MHI Newswire

How can a $1.3 trillion industry, getting bigger every year, be hidden in plain sight?

 

Easy. The vast U.S. logistics business, which delivers 48 million tons of freight (worth about $48 billion) daily and already employs roughly 6 million people, operates mostly behind the scenes.

 

"When you order something from, say, Amazon, you know it arrives on your doorstep in two days, but most people don't think about how," observes George Prest, CEO of logistics trade group Material Handling Industry (MHI). He adds that the field gets overlooked by new grads in particular, who think of supply-chain work -- if they think of it at all -- as "a guy driving a forklift in a dusty old factory."

Relatively few managers have done much to protect their supply chains from critical, costly disruptions, even though they know that disasters like the 2011 Japan tsunami and Thailand floods can hit business for months, a recent MIT Sloan Management Review article notes. The problem is that protective measures can be at odds with supply chain managers’ goal of improving cost efficiency.

However, managers actually can reduce the risk of major disruptions while improving supply chain efficiency by taking certain steps, such as supply chain segmentation, to achieve both goals.

The days when supply chain design and strategy were mainly focused on achieving the lowest possible cost of products and the most efficient distribution to stores is long gone. The new model emerging is not entirely driven by enterprise technology or supply chain innovations, but by the supply chains' customers. Becoming more agile, resilient, and customer-centric has become a critical strategy.

 

Today's supply chain is sailing toward a digitally driven future. Sellers need to make their supply chains more agile, resilient, and customer-centric, according to a Retail Systems Research whitepaper published by InformationWeek, a sister site.

There is a significant leadership shortage in industrial sectors worldwide, according to a global survey of more than 450 international c-level executives conducted by Stanton Chase International, a global retained executive search firm. More than 70%  of respondents indicated this shortage is a primary road block to corporate growth and is characterized by a need for greater honesty and integrity. Engineers, particularly those with business skills, continue to be the highest in-demand function.

There is consensus that continuous learning and project team involvement will be used to support leadership development, but these seem like status quo approaches, the analysis concludes. 

The robotics market in North America posted its second-highest quarter ever in terms of robots ordered in first quarter 2014, according to new statistics from Robotic Industries Association (RIA), the industry’s trade group.

A total of 5,938 robots valued at $338 million were ordered by companies in North America in first quarter 2014, coming in just shy of the all-time record of 6,235 robots valued at $385 million in fourth quarter 2012. 

Supply chain risk has fallen slightly from its all-time peak last year but businesses must remain vigilant about the threats it poses, according to the first quarterly Risk Index published by CIPS.

In the first quarter of 2014, the Index – where risk is rated between one and 100 - recorded a score of 79.8, compared with 82.2 in the final quarter of 2013. This was attributed to improved economic prospects in the UK, US and Germany, and stability in the major exporting economies of the US and China preventing a major increase. The Index was at its highest in the third quarter of 2013, with a score of 82.4.

During the past decade, a number of manufacturers have relocated their overseas operations from China and other Asian nations to Mexico — and many U.S. companies looking for their first international site are choosing Mexico. Near-shoring allows manufacturers to take advantage of myriad business cost savings.

"There is a lot of opportunity in Mexico," says Scott Livingston, CEO of Horst Engineering, a contract manufacturer of precision machine components and assemblies. "The number one advantage is that Mexico is doable."

Moving perishable commodities like fruits, flowers and fresh seafood to the far corners of the world once was feasible only by air, making the price of these products prohibitive for most consumers. Thanks to a new generation of refrigerated ocean containers, however, perishable goods increasingly are being shipped by more efficient water transport. This shift is opening up new markets to producers and providing a growing, global middle class with affordable access to the fresh foods they want to buy.

Warehousing and distribution centers continue to be very active areas for incorporating the latest innovations in automation technology. Today, some systems are conveying and sorting up to 300 cartons per minute. This is almost mind numbing considering the variety of package sizes and weights that exist in most warehouses.

 

To handle these increasing demands, warehouses and distribution centers continue to undergo a quiet revolution in the adoption of advanced technologies to store, retrieve and convey goods. Palletizing robotics, autonomous forklifts, tracking systems, and scanning tunnels are now the foundation of a new generation of highly automated warehouses. 

3D printing has long been considered a tool to quickly design and make one-off prototypes. But as the technology is becoming more accessible, more affordable and more capable, it is beginning to redefine the way we think about manufacturing almost anything – and the way we run our businesses.

3D printing is sometimes referred to as additive manufacturing. While the terms are often used interchangeably, it is more accurate to call 3D printing a subset of additive manufacturing. In all, there are about seven different types of additive manufacturing and each is capable of making parts that cannot be manufactured by any traditional process.

Manufacturing in the U.S. is a growing trend. After many years of offshoring, companies are taking a hard look at the benefits of manufacturing closer to their customer base and many are expanding or reshoring production to the U.S.

Additionally, the elevating cost and risk of offshoring production—due to rising offshore wages and complicated, unstable supply chains—has made manufacturing in the U.S. increasingly attractive to global companies and foreign investment. Chinese wages have been going up 15-18% a year and are now high enough for many products to be made more profitably here in America.

We all know that political and country stability are part of the standard supply chain risk profile. We read about it, we talk about it, but what does it really look like? Let's consider some of the high-profile stories in the news recently.

A top headline maker in news media outlets across the globe is Russia. Regardless of what your personal political views may be, events such as the invasion and annexation Crimea and the military activity in eastern Ukraine are prime examples of political and country risk coming to life. In this case, the actions being taken by these governments -- both US and Russian -- are having a direct impact on supply chains in the technology sector and beyond.

A new study commissioned by SDI Inc. found that only 45 percent of companies believe they are efficient in managing maintenance, repair and operating (MRO) assets.

Independent market research organization IMTS conducted more than 100 surveys by live interviews with manufacturing executives from companies that spend more than $5 million in annual MRO. The inefficiencies, costs and barriers to improvement associated with MRO supply chain were made evident in the conclusions of IMTS' study and point to a great opportunity.

A shift is underway for distributors of industrial supplies and the e-commerce experience they provide to their customers, according to new research commissioned by global logistics leader UPS. 

In December 2013 UPS and TNS, a global market research expert, surveyed 1,500 industrial supplies purchasers in the U.S. to gain a deeper understanding of their perceptions in five key areas of the purchasing process: researching and selecting suppliers; the purchase transaction; suppliers’ websites; shipping, delivery and returns; and post-sales service and support. The survey indicates that in 2013 more than 63% of industrial supply buyers said they made purchases online, with half of those purchasers spending at least 50% of their annual budget with suppliers who have an e-commerce platform.