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In the New Normal Supply Chain, Firms Must Pivot Quickly

supply chain

In the New Normal Supply Chain, Firms Must Pivot Quickly

What will our supply chains look like after the impact of the pandemic has turned from an all-hands-on-deck crisis to some sort of new normal? Will either demand or supply patterns return to pre-COVID-19 levels? And should that happen, will it be in carefully managed phases, or more rapidly?

Many consumer-market experts speculate that we may find some of the changes in consumer buying—such as increased adoption of food home delivery or stocking cupboards with monthly visits to large-format stores—habit-forming, even after restaurants, hotels and fast-food outlets are once again operating at max capacity.

To imagine the future, we can look at what’s happening in the present crisis—astonishing, even heroic acts of supply chain flexibility.

-An industrial gases company pivoted so it was able to deliver a month’s worth of desperately needed medical oxygen in three days.

-A chain of currently shuttered department stores has loaned its distribution facilities and assets to a supermarket chain under pressure to keep food shelves full, as far more of us than usual eat three meals a day at home.

-A plastics molding company designed, developed and distributed a foldable, portable intubation shield within weeks.

These businesses have something in common—they have been able to use data and industry-specific software solutions to quickly adapt to shifting fulfilment and delivery operations, often over and over.

The need for flexibility in making and distributing goods is and will be, most obviously on show at the delivery end, where goods and services reach the point of purchase or consumption. Today’s newly responsive, efficient supply chain needs to stretch all the way to the supermarket shelf or patient’s bedside.

That won’t be possible without the ability to access and analyze extraordinarily detailed data about delivery operations. For distribution companies, this will be the key to competing and winning in a post-COVID-19 business landscape, where the ability to pivot quickly will be most prized.

What’s absolutely crucial is that companies can quickly model multiple potential new distribution strategies before they make actual changes. When granular-level information about what was delivered where and when yesterday is fed into delivery-planning software, it can help supply chain executives run myriad what-if scenarios to determine what resources to deploy tomorrow. What inventory, trucks and drivers would be required if sales volume dropped 50 percent, or doubled? What if orders are fulfilled out of a different distribution center?

Purpose-built route planning software like Aptean’s answers these and other questions in a matter of minutes—a superpower we are all going to need in the future. For example, it means a retailer can pivot quickly and easily, back and forth between replenishing outlets and delivering to homes, or rapidly increase service to demand hotspots. Regarding the “new normal” in delivery operations, the only certainty will be uncertainty. The ability to deftly manage this unpredictability will be a huge competitive advantage.

And yet, for a large number of businesses, delivery operations remain hampered by a lack of visibility or fine-tuned control. Too many rely on rudimentary distribution planning tools, or even paper-based systems to plan and assess their delivery operations. This means they are caught flat-footed when circumstances demand rapid change. Worse, the critical information about particular customer needs and demands too often resides in the head or heads of delivery planning staff, and becomes unavailable when those workers go sick or leave.

We need to pay heed to the lessons we’re learning during this challenge. The supply chain, like the virus, is global, but its effects are ultimately felt in individual businesses and homes. For companies reliant on delivery operations, if management of the final mile wasn’t a strategic imperative before COVID-19, it is now. It’s time to wake up to that reality and build delivery capabilities that are more flexible, more collaborative and, above all, data-smart.

To learn more about how to automate your route planning, contact info@aptean.com.

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Nicole O’Rourke has 25 years of success in building strategic marketing organizations and is responsible for leading Aptean’s global marketing and communications efforts as Chief Marketing Officer. She previously held the position of Senior Vice President and CMO for Manhattan Associates. Before that, she served as CMO at Covance Inc., and in senior strategic marketing roles at Aetna and Johnson & Johnson. O’Rourke holds a Master of Business Administration from Northwestern University’s J.L. Kellogg Graduate School of Management and a Bachelor of Arts in English Literature from Cornell University. She resides in Atlanta, Georgia, near Aptean’s global headquarters. Nicole can be contacted directly on LinkedIn or via info@aptean.com.

delivery

Is your Ecommerce Caught Between Delivery Delays and Voided Service Guarantees? Strategies to Survive this Situation.

The pandemic has disrupted ecommerce businesses in unique ways. While a few ecommerce stores went bust, others doubled their revenue overnight. Regardless the parcel volumes continue to soar. The parcel volumes are so high that even major shipping carriers like FedEx and UPS are overwhelmed. For example, FedEx alone saw a 35%-40% increase in B2C deliveries. An unprecedented rise in shipments has forced both the carriers to resort to undertaking stringent actions.

Carriers Suspend Service Guarantees

FedEx and UPS have suspended money-back guarantee for ground and priority services. Let’s take a minute to understand what this means for merchants. An escalation in order volumes directly impacts the carrier’s on-time delivery performance. It is almost a given that merchants will experience a minimum of 20% increase in delays. An explosion in sales, impatient customers, and shoddy delivery experience. Add to it, COVID uncertainty and unaccountability resulting from voided service guarantees. Sounds like a disaster in the making?

When delays are imminent

With the growing volume of residential deliveries clogging their network, carriers may redirect traffic to relieve congestion. Suspension of guarantees also means that FedEx or UPS can switch your priority shipments to lower-cost ground mode without notice. Expect more delays for overnight and priority shipments. While you pay for a premium service there is no way you can hold carriers accountable.

Watch out for COVID-19 Surcharges

In order to mitigate the strain on their delivery network, UPS followed by FedEx has come up with peak volume surcharges. A $30 surcharge as additional handling charges and $0.40 for services like FedEx SmartPost or UPS surepost. But the surcharge that retailers must be most concerned about is the residential area surcharge. A surcharge of $0.30 will be levied on all orders that are to be delivered to residences.

Strategies to survive

The disastrous combination of delivery delays and rising shipping costs can ruin your sales revenue. It is crucial to take steps to mitigate the impact of COVID on your shipping costs as well as customer experience.

Here are a few strategies to follow:

1. Re-negotiate your shipping contract: UPS or FedEx can’t spring a surprise charge. Especially during these trying times. Work through your shipping profile to figure out the impact of these charges on your costs. Negotiate with your FedEx or UPS rep and draw up a special contract for the COVID situation.

2. Consider charging for order delivery: Free and fast delivery has been your brand’s USP. However, if including a shipping fee helps your business stay afloat, don’t shy away. Don’t let the additional surcharge eat into your profit margin.

3. Delays should not deter you: Factor in for delays while revisiting the estimated date of shipments on your shipping page.  Communicate well in advance to your customer support team. Mention the changes to delivery times due to COVID On your home page.

4. Over-communicate with your customers: Let your customers know at all times where their package is. Stay on top of your orders at all times. Act quickly in case of a delivery exception.

5. Audit your invoices: Businesses are slashing all the excess spending. As for ecommerce, you should start by auditing your shipping invoice. It is more critical than ever to examine each and every line item on your invoice. This can help you save 10%-12% of your shipping costs.

The peak volume surcharges and service guarantee suspension are supposedly temporary. When things go back to normal, FedEx and UPS are likely to reinstate these service guarantees. However, with no clear timeline in businesses must prepare to navigate the status-quo as long as it lasts.

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Simon Perkins is a Shipping Cost Management expert at AuditShipment.com, a real-time parcel monitoring and AI-powered audit service that provides businesses with deep shipping intelligence and actionable cost recovery insights.

Global Trade Magazine Opens Nominations for 8th Annual “Americas 50 Leading 3PLs”

Global Trade Magazine has officially kicked-off its 8th annual “America’s Top 50 Leading 3PLs” nominations. This year’s selected nominees will showcase the most competitive movers and shakers transforming domestic and international logistics, exceeding client expectations while maintaining an exemplary company profile with competitive solutions.

Following last year’s focus on “needs-based” and “high demand” categories, the 2020 feature will spotlight specialty industries including E-commerce/Omni-Channel, Temperature-Controlled, Hazmat, Distribution, Freight Forwarding, and much more.

“It’s a measure of the quickly growing/changing/evolving global marketplace that arguably the most critical industry serving it, Third Party Logistic Providers (3PLs), continues to grow, change and evolve at a dizzying pace,” explained former senior editor Steve Lowery.

Global Trade Magazine will determine the final 50 nominations based on industry reputation, outstanding operational excellence, game-changing initiatives, disruptive technology solutions, and unmatched levels of innovation. This list showcases leading companies while providing a comprehensive list for businesses seeking new partnership opportunities.

“It’s easy to say that one must move faster, deliver services quicker, be more innovative and have organizational agility to flex with the world, but it takes something quite different to lead the cultural transformation that is required to make these goals a reality,” said Rich Bolte, CEO of BDP.

“Leadership will have to change as well. Leaders will be measured by their ability to innovate and create potential disruptions. The old paradigm of measuring only performance and execution has changed.”

To see a complete list of recipients, please visit globaltrademag.com to view the current issue.

Nominations are currently open and will be accepted through August 15 at 5 p.m. CST.

CLICK HERE TO NOMINATE YOUR 3PL

foreign

The Proposed Expansion of Mandatory Foreign Investment Filings During the Pandemic

In the midst of the pandemic, the Committee on Foreign Investment in the United States (“CFIUS”) has proposed several revisions to its regulations (“Regulations”) that change when short-form filings (called “declarations”) are required with respect to covered foreign investments of U.S. businesses which work with critical technology [2]. What is most significant for foreign investors is that the proposed rules expand the mandatory declaration and required CFIUS review to include critical technology transactions that range well beyond the 27 industries originally designated by CFIUS – to cover all sectors of the economy [3].

The raison d’etre for this proposed CFIUS rule change is not entirely clear. While the modification largely reads as being technical in nature, CFIUS does, however, observe that other, unspecified “national security considerations” are involved. Thus, a reasonable inference from current circumstances is that CFIUS seeks the ability during the Covid-19 crisis to review acquisitions by China in a broader range of business sectors in order to assess in advance the national security risk, if any, in situations where financially struggling U.S. firms with innovative dual-use technology might be more willing than before to consider such investments as a lifeline.

Interested parties in the business community should note public comments are due by June 22, 2020.

The Proposed Expansion of Mandatory Filings for Critical Technology Transactions

By way of background, under the existing Regulations, a mandatory declaration is required for transactions involving certain U.S. businesses that: 1) produce, design, test, manufacture, fabricate, or develop one or more “critical technologies”; and 2) use the critical technology in specified ways in one or more of 27 specified industries. Significantly, under the revisions, CFIUS eliminated the second prong of the requirement – i.e., the nexus to 27 industries, and refocused the requirement instead on companies that have critical technology that would require certain export licenses or other authorizations to export, re-export, transfer (in-country) or retransfer the critical technology to certain transaction parties and foreign persons in the ownership chain.

CFIUS indicates that the new focus of the mandatory filing requirement on export control requirements for critical technologies “leverages the national security foundations of the established export control regimes, which require licensing or authorization in certain cases based on an analysis of the particular item and end-user, and the particular foreign country for export, re-export transfer (in-country) or retransfer.” 85 Fed. Reg. 30894.

While that is true enough, in fact, the existing standard already is based on the export control standards. The term “critical technology” was and still is, defined as technologies that are subject to export controls (i.e., articles or services on the U.S. Munitions List, items on the Commerce Department’s Control List, and other specialized lists)[4]. Now, in addition to being subject to export controls (e.g., on one of the enumerated lists of controlled items), the technology must specifically be subject to a licensing requirement.

In effect, CFIUS has doubled down on export controls as the criteria for mandatory filing – the item must be on a controlled list and a license must be required for the particular foreign acquirer that is a party to the transaction.

The Significance of the Proposed Change in Mandatory Filing Requirement

Is this licensing requirement a meaningful distinction for foreign investors? While many of the items on these export control lists do require licenses or other authorizations for export, this is not necessarily the case for the export of all items to all countries for all uses. On some lists (e.g., the Munitions Lists), every article and service requires a license for export to all locations. On others (notably the Commerce List, the main list of “dual-use” technologies), items controlled are only licensable for certain countries and certain purposes to certain end-users, as designated on the list.

Overall, however, the universe of items on controlled lists versus those on the lists where licenses are required probably aren’t all that different – i.e., the range of mandatory filings is not very meaningfully limited by this change. Notably, for certain near-peer competitor countries like China and Russia, the distinction is particularly limited. Indeed, for these countries, many items on the Commerce List will require licenses in any event. Moreover, since China is under a U.S. arms embargo in place for many years, any export of an article or service on the Munitions List would certainly require a license (which would not be granted).

In any event, even if the new nexus to export license requirements narrows somewhat the class of critical technology transactions subject to mandatory declarations, this change is undoubtedly more than offset by the elimination of the required nexus to the 27 specified industries. Under the proposal, foreign acquisition of any U.S. business – regardless of what industry it works in – would require a mandatory declaration where the business utilizes critical technology provided that certain export licenses or other authorizations would be required to export such items to the foreign acquiring party.

On balance, this change is significant. It broadens the scope of the mandatory filing requirement to a wide variety of acquisitions involving critical technology applications from medical devices to commercial vehicles to a wide range of high tech sectors. Foreign investors thus would need to be considerably more diligent in considering the CFIUS risk with respect to structuring a broader range of these acquisitions.

Why the Expansion of the Mandatory Filing Requirement?

Why the expansion of mandatory declarations and does it relate to the pandemic?  CFIUS offers only vague explanations – noting its further consideration of public comments made in prior rulemakings, the Committee’s additional experience assessing mandatory declarations, and “other,” unnamed, national security considerations” [5].

One very possible set of such “national security considerations” is to afford CFIUS the ability to investigate a considerably broader range of transactions involving China where any critical technology requiring a license is involved. Since many dual-use items on the Commerce Control List and everything on the Munitions List do require licenses for China, the expansion of jurisdiction would be significant – as it applies without regard to the industry where the critical technology is used.

The logic of this expanded approach would be that, under Chinese laws and policies on civil-military fusion, any Chinese company, regardless of industry, could be required to divert the critical technology it is acquiring to the state sector for military use. Thus, it arguably makes sense for CFIUS to seek to examine these technology deals across the board.

This action also would be consistent with a range of other recent Administration actions during the Covid-19 crisis – from restrictions on participation in the U.S. bulk-power infrastructure to additional export control restrictions on Huawei – all of which appear to be focused on limiting U.S. high tech engagement with China.

Why now? The pandemic has raised the specter of foreign firms from potential adversaries buying sensitive assets at steep discounts. Numerous European governments are very focused on protecting sensitive assets against distress buying.  In this context, recent comments by Ms. Ellen Lord, the Under Secretary of Defense for Acquisition and Sustainment, suggest concern that during the pandemic smaller U.S. companies that support the aerospace and defense sector could experience “significant financial fragility” and therefore be more vulnerable to acquisition by potential adversaries [6]. She also noted the prospect of “nefarious” acquisitions involving the use of shell companies during the pandemic and indicated a desire for CFIUS to have more authority to address these situations. Thus, it just may be that the proposed revision to the Regulations is an effort to address this felt DoD need.

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A partner in Eversheds-Sutherland, a global law firm, Mr. Bialos [1] previously served as Deputy Under Secretary of Defense for Industrial Affairs and co-chairs the firm’s Aerospace and Defense practice.

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References

[1] A partner in Eversheds-Sutherland, a global law firm, Mr. Bialos previously served as Deputy Under Secretary of Defense for Industrial Affairs and co-chairs the firm’s Aerospace and Defense practice.

[2] 85 Fed. Reg. 30893 (setting forth amendments to 31 C.F.R. §800). The mandatory filing requirements were established pursuant to the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”).  The proposed amendments also make clarifying changes with respect to mandatory declarations in transactions involving foreign States. Specifically,  section 800.244 of the Regulations (see 85 Fed. Reg 30898) would, among other things, change the definition of “substantial interest” with respect to transactions where a general partner, managing member or the equivalent is involved, to clarify that the foreign state’s interest is only relevant it applies only where a general partner, managing member, or equivalent “primarily directs, controls or coordinates the activities” of the entity that is the acquiring party.  In effect, this change narrows to a limited extent the range of transactions with foreign government involvement where a mandatory declaration is required.

[3] CFIUS accomplishes this expansion through a series of technical amendments to the Regulations: Section 800.254 (defining U.S. “regulatory authorization” to refer to the types of export licenses that require mandatory declarations); section 800.256 (introducing the concept of “voting interest” to include foreign persons in the ownership chain that would need to be analyzed from an export control standpoint to determine if a license would be required to transfer the technology in question to that party); and 800.401 (which re-scopes the mandatory declaration requirement for critical technology transactions).  See 85 C.F.R. 30895-8.

[4] 31 c.f.r. § 800.215.

[5] 85 Fed. Reg. 3894.

[6] See Transcript, Press Briefing of Ellen Lord, Undersecretary of Defense (A&S) Ellen Lord on COVID-19 Response Efforts (April 30, 2020).   Available at: https://www.defense.gov/Newsroom/Transcripts/Transcript/Article/2172171/undersecretary-of-defense-as-ellen-lord-holds-a-press-briefing-on-covid-19-resp/

pandemic

How ‘No-Excuse’ Leadership Can Help Businesses Succeed After the Pandemic

The COVID-19 pandemic and the resulting economic slowdown created an uncertain future for businesses across the country.

Regardless of this rocky situation, though, the best business leaders will make sure they don’t allow the pandemic to become an excuse for failure, says Troy Nix (www.troynix.com), a motivational speaker, businessman and author of Eternal Impact: Inspire Greatness in Yourself and Others.

“I admire leaders who don’t complain about circumstances or point the finger at someone or something else,” says Nix, founder and CEO of First Resource Inc., an association management company specializing in manufacturing networks.

No, business leaders didn’t create the circumstances that led to the pandemic and its aftermath, but it is their responsibility to get their businesses and their people through the challenges they now face, he says.

“Whenever you’re leading an organization, the ultimate responsibility for any failure is yours,” Nix says. “It may be because you failed to train people properly or because you failed to hire the right person. It may be because you failed to develop a proper strategy or because you failed to develop the right culture. It’s ultimately your failure, and no excuse can ever absolve you of the responsibility of personal ownership.”

This is a mindset Nix learned in his days as a West Point cadet, where excuses were not allowed. To be successful in the coming months, he says, business leaders need to:

Set an example. Ultimately, you would like everyone in your organization to take responsibility and refuse to make excuses. “But you can’t expect that if you aren’t willing to set the example and claim responsibility for any failures yourself,” Nix says. “The best leaders take the high road and there’s no throwing anyone under the bus. Setting an example will have a constant impact on your employees, and they will know they can rely on you and depend on you.”

Do a little introspection. Nix says that, if you feel the urge to make an excuse for any failed business performance, look inward instead and ask yourself the following questions: Could I have acted differently to prevent this outcome? What could I have done to better improve the end result? How did my actions or inactions play a part in the failure? “I guarantee that if you do this and are honest with yourself, you will inevitably find a linkage for errors, disappointments, and fiascos directly back to yourself,” he says.

Take ownership. People don’t understand just how much they affect others when they make the decision to take responsibility for any and all actions. “We must own what we do, and we have to own what others under our command or influence do, even though it might be miles away from us and somebody else is executing the plan,” Nix says. “When you get up every morning and look at yourself in the mirror, are you owning what you are doing, or are you making excuses?”

“Making excuses – whether it’s in the crisis we now face or some other situation – will lead to dead ends,” Nix says. “I’ve seen time and time again that when people take control of their lives and eliminate the excuses, a life of excellence and fulfillment is the end result.”

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Troy Nix (www.troynix.com), author of Eternal Impact: Inspire Greatness in Yourself and Others, is the founder, president, and CEO of First Resource, Inc., an innovative association management company for America’s manufacturers. Nix, a graduate of the United States Military Academy at West Point, served in the armed forces for a decade before moving into the business world.

supply chain employee

Supply Chain Employee Engagement – 5 Benefits for your Business

Whether you operate out of a small warehouse or work as an international shipping company, employee engagement can be pivotal for your business’ ongoing success. According to Inbound Logistics, 85% of employees have reported that they feel disengaged from their jobs around the globe. However, those that feel engaged have reported 41% lower absenteeism, 24% less turnover and 70% fewer safety accidents on the job.

In terms of employee management, Forbes published a report which stated that 89% of HR leaders agree that ongoing employee feedback and engagement is crucial. Likewise, 89% of workers whose companies engage its employees are likely to recommend them as good workplaces to their friends and associates.

These numbers showcase that supply chain employee engagement factors into your business’ performance far more than it might seem at first glance. The way you treat your employees will have ripple effects on your overall output, brand reputation, and the subsequent bottom line as a direct result. Let’s take a closer look at why supply chain employee management matters so much, as well as the practical benefits of implementing it going forward.

Why Supply Chain Employee Engagement Matters

Let’s look at why supply chain employee engagement is pivotal before we move on to the benefits of active communication with your employees. Supply chain management is an industry with a flat vertical curve when it comes to warehouse and storage management employees. The HR structure typically isn’t built with vertical advancement and career development in mind (apart from mandatory hard skill development).

However, this doesn’t mean that you can’t pay closer attention to your employees, their feedback, opinions, suggestions and personal goals. Tyler Jonas, Head of HR at Top Essay Writing spoke recently: “All employees have equal rights for engagement. You don’t have to offer elaborate rewards, position advancements or paycheck bumps to make your employees happy. Sometimes all it takes is to open a line of communication and discuss what can be done to make the work environment more enjoyable for everyone.”

Some of the common complaints and bottlenecks which hinder supply chain employees’ performance include:

-Lack of hands-on leadership and coordination from managerial staff

-High focus on supply chain ROI instead of employee wellbeing

-Poor health coverage and off days management

-Undefined employee advancement systems

Benefits of Supply Chain Employee Engagement

Let’s assume that you’ve rooted out the above-mentioned bottlenecks in your company’s supply chain management – what happens next? As you can see, the complaints most employees have in terms of engagement are not irrational – they are simply absent from the supply chain management pipeline. If you decide to pursue to correct these shortcomings, you will effectively gain a plethora of benefits in regards to your employees, including the following:

1. More Efficient Coworker Communication

Supply chain employees who are satisfied with their work methodology and engagement are far more likely to cooperate and coordinate efficiently among themselves. This will come as a natural outcome of better communication with the upper management and their efforts to make the work environment more appealing.

Aim to emancipate your employees to cooperate autonomously. Let them know that you value their opinions, experience and expertise – delegate certain decisions to their discretion to facilitate coworker communication. Once that happens, your employees will feel free to communicate their thoughts and concerns for the benefit of your company as a whole.

2. Higher Employee Retention

A major point of concern for the supply chain management sector lies in employee retention and how to entice people to renew their contracts regularly. As we’ve mentioned previously, employees who don’t feel valued or engaged by the company will likely seek greener pastures. This will leave you with a roster of employees who are there simply because they have no other option at the moment.

Such a scenario can quickly lead to a toxic work environment which will reflect poorly on your overall quality of service and brand reputation. You can avoid both points by investing time and resources into establishing a communication channel with your employees proactively rather than reactively. Don’t wait for things to go bad in your supply chain management department before opening a dialogue – increase your retention rates early on.

3. Better Productivity & Morale

Coworkers who are satisfied with the way they are being treated by the upper management will subsequently perform better in their daily work routines. This same rule applies to supply chain management as well as other industries which naturally involve a more hands-off approach from the management.

Regardless, engaging your staff frequently and communicating about what works and doesn’t in the company will help gain a lot of points in your favor. This will inevitably raise the morale and energy in your staff, leading to further improvements in productivity and their sense of belonging in the company.

4. Lowered Margin for Errors

Shipping errors and supply chain mistakes, in general, are something you want to mitigate as much as possible in your company. While mistakes are bound to happen even in the best-maintained companies, their frequency will speak volumes of how you treat your employees. Dissatisfied employees who lack any faith in their managerial staff are likely to make accidental mistakes simply because they lack the morale to do otherwise.

These mistakes can cost your company tremendously in terms of reputation, resources, time and B2B partners if they persist. However, by introducing a communication channel with your supply chain employees early on, you will effectively lower the margin for error significantly. Employees will pay far closer attention to their work and do their utmost to avoid mistakes simply because their managerial staff cares about them more.

5. Healthy Coworker Competition

Lastly, a major benefit of engaging your supply chain employees goes back to their internal communication. More specifically, employees who are simply happy with their work environment are likely to develop internal camaraderie and healthy competition among coworkers.

This will raise your staff’s morale significantly and ensure that people are more satisfied with their place in your company due to consistent vertical communication. Remember that while your B2B networking may be efficient, ground-level operations still depend on the efficacy and dedication of your supply chain employees. Facilitating a healthy coworker competition and emancipating your staff through it will bring about a plethora of improvements in your supply chain pipeline.

Parts of a Whole (Conclusion)

A company consists of numerous departments which all rely on one another to make the company viable on the market. As such, paying closer attention to your employees in supply chain management will allow the company to thrive internally. Besides the obvious increase in productivity, this will also improve your reputation on the market and make your company more attractive to future employees. Meet your staff halfway and establish a meaningful dialogue – you will undoubtedly be pleasantly surprised with the results.

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Kristin Savage nourishes, sparks and empowers using the magic of a word. Along with pursuing her degree in Creative Writing, Kristin was gaining experience in the publishing industry, with expertise in marketing strategy for publishers and authors. Now she works as a freelance writer at ClassyEssay, Studyker and Subjecto. Kristin runs her own FlyWriting blog.

small businesses

U.S. Metros With the Most Small Businesses Per Capita

Small businesses across the United States face dire circumstances following the COVID-19 outbreak. While each individual small business might seem inconsequential to the broader economy, in aggregate, these firms are critical to the country’s financial well-being.

According to the most recent data from the U.S. Census Bureau, small businesses with fewer than 50 employees makeup approximately 95 percent of American business establishments and employ 40 percent of private sector workers. These 7.4 million small businesses (or 2.27 per 100 residents) also account for roughly a third of total private sector payroll.

Unfortunately, research shows that small businesses and their workers are particularly vulnerable during recessions and other periods of economic hardship. A recent survey conducted by the New York Fed found that even prior to the pandemic, 64 percent of small businesses faced financial challenges in the preceding 12 months. The same survey reported that a two-month loss of revenue would cause 86 percent of firms to take a serious financial action, such as using the owner’s personal savings, taking out a loan, or cutting staff salaries.

Moreover, small businesses in some industries have a larger economic impact than others. Among small businesses with fewer than 50 employees, those in accommodation, food services, and retail trade—coincidentally, the sectors hit hardest by COVID-19—employ the most workers. These industries, combined, account for more than 16 million employees and $362 billion in annual payroll.

Like the businesses themselves, small business employees are also more financially vulnerable than their large-firm counterparts. Data from the Bureau of Labor Statistics shows that fewer small business employees have access to retirement benefits, healthcare benefits, paid sick leave, life insurance, or disability insurance. Troublingly, only half of employees in small businesses have health insurance through their company and only two-thirds have paid sick leave.

While small businesses are a critical component of the national economy, some parts of the country depend more on small businesses than others. To find the metropolitan areas with the most small businesses, researchers at Construction Coverage, a review website for workers’ compensation insurance and construction software, analyzed the latest data from the U.S. Census Bureau. The researchers ranked each location according to the number of small businesses per 100 residents. Researchers also included statistics on the total number of small businesses, the number of retail, accommodation, and food service businesses, and the share of workers who are self-employed. For the analysis, small businesses were defined as those employing fewer than 50 workers.

To improve relevance, only metropolitan areas with at least 100,000 people were included in the analysis. Additionally, locations were grouped into the following cohorts based on population size: large metros (1,000,000 residents or more), midsize metros (350,000-999,999 residents), and small metros (less than 350,000 residents).

Here are the large metropolitan areas with the most small businesses per capita:

For more information, a detailed methodology, and complete results, you can find the original report on Construction Coverage’s website: https://constructioncoverage.com/research/cities-with-the-most-small-businesses

workforce

Handling Workforce Management Challenges in a Logistics Company During High Demand

The ongoing COVID-19 global crisis has caused a spike in demand for online shopping due to the stay-at-home orders that have been instituted by many countries all across the world. Most of the hauling necessary to get these ecommerce products to their intended recipients is being done by truck drivers. This means there’s more work than ever for the logistics industry but more tired workers too.

Keeping fleets properly organized and scheduling the right number of employees to manage all the necessary deliveries is the top workforce management challenge in a logistics company during such a period of high demand. It can be both difficult and stressful to match employees’ availability to demand.

Managers have to be able to track employees’ stress profiles for effective scheduling and also have to be ready to deal with unplanned changes to schedules as drivers could need to swap a shift with a colleague or fall sick (not just from coronavirus, but other ailments too). Companies should have the right tools in place to keep up with unforeseen shifts in demand and update their schedules accordingly.

Communication is important

Efficient, effective communication is absolutely vital to any workforce, but it is particularly crucial for teams that are as remote as those in the logistics industry, especially during this time. It’s important for managers to prioritize communication during this crisis because if communication falters, work progress not only suffers, but truck drivers are also extremely vulnerable to feeling both overwhelmed by the news and isolated from the team and company. This can have adverse effects on employee morale.

Work on employee morale

Speaking of employee morale, that’s another pressing workforce management challenge for logistics companies during this time. If we who are at home are struggling with motivation and mental health, you can imagine how heavy it must be for truck drivers who are out there all alone on the roads driving through deserted cities, staying away from their families as the world goes through such a scary time.

Keep in mind that they are scared to go home because they might accidentally infect their families and have to eat alone due to strict social distancing rules at restaurants. Maintaining high morale in the face of such extreme loneliness can’t be easy, both for the truckers and for their managers. Companies should leverage instant messaging apps to keep in touch with staff and use video sharing/conferencing tools more than ever to make both team updates and employee appreciation more personal.

We have all come to realize just how important truck drivers are to our way of life; that they have always been providing a service that is absolutely crucial to our supply chains and are continuing to do so even with their well-being at high risk. They are driving into places that others are fleeing from to deliver consumer goods to retailers and medical supplies to hospitals. Companies should make sure they are being compensated like the essential employees they are with significant salary raises and bonuses.

Keep your employees safe

Furthermore, employee morale during such a time is greatly tied to a sense of personal safety. Most truck drivers are middle-aged and/or older men who are more likely to suffer immunodeficiency from chronic illnesses such as pneumonia that make them more vulnerable to succumbing to the coronavirus.

Logistics companies should, therefore, make sure their drivers are sufficiently supplied with the necessary protection at all times – from face masks to gloves to hand sanitizer. Trucks should also be thoroughly disinfected as frequently as possible. When it comes to morale during such a time, it’s extremely crucial for employees to feel that their employers are doing their absolute best to keep them protect them.

Managing employees and hiring new ones to help

Managing the multiple locations and mobile employees that characterize the logistics industry was already challenging enough before the pandemic hit and even more now, in this time of high demand. There’s high potential for confusion around tracking hours accurately for payroll. Managers should be able to track employee hours from any location and capture accurate timesheets using geo-location.

Lastly, with the increased demand, many logistics companies are facing a higher need to acquire and onboard fresh talent but unfortunately, even before COVID-19, hiring and retention was already a major issue for the logistics industry according to recent PwC research. The survey found that transportation and logistics companies are lagging behind other sectors in terms of recruiting and hiring. SMEs in particular are not regarded as the preferred employers of the future.

Job seekers still don’t see transportation and logistics as a desirable industry. Logistics is one of those industries that most people looking for jobs, especially for fresh graduates, simply don’t find very appealing. This has to change if the industry is to keep up with this recent spike in demand. Companies have to make it appealing for fresh graduates, as well as people who have been laid off by other industries, by highlighting the potential for career growth.

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Derek Jones  (VP Enterprise Strategy, Americas)

Derek spearheads key initiatives at Deputy, a global workforce management platform for employee scheduling, timesheets and communication. With a focus on Healthcare, Derek helps business owners and workforce leaders simplify employment law compliance, keep labor cost in line and build award-winning workplaces. Derek has over 16 years’ experience in delivering data-driven sales and marketing strategies to SaaS companies like MarketSource and Griswold Home Care.

crisis

What Small Business Owners Can Do to Steer Their Way Through a Crisis

As the nation’s economy continues to struggle because of the impact of COVID-19, small business owners and their leadership skills are being put to the test.

They face the task of adapting to the crisis and helping their employees adapt as well. But just what steps can business leaders take to keep employee morale high, make sure the business stays afloat, and manage their own concerns about the future?

One of the most important things is to be transparent with employees about where the business stands, says Adam Witty, ForbesBooks co-author of Authority Marketing: Your Blueprint to Build Thought Leadership That Grows Business, Attracts Opportunity, and Makes Competition Irrelevant.

“Face the facts head-on and don’t try to sugarcoat it,” says Witty, the founder, and CEO of Advantage|ForbesBooks (www.advantagefamily.com). “Share with your team, in calm and rational terms, what impacts you expect the virus to have on your business and what the business is doing to try to mitigate those negative impacts.”

Witty suggests other steps business leaders need to take as they manage their way through the crisis:

Over-communicate. With remote work, communicating is more important now than ever. In an office, much of the communication happens naturally as people drop by each other’s offices or pass in the hallway. With everyone spread out, communication can easily fall by the wayside so it needs to be more intentional. Witty says it’s critical to use video communication like Zoom or Google Hangouts whenever possible to interact with employees. He also makes a point of sending at least three company-wide video messages a week. “In times of great uncertainty, communicate more not less,” he says. “In the absence of information, people tell themselves stories, and I can promise they are bad stories.”

Project calm. When a leader is anxious and fearful, everyone will pick up on that and they, too, will become anxious and fearful. “If your employees see that you are worried, they will begin to think it is all over,” Witty says. That doesn’t mean to fake it or to pretend the situation isn’t bad. “We can’t control the situation we find ourselves in,” he says. “But we can control how we react to the situation, and how we react will dictate our results.”

Consider introducing new products or services. Now is a good time to get innovative, Witty says, so brainstorm with your team about alternative ways to bring in revenue if your usual sources have been disrupted. For example, some restaurants that were strictly sit-down establishments pivoted to offer takeout and delivery. Witty’s own company created new publishing and marketing products aimed at potential clients who may be more cost-conscious during these tough economic times.

Finally, Witty says, have a plan.

“Hopefully, you already have a strategic plan for your business that you are executing week in and week out,” he says. “As we continue to move along through this crisis, that plan will need to be adjusted as COVID-19 makes some pieces of your plan obsolete.”

He suggests meeting weekly, if not more often, to keep updating the plan to reflect the new realities. Then communicate the plan and its latest adjustments to your team.

“When employees know the leaders have a plan,” Witty says, “it creates calm and confidence.”

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Adam Witty, co-author with Rusty Shelton of Authority Marketing: Your Blueprint to Build Thought Leadership That Grows Business, Attracts Opportunity, and Makes Competition Irrelevant, is the CEO of Advantage|ForbesBooks (www.advantagefamily.com). Witty started Advantage in 2005 in a spare bedroom of his home. The company helps busy professionals become the authority in their field through publishing and marketing. In 2016, Advantage launched a partnership with Forbes to create ForbesBooks, a business book publisher for top business leaders. Witty is the author of seven books, and is also a sought-after speaker, teacher and consultant on marketing and business growth techniques for entrepreneurs and authors. He has been featured in The Wall Street JournalInvestors Business Daily and USA Today, and has appeared on ABC and Fox.

supermarkets

From Physical Retail to Online Business: Marketing and Logistics Principles for Supermarkets

Supermarkets and retailers around the world began distributing goods via order channels over a decade ago, often as a future-oriented addition to a minor business segment, complementing standard services. As such, ordering online and receiving groceries via delivery is nothing new. Caught off-guard by the COVID-19 outbreak, however, supermarkets and food-retailers today are facing the challenge of switching their business model from physical retail to online order and delivery with unprecedented urgency. With physical distancing measures in place across entire countries, people increasingly prefer to avoid purchasing their groceries as walk-in customers to safeguard their health and well-being.

In this situation, the supermarket industry finds itself in a fundamentally altered market environment. The changes required from them are profound. Their typical infrastructure, such as buildings and storage centers, was strategically designed to walk customers through a supermarket, positioning products on shelves as per marketing and product placement logic, factors that become obsolete in an online retail world. What matters now is safe, reliable, and fast supply of customers’ online orders via dedicated distribution services. Logistics is at the core of addressing these challenges and the interface between marketing and logistics indeed becomes vital for fast implementation in the current scenario.

For a swift short-term switch, the prerequisites are two-fold: On the one hand, the supply of selected products needs to be covered either through local production or through available imports. On the other, a functioning online ordering front-end needs to be made available to customers. Yet, especially for supermarkets, it is the seamless and efficient operation of the “pick and packing” functionality that has now become the bottleneck.

This has several consequences that can be addressed: First, online supermarkets cannot provide the full portfolio of goods to their customers, at least for the time being. Sales analysis is required to meaningfully reduce the portfolio of products available online, and hence decrease the complexity of assembling orders later on. Amid the current circumstances, food and canned products will have higher importance than non-food items, and any of the latter to be upheld would need to be chosen sensibly. While customers may have less choice, portfolio reduction will help significantly in maintaining capacity for faster, more reliable physical delivery.

Second, shortened product portfolios can be divided into two categories: High runners and low runners. High runners are regularly purchased in high volumes, and their turnaround is quick. Low runners might be appealing in the physical retail world, but have less meaning in the current landscape. Third, high-running products within a simplified offering need to be stored differently for now. Usually, they would be placed decentralized along strategic points throughout the supermarket to attract attention. In a recalibrated setup, identified high runners need to be stored centrally in a dedicated area of the market where employees have unhindered access for fast “pick and packing”. Fourth, the commissioning time needed for workers to assemble an incoming order, needs to be kept as low as possible by minimizing physical distances required to walk.

Fifth, in packing the online orders received and getting them ready for dispatch, standardized package box sizes can be used to further reduce complexity. Just like in a game of “Tetris”, utilizing uniform cubic sizes will allow for packages to be stored in delivery vehicles in the most effective fashion. This is particularly relevant for food retailers that do not rely on third-party logistics providers for reasons of quality and food safety assurance.

Sixth, physical delivery of the commissioned orders should be prioritized and planned in a calculated way. Typical linear concepts such as “first order in, first delivery out,” will not be efficient under the current circumstances. Seventh, because of the reduced product portfolio, the products offered should not be static, but optimized on a regular basis. In other words, the now required short-term shift should not limit the industry to short-term thinking. Requiring customers to order in excess of minimum order amounts, imposing high delivery charges, expecting customers to accept long delivery times, accepting the jamming of orders, amongst others pitfalls – all of which we are currently witnessing internationally, can be avoided by emphasizing the outlined marketing and logistics principles.

While it is clear that supermarkets are at the heart of consumer goods supply during the current pandemic, it would not be reasonable to compare them with established online giants such as Amazon and others. Their business model and logistical setups are different, from the outset. This naturally calls for customers to exercise patience and good-will with their supermarkets for a while. Supermarkets are logistical hubs, run by people, for people, through people, even if for the time being, they may appear as an anonymous online screen only.

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Frank Himpel is a faculty member of the Engineering Management and Decision Sciences division at College of Science and Engineering at Hamad Bin Khalifa University in Qatar. Prior to moving to Qatar with his family in 2018, Frank served as a professor of business administration and logistics in Germany, where he also received his academic degrees. His research into aviation and air transportation management has taken him to several countries around the world.

 About Hamad Bin Khalifa University

Innovating Today, Shaping Tomorrow

Hamad Bin Khalifa University (HBKU), a member of Qatar Foundation for Education, Science, and Community Development (QF), was founded in 2010 as a research-intensive university that acts as a catalyst for transformative change in Qatar and the region while having global impact. Located in Education City, HBKU is committed to building and cultivating human capacity through an enriching academic experience, innovative ecosystem, and unique partnerships. HBKU delivers multidisciplinary undergraduate and graduate degrees through its colleges, and provides opportunities for research and scholarship through its institutes and centers. For more information about HBKU, visit www.hbku.edu.qa.