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In the past decade, Artificial Intelligence (AI) has come out as something that people use almost every day without even realizing it. Apart from powering a huge number of applications and other digital devices, this technology stands to benefit all industries including supply chain. In fact, many companies have already started benefiting from investing in AI. A report by State of Artificial Intelligence for Enterprises shows that supply chain is one of those areas which will significantly benefit from AI. On the other hand, PwC states that AI could inject up to $15.7 trillion to the global economy by 2030.
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Go With The Flow: Streamlining Your Supply Chain Flow with AI
Monday, 08 October 2018
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What’s Cloud Got To Do With It?
Wednesday, 05 September 2018
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We were the machines
Tuesday, 12 June 2018
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Is Blockchain the Answer… to Everything Supply Chain?
Monday, 07 May 2018
Retail
If you’re anything like me, you’ll plan on beginning your holiday shopping early - but somehow always end up ordering last minute gifts on Amazon days before Christmas. While there are benefits to finishing up your shopping early – bigger inventory and less crowds being two of them – many people will wait until Black Friday to begin their shopping. A new theory from NBC Boston suggest that it may be beneficial to start your shopping early this year. And it may not be for the reason you think.
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Baby Formula is Latest Casualty of Supply Chain Crisis
Monday, 16 May 2022
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School Supply Industry Face Supply Chain Disruption Amid Start of the School Year
Monday, 16 August 2021
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Grocery Stores Taking Stock of Pandemic Issues
Monday, 01 March 2021
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Get Your Supply Chain Ready for the Holidays
Monday, 12 October 2020
Technology
Over the past few decades, the global economy has become increasingly interconnected, and supply chains have become more complex than ever. With the COVID-19 pandemic, things further degenerated, highlighting the need for resilient and flexible supply chains. As we think of attaining this, technology will be crucial in enhancing supply chain resilience. Here are some AI and machine learning innovations that are set to revolutionize supply chain management in 2023.
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Benefits of Real-Time Big Data Analytics for Supply Chain Management in 2023
Monday, 20 March 2023
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Blockchain in the Supply Chain
Monday, 06 March 2023
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The Future of the Supply Chain: Emerging Trends and Innovations
Monday, 06 February 2023
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The Role Of Technology In Improving Supply Chain Efficiency and Effectiveness
Monday, 02 January 2023
Keeping Perishibles Moving
According to Forbes, NFTs and blockchain can keep the perishables supply chain flowing smoothly.
As the global perishable food market grew to roughly $152.24 billion by the end of 2022, and continues to grow at a compound annual growth rate of 9.5% per year, leaders in the perishables supply chain space are expected to accommodate these remarkable growth rates in nearly every capacity
Read the Article Forbes
Using Tech for a Better Customer Experience
According to Harvard Business Review, technology can be used to enhance the customer experience.
The last few years have been characterized by an overwhelming amount of change for customers and marketplaces.
Read the article Harvard Business Review
Blockchain Keeps Food Chain Visible
Ethereum and VeChain demonstrate the use of blockchain technology in the global food chain, reports Crypto News Flash.
The discussions on the importance of blockchain technology are gaining momentum and two of the most versatile Layer-1 protocols, Ethereum (ETH) and VeChain are gaining momentum in related conversations globally.
Read the article Crypto News Flash
Pricefx Closes Five New Wholesale Distribution Customers with SAP
-Pricefx, a global leader in cloud-native pricing software, today announced it has signed five new wholesale distribution customers. These customers, including U.S. natural food distributor KeHE, selected Pricefx’s SAP® endorsed app to help them deliver a better customer experience, improve margins and maximize their ERP investment.
Wholesale distributors face unique challenges in an ultra-competitive industry. Facing critical business disruptions, distributors are a key lynchpin between manufacturers and retailers in the supply chain. Managing hundreds of products and sales reps with rising costs, particularly for transportation and labor, requires examining and re-examining pricing strategies. Pricefx’s solution helps enable wholesale distributors to drive new revenue sources, reduce costs, and maintain or grow margins.
“Customers are experiencing the margin squeeze and must quickly respond to rapidly changing business conditions,” said Darryl Gray, Global Vice President, Software Partner Monetization & Success at SAP. “Pricefx’s cloud-native, AI-powered price optimization solution helps unlock the power of data to deliver profitable growth and efficiency in record time. As an SAP endorsed app with premium certification by SAP, customers evaluating a price optimization solution for commerce should consider Pricefx’s offering.”
“There is no ‘one size fits all’ pricing strategy for distribution businesses; it should reflect the company’s preferences, strengths and weaknesses, and the overall objectives that the business is trying to achieve,” said Ronak Sheth, Chief Executive Officer for Pricefx. “With that in mind, Pricefx’s solution offers distributors an integrated, intelligent foundation of technology and best practices to help achieve operational excellence and drive profitable growth. Our customers leverage pricing strategies that help reinforce profitability with flexibility to adjust to continuously evolving market conditions.”
Pricefx and its Optimized Dynamic Pricing solution – an SAP endorsed app – is available on SAP Store. This app is premium certified for integration with the SAP Commerce Cloud solution and is a part of SAP’s industry cloud portfolio. It also integrates with SAP S/4HANA®, SAP Sales Cloud, and SAP CPQ. Pricefx has been recognized as a leading SAP partner through the SAP Pinnacle Awards program for three years in a row, most recently receiving the 2022 SAP Pinnacle Award as the SAP Store Partner of the Year and being named a finalist in the Customer Excellence category.
For more information, please visit www.pricefx.com.
Girl Scout Cookies - The Latest Food Plagued By Supply Chain Disruption
Even the Girl Scouts aren’t safe from supply chain issues as the beloved cookies have become the latest causality in the on-going supply chain woes that continue to plague the world since the Covid-19 pandemic began in 2020.
Girl Scout Cookies have been an American tradition since the organization first began selling them in 1917. However, it wasn't until the 1930s that they started commercially baking and selling cookies for their fundraiser. Today, the cookies have become a staple in homes across the country from January to April – reminding consumers of when they themselves were Girl Scouts or memories of their families purchasing cookies from their local Girl Scout troop.
But this year may be different as one of the two primary cookie bakers are experiencing supply chain problems. The Little Brownie Bakers (LBB) located in Louisville, KY have been dealing with inventory shortages as well as power outages due to inclement weather.
In a Facebook post, LBB stated that they were “working overtime” to fix this issue. And like the Girl Scout troops and consumers they too were frustrated, promising they did not take the disruption lightly. They assured the public that they – “…understand what cookie season means to Girl Scouts, and we take our commitment to them very seriously.”
Despite their apology both the Girl Scout executives, troop leaders and consumers aren’t willing to forgive them just yet. The Girl Scouts have expressed their disappointment in the manufacturing company letting the local troop leaders know they expected more out of LBB.
Whitney Ford, a mother of a Northeast Texas Girl Scout wrote in the comment section of LBB’s Facebook post – “Supply and labor issues were predictable...a good first step would be to not promise what you can't deliver so that others dependent on you can plan accordingly instead of it being a near daily surprise of problems.”
The cookie drive is a Girl Scout Troop’s main fundraiser for the year and because of the shortages – approximately 75% of troops won’t be able to make their sales goals this year. The remaining 25% receive their cookies from a supplier called ABC Bakers. At the time of this article ABC Bakers are not having supply chain disruptions.
Due to the supply chain issues there are limited cookies available – making some cookies like the new vegan Raspberry Rally skyrocket in price on resale sites like E-bay. The organization issued a statement stating that they were “saddened” that people were making a profit off their name without supporting the troops. The statement went on to say, “The third-party sellers have ‘deprived’ troops of valuable experience and of proceeds that fund ‘critical programming’.” At the time of writing this article there are over 350 listings for Raspberry Rallys – the lowest being advertised at $13.10 per box and the highest at $499 per box.
While there are minimal flavors available for purchase online – I stopped by my local Starbucks to see if the shortage would affect in-person sales at a local pop-up booth. To my surprise the Girl Scouts had every flavor (minus the Raspberry Rallys which was always an online exclusive). So while your favorite flavors may be sold out online – you may have better luck stopping by a local pop-up or ordering through your neighborhood Girl Scout. To find a pop-up cookie booth near you – head to Girl Scouts’ website and enter in your Zip Code.
Check These Ideas to Make Your Supply Chain Better
A supply chain is the backbone of any business that intends to succeed, without which operations will be affected. The processes in a supply chain involve moving products from the point of origin to the point of consumption. A smooth, organized and efficient supply chain is important for the success of any business. As you seek to improve your supply chain, check these ideas to make your supply chain better.
- Collaborate with Your Suppliers
Suppliers are everything in a supply chain. Therefore collaborating with them can be a game-changer for business. Work with them your suppliers to optimize the flow of goods, reduce lead times, and improve quality. Collaboration can also help you to build better relationships with your suppliers. This can lead to more favourable terms and conditions.
- Implement a Real-Time Monitoring System
Transparency of a supply chain can only be achieved by having a real-time monitoring system. This system can help you to track the movement of goods throughout the supply chain. It can alert you to any delays or problems, thus providing the opportunity to take action before they become bigger issues. With this, you will have control and can improve the efficiency of your supply chain, reduce costs, and provide better customer service.
- Use Data Analytics
Data is the new fuel without which organizations cannot realize their full potential. Therefore, data analytics can help you gain insights into your supply chain's operations. Use data to identify bottlenecks, optimize inventory levels, and improve order fulfillment times. With data analytics, you can make better decisions, improve your operations, and reduce costs.
- Implement Lean Principles
Waste is the biggest setback that can pull you down. Therefore, you must eliminate waste and optimize processes. Doing this can reduce lead times, cut costs, and improve quality. This approach can help you to develop an efficient and effective supply chain.
- Optimize Your Inventory
Inventory management is an important part of any supply chain. As such, you must have the right products in the right quantities at the right time. Take care not to have too much inventory because this can tie up capital and increase the risk of obsolescence. In addition, too little inventory leads to stockouts and lost sales risk. Therefore, optimizing your inventory can help you to balance these factors and improve the overall performance of your supply chain.
- Consider Outsourcing
It is sometimes good to know that you cannot do everything alone. However, with outsourcing, you get the time to focus on your core competencies and reduce costs. By outsourcing non-core functions, like warehousing or transportation, you can free up resources to focus on what you do best. Outsourcing can improve efficiency and quality and reduces costs.
- Embrace Technology
Technology can no longer be wished away by any business, more importantly, the one that deals with transporting products. Technology can help supply chain companies to automate processes, improve visibility, and reduce costs. RFID or barcodes, for example, can help you track inventory or optimize shipping routes. By embracing technology, you can improve your supply chain operations and gain a competitive advantage.
- Build Strong Relationships with Customers
Customers, like the suppliers, are the backbone of any business. Therefore, you must strive to build a strong relationship with them, which is essential for any business. Understanding their needs and expectations allows you to tailor your supply chain operations to meet their requirements. Furthermore, you can improve customer satisfaction, repeat business, and referrals.
In conclusion, as you seek to improve your business and reach as many people as possible, the first step is to bolster the supply chain. Collaborate with your suppliers, use data analytics, and embrace technology as some of the first strategies. Furthermore, building strong relationships with customers can differentiate your business and create a competitive advantage.
4 Key Steps to Integrate ESG into Supply Chain Management
While ESG goals and standards have continued to evolve within supply chain operations, there is also an opportunity to create new avenues for growth within this space. Now is the perfect opportunity to evaluate the role ESG plays in supply chains and to make foundational, forward-thinking changes.
A recent PwC survey of over 240 executives reveals the ESG-focused actions that businesses can take to protect their supply chain and bolster their operations.
- Staying aware of regulatory changes and keeping up
Ever-changing regulatory environments are difficult to manage. In fact, 66% of supply chain leaders say staying aware of rapidly evolving legislative and regulatory frameworks in relevant jurisdictions is currently a challenge, with nearly a quarter saying it is a major challenge.
Businesses can respond to this regulatory landscape by dedicating time and resources to monitoring local, national and global ESG regulations and putting the same premium on these concerns that they place on other key business areas.
Leaders and their companies can be empowered to not only know of changing conditions, but how to act upon them, through dedicated functions, including government and regulatory affairs. Many organizations are presently reconfiguring supply chains to respond to both geopolitical and macro-economic factors, rendering regulatory mapping a key supply chain optimization exercise.
- Identifying supplier risks and make up
Supplier risks, like pollution, corruption and shortages of raw materials, are the second most prominent challenge, cited as a concern by 58% of supply chain leaders. Businesses are tasked with tackling several forms of supplier risk: traditional management, concentration risk and supplier diversity.
When companies can identify and understand the respective risks and make up of their suppliers, they can take steps to diversify the types and locations of suppliers they work with. A strategic and thoughtful approach should be taken when identifying and vetting new suppliers and the same rigorous process should be followed when evaluating current suppliers.
The use of risk monitoring tools and control towers is crucial as risk factors continuously evolve, impacted not only by weather or supplier risks but new entrants, alternative sources of demand and uncertain demand worldwide.
- Building confidence in supply chain ESG reporting and data gathering
Business leaders are frequently positioned to parse through extensive data about their company and its operations. Effective ESG-focused supply chain management requires confidence in reporting and data gathering. Three-fourths of business leaders say they see defining steps to have confidence in their ESG reporting as a challenge they’re either already facing (54%) or will face within the next one to three years (21%).
It is no secret that reporting can be a significant undertaking. Leaders are presented with the task of choosing a starting point. This can mean starting with the highest volume suppliers, suppliers in challenging locations and considering whether to mobilize a different group or set of skills than those applied for their own supply chain.
Leaders must consider what they already report on. Data is often already being collected and measured from the supply chain, including water usage, energy efficiency and waste management. In the continued crunch to do more and anticipate evolving trends, it is important to give and get credit for initiatives already underway without getting confused amidst new definitions and terminology. Mapping out existing data efforts is key to avoiding duplicative efforts and leveraging potential synergies.
The areas that are most challenging to collect data around are product footprint, carbon border adjustments and supply chain resiliency from an environmental risk standpoint. Investing in and developing modeling and reporting standards that address these three issues will build confidence in understanding of the supply chain and mitigate future headaches. Ultimately, business leaders need to effectively evaluate where perfect may be the enemy of good, through building a blend of collecting actuals and investing in estimation methodologies as appropriate.
- Reducing Scope 3 emissions
One of the ultimate goals of much ESG adaptation is the reduction of emissions. Supply chains, with their many parts, are ripe with opportunities for refinement. Scope 3 emissions are particularly relevant as they are the result of suppliers, customers, and employees.
To reduce Scope 3 emissions, companies should open a dialogue with suppliers to facilitate an understanding and reduction of carbon footprints. Additionally, by modeling supply chain risk from climate change and other disruptions to help understand vulnerabilities, companies can anticipate their most significant pain points and prevent challenges before they occur.
Integrating ESG into supply chain management can be a challenge and requires taking a careful look at company operations. However, any short-term difficulties in implementing these changes are far outweighed by the long-term benefits of an ESG-conscious supply chain that will help to protect the business and be a value driver.
Leaders are constantly monitoring a challenging geopolitical and inflationary environment, requiring thoughtful prioritization when it comes to efforts around the opportunity for supply chains to deliver against both business objectives and sustainability goals.
Matt Comte, PwC Operations Transformation Practice Leader
Kareem Mohamednur, PwC Partner
Eggs - The Latest Food to be Affected By Supply Chain Disruption
The latest food to be affected by supply chain disruption are eggs. Stores have had a hard time keeping eggs in stock mainly due to an outbreak of the Highly Pathogenic Avian Influenza (HPAI)
that’s killed 43 million egg-laying hens since February 2022.
Because avian flus are both deadly and contagious – farmers may be euthanized to control the spread of the disease. Many farms cannot reopen until they do a thorough sanitation of their facilities and no avian flu is detected.
“The flu is the most important factor affecting egg prices,” Maro Ibarburu, a business analyst at the Egg Industry Center at Iowa State University, told The Washington Post. According to the CDC, mortality rate of HPAI is between 90-100% in just 48 hours.
Farmers assumed the outbreak was over in June but a second wave hit farms around the world between September and December. The lack of eggs coupled with inflation rates has increased the price of eggs all over the country.
Stores and restaurants have reported a significant increase in not only the price of eggs but also the cost of chicken feed and egg cartons, highlighting the significant impact to the industry.
Ron Eichner, owner of Eichner’s Farm Market in Pittsburgh, PA explained that “I had to take the prices up 25% just in the last 4 months... jumbo is $5.20 a dozen, extra-large $5.10 and large $5 a dozen.”
To get an idea of how much eggs have increased – Taki Kastanis, CEO and founder of Chicago-based restaurant chain Yolk, told The Washington Post, “Eggs, on average, maybe five or six years ago were about $18 a case [15 dozen],” Taki Kastanis, “Now we’re paying upward of $70 a case.”
This isn’t the first time that an avian flu has disrupted the egg supply chain. Back in 2015, an avian flu (H5N5) effected turkeys and chickens in the Midwestern region of the United States. While it mainly effected turkeys – many egg-laying hens contracted the disease or had to be culled to stop the spread. Like in 2022 – the average price of eggs skyrocketed – increasing about 120% back in 2015. The outbreak was assumed to be caused by migratory waterfowl.
The avian flu got so bad this year that Mexico has begun to vaccinate egg-laying hens especially those in high-risk areas. Over 52,000 birds in Mexico were affected by the avian flu in 2022.
Because wild birds migrate in the Spring bringing with them the avian flu, we won’t know for sure if the avian flu has subsided for a few months. For now, experts believe the avian flu is subsiding. According to USDA data, the price of eggs have fallen 13% in the past two weeks. Today a dozen eggs will cost consumers an average of $4.7034, a staggering difference from the $1.36508 in January 2022. It will still be a while until grocery stores have a consistent supply of eggs on their shelves and an even longer time until customers see a decrease in prices. So for now customers will have to continue paying upwards of $7 per dozen.
Helping Small Businesses Benefit From Disruption Within The Shipping Industry
Disruption in the shipping industry – marked by large transportation providers going through operational change, consolidation, and layoffs – will help small businesses cut costs and ensure service levels in 2023 and beyond. The question is how.
During the height of the COVID-19 pandemic while e-commerce surged, small businesses struggled to find capacity to ship their goods as logistics companies had all the power. Today however, there is more than enough capacity with transportation providers being overbuilt, and now finding themselves needing to “right size” their operations. As a result, they will try and sell the excess capacity, which will be a disruptor in the marketplace.
In an environment of reduced volumes, there’s an opportunity for small businesses to drive down their costs and ensure reliable delivery of their products by diversifying their carriers. But unlike larger shippers that have multiple carriers and can use whichever one is best depending on the location (and also get cost advantages), small businesses don’t have the volume required to diversify carriers. There are however different ways to tackle this issue.
Helping small businesses to diversify carriers
There are more than 33 million small businesses in the U.S. and the market has its own attributes. When it comes to shipping, small businesses typically require more affordability, reliability, and flexibility to meet customers’ rising expectations, especially in the e-commerce age. They also need a shipping partner they can trust and can help to insulate them during this time of disruption.
Over the past year and half, asset light carriers have emerged in the U.S. to level the playing field for small businesses. For example, Sendle taps into big business delivery networks and makes them available to everyone. Rather than putting more trucks on the road, Sendle makes use of wasted space in existing delivery trucks, maximizing the efficiency of all of those shipping routes. Sendle also helps to shield small businesses from the chaos in the market by handling the end-to-end journey of every parcel shipped.
New revenue stream for carriers
The upheaval in the shipping industry will not only help small businesses to save on costs, but also offer regional carriers an opportunity to partner with asset light carriers to provide a safe haven to small businesses. These partnerships can help regional carriers access a niche, untapped market and create a new revenue stream as small businesses continue to be a growth driver. Asset light carriers like Sendle that are focused on small businesses, can help shippers with customer acquisition, support, and billing, and they don’t have to deal directly with end customers.
The key to maximizing this growth opportunity for regional carriers is to choose an asset light carrier partner that understands the small business market and can bring in customers. Asset light carrier partners should understand the specific attributes of small businesses to efficiently match the right shipping provider to the right shipper. Effectively matching supply and demand creates efficiencies which benefit all parties. In addition, the innovative asset light carrier model of using trucks already on the road is an additional differentiator that will help attract small business customers as they increasingly move toward offering “green” products and want to use shipping services that support their brands.
While the shipping industry is seeing turbulence, the era of reduced volumes creates an environment where the small business market can more effectively compete against larger shippers. In turn, the support they require to make their success a reality, offers new revenue growth opportunities to those carriers using innovative solutions, and partnerships to shield small businesses from the disruption.
Dennis Oates, Chief Logistics Officer, Sendle
Impact of Autonomous Vehicles on Supply Chain Management in 2023
Autonomous vehicles (AVs) are fast becoming famous, changing how businesses operate and revolutionizing the supply chain industry. With the evolution of technology, the implementation of AVs in supply chain management (SCM) will become more common. A report by Allied Market Research notes that the global autonomous vehicle market will reach $556 billion by 2026, with a CAGR of 39.47% from 2019 to 2026. As AVs become more prevalent, businesses must understand their impact on SCM in 2023 and beyond. Here are some impacts of AVs on supply chain management in 2023.
Improved Efficiency and Cost Savings
Efficiency has always been a leading challenge to many organizations, mainly concerning efficiency and cost savings. However, AVs are the solution to this problem as they will significantly improve efficiency and cost savings in SCM. Adopting autonomous vehicles and respective implementation will lead to fewer delays while improving fuel efficiency, known for high operational costs, and will further reduce labour costs. These vehicles can operate 24/7 without rest, leading to faster delivery times and increased productivity. They can optimize routes and reduce fuel consumption by avoiding traffic and selecting the most efficient routes. Furthermore, by reducing costs associated with labour, fuel, and maintenance, organizations can reinvest in other areas of their operations and increase the profitability of their businesses.
Redefined Supply Chain Network Design
The adoption and implementation of AVs will redefine supply chain networks’ design. These vehicles allow businesses to transport goods across long distances without worrying about human factors drivers face, such as fatigue or safety concerns. Consequently, businesses can expand their supply chain networks to include remote or previously inaccessible locations. Furthermore, with AVs, there will be smaller warehouse and distribution center footprints because businesses can use AVs to transport goods directly from manufacturing facilities to customers, reducing the need for storage and distribution centers.
Improved Safety and Risk Management
Autonomous vehicles can improve safety and risk management in Supply chains. With these vehicles, there is minimal risk of accidents, mostly caused by human error. They can also be equipped with advanced safety features, such as obstacle detection and automatic emergency braking and have the ability to collect and transmit data in real-time. This data can be used to identify and address potential safety concerns before they become significant issues or cause loss of life.
New Challenges and Considerations
Although AVs have various benefits in supply chain management, there are also new challenges and considerations that businesses must address. The leading challenge to AVs and the supply chain is cybersecurity. These vehicles rely on advanced technology and connectivity. Since anything connected to the internet is open to attacks, AVs are also vulnerable to cyber threats. Therefore, organizations must always ensure their AVs are secure and protected from cyber-attacks to prevent disruptions in their supply chain operations and data.
Specialized training and hiring people with the right skills is another critical step in operating and maintaining AVs. This means there is a need to invest in training and development programs to ensure that employees can operate and maintain AVs safely and effectively.
In a nutshell, the implementation of autonomous vehicles in the management of supply chains will bring significant benefits to businesses. Some benefits include enhanced efficiency, cost savings, and improved safety. Despite these benefits, businesses must be aware of the new challenges and considerations that come with the use of autonomous vehicles. With this knowledge and addressing these challenges, businesses can take full advantage of the benefits of AVs in SCM and remain competitive in the marketplace.
The Complexity of the Supply Chain
Supply chain is a complicated beast, and we can’t afford to skimp on the details (e.g. timeliness, quality, logistics, etc.) in our business operations. Despite the fact that the term is often used interchangeably with “dispatch”, it has a very different meaning and tends to be more about planning for delivery than about getting goods from one point to another on a defined schedule.
The supply chain works like this: each stage in the process of producing goods requires labor and materials which are sourced from different suppliers. In order to satisfy every customer requirement and get goods out of the warehouse to their destination on time, these suppliers must be able to deliver quickly.
This means that orders need to be prioritized by value and delivered according to the appropriate timeliness standards defined in each order (or contract). If you don’t prioritize your orders by urgency and deliver within a certain time frame, your customers will never get their goods delivered on time!
The importance of a defined schedule
The best prescription for delays is to create a schedule, one that is as defined as possible, so that one could predict the timing of shipments to a given destination and allocate resources accordingly.
For example, in the food industry, a single batch of shrimp might ship from China via two ports: one in Southeast Asia and one in India. The shipment might take five days to arrive at its destination in Singapore, and then another three days to arrive in India. In addition, a portion of the shipment might be held up at the port of origin until the receipt of cargo manifests and customs clearance procedures are completed. A further delay might occur when first-class or express services must be booked, which there isn’t enough capacity at the port to handle or pay for. Delays can also occur by design because demand varies from week-to-week or month-to-month; you know that your customer will need more product than usual during peak demand periods, but you don’t know what those peak periods will be.
However, if you have a fixed schedule — say that your next order of widgets will ship on December 1st — then it’s much easier to allocate resources correctly and predict when reasonable quantities might be available for delivery by December 31st.
Types of disruptions that can occur
The logistics industry has been plagued by complexity and regulations for a long time. When it comes to supply chain disruption, there are three main types: A) Risks in the supply chain that do not impact the business; B) Risks in the supply chain that impact the business; C) Complexity within the supply chain that impacts both.
Mitigating disruptions
The supply chain, from raw materials to products to end customers, is the backbone of any successful business. It’s a finite and complex system that is difficult to predict and manage. Predictability has, in fact, been a very important driver of success in the industry since time immemorial. This is because supply chain isn’t just about moving goods from one place to another on a defined timetable; it’s also about moving goods on an unpredictable timetable.
So here are several ways that the supply chain can fall prey to disruptions:
1) Shipment errors – shipments can be lost or diverted by unexpected weather or shipping delays. In this case, timing matters more than anything else. So what happens when there is a sudden increase in demand (e.g., for a new product)? There is little time for the risk managers or risk assessors at fulfillment centers to react and respond to such an unforeseen spike in demand before an urgent shipment runs out of stock that could lead to massive price increases for customers and higher input costs for suppliers – both of which could have disastrous consequences for the company’s bottom line.
2) Warehousing disruptions – As production moves from one warehouse or facility to another within the same region, warehouses become increasingly complex as physical space becomes increasingly constrained. For example, inventories can be moved by truck across different regions, elevators can be used instead of workers walking up and down stairs as they move materials around warehouses and back into inventory bins, offices may also find themselves being relocated between different facilities within their region with no real coordination among regional partners operating in proximity with one another when doing so. Defects then become more likely as parts get moved between warehouses over time as they are frequently reused due to modularity improvements made by manufacturers over time as well as reusing existing parts when possible (e.g., new tires).
3) Logistics disruptions – Distribution hubs become physically congested due to rising supply chains (elevators may not work with trucks carrying products!). In this case too timing matters more than anything else: Ideally all suppliers would have access to the same low-cost transportation network so they could move their raw materials around efficiently without having them stop suddenly every few miles; meanwhile transportation costs are often fixed per shipment so there isn’t much room for error if your supplier unexpectedly decides not take part in your
The future of the supply chain
The supply chain is the backbone of business. Without it, business would grind to a halt. In fact, if your company depends on the entry of raw materials into your store or warehouse in a timely manner, you’re an easy target for hackers.
The forces that lead to supply chain success are not always straightforward. The main driver is speed of delivery (which can be measured in minutes). But it also has to do with the timeliness of suppliers: if they deliver late, you lose out on a good deal; if they deliver early, you lose out on making money at all.
To truly define your company’s supply chain strategy and implement it into practice, one needs to hold a thorough analysis of their current relationship with suppliers. In some companies, this may take months or years; in others, even decades — no matter how long it takes. One thing that is certain though: this analysis should be done far earlier than when the relationship between supplier and customer first begins. It should happen before any new products are introduced or orders are placed (early enough so that both sides have time to adjust). Otherwise, there is a risk that a supplier will simply walk away from any deal as soon as their vendor account balance grows too large…
The Evolution of Container Chassis Provisioning
When Malcom McLean introduced the world to container shipping in 1956, it not only touched off a seismic shift in the way cargo was handled but also the equipment and infrastructure needed to support containerized operations.
Loading and unloading cargo from ships piece by piece in breakbulk operations, a process that could take days and even weeks, became mostly obsolete. Containerization allowed whole containers full of goods to be lifted or driven on and off ships securely, safely and quickly. Ports had to adapt, jettisoning old wooden finger piers and dockside warehouses and building marginal wharves with gantry cranes and container storage areas near the stringpiece. Ocean carriers bought containers and built cellular container ships. And chassis became a critical component in the supply chain, as they were needed for all first- and last-mile container truck moves.
In the 66 years that have followed the advent of containerization, chassis have been viewed in different ways depending on who was providing and paying for them. To some, chassis might be viewed as a competitive advantage; to others, they might be seen as an unavoidable cost to doing business and a maintenance and administrative headache. Today, chassis provisioning is evolving into a more interoperable, homogenized, streamlined and cost effective system.
To understand where the industry is going, we need to look at how chassis have been provisioned in the past, how ownership has transitioned, and how new provisioning models have and continue to evolve.
Chassis Deployment and Ownership Through the Years
In the early days of containerization, particularly outside the United States, motor carriers owned and operated the chassis.
In the U.S, however, shipping lines developed a different approach. They provided their customers with chassis along with containers for all moves as part of their service offerings. Given dockside land was readily available most terminals operated as “wheeled” facilities allowing for less on terminal handling and a more expedited pick up and drop off of cargo. The chassis was owned and/or leased and maintained by the ocean carriers. Motor carriers were allowed free access to chassis through interchange agreements.
This meant that chassis provisioning for the first 40-plus years of containerization up until the early 2000’s was ocean-carrier centric.. To some carriers, providing chassis to customers was viewed as a competitive advantage, while others wanted to exit the chassis business because it was not a core part of their expertise. Moreover, given the line had minimal physical control over the use of their chassis, they believed it would be more efficient for others to operate them.
So in the early 1990’s, ocean carriers looked for a more efficient provisioning model and began contributing their chassis to “pools”. This allowed the lines to share their chassis, resulting in greater efficiencies, as well as operational and administrative cost savings driven by the synergies created where any chassis could be used to move any container of the participating ocean carriers.
The trend toward pooling arrangements was driven by the desire to improve equipment utilization, reduce inventory, increase velocity and reduce costs. Pooling also provided for centralized inventory control via forecasting and repositioning; standardized maintenance and repair for safety and reliability; reduced congestion at ports with faster truck turn times and positive environmental benefits, and regional efficiencies resulting from less equipment repositioning.
Over the next 15 years, those pooling arrangements began to take off in several different forms, including port terminal pools, carrier alliance pools and cooperative gray pools.
In 2005, many of the world’s largest ocean carriers under the Ocean Carrier Equipment Management Association (OCEMA) decided to take a more holistic approach to chassis pooling and created Consolidated Chassis Management (CCM) to manage their cooperative gray pools.
By 2008, some say driven by the economic crisis, shipping lines began to divest themselves of their chassis, selling them to leasing companies and shifting away from providing chassis for all of their shipments. This opened the door for new new provisioning models.
As ocean carriers sold chassis, shippers and motor carriers became increasingly responsible for providing chassis. Chassis leasing companies, which were becoming the primary contributors to the pooling model, were also leasing chassis directly to motor carriers, shippers and beneficial cargo owners (BCOs).
How the Different Chassis Provisioning Models Have Evolved
Ocean Carrier Ownership – Pre 2005
In this straightforward model ocean carriers owned and/or leased their chassis. A motor carrier would pick up ocean carrier “A’s” box and would use ocean carrier “A’s” corresponding chassis, which was provided free of charge for the container move as part of the line’s service offering.
Ocean Carrier Chassis Pools – Mid 1990’s - Early 2000s
Chassis pools comprised of chassis contributed by ocean carriers were introduced sporadically and in different forms throughout the 1990s and early 2000s. In some regions of the country, lines still owned and operated their own chassis, but also contributed them to gray pools, which allowed truckers to enter a terminal and take any chassis from the pool to move any box for a participating ocean carrier.
Sea Land Service was the first to implement a limited scope chassis sharing arrangement within its vessel sharing agreement (VSA) with OOCL and P&O Nedlloyd, which was formed in the 1990s. About the same time, the Maher Terminal Chassis pool was formed as the first terminal sponsored cooperative chassis pool.
In 2004, OCEMA in conjunction with Virginia International Terminals (VIT) established the Hampton Roads Chassis Pool as the first port-wide gray chassis pool in the U.S.
In In 2005 OCEMA created CCM to manage chassis on behalf of the ocean carriers in interoperable chassis pools across regions in the US.
The Grand Alliance, which was begun by OOCL, NYK and Hapag Lloyd in 2008, also produced a significant “alliance” shared chassis pool on the West Coast.
Ocean Carrier and Leasing Company Mixed Ownership Pools – 2008 and Beyond
Ocean carriers began to divest themselves of their chassis, selling them to third party leasing companies, who then became the primary contributors to the pooling model while also leasing chassis directly to motor carriers and BCOs.
The first shipping line sold its chassis fleet in 2009 with the intention of providing chassis only on a limited basis. As that happened, they began to bill certain shipments for chassis usage and would only provide chassis on carrier haulage moves. They also initiated charges on merchant haulage moves. Evergreen was the last major carrier to sell their chassis in 2019. However, even with this shift in the chassis provisioning model, there are still some smaller carriers that maintain their own fleets.
Over time, leasing companies decided to create their own proprietary pools to service their liner customers as opposed to operating in cooperative pools.
One example is the “Pool of Pools” (POP) in the Port of Los Angeles /Long Beach. It was formed in 2015 by combining three major proprietary marine container chassis pools, DLCP (DCLI), TPSP (TRAC) and FLBP (Flexi-van). At the time the pool encompassed a combined fleet of more than 80,000 marine container chassis with mutual start/stop locations covering eleven (11) major marine terminals and four (4) major rail facilities. Within pool operations, any chassis contributed to the three proprietary pols (DCLP, TPSP or FLBP) could be used by authorized parties (users) in all of the participating pools, and wold be interchanged out or returned to any of the 15 start/stop locations.
For cargo shippers in the POP chassis are assigned to the providers carrier regardless of the chassis used. While this creates a degree of interoperability, chassis use is dedicated to the provider that the ocean carrier has nominated regardless of shipment terms.
A Further Focus on Chassis Provisioning Models in the United States
While there are several provisioning models and variations thereof in the U.S., these are the most commonly found:
The Daily Rental Model
In this model, chassis customers pay by the day. A chassis user establishes a bilateral agreement with a provider for use. A customer/user is able to take and use the equipment as long as they want and are charged for the usage accordingly. This arrangement works for motor carriers looking to rent a chassis on a short-term/daily basis. With this model, truckers may use the network of the specific provider only.
Cooperative Pools / Gray Pools
Chassis contributors, the majority of them leasing companies along with other entities (also called EP’s), provide equipment into “pool” based on the anticipated volume of their contracted users within a pool to which they contribute their assets. The contributor charges the user which can be an ocean carrier, trucker or BCO. These pools are typically managed by a single entity who is responsible for all M&R, repositioning and general operations. The pool manager charges the contributors on a cost-pass-through basis for these operational costs which are included in the EP’s charges to their eventual end user.
Among contributors to these pools are ocean carriers, motor carriers and shippers. In return, these and other entities are able to access pool units throughout the pools network for their use. Those who do not contribute to the pool, may participate via an existing provider. A cooperative or gray pool means that chassis in the pool, regardless of branding on the side of the chassis, all are “gray” and a motor carrier can use that chassis for any box and return it to any location within that regional network.
Neutral, Dedicated or “Proprietary” Pool
Typically in this model a single equipment provider will operate independently where all aspects including price, network, and operational rules for pool access and usage are controlled by this single EP. The pool can be neutral (meaning open to all users) or dedicated (to a single user). A dedicated pool is usually established by the leasing company for a specific customer’s use and is usually sourced off the ocean or rail terminal.
Direct Least Operation / Purchase / Long Term Rental Without a Chassis Pool
In this scenario, a user either contracts directly with the leasing company to lease their chassis, or purchases a chassis directly from a chassis manufacturer for private use. This allows motor carriers, BCO’s and others to operate independently of pools.
Leases typically track a calendar period with the lessee paying daily for the length of the contract and assuming responsibility for all costs including the maintenance and storage of the units.
The Latest Developments in Chassis Provisioning
In an effort to ensure port users, including U.S. exporters and importers, truckers, rail roads, and ocean carriers, as well as the ports themselves, receive access to the most resilient, efficient, and environmentally sound chassis within a large geographic area, public-private partnerships are being established to create single-provider models that combines the best qualities of the current gray pools and proprietary operating arrangements.
With a single provider utility-type pool, the pool manager controls the availability / quantity of chassis as well the overall quality of the chassis. Chassis rates are made available to pool users usually through a publicly available tariff. The single management entity ensures chassis availability that is responsive to swings in chassis demand as well as maintaining the quality / reliability of the chassis.
The most recent example of this development is the announcement this year by major South Atlantic ports, OCEMA and CCM to develop the next generation South Atlantic Chassis Pool (informally know as SACP 3.0) of 60,000 units that will debut in Oct. 2023.
OCEMA, the Georgia Ports Authority (GPA), Jacksonville Port Authority (JAXPORT), North Carolina State Ports Authority (NC Ports), and CCM are all signatories to the historic memorandum of understanding. The pool will be owned by a subsidiary of OCEMA and managed by CCM. CCM will be responsible as the single provider by way of long term operational leases with the major leasing companies. A key part of the operational agreement are forward looking operating parameters that have been agreed with ports.
The SACP will continue to be the largest fully interoperable chassis pool in the U.S., with over 75 locations in the states of Alabama, Florida, Georgia, North Carolina, and South Carolina.
The success of this chassis provisioning model is largely dependent on the strength of the public-private partnership and the technology and management expertise of the pool manager.
While chassis provisioning has evolved significantly since the advent of containerization, the trend continues to be open to several forms, including this homogenized, streamlined and cost effective model.
Mike Wilson is chief executive officer for Consolidated Chassis Management, LLC, a leading manager of cooperative intermodal chassis pools in the U.S. He has been a member of the CCM board of managers, and an officer of its parent company, Ocean Carrier Equipment Management Association, since 2010.
Industry 4.0 is bringing about Supply Chain 4.0. Are you ready?
Transacting business in the supply chain generally means communicating orders via EDI formatted files or some other equally rigid set of rules. The reasons are easy to understand; order times are critical and specifications for orders are complex so their formats need to adhere to formats that can be instantly read by computerized systems.
EDI requirements may be rigid but they change frequently so there’s some reason to believe that there is in fact, flexibility within the order process. But getting the details wrong causes errors and costs money. How will this tight connection fare in the age of what’s called ‘Industry 4.0’ as new technologies are brought into the mix? Is it possible that the long-standing EDI format will be replaced by directly connected machines (IoT) that avoid the details of creating and processing orders? Or will the deeply embedded format keep business at a slower pace than might be possible if things changed?
Industry 4.0
Internet of Things (IoT) is impacting manufacturing, shipping, warehousing, delivery, and even customer support by adding smart devices to things that have traditionally been, well… dumb. Dumb in the sense that they don’t communicate or have any way to sense their surroundings. That’s changing rapidly as we approach the widely touted 50 billion IoT devices expected to populate the earth by 2020. Whether any particular company wants to move toward these automated pipelines is as moot as those who declared they were not abiding by Walmart’s demand to implement EDI years ago.
Manufacturing facilities around the globe are adding smarts to their machinery or replacing old machines with newer and smarter ones that can go beyond the basics of their intended functions. They are attached wirelessly directly to their company’s management and ERP systems and communicate their current status. They take instructions about manufacturing conditions to adjust their speed and can even sense variations in the materials they work with and adjust their actions to create products that meet required specifications.
The data passed between those machines and the systems that control them amount to magnitudes of data that never existed meaning that traditional manufacturing facilities that operated manually and on a completely analog basis are becoming digital factories. The data itself presents both issues and opportunities for every point along the supply chain because it’s now possible for the end customer to be aware of the status of the product they expect to purchase, and for the manufacturing machine to know how many units it needs to build to meet demand.
Flexibility stretched
Every participant in the supply chain is being armed with more data than they have ever encountered. Their first challenge is to collect and store it; in itself a mundane IT task of managing storage and connectivity. But what is done with that accumulated data as it passes along the chain is what will define the next generation manufacturer, transport company, retailer, and even the end customer. Those that devote the time and resources to understanding, then imagining how Supply Chain 4.0 will look.
Walmart - The NEW Mandate
It’s been a while since Walmart first insisted that its suppliers moved to its digital order process. Back then the prospect of using EDI rather than fax or phone to place orders seemed like a technological hurdle. And in fact it was a significant hurdle that plenty of suppliers bucked against. But today Walmart’s tactics have become accepted and electronic order processing is no longer the pariah it once was. Now the retailer is making another mandate to its suppliers. But this time it’s not about what but where.
Amazon’s Web Services (AWS) has been the go-to supplier of cloud based software deployments and an overwhelming number of companies have put their online software there. It’s easy, reliable, and competitively priced. But now that Amazon is competing directly with Walmart for retail business Walmart doesn’t want the digital guts of its business hosted on a competitor’s site. That’s understandable, and in fact in 2014 the company moved its entire ecommerce presence to the cloud - and not Amazon’s cloud.
Our colleague Steven J. Vaughan-Nichols explains the move and strategy here.
So where’s the mandate?
It isn’t enough that Walmart hosts its own data away from AWS. The retailer doesn’t want its suppliers hosting its data and the transactions they process on its competitor’s cloud either. The most recent mandate instructs suppliers to move their systems off AWS. They’re apparently fine with alternate cloud vendors like Microsoft Azure who are not direct competitors, but Amazon is a no-no.
To be clear, the mandate (for now) is directed at tech providers. So product suppliers who host their own systems on AWS may not be affected. But the move may turn out to indirectly impact product suppliers if their EDI service providers host their applications and data on AWS.
The ripple effect
Amazon has done a great job of delivering cloud computing facilities that make it easy for companies to deploy their software services. In fact it may be the default choice for smaller EDI service providers because they can concentrate on developing their systems and delivering high quality customer support while leaving the heavy lifting of server farms and data centers to Amazon.
If your EDI provider has received a mandate letter from Walmart to shift its cloud hosting services you can bet they are scrambling to meet whatever deadlines are being required. Their revenue is reliant on delivering their customers’ transactions (your transactions) to and from Walmart and every other trading partner you deal with. And because of the depth and breadth of Walmart’s vendor base nearly every EDI service provider has connections to Walmart.
Be proactive
Don’t know if you will be affected? Ask your EDI service provider where their applications are hosted and how they are responding to Walmart’s mandate. Either your provider will need to change or you will need to change your provider if you want to keep your business relationship with Walmart.
Your EDI App

The majority of enterprise workers carry some kind of smart phone or tablet with them. That means that folks have at least the capacity to access their data and applications if it's important to do so.
But fewer people that have mobile devices connect to their supply chain systems using these devices. It could be that they never found it necessary to do so, or that they don't want to be bothered with work issues while they are away. But I believe the issue has more to do with having the proper applications in place to easily and quickly connect to their systems. For most, I think the issue is the availability of the appropriate app.
But is there really a reason to extend access beyond the company firewall? If every transaction processes correctly, and all systems work as they should, there is little reason to access these systems. But the reality is that there are always issues to be managed.
As mobile apps become more commonplace, forward thinking EDI providers and the companies that use them are seeing the demand for these apps from their users. Even if the apps deliver low levels of functionality for status checking and minor management tasks, not having these extensions to their systems will eventually be seen as missing features.
Big Data from EDI Can Make Predictions

EDI software/service providers/VANs that act as collecting points for EDI data are in a great position to help leverage this data because all the transactions they transfer between trading partners pass through their servers. At some point these transactions are stored on their servers, and some of the providers maintain those transactions for historical purposes. The newest trend that these providers are offering is to leverage those transactions by applying business intelligence techniques to them. What emerges from these advanced calculations takes on many forms, but in general they paint a picture of what has happened, and what is likely to happen in the future.
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