Kelli Saunders, Author at Morai Logistics Inc.

Smaller Firms Investing Larger in Supply Chain Management Software

https://morailogistics.com/smaller-firms-investing-larger-in-supply-chain-management-software/

Good Supply Chain Management (SCM) is a critical part of any firm. It boosts customer service by ensuring that the right product assortment and quantity are delivered in a timely fashion, and it makes those same products available in the location that customers expect. Good SCM also improves the bottom line by managing fixed costs and improving cash flow through smoother deliveries.

It is no surprise then that “SCM software”, which include: warehouse management systems (WMS), transportation management systems (TMS), procurement, strategic sourcing, supplier relationship management (SRM), contract lifecycle management, demand planning and supply planning, is such a popular topic of study for businesses large and small.

Software Advice, a company that connects supply chain management system software buyers with vendors, recently published a report that analyzed 200 prospective supply chain management (SCM) software buyers.
The key findings of the study were as follows:

Small businesses (those with annual revenue of $50 million or less) are willing to spend a rather hefty amount—$30,000, on average—for new SCM software.
Midsize and large businesses (those with annual revenue above $50 million) are willing to spend an average of $171,000 for new SCM software.
Twenty-seven percent of larger businesses cite the need for stronger integration as a reason for seeking new software, compared to just 16 percent of small businesses.
Only 6 percent of small businesses are currently using commercial supply chain management software, compared to 21 percent of midsize and large businesses.

Is this the Right Time for Your Company?

The last key finding isn’t all that surprising according to Forrest Burnson, a market research associate at Software Advice who gave an interview regarding his research.

Many of the businesses we speak to are growing and expanding their operations, and are, therefore, investing in these types of solutions for the first time. On top of that, many smaller businesses may be unaware of the solutions that are out there, so they’re just in the preliminary phase of their research.

Burnson also points out later in the interview that although there are several cases of small businesses being successful without SCM software, they will eventually need it as their business grows and expands if they wish to not be a victim of their own success.

[Burnson responding to a question about small businesses meeting their SCM needs without the appropriate software] They’re generally using some combination office productivity software (e.g., Excel), a legacy database system and/or basic accounting software to conduct their day-to-day operations.

Although SCM software can help improve efficiency in a business through the improvement of data flow integration between their different business processes, and streamlining compliance, the big reason that small businesses should look into SCM software is that the technology is ready for it.

“As with other things in technology, SCM has seen big advantages thanks to social, mobile, cloud and analytics,” said Boris Kontsevoi, president and founder of Intetics, a software development company quoted in the conclusion of the study.

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!

INFOGRAPHIC: 12 Reasons to Invest in Mexican Nearshoring

https://morailogistics.com/infographic-12-reasons-to-invest-in-mexican-nearshoring/

In recent years, the growing trend with many U.S. companies has been to relocate some or even all of their off-shore production back to North America. China no longer holds the sway that it used to, but countries such as Mexico are quickly becoming the much more attractive option. Here are 12 reasons why you should consider near shoring in Mexico.

The Right Time to Consider Nearshoring Strategies to Mexico

morai-logistics-12-reasons-to-invest-in-mexican-nearshoring

As foreign investment in China stalls, Mexico’s foreign investment continues to grow. As a result, demand for facilities and land is beginning to drive up. Thus, the best time to invest in Mexico for your manufacturing or sourcing potential for your organization is now.

Logistics in Crisis: The Nepal Earthquakes

https://morailogistics.com/logistics-in-crisis-the-nepal-earthquakes/

Recently, Nepal has been hit by a second major earthquake in less than three weeks. It had 7.3-magnitude and it killed 65 people and more than 1,200 injured.

The human cost in lives and injuries is hard to calculate at the moment, but between this new earthquake and the April 25th earthquake (7.8-magnitude) just a couple of weeks prior, the estimated death toll is currently over 8,065 with over 19,200 injured. These causalities don’t take into account those killed in the adjoining areas of Nepal, or by the subsequent avalanches it triggered on Mount Everest and in the Lantang Valley.

As catastrophic as the two earthquakes have been on human life, Nepal’s pre-disaster limited infrastructure means that recovery and aid for the afflicted groups in the area could in fact take weeks to years for some of the more isolated communities.

In an interview with the Wall Street Journal, Alex Marianelli, senior logistics officer for Asia at the United Nations World Food Program and one of the directors of the effort that is bringing medicine, food and other supplies to the battered, impoverished nation, had this to say “Logistically, this particular disaster—because of the geography and the mountainous terrain and poor roads—is probably the most difficult response I have ever had to implement”.

Other issues that have hindered aid groups and relief supply chains are the country’s customs requirements, congestion, and transportation difficulties.

The Nepal Crisis

The Nepali government wanted to tax the relief materials like ordinary goods which in turn has led to Nepalis expressing doubt as to the effectiveness of the government in sending aid where it’s most needed.

The country only has one airport in Katmandu that can handle the larger aircraft needed by relief groups. However strict weight restrictions and the capital’s 4,600-foot elevation and relatively short runway make landings difficult.

Both UPS and FedEx Corp. have committed resources to helping Nepal. UPS has announced that it would give $500,000 to aid which in combination with in-kind support to enable the provision of urgent relief supplies, as well as potential on-the-ground logistics support for long-term recovery needs. FedEx’s announced support was for approximately $1 million in cash, transportation support and a chartered flight to deliver critical medical aid and supplies to Nepal.

There had been some progress in alleviated Nepal’s most affected areas as several international bodies (both public and private) were working on more long term solutions which would’ve addressed the country’s unique geographic situation. However, yesterday’s earthquake has put that work into question.

Thousands died in the initial April earthquale. Hundreds of thousands more were left homeless, and centuries-old buildings were destroyed at UNESCO World Heritage sites in the Kathmandu. The new earthquake only added to the misery and will stretch already thinned supply lines even further as things begin to settle.

After the initial search and rescue operations, focus will shift toward shelter, water, and medical supplies. Hopefully, the logistics of the situation can improved soon as food is already an urgent need for many thousands in the country, and it’ll become even more pressing once the heavy rains start and new area fall victim to avalanches.

The Logistics Behind the 2015 Pan Am Games

https://morailogistics.com/the-logistics-behind-the-2015-pan-am-games/

With over 10,000 athletes from 41 different nations competing in 36 different sports, the 2015 Pan Am Games (TO2015) which are set to take place in Toronto, are looking to be a big win for Canada this summer.

Although the Pan Am Games is impressive in its own right as a major international sporting event, it is also something of a minor logistics marvel.

Aside from the numbers mentioned earlier, the organizers of this year’s event need to also take into account that over 250,000 visitors and media personal will be attending the event. More than 30 venues in and around the city of Toronto will host the main event with an additional be 13 non-competition venues and 15 training sites for the athletes. Because of the major logistics demand this will entail, the 2015 Pan Am Games teamed up with Schenker of Canada, an international logistics company.

DB Schenker has pledged to provide 6,968 square metres (75,000 square feet) of warehouse space, warehouse operations (including staff and equipment), freight transportation and freight distribution operations, venue and Athletes’ Village logistics operations, as well as customs clearance and freight forwarding according to an earlier press release.

In fact, DB Schenker has estimated that 2015 Pan Am Games will require twice the number of products used during the Vancouver 2010 Olympic and Paralympic Winter Games.

A Fully Stocked Event

In a bit of creative and proud self-promotion, DB Schenker posted a list of the items they’d be providing for the event–back in 2013. The intent being to market themselves as the official logistics support for the event. Here is the highlights of that list:

1,000,000 items with 5,000 stock-keeping units (SKUs) to keep track of them in the warehouse
6,250 folding tables (stretched end to end would run the entire length of the Pan Am equestrian cross-country course)
22,500 folding chairs (the equivalent of 12 fully loaded 16-metre tractor trailers)
7,500 metres (25,000 feet) of barrier tape (almost 14 times the height of the CN Tower)
7,600 beds and mattresses
950 pairs of track spikes
920 swimsuits
700 wheelchairs
400 bicycles
250 boats (sailing, canoe/kayak, rowing)

The company also committed to picking up the equipment and luggage of the participating athletes from the Toronto Pearson International Airport and transport to and from the event.

Events such as the 2015 Pan Am Games are about the coming together of different people from different nations in the spirit of friendly competition. But these events can only come to be if there’s a strong, organized, and well planned logistics structure behind it. Ian Troop, chief executive officer of TO2015, had this to say on the matter, “A great logistics team means our athletes, officials, volunteers and staff can perform with ease and confidence when the world is watching in 2015″.

The Pan Am Games will be held between July 10th and 26th, with the Parapan Am Games between August 7th and 15th.

Here Come the Drones…

https://morailogistics.com/here-come-the-drones/

A little under two weeks ago, the Federal Aviation (FAA) granted approval to e-retailing giant Amazon.com to test-fly their new advanced drones, under certain provision, for potential delivery. This latest petition received quick approval from the FAA compared to past efforts this year, such as the six month delay in approving an earlier prototype for which the FAA received a lot of criticism.

“We’re pleased the FAA has granted our petition for this stage of R&D experimentation, and we look forward to working with the agency for permission to deliver Prime Air service to customers in the United States safely and soon,” said Paul Misener, Amazon vice president for global public policy.

The FAA said Amazon was one of 30 exemptions the agency granted a day earlier for commercial drones, bringing the total to 128 according to this RTT News article.

The article is one of many recent stories involving drones. An increasing number of industries outside of logistics and e-commerce are looking at drones as the technology of the future.

Danny Vogel of JUDSPURA Business Advisor outlined some examples from other industries that have already started to seriously consider utilizing drones:

Law enforcement agencies have shown strong interest in using drones for surveillance and public safety while other government agencies have found drones useful in fighting fires, search-and-rescue missions or catastrophic events
Construction companies have already begun using drones for mapping sites and monitoring progress, and mining companies have used drones to map the insides of mining tunnels
Media companies have also begun testing drones for filming reports and news coverage

What it all means for logistics reliant businesses

Back in February of this year, a number of articles reported on Amazon’s inability at the time to get approval from the FAA to test their drones on American soil. At the same time, one of the company’s major international competitors, the Chinese online giant Alibaba, was ready to test their own drone delivery program by delivering tea to 450 of its Chinese customers in a trial run.

The reason why both companies’ drone delivery programs were so heavily compared to one another was because since Jeff Bezos, CEO of Amazon.com, publicly revealed the Prime Air program in late 2013, Amazon has been in the press as the main proponent of utilizing drones for commercial purposes. Although many companies since then have started their own drone testing, seeing a competitor such as Alibaba made the public all the more aware of how far drone delivery programs have come in two short years.

Many news articles, industry discussions, and blog posts related to logistics discussed how drones would be a hot item discussion in 2015. However, with each passing month it becomes more and more apparent that the discussion around the requirement for drones was settled even before the start of the calendar year. Instead, the real discussion is centering around which companies will come up with the best solution to the problem of possible collisions and best marketing strategy.

Where will you manufacture?: Near-shoring vs. Re-shoring

https://morailogistics.com/where-will-you-manufacture-near-shoring-vs-re-shoring/

In the past, we’ve written about the benefits of near-shoring over off-shoring. However, something we haven’t discussed in much detail is re-shoring.

A recent article on EBN discussed the findings of Cushman & Wakefield’s 2015-2017 North American Industrial Forecast. In the article, writer Jennifer Baljko highlights the differences between the praise reshoring has gotten in the media versus Cushman & Wakefield’s findings and in doing so, asks an important practical question of manufacturing and logistics companies: “Where will you put your factory?”.

Before going any further, it’s important to properly define the terms re-shoring and near-shoring as they are sometimes used interchangeably despite them having very different meanings.

According to a Forbes article on the topic,

Re-shoring refers to manufacturing that was previous done outside of America and has been moved back to America. Near-shoring refers to manufacturing work that has returned closer to America in countries such as Mexico.

Cushman & Wakefield’s findings, as Baljko points out, makes fining quality and affordable space for factories and warehouses one of the biggest challenges for companies who decide to move back home.
“A lack of quality space remains one of the biggest challenges facing manufacturers in the U.S. Emerging technological advances, such as improved measuring/process control, advanced digital technologies and sustainable manufacturing, have made many older facilities functionally obsolete, opening the door for more speculative construction to take place within the next few years,” the report noted.

How Does Near-shoring compare?

Although Cushman & Wakefield’s study advised caution for companies considering re-shoring their manufacturing, their findings did indicate that near-shoring to Mexico might be a more prudent long-term strategy.

“Major drivers of industrial real estate activity continue to reflect the prominent role of distribution and logistics sectors. They include large renovations, like Kuehne+Nagel’s 341,000 sf at O’Donnell Logistics Park, or expansions, like Walmart’s 132,000 sf at Parque Industrial El Convento” they write.

The reason for this is that is because of the competitive land prices the country offers. “Average industrial land costs range from $638.08 psf to $231.85 psf for private industrial parks sites and raw land respectively” they write in their report.

Manufacotring in Mexico also has other advantages that we’ve written about elsewhere, but according to Cushman & Wakefield’s, “Generally, Mexico is increasingly developing a pool of high-skilled workers and rapidly integrating its manufacturing industries with global production lines. Also, in addition to a successful macroeconomic reform agenda, an ambitious investment program by the federal government is expected to bring further improvements to Mexico’s transport and logistics infrastructure” they highlight in their findings. “Given such factors, Mexico’s industrial real estate market is forecast to continue growing and benefiting from increased demand from a diversified range of industries” they conclude.

Infographic: Women in Logistics – Looking at the Gender Gap Around the World

https://morailogistics.com/infographic-women-in-logistics-looking-at-the-gender-gap-around-the-world/

Globalization has broken through several technological, political, and geographic barriers to supply chain logistics. However, while its been documented that companies that include more women at the top levels of leadership tend to outperform those that don’t, there is still a noticeably large gender gap when it comes to the logistics industry.

Although there has been a great deal of progress in the last few decades in closing the gender gap, this infographic shows that there is still a lot left to do.

Closing the gap for good shouldn’t be thought of as barrier for those of us in logistics, but rather an opportunity. An opportunity for logistics companies, as Shalu Shigram puts it, ‘to maintain a competitive edge by utilizing all human resources and potential capital.”

Top 10 Facts Exploring the Gender Gap Around the World

Morai-Logistics-Infographic-Looking-at-Gender-Gap

The Logistics of Epidemics: How the Supply Chain Can Help… Or Hinder

https://morailogistics.com/the-logistics-of-epidemics-how-the-supply-chain-can-help-or-hinder/

Last week, an article in The Verge covered Bill Gates’ statements concerning the lack of preparedness the world saw when it came to the Ebola epidemic that ravaged Sierra Leone, Guinea, and Liberia. What Gates suggests is needed, is for preparations for epidemics be similar to preparations for war, “war games” and all.

“It’s useful to compare our preparations for epidemics with our preparations for war. Defense budgets and investment in new weapons dwarf investments in epidemic preparation. NATO has a mobile unit that is ready to deploy quickly. Although it’s not a perfect system, they do joint exercises where they work out basic logistics like how fuel and food will be provided, what language they will speak, what radio frequencies will be used. When soldiers sign up to serve, they know what the risks are and who will take care of them if they’re injured or killed. Few if any of these things exist for an epidemic response.” the article quotes Gates, who originally wrote this in The New England Journal of Medicine.

Gates isn’t wrong in his assessment.

When You Play the Game of Infectious Diseases…

A research paper written by Thomas K. Dasaklis, Costas P.Pappis, and Nikolaos P. Rachaniotis in the International Journal of Production Economics which looked at epidemics control and logistics operations highlighted the importance of logistics supply in controlling epidemics.

“Logistics operations play a crucial role during the containment effort of an epidemic outbreak as they strengthen the ability of all the parties involved to promptly respond and effectively control the situation,” they wrote. “Even at a long-term level, strategies adopted in commercial supply chains could be also adopted in the case of emergency and/or humanitarian supply chains in an effort to match supply with demand”.

The researchers continue their paper with clear examples of the necessity of a strong logistical network to combat an epidemic,

“The flow of essential medical supplies, transportation activities and demand for medical personnel are some of the logistics-oriented features that depend on the available information regarding disease’s progression. At the same time the management of materials flow during the containment effort necessitates its own stream of information. Highly sophisticated systems in business supply chain and relevant technologies like RFID could also be adopted in the case of epidemics containment”.

This is not say to say that there is a one-to-one comparison to more traditional logistics models, ” Such supply chains have much in common with commercial supply chains but at the same time they pose significant challenges as they operate under uncertain, and many times, chaotic conditions” the researchers clarify.

The paper’s conclusion is similar in some aspects to Gate’s words when it finds that there are “a plethora of gaps and discrepancies in the literature regarding epidemics control and logistics operations”.

As The Verge article, quoting the US Center for Disease Control and Prevention points out, over 25,000 across Sierra Leone, Guinea, and Liberia have been infected with Ebola as of March 15th, and 10,000 people have died.

With the virus still spreading, and 116 new cases confirmed in the week before March 8th according to the World Health Organization, perhaps Gates’ suggestion that the Ebola epidemic (and really epidemics) be treated as serious as war is treated isn’t a bad one.

Assessing the Costs, Consequences, and Repercussions of the West Coast Port Strike

https://morailogistics.com/assessing-the-costs-consequences-and-repercussions-of-the-west-coast-port-strike/

With the worst of the West Coast dockworkers strike effectively ended last month, now is a good time to take a step back and assess the costs, consequences, and repercussions to all of the stakeholders that were affected in the nine month strike.

Optimism from Mayor

Political stakeholders have been the most optimistic about the future of the West Coast port and its ability to meet the massive backlog that has accrued over the protracted labour dispute.

” Business should return to normal at U.S. West Coast ports in about three months, and long-term damage from a nine-month labor dispute should be limited, said Long Beach, Calif., Mayor Robert Garcia in an interview with the Wall Street Journal.

Later in the article, he admits that some business may have been permanently lost to East Coast ports, but remained confident that they would regain the vast majority of the business.

Zepol report

A report put out by Zepol concerning the impact of the West Coast port strike puts forth a less optimistic view than Mayor Robert Garcia. Some of the highlights of the report are as follows:

Total U.S. container imports are down over 5 percent this year, compared to January and February of 2014.
The ports of Los Angeles and Long Beach, which make up a combined 40 percent of U.S. container imports, declined by 19 and 20 percent so far in 2015.
East Coast ports have increased container imports by 8 percent this year.
Total U.S. imports by TEUs (twenty-foot containers) dropped from 2.93 million in January through February of 2014 to 2.78 million in 2015.
Combined, the ports of Los Angeles and Long Beach have declined by over 230,000 TEUs compared to the first two months of 2014.
The port of New York/Newark grew by over 34,000 TEUs. The port of Savannah increased 20 percent with an increase of over 40,000 TEUs and Houston rose 29 percent, by nearly 31,000 TEUs.

Canadian fallout

Although Canada wasn’t as heavily affected by the strike as its southern neighbour, however retailers north of the border still felt the impact of the situation, in particular, Ontario’s automotive plants.

An article on OurWindsor.ca discussed the potential and actual impact of the west coast strike at the time. Instances of Honda Honda Canada Manufacturing plants sometimes running at 60 % capacity, congestion at B.C. ports, shipping containers running five to 10 days late, and a trickle-down cost to consumers from additional costs incurred from said congestion were all issues that this article brought up.

As previously mentioned in this article, the worst of the strike seems to be over. However, there’s still a chance that even with the most optimistic of predictions and outcomes, more complication will arise. Especially when the five-year deal still must be approved by the 13,000-member International Longshore and Warehouse Union’s rank-and-file.

eBook: International Women’s Day Logistics Tribute

https://morailogistics.com/ebook-international-womens-day-logistics-tribute/

This past Sunday was International Women’s Day. In tribute to celebrating women globally, we would like to dedicate this week’s post to showcasing the major milestones in recent development for the state of women in the logistics and supply chain industry.

Last year we posted an infographic that the logistics community wholeheartedly enjoyed and we thought we would continue the trend and release an update, this time in the form of an eBook. We have come a long way from the world of logistics notoriously being known as a Gentleman’s Club, but we still have a ways to go when it comes to diversity in logistics (and not just with women).

From education, job options, and position within companies, we take a careful look at contemporary findings and showcase the statistics behind women in the logistics industry for 2015.