3 SUPPLY CHAIN FLOWS

New Supply Chain for manufacturers & retailers is strategic, drives the new reality, & is about its logistics components & more. It is about flows from suppliers through to the end locations. The Supply Chain has 3 flows--product/ inventory, information/data, & financial. 

FUTURE OF CONTAINER LINES

With 2020, low-sulphur fuel, scrubbers, and the likely BAF battle, is this the future of container lines? If so, what will it mean for low-rate hunting NVOs and BCOs, both retailers and manufacturers. Will carriers that step up and improve their service offerings?

AS RETAILERS AND MANUFACTURERS IMITIATE AMAZONE AND ITS LOGISTICS

3PLs and logistics providers, what will you do when retailers and manufacturers imitate Amazon and do their own logistics—insource / Reverse Outsourcing? Wait till it happens, aka, it is too late? Or work now on a new business strategy?

FUTURE OF THE 3PL

Amazon’s bringing logistics inhouse is validating that the future is 3PSCM, not 3PL, and is SCMaaS. It is about velocity--Supply Chain, inventory, and Order Delivery. The 3PL business model is riding in to the sunset. New ways that drive the new reality.

BLACK SWAN SUPPLY CHAIN MANAGEMENT

Question. Do manufacturers and retailers that struggle with the new Supply Chain, its velocity, Reverse Outsourcing, and other uniqueness because they are so used to the traditional SCM that the view the new Supply Chain Management as a black swan?

WHY BUY PANALPINA?

In a time of ogistics disruption, why buy a firm instead of investing on transforming to the new reality? What is the purpose of an acquisition of a standard service provider? Old way thinking in a new way world?

https://theloadstar.com/battle-for-control-of-panalpina-heats-up-as-decision-on-agility-or-dsv-looms/

CUBE UTILIZATION

Warehousing and transportation share a common issue. Filling the cube (Cube Utilization) of the building and trailer/container—and that is impacted by product/inventory characteristics, especially density.

SUPPLY CHAIN SUBOPTIMIZATION

A hidden issue at manufacturers & retailers with Supply Chains, especially for Velocity is the lack of process integration. Much is a series of "optimized" activities that hand off to each other. The cumulative/end result of all that optimization is suboptimization.

SUPPLY CHAIN STRUCTURE

Directing Supply Chain complexity and achieving performance reflects SCM structure of process, organization, and technology. That applies to both manufacturers and retailers.

SUPPLY CHAIN MANAGENT AND CHANGE

Supply Chain Management is strategic. SCM is driving the new reality. Why are retailers & manufacturers not transforming or doing it in small ways? Fear of change? Stuck in their ways? Denial of what is happening? Ignoring it? Or?

SUPPLY CHAIN DUALITY

The new reality and the old reality require Supply Chain Segmentation and duality. One approach SCM does not work and is counterproductive across channels, markets, and industries. Retailers. Manufacturers. Part of Supply Chain transformation.

ANALYZE LAST MILE

Retailers and manufacturers. Analyze Last Mile. Segment it. Population density. Products involved. Shipment size. And more. Data Analytics/analyze. That is better approach that treating it as a monolithic logistics cost monster and wailing at the moon.

IN-STORE FULFILLMENT FROM A SUPPLY CHAIN MANAGEMENT PERSPECTIVE

In-store fulfillment for e-commerce has gotten stories done about it  Details as to what is done and how are sketchy.  They are written about retailers and from the retailer point of view.  They are not written about from the supply chain management perspective. What is missing too is the cost-to-serve and order-delivery performance metric.  

Some discussion points and to create comments for supply chain management side:

·       Retailers may be assuming store employees as no-cost workers to do this.  They are already there.  Otherwise, this seems to be an expensive order picking approach.  There is no technology used for picking and moving products.  Plus, factor in the poor store layout and the picking waste of employee add time and cost.

·       Online is about the customer expectation for order-delivery velocity.  That is the sum of order picking, preparation, and shipping delivery.  And, stores are close to customers?  So, how does this method satisfy that customer centric metric?  How does it compare with shipping from warehouses?  Better yet, how many retailers know their performance against this customer centric KPI?  Given where dominate e-commerce growth is, this is a valid question.

·       Store fulfillment is also to achieve cheaper delivery?  Much parcel shipping is essentially flat rate.  If employees make deliveries, how are they compensated with this Grubhub- like retail service and how does that compare to parcel delivery pricing?

·       How does the supply chain handle the velocity at and to all the stores?  This can be part of an extensive end-to-end network.  This means total velocity, not just downstream.  Supply chains may have limited velocity because of the pressure to keep transport costs down--which is often at the sacrifice of speed of inventory movement.  Add to this the unreliability of ocean carrier service.

·       How are stores restocked to keep the order performance going?  This is really about the end-to-end movement of inventory.  Out-of-stocks are a no-no for customer orders.  Fulfillment success depends on the upstream supply chain, where supply begins.  This issue may be masked with building inventories to avoid higher tariffs with trade wars.

·       What is the total inventory and working capital impact of using stores for this?  Additional stocking locations mean additional safety stock.  Are transport costs being traded for higher spending for inventory?  Is there the potential for being inventory rich?

It would be good to understand the analyses used by retailers as to cost and order performance for stores versus warehouses.  How does it compare to the maximum two-day order delivery?   What about an updated warehouse network built around omnichannel, not stores, with strong inventory positioning?

Also, the real issue is the total supply chain, not just one part, fulfillment.  How does forcing this at the end of the supply chain affect the total chain.  What changes were required upstream?  Or are there hidden problems if this is to be more than a Christmas time service?

Design the new supply chain's warehouse/fulfillment recognizing the different service requirements of the channels.  The solution may be a combination of approaches.  One way may not answer all needs, both cost and service.  That may require data analytics, such as regression analysis, to understand order size, number of SKUs per order, which products are likely to be ordered together, and other questions. 

With that, construct the network for what is the best way to meet customer demands—warehouses—how many, located where, size; or warehouses of different sizes depending on order volume; or a mix of warehouses and stores.  Segment based on common supply chain or other significant issues.  The monolithic purpose, one-size-fits-all supply chain is counterproductive to creating velocity.  

TIME TO BURY THE OLD SUPPLY CHAIN

The monolithic, one-size-fits all Supply Chain is counterproductive to driving a customer centric business & meeting Customer Expectations. A New supply chain should be designed back from channels/markets and its customers. Time for retailers & manufacturers to bury the old way.

IN STORE E-COMMERCE FULFILLMENT VS ?

Instead of In Store fulfillment, have retailers looked at an updated warehouse network built around omnichannel, not stores, with strong, improved inventory positioning?

QUICK FIXES AND SUPPLY CHAIN TRANSFORMATION

Manufacturers and retailers should understand that transforming their end-to-end Supply Chains to drive the new reality is not a quick fix and is not done by cherry-picking parts.  It is a serious effort with no short cuts that can impact achieving the needed results.

IS AMAZON TO BLAME FOR THE RETAIL APOCALYPSE?

Many blame Amazon for what has happened to retail & how they did e-commerce driven by Supply Chain Management to create Customer Expectations. Is it not better to ask retail executives why they did not do it? Amazon did not create e-commerce. They redefined retailing & SCM.

NEED FOR A NEW APPROACH FOR WAREHOUSING

The role of warehousing in Supply Chain Velocity needs revised. More than different warehouses for pallets vs e-commerce eaches. It is segmenting where to position and inventory to stock with differing inventory and order velocities. Single purpose warehousing counters velocity. Different needs to for manufacturers and retailers. It is about more than technology. It is also about not drowning in overall excess inventory at multiple facilities.

SUPPLY CHAIN VELOCITY AND VALUE STREAM MAPPING

Manufacturers and retailers, to improve critical Supply Chain Velocity, map your Supply Chain. Segment it. Then map as to the steps and time required. VSM, value stream mapping, is an excellent tool for this. Provides a picture of where you are.

POTENTIAL LOGISTICS / SUPPLY CHAIN PERFECT STORM

How will manufacturer and retailer C-suites deal with the potential 2020-2021 loss of with logistics providers across transport modes? Higher costs? Impact on Supply Chain Velocity? Wait to see what happens or change present thinking to avoid the self-made Perfect Storm?

ACCOUNTING AND THE OUTDATED SUPPLY CHAIN

The monolithic Supply Chain cannot drive manufacturers and retailers in the new reality. A key factor to change are outdated accounting methods like a Model T. Freight & warehouse on the P&L. Inventory on the balance sheet. No service. No SCM. Holds back transformation.

MANUFACTUERS AND RETAILERS--SPEED IS THE COMPETITION

Retailers and manufacturers, including SME, that competition speed is driven by Supply Chain Management.  How fast is your speed? Are you driving for greater velocity--Supply Chain, inventory, and Order Delivery? If no, why?

NEED FOR SEGMENT LOGISTICS SERVICES

Manufacturers and retailers, think about the logistics providers you use. They are designed from the inside out, as transport or warehouse services. With a single operating way. They are not offering segmented Supply Chain Velocity and standard service providers. How do all parties transform?

CONTAINER LINE SERVICE VERSUS INVENTORY VELOCITY

Using this story to ask again--are container lines friends or "enemies" of manufacturer & retailer Supply Chains? If enemies, what can shippers do besides invest more money/working capital in inventory and fly more products to not lose too much SCM & inventory velocity?

https://theloadstar.com/life-on-asia-europe-tradelanes-longer-transits-fewer-sailings-reduced-capacity/

SUPPLYI CHAIN ASSESSMENT OR AUDIT

Manufacturers and retailers, to improve your Supply Chains, you must first assess them using strong SCM, not logistics, metrics. Assessment is much different than an audit. The point is to know where you are as a first step in transforming.

SUPPLY CHAIN VELOCITY AND SKU RATIONALIZATION

Manufacturers and retailers, as you work to build Supply Chain Velocity, do not overlook the need for SKU rationalization.

NEED FOR 3PLs AND LOGISTICS PROVIDERS TO ADAPT

As manufacturers and retailers adjust to Supply Chain Velocity and Supply Chain Management as strategic, 3PLs and logistics providers should remember that transport and warehousing are logistics activities within the end-to-end Supply Chain. How do they adapt?

CMA CGM AND CEVA IN END-TO-END SUPPLY CHAIN MANAGEMENT

CMA CGM with Ceva moving in to compete with Maersk in the Supply Chain market. Same questions for both carriers. How to do SCM from a logistics skillset & organization? What is your knowledge of Supply Chain Velocity for retailers & manufacturers?

https://theloadstar.com/cma-cgm-set-to-take-full-control-of-ceva-as-it-eyes-end-to-end-services/

ATTEMPTS AT ADAPTING TO SUPPLY CHAIN BEING STRATEGIC

Interesting to read articles on what #manufacturers and #retailers are doing to adapt to the new reality with #SupplyChainManagement as strategic. But when you drill down, it is either rehashing the same old but with a new coat of paint or attempting programs that are odd, not creative/transformative, from a #SCM view.  Time will tell.

SME AND SUPPLY CHAIN TRANSFORMATION

SME manufacturers and retailers transforming their Supply Chains should: Prioritize and segment the supply chain.  Focus on and change what is important.  Everything cannot be done at once. Note, this is not the same as cherry picking.  The focus is very important.  Segment based on common supply chain activities.  Stop the monolithic supply chain approach.

BLOCKCHAIN AND MORE FOR LOGISTICS INTERMEDIARIES

Blockchain instead of finance intermediaries. Interesting. With Platform Business, blockchain, digitization, and other technologies, logistics intermediaries face similar replacement and disintermediation. Perhaps especially in Global Trade.

https://www.forbes.com/sites/rachelwolfson/2019/03/18/ibm-launches-a-blockchain-based-global-payments-network-using-stellars-cryptocurrency/?utm_source=twitter_video&utm_medium=social&utm_campaign=forbes#4cae9c453ec0

CATEGORY MANAGEMENT AND SUPPLY CHAIN MANAGEMENT

Retail Category Management should have a relook with the velocities--SCM, inventory, and Order Delivery. It may need Supply Chain segmentation as part of redefining.

SUPPLY CHAIN CHALLENGES

Manufacturers and retailers, your Supply Chain challenges include: It is strategic. Performance vs cost priority. Disruption. Transformation. Must focus on end-to-end. Dynamic competition moving quickly.

3PL AND LOGISTIC PROVIDER STRATEGY NEED

3PLs and logistics providers with no or outdated strategies, how do you move forward in this time of disruption and transformation? How do you brand? How do you fight new types of competitors? Reacting is not strategy. Not having differentiation in a commodity industry.

USING STORES FOR E-COMMERCE ORDERS

A first glimpse into stores as warehouses for retail / grocery. Many SCM commented on using non-warehouses and their layouts and how to replenish to meet e-commerce customer demands. Raises questions on how other retailers are really doing. 

https://www.wsj.com/articles/walmart-turns-to-food-delivery-to-fend-off-amazon-11552555801?mod=djemlogistics_h

AMAZON--LOGISTICS OR SUPPLY CHAIN MANAGEMENT

Many are fixated on Amazon & logistics. A standalone to compete with.... But look at their forwarding/ocean shipping activity. And trucking And planes. And tech. Do you see logistics? Or aggressive, in-house Supply Chain Velocity & risk control to further dominate retail?

LAST MILE AND MISDIRECTION

Manufacturers and retailers, be careful. “Obsessing” on Last Mile can create misdirection in the end-to-end Supply Chain and cause gaps and performance problems elsewhere. Misdirection.

MULTI-TIER WAREHOUSE NETWORK

Retailers and manufacturers, is your multi-tier warehouse network still valid or is it a hindrance to achieving Order Delivery Velocity?

TRANSPORT CONTRACTING

An approach to transport contracting.  It is called craps for a reason.  And when it happens?

TRANSFORMING SUPPLY CHAINS

Manufacturers and retailers, what are you doing to transform your Supply Chains that are strategic to the new reality? Little, nothing, and repainting the barn are not good answers.

LOGISTICS APOCALYPSE

Will Amazon do to logistics what it did to retailing--a Logistics Apocalypse?

SUPPLY CHAIN TRANSFORMATION

Manufacturers and retailers. Transform your Supply Chains. SCM is now strategic for a reason.  As Yoda said-- Try not. Do… or do not. There is no try.

AMAZON HAS PROVEN AND IS PROVING

As Amazon proved to retailers and manufacturers with the new selling, Customer Expectations, and Supply Chain Management to drive it As Amazon is proving with logistics.

SUPPLY CHAIN STRATEGY

Reacting to internal and external events is not the type of Supply Chain Strategy needed by manufacturers and retailers in a time of disruption and transformation. That is following, not leading.

RISING IMPORTANCE OF LOGISTICS AND SUPPLY CHAIN MANAGEMENT

Logistics / Supply Chain catastrophe with No Brexit deal. Notice the past few years with the Amazon Effect, Brexit, and increased corporate logistics costs, how the minor has become major? Yet what changes to adapt?

https://theloadstar.com/logistics-set-up-for-a-fall-of-catastrophic-proportions-in-a-no-deal-brexit/