supply chain

A Supply Chain Built to Handle Disruption

By | Gemini News | No Comments

Sara Mayes, President and CEO Gemini Shippers Group

Often companies measure the effectiveness of their supply chain with a focus on the need to increase velocity while reducing costs.  While cost control and speed are important features of great supply chains, a supply chain that offers a true competitive advantage has to be designed to allow the firm to deal with the known and unknown disruptions we face every day.

Today, importers face a host of challenges; uncertain and fickle consumer demand, the threat of supply disruption in both their raw material and ocean transportation, SOLAS weight requirements, the effects of e-commerce and Omni-channel shoppers, a tepid economy and a looming US presidential election.

Challenges like these require Supply Chain managers to build a supply chain nimble enough to deal with change and resilient enough to overcome disruption.

In 2004, Stanford Professor Hau L. Lee wrote an article in the Harvard Business Review, The Triple-A Supply Chain, where he outlined that a focus on efficient and cost effective supply chains alone did not lead companies to a sustainable competitive advantage over their rivals.  Based on Professor Lee’s research, companies that had achieved a true competitive advantage in their supply chain displayed three distinct qualities; Agility, Adaptability, and Alignment.

An agile supply chain is designed to deal with changes in supply and demand efficiently and to respond to external disruptions seamlessly.  Picking dependable logistics partners, sharing information among your partners and having a strong forecasting and inventory management system in place are all attributes of an agile supply chain.

Adaptable supply chains are able to adjust to shifting structural trends in the market.  Most recently, the effect of growing e-commerce and Omni channel shoppers, the passing of the TPP agreement and the enlarging of the Panama Canal are all examples of changing market dynamics that should be incorporated into supply chain planning.  Companies can increase their adaptability by creating a formal monitoring system for changes that will affect their supply chain and creating active listening and feedback loop for input from both their customers and suppliers.

Successful supply chains align the goals and incentives of the firm with their vendors.  Importers should provide their partners with clear goals, increased visibility and information and an equitable share of risk and reward to ensure all parties are working together on towards the mutual goal.

While the focus on cost and speed is important as ever, professor Lee’s Triple-A supply chain reminds us that speed and cost control is not enough in today’s disruptive environment.

RILA and TPM Events Shape Issues Affecting the Supply Chain

By | Gemini News, Industry News | No Comments

By Sara Mayes, President / CEO Gemini Shippers Group

Last week shippers and carriers came together at two of the industry’s iconic events to discuss a range of issues impacting the supply chain today.

The 16th annual Transpacific Maritime Conference was held in Long Beach. Over two and a half days, carriers and shippers discussed a range of issues affecting the Transpacific trade, supply and demand and operational issues affecting carriers and shippers alike.  Concurrently, in Dallas, the Retail Industry Leaders Association (RILA) met for their 2016 Retail Supply Chain Conference.  While each conference had its own distinct focus, a number of common themes which highlighted the risks and opportunities shippers and carriers face, were prevalent in both venues.

Demand and Growth: Expectations for trade growth in 2016 remain muted. A host of noted economists parsed the global economy along various lines, but a key theme emerged that demand in 2016 will remain   modest and in the low single digit range.  For carriers, this lack of demand likely means that the current overcapacity, and downward corollary pressure on rates, will continue. For shippers, the need to maximize sales to an increasingly nimble and fickle shopper continues unabated.

Disruption: A number of panels at TPM continued to voice concern over ongoing disruption in the liner shipping space brought on by a host of changes including; global alliances, carrier M&A, port congestion, labor disruption, chassis provisioning, SOLAS weight rules, and the upcoming opening of the enlarged locks at the Panama Canal.  The takeaway from all stakeholders was that shippers’ supply chains must remain flexible to deal with this ever changing landscape.

Omni-Channel Shoppers:  Both conferences highlighted the changes being felt in the supply chain due to the increase in E-Commerce and the effect that Omni-Channel shopping has on the supply chain.  For retailers, the added complexity of multi-channel inventory management, Buy Online – Pick Up In Store, same day delivery and the on demand economy continues to present challenges for network design and inventory management.

Technology:  Both conferences highlighted the continued need for all parties in the supply chain to adapt new technologies to improve performance.  Numerous speakers noted the transformation of a new digital supply chain network driven by analytics and visualization.  Enabled by big data technologies, interconnected networks can provide supply chain executives with real time descriptive, predictive and prescriptive insight that, once established, allows for real-time visibility, customer segmentation intelligence, and planning.

Human Capital & Technology:  With so many changes occurring in the Supply Chain today, many speakers emphasized the need for supply chain team members to embrace and become knowledgeable with the new technologies of analytics and data science.

In closing the RILA conference, former Commander of the USS Benfold and bestselling author, Mike Abrashoff, noted that a motivated and well  led team was paramount to the supply chain.  He called upon supply chain leaders to constantly lead and motivate their teams and embrace a culture of excellence. Commander Abrashoff closed with the compelling call to all supply chain leaders “If you’re not getting the results you’re looking for, challenge the process.”

As each conference highlighted, today we operate in challenging times, and the successful will embrace change and technology with a motivated team of professionals able to adapt and react quickly to the challenges of a changing industry landscape.

The major take away from both conferences was the acknowledgement that we are operating in challenging times and, in order to be successful, we must embrace the change and technology with a motivated team of professionals in order to adapt and react  quickly to the challenges of a changing industry landscape.