Winning customers and earning their loyalty requires not only excellent products, but a supply chain made up of reliable, flexible, responsive and interconnected business partners.
Ed C. Reel is senior vice president of Peach State Integrated Technologies. He can be reached at (678) 327-2044 or by visiting the company's Web site, www.peachstate.com.
There may have been a time when building a better product was enough to bring the world to your door. But if that time ever was—and it's doubtful—it is no more.
Winning customers and earning their loyalty requires not only excellent products, but a supply chain made up of reliable, flexible, responsive and interconnected business partners. A well-designed supply chain is one that can deliver the "perfect" order—the right product, in the right quantity, to the right location, at the right time—consistently and at the lowest possible cost. At the same time, it must be able to respond to changing market and customer conditions. Though the description makes it sound simple, many companies will attest that putting all the right pieces in place—and in action—is far from simple. And the reality that supply chain excellence is not broadly understood—even in many boardrooms—only makes it harder.
Supply chain performance is too often defined through specific metrics such as customer service, order and inventory accuracy, fill rates and delivery times. Yet these discrete metrics, while important, provide too narrow a view and can mask the supply chain's true potential and the far-reaching benefits it can deliver. Still, as businesses begin deliberating how to achieve supp ly chain excellence, they often overlook the most critical element of them all—linking corporate strategy with logistics strategy.
You can't make that linkage happen without getting the CEO's attention. And the quickest way to do that is to demonstrate the financial improvements that supply chain excellence can provide. For instance, if a core competency of the business is to grow revenue and market share through customer service—delivering the perfect order and responding promptly to changing demands—it's imperative to link the supply chain's design to that goal. Study after study has demonstrated the critical link between supply chain excellence and market share and revenue improvement.
How so? A responsive and efficient supply chain provides customer service that is better and more consistent than the competition's, attracts customers away from the competition, creates tools for penetrating new markets and brings the customer back for more.
Providing excellent customer service is no longer a choice in many business sectors. Companies must be able to meet or exceed their customers' demanding service requirements, epitomized by the service expectations of mass retailers such as Wal-Mart, Target, Home Depot and Lowe's. Manufacturers and distributors of products face pressure to improve supply chain performance to meet these retailers' distribution schedules and strict service requirements. Stumble here and you lose the business. What's critical is to design the supply chain in a way that serves both customers and the company.
One recent high-profile case illustrates what's possible. Unilever completed an extensive supply chain optimization program that truly transformed its distribution network and operations. The impetus for the changes was the daunting task of merging the supply chain operations of three recently acquired companies with three distinct product lines. Each of these companies relied heavily on major retailers to sell its products and faced intense pressure to enhance its supply chain performance to meet its customers' own distribution schedules. Realizing the significant role that customer service played in achieving the financial performance goals, the company focused on upgrading customer service to exceed the industry's standards. Senior executives at Unilever determined that the company needed to build a world-class supply chain to improve its customer service levels and its competitive position. Optimizing its supply chain, they theorized, would eliminate significant inefficiencies across its operations and further contribute to bottom-line savings. However, the plan the company adopted targeted not just operational improvements but strategic imperatives as well. The plan's overriding objectives included enhancing and improving Unilever's top-line growth, operating margins, customer service and shareholder return.
Unilever's existing distribution network consisted of 15 distribution centers spread across North America. The supply chain optimization plan that emerged recommended replacing them with five new mega-distribution centers strategically located in the U.S. Northeast, Southeast, Southwest, Midwest and West. In total, the new network would include approximately 5 million square feet of distribution space in the company 's most strategic distribution markets.
In the end, the efforts generated the results Unilever had sought. Customer service levels improved markedly, with one-day service levels rising by almost 20 percent. Additionally, through eliminating supply chain inefficiencies, the company reduced its total logistics costs by approximately 7 percent. These savings helped the company achieve a payback on its entire project investment in approximately one year's time.
Unilever's experience demonstrates the significant value a supply chain optimization program can have in improving a company's operating and financial performance. As customers' demands and service requirements continue to escalate, it's vital that manufacturing and distribution companies optimize supply chain networks to fulfill these requirements. But as outlined in this article, supply chain excellence is becoming imperative in achieving competitive advantage, growing revenues and market share, and reducing operating costs—all critical in delivering the goods, physical and financial.
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.
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.
The report cites data showing that there are approximately 1.7 million workers missing from the post-pandemic workforce and that 38% of small firms are unable to fill open positions. At the same time, the “skills gap” in the workforce is accelerating as automation and AI create significant shifts in how work is performed.
That information comes from the “2024 Labor Day Report” released by Littler’s Workplace Policy Institute (WPI), the firm’s government relations and public policy arm.
“We continue to see a labor shortage and an urgent need to upskill the current workforce to adapt to the new world of work,” said Michael Lotito, Littler shareholder and co-chair of WPI. “As corporate executives and business leaders look to the future, they are focused on realizing the many benefits of AI to streamline operations and guide strategic decision-making, while cultivating a talent pipeline that can support this growth.”
But while the need is clear, solutions may be complicated by public policy changes such as the upcoming U.S. general election and the proliferation of employment-related legislation at the state and local levels amid Congressional gridlock.
“We are heading into a contentious election that has already proven to be unpredictable and is poised to create even more uncertainty for employers, no matter the outcome,” Shannon Meade, WPI’s executive director, said in a release. “At the same time, the growing patchwork of state and local requirements across the U.S. is exacerbating compliance challenges for companies. That, coupled with looming changes following several Supreme Court decisions that have the potential to upend rulemaking, gives C-suite executives much to contend with in planning their workforce-related strategies.”
Stax Engineering, the venture-backed startup that provides smokestack emissions reduction services for maritime ships, will service all vessels from Toyota Motor North America Inc. visiting the Toyota Berth at the Port of Long Beach, according to a new five-year deal announced today.
Beginning in 2025 to coincide with new California Air Resources Board (CARB) standards, STAX will become the first and only emissions control provider to service roll-on/roll-off (ro-ros) vessels in the state of California, the company said.
Stax has rapidly grown since its launch in the first quarter of this year, supported in part by a $40 million funding round from investors, announced in July. It now holds exclusive service agreements at California ports including Los Angeles, Long Beach, Hueneme, Benicia, Richmond, and Oakland. The firm has also partnered with individual companies like NYK Line, Hyundai GLOVIS, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), and now Toyota.
Stax says it offers an alternative to shore power with land- and barge-based, mobile emissions capture and control technology for shipping terminal and fleet operators without the need for retrofits.
In the case of this latest deal, the Toyota Long Beach Vehicle Distribution Center imports about 200,000 vehicles each year on ro-ro vessels. Stax will keep those ships green with its flexible exhaust capture system, which attaches to all vessel classes without modification to remove 99% of emitted particulate matter (PM) and 95% of emitted oxides of nitrogen (NOx). Over the lifetime of this new agreement with Toyota, Stax estimated the service will account for approximately 3,700 hours and more than 47 tons of emissions controlled.
“We set out to provide an emissions capture and control solution that was reliable, easily accessible, and cost-effective. As we begin to service Toyota, we’re confident that we can meet the needs of the full breadth of the maritime industry, furthering our impact on the local air quality, public health, and environment,” Mike Walker, CEO of Stax, said in a release. “Continuing to establish strong partnerships will help build momentum for and trust in our technology as we expand beyond the state of California.”