In a challenging economic environment, leading retailers are turning to their supply chains to improve inventory management, control costs and maintain first-rate customer service, according to the Retail Industry Leaders Association (RILA) and Auburn University’s 2009 State of the Retail Supply Chain study.
The recently released report underscores the critical role of supply chain management in today’s challenging retail environment. Executive interviews and a national survey gathered information in three primary areas:
* The strategic role of SCM in retail companies
* Supply chain challenges that are of great concern to the retail industry
* Capabilities must retailers develop and leverage to achieve supply chain excellence
The study found that best-in-class retailers:
* Leverage strong distribution networks that are capable of supporting high volumes
* Create flexible capacity to adjust supply chain infrastructure and support unanticipated fluctuation in demand
* Align inside and outside the organization to break down silos and manage processes more holistically
* Continually develop the internal talent pool to enhance the quality of the workforce
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Thursday, December 3, 2009
Wednesday, November 4, 2009
Outsourcing and respect
The idea of outsourcing often comes about when the CEO, controller, or another member of senior management reads an article—or has been speaking with a 3PL—about saving a minimum of 10 percent or more of their logistics costs by turning to a third party. However, I've found that these “savings opportunities” are often purely theoretical and are only supported by management due to their lack of logistics knowledge or their lack of confidence in the ability of its logistics team to efficiently manage its processes.
Of course, there are other times when the outsourcing conversation is sparked by the urgent need to reduce headcount.
The transportation teams that feel especially threatened are those that lack the experience, leadership, talent, knowledge, process excellence, and contingency strategies to guide their companies through today's global market. They often fail to anticipate and prepare themselves for tomorrow's challenges. And it often takes just one unpleasant and costly surprise to jumpstart the outsourcing movement in teams like these.
When I hear transportation leaders tell me that their companies keep reminding them that they're just another cost center, I tell them that it's their fault that management doesn't see them as a value-add to the organization. This tends to lead into the question: How do I get some respect?
The answer is simple. It's all about education and managing expectations—neither of which start in the middle of a crisis. Earning respect starts with your knowledge and command of the marketplace and your transportation governance, and it ends with programs that you have created to educate senior management and other organizations on a regular basis. As a quick reminder, I define transportation governance as “the direction and control associated with creation, administration, oversight, and enforcement of your company and supply chain's policies, regulations, and procedures related to the legal, safe, efficient, and service-effective movement of freight it controls either directly or indirectly.”
Read the rest of the logisticsmgmt.com article here.
Of course, there are other times when the outsourcing conversation is sparked by the urgent need to reduce headcount.
The transportation teams that feel especially threatened are those that lack the experience, leadership, talent, knowledge, process excellence, and contingency strategies to guide their companies through today's global market. They often fail to anticipate and prepare themselves for tomorrow's challenges. And it often takes just one unpleasant and costly surprise to jumpstart the outsourcing movement in teams like these.
When I hear transportation leaders tell me that their companies keep reminding them that they're just another cost center, I tell them that it's their fault that management doesn't see them as a value-add to the organization. This tends to lead into the question: How do I get some respect?
The answer is simple. It's all about education and managing expectations—neither of which start in the middle of a crisis. Earning respect starts with your knowledge and command of the marketplace and your transportation governance, and it ends with programs that you have created to educate senior management and other organizations on a regular basis. As a quick reminder, I define transportation governance as “the direction and control associated with creation, administration, oversight, and enforcement of your company and supply chain's policies, regulations, and procedures related to the legal, safe, efficient, and service-effective movement of freight it controls either directly or indirectly.”
Read the rest of the logisticsmgmt.com article here.
Wednesday, October 7, 2009
New Study Highlights Role of Third-Party Logistics Providers in Helping Shippers Adapt to Economic Challenges
The fourteenth Annual Third Party Logistics (3PL) Study examining the current global market for logistics outsourcing was recently released. The study surveyed shippers and logistics service providers in North America, Europe, Asia Pacific and Latin America. Key findings included:
* The economic downturn has created significant challenges for both shippers and third-party logistics providers (3PLs) – 82% of shippers are employing cost-cutting tactics and 60% are rethinking their supply chains and relationships with 3PLs
* 88% of shippers feel that IT-based logistics services are important, but only 42% are satisfied with the capabilities of their provider – as a result of this IT capability gap, shipper respondents reported a lack of the key performance indicators, alerts and visibility required for an adaptive supply chain and 3PLs reported similar difficulties in getting the data and commitment they need from shippers
* There are significant differences between how 3PLs evaluate their role in the supply chain and how they are viewed by shippers – 59% of shippers feel their use of 3PLs has a positive effect on customer service compared to 88% of 3PL respondents
* Shipper respondents devote an average of between 47% (in North America) and 66% (in Europe) of their total logistics expenditures to outsourcing and this is expected to increase in the next five years.
“Shipper-3PL relationships are being impacted significantly by the prevailing uncertainty and economic volatility in global markets,” said Dr. C. John Langley Jr., Professor of Supply Chain Management, Georgia Institute of Technology. “It is very important for 3PLs to mitigate or reduce any financial risk or service level impact that this may cause.”
Economic uncertainty and the use of 3PLs
Economic volatility has challenged shippers and 3PLs alike to contend with factors such as unpredictable demand, instability in fuel costs and currency valuation, and excess inventory. In response, not only are shippers attempting to cut costs, 77% are also seeking to improve forecasting and inventory management.
Cost reduction and improved reliability in services are the main factors likely to increase shipper respondents’ use of 3PLs. This includes converting fixed to variable costs (59%), expanding to new markets or offering new products (56%), and restructuring the supply chain network to improve financial performance (48%).
Read the rest of the mhia.org article here.
* The economic downturn has created significant challenges for both shippers and third-party logistics providers (3PLs) – 82% of shippers are employing cost-cutting tactics and 60% are rethinking their supply chains and relationships with 3PLs
* 88% of shippers feel that IT-based logistics services are important, but only 42% are satisfied with the capabilities of their provider – as a result of this IT capability gap, shipper respondents reported a lack of the key performance indicators, alerts and visibility required for an adaptive supply chain and 3PLs reported similar difficulties in getting the data and commitment they need from shippers
* There are significant differences between how 3PLs evaluate their role in the supply chain and how they are viewed by shippers – 59% of shippers feel their use of 3PLs has a positive effect on customer service compared to 88% of 3PL respondents
* Shipper respondents devote an average of between 47% (in North America) and 66% (in Europe) of their total logistics expenditures to outsourcing and this is expected to increase in the next five years.
“Shipper-3PL relationships are being impacted significantly by the prevailing uncertainty and economic volatility in global markets,” said Dr. C. John Langley Jr., Professor of Supply Chain Management, Georgia Institute of Technology. “It is very important for 3PLs to mitigate or reduce any financial risk or service level impact that this may cause.”
Economic uncertainty and the use of 3PLs
Economic volatility has challenged shippers and 3PLs alike to contend with factors such as unpredictable demand, instability in fuel costs and currency valuation, and excess inventory. In response, not only are shippers attempting to cut costs, 77% are also seeking to improve forecasting and inventory management.
Cost reduction and improved reliability in services are the main factors likely to increase shipper respondents’ use of 3PLs. This includes converting fixed to variable costs (59%), expanding to new markets or offering new products (56%), and restructuring the supply chain network to improve financial performance (48%).
Read the rest of the mhia.org article here.
Wednesday, September 2, 2009
New Member of AWI Advisory Board
AWI (Associated Warehouses Inc.) is pleased to announce that Mark A. Andrews, Vice President Sales & Business Development at Bonded Logistics, Inc., in Charlotte, NC has joined the Advisory Board.
The AWI advisory board is made up of executives from several of the companies who are part of the AWI logistic services network. This group provides leadership and insight on the strategic direction of the organization and service offerings.
Materials handling: U.S. Department of Agriculture seeks public comment on potential changes to wood packaging regulations
The U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) is seeking information from the public on potential approaches for dealing with the interstate movement of wood packaging material (WPM). WPM includes crates, dunnage, wooden spools, pallets and packing blocks used in domestic trade.
Currently, APHIS regulates the movement of logs, lumber and other unmanufactured wood articles due to the presence of wood pests such as the Asian long-horned beetle (ALB) and the emerald ash borer (EAB) within specific areas of the United States. The artificial spread of these pests has been linked to the domestic movement of WPM, and poses a potentially serious threat to U.S. agriculture and forests. APHIS is looking at ways to protect the environment without placing an unjustified strain on domestic commerce and shipping requirements.
“We recognize this is an area that requires additional information,” said Andrea McNally, assistant director of public affairs at the APHIS. “We are in the initial stages of a fact finding mission that will help the APHIS determine whether or not to generate a proposal to modify the current regulations.”
Wood packaging materials are used to ship nearly every type of commodity or product shipped domestically, including the 1.2 billion wooden pallets that are currently in circulation in the United States. Nearly 93% of all goods move on pallets, according to the National Wooden Pallet & Container Association (NWPCA), the trade association that represents the pallet industry.
International commerce is already regulated. In 2004 APHIS adopted ISPM 15, an International Plant and Phytosanitary Standard that requires all imported wood packaging to be fumigated or heat-treated before it is admitted into the United States.
One option under consideration is to apply that same regulation to domestic commerce, a move that is supported by industry groups like the NWPCA, according to Bruce Scholnick, president of NWPCA. “We believe that some kind of regulation is inevitable and it’s preferable to the state-by-state, piecemeal approach in place now,” Scholnick said. “It’s confusing to pallet users and is unfair to wood packaging companies in quarantine states.”
Read the rest of the logisticsmgmt.com article here.
Currently, APHIS regulates the movement of logs, lumber and other unmanufactured wood articles due to the presence of wood pests such as the Asian long-horned beetle (ALB) and the emerald ash borer (EAB) within specific areas of the United States. The artificial spread of these pests has been linked to the domestic movement of WPM, and poses a potentially serious threat to U.S. agriculture and forests. APHIS is looking at ways to protect the environment without placing an unjustified strain on domestic commerce and shipping requirements.
“We recognize this is an area that requires additional information,” said Andrea McNally, assistant director of public affairs at the APHIS. “We are in the initial stages of a fact finding mission that will help the APHIS determine whether or not to generate a proposal to modify the current regulations.”
Wood packaging materials are used to ship nearly every type of commodity or product shipped domestically, including the 1.2 billion wooden pallets that are currently in circulation in the United States. Nearly 93% of all goods move on pallets, according to the National Wooden Pallet & Container Association (NWPCA), the trade association that represents the pallet industry.
International commerce is already regulated. In 2004 APHIS adopted ISPM 15, an International Plant and Phytosanitary Standard that requires all imported wood packaging to be fumigated or heat-treated before it is admitted into the United States.
One option under consideration is to apply that same regulation to domestic commerce, a move that is supported by industry groups like the NWPCA, according to Bruce Scholnick, president of NWPCA. “We believe that some kind of regulation is inevitable and it’s preferable to the state-by-state, piecemeal approach in place now,” Scholnick said. “It’s confusing to pallet users and is unfair to wood packaging companies in quarantine states.”
Read the rest of the logisticsmgmt.com article here.
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