6.30.2015


A new report by Conexus and Ball State University compares the states on several factors, including:

Manufacturing Industry Health
Logistics Industry Health (above)
Human Capital
Worker Benefit Costs
Tax Climate
Expected Fiscal Liability Gap
Global Reach
Sector Diversification
Productivity and Innovation

The health of the logistics industry was determined by assessing the share of total logistics industry income as a share of total state income, logistics employment per capita, commodity flows by rail and road, and  per capita expenditure on highway construction.

6.29.2015


Density tends to help supply chains until it hurts supply chains.

Density of demand supports high volume distribution at lower per unit costs and, potentially, higher revenues. Dense demand allows for concentration of resources that can be managed more efficiently and effectively.

Dense consumer markets often feature rapid fluctuations in demand. Example: Greek yogurt went from being 1 percent of yogurt sales in 2007 to capturing 44 percent of the market in 2013. Social networks, especially in younger, more affluent, urban markets can fuel sudden shifts.  Agile supply chains can benefit.  Others will be left far behind.

Concentration also causes congestion, George Stalk and Petros Paranikas write in Harvard Business Review:

Longer commute times are just one sign that congestion is creeping into our lives. Highways and bridges are in desperate need of repair, making travel slower—and more dangerous. Our overburdened air-traffic-control system struggles to deal with increasingly crowded skies. Port congestion is a growing problem, exacerbated by the new super-size container ships that take far longer to unload than older, smaller ships. “Expect delays” has become the recurring theme of our transportation system.

Functional and geographic concentration of processing and logistics to reduce delays and facilitate efficiency and agility can increase other risks.  The benefits of "logistics clusters" have been persuasively demonstrated by Yossi Sheffi and others.  The potential pit-falls are too often discounted.  Putting all one's eggs in a single basket increases systemic vulnerability no matter what.

6.28.2015


Time-to-Survive is an important analytical method for supply chain risk.  It  has been developed by David Simchi-Levi to complement his influential Time-to-Recover methodology.

In the Harvard Business Review, Dr. Simchi-Levi identifies three key benefits and examines the experience of Ford (above) in applying the method;

Strategic: To identify exposure to risk associated with parts and suppliers, prioritize and allocate resources effectively, develop mitigation strategies, and identify opportunities to reduce risk mitigation cost

Tactical: To monitor changes in risk exposure on a daily or weekly basis

Operational: To identify an effective way to allocate resources after a disruption.


6.27.2015

The new CSCMP Annual State of Logistics finds that total U.S. business logistics costs rose to $1.45 trillion in 2014, a 3.1 percent increase from the previous year. However, the growth rate for logistics costs was lower than the U.S. gross domestic product (GDP), resulting in a slight decline in logistics as a percent of GDP from 8.4 percent to 8.3 percent."  MORE.

6.26.2015


Forty-one years ago today pull began to give push a run for its money. The Universal Product Code (UPC) connected individual demand to global supply in a way unprecedented. Since then accumulating data has allowed suppliers to anticipate consumer trends,recognize (and serve) previously unknown relationships, and make supply much smarter.

All of which allows those willing to implement these new insights the ability to reduce wasted time and product; providing what is wanted where and when there is a customer. The cost of logistics in the price of most products has fallen from half or higher to often less than a tithe.  For the entire US economy logistical requirements have recently totaled barely eight percent.

According to GS1, today bar codes will be scanned at least 5 billion times.