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Aug 29

Blockchain and the Supply Chain

Posted on August 29, 2016 by Julian Blumenthal

In the August 29, 2016 edition of Bloomberg Business Week in the opening remarks section there is article by Olga Khariff and Peter Coy about Blockchain, a software that came about to control Bitcoin and other electronic currencies.  This software is about controlling a large system, such as a currency system and making it visible. It limits a given item such as money token to one use per person.  In my mind’s eye it reminded  me of a complex supply chain.  So what is the value of Blockchain to the supply chain? It is a system software, so in situations of drastic change such as a large natural disaster this software will have limitations, because the system cannot easily transform. So after writing the software probably can not handle a disaster, I will turn around and say this will be great software for post disaster planning and getting the right support items.

The dreamers of this software, and yes you need dreamers to innovate, champion, and execute any new idea, see as a way to end corporations forever with a group think management style.  No more CEO’s.  Everybody in the system will be equally powerful. Since most of these people hate bureaucracy and corporations, I suspect they have not spent time looking how organizations survive and prosper through change management with a champion at the top. You can dislike wage disparity between CEO’s and everyone else, and still see a need to have a constructive organization direction.

So don’t let the political rhetoric distract for the value of this software which allows all parties to use their resources in the system to create an action, and in the supply chain that will be about getting something moving or stored.  The software specializes in making transaction visible, so a second tier supplier actions would be visible to the primary supplier and the end user, useful information to manage the system efficiently. In a set up supply chain that is running relatively smooth over a period of time, the attraction of this software should be self event.

But the software is not going to predict a change like going from DVD’s to music apps and then back to long running records. Or a earthquake in Japan knocking out sizable production, and new alternatives will be needed much faster than the software can be changed. The needs of the market place will fundamentally change. Any software which promotes a system will be a hindrance in drastic change situations

Speaking of disasters, I see a good use the Blockchain software might be very useful in a post disaster situation. Frequently after disasters, the blizzard of donations after the terrible event rarely meets the needs of what is needed. You might have to few blankets, but way too many pots and pans. I could see non-profits finding value of a software where one could see what is needed and make the donation. Much of this type of demand can reasonably anticipated so software can mostly be set up in advance and activated on short notice.

It will be interesting to see how this plays out.

Posted in Infrastructure, Learning from failure, Logistics, Logistics Software, Management, Patient transport, Public Policy, Supply Chain, Sustainability, Transport Security, Transportation, Warehousing | Tagged | Leave a comment
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Aug 15

Benchmarking Legal in Transportation

Posted on August 15, 2016 by Julian Blumenthal

File this essay on there has to be a better way department.  How often as a transportation contract between a carrier and a shipper taken months to resolve, usually over one word, liability?

After months of negotiation, red-lining contracts, sending out emails, and having a bunch of meetings a contract; it is resolved in a way almost all parties could have predicted at start. Carriers know what shippers will want. Shippers know what carriers will want. Yet the original contract contains pie in the sky liability sentences which could only exist if due diligence is not done by the other party to the contract. Yes it happens, but 99% of the time, it does not.

It is safe to say that lawyers are trained to be advocates for liability protection for their clients being they shippers or carriers. It probably also safe to say also that lawyers were never trained to due the process efficiently. Trained appropriately on the details of law, but left out on how to get this done efficiently.

So let me propose some professional organization, provide contract benchmarks. Say this is the standard on liability that 75% of the shippers and carriers agree to. It would be more efficient and save time if the standards were agreed upon being written down on paper. Negotiation time would be cut in probably by 80% and a clear path to written contract could be accomplished.

So you ask why will only lawyer or lawyer firm agree to that since it would cut the amount of revenue each contract brings in? Corporate lawyers are going to be paid anyway and they can be incentivized to bring efficiency into the process.  Carrier attorneys can be rewarded the same way. And ultimately it will be a survival strategy, somebody is going to come in with a legal business model to promote efficiency and take a large share of the business anyway.

 

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Jul 26

Driverless Trucks-Really?

Posted on July 26, 2016 by Julian Blumenthal

There are lots of driverless trucks articles out of late. There is talk that a truck can do 1000 miles in one day therefore make multi-warehouses redundant. Realizing there is already one driverless truck out there Volo is testing in Europe, let’s just take a step back to consider what it will mean to logistics and the supply chain.

I am one who believes that the driverless truck technology will be of value but in limited circumstances. Public acceptance will be an issue. The ability to program for the complexities of urban delivery though makes me a skeptic about its use for local operations.

Let’s talk long haul interstate or divided highway situations. That is a controlled situation which relatives few anomalies.  If I was the head of the American Truck Association,  I would be thinking how in the world to make this acceptable to the public who is deeply suspicious of trucks in general.  I would be looking even before the technology is available for an interstate highway run test area to prove the concept to the public, that it is safe and viable. There may need to ab internet site or phone number, people can call if there is incident in its operation, which I think would offer some assurance to the public that safety is being considered. Any responsible operator of carriers, thinks safety day in and day out, but one spectacular accident involving a truck, to easily dissuades the public that is money trumps safety. An interstate highway operation would be probably easiest to control and be easiest to defend against cyber security issues.

Despite the ability to avoid human hours of service limitations, with the need for quick delivery in major urban areas, I doubt there will be significant changes in the number of warehouses and location of main warehouses in the country.  Today’s drivers can do 500 to 600 miles which is an overnight journey. The fact you can do 1000 miles in one vehicle in 20 hours really is too slow for much of e-commerce.

Pick up and delivery deals with a massive number of unusual dock and terminal situations particularly in older urban environments.  Can a machine handle blocking off the street while a truck backs into a dock off the street?   There are a lot of judgements drivers make in that situation based on situations sometimes fairly far out and down the road.  For an individual site you could program for it. It would be expensive to consider and hard to program all the possibilities for local pick up and delivery. I suspect that trucks in non-controlled environment of local streets is more of a cyber-security risk.

It will be interesting to see how this plays out.

 

Posted in Logistics, Logistics IT Security, Logistics Software, Process Management, Supply Chain, Transport Security | Tagged | Leave a comment
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Jul 10

Bring the value discipline to the supply chain

Posted on July 10, 2016 by Julian Blumenthal

This essay is about being your best self and applying it your work environment. Supply chain practitioners bring to work environment, process skills, organizational skills, supply chain skills, and financial skills. These are all important disciplines brought to the work environment. Let us not forget, though, that our best personal values is an important of the disciplines you bring to work.

Sustainability is great place to start when talk about bringing good values to your business processes. Let’s look at the environmental aspects of sustainability, a word that encompasses much more that. While the political system has had difficulty with environmental actions, many business firms decided that that where there were financial benefits to be environmental responsible, the organization would pursue them. Actually it was not the organization, it was the individual in them who took this initiative, in no small part because of their environmental consciousness. These changes have made significant dent in carbon in the atmosphere process. Yes, there are actions that organizations could take because they are not financially justified. It is better to make what progress you can, than none at all.

Supply Chain is a people business no matter how much technology is used in it. People determine what needs to move, when, at what service level, and perform the warehousing and transportation of goods. When things go wrong, people need to perform to correct the issue. In dealing with people, the values of compassion, empathy and inclusiveness are important assets and as I will discuss, a cost benefit.

In talking about values, we can start out with integrity, with its benefits of trust and ease of flow in the supply chain system. A simple example of a situation where trust is valuable.  If you know your supplier will be truthful about shipping inventory, you will not need as much safety stock of inventory as if you don’t trust that person’s statements.

But we know there are people with integrity, you can trust what they said, but do not have compassion, empathy or inclusiveness. It certainly possible you might remember a boss in your career who was not compassionate, emphatic, or inclusiveness. Think about what that would have meant if that boss did have those qualities and how much more you would have given the organization were those values there.

By nature of the supply chain, change is inevitable. That means jobs will need to change, sometimes eliminated, sometimes new ones will be established. Vendors, some long term, will find their work gone or there may be more work for them.  If you include the discipline of your best personal values including compassion, empathy and inclusion, it will help deal with the people aspects of these changes. If one doesn’t include this in your process, it increases the chance of surprise cost increases from people not working together or in some cases sabotaging the change.

Like the sustainability example above, doing what you can with the values discipline does make a difference in dealing with the ramifications of change.

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Jun 19

Being Thrown Into The Supply Chain

Posted on June 19, 2016 by Julian Blumenthal

Particularly in mid-size and smaller organizations, you might have an acquaintance or friend who out of the blue is assigned by their management to handle the supply chain. They might know you have experience in the supply chain and ask for your advise. While, probably,  this is happening due to many supply chain educational opportunities available to young adults, it still not uncommon.

One you are the experienced one, this becomes a challenge as you have so much information floating in your mind, you many not know where to begin. But as always, listening to the rookie’s understanding of the situation is a great place to start.

I found after that the following was useful to the new comer to the field. Ask him to determine what metrics are being used to judge the operation. You can mention beyond cost, our metrics of service performance and throughput measures. By saying this you are helping the rookie focus about what is currently important in the operation.

Being experience, you are likely to know of appropriate professional organizations and educational institutions in the area. This can be a source of information for the new comer.

Lastly you will probably know reputable and professional run vendors in the field. There are still hundreds of vendors out there ranging from warehouse operators to carriers to 3PL’s. Just giving that person a place to start is just so worthwhile.

 

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Jun 06

Freight in Global Cities

Posted on June 6, 2016 by Julian Blumenthal

Last Thursday, June 2, I attended the Global Transportation Hubs session of The Chicago Council on Global, part of their Global Cities program.  The session was transit-focused and it was clear the thought leaders there had not given extensive amount of thought on freight in these large megacity transportation hubs. Now, I happen to be transit enthusiast, some would call me a transit fanatic. So I enjoyed listening to the speakers but knew there was something missing from the global cities transportation hub description.

So how does freight fit in this overall picture of megacities?  How can it be balanced against land use, economic growth, income equity, and cultural amenities? Can shipper and carrier business interests be balanced with the overall public good?  How can the supply chain industry have planners put freight movement into the equation. This would be far better than just reacting, when something is “bad” is about to happen to freight interests.

I was able to question the panel about where does freight fit in this process? Ginger Evans, who is currently the Commissioner of the Chicago Department of Aviation, responded that freight transportation infrastructure needs to happen outside the cities, citing recent rail infrastructure projects being built outside metro area. Clearly she was thinking of the rail intermodal yards in the Chicago area, south of Joliet, IL and in Rochelle, IL.  Her point was land is at a premium in these mega cities, and transportation which needs large foot prints of land will find the least costly option outside the cities most utilized areas. She felt such close-in projects as the Alameda Corridor which takes rail traffic from Port of Los Angeles and Long Beach in a below ground trench from the port to major rail yards in the area, are not likely to happen in the future.

Having a supply chain background, I know about the increasing demand for fast delivery, same day or even 2-hour delivery windows in those dense, congested, mega cities. I also know for this be economically viable, warehouse and to lesser extent transportation facilities need to be close in to the customers of the products.

So I would encourage supply chain academics and the professional organizations of transportation, supply chain, and logistics to start thinking about its place in large metropolitan area. One of the issues on the urban planners’ plate is on how to provide jobs to the non-professional workers. Certainly encouraging warehousing and transportation jobs is a worthy selling point to those planners.  Making sure there is places to drop freight off street sized for trucks, will decrease urban congestion and increase operator efficiency.

In conclusion, there needs to a conversation about the supply chain and freight movement in urban areas. Supply chain interests would be wise to be a part of the regional planning, both to promote business growth and avoid barriers to their successful operation.

 

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May 25

Lessons for the Supply Chain from TSA

Posted on May 25, 2016 by Julian Blumenthal

The long Transportation Security Administration (TSA) lines at airports is in many ways similar to supply chain/logistics issues. Many we will say that TSA is government therefore incompetent, as though the for-profit sector never had a major bankruptcy or a failed supply chain program. The problems TSA has had, certainly have occurred in the supply chain sector. So let us look at their failures to see what we can learn.

This is one of those cases where the issues that causing the problem distracts from the fundamental problem.

The issues that are causing the long lines apparently are:

  1. If audits in 2015 found failures to catch contraband  and led to longer and more detailed searches, lengthening the time for each individual to processed.
  2. The there are roughly 15% less agents in airports today than last year
  3. Stories about high turnover at TSA because of poor management treatment as well as poor treatment by people going through the lines of TSA workers. New people learning the task cannot be as efficient as experienced workers.
  4. The number of airline travelers are increasing.

However the fundamental problem is not understanding who their customers are and putting processes in place to handle its mission. The organization acts if their only customer is the their organization the Homeland Security. They are directing service and paying the bills. But the real customers are the people being screened. They have the influence to affect the service through Congressional and other political entities in the process.

In a supply chain it is easy to become transaction based.  The actual end user the supply chain serves, may not seem to be a part of the process as a third party may be the paying the bills in the process. The end user preferences, though, will decide ultimately decide the success of the business. If the end user does not timely have the product or its frequently damaged in transit, the end user will avoid the product. Your costs and service and seem impeccable to the third party buying the product, but an dissatisfied end user can end your business success.

If the TSA looked at its process to serve its end use customers who have two objectives, travel safely and get through the process quickly, it would have designed the process differently. It would have set goals for time in the line necessary to meet its clearance process. These goals should be public and it is important to make goals clear to all.  TSA would look to eliminate waste in process.  For example, TSA pre-clearance passengers only receive TSA Pre about 60% of the time. It probably should be more likely 99.9%.

My guess is that if the top managers of the TSA headed to their employees’ lounge and listened to the people actually doing the work, they would have known that signficant problems were going to occur before they did. Part of any effective supply chain, is to get such information up the management ladder.  My guess is management never thought about listening. Again, this not only a government problem, this is frequent in the for profit sector.

Successful supply chains are about breaking silos for the overall good of the organization. Look at the process holistically and not on a transaction basis.  Unfortunately I am not hearing these type of words coming from public comments the TSA management has made. And yes, not heard these words in for profit organizations also.

 

 

Posted in Logistics, Logistics Safety, Management, Public Policy, Supply Chain, Supply Chain Education, Transport Security, Uncategorized | Tagged | Leave a comment
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May 10

Dealing with anger in the supply chain

Posted on May 10, 2016 by Julian Blumenthal

Watching and listening to the 2016 Presidential campaigns, you get the sense there are lots of angry voters out there. Since this is a supply chain/logistics blog, I wondered about anger in the supply chain. As any person in the supply chain knows at times you have to deal with anger, either with your customers or suppliers or yourself.  I will focus on this blog on finding yourself to be angry. Maybe it will be from poor treatment for your company, your boss, your co-workers, your vendors or customers.

One option when your angry is to become a loose cannon.  But ultimately that works like an 20th Century Roadrunner Cartoon.  In those films, Wile E Coyote obsessed about catching the Roadrunner bird, to the point that he could not think logically and every crazy schemes he tries to catch the Roadrunner failed and worse ending up hurting him.  In real life, it can cost you your job, your reputation, your income, and put a major dent in your future.

That is not to say you should bury the emotion. That becomes in time a volcano within. We are dealing with enough volcanoes outside our body as is.

So first things, first, recognize that your angry. Once that is done, you start to feel a little more in control of a bad situation.  It is easy to be so worked up about being anger that the anger takes control of your life and your perspective vanishes and you are slave to the emotion.

Second, realize there is a basis for your anger.  It can be positive motivator to move forward and provide the energy needed to bring desired change. A question to ask, is what can done ti constructively to make things better. In the supply chain, listening to find the real problem is an important part and required first step. When a customers is telling you off for poor delivery, engage them to start finding a better solution.

Sometimes a significant change is necessary. Let me give you this non-supply chain example. A famous headhunter blogger, Nick Corcodilos, says he has seen  a number of millennium women angry that they are not making the same money as men in their position. They search for an employer who will pay what they are worth and move on. This is a constructive use of that anger.

If your supplier or vendor is incapable of performing, and when given a chance to improve fails or ignores you, the angry that this brings will likely lead to a planned, better operation situation when changes are made.

So when angry, recognize what it is and start thinking how to constructively use that energy to get into a better place.  Make yourself sustainable, not a target of derision.

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Apr 26

Imagine starting a supply chain from scratch

Posted on April 26, 2016 by Julian Blumenthal

Last week, the Chicago Roundtable of the Council of Supply Chain Management Professionals (CSCMP) visited Magid Glove in Romeoville, IL.  Magid had a number of stories to tell about moving from an old outdated facilities in Chicago, IL to a new facility in a southwest suburb of Chicago, Romeoville, IL.  Their business is to make, distribute and sell safety productive clothing, with a specialization of various types of safety gloves.

To me the visit could be summarized on their second floor, where on one side of the building is a sophisticated tote conveyor system for storage and retrieval of products and other side the same floor are women working sewing machines with items moved between work stations in laundry baskets. Rarely have I seen such stark contrasts together  in the same building but to me it represented common sense planning.  How can that be? We will get there.

As a private company, it is easier to make long term calls to improve your performance when the firm don’t have investors only interested in quarterly profits.  Magid decided a US presence was needed to stay in business and it wanted to be close to Chicago to keep its skilled workforce and managers. Maintaining its quality of workmanship was deemed an important core company value to be sustainable in its market. It knew its presence workforce was skilled in providing that quality. To keep the employees they stayed in the Chicago market.

Rarely does an organization have the opportunity to redesign your operation from scratch. This was one of those times. One story is that process from moving from old building to new one. They started with their purpose in the marketplace: High quality, individualized safety clothing products shipped promptly and correctly to the customer. For these type of low volume supplies, customers are not getting to do a large amount of planning, so when something breaks or a surge in business comes, they will need the product right now to maintain their production. As this is safety equipment, it must perform as advertised for both moral and certainly legal reasons. So while Magid has a plant in the Philippines, it is too far away to timely ship to the US market.

While machines can make the basic glove, the extra fabrics and detail needed to make a safety glove safe, in the small batch requirements of the customers, it was felt best to have individual people sewing the needed safety details to the glove.   These small batches  can be moved to work stations by sophisticated conveyor machines or robots, but would there be any real savings or any real improvement in productivity?

But the story in the distribution warehouse was quite different. Not only did have the own products to sell but they sold complementary products from other firms. In their distribution system with a lot small quality sku’s, a sophisticated tote conveyor system was chosen to significantly cuts down on storage space needed and speeds the product through the warehouse. It also improved order accuracy.  The investment was large, but the return on investment was quick.

The 30,000 feet view story here is that organizations can’t do everything, especially everything at once with not only limited cash but also limited management resources, even in a starting from scratch situation.  The organization must choose what it thinks would give it the biggest bang for the buck, improving its distribution system in the warehouse. Time will allow the firm to approach other process improvements.

There is a lot of technology out there: the internet of things, SOP, ERP, WMS, TMS, robots, and artificial intelligence among others. Maybe, all them would help your company be more efficient. There is not enough cash nor management personnel to implement everything. The wise managers will prioritize improvements based on what will help the business be successful to meeting customer needs and expectations, where to modernize and where to put off.

 

 

 

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Apr 20

Connecting the Supply Chain to Research

Posted on April 20, 2016 by Julian Blumenthal

Last Thursday, April 14,2016, the Chicago Roundtable of the Council of Supply Chain Management Professionals (CSCMP) visited the Digital Manufacturing and Design Innovation Institute (DMDII). DMDII is a public-private research institute in Chicago which is provided digital manufacturing research for American manufacturing companies so they can succeed.

OK, lots of acronyms and words here. What does it all mean? In this brief essay, I will tell about my visit to the facility, examine how well this research works with the supply chain, why research is value and worthy of the taxpayers’ dollars and finally, an overview of the recently started national research centers, their acronyms, their purpose, where they are located and of course, their website.

DMDII and UI Labs share a brand new building, open last year, on Goose Island in Chicago, a few miles northwest of the loop. One of their Business Development personal, Mary Kate Love, gave us a brief history and overview of the operation. Manufacturing is undergoing changes as a result of the digital technology revolution. To be successful in this environment, research needs to be done to keep America competitive with the world.  DMDII is a public-private center where business, academics and the government can do this research. We saw machines being tested, labs areas and a lecture hall. Industries have provided, on loan, machines to be tested. Some companies assigned their personnel to work there. There is an engineering focus at this location. Memberships annual fees start from $500 and goes up to the several hundred thousand dollar.

Supply Chain/Logistics people are in are the unusual position, of not only looking at the organization inward, but outward looking to its suppliers and customers.  It is significant supply chain/logistics organization, the Chicago Roundtable of CSCMP choose to visit there even though it is not directly connected what supply chain practitioners do in their jobs. It is of value for logistics and supply chain to let management know organizations like DMDII exist and that information needs to be communicated to upper management of this source of research information.

It is of concern that digital research tends to be inwardly focused, just on the machine or the internal process. Data developed in these research projects have implications in production information for the supply chain and for the company’s suppliers and customers. If your organization chooses to join an organization such as DMDII, supply chain leaders should solicit input into the project to make sure these larger picture items are considered.

My belief is that that government has a role in investing in the economy and keeping it productive by doing research. In other nations, research might be controlled by the government. Working in team environment of industry, academics and the government  gives America a competitive advantage to do this research. There is a serendipity effect when people work together. The sum will be more than the parts.  Part of rebuilding America’s manufacturer sector, such inputs as this research will be needed to spur economic growth.  Yes, efforts should be made to minimize failures and wasted money, but fear of failure should not scare us, if we want to have a better future.

The visit made me curious about the other research facilities created recently by current federal administration. Here is a list the research centers which are in existence today and their location. All of these have been started in the last five years.

The national organization is the National Network of Manufacturing Innovation (NNMI). It is part of the Advanced Manufacturing National Program Office (AMNPO) in Gaithersburg, MD, part of the Department of Commerce.

Organization                                                                                            Acronym/Website

Advanced Functional Fabrics of America                                                AFFOA

Research into the new fabrics                                                     www.rle.mit.edu/fabric/

American Institute for Manufacturing Integrated Photonics     AIM Photonics

Research on photonics, use of light waves to convene data    www.aimphotonics.com/

American Lightweight Materials Manufacturing Innovation Institute                                                                                                                                        ALMMII

Located in Detroit, MI Lightweight materials research.                         lift.technology/

Digital Manufacturing and Design Innovation Institute                          DMDII

Located in Chicago, IL Digital manufacturing research                        dmdii.uilabs.org/

Institute for Advanced Composites Manufacturing Innovation            IACMI

Located in Knoxville, TN.  Advanced polymer composites research  http://iacmi.org/

Nextflex                                                                                                                   Nextflex

Located in San Jose, CA. Research in flexible hybrid electronics      www.nextflex.us

PowerAmerica                                                                                        PowerAmerica

Located in Raleigh, NC. Develop wide bandgap          www.poweramericainstitute.org

power electronic technologies. Works with the Department of Energy

 

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