Category Archives: Supply Chain

That Expedited Shipment Has to Be On Time. Who Do You Choose?

No matter how much effort is put into planning, at some point a shipment is going to have to be expedited. It’s going to cost extra, but there is going to be no choice in the matter. The only choice is Fedex vs. UPS. Which should you choose?

PackageFox recently put together an informative infographic that compares and contrasts the two companies, and the net result is that, from a big picture, they are surpassingly similar. But one difference stands out. With 2.4 times as many jets, Fedex rules the air while UPS, with 4.63 times as many delivery vehicles, rules the ground. While there probably won’t be much difference for in-country shipments, if it is international, and has to go air, it might have to go Fedex.

Why You Should Optimize Your Supply Chain

Besides the host of reasons this blog has provided you with in the past, which include:

if the supply chain isn’t optimized, it might not be nimble enough to keep up. As per this recent McKinsey article on building the supply chain of the future, ““the competitor that’s best at managing the supply chain is probably going be the most successful competitor over time“. Furthermore, as supply chains are becoming more splintered, they are getting harder and harder to manage by the seat of one’s pants, which increases the management complexity. In many organizations, instead of increased agility, this actually leads to increased inefficiency as managers struggle to manage the complex splintered chains efficiently.

But if supply chain optimization is employed, the splintered chains can be quickly optimized. But more importantly, an organization can progress beyond managing splintered chains to managing supply chain segments, which is likely the ultimate key to supply chain success in the years ahead. Think about it … if the origin and destination of goods has to continually adapt due to changing low cost locales and emerging (consumer) markets, then the ultimate key to quick adaptation will be to just change the relevant segments of the (splintered) chains and not the whole chains. If the organization was sourcing from Thailand but switches to Vietnam, but is still shipping to the US, why should the whole supply chain change? Maybe it’s still the same ocean carrier, and all that changes is the port and the carrier that gets the goods to the port. And if the organization has general contracts with a number of different international carriers, it will be quick to run an optimization and build the modified change from available segments.

And that, in a nutshell, is why you need supply chain optimization.

Retailers Are Struggling with Cost vs. Value

According to a recent article over on the National Retail Federation’s on “officemax petco and half price books weigh in on retail horizons key findings” on Retail’s BIG Blog, retailers will continue to be challenged by balancing the demand for value and keeping prices down. In addition, seventy-six percent of participants said the top supply chain strategic initiative for 2011 is cost reduction/cost containment. This should not be a surprise. It’s the tail end of a lingering recession, thanks to the jobless recovery — and this translates into less dollars in customers’ pockets to spend. Raw material and transportation prices are going up again, and this translates into higher costs. Unless the value is there, customers are not going to spend.

However, this does show the heightened need for next generation sourcing techniques throughout the supply chain. Retailers need to get the right high-value products on their shelves at the right price. Manufacturers need to source the right high quality materials at the right price. Material suppliers have to source the right high-value components at the right price to process the raw materials. And each has to insure that the materials flow up the chain at the right time to minimize inventory and distribution costs. Not easy without systems and processes that keep the modern value chain in sync.

Do You Know Just How Risky Your Supply Chain Is?

Or that even seemingly unrelated natural disasters can put it on hold? Or that it’s not just unpredictable disasters, like the eruption of Eyjafjallajokull that can bring things to a halt? Even completely predictable events like floods, which occur fairly regularly in most regions over the course of decades, can have devastating effects well beyond the coastal areas.

Consider the recent flooding in Australia’s Queensland slate. It did more than just make coastal areas unusable. It also resulted in significantly increased coal output. BHP, the world’s biggest producer, minded most of its coal products in Australia’s Queensland’s Bowen Basin from three of the world’s largest coking coal mines — Goonyella Riverside, Blackwater and Peak Downs. As a result of the flooding, all three mines were temporarily out of commission and mining is still constrained. This has caused BHPs production of coal to fall 30%. All because of a little extra water. This is not something that would come to mind if you asked an average organization about its supply chain risks.

So do you know just how risky your supply chain is? If not, maybe it’s time you did an assessment.

Is the Dreamliner Just a Dream?

I used to think vapourware was unique to IT. But after hearing that the Dreamliner, which was originally scheduled to ship back in May 2008, has been delayed yet again, I am beginning to think that Boeing has found a way to effectively translate the concept into aviation. Yes they have planes, and yes some of them fly, but they never seem to work. At this point I am starting to wonder if they are anything more than 767s with a new outer shell and a few cosmetic upgrades to the interior. If movie sets can recreate entire towns with nothing more than drywall and a few 2×4’s and pull the wool over our eyes everyday, why can’t aviation companies?

I guess we just wait for the next analysis of the continuing fiasco from Bob:

or Doug:

  • Aircraft Materials’ Battle Heats Up
  • Boeing Develops Technologies to Recycle Carbon Fibers
  • Boeing Races to Redesign Weight Out of Dreamliner 787