Trending Now

Virginia and Baltimore Companies Unite to Solve Shipping…

New Articles

Implementing Lean Six Sigma Principles in Supply Chain Management

lean
Global Logistics, Global Trade Daily, Uncategorized

Implementing Lean Six Sigma Principles in Supply Chain Management

Leave a comment

Amid the ongoing supply chain digitization, efficiency and quality in Supply Chain Management (SCM) are crucial. Lean Six Sigma principles, rooted in eliminating waste and reducing defects, offer a powerful framework for streamlining SCM processes. By seamlessly integrating Lean’s focus on process optimization with Six Sigma’s precision in defect reduction, businesses can achieve remarkable improvements in their supply chain operations. 

Understanding Lean Six Sigma Principles

As an introductory note, Lean Six Sigma is a powerful approach that revolutionizes how businesses operate. As the name suggests, it combines two essential principles: Lean and Six Sigma. Lean is more focused on waste and how to make processes leaner, while Six Sigma aims at reducing defects and variations in processes. While their origins are arguable, Investopedia traces the roots of Lean methodology to 1940s Toyota and those of Six Sigma to 1980s Motorola.

What makes Lean Six Sigma truly formidable, especially in SCM contexts, is how these principles work together. Lean’s efficiency drive complements Six Sigma’s precision, resulting in a highly optimized process that operates with minimal waste and errors. This blend of Lean and Six Sigma forms the bedrock of a robust and agile supply chain, setting the stage for a new era of operational excellence in businesses worldwide.

Benefits of Implementing Lean Six Sigma in SCM

With the above in mind, implementing Lean Six Sigma principles in SCM brings many invaluable benefits: 

  • Improved efficiency – this means streamlining processes, cutting out any activities that don’t add value, and making the entire supply chain run smoother. 
  • Enhances quality – it’s all about reducing errors and defects, ensuring that every product or service consistently meets high standards. 
  • Substantial cost reduction – minimizing waste and excess inventory is how businesses can operate with leaner resources. This, in turn, lowers operational costs, contributing to a healthier bottom line. 

In brief, implementing Lean Six Sigma principles isn’t just about optimization; it’s about creating a supply chain that’s efficient, reliable, and financially sound, ultimately driving success in the competitive global market.

Implementing Lean Six Sigma Principles in SCM

That said, implementing these principles requires a multifaceted approach.

#1 Lean Six Sigma in Procurement

When it comes to procurement, Lean Six Sigma principles play a crucial role in optimizing operations. It all begins with simplifying supplier selection and evaluation processes to ensure that you choose the most reliable and efficient partners. Another key aspect is Just-In-Time inventory management, which involves keeping inventory levels as close to demand as possible to reduce excess and save costs. Also, it focuses on shortening procurement cycle times. So, by reducing the time it takes to acquire goods and services, businesses become more agile and responsive to market demands. This not only enhances efficiency but also bolsters the overall resilience of the supply chain.

#2 Lean Six Sigma in Manufacturing

Transformation in manufacturing starts with optimizing production schedules and workflows, ensuring that resources are utilized efficiently to meet demand. Furthermore, it involves implementing Total Productive Maintenance (TPM) practices, which focus on maintaining equipment in top-notch condition to prevent downtime and ensure seamless operations. Additionally, Lean Six Sigma places a strong emphasis on reducing defects through statistical process control (SPC). This means using data-driven methods to monitor and control the production process, ensuring that products consistently meet high-quality standards. 

#3 Lean Six Sigma in Transportation and Logistics

Lean Six Sigma principles promise to bring about a remarkable overhaul of transportation and logistics. For one, it involves optimizing routes and modes of transportation, ensuring that goods move from point A to B most efficiently and cost-effectively. This minimizes unnecessary expenses and time wastage. Secondly, Lean Six Sigma focuses on reducing transit times and lead times, making sure that products reach their destination swiftly. This not only pleases customers but also enhances the overall agility of the supply chain. And lastly, it emphasizes implementing efficient warehousing practices. This means organizing storage spaces in a way that allows for quick retrieval and movement of goods, reducing delays in the process. 

#4 Lean Six Sigma in Demand Planning and Forecasting

Lean Six Sigma principles are instrumental in refining operations by enhancing demand planning and forecasting. It all starts with bolstering the precision of demand forecasts to provide businesses with a clear understanding of customer needs. This reduces the risk of costly overstocking or product shortages. Furthermore, Lean Six Sigma aims to reduce excess inventory and stockouts, maintaining a balance that controls costs while efficiently meeting customer demand. Most importantly, it encourages collaborative forecasting with partners, enabling close cooperation with suppliers and distributors to align forecasts, ensuring a seamless flow of goods throughout the supply chain.

Conclusion

In brief, incorporating Lean Six Sigma principles into SCM isn’t just a choice; it’s a transformational journey toward excellence. By merging the power of Lean’s efficiency drive with Six Sigma’s precision, businesses can achieve remarkable improvements. The benefits are profound: streamlined processes, reduced defects, and minimized costs. These dynamic principles are not just tools; they’re a philosophy that propels businesses toward a future of competitiveness and success. 

 About the author 

Dylan Jacobson is a freelance copywriter and web designer. He’s keenly interested in global logistics, supply chain management, and the relocation industry and how they all respond to digitization. He’s been a regular contributor to bigmansmoving.com, where he shares his insights and analyses.

south ports detention reshoring
Global Logistics, Global Trade Daily, Ocean Ports, U.S. Ports

Average Demurrage and Detention Charges Witness a 25% Dip Globally in 2023; 7 U.S. Ports Rank Highest

Leave a comment

Average Demurrage and Detention charges experience a year-on-year decline of 25% in 2023, with a significant 14% decrease compared to the rates in 2020, as found by Container xChange’s annual Demurrage and Detention Charges benchmark report 2023.

However, there are still 11 ports where Demurrage and Detention fees remain higher as compared to 2020. These ports include Antwerp, Jebel Ali, Ningbo, Port Kelang, Rotterdam, Shenzen, Singapore, Tianjin, Xiamen, Hong Kong, and Guangzhou.

Fig 1: D&D fees over the last 4 years across shipping lines for key ports

In an exclusive webinar held in July’23, a powerful panel of speakers from Drewry, S&P Global, and Container xChange discussed the impact of these charges on shippers worldwide amidst the changing dynamics of demand and supply for containers on a global scale.

“There are multiple factors contributing to the inability of these ports to return to normalcy. The significant increase in energy prices, coupled with higher labour costs, and escalating land expenses and port fees, have all played a part,” stated Chantal McRoberts, Director, DSCA Advisory, Drewry. 

“Furthermore, the implementation of new regulations, particularly those focused on green energy in EU ports, has added to the financial burden. Additionally, the introduction of rules requiring individualized shipment customs clearance, no longer consolidated under one bill of lading, has proven to be time-consuming, as seen in the case of Rotterdam.”, added McRoberts.

Christian Roeloffs, Co-Founder and CEO added, “Bleak expectations for a significant peak season with a substantial increase in volumes, prices, and the potential for congestion and associated charges are evident in our customers. However, a key factor in determining whether you must pay detention charges is the efficiency of your processes and monitoring. How quickly can you act and notify your agent or trucker if something goes wrong, such as a container being forgotten at the terminal. Timely communication is crucial in avoiding unnecessary charges. This holds true in any market situation.”

“Demurrage and detention should ideally be a free market. The number of free days and the charges should be negotiable between parties and carriers, just like any other free market scenario. However, perhaps what needs regulation is the clarity on when the clock starts. Establishing clear time stamps and determining who bears the burden of proof in cases of congestion, where a container cannot be picked up, would be crucial. Payment should only commence once the terminal is able to release the container. These aspects warrant attention and potential regulation.”, he added.

Shipping Industry Facing New D&D Challenges as U.S Regulators Prepare for Decisions

Demurrage and Detention (D&D) rates in the shipping industry have reached unprecedented levels, especially with the Federal Maritime Commission (FMC) set to make crucial decisions. 

Commenting on the new regulations, Christian said, “The pending U.S foreign trade regulator’s decisions on new shipping line regulations “will significantly impact D&D practices” and could even reshape the landscape, bringing both challenges and opportunities.”

The D&D annual report highlights Drewry’s perspective that the FMC must strike a balance between the conflicting needs of cargo owners and shipping lines. Before the pandemic, shipping lines prioritized revenue generation, considering factors like cargo weight and equipment availability when making occupancy decisions. Regulating these market factors presents challenges for the FMC, especially since a substantial portion of US exports fall into low-income and heavyweight categories.

In April 2023, even before the official FMC decision, major carriers like Maersk, MSC, HMM, and Hapag-Lloyd contemplated waiving D&D surcharges on weekends and holidays when terminals are closed. Additionally, the Port of Houston stopped charging import container storage fees during closed terminal gates but raised daily rates in specific positions by 32% starting May 1.

Operational Challenges Likely to Impact D&D Charges Amid Uncertain Demand Recovery

Commenting on the shipping forecast for the upcoming holiday season, Eric Johnson Senior Editor, Technology JOC, S&P Global Market Intelligence, said, “In a very recent conversation with a Non-Vessel Operating Common Carrier (NVOCC) about their thoughts on a major trans-Pacific shipment, we came to know that they don’t expect the demand to recover until after the Lunar New Year next year. This matches what we’re hearing in general.”

“So, if we assume that’s the case, the focus shifts to operational issues at important ports that we need to consider avoiding delays or additional charges once the container is out of the terminal. It becomes more about specific factors in the field that could cause delays in returning containers on time, rather than relying on a big overall economic improvement to drive demand. With each passing day, it seems less likely that there will be a quick demand recovery.”

U.S. Ports Rank Highest in average Demurrage and Detention (D&D) charges

Out of all the ports worldwide, those in North America stand out as the most expensive when it comes to Demurrage and Detention (D&D) charges. Leading this list of costly ports are New York, Oakland, and Los Angeles, taking the top three spots.

Fig 2: Accumulative D&D fees across shipping lines for North American ports: 2023

Even though these ports take the top 7 spots in our ranking table, the overall average charge has at least decreased by 25% in 2023 and stands at a value of $2008 per container per day (coming down from $2692 in 2022). The late fees at the twin ports of Los Angeles and Long Beach surpassed by another western port, Oakland.

Fig 3: D&D fees over the last 4 years across shipping lines for North American ports

 

 

 

 

goods SAAFF future-proof supply chain carl impact operations work overhaul global peak
Archives, Global Logistics, Global Trade Daily

Supply Chains are our Lifeline!

Leave a comment

Maintaining the balance of cause and consequence between all parties involved in the supply chain is paramount for SA Inc.

As the architects of the supply chain – and in existence for more than a century – The South African Association of Freight Forwarders (SAAFF) represents more than 300 clearing and forwarding agents accounting for more than 80% of the trade goods in and out of South Africa. While our focus is on our members – enterprises big and small who have incurred logistics costs of nearly R7 billion over the 11 days of industrial action at our ports – as the collective, we have SA Inc and the health of our Nation at heart!

Unfortunately, it was clear that the interests of SA Inc. were not considered (knowingly or unknowingly) during the time of the strike, as South Africa lost the opportunity of moving R65,3 billion worth of goods. Some of that will possibly move later, but the rest is gone and gone forever.

Considering that the wage increase cost – if adopted across the board for all workers at Transnet – is, in relative terms, a mere R1,5 billion, we need to realize the consequences of actions from all parties. We can never allow these events to stand in the way of our drive for economic growth, as South Africans – especially the lowest wage earners – deserves a better quality of life! Therefore, it is imperative to work together and have the interests of SA Inc. in all our minds at all times!

SAAFF calls on the need for growing maturity in resolving matters amicably, in a timely and efficient manner, to strengthen partnerships between Government and strategic stakeholders through early consultation to enable prevention rather than cure, as risk mitigation is our joint responsibility to the smooth running of our national economy. We must learn the stark lessons provided by these operational disasters, or we are going down an endless spiral with the worst possible outcome. Our late President Nelson Mandela created the social compact comprising Business, Labor, and Government, which means we need to work together to achieve our mutual goals in this compact – for the logistics industry, that means trade must occur using shared infrastructure with shared responsibilities from all parties.

If goods can’t move, the economy stops. And if the economy stops, the impact is hugely negative for anything related to the movement of cargo – including time, cost, and service reliability. With the economy’s circular flow, ordinary South Africans will suffer in the end – the very individuals who went on strike against a wage offer way below the inflation figure. While SAAFF is very pleased that an agreement has finally been reached, we must stress that the hard work only starts now, as, according to our consolidated reports, most port terminals are operating at productivity levels that are somewhere between medium and normal levels. So, although it might seem that we are making a return to full operational status, we are certainly not there yet!

In the aftermath, beyond the strike, barring any further destructions, a complete restoration of normal functionality will only happen in early 2023, as the consequences of one day’s worth of stoppage have been shown to result in anything up to 10 days needed for recovery! Restoring normality can only happen if we learn from this experience and adopt better operational practices to improve our logistics performance. We reiterate that this can only be achieved by close collaboration between all the parties – Business, Labor, and Government.

From the perspective of the clearing and forwarding industry – the workhorses of making the merchandise trade tick – the following solutions are proposed as urgent topics for consideration by all parties:

  1. We need backup port facilities to evacuate the ports
    1. We have a high freight demand; therefore, only a multi-modal approach – with all parties operating efficiently – will have a chance of satisfying our demand.
    2. Therefore, we need a robust functional rail sector – especially when evacuating goods from the ports.
  2. We need a precise policy alignment to allow for the practical execution of moving goods
    1. The functioning of the supply chain – nor the economic extent of policies and actions that affect it – is clearly not fully understood by decision-makers.
    2. The Government often ask the private sector to assist in picking up the cost (such as increased taxes and levies). But this help must be reciprocated with the private sector’s ideas comprising meaningful involvement in operations.
  3. We need port efficiency to improve the time, cost, and service reliability involved in moving goods
    1. This approach must include inter and intra-port competition.
    2. And all functions must be overseen by a strong, independent ports regulator.
  4. All role-players must be held accountable for their performance
    1. This approach includes Business, Labor, and Government.
    2. The public choice theory explains this very well, as people react to incentives; however, incentives must be balanced between all role-players.
    3. KPIs across all role-players must be established and published – with all parties being held accountable.
  5. No party should be allowed to profiteer from this crisis
    1. There must be transparency in all dealings.
    2. And there should be no favoritism in alleviating the crisis or afterwards, as we strive for continuous improvement.
  6. It is the responsibility of all parties to educate the economic realities of their actions to other parties
    1. As SAAFF has warned, we will be economically far worse off when calamities such as these are allowed to continue.

We must ensure that we evolve and mature as a nation. We must maintain a balance between the cause and consequence of our actions. We cannot allow for ideology and self-interest to drive the actions of respective parties to the detriment of SA Inc. There are positive lessons to be learned from this situation, as we can work together and create prosperity for all instead of allowing greed and self-interest to cloud our broader holistic view incorporating each player in the industry. The private sector needs to redouble its own work and find new ways to ensure that Government takes its share of responsibility. Bemoaning the status quo is helping no one – every sector and every entity must take responsibility for its own destiny.

goods SAAFF future-proof supply chain carl impact operations work overhaul global peak
Archives, Global Logistics, Global Trade Daily

Future-Proof Your Supply Chain for 2025 and Beyond

Leave a comment

It’s no secret that events like COVID-19 and the Russian invasion of Ukraine have continued to impact and alter the supply chain. Other issues like extreme weather, massive labor shortages, and changing governmental regulations pertaining to issues like environmental and due diligence policies all point to a clear sign of fundamental shifts across all industries and the necessity of being prepared for the unexpected.

The supply chain had been facing significant upheavals long before the pandemic. In 2020, analysts were already forecasting a Compound Annual Growth Rate (CAGR) of 11.2% for the global supply chain market from 2020 to 2027, resulting in a $21.56 billion market value increase. These projections have proven true, even throughout the pandemic. In Q1 of 2022, the value of world merchandise exports increased 16%, according to the World Trade Organization. As more customers shop online and expect goods to arrive at their resident doors faster than ever, the culprit to this fluctuation and variability in trade is simply that supply chains are not keeping up with the latest technology to stay ahead of the curve. While many can blame it on “The Amazon Effect,” where there is an ever-increasing demand for quick fulfillment and deliveries, this market shift was inevitable, and these current issues are simply catalysts to expedited change.

It’s time companies adapt and evolve. Here are some ways to future-proof your supply chain for 2025 and beyond:

Embrace Digitization
It wasn’t too long ago that the process of aggregating and analyzing data took a team of people. They would first have to compile and analyze pages upon pages of spreadsheets–or even place post-it notes on a bulletin board–before a decision could be made weeks later. Technology offers a better way, but for many, there remains a large opportunity to boost digital efforts. In fact, according to Gartner’s 2021 Future of Supply Chain survey, only 1% of supply chain leaders have a digital ecosystem, but 23% of supply chain leaders expect to have one by 2025.

A digital ecosystem is a framework of software and technology that creates a cohesive digital strategy across an organization. When it comes to the supply chain, this could translate to global trade and transportation execution (GTTE) software that provides an adaptive solution to manage global trade, compliance and distribution activities. GTTE digitizes the supply chain and automates processes, providing access to a global trade network and real-time information to control costs, mitigate risk and rapidly adapt to changing regulations.

#1. To future-proof your supply chain, find ways to digitize and transform each process.

For example, perform a time-to-value study to identify areas to automate. This can be easily done by using a timer to track the duration of printing to processing to loading inventory. Even something as simple as the amount of time it takes to print a carrier compliant shipping label can make all the difference. If it takes under a second to print a label, you can process 1,000 labels in less than 17 minutes. If it takes 2 seconds, you’re looking at more than half an hour. That’s not a big deal if you are processing only 1,000 parcels a day. But if you are shipping 10,000, 20,000 or more parcels a day, those extra seconds add up.

In addition, today’s digital supply chain tools have the ability to quickly find the fastest route or cheapest carrier in real-time, allowing for instant decision-making to meet customer expectations. Plus, with the proper software, they’re all located in one platform, with easy-to-read reports. With greater digital connectivity with supply chain partners and without the need for all the extra steps, both shipping and labor costs are cut, while productivity is improved.

Shift to e-Commerce
Digital transformation can lead to entirely new business models that factor in the growing e-commerce sector, whether business-to-consumer or business-to-business. According to the same Gartner survey, 79% of supply chain leaders think that an internet- or platform-based approach is the most critical new business model to support post-pandemic recovery.

#2. Future-proof your supply chain by building scalable capacity.

Now, more than ever, consumers are buying online and the number is only increasing. A good supply chain partner will help assess customer needs and identify the right software to support them. Having a model that supports market shifts like the e-commerce boom and COVID-19 will make sense for the bottom line while improving customer experience.

Go to the Cloud
Without a finger on the pulse of the customer, companies will inevitably lag behind. They have to adapt to the constantly evolving trends. Gartner/Oxford reports that 98% of supply chain leaders believe working from home will increase over the next five years. This will require a completely new strategy to find cohesion among departments to keep the supply chain moving. With so many businesses still reliant on manual processes and legacy technologies, not only is supply slowing down, but collaboration is becoming nearly impossible. In a 2021 Oxford Economics procurement survey, 38% of organizations are still stuck using manual procurement processes (like phone calls and spreadsheets) as their primary method of communication with external supply chain partners, taking up to weeks to make sure everyone is properly looped in.

#3. Future-proof and unify these connections by moving to the cloud.

Platforms that utilize the cloud are able to access real-time visibility into supply chain conditions. Without being solely reliant on the information provided by one facility or one carrier at a time, quick access to all locations’ data across the supply chain’s business network and cloud platform allows organizations, and their supply chain partners, to respond and adapt quickly. Quicker visibility can greatly improve supply chain performance by enabling faster and more cost-efficient delivery of products, enhancing products’ traceability and improving coordination between supply chain partners. Your access to this information and subsequent reaction can be the difference between business resilience and ongoing customer satisfaction or delayed orders, unhappy customers and spiraling costs. Cloud technology brings a company into the future by adopting a collaboration process that is no longer linear, but one that is connected by many branches, ultimately minimizing risks that arise.

Ensure Ongoing Trade Compliance

This future-proof tip simply requires you to be diligent on a global scale. Avoid complications that can cause costly fines or reputational damage by becoming well-versed in trade compliance.

#4. Future-proof your supply chain by putting trade compliance at the forefront to mitigate potential disruptions.

An effective global trade management solution reduces the risk of non-compliance, avoids delays at the border and simplifies import/export processes. For example, knowing the specific requirements of a cross-border transaction or the exact tariff implications helps the company better plan and execute global trade and transportation–at a lower cost and quicker timeframe.

 Localize the Stock

You can even take it a step further by taking advantage of Foreign-Trade Zones (FTZs). FTZs, also referred to internationally as “free-trade zones” (and formerly named “free ports”), are areas where goods may be landed, handled, manufactured or reconfigured, and re-exported without the intervention of the customs authorities. The companies that have leveraged these zones drastically reduce or eliminate duty costs, encourage domestic trade and improve supply chain productivity.

Even with an ability to communicate and collaborate instantly on a global scale, the final future-proofing tip is to reassess offshoring strategies and bringing some of the supply closer to the demand. Investing in local sources like FTZs or regional manufacturers will increase the supply chain’s resilience and the agility needed to go to local markets or meet global regulations.

Looking Ahead

Ultimately, the future is now for supply chain professionals to boost digital efforts and connect more tightly with partners. It’s important to assess the potential of digitalization on current processes and the deployment of a connected ecosystem with other firms. Yes, this requires a resource commitment but the investment results in improved supply chain performance and competitive advantages. Following these 4 tips not only gives companies a competitive edge, they will help shield from future unplanned disruptions.

bullwhip 2017 saw more shipments of export cargo and import cargo in international trade.
Archives, Education, Global Trade Daily

The Perfect Storm: How a Potential Economic Recession and the Supply Chain Bullwhip Are Colliding

Leave a comment

The impacts of the supply chain bullwhip and brewing economic recession have recently come to a head. As the economy has stretched its legs from the Covid-19 pandemic, supply chain issues continue and are exacerbated by ongoing economic challenges. A combination of inflationary pressures, interest rate hikes, and supply chain problems could spell disaster for shipping markets and companies involved in logistics. This article will look at the so-called “bullwhip effect,” its origins, and how it’s creating a perfect storm with the potential economic recession.

What is the ‘bullwhip effect?’

The bullwhip effect is a type of economic scenario where minimal changes in supply chain demand cause increasingly large demand changes as they move up the supply chain. The term references the effect generated when a whip is cracked, and the subsequent wave generated down the whip becomes larger as it moves towards its end.

Bullwhips are generated at the retail level first, then move from retailers to wholesalers and then up to manufacturers. Typically, consumer demand for goods (real or predicted) changes; then, in conjunction with a lack of information on demand, wholesalers will increase their orders, and manufacturers will change their production by an even larger amount.

Unfortunately, supply chains are not perfect, and as a result, they suffer from inefficiencies. The bullwhip effect amplifies these inefficiencies and can result in several different problems. Ultimately, it can mean inflated inventories, lost revenue, poor customer service, schedule delays, and even larger economic problems like layoffs and bankruptcies.

Why are we experiencing a supply chain bullwhip?

Supply chain bullwhips don’t just happen overnight; they take time to build up as different sections in the supply chain adjust to changing demand pressures. That being said, the most recent bullwhip originated from the Covid-19 pandemic. 

Measuring container shipments over time can give us an idea of how the issue has evolved. Before Covid-19, the ratio of containers per shipment was relatively static; however, in the summer of 2020, the container-to-shipment ratio bubbled. So-called Big Box retailers (like Walmart and Target) used their leverage to increase the number of containers in their already scheduled shipments. Comparatively, smaller importers kept a more static ratio due to difficulty securing additional container capacity. 

Continuing economic trends worsen the supply chain

As you probably recall, the economic shutdown in April 2020 essentially brought global supply chains to a halt. The subsequent uptick in the container-to-shipment ratio was an effort by retailers to resupply dwindling inventories. One way to track these inventories is using tools like Visualping, which monitor websites for changes (like product availability) and can email you when a web page is changed or updated.

These trends continued until the end of 2021 when Big Box retailers returned to pre-Covid ratios. One theory is that they believed they had generated sufficient inventory to handle consumer demand. Through the end of 2021, consumer demand remained stable, and, normally, the bullwhip effect would have slowly resolved itself as retailers worked their way through their excess inventories over time. However, the Russian invasion of Ukraine in February of 2022 upended everything.

The real effects of oversupply and dwindling demand

In response, food prices began to surge, and out-of-control inflation set in, resulting in price surges that hadn’t been since the 80s. With inflation rising, consumers reacted by clamping down on their spending. Retailers, with their excess inventories, were faced with a dilemma and had to reduce subsequent container orders.

Big Box retailers, like Target and Walmart, have since reported having too much inventory. And these two companies are the two largest importers of container freight in the United States. Together, they account for close to 7% of all container imports to the United States. Another large importer, Samsung, also faced similar problems and requested suppliers to reduce production by up to half in July. (Last year, in 2021, Samsung was the 7th-largest importer into the United States.)

Finally, other events, like the transport worker strike in Chennai last month, further compound the bullwhip effect because it further constrains demand up and down the supply chain.

How does the bullwhip effect impact a potential recession?

One issue with the bullwhip is that consumer demand is being destroyed by the Federal Reserve through interest rate hikes. These hikes, designed to slow demand and limit the impact of inflation, have concerned economists and financial experts because of their potential to cause a recession. Normally, demand would stabilize, and excess product inventories could be sold. Instead, fears of the recession and other economic pressures are reducing demand further when inventories are already at extreme highs.

What are the economic dangers?

Unfortunately, there is no clear answer to whether the U.S. has entered a recession. Economists define a recession as “an economic contraction starting at the peak of the expansion that preceded it and ending at the low point of the ensuing downturn.” 

The National Bureau of Economic Research (NBER), a nonprofit, nonpartisan organization, is one of the most frequently cited organizations when determining whether or not the economy is in a recession. As of early August, NBER has not yet claimed that the U.S. has entered one, despite the U.S. experiencing two straight quarters of GDP decline; a so-called “technical recession.”

Moody’s analyst Scott Hoyt argues the “technical recession” many are referring to most likely comes from other countries without an organization like NBER to declare an official recession. Other experts have argued that demand fluctuations are not a demand problem but really just a coordination problem and not a sign of a recession.

Despite suggestions that there is no looming recession, over 30,000 tech employees have lost their jobs as of July, and housing markets are beginning to slow. Cryptocurrency markets have been decimated since their highs earlier this year, giving investors the chance to buy any crypto at a discount. 

The combination of inflationary pressures, interest rate hikes, and GDP regression all have a significant impact on supply chains and thus worsen the effects of the bullwhip.

 

arrive circle logistics tag documents food circle redwood
Archives, Global Trade Daily, News

The Tive Tag: A Cloud Enabled Multi-Trip Flexible Temperature Logging Label

Leave a comment

Tive delivers innovation for First and Last Mile cold chain visibility with the release of the Tive Tag. Half the cost of conventional temperature loggers, the Tive Tag opens markets untapped in
the global supply chain.

Tive, a global leader in supply chain and logistics technology, today
announced the release of the Tive Tag. The Tive Tag is a long-life cloud-enabled temperature logger in the form factor of a flexible shipping label. Designed to break price point barriers, the Tive Tag provides a solution for first and last-mile deliveries, warehouse operations, as well as over the road, rail, air, and ocean cold chain management.

Breaking New Ground in Cold Chain Visibility

Imagine a cloud-enabled temperature logger, in the form of a thin, flexible shipping label, and at half the cost of a conventional logger. Now make it last for a year, design it to be reused trip after trip during that year, and then give it a non-Lithium earth-friendly battery. Introducing the Tive Tag. It’s like a shipping label – just one that has an incredible amount of tech embedded inside.

Tive already has a portfolio of award-winning cold chain innovations. The Tive Tag is a simple solution for shippers, retailers, cold storage operators, and last mile delivery. Customers have
an audit trail for compliance, the tag is air freight safe, and supports your ESG initiatives with minimal electronic waste. Simply stick, tap it with your phone, and ship.

Tive Tag: Simple and Powerful Cold Chain Visibility

Start and stop the Tive Tag to define individual trips. Stick the Tag on a reusable plastic container (RPC), a carton, or a box and now you have proof of delivery and proof the cold chain was maintained. Go across town, coast-to-coast, or continent-to-continent. The Tive Tag
makes shipping and receiving safe and easy.

About Tive

Tive is a global leader in supply chain and logistics technology. With Tive, shippers, retailers, and logistics service providers (LSPs) have the ability to eliminate delays, avoid damage and mitigate shipment failures. Tive’s solution provides insights generated by its industry-leading products for clients to actively optimize their shipments, improve customer experience, and unlock actionable data in real-time.

united states secretary PPE
Archives, Global Logistics, Global Trade Daily, News

Secretary Blinken and Secretary Raimondo Co-Host Supply Chain Ministerial and Stakeholder Forum

Leave a comment

Secretary of State Antony J. Blinken and Secretary of Commerce Gina Raimondo co-hosted a Supply Chain Ministerial Forum July 19-20, 2022, to further build cooperation with stakeholders and key partner nations on supply chains.

Under Secretary for Economic Growth, Energy, and the Environment Jose W. Fernandez and Under Secretary of Commerce for International Trade Marisa Lago delivered opening remarks for the July 19 stakeholder sessions on Crisis Response, Enabling and Investment Environment, Transportation/Logistics, and Workforce Development/Labor.

The virtual event convened stakeholders from labor, industry, civil society – including historically underrepresented voices – and subnational officials to address both short-term bottlenecks and longer-term supply chain challenges.

At the Ministerial Plenary on July 20, the United States, allies, and partners made political commitments to work together to address near-term supply chain disruptions.  They aim to cooperate on building long-term supply chain resiliency by supporting transparency, diversification, security, and sustainability by adherence to high environmental and labor standards, including the prevention of forced labor, coupled with workforce development to meet tomorrow’s needs.

The United States, allies, and partners acknowledged that to ensure efforts on supply chains are effective and reach those most in need, they must build solutions from the bottom up, with industry, unions, labor, and civil society, including representatives from minority and indigenous populations, underserved communities, and subnational governments.

This summit was part of the Biden-Harris Administration’s whole-of-government response to address supply chain disruptions that hamper economic recovery and fuel inflation, and another example of how this Administration is working to deliver sound foreign policy for the American people.

knichel
Archives, Education, Global Logistics, Global Trade Daily

Women in Logistics 2022: These 10 Leaders Are Reshaping an Industry That Relies on Agility & Flexibility

Leave a comment

For agility and flexibility in today’s complex supply chain environments, you need diverse, collaborative professionals who can make critical decisions and implement new technologies that streamline operations—all the way from development to fulfillment.
One underrepresented group that can help with this challenge is
women. The gender comprises 41% of the supply chain workforce on average in Gartner’s 2021 “Women in Supply Chain Survey.”

“All told, 73% of responding supply chain organizations, the
highest proportion ever, have a diversity, equity and inclusion goal
related to attracting, developing, retaining and advancing women,”
states the survey’s introduction. “The number of women that held
leadership roles also increased in 2021.”

The report broke it down the percentage of women year-overyear (YoY) thusly:

● First-line managers and supervisors: 33% (2% increase YoY)
● Senior managers: 29% (4% increase YoY)
● Directors: 26% (3% increase YoY)
● Vice presidents and senior directors: 23% (2% increase YoY)
● CSCOs, SVPs, EVPs, and CPOs: 15% (2% decrease YoY)

The report includes possible reasons for the increases, including diversity measures introduced by businesses paying off and the public eye and shareholder scrutiny being fixed on corporate actions
and commitments amid unrest of racial justice and inequality.

However, Gartner cautions, “it is important to know that despite
improvements in representation when compared to 2020, there is
one trend that has remained since this survey was launched in 2016:
as the corporate ladder advances, the proportion of women leaders
declines. Women only make up 23% of VP-level positions in the
average supply chain organization, and apart from consumer sector
supply chains, that number continues to decline as we look at specific industry segments.”

Further, Gartner reports that 54% of survey respondents claimed
that retaining midcareer women is an increasing challenge, and 10%
advised that it is a significant challenge. “We find that lack of career
opportunities is the top reason that midcareer women have left the
organization across all supply chain industries, including supply
chain solution providers,” states Gartner.

Given the improving but still challenging state of women in
supply chain leadership, it is critical that Global Trade’s Women
in Logistics for 2022 recognizes just some who are helping reshape
the industry.

Kristy KnichelCEO and owner Knichel Logistics, Pittsburgh, PA

Twenty-four years ago, Kristy Knichel was 19 when she left the pizza joint she was managing to join her father William’s business. In 2007, she became president of Knichel Logistics, and today she owns and runs the Women’s Business Enterprise National Council-certified company that aims to become a $250 million concern in the next three to five years.

“My mission now revolves around being an advocate for other women within transportation while continuing to grow my business in this fast-paced and ever-changing industry,”
she said in the July/August 2020 issue of Pittsburgh Magazine. The
Women in Trucking Association, which bestowed its inaugural Distinguished Woman in Logistics Award to her, has named Knichel Logistics a top womanowned business and top place for women to work multiple times. (The company has also made Global Trade’s annual list of America’s Top 3PLs several times.)

As of April 25, Synergy Freight Solutions merged with Knichel Logistics to become Knichel LogisticsDetroit Branch. All Synergy employees were retained, including owner and CEO Natasha Erickson, who joined the Knichel leadership team as executive vice president of Business Development. “This relationship will provide additional resources and services to Synergy Freight Solutions customers,” reads a company release, “while also providing Knichel Logistics leadership with another female logistics
entrepreneur’s expertise.”

Gretchen Seth: Senior Vice President Logistics Plus of Erie, PA

A key leader at the transportation, warehousing, fulfillment, global logistics, business intelligence, technology and supply chain solutions company, Seth has more than 40 years of industry experience. That she spearheads business development, implements programs for some of the company’s largest clients and provides international logistics expertise to the freight forwarding division are enough to put her on this list.

What sends Seth over the top is her charitable work, which includes helping launch a  fundraising campaign in March for refugees of Ukraine, where Logistics Plus had 50 employees. As of April, nearly $600,000 had been collected, and she even traveled to Poland to help distribute the aid.

During the height of the pandemic, Seth helped create the LP Medical division that leveraged the company’s overseas resources to source, import, warehouse and deliver more than 2 million pieces of personal protection equipment for hospitals, government organizations and companies in dire need.

Robyn McAllister Meyer: Vice President, Parcel Solutions Transportation Insight of Atlanta, GA

Recognized as a 2021 Supply & Demand Chain Executive Women in Supply Chain, Meyer is known for encouraging women within the industry to take charge and make their own path without worrying about negative reactions or stereotypes. Their inspiration can be her nearly 20-year career of deploying innovative strategies in small package logistics.

Certified in International Trade Compliance, Meyer has worked with logistics, supply chain and fulfillment leaders to solve supply chain challenges for e-commerce companies, retailers, distributors and manufacturers. Her expertise in customer experience, client retention, compliance, risk mitigation, B2B platforms, data security, parcel logistics program management, strategic planning and executive alignment has helped shippers achieve significant cost savings, reduce cycle times, and improve
customer satisfaction rates.

Meyer has also focused on identifying and mentoring individuals who demonstrate leadership qualities, many of whom have risen to VP level or above in various organizations. Like Seth, Meyer has leveraged her industry knowledge to assist those fleeing Ukraine.

Lily Shen CEO & President Transfix of New York, NY

As the leader of the freight transportation company that links shippers with carriers, Shen has driven significant company milestones in waste reduction, empty miles driven and workforce diversity at all levels.

She and her team recently released their inaugural Environmental, Social and Corporate Governance report that shows 43% of senior executive roles are held by women as are 40% of its board seats. Prior to joining Transfix, Shen held numerous senior leadership positions at such companies as eBay, Wealthfront and IDEO, and she served as an advisor to leading global platforms including WeChat, Coupang and Mercari.

During her first year, Transfix’s growth quadrupled and the enterprise customer base increased fivefold. With clients that now include Unilever, Staples and Target, Transfix posted record revenues in 2021 and was positioned to become the first female-led digital freight brokerage to go public via specialpurpose acquisition company in Q2 2022.

Renee Krug CEO Transflo of Tampa, FL

Only announced as the new CEO on April 19, Krug came to Transfl —a Pegasus TransTech mobile, telematics, and business process automation provider to the transportation industry—from GlobalTranz, where she had also served as the 3PL’s chief executive.

She also brings Transflo experience from the carrier side, having previously filled leadership roles at Swift Transportation, America’s largest full truckload carrier, as well as the shipping side from her
days at Honeywell. Krug was presented with a 2018 Distinguished Women in Logistics Award from the nonprofit Women in Trucking. Her arrival at Transflo allowed previous CEO Frank Adelman to become chairman of the board, and he could not be happier about
his successor, praising her “deep sector expertise” and “track record of innovation and executing strategic initiatives.”

Karin Stevens Executive Vice President and Chief of Marketing and Product Overhaul of Austin, TX

Hired as the first full-time employee before Overhaul officially launched in 2016, Stevens’ executive leadership during the early days helped propel the software-based, supply-chain visibility and security solution company to hyper-growth mode now. Part of an initial team of only 15 people, Stevens helped secure the company’s first Fortune 50 customer and coordinated the onboarding of 20+ distribution sites.

After the company secured $55 million in funding that allowed for expansion across North America and into Asia, Europe and Latin America, she played a pivotal role in securing key hires across Client Management & Operations, Sales, Marketing and Product Marketing.

Her superpowers include being a good listener, supporting employees through modeling and recognizing and nurturing her team members’ unique strengths in intentional and innovative ways,
which explains why Stevens earned the title Captain Marvel in Overhaul’s Superhero Program that matches staff attributes with those of corresponding characters in the DC or Marvel universes.

Jennifer Coulter-Lissman Vice President TOC Logistics International of Indianapolis, IN

With two decades of experience working in international logistics and supply chain management, Coulter-Lissman has spent her past eight years as vice president helping realize TOC’s mission of providing supply chain solutions that are unique to each client. She
helped open new offices in Hamburg, Germany; Monterrey in the state of Nuevo León, Mexico; and El Paso and Laredo, Texas. and Hamburg.

Under her leadership, employee count has grown by 1000%, more than 150 new positions have been filled and performance reviews were restructured to encourage open, engaging conversation between team leaders and staff. Speaking of staff, TOC’s team is now comprised of around 50% women and about 50% minorities.

Coulter-Lissman firmly believes that if the company does well,
employees should also, which explains her championing profit sharing and quarterly bonuses. She’s also known for promoting from within.

Cinzia Atkinson Business Solutions Manager Railinc of Cary, North Carolina

With nearly a decade of supply chain experience and a reputation
as a mentor and company culture builder, Atkinson works in rail
freight solutions company Railinc’s TransmetriQ business unit, where she speaks daily with customers navigating the challenges of moving stuff across the country.

She gleans the perspectives of port officials, shippers, railroads and 3PLs to develop more effective inventory strategies in the face of supply chain bottlenecks. That also has her staying up to date on the latest technology advances so she may be a resource for clients.

Because each has unique challenges, she customizes solutions to fit specific business needs and objectives, relying on an array of TransmetriQ data and intelligence on various platforms. She then leverages customer feedback to further refine her team’s solutions. Atkinson was nominated for Railinc’s 2021 President’s Award, and she was named a 2022 Supply & Demand Chain Executive Pro to Know.

Jo Shepherd Executive Vice President of Supply Chain AkzoNobel of Chicago, Illinois

Headquartered in The Netherlands with about 10,000 employees in more than 80 countries, the former AkzoNobel Surface Chemistry hired Shepherd 38 years ago for a junior-level position in the United Kingdom.

She went on to posts around the world before eventually
landing in the Windy City, where she helps the global company transform being the “only woman in the room,” she is thankful “the pool is getting a little bigger” and actively encourages women to explore career opportunities in supply chain. But she adds this warning: “If you want to be praised and patted on the back, then don’t go into supply chain.

This job requires a thick skin because people generally only come to you when things are going wrong. They don’t tell you about the 95% that’s going well.”

Melissa Runge Logistics Industry Consultant Services Atlanta, GA

In 2021, Spend Management Experts was acquired by Transportation Insight, and Runge was put in charge of building a new small parcel business with eight new account managers. Along with her team, the vice president of Parcel Implementation and Client Services helped propel customer retention rates to 97%, and TI went on to realize one of its highest revenue years ever.

Runge, who left TI in May, has a diverse background working for
Fortune 500 enterprises such as UPS, Georgia Pacific, Kimberly Clark and AGCO. Named one of the 2020 Supply & Demand Chain  Executive Women in Supply Chain, Runge is a frequent community speaker and industry writer who serves as the board treasurer for
Girl Talk, which inspires middle and high school girls to be confident leaders customer service, planning, scheduling and logistics functions. “I spend quite a lot of my time mentoring people and developing people; that’s one of my passions,” Shepherd says.

Accustomed to In 2021, Spend Management Experts was acquired by Transportation Insight, and Runge was put in charge of building a new small parcel business through peer-to-peer mentoring, and member of CHIEF, the only private membership network focused on
connecting and supporting women executive leaders

disruption ichca sel recovery overhaul
3pls, Archives, Global Logistics, Global Trade Daily

Sel Supply-Chain Solutions Opens Edmonton, Alberta Canada Office

Leave a comment

Fort Worth-based SEL Supply-Chain Solutions (SELSCS) announced today that they have opened their first Canada-based office in Edmonton, Alberta.

The new office is in the Scotia Place Tower in Edmonton and serve entrepreneurial freight agents and their customers.

If you’re a freight agent in Canada looking to make a move into an entrepreneurial role, SELCS has the capacity and resources to make you successful. SELSCS has more than 25 years’ experience in transportation and logistics. The business recently rebranded and now serves an expanded national and international area as well as an entrepreneurial program for independent agents.

About SELSCS

SEL (Serving Entrepreneurs in Logistics) Supply-Chain Solutions based in Fort Worth, Texas, is a top 100 logistics company offering over the road transportation solutions in the U.S., Canada
and Mexico.

SELSCS operates its business through a network of independent business owners and provides the back-office functions to Service Entrepreneurs in Logistics. Combined its entrepreneurs have hundreds of years of experience in the transportation and logistics space. It’s main modes of transportation include truckload, refrigerated, flatbed, over-sized, Drayage,
and Intermodal service. Find SELSCS online at www.selscs.com.

SEL is the dedicated vision of Dennis Martin, a lifetime logistics entrepreneur who developed the company as a resource-based logistics firm to support the independent freight agent.

Dennis knew from his own experience that the hard work of maintaining a book of business in logistics can take precedence over a healthy work-life balance. He saw it in his own life when satisfying customers meant putting his family second. That is a choice he doesn’t think anyone should have to make.

 

 

disruption ichca sel recovery overhaul
Archives, Commentary, Education, Global Logistics, Global Trade Daily

Avoiding Downtime: 8 Strategies to Maintain Productivity Across the Supply Chain

Leave a comment

Every organization wants to avoid supply chain downtime, yet it’s rife throughout the industry. Delays and disruptions are all too common, but that doesn’t mean they’re unavoidable. Supply chains can prevent these scenarios by implementing the right strategies.

Even in the most efficient supply chains, there’s room to improve. Downtime costs $1 million or more per hour for 40% of organizations today, so businesses should aim for no downtime at all.

Here are eight strategies to help reach that goal.

1. Maximize Visibility

One of the most important steps in avoiding supply chain downtime is increasing transparency. If businesses had more real-time insight into their supply chain partners, they could see disruptions as they arise and adapt faster. These quick reactions can help mitigate or even eliminate downtime.

More than half of all businesses have poor supply chain visibility and 63% don’t use any technology to monitor them. The two are related. Supply chains can maximize their visibility by implementing more technologies like the internet of things (IoT) and artificial intelligence (AI).

IoT devices can provide real-time insights and AI can analyze this data to predict incoming disruptions. Supply chains should partner with businesses willing to implement more IoT technologies and share this data to gain comprehensive insights into their operations. When that happens, they can enable faster, more effective reactions.

2. Improve Workplace Safety

Workplace injuries are another leading cause of downtime. Responding to safety incidents translates into lost productivity and injured workers may be unable to work at their full capacity for days. If supply chains improved workplace safety, they’d enable higher productivity.

Fall hazards are some of the most important risks to address, as 20% of all workplace injuries come from falls. Using proper safety harnesses and lift platforms can help, but removing workers from hazards entirely is the safest option. Warehouses can use automated systems to handle the most dangerous work, like retrieving items from high shelves to minimize risks.

3. Employ Predictive Maintenance

Supply chains must also address machine maintenance. Equipment malfunctions make large industrial facilities lose 323 production hours annually, costing $172 million overall. Supply chain organizations can minimize these errors and their expenses by switching to predictive maintenance strategies.

While implementing predictive maintenance can be expensive, its long-term benefits outweigh the costs. By enabling need-based repair, these practices prevent unexpected, costly breakdowns while simultaneously eliminating downtime from unneeded repairs. Conventional preventive maintenance only addresses downtime from the former and run-to-failure approaches address neither.

Predictive maintenance will also improve safety, further reducing unplanned downtime. When equipment runs in better conditions, it avoids breakdowns or errors that could endanger employees.

4. Create Buffers

While supply chains should do all they can to prevent disruptions, some are unavoidable. Since it’s impossible to avoid unexpected situations entirely, supply chain organizations should ensure
they can maintain productivity when things don’t go as planned. Buffers are a crucial part of these backup plans.

This practice goes against lean principles, but lean operations quickly fall apart in the face of disruption. Businesses don’t need massive reserve inventories, but they should avoid just-in-
time practices for some critical parts and products.

Companies should multiply their average daily use of a product by its average lead time. Then, they can subtract that total from the product of maximum daily sales and maximum lead time. The resulting answer is their ideal buffer inventory level for that product.

5. Keep Employees Engaged

Maintaining an engaged workforce is a crucial but often overlooked part of avoiding downtime. Having unengaged employees leads to turnover, hindering supply chains’ productivity, but an engaged workforce will be more productive. Businesses can maximize engagement by listening to and meeting their workers’ needs and wants.

Financial support like higher salaries and better benefits help, but they’re not the only ways to improve engagement. Since one in five American adults experience a mental health issue every year, businesses should also ensure they provide support for these concerns and encourage communication. Flexible schedules, opportunities for upward mobility, recognition for commendable work, and workplace fairness initiatives can also help.

6. Emphasize Training

Another employee-related strategy to prevent downtime is to train workers more thoroughly. As much as 70% of unplanned downtime results from human error, so more knowledgeable and skilled workers will translate into less downtime. Process improvements to simplify operations help prevent these mistakes, but businesses shouldn’t overlook the importance of training.

Onboarding and training should cover what to do in various unexpected or uncommon scenarios. If employees don’t know what to do when something unusual happens, they could take longer than needed to look into the situation or ask around. In contrast, if there’s a set protocol to follow, they can minimize downtime and adapt accordingly.

7. Diversify Suppliers

Single dependencies in supply chains can reduce operating costs, but they’re prone to disruption. Supply chain organizations should eliminate these if they want to minimize downtime, which means diversifying their suppliers. If businesses can source parts or products from multiple facilities, a disruption or delay at one won’t jeopardize the entire supply chain.

As supply chains diversify, they should re-shore or near-shore some of their sources. Shortening the distance between facilities can enable faster reactions if an unexpected scenario arises. International travel is also more likely to encounter difficulties, thanks to uneven regulations and government relationships between countries.

The need for diversification has become increasingly clear over the past few years. In 2021, 55% of supply chain leaders began dual sourcing raw materials to make their networks more resilient and 25% embraced regionalization.

8. Track Downtime

Regardless of what other steps a supply chain takes, it should monitor its downtime. When a disruption or delay occurs, businesses should record its source, how long it takes to resolve,
what fixed it, and similar data. This information will reveal ways supply chains can improve in the future.

Downtime tracking will also help organizations set relevant KPIs and benchmarks, guiding their long-term improvements. Since every operation is unique, this data is essential, as it provides real-world context for what does and doesn’t work in a specific scenario.

Maintaining Supply Chain Productivity Is Crucial

Every business wants to maximize productivity, but supply chains face more pressure than most. Disruptions in this industry will ripple across other companies and sectors, and by the same token, supply chain optimization will improve entire industries.

Downtime may be common, but it’s not necessarily unavoidable. If supply chain organizations implement these eight strategies, they can minimize unplanned downtime and mitigate it if it does occur.