January 29, 2014
The San Francisco 49ers' Super Bowl XXIX troph...
Super Bowl trophy on display . (Photo credit: Wikipedia)

As Super Bowl XLVIII descends on New Jersey this weekend, much has been made of the decision to host the world’s largest individual sporting event in the tri-state area.

The heavy traffic and colder weather conditions have some predicting a less enjoyable big game experience than previous years. Meanwhile, others in similarly ‘tough winter’ states are rooting for NY/NJ to put on a spectacle that will pave the way for cities like Boston, Washington D.C. and Pittsburgh to host future Super Bowls.

Much of the outcome will depend on how well the logistics of the event have been planned in advance and are managed on the day.

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Traffic Trouble

One of the biggest concerns for attendees is how to get to the stadium. For all of its big game pedigree, being home to two well-supported NFL teams and hosting numerous events by international artists throughout the year, the Meadowlands complex can be a tough location to access. Roads wind around the stadium in every direction, but the tight nature and numerous choke points make it difficult to imagine fans, officials and the national media descending upon the location without severe jams.

To expedite (or, more accurately, to execute) the automobile concern, the NFL implemented a controversial mandate of only two options for fans to gain access to the stadium area: either ride NJ transit at the usual rates or pay a $51 premium to take the ‘Fan Express’ shuttle service,  approved by the NFL. Rather than see this as a move full of logistical foresight, most are calling it as an exercise in extortion by the NFL. That view is somewhat supported by the fact that no-one will be allowed to walk into the Meadowlands area either, with only safety and security as the potential reasoning.

The concern over traffic is justified, but the measures to tackle it will seem like overkill to almost everyone outside of the NFL organization.

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Winter Worries

Finally, we come to the weather. Cities across the U.S. have been battered by the polar vortex and subsequent icy blasts from the Arctic, but only one of those locations is the focus for thousands of fans and more than 100 million viewers this weekend.

Even if the weather cooperates for the athletes at the Super Bowl, it could hold challenges for the transportation system. The tri-state area has experienced weeks of frozen temperatures and a couple of snow storms, each of which has delayed public transit to some extent. On the flip side, that makes transit authorities all the more used to dealing with such conditions and able to plan fall back logistics for areas they know could be a problem.

If the extended forecast as of today is accurate, though, they won’t need them, as the snow is expected to hold off until Monday. At last, something we can all cheer together.

Whether you’re at home or heading out to Super Bowl XLVIII, stay safe and enjoy the big game!

 

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January 24, 2014
Interstate sign value
U.S. roads helped to contribute almost $800 billion to the economy in 2012

Logistics is an extraordinary business. It touches almost every element of our personal and professional lives, yet often remains in the background for  all except those of us who work in the field.

Each part of the supply chain contributes in some way to bringing products into homes and businesses around the country, with a massive contribution to employment and the wider economy.

To understand just how much this is true – and what goes into making everything run smoothly – consider these 7 surprising logistics statistics:

  1. Expenditure on U.S. logistics was $1.1 trillion in 2009, which is larger than the national GDP of every country in the world, except for the top 12. [CSCMP,2009]
  2. America’s roads generated total revenues of $791.3 billion for the country’s economy in 2012. [Marketline, 2013]
  3. The U.S. transport infrastructure includes:
    • 47,000 miles of Interstate roads,
    • 94,313 miles of Class I freight railroads,
    • 25,320 miles of navigable sailing channels.
    • [2008 US Government Bureau of Transportation Statistics, RITA]
  4. U.S. rail freight grew by 4.6% in 2013, with the value of the sector up to more than $60 billion. [Association of American Railroads, 2013]
  5. The average container vessel calling along the Pacific Coast, which is the busiest port area of the U.S.,  is 4,345 TEU. This is equivalent to a maximum potential weight of more than 100,000 tonnes, or in excess of 230 million lbs! [RITA, 2011]
  6. Transportation and warehouse employment alone represents 3.2% of the total US workforce, more than 4 million people. [Bureau of Labor Statistics, 2010]
  7. Companies that use sophisticated supply chain methods have been found to achieve profit levels 12 times greater than those with less sophisticated solutions. [Bain & Company]

For more on where we see the profession going this year, read our summary of supply chain management trends for 2014.

January 21, 2014
English: A shopping cart full icon from "...
Shopping cart full icon (Photo credit: Wikipedia – iSimple System Icons)

If there was any uncertainty over the importance of ecommerce to retailers and the wider world economy, the sheer speed of its breakout growth is quickly dismissing that doubt.

A study conducted by OC&C and Google set the six-year growth of online retail at the $130 billion mark by 2020, taking into account major Western markets including Germany, Britain, and the U.S.

The figure may not surprise those of us who see first-hand the amount of physical goods flowing through the supply chain thanks to orders originating online, but there are many retailers whose ecommerce platforms need some fine-tuning at best, or a complete overhaul at worst. The order fulfillment process lies at the heart of this improvement, but there are also implications for the customer service, sales and marketing functions right behind getting the order correct and in the hands of the customer.

Interestingly, despite the vast consumer base and the fact that many technology solutions originate here, the U.S. is not the world’s most advanced ecommerce market. That distinction goes to the considerably smaller U.K., which nonetheless has an online trade surplus of more than $1 billion.

The U.S. still has a healthy $180 million by the same measure, but will be expected to catch up with its European counterparts as more of the population owns one-click consumption devices like tablets and smartphones. North American businesses need to be ready to transition to taking a majority of orders online as that happens, again referring back to that expected fivefold increase in ecommerce by 2020.

This latest study is proof positive that consumers are moving to the 24/7 ordering model, with all of the associated opportunities and challenges that come with it. If you have questions about how the supply chain of your business must change to rise to the ecommerce boom, get in touch with us!

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January 17, 2014
A working 3D printer
A working 3D printer (Photo credit: 3dilla)

The prophecies and predictions for supply chain management in 2014 have all been published by now, giving professionals in our industry a good idea of where we’re going in the next twelve months. But an influential new technology was notable by its absence, that of 3D printing.

Right now the idea of 3D printers in every home is still a very futuristic notion. Although the products exist – in fact, some were just unveiled last week at the Consumer Electronics Show in Las Vegas – the high price will limit early purchases to technology enthusiasts and affluent hobbyists.

The potential is there, however, to significantly disrupt the way physical products are made and delivered. This will impact order fulfillment and logistics, if not this year then almost certainly in the few that follow.

 

Order Fulfillment in the Age of 3D Printing

Much depends not only on how the technology develops, but how consumers choose to adopt it. Where people spend dollars will influence the companies that make 3D  printers to focus on certain priority areas.

Some of the questions that arise are:

  • Will home 3D printing be popular? Do people want to cut out all of the steps in between and print their own products, or will a professional, heavy duty printing device be required to produce items of a suitable quality?
  • What are the limitations of 3D printers? Is there a point at which consumers will prefer a product that is made by traditional manufacturing processes, even when a 3D printed version is quicker to obtain.
  • Which industries are most likely to be early adopters? Where will the trend spread first?

 

All of these considerations will affect where and when 3D printing begins to reshape the supply chain.

If home printing takes off in a big way, there are of course huge implications for the production, storage and shipment of goods. The reality is probably somewhere in between, however, with some products being suitable for home printing and others requiring a professional device that the everyday consumer is not willing to invest in. This would provide an opportunity for closer integration between manufacturers and logistics companies to bring in enterprise-level 3D printing equipment, developing new processes to produce, package and ship orders immediately.

As the CEO of 3D Systems Inc, Avi Reichental, suggested at the Consumer Electronics Show last week, “there are far reaching social impact opportunities, going from ideas to products in hours & days.” Although the promise is still very much more than the actual product at the moment, it’s a good idea for supply chain managers and logistics professionals to  read up on the technology and monitor its development.

3D printing may impact our industry sooner than we think and it will pay to be prepared!

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January 13, 2014
An eastbound BNSF train at Prairie du Chien, W...
An eastbound BNSF train in Wisconsin.  (Photo credit: Wikipedia)

At more than $60 billion in annual revenues, the U.S. freight rail network is a high-value and rapidly changing part of the supply chain.

Early reports on railroad performance during 2013 and announcements of proposed infrastructure investment each demonstrate why logistics managers are focusing more attention on rail as a part of their intermodal transportation solutions.

 

Record Rail Growth

With 12.8 million containers and trailers riding the rails last year, a rise of 4.6% (Association of American Railroads) on the previous year, 2013 proved to be a record-breaker. 2006 was the previous high and the notable growth following a period of extended economic trouble is further evidence that the year ahead could be a boom year for U.S. business.

The rail freight rises have put the efficient integration of rail and road solutions high on the list of logistics priorities this year, as huge names like Home Depot move closer to rail freight facilities.

Fully one-third of U.S. distribution center developments currently underway will factor in some form of railroad connection. For supply chain planners hoping to take advantage of this rail rush, the biggest challenge may be finding space, not only on the rails with moving cargo, but also next to them to unload and move it onward.

As the country’s dependence on rail freight grows, lawmakers are moving to ensure that supply keeps up with that demand.

 

Investing in Infrastructure

Looking to the future, U.S. Rep. Adam Smith last week reintroduced the Freight Infrastructure Reinvestment Act. Citing a vision for as far ahead as the next quarter-century, Smith stated:

“With our nation’s freight expected to double by 2040, it is critical to start making investments in freight and transportation infrastructure now to keep America competitive internationally for years to come.”

The legislation aims to drive infrastructure development and efficiency by introducing grants for states who propose initiatives at a local or regional level. Such a long-term focus is to be applauded given the still-fresh wounds of the economic crash and the slow short-term drag back to employment and profitability.

We see constraints across the network as it is, and with the expansion of container ships and the routes that serve them, the U.S. needs a plan in place to keep up with what we hope will be not just a surge, but a sustained level of demand. Hopefully states and businesses will rise to this challenge, making the most of the return to strength currently riding the nation’s railroads.

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