Reviewing Supply Chain Conflicts: Manufacturer Vs Multi-brand Retail

 manufacturer vs multi-brand retail is one of the classic cases of supply chain conflicts.

Manufacturer vs multi-brand retail conflicts is one of the most classic cases of supply chain conflict, as the manufacturer will want the retailer to work with high service levels as to ensure availability of his product on the shelf. However, a multi-brand retailer across the world or any big departmental store would want to maintain a high product availability at the category level and not on a brand level.
If the cost of substitution of competing brands is not very high, the departmental store does not mind which brand” is available at the store as long as the category product are available. This model is valid for products that do not have a very high level of brand loyalty. For example “ Milk, Yoghurt, Cheese, Butter, jams, sauces “ which are mostly generic products”
In the above cases,  the  multi-brand retail chains would like to work on a lower service level as to keep his “overall cost low This substitution model, which the multi chains believe in, is in direct confrontation with the model the manufacturers believe in.  However for a single sourced item in a business to business environment, we don’t see the kind of conflicts we see in “ product categories that are more or less “commodities “.

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Supply Chain Risk; Suppliers Vs Manufacturers

 SUPPLY CHAIN RISK: SUPPLIERS VS COMPANY

For companies that manufacture products mostly  use suppliers, and over a period of time, they have become extremely dependent on them.  So should the  supply chain depends on the outsourcing suppliers? Most companies have many suppliers as to derisk their investment and ensuring backup if one supplier goofs up

However,  there exist a divided opinion on ultimately who is responsible for " supply chain.  Are the suppliers more accountable for the  supply chain risk, or is it the supply chain teams  of the company more responsible for " ensuring vendors and suppliers" deliver in  the right number and the right time

According to The Ripple Effect, a recent survey conducted by Deloitte Consulting LLP, 63% of executives see external suppliers as one of the biggest sources of today’s supply chain concerns. And when problems do arise, it’s the company—not suppliers—that will likely bear the brunt of the blame. What’s more, even having a diversified portfolio of suppliers is no guarantee when it comes to managing the supply chain.

 For example, when Japan was hit by a tsunami in 2011, most companies thought their supply chains were safe because they had multiple suppliers as backups. As it turned out, many of those suppliers relied on the same secondary suppliers, causing the entire supply pyramid to collapse.

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Top 3 Challenges in Supply Chain for the Food Industry

TOP 3  SUPPLY CHAIN CHALLENGES ACROSS THE FOOD INDUSTRY

Supply chain across Food Industry is a big challenge. The basic problem is in the kind of products across supply chain which is perishable. Unlike other industry the inventory has to be very tightly controlled so that products are fresh and losses minimized

In the past, most food companies dealt with supply chain risk after-the-fact through product recalls—and by switching suppliers once problems were detected. In an increasingly complex marketplace, the traditional approach just isn’t good enough.

 Tracing a food problem back to its source is complicated by multi-tiered supply networks and divergent standards for food quality and safety around the world. For example, various countries that produce rice allow different levels of arsenic (which is used to control pests). This means that rice may be deemed safe and legal to sell in one market but not in others. Regulations and standards are continually evolving and present a challenging risk. In the U.S., for instance, federal lawmakers are expanding the authority of the Food and Drug Administration to include the ability to shut down operations that fail to comply with the law.

 The supplier in the food industry  is a big variable and is a  crucial factor in deciding the success of the supply chain, as the raw  stock of the food  is the most precious and important part of the inventory forecasting. Apart from quality and consistency, adulteration is another risk.The entire ecosystem  Farmers, to the cold storage  to the suppliers  play a big role in ensuring the effectiveness of the supply chain  across the Food Industry.

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The numbers behind the Trucking Industry: Infographic

The numbers and data behind the US trucking Industry: top 5 trends

1. Trucking statistics in the United States The trucking industry employs a total of all most 9 million, out of which 3.5 million are truck drivers 
2.  There are currently 62 million unregistered vehicles in the United states and approx 6.4million unregistered Vehicles Out of which 32% consists of heavy vehicles including construction Vehicles, bulldozers, and heavy machinery vehicles out of which 2 million tractor trailers. 
3.  The US economy is heavily dependent on Trucking industry to deliver 70% of freight transported annually
4.  Approximately 671 billion of manufacturing and retail goods are transported by Trucking industry in one year.Truck Transportation of goods to Canada makes up $295 billion of the truck trade and $195billion with Mexico
5.  1 out of 9 truck drivers are independent, a majority which are owner operators Approx 5.7 % of truck drivers in the United States are the woman.

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Reviewing Less Than Truckload Shipments

Explaining LTL Shipments (Less than Truckload ) Shipments in Logistics and Transportation

A shipment that does not require a full 48- or 53-foot trailer can be shipped via less-than-truckload or LTL. Shippers use this option, which can be cost-effective and environmentally friendly when they only need to ship a small amount of product.

LTL shipments involve shipment of relatively small freight. To put it in simple terms, general freight carriers offer two types of service, Full Truckload (FTL) service or Less-Than-Truckload (LTL).

While the FTL carrier moves full containers or trucks of one product from one customer, the LTL carrier moves goods from many different customers on one truck.

 LTL shipments typically weigh between 151 and 20,000 lb (68 and 9,072 kg). Less than Truckload carriers use "hub and spoke," operations, where small local terminals are the spokes ('end of line') and larger more central terminals, are the hubs (also called Distribution Centers or DC's).

 LTL shipment rates s are determined by class, weight, lane (i.e., pickup and delivery locations), and additional required services, if any. LTL carriers normally offer better rates than parcel carriers for competitive reasons and economies of scale. A separate cost added on top of the line haul, the fuel surcharge is the cost of fuel associated with the lane, specifically the distance between the shipper and the consignee. The fuel surcharge changes weekly due to barrel costs.

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Reviewing Logistics & Transportation Scheduling: Static Scheduling

Once the vehicle route has been scheduled, the frequency of collection and dispatch not only depends upon the demand and supply but also on other constraints.The firm has to keep  in mind  the firm has to choose between 2 strategies  for optimal utilization of the resource.

Take the example of Amul Dairy  and milk marketing cooperative in India. Here schedules are announced in advance  and the local farmers know at what time the vehicle will visit their village for milk collection.In other words,  it works with static schedules which are pre-decided for milk production
Auto companies to work with static schedules for part collection from their vendors.

Companies  like Unilever clusters all dealers into 6 groups and each static group gets served on a working day and even within that day, the route followed by the vehicle is announced well in advance. Static schedules result in, by and large, uniform load on the depot and transport system and helps the dealer in planning the work ahead  because the dealer knows the exact slot  within a week when delivery can be expected.

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Review of Supply Chain: Cross Docking and Best Practices

As we explained Cross Docking here.  In this article we look at  the benefits of cross docking and across which industry and circumstances can it be used. 1) The first benefit is that it allows manufacturers to prevent costs on warehouses as the incoming materials are directly picked up by outbound trucks.
2) This ensures transportation costs are minimized and kept under control.

 However, this concept of cross docking is only possible only if a firm is working in an environment of predictable volumes which lowers transit types. For example, if 3 trucks bring in incoming materials to be loaded onto outgoing 3 trucks, all the 6 trucks must be available at the single point at one destination. if this is not available cross docking cannot take place, otherwise, the firm needs a physical distribution point or a warehouse to take care of the inventories piled up In the absence of cross docking, the manufacturer does not have to tightly control the logistics flow.

 And the material can be directly shipped, however in this model the cost of transportation increases. In cross docking the " need for tightly controlling the logistics as it has to ensure that the entire ecosystem has to be tuned in to ensure both incoming and outgoing trucks are available in real time and a predestined point. Walmart is one company that has been using cross docking extensively which has ensured that its transportation costs are kept low. For this reason, Walmart has been using its own vehicles so that it can have more control over the vehicles.

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