Kelli Saunders, Author at Morai Logistics Inc.

Supermarket Cold War Heats Up with Amazon Go Reveal – Part 2

https://morailogistics.com/supermarket-cold-war-heats-amazon-go-reveal-part-2/

In last week’s post, we covered the reveal of Amazon Go.

This week, we’ll cover the steps Amazon’s competitors have taken to stay competitive. We will also be going into why with just a teaser video, Amazon may have already won the war for the future of retail.

Before we begin, we need to do a recap about what we know so far.

What the Reveal Video Tells Us

Amazon Go will work like this:

Amazon Go aims to give customers a ‘grab and go’ feeling similar to how its digital shop operates.
You enter the store by waving your smart phone across a scanner.
You will need an Amazon account (likely Amazon Prime) to use the store.
If a customer changes their mind about an item, he/she just puts it back.
The store will be using AI and facial recognition technology similar to that found in a self-driving car.
Seattle will be the first test city which makes sense given the city is also home to Amazon’s head office.

The video is meant to cement the idea of a friction-less retail experience. Simply go in, get what you want, then leave. The video makes the idea believable, influences buyer expectation, and affects the future of the industry.

Let’s look at the strategies Amazon’s competitor’s have been testing to expand their market share.

Competitor Response

Big retail and food companies are using a number of different strategies to stay competitive. Companies such as RetailNext, Euclid, Nomi and others are part of a trend that provides brick-and-mortar stores with analytics that looks similar to website traffic reports. The aggregate data is used to project purchasing trends, decide how to build a layout, and produce more detailed reports for shareholders.

Food heavyweights such as Tyson Foods Inc., Campbell Soup Co. and Hershey are taking a page from UberEATS with their strategy. They are trying to get into the home delivery and meal kit market as Wall Street Journal correspondent Kelsey Gee explains. They are working with online couriers to challenge companies like Blue Apron and HelloFresh that have carved out a $1.5billion market delivering parcels of fresh ingredients.

Wal-Mart is also making an aggressive push into online groceries. Wal-Mart Pickup and Fuel lets customers order their items online and pick them up when they are ready.

Future of Retail—Has Amazon Already Won?

While the strategies used by Amazon’s competitors are innovative, they haven’t had the same media buzz. With just a video, Amazon has created an expectation amongst consumers. They will expect greater convenience in the way the video promised. Companies using alternative models will need to work harder to convince their consumers that their way is superior.

However, being king of retail may not be Amazon’s true goal. Amazon Go is more likely to be a proof-of-concept and a retail model it can sell to other businesses as this video speculates.

Conclusion

The reveal of Amazon Go is recent, but it’s already beginning to disrupt the retail industry. Time will tell which new retail method becomes the standard, but one thing is certain—retail will be undergoing a drastic evolution very soon.

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.

Supermarket Cold War Heats Up with Amazon Go Reveal – Part 1

https://morailogistics.com/amazon-go-supermaket-cold-war/

A couple of weeks ago, Amazon.com Inc. announced it will be opening a grocery store. This is an unexpected move for the e-commerce giant.

Amazon Go is the name of the name program. The reveal video promises “no lines, no checkouts, no registers”. It’s about to enter the pilot phase, being limited to a single store. The only customers to test it out will be employees.

So why the hype?

More Than Meets the Eye

It might seem strange that the announcement of physical store is having such an effect on news outlets. After all, e-commerce sales continue to grow each year. The sale of groceries isn’t new for the company as its AmazonFresh program made its debut back in 2007. This being Amazon however, means the project is more nuanced then it first appear.

A 2014 patent filed by Amazon gives more insight into how the store could work. Basically it involves a whole lot of cameras, sensors and tracking. Natt Garun, from the Verge, comments:

The patent describes a system where cameras could capture you as you walk into the store, then identify who you are based on an ID card that’s associated with your Amazon client

There are cameras lined within the store as well. They’d determine if multiples of the same items are taken. So if you took several bags of chips to get to one in the back and you put the rest back, then the cameras would recognize the action and keep you from being charged.

Sensors in the shelves are another way for the store to know what you have taken. They will check to see if the weight has changed from its original state.

Why Invest in a Grocery Store?

There are some unique ways Amazon Go stands to benefit the company.

Amazon Go, even if it were expanded far and wide, would generate a shadow of the sales of the parent company. E-commerce will have the advantage over physical stores because it isn’t limited by the geography of its customers.

What Amazon Go represents for the company, is valuable information on its customer’s buying habits. Customers would be enticed by the promise of a hassle-free grocery experience, and the cameras in the store would collect information about them. Nat Garun continues:

The patent says this is used to identify the shopper’s hand to see whether they actually pick up anything off a shelf, but combine that with the fact that Amazon knows what you’re buying and who you are down to your skin colour and this is pretty next-level market data

Information gathered this way could be used to strengthen its other programs, AmazonFresh in particular. The company would be able to see what works to move a product and what doesn’t. Having physical stores would also allow Amazon to broaden its influence in the retail market.

Conclusion

Time will tell how much of a disruption Amazon Go will be on the industry. The promise of “no lines, no checkouts, no registers” sounds appealing but customers may not like being always watched.

The store will also be a model for other industries to consider. In the same way the reveal of Amazon Prime Air made waves in 2013, the same will be true for Amazon Go.

Santa Readies His Workshop for the Holidays and by Santa, We Mean eCommerce Operations

https://morailogistics.com/santa-ecommerce-operations/

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!

What is Blockchain and How is it Going to Benefit the Logistics Industry?

https://morailogistics.com/is-blockchain-and-logistics-going-to-benefit-each-other/

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.

5 Tips for Supply Chain Professionals to Survive, and Succeed, The Holiday Season Logistics Peak

https://morailogistics.com/5-tips-to-survive-the-holiday-season-logistics-peak/

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.

Autonomous Cars Driving Change in Automotive Manufacturing & Supply Chains

https://morailogistics.com/autonomous-cars-driving-change-automotive-manufacturing-supply-chains/

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.

10 Reasons to Pursue a Career in Logistics & Supply Chain Now!

https://morailogistics.com/10-reasons-pursue-career-logistics-supply-chain-now/

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

morai-logistics-infographic-10-reasons-to-pursue-career-in-supply-chain-logistics

3 Steps to Eliminate Zombies From Your Supply Chain

https://morailogistics.com/3-steps-eliminate-zombies-supply-chain/

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!

5 Ways to Revitalize a Lagging Corporate Culture in Logistics and Supply Chain

https://morailogistics.com/5-ways-revitalize-lagging-corporate-culture-logistics-supply-chain/

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

Why Culture Matters

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

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

5 Steps to Implementing and Measuring Culture

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

1. Define Core Values

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

2. Align Core Values

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

3. Reinforce Core Values

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

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

4. Measure the Integration

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

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

5. Build Action Plans

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

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

The Success of 3PLs and Mexico As A Logistics Hub

https://morailogistics.com/success-3pls-mexico-logistics-hub/

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