Earlier this week, newly inaugurated president Donald J. Trump withdraws from the Trans-Pacific Partnership (TPP). Hence, the U.S withdrawal from the 12-country agreement effectively rendered seven years of negotiations a waste.
Pulling the U.S out of TPP was one of Trump’s campaign promises. Though, aside from the possible global-political ramifications of the action, what many are wondering now is if he’ll do the same to NAFTA and what all this will mean for the logistics industry.
Consequences of the Withdrawal
To say TPP was controversial would be an understatement. Several protests around the world were held throughout the negotiations.
There are many reasons for and against TPP, with both sides passionate about their position. But, the trade agreement would have created a network encompassing 40% of all world trade and affected millions of people across the world. Other global concerns would’ve been impacted as well, including cyber security, environmentalism and free trade.
Fallout of the withdrawal is being hotly debated across the professional and media landscape. So we have detailed the three key concerns that are being discussed:
- Loss of North American competitiveness — TPP would’ve eliminated more than 18,000 taxes and trade barriers across its member countries. By pulling out of the trade agreement, the U.S and by extension Canada, is losing out on a large section of the global market. Farming manufacturing, and the services and technology sectors will be impacted the most. While Canada and Mexico can still negotiate on their own, they lose a lot of bargaining power without U.S backing.
- Loss of North American influence over global trade — One notable absence from TPP was China. Some experts theorized the exclusion was intentional. TPP they argue, was an attempt to counter China’s growing economic influence on global trade. China has pushed its own trade pact, called the Regional Comprehensive Economic Partnership (RCEP), which currently has 16 members. By backing out of TPP, Trump may’ve pushed some countries that originally signed to seek other trade agreements, like RCEP.
- Risk of protectionism — The U.S is not part of the RCEP. If it goes through, experts are worried that it will have tariffs against the U.S. This, along with the shaken confidence of TPP members may raise the number and cost of tariffs.
What Will Happen with NAFTA?
Trump promised Americans to either renegotiate or outright end NAFTA during his campaign. His actions with TPP indicate he’s serious about his promise.
When asked on Monday, White House press secretary Sean Spicer said Trump would rather renegotiate NAFTA rather than tear it up.
“Mr. Spicer said Mr. Trump’s complaint is with “multinational” trade deals because they are more complicated to renegotiate. But he said the President was open to bilateral deals – a sign that he might be willing to keep a deal with Canada, even if he makes good on his pledge to change the terms of NAFTA to make it harder for American companies to move to Mexico” wrote Adrian Morrow, reporter for the Globe and Mail.
Trump will be meeting with Prime Minister Trudeau and Mexican President Enrique Pena Nieto in the coming weeks to discuss a renegotiation.
If NAFTA were to end, it would have serious negative repercussions for the transportation, manufacturing and logistics industries across the three nations.
The end of TPP is already having an impact on offshoring efforts. Thus, the coming weeks will see if nearshoring efforts will be upturned as well.
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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
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.
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.
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.
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.
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.
To most job seekers, a career in logistics or supply chain is just misunderstood — or invisible. This is why we’ve compiled 10 reasons why a career in logistics and supply chains can be the dynamic and rewarding career so many look for!
Have you ever wondered how a package or an item gets to where it needs to go? You should—the system that ensures that it happens is called a supply chain. The industry that ensures that it runs smoothly is called logistics. And the reason why this industry is so exciting is because without it, no other industry would be able to operate!
Despite the critical role logistics plays behind consumer goods, military supplies and personnel, it’s an industry with a recruiting problem.
Here Are Our Top Picks for Why This Career May be Right for 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.
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
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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.