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How Machine Learning Is Transforming Supply Chain Management

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How Machine Learning Is Transforming Supply Chain Management

Supply chain management is a complicated business. A lack of synchronization or one missing entity can interrupt the entire chain and result in millions in losses.

In a market environment where businesses are continually striving to cut costs, increase profits, and enhance customer experience, disruptive technologies like machine learning offer a window of opportunity. By exploiting the enormous amount of real-time data and leveraging the cloud power, it improves decision making, process automation, and optimization. It can create an entire machine intelligence-powered supply chain model. It also helps companies improve insights, mitigate risks, and enhance performance, all of which are crucial as the global supply chain war wages on.

Gartner recently announced that innovative technologies like blockchain and Artificial Intelligence (AI)/machine learning would significantly disrupt existing supply chain operating models. In addition to advanced analytics and Internet of Things (IoT), machine learning is considered one of the high-benefit technologies. This is because it allows dynamic shifts across industries and enables efficient processes that result in significant revenue gains or cost savings. 

So, it is no surprise then that, in another industry update, Gartner predicted that at least 50% of global companies would be using AI-related transformational technologies in supply chain operations by 2023.

There are three key ways in which these transformational technologies empower businesses:

Monitoring: By connecting equipment, products, and vehicles with IoT sensors, companies can monitor goods and operations in real time.

Analyzing: Advanced analytics convert data into actionable insights and help businesses understand the reason behind specific incidents and how they impact the business.

Acting: Valuable insights as a result of data crunching help businesses address planning challenges and automate processes to improve efficiency.

So, adopting machine learning in supply chains is critical for companies to stay competitive in the long run. However, what aspects of the supply chain will be impacted by machine learning? Let us find out.

A Myriad of Benefits to Supply Chains

If you get the algorithms right, the benefits of using machine learning are innumerable. The algorithms can predict supply trends based on human behavior, resulting in personalized customer service with lower inventories and better utilization of resources. We take a look at several such benefits of machine learning below.

Brings Real-Time Visibility Which Improves Customer Experience

According to a Statista survey, visibility is a significant organizational challenge for 21% of supply chain professionals. Visibility has been a buzzword in supply chain circles for more than a decade now and every technology so far has promised to improve visibility in some way. But, is machine learning contributing anything here? 

The combination of IoT, deep analytics, and real-time monitoring is improving supply chain visibility, helping businesses achieve delivery commitments and transforming the customer experience. By examining historical data from various sources, machine learning workflows discover complex interconnections between various processes along the value chain.

Amazon is a prime example as it is using machine learning to enhance its customer experience by gaining an understanding of how product recommendations influence customers’ store visits.

Cuts Costs and Reduces Response Times

As per Amazon’s regulatory filing in 2017, their shipping costs increased from $11.5 billion in 2015 to $21.7 billion in 2017. And, it’s not just Amazon. Many other players are struggling because of rising shipping costs. In fact, in one survey, more than 24% of supply chain professionals expressed that delivery costs are the biggest challenge for B2C companies.

By applying machine learning to handle demand-to-supply imbalances and trigger automated responses, businesses can improve the customer experience, while minimizing costs. Operational and administrative costs can also be reduced by integrating freight and warehousing processes and improving connectivity with logistics service providers.

Machine learning algorithms’ ability to analyze and self-learn from historic delivery records and real-time data helps managers and dispatchers optimize the route for each vehicle. This allows them to save costs, reduce driving time, and increase productivity. 

Machine learning can also be used to detect issues in the supply chain before they disrupt the business. Having an effective supply chain forecasting system means a business has the intelligence to respond to emerging threats. And, the faster a business can respond to problems, the more effective the response will be.

Streamlines Production Planning and Identifies Demand Patterns

When it comes to machine learning’s role in optimizing complex supply chains, production planning is just the tip of the iceberg.

Sophisticated algorithms are trained on existing production data in such a way that they start identifying future buying, customers’ ordering behavior, and possible areas of waste. This helps businesses tailor production and transport processes to actual demand as well as improve their relationships with specific customers.

For example, by anticipating and acting on the specific needs of your customers before they even arise, businesses can establish themselves as reputed brands capable of recognizing customer needs. 

There is so much volatility in global supply chains that it will be challenging to forecast demand accurately, without technologies like machine learning. However, reaping the full benefits of machine learning might take years. So, businesses should plan for the future and start taking advantage of the machine learning solutions available today.

Investing in machine learning and the related technologies today means increased profitability and more resources for your business tomorrow. Businesses that can use machine learning in their supply chains will have better plans, resulting in less “firefighting” and fewer inefficiencies.

 

6 Important Tips for Effective Logistic Management

The larger your operation, the more steps you will have in your logistics plan and the harder it is to manage. A supply chain has to be very efficient to supply different materials to varying locations at specific times.

It’s also important to be able to respond speedily when there’s a problem. Here are six tips to help you manage logistics effectively.

1. Define your goals

The business sector uses the term logistics to describe the efficient flow and storage of goods from where they originate to where they’re consumed. The supply chain includes transportation, shipping, receiving, storage and management of all these areas.
 
Some of the key goals for all businesses are increased efficiency, more sales, and greater customer satisfaction at the lowest cost. However, for every business there are different logistic/supply chain needs and they must support the goals of the business.

For example, if one of your goals is to make your supply chain as lean and efficient as possible, you will continuously strive to identify opportunities to streamline work processes and minimize waste.

In order to implement a logistics management strategy, business owners need to take a thorough look at every part of the chain, define how it should work and how it contributes to the overall supply chain management goals i.e. are the distribution centers in the right locations and are there enough of them?

2. It’s all in the planning

Logistics can be very stressful without good planning. The entire operation should be able to progress smoothly with minimal interruptions and this requires planning ahead.  Of course, there are always unexpected hiccups but the fewer off-the-cuff decisions that have to be made the better.

Shawn Michaels who works for paper writing services has spent a decade motivating business owners across various industries. He suggests logistics managers should devise flow charts for the entire operation. It needs to include factors such as goods procurement, storage facilities and delivery of products to an exact location.   

3. Have a contingency plan

Logistic managers need to have a contingency plan for every aspect of the logistics. No matter how good the original plan, covering every eventuality is impossible. Managers have to follow the supply chain at every point and be ready to switch to a backup plan if necessary.

Inventory management is often one of the main culprits that can adversely affect business goals. Being able to track and manage inventory in real-time helps with smooth and efficient functioning and increase sales.

If there isn’t the capability to give the alert about potential shortages and relay information about bottlenecks, costly delays can be expected that can significantly affect the company’s bottom line.

Logistics managers need to know that they can’t depend on one supplier or vendor and usually have an extensive network of sources for products and services. Michael Osborne who works as a writer for rush essay stresses the importance of having a network of contacts to rely on in event of an emergency. 

4. Hire the right logistics manager

Your company needs a good logistics manager who knows how to sort out issues and keep things moving. He must be able to keep a cool head and think on the fly. 

He needs to be good with people and have the interpersonal skills to communicate with employees and make alternative arrangements when necessary. It helps if he has a network of industry contacts he can rely on when he needs to sort out problems. 

Richard Alderman, manager of My-Assignment.Help, says that apart from good interpersonal skills, and the ability to remain calm under pressure, good logistics managers also need strong leadership skills and good financial acumen.

5. Adopt automation

Technology can play a major role in increasing еру efficiency of the supply chain. Today’s software is able to measure and analyze just about anything, improving the chances of success in any logistics venture. Valuable software saves time and maximizes performance.

Potential problems in the supply chain such as inadequately tracked fleets, scattered inventory or mismanaged warehouse processes can be improved by automating systems.

For example, using fleet and inventory management software and HR software can help refine processes taking into account factors that have the most impact on the bottom line. Tracking a truck in transit not only provides valuable data but helps to make sure delivery is on time as a driver may have questions about the freight and problems could occur.   

Kenneth Novak who heads up a writing service has found that using systems to centralize information and automate provides access to real-time information. This can help a business to reach its maximum potential with a minimum investment in planning and implementing solutions.

6. Learn from your mistakes

Poor logistics management can undermine a company’s future. In order to optimize your supply chain, you have to learn from your mistakes. This means regularly sitting down as a team, being open about mistakes and discussing how to put systems in place to prevent them from happening again. 

According to John Abrahams who writes easyessay, learning from mistakes is vital when it comes to conducting logistics-related activities in an economic and efficient way. Team meetings need to be held frequently that include all the primary functions of the business in order to review and discuss problems and solutions.

The aim of effective logistics management is to improve operations, ensure customer satisfaction, and increase productivity.  Using the best logistics practices can help your company to gain a competitive advantage. The supply chain environment is continually shifting and so logistics strategies need to be constantly reassessed. If you keep these tips in mind, you can make sure your supply chain is as effective as possible.

This guest post is contributed by Kurt Walker who is a blogger and college paper writer. In the course of his studies he developed an interest in innovative technology and likes to keep business owners informed about the latest technology to use to transform their operations. He writes for companies such as Edu Birdie, XpertWriters and uk.bestessays.com on various academic and business topics.

RILA

Disruptors, Problem-Solvers, & Up-and-Comers: What to Expect at RILA/LINK 2020

Known as The Retail Supply Chain Conference, the 2020 Retail Industry Leaders Association’s (RILA) LINK show gathers leading retail players for an event that goes far beyond networking. The annual RILA/LINK conference will be held from Feb. 23-26, 2020, at the Gaylord Texan Resort, one of the premier conference centers in Dallas. 

The conference boasts a global and domestic attendee presence consisting of exclusive RILA members, executive keynote speakers and supply chain professionals in search of the latest and greatest innovations, resources and partners. More than 1,800 attendees are expected so far.

Participants can anticipate more than 300 solutions providers, 155-plus leading retailers, dozens of breakout sessions and more keynote speakers than one can count on their hands. Among the speakers currently lined up include Levi Strauss & Co. President and CEO Chip Bergh as a keynote speaker and seminar leader, educator and business guru Dr. Dale Henry as a general session speaker. 

Innovation, industry disruptors, retail up-and-comers, economic growth, environmental sustainability and competition are among the RILA focus areas and are part of the topics anticipated for the conference to address.

Hundreds of exhibitors from around the globe will showcase the latest innovation, retail and supply chain solutions and expertise at the show. Among the big names to look out for include: Descartes Systems USA, Amber Road, APL Logistics, Approved Freight Forwarders, Bastian Solutions, BluJay Solutions, CN, FedEx Corp., Georgia Ports Authority, Port Everglades, Port Tampa Bay, Port of Baltimore, Port of Long Beach, Port of Los Angeles, Port Authority of New York & New Jersey, and many more. DHL serves as the Title Sponsor for the 2020 conference, following suit from last year’s event in Kissimmee, Florida. 

LINK 2019 put a spotlight on many of the issues retail and supply chain players are still learning to navigate to this very day. Of these issues, trade tariffs, customer relations and innovation remain high on the list of significant disruptors showing no signs of going away. The retail ecosystem is continuously evolving without warning. The customers of yesterday are greeted with new and competitive offerings to gain their loyalty and without the knowledge of experts and peers, it seems nearly impossible to keep up.

Jennifer Safavian, RILA executive vice president of Government Affairs, issued a firm statement in a recent press release from the association, commenting on the current situation in the trade war and how it continues impacting industry players and customers by taking actions one step further. The following announcement is being attributed for ultimately delaying the imposition of President Trump’s proposed tariffs for another month:

“The damaged caused by the trade war is escalating. Economic indicators continue to signal a slow-down in growth. Investors are skittish, markets are volatile and uncertainty over tariffs is stalling business investments and job creation. Consumer confidence is the one pillar of strength in the U.S. economy, and the president’s tariff strategy is threatening that as higher prices will be imposed on consumer goods with increased tariffs.”

As the retail sector changes, RILA and its 200+ members of retailers, manufacturers and suppliers are ready and prepared for the next step in ensuring success and establishing a competitive edge. Furthermore, the executive team at RILA is ready to stand up on behalf of global retailers. If your company is involved in supply chain logistics or retail in any way, RILA’s 2020 LINK Conference is a no-brainer. Registration is now open, secure your spot today! 

delivery

The Advent of Smart Vehicles & Drones in Delivery

Consumers will almost always pick the company that delivers faster. Having the most efficient supply chain is now, more than ever, the key differentiator that sets companies apart from their competitors. But more than this, companies that can predict behavior are the ones that will stand out ahead of the pack.

Since the early 2000s, logistics, freight, delivery and service companies have been outfitting their fleets with GPS tracking systems to monitor the location, movement and status of their fleets. For many companies, GPS tracking is where logistics technology begins and ends, with businesses investing thousands of dollars into monitoring their vehicles and reacting to ‘what happened’. But companies that are positioning themselves for the future recognize that the real value lies not in just determining what happened, but rather in using data obtained through intelligent logistics solutions to predict future scenarios, mitigate risks and avoid adverse outcomes altogether.

By accessing data in real-time through internet of things (IoT) technology, businesses can anticipate their customers’ needs and desires before they do, enabling them to deploy resources more strategically and sharpening their competitive edge. Using the real-time data collected, which helps identify where to trim the fat or drop what’s not working, companies are now able to make quicker, bolder and more informed business decisions. And beyond helping companies streamline their logistical processes and distribution networks, IoT technology is also driving their expansion into new untapped markets with the advent of smart vehicles and drones.

Using smart vehicles and drones to expedite delivery

One of the key – and arguably most important – innovations in intelligent logistics is the development of the delivery drone. The immediate and obvious benefit of drones is faster delivery, enabling consumers to speedily receive products from vendors like Amazon, Sam’s Club and Whole Foods. Drones allow for expedited deployments; waiting for trucks to dispatch takes significantly longer. However, even more important is the impact drones are making on reaching developing societies that, up to now, have missed out on decades of infrastructure development.

Drones using IoT technology are connecting developing countries with limited infrastructure to the global village, thus enabling them to participate in the global economy. This is opening new markets for business that were previously closed to them in the past.

Smart logistics in vehicle fleet management

Delivery vehicles that get caught in traffic or take convoluted routes to their locations can cost businesses hours of lost productivity. But by using Real-Time Location System (RTLS) technology, IoT devices allow businesses to easily and precisely track driver locations.

Smart trucks that implement IoT tech do more than ensuring the driver is on task, on time and performing safely at optimum levels. IoT devices are also enabling businesses and their delivery fleets to gather even more valuable data, such as identifying the fastest route to avoid traffic, knowing when the trailer is unhitched or when the recipient has opened a dispatched package. Companies like McDonald’s are experimenting with delivery trucks that can map the fastest and most efficient routes on their own, thereby reducing emissions and speeding up delivery.

Drivers, too, benefit from IoT tech in their vehicles. Smart logistics tech can also monitor the environment on all four sides of a vehicle, which helps prevent costly mistakes and accidents.

By leveraging IoT technology, companies can now execute every step of the delivery process on-site. For a happy ending, wireless sensors notify companies when the order was opened, allowing company representatives to ‘wow’ customers with a text alert saying, “did you enjoy the product?”

Driverless vehicles: how can they help me?

Back in 2017, an English online grocery chain named Ocado released a self-driving delivery truck into the backstreets of London. The little truck was accompanied by two human monitors and delivered goods to London residents over the course of ten days, all by using its onboard IoT mapping software.

Ocado’s mini-truck was unable to carry as much cargo as its bigger, 18-wheeler brothers, but it did arrive at customer houses faster and with less hassle than larger vehicles could have. Online buyers, meanwhile, could use Ocado’s smartphone app to track their delivery and receive updates right as the Ocado van pulled up to their place of residence.

The Ocado van was the first in a continuing development of vehicles that can deliver goods quicker than traditional freighters, with more cost savings. Additionally, autonomous delivery vehicles can be scaled up more quickly; it’s easier to fit 20 small vans on the streets versus 20 diesel trucks.

IoT technology is future-proofing businesses for long-term returns

To today’s businesses, with the advent of smart vehicles and drones integrating IoT tech into supply chains may seem costly or even risky. But its striking long-term benefits and savings far outweigh the initial costs. Companies deploying intelligent logistics technologies within their fleets have fewer safety concerns, less staff compensation claims and more satisfied customers. With an eye on the long game, smart companies are employing IoT solutions to go beyond merely being ‘good’ at logistics: by mining IoT data, they’re investing in long-term returns for their businesses.

Gregg Abbate is the iLogistics key account manager of Advantech.

IoT technology

The Utilization of IoT Technology in Smart Logistics

With the new IoT-powered supply chain, the industry can now track goods from anywhere, at any time, on a global scale, transforming the modern supply chain as we know it.

We live in a complex, global world, and few industries better illustrate this complexity than logistics. In this multifaceted landscape, missteps along the supply chain are unavoidable. Most consumer goods travel thousands of miles, changing hands multiple times, before reaching their final destinations. Yet, no matter how solid the logistics network for a moving asset is, at some point a truck will get stuck in traffic, a crate will be delayed at a warehouse or an asset will go missing altogether.

Most parcels languish for much of their time in transit dead-zones; goods are first logged at factories, warehouses and delivery depots, but little real-time data exists during the journey between these points. Although radio-frequency identification (RFID) tags help track goods as they reach their destination, when it comes to following mobile assets, traditional RFID technology falls short. They give no information on what happens ‘in between’, leaving logistics managers largely in the dark about the state of the goods they’re charged with moving safely, and quickly, through a complex supply chain.

With traditional supply chain management solutions, logistics managers often only learn about delayed or misrouted assets after they arrive hours late—or not at all—at their destinations. These hours in limbo translate into lost productivity, delayed production and broken client relationships.

IoT technology unlocks the value in supply chains

Using the real-time data collected by IoT sensors, companies are now able to identify where to trim the fat and make quicker, bolder and more informed business decisions that sharpen their competitive edge. It also gives unmatched insights on customer behaviors, enabling them to innovate based on sound evidence. And by accessing data in real-time, businesses can anticipate their customers’ needs and desires before they do, enabling them to deploy resources more strategically and be more adaptable.

Real-time asset tracking streamlines field operations

As a tracking tool, IoT technology sharpens efficiencies between warehouses and distributors, giving customers clearer visibility of their deliveries. But more than this, real-time tracking provides data with fine-grain accuracy, hyper-speed connectivity, low-latency (less downtime), and deep coverage.

In contrast to RFID-based scan points, the IoT smart tracking device securely transmits real-time information about the exact location of those goods at any point along the supply chain, enabling businesses to minimize costly errors or avoid disruptive bottlenecks quickly.

Unlike most first-generation smart devices, assets connected to the IoT network don’t rely on WiFi or 4G, so connectivity issues are lessened, regardless of where the asset travels. IoT devices also benefit from deeper coverage in traditionally low-connectivity areas such as garages and basements.

Cameras installed on multiple parts of delivery vehicles give a 360° view of the travelling environment, while LTE signals in vehicles make for better GPS tracking. The quality and quantity of granular data that these intelligent devices can collect and organize is unprecedented. Thanks to this new level of information, global companies are beginning to see their supply chains become leaner and more efficient. 

Reducing delay-related costs with improved speed and accuracy

As goods make their way through the supply chain, IoT sensors return information about journey times, traffic surge spots, warehouse delays, network gaps or a change in ambient temperature. These up-to-the-minute alerts allow companies to mobilize quickly across a complex, global transportation network. Delayed assets can cause major disruptions further down the supply chain, but smart logistics turns potentially costly disruptions into a minor hiccup.

Building a lean supply chain

As our global economy becomes even more interconnected, investing in IoT-powered smart logistics solutions has no longer become a ‘nice to have’ option, but a critical necessity, giving the industry all the tools it needs to remain at the forefront of agile innovation in an everchanging world. 

 

Gregg Abbate is the iLogistics key account manager of Advantech.

students

SCHOOLS, STUDENTS & SUPPLY CHAINS SCRAMBLE TO MEET INDUSTRY DEMAND

While the internet has been exceptional in a multitude of ways, its ability to deliver information, services and products easily and quickly is by far its notable, competitive advantage. Information is digital, while services and products especially remain physical. And this is where supply chain management intersects, taking the “old” way of managing chains and super-sizing it based on the needs of a digitally, interconnected world.

Robots can and continue to contribute to supply-chain management. But the brains behind the chain are still flesh and blood. Satisfying customer expectations in 2019 demands perhaps the most agile chains in human history, so companies need good people, and students need good training. 

Student enrollment in supply chain programs has exploded. Gartner research found that from 2014 to 2016, enrollment ballooned by 43 percent. In raw numbers this is a jump from 8,500 students to 12,200. 

Take the University of Tennessee Knoxville (UTK) as an example. The state’s largest university holds two student job fairs every year. Student job fairs are typical across universities. What’s not typical, however, is the UTK supply chain program holds its own fairs. Roughly 1,000 students arrive to these fairs to be ultimately placed in touch with between 160 and 180 Fortune 500 companies for internships, full-time jobs as well as co-op programs. An innovative supply chain forum features in-depth panel discussions and speed networking events for both companies and students alike.

Still Not Enough

There are currently 150-plus schools (U.S. only) that offer bachelor or associate degrees in supply-chain management. Yet, despite this future supply chain churn, a study by DHL in 2017 revealed jobs in the larger supply chain sector are outpacing supply by a shocking 6:1. The good news here is if you have a supply chain degree, the world is your oyster. But if you’re an employer seeking fresh, new graduates, they won’t simply fall into your lap. 

Recognizing this, companies have been engaged in more than simply getting the good word out at recruiting fairs. Abe Eshkenazi is CEO at the Association for Supply Chain Management (APICS). One of the (if not the) leader in supply chain certification programs, APICS serves an invaluable role for companies seeking supply chain management talent as well as those needing to ramp up the skills of current employees. Known for their ability to develop talent and work collaboratively with supply chain stakeholders of every kind, Eshkenazi is understandably bullish, despite this supply gap. 

Perhaps the biggest barrier to inculcating supply chain management as a profession in a teenager’s mind is it does not neatly fall into science, the arts, technology or math. Eshkenazi is a vocal supporter of getting supply chain management concepts integrated early and often in school STEM programs. Via basic, age-old exercises like the typical lemonade stand, kids learn supply chain fundamentals: calculating the amount of lemons needed, finding providers, getting the lemons back to the stand and so on. These are things we all engaged in but never knew how to neatly define the process. Yet this is supply chain management at its most basic level, through and through. 

Competition Attracts Everyone

Even the most uncompetitive among us are still drawn, to some extent, to competition. The opportunity to win something or be recognized for a job well-done is a satisfactory feeling. One way companies are attracting fresh talent to universities (to in turn groom them) is through old-fashioned, friendly competition. 

The previously mentioned APICS partnered with Deloitte to develop the ASCM Case Competition. A supply chain management problem is presented, and teams then coalesce to brainstorm, test, fail and ultimately provide solutions. The trial-by-error nature of this case competition gives participants unique insight not only into learning through mistakes but recognizing common mistakes and patterns that will likely arise in the real world. Cases involve everything from logistics to sales, operations planning to distribution, as well as inventory and similar management problems. 

The competition started as a fun idea and has evolved into a flagship event that involves students and universities across North and South America, Europe, Africa and Asia. A sampling of the universities that have gone through the ASCM Case Competition speak to its global reach–Duke University, University of Pretoria, Indian Institute of Technology Delhi, Rhode Island College, American University of Sharjah, Western Michigan University and so on. The finalists from last year were from the U.S., Mexico, Germany, India, Hong Kong and Canada.

Scholarships Never Hurt     

While competition is nice, a scholarship is arguably better received. To attract bright minds into the food side of supply chain management, the National Restaurant Association Educational Foundation provides scholarships to roughly 50 students per year. The Institute for Supply Management posts scholarship opportunities year-round, and it is not unheard of to see awards exceeding $10,000 per student. 

The Zaragoza Logistics Center (ZLC) is one such university, a research and educational institute forged via a partnership between MIT and the University of Zaragoza. Their full-time Master of Engineering in Logistics and Supply Chain Management is a 10-month program (nine months at the ZLC campus and three weeks at MIT) that prepares graduates to work at a global level in the larger supply chain management field. An extensive amount of scholarships is available, and if 10 months is too big a time commitment, a blended Master of Engineering in Logistics and Supply Chain Management is offered with a mix of online courses plus three weeks at MIT and four months at the ZLC campus. 

The challenges of recruiting well-trained, recent graduates will likely be an issue for some time. What the larger sector needs to do is make supply chain management an attractive offer, and for this generation of young people a nice salary isn’t going to cut it. More coverage via events from UKT and stimulating competitions get folks in the door. Evolving in this direction is where the industry should move. Only time will tell if this ends up occurring.  

Pilot

Pilot Freight Selected for “Logistics Provider of the Year”

Major motion picture 3PL provider, Technicolor, recognized Pilot Freight Services as the 2018 Logistics Provider of the Year. The eMemphis-based, long-term Pilot customer relies heavily on the freight forwarder for time-sensitive deliveries of  DVD displays to big-name retailers, ultimately supporting Technicolor during peak, fourth quarter deliveries while providing the company unwavering support.

“Pilot pulled out all the stops to make sure we were in every store we needed to be in for Black Friday and continued their stellar support through the busy holiday season,” said Elaine Singleton, vice president of supply chain at Technicolor.

A variety of strengths launched the global company at the top of the list for the recognition, among them included on-time service; communication and proactive tracking; billing accuracy; and proof of delivery. The final decision was made by Technicolor staff votes.

“We are thrilled to be recognized by Technicolor as their Logistics Provider of the Year,” said John Hill, president and chief commercial officer of Pilot. “We’ve had a longstanding relationship with Technicolor and our abilities to coordinate and handle time-specific deliveries have been able to help us both grow in our respective industries.”

Source: Pilot Freight Services

Blockchain

Where Have You Been? Blockchain for Tracking Goods in Trade.

Why is it so hard to track the origin of a diamond, or take longer than we’d like to trace the source of a food safety outbreak? It turns out that we’ve been tracking the supply chain in some really antiquated ways, but that’s about to change thanks to blockchain.

Origins and Travels

The “provenance” of a good refers to its origin as well as a chronological record of its ownership, location, and other important information as it moves along a supply and distribution network.

Many companies are exploring the use of blockchain technologies to help track this information much deeper into their supply chains than previously feasible. A retailer, for example, might require detailed information about materials, components, and ingredients as would manufacturers sourcing from a variety of suppliers.

Using blockchain technologies to track the origins of raw materials and follow domestic and international supply chains can also help meet the increasing demand for consumer information about globally produced goods, providing more transparency and accuracy about a product’s long journey to the store.

How Blockchain Can Help

Blockchain works to track the provenance of a good thanks to digital tokens that are issued by each participant in the supply chain to authenticate its movement. Every time the item changes hands, the token moves in lockstep. The real-world chain of custody is mirrored by a chain of transactions recorded in the blockchain.

The token acts as a virtual “certificate of authenticity” that is much harder to steal, forge or hack than a piece of paper, barcode or digital file. The records can be trusted and greatly improve the information available to assure supply-chain quality.

Blockchain technology can also make the audit process more efficient. The ledger distributes responsibility to the owners of pieces of information while ensuring verification along the way. The transactions are transparent to parties on a permission basis.

Consumers Want to Know

Surveys show that consumers in the United States and around the world are becoming more aware and interested in the origins of the merchandise they buy and the food they consume. Many also want to know how production processes of the goods they consume impact the environment and society.

The Pew Research Center found that 75 percent of Americans are “particularly concerned” for the environment, and 83 percent make an effort at least some of the time to live in ways that protect the environment. Nearly three out of four Millennials surveyed by Nielsen say they would pay extra for “sustainable” products and brands with a reputation for environmental stewardship. When it comes to food products, 71 percent of people surveyed by Label Insight said they want access to a comprehensive list of ingredients when deciding what food to buy.

Sustainable Coffee, Genuine Brand Purses and Conflict Diamonds

Retailers are concerned that brand loyalty is on the decline. But with some products, high consumer demand for product information is associated with higher expenditures, meaning people might pay more for a product they believe is ethically or sustainably sourced or manufactured. Blockchain can be used by companies to verify the claims their customers care about.

Take Starbucks, for example. Since 2004, the company has worked to support farmer livelihoods through its Coffee and Farmer Equity (C.A.F.E.) program. In 2015, they announced that 99 percent of their coffee was “ethically sourced,” complying with a set of principles and practices at each step of the supply chain from farm to cup. Last year, they took traceability to the next level by piloting the use of blockchain to create a transparent and direct connections with tens of thousands of coffee farmers. Customers can now see up close a supplier’s sustainability practices.

Worried your designer handbag isn’t the real deal? The luxury goods industry is seeking to use blockchain to verify the authenticity of its product. Brand name shoes, dresses or purses would have specific codes that retailers and consumers could use to track changes in ownership. Given the decentralized blockchain platform and multiple authentication processes to update the ledgers, fraudulent entries will be nearly impossible. The auditable and tamper-proof records produced through blockchain technology could help combat trade in counterfeit goods, which is a $1.77 trillion problem for manufacturers according to the International AntiCounterfeiting Coalition.

Blockchain is a promising development for the diamond industry, which struggles to prevent so-called “conflict diamonds” from entering their value chains. A United Nations panel reportedly found that 140,000 carats of diamonds were still being smuggled out of the Central African Republic between 2013 and 2015 and traded illicitly to finance armed conflict despite an export ban. De Beers, which controls 37 percent of the global diamond market, reported earlier this year that it was able to track 100 high-value diamonds from mine to retailer using blockchain technology.

Food Safety and Quick Recalls

The Centers for Disease Control and Prevention estimate that each year roughly one in six Americans, or 48 million people, becomes ill as the result of a foodborne pathogen (e.g., salmonella, listeria, or E. coli). Blockchain technology will not necessarily prevent outbreaks but could be used to track their source more quickly and prevent outbreaks from becoming epidemics. Retailers and regulators could use the distributed ledger technology for accurate and rapid information about potentially contaminated food.

Walmart is pioneering the use of blockchain to maintain easily accessible records of food provenance. In a simulated recall, The company was able to trace the origin of a bag of sliced mangoes in 2.2 seconds compared with the 6 days, 18 hours, and 26 minutes it would take using a standard approach of working with suppliers.

Australian exporter InterAgri is experimenting with using blockchain to track the production and global delivery of its Black Angus Aussie Beef. Teaming up with JD.com, a major e-commerce site in China, InterAgri aims to detect and eliminate food fraud such as counterfeit Aussie beef illegally marketed in China. By some cost estimates, food fraud affects approximately 10 percent of all commercially sold food products, creating food safety concerns for the consumer and liability issues for producers.

Coming to a Shelf Near You

In principle, blockchain could be applied to tracking provenance information for virtually any good, from agricultural commodities to luxury goods. Although blockchain technology is still not prevalent or the industry standard, more producers and retailers are exploring ways to track their own supply chains to increase quality assurance and their ability to communicate information about their products to consumers.

It will take trial and error and significant work with suppliers to ensure interoperability and efficiencies, but such experimentation will be essential if the U.S. and global economies are to realize the benefits of blockchain in international trade.

This is the first in a three-part series by Christine McDaniel for TradeVistas on how blockchain technologies will play an increasing role in international trade.

ChristineMcDaniel

Christine McDaniel a former senior economist with the White House Council of Economic Advisers and deputy assistant Treasury secretary for economic policy, is a senior research fellow with the Mercatus Center at George Mason University.

This article originally appeared on TradeVistas.org. Used with permission.

Truman’s Eliminates Plastic Waste with Direct-to-Consumer Business Model

If there’s one thing on which everybody can agree, it’s that we need to reduce the amount of plastic waste in the world. We launched Truman’s earlier this year not because we’re obsessed with cleaning, though we kind of are, but because we wanted to make a dent in the global plastic problem and found the perfect opportunity.

We saw a giant industry — household cleaning — that still relied on single-use plastic containers for its ever-increasing, unnecessarily cluttered array of products. At the same time, we saw an industry in no hurry to upset its status quo of shipping 5 billion pounds of single-use plastic each year, despite its adverse impact on the world. To us, this was an open invitation to engage in some environmentally friendly disruption.

The result? A simplified line of safe, multi-purpose household cleaners that not only generate far less plastic waste than traditional cleaning products but utilize fewer resources getting them from the point of manufacture into customers’ hands. Thanks to our slim, lighter packaging and a direct-to-consumer business model, we’ve streamlined delivery and eliminated several links in the supply chain.

Refill ’er up

For decades, home cleaners have come in ready-to-spray, use-it-then-lose-it bottles that contain 98% water. That may have seemed fine back when “throwaway living” was celebrated as the carefree wave of the future, but these days, shipping bulky, water-filled bottles is recognized to be incredibly wasteful.

Commercial establishments have been wise to this fact for years. You don’t see your favorite corner coffee shop or drugstore purchasing bottle after bottle of spray cleaner; they rely instead on concentrates and tap water, and refill the same bottle, over and over again. If this routine works for businesses, we thought, why shouldn’t it work for everyone? We set to work creating a fun, family-friendly, no-mess product line that would inspire people to change virtually everything about the way they clean.

Truman’s four simple, non-toxic household cleaners come in small concentrate cartridges. Users fill and refill the same bottles with tap water and additional cartridges; the cartridges’ auto-dispensing mechanism eliminates hand-mixing, so there’s never any mess. By shipping tiny cartridges instead of pre-filled bottles, we’re able to dramatically reduce plastic waste.

To give a sense of the environmental savings, it takes 30 semi-trucks to ship the equivalent number of ready-to-use cleaning bottles as it does one semi-truck of Truman’s refill cartridges.

Taking a Direct Approach

When we started planning Truman’s, we knew we wanted to avoid the overcrowded retail shelf and its rental fees. Instead, we adopted a subscription e-commerce model similar to those successfully used to sell everything from razors to meals. This both keeps costs down and gives us direct and immediate contact with customers, which is essential when you’re trying to change lifelong habits. (“Big Cleaning,” by contrast, has been slow to take advantage of e-commerce, partly as a result of its bulky, waterlogged ways.)

After a customer orders a Truman’s Starter Kit of four cleaners, they then sign up for regular refill kits — never fewer than four cartridges at a time — which are sent to their house at their convenience. By being mindful of packaging and the number of shipments we make, a Truman’s subscription results not just in significantly less plastic waste but less overall environmental impact because we bypass the traditional retail supply-chain. Truman’s cleaners are easier on the environment than traditional home cleaners from the moment of manufacture to the day they arrive at consumers’ doorsteps.

Break the Chain

Products sold at traditional retail outlets follow essentially the same route to get there: After assembly, they’re put in boxes, which are loaded onto pallets or into crates, which are then transferred onto trucks by a forklift. The pallets or crates are then driven to a distribution center/warehouse, where they’re unloaded and moved into their assigned position. There they sit, consuming overhead costs, until they’re put onto another truck to travel to the retail store. At the store, they’re unloaded in the stocking area, where some of them wait, while a few are plucked from their boxes and put on the shelf. Depending on how much their manufacturers have paid, some get front-row seating while others are assigned the nosebleed sections. And there they remain, consuming overhead costs, until they’re plucked from the shelf by a consumer who has probably driven miles to shop, most likely in their pickup or SUV.

Truman’s, by contrast, follows a totally different “demand chain” route that uses less packaging, involves fewer overhead costs, and results in lower overall energy consumption and carbon-dioxide emissions. Thanks to our direct contact with customers, we’re able to keep close tabs on demand. We manufacture and ship only the number of products that have been ordered, and we deliver them straight to the door, carefully packaged to minimize waste. A six-month supply of four refill cartridges easily fits in a standard mailbox.

An added benefit? Customers are spared having to enter the heavily scented cleaning products aisle and spared the ordeal of deciding among the mind-boggling number of wastefully packaged products.

Change Doesn’t Have to Be Hard

The growth of e-commerce has dramatically changed the retail landscape in the last decade. However, the cleaning industry, burdened by fear of change, has been slow to adapt. At Truman’s, we’re proving that people can change their habits and forgo single-use plastics in favor of concentrates. By making the customer experience as easy as possible, we can slowly but surely change the way people clean, and, more importantly, reduce the amount of plastic piling up in our landfills and oceans.

global logistics

Smart Logistics: Catalysts Changing the Logistics Sector

The logistics industry is watching closely as United States and China negotiate to resolve their trade war amidst the threat of higher tariffs starting March 1. At stake is $635 billion in annual trade – China exports $505 billion and imports $130 billion with the US[i]. These negotiations have repercussions for the global economy well beyond the US and China. Many industries engage vast trade networks that span myriad countries leaving few markets or nations exempt from these talks. For the US alone, which imports $2.3 trillion and exports $1.5 trillion annually[ii], its entire trade regime is now in play.

Countries are not alone in broiling trade disputes. This month XPO issued a profit warning citing the expected loss of $600M[iii], or 3.5%, of revenue from an unnamed customer. Amazon, widely believed to be XPO’s unidentified customer, is expanding its own logistics capacity. The expansion of e-commerce has been a boon for the logistics industry and bane for traditional retailers. Now as Amazon develops its own distribution capability, logistics providers and retailers alike are threatened. 

Global Logistics – an Industry in Transition

Ecommerce has been a key growth driver for the global logistics industry, which is expected to grow 7.5% annually from $8.1 trillion in 2015 to $15.5 trillion in 2023[iv]. The logistics of delivering directly to consumers is far more intensive than distributing in bulk to big box retailers. Long haul full truckload remains the largest market segment in logistics with a 70% share, yet less than truckload, parcel and intermodal – which together comprise 15% share of the logistics market – are fastest growing. 

The politics of logistics extends beyond trade disputes. US freight employs over three million truck drivers. As the graph below indicates, trucking is the largest employer in 29 of 50 states across the US. The American Trucking Association estimates a need for an additional 900,000 truckers[v] over the next ten years to keep up with demand. The industry already faces a shortage of over 50,000 drivers[vi]amidst the need to replace an aging workforce: 57% of US truckers are over 45 years old and 37% are over 55[vii]. Given the backlash over Amazon’s recent pullback of a second headquarters in New York City for 25,000 jobs[viii], one might imagine the political stakes involved with four million truck drivers across the US in the coming decade. 

Logistics – a Magnet for Venture Capital Investment

Venture capital has poured into the logistics sector in recent years. In 2018, global venture investment in logistics reached nearly $14 billion, more than the three previous years combined. Funding for supply chain, logistics and shipping businesses continues to grow in 2019. In February alone, investors have committed over $5 billion to the logistics sector. Major financings include a $1 billion investment in Flexport for intermodal logistics, $940 million in Nuro for its self-driving delivery vans, $700 million in Rivian for electric delivery vehicles, $400 million in DoorDash for local food delivery, and $300 million in Hong Kong-based Lalamove for last mile delivery. 

Five catalysts are driving innovation and investment in the logistics sector:

Ecommerce: Online retail continues to cannibalize physical retail. Ecommerce in the US reached 9.8% of total US retail in 2018, nearly triple the share of retail ten years earlier[ix]. Ecommerce is growing even faster in Asia, Europe and the Middle East. Traditional retailers are embracing omnichannel marketing as ecommerce extends to more retailing categories. The physical landscape will change dramatically in the decade as ecommerce players build more warehousing capacity replacing stores due to overcapacity in the traditional retail sector.

Crowdsourcing: Much as Uber, Lyft and Didi among others have disrupted the taxi industry through crowdsourced drivers, the gig economy is infiltrating the logistics sector enabling new services. Consumers are the biggest beneficiary through the rise of the concierge economy. Crowdsourcing has lowered delivery costs making home deliveries available for a broader range of items. Food delivery has received most funding with the rise of Uber Eats globally, Doordash and Postmates in the US, Just Eat and Deliveroo in Europe, Swiggy in India, and Meituan in China.  

Intelligent Automation: The securities brokerage industry has gone digital in the past two decades. The logistics brokerage industry still runs on phone calls and fax machines with limited price transparency and inefficiencies borne by limited supply chain visibility. Digital brokerage is now coming to the logistics sector through the confluence of sensors, cloud and intelligent automation. ELD and camera technology now monitor drivers reducing wait times, reducing accident risk, and helping to adjudicate cases when accidents occur. Venture backed companies that have raised $100 million or more in the US alone include Convoy, Flexport, Nauto, Next Trucking and Transfix, amongst others.

Electric Vehicles: The prospect of replacing diesel trucks is as welcome as replacing gas vehicles in the consumer sector. Tesla is now tackling the challenges of transporting large trucking payloads. Others are as well including the recently funded Rivian Automotive and Thor Trucks.

Autonomous Technology: End-to-end autonomous trucking may still be decades away yet the use of autonomous technology in logistics is already live in the warehouse with pilots underway for first and last mile as well as interstate long-haul deliveries. Autonomous delivery startups announced over $1.5 billion in February alone, including Endeavor Robotics, Ike and Nuro in the US and AutoAI, Mogu Zhixing and TuSimple in China. 

Logistics is a vast sector ripe for innovation across the supply chain.  Entrepreneurs and investors have flocked to logistics seeking to disrupt an industry representing over 5% of the US economy. While investment in logistics has increased substantially, funding has focused on major sectors. We believe many opportunities remain for further innovation across the supply chain as new technologies such as robotics, autonomous vehicles and machine learning develop for the logistics sector.    


[i] Stifel analyst report

[ii] Stifel analyst report

[iii] https://www.thestreet.com/investing/xpo-plummets-on-earnings-miss-and-warning-about-2019-14868169

[iv] https://www.prnewswire.com/news-releases/global-logistics-market-to-reach-us155-trillion-by-2023-research-report-published-by-transparency-market-research-597595561.html

[v] May 2018 Techcrunch article

[vi] May 2018 Techcrunch article

[vii] Stifel analyst report

[viii] https://www.nytimes.com/2019/02/14/opinion/amazon-new-york.html

[ix] https://ycharts.com/indicators/ecommerce_sales_as_percent_retail_sales