Morai-Logistics-Blog-tech-car-manufacturing

Last week, an article in the Wall Street Journal covered the changing technology that are now coming as standard in automotives, and how it is creating changes in car manufacturing supply chains. In the article, WSJ writers Yoko Kuota and Jeff Bennett reported that auto part makers are quickly looking to adapt after the entry of Google and other tech focused businesses into car manufacturing with the services and features their automotives offer.

For large automotive parts companies, this means focusing on installing newer technology into their cars while forgoing more traditional features to optimize space.

“General Motors Co.’s pricey new sedan isn’t unique in leaving a few old standbys out. New cars hitting dealerships this year—ranging from bread-and-butter Dodge sedans to edgy Audi coupes—are shedding familiar features to save weight or keep up with fast-moving technology. Versions of Toyota Motor Corp. ’s latest Prius hybrid, for instance, lack a spare tire”, write Kuta and Bennet. “Well-known components like ignition keys and analog gauges are going the way of cigarette lighters and hand-cranked windows” they continue. Other staple features that some newer model cars no longer come with are lighters, analog displays, and even rear view mirrors in some cases.

More technology on the horizon

Even with all the innovations that both tech companies and the quickly adapting car manufacturers are offering their customers, several analysts are predicting that there are still many more not-so-distant features on the horizon.

For example, Forbes contributor Karl Brauer writes in this article a list of features which he believes will become the standard for cars made past 2020. Here is the list:

  • Driver Override Systems
  • Biometric Vehicle Access
  • Comprehensive Vehicle Tracking
  • Active Window Displays
  • Remote Vehicle Shutdown
  • Active Health Monitoring
  • Four-Cylinder Supercar
  • Smart/Personalized In-Car Marketing
  • Reconfigurable Body Panels

Functionality Versus Branding

In Kuota and Bennett’s WSJ article, there was the sense from those interviewed that to compete with the likes of Google, car part manufacturers would have to adapt by forgoing traditional features in their newer model vehicles. However, such an approach applied across the industry could hurt some car manufacturers. Especially if those car makers brand themselves and their product a certain way.

“A great car in Germany is not the same as a great car in the US. A great car in Germany is seen by many consumers to be a car that can be driven at 200km per hour on the autobahn” writes Professor Dominique Turpin in this article. “When Volkswagen – the quintessential people’s car tried to launch a luxury car, the Phaeton, it did not really take off. Through the development of a portfolio of brands, however, the Volkswagen Group has ably met the challenge to meet different customer needs” continues Professor Tupid.

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-Chocolate-Supply-Chain

There was an article in the Wall Street Journal last week about everyone’s favorite treat. Candy makers Mars Inc., Hershey Co., Modelez International Inc. (maker of Cadbury), and other big food companies are sharing private data on cocoa farming practices and crop yields despite being competitors in an effort to help cocoa farmers see greater yields.

The reason for this is that the surging demand for chocolate is far outpacing the supply available, so they are trying different pilot programs to address the problem. The shortage of cocoa isn’t a new issue. In 2014, a Slate article citing a report in Bloomberg Pursuits, quoted that by the year 2020 there could be a gap of 1 million metric tons between how much cocoa the global population wants and how much farmers can produce. It also surmised that by 2030, that gap would double in size.

There are several factors that are attributed to the gap between demand and supply:

  • Global chocolate consumption has grown steadily since the 1990s, with overall consumption predicted to hit 8.5 million tons in 2020.
  • Consumers in China and India are eating more chocolate, creating a potential two billion more chocoholics according to several articles.
  • Global demand for chocolate rose 0.6% to a record 7.1 million tons in 2015, led by a 5.9% jump in Asia.
  • Dark chocolate, which requires more cocoa to produce than other forms of chocolate, has become more popular according to this Vice article.
  • As of last September, Ghana’s cocoa production fell by 18 percent from the year before. Production is expected to be down again in part thanks to an El Niño that has put Africa into one of its worst droughts in 30 years.
  • The strength of the dollar may also be attributed to cocoa’s success over the past five years writes this article on CNBC.

Sweet Logistics

The plan to address the gaps in supply revolve around enabling farmers to grow greater yields in increasingly difficult growing conditions. To this end, Mars Inc., Hershey’s, and Mondelez International, have been sending agriculture experts abroad to teach farmers how to space young trees at planting, prune them, and apply fertilizer. Mondelez alone has promised $400 million by 2022 towards this project.

Hershey’s and Mars have sent agronomists to cocoa-producing countries to teach farmers how to graft a new cocoa plant to an existing under producing plant. “There is often a tech element involved, too. Hershey’s supplied farmers in Ghana, the world’s second-largest cocoa producer, with weather and marketing information by text message, and those who followed the advice produced 46 percent more cocoa” writes Vice.

Time will tell if the efforts will be enough to accommodate the growing demand from the millions of future chocoholics around the world. 2016 isn’t a very encouraging year for the chocolate industry as many of the same problems plaguing it have carried over into the new year. However, the efforts by the companies involved look like they may yield the needed results in the long term thereby likely preventing any sort of future “chocopocalypse”.

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!

If 2015 could be summarized in a word, that word would be “uberification” as the on-demand delivery model really took off. Many industries have been affected by uberification, with several entrepreneurial ventures popping up this last year with their pitch being “Uber, but for X”. Given that uberification is focused strictly on the distribution and not necessarily production of goods, this means that this latest trend will have the greatest impact on the last-mile end of the supply chain.

To kick off our first ebook of the year, let us look at a bit of the history of this trend and why it has evolved so suddenly!

eBook – Uberification and Its Impact on Logistics

Click the Cover Image below to access our ebook!

morai-logistics-blog-uberification

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-amazon-soar

Flying high

So it’s not really a surprise at this point, but e-commerce giant did well over the holidays, very well. Not only did it manage to ship packages to 185 countries during the holiday season, but it also managed to expand its Prime subscription service by more than 3 million people (and sell an Adele CD every 3 seconds on Cyber Monday).

According to an article on The Verge, over 200 million items were shipped for free to Prime subscribes. With another successful holiday season under its belt, it also isn’t a surprise that Amazon is expanding in new areas to better manage its business in the coming years. It looks like that this year, Amazon is focusing on innovating the transportation and delivery of its packages. Amazon is currently in talks to launch its own air freight line which it would start by leasing 20 Boeing 767 freighter jets.

The company is currently heavily reliant on UPS, FedEx, and the U.S Postal Service for its deliveries, but it looks like it would like to exert more control over its product especially for its Prime members. This is likely due to avoid another debacle like that of two year ago when the holiday crunch delayed UPS from delivering important Christmas gifts before the holiday leading to Amazon refunding shipping charges and offering customers a $20 gift card.

According to this USA Today article, Amazon building its own transportation logistics network would mean three things:

  • It gives the company capacity. Amazon needs to in-source more of its transportation logistics so it can continue to grow
  • It gives Amazon control over delivery, which is a large part of the customer experience.
  • Amazon is a master at building infrastructure for itself and then selling excess capacity to others at a profit.

Although having its own transportation logistics would be helpful, it doesn’t cheap. Leasing newly built Boeing 767F jets runs $600,000 to $650,000 a month. “Used converted freighter jets, which Amazon will likely have to launch the cargo business, cost about $300,000 to $325,000 per month to lease” writes the Seattle Times.

Flying higher

Leasing a fleet of Boeing 767F jets isn’t the only reason Amazon is in the news currently. Thanks to a project called “Blue Origin” with which Jeff Bezos is involved with, Amazon may someday also have affordable commercial suborbital to orbital flight to make it’s deliveries. The company tested out its New Shepard rocket last month which is designed to carry six passengers.

The rocket reached an altitude of 62 miles (100 km) – breaching the boundary between Earth’s atmosphere and space – and landed back at the launch site eight minutes later, the company said.
“Fellow billionaire entrepreneur Elon Musk, founder and chief executive officer of rival rocket company Space Exploration Technologies, or SpaceX, used his Twitter feed to congratulate Bezos and the Blue Origin team on the landing, a technology that SpaceX is also pursuing” wrote Supply Chain 247.

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-santa-tracker

Every year on this day, the North American Aerospace Defense Command (NORAD) “tracks” and broadcasts Santa Claus’ location as he leaves his home in the North Pole and delivers presents too all the children of the world.

This article on CNET goes into colorful detail about the origins of the now 65 year old Christmas-themed program:

“One morning that December, U.S. Air Force Col. Harry Shoup, the director of operations at CONAD, the Continental Air Defense Command–NORAD’s predecessor–got a phone call at his Colorado Springs, Colorado, office. This was no laughing matter. The call had come in on one of the top secret lines inside CONAD that only rang in the case of a crisis.

Grabbing the phone, Shoup must have expected the worst. Instead, a tiny voice asked, “Is this Santa Claus?”

“Dad’s pretty annoyed,” said Terri Van Keuren, Shoup’s daughter, recalling the legend of that day in 1955. “He barks into the phone,” demanding to know who’s calling.

“The little voice is now crying,” Van Keuren continued. “‘Is this one of Santa’s elves, then?'”

What had happened is that a local paper had run an ad with a large picture of Santa Claus that urged kids to call the displayed number to talk “personally any time day or night”.
However, the number listed on the ad was wrong by a digit. Rather than talking to jolly St. Nick, children were calling into a very special phone line that was only supposed to ring if the Cold War heated up and Russia attacked.

Thanks to the wrong digit in the ad, many hopeful kids called in excited to be and eagerly anticipating their chance to tell Santa want they want personally. Realizing what had happened and not wanting to crush the expectations of so many children, those on the other end of the line decided to pretend to be Santa and his helpers. From there a tradition was born.

Now every December 24th, children can call NORAD to find out where in the world Santa is located.

Tracking Santa Today

“Tracking Santa” is more difficult and resource intensive than many would imagine. Here’s the short list of some of the stats behind the scene:

Although the program is led by NORAD, it comes to no cost to tax payers. Instead, it is paid for by its corporate partners and through the hard work of the people working on helping to track Santa.
It is through their efforts that Christmas can remain special a little longer for thousands of children around the world.

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-ecommerce-slow-down

Kurt Salmon, a global management consulting firm, recently put out a study of online orders from 62 different retailers. The study analyzed online orders that were shipped to consumers, as well as those picked up in-store to measure shipping speed, accuracy and cost.

The most interesting find in the study, is that on average, order-to-delivery time for the 62 major retailers was slower by 20% than last year’s average:

In fact, only 40% of buy online, pick up in store (BOPUS) transactions were error free this year, compared to 91% of delivered orders in the study and 98% of delivered orders during the rest of the year. This huge service gap—especially in such a customer-facing area—exposes retailers and can leave customers out in the cold

On the positive side, the amount of retailers surveyed from last year is now at 90%, up 15%. Retailers offering free shipping on anything in their catalogue rather than select items has also increased. This number has grown by 50%.

“Improved execution enabled 80% of retailers to complete orders within two weeks of Cyber Monday, up from 66% in 2014, with 9% fewer cancelled orders. Overall delivery time has increased 21% from 2014”, writes the study.

An article on CNBC.com also describes how although there is a gap, the deadline for deliveries has gained an additional day.

According to a study by customer analytics firm StellaService, Dec. 21 is the most common deadline put in place by retailers promising standard or free shipping by Dec. 25. That’s one additional day compared to last year, when the most common cutoff date was Dec. 20.

morai-logistics-cnbc-retailers-standard-shipping

Source: CNBC

It’ll be important for e-commerce companies to improve their order-to-delivery times not only to meet current customer demand, but also future customer demand. Looking at data from this past Black Friday and Cyber Monday, it looks like Cyber Monday has already eclipsed the former as the shopping holiday.

According to this article from LogisticsManagement.com, the sales breakdown for the two holidays was as follows:

  • Sales expectation for Cyber Monday were expected at $3 billion, a first for the holiday
  • This is a 12% annual increase and a 50% increase from 2012, according to Adobe
  • According to an analysis by ShipMatrix, 91 percent of orders delivered by UPS’ ground service during Cyber Week were on time, compared to 97 percent during that time frame last year.
  • Black Friday sales dropped from $11.6 billion in 2014 to $10.4 billion in 2015, according to data from ShopperTrak
  • Online sales between Thanksgiving and Sunday were up 17 percent to $8.03 billion, according to Adobe

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!

With the rapidly changing environment of the logistics and supply chain industry, it has been a busy one for mergers and acquisitions (M&A) in the third-party logistics sphere. There is a lot of pressure for 3rd party logistics providers to expand their services; customers and clients are now looking more and more for a one-stop solution for all of their logistics and supply chain needs. Combine this with a need to drive scale in specific markets and a desire to go global for rapidly growing companies and you’ve got a recipe for a healthy M&A environment.

This month we thought we’d focus on exploring how these concepts are affecting 3PLs and compiled the most insightful facts we could find!

9 Facts Looking at the Trend of Mergers and Acquisitions in Third-Party Logistics

morai-logistics-infographic-9-facts-looking-at-mergers-and-acquisitions-in-3pls

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-Sports-Logistics

“Before the high-profile athletes and rabid fans arrive at a major professional sports event, superstar logisticians and planners perform their own feats of greatness to ensure the big game goes off without a hitch” -writes this InboundLogistics post.

Last night the Toronto Raptors faced off against the Cleveland Cavalier, and emerged victorious with 103-99 score. Those in attendance were treated to stylish swag, as the game was also the third annual Drake Night for the Toronto Raptors.

As of September 2013, Canadian music artist Drake (Aubrey Drake Graham) became the Toronto’s Raptors’ official “global ambassador“. His responsibilities have been to rebrand, create buzz, and even help design jerseys and merchandise. In his role as global ambassador for the team, Drake has even created a new logo and new colors for the team.

His help with branding was no small feat either, as Raptor’s brand value rose from $52 million in 2013 to an estimated $97 million as of January of this year according to Forbes.

A professional sporting event is not just about selling a game to fans, but about delivering an experience. There are many moving parts behind the scenes to ensure those attending the event enjoy as positive an experience as possible. Having clothing designed, delivered, and ready for the big game is only one area wherein logistics is important in professional sporting events.

For larger and well known international events, ensuring the logistics of an event means that careful planning is done several years before the event itself.

The 2014 Sochi Winter Olympics for example, was announced and planned seven years prior to the event, which was a smart move as there were:

  • over 5,500 athletes and team members who attended.
  • over 350 paralympic athletes and team members who attended.
  • over 25,000 volunteers who helped out with the Olympic games.
  • over 12,000 media representatives from all over the world broadcasting the games to an expected 2.1 billion television viewers.

Transport and Sporting Events

Without athletes, you cannot have a sporting event. Without a venue, you cannot have your sporting event. Without an audience, you cannot have a sporting event. It is for these three key considerations that transport services for a sporting event is so critical.

SEL, a company specializing in sports and events logistics, writes:

“Managing the transport services for a sporting event involves not only arranging transfers for athletes and equipment, but also providing for all that is closely connected with it, from catering to the most advanced kinds of fuel. Moreover, covering world championships means coping with various countries and languages, long distances, and customs and domestic rules that differ from one nation to another”.

Fun and Games For The Next Generation of Logisticians

Like other areas of logistics, sports and event logistics are quickly growing fields. Some schools are already offering programs specializing in these fields with courses in Event Planning and Logistics, Behind the Scenes in Events, Sports and Event Marketing.

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-Holiday-Planning

We are in mid November and for many people this means that it’s the best time to start to thinking about who they’ll be giving a gift to and what that gift will be. If organized, they’ll set a budget and a timeline so they aren’t scrambling at 11 PM the night before in a dollar store for the perfect gift.

If you are working in a distribution centre however, the planning and preparation stage for your building/company would have started about four months ago back near the end of July. You would now either be in the middle or very close to peak season, meaning that your building could see an inventory increase of over 40%.

Given how close the holiday season is, there is likely not much that can be done if your distribution centre is only just now scrambling to put together peak plans for your building. Rather than this be a list of tips for planning a successful peak, consider this a quick checklist to determine exactly how rocky a peak your supply chain may have. As the saying goes,

“the best laid plans of mice and men often go awry” – Robert Burns .

Filling personnel gaps

Does your distribution centre have the right people, in the right places, in the right numbers? Being in the peak season means that overall volume of your buildings will increase. The amount of items received and shipped will increase. The amount of items being stored and necessary space will increase. Quality control in your building’s processes will need to be increased. Even available security and janitorial personnel will need to increase in order to service the increase in personnel in other areas of the building.

What are your building’s plan for staffing needs? This is a question that should’ve been addressed early but now is a good time to review!

  • How many temps have been hired, and what sort of tasks are they handling?
  • Is there an incentive plan that pays bonuses for workers who excel during peak? If so, how has it impacted worker engagement thus far?
  • Is your building’s staffing plan calculated to meet your service goals (orders/boxes per hour per employee, lines picked per hour per picker, etc)?. How closely are those goals being hit?

Winter is coming…

The holidays not only bring cheer and a spike in products traveling through supply chains, but also bad weather (if you are in North America). Even if you are located in an area where snow won’t affect your distribution centre directly, it doesn’t mean that your vendors, carriers, and customers will be safe from it.

  • Does your building have a well-documented emergency plan in case of power outages?
  • Does your staff understand the expedited transportation options available such as time-definite ocean transportation, air-sea, sea-air, and team-driver trucking service?
  • Has your building tested Plan B carriers to see if there are any issues in utilizing them if your preferred carriers become indisposed during peak time?

Getting those evaluation sheets ready

No matter how well prepared and laid-out the plans for your distribution centre are, chances are there will be some area in which those plans fall short. It could be due to vendor mismanagement of inventory leading to out-of-stock of a hot item. Or underestimating the amount of returns and not having the staff post-holiday. Regardless of the shortfalls, it is important to have a system in place to track your performance and use labor statistics, order data, customer satisfaction scores, and inventory reporting to identify areas where you both shined and struck out.

This information will help you during future peak planning. Having an outside consultant come in and review the data with you post-peak. This help you think through necessary changes for next year’s peak season that you can begin working on as soon as the peak season has wrapped up.

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-the-dabbawalas

Restaurants offering delivery of their items for a cost is nothing too special in most large cities. However, the service is typically only offered on orders over a certain amount and only for some items and not others.

What would you say then if we told you than in Mumbai, India you could have your food delivered to you every day for a monthly fee of around $10? The service would also be guaranteed rain or shine, and even during more extreme situations such as monsoons and political strife which is only part of the reason why its growing at a steady rate of 5 to 10 percent a year.

The best part of all is that this delivery service doesn’t have a minimum amount that needs to be ordered before it applies as it isn’t tied to any restaurants. It is instead a service by the dabbawalas (“those who carry boxes”), and they specialize in receiving home cooked meals from a family’s home in a tiffin (a circular silver tin with multiple compartments) and delivering the lunch to a working spouse who could be several miles away.

Over 200,000 meals a day are collected by around 5,000 dabbawalas in the morning from their clients’ homes.

The lunches are sorted according to where they came from, and where they are intended to go. Each tiffin is labelled with an alpha numeric code and loaded onto city trains before traversing the city’s maze of over 22 million before being handed off to local dabbawalas who complete the last part of the delivery. After the food is eaten, the tiffins are collected by dabbawalas and make a return trip to their respective homes.

What’s most impressive is that although the majority of the dabbawalas are semi-literate or illiterate, mistakes are rarely made. Their delivery system has been awarded a six sigma level of efficiency. That means they make around one mistake in every six million deliveries. The incredible level of efficiency and precision of their delivery system has even garnered the attention FedEx and was the topic of a Harvard Business School case-study.

Organization and Logistics

The organization of this dabbawalas is very interesting as its largely decentralized with no organizational structure, managerial layers or explicit control mechanisms. Dabbawalas are divided into sub-groups of fifteen to 25, each supervised by four mukadams. The mukadams are familiar with the colors and codings used in the complex logistics process.

Their key responsibility is sorting tiffins but they play a critical role in resolving disputes; maintaining records of receipts and payments; acquiring new customers; and training junior dabbawalas. Each group is financially independent but coordinates with others for deliveries. The process is competitive at the customers’ end and united at the delivery end. The dabbawala business has been adapting well to changes in the big city including going online. Customers can now log onto their website to access their service.

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!