Perspectives on Various Issues of Interest

Supply Chain Technology Trends

TREND 1: Data Analytics/Big Data

Data Anayltics is about getting away from the mechanics of data structure and finding out what it means. What happens when the organization’s need to handle, store and analyze data (its volume, variety, velocity, variability and complexity) exceeds its current capacity and has moved beyond the IT comfort zone? Then it becomes Big Data.

Sources of Data: Sensor and RFID Data, point of sale data, social media, geo-location, customer complaints, maintenance logs.

Big Data Analytics has had its applications in health care, credit risk scoring, fraud detections but not so much in supply chains.

Marketing is certainly an area that’s receiving much attention in regards to analyzing consumer behaviour. Example: Walmart uses demand data for marketing, site personalization, fraud detection. Walmart has acquired analytics startup Inkiru to help build its e-commerce capabilities and rival Amazon's online success. The startup is joining WalmartLabs, the technology arm of Walmart Global eCommerce and gives the traditionally bricks and mortar retailer a predictive analytics platform.

The most common analytical activities thus far have been descriptive—reports about what has happened in the past. But in future supply chains, we expect to see more prediction and prescription—that is, optimization and testing models that tell supply chain managers what they should do to improve performance.

Example: INRIX collects trillions of bytes of information about roadway speeds from nearly 100 million anonymous mobile phones, trucks, delivery vans, and other fleet vehicles equipped with GPS locator devices. Real-time traffic information is analyzed to improve how transportation agencies monitor, manage and measure the performance of their road network (http://www.inrix.com/pdf/inrixanalytics.pdf)

Example: UPSPredictive Analytics: Measuring and monitoring parts for maintenance.

Example:  UPS has launched its route optimization software which the company expects to save more than 1.5 million gallons of fuel and reduce carbon dioxide emissions by more than 14,000 metric tons by the end of the year. To gather the necessary data, UPS scientists began piloting telematics technologies with the installation of advanced GPS tracking equipment and vehicle sensors in 2008. The integration of these technologies allows UPS to capture data related to vehicle routes and performance and driver safety.

The 2014 18th Annual Third-Party Logistics Study headed up by Dr. John Langley of Penn State highlighted this obstacle. Some 22 percent of shippers and 32 percent of third-party logistics companies (3PLs) surveyed for that research said their companies considered data to be proprietary and would not be willing to share that information with others. That's troubling, since using big data analysis to solve supply chain issues will likely require access to more than one company's data. Big data analysis has huge potential to transform supply chains. For that to happen, though, supply chain chiefs will have to reach out to their supply chain partners to gain their cooperation in sharing the right data. http://blogs.hbr.org/2013/08/big-data-and-the-global-supply/

TREND 2: Cloud

Cloud is about getting the benefits of the datacenter and software without having to invest in the infrastructure.

1. Cloud-based applications (Operating system neutral)
   1. Supply chain visibility
   2. Example: TMS software (IBM)

Security concerns

TREND 3: Mobile Technologies

1. From rugged computers to tablets (http://www.supplychainquarterly.com/video/index/2139716989001/)
   1. Battery life
   2. Touch screen
   3. Lighter 
   4. Barcode scanners to tablets/smartphones at warehouses
      1. Larger screen hand-held units that can run more applications
      2. Add barcode scanners to smartphones/tablets (http://www.supplychainquarterly.com/video/index/2139659358001/)
      3. Mobile Access to Software (SAP, etc)
         1. Dashboards
         2. Today's executives rely on mobile solutions for timely business intelligence. You need to access real-time data, analytics, and dashboards from smartphones and tablets to make time-critical decisions on the road.
         3. RFID (http://www.supplychainquarterly.com/video/index/2139716989001/)
            1. Asset tracking (Mining, oil-gas, rail), not as much at inventory level

http://www.mirnah.com/images/White_Papers/Trends_SupplyChain/Top10Tech_wp.pdf

TREND 4: Automation in Warehousing

Reduced investment costs and increased labor shortage, especially in enviroments where workers do not want to work (Refrigerated), encourages automation.

Amazon paid $775 million for Kiva Systems Inc., a maker of robots that move items around warehouses.

Amazon spent $4.6 billion last year on warehouses -- the company’s largest operating expense at 9.5 percent of sales, according to its annual report. Kiva makes a clever self-propelled robot that scoots around warehouses to retrieve and carry entire shelf-units of packages to their proper shipping point.

TREND 5: 3D Printing (Manufacturing)

http://www.economist.com/news/technology-quarterly/21584447-digital-manufacturing-there-lot-hype-around-3d-printing-it-fast

3D printers make things by building them up, a layer at a time, from a particular material, rather than removing it by cutting, drilling or machining—which is why the process is also called additive manufacturing.

Extreme customization. (One-off items, prototype parts, gadgets, mock-ups, craft items)

• Hard-to-find spare parts
• transparent plastic “aligners”, instead of metal braces
• Hearing aids
• The aerospace industry

Lower inventories, reduce waste, reduce shipping costs. (One step ahead of postponement)

Can’t replace mass production.

Market growth: 2012: $2.2 B, up 29% from 2011, according to Wohlers Associates, a consultancy.

100 three-dimensional (3D) printers quietly making things at RedEye, a company based in Eden Prairie, Minnesota, and you can catch a glimpse of how factories will work in the future.

BMW’s assembly-line workers design and print custom tools to make it easier to hold and position parts. 3D-printed plastic moulds and dies are also being printed to help set up and trial new production lines. Some of these printed parts are even used as temporary stand-ins for broken steel tools, which can take weeks to replace.

Hard-to-find spare parts are also being 3D printed, in one case helping a large American airline to get some of its aircraft back into the air. The carrier was frequently having to ground its ageing McDonnell Douglas MD-80 jets because of leaking toilets. Production of these aircraft ceased long ago, and the airline was struggling to find spare parts. Its new plumbing is now being 3D printed in an aerospace-grade plastic (which does not ignite or produce noxious fumes if burned).

New York-based Shapeways already accepts your 3D designs and prints them for you.

UPS, is going to test 3D printing in its stores.

Cons: Finish, durability, cost, copyright issues.

Extra: Eliminating waste in packaging

1. Shipping in the rigth sized package
   1. Staples (http://www.dcvelocity.com/dcvtv/news/2474878749001/)
   2. Cubing device->WMS
   3. Customized box size.

Source: Yildiz, H. Supply Chain Technology Trends.

Horizontal Collaboration in Transportation

Baxter International Inc. is one of the early movers in adopting the concept of horizontal collaboration in transportation. The company took part in its first European transportation collaboration in 2011. It teamed up with the Belgium-based pharmaceutical manufacturing company UCB to share shipping to six Eastern European countries: Bulgaria, the Czech Republic, Hungary, Slovakia, Slovenia, and Romania. Baxter and UCB were brought together in 2010 by Tri-Vizor NV, a neutral third party that orchestrates shipper collaborations. The Belgian service provider's database showed that the two companies had significant overlap between their freight flows out of Belgium and could benefit from shared transportation. Eastern Europe presented a good test case due to the close proximity of destination points of UCB and Baxter and because of the large distance of these final locations from the distribution center in Belgium.

Baxter and UCB now use a motor carrier to make full truckload shipments to all of the Eastern European destinations except for Romania, where co-loaded containers move via railroad. For the over-the-road shipments, the truck stops first at a UCB plant in Belgium and then proceeds to Baxter's facility in nearby Lessines. The truck goes to UCB first due to the first-in, last-out loading sequence for pallets: At each destination in Eastern Europe, the truck delivers to Baxter's customer first and then to UCB's consignee. That synchronization also extends to how much product each company ships. Normally, UCB places three pallets on the truck. If the Belgian pharmaceutical maker wants more than three pallets, Baxter will ship fewer of its own pallets on that truck. In 2012, Tri-Vizor suggested that Baxter should collaborate with another shipper, Donaldson Company Inc., a maker of filtration systems. Now Baxter and Donaldson co-load shipments from Belgium to Ireland. A truck picks up raw materials from Baxter's and Donaldson's facilities in Belgium and then takes a short-sea ferry from the port of Zeebrugge, Belgium, to Dublin, Ireland. From there the truck travels to Castlebar, Ireland, where a Donaldson manufacturing center is located near a Baxter plant.

Horizontal collaboration is facilitated by the ‘neutral trustee’ role played by the 3PL, Tri-Vizor. As an impartial third party, Tri-Vizor can make sure that all costs and savings from the collaboration are distributed equitably. It also can synchronize the two shippers' daily operations so that one is not favored over the other. Tri-Vizor coordinates the shipments through its Web portal. Baxter and its shipping partners place shipment orders through the Tri-Vizor portal, which automatically synchronizes the shipments and assigns them to a carrier on a pre-approved list. The portal also handles all aspects of the collaborative arrangement, including invoicing. As part of that process, Tri-Vizor tracks such key performance indicators as number of loads consolidated, pickup and delivery performance, and claims, as well as monetary and greenhouse gas savings. There are limits on what any party can see through the portal, as Tri-Vizor makes sure to guard companies' confidential data.

Baxter has realized freight cost savings of around 10 percent on the collaborative trade lanes. In addition, the company has witnessed a 30-percent reduction in its transportation-related carbon dioxide (CO₂) footprint as a result of the consolidated truck shipments and the use of short-sea shipping and rail.

Baxter has now begun working with the European consortium Collaboration Concepts for Co-modality, informally known as CO₃. Tri-Vizor is a key member of that consortium, which was launched with a grant of 2 million euros from the European Commission. The organization's goal is to promote shared supply chains as a way for Europe to reduce its dependence on foreign oil, ease traffic congestion, and cut greenhouse gases. Comprising 17 members, CO₃ is developing a legal framework that allows companies to work together without violating antitrust law. It's also conducting pilots to demonstrate the value of shared supply chains from both a monetary and a sustainability standpoint.

At the moment, Baxter is engaged with two other test projects under the auspices of CO₃. One of those involves the consumer goods company Kimberly-Clark, which got under way in March 2013. Kimberly-Clark and Baxter now send full truckloads back and forth between France and Belgium. The project is being managed by Tri-Vizor and another CO₃ consortium member, Giventis, a Dutch information services company. Giventis developed a platform that automatically detects co-loading and round-trip opportunities between multiple logistics networks. In another project, Baxter is working with three other companies— Belgian retailer Colruty, the building-products company Eternit, and Ontex, a manufacturer of hygienic personal care products—to run full truckloads between Belgium and Spain. That project is making use whenever possible of short-sea shipping between those two countries.

Source: Cooke, J. A. Collaboration without borders. Supply Chain Quarterly, Quarter 3, 2013.