Supply Chain - Overcoming Extreme Weather

A critical component of supply chain management is planning around risks that can compromise the chain, and few risks are more disruptive than extreme weather.

In a time when the ill-effects of climate change are being felt around the world more than ever, supply chains have to mitigate for those effects to function year-round. Of course, what makes extreme weather so troublesome for supply chains is that it’s unpredictable and can come in many forms. With each form—flooding, storms, freezing temperatures, etc.—coming with its own host of problems. It’s imperative then that supply chain managers help form their chains with the possibility of extreme weather in mind and plan accordingly.

Resilinc spoke about this and the importance of planning around disruptive weather in their blog,

Bad weather tests the agility and resiliency of even the best supply chains. However, companies that manage weather-related disruptions as part of their event-monitoring best practices and supply chain risk management strategies tend to fare better than those that don’t take preventative measures, Resilinc’s work with customers shows.

This article by Morai Logistics highlights some of the key ways that supply chains can navigate the risks of extreme weather.

Have a Back-up Plan

At times the weather event that hits a supply chain will be too great to overcome. No amount of resilience can overcome a hurricane, for instance. This is when it’s crucial to have an additional plan in reserve. So, in practice this could look like a warehouse being impacted by bad weather. And, in response, those in charge of the supply chain having some spare carriers ready at another warehouse (at a separate location) with the same product.

While this is an additional cost, considering the physical and reputational damage bad weather can inflict, it’s a necessary one. Not only that, but, in the long run, a potentially cost-saving measure too.

Embrace Technology

There’s a variety of technology that helps supply chains work around or anticipate extreme weather. Foremost amongst this technology is artificial intelligence, particularly machine learning. Via machine learning supply chain companies can gain access to data regarding internal and external risks, including weather.

This means having the latest information about the weather as well as the most precise predictions possible regarding it. Thus, through this technology supply chain companies can potentially avoid extreme weather by anticipating it. Or, at the very least, they can start planning for the weather as soon as possible.

Flexibility

A supply chain needs the ability to maneuver whatever comes its way. This is true in general but especially so with extreme weather. There will be instances where the weather isn’t so bad that the supply chain is completely brought to a halt. Rather, more often than not, the weather will require supply chain adaptations to still function. These can be as simple as taking a slightly altered route.

This point was emphasized in a Supply Chain 24/7 article about El Niño,

The key to riding out a situation like El Niño is to have a supply chain that is flexible enough to adapt. With an efficient and accurate inventory process, you’ll know what must be shipped by air and what can wait the extra week to arrive via ocean.

Robust Infrastrucure

Even with great technology, planning, and flexibility, each facet of a supply chain needs to be strong enough to deal with harsh weather conditions to some extent. For example, a supply chain’s warehouse should be able to withstand strong wind without being breached. Or, its production facility should have a variety flood-proof installations so that a flood has minimal impact upon it. In turn, when the products are being transported they might need to be temperature controlled. All in all, each step of a supply chain needs to have resiliency. So it can handle whatever weather conditions it might face.

5 Supply Chain Trends to Watch Out For

With supply chain companies having to continually respond to the needs of their respective markets, it’s critical that they stay cognizant of the many structural and operational advances being made in order to remain competitive.

Customers’ expectations about what supply chains should look like in terms of responsivity, transparency, and flexibility are greater than ever. As a result, supply chains are evolving faster than ever to meet and surpass those expectations. In turn, this evolution means monumental changes to the technology, management, and operations of supply chains.

Globecon Freight pointed out the scale of these changes in an article earlier this year,

Supply chain management is undergoing a significant transition that will change the face of shipping and logistics.

This week’s article by Morai Logistics identifies 5 prominent trends taking place and set to take place in the world of supply chains.

Digital Transformation

The need for supply chain operations to be digitized is stronger than ever and will only grow going forward. If supply chains are going to take advantage of the many technological innovations today and in the coming years, they need the infrastructure for it. That means making their operations digital. By undergoing a digital transformation, supply chain companies can lay the groundwork to make their technological progress iterative, not singular. Technology will keep advancing and it’s crucial supply chains keep abreast of it.

Artificial Intelligence (AI) and Automation

Both AI and automation are set to greatly boost efficiency, lower costs, and drive profitability in supply chains. They can work individually or hand-in-hand to improve a range of supply chain processes. These include (but aren’t limited to) warehouse management, forecasting, data collection, equipment maintenance, and waste reduction. AI and automation are only going to become even more powerful, adaptable, and precise in the future. Thus, it’s inevitable that their presence will only grow in supply chains.

Transparency

More than ever before, customers expect to know the state of their product from beginning to end. This means that supply chain companies need to ensure that their chains are as transparent as possible. This is set to be achieved in a variety of ways, including blockchain, transparency mapping, tracking materials, and third-party certification. Blockchain in particular is primed to play a major role in supply chains going forward, as it is a database that’s data cannot be altered. Moreover, the data that’s entered in a supply chain blockchain needs to be verified by everyone in it.

Real-Time Tracking

Building off the demand for transparency but also the continual need to be able to check on the integrity of a supply chain is the advent of real-time tracking apps and devices. These can be wearable devices that employees wear, helping them with a variety of tasks that are then instantly available for review. For example, a warehouse employee can use a device to input data regarding inventory. This data in turn can be viewed by the inventory manager. Additionally, apps can be made available for customers and those overseeing the supply chain, so they can see the data being collected along it to make sure it’s proceeding smoothly.

Customer-Specific Supply Chains

A generic, one size fits all supply chain is quickly becoming a thing of the past. Supply chains are growing increasingly segmented for the sake of customers. In order for customer needs to be met more precisely than before, supply chain companies are recognizing that each supply chain should be uniquely geared to them. In practice, that means dealing with customers directly (a direct-to-customer approach). It also means setting up supply chains to be pliable enough to proactively respond to customer interests.

Supply Chain - Digital Transformation

If supply chain companies are going to evolve to meet the demands of the market, digital transformation has to be central to that evolution. 

Now, more than ever, supply chains are being pushed to grow as a result of the needs of customers. And, no matter how well run a supply chain is, by itself it simply can’t meet those needs. Not without the aid of technology. In turn, there’s no greater way to technologically integrate and streamline an operation than digital transformation.

The numbers bear this out. A McKinsey study showed,

That, on average, companies that aggressively digitize their supply chains can expect to boost annual growth of earnings before interest and taxes by 3.2 percent—the largest increase from digitizing any business area—and annual revenue growth by 2.3 percent.

If they digitally integrate properly, supply chains should see improvements in the following areas, just to name a few:

  • Speed
  • Efficiency
  • Decision-making
  • Communication

This week’s article by Morai Logistics underscores the importance of digital transformation for supply chains. Pointing to some of the most relevant areas of improvement digital tools will bring and how.

Speed

There are a multitude of reasons why digitization should improve the speed of a supply chain. Automation by itself should greatly enhance supply chain speed by conducting repetitive tasks like data collection without human error. Additionally, machine learning can greatly help with predictions that are central to supply chains running smoothly. 

These predictions can involve data within a company, such as the health of machinery so that it can be fixed or replaced before it disrupts operations. The predictions can also involve external data such as market demands, so inventory can be stocked accordingly or weather patterns, so the supply chain can adapt to them.    

Efficiency

Efficiency often goes and hand-in-hand with speed, with the added bonus of leading to more profitability due to less waste. Thus, for many of the same reasons speed is improved, efficiency is too—automation and machine learning. However, in addition to those reasons, digital integration drives efficiency also because it can bring with it artificial intelligence (AI) and robotics. 

AI, much in the vein of automation, can handle tasks that would otherwise be mundane, freeing up the workforce for more important matters. Robotics is useful in several domains, particularly warehouse management, as they can deal with the handling of the inventory. 

Decision-making

In order for a supply chain to perform optimally, the decisions that underpin it have to be precise yet flexible, accounting for customer demands and adaptable to any circumstance. The collection of data, the generation of analytics, and the subsequent insights they give can be integral to understanding a supply chain. 

Moreover, the earlier mentioned machine learning can go a long way in making decisions more informed. As they give suggestions to help with inventory management, scheduling, market fluctuations, and so on.

Communication

As a result of the incredible size of modern day supply chains—often stretching from one side of the globe to the other—it’s critical that communication along them is excellent. Any gap can lead to a breakdown in the entire chain. One digital option to overcome this issue is blockchain technology.

Blockchain provides a database with an immutable and transparent digital record of the movement of products along supply chains. Where, in turn, each new piece of data has to be validated by every player in the supply chain. Consequently, there is a continual mutually agreed upon data trail of what is happening each step of the way. 

Cybersecurity and Supply Chain Risks

As supply chains get increasingly digitized, the risks of supply chains being undermined by cyber attacks also increases, making cybersecurity vital to supply chain health.

Digital transformation is something that is crucial for supply chains going forward. If they are to keep up with the market demands that are placed upon them, they need the efficiency, productivity, and precision digital tools bring with them. However, with the considerable upside of digitization also comes risks.

Supply Chain Digital recently released an article outlining just how significant a challenge cybersecurity has become for supply chains, stating,

Research from Ponemon Institute indicates that cybersecurity is a growing supply-chain challenge, with 56% of organisations reporting to have had a breach that was caused by one of their third-party vendors.

That means more than half of those in the supply chain industry have dealt with cyber attacks already. That is a hugely concerning number and all the more reason for companies to make cybersecurity a priority. With that said, in order for companies to have optimal cybersecurity, they need to pinpoint the areas that present the greatest risk.

This week’s article by Morai Logistics highlights some of the most significant cybersecurity threats supply chains face today.

Software

A vast majority of companies use software for their supply chain operations that aren’t their own. That means they have to rely on software provided to them by a third party. As a result, there are many avenues through which they can be compromised. The software itself has to be diligently vetted to make sure that it can’t cause harm, but the threat doesn’t end there.

Each software update can bring with it a renewed risk. What’s more, often these updates are automatic, making it impossible to assess them before they’re already up and running. Finally, software issues can even arise from someone from a third party being brought in to run diagnostics, and it’s hard to know what they’re bringing in as they plug their laptops into a company’s supply chain network.

Hardware

Much in the same way as software, hardware is rarely built in its entirety in-house. It’s far more likely that companies will use hardware that isn’t their own, opening themselves up to cyber vulnerability. Each device or piece of equipment has the potential to be used to steal data or seize control of the system it’s being operated on. Thus, just like with software, third party providers  have to be stringently reviewed.

Network Services

The network service a company uses to host its digital traffic, if public, has the potential to have bad actors on it. Actors who can hijack company data. In turn, the company’s operations can be severely compromised. However, the solution to this is straightforward: the use of private networks.

Other Threats

The list of other potential threats is extensive. Cloud computing, the internet of thing (IoT), and third party vendors are all areas from which cyber attacks can arise. It’s worth touching upon the first two.

The risk of using a cloud for shared data storage is that it’s an easy target for hackers. What’s more, many devices’ default setting is to link their data to a cloud, providing an easily overlooked vulnerability. Similarly, the IoT can be a cybersecurity risk. A security camera, for example, when connected to the internet can be accessed remotely by malicious actors. Who, in turn, can spark a considerable privacy breach.

The simple fix for these issues and others is to take a safety-first approach. Rather than rushing to adopt new technologies, softwares, and devices, companies need to carefully access each of them. Only after thorough inspections, safety protocols, and when safeguards are put in place, should these new elements be adopted.

Supply Chain - Customer Service and Technologies that Will Deliver it

Despite all the talk about blockchain technology, one of the preeminent challenges supply chains still face is customer service, and there are several technologies that could be the key to addressing it.

Customer service is an ongoing priority in the supply chain industry. Customers, now more than ever, need a seamless experience across a supply chain. Customers want their orders delivered faster. They want them delivered more accurately. They demand transparency throughout the process. Moreover, they expect an ability to track their deliveries. And, in turn, they expect inventory to meet their demand. More than anything, customers expect an experience modified to their individual needs.

A 2018 Logility and APICS survey on supply chain priorities revealed that,

30% highlighted the need to respond to customer mandates for faster, more accurate and unique fulfillment as a top business priority moving forward

The industry is well aware of the importance of customer service and is making it a top priority to solve. For companies to address this issue, however, they’ll need to adopt the precision, productivity, and granularity technology brings.

This week’s article by Morai Logistics details the difficulties customer service presents supply chains and how various technologies can solve them.

Artificial Intelligence (AI)

The term “AI” is so prominent in so many industries that are dealing with or relying on technology that it’s something of a buzzword at this point. But, there is a reason for this, it is providing unprecedented benefits to companies the world over. The supply chain industry is no exception. Through AI, companies will be able to optimize their chains from start to finish. Gaining access to analytics and forecasting that will be crucial to getting the most out of their operations. Thus, the faster and more accurate deliveries customers want can be achieved.

Automation

Automation achieves many of the same results AI does. By being able to automate many of the processes in a supply chain, it becomes more efficient. Operations in warehouses, involving data collection, and transportation, should all be automated. In turn, supply chains can become more transparent and reliable, on top of being faster and more cost-effective.

Mobile Applications

In the short-to-medium term, mobile applications might be the most useful technology this article covers.

A 2018 report highlighted by eMarketer stated,

Mobile devices and apps (27.9%) were cited as the technology that would deliver the most innovation benefits in five years.

Their are several reasons for this. Key among them is convenience. Everyone carries mobiles. As such, accessing these supply chain applications is simple, any time, any place. These applications enable supply chain managers the ability to get real-time updates and closely monitor their inventory and operations. Consequently, this brings a degree of granularity to the customer experience unlike what was achievable before. Supply chain managers can continually monitor the various activities that make up their chain and customize them to fit their clients’ needs.

Inventory and Warehouse Management Softwares

Softwares that allow for the management of inventory and warehouses are tremendous tools for optimal customer service. They provide visibility, control, and tracking of inventory. Moreover, they assist in meeting customer demands, by tracking inventory levels and making sure they are in the desired range. Finally, like all the other technologies covered here, they improve the accuracy, speed, and reliability of deliveries.

Copy of Copy of Copy of Copy of How Supply Chain Orchestration Improves the Customer ExperienceClearly blockchain technology has major benefits for supply chains, but even with that being the case, there are some significant obstacles it still has to overcome.

Blockchain is growing rapidly. According to TechJury, the blockchain market is set to have made 20 billion dollars by 2024. More pertinently, 53% of respondents to a 2018 Statista study said they’re using blockchain for their company’s supply chain. As such, the futures of supply chains and blockchains are very much intertwined. Yet, like with any new technology that has to grow at an immense pace in order to keep up with market demands, blockchain remains on unsteady ground.

This week’s article by Morai Logistics explores the most prominent hurdles blockchains have yet to overcome in the world of supply chains.

Novelty

The very fact that blockchains are such a new technology is their baseline barrier to any market. This includes the supply chain industry. Simply understanding the technology, how to talk about it, and how to use it to its fullest potential all have to be a part of an education process.

CoinDesk highlighted this in an article addressing blockchain limitations,

Blockchain technology involves an entirely new vocabulary. It has made cryptography more mainstream, but the highly specialized industry is chock-full of jargon.

Without acclimating each segment along supply chains to blockchain technology, it is unlikely be adopted by them. This is harder than it might seem. These segments are often disparate and will have different degrees of understanding and resistance—from those in warehouses to those driving trucks.

Security

Despite being known for the transparency they provide, blockchains aren’t foolproof when it comes down to data security.  This is particularly true when a blockchain isn’t large. Part of the strength of the technology is the size of its network. If, for example, there only a few actors along a chain, it’s more likely that that blockchain will be susceptible to poor/bad data. Large scale adoption is crucial to overcome this.

Additionally, not all blockchain platforms are made equal. Technological advancements in machine learning and automation are not always used in supply chains. This means the data that is entered in the blockchain is more likely to suffer from human error. Blockchain needs to be part of a larger evolutionary process by supply chains, not adopted in a vacuum.

Efficiency

Building off the previous point, blockchains are not only less secure but, in turn, less efficient without a holistic approach to their implementation. This means there needs to be integration of blockchain data into the supply chain platform being used. Moreover, without some kind of automated operation to make sure the data is clean, secure, and reliable, it can be a slow form of record keeping—human data entry being more time-consuming.

Maturity

In many ways, the topic of maturity is just all the issues raised in this article combined. All of them come together to make potentially the biggest obstacle that blockchains need to clear. Blockchain is a technology for the future. In the present, it is very new, hurt by that newness, and stymied by efficiency and security concerns.

Kasey Panetta of Gartner writes,

Confusing future blockchain technology with the present-day generation. Current blockchain platform technology is limited in scope, and falls short of meeting the requirements of a global-scale distribution platform that can enable the programmable economy.

Thus, one of the things blockchains require the most is simply time. However, that isn’t something they are receiving. As such, it is up to the countless blockchain projects in the world of supply chains to not rely on what they will be able to do down the line but rather respond to present-day pressures.

How Supply Chain Orchestration Improves the Customer Experience

3PLs have become a dominant force in handling the logistics and supply chain networks of large companies around the world, but where are 3PLs headed next?

According to Allied Market Research the 3PL market was valued at $869 billion in 2017. Furthermore, it will come close to doubling that by 2025. In roughly a 40-year span it has gone from being a insignificant industry in the 1970’s to becoming a ubiquitous presence vis-a-vie the supply chain process. With that being the case, it’s become apparent that 3PL is very much an adaptable industry. One that caters to the demands of modern day market pressures. As well as one that is set to navigate future demands.

However, for that to be the case, 3PLs have to identify what those future demands placed upon it will be. More importantly, be willing to act upon those demands, even if those actions come with a degree of risk. As logistics and technology researcher, Haley O’Donnell wrote:

3PLs tend to be risk-averse, which deters technology investment. Gaps in data leave 3PLs in a reactionary mode.

In this article, Morai Logistics covers where 3PLs have been and can continue to be successful, as well as areas of potential future success.

Areas of Continued Success

The rise of globalization has been taking place for decades. And 3PLs have done a remarkable job at rising right alongside it. As the world has become more interconnected, the number of multinational businesses have grown. Their influence has spread. Consequently, the demand for the movement of their goods as a result of those connections has grown exponentially. 3PLs have helped businesses meet that demand. And that demand isn’t slowing down any time soon. Despite some pushback in certain parts of the world, for the most part globalization is still increasing as an economic force.

In turn, the boom in the e-commerce industry in these past couple of decades has meant its heavy reliance on dependable supply chain processes. This has resulted in 3PLs playing a supplementary role that has seen it soar alongside e-commerce. Again, just like with globalization, e-commerce is set for continued growth in the years to come. With it being projected to grow in revenue by over a $100 million in the next four years in the U.S. alone.

Areas of Future Success

Going forward the expectations for improved transparency, responsivity, efficiency, communication, and predictive accuracy are only going to grow with the development of technology that can meet those expectations. Innovations in all kinds of technologies are coming thick and fast:

  • Blockchain technology
  • Automation
  • Machine learning
  • Transport management software
  • Mobile applications
  • Big data

Each area of innovation is varied and addresses multiple market demands. We’ll touch on several here. Firstly, blockchain technology provides transparency, security, and ensures quality as it allows for real-time feedback along the supply chain network. TradeLens, having just launched in the last year, is set to be the biggest blockchain-enabled trading platform going forward.

Equally, automation can bring down costs and increase productivity as logistical hurdles like manual data entry are replaced. Moreover, machine learning makes precise predictions about supply chain routes possible, so that risks can be anticipated, avoided, and solved for.

On top of that, transport management systems will drive down the cost and time along supply chains. With technologies such as voice commands greatly helping with communication along each stage of the transportation process. At the same time, mobile applications from which orders can be made, processed, and tracked, providing flexibility and ease for clients and 3PLS alike, unlike ever before, are being rolled out. Finally, big data will see 3PLs have the ability to prognosticate potentialities that enhance performance as a result. Addressing a plethora of the expectations mentioned earlier.

Thus, the future of 3PLs involve much of what’s seen them flourish already, as well as plenty that is novel. If the 3PL industry wants to remain a big player in the supply chain market, it has to continue to adapt. Not languish in the face of potential risk.

Hey everyone! Thanks for checking out our blog page, we’re really eager to bring you the latest news in the logistics world as well as some insight into how to make smart decisions when looking at how your business should tackle its transportation needs.

We love logistics, and we feel that many people outside of the logistics community have absolutely no idea what we actually do! Whenever I’m at a cocktail party, introductions always have the follow-up question of what one does and for me the conversation always goes something like this:

Stranger: “Hi, I’m Matt. It’s a pleasure to meet you.”
Me: “I’m Kelli, likewise.”
Matt: “So, Kelli, what do you do?”
Me: “Well, I’m actually in logistics!”
Matt: “… are you a trucker?”

Our goal is to bring you some insight into how your packages get from point A to point B, and what people in logistics actually do to make this happen smoothly! The best logistics companies are like the perfect waiter, where your glass is constantly topped off and you go from your appetizer to entree to desert without even noticing they’re there. It’s time to bring us logistics people out of hiding to give you a better idea of what we do and how your company can make better decisions when it comes to logistics.

Be on the look out for our future posts, but in the meantime feel free to check out what we do as a 3rd party logistics provider by visiting our Core Services section. Or feel free to contact us if you have any questions! Looking forward to hearing from you!