Outsourcing is business strategy of contracting work out to a third-party. Companies use outsourcing to gain access to cheaper labour, larger specialized labour pools, and/or obtain other benefits through an economy of scale. The term encompasses both the setup of a subsidiary, and the off-site activities of a company.

For decades, companies used outsourcing strategies to meet the needs of their business, but it was not formally identified as business strategy until 1989.

The three main types of outsourcing are: offshoring, nearshoring, and reshoring in the logistics and supply chain industry. The main difference between them is the location of the third-party. Each has its own benefits and costs, but because of the dynamic nature of global political-economy these are always changing.

We created this eBook to kick off 2017 to clarify why companies choose a particular offshoring option over another. This way, you can see how manufacturers think about these strategies.

What is the Difference Between Logistics Oursourcing Options

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Choosing Shoring Options

There are many advantages to outsourcing certain jobs and functions—cost advantage, access to bigger pools of skilled labour, increased efficiency, and saving on infrastructure and technology. However, the biggest advantage is that it allows your business to focus on core areas. Your business will be able to spend more time on building its brand, R&D, and providing higher value added services.

Offshoring, nearshoring and reshoring each have their own distinct advantages and disadvantages. Though, what will work best for your business will depend on its goals and core competencies. Talking to a third-party logistics provider is a very useful way to learn more about sourcing options.

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-blockchain-logistics

The Port of Rotterdam tests blockchain logistics which can kickstart a revolution in the level of transparency within the industry.

The Port of Rotterdam, Europe’s largest shipping port, is taking part in a Blockchain consortium which is focusing on logistics, reported Coin Desk. The project has the support of more than fifteen public and private sector companies based in the Netherlands.

Consortium members will spend the next two years designing and developing applications for blockchain technology in the logistics sector. There have been similar efforts in the past, but according to the founders, this blockchain project is unique because of its scale in the logistics chain.

What is Blockchain Technology?

According to the Economist, a blockchain is a distributed database that maintains an ever-growing list of records called blocks. The information in a block cannot be altered retrospectively as each block contains a timestamp and a link to a previous block. The nature of blockchains makes it function like a public, digital, distributed ‘ledger’.

The technology is relatively recent having first been put into practice by Satoshi Nakamoto in 2009 as a core component for the digital currency known as bitcoins.

Since its debut, blockchain technology has had a disruptive impact on several industries. Financial technology was the first to start adopting blockchains, but its started to move into the logistics sector as well.

How Blockchain Technology Can Benefit Logistics

There have been several articles published online about the benefits blockchain technology can bring to the logistics and supply chain sector. Here are a few ways the technology can improve the industry.

  • Transparency for customers. For most people, little is known about the products they use. As LetsTalkPayment.com phrases it, “an almost incomprehensible network of retailers, distributors, transporters, storage facilities and suppliers stand between us and the products we use.”

    With blockchain technology, customers will be able to see every part of the journey their product took before arriving in their hands. The network behind the store shelf will no longer be hidden, allowing the customer to make better informed decisions.

  • Transparency for auditors. Because the history of transactions is locked into each block, auditors will have an easier time understanding where items and resources have gone. This, as Adam Robinson of Cersasis puts it, “help[s] supply chain leadership, such as C-level executives understand how to make the supply chain more efficient and productive.”
  • Greater security. The technology will enable supply chain companies to identify attempted fraud more easily.

    “For example, an employee that goes into the system to change past events will alter the coding of the event” writes Robinson. “However, the altered coding appears so differently that it would be practically impossible to not notice the change. This will allow companies to recognize the fraud and who initiated the change almost immediately.”

The two-year project undertaken by Port of Rotterdam will give insight into the scope of the benefits, but the technology has already shown promise.

“With a world that is becoming more connected on a daily basis, blockchain technology will inherently develop into a symbiotic relationship with the Internet of Things and today’s advanced logistics and supply chain management systems” concludes Robinson.

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-tips-holiday-peak-season-logistics

November is almost at an end. As December nears, the holiday peak looms for many distribution centers. The season will be the busiest for us in logistics and transportation thanks to Black Friday, Cyber Monday, Christmas Eve, and Boxing Day.

Customers will be expecting to receive their purchases and gifts with little hassle. This means that for many organizations, the sole focus of the winter peak will be to customer satisfaction. Thanks to the increasing number of people shopping online, the winter peak is especially volatile for orders.

Proper planning for the winter holiday peak should have started months ago. Some businesses go all-hands-on-deck as early as August, or October. While strategic planning is important for a smoother peak, it doesn’t guarantee it. There are several ways the plan can become derailed.

This week we’ve decided to focus on the five ways to help make sure your business stays on track.

1. Clarify Your Expectation to the Staffing Providers

As Deborah Ruriani of Inbound Logistics points out in her article, planning for the holiday peak should have involved your staffing providers. With the winter peak so close, it’s important that the expectations of your relationship are re-communicated. Turnover is likely to be high until the peak is over. Staffing providers need to ensure that new hires are of the same standards as those they are replacing.

2. Audit the Preparedness of Your Organization on All Levels

As the holiday season approaches, it might be tempting to hunker down and only focus on your work until it passes. Doing so puts your organization at risk. Fulfillment centers can only succeed if all its parts are all working smoothly and towards a common goal. Any weakness in the management, operations, support, HR or other departments can lead to a domino effect.

3. Regularly Check the Morale of Your Employees

It’s normal for stress levels to be higher during the holidays. A lot is expected of the staff and they’ll have tight deadlines in which to accomplish these tasks. Stress levels can’t get too high however. Too much stress over too long a period will cause mistakes. Too many mistakes will cause more stress, growing and extending the cycle.

4. Check and Update the 5S Lean or Other Quality Initiatives

The 5S Lean Methodology is a strategy on how companies organize a work space for efficiency and effectiveness by identifying and storing the items used, maintaining the area and items, and sustaining the new order. By this time of year, your company should have a detailed space utilization plan in place. But remember, this time of year is volatile so your plan may need tweaking. You’ll need to check which variables have changed since the plan was drafted and adjust accordingly. Flexibility is crucial in this area.

5. Continue to Audit your Building’s Processes for Best Practice Research

Peak is an important time for many organizations. This is why a record of what worked and what didn’t needs to be kept during and after every peak. Each peak brings with it the opportunity to do things a little bit better.

The winter peak is a stressful time for many of us in the logistics industry. Our customers expect us to deliver so they can have a happy holiday season. It’s because of our customers that we need to ensure that both the planning and execution of peak plans are done with the utmost dedication and care.

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-driverless-car-manufacturing-supply-chain

The long road to commercially available autonomous cars is almost at an end. A number of things will be changing when that happens. Chief among the changes is the way automotive manufacturers invest and sell their products.

What separates an autonomous car from a regular car is the onboard computer. Behind that technology are companies such as Intel, Qualcomm Inc. And Nvidia Corp. which provides the chips necessary for the computing power. Cars will need to be turned into essentially mobile data centers meaning that the competition for the future of autonomous cars isn’t only among car manufactures. It’ll also be with and between the world’s largest biggest tech companies.

There’s Big Business in Little Parts

As we approach the final lap on the course towards autonomous cars, automotive manufacturers have already started to change their sale tactics. Where manufacturers used to talk about horsepower, they’ve now started talking about processing power.

According to data compiled by Bloomberg, the total value of automotive supplier deals in 2015 and 2016 were $74.4 billion. For some context, each of those years far exceeded the $17.7 billion annual average of the previous 10 years.
“The number of transactions valued at $500 million or more also skyrocket to 18 last year, triple the level of the previous decade” writes Elisabeth Behrmann, Polina Noskova, and Aaron Kirchfeld from the same Bloomberg article. “There have been 11 such deals so far this year.”

An example is Intel. Its automotive business is currently involved in 30 vehicle programs on the road. By 2020, the company is set to increase that number to 49 with orders worth $1 billion according to the Wall Street Journal.

Many of the deals are still done with makers of powertrain and chassis components. However, electronics-related acquisitions are growing the fastest. Some estimates have the cost of electronics in car manufacturing growing to 50% by 2030, up from around 30% in 2015. A portion of resources have also gone into securing the proper know-how to ensure that their cars have the necessary sensors, cameras, radar, and computing power necessary to safety assess traffic conditions and see their environment as a driver would.

Phone to Pocket PC, Car to Mobile Entertainment Hub

One of the biggest innovations over the last two decades has been in finding new uses for old products. TVs grew ‘smart’, watches and shoes graduated into personal trainers, and cell phones evolved into pocket PCs. Today’s new technology is sold with the promises of greater efficiency and consolidation. Autonomous cars will be no different.

For as useful as cars are in our everyday lives, they spend close to 95% of the time unused. This means there is a big opportunity for the manufacturers of autonomous cars. Captive consumers will be surrounded by the technology for an average of at least five hours a week. The challenge will not just be how to commercially manufacture autonomous cars, but also in building a platform that connects software developers with the passengers.

As Nokia and Blackberry demonstrated in the past, consumers need more than just an effective product. They also need their devices to consolidate their consumption of media.

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-corporate-culture

An adaptive corporate culture is an important part of any organization’s long-term success. Yes, managers and C-level personnel set the standards for how business is run, but it’s the values and practices shared by the employees that will guide the hundreds of decisions they make on their own every day.

Why Culture Matters

As Frances Frei and Anne Morriss write in this article for the Harvard Business Review, “Culture tells us what to do when the CEO isn’t in the room, which is of course most of the time”. These seemingly small decisions add up. For example, some studies show that companies with adaptive cultures successfully aligned to its business goals outperform their competitors by 200% or more.

Companies that deal with supply chains or are in the business of running supply chains need to take extra precaution for these reasons. With so many stakeholders and moving parts in a supply chain, it is easy to forget about fostering a healthy culture, and instead leaving ignoring the issue until it becomes toxic. However, if left unchecked a toxic corporate culture can not only severely injure a company’s reputation, but the reputation of an entire industry if it becomes the norm.

5 Steps to Implementing and Measuring Culture

Culture is at its core, a structured system, is something that can be purposefully implemented and evaluated through these five steps:

1. Define Core Values

Well defined core values reflect the priorities your business holds. They’ll inform how your employees behave and act with each other and the professional tone of the work place. Without a well-defined and meaningful set of core values, attitudes and expectations become confused. This could lead to situations of mediocrity, laziness, lack of accountability and general unprofessionalism.

2. Align Core Values

Core values need to apply to everyone. They need to start at the top levels of leadership, and radiate across all levels of the organizations from the top down. Leadership needs to be both an example of the values in action, and a facilitator that reinforces these same values in the behaviours of their staff. Higher productivity and increased job satisfaction can only come about with the involvement of manages ensuring that workplace attitudes, work ethic, and daily routines matches the company’s core values.

3. Reinforce Core Values

Core values can be reinforced through recognition of outstanding team members, encouragement of new ideas, and standardizing employee and manager reactions to conflict. Reinforcement also needs to extend outside the organization to potential clients, partners, and vendors.

“It is important to choose an outsourcing partner or client whose values align with your own and who can integrate easily from a culture standpoint. This improves communication, cooperation, and efficiency, and results in enhanced performance and reduced costs” writes Ron Cain from Inbound Logistics.

4. Measure the Integration

Like with any other aspect of a business, accountability and transparency needs to also be factored into culture. For this reason, a careful and deliberate cultural assessment needs to be conducted of the organization to measure how well your company integrates core values into cultural variables.

Getting a second opinion in this area may also be a good idea so hiring a culture auditor should also be considered if the budget is available and time is a factor.

5. Build Action Plans

A detailed plan with defined expectations, attitudes, accountability, and metrics is necessary if it is to succeed. Leadership also needs to be in regular communication with employees to issue and track performance. By doing so, your organization will be able to affect a change in culture in a stable, measureable, and lasting way.

By having a well-defined company culture your organization won’t just have a better bottom line, and improved morale, but also a better chance for success in the long-term for years to come.

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

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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.

Kelli-Saunders-OWIT-Woman-Exporter-of-the-Year-Award-Press-Photo
Nominated during OWIT (Organization of Women in International Trade) Toronto’s Annual Awards Ceremony, where Kelli Saunders of Morai Logistics Inc. wins Woman Exporter of the Year.

Toronto, ON (June 16,2016)

On Thursday, June 9th 2016, Kelli Saunders, President of Morai Logistics Inc., an Authorized Agent of Mode Transportation, was the recipient of The Woman Exporter of the Year Award from OWIT-Toronto (Organization of Women in International Trade-Toronto). Nominees had to have at least 50% ownership of a profitable business registered and operating in Ontario for more than 3 years. Nominees also had to have earned their primary income from the business and must have been responsible for its daily operations. A significant portion of her company’s business had to have come from exporting products or services.

The Woman Exporter of the Year Award honors an outstanding woman entrepreneur who, through her exporting endeavors, is advancing women and the image of Canadian business women in the international community.

Network and Cherish Those Around You.

Kelli was presented this award for her company’s work with major fast-moving consumer goods companies as a third-party logistics provider with expertise in cross-border intermodal logistics in the US and Mexico.

Jim Damman, President of Mode Transportation, said:

We are all very excited for Kelli. She is an outstanding businesswoman, and she and her team do a great job of providing the best export solutions to her valued customers. This award is very well deserved. Her hard work in receiving this award is something that makes all of us very proud.

Kelli’s advice to other women is to network and cherish those around them. Surrounding yourself with energetic high achievers will give you the foundation for a strong, career-long network from which to grow.

Shown above is Kelli’s acceptance speech.

ABOUT OWIT TORONTO: OWIT-Toronto (Organization of Women in International Trade) is a non-profit professional organization designed to promote women doing business internationally, by providing networking opportunities, export education and global business contacts. Members include women entrepreneurs, service providers and business women involved in international trade.

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.

The Industrial Internet of Things (IIoT) leverages the interconnectivity of machines and systems with sensors, intelligent data, and analytics to provide increased visibility and better insights into the performance of equipment and assets. Despite what its potential offers, attitudes surrounding IIoT are mixed. Some industry leaders are optimistic, others are dismissive.

For this week’s infographic, we’ve decided to cover nine facts and figures about the opinions of industry leaders related to this topic.

9 Facts About the Industrial Internet of Things (IoT)

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.