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How to Gain an Advantage in Manufacturing Facilities During Post-Crisis Times

manufacturing

How to Gain an Advantage in Manufacturing Facilities During Post-Crisis Times

In the United States today, as many manufacturers have entered post-crisis phases in their facilities, some have a much different business model than they did entering 2020. Others, such as those who manufacture medical supplies, craft supplies, and pet supplies, don’t look much different than they did at the beginning of the year, outside of a backlog of orders that they are doing their best to fill in a timely fashion. 

Some manufacturers were surprised at how well their products did during crisis times earlier in the year. For example, LumenAID, a manufacturer of portable, solar-powered lanterns that double as a phone charger, has seen a huge uptick in sales. It seems with people preparing for times unknown, emergency supply manufacturers of this type can’t fill the shelves quickly enough. Other manufacturers were well aware of the need for their products, like office chairs, school supplies, and pet training products. The comforts of home for those stuck at home became the quick front-runners in sales, and suppliers with stored inventories were pleasantly surprised with their sales numbers. 

Yet, for some manufacturing facilities, especially in the hardest-hit areas of the country, it wasn’t a lack of demand that shut down the product lines. It was the lack of production associates able to make it to the facility. Quarantine, public transportation being shut down, mandatory stay at home orders, and a lack of child care left some facilities looking much like a part of a ghost town. The most prepared of those production facilities put that time in the hands of their plant engineers and maintenance managers, and for good reason. 

In an industry where it is often common for machines to run in 72-hour cycles or longer to meet production needs, the downtime came as a blessing in disguise to many engineers and mechanics. They strapped on their tool belts and began performing preventative maintenance that had been put off, in some cases, until the machinery refused to operate any longer. While many production associates were home by no choice of their own, skeleton crews of mechanics and engineers quietly worked behind the scenes to ensure that the production lines that these associates returned to were repaired, lubed, and ready to run for another 100,000 rotations. 

While You Were Out…

Although we’re not positive what the “new” normal will look like, manufacturers are doing their best to get back to business as usual.  One key element is ensuring that their facility can handle the workload, and well-maintained production lines are a fundamental part of that process. Even those production facilities that did not have to implement the Emergency Contingency Plan and were still able to run socially distanced production shifts were finding difficulty in getting the parts necessary to perform preventative maintenance on their production machinery. 

Facilities with CMMS systems that handled their maintenance parts rooms were seeing just how much those systems did for them, possibly for the first time ever. These manufacturing facilities were able to perform preventative maintenance as normal, because of the reorder point set in the CMMS, ensuring that the parts to perform the maintenance were, indeed, stocked in the parts room. Due to the human element being removed by CMMS, the moment the last technician performed the PM and took the part off of the shelf, the system already issued a purchase order and had a replacement on the way. 

Full Speed Ahead

As manufacturers are getting back into the swing of things, especially those fortunate enough to have orders that they need to fill, the appreciation for well-maintained machines is at an all-time high. With most of the country able to return to work, and production lines full of associates thankful to be back on the line, returning to a facility with newly maintained machinery is just another day in manufacturing. However, from the mechanics and engineers who worked solo overnight shifts to prepare for firing the production lines back up, there is a nearly audible sigh of relief when the conveyor belts start running. 

Preventative maintenance was, in some facilities, the only items that could be completed during the height of the crisis, and production managers are reaping the benefits of those overhauls at the moment. In notoriously under-maintained facilities, the quietly operating, well-oiled machinery that is producing post-pandemic inventory is a sign of moving into stronger financial times. 

As A Post-Crisis Model

If your production facility is running at a pre-pandemic rate, you’ve more than likely gotten back into the normal preventative maintenance schedule, less a few adjustments. For those facilities that don’t have the need to run full production shifts at this point, investing labor dollars into machine maintenance is a smart move. Although the need may not be there at the moment, when the orders do come in, the ability to perform full production runs without stopping because of unperformed routine maintenance will be one more way to stay competitive. 

Well maintained machinery produces to specification, which reduces scrap and reworks exponentially. By producing a consistent and reliable product, your facility develops a reputation for quality, and that is priceless in post-crisis America. By ensuring that your production facility is adhering to a preventative maintenance schedule, you’re committing to running products that are manufactured to strict standards at a time when they’re more valued than ever. A CMMS is another tool in a manufacturer’s facility to ensure that they’re producing items that meet or exceed the expectations of their customers. 

In addition, maintenance costs are decreased by 5-10 percent by having a preventative maintenance program in place in a manufacturing facility. It also decreases the time spent repairing machinery by 20-50 percent. In terms of looking out for the bottom line as manufacturing facilities try to push forward in uncertain economic times, a strong preventative maintenance program makes sense. In saving both time and money long term for manufacturing facilities, preventative maintenance can help manufacturers get a leg up in the post-crisis American economy. 

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Co-Founder and CEO of Redlist. Raised in a construction environment, Talmage has been involved in heavy equipment since he was a toddler. He has degrees and extensive experience in civil, mechanical and industrial engineering. Talmage worked for several years as a field engineer with ExxonMobil servicing many of the largest industrial production facilities in the Country.

companies

How to Build High-Performing Companies

There are some executives that like to look at academic journals but unfortunately the crossover literature has not reached them enough. I attempt to blend scholarly concepts with real-world applications. For the executive’s corner, I place a great deal of emphasis on the literature of knowledge management, information technology, strategy, and culture as four significant indicators for financial performance.

This article adds to a relatively small body of literature but pays homage to the scholarly contributions. I highlight the direct impact of these organizational factors on financial performance. This article actually investigates the crossover potential of scholarly research and how it can be applied in the organizational boardroom. Executives will also see that I expand upon the subject matter of a company’s internal resources. Insufficient consideration of the impacts of these resources on financial performance has been exposed and I attempt to address this concern. This article can portray a more detailed picture of the effects of knowledge management, information technology, strategy, and culture on financial performance that have been mentioned but not placed in a model in the past.

 Why Knowledge Management Is So Important To Financial Performance?

Executives across the globe have found that knowledge is critical to financial performance. Knowledge, in of itself, is not enough to satisfy the vast array of changes in today’s business environment. Knowledge management is only a necessary precursor to effectively managing knowledge within the organization. Organizational knowledge cannot merely be described as the sum of individual knowledge, but as a systematic combination of knowledge based on social interactions shared among organizational members. Executives agree with Haridimos Tsoukas who determines organizational knowledge as a collective mind, and Kiku Jones and Lori Leonard at The University of Tulsa who explain organizational knowledge as the knowledge that exists in the organization as a whole. [1] [2] Organizational knowledge is owned and disseminated by the organization.

The key take-away for executives is that organizational knowledge is a resource that enables companies to solve problems and create value through improved performance and it is this point that will narrow the gaps of success and failure leading to more successful decision-making. The key is for executives to convert individual knowledge into valuable resources to ensure that the knowledge is actually helping the organization grow profitably for all stakeholders.

Knowledge management can help companies identify their inefficiencies in organizational processes which can enable them to prevent further operational risk. The question remains. How does knowledge management impact your company’s financial performance? By answering this question, executives are able to answer the questions necessary to apply knowledge management to exploit financial performance for companies.

Knowledge is firstly created and acquired from external environments. This knowledge exchange with external business partners develops innovative environments that can enable companies to create a more innovative climate. This knowledge exchange also enhances the capabilities of companies in recognizing possible opportunities in the business environment and developing a more effective vision, including a more comprehensive array of information and insights about external environments.

Furthermore, executives need to focus on coordinating experts, sharing knowledge, and scanning the changes of knowledge requirements to keep the quality of their products or services in-line with market demand. It is apparent that this can help companies assessing the required changes to keep the quality of both products and services at maximum levels. Also, a systematic process of coordinating company-wide experts enables companies to effectively meet customer needs.

The knowledge within organizations also needs to be reconfigured to meet environmental changes and new challenges today. Knowledge is globally shared with other organizations. However, companies might lack the required capabilities or decide to decline from interacting acting with other companies, or even suffer the distrust to share their knowledge. In addition, expert groups may not have sufficient diversity in order to comprehend knowledge acquired from external sources. Networking with business partners is a key activity for companies to increase financial performance, thereby transferring knowledge among companies which creates better solutions for capturing the interest of customers and developing market share. The key here is that there are positive effects of knowledge management on financial performance.

Does Information Technology drive Financial Performance?

Information technology is necessary to build high-performing companies and also may be necessary as the globalized market demands are increasingly difficult to adapt and sustain profitability. Financial performance in global markets is dependent on continuous learning. Corporate learning plays a critical role and is a strategic prerequisite for increasing sales and market share in today’s knowledge-based economy. Effective corporate learning can enable companies to actively respond to environmental changes and customer needs and organizational members’ growth needs. Thus, information technology is a key factor that should be embraced at the senior level of organizations to enable financial performance in globalized markets by building a learning climate and empowering organizational members. In the absence of effective IT management, companies cannot implement successful plans in order to adapt to today’s global business environment.

Information technology is a key factor to improve financial performance for companies. Earlier studies clearly indicate that effective IT implementation significantly contributes to companies’ financial performance. These researches acknowledge that information technology is an important enabler to effectively manage business processes. Information technology can reduce paper-based transactions for companies that can potentially decrease costs and subsequently improve profitability for companies.

Furthermore, it can be seen that information technology enables companies to effectively identify opportunities in external business environment that leads to identify the best opportunities for investment that potentially improves financial performance in terms of return on investment. Information technology can also help companies to effectively create more innovative solutions for their organizational problems. More innovative solutions and better ideas can improve the quality of products and services, which in turn increases sales and market share for companies.

Business success for companies in today’s global business environment can be, therefore, achieved when information technology is effectively applied and widely used to achieve a higher degree of financial performance. When information technology can create a learning workplace and inspiring vision for future expansion into global markets, companies will secure a foothold in the ever-expansive global marketplace. Two important dimensions that all managers world-wide can learn from this article is that information technology can help companies to accomplish their goals that they would not ordinarily consider part of their competencies.

The question posited for top management executives and leaders in any and all companies is to accept the challenge of information technology implementation in order to address the current gaps in business effectiveness and improve their competitiveness in global markets. Thus, I recommend that executives should consider information technology as a key driver for improving financial performance in today’s hypercompetitive environment.

If Corporate Strategy Comes First, Company’s Financial Performance Will Follow

Executives are aware that corporate strategy mainly encompasses four aspects: analysis, pro-activeness, defensiveness, and futurity. So how can you as an executive use these four dimensions? Scholars provide a blueprint to follow:

-Analysis refers to the degree to which the roots of problems are analysed to provide the best solutions, which ultimately results in a more efficient allocation of resources to solve problems and also achieve organizational goals.

-Pro-activeness is defined as the extent to which a firm continuously searches for emerging opportunities in its business environment, and then actively participates in these opportunities by responding to changing trends.

-Defensiveness, which recommends undertaking defensive behaviors that manifest themselves in enhancing efficiency and in cutting costs while maintaining continuous budget-analysis and break-even points.

-Futurity is reflected in the degree to which the strategic decision-making process takes a two-way approach—-an emphasis on both long-term effectiveness and shorter-term efficiency concurrently.

Analysis strategy is regarded as the tendency to search for problems and their root causes and generates better alternatives to solve them. Analysis strategy, an academic term that is very applicable to executive span of control is also concurrently aired in the academic circles of higher education. For instance, analysis strategy is highly related to firms’ capacity to generate new ideas and knowledge and plays a crucial role in acquiring knowledge. Therefore, I appeal to executives across the globe that analysis strategy could improve the quality of products and services, which can in turn enhance profitability and market share.

I also feel that as executives use the pro-activeness strategy which refers to finding new opportunities and proactively responding to current challenges in external environments, they are also enhancing their span of control. Therefore, the pro-activeness strategy can provide a higher degree of knowledge through developing interactions with external environments. As executives effectively use knowledge management for projects and organizational investments they require a continuous investigation from external business environments. The pro-activeness strategy enables companies to identify changes in external environments and accordingly help them to actively respond to these emerging rapid changes.

Some executives feel that a defensive strategy, while necessary, sets a negative connotation on their span of control. However, it is believed that a defensiveness strategic approach enhances efficiency through cutting costs which in turn increases organizational revenue and the company’s financial performance.

Futurity strategy can also enhance financial performance by providing a series of clear guidelines for companies to track future trends in the business environment, and accordingly conduct “what-if” analysis and allocate organizational resources. My explanation of this is clearly within the executive span of control and potentially limits operational risk. My conclusion for executives is that organizational strategy has a positive association with financial performance. Therefore, I suggest that a firm’s ability to enhance financial performance can be highly affected when executives develop and implement an effective corporate strategy as the primary form of managing people, resources, and profitability.

Does Corporate Culture Increase Financial Performance?

Corporate culture is the resource that builds upon the foundations that helps organizations prosper. Andrew Pettigrew initially introduced the term corporate culture into the business literature. [3] Edgar Schein, one of the prominent management scholars, describes corporate culture as a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems. [4] Corporate culture is, therefore, reflected in shared assumptions, symbols, beliefs, values and norms that specify how employees understand problems and appropriately react to them.

To analyze the relationship between corporate culture and financial performance, corporate culture could be visualized by its three major aspects, including collaboration, trust and learning. Both cultural aspects of collaboration and trust positively contribute to companies to effectively and actively respond to environmental changes and customer needs and employee growth needs through developing effective learning workplaces within these companies. Thus, these two cultural aspects can help companies to improve the quality of products and services and increase financial performance in terms of profitability and sales.

Learning culture is another cultural aspect sheds light on organizational capabilities to develop learning. It is quite understandable that this cultural aspect can particularly increase financial performance for companies, by developing suitable workplaces for employees to effectively share their knowledge with others. People, in fact, recognize how old resources can address new and problematic situations by sharing their knowledge within companies, and this can help to create more innovative ideas for organizational problems. David Maister in Harvard Business School in his book, Managing the Professional Service Firm, says that innovative ideas generation can improve profitability for companies. [5] Thus, I suggest that executives should consider corporate culture as an important enabler to enhance financial performance.

In Conclusion

This article may be the answer executives need but may also lack the fundamental fortitude necessary to be an all-encompassing model to predict financial performance. This article has started a mindset that encourages executives to investigate scholarly work to increase financial performance, enhance profitability and improve shareholder value. Executives can contribute to meet dynamic market needs, through reshaping an organization’s internal resources (i.e. knowledge management, information technology, strategy and culture) to meet the needs of customers in the marketplace. In fact, this article has been focusing on thus far is the needs of companies for enhancing financial success. This article presents executives with organizational factors that can be effectively manipulated to improve financial performance and become more profitable.

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Mostafa Sayyadi works with senior business leaders to effectively develop innovation in companies and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders. He is a business book author and a long-time contributor to business publications and his work has been featured in top-flight business publications.

References

[1] Jones, K., & Leonard, L.K. (2009). From Tacit Knowledge to Organizational Knowledge for Successful KM. In W.R. King (Eds.), Knowledge Management and Organizational Learning, (pp. 27-39), Berlin: Springer.

[2] Tsoukas, H. (1996). The Firm as a Distributed Knowledge System: A Constructionist Approach. Strategic Management Journal, 17, 11-25.

[3] Pettigrew, A.M. (1979). On studying organizational cultures, Administrative Science Quarterly, 24(4), 570–581.

[4] Schein, E. (1984). Coming to a new awareness of organizational culture, Sloan Management Review, 25(2), 37–50.

[5] Maister, D.H. (1993). Managing the professional service firm, Free Press, New York.

leader

So You’re Not The Boss? Here’s How You Can Still Be A Leader.

Are leaders born or are they developed? It’s a subject that’s long been debated.

And in the workplace, can an employee who holds no supervisory job title be an effective leader — before being entrusted with managing people? 

Grant Parr, a mental sports performance coach, says yes — and adds that it’s almost mandatory if someone hopes to be ready as a leader when promoted to a bigger role in an organization.

“Leadership is a choice,” says Parr (www.gameperformance.com), author of The Next One Up Mindset: How To Prepare For The Unknown. “It’s not a title, position, or rank. You don’t have to be a department head, manager or CEO to be a leader.”

“Leadership is a group of characteristics, and you can acquire them even if you’re not the boss. You’ll never be a leader when you assume that prime time role unless you have developed the qualities of leadership as part of your preparation for the next big step.”

Parr offers five ways to become a leader at a company without holding a leadership-type position:

Listen to others’ ideas. “Leadership is about others, not about the self, and it starts with listening,” Parr says. “Being a leader isn’t putting yourself above others, interrupting them, or acting like your ideas are more important than anyone else’s. True leadership brings out the best in others and your culture, and you do that by making them feel valued and giving them a voice.”

Be accountable for mistakes. “Own your errors,” Parr says. “It sets an example of accountability that is good for the culture. Too many people, when told of a mistake, assign blame and make excuses. A leader corrects constructively and surveys for solutions. As a subordinate, staying positive and offering ways to fix your mistake, and showing the humility of asking for help, is a path toward being a leader people can trust.”

Learn flexibility. “This applies in so many ways,” Parr says. “If you’re stuck on doing something one certain way, you’re headed toward being a micromanager who few would like and fewer would want to work under. Leadership is about tapping into your broad base of workplace talent, expanding knowledge, improving systems and raising the ceiling.”

Interact and network. Networking isn’t only about finding jobs, it’s about connecting with people in a way that enhances important relationships and the work environment. “As you learn to interact with different types in the workplace,” Parr says, “you’ll learn which relationships are most effective, how to help those people with their career, and show your ability to direct and lead.” 

Develop a thick skin. To become a leader, Parr says it’s vital to rise above annoyances and petty slights from others and let them roll off your back. “HR isn’t the principal’s office,” he says, “and if you vent every time about someone doing something irritating, you’ll get the reputation of being a whiner. Don’t complain behind closed doors, gossip, or criticize people behind their backs. No one who does those things can be viewed as a leader.”

“People want to be led,” Parr says. “But they don’t want to be bossed around. Great leaders can learn this as underlings on their way to a management position. Then when they get there, they’re ahead of the game — and everyone’s in step with them.”

Grant Parr (www.gameperformance.com) is a mental sports performance coach and the author of The Next One Up Mindset: How To Prepare For The Unknown. Parr owns and runs GAMEFACE PERFORMANCE, a consulting firm that enhances mental skills for athletes and coaches. A recruiter and sales leader in the corporate world for 17 years, he now works with a wide variety of athletes including Olympians, professionals, collegians and high school athletes. His podcast, 90% Mental, provides a window into a broad range of athletes’ and coaches’ mental games and shares their insights around mental performance.

Warehousing 2019: How to Optimize Operations

In 2019, warehousing companies might want to consider the use of unmanned aerial vehicles as an option for delivery. The top two of key differentiators companies consider drivers for change in warehouse usage include the need for lowered transportation costs (at 42.7 percent) while others cited the need for shortened delivery times and (40.5 percent), according to a Zebra Technology survey.

Looking ahead at the changes to come in 2020, Zebra also shows that in 2015, only 55.1 percent of companies were leveraging load optimization and performance monitoring and anticipating its integration by 2020. This number will jump to 61.6 percent, according to the global survey results. The report goes on to explain that explicit costs and benefits should not be the total focus and only make up a part of the bigger picture.

It states that, “Not only do we need to improve the technological advancement of our warehouse, but we need to update our thought process also. When considering RoI on implementing technology, don’t only look at the investment as cost and recovery of cost, but think of how this creates value for your customers, how you improve the productivity of your employees, what impact does it have on your culture and public image, will embracing technology give an advantage over competitors, and so on.”

Zebra’s survey also revealed some interesting insight into the level of difficulty experienced by companies seeking to change the supply-chain process. A total of 32.2 percent noted that it is “somewhat difficult” to introduce changes in 2015. That number is predicted to drop down to 22.1 percent in 2020.

Refreshing your operational approach to warehousing operations should be handled with caution and care. Don’t rush trying to integrate a new technology solution without checking the other boxes first. UPS cautions this practice for next steps and transforming your current business model.

“Most operations were designed based on what worked in the past, and, of course, that can’t necessarily deliver what customers expect today,” says Simon Bhadra, senior manager for the UPS Industrial Distribution customer segment. “There are valid business reasons that customers demand changes from their intermediaries or are bypassing them altogether. Pressure to cut costs, reduce turn times, for example. It’s difficult to make meaningful changes and still be productive and keep customers happy. People say it’s like trying to build an airplane while it’s in the air, and that’s pretty accurate.”

Dubai Customs Boasts Exemplary Customs Strategies

Many might recall the June 2018 Air Cargo Advance Screening Program mandating foreign shipments to be subject to providing a laundry list of pre-arrival cargo data when the U.S. is the final destination, per measures from the Department of Homeland Security. Strict screenings such as these have been implemented globally, as recently reported for Dubai Customs, which prides itself on significant progress in performance due to the advanced infrastructure as well as supportive government policies assisting in facilitating global trade efforts. The success is also paired with a proactive approach involving careful evaluation and research of trade trends.
Director of Dubai Customs, Ahmed Mahboob Musabih, explains: “We have an integrated strategy in place to develop the external trade performance further following the vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, vice president, prime minister and ruler of Dubai, and along with the guidelines of Dubai Plan 2021 and the UAE Centennial 2071. We are watching closely the changes taking place in the international trade and we will turn challenges into opportunities by entering new markets and expanding our existing ones.”
More recently, however, Dubai Customs reported several cases where significant smuggling attempts were stopped because of the diligence and seamless communication strategies in place. One report identified 922 successfully prevented smuggling attempts, of which 38.5 percent were drug contrabands. Even more interesting is the time frame the attempts occurred: between January and September of 2018.
“Thanks to our inspectors’ vigilance, we are closely in full control of all checkpoints,” explains Ibrahim Al Kamali, Dubai Customs’ director of Passenger Operations. “Our inspection officers receive the best training on body language and different types of drugs, and how to distinguish fake brands from genuine ones.”
“There are challenges facing customs authorities in countries that have strategic locations,” Musabih points out. “Dubai is not an exception. It’s strategically located between East and West, and it has spent billions of dirhams to develop its infrastructure, ports and airports.”
“The Emirate has also provided an unprecedented host of services and products, including the iDeclare application which significantly reduces passengers’ time needed to declare different belongings. These advanced services will facilitate passengers’ entry into the country.”
From security and trust to reliability and competition, sourcing the best carrier and airport connection needs to align with customer needs, the types of products being transported, and compliance efforts for the region. Just because an airline is associated with a big brand does not guarantee a seamless transport of goods.
Conduct necessary research and review updated reports to learn and identify an airline’s strengths and areas of improvement. No two carriers are the same, and the options available depend on the amount of knowledge you have going in and what fits your long-term and short-term needs. Consider the partnerships involved with the airline of your choice and how these partnerships create competitive advantage. If you can’t identify what makes a carrier or airline significant, it might be time to reconsider market options.

AI

Overcoming Operational Challenges

In the age of Amazon-inspired standards and expectations, everything moves faster while changing just as quickly. In an evergreen market, the main key to success stems from proactive, digital solutions that are equipped with the ability to keep up in an ever-changing industry.

So what is really needed to make it work and go above set expectations within your organization and standards of operations? Below are three high-level tips to consider as we approach cyber-Monday and one of the busiest times of the year for e-commerce.

1. Be selective and remain modular.

It can be tempting to research and invest thousands into a solution that crosses multiple platforms while offering various strategy solutions. Although this is great, it produces higher risks and takes away from the actual needs of the company. Focus on what can be improved based on the company’s needs first, then look into broader solution options. Be cautious of investing in a solution that is new but irrelevant to operational needs. Prioritize your business goals to align with efficiencies on a multi-platform solution and approach. Remember what the customer needs and what is realistic in terms of delivering within operations.

2. Address internal and operational issues.

Everyone talks about transparency with customers for success, but you must first take an honest assessment at what is and isn’t working, internal/external challenges, pain points and inefficiencies before you can deliver the best to customers. You can’t produce quality results externally without fixing an area that needs improvement first. After a thorough evaluation is done, you can wisely select solutions and changes needed for success. Remember the example of the domino-effect business model, each part of the business is impacted by the other.

3. Choose fully-integrated solutions.

The implementation of digital solutions is at its peak. But what if a solution leaves out one area or another? For example, a digitized delivery system tracking ETA but can’t provide temperature control or visibility. Project44 said it best, “The holy grail is a truly integrated supply chain which connects all your modes and nodes including ocean carriage, drayage, deconsolidation, inland transportation, and final mile.”  When vetting solutions, remember each operational sector and choose the one that fits all.

 

Source: Project44