Randall Manufacturing
Archive | Printer Friendly Version | Send to a Friend | www.mhi.org | MHI Solutions magazine March 20, 2013

Logistics Management
In an effort to pre-inspect truck-hauled cargo between the United States and Canada, the countries last week issued a Memorandum of Understanding (MoU) between Canada's Ministry of Public Safety and U.S. Customs and Border Protection to launch a truck cargo pre-inspection pilot program in Canada.

"Our Government aims to enhance our security and accelerate the legitimate flow of people, goods and services at the Canada-U.S. border, as envisioned in the Beyond the Border Action Plan," said Canada's Minister of Public Safety, the Honorable Vic Toews in a statement. "The pilot...will test the concept of conducting primary inspection of U.S.-bound truck cargo in Canada in order to better manage our shared border and improve economic opportunities for Canadian manufacturers and their U.S.-based supply chain partners."


Recent trends suggest a reason for optimism for the U.S. economy and its manufacturing sector, according to the quarterly Manufacturers Alliance for Productivity and Innovation (MAPI) U.S. Industrial Outlook, a report that analyzes 27 major industries.

While GDP declined at a 0.1 percent rate in the fourth quarter of 2012, manufacturing output grew at a 1.9 percent rate.


Material Handling & Logistics
The risk of introducing the Asian Gypsy Moth (AGM) into North American supply chains is high this year, judging by actions of the U.S. Department of Agriculture and Canadian Food Inspection Agency. They are issuing regulations for vessels arriving at North American ports this summer from Far East Russia, Japan, Korea and Northern China.

The Asian Gypsy Moth is a pest that can be carried on the superstructure of ships and cargo and is prevalent in some seaport areas. Inchcape Shipping Services (ISS) reports that U.S. and Canadian authorities intercepted a large number of vessels with AGM egg masses arriving in North America last year. ISS issued an announcement that vessels arriving without the required AGM documentation or if AGM infestation is detected, there can be significant delays in cargo loading or discharging activities. It is the responsibility of shipping lines to meet all requirements for entry to the U.S. and Canada, ISS added.


Logistics Management
Like the saying goes, what goes up must come down. That appears to be the case with diesel prices over the past three weeks, with the average price per gallon of diesel declining for the third straight week, according to the Department of Energy's Energy Information Administration (EIA).

Following declines of 4.2 cents and 2.9 cents, respectively, over the last two weeks, the EIA reported that diesel prices this week dipped 4.1 cents to $4.047 per gallon. Over the last three weeks, priced have dropped a cumulative 11.2 cents.

Goff Enterprises

It was never going to be cheap, but adding up the cost of compliance with government rules and regulations is proving to be quite exasperating for businesses and researchers alike. There is no precise price tag. It varies from one company to another even in the same industry and depends on a variety of factors, including business location, markets and regions served, and level of internal expertise.

There's a cost to enterprises even when they decide to exit or pull products from a market or region to avoid falling afoul of environmental laws, as some companies chose to do when the European Union first introduced its Restriction of Hazardous Substances (RoHS) directive. Some suppliers that took steps to make their components compliant with RoHS found themselves squeezed nonetheless when an OEM customer opted to exit the market because some other partners couldn't make the cut. Plus, when an enterprise leaves money on the table for rivals to pick up, the costs add up in the form of lost sales and market share.


DC Velocity
Pallet damage can add significant cost and waste to your supply chain. And it's not just the cost of repairing or replacing the pallet itself; you also have to factor in the expenses your company will incur if the product loaded on that pallet is damaged as a result.

"Whenever the pallet is damaged, most of the time, the product on top is also susceptible to damage," says Skip Miller, vice president of global quality for pallet pooler CHEP. "Even if it's not damaged at the same time the pallet is, it's more susceptible to damage during the rest of the trip through the supply chain."


U.S. manufacturers are targeting an aggressive 1.5 percent reduction in cost of goods sold (COGS) for 2013 in an effort to drive margin growth, according to a new study from The Hackett Group, Inc. A significant portion of this will be driven by a planned 1.7 percent reduction in internal manufacturing costs, which is on top of a 1.8 percent reduction in 2012. In addition to internal manufacturing efficiencies, purchased material cost reductions are expected to reach 0.5 percent of total materials cost in 2013, 0.3 percent lower than 2012, as companies continue to lock-in savings from favorable commodity price markets.

With GDP growth stabilizing in major regions of the world, manufacturers are expecting reduced sales forecast uncertainty, enabling them to plan supply requirements and manufacturing capacity with far greater confidence, the study found. The research showed that companies are taking advantage of this stability by looking inward for cost reduction opportunities and other improvements: companies are turning to strategic sourcing, improving their operations, and optimizing their supply chain networks.


It's becoming clear to me that regardless of how much digital "ink" we spill globally on supply-chain importance and tactics, we have a long way to go to optimize processes.

Bigger companies are, of course, more geared up to improve processes and invest in new technologies. But the majority of the bell curve (small to mid-sized companies) face a resource challenge.


Supply Chain Brain
In 2013, four trends will become hot topics for transportation operations in companies large and small: transportation continuity planning, fuel efficiency and the move to alternative fuels, driver shortages, and transportation category management.

Sandy, and the storm that followed, has focused shippers on the need for transportation continuity planning. Most organizations don't have a formalized plan - instead, they rely on talented people to respond to a difficult situation. We suggest three basic actions.


Food Logistics
Savvy consumers today want only quality food products for their families. But they also want that quality to be available to them at a comfortable price point. What they might not know are the intricate and complex behind-the-scenes activities railroads, short lines, trucking companies, and logistics providers perform successfully every day to bring that quality food to market at affordable prices. Just about every food product you can find in your local supermarket can ship by rail today, moving thousands of miles from growing fields to community grocery shelves.

The clockwork choreography performed within the infrastructure of today's intermodal network is beyond impressive. It relies on trusted relationships between and among Class 1 railroads, short line railroads, trucking companies, food growers and processors, retailers, groceries, foodservice companies, warehousing providers, trans-load companies, and logistics and distribution companies. The goal for everyone in the food supply chain is to provide safe and cost-effective food delivery.


Truck News
The impending US Food Safety Modernization Act (FSMA) will have major implications for Canadian refrigerated trucking companies that haul in or out of the US, as well as Canadian food companies that export product there.

During a presentation to the Technology & Maintenance Council here this morning, Bud Rodowick, manager, fleet performance with Thermo King, said carriers should be communicating with their customers to find out how they'll be affected by the sweeping legislation.


Material Handling & Logistics
By the time 2012 ended, manufacturing and distribution professionals had reason to be conflicted. For many of them business was up and leading business indicators promised that an additional slow but steady lift was coming in 2013.

This being a group that thrives on being well informed, however, they also know the threats they face. These include fragile consumer demand, continuing legislative/regulatory pressures, unpredictable oil/energy prices, decreasing margins and increasing wage pressures.

Naylor, LLC

Automation World
Knowing day and night where your materials are and what they are doing is part and parcel of profitable manufacturing these days. So, world-class manufacturers like Dow Kokam of Midland, Mich. have been continuing to invest in the latest technologies for tracking their inventories throughout their supply chains.

For example, the manufacturer of cells for automotive batteries recently put a Siemens Simatic IT manufacturing execution system (MES) at the heart of its inventory control. The move took advantage of libraries of best practices developed by the automation vendor over the years, including those for streamlining integration with other software. Through the communications channels established by these tools, the MES accesses data in the company's enterprise resource planning (ERP) system and other software.


Business Day
The global supply chain management industry is "in flux and changing", requiring a more sophisticated approach to managing the alignment of supply and demand, says Hamish Brewer, CEO of U.S.-based supply chain management solutions group JDA Software.

Mr. Brewer said on Tuesday that the "massive shift" of manufacturing capacity to Asia over the past decade had seen a big effect on supply chain planning and execution, with companies having to move products around the globe to meet demand.

The dynamics of the global economy had changed, with economic growth in the "mature economies" having slowed while the emerging economies were "still growing strongly", meaning businesses had to manage "very different strategies" for their operations in different economies. Another change had been the growth of online e-commerce where consumers could "shop across boundaries".


Logistics Management
As the defense budgets of leading countries around the world are cut, anti-piracy operations are being hard hit. The US could be the latest country to cut anti-piracy spending, meaning a further reduction to the forces patrolling the area around Somalia.

Although there has been a recent decline in attacks, it is estimated that 40% of this decline can be attributed to the presence of warships that have previously been contributed by countries including the US and UK.


Food Logistics
Food supply chains (food chains) are made up of multiple enterprises (producers, packers, transporters, processors, distributors and retailers) each with very different sets of activities to perform. There is limited "vertical integration" in food chains since rarely are more than a few of these enterprises controlled by a single entity.

However in order to function effectively, it is essential that there be an acceptable level of "supply chain integration" among these enterprises. This simply means that these entities within the food chain must cooperate to achieve certain desired results, such as assuring no delays at the transfer points.

Naylor, LLC


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