Too many companies see visibility solutions as tools that can simply be slapped onto existing operations. But some assembly is required if you really want to see results.
You've heard the buzz by now: visibility software lets supply chain managers pinoint the exact location and status of shipments anywhere in the supply chain. Operating in real time, it tracks goods whether they're within the distribution center's four walls, at another facility or even in transit. It cuts production costs by reducing unintentional inventory build up, alerts managers to delays and kicks customer service levels up a notch.
But DC managers who expect to hop on the fast track to supply chain success simply by providing some visibility are bound to be disappointed.
It's not enough to locate inventory in the supply chain. You have to use the information that visibility provides to make strategic decisions that help DCs serve customers better. As John Langley, professor of supply chain management at Georgia Institute of Technology, puts it, "The objective should not be visibility. The objective is having information available so managers can take action when needed. Visibility for its own sake provides no value."
Visible results
Though it may not stand on its own, visibility becomes a very powerful tool when used in conjunction with topflight business processes. But that assumes that a company has its supply chain management house in order. At a minimum, that means it has the following in place:
a clear supply chain strategy,
on going collaboration with key customers and suppliers,
appropriate business processes that can be used to act upon visibility information, and
integrated communications systems through the supply chain.
Without those elements, a visibility solution cannot live up to expectations. But in combination with them, visibility can quickly push DC operations to new levels. Armed with accurate and up-to-the-minute data, DC managers can monitor transactions and shipments, respond to late or inaccurate shipments, and perform all the tasks normally associated with real-time management of the supply chain.
Access to the right info also let s managers focus their attention on the largest or most strategic customers and the processes that most directly affect supply chain performance. In short , visibility provides the foundation to achieve what should be the true goals of all businesses: kicking up customer satisfaction levels and securing a stronger competitive position by making the entire supply chain perform as a single entity.
Not there yet
Many companies have achieved visibility within their own factories, warehouses and distribution centers. Some can also locate goods from suppliers and finished products that are in transit to customers or retail outlets, either with their own visibility capability or, more often, through integrated transportation service providers such as FedEx or United Parcel Service.
Very few companies, however, have achieved end-to-end visibility through out their supply chain, though many are working toward that goal. Intel Corp., the giant semiconductor manufacturer, is a case in point (see sidebar). Intel has launched a major corporate initiative aimed at improving supply chain ef ficiency. The goal is for managers to know the location and status of all inventory, regardless of its position in the supply chain, enabling them to make decisions on the fly, all in the interests of better meeting customer needs.
But what Intel and others have found is that the complexity of today's supply networks makes true supply chain visibility tough to achieve. "The biggest challenge is that the supply chain contains so many disparate participants, it's hard to tie them together," says Langley. "In theory, you can establish visibility in your supply chain, but saying it and doing it are two very different things."
What customers want
All too often, visibility initiatives fail because managers have neglected the critical behind-thescenes work that's required for success. Too many companies continue to see visibility solutions as tools that can simply be slapped on existing operations to produce significant benefits. More and more,software vendors are trying to help potential clients through a step-by-step process that will ultimately allow them to focus on their own customers' needs.
"The most important thing is that companies considering visibility and similar solutions first look at what their customers want and how they can improve customer service," says John Davies, co-founder and vice president of Optum. Based in White Plains, N.Y., Optum markets supply chain execution software , including a supply chain visibility and event management tool called TradeStream.
Davies adds that it's essential to examine all business processes that affect—or may affect—customer satisfaction. "We try to help them determine what has to happen both within their company and through out the entire supply chain,a ll the way to delivery of the product to the customer. Then—and only then—should companies apply software tools to these processes."
All aboard?
At the same time, the more astute observers warn companies not to get too hung up on the tools. True supply chain integration demands a lot more than software, hardware and other high-tech apparatus. To get the most from visibility solutions and other systems designed to improve supply chain performance, manufacturers must bring all key players into the picture.
Though everyone agrees that collaboration is critical, they also agree that there is no simple formula for how to go about it." Everyone should collaborate," says Dr. Karl B. Manrodt, assistant professor in the Department of Information Systems & Logistics at Georgia Southern University and co-author of a report title Visibility ã Tactical Solutions, Strategic Implications, which summarizes research conducted by the consulting firm Cap Gemini Ernst & Young, Georgia Southern University and the University of Tennessee." But the critical thing is for companies to first identify their most critical customers and suppliers. Then they have to determine exactly how to collaborate with each, and the approach can vary significantly from one situation to the next."
Manrodt also notes that although conventional wisdom dictates that interaction should begin with the people at the top, that may not be practical." Executives should certainly collaborate with each other, but they're typically so busy that it's hard to get their support," he says. "So companies may have to aim for some small success first, t hen bring in their executives to collaborate."
View-masters
Because visibility capability is so critical for other supply chain improvements, most industry sources believe it will soon become standard issue in supply chain management software.
"I believe that before too long, visibility will become a standard part of the offerings of not only software companies but also logistics service providers," says Georgia Tech's Langley. "Transportation management systems and warehouse management systems will include visibility functionality."
Still, James R. Kellso, manager of supply network research at Intel Corp., isn't expecting a visibility explosion anytime soon. The transportation industry has to get financially healthy b efore carriers will invest in such capabilities as standardized shipment visibility, he reports. "Right now, there is great pressure on costs,and that pressure has limited investment by carriers."
But, as with everything else in the IT world, that will change. Within five years, Kellso predicts, visibility capability will be fairly standard among carriers. When that happens, DC managers had better be poised to take the data and run with it.
Cashing in on Intel's chips
James R. Kellso of Intel faces the classic visibility challenge, if such a thing can be said to exist. As manager of supply network research at semiconductor giant Intel Corp., Kellso oversees an organization that has a good grip on where items stand in its internal supply network. But now, Kellso has to figure out a way to track inventory that is no longer in the company's direct control ãand do it flawlessly and in real time.
"We have great visibility within the systems that we own and manage, such as internal shipping and our own warehouses," says Kellso. "But we have spotty visibility as products move from place to place out of our direct control. Our level of visibility once product leaves our control is totally dependent on the capability of individual carriers."
Therein lies a problem. Kellso reports that there is a great deal of variance in the ability of transportation service providers in this area. "Some can provide timely visibility information," he says, "but most cannot." Kellso hopes that will change soon. Once everybody's operations are in sync, he notes, "I can treat in-transit inventory the same as I do inventory that's sitting in one of our warehouses. I can change it; I can repackage it." And that could save a lot of money.
Another problem he faces is a potential failure to communicate: For full-blown integration to take place, internal and external systems will need to "talk" to each other and that is unlikely to happen anytime soon. "The systems that exist are proprietary," says Kellso, "so there are massive—and expensive—connection and translation challenges."
Help may be on the way, in the form of industrywide communications standards that would greatly reduce the complexity and costs of integrating internal and external systems. For its part, Intel supports the efforts of RosettaNet, the standards organization that is composed of companies in the information technology, semiconductor manufacturing and electronics components industries. The goal of RosettaNet is to create and implement communications interfaces that will align business processes between supply chain partners.
Last year, RosettaNet merged with the Uniform Code Council (UCC), the group that develops standards for product identification, including bar codes. Mergers of standards organizations are becoming more common, as various industries strive to establish the communications standards that are so essential to supply chain integration. Will those mergers accelerate the development of standards? Kellso and his colleagues hope the answer is yes.
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.”