Performance characteristics of Retail Industry with Consumer Pick Up

The Inventory and cost impact "for  retail consumer pick " Industry

 In  retail consumer site, the inventory is stored with the manufacturer or distributor  warehouses, however, the consumer orders are based on online or the phone orders. In this   case, online consumers give the order online or mobile. The "goods are picked up and are then sent to the designated pick up spots "which are then send to the consumer. This involves
1) Order by phone
2) Orders are delivered to stockists
3) merchandise are then shipped  to pick up points

 In this post, we take a look on how " inventory costs and performance" impact consumer retail pick up industry

Cost factor : Inventory
Performance: Higher  than all other options

Cost factor: Transportation
Performance: lower that other options

Cost Factor : Facilities and handling
Performance: Higher than other  options. The increase in handling site  at the pick site can be significant for online and phone orders

Cost Factor : Information:
Performance: some investment in infrastructure needed  for online and phone orders.

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Supply Chain drivers that impacts Distribution Network Design

At the highest level performance of a distribution network shall be evaluated by following criterias
 1) customer needs that are met
2) Cost of meeting customers; The the firm must consider the impact of customer service and the cost of meeting that service

 Although there are customer values is impacted by various factors we discuss the measures influenced by the structure of the distribution network .Parameters that impact Customer needs are 1)response time for reaching customers
2)Product variety and SKU
3) Product availability
 4) customer experience
5)Time to market
6) order visibility
7) Return ability Firms that are able to target customers who can tolerate long response time are required only a few locations that may eb far from the customer. These companies focus on increasing the capacity of each warehouse ot stores In contrast firms that target customers with shorter tolerance response time needs to have their location close to their facilities

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Review of Storage and Warehousing Supply Chain Start Ups

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Storage and Supply chain today has undergone a evolution. From the time consuming process of loading , tracking and following shipments, many supply chain start ups are " disrupting the existing space by " providing faster service and GPS tracking to their consumers which makes shipping and tracking easy

 LIST OF SUPPLY CHAIN WAREHOUSING AND STORAGE START UPS 

1.)Lockitron A remote controlled lock and mobile app enabling users to store locally instead of using warehouses.
2.)MakeSpace An on-demand storage solution. MakeSpace provides pickup, urban storage, and on-demand retrieval.

3.)Boxbee Much like MakeSpace, BoxBee provides pickup, urban storage, and on-demand retrieval for homes and businesses through an easy web/mobile interface.

4.)ShareMyStorage On sharemystorage.com people are brought together to provide a common sense self-storage solution – using space such as the attic, garage, basement, or spare room in the back-office.

5.)Cubbyhole An app-based service that lets users rent their storage space out to strangers. Renters specify how much space they need and for how long, and snap a photo of the goods they need to store. Prices start at $15, renters pay via credit card directly through the app

6.)Keycafe Store your keys securely at the local cafe and exchange them remotely with your home-rental guests via the app. Keycafe is not classic ‘storage’ but about managing access to your home remotely.

7.)Swapbox: Shop online and ship your packages to a Swapbox located nearby. It’s a modern, always-open postoffice. You get notified via email and/or text message when your packages arrive.

8.)Cargomatic A platform that provides shippers with instant access and real-time visibility to trucks around them via mobile app and cloud-based software.

TruckTrack A cloud app for trucking business management, giving instant insight into business KPIs, fleet and human resources. The app also provides you business optimization recommendations.

source : Johathanwichmann

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Supply Chain Logistics and Transportation Start Ups

Transportation & Logistics Start Ups 

 Matternet is a transportation system made up of Unmanned Aerial Vehicles (UAVs), landing stations and routing software. The system aims to transform the way we move goods locally, starting with the pharmaceutical delivery market in areas inaccessible by traditional infrastructure.

 Freightos A website – and a network of freight forwarders – that provides automated freight quotes and a contract management system for shippers.

 Transporteca: A website giving shippers and consignees a much-needed tool to easily compare shipping and transportation prices from freight forwarders.

iContainers: An end-to-end pricing tool and freight forwarding service offering best available prices for ocean and sea freight as well as international moves. With iContainers you can get a quote online instantly from multiple carriers.

 Shippo" Shippo  is “shipping made easy”. With the Shippo API and apps you can get discounted shipping rates and labels within minutes. Shippo is basically selling discounted labels when connecting shopping cart apps with carriers such as DHL, FedEx and UPS – making things easier and cheaper for those who want to ship.

Retigence : A company specialising in " providing predictive analytics, which will help retail  and businesses to align inventory to the real time demand of the product.By mapping inventory in real time it helps retailers predict ' demand forecasting  better

Freight Filter An easy-to-use service to help you find the best shipping options. It’s divided into three simple steps – get the price, book it, and ship.

Xeneta A service that ads transparency to the shipping industry by enabling companies to benchmark their ocean freight rates. Useful for both importers, exporters and freight forwarders, e.g. for understanding the market and when negotiating prices.

source :jonathanwichmann

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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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Reviewing the role of Information Technology in enabling effective Supply Chain decisions

INFORMATION TECHNOLOGY AND SUPPLY CHAIN DECISION  MAKING 

Information technology plays a huge supporting role in ensuring the right mix of decisions and designs that helps supply chain managers take the right decision Information technology helps managers to access information on the functions and status of all other supply chain across geographic units.

For example a retail store can not only afford to figure out the store inventory, but also need information on consumer demand, lead times and associate variability’s like “logistic and transportation “

1. The IT department provides seamless and friction less support across the supply chain implementation , which forms the core of the supply chain. Any process related to order and purchase, manufacturing , inventory, transportation and logistics , and warehouse are mapped and tracked
2.  IT provides internal collaboration across departments, which are shared across the internet and cloud . It helps vendors, suppliers and other stakeholders across the supply chain to co-operate and collaborate.
3.  IT based decisions support systems is used to aid better decisions through the supply chain mechanism and ecosystem. Any critical issue on delivery, demand fluctuations ,lead time and risk can be “ tracked in real time” therefore giving the operational managers, the flexibility and the time to ensure compliance 
4. The role of Information Technology in terms of  measuring the entire supply chain performance and aid the operational managers to set internal metrics and benchmarks and observe “ their effectiveness”cannot be more emphasized. Business Intelligence tools includes a technology stack with layers for reporting and analysis

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Reviewing Supply Chain Redesign : Centralization vs Decentralization

HOW CENTRALIZATION AND DECENTRALIZATION OF  IMPACT SUPPLY CHAIN  REDESIGN

A supply chain redesign has a significant impact on the inventory and supply chain costs. This can be done only by a rigorous cost benefit analysis The centralization and decentralization example also illustrates the benefit of Risk Pooling.

  For example a company has 10 regional stock points which it serves its dealers from the stock point that is the closest and wants to centralize its stock holding, which means that the stocks will be held at one point and the retailers would be served from there.

However this arrangement, will increase the transportation costs along with the fact that it cannot force the retailers to hold excess inventory. This means that the company has to work on a much faster transportation and logistics scheme.However this  will increase its logistics  costs.

Whereas in the decentralization model, the transport costs will be low, but the cost of holding inventory at the companies warehouse will be  high.

Thus its essential to do a rigorous and effective costs analysis by “ using a preductive software to estimate demand and supply chain redesign In general whenever we pool demand across locations , the phenomenon of rik pooling may be observed. Risk pooling suggests that demand uncertainity is reduced when one pools demands are spread across location

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Reviewing 5 Trends that will shape supply chain and logistics by 2016

5  trends that will shape   supply chain  and logistics by 2016

The next 5 tech frontiers : that will change the supply chain and logistics industry :

1)Algorithm, Remote and real time shipping : Powered by  drones, this technology is set to go where no man, machine or android has ever been before.. At the customers doors without a human waiting to deliver goods.
The development of drones has progressed much faster that users expected. Automated Drones with Remote sensing, using powerful algorithms, along with geo targeting,remote sensing capabilities will deliver packages to consumers in flat 60 mins
The top speed of a drone : 50 mph per hour while the max done payload is less than 5 LBS, at this capacity the drone can deliver 86% of Amazons inventory Trend :
How Soon :in very near future within 2-5 years

2)Same day delivery is now MUST ‘ In the early 2012, shipping time used to be one week as a standard. In 2012, around 50% of consumers felt ok to wait seven days ( a week for a package delivery) In 2014, only 35% felt ok with one week deliveries

How soon? An overwhelming 85% believe that same day delivery should be the norm by 2017-18

3)RFID zation of managing inventory by :The RFIP market is further set to grow with increasing consumer online buying.Another step towards industry moving toward internet of things , fuelled by increasing adoption of RFIDs, as they reach the point of sale quickly.An Idtechex research data show that RFID market will be up from $8.9billion in 2014 to $27.31 billion by 2024

4)Real vs Retail : The lines between retail stores and online stores  is soon to get blurred : Closer home online retail will have much bigger share of the wallet with more than 10% of all retail sales coming from internet by 2017

infographic: via

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Reviewing the evolution of Supply Chain models

15 Key Innovations in supply chain strategy:  Ford Assembly line, EDI, MRP, ERP, Dell Direct, Walmart Cross Docking

1913 – Ford Assembly Line – Henry Ford installs the first moving assembly line of an entire automobile, the Model T, first produced in 1908.

The 1950s - Ocean Shipping Container: Malcolm McLean invented the standard steel shipping container first implemented in 1956 at the port of New Jersey.

The 1960s – Electronic Data Interchange (EDI) – Started when computer systems first had the capability to transfer data to other computer systems. Enables the exchange of electronic business documents.

1961- Material Resource Planning (MRP) – Josef Orlicky makes the first MRP system in Racine, Wisconsin. A year later, Gene Thomas from IBM invents the Bill of Materials Processor.

1990: Universal Product Code (UPC) – a company called Logicon wrote a standard for something close to what became known as the Universal Product Code (UPC) to identify via a barcode a specific SKU. The first implementation of the UPC was in 1974 at a Marsh's supermarket in Troy, OH.

 The 1980s – Enterprise Resource Planning – In 1990, Gartner Group first employed the acronym ERP which came to represent a larger whole, reflecting the evolution of application integration beyond manufacturing.

 1984 – Dell Direct Orders – Michael Dell started his company in his dorm room shipping computers to customers. This developed a unique model of make to order that provided custom configurations to customers and shipped to them.

1985 – FedEx Tracking System – After re-inventing the category of express parcel shipments, FedEx went a step further by developing a new computerized tracking system that provided near real-time information about package delivery.

1987- P&G's Continuous Replenishment: Order patterns were totally dependent on sales and retail buyer input until P&G bought a mainframe application from IBM for "continuous replenishment" re-wrote it for retail,

1988 – Walmart Cross Docking – With the rapid expansion in the number of Walmart stores, the company needed an effective communication system. They introduced the first cross docking system, which enabled them to track goods across all their DCs and stores

Source: opsrules

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