morai-logistics-blog-santa-ecommerce

eCommerce operations is the true Santa’s workshop and its logistics and supply chain professionals that scramble during the holiday season to make sure that your gifts and goodies arrive just in time for the holidays!

Most people are readying themselves and their bellies for the holidays, logistic providers are readying themselves as well. eCommerce businesses in particular, started preparing for the holidays back in August. Although Black Friday and Cyber Monday are behind them, there is still Christmas Day and Boxing Day still looming later this month.

Right now, operation teams across North America are making their lists (of inventory and personnel) and checking it twice (and several more times for good measure). Thanks to Black Friday and Cyber Monday they’ve found out which retailers and shippers are naughty or nice. This is because when the holidays come, customer shipments are comin’ to town (every town)!

Getting the Workshops Ready

According to a recent Wall Street Journal Logistics Report written by Loretta Chao, Transportation and warehouse companies added about 8,900 jobs across the U.S in November.

The number of warehouse operator jobs grew by 3,100 jobs from October to November. Payrolls have also increased as its grown by 47,000 jobs over the past 12 months.

It wasn’t only fulfillment centers that saw an influx of newly hired associates. As Chao points out,

Courier and messenger companies, including the package carriers that deliver online orders, increased their payrolls by 5,700 jobs last month, expanding employment in the industry by some 26,300 jobs from a year ago, according to the U.S. Department of Labor jobs report. The gain followed the addition of 12,200 transport and logistics jobs in October

Big Business in Gift Giving

The reason the holidays are such a scramble for retailers is because of the amount of business they stand to gain. In the U.S alone, the holiday season generated over three trillion dollars for the retain industry in 2013. The holiday sales accounted for 19.2% of retail total sales that year.

Increasingly, people are turning to online shopping. In terms of numbers, by 2010 B2C ecommerce sales totaled $283 billion USD in North America. By this year’s end, ecommerce sales are predicted to reach nearly $600 billion according to Statista.com.

In 2015, the holidays season saw desktop retail e-commerce spending in the U.S reach over $56 billion USD. Most of that money was spent online on Cyber Monday.

Cost of Late Deliveries

Understandably, customers will be upset if the items they ordered online don’t arrive on time. The main draw of purchasing gifts online is the promise of convenient and speedy delivery after all. Failing to hit deadlines means not just having angry customers, but also losing their trust when they need to do their holiday shopping in the future.

The holiday season of 2013 is the worst example of this. A shortened holiday season and erratic weather were cited as the reason for delays, but the damage was done. Customers were angry. It took costly good will gestures to regain their trust.

As 2016 ends, remember all the people that helped make your holiday special. Receiving gifts is great, but more amazing is the gift’s journey and the people around you!

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-zombies

Zombies are undead creatures, popular in many modern books, movies, television, and as Halloween costumes. They are the monsters that just won’t stay down. No matter what happens to one, it will eventually get up and continue its hungry lurching. Unlike more classic monsters, zombies cannot be waited out or ignored. Every passing hour increases the size of the horde as more people fall and become zombies themselves.

We have our own zombies in the world of logistics. Logistical zombies are issues that just never seem to go away. Like the classic zombie, these zombies can be very hard to put down. Just when you think it’s been taken care of, it rises again. These zombies generally start small. The problem is that like its movie and film counterpart, it will escalate and multiply if ignored, becoming a much bigger problem later on.

The go-to recommendation is to take action. This may just waste resources. Without a strong understanding of the core issue its likely time and effort will be wasted on a symptom and not the true cause. What’s needed is a root cause analysis.

Here are the 3 steps necessary for an effective root cause analysis:

Build Your Root Cause Analysis Diagram

To start, you’ll need a root cause analysis team. With a dedicated and varied team, a better root cause diagram is more likely because of the different perspectives.

Choose which root cause analysis diagram to use. Two popular diagrams are the fishbone or Ishakawa diagram, and the 5 Whys. Both diagrams have their advantages and disadvantages.

It’s important that everyone on the team understands that participation will not result in disciplinary action or peer ridicule. Management must stand by this agreement.

Walkthrough the Story and Verify Observations

Once the diagram is complete, the team needs to run through the diagram from every angle. Conditions and sub-causes need to be checked against verifiable evidence. Unsupported items need to be removed.

The aim is to have a list of actions (5 Whys) or diagram with items within verifiable contexts. A clear and cohesive story needs to come from the team’s diagram that leads to the primary event.

Depending on the resources available to your team, financial or technical constrains may restrict how far they are able to go.

When this happens, TechRepublic advises “… there are two possible solutions. First, the team can identify another point at which they can improve or implement a control. The goal is to arrive at the desired probability of occurrence with a combination of changes instead of a single root cause remediation.”

Consider Implementation and Create Action Plans

With the root causes analysis diagram complete, now it’s time for a formal action plan. List the tasks necessary to reduce the likelihood of the issue or increase your organization’s ability to detect the issue.

For each task, the plan should list the resources assigned and expected completion date. Don’t forget to assign someone to own and manage the plan!

Film and TV zombies may rise again, but by using root cause analysis your company/team will be able to put down logistical zombies permanently!

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.

On February 4, 2014, we released a white paper detailing the different ways the logistics landscape had changed. Developments in the industry had created new challenges and opportunities all along the supply chain, shifting the world of transportation.

The last few years has seen many developments in the realm of logistics. The recent carrier, port, and labour issues; rate instability, primarily in ocean carrier; and rising costs in other areas of the world, specifically China, has led a number of global companies to reconsider their outsourcing strategies.

This week on the blog, we are taking a look at these changes in the logistics landscape and what progress has been made since 2014.

White Paper: Third-Party Logistics and Mexico Nearshoring Still Growing

ebook-3pl-mexico-cover

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-relationships

The 3PL industry has come a long way in a few short years with its evolution from tactical service providers to collaborative partners that take on greater accountability and control.This week on the blog, we wanted to focus on the relationship between shippers and 3PLs.

In the past, the question was why a company should hire a 3PL as many companies had their own in-house logistics teams; then the question became if a company should hire a 3PL as the cost-benefit of outsourcing certain functions was weighed. And now in 2016, the question is which 3PL a company should partner with as a growing number of companies have as best practice, the outsourcing of some or most of their logistics functions.

The 2017 21st Annual Third-Party Logistics Study, which was released recently by Capgemini Consulting, Penn State University, and Penske Logistics at the Council of Supply Chain Management Professionals Annual Conference in Orlando, Florida sheds light on the change in strategy.

Data for the study was based on feedback from 194 usable responses from both shippers, or users of 3PL services, and non-users of 3PL services, as well as a separate, related version of the survey by 148 respondents from the 3PL sector.

One of the focuses of the study was looking at the 3PL and shipper partnerships in tandem with the strategic nature of relationships.

Of those surveyed, 91% of shippers and 97% of 3PLs indicating they have successful relationships that are bringing about positive results, which is up from 2012, which showed that 88% of shippers and 94% of 3PLs cited successful relationships.

75% of shippers and 93% of 3PLs also indicated that using 3PL services has led to over all logistics cost reductions, and 86% of shippers and 98 percent of 3PLs said that has led to improved customer service.

Big data, the new core competencies of 3PLs

A selling point for 3PL partnerships is the effectiveness such a relationship provides in preventing visibility “black holes”.

By selecting the right 3PL provider, a company gains in-transit visibility for all inventories from point of origin to final destination, information concerning production status, and projected inventory at destination distribution centered as well as accurate ETAs and data that would allow for easy comparison of expected performance to actual performance.

Big data, the study indicates, is the new way visibility is ensured and the new core competency 3PLs are providing.

Key Area for 3PLs

The biggest focus areas related to big data cited in the study for shippers included: improving integration across the supply chain; improving data quality; improving process quality and performance; increasing levels of data transparency; improving customer interaction and service; and improving logistics optimization.

98% of 3PL’s indicating that improved, data-driven decision-making is essential to the future success of supply chain activities and processes, which was supported by 93%of shippers.

86% of 3PLs and 81 percent of shippers also noted that effective use of big data will become a core competency of supply chain operations.  

The study ultimately explains why so many businesses have turned to 3PLs for their logistics needs. Strategic shipper and 3PL relationships create value throughout the supply chain.

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 was just under three years ago that Amazon.com CEO Jeff Bezos revealed plans for “Amazon Prime Air,” a drone-based delivery system that would’ve been a game-changer for delivery services. At the time, there were a number of news outlets and commentators divided on the topic, with some being excited at the implication of drones that could theoretically reach you anywhere, while others had safety and privacy concerns. 

This week we thought we’d focus on the impact drones are having on the future of supply chains.

The Fight For Flight: Commercial Drones May Soon Deliver Your Next Order Online

fight-for-flight

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-top-5-carrier-switch

With the increase of transportation management systems, tighter driver availability, and growing regulatory guidelines, it is essential to collaborate with carriers to ensure you are adding profitable business to their network. This will solidify a long-term relationship that will save you from costly changeovers.

Building important long lasting relationships with a carrier is an important part of maintaining a strong supply chain network. Capacity shortages and other carrier-related service issues will inevitably occur and carrier change-over can be costly. But sometimes, the business arrangement is simply no longer mutually beneficial and it’s time to switch carrier.

Here are 5 signs to look out for that maybe it’s that time.

1. The Last Time Your Carrier’s Technology was Updated, iPhones Didn’t Exist.

In order to stay competitive, it is key that your carrier embraces technological changes. Implementing the latest technology helps to continuously gather intelligence regarding your market and assists in mitigating risks. Even embracing technology as simple as RFID can help improve supply chain visibility from start to finish. It is essential that carriers are capable of evolving as consumer demands evolve, allowing companies to take advantage of potential in new markets and quicker react to opportunities with current consumers.

2. Uncompetitive Rates

Competitive rates are a no brainer. In order to build a strong relationship with clients, carriers must offer competitive rates. This gives the ability to negotiate and strategize the best possible options and plans based on your needs. Rate shopping can be a daunting task, and your carrier should be able to provide rate costs that best fit your budget and shipping requirements. By providing competitive rates, your carrier is acknowledging that they want to give you the best benefits at the best prices. If your carrier refuses to budge on your rates, it’s definitely time to find a carrier that has your best interests in mind.

3. Instead of PB & J You’re More Like Pickles and Marshmallows.

The relationship between carriers and clients is important. Your business needs are important, and you should be a priority to your carrier. Long term relationships can often result in better plans and rates based customized to your specific shipping needs, and can help when evaluating bottom line. A positive carrier/client relationship can often offer discounted rates over the course of time, in addition to more carrier options and credibility to your business which can minimize risks of shipping nationally/internationally.

4. Mistakes are More Common than Actual Completed Shipments

Everybody makes mistakes, and everybody has those days. While service issues are a reality, recurring service issues should not be. Frequently experiencing issues and service problems is not necessary and is costly to your business. When you find yourself constantly addressing service failures that your carrier refuses to acknowledge with no signs of improvement, it’s time to find a provider that takes places importance on the level of customer service they provide.

5. You’ve Outgrown Your Carrier

You have now become a big and beautiful business, but your 3PL and carrier requirements have outgrown the capabilities of your current provider. It’s important to understand that not all carriers provide the same scope of services. Some carriers provide specialized services that might be exactly what your business requires, while others offer customized warehousing or global partnerships. It’s nothing personal, you’re just in different places, and it’s best to consider a carrier that matches your needs on all levels.

The nature of business relationships are not always win-win. The ability of both parties to give-and-take to serve customer needs is more important for a lasting business alliance.

However, sometimes a partner may take too much either through limited capability or limited ability. Depending on where your business is at present, and where it needs to be, it may just be time to switch carriers.

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-4-Industries-Supply-Chain-Transparency

Transparency within the supply chain used to be quite the grey area. With consumers more interested than ever in knowing exactly where their products come from, the need for supply chain transparency is vital.

Consumers today demand to know the origins of the products they are purchasing. Knowing a product has been ethically sourced or produced in a sustainable manner increases value, and creates loyalty and trust between consumers and companies. While it may seem like creating total supply chain transparency would be a no brainer, many businesses worldwide still turn a blind eye and fail to place importance in this necessity. Scandals continue to arise each year as company after company is faced with the consequences of hiding how their goods are produced.

According to The Toronto Star, more than 40 Canadian drug companies have been cited for serious manufacturing violations, putting patients at risk by selling prescription drugs that companies sold with knowledge that they were defective. In this case, not only were companies hiding test data about the production of their goods, but they were additionally putting consumers at risk. In February of this year, Bloomberg News reported finding many popular Parmesan cheese brand manufacturers were using wood pulp and cellulose as cheap fillers in their products. While the FDA in the USA regulates that companies can legally use cellulose as a filler, consumers were outraged at the lack of supply chain transparency in the manufacturing of this product.

From Cotton to the Tech Industry

Although there are continuous reports of problematic companies, there are many industries working and moving towards supply chain transparency:

  • Cotton Industry – Although the apparel production still has a long way to come in terms of total supply chain transparency (with a specific regard to manufacturing), this industry is working harder to be completely transparent with consumers and the exact methods of production for the products they are purchasing.
  • Floral Industry – Companies in this industry are beginning to take charge and are pushing for more transparency. With a large reputation for permitting unsafe working conditions, companies are now providing information to consumers about how they are creating ethical farming practices to ensure the well being of their farmers.
  • Organic Foods – The food industry has major strides to make in terms of transparency, however the farm to table movement has helped in leap starting that transition. Informing consumers about more local products gives them a connection to those producing their food. With clearer supply chain transparency, farmers are receiving better fair wages and safe working conditions, while consumers benefit from ethically sourced and fresher products.
  • Technology – While this industry has faced major backlash for using unregistered workers, unfair wages and poor working conditions, many startups and technology companies are utilizing tools that allow complete transparency with consumers. These tools offer product traceability so consumers can determine exactly where and how a product was manufactured, and if it was produced in an ethical manner.

Although there are major adjustments that need to be made in numerous industries worldwide, more companies are beginning to understand the importance of supply chain transparency and are developing methods to better inform consumers. Better supply chain transparency increases value for businesses, and in return increases consumer loyalty and overall brand strength. Not only can a lack of transparency be damaging to business, it can also put consumers at risk.

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-Starwars-supplychain

“May the 4th be With You.”

Earlier this week people across the world celebrated fan proclaimed Star Wars Day on May 4th. In honour of this day, we decided to take a look at the role of the supply chain in large film franchises.

Over the last 39 years, the Star Wars franchise has produced over $975 million in merchandise sales alone and has expanded into an extensive universe with products for fans worldwide. When a film franchise becomes a worldwide phenomenon, the demand for related merchandise skyrockets. In order to meet high demands, it is key that all elements of the supply chain work cohesively together to ensure success.

Supply chain technology supplier FusionOps found in a survey that 69% of consumers believed that merchandise related to The Force Awakens (the most recent Star Wars franchise film) would be out of stock or unavailable during the film’s release.

“While technology advancements have been exponential since the first Star Wars toys were introduced 38 years ago, companies still struggle to keep the supply chain healthy and reassuring to consumers,” said Gary Meyers, CEO of FusionOps.

Consumer demand exceeding supply is one of the largest unpredictable factors facing supply chains, and continues to be a major issue facing film franchises.

In 1995, Thinkway Toys failed to anticipate high demands for the Buzz Lightyear action figure after the release of Toy Story. Unprepared to manufacture and ship more merchandise, consumers were left disappointed and analysts estimated a loss of $300 million in potential sales.

Disney once again miscalculated consumer demand in 2013 after Frozen became the highest-grossing animated film of all time. Manufacturers struggled to put products on shelves on shelves fast enough, with shipment after shipment selling out instantaneously. Exactly a year later, suppliers and manufacturers announced they had finally adjusted to the unexpected and insatiable demand for Frozen merchandise.

Learning from Past Mistakes

Taking notes from past experiences, manufacturers planned to ship The Force Awakens merchandise to stores in waves in order to meet and keep up with consumer demands. This allowed the franchise to analyze sales and consumer habits within each wave, and best determine areas of the supply chain to make adjustments.

In order to maximize success, large franchises must utilize the information and analytics at their disposal to make better decisions and changes to their advantage. In addition, a lack of cohesion between all elements of the supply chain can be detrimental to a franchise not only sales, but in reputation and consumer loyalty.

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.