Tag Archive: logistics

2019 Predictions from Manufacturing & Logistics Executives

April 22nd, 2019

Economic volatility and uncertainty are the new normal. Instead of lamenting, manufacturers have a unique opportunity. There has never been a better time to stand out from the crowd with a superior customer experience amidst the chaos. 

Not only has the Amazon Effect driven customers to expect customized product and service offerings with rapid response – creating a greater demand for local manufacturing – it has also made innovation a cultural norm. There is a trend towards near-sourcing, vertical integration and agile strategies to proactively address these elevated expectations as well as to meet customers’ insatiable need for last minute changes.

With the rise of e-commerce, increasing transportation costs and global risks, sourcing experts are re-evaluating their global supply chains. Logistics is gaining in relevancy as transportation costs increase, sustainability efforts expand and managing inventory becomes a hot topic as accelerating cash flow becomes more relevant.

Drones, robotics, IOT, artificial Intelligence, big data predictive analytics and additive manufacturing are transforming entire industries while providing the tools to create a customer-centric, resilient supply chain. However, technology alone will achieve nothing. With a differentiated strategy and the right talent, the opportunities are endless. 

We asked business owners and executives for their predictions for 2019. From aerospace and defense to food and beverage to building products, the perspectives may be different, but the outcome is the same: Opportunity Abounds. 

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2019 Predictions Report: What to Expect and Where to Focus

March 26th, 2019

I’m thrilled to launch our 2019 Predictions Report, “Manufacturing & Supply Chain in the New Normal: 2019 Predictions from Manufacturing & Logistics Executives” discussing what to expect and where to focus.

We assembled this based on these types of questions:

  • How do we increase profitability in today’s new normal environment?
  • Do we see growth or recession? Or something in the middle? What should we do?
  • There are so many technology options with the promise to transform entire industries. Should we be pursuing? Which ones?
  • Customers expect quick delivery with changes along the way (even while intransit), excellent on-time-delivery (OTD) results and more. Where should we focus?
  • Trade wars and global sourcing – what to do?!
  • How is it trending in our industry? Are there any hot buttons, like talent?

Discussions with several manufacturing and logistics executives and experts are included in the report. Feel free to pass on this link to colleagues and friends to get a free copy of the report.

With that said, since you are already on our newsletter list, here is a direct link just for our newsletter subscribers.

Thank you to our clients and colleagues who participated with their predictions and advice! Please share your feedback. We would love to gain your insights, concerns etc. We’ll incorporate into our upcoming interview and article series.



Ideas to Fill Peak Capacity Periods

February 27th, 2019

As we toured several e-commerce facilities such as UPS and Amazon, it became obvious that the sheer volume during peak season presents a huge dilemma. For example, UPS goes from 250-300 containers per night to 450 during peak season. Now that is quite a surge! Amazon has similar surges and stated facts such as 68 million orders on Cyber Monday.

Peak season occurs in other industries, as well. For example, building products companies tend to have a summer season since there are more issues to navigate in winter conditions. Since working with a large number of these companies, we’ve seen it range from a low of around 10-20% surge to almost 70% of the year’s volume sold during the summer. That can definitely be a challenge to navigate!

In this case, we are talking about labor but the same issues relate to machine capacity, storage capacity, transportation capacity and many others. We find that this area alone can achieve a significant return on investment as companies better align demand with supply. In fact, in 80% of our clients, these types of programs do the best job of achieving bold customer promises and profits simultaneously.

We have found several ideas to fill peak capacity periods. Of course, there is no one formula for success.  Each company has unique circumstances that require different solutions. However, a few ways to meet peak capacity include:

  1.  Hiring temporary workers for the peak season – of course, this strategy sounds like an easy win. If only it were that easy! UPS starts hiring seasonal workers prior to the holiday season in order to provide training. In 2018, they expected to bring on 100,000 seasonal workers. Over the last 3 years, 35% were hired into a full-time role after the peak season, creating an interesting enticement. Since every e-commerce related business needs seasonal workers, you need to provide some sort of benefit or enticement to fill these positions.
  1.  Overtime – of course, this is commonly used throughout manufacturing and logistics organizations. We’ve seen many aerospace firms running at high rates of overtime for many months, even years, in a row. It can be a tricky issue as employees become accustomed to higher paychecks, and the costs add up. On the other hand, people get tired and can get less productive and want a break. Counter-intuitively, it can also be the better financial decision given the learning curves associated with complex manufacturing roles. Of course, the answer is, “It depends”.
  1.  Hiring people with developmental disabilities – as our Inland Empire Economic Partnership leadership regional academy toured Goodwill and we have worked with clients such as Oparc, we have learned that people with development disabilities can be an ideal solution to fill peak capacity.  Thanks to Oparc for their research statistics: 1 in 7 people have intellectual or developmental disability, yet, only 19% participate in the labor force, leaving a significant opportunity to supplement the labor force. Studies show that these folks rate higher in reliability, productivity and loyalty. For example, a DuPont study showed that 90% of employees with Disabilities rated average or better on job performance. According to Walgreens, disabled employees had 40% lower accident rate, 67% lower medical treatment costs and 78% lower overall costs associated with accidents. And, Marriott shows a 6% turnover rate vs. 52% overall. It is worth checking this option out! Please contact us for a referral.
  1.  Partnering with companies with counter cyclical peak seasons – again, have you thought about partnering with strange bedfellows? Why couldn’t an e-commerce company with a winter peak season collaborate with a company in the building products industry with a summer season? In a way, the 3PLs follow this model. Having counter cyclical clients is an important aspect of maintaining a strong workforce as a 3PL.
  1. Outsourcing – one of the advantages of outsourcing and overflow capacity is that you can use it when you need it. Of course, you’ll pay a premium but it can still provide maximum value in several cases and meet the peak season requirements.
  1. Leveraging your extended supply chain – you never know what collaboration might make sense with your suppliers, customers and other supply chain partners until you ask. Explore the possibilities.

One thing is definitely true. You will not succeed during peak season if you wait until it hits to address your capacity shortfalls. Be clear on your strategy and make sure to build it into your plans. It isn’t all about peak season. Perhaps off-peak is “the time” to upgrade your infrastructure such as your ERP system, your business processes and to explore your customer collaboration opportunities. If you’d like an expert to weigh in on your plans, contact us.

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The Global Logistics Landscape

February 15th, 2019

In the past two weeks, I attended the CSCMP State of Logistics event, am preparing for the Future of Supply Chain & Logistics reception event as part of the leadership team and have debriefed with LMA Associate, Elizabeth Warren who attended the State of the L.A. Port and the State of Long Beach Port events. To summarize, I’ll borrow from the Port of L.A.: “Busier, safer, greener”.

Still number 1 and 2 in the U.S., the ports of Los Angeles and Long Beach increased volume last year to 9.5 million TEUs (twenty-foot equivalent units) and 8.1 million TEUs respectively.  With the threat of tariffs, there was a surge of imports around the holidays, creating record-breaking days in both locations and the second busiest month in history at Long Beach.

Significant progress has been made in terms of air emissions. From 2005 to 2017, diesel particulate matter has decreased by 88%; nitrogen oxide has decreased by 56%; sulfur oxide decreased by 97%; and greenhouse gas by 18%. In terms of targets, there is a goal to reduce greenhouse gasses by 40% in 2030 and 80% in 2050. Certainly, California leads the way when it comes to green and sustainability.

Logistics is around 7.7% of GDP or $965 billion. It has increased around 20% since 2006 yet decreased as a percentage of GDP by 30%. In comparison to other countries, we are far lower with Japan the closest around 11% and China the furthest around 18%. E-commerce is increasing around 15% per year, and it carries high supply chain costs around 25-30% of e-commerce sales.

All modes of transportation were up (airfreight, rail, trucking)! With that said, trucking is 76% of transportation spend and is the 100 pound gorilla. Rates have been on the rise, capacity is tight and shippers have to be more proactive. There are lots of technologies being explored but no near-term, viable solutions to resolve the issues. Again, similar to the ports, there are countless conversations about sustainability.

What Should We Consider and/or What Impacts Could Arise?

Global logistics is relevant to GDP and to every business that produces, distributes and sells products. Whether an aerospace manufacturer with multiple outside service steps all requiring transportation or Walmart, requiring a supply chain sourced both locally and from afar as well as grocery delivery on the customer side, without logistics, business will cease.

In today’s Amazon-impacted marketplace where quick turnaround, short lead times and frequent order changes are the norm, re-thinking your manufacturing and extended supply chain footprint is becoming a necessity. Whether re-evaluating make vs. buy decisions, re-configuring sales channel structures or revising inventory fulfillment practices, logistics is one component that can no longer be an afterthought.  

In our view, those clients with a resilient supply chain will thrive in this new normal business environment.

To learn more about how to create a resilient supply chain to navigate disruption and achieve peak performance, check out our new series or contact us for customized expertise.



Guest Blog by Jyoti Sharma

January 22nd, 2019

3 Ways AI is Transforming the Supply Chain

Artificial intelligence is increasingly becoming a vital part of the leading supply chain companies and is transforming the supply chain system at a very fast rate, even though many companies aren’t ready for it. The new inventions in the logistics IT solutions & various supply chain technologies are leading the organisations to leave their mark of presence in the race of digitisation. The inculcation of AI in the supply chain will help in collecting the data from various different sources and generate that intelligence, which will further help in making the predictions based on the historical pattern of that particular data. This will help in a smooth running of a cognitive supply chain.

The following trends are responsible for transforming supply chain business:

              1. Autonomous vehicle

Various Automotive Industries that are using artificial intelligent applications involve driverless cars that have received the most attention during the rise of this era. Driverless cars are no more a dream. With the development of technology where powerful computers, GPS systems and other small but distinct notable improvements have come up, Driverless cars are no longer a dream. Making all the procedures technology pro and highly efficient.

              2. Robotic solutions

Robotics solution is the one taken up by many distinctive companies for managing warehouse automations. Companies are using artificial intelligence to forecast what order inventory will arrive and leave the warehouse, allowing the pallets to be placed in the correct positions, boosting efficiency in moving products. Such technologies work best under the influence of efficient warehouse management system only.

            3. Drone deliveries

The popularity of drones is swiftly increasing across various industries like e-commerce and logistics. But still, the growing number of drones is posing new challenges like increasing air traffic, laying optimum air routes, dealing with emergencies like collision and managing drone swarms, among others etc. AI enabled drones are eliminating the last mile delivery challenges as it allows drones and other machines to make decisions and operate on their own on your behalf. AI enabled drone delivery is going to be very beneficial for the local deliveries.  

AI is driving the evolution of digital supply chain networks. As we step into the future, there are various AI powered supply chain analytics softwares that empower you to make decisions proactively based on the diverse data across your supply chain. It helps in making your supply chain responsive and enables you to have a real-time control on your supply chain.

This initiative can help supply chain managers to be more dynamic and efficient in designing strategies. Investing in AI is an important next step for supply chain companies looking to lower costs and improve productivity. Supply chains can also use AI to minimize the repetitive manual tasks and begin automating processes. This can enable the companies to reallocate time and resources to their core business.

Author Bio-

I am a budding and aspiring blogger and my area of interests are Supply Chain, Logistics, Retail Logistics, international Freight etc. Being a writer by profession and by choice I like to contribute to various quality websites especially those who talk about my area of interests.

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Jyoti Sharma

Consultant/Writer

Holisollogistics.com