John Johnson joined the DC Velocity team in March 2004. A veteran business journalist, John has over a dozen years of experience covering the supply chain field, including time as chief editor of Warehousing Management. In addition, he has covered the venture capital community and previously was a sports reporter covering professional and collegiate sports in the Boston area. John served as senior editor and chief editor of DC Velocity until April 2008.
When Wal-Mart first issued its now famous RFID mandate, no one dreamed it would reverberate around the globe to a tiny town just south of Rotterdam in the Netherlands. Yet some 4,635 miles away from Bentonville, executives in the hamlet of H.I. Ambacht followed the developing story with avid interest. As word spread of the technology's dazzling capabilities, they became more and more convinced they had stumbled onto the asset-tracking solution they'd been seeking.
The executives in question work for Florensis, one of the world's largest suppliers of flower seedlings: everything from phlox, zinnias, and petunias to coreopsis, dahlias and verbena. But the assets they wanted to track weren't rare and exotic hybrid plants; they were ordinary-looking blue plastic florists' trays.
At the time, the company was about to invest several million dollars in high-end nesting seedling trays, which would replace the cheap reusable foam trays it had been using to ship seedlings to customers. The new trays, which hold up to 594 seedlings apiece, would be sturdier units produced from polypropylene in the company's signature lilac blue. Unlike the foam trays, which tend to disintegrate after about 10 trips, the new trays are designed to last up to eight years.
The problem was, customers had grown lax about returning trays—more than 20 percent ended up in dumpsters. Florensis couldn't afford those kinds of losses once it switched to the new trays. To protect its investment, it needed a way to track the trays as they moved through its facilities and out to customers. (The company's customers are growers that raise the young plants to maturity and then ship them to retailers.)
In the past, Florensis had tried bar codes for tracking, with mediocre results. The dirt, water, mold, algae and humidity present in nurseries rendered many of the codes unreadable.
RFID, however, wouldn't have that drawback. RFID chips don't require a line of sight to be read (the radio waves fan out to find them), which means the tags would remain readable despite any dirt or mold that might accumulate on them. RFID promised other advantages as well. While paper bar-code labels are easily destroyed by water, plastic RFID tags can take plenty of abuse. And because the information encoded into the tags is captured automatically, no workers are needed to hand scan each incoming and outgoing tray.
But as Florensis's technical people looked further into RFID technology, their enthusiasm waned. For one thing, there was the cost. To track its nearly two million trays, Florensis would have to spend about $1 million on RFID tags alone. Plus it would need to buy software and high-end enhanced readers that could withstand the humidity in the company's nurseries (which are located in the Netherlands, Germany, Kenya and Ethiopia).
For another, they had concerns about interference from metal. Radio waves cannot penetrate metallic objects. And there was plenty of metal to be found in Florensis's nurseries, including the metal frames used in the buildings. There were also worries about interference from the automated window openers and the automated guided vehicles (AGVs) that move pallets of seedlings.
2-D or not 2-D?
The story might have ended there if the company's systems integrator, CaptureTech, hadn't suggested an alternative. On CaptureTech's advice, Florensis agreed to test another powerful, but less well-known tracking technology.
That solution, the Visidot system from Israel-based ImageID Ltd., uses two-dimensional (2-D) DataMatrix bar codes that can be read hundreds at a time via imaging technology. Like RFID, it's fast. The system captures the 2-D bar codes in a single digital image that can be decoded in seconds and stored in the company's database. But unlike RFID, it's relatively inexpensive. Although the imaging cameras cost nearly as much as RFID scanners, the label costs are negligible.
It's also accurate. DataMatrix bar codes include robust error correction capabilities so that codes can be read even when a tag is dirty or damaged. During pilot tests last year, the system consistently read 99.7 percent of the 2-D bar codes, even those obscured by dust or dirt.
But there was one drawback: 2-D bar codes still require a line of sight to be read. Florensis and CaptureTech solved that problem by installing one of the fixed imagers at the end of the pallet-loading area. Trays are now stacked on a pallet all facing in one direction, so that their codes can be captured simultaneously. After a loaded pallet has been transferred to an AGV, the vehicle is stopped for a few seconds so the device can capture an image of that pallet. As the AGV continues on its way, software scans the captured image and checks the codes. If it detects an errant tray of petunias or primroses, an error message pops up on a computer screen at the next checkpoint. That message indicates right on screen exactly which tray was misplaced.
Growing on them
With the Visidot system in place, every tray is linked to a customer order and the customer's information. This link is maintained until the tray is returned. That's made tracking infinitely easier than in the past. Though Florensis had no problem keeping tabs on trays in the nursery, it tended to lose track of them once they were loaded into trucks for delivery. The company knew how many and what kind of trays had been sent to each customer, says Peter de Graaf, the company's director, but it had no way to track individual trays. "[I]t was a big job to administer this in the right way and to approach the customers about returning the trays," he notes.
With the new system, the company has much better accountability. "Now, we know exactly which customer has unreturned trays so we can invoice them for the cost of a new one," says de Graaf. That threat alone will make customers more likely to return the trays, he predicts. In fact, de Graaf says he expects the returns rate to jump to 90 percent or better.
De Graaf hopes that will happen for a couple of reasons. For one thing, a shortage of trays could snarl operations—particularly during peak spring shipping season, when Florensis ships 140,000-plus reusable trays a week. For another, those trays represent a significant investment. "Our business case calls for re-using these trays for eight years," he says, "so it's imperative that we get them back."
Everything's coming up roses
The Visidot system has also brought benefits that go beyond tracking. For example, Florensis will see a drastic reduction in labor costs. Now that the data collection process has been automated (gateways with imagers are installed at the production site, in the DC's stacking area, at the order collection point, and in the shipping area), Florensis no longer has to hire people to scan each inbound and outbound shipment. De Graaf expects to reduce his temporary workforce from 60,000 man-hours to 40,000. "One-third of our labor costs will disappear," he says. "That's quite [important], because our margins are also decreasing, which means we need to have savings internally."
Even Florensis's customers, the growers, have embraced the change. True, they're feeling more pressure to return trays now. But they also recognize that the system helps keep their own costs down. Another plus for customers is that Florensis now can group the plants in their orders by color or variety, something it was unable to do before.
So while RFID continues to gain momentum worldwide, Florensis is nurturing another blossoming technology. To date, it has invested $7.5 million euros (approximately $9.2 million U.S.) in the project—a figure that includes the cost of the new trays. And it plans to go forward with Visidot. The company has been using the system at its two nurseries in the Netherlands since January; it is currently installing imagers at a site in Germany.
Might the company someday switch to RFID? The likelihood seems pretty remote. "We know that RFID tags will come down in price, but probably not to where we need them to be," says de Graaf. "That's why we decided to go with this system for our entire operation." Sounds like Visidot's growing on him.
Artificial intelligence (AI) tools can help users build “smart and responsive supply chains” by increasing workforce productivity, expanding visibility, accelerating processes, and prioritizing the next best action to drive results, according to business software vendor Oracle.
To help reach that goal, the Texas company last week released software upgrades including user experience (UX) enhancements to its Oracle Fusion Cloud Supply Chain & Manufacturing (SCM) suite.
“Organizations are under pressure to create efficient and resilient supply chains that can quickly adapt to economic conditions, control costs, and protect margins,” Chris Leone, executive vice president, Applications Development, Oracle, said in a release. “The latest enhancements to Oracle Cloud SCM help customers create a smarter, more responsive supply chain by enabling them to optimize planning and execution and improve the speed and accuracy of processes.”
According to Oracle, specific upgrades feature changes to its:
Production Supervisor Workbench, which helps organizations improve manufacturing performance by providing real-time insight into work orders and generative AI-powered shift reporting.
Maintenance Supervisor Workbench, which helps organizations increase productivity and reduce asset downtime by resolving maintenance issues faster.
Order Management Enhancements, which help organizations increase operational performance by enabling users to quickly create and find orders, take actions, and engage customers.
Product Lifecycle Management (PLM) Enhancements, which help organizations accelerate product development and go-to-market by enabling users to quickly find items and configure critical objects and navigation paths to meet business-critical priorities.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
With the economy slowing but still growing, and inflation down as the Federal Reserve prepares to lower interest rates, the United States appears to have dodged a recession, according to the National Retail Federation (NRF).
“The U.S. economy is clearly not in a recession nor is it likely to head into a recession in the home stretch of 2024,” NRF Chief Economist Jack Kleinhenz said in a release. “Instead, it appears that the economy is on the cusp of nailing a long-awaited soft landing with a simultaneous cooling of growth and inflation.”
Despite an “eventful August” with initial reports of rising unemployment and a slowdown in manufacturing, more recent data has “calmed fears of a deteriorating U.S. economy,” Kleinhenz said. “Concerns are now focused on the direction of the labor market and the possibility of a job market slowdown, but a recession is far less likely.”
That analysis is based on data in the NRF’s Monthly Economic Review, which said annualized gross domestic product growth for the second quarter has been revised upward to 3% from the original report of 2.8%. And consumer spending, the largest component of GDP, was revised up to 2.9% growth for the quarter from 2.3%.
Compared to its recent high point of 9.1% in July of 2022, inflation is nearly back to normal. Year-over-year growth in the Personal Consumption Expenditures Price Index – the Fed’s preferred measure of inflation – was at 2.5% in July, unchanged from June and only half a percentage point above the Fed’s target of 2%.
The labor market “is not terribly weak” but “is showing signs of tottering,” Kleinhenz said. Only 114,000 jobs were added in July, lower than expected, and the unemployment rate rose to 4.3% from 4.1% in June. Despite the increase, the unemployment rate is still within the normal range, Kleinhenz said.
“Now the guessing game begins on the magnitude and frequency of rate cuts and how far the federal funds rate will be reduced,” Kleinhenz said. “While lowering interest rates would be good news, it takes time for rate reductions to work their way through the various credit channels and the economy as a whole. Consequently, a reduction is not expected to provide an immediate uplift to the economy but would stabilize current conditions.”
Going forward, Kleinhenz said lower rates should benefit households under pressure from loans used to meet daily needs. Lower rates will also make it more affordable to borrow through mortgages, home improvement loans, car loans, and credit cards, encouraging spending and increasing demand for goods and services. Small businesses would also benefit, since lower intertest rates could lower their financing costs on existing loans or allow them to take out new loans to invest in equipment and plants or to hire more workers.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.