Social-media-for-public-relations1We’ve reached a point in society that people’s parents and even in some cases their grandparents are getting social media savvy! It is no surprise then, that these social media developments is something that businesses can no longer ignore; logistics and supply chain industry or otherwise.

This week’s blog post will focus on two case studies that show how both social media application and mobile technology is affecting the logistics and supply chain industry in an interesting way.

Twitter is Making Truckers Healthier

Fronetics released a post this month on how an interesting development on Twitter has trucking companies leveraging social media to both save money and take care of their staff. According to the article, both obesity and sleep disorders (i.e. sleep apnea) are the primary health risks for truckers and end up costing their employers $190.2 billion in medical spending. According to the Journal of Occupational and Environmental Medicine, obese truckers had an annual average total health care cost of $1,944, compared with $1,755 for overweight truckers and $1,131 for normal-weight drivers.

So how does social media come into play? Well, a 42 year old trucker with over 20 years of experience decided to use Twitter as a venue to track his progress to adopt a healthier lifestyle on his journey from being the typical statistic of an unhealthy overweight trucker to a healthier, and happier, trucker.

He started an account as @urbanhauler and, using the hashtag #fittrucker, captured the attention of over 1500 fellow truckers (based on his follower list alone). This spurred Jarred Martin of Speedy Transport to secure a new job opportunity while continuing his quest to change the habits of truckers everywhere.

Google’s Uber Taxi App Expands with UberRush

Source: Uber
Source: Uber
There is a new face in the traditional parcel deliver services, and logistics companies are taking notes. Uber, a San Francisco based venture focusing on on-demand transportation services best known for their vehicle-for-hire or ridesharing app by the same name has expanded in NYC by launching Rush. Rush, or Uber Rush, extends their ridesharing model to a package delivery service. Uber Rush uses bike and on-foot messengers to get your belongings from origin to destination.

It works by having users request a messenger at your location via the Uber Rush app. A chosen delivery person will then arrive to collect your delivery instructions (via bike or foot), then take your package to your destination. Both the sender and recipient can track the location of the package via the app. How’s that for taking logistics services straight to the masses?

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Morai-Canada-Day

The Morai Logistics Team wishes you a Happy Canada Day! To celebrate, here’s a link to the (albeit older) resource from our very own Government of Canada’s State Logistics – The Canadian Report:

Source: Industry Canada
Source: Industry Canada

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Source: Wikimedia Commons
Source: Wikimedia Commons
In the recent years, China and Mexico have been battling to be the prime hub spot for logistics operations in North America. While there are still advantages of offshoring to China, for example their already established work force and prime manufacturing facilities, when it comes down to it cost and time are the prime factors for the change. We will be discussing the expected advantages for nearshoring as well as present some statistics that support the trend that suggest that nearshoring, especially for companies that are looking to build manufacturing plants, is the better option.

Top 5 Expected advantages of Nearshoring

Inbound Logistics Magazine released and analysis of the status of the logistics and supply chain industry in Latin America. Below is an excerpt of survey respondents based on research by AlixPartners of the top five expected advantages of nearshoring:

  • Lower Freight Costs
  • Improved Speed-to-Market
  • Lower Inventory Costs
  • Time-Zone Advantages
  • Improved Cultural Alignment with North American Managers

Nearshoring is becoming more and more attractive as geopolitical changes, and factors such as rising fuel costs, have been affecting the main attraction for China: lower total cost for logistics operations. By 2015, China’s wages are expected to rise to $6 USD, and by this point it will no longer be cheaper than Mexico’s flat wages.

3 Statistics on Mexico as an Advantageous Nearshoring Move

Statistics since our initial post on our case study exploring Mexico as a prime logistics hub has shown that the trend to nearshore is not just very real, but also becoming more and more attractive. Logistics Management’s report exploring how US manufacturing costs are now equal to Mexico and how costs will be equal to China by 2015 seem to be confirmed as we near 2015. The following are statistics that we found that further solidify this trend:

1 – The full landed cost of Chinese production rose from 2005-2010 to 87% of US costs, while Mexican costs fell to 75% of US costs.
Source: Lilly and Associates

2 – Ocean freight from Altamira, Mexico to the port of Miami takes 6 days while a similar shipment from China can take up to a month to arrive.
Source: Lilly and Associates

3 – China’s fuel costs grew at approximately 20 percent per year in the past few years.
Source: Supply Chain Brain

China has some challenges to compete with the attraction of nearshoring to Mexico, and indeed efforts are being taken in order to control the rising fuel costs and the new minimum wage standards in order to remain a strong competitor as an offshoring option for North America. But the concept of nearshoring is now not just a real avenue of exploration, it simply cannot be ignored for those in the North American logistics and supply chain industry.

If you’re interested in finding out more Mexico as a solution for your logistics and supply chain needs, check out our white paper on Mexico and Third Party 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!

DictionaryThis Logistics Glossary Post is going to focusing on order fulfillment in the supply chain. In the logistics industry, we look at order fulfillment as a way to de-couple the supply chain and is especially important for companies that either offer product customization and/or have a variety of different products to offer. Looking at order fulfillment to minimize the amount of steps take along the supply chain and mitigate the impact of variety both on cost and time to produce.

Order Fulfillment

Hal Mather published a book called Competitive Manufacturing and pioneered the research behind order fulfillment. He was also responsible for defining the order fulfillment strategies that we are defining below:

Engineer-to-Order (ETO)

Definition: Engineer-to-Order refers to products that are designed and built to customer specifications. For example if I wanted a custom car built from scratch, a company that specializes in that service would have an engineer-to-order car. Companies that use this approach usually large construction projects or companies that offer one-off products such as the example above.

Build-to-Order (BTO)

Definition: Build-to-Order, also known as Make-to-Order (MTO), refers to products that have a standardized built. This means that the basic build of the product is the same throughout, but the production of components and the manufacturing of the final product is linked to the order placed by the final customer’s specifications. This is usually seen in the automotive industry, where customers can customize certain aspects of the car model that they have chosen to purchase (i.e. colour, type of interior, etc.).

Assemble-to-Order (ATO)

Definition: Assemble-to-Order products are built to customer specifications based on a list of items (i.e. a stock of existing components). This means that the base product itself has the type of architecture to allow the final product to be configured in such a way that the components can fit. The most common place this is seen is in electronics like laptops where you have the option to choose your hard drive space, the amount of memory, the type of graphics card, etc.).

Make-to-Stock (MTS)

Definition: Make-to-Stock, also known as Build-to-Forecast (BTF), is a production strategy that is most commonly seen in grocery stores and retail. The product is manufactured as is with no customization and its production is built against a sales forecast.

Digital Copy (DC)

Definition: Digital Copies are as they sound, the products are digital assets and inventory is maintained within a single digital master (i.e. source). Copies are created based on the demand and customers can download and save products on their storage devices. A common example is an e-book, where a digital copy is bought and downloaded onto an e-book reader for consumers to use.

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!

Today we have created an infographic to shed light into what supplier diversity is and to highlight some quick facts about how the women-owned and other minority-owned businesses have been progressing in the recent years. We also cover the spending trends with regards to the investment of companies into supplier diversity programs.

The benefits of supplier diversity go beyond the “social good.” We are now at an age where companies are starting to find that supplier diversity programs can be fiscally beneficial. A study from the Hackett Group showed that companies that “focus heavily on supplier diversity” generated a 133% greater ROI when it comes to procurement than the typical business. And this is just the beginning, scroll down to see more facts about supplier diversity.

Supplier Diversity and the Logistics Industry

Morai-Logistics-Infographic-Supplier-Diversity

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Tulips_On_Park_AveHave you ever wondered how flowers arrive at your doorstep? Flowers are an iconic symbol and even something as simple as a rose can have several different meanings behind the gesture of giving someone on. For example, whether or not you give one or a bouquet, and even the colour(s) you pick matters. Flowers can even be part of a grand gesture, like the Canadian Tulip Festival where the Dutch government sends 20,000 tulips to Canada every year (10,000 from the Royal Family and 10,000 from the Dutch Bulb Growers Association) due to Canada-Netherlands relations in WWII. Since Mother’s Day is this weekend (at least for Canada and the United States) we thought we would focus on the logistics of flowers, both in how flowers arrive to the flower shops these days as well as how flowers arrive at your doorstep.

Rising Freight Costs and Flower Shop Woes

Have you ever wondered where these florists get their flowers? Well, they’re not just grown in the back! In fact, even though traditionally flowers have come from local sources within the community (i.e. nearby flower farms), these days they can come from anywhere. In an interview with Jim McCann – the owner of 1-800-flowers.com – on Bloomberg, he mentions that 80% of the flowers in the West come from Colombia now because of a free-trade agreement that allowed thousands of different Columbian products, flowers included, tariff-free entry into the American market. This in contrast to a couple of years ago when 75% of flowers were supplied locally/domestically.

The difficulty in flower logistics is that, while they are a beautiful gift, they are expensive and dead in a day. In fact, flower production in the US is going up because of rising freight costs. Many small businesses in general are affected. In Canada, for example, the cost of ground transportation has risen ~9.5% since February 2011. The preservation of flowers is actually much better these days due to improvements in the cold supply chain, with flower preservation doubling in just the past 5 years.

Getting Flowers to Your Doorstep

since the delivery conveniences of companies like Amazon, and the conceptualization and development of same-day delivery, consumers are all about the now. They want their products, and they want it ASAP (and it has to be cheap!). Flowers are no different, the biggest strategy that florists have when it comes to high-demand periods like Valentine’s Day and Mother’s Day is partnering with local florists to handle product orders.

And with that, we’d like to leave you with how much the flower industry is worth on Mother’s Day:
Source: ftd.com

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!

DictionaryOur mission to provide little tidbits on the vast library of logistics terminology month by month continues! We love to educate those who are interested in logistics to know more in manageable chunks. This month’s Logistics Glossary Week post is on food logistics. What kind of terminology along the supply chain are used when transporting goods? This post on food logistics terminology is going to focus on regulating edible perishable goods.

Food Logistics – Part I

One of the main challenges for companies that have to deal with food transport is ensuring that the food coming from the origin stays fresh throughout its journey to its destination, no matter what the distance. On top of that, these perishable food items also have to arrive with enough time to be on store shelves and stay unspoiled for a particular amount of time to be bought and consumed by customers. Below are some terms that are commonly used in food logistics related to maintaining a level of standard (from origin and throughout the supply chain) for food once it hits the store shelves.

Food and Drug Administration (FDA)

Definition: The Food and Drug Administration, or FDA, is an agency of the United States Department of Health and Human Services. The FDA serves to protect and promote public health of food safety, pharmaceutical drugs (both prescription and over-the counter), as well as various other consumable goods like tobacco products, medical and veterinary products and devices, etc.

Every country has their own set of rules and regulations (e.g. the Canadian Food Inspection Agency enforces Canadian Food and Drug Regulations) and it is important to consider these as a logistics company as some differences can alter how a product should be transported and handled. This is why when doing food-related cross-border logistics, it is important to be aware of these governing bodies and their regulatory requirements.

Standard Operating Procedure (SOP)

Definition: Standard Operating Procedure, or SOP, in the general sense is a detailed written set of instructions for a process that must be followed to ensure standardization and compliance.

In the world of food logistics, the SOP of food is based on the type of food product and the recommendations of the governing body that regulates its best practices. This is important as it is the responsibility of companies that offer food or perishable edible goods to be able to ensure a consistent and desired outcome for the end consumer.

Hazard Analysis and Critical Control Points (HACCP)

Definition: Hazard analysis and critical control points, or HACCP, is a food safety system based on the principles of identification, evaluation, and hazard control. It is more of a systematic preventative approach to food safety, as opposed to a finished product inspection.

Time and Temperature Control for Safety (TCS)

Definition: Time and temperature control for safety food items, or TCS foods, are as the term suggest; food that needs time and temperature control to prevent a product from becoming unsafe due to biological hazards.

Food that is normally regarded as TCS foods are those that are high in protein, are moist, or are moderately to slightly acidic. Some regulating bodies recommend that these products be labeled.

Source: foodprotection.org
Source: foodprotection.org

The above example is from the International Association of Food Protection and serves as a label for potentially hazardous food that requires time/temperature control for safety.

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!

3 Reasons to Partner with a 3PL Provider
3 Reasons to Partner with a 3PL Provider

Why do companies look to outsource their logistics processes? The primary reason is that companies expect third-party logistics providers (3PLs) or logistics service providers (LSPs) to run all transporting and warehousing operations more efficiently, and at a lower cost, than they can run it themselves. The services that 3PLs provide can include all of the steps along the supply chain from origin to destination depending on the type of partnership. Furthermore, multiple 3PLs can take care of different aspects of your logistics needs (one that specializes in small package deliveries for one product line and another for larger shipments, etc.).

Take advantage of this free white paper today to learn about the logistics and supply chain industry by filling out this form below. If you subscribe to our content by checking yes (it’s optional!) to our e-mail subscription form will send you updates on our next White Paper or other digital assets as they become available. We will also never share your information.

This White Paper focuses on:

  • Benefits of outsourcing third-party logistics services.
  • What makes a 3PL provider a good one.
  • Current state of the logistics industry for 3PL.
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Source: Wikimedia Commons
Source: Wikimedia Commons

We’d like to kick off April with our Industry Focus Week post on reverse logistics. You may have seen lots of news in the past little while about the benefits of reverse logistics, and how emphasizing strategies on reverse logistics is a good thing. But what exactly is reverse logistics? We thought that this month we would focus on answering that question for our readers.

What is Reverse Logistics?

According to The Council of Logistics Management, the official definition of reverse logistics is:

The process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal. More precisely, reverse logistics is the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. Remanufacturing and refurbishing activities also may be included in the definition of reverse logistics.

In layman’s terms, reverse logistics is essentially all logistics operations related to reusing products and materials. Contrary to normal logistics processes, which focuses on bringing products towards the customer (i.e. origin to destination), reverse logistics goes at least one step back in the supply chain. For example, having products or goods move from the customer to the manufacturer or distributor. The process of reverse logistics creates its own challenges, as certain factors can affect how goods can be taken backwards through the supply chain cycle (e.g. cross-border issues), hence the importance of creating a proper reverse logistics structure.

Looking at its most salient model, reverse logistics in the retail industry is the process by which customers return their products.

Why Is Reverse Logistics Important?

The importance of reverse logistics is mostly based on industry, but the average manufacturer spends 9-15% of total revenue on returns. It can be seen by certain companies as a hidden cost, but it can be a very real one based on industry and involves processes where vendors convert liabilities into either reduced liabilities or viable assets (i.e. it’s more than just warranty and basic logistics processes).

Industries involved in retail are obviously the most affected by reverse logistics risk management, as 95% of customers will not buy from a company if they have a bad returns experience. Thus, focusing on reverse logistics is an important, and sometimes unseen, customer service opportunity that many businesses have yet to properly leverage. US-based experts have suggested that companies with best-in-class reverse logistics capabilities average a 12% advantage in customer satisfaction, which leads to better retention and a higher rate of return (customers).

Process Improvement Strategies

Reverse Logistics Magazine released a great list of reverse logistics elements that can be modified and improved for optimizing the reverse supply chain:

  • Gate keeping
  • Compacting Disposition Cycle Time
  • Reverse Logistics Information Systems
  • Central Return Centers
  • Zero Returns
  • Remanufacture and Refurbishment
  • Asset Recovery
  • Negotiation
  • Financial Management
  • Outsourcing

They also highlighted the importance of updating warehouses with reverse gear. This essentially focuses on equipping warehouses with the capability to accept returns, process, repair, and replace products coming in through the reverse supply chain cycle. So if your company involves any form of reverse logistics, these factors can be the difference of having your end step (i.e. customers) experience improved.

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!

DictionarySpring is here! What better time to continue our end-of-the-month Logistics Glossary Week posts, to continue our mission to provide all who are interested in our industry to get savvy with our terminology. This month we’re going to continue our Border Crossing Logistics Terminology series!

Border Crossing Logistics Terminology – Part II

This month’s focus we’re going to be taking a more basic look at what cross-border logistics is all about and focus on the kinds of governmental initiatives that are involved in various cross-border logistics processes.

Cross-Border Logistics

Definition: The definition of cross-border logistics is pretty intuitive. It is simply any logistics processes that involves moving goods from one geographic boundary, usually separated by political entity (i.e. political entities or legal jurisdictions such as governments, sovereign states, federal states, and other applicable subnational entities.

As borders that separate these regions have their own system of governance, third-party logistics companies that specialize in cross-border logistics can take away any potential chaos with regards to compliance and the required documents to get your goods across from origin to destination.

North American Free Trade Agreement (NAFTA)

Definition: The North American Free Trade Agreement, or NAFTA, is an agreement between Canada, the United States, and Mexico. It was created in order to allow easier trade between the borders of each participating country through an ease of customs, regulations, and arguably most importantly: tariffs.

Because of the advantages that NAFTA offers to the participating North American countries, Canada and Mexico have been and currently maintain their place as two of the largest trading partners for the United States, and vice-vera.

Customs-Trade Partnership Against Terrorism (C-TPAT)

Definition: The Customs-Trade Partnership Against Terrorism, or C-TPAT, is a voluntary supply chain security program. Headed by the US Customs and Border Protection, it was launched in 2001 in order to improve the security of private companies’ supply chains with respect to terrorrism.

Companies who participate in the C-TPAT certification program undergo a documented process for determining and alleviating risks throughout their cross-border supply chain processes. The benefit to this program is that participating companies are deemed low-risk, and are eligible for expedited processing of cargo which in turn leads to fewer customs examinations.

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!