Wednesday, 24-09-14 14:29
Robert J. Bowman,
I enjoy your blog. I am a student at the University of Texas at Austin studying Supply Chain Management, and I found this article particularly interesting.
In response to store-bound retailers attempting to offer products that are not e-commerce friendly, I agree that this is unrealistic with the progression of the use of technology in the world. Those retailers should, rather, focus on minimizing physical stores and improve timeliness of deliveries, straight from distribution centers. This has a wide affect on the suppliers and buyers because they will need to find faster and more efficient modes of transportation as well as be able to respond quickly to a change in the market and demand. These retailers may even consider having less distribution centers to cut down extra costs and send the product from a few central distribution centers to the consumer.
In response to retailers with a wide variety of brands, I agree that the Apple Store and other brands are adding competition. However, this does not mean an end to Targets and Wal-Marts. These retailers will have to shift their focus to improve consumer experience at their stores, as Apple has done, or to become a strictly online service. The retailers must find what it is that brings consumers to the stores and how they can use this to cater to the consumers desires. Also, rather than seeing the internet as the "Big Bad Wolf", it would be more beneficial for retailers to creatively use the internet to their advantage.
Thanks for the article!
Tuesday, 23-09-14 22:22
It was interesting to see that stores have the option of same day delivery mostly because of the competitiveness factor instead of providing for the customers' wants. I believe that most people do not bother with the same day option due to the costliness of the delivery. It would be more practicable for groceries since they are perishable. However, with commodities such as clothing, customers would rather try it on before buying, which cannot be done over online purchasing. Customers would not be willing to buy clothes or shoes online without a good solid returning/exchange policy. Stores must make returning or exchanging extremely simple and beneficial to the customers in order for them to purchase it. With a return/exchange policy like that, it would be really costly for the stores to provide delivery from and back to the store. Nevertheless, they would need to provide this to maintain good customer service.
Also, to provide same day service, stores must make sure they have all the inventory needed with them. If same day delivery actually were to be big someday, there must be warehouses at many locations globally that is frequently restocked. Once a customer buys a product, that product must be restocked quickly before the next customer buys the same product with a same day delivery. These stores would have to have a really good solid relationship with their suppliers to get products promptly and at reasonable prices. The stores would also have to make a decision on how much of a product they should hold depending on the turn over rate of the inventory.
Tuesday, 23-09-14 01:05
I am wondering if Mr. Bowman works for the DNC for his day job because reading this article makes me feel like I'm listening to a campaign speech.
Get used to it? Really? Remember, as retailer prices go up, prices go up which hurts the people intended to be helped.
This isn't the first article I have read from SupplyChainBrain that makes me feel like this website is coopted by the left.
Simply put, I want balanced supply chain information. I don't want to be told to "get used" to anything; especially when we shouldn't have to get used to it. Remember, Mr. Bowman, half of the country doesn't buy into the ideology of the left.
I am pro-business. Period. Minimum wage jobs are not supposed to be jobs that people stay in all their lives. The idea of a living wage is such a broad target; some think $25 per hour is a living wage. Do you really think retailers can afford that? Plus benefits, etc....
Please SupplyChainBrain.... check the Democrat policy pushing at the door.
Monday, 22-09-14 16:52
I think this is a great opportunity for large companies, with extensive supply chains, such as Walmart to go back and reevaluate some of their current processes. If the company has a hard bottom line for wages, then there is the option of cutting back on number of employees and streamlining processes to make their work more efficient. With a smaller work force, those employees will reap more benefits, and hopefully that will motivate them to perform better. As far as processes go, SKUs can be managed and organized by technology, like by robots or better sorting. If technology is implemented, then there would be less of a need for employees. Large retailers can launch apps that show whether or not the desired items are available in store, and the customer could purchase via web and just pick up in store. These new technological options help to optimize purchasing and utilize less physical workers.
If cutting back on the workforce is not an option, perhaps the companies can reevaluate their business models to see where else they could reduce costs to help compensate for the bottom line. Possibly changing suppliers, looking for new suppliers, ordering larger quantities, shipping larger loads, etc.
Very interesting article, and looking forward to seeing how this plays out!
Friday, 05-09-14 13:58
This is a great article. I agree that in tracing the minerals back to the mine it would be extremely beneficial to have the smelter validation program set up by the EICC.
Tuesday, 02-09-14 09:48
Great to see The PRC rejected their arguments and let the changes stand.
We needed more competition and it looks like we will get it. All the extras that the big boys charge usually are not in the USPS charges (free Saturday delivery, no residential charge, no fuel, no extended area) it add up.
Monday, 11-08-14 06:18
It's indeed a very good article, however the proposed Best Practice is not valid till 2025 with such rapid changing environment. I would consider one of the elements which is missing in the list is People development. With such rapid changes in environment, people should develop their skills to keep up the pace and in every organization, there is a need to have a team of people who will focus on people development, to retain the talent as well as develop them to make sure the progress is in line with the pace of external world.
Monday, 19-05-14 10:05
I'm still confused as to why we care.. Aren't there atrocities elsewhere in the world and even here at home we should focus our concerns on? How did the DRC become important and vital to U.S. national security? More important than say education or (insert cause)? Seems more a drain on profits and a waste of time. ($4 billion to implement and $200-600 million annually thereafter - Washington Post)
Wednesday, 30-04-14 14:52
I found this article very interesting mostly because, Whirpool is such a highly sensitive market to consumer demand. Since it is a commodity product, and a household brand, the logistics heavily involve sourcing to changes in consumer demands and pricing competition. I found this part very interesting, "With Whirlpool under constant pressure from competitors who manufacture abroad, smart logistics management becomes an important weapon in its struggle to control costs. The company’s products are relatively lightweight, cubing out trucks without approaching vehicle weight limits. Whirlpool is addressing the problem by working with other shippers that can fill out the loads with smaller, heavier items." By restructuring their weight limits when shipping, will hopefully lower costs among competitors and really bring Whirlpool to the front for consumer products.
Wednesday, 30-04-14 12:09
What’s essential to food safety is a two-pronged approach that addresses traceability and transparency. Traceability offers companies more than positive brand image – it benefits them economically as well. According to a study in 2004 by the U.S. Department of Agriculture and numerous studies by the FDA, traceable supply chains have seen positive, long-term revenue growth. Comparatively, transparency can help ensure food safety as well. According to a study published in Advanced Engineering Infomatics in 2010, there are four major areas of improvement that will help create more transparent supply chains. First is environmental reporting and ensuring that there are common standards of reporting across nations. As Bowman mentions, the FSMA was the FDA’s attempt to create this standard. Secondly, there should be lifecycle assessments that help determine standards both horizontally and vertically throughout the supply chains to get an idea of how different vendors compare to one another. Third, correct labeling, as mentioned in this article, is essential. Every aspect of the supply chain impacts how food is labeled, and therefore, more correct and explicit labeling can help increase transparency. And lastly, implementing traceability systems helps build up brand image by fully disclosing a food’s information to consumers.
I appreciated Bowman’s criticisms to the FSMA. It does seem unlikely to achieve universal standardization within this industry. Therefore, I also agree that the responsibility then falls to the food suppliers and keeping an “eye toward identifying the weak links in the chain” to ensure safe food is supplied to consumers.
For an interesting perspective on the FSMA from small, local farmers check out this video: http://www.youtube.com/watch?v=zyrGgHdTN_A.
Wednesday, 30-04-14 10:17
It is interesting to know there are now ways of calculating a companies green house gas emissions. Much more importantly is that organizations are willing to set their scores public. This as, Michele Carchman-Hinks mentions, allows for other organizations to benchmark against each other in their footprint impact. This can be a good step towards more environmentally conscious industries and a battle to be pollute less. In a time where the effects on the environment is become of interest to the end consumer this can definitely give a company a competitive advantage.
Wednesday, 30-04-14 10:16
I agree with the case for free as well.
Wednesday, 30-04-14 01:17
Although I agree that consumer demand for same day delivery given today’s fast marketplace pace does seem inevitable, I have sincere doubts that it will be cost-effective in the near future. In fact, Mariana’s comment below highlights even more costs and concerns than previously noted in the article. I was interested to read that the drive towards same day delivery has less to do with consumers’ pull demand and more to do with retailers’ and carriers’ attempts to be competitive against one another. Speaking as a consumer that often shops online, even when a retail store is within driving distance, it seems less convenient than ordering something from the comfort of my home. Having products arrive at my doorstep after 2 days (I am a loyal Amazon Prime member) is already changing my shopping habits; getting my orders in the same day would probably drive me away from certain retail stores almost altogether. Therefore, I have several facets of this trend that I would like to keep an eye on:
1) How soon will widespread same day delivery become logistically possible and cost-effective?
2) In what format will same day delivery manifest itself? Will retailers build more DCs, or will retailers collaborate with physical stores or carriers?
3) Which retailer or carrier will win the race to same day delivery, and how long will the resulting competitive edge last?
4) If same day delivery is implemented on a large-scale basis, how will consumers’ shopping habits change, and what effect will it have on physical retail stores?
However, as with most things, only time may tell. As a customer, I can only hope that same day delivery becomes possible sooner rather than later.
Monday, 28-04-14 10:32
Very interesting article. Some detailed information that you usually don't see addressed.
Sunday, 27-04-14 17:28
Delivering on the same day a customer orders sounds ideal; however, retailers have to consider many other issues. Ordering through the internet, and having delivered on the same day or picking up on the same day seems the ideal for the customer; however, how efficient is it for the retailer. Every retailer would have to build large distribution centers, as Amazon, to meet demand on time. With this huge distribution centers, retailer have to keep in mind costs. It not only costs more to set up more warehouses, but also keeping inventory. Retailers will have to forecast demand of online sales accurately in order to have sufficient inventory to meet demand. In my opinion, same day delivery works for commodity products and specialized retailers, for example grocery. Having a same delivery on a department store for example, will increase costs very high. A retailer who wants to change to this model, should know very well their market. If people prefer to see the product and try it on before buying it; this model will not work. It is important for the retailer to know the market, and realize that they will have a competitive advantage over their competitors with this new business model. It is also important to have an elaborate contract with the customer, with clauses explaining any problems if the product is not delivered on time. The retailer should look at its geographical location, and consider any risks, before submitting themselves to this type of business. The contract should emphasizes on any type of natural disaster or any force majeure to secure themselves from losses of not delivering on time.
Sunday, 27-04-14 17:06
Very insightful article. Big data and its role in supply chain processes has become an incredibly important tool for businesses. Information gathering and synthesis of that data can certainly transform the demand planning and customer service side of CPG businesses. Furthermore, big data is evolving the delivery process as well. Telematics systems in trucks are providing critical route planning and delivery data to managers allowing more efficient delivery of products. As easy as it is to be "overloaded" by big data, knowing what data to look for and making educated decisions with the data will allow companies to streamline their supply chains.
Tuesday, 22-04-14 19:41
The fact that passenger airlines are switching to widebody airplanes shows that they are focusing their market and profits on passengers, as they should be. They are not trying to compete with air-cargo carriers. I believe that air-cargo carriers should continue to improve their methods as well just as the passenger segment has. The passenger airlines are simply adjusting to their markets demand for more passenger space. The air-cargo carriers will just have to keep researching and developing their side of the market to better fit the needs of their cargo consumers.
It is however interesting that the passenger airlines can still have a small nitch market within the air-cargo market with such little costs for them. That does hurt the air-cargo carriers, but does not necessarily mean they are doomed.
Tuesday, 22-04-14 12:27
@bruce barnett, Science never ceases to question everything. But at least 97 out of 100 scientists agree about the existence of man-made climate change. There's nothing "false" about this conclusion. It's time to move past that debate and start doing something about this critical issue.
Tuesday, 22-04-14 08:36
Before one attempts to justify Climategate aka AGW...anthropogenic global warming, one first needs to verify "misleading facts" so we all avoid international environmental extortion which is what this concept leads too. Those who fell in this pit of nonsense should first look at what those misleading facts that gang is pushing & ask a simple question...why was historical temperature data falsified ? That should end the conversation. climate theory is based on deliberate deception on unproven climate hypothesis being sold as science. None of the claims are supported by "independent" verified scientific analysis & the motive is to force fear (a common stunt). This is nothing less than a cheap stunt to end around the goal of centralized one world govt. as if you need any example, just look what centralized govt in Europe has produced. If that's not enough, venture back to 1993 & the club of Rome where this is outlined with the goal of global govt or verify the statement of prof Dan Botkin...."to get society to truly change is to frighten people with the possibility of catastrophe". Earth does not maintain a static climate, its constantly changing & influenced by solar radiation, moons gravitational pull,cosmic rays, tectonic plate movements, effects of the gulf stream & emissions of volcanic eruptions. Sea levels have been rising approx 1 foot per "century" since the last major ice age due to gradual expansion of water as solar radiation warms & expands the volume of the oceans. While on the subject, why not mention the Boston Globe (Ross Gelbspan) who advised journalist not to report arguments by climate skeptics. Could this strangely be connected in the 1994 UN human dev report....mankind's problems can no longer be solved by national govt....what is needed is a "world govt". UN intergovernmental panel (Johnny Houghton)..."unless we announce disasters no one will listen". And then that infamous Albert Gore ..."the debate is over...the science is settled". Then one must ask Albert about his GIM (generation investment mgt) to manage carbon trading credits...now how in the world would Albert arrange such a convenient myth ? Gore can't debate his critics as he has nothing to stand on & Albert is part of the flat earth groupies. His polar bear scam failed to mention their population has risen 500% but he only spoke of the (4) that drowned. Lets not forget the Arctic ice stunt....its expanding & thicker, that might have something to do with their boat that recently was frozen into the ice in the last several months & had to be rescued at tax payer expense. In other words, the info you are feeding has been "cooked" to support a predetermined conclusion. How can you...Rob Bowman defend a biased science that legitimizes false theory? As the author of this piece, you should be ashamed. Bottom line direction is population limitation. Before anything is "settled" as Albert stated, there first has to be science & science does not support this nonsense, especially when temperatures have been falling. Science never ceases to question, global warming aka climate change aka whatever it will be this month. Besides, what's up with the name changes?
Wednesday, 09-04-14 00:29
@chris knox, I didn't say that Atlas Air has been in bankruptcy during the economic recovery. Just that it had filed for Chapter 11 protection, from which it did in fact emerge in 2004.
Sunday, 06-04-14 21:05
Lots of opportunity for those considering a career in Supply Chain or who have a strong background in Supply Chain already. Regardless, clients and candidates alike need to partner with a strong recruiter to make sure the match is right on both sides.
Sunday, 06-04-14 11:01
There is a mistake in this article. Atlas Air has not been in bankruptcy during the economic recovery. It went into bankruptcy in 2004. 2010 was the most profitable year ever for the company. Furthermore, last year during the cargo slump that this article discusses, Atlas Air made $97 million in profits.
Friday, 04-04-14 23:52
A few words for our belly-cargo messiahs: lithium batteries, flammable liquids, flammable solids.
The predicted demise of the freighter is a bit premature. Slow growth isn't the same as no growth.
Friday, 04-04-14 22:19
How much did UPS or FED EX pay you to publish this article?
For the sake of brevity and argument, what did UPS/FEDEX net for the quarter? It is all about contract negotiations.
Monday, 31-03-14 09:31
True. One of the issues, however, is security. The more belly cargo, the more opportunity to damage a jet full of passengers.
Through security checks for belly cargo may slow down turnaround time for expensive planes.
Saturday, 29-03-14 10:13
I am all for increased use of intermodal freight. Trucks don't pay nearly enough for the roads they use or the road damage they cause. They pay only pennies per mile. They are involved in 3,900 deaths per year, and something like 60,000 injuries. Trains use only 25% of the fuel, and polute only 25% as much as truck freight. Let's get the long haul trucks off the road and on to rail cars to save wear and tear on highways, stop wasting fuel, and save lives.
Railroads pay their way, while the highways are paid more and more by sales taxes, bonds, and the general funds from the US treasury. States are raising all sorts of non-user taxes. Fuel taxes haven't kept up, so trucks are getting a huge handout. Stop this sort of highway robbery!
If we simply would charge trucks for their actual road use, the shippers would use more rail.
Instead of subsidizing the entire trip for a truck, let's just subsidize them to and from the intermodal yard. Let the railroads make a profit hauling them, and keep them of the roads. We will all benefit from reduced accidents, deaths and injuries, highway congestion, road wear, and environmental damage.
Tuesday, 18-03-14 09:45
I must have missed the part where they say that container haulers...mainly o/o drivers will see an increase in rates! I mean they are building ports in Mexico and widening the Panama Canal and dredging the water ways around Savanna and all this preparation for intermodal expansion. They've even raise the bond for freight brokers to cut out the riff raff that violate the laws. And the main companies that have rates so cheap...JB Hunt...Swift...Hub....Schneider get top billing of gratitude? Well maybe that's what i took from some that article (just me). But what about all the stealing these agents do to the drivers? I mean the rates are horrible and let alone honest. We never get to see the original invoice and they tell you they're paying you 70%. But 70% of what? After everybody gets thru pinching off of the original invoice rate that you never get to see, you don't know where those figures they want to pay you comes from! Not to mention all of your detetion...hazmat pay...back haul pay (JB Hunt)...and other stuff..load locks...scale weights...tolls. Don't get me started on this raggedy eqpt we have to deal with..chassis...recap inner tube tires. We have to be mechanics, electricians, body work techs...lol...i swear! We make this look easy but its not by a long shot! Plus the crazy hours we keep. We do more before 6am than most people do all day! I don't have time to list all the pros and cons but i can say that we need regulation of some sort on these rates and transparency from the agent on what moneys are really being paid from the broker. Ooops..gotta go turn this empty in and do my next load. This ain't over yall...stop pulling on the cheap and do the math!
Wednesday, 05-03-14 12:59
There are qualitative factors to take into account here. As Bowman mentions, the Chinese, along with people in a variety of nations, remain consumers of status. The iPhone in China is seen as a symbol of unintelligible wealth at 4988 yuan ($792 USD), while the ordinary Chinese person carries a Samsung or Nokia, costing between 950-2500 yuan (roughly $150-400 USD). Without the upper hand on price, American manufacturers will have to rely on their brand notoriety and product quality in order to compete in the market. Additionally, in a study by MillwardBrown (find it here: http://www.millwardbrown.com/BrandZ/BrandZ_Top_Chinese_Brands.aspx), analysts found that the Chinese brands with the fastest growth are market-driven brands, rather than state owned enterprises. The fast growth indicates that this type of business model and brand management is successful for Chinese businesses. Such success will make it even more difficult for American manufacturers to gain a foothold in the Chinese market.
I agree with Bowmanâ€™s concluding statement on globalization blurring the lines of geography and national brand association. However, I wouldnâ€™t discredit neo-colonialist and competitive attitudes to keep this blurring at bay. If this is the case, I could foresee future advertisements promoting brands by identifying their origin nations.
Wednesday, 05-03-14 11:23
Through social media and advertising through newer, more innovated channels, companies are now able to segment their customers into more specific target groups. They do not have to be clueless about what their customers are like since they now can see full well what it is their customer base is made up of. Consumers share very detailed and personal feelings or needs on their choice of social media giving companies the ability to know more precisely exactly what to provide for their consumers. This allows companies to be able to come up with better relating designs of new products as well as more accurate forecasts on products and thus saves them unnecessary overage costs. This will also save them money on advertising since they don't have to be so broad on who to target and can address their marketing directly to their segmented target. However, I agree and think that the biggest downfall of social media for companies is all the negative publicity that can be shared for others to see when a bad experience or defective product comes about. An actual example of this that I saw was when a college organization ordered over 20 boxes of pizza from Dominoes. When delivered, at least half of the boxes were smashed in and in bad condition, making the pizzas looked deformed and smudged. Later that night a member of the organization posted on Twitter saying "Dominoes not coming in clutch" with a picture of the smashed pizzas. In order to fix the problem and avoid bad publicity, Dominoes promised the member free pizza next time the organization had a similar large sized order (in order for everyone that saw the bashing tweet to see their company responses as well). Companies should just be aware of the negative effects of social media as well as the many benefits that it can bring.
Wednesday, 05-03-14 02:17
Retailers are in a particularly difficult position as they must forecast demand as accurately as possible, fulfill the orders as accurately as possible, and get the orders to the consumers as quickly as possible. Furthermore, clear communication with parcel delivery services will be something that is emphasized in upcoming years after consumer backlash of parcel services from this previous holiday season. I am anxious to see how new technology and automation will shift retailer's processes in years to come! Thank you for sharing!
Wednesday, 05-03-14 02:13
I really enjoyed this article because it very clearly discusses how retailers face the challenging and unpredictable holiday season. Retailers are in a particularly difficult position as they must forecast demand as accurately as possible, fulfill the orders as accurately as possible, and get the orders to the consumers as quickly as possible. Furthermore, clear communication with parcel delivery services will be something that is emphasized in upcoming years after consumer backlash of parcel services from this previous holiday season. I am anxious to see how new technology and automation will shift retailer's processes in years to come! Thank you for sharing!
Wednesday, 05-03-14 00:02
It is interesting how this article mentions that corporations have the burden to act like law enforcers with their suppliers. Quality starts from the beginning of the supply chain. Nowadays, it is becoming increasingly important that companiesâ€™ suppliers are following through with their quality and worker safety requirements. Loyal employees are those that feel appreciated within the company; they deliver the highest quality. In order to have loyal employees, the Chinese government should not only increase factory wages but should also make them an asset for the company. They should enforce better working conditions and create work incentives to keep employees motivated. In addition, companies should try to maintain a transparent supply chain which will strengthen the relationship between the company and its customers.
Tuesday, 04-03-14 23:48
It's interesting to read that a lot of companies have been searching to source elsewhere outside of China. The lead times it takes for freight to come to America from China are surmountable to about 25 days. Whereas in Mexico it could only be 5. I personally would starting a full supplier evaluation in Mexican manufacturers, if there's a to be a serious resurgence in sourcing strategies among companies.
Tuesday, 04-03-14 19:05
I agree with the case for free trade. Globalization is an inevitable aspect of our economy today. To stay competitive with foreign companies, the United States needs to foster international relationships. Free trade will enable US companies to source raw materials at a low cost and to sell globally at a competitive price. An example is the defense industry, in which budget cuts have reduced the number of contracts with the US Department of Defense, the number one customer for US defense contractors. Major players in the US defense industry are now turning to the global market for business. Free trade partnerships will minimize political barriers and ease the relationships made between US contractors and foreign buyers.
Tuesday, 04-03-14 10:49
As sales peak and social media plays an important role, retailers are struggling to meet the demand of the consumers. Forecasting demand with data and analysis is essential. However, it is important for the retailer to have a very good relationship with their supplier, to be able to meet demand. Establishing a good relationship means the supplier can be asked in peak times for more than what was ordered. Usually companies don't like to overstock, as it might come with a lose; therefore, the supplier should have low lead times, helping the retail restock in peak sales. The supplier should be very responsive and flexible in their production process. Being responsive and providing the best quality will help the retailer meet demand. Due to the impact social media is making the supplier needs to be integrated with the retailer.
Tuesday, 04-03-14 10:30
As sales peak, the challenge of having inventory on stock becomes a problem for many companies. Marketing and social media has caused many customers to be aware of many products and to get feedback on them. It is substantial for the retails to forecast, accurately using data and analysis. It is also important for the retailer to have a good relationship with their supplier, and to have a low lead time to be able to stock up inventory as soon as possible. Establishing a good relationship with the supplier enables the retailer to meet the demand of their customers. The supplier should be responsive to meeting demand and flexible to the wishes of the retailer. The product should be at the best quality and delivered on time. Therefore, with these new trends in social media creating impact on demand, retailers should have reliable suppliers that can meet their needs in peak sales.
Monday, 03-03-14 21:51
This is very interesting. I think this is a really great example of the government imposing regulation without understanding the consequences, and adversely affecting a group they were intending to benefit. This makes me really curious about the underlying economies of scale for intermodal vs traditional trucking.
Friday, 28-02-14 12:05
The trucking rates are so low that the co.(s) are forced to hire new drivers all the times as soon a people find out what can make in this industry they leave and get other jobs. All new drivers to the US. and Canada should run with a more exp. driver for one year. Most truck drivers are doing other jobs because of low pay both too drivers and truck owners. If there was a true shortage trucking rates would go up to the point that drivers would make a fair wage and be paid for dock time. Many smaller trucking co. would plate more trucks. Many farmers used to trucking as well, but the trucking rates today can make more money in Canada running more land and or hogs instead. Many farmers in Canada are paying over $20.00 per hour for good help and hiring ex truck drivers to do farm work. In Canada you can make as much money in 8 months as driving truck 12 months. The farm employee(s) get half wages for the other 4 months from the gov. This brings a good farm worker wages and EI. to app.$72,000 per year in western Canada.
Wednesday, 26-02-14 20:13
The truck driver shortage was caused by too many small co.(s) and owner op. leaving this industry in 2009 to 2011 . These people have got other jobs as welders and equipment op. One former truck driver makes the same in 44 hours putting up bins as in 70 hours driving truck. His truck has sat in my yard for the past 3 years. He was waiting for the rates to go back up as he likes to drive truck but has 2 girls to support.
Monday, 03-02-14 14:16
This article provides an interesting take on the pros and cons of using the internet for retailers. Though retailers who are adept at using the internet to promote their products may have an upper-hand, there are many challenges in using such an unstable source for both data analysis and forecasting. The challenge lies most in integrating social media trends into the supply chain and using these trends to forecast demand. The article mentions the unanticipated success of a particular item, and the potential viral impact of a company's mess-up. Additionally, the use of online retail can provide excess store-front costs, which companies like Amazon avoid and have the upper hand. All in all, though social media can help stores if used correctly, it is a rapidly changing and highly volatile data source and can be hard for companies to integrate.
Monday, 27-01-14 16:48
AASHTO has been forecasting this development for several years. It now is occurring.
Friday, 27-12-13 14:52
The technologies exist already to ensure that customers can monitor the performance of their suppliers but I think the problem is that both sides of the supply chain would rather deal in vagueries and conjecture rather than undeniable facts that have to be dealt with or suffer the consequences of lack of action.
Monday, 09-12-13 10:23
The US Government also has some responsibility here in creating an economic and regulatory environment in the US that would encourage manufacturers to build their factories in the US. Creating an improved business climate in the US would likely "force" other countries to improve working conditions in order to be competitive. Unfortunately, our government appears to be driven by what is politically expedient rather than what is the right thing to do.
Sunday, 08-12-13 07:08
Greg Chalkley correctly listed "Management Commitment" as an essential aspect of a good international trade compliance program. With out buy in and support from management, especially the executive level, an international trade compliance program is pretty much dead in the water. With the current economic slump, most executives and managers have wrongly turned a blind eye to international trade compliance, as they see it as a cost and they are preaching the focus on increasing sales or reducing operating expenses. If the business relies on international trade, they are only asking for a disruption of their business.
Friday, 06-12-13 23:52
Great article, I especially agree with your statement that cloud-stored data should be available, recoverable, and secure. IT security is definitely an important consideration for any company. No matter how accurate, extensive, or useful the data you've gathered is, if you are unable to adequately protect and access it, your effort is wasted. For any company, moving data to the cloud is a decision that should be made carefully, and shouldn't be made for the sake of being "technologically adept".
Thursday, 05-12-13 11:37
With autonomous motor vehicles just a few years away from volume production for consumer vehicles, I did research into the implications of the technology on the trucking industry.
The problems related in this article are easily mitigated (if not completely circumvented) by taking advantage autonomous vehicles and incorporating them into transportation companies.
The driving hour restrictions will be circumvented while simultaneously increasing roadway safety dramatically! With no need to hire drivers, the diminishing labor pool will no longer become a factor. Instead, the initial investment to compete in the industry will rise with the cost of the technology.
The technology will revolutionize the industry, and the effect will cause the current economic forecast to do a complete 180 as truck transportation becomes increasingly more efficient, timely, reliable and affordable.
As can be expected, there are still hurdles to overcome, the largest being state laws. Unlike consumer vehicles, freight trucking inevitably crosses state lines. Currently only a few states have passed legislation to allow the operation of autonomous vehicles on public roadways. Until all states are on board with the technology, manual drivers will remain an issue for the industry.
Wednesday, 04-12-13 15:32
Interesting article. The U.S. Cellular example nicely demonstrates the benefit of more sophisticated planning tools. Given the short life-cycle of mobile phones and huge peak in demand in the early stage, another important consideration not addressed in the level of information sharing between the phone manufacturers and cellular company. Both companies could stand to benefit by potentially integrating inventory tracking systems or sharing real-time information so as to avoid lost sales and management inventory.
Wednesday, 04-12-13 14:16
A topic of discussion in my procurement class has been on the issue of CSR. The question we've had to answer is, "How far does your responsibility go?" A chain is only as strong as its weakest link. Conventional wisdom leads us to believe that focusing on the bottom line is what makes a company successful but social media has redefined the success of a business because it has allowed consumers to monitor where and how their purchases are sourced. It means that a corporation's responsibility does not end on the first or second tier of the supply chain, but extends all the way to the purchasing of raw materials. The greater the reach of a corporation, the greater the responsibility. It is these businesses that have the resources to implement sustainable practices that can lay the groundwork for those smaller or competing businesses.
Wednesday, 04-12-13 03:39
Surprising to see that a company you would expect to have an easy time supplying large retailers also must deal with a large complexity, despite the fact that the products are slightly differentiated. By realizing the different needs within several products, no matter how similar, a company can become more efficient and cater specifically to what changes in demand they see approaching. Interesting to note that 'value-chain segmentation' is something we discussed and recommended when studying the Sport Obermeyer case, without knowing the technical term for it. There, they also had to separate each product and understand the different product cycles of each and the best approach to take when sourcing and manufacturing it.
Wednesday, 04-12-13 01:12
We have been talking about sales and operations planning (S&OP) in one of my classes and I am excited to see that what I have been learning in class is actually beneficial in the real world. Sales, marketing, and supply chain do need to work together in order to make sure demand is met and the company is going in the right direction from both ends of the supply chain. However, when I go to the store and look at products like Clorox, I am often baffled by how many choices there are and while this can be a good thing, I feel like I have information overload and just end up picking one at random. But I guess the main point for supply chain management and the company as a whole is that the products are available and demanded.
Tuesday, 03-12-13 21:55
Data security is something we recently discussed in my procurement class at the University of Texas. It seems that this subject is one of the least discussed, from my experience, in the classroom or corporate world. However, for a supply chain management professional, it is a very important concept because not only does your company's information need to be protected, but so does your supplier's, your consumer's, and your employee's. Intellectual property and process information is at stake every time an employee sends out an e-mail or does work on a laptop during the flight. Data security is one of the least controllable variables since there are so many avenues for information to be leaked, but that is precisely why companies need to concentrate on it.
Tuesday, 03-12-13 17:09
Thank you for this article. There is no question that variety in Consumer Goods is important not only to stand out among competitors to consumers but also to expand into new markets. For example, top cosmetics and beauty CPG company Lâ€™Orealâ€™s portfolio is constantly changing. It can introduce new productsâ€”but at the same time, the new additions to the portfolio would add cost and complexity. Therefore, it would be in the companyâ€™s best interest to remove products to maximize overall gains in the company portfolio. At this point, the big question is â€śwhich SKUs should be removed?â€ť The growing variety of SKUs increases the difficulty to accurately forecast demand for a product. I agree that it is vital to the success of company for the supply chain managers to be cross-functional and â€śspeak multiple languages.â€ť This way, the managers will be able to communicate with sales and marketing, finance, and manufacturing. The goal is to have improved profit-and-loss performance and maximize profits and provide a product desirable to consumers.
Tuesday, 03-12-13 16:55
Trucking is an essential part of any product based company or business, but not necessarily a position or career that someone aspires to be apart of. That being said, until recently that opportunity to make money was vast and appealing. The restrictions that are coming in to play take a toll on the industry, reducing the willingness of employees to drive only within certain hours, taking away from their monetary opportunity. From a company/business standpoint, this is a smart decision due to the safety concerns and casualties on the road. A solution to the problem could perhaps be to train job-less individuals to operate vehicles, and to allow them an opportunity to make a living which was previously non-existent for them. Additionally, it should be put in to effect that each driver must travel with a co-driver to reduce sleep related accidents, or mistakes on the road.
Monday, 02-12-13 20:43
This article raises an interesting point and something that we should all keep in mind over the next few years. With all the recent talk about moving manufacturing jobs back to America I was also wondering what the factories would do with their excess capacity. It makes sense for Chinese companies to become large players, especially for consumer products and automobiles, as their overall infrastructure has seen rapid growth over the past 10-20 years.
As I see that there is a possibility for Chinese companies to enter the US market, I am rather skeptical on how consumers will respond. Right now there is a large trend to bring manufacturing back to the States and if this continues I cannot imagine that Chinese branded products will be widely accepted.
Monday, 02-12-13 19:05
The thing that struck me most about this article was the discipline required for a business-unit leader to prioritize their product's needs between innovation, cost or service and the unwillingness of project leadership to accept "everything" as an answer. While the framework they described sounds helpful, without the willingness to make difficult decisions about investment decisions this sourcing project would likely not have been successful.
Wednesday, 27-11-13 13:09
This article helps to highlight the power of big business to affect change in its supply chain partners. As firms like Kroger and Dell recognize the savings that can be realized through cost-effective sustainability improvements, they serve as an example to others that sustainability can be profitable all the way down the supply chain. Once big business begins to â€ślead by exampleâ€ť, others are sure to follow. Soon, massive distribution centers powered by roofs covered in solar panels and lit by highly efficient LED lighting will be the norm and no longer cause for news. However, I caution the use of bamboo for Dellâ€™s packaging. My research into the sustainability of bamboo emphasizes the use of naturally occurring bamboo as opposed to planting non-native crops in foreign ecosystems. The sustainability press that bamboo has received in recent years has led to widespread overplanting of invasive, fast-growing species of bamboo around the world that compete with native flora, even in China.
Wednesday, 27-11-13 11:44
I read an article about the growing trucker shortage in The New York Times just about a month ago, and brought up the subject during a current events discussion in my procurement class. I noted that the turnover rate for long haul truckers is approaching ninety-two percent as drivers are lured away by more competitive wages, and as carriers compete for experienced drivers. My classmates and I agreed that the extra cost will eventually be passed down to the consumer unless a solution can be found. The idea of more drivers making shorter hauls through regional carriers could attract those potential new drivers who do not wish to spend days away from home and families. Additionally, since the class discussion, I have learned of two pairs of distant family members who are â€śempty-nestersâ€ť (parents whose children are grown and out of the house, and who have retired from their career jobs), and have found a way to tag-team long hauls. They say their methods cut trucking times without violating driving regulations, and serve as a way to spend more time together as they get paid to tour the country. Could seniors be the cure for the long-haul trucker shortage?
Monday, 25-11-13 14:48
I was recently discussing this topic with SCM peers. Trucking has been a vital industry in the U.S. economy especially with NAFTA. I know people who have worked in the field and have described the increasing regulation and increasing demand for drivers. This article has confirmed the trend. I feel one of the best solutions to this problem is autonomous trucking. Google has recent notoriety with their driver-less cars. Incorporating this technology into logistical trucking could revolutionize business. Specifically I believe it solves three main issues of driver shortage, decreases costs for businesses, and increases safety. 3PL's will have a reduced labor cost that reduces margins. The cost reduction could offset volatile fuel prices. Also autonomous transportation removes human error and fatigue from the equation. One of the few problems is where will the labor force go. However with fewer young people entering the field the labor issue is likely to phase itself out.
Saturday, 23-11-13 18:49
Interesting post. It is clear that companies have many strategic decisions they have to make in terms of both transportation and inventory. This has of course always been the case, but now it has become a competitive factor in most industries. Information is the key, and all corporations need to invest in systems that allow them to forecast and plan their procurement operations. From my point of view, it is also a choice between long-standing relationships and a going-to-market approach. The different transportation possibilities, intermodal, truck, air and shipping all have changing prices and availability and therefore the companies have to choose between low price, but higher volatility (going-to-market approach) and higher price, but stable deliveries (long-term relationships). Supply chain management has truly become a highly strategy decision and a competitive factor.
Friday, 22-11-13 11:57
Over the last decade, I've seen an interesting shift in the workforce away from Forecast Analysts to Demand Planners. At the time, it seemed to be a result of more organizations getting lean, reducing head count, and turning combining the role of Inventory Planner and Forecast Analyst. That's where the "Demand Planner" came from, and really was a role for a jack-of-all-trades. All of the criteria above are absolutely necessary for the role of Demand Planner. However, rather than trying to find that perfect fit, I would say that perhaps more important than the individual, would be Demand Planning as a department for your organization. This department would have people of varying strengths/weaknesses, but combined to be a powerhouse of data, information, insight, and execution. You can keep your Forecast Analyst (the math geek) and your Market Analyst (the customer advocate) and your Supply Chain Analyst (the supplier interface) as your individual contributors, while having a Manager or Director of Demand Planning possessing enough knowledge of everything previously stated, and the know-how to navigate the executive branch. If you have 100% confidence in each of the individual contributors because you're using each of them for their particular strengths, then the sum of the parts should create a well versed, statistically backed, operationally driven juggernaut of a Demand Planning department.
Wednesday, 20-11-13 10:00
It is great to see examples of companies that are taking steps toward a sustainable supply chain. As large companies like Dell continue to make progress, will smaller companies with global supply chains be able to keep up? It will likely become necessary for smaller companies to join organizations like the SCLC to exert influence among suppliers.
Friday, 15-11-13 18:30
It's interesting to see how companies are reacting to intermodal carriers are beginning to tighten up transportation when coming to North America. The benefit for many companies that use carriers to bring product inland, is the storage benefit. Keeping inventory on ships has been a method for many companies to reduce storage costs. Moreover by stopping at the coast line, companies will have to find other methods of transportation to bring the goods in-land to the right distribution centers.
But Bowman is completely right, its all about information. Information has been crucial in this retail era as shoppers are becoming more savvy when it comes to spending their dollars and where. For example, many companies were looking forward to an upwards trend for this upcoming Black Friday. However, according to the NRF, approximately 140 million plan to shop on Black Friday in comparison to last years 147 million. Using this data, retailers can change their strategy and try to pull in as many customers as possible.
Tuesday, 12-11-13 10:29
A very interesting view of how the holiday season will unfold for retailers and make sure logistics meet the demands and stay competitive.
Saturday, 09-11-13 23:18
I agree with Wells' notion that entering into an IP agreement is like entering into a devil's bargain. The legal infrastructure in China creates a series of obstacles for foreign companies when entering the Chinese market. However, what is the most perplexing to me is how these companies are going to supply the Chinese? For example, if company x has a strong, luxury brand name and its goods are made in China, would the Chinese still purchase it? If not, does that mean that company x would need manufactures in China and their country origin? There are many caveats with U.S. manufacturers selling in China and needs to be greatly looked into before making a a decision. The IP is a large aspect of it, but the logistics are just as important.
Friday, 08-11-13 18:49
I was glad to come across this article, as the subject reminds me of a discussion we often find ourselves having during my Procurement class - to what extent should you be responsible for your supplier's actions . . .
I do agree that the end consumer has a great deal of power in making a change in such situations, although right now awareness of this issue is pretty low. This article was written in June, and as I write this comment in November, there have since been a further number of factory fires and discoveries of poor working conditions in overseas factories. This does make me worry that changes being made concerning this issue - if any - are slow and possibly ineffective.
There's more social responsibility to supply-chain that people think, and this article definitely highlights that fact.
Friday, 08-11-13 18:35
I recently read an article about consumer goods brands, and how their increasing array of products is starting to cause stress as far as sourcing and inventory management goes. I'm sure such companies are already using some sort of segmentation to contribute to their supply-chain strategy, but the ease with which Clorox has managed this makes me wonder if maybe other consumer goods companies should reevaluate their process. Maybe it has something to do with the six-box graph? I had never heard of that either, so I found it very interesting.
Friday, 08-11-13 18:29
I had never given much thought to segmentation within brands and how it could possibly effect the supply chain, so I found this article very interesting.
I recently read an article on SCB about how consumer goods brands are constantly expanding their products/lines, and how it's causing stress as far as sourcing and inventory management go. I'm sure these companies are already using segmentation as well, but wonder if maybe they could benefit from reevaluate how they do so? I'd never heard of the six-box graph as well, so maybe that's something that could be used during reevaluation.
Tuesday, 05-11-13 12:10
Good article, which clearly illustrates how the growing complexity of the globalized world is continually challenging the standard of industries.
I found it interesting that you mention a six-box graph with focus on growth and market economics. I am familiar with the four-box graph with axes of product complexity and value potential, but it is interesting to include the productsâ€™ growth potential. Of course, the reason for creating frameworks is to simplify things, and you clearly have to consider more than two factors when making supply chain management decisions. Nonetheless, I think growth is an important factor, and it makes the consideration more strategically, as it enhances the importance of future changes.
Friday, 01-11-13 23:14
I agree with Sue. Companies are not looking hard enough at those who are out there looking for their next opportunity. I have Bachelors in Logistics and International Business and 14 years experience, and am having problems getting interviews. Companies are looking for people who can start producing at a maximum level from day 1, knowing the internal systems, which is nearly impossible. They are to focused on what candidates don't have, rather than what they do have.
I have been out of work for a year, and have been told too many times that "Oh, you don't have experience in ____ software, we can't hire you" or words to that effect, ignoring the fact that I have experience in 3 other similar packages, I hear companies complain about a dearth of talent, and frankly, I think "BS." There are people out there who can excel in the job you're looking to fill, if you are willing to give them time to learn you systems and the industry. It often takes less time to get someone with 10-15+ years experience up to speed and productive than a new college graduate with no or little experience.
I spent 7 years at AT&T. When I started, you weren't allowed to considered an internal transfer/promotion until you had been in your current position for 18 months - 6 to learn your job, 12 to perform it. That 6 month grace period has disappeared, and companies are worse off for it.
Thursday, 31-10-13 12:53
Thank you for an interesting article.
As the retail world turns more and more complex, companies that do not manage complexity well will suffer from a non-competitive cost structure. Range Proliferation is one of the most evident examples of how complexity affects retailers nowadays.
The key questions is â€śwhat can I do about itâ€ť. Many retailers do not face Range Optimization as a cross-functional strategic initiative, and therefore do not manage to capture the full range of potential benefits to both the retailer and the customer.
In the following link there is some more information on how effective range optimization could be planned, I hope you enjoy it.
Thursday, 10-10-13 00:39
The field of candidates who can tackle the challenges of global supply-chain management today remains alarmingly sparse???? Only if they insist on hiring fresh or recent college grads. They forgot to mention that criteria apparently.
It is really sad that the C Levels mentioned are completely unaware of the incredible pool of extremely qualified professionals at all levels out there that just happen to be mid career.
And not only does this mid career group have the brainpower and technical expertise necessary but they have experience. Plus this age group won't leave when the first better offer comes knocking.
This is not the "older" group that you refer to that came out of the armed forces, they didn't start in â€ślogisticsâ€ť, marketing or operations, and they are definitely qualified to handle the "complexity".
These folks have the required areas of expertise you mentioned and then some (procurement, forecasting, supplier management, international trade trends and regulations, information-technology prowess and customer-relationship management, etc).
The talent is there. I would encourage these C levels to stop trying so hard to hire young and hire quality instead. Those mid career are going to work way longer than the historical retirement age, and they will add quickly to the bottom line.
Monday, 07-10-13 18:01
Being a student of supply chain, I had thought that a pull rather than push supply chain would be obvious, however this article shows how the ideas of supply chain have changed over the past 10 years. I have learned that you don't want to have very high inventory because it adds to the overall costs of production. After reading this article, I realize that supply chains are always changing and must adapt to the industry to which they are providing their services.
Tuesday, 01-10-13 14:37
Don't forget, there are a lot of "Boomers" who want to remain working or are willing to come back part time. They may need some training to get more current but that is cheap compared to new hires who leave in a year or 2 and need to be replaced.
Monday, 09-09-13 23:33
I started reading this article sceptically, wanting to hear about some of the Chinese brands that we'll be seeing. But aside from Lenovo and Volvo - not good examples - the article didn't mention any. Disappointing, given the title.
The reason there are few mentions is that aren't many Chinese brands that are recognized outside of China, especially consumer brands. Certainly a few have potential, like the sportswear brand Li Ning and some of the homegrown auto brands like Cherry and appliance brands Haier and Midea. It's not really a surprise given that that the brands they do lack something unique. So why don't Chinese get some high power western marketing behind some of the products they make well.
Maybe one answer is that the Chinese don't care too much to face the challenge of growing a brand in the U.S. or Europe when they have a retail market at home that is growing at 15% per year, with a huge developing consumer base.
Saturday, 31-08-13 04:56
Excellent article. Cant agree more. What this article clearly suggests is that while many demand planners may not be 'born', it is equally important to consistently develop demand planning skills sets within planners, most of which be probably not easily identifiable.
Thursday, 29-08-13 01:59
Very nice article â€¦.
Demand Planning is one of the key areas in all organisations. Thereâ€™s no magic formula for developing demand planners. We need more skilled and professional demand planner with knowledge of Economics, Marketing & Sales and statistical knowledge. Very difficult to get good DP with all these skill.
Wednesday, 14-08-13 11:27
Monday, 05-08-13 15:29
Excellent article as many are looking to replace their software systems or upgrade them. Love this quote, "Cloud technology has matured to the point where security isnâ€™t a crippling concern â€“ no more, at least, than it is for software that sits behind a companyâ€™s firewall." I fully agree with this. The leveling of the security ground, illuminates all the other greater benefits of the right cloud-based solutions in the supply chain industry. Like anyone else tracking their products, supplies, and tools - I want to know exactly the moment something is used, running low, out of stock, or needed. Only the best cloud services allow for the most accurate information quickly.
Monday, 05-08-13 13:05
It looks like Uruguay slipped from 87 to 89. The US stayed at number 4.
Monday, 22-07-13 12:54
Like most Obama administration initiatives that affect the economy, trade, or commerce, they are big on announcements and poor on execution and follow through. With little or no experience in running a business or global commerce, the platitudes are great but the results are usually found wanting and disappointing.
Sunday, 23-06-13 19:13
We are now helping several clients with their reshoring decisions. We start with the hypothesis that bringing some manufacturing back (typically 15-20%) is the right thing to do for America and is appropriate for American companies to set as a target. From there, we help engineering innovate, automate and localize so that production costs come back into alignment with global competition.
We also consider the tax and other governmental incentives that further improve the cost equations. Finally we consider the marketing and PR benefits to a "Made In America" claim.
Taking the whole picture into account is complicated and cannot be judged on costs alone. Considering Mexico as a cost-effective alternative will not help repair the US manufacturing economy.
We are all on the same wavelength - we need to do this for America, and do it fast.
Monday, 17-06-13 12:33
Good article. Thanks for doing the survey and for linking to the Reshoring Initiative.
The article refers to â€śtotal landed costâ€ť and links to a definition. The Initiative encourages the use of Total Cost of Ownership, a far more comprehensive cost measure. TCO also includes carrying cost of inventory, travel cost, impact on innovation, IP risk, etc. To help companies make better sourcing decisions, the non-profit Reshoring Initiative, www.reshorenow.org, provides for free a Total Cost of Ownership (TCO) software that helps them calculate the real offshoring impact on their P&L. In many cases companies will find that, although the production cost is lower offshore, the total cost is higher.
The Reshoring Initiative tracks all reported and some private cases of reshoring and concludes that about 80,000 manufacturing jobs have been reshored since Jan. 1, 2010. If companies consistently evaluate all of the costs and risks, about 500,000 more manufacturing jobs would come back today. Current research shows many companies can reshore about 25% of what they have offshored and improve their profitability.
Readers can help bring back jobs by asking their companies to reevaluate offshoring decisions. Suppliers can use the TCO software to convince their customers to reshore.
You can reach me at firstname.lastname@example.org.
Monday, 17-06-13 10:51
We are very aggressively evaluating re-shoring fabricated components, with success. We have used "patriotism" factor to our cost base to help re-shore.
Wednesday, 12-06-13 19:22
Great article. I'd add that a group of people with just the right mix of skills is Industrial Engineers, who were not mentioned in the piece. At Rensselaer Polytechnic Institute (RPI), our IE students take required courses in supply chain, statistics, optimization and information systems; they add in relevant electives and cross-disciplinary/client-owned senior design projects. They also understand engineering economics (ROI, anyone?) and tend to be less "cubicle oriented" than many other engineering disciplines. IE is one of the lesser known engineering disciplines, but it is excellent training for demand planning.
Wednesday, 08-05-13 23:21
Some industries like healthcare are prone to sudden spikes in demand regardless of the amount of information that can be used to replace inventory. It would be interesting if a way could be found to input such parameters into the calculations.
Wednesday, 08-05-13 13:41
Its a good attempt but theoretical logistics (may I say) will also fail in providing zero inventory even with complete seamless flow of information and zero bottleneck. I have already tried that and unless you can do magic of production or movement in zero time, you can't have zero stock.
Friday, 03-05-13 01:59
Managing the supply chain in food to the highest safety standards is quite complex. As you mentioned the scandal in unlabeled horse meat in Ikea swedish meatballs, I realized that during the period that this occurred, I sat in the Ikea cafeteria with a plate of meatballs wondering how such could have been passed through without proper quality control. More so, you mentioned a significant amount of individuals passing away due to "food-borne diseases". I would never have imagined that it could affect individuals to such a large degree. Thus, as consumers, we should be aware of the products we choose to buy and where we buy them from.
Wednesday, 01-05-13 10:21
The article provided different views of replenishment in different regions of the world such as Japan, Europe and the US. I found it interesting that different geographic reasons have various methods of replenishment depending on the location, proximity of distribution centers, and cultural influences. This becomes a strong logistics issue in transporting products from DCâ€™s to retailers and a procurement issue by having the responsibility of restocking shelves multiple times a day. Although this may provide variety and increase in sales, merchandisers, in the United States, will have difficulty forecasting demand and face the possibility of overstocking and excess inventory which leads to additional inventory holding cost. I think that the idea of replenishment multiple times a day can be beneficial but it is not executable with the lack of IT systems. It would help companies to get predictive analytics tools that analyze amount of sales for particular items, time and types of customers throughout the day in order to target the specific market. Then, companies can tailor their inventory to these individuals throughout the day in order to closely mimic Japan and European models.
Tuesday, 30-04-13 23:42
I definitely agree that although machines have altogether replaced many historically labor-intense jobs, there are many instances where it is much better to have a living, breathing person to do it instead. You've outlined some good reasons for that, such as customization and flexibility, two things that machines have typically lacked, but let me add another: learning. Workers on the factory floor, the department store, or assembly line see things that upper management definitely cannot, including opportunities and problems. Many improvements can be found from simply talking to the people who do the work firsthand, and they can reveal inefficiencies and/or opportunities. Unfortunately, it is difficult to quantify exactly how valuable this learning is before it occurs, but it does make the man vs. machine debate more complicated.
Tuesday, 30-04-13 23:01
Intra-day replenishment is certainly necessary in today's world. Supply chains in every industry are becoming more structured day by day. Retail, specifically, must be able to deal with the different demands in such a competitive market. The comparison between Europe/Japan and here in the U.S. brings up a great point. However, population, technology, and distance all pose questions about feasibility. Distribution centers in the U.S. are normally located in more rural areas, and stores that need intra-day replenishment are in urban locations. Planning how to transport goods with such quick timelines is not an easy task. It will be interesting to see how intra-day replenishment becomes a popular trend and how it is implemented in retail stores that have intricate supply chains. With quick replenishments, inventory is eventually going to phase out completely. What will stores do when there is a need for a large supply of items?
Monday, 29-04-13 20:32
Food supply chains are complex pipelines with many suppliers, often making it hard for the end company to know the full transparency of their supply chain, causing the scandals we hear of today with mislabeled meat and improperly stored or manufactured food. Mr. Bowman, you brought up a great point about how it is the job of the consuming corporation to try its best to uncover the full details of its supply chain; in the end, it comes down to owing customers the responsibility and transparency that what the customers are buying are quality and safe products. One would expect that companies would learn from the past and perhaps place more quality control measures or be stricter and require suppliers to be diligent with their supply chains. Now that the FDA has passed the FSMA, industry standards will rise and companies will be required to take better preemptive measures to ensure that their entire food supply chain is clean. Like you said, the FSMA isnâ€™t an excuse for companies to stand idle while the FDA inspects food supply chains, but the act is giving the FDA greater control and ensuring that customers are getting what they expect. Before reading your post, I didnâ€™t realize the number of deaths and hospitalizations which occur from food-borne diseases, and to think that some of these numbers could be reduced from better supply chain management is motivation which customers should take to demand more transparent supply chains from businesses. As consumers, we go day-to-day unaware of where the products we buy come from, but as a population, we should gain greater awareness of the companies we buy from and what suppliers these companies use. In the end, we want to make sure we are buying from and supporting the companies whose supply chain practices we agree with.
Monday, 29-04-13 13:11
This article does a tremendous job of highlighting the key features to reduce inventory, especially those which are typically underemphasized. For example, I completely agree that the model forces "you to map your supply chain and understand what your drivers are." This is definitely the key to inventory reduction. Finally, a point is made at the end of the article - that there is no single number. I would further that point and include that even within companies, for different lines, there is not one single number and that organizations need to be aware of this during inventory reduction practices. Overall, great article.
Monday, 29-04-13 13:04
This is a very interesting read. It made me realize the difficulty in nature of a demand planner. The analytical skills required for a demand planner go way beyond mathematics and reading numbers. Rather, he/she must be able to communicate with several different organizations across the firm to see what is needed. The planner must be able to understand if these demands are feasible and accumulate the data in a presentable manner for management and suppliers. Perhaps every smaller organization in a firm should have a demand planner, to make this role less complicated. Of course, this job is different in each company. However, hiring additional demand planners could help the company be more accurate with predictions and allow for a better strategy with long-term goals.
Monday, 29-04-13 13:03
How much value do you place on forecasting within a corporation as a whole? What I mean is, would a company's time be better spent using manpower to develop other aspects of the company other than forecasting. In "The Black Swan" by Nassim Nicholas Taleb, the assertion is made that forecasting is overall a useless practice. Although it's necessary to have a goal to reach or a small scale forecast, attempting to create complex models with many variables are often shown to be no more effective than using the random walk method.
I completely agree with the last statement you made:
One fixed number for forecasting? Forget about it. But companies can still achieve internal and external alignment of the planning process through proper measuring, and an understanding of the natural biases that each function holds. As Fisher put it, â€śYou replace one number with one plan.â€ť
Overall, I just wonder whether or not spending a great deal of time on forecasting is a useful practice. Time may be better spent developing a simple forecast. Then a plan can be developed for that forecast, and even more time can be spent developing robustness to the unknown.
Saturday, 27-04-13 01:02
I believe this article hits the nail on the head. There is no perfect number in demand forecasting, but rather a range. The idea of a perfect number has been perpetuated too long in academia by such things as the Newsvendor model that promises students a Q* that will solve all their problems. Reality is much less certain. The importance of performing sensitivity analysis cannot be emphasized enough. Developing both an optimistic and pessimistic scenario is a step in the right direction to form a sort of confidence interval. However, the implementation of CPFR and the use of cross-functional teams to help in the forecasting process will definitely take demand forecasting to the next level and provide a more informed and more realistic view for the company.
Thursday, 25-04-13 01:11
As I will begin a career in inventory control in the near future, I found this article to be very enlightening. Thinking about inventory in terms of time is an essential starting point in managing inventory effectively. The ultimate goal is to have enough units of inventory on hand at any given time in order to support sales, while also maintaining a conservative amount of safety stock. The key of mapping out the supply chain and gaining a distinct insight on the drivers of the supply chain should ultimately lead to success â€“ and solve the question of how much inventory you really need. Excellent article.
Wednesday, 10-04-13 15:17
Good article that provides a means of further creating a level playing field within suppliers. Competition to decrease costs is inevitable as companies continue to source in places that provide a cost effective means. However, as the article noted this should not blind-sight a company from improving quality of service to customers. Though the savings may be apparent through a collaborative effort, competition will divert this cost savings approach to what really matters - quality and what the customers values within that company. This article noted quality as being a major concern as it should not devalue the product/service being offered. The question I have in mind is how would this collaborative effort would occur within a competitive landscape such as small restaurants, ex. come to "band together" to create competition when they themselves are trying to differentiate themselves from one another. One comment to add to this article is the importance of building strong relationships with suppliers to create trust to avoid risks of losing vital product/service information.
Wednesday, 10-04-13 15:00
The development of a one number forecast plan is possible through a consensus based approach as noted in the article. The added note that a confidence interval should surround that single demand allows for greater flexibility and accounts for demand variability and any sudden fluctuations. I do believe this consensus based approach will benefit companies of a single product. The pros to this approach is apparent as spending costs and inventory levels will be manageable. The development of a forecasting team is pivotal as well towards achieving this magic number. The FVA is a great approach to this as it accounts for maturity levels downstream. Greatly appreciate this article as it provides a means of approaching this single demand with a collaborative effort that avoids discrimination of any parts of an organization.
Sunday, 07-04-13 20:17
This is an interesting take on how a company should spend excess cash. I agree that a company should consider investing in helping and developing their suppliers because itsâ€™ business depends on the upstream supplies to continue running itsâ€™ business smoothly. In an era where specialization is prominent and outsourcing is common, companies could consider their sourcing partners as an extension of their company. In addition, helping suppliers improve their efficiencies can help both companies cut costs in future productions. However, the company should be careful on which supplier to develop and how much to invest in developing it. After all, it is possible that a company may help or even create itsâ€™ own competitor as in the case of Asus and Dell.
Friday, 05-04-13 23:08
I definitely agree with the insightful points made. Mexico does seem to be the best option due to its effect on minimizing cost in sourcing to China suppliers . Yet, this does not take in account the total cost of ownership and the level of logistical involvement. Even with all of the advantages mentioned in this article, most corporations are willing to pay the extra cost to insure that these cargos and the employees are safe. The political risks are a huge disadvantage to Mexico and their potential economic growth. The long-term effects of a company's reputation and security is not worth the extra investment to continue outsourcing to China versus Mexico.