BIG Data : Can it make a BIG difference in Shipping ?

What is “BIG DATA in shipping?”

First things first.  It is important to understand that 'lots of data' and 'big data' are different!

Traditional technology has been serving organizations’ analytics needs for decades, allowing them to analyze large data sets from traditional sources such as warehousing and distribution systems. 

‘Big data’ takes it to the next level, allowing companies to harness extremely large data volumes including non-traditional data types such as text, audio and video in conjunction with information from business systems in a much more economical fashion, in both batch and in real time modes. While the sheer volume of data available to a company today is daunting, the first step in leveraging 'big data' is deciding on the problem you want solved, or the issues you need addressed, and then finding the proper data necessary. It is more than just 'look-back information', of say how many containers or TEUs you shipped in May 2016 from Chennai/Mumbai to Rotterdam, but rather pulling the data necessary to ship them cheaper, faster, or to achieve whatever metric you need addressed.

Is Big Data just another expensive IT solution then?

No; Big data is not about IT at all; remember the term “Garbage In = Garbage Out? That is applicable for too-much data, and not for Big Data. 
A company needs to determine what they want to do
Does the company want to reduce GHG emissions?  
Does the company want to reduce costs? OR Increase revenue? 
Does the company want to Optimize transit times? 
These are all serious strategic issues for both a carrier and a shipper, whose implementation – or not – affects profitability on every voyage. The carrier needs to sit with the Consultants / IT firms to figure out the questions that need to be asked in order affect positive outcomes, and determine what is the traditional and non-traditional data that goes into profitability.

What is traditional data vs. non-traditional data?

Traditional data is look-back data from ordinary business systems; fuel costs, transit times, wages, insurance, revenue per TEU. It's accounting data that's used to determine the profitability of a voyage. 
Non-traditional data is time-sensitive data – weather and traffic delays, port strikes, unexpected repairs. It’s also extremely large volumes of data being generated from sensors, GPS devices, RFID tags and traffic management systems. If Big Data can assist in helping forecast or avoid problems, the money saved goes straight to profitability

Is non-traditional data quantifiable?

Some of the non-traditional data is quantifiable, some isn't, but it's all related to issues that can be resolved or avoided. 
For example, If a storm blows up, would you steam through it? Perhaps not, but you would use a ‘big data’ solution to analyze GPS-type information to quickly determine the costs of other routes as opposed to not diverting. Or a 3PL might get a message from his GPS about a highway being closed, so instead of having the truck idling in traffic burning fuel and time; the driver would be re-routed. 
Preventive technology is a lifesaver for most forms of transportation from a container ship to a delivery truck; modern sensor technology enables the carrier to be warned of failures before they occur, which allows management to affect repairs prior and on a timely basis, instead of being stuck in port on demurrage or being towed off the motorway. Sensor information can be leveraged to predict a failure rather than waiting for it to occur.

This sort of information would be equally important for the shipper?

Yes; whether you are shipping the goods as a vendor, or receiving them as the buyer; getting them to the final destination on time, undamaged, and in a cost-effective manner is important. Whether the data comes from the carrier, or is transmitted via RFID; it's data the shipper can use to quantify his shipping metrics and work on improvement.

Is there a place for Big Data in Supply Chain Management?

Yes; in fact it is what makes advanced SCM possible. It is using Big Data to start replacement inventory moving before inventory is exhausted; it's taking look-back vendor reliability data and instead of just disqualifying those who missed shipments, rewarding those with good reliability as well as others who stepped up to cover for those vendors who failed. It’s bringing information together from multiple sources to make predictions and real-time decisions to keep the logistics pipeline flowing. Remember, Big Data is used to quantify what you, the customer, has determined is important to your business.

Consultants / IT firms with required industry business and technical expertise can make sense of the ‘big data’ and provide strategic direction and answer business-critical questions based on the facts coming from the data

Success Stories: NYK & K Line achieve CO2 Emissions by Using Big Data

Japanese shipping companies NYK Line and Kawasaki Kisen Kaisha (K Line) achieved CO2 emission cuts from their ships in 2015 by using energy-saving technologies, primarily big data, and they are setting further targets to cap the emissions.

NYK line reduced its CO2 footprint by 14.3 percent, exceeding its goal established in 2011 – reduction of ten percent by 2015 in the CO2 emission rate per unit of transportation from vessels compared with the rate recorded in 2010. NYK said it was using its ship information management system (SIMS) on vessels in 2008, before the International Maritime Organization (IMO) tightened regulations on CO2 emissions, and currently utilized big data to reduce fuel consumption. The company said it is still making efforts to attain the next goal – a 15-percent improvement in fuel efficiency above the 2010 level by 2018. 

Big Data has been utilized by K Line to reduce Green House Gas emissions 

K Line has also announced that it slashed CO2 emissions by 13.6 percent in 2015 against its 2011 level, as a result of deployment of larger vessels, introducing energy-saving technologies and using big data as well.

K Line said it accomplished ahead of schedule the CO2 emission reduction target by ten percent for 2019 against 2011 level. In light of this achievement, the company is to set a new emission reduction target – 25 percent by 2030. This is part of its vision for 2050 – to reduce CO2 footprint by 50 percent.


Few & final thoughts on the use of Big Data for shippers and carriers


It is important to remember that Big Data is used in assisting a company in achieving it's business objectives, whether reducing costs or improving efficiency, which is of obvious daily importance to carriers and shippers, or increasing sales, which is of interest to everyone. When properly used, Big Data will enable management to take a gut-feel decisions and quantify it, which lets them take that good idea and make it work.

Ethical Supply Chains … which are sustainable

Operating ethically and operating profitably are no longer mutually exclusive concepts. Leading companies are “walking the walk,” balancing the goal of achieving profitability with gaining social and environmental advantages. Companies stuck in a mindset of “what’s the minimum I need to do” are missing out on opportunities to use ethical business practices as an integral part of what makes them unique.

Achieving responsible and profitable supply chains is about gaining a triple advantage: creating a clear business case for corporations, as well as benefits for the environment and society. Those focused on this “triple advantage” in supply chain operations can increase competitiveness through increased revenue and brand reputation while decreasing cost and risk.

In this fast paced business world, fiscal priorities often prevail over values—even the values of social responsibility and ethical behavior—as corporations strive to reduce costs and uncertainty in the corporate supply chain. The global market place need supply chains to be nimble and agile. Efficient supply chains are responsive to changing priorities by keeping costs in line, schedules on time and, more importantly, giving companies the room to scale for growth.

In the 1990s, several U.S. and European companies set aside much of their supply chains for outsourcing. Globalization, technology and the desire for profit assisted in manufacture of parts in a nation with cheapest costs, assemble parts together in another and sell them in a third nation at the best prices. This outsourcing process in itself was expedient and profitable despite its various controversies.

However the corporate citizenship  / Corporate Social Responsibility did not diminish. The supply chain cannot be divorced from corporate social responsibility (CSR) concerns about the environment, health and safety.

Envisioning a seamless world of corporate citizenship that extends beyond parent company’s country borders is far easier than achieving it. Outsourcing has brought a host of new challenges, not the least of which was entirely different sets of standards with regard to health and safety and environmental regulation.

Walking the walk - Courtesy accenture.com

CSR advocates have always argued that U.S. companies have an ethical responsibility that isn’t constrained by geographic and political borders, or even cultural traditions. It has been a sobering enterprise to put that notion into effect in countries that do not share the United States’ affinity for regulation and compliance, although it must be argued that many U.S. companies shifted operations overseas to avoid the heavy hand of U.S. regulation and the costs that came with it.

The Melamine scandal in China

Companies doing business in China have had difficulty maintaining quality throughout the supply chain, as illustrated by food and product safety scandals in 2009 especially when melamine-tainted milk discovered. Inherent problems in manufacturing processes and supply chains led to a breakdown of quality assurance. The scandal severely damaged China’s dairy industry; it took more than six months from the time the scandal broke for dairy-product sales to recover 70-75 percent of their pre-scandal value, according to one Beijing dairy analyst. To salvage consumer confidence, companies must place new importance on quality assurance. And to achieve good quality control, managers must build more accountable, transparent, and ethically managed supply chains.

Lessons from the Melamine scandal : 
The Melamine scandal provides lessons on how companies can better control their supply chains. Melamine, a chemical used to produce plastics and fertilizer, can appear to heighten the protein levels of milk so that the milk is erroneously identified as a higher grade and yields a higher price.  PRC authorities found that melamine was added to roughly 70 milk products from 20 companies in China last year; the chemical sickened nearly 300,000 infants and caused the death of at least six children, according to press reports. Leading dairy company Sanlu Group, a partially state-owned enterprise that is now defunct, sat at the heart of the scandal. Investigations determined that some Sanlu staff were aware that third parties had added melamine to milk used for its baby formula, but that Sanlu continued to produce and distribute the formula for months after the discovery. The scandal forced New Zealand dairy company Fonterra Cooperative Group Ltd., which at the time owned a 43 percent stake in Sanlu, into the international spotlight. Meanwhile, Beijing Sanyuan Foods Co. Ltd., another state-owned Chinese dairy company, man- aged to keep fairly free of the scandal, and its business is booming—2008 net profits rose 87 percent over 2007.

Other Examples of Nike and Apple

Nike

The experience of Nike in the 1990s illustrates this issue Nike outsourced its manufacturing. Nike was driven by a desire to assemble products at a fraction of the cost of producing them in the United States—indeed Nike was one of the great innovators in overseas manufacturing. But, Nike insisted that labor conditions in its contractors’ factories were not its responsibility. Nike’s company line on the issue was clear and stubborn: without an in-house manufacturing facility, the company simply could not be held responsible for the actions of independent contractors

Nike was still sensitive to the potential public relations nightmare an unrestrained local manufacturer could wreck on its good name, and it drafted a code of conduct for its contractors. There was no effort, of course, to determine if contractors complied with the code, and, eventually, Nike’s factories came under attack for their workplace practices, including the use of child laborers. Watching its reputation sullied by stories of abuse, facing a backlash on college campuses from irate students, Nike began to see its profits dip. In fiscal year 1998, beset by the Asian currency crisis, oversupply and weak demand, Nike saw its earnings fall 69 percent and was forced to lay off workers. Nike product became synonymous with slave wages, forced overtime

Nike revised its policies on contractors and encouraged monitoring of local factories and has gone beyond monitoring to embrace a more collaborative approach to reforms, sharing workplace and human resource best practices.

As Richard M. Locke, Fei Qin and Alberto Brause noted in “Does Monitoring Improve Labor Standards? Lessons from Nike” in 2007 in the Industrial & Labor Relations Review, monitoring alone is not able to accomplish the tasks necessary to ensure a safe and healthy workplace. They wrote that, “global brands and labor rights NGOs would do well to complement their current emphasis on monitoring by providing suppliers technical and organizational assistance to tackle some of the root causes of their poor working conditions. Perhaps not all suppliers would be willing to collaborate with global brands and NGOs on these efforts, but refusals to collaborate could provide global brands with a justification to shift orders and consolidate production in more efficient, cooperative, and perhaps even ‘ethical’ suppliers.”

The lessons learned from the Nike experience have a particular appeal in a world that has shrunk considerably in the last decade where in CSR and corporate citizenship has taken hold, not only in the imaginations of academics but also in the real world inhabited by consumers.

Apple

Today another corporate - Apple—finds itself facing criticism for the practices of yet another overseas supplier with a less than savory reputation for workplace safety and fair wages. Apple has been buffeted by attacks in the United States for much of the last year for the workplace conditions and wage rates of its Chinese manufacturer, Foxconn, which makes the incredibly popular iPhone.

In February Apple became a participating company in the Fair Labor Association (FLA) and, in doing so, it agreed to abide by the FLA’s Workplace Code of Conduct throughout its supply chain. The FLA quickly launched a series of independent investigations of Foxconn’s factories in Shenzhen and Chengdu, China. A report detailing the FLA’s findings at Foxconn facilities and recommendations for a broader strategy to address workplace rights issues is due in March.

Launched in 1999 by a coalition of industry, labor and nonprofit advocacy groups, including Nike, the FLA assesses working conditions and monitors attempts to remedy violations in factories, farms and facilities used by its affiliated companies. Independent assessors schedule random visits, although critics complain that they do give warnings of their imminent arrival, to facilities supplying participating companies.

“We believe every worker has the right to a fair and safe work environment free of discrimination, where they earn competitive wages and can voice their concerns freely,” Apple CEO Tim Cook said in February. “Apple’s suppliers must live up to this to do business with Apple.”

Apple is an exceptionally able company to walk the minefield of workplace standards at this moment in time. Arguably one of the most agile and intellectually authoritative corporations operating today, Apple has the creativity, reputation and scope to find solutions to workplace standards and compliance

for contractors that have eluded many other companies.

Key findings

·    Companies that talk about sustainability instead of actually shaping responsible supply chains will begin losing their ability to grow and compete.

·         Social media puts businesses under the lens for their practices, and they may feel a reaction from a global customer base that will “vote with their wallets.”

·         Reputable analyst firms are increasingly factoring ethical behavior into their valuations, and sustainability can create significant impact on stock prices.

·         Ignoring business sustainability may make it difficult to attract and retain new talent. Millennials consider sustainable practices to be essential, and 46 percent of CEOs reported that employees would be among the most influential groups in guiding their action on sustainability over the next five years – second only to consumers.

·   Companies that don’t embrace responsible supply chain practices risk falling behind and losing a competitive edge they may never regain.


Tips for ethical supply chain management  (with reference to the lessons from the Melamine scandal )

To reduce risks stemming from miscommunication, cultural differences, and logistical challenges while improving accountability and quality assurance in the supply chain, companies investing in overseas supplychain operations, should consider taking one or more of the following steps.

• Focus on ethical supply chain management early : When considering a joint venture (JV), the potential foreign and domestic partners should emphasize the importance of establishing an ethical supply chain management process early in the contractual negotiation stage—when trust is being built between the two companies. Once the partners agree on a set of values, the values become the foundation on which the partnership builds its supply chain and quality assurance management systems. Foreign investors should also use their negotiating power to set high ethical standards for a subcontractor’s supply chain management in their business agreements and contracts—including by making subcontractors’ adherence to a contractual clause related to quality assurance and supply chain management mandatory. Companies may want to establish financial consequences for breaches of these contractual commitments.
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• Integrate ethical considerations into technical solution :Companies may wish to discuss supply chain management best practices with consulting companies that focus on ethics and corporate social responsibility (CSR). Such consultancies can help foreign companies locate partners with strong corporate values and find districts and zones that maintain legal policies and training programs that uphold high standards in employee relations, supply chain management, and environmental sustainability. Consultation on ethical criteria facilitates the building of trust between JV partners and emphasizes the importance of ethical considerations in business decisions.
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• Grow sustainably : With more than 45 years in the milk industry, Sanyuan was cautious about enlarging distribution beyond its base in northern China. This strategy allowed Sanyuan to focus less on market growth and more on the effective management of its infrastructure, with a huge payout in the long term. In contrast, Sanlu’s relatively quick expansion after its founding in 1995 led to a shortage of milk sources, the collection of milk without close supervision of quality, and ultimately the company’s demise. Sanyuan’s March 2009 takeover of Sanlu’s dairy farms and distribution infrastructure poses a challenge to its sustainable growth and has opened an online debate among consumers about the future of Sanyuan and the quality of the company’s products as operations expand.
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• Invest in greater integration and ownership of supply chain channels : Sanyuan’s integrated, company-owned supply chain focuses on quality assurance. A November 2008 Xinhua News Agency article explained that Sanyuan “escaped the scandal because of its nearly self-sufficient production chain. Its raw milk came largely, or 80 percent, from dairy farms that the company owned or had a stake in.” The company built secure milk sources by using dairy farms run with strict quality-control systems for animal feed procurement, veterinary care, milking, and delivery of raw milk to processing plants. With strong ownership in the supply chain, Sanyuan directly participated in the establishment of these quality-management systems.
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• Go beyond compliance training to develop a stronger ethical culture : Companies should consider training programs and quality assurance processes that link product safety, consumer safety, and profit in employees’ minds and thereby encourage employees to identify quality as a company hallmark. For example, Sanyuan’s workers test-drank every batch of milk before it left the factory, according to Xinhua’s interview with Sanyuan. Companies can also consider conducting training seminars in leadership and business ethics. The dairy company Inner Mongolia Yili Industrial Group Co., Ltd. delivered leadership and business ethics training seminars to help develop a deeper ethical sense among its employees. These efforts created a stronger ethical culture at Yili, which survived the product safety scandal, though it too had to recall melamine-tainted products.
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• Focus talent recruitment efforts on candidates who value business ethics : For entry-level positions, companies can attract talented individuals devoted to ethical supply chain management by participating in student organization and nonprofit initiatives. For example, companies can attend conferences on CSR or innovation that are run by business school students. Companies can also reach out to university students interested in business ethics through research competitions.
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• Share best practices with other companies : Companies can learn more about supply chain best practices by joining CSR-related groups. For example, the Beijing Ethics Network, a group of about 15 CSR practitioners from the business and nonprofit sectors, holds a monthly round-table to discuss CSR best practices. In a meeting that focused on labor rights and ethical supply chain management, human resources and compliance officers shared ethical supply chain management problems and best practices with colleagues from various industries. One discussion centered on how contracting companies in the technological and financial services sectors handle subcontractors that stand out as high ethical performers. Participants described their companies’ preferential policies in which subcontractors that excel receive more business from the contracting companies. Some managers explained that their companies took initial steps toward this type of reward policy, while others require that ethical performance clauses be added to every contract signed with a subcontractor.

To conclude

• By exhibiting a genuine commitment to social responsibility and ethical business practices, corporations like Nike and Apple have the power to not only transform their organizations but also their supply chains. A robust corporate citizenship isn’t limited by the vision of its shareholders and customers, and its reach certainly doesn’t end with its company headquarters.
  
  
  Companies must move go beyond the concept of sustainable business practices as a noble purpose and instead embrace them as a strategic weapon wielded to gain a competitive advantage.
  To do so calls for getting the numbers straight and building a clear business case for investments. Businesses must also pass by “trial and error” approaches and go straight to proven methods. Decision support tools can help a company to compare its current portfolio of initiatives and identify ways of prioritizing supply chain investments.
  
  
  It also is key to collaborate on sustainability issues across an extended value chain of internal stakeholders, suppliers, sub-contractors and the end consumer. By working together, companies can find new ways of achieving social, environmental and economic gain, and ultimately create a competitive advantage.
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• Info resources: accenture, china business review

Minor ports do Major business !!

Adani's Mundra port - minor ports do major business!

Minor ports in India are aggressively eating into the market share of their government-owned major ports, as shippers and ocean carriers frustrated with growing delays at some of the leading public port complexes, including Jawaharlal Nehru Port Trust & Chennai Port Trust look for alternative port options.  Non Major ports known as minor ports‘ cargo volumes are growing at 3 times the cargo throughput of Major ports. Customers are now utilising minor ports to avoid congestion and other issues.

The numbers speak for themselves!!

JOC stats show that Minor ports handled 226.7 million tons of cargo in the first fiscal half of 2014-2015, up 11.1 percent from 204 million tons in the same period in 2013. 

That compares with just a 4 percent year-over-year growth in total traffic at the 12 major ports in the same six-month period from April through September, with overall tonnage growing from 277.2 million tons to 288.5 million tons.

The collected data shows minor terminals, which are either privately-operated or operated by state agencies, increased their share of the country’s total seaborne trade to 44.63 percent in fiscal year 2014-15, from 43 percent in the previous year. Cargo volumes reached 468.47 million tons, up from 417.12 million tons. That translates into a 12.3 percent year-over-year growth in volumes for so-called “non-major” ports.

“Non-major ports have been more successful in attracting higher private investment, because they are perceived to be more business-oriented, customer-friendly, cheaper and in general, more efficient,” the Planning Commission under India's Ministry of Finance said in a recent policy paper, titled “Ports and Shipping.”  “This has been largely due to lower levels of regulatory and financial controls compared to major ports.”

Minor ports in India are GROWING !

As a result, the overall market share of major public ports declined from 57.11 percent in 2013-14 to 55.37 percent in 2014-15.  Year-over-year, major port trusts recorded a mere 4.65 percent increase in total tonnage, annual statistics released by the Indian Ports Association show.

India has 12 publicly-owned major ports, equally spread over the west and east coasts, and nearly 200 minor ports located along its 4,600 miles of coastline.

The Minor ports which are doing major business

The growth in quantum of cargo handled at non-major ports has been primarily driven by growth in non-major ports in Gujarat (Mundra Pipavav) and Andhra Pradesh (Krishnapatnam)

Mundra :

The latest data shows minor ports in the western state of Gujarat, where Adani Ports and Special Economic Zone operates its flagship Mundra Port, led minor port growth in market share.  In 2014-15, Gujarat accounted for about 72 percent of overall cargo volumes routed via minor ports, followed by the southern state of Andhra Pradesh, at roughly 16 percent.

MUNDRA PORT

Mundra’s cargo volumes were up 10 percent last fiscal year, with some of that growth owed to congestion at JNPT, also known as Nhava Sheva.  Quick turn times on the back of modern infrastructure and dedicated hinterland connectivity as well as a variety of ocean carrier options have made Mundra an attractive port for shippers.                                                                                                                                  

Krishnapatnam:

Krishnapatnam, about 112 miles north of Chennai, is the fastest-growing minor facility on the east coast.  Total cargo tonnage there jumped 67 percent year-over-year in fiscal 2014-15, according to traffic figures compiled by JOC.com.  In a short span of seven years, the port has been seeing double-digit progress year-on-year.  Since inception, it has handled record-breaking cargo volumes and last year, the port achieved 41 million metric tons, which was the highest and is the fastest growth recorded by any port in India.

KRISHNAPATNAM PORT 

“The port has potential to become the hub port on the east coast and a transshipment hub not only for domestic cargo but also for international transshipment of containers.  Its deep draft and state-of-the-art, modern marine and handling equipment, proactive management and professional manpower will encourage the growth rate.”

The private operator, riding high on strong cargo gains, last week received a further boost with the launch of a weekly rail service by Container Corporation of India linking Krishnapatnam to Bangalore, a key inland container depot in the country’s southern region.  “This weekly rail service provides the fastest transit time from the Bangalore ICD to the closest gateway port, and has given an impetus to importers and exporters in the region,” the Krishnapatnam port authority said.

JNPT ‘s initiatives to stay ahead of competition!

Amid ongoing infrastructure bottlenecks, JNPT is working on a number of projects to retain and build on its current business.  Foremost among those is the port’s fourth container terminal, which is designed to double the largest container handler’s throughput capacity from about 4.2 million 20-foot-equivalent units to 9 million.

Deep sea satellite ports will help JNPT to stay ahead of its competition !

To stay ahead of expected trade growth and to ease increasing pressure on JNPT, the government of India recently approved construction on a new, deep-sea satellite port in Dahanu, about 80 nautical miles from Nhava Sheva, with public and private investments.

The future outlook: 

Minor ports are set to increase their volumes further. Traffic projections by the Ministry of Shipping, minor ports are expected to handle 1.2 billion tons of cargo by 2019-20, with overall capacity going up from the current 800 million tons to 1.67 billion tons. 

Robotics in Logistics

DHL's Smart Robots in Warehousing and Supply Chain

We can recollect several scenarios from science fiction, as well as by hype and wild speculation from the world’s media, about the anticipated era of robotics. We are deeply concerned that robots may steal all our jobs and spy on us. We imagine that they will arrive in vast armies ready to alter forever life as we know it. The reality is, of course, quite different. Exciting as it is, robotics technology seems to be arriving slowly but surely in cautious and well-considered stages. Smart robots are now being deployed in warehousing!

A Surveillance robot in warehousing

DHL 's smart robots - Baxter and Sawyer

DHL is currently testing Baxter and Sawyer, two smart and collaborative robots, in its warehouses on co-packing and value-added tasks, such as assembly, kitting, packaging and pre-retail services. Rethink Robotics' Baxter and Sawyer are smart, adaptable solutions that support warehouse staff and could help to enhance productivity at DHL facilities.

Historically, the distribution environment has been difficult to automate using traditional industrial robots, which do not respond well to variability

In a recently published DHL Trend Report "Robotics in Logistics" it was found that 80 percent of logistics facilities today are still manual due to the complexity of the operations. As technology improves however, the logistics industry will benefit from the adoption of collaborative robots to improve efficiency,

DHL is currently testing how to integrate several Baxter and Sawyer robots into various operational sites across the globe. DHL also recently purchased its first Sawyer robot and its research entails 3D printing possibilities to create specialized grippers for the robots to allow for additional tasks to be completed in the warehouse.

Baxter and Sawyer robots are some of the most advanced collaborative robots on the market, and are planned for deployment in a variety of packaging and inventory tasks that will allow DHL to use employees for higher value work. By deploying these robots to work in tandem with humans, DHL can ensure that production lines are adjusting to changes and running more efficiently year-round.

Robots in warehousing applications

With Baxter and Sawyer, DHL is now able to leverage automation that can adapt to real world variability, change applications quickly and perform tasks like people do.

The logistics industry has been unable to leverage smart, collaborative robots until recently, and the high performance Sawyer robot is changing the game in what can and cannot be automated. Such an automation will be bringing flexibility and efficiency to factory floor, enabling shorter cycle times, more uptime and helping bottom line.


But Why Robotics in Logistics: 

One of the biggest challenges facing the logistics industry today is labor availability. It’s not easy for companies around the world to find enough high-quality employees to move goods from suppliers to customers. Two competing factors are making this especially difficult: The first is an increasing need for more logistics workers and this is being driven by the e-commerce revolution and its need for more parcel shipments; the second is a decline in the size of the available workforce due to shrinking population levels in the Western world.

Robots in warehouses!

Robotics technology is finally beginning to catch up with our desire to have a robot that is flexible and low cost enough to work in the logistics and distribution environment. This trend report outlines the key changes that are happening today in the world of robotics; changes that should eventually lead to more effective robots across all areas of the supply chain.

Future outlook

Every day we interact with products that were built by robots and yet we never think about it. These robots impact our world even though they are hidden away in factories that we never see. We are entering a point in time when robots will become more visible and impact our lives more directly: in our stores, in our offices, and in our homes. And as robots improve and our acceptance of them grows, they will also enter the world of logistics.

Retailers like Amazon are leading the way, embracing robotics technology by making large investments. Equipment providers see this trend and are designing robots into their logistics systems as the cost of the technology drops and capabilities improve. With these advances, we are seeing first examples of self-contained mobile picking robots as well as robot forklifts entering distribution centers, and initial trials seem positive.

Collaboration ... Future outlook

There is still a long way to go before robotics technology is ready and major improvements are still required but many of the pieces are now in place to drive progress. It seems clear that it is not a matter of “if” but rather “when” robots will be working in our parcel sorting hubs, distribution centers, and delivery vans.

The business leaders of the future need to understand this technology and start planning for the day when it provides a viable solution to ever-growing pressures on the supply chain. The history of robotics includes many stories of hype and disappointment, but if you take a step back you can see steady progress. There is an incredible difference between the robots of the 1960s and those of today. The speed of progress is increasing rapidly with new advancements and breakthroughs happening every day. Our young children can’t picture a world without computers and it is likely that their children will feel the same way about robots. The outlook for robotics is very positive and the world of logistics will benefit from the coming advances in robotics technology.

When Things go wrong in Supply Chain , Logistics and Shipping !

The true measure of customer service is what supply chain partners do when something does wrong

So if you are a retailer, and out of stock on a particular product. Then, of course, a customer orders it. What do you do? When a certain outdoor gear retailer was faced with an out of stock that would disappoint a customer, an employee went shopping on a competitor's website, purchased the item with a personal credit card, and shipped it to the customer.

Supply chain managers understand the crucial role that logistics and shipping plays in providing good customer service. When it's business as usual, and you have good controls and procedures in place, customer service levels are adequate to keep everyone happy. But the true measure of customer service is what your team members, carriers, and supply chain partners do what is required when something goes really wrong.

You can work with world’s leading carriers that provide great service, you can implement technology that provides the visibility and capability to redeploy assets and reconfigure your supply chain, and you can rely on a talented pool of internal logistics and supply chain team members to enable good customer service. But great customer service comes down to the people who are working behind the scene and behind the systems, and their personal commitment to satisfying customers.

Narrating a recent experience from a USA based LSP - logistic service provider: One in particular, involving critical shipments moving by truck, stands out. Even though an advance ship notice was issued, when connections arrived to meet the truck, the goods were not on it. With the customer's deadline at risk, the LSP deployed a team driver to drive all night, tracked this reshipment truck in transit, met it on the road, and arranged for a crossdock at 3 a.m. to transfer the shipment onto the new vehicle. But by the time, the LSP team accomplished all this, the hours-of-service rules kicked in, and the driver timed out. While the driver sat at a truck stop for the required rest period, the LSP team refused to give up. They called every carrier they could, but no one could deliver the critical shipment the rest of the way.

After some creative brainstorming, the team hired a tow truck to move the truck from the rest stop to the waiting crossdock, which stayed open to meet the delivery—and the customer's deadline.

The technology was there: the trucks were tracked and the staff had full visibility to the shipments. But, technology did not have the idea to deploy a tow truck to move a critical shipment to its final delivery.

Another example : The LSP was ordered to send a container for export stuffing, well past office hours. The LSP then called up various carriers only to be given a response – please call us tomorrow. One of them agreed to release the container, The deadline was met by the LSP.

This is just one example of what people can do when everything else fails. They take 24/7 ownership of customer service issues. They exhaust every possible concept and idea. They do whatever it takes to keep their customer commitments.

Latest technology and equipment are great for enabling standard customer service. But when things go wrong, it's people who drive extraordinary customer service.

Social Supply Chains

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Before we discuss about “ social supply chain” , we will look at 2 definitions of Supply Chains

„ “Supply Chain is the activity that manages the flow of information, money, and material across the extended enterprise, from supplier through the functional silos of the firm to customer.”

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    A supply chain is a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities involve the transformation of natural resources, raw materials, and components into a finished product that is delivered to the end customer.

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   If we take a look at the above graphic we can see that products flow from the firm to the suppliers to the end customers.  However, the business decisions around those products are based on information that flows from the customers to the suppliers to the actual firm

  Supply chain is being driven by Mobility, Cloud, Big Data.   The Industry's best supply chain will be

„  Migrating from a reactive to a Proactive Supply Chain

„  Striving for Holistic Supply Chain Management

„  Enabling a Predictive Supply Chain

„  Driving towards an In-transit Inventory Allocation Model

„  Establishing a Collaborative Supply Chain Network

„  Evolving to the working style of the ”millennial” workforce

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     For the industry’s best supply chain : A social Supply Chain need to be created by facilitating people-to-people communication and collaboration, which is at the heart of managing and executing supply chain processes. And that Supply Chain Operating Networks like GT Nexus enable communities of trading partners to communicate, collaborate, and execute business processes in more efficient, scalable, and innovative ways.

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     Simply put, the social supply chain is the application of social networking tools to the process of managing the supply chain. Social networks are all about communication, free-flowing and unstructured communications, and that’s what the social supply chain attempts to incorporate.

„          A Social supply chain is more than just adding a forum or chat alongside every day operations. It means making communication easier and more valuable by infusing social communications throughout the network, tying it to its relevant context, and leveraging the underlying network relationships.

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Social supply chain management seeks to incorporate social data, network, and interactions into the supply chain.  

Benefits: If a problem arises, with say a shipment, the customer  should be able to launch a chat with key personnel inside and outside customer’s company who are relevant to resolving the problem. The system could even suggest resolutions based on relationships and data (both historical and real time) from across the network. Any discussion and decisions could be captured and stored for potential auditing and analysis, fueling better suggestions for future problem resolution.

How exactly is a social supply chain different?  There are two differentiating factors of a social supply chain:

Feedback mechanisms

Feedback mechanisms can vary from all sorts of channels and mediums, whether they be APIs or whether that feedback comes from supplier communities or directly through a tweet.  Many companies are now using RFID tags which basically give products a “voice” to communicate with their handlers (you can find out everything you need to know about a product or inventory based on an RFID tag).  The key here are the new channels and methods of information flow and feedback.

Response time

Responses to changes in the supply chain or to suppliers can now be made in almost real-time via social channels. This was not possible even 3-5 years ago.  It’s the same concept that we apply to basic social media interactions.  Nowadays you can find out about and respond to someone in real-time that is talking about you on the web.

There is a lot of research/learning around social supply chains but the concept and idea is very interesting.  In the meantime, what do you think about social supply chain management? Please share your feedback in comments!