MHI Newswire

Over 50 percent of retail CEOs see supply chain as strategic differentiator, but many are not making required transformation to take advantage of the pace of change. according to a recent survey by PwC titled CEO Viewpoint: The Strategic Role of Supply Chain in an All-Channel World.

Digitally connected consumers have turned retail models upside down as omni-channel has transformed supply chains. However, 83 percent of worldwide CEOs believe that their retail supply chains are currently "not optimal" for today’s changing retail environment.

United Parcel Service Inc., the world's biggest package delivery company, said it would start charging by size of packages for all ground services in the United States as it looks to offset rising fuel costs.

Rival FedEx Corp. made a similar move in May, which had analysts speculating if UPS would follow suit and start charging by size, instead of weight alone.

The logistics giants have been struggling with high oil prices, which jumped to nine-month highs last week as concerns mounted that escalating violence in Iraq could disrupt oil supplies.

One area where design and supply chain touch is logistics. Design of both product and packaging directly impacts the packing, shipping, and return handling of both components and end-products along the supply chain. "Almost everyone recognizes there is a big value stream related to packaging and solid business reasons for paying attention," said Benjamin Büscher, managing director at Avnet Logistics GmbH.

By maximizing space utilization in shipping cartons, distributors and OEMs can reduce the use of boxes. Avnet, for example, has reduced the number of carton sizes it uses from as many as 30 to only 11. "Based on dimensions and weight of the products we are packing, we try to optimize the cartonization of those products and ship less filling material to the customer," said Büscher.

Over the next 10 years, online retail will continue to gain popularity in both developed and emerging markets and as a result, logistics companies are set to play a key role in providing vital supply chain management solutions that are able to evolve with consumers' changing shopping habits.

Like Walmart, Amazon and a handful of other retailers, Target is realizing the potential value in offering same-day delivery.

Target is testing its Rush Delivery service in Boston, Miami and the Twin Cities metro area, allowing online shoppers the option to have their products delivered between 6 p.m. and 9 p.m. that same day. Rush Delivery costs an extra $10 per order. The orders must be placed by 1:30 p.m., or they will be delivered the next business day.

In order to ensure shoppers' packages are delivered the same day, Rush Delivery orders are filled at Target stores instead of warehouses. Then, Dynamex courier service drops the orders off at shoppers' residences. Target's plan is to eventually leverage all 1,789 of its U.S. stores as distribution centers, enabling the retailer to better compete with online retailers like Amazon and eBay.

In 2013, about 179,000 industrial robots were sold worldwide, again an all-time high and 12% more than in 2012, according to the International Federation of Robotics.

IFR president Arturo Baroncelli announced the preliminary results of IFR’s world robot statistics at AUTOMATICA in Munich. "Incoming orders in the first four months of 2014 increased remarkably and requests from all customer industries are on the rise," he said. "Therefore, we expect that in 2014 growth of unit sales will continue with the same pace like in 2013."

Total U.S. business logistics costs in 2013 rose to $1.39 trillion, a 2.3 percent increase from the previous year, according to the recently released Council of Supply Chain Management Professionals (CSCMP) 25th Annual "State of Logistics Report®.

"Our mission is to develop and disseminate research that helps our members understand how to do their jobs better," said Rick Blasgen, President and Chief Executive Officer of CSCMP. "Knowing how logistics and supply chain costs affect and are affected by the larger economy is a key part of this understanding."

Corporate sustainability strategies are evolving and it is no longer enough to get our own house in order. We must look beyond the boundaries of our own operations and consider the social and environmental impacts of the entire value chain from material sourcing through to recycling. This is not a call for altruism, but rather a prerequisite for long term business continuity and a greater competitive advantage.

Over the next 20 years, the global middle class will increase to an estimated three billion putting more pressure on an already fragile and resource constrained environment. It is crucial for companies to shift their mindset from individualistic "wins" to holistic "triumphs" hence, invest into resource efficient value chains with bigger ambitions and better returns. 

When online retailers including Amazon and Flipkart launched express-delivery services promising to deliver goods on the same day at an extra cost, little did they realize that within a few months they would end up with hundreds of disgruntled customers. 

After assuring to change the dynamics of online shopping in the country, same-day delivery services seem to have mysteriously disappeared from most shopping websites.

Manufacturers and shippers are expecting the rest of 2014 to continue its economic growth trend, according to the latest Logistics Market Snapshot, from the Georgia Center of Innovation. U.S. shippers on average expect their volume to rise 3.6% over the coming year, the highest forecast since 2010. Other data points supporting these projections:

Railcar and intermodal growth is expected to drive total freight volume, expanding 5% over the next 12 months.

Domestic ground and ocean shipping traffic will increase between 3% and 4% during the same period.  

As manufacturers seek to source quality goods at the lowest cost, supply chains that were once confined to a single country or continent have stretched around the world. Managers have become adept at addressing recurrent risks—frequent, low-impact incidents such as demand fluctuations or supply delays that affect efficiency. 

However, they have devoted less energy to designing supply chains that prevent or mitigate the impact of disruptive risks such as labor strikes, political unrest, regulatory shifts, and natural disasters. These events can have severe and lasting repercussions on operations, so manufacturers would do well to devise strategies that alleviate this risk.

MHI has announced the launch of the official MHI CEO Twitter account @mhi_ceo, following a change in the association’s main Twitter handle to @poweredbymhi.

According to a release, the new account gives MHI CEO George W. Prest a means of communicating directly with the public and MHI members to share updates, observations, industry news, and general thoughts.

"As a thought leader in the industry it makes sense that MHI’s CEO should join Twitter where ideas are easily shared and spread," said Carol Miller, vice president of marketing and communications services. "This gives George an even greater voice with which to deliver valuable insight and empowering messages."

A while back I was watching my youngest son play Angry Birds.  It was interesting to watch because he would start a level and not really spend too much time looking at how things were set up.  He might look at what kind of birds he had to work with, but for the most part he’d just start playing.  Once or twice he got lucky and freed all the birds on the first try.  Mostly he’d play several times and finally figure out how to beat the level.  When he beat it, he went on to the next level.  He didn’t try to get the highest score; he was more interested in completing all the levels in each of the different themes.

So what does this have to do with Control Towers and Supply Chain Optimization?  Before I get to that, there are a couple of other pieces of the puzzle for this particular "what I learned" lesson.