Tag Archive: supply chain network

World Logistics Center & the Sheer Relevance of Logistics

June 14th, 2017

There is no doubt logistics is relevant in the U.S. and the Inland Empire. During a presentation by the visionary behind the World Logistics Center in the Inland Empire, I heard several amazing statistics. One that stands out in my mind is the fact that the GDP of the 11 Western States would be the 3rd largest economy in the world behind the U.S. and China, largely due to the impact of international trade.

Going hand-in-hand with the sheer relevance of logistics is the fact that we’d be hard pressed to find any product solely made in any specific country. For example, Apple has 776 global suppliers. In partnering with several Southern California manufacturers and distributors, the picture below is not uncommon in terms of sourcing requirements to produce a product. The bottom line is that logistics can have a powerful impact on the world economy and on your customer experience and profitability.

World Logistics Center

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

Certainly, a good place to start is to not ignore logistics. It might seem like goods movement wouldn’t be that important yet it can have a profound impact, starting with the customer. Regardless of your supply chain network (whether you are a single manufacturing facility with local suppliers and local customers, a pure global network or anywhere in-between), you must think about your customers (both current and prospective). What type of service and experiences do you need to provide in order to gain customer loyalty? Once you know this answer, you can think further about your network and logistics implications.

Once you are evaluating logistics options, you’ll see the vast array of options and trade-offs. We are collaborating with a client currently to evaluate their supply chain network, and there are far more considerations than you’d think. Before jumping to a decision that you’ll be stuck with for the long-term, take stock of your current situation. Evaluate your forecast and future business. Consider innovative customer collaboration programs. There is a heightened interest in these lately! Understand your customer requirements, and align your supply chain network to these while optimizing sales growth/customer service, cash flow, and profitability.

 



Why Care About Rail?

May 8th, 2017

This past weekend, my APICS (premier association for supply chain and operations professionals) Inland Empire chapter had its spring executive panel and networking symposium on the topic of “Disruptive Innovations in Logistics”. We had an amazing panel of experts covering trucking, rail, import/ export, distribution and policy. It was clear that rail can have a profound impact on logistics, and there is much more involved in rail than obvious at first glance.

rail industry

For example, Union Pacific (represented on our panel) and BNSF are the two core freight rail lines supporting the U.S. There is an amazing amount of disruption and innovation going on in the rail industry to increase fuel efficiency, decrease emissions, enhance safety and improve outcomes for customers. For example, the new train configuration emits 15% less emissions/improves fuel efficiency. There are initiatives going on to stop any train from having an accident with any other train technologically. However, it is never as easy as it sounds. Will the tracks support it? Will the technology and satellites support it? Will the infrastructure support it? There is an amazing amount of money being invested as well. For example, a tier 3 locomotive costs around $1.5 million whereas a tier 4 environmentally-friendly locomotive that also maintains power and performance is double that amount.

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

You might wonder if rail matters to you. For the vast majority of companies, rail will impact the end-to-end supply chain in some manner which will impact them. On Friday, I met with a client who was re-evaluating their supply chain network. Rail is and will remain a key aspect of their network because it is an efficient way to transport goods across the country in combination with trucks, ports, etc. In this case, they transport finished goods; however, in many cases, it might not be that direct (and obvious). Many of our clients’ suppliers use the rail system extensively. When I was a VP of Operations and Supply Chain, rail was one of the modes of transportation we utilized (as it was lower cost and reliable, albeit a little slower), and of course, our suppliers definitely used it as well. Undoubtedly, it will impact you in one way or another.

Thus, it is helpful to be aware of what’s going on in the rail industry. Stay in tune with what issues are affecting your logistics system as these topics will impact costs, service and visibility at a minimum. Also, what disruptions are likely to occur? Are you ready for them? Are there risks associated with these areas? Certainly, natural disasters can have a profound impact, let alone strikes, accidents, etc. Within the last year, the freight rail systems largely came to a halt in Southern California due to fire. What backup plans do you have? And, do you understand how you are impacted by the rest of your logistics systems?

 



Southern California Supply Chain Summit Touts Impressive Facts

April 27th, 2017

According to the Southern California Logistics & Supply Chain Summit featuring executives from Amazon, UPS, the California Trucking Association and more, supply chain has a dramatic impact on the Southern California economy and the world. For example, UPS is the 9th largest airline, has 100,000 trucks, and delivers a mind-boggling 19 million packages a day. Amazon has added 8 million square feet in California in the last 5 years, and every 1 million in square feet turns into 3 million square feet of supporting buildings.  Amazon is investing in robotics, solar panels, drones and more. The LA and Long Beach ports bring in 40% of all goods for the U.S. And the list goes on…. Have you thought about your supply chain network lately?

disruptive innovations

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

We definitely should NOT bury our head in the sand when it comes to supply chain! If you aren’t constantly learning, watching trends, keeping up with regulations and requirements and thinking about your supply chain network next year and beyond, you won’t be able to respond fast enough to the ever-changing nature of the supply chain. Therefore, attend events such as the upcoming APICS Inland Empire executive panel & networking symposium on “Disruptive Innovations in Supply Chain” and other events in your area, seek out mentors and advisers, and read the Wall Street Journal, trade magazines, on-line resources and research reports to keep up-to-date.

Also, take time to think about your company’s strategy when it comes to supply chain. What should you be tracking to stay on top of what is important to your industry, your supply chain partners, and the countries and currencies where your customers and/or suppliers are located?  What type of products do you have? Lightweight but bulky products? Large, odd-shaped products? Perishable products with a short shelf-life? Where are your customers located and what type of service do they expect? Is that changing? And the list can get VERY long. Understand your situation, likely changes in the next year and your internal and external strengths and weaknesses. You’ll have a place to start.