Tag Archive: UPS

Will Amazon Pass UPS & FedEx?

January 26th, 2020

According to a CNBC article, Amazon is already delivering half of its packages. It appears that Amazon is on target to pass by FedEx and UPS. They have had distinctly different strategies. FedEx curtailed its contract with Amazon in early 2019, and Amazon just retaliated by not allowing 3rd party sellers to ship via FedEx. On the other hand, UPS is doubled down with Amazon. Which will turn out to be better in the long run? And, as we know, USPS has been delivering packages for Amazon behind-the-scenes. Could they come out on top?

Or will Amazon just crush everyone? In recently touring the Ontario airport (the powerhouse in package shipping), it is clear Amazon has a long way to go to catch up in air freight but they are also known to speed by competitors. Amazon is slowly making inroads to ocean shipping as well. No matter who you think might win this race, if you ship or receive anything, you should pay attention!

What Should We Consider and/or What Impacts Could Arise?
Simply think about Sears. They were Amazon prior to Amazon entering the scene. Unfortunately, they didn’t keep up with changes occurring, and they are largely out of business. That annoying but not worrisome competitor might just speed by you if you aren’t staying relevant!

Additionally, from a supply chain and logistics point-of-view, there are substantial impacts. With the sheer relevance of the last mile, transportation infrastructure, customer perceptions, technology advancements and much more are becoming relevant. Undoubtedly, no matter your industry, it will be impacted since everyone relates to logistics. Not only logistics, but many industries relate to oil and gas prices or would be impacted by delays in materials etc. The impacts are widespread and substantial. Have you thought through your strategy and positioning based on these factors?

At a minimum, continually re-evaluate your supply chain road map and think through related impacts. These topics certainly relate to our new LMA-i, LMA-Intelligence series including the Amazon Effect, the Resilient Supply Chain and Future-Proofing and contact us if you’d like an assessment path-forward plan to accelerate your bottom line and customer performance.



Drones are More Than a Pipe Dream

December 2nd, 2019

In reading an Cnet article on drones, it is clear drones are more than an Amazon pipe dream. In fact, NASA Administrator Jim Bridenstine said that he expects at least one U.S. city to have have the ability to control hundreds of unmanned aerial systems by 2028. NASA is using a “grand challenge” incentive program to improve the technology’s maturity, and there are many key companies working on drone technology. Of course, Amazon is one.  They are joined by folks like UPS and Uber Elevate. Drones soon will become a reality.

One of our clients makes drones for military use, and they have a “mini Cal Tech” feel. The future will be in the hands of those who can transform technology into practical applications, improving the customer experience and the bottom line simultaneously. Are you thinking about how drone technology and other technologies might impact your industry, your company and your employees?

What Should We Consider and/or What Impacts Could Arise?
Certainly, there are a vast number of challenges in flying commercial drones especially in dense population areas like Los Angeles. However, as NASA says, with the brightest minds thinking through how to bring this to a reality, it will occur. The only question is whether you will be surprised and left in the dust by the impacts or whether you will be positioned to thrive. We plan to ensure our clients are thinking ahead to be squarely in the “thrive” category!

Drones might seem unrelated to our immediate future and to our business. However, if we receive anything or ship anything, I imagine drones might be relevant. Perhaps we should re-think the impact. And, more importantly, it isn’t the drones themselves.  Instead, it is the technology and that translation of technology into practical applications. Whether it is autonomous vehicles, artificial intelligence, the internet of things, blockchain or another buzzword, the key question is whether we are thinking about our vision and objectives and how we can leverage technology to accelerate our progress towards these objectives. Now that is worth something!

Since we are unveiling another LMA-i, LMA Intelligence category of Future Proofing Manufacturing & Supply Chain, this is quite relevant to preparing to successfully navigate your future. No matter what happens in the volatile global marketplace, if you are set up to thrive no matter the conditions, you’ll come out ahead. Stay tuned for article archives related to future proofing, just as we have for the Amazon Effect, the Skills Gap and the Resilient Supply Chain.



Amazon Adds In-Garage Delivery Option

May 20th, 2019

According to Good Morning America, Amazon is adding in-garage delivery options to its already vast array of delivery options – in-home and in-car. I remember when I first started working after college receiving a package was an ordeal! I was lucky if I could go to the post office on a Saturday to get a package or have to take a vacation day just to get the package. How insane that sounds!

Now, we can receive packages in-car (I would have loved that at the time because I could go to the parking lot at work), in-home (hard to imagine but even Walmart has been testing putting groceries away in the refrigerator with in-home delivery) and now in-garage if you don’t want people in your house or if you have pets you worry about. You can control the garage door opener from your phone and see the package being delivered for peace of mind. Talk about convenience!

What Should We Consider and/or What Impacts Could Arise?
Consumer products companies are evaluating all sorts of convenience-related delivery options to ‘win’ the race for shopping convenience. That’s why we also see Amazon tents popping up around the country as Amazon gets into the transportation business and needs last mile facilities. What will be next?

At a minimum, get up-to-speed with the latest strategies in e-commerce and logistics. LMA Consulting was a sponsor at the e-commerce and Logistics Summit recently, featuring keynoters from UPS, Georgia Tech and more. Check out these types of events to at least be aware of what’s happening in the industry and think about what types of piloting you should perform at your company.

Can you work with select customers to determine what type of service would go “over-and-beyond” for them? High-quality products and great brands are no longer enough. You better add top notch service into the mix to succeed!

You’ll find more information on these types of topics on our resilient supply chain series.



What is at the Cross-Section of Success?

March 4th, 2019

In thinking about the tours and events in which we’re recently participated, spoken or led, the audience represented a great cross-section of manufacturing and logistics industries, as well as company size:

  • Professional Women in Healthcare – spoke on the Amazon Effect
  • Aerospace & Defense Forum – spoke on the resilient supply chain
  • Anti-seminar themed Executive Luncheon – was a panelist on the topic of increasing demand
  • CSCMP state of the industry event – listened to the president of CSCMP discuss the latest statistics and timely topics in logistics
  • ProVisors manufacturers and distributors event – featuring a City National Bank expert discussing an economic forecast
  • The Founder of the UGG brand – talking about how he created the UGG brand and grew the company from the back of his van to what it is today
  • Tours of UPS, Amazon, Pacific Mountain Logistics, Shamrock Foods, Goodwill, Lifestream, ESRI and more.
  • Meetings with 9 academic institutions in the Inland Empire and surrounding areas
  • Harvey Mudd executive roundtable event –  M&A and preparing for sale
  • Webinars with APICS-IE on IoT and with the Society for the Advancement of Consulting on overcoming obstacles, leveraging PR and more.
  • And more…

So, what is at the cross-section of ALL of these tours, events and/or interactions?

The need for a resilient end-to-end supply chain!

What is in common is the sheer amount of volatility and disruption. Whether the disruptor or the disrupted, entire industries are transforming the way business is done. Some are preparing to have artificial intelligence and automation take over. For example, according to research performed at the University of Redlands, 60%+ of jobs are subject to automation by 2025. Others are dealing with massive benefits or disruption from changes in trade, depending on their role, while others choose to ignore the hoopla and are growing while everyone else is caught up in the chaos! And, this is just the beginning. Trade wars or not, many companies are near-sourcing, and looking at additive manufacturing and vertical integration.

What’s next? If you develop a resilient supply chain, the idea is you don’t have to worry because you’ll successfully navigate disruption to achieve peak performance. Contact us if you’d like to find out how to create a resilient supply chain.

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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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