finding ready customers (much) farther away.

President Barack Obama set a timeline Tuesday for his administration to issue new fuel-efficiency standards for freight trucks and tractor trailers. 

The new, stricter standards for medium- and heavy-duty vehicles will be proposed by the Environmental Protection Agency and the Transportation Department by March 2015, he said. The agencies are then required to implement the standards by March 2016. 

Snowstorms and frigid temperatures across much of the USA the past six weeks have stalled shipments, forcing some manufacturers to shut down for days and delaying deliveries to some retailers.

The snarls have compounded the effects of weather on the economy. Last week, the government reported that factory production fell sharply in January. Some workers have seen reduced hours and pay.

The disruptions are also helping drive up some trucking rates — costs that could get passed through to consumers.

A lack of systems to meet local laws and ethical standards is the number one supply chain issue in Latin America, according to a report.

The Sedex Latin America briefing said inadequate working conditions and forced and child labour are the key threats in the region, with the countries of Mexico, Brazil, Colombia and Peru rated the highest risk.

The Toyota Production System or lean management has been described in many ways. It is the systematic elimination of waste. It is continuous improvement. It is striving for interruption-free processes. It is a passionate focus on serving customers. It is many things. But one aspect of lean that has not been given enough attention, in my opinion, is how lean is an organization wide system of motivation that creates a high-performance culture.

Too many lean implementations suffer from a focus on problem-solving skills, but a failure to attend to the system or culture of motivation. Too many rely on the "they oughtta wanna" assumption, which usually results in disappointment.

Portcentric logistics is seen as the new way forward but is there enough land to support port related warehousing round UK ports? Liza Helps investigates.

 

Demand for portside warehousing across Europe – based on growth in container volumes – could reach 215 – 323 million sq ft by 2030, according to Jones Lang LaSalle’s most recent European Seaports: future logistics hotspots research. 

Dramatically improving supply chain capabilities and performance requires significant changes to practices and processes. Supply chain transformation involves changing multiple functions, and impacts processes and individuals across the organization. 

The question many ask is, "How do we transform?" Regardless of what changes need to be made to achieve a particular level of performance, an enterprise should take the following steps.

You’re a major retailer and you’ve decided that your supply chain is going to go green.

It’ll be great for CSR, PR, and improving profit margins from reduced waste and improved consumer opinions. There are a good few ways of entering a green supply chain management strategy, and an increasing amount of literature every year is being devoted to discussing green SCM.

Undoubtedly going green is a great move for a consumer facing company. But there are problems that need to be addressed further down a value-chain you go. And these problems can be a plethora of items including a level of uncertainty regarding: market position, stakeholders concerns, and change.

Many companies’ approaches to applying ‘Lean’ principles to their procurement operations are fundamentally flawed and misconceptions about the idea are rife, according to experts from a top industry consultancy.

 

Speaking exclusively to Supply Chain Digital, experts from Hitachi Consulting championed the use of Lean principles, most commonly associated with production and manufacturing, in procurement operations.