Morai-Logistics-Need-For-Drugs

Research and Markets recently announced the release of its “Bio-Pharmaceutical Logistics Global Market Report 2016.”  The report has a detailed strategic analysis of the bio-pharmaceutical industry on a global level and provides a growth forecast for the markets of North America, Europe and Asia-Pacific from 2012 to 2020.

The scope of the report involves an analysis based on the type of transport used and in the type of product used(/transported?). The Porter’s Five Forces analysis included in the report provides an insight into market dynamics and industry competition.

The Bio-Pharmaceutical Industry Hurdles Obstacles to an Exponential Growth

The major take away from the report is that the global market for bio-pharmaceutical logistics has had major growth over the last few years. In 2014, the industry was valued at $61.1 billion USD and by 2020, it is expected to be at a value of $91.0 billion USD, growing at a CAGR of 6.9% between of 2015 and 2020.

Despite the rapid industry growth however, temperature control, regulatory compliance, security, safety and chain of custody remain the key obstacles for pharmaceutical manufacturers. It is through effective logistics that management pharmaceutical companies are able to have a constant supply of drugs, devices and equipment from various dealers and distributors in different locations.

The report also highlights some other issues that are impacting the bio-pharmaceuticals logistics industry:

  • Patent rights for several leading drugs are set to expire, meaning that large portion of sales will shift from original brand manufacturer to generic manufacturers.
  • The global pharmaceutical market has more than doubled in the past 10 years and is expected to reach 942 billion by the end of 2016.
  • Markets like Asia, Latin America and the Middle East are becoming more attractive to these pharmaceutical companies, however, these markets have the most challenging supply chains.
  • The distribution structure in European and American markets are heavily inclined towards national warehouses both regionally and centrally.

Pharmaceuticals See the 3PL Salvation

Developing warehouse structures and outsourcing to logistics service providers is the key focus with some pharmaceutical manufacturers. Low cost and greater visibility in the supply chain are the main advantages of outsourcing logistics services and is becoming an integral part of strategy for the pharmaceutical industry.

A few key findings from the report with regards to pharmaceutical logistics include:

  • Geographically, Asia-Pacific dominates the market, which is evident from the presence of key players and lower logistics costs.
  • Panalpina, DHL, FedEx and UPS are amongst the leading logistic service providers in the industry.

The report has more value than just a global industry overview. It also contains growth strategies, describes entry barriers to be considered and has competitive profiling of leading players, recent corporate developments in the industry and various business strategies adopted by them.
This makes the report an excellent tool for people looking to enter the industry and those already in the industry seeking to plan and implement their strategies in different market areas such as emerging geographies and new technologies.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

Morai-Logistics-Millenials
Every day, more than 12,000 Millennials become adults. This is an impressive number until you remember that the demographic is currently estimated at being comprised of over 80 million people, according to the U.S Bureau statistics.

Millennials, individuals born between the years 1980-1999, are now almost all adults. This means that if they are not currently in a career path, then they are most likely seeking one.

Millennials Are Not Booming to get a 3PL Job like Baby Boomers

The reason why this is important is because the supply chain logistics industry has something of a talent shortage in North America at the moment. This is a problem that will be made worse once more Baby Boomers retire as they are critically important to the industry: they make up the majority of supply chain management positions. Even if the talent shortage didn’t exist, Millennials are still predicted to make up about 75% of the workforce by 2025. That’s only 9 years for potential entry-level employees who need to be hired, trained and mentored before they can rise to the ranks of upper management—and that takes time.

With more and more Baby Boomers retiring, logistics companies will need to Millennials to fill in the gaps. However, the recruiting and retention strategies are not the same for both groups and even with this knowledge, this is still where many companies are lagging behind.

For example, EyeforTransport asked various logistics companies what impact Millennials are having on their supply chains.

Millenials Search for Meaning Beyond Their Role

When asked if the respondent’s company was prepared for a future change in workforce…ie. hiring more millennials, the following results were reported in their “Q1 2016 Hot Trends in Supply Chain and Logistics Report“.

  • 36% said yes, they have adjusted their on-boarding to reflect millennial values – technology, innovation, data-driven, ownership, etc.
  • 25.5% said yes, and there is no need to change our current practices of on-boarding
  • 17.6% said no, but they have plans in place to do something to ensure our business is aligned with this workforce
  • 12.1% said no, and they don’t have a plan as of yet
  • 8.8% answered they didn’t know

When it comes to hiring and retaining Millennials, several articles give lists that are built around two-way communication between the employee (or prospective employee) and the company.

Millennials are very interested in job perks but not necessarily the ones that traditionally come to mind such as set annual raises and a structured schedule. Instead, a job that provides the employee a rewarding challenge built on problem solving and with a clear indication of the value of the role is much more appealing to a Millennial employee.

Flexibility is also another job perk that is of interest to Millennials and not just in regards to hours. Flexibility in workload is very important as Millennials are used to a culture of collaboration and communication of ideas from everyone, not just from those at the top.

As Millennials make up more and more of the workplace (between 25 – 50% at some companies), it will be critical that supply chain companies not just entice them to sign on, but also to adapt their retention strategies toward a mutually beneficial arrangement built on communication and innovation.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

RMS Inc., a risk-modeling firm, recently released a report that looks at the top ports at risk of a disaster. The predictions are primarily based on cargo type (e.g. autos, bulk grains, electronics, etc.), precise location, storage infrastructure and the dwell time.

The report was released a year after the Tianjin port explosion in China, a man-made disaster that led to more than $3 billion in claims after damaging property, disrupting supply chains and killing more than 170 people.

This month we decided to focus on the most at-risk international ports.

8 Interesting Facts about the Most At-Risk International Ports

morai-logistics-8-interesting-facts-about-at-risk-international-ports

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

Morai-Logistics-Cold-Chain

Being well into the summer, we thought we’d take a moment to look at the challenges faced by an often under-appreciated branch of our industry: cold chain logistics. We might find it difficult to stay comfortable in the hot summer months, but it is the job of those involved in cold chains to ensure that the temperature sensitive cargo of their clients not only arrives safely but also fresh (if food or drink), or viable (if pharmaceuticals).

Cold Logistics turning into Gold Chains

A recently published report, titled “Global Food and Beverage Cold Chain Logistics Market 2016-2020” by Technavio defines a cold chain as “a temperature-controlled supply chain process used to maintain ideal storage conditions for different products and commodities.” The report details that cold chains,

…provide temperature-controlled warehouses for surface storage and refrigerated transport vehicles for physical distribution of products at optimal temperatures. It is used widely to store and transport fruits, vegetables, drugs and medicines without spoilage. Cold storage increases shelf life and maintains product quality.

As you can imagine, there are a lot of items that require a cold chain for it to arrive in a satisfactory/sellable state. This is why the global food and beverage cold chain logistics market is estimated to grow at a CAGR of 11.18% in revenue between 2016 and 2020, according to the report.

Cold Chains Turnaround for Emerging Economies

A researcher for the report noted that much of this growth is coming from emerging economies such as those of India and China, despite the industry still being in its developmental phase. This is the result of the high populations in each country. India’s tropical temperature also makes it one of the leading producers of food grains and food products worldwide.

Given the climate of some emerging economies, lack of proper infrastructure, the presence of minimal logistic support and lack of proper warehousing facilities, a substantial wastage of food products in these countries means that proper storage and cold chain logistics would greatly benefit these economies. Other factors affecting the need for proper storage and cold chain logistics include limited presence of service providers and lack of skilled workers.

The Technavio report goes on to state that:

According to the United Nations Environment Programme (UNEP) and World Resources Institute (WRI), about one-third of the food produced every year is wasted. Fruits and vegetables are products that are wasted the most; about 25% of them are wasted at the production level. In addition, perishable food products are often exposed to fluctuating temperatures during transit and handling, which adds to the wastage. The global population is expected to increase at a rapid pace in the future, which is expected to increase the demand for food products.

Although the cold chain market continues to grow, it isn’t without its hurdles. Lisa Terry highlights in her article of ten trends that are putting a damper on the growth of cold chain logistics.

Cold Supply Chains still shackled

Among the issues highlighted are that cold chains are becoming more global, there’s an increasing focus on quality and product sensitivity and the rising regulations in places like the EU. Other trends she notes are driver shortages and capacity restraints, fluctuating fuel pricing and subsequent mode shifting, and the industry drive to adopt better and upgraded technology

So while you’re busy trying to find some shade, or a place with the right level of air conditioning, remember the people whose job it is to keep things cool whether it’s ensuring that a bag of ice arrives intact to your local super market or life-saving medicine arrives where it is needed most. The world is a better place because of cold chain logistics.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

Morai-Logistics-Blog-3-Supply-Chain-Tech

It’s safe to say that most people realize the benefit of supply chains. Pretty much everything a person living in an industrialized city or country encounters in their day-to-day life encountered a supply chain.

From fancy new technologies such as the latest Apple products to the Starbuck’s grande coffee someone orders and pretty much everything found under the Christmas tree is a result of the supply chain.

It can be easy to take the benefits of supply chains for granted as their effects are so universal and pervasive in our lives. However, it is important to remember that the technology and structure that the logistics industry is based on is continuously evolving and looking for new ways to improve.

Three different ways that supply chain technology connects the world are: software technology, hardware technology and digitalization. These three sectors of the supply chain technology work together to bring the world closer together and also make it more awesome!

1. Software technology

Software technology has had a great impact on the infrastructure of logistics: it has greatly improved areas of processing, tracking transactions, planning, scheduling and managing. Due to collaboration with software technology, the supply chain is truly integrated, visible and more efficient.

According to Melissa Jun Rowley, in her Cisco article titled Supply chain digitization and positive impact, software technology has impacted supply chains in the following ways:

  • Transaction processing — Reducing manual work and costs, improvement of information quality, speeding up of information transfer and having a higher volume of transactions used to drive the use of IT for transaction processing,

  • Supply chain planning and collaboration — Information is used for running processes such as demand forecasting, production and distribution planning, procurement, sales & operations planning (S&OP), as well as VMI and CPFR initiatives that benefit both a company’s internal and external supply chains,

  • Order tracking and delivery coordination — For tracking the progress of orders or deliveries and providing this information to interested parties,

  • Supply chain analytics — Provides supply chain members with improved data accuracy, clarity and insights, which can lead to more contextual intelligence to be shared across supply chains.

2. Hardware technology

It’s difficult to believe that many of the gadgets from popular sci-fi shows of old such as Star Trek, that were once non-existent, are now common place in distribution and fulfillment operations. Automated equipment ranging from forklift trucks and carousels to Kiva robots move material quickly and efficiently through a facility to satisfy customer orders (rather than plotting the downfall of humanity). Other tools such as bar code scanning and RFID increase not only speed of processing but also accuracy to a degree far beyond the capabilities of their pen, paper, and human predecessors.

Likewise, in the world of transportation, GPS and telematics now provide data that improves the efficiency of product delivery. Where a driver once fumbled with a map when delivering cargo to a new location or site, now he or she can check the GPS for the optimal route.

3. Digitalization

The digitalization of the world (the Internet) has helped enable consumers to be informed about the products they purchase. NGOs, consumer groups, and individual consumers can analyze data through website and mobile apps to see which brands are sustainability-conscious.

Workers can also utilize mobile apps to report work-related grievances.

Supply chains make the world go round, that’s plain to see for anyone living in an industrialized community. What’s important to remember is that thanks to the continuously evolving technology that they’re built on, it’s also making logistics more efficient.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

morai-literally-visual-supply

Last week, we discussed how augmented reality technology (VR) had begun shaping innovative new ways to improve the operation of warehouses and supply chains overall. This week, we would like to take some time and focus on virtual reality (VR).

The applications for VR are already varied. Military services have been using it in training for a number of years, it’s been used for architectural and urban design, and for the treatment of phobias. However, video games are still where this technology will likely be the most commercially viable.

Video games have evolved a great deal since the days of Pong and the original Super Mario Bros. In more recent years, extremely complex concepts have received game adaptations that have allowed someone not versed in the relevant fields to gain an understanding of the topics without years of study.

Two notable examples are Foldit and No Man’s Sky. Foldit is an online puzzle game about protein folding. User submitted solutions have led to important leads in biological innovations and the fight to eradicate deadly diseases.

The purpose of the upcoming No Man’s Sky is rooted in entertainment, but the way it’s game world (universe really) was created is fascinating. The small team of programmers used artificial intelligence and procedural generation to self-create an entire galaxy with over 18 quintillion unique planets complete with their own geography, ecosystems, flora, fauna, and structures) for users to fully explore. The scope of the game has given some who have tried the demo a fuller appreciation of the size of the cosmos, and understandably a bit of existential angst.

VR technology, used in a similar to the aims of these games could present two unique possibilities for the logistics industry.

A Logistics World in VR

The first possibility is that crowd-sourced solutions to problems in specific pain points could be found. Everything from dealing with complicated socio-political unrest in a key supplier, to better pick paths within a distribution center could be structured as a game and new best practice solutions gleamed from the results. The advantage of VR over traditional virtual modeling is that users would be able to test out their solutions and experience three benefits that Cliff Holste of SupplyChainDigest identifies:

  • Gain understanding of complex multiple variables and their impact on operations
  • The ability to perform time-phased analysis, seeing
  • The ability to easily perform multiple “what-if” analyses and understand the impact of different operational scenarios

The No Man’s Sky approach is also another possibility that the logistics industry could wherein VR would be used to give customers a fuller, more comprehensive appreciation of all the moving parts that are involved in a supply chain. Basically, granting customers the ability to literally visualize the supply chain.

McDonald’s UK is trying something similar to this with its ‘Follow the Footsteps’ campaign it launched this year. With it, the company aims to inform the public about the work that goes between the farm to your plate by allowing users to experience a variety of jobs (from tractor operator to cashier) all along the McDonald’s production chain through the Oculus Rift.

It might a few years before VR is fully embraced in the commercial sphere, and probably a bit longer before it is embraced by the logistics industry. However, looking at other industries that have adopted the technology, it’s clear that VR will be a key area of potential growth in the 21st century.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

morai-logsitics-ar-supply-chain

If you’ve been to any public places the last two weeks, then you’ve seen children and adults wandering around pointing and swiping at their phones. This is because of the new app Pokémon Go, an augmented reality game where people hunt, capture, and battle adorable creatures that they can find just by walking outside. The app has been out a short awhile, but has already reached meteoric levels of popularity as, just a day after it was available, it was already installed on more US Android phones than Tinder.

The application of augmented reality (AR) technology isn’t limited to gaming. Aeronautics and automotive manufacturers have been implementing AR with heads-up displays for years. Although, it is only now that the technology is seeing more commercial use as wearable AR technology is becoming more affordable. In fact, AR is predicted to become a $90 billion industry by 2020.

Even for just next year, the value of AR is estimated to be over $6 billion with industrial sector (manufacturing, distribution, and logistics) seeing the largest utilization of the technology.

What is augmented reality technology?

“VR is complete immersion in a virtual world – with no outside stimulus. VR is much more common and is mostly used in gaming and entertainment. AR is technology that alters what the wearer sees in his/her reality” writes blogger Kristi Montgomery in this TalkingLogistics post. The alterations to what a user perceives can be made to motivate towards a behaviour, such as with Zombie, Run!, a phone app that turns real-world running into a game, or it can provide useful information real-time like in the case of DHL’s successful pilot project which tested smart glasses and augmented reality in a warehouse in the Netherlands.

AR in Action

DHL recently published its results for the pilot program it conducted in collaboration Ricoh and Ubimax which had staff in a Netherlands warehouse be guided by graphics displayed on a smart glass.

The aim of ‘vision picking’ was to reduce errors and increase efficiency which the project did very successfully as it resulted in 25% efficiency increase during the picking process. Because picking tasks accounting for 55% to 65% of the total cost of warehousing operations, the potential value of that the efficiency adds to picking is huge.

Given the value that AR can add to a supply chain, it is no surprise that DHL is not the only logistics company that is trialing the technology. The AIMIA Institute described another example in this post “In the middle of last year, Active Ants reported similar results from when they equipped their stock pickers with Google Glass. Active Ants used Google Glass with a custom-built app and they saw an efficiency increase of 15%”.

There are still several barriers to the wide-spread implementation of AR technology in logistics to be sure, but it is clear that there is also lot of potential value in it as well. As the cost and efficiency of the technology evolves, so will the innovative changes that VR can offer to supply chains.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

It’s been two weeks since the United Kingdom European Union membership referendum was held in the UK. In what surprised many political analysts and commentators, a majority of British citizens voted to leave the EU with 52% percent in favour of leaving and 48% in favour of remaining.

This month, we’re focusing our eBook on how this change will affect the logistics industry both now and in the future as the United Kingdom prepares to leave the EU.

Looking at Current and Future Cost of Brexit for the Logistics Industry

morai-logistics-ebook-brexit-and-logistics

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

morai-logistics-blog-omni-channel-fulfillment

With so much discussion over omni-channel fulfillment being the future, it is interesting then that only 19% of the top 250 retailers are currently fulfilling omni-channel demand profitably, according to a new the third annual Sands Future of Retail Report.

Despite such a small percentage of top retailers making a profit from omni-channel fulfillment, the service is in high demand by customers and growing.

For example, for nine out of ten consumers, free shipping was reported as the top incentive to shop more online. This number has grown to become the top consideration. One-day shipping (69%) and free returns (68%) also continue to be top drivers.

The Future of Retail and Logistics

There were other key findings of note in the study:

  • Nearly a third of consumers (31%) now shop online at least once a week, an increase of 41% from two years ago.
  • Only 9% of consumers have used same-day shipping in the past year, but almost half (49%) say same-day shipping would make them shop more online if it were offered more frequently.
  • 40% of consumers expect to receive their first drone-delivered package in the next two years or less. Less than a third (31%) think it will take more than five years.
  • Among consumers who don’t trust drones to deliver packages, theft and damaged packages are the top concerns (72% each), but safety (68%) and privacy (60%) seem less risky than they were a year ago.

A theme throughout the study from customers was the expectation of greater and greater speed of the supply chain. This can be seen by the finding that consumers who shop online more than twice a week are twice as likely to be persuaded by same-day shipping as consumers who shop online only a few times a year (63% vs. 32%).

The main reason that so few top retailers are yet to make a profit from omni-channel fulfillment is simply that they have yet to figure out how.

According to the 2015 Third-Party Logistics Study, fully one-third of all respondents (nearly 800 manufacturers, retailers and 3PLs) say they’re not currently prepared to handle omni-channel fulfillment.

Tim Foster, managing director, Asia-Pacific, with supply chain consulting firm Chainalytics weighed in on the discussion.

“Forester believes manufacturers and retailers will address this market transformation by eliminating non-value-adding activities within the supply chain. He cites the example of pharmaceutical distribution, where the traditional supply chain flow from manufacturer to wholesaler to retail pharmacy is being replaced by either a direct flow from manufacturer to retailer, or a loop with the 3PL in the center” summarizes Material Handling and Logistics News in this article.

3PLs have some time to catch up to customer demand. Privacy and security concerns are hampering the demand for omni-channel distribution in the areas of mobile phone payment. “This could explain why adoption has essentially remained flat year over year, with about a third of consumers having used these applications. Still, U.S. mobile payment transactions are expected triple in 2016 to $27 billion, a sign that a few eager early adopters and the growth of Apple Pay could eventually force more widespread changes in consumer behavior” concludes the article.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

Morai-Logistics-Blog-Old-Coffee

Nine years ago, several coffee beans of the higher quality Arabica variety were stashed away and forgotten about. At the time, there was a period of oversupply you see.

As the coffee beans sat in the warehouse, they lost their quality and with it their value. In fact, the value of the coffee beans has dropped so much that they are essentially free for anyone that can find a use for them.

“For instance, coffee that’s been certified by the ICE Futures U.S. exchange that goes unsold for 121 days costs half a cent cheaper per pound, according to the Journal. For three years, the cost falls 35 cents per pound. Coffee that’s nine years old is a whopping $1.55 less per pound, which makes it pretty much free since arabica coffee futures were at $1.37 a pound as of Monday” writes this article in Fortune.

Good ‘Ol Coffee Bean Logistics

For some context, 2007, when the oldest of the beans became stored away, was an interesting year. The Writer’s Guild of America went on strike impacting many popular shows, Vladamir Putin was announced as Time magazine’s Person of the Year, and Steve Jobs revealed the first generation of the iPhone to the public.

The coffee beans and their journey from valued commodity to essentially chaff is an example of the problem of inefficient supply chains. Because of a mismanaged glut, old coffee beans circa the Bush administration are just now leaving their home warehouse.

Coffee connoisseurs don’t fret! You’ll likely not have to worry about stale coffee the next time you go for a cup of Joe at your local Starbucks or Starbucks equivalent. Despite the super sale on these beans, they are ultimately not destined to for Starbucks (or any other upscale caffeine providing establishment). This is because many coffee roasters said they wouldn’t purchase beans that were more than a year old because they lose their flavor.

You’re not going to see this in your Starbucks, ” according to Jorge Cuevas, chief coffee officer at Sustainable Harvest, a coffee importer, in an interview with the Journal. “It’s mostly going to be in generic brands that you might get at an institutional level.”

These beans will go to bulk and instant-coffee roasters, and eventually to companies that supply most institutional coffees for places like hotels, schools, and vending machines. They may also combine older beans with newer ones, or roast them longer to mask the taste.

The use of older beans isn’t uncommon. However, coffee beans are not usually this old. The quantity of these beans has also had an impact. “According to exchange data, 18% of exchange-certified beans were more than three years old at the end of May this year, compared with 11% in May 2013” points out this article from the Consurmerist.com.

At least the beans are being put to use. The cups of Joe made from them may not have the flavor of brews made from newer beans, but at least a person in need will be getting some caffeine.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.