MHI Newswire

Inconsistency in their supply chain data appears to be a big reason behind Target’s recent trouble with their Canadian supply chain. Instead of a slow rollout, the retailer underwent a rapid, coast-to-coast launch of 124 stores last year. This rapid roll-out along with poor supply chain data caused significant bottle-necks, empty shelves and disappointed customers.

Goods were coming into warehouses faster than they were going out, according to Reuters, partly because barcodes on some items didn’t match the data in the computer system of Target’s third party logistics contractor. Workers found errors with inventory levels, including one instance where there they found 12 shirts per box when the computer system said there should have been 24. The inconsistencies led to delays and impacted the inventory that arrived at Target retail outlets. 

Third-party logistics (3PL) providers play an essential role in hooking up shippers with the right kind of transportation service. But their numbers are shrinking.

The trend is toward fewer, larger players. A recent example was the acquisition of One Stop Logistics by Echo Global Logistics, Inc. Chicago-based Echo earned $884 million in revenue in 2013, drawing on a network of more than 26,000 transportation providers. One Stop, with $50.7 million in gross revenue last year, offers both truckload and less-than-truckload brokerage services out of offices in Northern California and Florida. Purchase price of the deal was $37.3 million.

The supply chain management profession is designed for people who like to solve problems, but the profession is facing a few of its own problems in the near-to-mid term. One is that when the bulk of the baby boomers occupying management and executive levels have retired, there won’t be P&L-driven executives to fill the slots.

 

The predictions may sound dire, but part of the need is to draw attention to solutions that will address the changing nature of the workforce and the work itself. It is unlikely companies will be left with no one watching the profit and loss statement, but driving that kind of discipline to the front line manager is a different game with new rules.

In 2014, there is renewed optimism among many business leaders about the resurgence of U.S. manufacturing and the potential for significant new facilities to be built In the United States for the first time in decades. Rising labor costs around the world and starkly lower energy costs in the U.S., combined with some highly publicized supply chain issues in recent years, are causing executives to look more closely at manufacturing opportunities stateside.

In a recent media interview, Bayard Winthrop, CEO of American Giant, one of the world’s most popular hooded sweatshirts, discussed publicly how expanding manufacturing in the U.S. has provided greater flexibility and customer responsiveness: "After solvents caused blotting on t-shirts at the Los Angeles factory recently, [Winthrop] was able to get his production chief in California on the phone with his fabric supplier in North Carolina. The issue was fixed within a few hours and only about ten yards of fabric went to waste." As Winthrop told the reporter: "This wasn’t a myopic quest to make everything in America. You just can’t get that kind of quality control with overseas suppliers." 

In today's 24/7/365 world, speed is a competitive differentiator across nearly every industry.

In the logistics sector, the need for speed has translated to a rise in the frequency with which companies have embraced the practice of cross docking -- transferring an order from one truck to the next in real-time to eliminate the need for warehousing. 

Most supply chains move in one direction: New products move from manufacturing to a customer. Increasingly, those products are coming back into the supply chain, either as returns for repair under warranty work or to be remanufactured for reuse. 

In fact, new research from the nonprofit organization APICS Foundation, finds that remanufacturing serves a broad array of strategic interests for companies, provides considerable career advancement potential for individuals and has become instrumental in furthering sustainability initiatives. 

Russia doesn’t have many Starbucks–at least compared to the United States, where they’re everywhere. Instead, Russia’s street corners have OZON.

 

OZON isn’t a coffee chain. It’s an online retailer vying to become Russia’s answer to Amazon. But unlike Amazon, it operates more than 2,000 brick-and-mortar locations where customers can pick up the stuff they purchased on its website. OZON CEO Maelle Gavet likes to pitch these "pickup points" as the "Starbucks of e-commerce." "The Russians are not as addicted to coffee as the Americans," says Gavet, 36. "We should work on that!" 

The global economy has empowered criminals and terrorists to take advantage of weaknesses in top-down government controls, and thus threaten global supply chains, says a task force of industry leaders and national security experts in a report put together by the Stimson Research Center.

The report, "Making Public-Private Security Cooperation More Efficient, Effective and Sustainable," lays out seven steps to close security gaps in global trade.

The Senate Commerce, Science and Transportation Committee has scheduled a hearing on a $265 billion transportation funding bill that was approved by a separate panel earlier this month, committee officials said Monday. 

The measure, which is a reauthorization of transportation funding that is scheduled to expire in September, originated in the Senate Environment and Public Works Committee. 

The Commerce Committee, which shares jurisdiction over transportation issues, will hold its own hearing on the bill on June 3. 

According to industry statics, order picking costs typically account for more than 50% of total DC operating costs. With the trend toward smaller, more frequent orders, order fulfillment costs will continue to increase. Naturally companies are concerned and searching for better management methods to combat this growing problem.

Many DC’s are considering deploying Labor Management Software (LMS) to help improve their bottom lines – especially when it comes to order picking operations. Software providers tout that implementing LMS into a DC often results in a labor productivity increase simply because employees know they are being tracked throughout the operation. But, distributors should be mindful that LMS isn't a one-size-fits-all proposition. According to LMS providers, large distributors with 15 or more order pickers often benefit most from LMS.

Despite many underlying tensions, the Middle East has maintained a positive economic outlook, according to Frost & Sullivan's "International Supply Chain Excellence Programme-Gulf Edition 2014." This is evident from the region's ability to maintain a positive growth rate when most economies globally have struggled to be above the red line. 

Procurement teams invest heavily in their core spend areas, but the final 20 per cent of spend, the "tail-end", remains a largely untapped opportunity for most companies.

A large number of suppliers, smaller spend volumes and a perceived lack of economies of scale mean knowing exactly where to focus attention on the tail is a daunting task. The complexity of this tail spend is usually due to the fact it has been under the radar of the procurement team for a while, who as a consequence have let the local operations team buy whatever they want under a certain value threshold. Despite a handful of challenges, Everest Group suggests the inclusion of tail spend can generate significant savings. Therefore, it’s worth exploring ways to manage the common challenges.

At $4.8 trillion annual revenues, the wholesale distribution (WSD) market is huge. WSD industry revenues are nearly 100 percent more than sales of consumer packaged goods and slightly greater than U.S. retail sales revenues.

 

WSD is a fragmented market, with many subsectors, including grocery and foodservice, oil and gas, pharmaceutical, motor vehicle parts, computer equipment and software, agricultural products, apparel, building products, industrial products, office products, home furnishings, chemicals and plastics, hardware and plumbing, and beer, wine and liquor. Every aspect of consumer and industrial products is in some way influenced by wholesale distribution.

In an industry first, ThomasNet® and Institute for Supply Management® (ISM®) have launched an exciting new initiative to honor supply chain's young "rock stars," and they're getting manufacturers and their suppliers involved. The "30 Under 30 Rising Supply Chain Stars" Recognition program will spotlight thirty professionals who are thirty or younger, and are already making their mark on the profession.