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Case Study: Wal-Mart’s Distribution and Logistics System

As the world’s largest retailer with net sales of almost $419 billion for the fiscal year 2011, Wal-Mart is considered a “best-in-class” company for its supply chain management practices . These practices are a key competitive advantage that have enabled Wal-Mart to achieve leadership in the retail industry through a focus on increasing operational efficiency and on customer needs. Wal-Mart’s corporate website calls “logistics” and “distribution” the heart of its operation, one that keeps millions of products moving to customers every day of the year.

Wal-Mart’s highly-automated distribution centers, which operate 24 hours a day and are served by Wal-Mart’s truck fleet, are the foundation of its growth strategy and supply network. In the United States alone, the company has more than 40 regional distribution centers for import flow and more than 140 distribution centers for domestic flow. When entering a new geographic arena, the company first determines if the area will be able to contain enough stores to support a distribution center. Each distribution center supports between 75 to 100 retail stores within a 250-mile area. Once a center is built, stores are gradually built around it to saturate the area and the distribution network is realigned to maximize efficiencies through a process termed “reoptimization”. The result is a “trickle-down” effect: trucks do not have to travel as far to retail stores to make deliveries, shorter distances reduce transportation costs and lead time, and shorter lead time means holding less safety inventory. If shortages do occur, replenishment can be made more quickly because stores receive daily deliveries from distribution centers.

An important feature of Wal-Mart’s logistics infrastructure was its fast and responsive transportation system. The distribution centers were serviced by more than 3,500 company owned trucks. These dedicated truck fleets allowed the company to ship goods from the distribution centers to the stores within two days and replenish the store shelves twice a week. The truck fleet was the visible link between the stores and distribution centers. Wal-Mart believed that it needed drivers who were committed and dedicated to customer service. The company hired only experienced drivers who had driven more than 300,000 accident-free miles, with no major traffic violation.

Wal-Mart truck drivers generally moved the merchandise-loaded trailers from Wal-Mart distribution centers to the retail stores serviced by each distribution center. These retail stores were considered as customers by the distribution centers. The drivers had to report their hours of service to a coordinator daily. The coordinator scheduled all dispatches depending on the available driving time and the estimated time for travel between the distribution centers and the retail stores. The coordinator informed the driver of his dispatches, either on the driver’s arrival at the distribution center or on his return to the distribution center from the retail store. The driver was usually expected to take a loaded truck trailer from the distribution center to the retail store and return back with an empty trailer. He had to dispatch a loaded truck trailer at the retail store and spend the night there. A driver had to bring the trailer at the dock of a store only at its scheduled unloading time, no matter when he arrived at the store. The drivers delivered the trailers in the afternoon and evening hours and they would be unloaded at the store at nights. There was a gap of two hours between unloading of each trailer. For instance, if a store received three trailers, the first one would be unloaded at midnight (12 AM), the second one would be unloaded at 2 AM and the third one at 4 AM. Although, the trailers were left unattended, they were secured by the drivers, until the store personnel took charge of them at night. Wal-Mart received more trailers than they had docks, due to their large volume of business.

Because Wal-Mart’s fast, responsive transportation operations are such a major part of the company’s successful logistics system, great care is taken in the hiring, training, supervising, and assigning of drivers’ schedules and job responsibilities. From the onset of his retailing career, Wal-Mart founder Sam Walton recognized the importance of hiring experienced people and of building loyalty not only in his customers but also in his employees. The company hires only experienced drivers who have driven more than 300,000 accident-free miles and whom it believes will be committed to customer service. Its retail stores are considered important “customers” of the distribution centers. As stated in the “Private Fleet Driver Handbook” that each driver is given a copy of, drivers are expected to be “polite” and “kind” when dealing with store personnel and others. In addition to containing a driver’s code of conduct, the Private Fleet Driver Handbook gives instructions and rules for following pre-planned travel routes and schedules, the responsible unloading of a truck trailer at a retail store, and the safe-guarding of Wal-Mart’s property. For example, although drivers deliver loaded trailers in the afternoon and evening hours, a trailer can be brought to the store’s docks only at its scheduled unloading time. Because unloading is done at two-hour intervals during the night, a driver is expected to spend the night, returning to the distribution center at a pre-scheduled time with an empty trailer. Coordinators closely monitor the detailed records of each driver’s activities for adherence to rules. Violations are dealt with according to handbook procedures, which include employee education to prevent future occurrences of incorrect actions. By effectively managing every aspect of its transportation operations and treating its drivers fairly, Wal-Mart gets results that are unrivaled in the logistics arena. This philosophy parallels the successful coaching style of New York Giant’s football coach Tom Coughlin who believes that rules are more than just discipline. Rules are a key to consistency, which leads to preparedness, which then leads to proper execution.

To make its distribution process more efficient, Wal-Mart also made use of a logistics technique known as ‘cross-docking.’ In this system, the finished goods were directly picked up from the manufacturing plant of a supplier, sorted out and then directly supplied to the customers. The system reduced the handling and storage of finished goods, virtually eliminating the role of the distribution centers and stores. There were five types of cross-docking.

• Opportunistic Cross docking – In this method of cross docking, the exact information about where the necessary good should be shipped and from where it should be procured and exact quantity which will be sent was necessary. This method of cross docking has allowed the company to ship directly the goods, necessary retail clients, not storing them in warehouse bins or shelves. Opportunistic cross docking could also be used when the warehouse software of management installed by the retailer, has set ready it, that the specific product was ready to moving and could be moved immediately.
• Flow-through Cross docking – In this type of cross docking, there was a constant inflow and outflow of the goods from the distribution center. This type of cross docking was mostly suitable for the perishable goods which had very short interval of time, or the goods which were difficult to be kept in warehouses. This cross docking system was mainly accompanied by supermarkets and other retail discount stores, especially for perishable items.
• Distributor Cross docking – In this type of cross docking, the manufacturer has delivered the goods to directly to retailer. No intermediaries have been involved in this process. It has allowed the retailer to save a major portion of the expenses in the form of storage. As the retailer should not support the distribution center for storage various kinds of the goods, he has helped it to save warehouse costs. The lead time for the delivery of goods from the manufacturer to the consumer was also drastically reduced. However, this method had some disadvantages too. Expenses of transportation both for the manufacturer and for the retailer tended to increase during time when the goods have been required to be transported to different locations several times. Besides, the transportation system should be very fast. Otherwise, the purpose of cross docking has been lost. The transportation system should be also highly responsive and to take the responsibility for delays in delivery of the goods. The retailer was at a greater risk. He has lost that advantage to sharing risks with the manufacturer. This type of cross docking was suitable only for those retailers who had the big distributive network and could be used in situations when goods had to be delivered in a short span of time.
• Manufacturing Cross docking – In Manufacturing cross docking, these cross docking facilities served the factories and acted as temporary and “mini warehouses.” Whenever a manufacturing company required some parts or materials for manufacturing a particular product, it was delivered by the supplier in small lots within a very short span of time, just when it was needed. This helped reduce the transportation and warehouse costs substantially.
• Pre-Allocated Cross Docking – Pre-allocated cross docking is very much like the usual cross-docking, except that in this type of cross docking, the goods are already packed and labeled by the manufacturer and it is ready for shipment to the distribution center from where it is sent to the store. The goods can be delivered by the distribution center directly to the store without opening the pack of the manufacturer and re-packing the goods. The store can then deliver the goods directly to the consumer without any further repacking. Goods received by the distribution center or the store are directly sent into the outbound shipping truck, to be delivered to the consumer, without altering the package of the good. Cross docking requires very close co-ordination and co-operation of the manufacturers, warehouse personnel and the stores personnel. Goods can be easily and quickly delivered only when accurate information is available readily. The information can be managed with the help of Electronic Data Interchange (EDI) and other general sales information.

In cross docking, requisitions received for different goods from a store were converted into purchase or procurement orders. These purchase orders were then forwarded to the manufacturers who conveyed their ability or inability to supply the goods within a particular period of time. In cases where the manufacturer agreed to supply the required goods within the specified time, the goods were directly forwarded to a place called the staging area. The goods were packed here according to the orders received from different stores and then directly sent to the respective customers. To gain maximum out of cross-docking, Wal-Mart had to make fundamental changes in its approach to managerial control . Traditionally, decisions about merchandising, pricing and promotions had been highly centralized and were generally taken at the corporate level. The crossdocking system, however, changed this practice. The system shifted the focus from “supply chain” to the “demand chain,” which meant that instead of the retailer ‘pushing’ products into the system; customers could ‘pull’ products, when and where they needed. This approach placed a premium on frequent, informal cooperation among stores, distribution centers and suppliers with far less centralized control than earlier.

Besides, if the supplier knows also, that for the company it will be incredibly difficult to make proper adjustments to guarantee smooth transition to the different supplier, then they will be less inclined to lower their price as much. It is not, how existing suppliers deal with Wal-Mart; when they see that Wal-Mart has found the supplier who will give them lower price, current suppliers lower their prices accordingly. They know that logistical system of the Wal-Mart can address with transition easily, and consequently they do not receive additional leverage, as it will not be difficult or expensive for Wal-Mart to choose other supplier.

Another reason that Wal-Mart’s prices are so competitive is because they buy in such large quantities that transportation from one end of the supply chain to another is not as expensive for additional units. This aspect of the logistical system does not come from skill or expertise it simply comes from the sheer size of the company, but this is still a factor. On the other hand, the Wal-Mart buys so many supplies from different places throughout the world, that they have the luxury of using bigger trucks and using less fuel to go back and forth. Also if by chance they have to use shipping services to transport material from one location to another, Wal-Mart will give them so much business that they will get huge discounts.

On the whole, the logistical system that Wal-Mart uses is so effective because it is so flexible. This is why Wal-Mart is able to offer things much cheaper than other companies can.

About Wal-mart Stores

Wal-Mart Stores, Inc. is the largest retailer in the world, the world’s second-largest company and the nation’s largest nongovernmental employer. Wal-Mart Stores, Inc. operates retail stores in various retailing formats in all 50 states in the United States. The Company’s mass merchandising operations serve its customers primarily through the operation of three segments. The Wal-Mart Stores segment includes its discount stores, Supercenters, and Neighborhood Markets in the United States. The Sam’s club segment includes the warehouse membership clubs in the United States. The Company’s subsidiary, McLane Company, Inc. provides products and distribution services to retail industry and institutional foodservice customers. Wal-Mart serves customers and members more than 200 million times per week at more than 8,416 retail units under 53 different banners in 15 countries. With fiscal year 2010 sales of $405 billion, Wal-Mart employs more than 2.1 million associates worldwide. Nearly 75% of its stores are in the United States (“Wal-Mart International Operations”, 2004), but Wal-Mart is expanding internationally. The Group is engaged in the operations of retail stores located in all 50 states of the United States, Argentina, Brazil, Canada, Japan, Puerto Rico and the United Kingdom, Central America, Chile, Mexico,India and China.

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Digital transformation as a response to economic downturn

Background:.

A logistics and transportation business offers a range of logistic services from domestic road transport to the warehousing of goods. The business initially started operations in customs clearance, but  over the years its services have expanded into logistics forwarding through good business relationships and partnerships with clients and suppliers. The business has become one of the key market players and is an example of a modern, fast growing business.

Due to poor market conditions and overall economic downturn, the business was looking for new ways to manage its clients’ supply chains and logistics departments to improve efficiency reduce costs and mitigate any risks.

The business’s goal was to provide integrated business solutions through innovation and digital transformation. It wanted to integrate digital technology into its business models to enter new markets, improve market intelligence and deliver higher value to customers. It wanted to establish a fully-digital business model via a digital app and meet customer demand by utilising the logistics capacity of other businesses rather than owning its own logistics assets. 

The solution:

The business underwent a digital transformation leading to where they are today, employing around 200 people without needing to actually own any physical logistics assets. Even though transitioning to the non-asset business model required high initial costs, it allowed the business to reduce amortisation and inventory costs, saving the business money in the long term.

It tracked all shipments with digital technology and acted as a middleman in matching logistics capacity to customer demand. By establishing operations this way, the business was able to provide the same level of service as much bigger players in the market. As a small business, it benefited from an agile approach, making digitalising the entire business model and then adopting it easier.

A non-asset-based logistics business finds its market in providing expertise within supply chains and negotiating better commercial terms with the parties – it is connecting clients with distribution companies that deliver, store and manage their products and materials. The high flexibility of such supply chain models allows it to identify the best approach to meet the demands of industry and to respond to clients’ needs on a case-by-case basis.

The new strategy included a mission of providing innovative integrated logistics services, emphasising efficiency and dedication to customers as well as a vision of creating a sustainable model to take a leading position on the regional market. As part of the strategy, the business also aimed to invest in its employees and in technology.

The business conducted a skills assessment to make sure its workforce was able to implement its strategy. This helped it to identify a skills gap and to prepare a workforce plan to develop its current workforce and recruit people with the necessary skills to support the business transformation. The business managed to establish a balanced workforce of young and energetic people and experts with proven knowledge and experience. 

In hiring employees  the business focused on young people without significant previous work experience and trained them through its internship programme. During their studies, they got to know the business and gained some practical knowledge and experience. Many stayed with the business after the internship programme ended. The fact that the employees were already adapted to and comfortable with the business’s working environment and culture benefited both the business and its employees.

When it comes to digitalisation , the business has turned to providing its clients with transportation management system software, compatible with logistics platforms such as EDI, SKYTRAK and WMS. This helps clients to procure distribution services in an efficient and timely manner. It has also invested in the education of its employees and in an integrated information system that allows quicker flow of information within the business.

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Case Study – High tech firm

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Redesign to Improve Value: A Case Study of a Supply Chain Leader

Supply Chain Shaman

JUNE 21, 2014

I also think that Quintiq’s leadership in concurrent planning to solve new problems is promising, especially in the design of transportation and inventory flows. For example, we discovered that transportation and duties are 5x the expense of labor and overhead. Is it duties, or is it transportation ? Find out what it is.

Thoughts. Selecting Supply Chain Software

APRIL 29, 2024

I still hold hope that SAP could get serious about supply chain planning, but I have given up on Oracle (with the exception of transportation management.)) Then build business case studies (think back to your business school case studies ) describing the opportunity. Put your case studies in your briefcase.

Real-Time Visibility in the Chocolate Supply Chain | Roambee Case Study

JULY 6, 2022

The journey of a chocolate involves everything right from transporting and processing cocoa to production and further transportation to retailers and then customers worldwide. The world of chocolate supply chain is bittersweet, just the way chocolate connoisseurs like their chocolates.

Watch: Leveling Transportation Demand at Kimberly-Clark

DECEMBER 1, 2022

Ron Sweet, senior consultant at Kimberly-Clark, describes how the CPG giant optimized transportation management, in this case study submission to the 2022 Supply Chain Innovator of the Year Award.

Inside the Shipper Mind with Jim Bierfeldt

NOVEMBER 13, 2023

His expertise includes strategic planning, brand positioning, advertising, public relations, website strategy and design, and development of white papers, case studies and other content. Logistics Marketing Advisors is a boutique marketing and public relations agency specializing in the logistics and transportation industry.

Case Study: How Generac Power Systems Cut Millions from Its Global Transportation Spend

CH Robinson Transportfolio

MARCH 28, 2018

How Generac Power Systems Cut Millions from Its Global Transportation Spend | Transportfolio. Our team provided North American transportation to Generac at the time. Generac implemented our global transportation management system (TMS), Navisphere ® and integrated it with its enterprise resource planning (ERP) system.

[PODCAST] The Growing “Influence” of Content Marketing in the Supply Chain

MARCH 3, 2020

Business and Marketing Resources Marketing Logistics Services: A Discussion on Getting Attention Online Listen to the Podcast Example of an Effective Transportation Management Case Study View Case Study How Industrial Companies Can Pivot to Inbound Organizations & Increase Customer Experience Listen.read More.

Delivering Green: Three Case Studies in Low-Carbon Logistics

MIT Supply Chain

APRIL 29, 2013

Caterpillar is the subject of one of three case studies that show how supply chain management can support both environmental and financial goals. Here are three case studies that offer clear, irrefutable evidence that sustainability and profitability can be compatible in the supply chain domain.

Understanding the Profitability of Omnichannel Retail is a Problem

NOVEMBER 20, 2023

But one thing you notice as you go to omnichannel software vendor’s web sites and examine customer case studies , the case studies may talk about retailers growing their revenues by 100% or more, but none talk about how much profitability grew. These new order fulfillment paths allowed retailers to rapidly grow sales.

Revisiting Transportation Forecasting

MAY 20, 2013

Many companies have collaborative planning and forecasting processes with suppliers and manufacturing partners, but very few companies translate demand and production forecasts into transportation capacity requirements. In this episode, Adrian discusses the key challenges and opportunities associated with transportation forecasting.

Revolutionizing Parcel Transportation & Courier Services: MercuryGate TMS Case Studies

MercuryGate

MAY 23, 2023

The parcel transportation and courier market has become a critical component of the global economy, estimated to represent an astounding $413 billion worldwide. The post Revolutionizing Parcel Transportation & Courier Services: MercuryGate TMS Case Studies appeared first on MercuryGate International.

Case Study: People and Processes Drive Supply Chain Improvements at Honeywell

MAY 8, 2019

Then you’ll be able to leverage your transportation management system (TMS) to execute, automate, and optimize those processes, as well as gain visibility to business intelligence to drive continuous improvement. Managing freight transportation with the help of a TMS is becoming a competitive necessity.

Heart of Efficiency: 3 Logistics Case Studies that Show the Love

FEBRUARY 13, 2024

Transportation management professionals love the seamless integration of logistics technology and collaboration, leading to operational excellence. This article dives into three compelling logistics case studies showcasing how MercuryGate enhances transportation management for three of our clients.

Modern Ways Technology Provides Transportation Management & Freight Spend Visibility

Intelligent Audit

AUGUST 25, 2022

This standard method has helped countless businesses identify where transportation spend is going and where there is an opportunity to optimize. That said, companies can now access modern technology, such as machine learning, to improve the processes of gaining visibility and managing transportation .

DELMIA Communities Month in Review

DELMIA Quintiq

AUGUST 31, 2022

New Case Study DELMIA Ortems in Packaging. Watch this video or read the case study about Xos Trucks, Los Angeles-based company which is on a mission to decarbonize commercial transportation and facilitate fleet owners’ seamless transition from traditional internal combustion engines to 100% battery-electric.

Transportation Management Case Study: Medical Supply Company Decreases Freight Claims Percentage, Improves Visibility, & Reduces Costs

NOVEMBER 15, 2017

In a first of several case studies to come out from Cerasis regarding how our solutions aid shippers in managing transportation more effectively thru our transportation technology and managed services, learn how a Medical Supply Company switched providers and increased overall results.

The Critical Path: Navigating Supply Chain Efficiency in the Oil Industry

JUNE 27, 2024

Distribution : Transporting oil products to various markets. Challenges in logistics are manifold and can significantly impede supply chain fluidity: Transportation Issues : Navigating maritime, rail, and trucking regulations and capacities. How Do Seasonal Weather Patterns Affect Transportation and Distribution?

Profiles in Transportation Management Excellence: Molson Coors’ Success with Drop and Hook 

SEPTEMBER 5, 2024

Transportation executives are always looking for ways to reduce costs, improve service, satisfy customers, and help their businesses meet their financial and strategic objectives.

Managed transportation services: a case study

Bulk Connection

MAY 13, 2021

When it comes to transportation logistics, that’s exactly what is possible through managed transportation services. In this article, we’ll share a Bulk Connection case study showing how this arrangement works and dive into key advantages of managed transportation .

Case Study: Top Ten Retailer Gets $31 Mil Annual ROI From Returns SaaS and Consolidation

APRIL 30, 2021

The results were reduced costs of monthly store labor and transportation , consolidated vendor returns, and improved shipping, inventory, and data visibility.

LTL Freight Class: DIM Pricing Updates & A DIM Pricing Case Study

JANUARY 29, 2020

The post LTL Freight Class: DIM Pricing Updates & A DIM Pricing Case Study appeared first on Transportation Management Company | Cerasis. Throughout the strategic freight series, we sought.read More.

Bucking the Trend in Transportation – Simultaneously Cap Rate Growth and Beat Capacity Constraints

OCTOBER 30, 2018

If you’ve ever paid $10 for an Uber ride to the cocktail lounge in the evening and then a “surge priced” $50 for the same distance Uber ride back to your home only a few hours later around closing time, you understand the dynamics troubling shippers in today’s capacity constrained transportation market. Consider the potential savings.

Validated, Real-Time Visibility for Pharma with Josh Allen

NOVEMBER 18, 2022

The Tracker provides real time alerts that enable shippers and their 3PL partners to respond and recover the shipment in the case of temperature breech, tampering, shock, damage, theft, and a variety of other factors. Biocair case study . Optimize Courier case study . Mercury case study . Tive website.

The Newtrul Story with Ed Stockman

NOVEMBER 4, 2022

Ed’s expertise is rooted in sales and growth, and he has served as the Director of Sales at two enterprise transportation brokerages. Ed founded Newtrul on his first-born’s birth date in 2018 after realizing the need for digitization and aggregation in the increasingly fragmented transportation space. Case Studies .

Case Study: Refrigerated Transport Services for Legendary Chocolate Maker

West Coast and California Logistics

DECEMBER 15, 2020

A few years ago, they turned to Weber Logistics to provide a variety of refrigerated transport services in a very specific part of the globe – the U.S. We recently wrote a case study on the relationship, which we preview in this article. West Coast.

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It’s Time to Rethink Your Global Logistics

• Willy C. Shih
• Adrien Foucault

The pandemic has overloaded companies’ usual shipping networks.

The initial supply and demand shocks caused by the pandemic were followed by an import surge as suppliers tried to replenish inventories, which threw normal transportation operations into turmoil. In the United States, this has included a lack of freight-handling capacity at Los Angeles and Long Beach ports, overloaded U.S. intermodal rail networks, and a lack of containers. But alternatives to established logistics networks exist. It’s time for companies to take advantage of them.

Over the last three decades, companies have established wide-ranging global supply chains that have taken advantage of steadily improving scale economies in global logistics. Efficient and reliable ocean and air cargo have linked low-cost manufacturing hubs across Asia with major markets in the United States and Europe. Much of this global sourcing was driven by the cost savings reaped through labor arbitrage, cost savings that were so dramatic that it more than covered the expense associated with moving products across vast distances to markets, or the extra cost of carrying inventory in long pipelines.

• Willy C. Shih is a Baker Foundation Professor of Management Practice at Harvard Business School.
• Adrien Foucault is an MBA student at Harvard Business School and has worked at maritime transport company CMA CGM.

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Logistics →

• 25 Apr 2023

How SHEIN and Temu Conquered Fast Fashion—and Forged a New Business Model

The platforms SHEIN and Temu match consumer demand and factory output, bringing Chinese production to the rest of the world. The companies have remade fast fashion, but their pioneering approach has the potential to go far beyond retail, says John Deighton.

• 18 Oct 2022
• Cold Call Podcast

Chewy.com’s Make-or-Break Logistics Dilemma

In late 2013, Ryan Cohen, cofounder and then-CEO of online pet products retailer Chewy.com, was facing a decision that could determine his company’s future. Should he stay with a third-party logistics provider (3PL) for all of Chewy.com’s e-commerce fulfillment or take that function in house? Cohen was convinced that achieving scale would be essential to making the business work and he worried that the company’s current 3PL may not be able to scale with Chewy.com’s projected growth or maintain the company’s performance standards for service quality and fulfillment. But neither he nor his cofounders had any experience managing logistics, and the company’s board members were pressuring him to leave order fulfillment to the 3PL. They worried that any changes could destabilize the existing 3PL relationship and endanger the viability of the fast-growing business. What should Cohen do? Senior Lecturer Jeffrey Rayport discusses the options in his case, “Chewy.com (A).”

• 12 Jul 2022

Can the Foodservice Distribution Industry Recover from the Pandemic?

At the height of the pandemic in 2020, US Foods struggled, as restaurant and school closures reduced demand for foodservice distribution. The situation improved after the return of indoor dining and in-person learning, but an industry-wide shortage of truck drivers and warehouse staff hampered the foodservice distributor’s post-pandemic recovery. That left CEO Pietro Satriano to determine the best strategy to attract and retain essential workers, even as he was tasked with expanding the wholesale grocery store chain (CHEF’STORE) that US Foods launched during the pandemic lockdown. Harvard Business School Professor David E. Bell explores how post-pandemic supply chain challenges continue to affect the foodservice distribution industry in his case, “US Foods: Driving Post-Pandemic Success?”

• 05 Jul 2022
• What Do You Think?

Have We Seen the Peak of Just-in-Time Inventory Management?

Toyota and other companies have harnessed just-in-time inventory management to cut logistics costs and boost service. That is, until COVID-19 roiled global supply chains. Will we ever get back to the days of tighter inventory control? asks James Heskett. Open for comment; 0 Comments.

• 19 Oct 2021
• Research & Ideas

Fed Up Workers and Supply Woes: What's Next for Dollar Stores?

Willy Shih discusses how higher costs, shipping delays, and worker shortages are putting the dollar store business model to the test ahead of the critical holiday shopping season. Open for comment; 0 Comments.

• 26 Mar 2014

How Electronic Patient Records Can Slow Doctor Productivity

Electronic health records are sweeping through the medical field, but some doctors report a disturbing side effect. Instead of becoming more efficient, some practices are becoming less so. Robert Huckman's research explains why. Open for comment; 0 Comments.

• 11 Nov 2013
• Working Paper Summaries

Increased Speed Equals Increased Wait: The Impact of a Reduction in Emergency Department Ultrasound Order Processing Time

This study of ultrasound test orders in hospital emergency departments (EDs) shows that, paradoxically, increasing capacity in a service setting may not alleviate congestion, and can actually increase it due to increased resource use. Specifically, the study finds that reducing the time it takes to order an ultrasound counter intuitively increases patient throughput time as a result of increased ultrasound use without a corresponding increase in quality of care. Furthermore, the authors show that in the complex, interconnected system or hospitals, changes in resource capacity affects not only the patients who receive the additional resources, but also other patients who share the resource, in this case, radiology. These results highlight how demand can be influenced by capacity due to behavioral responses to changes in resource availability, and that this change in demand has far reaching effects on multiple types of patients. Interestingly, the increased ultrasound ordering capacity was achieved by removing what appeared to be a "wasteful" step in the process. However, the results suggest that the step may not have been wasteful as it reduced inefficient ultrasound orders. In healthcare, these results are very important as they provide an explanation for some of the ever-increasing costs: reducing congestion through increased capacity results in even more congestion due to higher resource use. Overall, the study suggests an operations-based solution of increasing the cost/difficulty of ordering discretionary but sometimes low-efficacy treatments to address the rise in healthcare spending. Therefore, to improve hospital performance it could be optimal to put into place "inefficiencies" to become more efficient. Key concepts include: A process improvement can inadvertently cause an increase in demand for a service as well as associated shared resources, which results in congestion, counter intuitively decreasing overall system performance. While individual patients and physicians may benefit from the reduced processing time, there can be unintended consequences for overall system performance. Closed for comment; 0 Comments.

• 25 Jan 2013

Why a Harvard Finance Instructor Went to the Kumbh Mela

Every 12 years, millions of Hindu pilgrims travel to the Indian city of Allahabad for the Kumbh Mela, the largest public gathering in the world. In this first-person account, Senior Lecturer John Macomber shares his first impressions and explains what he's doing there. Closed for comment; 0 Comments.

• 07 Aug 2012

Off and Running: Professors Comment on Olympics

The most difficult challenge at The Olympics is the behind-the-scenes efforts to actually get them up and running. Is it worth it? HBS professors Stephen A. Greyser, John D. Macomber, and John T. Gourville offer insights into the business behind the games. Open for comment; 0 Comments.

• 19 Oct 2010

The Impact of Supply Learning on Customer Demand: Model and Estimation Methodology

"Supply learning" is the process by which customers predict a company's ability to fulfill product orders in the future using information about how well the company fulfilled orders in the past. A new paper investigates how and whether a customer's assumptions about future supplier performance will affect the likelihood that the customer will order from that supplier in the future. Research, based on data from apparel manufacturer Hugo Boss, was conducted by Nathan Craig and Ananth Raman of Harvard Business School, and Nicole DeHoratius of the University of Portland. Key concepts include: Two key measures of supplier performance include "consistency", which is the likelihood that a company will continue to keep items in stock and meet demand, and "recovery", which is the likelihood that a company will deliver on time in spite of past stock-outs. Improvements in consistency and recovery are associated with increases in orders from retail customers. Increasing the level of service may lead to an increase in orders, even when the service level is already nearly perfect. Closed for comment; 0 Comments.

• 19 Jul 2010

How Mercadona Fixes Retail’s ’Last 10 Yards’ Problem

Spanish supermarket chain Mercadona offers aggressive pricing, yet high-touch customer service and above-average employee wages. What's its secret? The operations between loading dock and the customer's hands, says HBS professor Zeynep Ton. Key concepts include: The last 10 yards of the supply chain lies between the store's loading dock and the customer's hands. Poor operational decisions create unnecessary complications that lead to quality problems and lower labor productivity and, in general, make life hard for retail employees. Adopting Mercadona's approach requires a long-term view and a leader with a strong backbone. Closed for comment; 0 Comments.

• 12 Jul 2010

Rocket Science Retailing: A Practical Guide

How can retailers make the most of cutting-edge developments and emerging technologies? Book excerpt plus Q&A with HBS professor Ananth Raman, coauthor with Wharton professor Marshall Fisher of The New Science of Retailing: How Analytics Are Transforming the Supply Chain and Improving Performance. Key concepts include: Retailers can better identify and exploit hidden opportunities in the data they generate. Integrating new analytics within retail organizations is not easy. Raman outlines the typical barriers and a path to overcome them. Incentives must be aligned within organizations and in the supply chain. The first step is to identify the behavior you want to induce. To attract and retain the best employees, successful retailers empower them in specific ways. Closed for comment; 0 Comments.

• 05 Jul 2006

The Motion Picture Industry: Critical Issues in Practice, Current Research & New Research Directions

This paper reviews research and trends in three key areas of movie making: production, distribution, and exhibition. In the production process, the authors recommend risk management and portfolio management for studios, and explore talent compensation issues. Distribution trends show that box-office performance will increasingly depend on a small number of blockbusters, advertising spending will rise (but will cross different types of media), and the timing of releases (and DVDs) will become a bigger issue. As for exhibiting movies, trends show that more sophisticated exhibitors will emerge, contractual changes between distributor and exhibitors will change, and strategies for tickets prices may be reevaluated. Key concepts include: Business tools such as quantitative and qualitative research and market research should be applied to the decision-making process at earlier stages of development. Technological developments will continue to have unknown effects on every stage of the movie-making value chain (production, distribution, exhibition, consumption). Closed for comment; 0 Comments.

• 20 Dec 2004

How an Order Views Your Company

HBS Professors Benson Shapiro and Kash Rangan bring us up to date on their pioneering research that helped ignite today’s intense focus on the customer. The key? Know your order cycle management. Closed for comment; 0 Comments.

• 15 Apr 2002

In the Virtual Dressing Room Returns Are A Real Problem

That little red number looked smashing onscreen, but the puce caftan the delivery guy brought is just one more casualty of the online shopping battle. HBS professor Jan Hammond researches what the textile and apparel industries can do to curtail returns. Closed for comment; 0 Comments.

• 26 Nov 2001

How Toyota Turns Workers Into Problem Solvers

Toyota's reputation for sustaining high product quality is legendary. But the company's methods are not secret. So why can't other carmakers match Toyota's track record? HBS professor Steven Spear says it's all about problem solving. Closed for comment; 0 Comments.

• 19 Nov 2001

Wrapping Your Alliances In a World Wide Web

HBS professor Andrew McAfee researches how the Internet affects manufacturing and productivity and how business can team up to get the most out of technology. Closed for comment; 0 Comments.

• 22 Jan 2001

Control Your Inventory in a World of Lean Retailing

"Manufacturers of consumer goods are in the hot seat these days," the authors of this Harvard Business Review article remind readers. But there is no need to surrender to escalating costs of inventories. In this excerpt, they describe one new way to help lower inventory costs. Closed for comment; 0 Comments.

• 12 Oct 1999

Decoding the DNA of the Toyota Production System

How can one production operation be both rigidly scripted and enormously flexible? In this summary of an article from the Harvard Business Review, HBS Professors H. Kent Bowen and Steven Spear disclose the secret to Toyota's production success. The company's operations can be seen as a continuous series of controlled experiments: whenever Toyota defines a specification, it is establishing a hypothesis that is then tested through action. The workers, who have internalized this scientific-method approach, are stimulated to respond to problems as they appear; using data from the strictly defined experiment, they are able to adapt fluidly to changing circumstances. Closed for comment; 0 Comments.

Rapid Response: Inside the Retailing Revolution

A simple bar code scan at your local department store today launches a whirlwind of action: data is transmitted about the color, the size, and the style of the item to forecasters and production planners; distributors and suppliers are informed of the demand and the possible need to restock. All in the blink of an electronic eye. It wasn’t always this way, though. HBS Professor Janice Hammond has focused her recent research on the transformation of the apparel and textile industries from the classic, limited model to the new lean inventories and flexible manufacturing capabilities. Closed for comment; 0 Comments.

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Case Studies

Freight sourcing.

Grupa Transportowa marks 10 years of partnerships with outstanding AI-enabled growth

Sonepar plugs into a new era of freight matching with Transporeon Freight Procurement

How Transporeon is helping Limagrain Europe achieve its field of dreams

Transporeon improving Amica’s logistics processes

Benetton Group: Comparability of offers and transparency

AB InBev brews up double-digit spot freight savings with Transporeon Autonomous Procurement

RPM Logistics Deploys Autonomous Truckload Procurement

ZF Friedrichshafen: Easy handling of complex logistics tenders

Transport Execution

SIJ Group connects major logistics divisions to achieve efficiency-boosting synergy

Ritex Logistics' journey to operational excellence with Transport Assignment solutions

Transporeon solutions help Essity reach 1bn people every day

Barilla Group achieves 99% carrier allocation success

Duracell: Managing Parcel, FTL and LTL shipments on one Transportation Management Platform

Acerinox: Globalization with a single tool

How we helped DHL to innovate at a crucial time

Facil chooses Transport Operations to streamline transportation flows

How Pfeifer is putting logistics efficiency at the root of their business

Flowing with success: Acqua Vera

Girteka Logistics: Developing relationships between business partners

H.Essers: Finding price-competitive capacity and speeding up the average time to carrier acceptance with Freight Matching

Barilla: Digitalization is the secret ingredient that keeps your pasta fresh

Perfect transport partners with the Transporeon Transportation Management Platform

How Burgo Group digitises its logistics

How K+S achieves efficient end-to-end processes and carrier connectivity with Transporeon and Visibility Hub

Dock & Yard Management

Knauf Group achieves measurable results with Time Slot Management

ArcelorMittal Hamburg: Improving time management and streamlining processes in logistics

Metro Logistics: Digitisation ensures transparency in the incoming goods department

How GEBA Trans is improving its customer service offering with Transporeon’s Visibility Hub

How Nestlé is using Transporeon Visibility Hub to manage supply chain disruptions

Saint Gobain Isover: Rapidly scalable visibility solution with high levels of automation

Schneider Electric: Unlocking greater visibility into the market 

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Visibility Hub

• Reduce check calls and automate processes.
• Increase performance and customer satisfaction.
• Reduce wait and dwell times with more accurate ETAs.
• Increase your on-time performance and avoid penalties  
• Reduce CO2 emissions and empty mileage.

Freight Audit and Payment Hub

• Pre-fill and validate fields from the Transporeon platform.
• Easily transfer documents to ERP systems via the interface.
• All relevant parties maintain access to the latest versions of all documents.
• Get automatic reminders and notifications for requirements documents.
• Instantaneous and traceable digital transmission of all documents.

Transport Execution Hub

Attachment Services

• Pre-fill and validate fields from the Transporeon platform
• Easily transfer documents to ERP systems via the interface
• All relevant parties maintain access to the latest versions of all documents
• Get automatic reminders and notifications for requirements documents
• Instantaneous and traceable digital transmission of all documents

Freight Sourcing Hub

Autonomous Procurement

• Automates procurement using data and behavioural science.
• Analyses how carriers make pricing decisions.
• Achieves requested capacity at lower freight rates for road transports.
• Fully automated process of predicting, framing offers, and concluding assignments.
• Entirely carrier specific and automated process.

Best Carrier

• Access the spot market more easily.
• Cut transaction costs by up to 19%.
• React quickly to market fluctuations.
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• Cloud-based system provides real-time transparency.

Carrier Premium Account

• Apply for suitable calls for bids with one click and win new customers.
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• Paperless management of the consignment note through all involved parties
• Easy usage due to conveniently comment and signing of the eCMR on a mobile device
• Provide the eCMR in real time via Transporeon platform plus additional communication channels

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ERP Interfaces

• Integrate the Transporeon platform into your ERP system using the ERP interfaces.
• Stay within your ERP system while using the full-service power of the integrated Transporeon platform.

Event Management

• Track transports from collection to end-point delivery with digital event management.
• Events can be defined and provided to customer needs.
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• Enable proactive reactions or automated platform based mitigation tasks.

Extended Yard Management powered by Peripass

• Reduce manual efforts by digitising the registration process.
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• Get a real-time overview of all trucks, containers, trailers etc on site.
• Centralise and digitise the operations of shunters, forklift and truck drivers and security personnel on site.

Freight Audit & Payment Hub

Freight Audit

• Full visibility of process, data and carrier performance.
• Logistics should no longer deal with invoicing.
• Underbilling is reported.
• Receives alerts about rejection/approval.
• Cost allocation of freight audit costs are automated.

Freight Matching

• Maximize profitability and productivity by equipping your teams to utilize available capacity opportunities within your trusted network, faster.
• Enable your carriers to realize their full potential by matching with the loads that are right for them.
• Manage your carrier relationships with more transparency from increased number of data points.
• Stay in control of your shipments and provide end-to-end visibility to your customers, and eradicate check calls.
• Reduce manual effort, and increase accuracy with full digitalization.

Freight Procurement

• Smart purchasing strategy.
• Achieve optimum freight rates.
• Reduce administrative effort and costs.
• Find suitable partners worldwide.
• Audit-proof the tendering process.

Procurement Advisory

• Save up to 19% on freight costs.
• Save 30% on administrative effort with e-sourcing.
• Use only quality-approved data for tender processes and RFQ events.
• Ensure 100% compliance with tendering processes.

Freight Settlement

• Save time by resolving billing issues before the invoice is sent.
• Simplified control of individual invoice items.
• All settlement transactions are displayed in their entirety to provide complete transparency.
• Company-wide and standardized coordination process.
• Can be also used as stand-alone-solution also compatible with other products.

Insights Hub

Market Insights

• Monitor the contractually agreed rates between shippers, logistic service providers, and the spot market.
• Use important "indirect" indicators to illustrate the capacity situation on any given lane or market.
• Define the lanes and metrics that you want to monitor.
• Get a clear overview of the biggest market changes and top movers.

Strategic Benchmarking

• Persistent freight cost savings with up to 8% with our state of art benchmarking approach.
• Get the most comprehensive overview of all markets and for all modes.
• Profit from insights into latest market developments & forecasts.
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• Receive regular information with market overviews, developments, cost drivers.

No-Touch Order

• Automated shipment execution processes.
• Fewer empty runs.
• Cut process costs by up to 30%.

Rate Management

• All freight rates and freight contracts in one centralized database.
• Rate query engine factors in multiple currencies, surcharges and total chargeable cost per available carrier.
• Optimization of inquiry processes and better usage of internal resources.
• Fully integrated process of assigning transports and management of rates in an organization.
• Centralized interfaces and import/export functions.

Real Time Workflow

• Less labor-intensive solution due to electronic workflows and paperless management of transport documents.
• Integration of drivers into the digital workflow.
• Immediate updates about status changes and shipping stages of the goods to be delivered.
• Photographic documentation of transport damage and proof of cargo safety.

Real-Time Yard Management

• Improve overall visibility and ability to predict changes.
• Combine yard, transport, and warehouse management.
• Automate arrivals, check-ins, and call-offs.
• Avoid costs and fees caused by idle and inefficient processes.
• Monitor, measure, and improve KPIs.

Time Slot Management for Retail

• Increase handling capacity by up to 20%
• Reduce driver wait times by up to 40%
• Shorten loading times by up to 60 minutes
• Audit and legal security
• Completely documented processes

• The SAP Add Ons integrates all Transporeon functionalities without a need for interfaces or middleware into the SAP ERP system.
• Benefit from the Transporeon UX within your standard SAP system.

Market Intelligence & Benchmarking

Supply Chain Advisory

• Know-How from more than 1,700 supply chain projects and 25+ years of experience 
• Gain full global network transparency  
• Achieve cost savings through supply chain optimization
• Support for all phases, from conception to implementation into your supply chain
• Deep knowledge of all modes of transport
• Specialized Benchmarks with proven Market Intelligence methodology

3PL Case Studies: Analyzing Successful Examples of Third-Party Logistics

Introduction to 3pl: understanding the basics.

In the ever-evolving world of logistics, businesses are constantly seeking ways to optimize their supply chain operations. This is where Third-Party Logistics (3PL) comes into play. 3PL refers to the outsourcing of logistics activities to a specialized service provider, allowing companies to focus on their core competencies while leveraging the expertise of a logistics partner.

What is 3PL and Why is it Important?

At its core, 3PL involves the integration of transportation, warehousing, and distribution services into a cohesive and efficient supply chain solution. By outsourcing these functions to a 3PL provider, businesses can benefit from their expertise, infrastructure, and technology, resulting in improved operational efficiency, reduced costs, and enhanced customer satisfaction.

One of the key advantages of 3PL is the scalability it offers. As businesses grow and expand, their logistics requirements become more complex. By partnering with a 3PL provider, companies can tap into a network of resources and capabilities, allowing them to adapt quickly to changing market demands and scale their operations seamlessly.

Benefits of Using 3PL Services

The decision to engage a 3PL provider comes with a wide range of benefits. Let's explore some of the advantages that businesses can gain by partnering with a 3PL:

Expertise and Specialization : 3PL providers are industry experts with extensive knowledge and experience in managing logistics operations. They possess the necessary skills and resources to streamline processes and optimize supply chain efficiency.

Cost Savings : By outsourcing logistics functions to a 3PL provider, businesses can reduce their capital expenditure on infrastructure, technology, and personnel. 3PL providers leverage economies of scale to offer cost-effective solutions, allowing companies to focus on their core business activities.

Flexibility and Scalability : As companies experience fluctuations in demand, a 3PL partner can adjust resources accordingly, ensuring optimal capacity utilization. This flexibility allows businesses to respond to market changes quickly and effectively.

Access to Technology and Innovation : 3PL providers invest in advanced technologies, such as warehouse management systems (WMS), transportation management systems (TMS), and real-time tracking tools. By leveraging these technologies, companies can gain visibility, traceability, and control over their supply chain operations.

Global Reach and Network : 3PL providers often have extensive networks and global reach, enabling businesses to expand their market reach and penetrate new regions. This global presence ensures seamless cross-border logistics and compliance with international regulations.

Key Players in the 3PL Industry

The 3PL industry comprises a diverse range of service providers, each offering unique capabilities and areas of specialization. Let's take a closer look at the key players in the 3PL industry:

Transportation Providers : These 3PL providers focus primarily on transportation services, including freight forwarding, trucking, air cargo, and ocean freight. They have expertise in managing the movement of goods across different modes of transportation and optimizing routes for cost and time efficiency.

Warehousing and Distribution Centers : Warehousing and distribution-focused 3PL providers offer storage, inventory management, order fulfillment, and distribution services. They operate warehouses strategically located to facilitate efficient product flow and ensure timely delivery.

Integrated Logistics Providers : Integrated logistics providers offer end-to-end supply chain solutions, combining transportation, warehousing, and value-added services. They provide comprehensive logistics solutions, from procurement to distribution, and often specialize in specific industries or verticals.

Freight Forwarders : Freight forwarders act as intermediaries between shippers and carriers, coordinating the movement of goods across international borders. They handle documentation, customs clearance, and logistics coordination, ensuring smooth international shipments.

Factors to Consider When Choosing a 3PL Provider

Selecting the right 3PL provider is crucial for achieving successful logistics outsourcing. To make an informed choice, businesses should consider the following factors:

Industry Expertise : Assess the 3PL provider's experience and track record in your specific industry. Look for providers with a deep understanding of your industry's unique requirements and challenges.

Infrastructure and Technology : Evaluate the provider's infrastructure, including warehouses, transportation fleet, and technology capabilities. Ensure they have the necessary resources and technology to meet your logistics needs effectively.

Network and Global Reach : Consider the provider's network and coverage. If you operate internationally or have plans for global expansion, choose a 3PL partner with a strong global presence and established international partnerships.

Service Level Agreements (SLAs) : Review the SLAs offered by the 3PL provider. Pay attention to key performance indicators (KPIs) such as on-time delivery, order accuracy, and inventory accuracy. Ensure their performance standards align with your business requirements.

Scalability and Flexibility : Assess the provider's ability to scale operations and adapt to your changing business needs. Ensure they can handle fluctuations in demand and offer flexible solutions to accommodate your growth.

By considering these factors, businesses can make an informed decision when selecting a 3PL provider, setting the stage for a successful logistics outsourcing partnership.

In the next section, we will delve into real-world case studies to explore how companies have leveraged 3PL services to optimize their supply chain operations and achieve tangible benefits.

Case Study 1: Company A - Streamlining Supply Chain Operations

Overview of company a.

Company A is a leading manufacturer of electronic goods with a global presence. With a diverse product portfolio and a wide customer base, the company faced numerous challenges in managing its supply chain operations efficiently. In an effort to streamline their logistics processes and improve overall supply chain performance, Company A decided to partner with a 3PL provider.

Challenges Faced by Company A

Before engaging the 3PL provider, Company A faced several key challenges in their supply chain operations:

Lack of Visibility : The company struggled with limited visibility across their supply chain, making it difficult to track inventory levels, anticipate demand fluctuations, and identify potential bottlenecks.

Inefficient Inventory Management : Company A had issues with inventory accuracy and control. Stockouts and overstocking problems were common, leading to increased carrying costs and missed sales opportunities.

Complex Transportation Network : With a global customer base, Company A had to manage complex transportation routes and multiple carriers, resulting in higher transportation costs and longer lead times.

Inadequate Warehouse Space : The company's existing warehouses were reaching capacity, hampering their ability to accommodate inventory growth and handle peak demand periods effectively.

Solution Provided by the 3PL Provider

To address these challenges, Company A partnered with a 3PL provider that specialized in supply chain optimization. The 3PL provider conducted a thorough analysis of Company A's supply chain operations and devised a comprehensive solution tailored to their specific needs.

The solution encompassed the following key elements:

Advanced Technology Integration : The 3PL provider implemented a robust Warehouse Management System (WMS) that provided real-time visibility into inventory levels, order status, and warehouse operations. This technology integration enhanced inventory accuracy, reduced stockouts, and improved order fulfillment efficiency.

Optimized Transportation Management : The 3PL provider leveraged their network of carriers and transportation expertise to optimize transportation routes, consolidate shipments, and negotiate favorable freight rates. This resulted in cost savings, reduced lead times, and enhanced overall transportation efficiency.

Warehouse Space Expansion : Recognizing the need for additional warehouse space, the 3PL provider recommended the strategic expansion of Company A's warehouse footprint. They identified suitable locations, designed efficient layouts, and managed the construction and setup of new warehouses, ensuring seamless integration with existing operations.

Demand Planning and Forecasting : The 3PL provider implemented advanced demand planning and forecasting tools, enabling Company A to anticipate demand patterns, optimize inventory levels, and improve supply chain responsiveness. Accurate demand forecasting helped the company reduce stockouts and minimize excess inventory.

Implementation of the 3PL Solution

The implementation phase involved close collaboration between Company A and the 3PL provider. The 3PL provider assigned a dedicated team of logistics experts who worked closely with Company A's supply chain and operations teams to ensure a smooth transition.

The implementation process included the following steps:

Data Collection and Analysis : The 3PL provider collected data on Company A's existing supply chain operations, including inventory levels, transportation routes, warehouse capacities, and historical sales data. They conducted a detailed analysis to identify areas for improvement and develop tailored solutions.

Solution Design : Based on the analysis, the 3PL provider designed a comprehensive solution that addressed Company A's specific challenges and goals. This included the selection and integration of appropriate technologies, optimization of transportation routes, and expansion of warehouse facilities.

Pilot Testing : Before full-scale implementation, the 3PL provider conducted pilot testing to validate the effectiveness of the proposed solution. This involved testing the WMS, transportation optimization algorithms, and demand forecasting models in a controlled environment to ensure accuracy and reliability.

Training and Change Management : The 3PL provider conducted training sessions for Company A's employees to familiarize them with the new systems, processes, and technologies. Change management strategies were implemented to ensure smooth adoption of the 3PL solution across the organization.

Results and Benefits Achieved

As a result of partnering with the 3PL provider and implementing their tailored solution, Company A experienced significant improvements in their supply chain operations. The key benefits achieved were:

Enhanced Visibility : The implementation of the WMS provided Company A with real-time visibility into their inventory levels, order status, and warehouse operations. This visibility allowed for proactive decision-making, improved inventory accuracy, and better demand planning.

Improved Inventory Management : With the demand planning and forecasting tools, Company A was able to optimize their inventory levels, reducing stockouts and overstocking. This led to lower carrying costs, improved order fulfillment rates, and increased customer satisfaction.

Cost Savings : The optimized transportation management solution resulted in cost savings for Company A. By consolidating shipments, negotiating better freight rates, and optimizing transportation routes, the company achieved significant reductions in transportation costs.

Increased Warehouse Capacity : The strategic warehouse space expansion recommended by the 3PL provider allowed Company A to accommodate their growing inventory needs and handle peak demand periods more efficiently. This expansion improved overall warehouse utilization and reduced the risk of capacity constraints.

The successful partnership with the 3PL provider not only streamlined Company A's supply chain operations but also positioned them for future growth and improved customer service. By leveraging the expertise and capabilities of the 3PL provider, Company A achieved substantial operational improvements and gained a competitive edge in the market.

Case Study 2: Company B - Optimizing Inventory Management

Overview of company b.

Company B is a global retail giant with an extensive product portfolio, serving customers across various channels. With a vast network of suppliers and distribution centers, the company faced significant challenges in managing their inventory effectively. In order to improve inventory management, reduce costs, and enhance customer satisfaction, Company B decided to leverage the expertise of a 3PL provider.

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Inventory Management Issues Faced by Company B

Before partnering with the 3PL provider, Company B encountered several key inventory management challenges:

Excessive Inventory Levels : Company B struggled with maintaining optimal inventory levels, resulting in high carrying costs and the risk of obsolescence. Inaccurate demand forecasting and inefficient replenishment processes contributed to this issue.

Stockouts and Lost Sales : Inadequate inventory management practices led to frequent stockouts, causing lost sales opportunities and customer dissatisfaction. Inaccurate inventory data and lack of real-time visibility contributed to this challenge.

Inefficient Replenishment Processes : Company B's replenishment processes were time-consuming and lacked automation. Manual order processing, delayed supplier communication, and inconsistent lead times impacted the efficiency of inventory replenishment.

Lack of Inventory Accuracy : The company faced challenges in maintaining accurate inventory records across their distribution centers, resulting in discrepancies between system inventory and physical stock. This led to inefficiencies in order fulfillment and increased costs.

3PL Solution for Inventory Optimization

To address these inventory management challenges, Company B partnered with a 3PL provider specializing in inventory optimization. The 3PL provider conducted a thorough analysis of Company B's inventory management processes and designed a comprehensive solution to improve efficiency and accuracy.

The solution included the following key elements:

Demand Forecasting and Analysis : The 3PL provider implemented advanced demand forecasting models, leveraging historical sales data, market trends, and seasonality patterns. This enabled Company B to generate more accurate demand forecasts, leading to improved inventory planning and optimization.

Inventory Visibility and Real-time Tracking : The 3PL provider implemented a robust inventory management system that provided real-time visibility into inventory levels across all distribution centers. This allowed Company B to track inventory movements, monitor stock levels, and identify potential issues proactively.

Automated Replenishment Processes : The 3PL provider automated the replenishment processes, integrating Company B's systems with suppliers and streamlining order processing. This automation reduced manual errors, improved communication with suppliers, and accelerated the replenishment cycle.

ABC Analysis and SKU Rationalization : The 3PL provider conducted an ABC analysis to classify Company B's products based on their sales contribution. This analysis helped identify slow-moving and obsolete items, enabling the company to rationalize their SKU portfolio and optimize inventory levels accordingly.

Integration and Collaboration with the 3PL Provider

Successful implementation of the 3PL solution required close integration and collaboration between Company B and the 3PL provider. The integration process involved the following steps:

Data Integration : The 3PL provider worked closely with Company B's IT team to integrate their inventory management systems, demand forecasting tools, and supplier databases. This facilitated seamless data exchange and information sharing between the two entities.

Process Alignment : The 3PL provider conducted workshops and training sessions to align Company B's employees with the new inventory management processes and systems. This ensured smooth adoption and collaboration between the internal teams and the 3PL provider.

Performance Monitoring and KPIs : Key performance indicators (KPIs) were defined to monitor the effectiveness of the solution. These KPIs included metrics such as inventory turnover, stockout rates, order fulfillment accuracy, and carrying costs. Regular performance reviews were conducted to identify areas for improvement and optimize inventory management further.

Continuous Improvement Initiatives : The 3PL provider worked closely with Company B's teams to identify opportunities for continuous improvement. This involved analyzing data, identifying bottlenecks, and implementing process enhancements to further optimize inventory management.

Improved Inventory Management and Cost Savings

Through the partnership with the 3PL provider and the implementation of their tailored solution, Company B achieved significant improvements in inventory management and cost savings. The key outcomes and benefits included:

Optimized Inventory Levels : By leveraging advanced demand forecasting models and implementing inventory visibility tools, Company B achieved optimal inventory levels. This resulted in reduced carrying costs, minimized stockouts, and improved order fulfillment rates.

Enhanced Customer Satisfaction : With accurate inventory data and real-time visibility, Company B was able to meet customer demands promptly, reducing the occurrence of backorders and improving overall customer satisfaction.

Streamlined Replenishment Processes : The automated replenishment processes reduced manual errors, improved communication with suppliers, and accelerated the order processing cycle. This led to faster replenishment times, reduced lead times, and increased operational efficiency.

SKU Rationalization and Cost Reduction : Through the ABC analysis and SKU rationalization, Company B identified slow-moving and obsolete items, enabling them to reduce excess inventory and optimize their SKU portfolio. This resulted in cost savings and improved inventory turnover.

The collaboration with the 3PL provider not only transformed Company B's inventory management practices but also positioned them for future growth and improved profitability. By leveraging the expertise and technology of the 3PL provider, Company B achieved significant improvements in inventory efficiency, cost savings, and customer satisfaction.

Case Study 3: Company C - Enhancing Last-Mile Delivery

Overview of company c.

Company C is a leading e-commerce company with a vast customer base and a strong presence in the online retail industry. As the demand for online shopping continues to surge, Company C faced challenges in meeting customer expectations for fast and efficient last-mile delivery. In order to enhance their last-mile delivery operations and improve customer satisfaction, Company C decided to partner with a 3PL provider specializing in innovative last-mile solutions.

Last-Mile Delivery Challenges Faced by Company C

Before engaging the 3PL provider, Company C encountered several key challenges in their last-mile delivery operations:

Delivery Time and Speed : The rapid growth of e-commerce led to increased customer expectations for fast and timely deliveries. Company C struggled to meet these expectations, resulting in delayed deliveries and customer dissatisfaction.

Route Optimization : Company C's delivery routes were suboptimal, resulting in longer transit times, inefficient fuel consumption, and increased delivery costs. The lack of advanced routing and tracking tools hindered their ability to optimize routes effectively.

Customer Communication : Limited communication and transparency in the delivery process led to customer frustration. Company C needed a solution to provide real-time updates and notifications to customers, improving their overall delivery experience.

Last-Mile Logistics Capacity : As the order volume increased, Company C faced challenges in expanding their last-mile logistics capacity. They needed a scalable solution to handle peak demand periods and ensure timely deliveries.

Innovative Last-Mile Solution by the 3PL Provider

To address these last-mile delivery challenges, Company C partnered with a 3PL provider known for its innovative last-mile solutions. The 3PL provider conducted a thorough analysis of Company C's delivery processes and designed a comprehensive solution to enhance last-mile operations.

Route Optimization and Tracking Tools : The 3PL provider implemented advanced routing and tracking software, enabling Company C to optimize delivery routes based on real-time traffic conditions, delivery constraints, and customer preferences. This technology allowed for efficient routing, reduced transit times, and improved fuel efficiency.

Real-Time Customer Communication : The 3PL provider implemented a customer communication platform that provided real-time delivery updates and notifications to customers. This allowed customers to track their deliveries, receive estimated arrival times, and make necessary arrangements if needed.

Crowdsourced Delivery Network : Recognizing the need for scalability and flexibility, the 3PL provider introduced a crowdsourced delivery network. This network comprised of independent contractors who could fulfill delivery orders during peak periods, ensuring timely deliveries and increased capacity.

Innovative Delivery Options : The 3PL provider introduced innovative delivery options such as same-day delivery, time-slot delivery, and alternative pickup locations. These options provided customers with flexibility and convenience, improving their overall delivery experience.

Implementation and Integration of the Last-Mile Solution

The successful implementation of the last-mile solution required close collaboration between Company C and the 3PL provider. The implementation process involved the following steps:

Data Integration and System Configuration : The 3PL provider worked closely with Company C's IT team to integrate their systems, including order management, inventory, and tracking systems. This integration ensured seamless data exchange and real-time visibility into delivery operations.

Driver Onboarding and Training : The 3PL provider onboarded and trained the independent contractors who would be part of the crowdsourced delivery network. This included training on delivery protocols, customer service, and the use of the tracking and communication tools.

Continuous Monitoring and Performance Management : The 3PL provider implemented a robust performance management system to monitor the performance of the delivery network. Key performance indicators (KPIs) such as on-time delivery, customer satisfaction, and delivery cost were tracked and reviewed regularly for continuous improvement.

Customer Feedback and Iterative Enhancements : Company C and the 3PL provider actively sought customer feedback to identify areas for improvement. Based on this feedback and data analysis, iterative enhancements were made to the last-mile solution to further optimize delivery operations and customer satisfaction.

Enhanced Last-Mile Delivery Efficiency and Customer Satisfaction

Through the partnership with the 3PL provider and the implementation of their innovative last-mile solution, Company C achieved significant improvements in last-mile delivery efficiency and customer satisfaction. The key outcomes and benefits included:

Faster and More Reliable Deliveries : The implementation of route optimization and tracking tools enabled Company C to improve delivery time and speed. Reduced transit times and optimized routes ensured faster and more reliable deliveries, meeting customer expectations for timely service.

Improved Customer Communication : The real-time customer communication platform allowed Company C to provide accurate and timely delivery updates to customers. This enhanced transparency and improved customer satisfaction by keeping them informed throughout the delivery process.

Scalability and Flexibility : The introduction of the crowdsourced delivery network provided Company C with the scalability and flexibility needed to handle peak demand periods. This ensured increased capacity during busy seasons, allowing the company to meet customer demands effectively.

Enhanced Delivery Options : The innovative delivery options, such as same-day delivery and time-slot delivery, provided customers with greater flexibility and convenience. The availability of alternative pickup locations further improved the overall delivery experience for customers.

The partnership with the 3PL provider not only transformed Company C's last-mile delivery operations but also positioned them as a leader in customer-centric logistics. By leveraging the expertise and technology of the 3PL provider, Company C achieved significant improvements in last-mile delivery efficiency, customer satisfaction, and competitive advantage in the e-commerce industry.

Conclusion: Key Takeaways and Lessons Learned

The case studies presented in this blog post highlight the transformative impact of 3PL services on supply chain operations. By partnering with specialized third-party logistics providers, companies like Company A, Company B, and Company C were able to overcome their specific challenges and achieve significant improvements in their respective areas of focus.

Summary of the 3PL Case Studies

Let's recap the key takeaways and lessons learned from the case studies:

Company A - Streamlining Supply Chain Operations : Company A's partnership with a 3PL provider enabled them to streamline their supply chain operations by implementing advanced technology, optimizing transportation management, and expanding warehouse space. The result was enhanced visibility, improved inventory management, and cost savings.

Company B - Optimizing Inventory Management : Company B's collaboration with a 3PL provider led to optimized inventory levels, improved customer satisfaction, and cost reduction. By leveraging advanced demand forecasting, enhanced inventory visibility, and automated replenishment processes, Company B achieved efficiency and accuracy in inventory management.

Company C - Enhancing Last-Mile Delivery : Company C's partnership with a 3PL provider resulted in faster and more reliable last-mile deliveries, improved customer communication, scalability through a crowdsourced delivery network, and enhanced delivery options. The innovative last-mile solution led to increased customer satisfaction and operational efficiency.

Common Success Factors in 3PL Implementation

While each case study presented unique challenges and solutions, there were common success factors that contributed to the positive outcomes:

Collaborative Partnership : A strong collaboration between the company and the 3PL provider is essential for successful implementation. Close integration, effective communication, and shared goals drive alignment and ensure a smooth transition.

Tailored Solutions : Each company's supply chain is unique, requiring tailored solutions to address specific challenges. A thorough analysis of existing processes and a customized approach are crucial in designing effective 3PL solutions.

Advanced Technology Adoption : Leveraging advanced technology, such as warehouse management systems, demand forecasting tools, and real-time tracking, enables companies to gain visibility, optimize processes, and enhance overall supply chain performance.

Continuous Improvement Mindset : Implementing 3PL solutions is not a one-time fix but an ongoing process. Regular monitoring, performance management, and feedback collection allow for continuous improvement and optimization.

Considerations for Implementing 3PL Solutions

When considering the implementation of 3PL solutions, companies should keep the following considerations in mind:

Alignment with Business Objectives : Clearly define the objectives and expected outcomes of engaging a 3PL provider. Ensure that the chosen provider aligns with your strategic goals and has the expertise and capabilities to meet your specific needs.

Evaluation of Provider Expertise : Conduct a thorough evaluation of the 3PL provider's industry experience, track record, and specialization. Look for providers with a proven record of success in addressing challenges similar to yours.

Integration and Communication : Seamless integration of systems, processes, and teams is crucial for successful implementation. Effective communication and information sharing between the company and the 3PL provider facilitate collaboration and ensure smooth operations.

Performance Metrics and KPIs : Establish clear performance metrics and key performance indicators (KPIs) to monitor the effectiveness of the 3PL solution. Regularly review and analyze these metrics to identify areas for improvement and drive continuous optimization.

Future Trends in the 3PL Industry

The 3PL industry continues to evolve, driven by technological advancements, changing customer expectations, and emerging market trends. Some of the future trends that companies should be aware of include:

E-commerce Expansion : As e-commerce continues to grow, 3PL providers will play a crucial role in enabling fast and efficient order fulfillment, last-mile delivery, and returns management.

Automation and Robotics : The adoption of automation and robotics in warehouses and fulfillment centers will increase, leading to improved efficiency, accuracy, and productivity in logistics operations.

Data Analytics and Artificial Intelligence : The use of data analytics and artificial intelligence (AI) will become more prevalent in supply chain optimization, demand forecasting, route optimization, and inventory management.

Sustainable Logistics : Environmental sustainability will be a key focus in the 3PL industry. Companies will increasingly seek 3PL providers that offer eco-friendly solutions, such as electric vehicles, alternative fuels, and sustainable packaging.

Final Thoughts

The case studies presented in this blog post demonstrate the significant impact that 3PL services can have on supply chain operations. From streamlining supply chain processes to optimizing inventory management and enhancing last-mile delivery, partnering with a specialized 3PL provider can drive operational efficiency, cost savings, and improved customer satisfaction.

As businesses continue to face new challenges and market dynamics, the role of 3PL providers will become increasingly vital in navigating complex supply chains. By carefully selecting the right 3PL partner, aligning objectives, and embracing technological advancements, companies can position themselves for success in an ever-evolving logistics landscape.

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ALBERTSONS’ SAFEWAY CENTRALIZES AND STREAMLINES TRANSPORTATION MANAGEMENT ACROSS MANUFACTURING AND RETAIL

A retail logistics and transportation management case study.

Albertsons is one of North America’s largest food retailers, with over 2,200 stores located mostly in the western, midwestern, and mid-Atlantic regions of the US, as well as western Canada. It also operates regional supermarket companies, including Safeway, The Vons Companies (primarily in Southern California), Dominick’s Finer Foods (Chicago), Carr-Gottstein Foods (Alaska’s largest retailer), Genuardi’s Family Markets (eastern US), and Randall’s Food Markets (Texas). It also owns e-retailer GroceryWorks.com. Outside of the US, Albertsons owns 49% of Casa Ley, which operates about 135 food and variety stores in western Mexico.

Key Facts About Albertsons Safeway

• 2nd largest food and drug retailers in the U.S.
• Annual Sales $57.5 billion
• 2,205 stores
• Stores in 33 states
• Nearly 265,000 employees

Challenges Retail Logistics and Transportation Management

One Network’s journey with Albertson’s began with Safeway in 2002. In an effort to streamline supply chain, Albertsons’ Safeway went through a centralization of their Transportation activities. The centralization increased the number of loads to be tendered and managed by Safeway’s Corporate Traffic department, located in Phoenix, AZ, approximately 300%-375% based on seasonality (from 300-400/week to 900-1900 week). Constrained by a manual process that required the Corporate Traffic department to make telephone calls to carriers and update an internally built MS Access application to provide track and trace functionality. In addition, meetings with the Produce department were required to provide visibility of load status at the beginning of each day.

How the Intelligent Logistics Management Solution Helped

Ultimately the process resulted in:

• A centralized transportation process, however a de-centralized scheduling process resulting in five dedicated schedulers (one for each warehouse) across each of Albertsons’ 16 facilities.
• Increased transportation and produce costs, due to increased stops and ‘Street Buying’
• Reduced delivery performance, due to a lack of visibility and notification of lead time and transportation issues potentially reducing retail sales due to out of stock conditions
• Increased labor costs due to manual process required to gain full supply chain visibility

Business Goals for the Logistics & Transportation Management Solution

Safeway approached One Network to provide a solution to:

• Substantially improve and automate the transportation processes defined above.
• Centralize transportation activities including carrier selection, tendering and contract management.
• Improve visibility and communication (between Buyers, Transportation, Carriers, and Service Vendors) of order status, and improved delivery performance.
• Centralize appointment scheduling to remove schedulers at each warehouse

Highlights of the Retail Transportation Case Study

• 2nd largest food and drug retailer in the United States
• Deployed One Network Transportation and Appointment Scheduling solutions in less than 3 months
• Centralized transportation and appointment scheduling processes
• Delivered a single systemic platform across Manufacturing and Retail Transportation Operations
• Reduced scheduling overhead by 90%

One Network’s Logistics Management Solution Selected

Safeway selected One Network’s Intelligent Logistics solution , utilized One Network’s Logistics Network, which was already used by approximately 25% of the Grocery Industry. Within the Intelligent Logistics solution Safeway activated the Transportation Management and Appointment Scheduling solutions.

Albertsons’ Safeway Transportation Network

• Approximate Annual Appointments: 533,463
• Approximate Annual Tenders: 81,328
• Core Carriers: 319
• Number of Carriers Scheduling On-Line: 1604
• Number of Users: 176 Users

“One Network has successfully allowed Safeway to streamline and centralize our transportation and appointment scheduling functions. We have benefited by reducing labor costs, improving our supply chain predictability and visibility, and reducing overall transportation costs.” – VP Transportation, Safeway

Logistics & Transportation Management Solution – The Results

Within 78 days from contractual signature, Safeway had rolled out an automated solution across their entire business providing corporate-wide purchase order visibility, online carrier selection and tendering, and in-route shipment visibility from their manufacturers to their distribution centers.

Additionally Safeway centralized the storage and maintenance of contracts, which resulted in dramatic increase in compliance worth a large six figure bottom line improvement. Prior to One Network, Safeway’s Corporate Transportation, established carrier contract guidelines, which were in turn utilized by each transportation specialist when they negotiated rates with their carrier-base. With Corporate Transportation having little measurement and monitoring capabilities, transportation specialist quickly strayed from the corporate contract policies established.

The result was a varying range of Safeway and carrier agreements that did not comply with Corporate Traffic guidelines costing Safeway Corporate Traffic hundreds of thousands of dollars per year.

Finally, Safeway deployed One Network’s Appointment Scheduling solution and centralized their appointment scheduling activities across all their warehouses.

Benefits of the Logistics & Transportation Management Solution

• Delivered a single systemic platform across Safeway’s Manufacturing and Retail Transportation Operations
• 90% reduction in scheduling overhead resulting in $2.35 M in annual cost savings
• 85.38% of appointments scheduled by Safeway vendors and/or carriers
• 100% of transportation and scheduling relevant data captured systemically in a central database repository for analysis and long-term planning. Examples of data captured include load tenders, freight costs, vendor scheduling compliance, and on-time deliveries.
• Vendor delivery date versus requested delivery date compliance
• Carrier turnaround time at Distribution Centers
• Number of orders re-scheduled
• On-time delivery
• Previously procurement phone calls were required to transportation and vendors, in order to identify if delivered freight was scheduled to arrive on time.

Due to the rapid return on investment and significant improvements that Albertson’s have seen with the Safeway project, they will be rolling One Network’s solution out to the whole company.

About One Network Enterprises

One Network offers a unique approach to supply chain management and other multi-party problems. One Network’s cloud platform, the Real Time Value Network , eliminates the traditional divide between planning and execution and enables visibility and data flow across the entire supply network of trading partners – in real time.

Additionally, One Network offers PaaS solutions and developers tools that enable organizations to design, build, and run multi-party applications that solve problems unrelated to their supply chains.

Leading organizations from around the world from nearly every industry have joined One Network, helping to transform industries including CPG, Healthcare, Automotive, Retail, Logistics, and Public Sector and Defense. Headquartered in Dallas, One Network also has offices in China, Europe, and India.

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• Materials Handling
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Easy Supply Chain Savings: A Simple Supply Chain Case Study

Logistics Bureau

AUGUST 31, 2021

Supply Chain & Logistics case studies are always interesting. Maybe you have some similar examples you can share in the comments? Check out this article related to this topic: 7 Mini Case Studies : Successful Supply Chain Cost Reduction and Management. And it was an easy problem to fix!

Transloading: A Comprehensive Guide With Client Examples

Dedola Global Logistics

JANUARY 14, 2023

Transloading: A Comprehensive Guide With Client Examples . For example , a shipment of heavy machinery may be transferred from a cargo ship to a truck using a break-bulk method, with the machinery being stored temporarily in a warehouse before being loaded onto the truck for the final leg of the journey. Contact Us. 562) 594-8988.

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Transloading: A Comprehensive Guide With Client Examples Transloading is a process that involves transferring cargo from one mode of transportation to another during the shipping process. This case study will delve into some of our most notable transloading success stories.

IoT in Logistics “The Maersk Case Study”

Logistics at MPEPS at UPV

MARCH 15, 2021

According to the article “ How IoT can improve the logistic pro ces s ” the internet of things (IoT) provides data, which describes objects “physical assets” for example a good to be transported and distributed worldwide.

Real-Time Trackers: A Welcome Labor Solution for Logistics

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Real-life case study examples of how real-time tracking helped two leading logistics providers overcome the challenges of the growing labor shortage. Why streamlining data simplifies the logistics role. The difference between real-time data tracking vs. passive data logging, and why the former is key to efficient operations.

BASF Video Case Study: The Value of Real-Time Freight Visibility

Talking Logistics

MAY 3, 2018

In addition to improved customer satisfaction, Wehrle shared these examples : The data we’re getting has been hugely successful. The post BASF Video Case Study : The Value of Real-Time Freight Visibility appeared first on Talking Logistics with Adrian Gonzalez. Benefits of Real-Time Freight Visibility.

Case Study: Advanced Planning & Scheduling at Leuze Electronic

Logistics Business Magazine

MAY 18, 2020

It provided comparatively basic forecasting procedures that made it possible to establish current levels of delivery readiness and to set defaults, for example at least 95%. The post Case Study : Advanced Planning & Scheduling at Leuze Electronic appeared first on Logistics Business® Magazine.

Cost to Serve Case Study that was Off the Scale! – with Steven Thacker

JULY 21, 2020

A Great Example . Let us watch the video below: Related articles on this topic have appeared throughout our websites, why not check them out? Robobyrne: Cost To Serve Lesson. Supply Chain Secrets: What is Cost to Serve? – Best Regards, Rob O’Byrne. Email: [email protected]. Phone: +61 417 417 307.

RFID Case Study: Can a Supply Chain be Digitised?

MAY 27, 2020

For example , the automated KanBan shelf was implemented successfully and cost-effectively into the system landscape. The post RFID Case Study : Can a Supply Chain be Digitised? Here, IoT digitalisation has been implemented efficiently and practically into the supply chain. 1] Radio-frequency identification.

ARL Logistics Achieves Day-to-Day Rate Positioning and Value Through SONAR

FreightWaves SONAR

DECEMBER 17, 2020

View the Full Case Study . After nearly two years of use, ARL Logistics is finding new value and opportunities to increase use cases of SONAR insights and data. View the Full Case Study . In modern freight management, the word of a broker is an unbreakable bond. Greg Morrow. Director of Operations.

Supply Chain Profit Leaks in Real-Life

NOVEMBER 15, 2022

Here’s a real-life example . 7 Mini Case Studies : Successful Supply Chain Cost Reduction and Management. How to identify and fix your profit leaks? Related articles on this topic have appeared throughout our website, check them out: Cost to Serve – A Smarter Way to Improved Supply Chain Profitability.

Modex meets Comicon: BlueGrace Logistics releases “Logistics Powers Unleashed!” comic book

Blue Grace Logistics

MARCH 12, 2024

BlueGrace Releases Comic Book Show Submenu Resources The Logistics Blog® Newsroom Whitepaper Case Study Webinars Indexes Search Search BlueGrace Logistics - March 12, 2024 DC Velocity Staff | DC Velocity March 12, 2024 Move over Marvel, BlueGrace Logistics has entered the comic book market.

Examples of How Supplier Quality Management System Implementations Pay Off

GlobalTranz

JUNE 11, 2015

We conclude our series on supplier quality management (SQM) today with a look at some case studies and examples of benefits derived from the application of a supplier quality management system. Examples and Case Studies from the Implementation of a Supplier Quality Management System.

Case Study: Bringing Symphonic Listening Pleasure to Japan

NOVEMBER 29, 2018

The case of an internationally renowned symphonic orchestra from Austria, for which cargo-partner transported all instruments to Japan, represents one example of such a challenge which cargo-partner solved without issue.

[PODCAST] The Growing “Influence” of Content Marketing in the Supply Chain

MARCH 3, 2020

Business and Marketing Resources Marketing Logistics Services: A Discussion on Getting Attention Online Listen to the Podcast Example of an Effective Transportation Management Case Study View Case Study How Industrial Companies Can Pivot to Inbound Organizations & Increase Customer Experience Listen.read More.

Case Study: Picnic for Pie Maker Thanks to Aisle Master

NOVEMBER 1, 2019

The stacker truck could only work in the cold store for example , and the counterbalance truck didn’t cope well with some of the surfaces when it was outside. The 2t 20WE models have a rear width of 1420mm which offers excellent stability when lifting 800kg pallets of, for example , frozen spinach to the top bay of 3.6m.

Understanding the Profitability of Omnichannel Retail is a Problem

Logistics Viewpoints

NOVEMBER 20, 2023

But one thing you notice as you go to omnichannel software vendor’s web sites and examine customer case studies , the case studies may talk about retailers growing their revenues by 100% or more, but none talk about how much profitability grew. These new order fulfillment paths allowed retailers to rapidly grow sales.

Case Study: Helly Hansen opts for UniCarriers once more

OCTOBER 1, 2019

Our partner is also highly flexible if we need additional forklifts to deal with spikes in orders, for example . The post Case Study : Helly Hansen opts for UniCarriers once more appeared first on Logistics Business® Magazine. He’s a true specialist, a perfect fit for us on both a professional and personal level. .

Case Study: Wood Wholesaler Likes Hyster Durability

OCTOBER 23, 2018

The DuraMatchTM gearbox, for example , prevents abrupt braking and regulates the direction of travel to protect brakes and tyres. The post Case Study : Wood Wholesaler Likes Hyster Durability appeared first on Logistics Business® Magazine. .” The Hyster® Fortens® forklifts with a 4.0-tonne ” Tweet.

Case Study: Handling the Tough Wood Supply Chain

AUGUST 21, 2018

Consider the journey of a laminate floorboard, for example .”. For example , due to the vapours produced by chemicals being used to laminate the wood, and the dust present in the atmosphere, parts of the production line may be zoned areas. For example , Zone 1 or 2 for gases, Zone 21 or 22 for dusts, or a combination of gas and dust.

Case Study: Tote Sortation Project for Leading Car Maker

AUGUST 30, 2018

If the roller conveyor cannot sort the tote because, for example , it is unable to read the colour of the tote or the sortation chutes are full, the tote will carry on round the conveyor and is moved via a cross transfer so that the opposite side of the tote is presented for scanning. “The

Case Study: Viennese Brewery Uses Fronius Battery Charging

JULY 31, 2019

A dry, frost-free and cool environment is required for example , as well as sufficient ventilation and measures to prevent fires and explosions. The post Case Study : Viennese Brewery Uses Fronius Battery Charging appeared first on Logistics Business® Magazine. Fronius scores highly here across the board.”.

Case Study: EnerSys and Unicarriers Make Dutch Fleet More Sustainable

OCTOBER 23, 2019

Our drivers can now connect their trucks to the charging station during their coffee break, for example , so that we can continue operating throughout the hours needed,” Mr Langenberg says. The post Case Study : EnerSys and Unicarriers Make Dutch Fleet More Sustainable appeared first on Logistics Business® Magazine.

Case Study: Hubtex Sideloaders Optimize Space and Storage

MAY 8, 2019

These materials are used, for example , to strengthen wind turbine rotor blades. The post Case Study : Hubtex Sideloaders Optimize Space and Storage appeared first on Logistics Business® Magazine. The processed materials had previously been stored in three warehouses in Ebnat-Süd.

Case Study: Why UK Ports and Shipping Firm Chose Hyundai

MAY 30, 2019

For example , wood pulp requires bale clamps, paper reels need reel clamps in addition to some specialised tissue clamps. The post Case Study : Why UK Ports and Shipping Firm Chose Hyundai appeared first on Logistics Business® Magazine. For other cargos, such as palletised goods, we would use the standard forks.

[PODCAST] Improving Trucking Marketing & How to Work with Industry Influencers

NOVEMBER 12, 2019

The 411 on Social Proof

JULY 28, 2021

Take us, for example . Social proof can come from all sorts of places, but the below examples have proven to be some of the most effective. Customer Testimonials & Case Studies . User reviews provide plenty of value, but more complicated operations can greatly benefit from customer testimonials and case studies .

Walmart in a World on Fire

NOVEMBER 15, 2021

One of the companies she holds up as a positive example of a big company addressing environmental, social, and governance (ESG) issues is Walmart. A few years ago, for example , my oldest child explained to me that Walmart was a malignant force. Rebecca Henerson’s formula for fixing capitalism was a business best seller.

How We Use Data to Better Plan for Produce Season

MARCH 26, 2024

Take, for example , the market of Twin Falls, Idaho in comparison to Lakeland, Florida. To see how other organizations are implimenting SONAR, check out case studies here. Produce seasons peaks across the country, happens quickly and rarely starts at the exact same time each year.

Solutions for Managing Transportation Spend [Video]

JULY 26, 2018

Can you give some examples of tactical and strategic questions that companies should be exploring? Can you share some case study examples and the benefits your clients have achieved? How do you go about analyzing these options and determining whether they’re the right actions to take? What’s required to get started?

Risks of using DAP Incoterm

DECEMBER 18, 2022

Although in many cases this might not be a problem, it would become a hassle if the cargo is not easily unloaded or it is delivered to an inconvenient place. Case Study . In this case , the buyer would have failed to take delivery and be liable for any charges incurred.

AI and the logistics of disaster

OCTOBER 3, 2022

Natural disasters, such as the recent hurricanes which devastated Puerto Rico (Fiona) and Florida (Ian), are serving up real-life case studies demonstrating how artificial intelligence, or AI, is helping to improve supply chain reliability in the face of horrific storms, writes Vaughn Moore, Executive Chairman and CEO of AIT Worldwide Logistics.

2023’s Freight Forwarding and Project Cargo: The Big Shifts We’re Buzzing About!

MTS Logistics

AUGUST 21, 2023

Example : Consider the Suez Canal obstruction. Case Study : A pharmaceutical company needed to transport temperature-sensitive vaccines to a remote location. Projects like NEOM (a planned development in Saudi Arabia) have showcased how digital solutions can offer unparalleled transparency and efficiency.

Sitma named “outstanding company” by Kotler

DECEMBER 3, 2021

Sitma, a specialist in designing and producing solutions for automation in the logistics industry, has been chosen as a case study for the book Essentials of Modern Marketing by Philip Kotler together with Weevo, which looked at more than 30 examples of outstanding Italian companies in different fields of production.

Prologis launches social value white paper

OCTOBER 26, 2022

In addition to providing guidance on its implementation, the report includes several case studies to illustrate how the Framework is being applied by Prologis and Tritax.

THE ENVIRONMENTAL IMPACT OF FOOD DELIVERY

MAY 28, 2023

This is the case of delivery companies, which had to expand their operations due to the increase in demand for home deliveries, especially food. For example , in the case of Just Eat, Glovo or Deliveroo in Spain, they each added more than 1,000 new restaurants in just three months. CherretT, T., Piotrowska, M., Chelitis, K.,

Let’s Talk Supply Chain! Envase Celebrates Growth, Drayage Impact on Leading Industry Podcast

Envase Technologies

DECEMBER 14, 2022

A good example is the establishment of ReadyGate, the automated gate solution that empowers facility operators to transition their facilities into automated, secure, efficient operations, with significantly reduced time spent on data entry and walking through yards to find equipment. “The We created Envase TMS for them.”.

Navigating the Loading Bay’s Hidden Risks

APRIL 26, 2024

Companies have fewer experienced employees who are knowledgeable about their operations, processes, and safety procedures to lead by example . The loading bay is a prime example of an area that could be optimised using automation to benefit the entire business operation. Changing priorities and expectations.

Freight Claims 101

APRIL 20, 2023

Freight Claims 101 Show Submenu Resources The Logistics Blog® News Press Whitepaper Case Study Webinars Indexes Search Search BlueGrace Logistics - April 20, 2023 Freight claims are an inevitable aspect of shipping cargo. How to Mitigate Freight Claims Freight claim mitigation is an essential element in the claims process.

Evans Adopts New Virtual Private Cloud for Security & Efficiency

3PL Insights

MARCH 17, 2021

This proactive improvement is just one example of how Evans drives innovation in our service offerings and operations. To learn about how Evans adopted new technology to help our customers, you should read our case study on SAS Automotive.

Kinaxis Kinexions ’22: Ready. Together.

MAY 18, 2022

Right now, we are looking for a giant breakthrough, giving examples such as the emergence of Google and FaceTime. An example would be a high-tech company with excess inventory determining how to move that inventory to maximize revenues. Sicard made another statement that really stuck with me as well. The releases of Planning.AI

Cost to Serve Analysis—And the Costs of Neglecting It

SEPTEMBER 4, 2023

Bundling/Upselling Opportunities For example , some of your products and/or services might have price structures that complement one another, creating opportunities for bundling or upselling. View case study Learn more about cost-to-serve benefits. In short, you can’t. I can think of a few more.

Harnessing the Power of Social Marketing for Your Home Service Business

JUNE 10, 2020

You can do this in the form of case studies or by encouraging user-generated content. For example , if you are a lawn and landscape company, encourage customers to post before and after photos of your work. It may seem like case studies only happen in the corporate world, but that doesn’t have to be the case .

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Logistics and Transportation Cases

OUR CLIENTS

Our large clients play leading roles in various sectors of the European economy.

The management within all of these corporations understand what they want and need. Their experience means they appreciate high-quality services and expect a certain level of expertise in shipping and logistics. This means that they are selective in their choice of logistics companies for strategic partnership.

THE OPPORTUNITY

To obtain freight logistics solutions that raise the standards of efficiency and cover all the needs within this area.

WELL PACK offers its own vehicle fleet and has developed a robust network of warehouses throughout Europe.

We cooperate with companies that produce reusable plastic boxes. WELL PACK transports their RPCs to washing and back on a regular basis, easily managing high volumes. We transport plastic boxes for their customers, and provide pallet exchange for them, with transport customer service available 24/7. It is possible to track the shipments at any point of transportation. New technologies are continuously developed as one of the main goals is to automate the working processes as much as possible. WELL PACK is always optimizing routes, transport costs, and logistics solutions.

Transportation and logistics is a crucial element for many businesses. For example, food logistics and e-commerce logistics are in high demand today, as the COVID-19 pandemic has drastically changed buyers’ preferences. To satisfy this demand, WELL PACK utilizes its vehicle fleet that consists of various types of transport means in different sizes, weight limits, and designed purpose:

• small trucks
• boxes/fridges, etc.

WELL PACK perfectly suits the concept of “freight forwarding companies near me,” as it is represented in 14 European countries and is able to cover long distances quickly. Our “logistics locations” include the Czech Republic, Austria, Germany, United Kingdom, Poland, Romania, Greece, France, Serbia, Ireland and Hungary.

The routes are made with the highest possible accuracy to minimize the travel time, reduce fuel consumption, and lower overall costs. The goods can be delivered to the destination point directly or via the transit point, but always on time. This is not limited to only European destinations. WELL PACK aims to meet all the requirements of its customers, and offers a range of additional and related services, including express transportation, storage, packaging, and more.

WELL PACK’s main objective is reached when new clients become long term customers because of our effective transportation and logistics solutions. Coordination and successful planning lead to maximum efficiency of the supply chain. Thanks to large volumes, the company is able to offer lower prices.

Do you have any questions?

You needn’t care about the details with a well-tuned supply chain. WELL PACK will do this for you offering the best logistics solutions that fit your specific business needs and will boost your growth.

Country Czech Republic Germany Austria Hungary Poland Greece Romania Russia

Services Warehousing and Fulfilment Services Logistics and Transportation Services All types of relocation and moving services Washing of Reusable Plastic Packaging Service Value Added Services Packaging Materials Mobile Washing and Steam Cleaning Services Banana Packing Support Furniture Logistics and Installation Import & export of exotic fruits and vegetables Pallet Service Municipal Services Dishwashing Service

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JSmol Viewer

Factory logistics improvement: a case study analysis of companies in northern thailand, 2022–2024.

1. Introduction

2. background, 2.1. industries in thailand, 2.2. logistics in thailand, 2.3. industries in northern thailand, 3. methodology, 4. results and case study, 4.1. transportation management, 4.1.1. vehicle routing solution, 4.1.2. transportation management system (tms), 4.2. warehouse and inventory management, 4.2.1. inventory model application.

• Analysis of order history.
• Implementation of Pareto/ABC classification to categorize materials based on their value, volume, and frequency of use [ 37 ].
• Application of inventory models, specifically the Economic Order Quantity (EOQ) model, incorporating Reorder Point (ROP) and Safety Stock (SS) calculations [ 38 ].

4.2.2. Warehouse Layout Design

• Redesign of warehouse layout based on product category and significance using Pareto/ABC classification.
• Determination of stock levels for A-level raw materials using Safety Stock (SS) calculations.
• Introduction of visual control concepts to enhance warehouse operations (as illustrated in Figure 4 ).

4.2.3. Warehouse Management System (WMS)

4.2.4. automation in material handing, 4.3. logistics administrative management, 4.3.1. forecasting and demand planning, 4.3.2. logistics communication, 4.3.3. outsourcing, 5. discussion and conclusions.

• Developing more adaptive and scalable logistics improvement methodologies that can accommodate businesses of varying sizes and technological readiness levels.
• Investigating the long-term sustainability of logistics improvements, particularly in the face of changing market conditions and technological advancements.
• Exploring the potential of emerging technologies, such as artificial intelligence and blockchain, in facilitating more seamless integration across logistics functions.
• Examining the role of organizational culture and change management in the successful implementation of logistics improvements.
• For policymakers, the results underscore the importance of continued support for logistics improvement initiatives, particularly in developing economies. The triple-helix model demonstrated here could serve as a blueprint for similar programs in other regions or countries.
• Industry practitioners can benefit from the practical insights and methodologies presented, adapting them to their specific contexts to achieve logistics optimization.
• Academic researchers can build upon this work to further explore the interconnections between various logistics functions and develop more integrated theoretical models of logistics performance.
• Technology providers may find opportunities to develop more tailored solutions that address the specific challenges faced by businesses in implementing logistics improvements.

Author Contributions

Data availability statement, acknowledgments, conflicts of interest.

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Ramingwong, S.; Sopadang, A.; Tippayawong, K.Y.; Jintana, J. Factory Logistics Improvement: A Case Study Analysis of Companies in Northern Thailand, 2022–2024. Logistics 2024 , 8 , 88. https://doi.org/10.3390/logistics8030088

Ramingwong S, Sopadang A, Tippayawong KY, Jintana J. Factory Logistics Improvement: A Case Study Analysis of Companies in Northern Thailand, 2022–2024. Logistics . 2024; 8(3):88. https://doi.org/10.3390/logistics8030088

Ramingwong, Sakgasem, Apichat Sopadang, Korrakot Yaibuathet Tippayawong, and Jutamat Jintana. 2024. "Factory Logistics Improvement: A Case Study Analysis of Companies in Northern Thailand, 2022–2024" Logistics 8, no. 3: 88. https://doi.org/10.3390/logistics8030088

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Digital Transformation Of Logistics And SCM

During the last decades, there have been significant transformations in organizational forms, tools, technologies for managing logistics of companies and supply chains. This is mainly a result of the paradigm of business digitalization. Companies switch to large-scale automation of corporate information systems, become participants of electronic trading platforms and e-commerce services, and form their virtual clones. The advantages of information services and fast business response to changes in demand are increasingly appreciated by consumers. Despite the existence of numerous research works in this area, there is uncertainty in understanding the goals, directions, and technologies of the digitalization of logistics and SCM. The principle of logistics integration focuses on the possibility of creating a unified information field for the supply chain and providing decision-making processes with quality information. It is the key factor in optimizing resources and costs. Russian logistics and SCM market is in the early stages of development and many companies are only beginning to explore the possibilities of logistics outsourcing and provisioning. Therefore, digitalization issues are not of paramount importance. The article formulates several hypotheses that are verified by comparing the results of the analysis of the market of applied Information and communication technologies and infrastructure solutions, the results of research of world consulting companies, which requires identifying the features of digitalization of logistics and SCM in Russia and the World. The conducted research helps to determine the prerequisites and general regularities of the qualitative transformation of the industry. Keywords: SCM digital logistics Logistics 40 logistics infrastructure information and communication technology in logistics

Introduction

Leading world scientists recognize the exceptional role of technologies in modern economic development and social life. Scientific discoveries embodied in technologies create new opportunities for resources, provide business growth potential, mechanisms for interaction between economic entities, new markets, and industries.

The direct influence of radical scientific discoveries and innovations on the deepest transformations that mark the transition to a new technological or economic mode of production. In the scientific environment, there is a strong belief that human history in its technological evolution from the first industrial revolution to the era of computers and telecommunications has overcome five types of technological patterns, and is currently developing a sixth. The present technological development of economic sectors is caused by the phenomenon of NBIC convergence (N - nano; B - bio; I - info; C - cogno).

The market diffusion of Nano, Bio, Information technology and Cognitive science has different impacts on economic sectors, human activities, and society. The greatest practical effect in logistics has been identified in relation to Information & Communication technology. Since the mid-twentieth century, scientists have been talking about the transformation of information into the most important productive force and resource determining success in business (P. Drucker, Al. Toffler, and others). This tendency has also been characteristic of the logistics industry. In traditional logistics and SCM, the main object of research is the material flow, in relation to which the system of optimal 7R management criteria is formed. However, the development of the industry allowed considering the information chain of value creation. Recognition of the information as a strategic economic resource, object of purchase and sale forces to reconsider the system of an assessment of indicators of efficiency of logistics and SCM. Along with the concept of "logistic material flow", the concept of "logistics information flow" is used. The logistic system integrates the information subsystem essential for performing operational and strategic management functions in logistics. Information & communication technology enables logistics and SCM to master new capabilities in global monitoring (GPS, GLONASS), controlling, analysis (Business intelligence), regulation, planning, and forecasting.

Digital economy conditions lead to the search for new forms and methods of supply chain organization and logistics management ( Evtodieva, Chernova, Ivanova, & Protsenko, 2020 ). Logistics and marketing tools are transformed as well ( Pogorelova, Yakhneeva, Agafonova, & Prokubovskaya, 2016 ). With the development of Web 2.0, Internet of Things (IoT), and Industry 4.0, flexible models of supply chains and logistics networks are implemented on a larger scale. The new concept of Logistics 4.0 has become an actual trend ( Evtodieva, Chernova, Ivanova, & Kisteneva, 2019 ).

Problem Statement

There is a growing awareness among logistics managers regarding the necessity of systematic implementation of informational technologies. Along with this, the pursuit of higher profits and improved operational performance requires analyzing the IT market and the latest developments in this field. The principle of economic feasibility in terms of selecting models of information support for logistics, management, and technological functionality, is achieved by correlating TCO (Total Cost of Ownership) logistics information systems with the advantages they bring to the company and its customers ( McFarlane, Giannikas, & Lu, 2016 ; Yakhneeva, Agafonova, Fedorenko, Shvetsova, & Filatova, 2020 ).

Telematics and informatics fields have very high update dynamics. Technologies become outdated rapidly enough, and new ones emerge to replace them. This peculiarity causes market uncertainty and high risks of decision making. The implementation of information technologies requires significant investments. Mahindroo, Samalia and Verma ( 2018 ) explore the possibilities of regression analysis and development of a roadmap for analyzing the relationship between selected logistics information system structures and indicators of its economic and operational efficiency. This question is not yet been completely answered and requires a more thorough study.

The world market for logistics services is developing unevenly. For many manufacturing, commercial and logistics companies, the transition from paper to electronic document management, the use of RFID ( Vaculik, Michalek, & Kolarovszki, 2009 ), the adoption of 3PL and 4PL are significant breakthroughs. At the same time, transnational global companies demonstrate a high level of utilization of the latest developments in Business Intelligence, Big Data analytics, IoT. Govindana, Cheng, Mishrac and Shuklad ( 2018 ) conduct an in-depth analysis of the use of Big data analytics and applications for logistics and supply chain management. The efficiency of telecommunications and information technologies in logistics is directly influenced by market conditions and its infrastructural support. Within the framework of the topic, a general analysis of the state of information infrastructure in logistics, evaluation of the quality of information resources and availability of digital services are of high importance. Review of publications on the topic has demonstrated that there is no systematic information about the transformation of paradigms of logistics automation, the positive and negative consequences of the implementation of one or another technology in terms of functional areas of logistics (transport, warehousing, inventory logistics, and others). Determination and search of preconditions and potential for qualitative change in logistics under the influence of the development of information and telecommunication technologies is another relevant issue of this study.

Research Questions

In the frame of this research, several hypotheses have been formulated and tested:

Digitalization is the key factor in the transformation of logistics and SCM;

Globally, and in Russia in particular, Logistics 4.0 infrastructure is developing.

Digitalization of logistics and SCM

Testing the hypothesis requires that the following questions be answered:

How does communication and information technology affect logistics and SCM?

What are the expectations of experts and business owners?

The infrastructure of Logistics 4.0

The questions that have to be studied:

To what extent is the market of communication services, software, digital services, and specialized automated equipment developed?

How much is the demand for communication and information technology and services by participants of logistics services and SCM market?

Purpose of the Study

To test hypotheses about the digital transformation of logistics, to identify current trends in logistics service development and ways to improve SCM efficiency based on Information&communication technology are the main purposes of the study. The major objective is to determine the features of the digital transformation of logistics and SCM based on public information, external research, and reports on the analysis of the IT market.

Research Methods

The study used methods of economic and marketing analysis, expert estimations, empirical (measurement and synthesis of research results, grouping) methods. PwC research report "Review of Transport and Logistics Trends in 2019" was applied to assess the factors of changes in logistics and SCM. The survey was conducted among managers of transport and logistics companies; 60% of them have been in management positions for 15 years; 94% are men, 36% are under 50 years old ( Sachek, Antonik, Babich, Malkievich, & Matyushko, 2019 ). The report is based on the results of 1,239 interviews with executives in 85 countries, and 85 respondents were representatives of the transport and logistics industry. In order to determine the investment preferences of top managers in BI tools and analytics, the results of a survey (over 600 respondents) of Tibco Software were used. Data sources for the analysis of the market of applied Information and communication technologies are the research results of IDC «Russian infrastructure market in 2019» ( Lebedev, 2019 ), Mail.Ru Cloud Solutions ( 2019 ) «IT infrastructure in 2019: Key trends, forecasts, problems and solutions», CNews Analytics ( 2019 ) «Largest IaaS Providers in Russia 2019», rankings of IT companies CNews100.

These studies illustrate the evolution in logistics and CRM caused by the implementation of the information and communication technology and by the adaptation of logistics concepts to the new digital economy framework. In "Review of transport and logistics trends in 2019" by PricewaterhouseCoopers, digitalization has been mentioned as the most important factor influencing the development of the transport and logistics industry ( Sachek, Antonik, Babich, Malkievich, & Matyushko, 2019 ). 68% of transportation and logistics executives expect that changes in key production and service technologies will have a breakthrough impact on their business.

The analysis of the international and Russian ICT markets reveals its maturity, diversity of application software solutions of different levels of complexity, functionality and price. Supply grows due to the implementation of new technologies of processing and transmission of data, including its big volumes and variability of structure, new intellectual services, virtualization of management of logistic processes and infrastructure. One of the popular models of informational support of logistics and SCM is outsourcing. The IT infrastructure of the supply chain increasingly acquires virtual, scalable, and flexible quality, which is ensured by "Infrastructure as a Service" technologies. Logistic services built on the principle of aggregation of information resources and transactions are in high demand. Increasingly, companies refuse proprietary on-premise systems by selecting public cloud technologies. This indicates the democratization of logistic information and the overcoming of entropy of the market. Optimization of supply chains is often performed in real-time, which is ensured by new identification and geolocation technologies, software products, and BI services.

Infrastructure and technological preconditions for digitalization of logistics and SCM

Analysts from International Data Corporation have identified ICT industry leaders: mobile devices, social technologies, cloud computing, Big Data. A review of current research and expert opinions has demonstrated that the most important requirements for the IT infrastructure of a company currently are the following: uninterrupted operation, scalability, security, speed of change, transparency and manageability, adequate cost of ownership ( Lebedev, 2019 ).

ICT infrastructure trends:

"Digital transformation" or deep transformations in the IT system, which allow companies to better cope with the attraction of customers, more effectively manage operating activities, enter new markets. The key condition for making such changes is the criterion of infrastructure flexibility, which is, in practice, often achieved by virtualization of the infrastructure, including cloud computing-based solutions;

The importance of the Application Programming Interface for improving business infrastructure. This eliminates downtime, increases both storage capacity and server computing capabilities, and increases the efficiency of business IT infrastructure;

Transferring data generation processes out of corporate data center;

Active development of a decentralized system for data collection and processing based on Edge Computing technology. The so-called "peripheral computing", i.e. for example, performed on user devices, instead of in data centers, demonstrates higher efficiency than the traditional data center model, which, according to experts, will significantly affect the infrastructure strategies of companies;

Redefining the scope of responsibility of IT infrastructure support specialists. With the advent of new management tools and the active utilization of cloud services, it will expand, resulting in the requirement to consider changes in educational programs and HR.

In 2018, the global IT market amounted to $3.69 trillion (compared to 2017, it increased by 4.5%). The volume of the Russian IT market in 2018 totaled $22.6 billion, which is 4% more than in 2017 ( Lebedev, 2019 ). The volume of the aggregated market for software and IT services in 2018 was $9917 million. The growth forecast for 2019 is 9.4%, and for 2020. - 8.6% compared to the previous year. A significant segment of the IT market is the market of IT services: the volume in 2018 was $6347 million, and the forecast for 2019 is $6926 million (with a growth rate of 9.1%).

Global trends in digitalization and virtualization of business IT infrastructure are confirmed by the data of CNews IaaS rating ( CNews ,2019 ), the revenue of the 10 largest domestic IaaS (Infrastructure as a Service) service providers in Russia increased by 56% to ₽16.1 billion. At the same time, high growth rates (over 50%) have been maintained for 4 consecutive years.

Qualitative transformations of logistics and SCM in Digital economy

Three out of five key logistics transformation factors are related directly to the ICT industry: digitalization, changes in core processes caused by the implementation of new software, changes in core processes caused by the adoption of new technology.

The highest level of digitalization in the commercial transport sector is observed in case of horizontal integration of the value chain (44% of companies), customer access to systems of the manufacturer, sales and marketing channels (37%), vertical integration of the value chain (36%), product design and development (25%), digital business models and portfolio of products and services (21%) ( Sachek, Antonik, Babich, Malkievich, & Matyushko, 2019 ).

Experts believe that digital logistics solutions have already evolved beyond information and communication technologies. They contribute to the creation of new business models, types of operations, marketplaces and services that can become new revenue sources. New ecosystems, such as logistics online platforms, are emerging. There is a qualitative change from a bulletin board with orders for transportation services to unified business and IT solutions, which connect more players of logistics and related markets. The principle of aggregation of logistics services is becoming more and more relevant. The single window system provides search and interaction with contractors, smart insurance, factoring, transaction systems, transport management software, map services, transport price indexes, quality rating system for suppliers and carriers, remote signing of contracts with electronic digital signature and others. In Russia, such aggregate systems are ATI, TRAFFIC, RailCommerce.

PwC expects the global market of business process robotization and preventative maintenance in logistics to grow by more than 35% in 2016-2021. Besides, blockchain and, in the wider sense, Distributed ledger technology is expected to impact on logistics no earlier than 3 years from today. Although, the technology already demonstrates promising results for postal and CEP operators (courier, express, parcels), since they perform operations with high levels of distribution and decentralization. Such solutions are implemented in large logistics companies such as Maersk, which, in collaboration with IBM, develops a blockchain-platform. Blockchain in logistics is designed to provide end-to-end product authentication, transparency and simultaneity of operation confidentiality, automation of document processing and logistics flow management ( Sachek, Antonik, Babich, Malkievich, & Matyushko, 2019 ).

A promising trend in the development of digital logistics services is geo-informational technologies, which perform functions of transport movement monitoring, measurement of environmental and cargo parameters, data collection from surrounding objects and transferring of this data to a unified center for online analysis and control. The market volume of geo-services in Russia is about $6 billion ( CNews Analytics, 2019 ).

Transport and logistics have become the most significant area of application for the Industrial Internet of Things ( Chulanova & Serguchenkova, 2019 ). In 2018, more than 40 million commercial vehicles worldwide were connected to cloud platforms, and the annual revenue of providers was approximately $12 billion. This is mainly due to the high level of penetration of cloud platforms, through which customers are able to monitor and optimize the utilization of commercial vehicles. Most developers of applications for the transport industry are already working on the public cloud model; there is a tendency to integrate IIoT-platforms of fleet management - Fleet Management (99% of the entire market) and facilities implementing telemetry of objects (M2M). IIoT platforms are mostly demanded in Europe and North America (35% and 26% of the world market respectively). In Russia, this market is almost non-existent (less than $3 million), and the functionality of data collection from connected transport objects was implemented mainly through proprietary on-premise Fleet Management systems, the size of implementation and technical support of which totaled ₽11.4 billion excluding communication costs ( Rudycheva, 2019 ).

According to the global trend of development of the Analytics 3.0 concept, BI instruments are increasingly being used in logistics. The market of analytics funds is rapidly growing, almost by 10% per year, and by the end of 2020 will exceed $22.8 billion ( Mail.Ru Cloud Solutions, 2019 ). The important feature of the industry is the usage of predictive analytics in logistics and SCM (for example, in "Safe Driving" modules, when assessing logistics risks, or forecasting the value of logistics costs.

The field of logistics and SCM is experiencing significant changes caused by the digitalization factor. Technologies of stream processes management that involve a high degree of human physical labor, which do not allow interactive monitoring of operations and quality control of their execution, and paper workflow, become inefficient and outdated. Application of Information and communication technology increasingly determines the level of competitiveness of logistics companies. The degree of digitalization largely determines the speed, accuracy of operations, and provides opportunities to develop adaptability and flexibility of SCM. This leads to new perspectives for companies and their customers: risk management based on rating and user community engagement, joint developments, forms of self-service and complex outsourcing. Smart logistics becomes a reliable basis for the development of international business, supporting the optimization of the involvement of world resources. The change in priorities from physical to virtual infrastructure, from owned to leased or utilized as a service, indicates a change in the nature of supply chains, their spontaneity, and orientation towards real-time solutions. The study of preconditions for the formation of logistic digital ecosystems, including at the meso-, macro- and global levels of functioning, can be an important direction of development of this study.

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Agafonova, A. N., Pokrovskaya, O. D., & Merkulina, I. A. (2020). Digital Transformation Of Logistics And SCM. In V. V. Mantulenko (Ed.), Problems of Enterprise Development: Theory and Practice, vol 82. European Proceedings of Social and Behavioural Sciences (pp. 522-529). European Publisher. https://doi.org/10.15405/epsbs.2020.04.67

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Profiles in Transportation Management Excellence: Molson Coors’ Success with Drop and Hook 

• By Adrian Gonzalez

The Use of Drop and Hook

Jeff notes, “We as a shipper are extremely drop load heavy with 80-85% of our shipments going out on dropped equipment because of the volatility in our production. We are a make-to-order operation with only one to two days of inventory in our onsite warehouses, so drop trailers are important to us and Uber Freight has been a good partner.”

In this short clip below, Jeff explains how Uber Freight’s Powerloop service works for them:

The Importance of Visibility

Since Molson Coors’ load control teams constantly are monitoring shipments through extreme heat or cold conditions, they need technology to supply continuous location data. Jeff notes, “Uber’s Powerloop trailers are state-of-the-art equipment with real-time GPS tracking capabilities, so we always know what’s happening with our loads. We can access this data through Uber’s portal. Real-time data has, over the last 3-4 years, become a key component of monitoring our carriers’ performance.”

Opportunities Going Forward

I asked Jeff what are the biggest opportunities they see for 2025 and beyond. He comments that they are working with their carriers on sustainability initiatives. “Whether it’s alternative fuels or electric vehicles, the industry is pushing hard in that direction.

“The other opportunity is in mode diversification. We’re looking to use more intermodal as well as incorporate our leased fleet of about 400 insulated rail box cars to ship long hauls.”

Jeff notes there are also challenges. Right now the trucking market is soft and rates are favorable. But he knows that won’t last, so they try to work with their carriers to smooth rates over time. Watch the short clip below where Jeff outlines their approach to transportation procurement:

Drop and Hook is Win-Win

Jeff says making sure drop and hook is win-win for Molson Coors and their carriers is an important part of their strategy. He had many great suggestions and insights along this line, so I encourage you to watch the full episode to learn more. Then post a comment and keep the conversation going with your questions and comments.

• beer , drop and hook , Molson Coors , Powerloop , transportation management , Uber Freight

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Ten steps retailers can take to shock-proof their supply chains

The ongoing COVID-19 pandemic has created the perfect storm to disrupt retail supply chains across verticals. Wild fluctuations in demand have destabilized each leg of the supply chain. Over the past 18 months, the share of household spending on goods increased for the first time in 60 years. Inventory levels fell precipitously as retailers delayed purchases during the early months of the crisis. Collectively, retailers will need to spend $39 billion to return to prepandemic inventory levels. 1 US Census Bureau, Manufacturing and Trade Inventories and Sales, March 16, 2021.

About the authors

This article is a collaborative effort by Manik Aryapadi, Tom Bartman, Martha Jachimski, Sarah Touse, and Kumar Venkataraman, representing views from McKinsey’s Retail Practice.

Retailers are now sprinting to get product from manufacturer to customer, but supply chains remain snarled. Logistics carriers reduced capacity to match falling demand and have been challenged to accommodate rising volume. From ocean freight through the middle and last miles, carriers are experiencing unprecedented congestion that has caused service disruptions and rate increases. The approaching holiday season increases the urgency of tackling these challenges. According to McKinsey analysis, the concurrent disruptions have the potential to decrease earnings before interest, taxes, depreciation, and amortization (EBITDA) for retailers by 20 to 40 percent in the near term, with 15 to 20 percent of that decrease enduring if these supply-chain shocks go unaddressed.

The disruptions have forced retail supply-chain leaders to take action across multiple fronts to manage volatility and ensure product is available to meet consumer demand. To address current disruption across the supply chain and secure inventory for the fourth quarter of 2021, retail leaders will have to rethink traditional approaches. These headwinds show no signs of slowing following the holiday season. Supply-chain leaders must address several items to keep the chaos under control and successfully manage transformation in the long term:

• See the full picture. Leaders must understand the disruptive dynamics currently at play in each leg of the supply chain.
• Navigate the near term. They must pursue bold measures to mitigate disruption over the next 12 months.
• Embed and enable resilience for the future. They must fundamentally restructure the supply chain to mitigate long-term disruptive forces and address capability gaps to sustain new models.

Only by creating a full view of the challenge and managing these disruptions across different time horizons will retail leaders prepare their supply chains to support growth in the next normal. According to McKinsey analysis, a sustained effort can increase sales by 3.0 to 7.0 percent, improve margins by 1.5 to 2.5 percent, and boost working capital and cash flow by 15.0 percent.

See the full picture

Individual links in the supply chain are being shaped and disrupted by a mix of interlocking trends. While capacity constraints and rate increases have been present across the board, unlocking resilience will require a nuanced understanding of the conditions at each link.

Ocean inbound

The ocean-cargo industry is facing a range of challenges that are hindering the flow of global goods. The supply of container ships has been falling, with overall capacity down by 11 percent from September 2020 to June 2021. Many shippers reduced capacity in response to falling demand early in the pandemic, and the subsequent ramp-up has clogged ports. The global disruption caused by the Ever Given’s blockage of the Suez Canal in April of this year is still reverberating, and Yantian port congestion sparked by COVID-19 outbreaks in May and July of 2021 has further constrained capacity.

The ocean-freight industry has also been gradually consolidating, with fewer, larger players controlling an increasing share of global capacity. The top five companies currently account for 65 percent of container capacity, a figure predicted to rise to 80 percent by 2025 (Exhibit 1). Industry consolidation has left retailers with fewer alternative carriers to augment capacity among their key partners.

Middle mile

Retailers are facing significant cost increases and capacity constraints in their middle-mile operations. First, spot and contract rates remain in record-breaking territory as surging retail imports and peak produce shipments fuel demand for transportation services. Refrigerated (reefer) capacity is even tighter than dry van, resulting in disruptions to the fresh supply chain: the rejection of contracted rates reached approximately 50 percent. National reefer spot rates are currently 107 percent higher compared with the same time in the third quarter of 2020. These high spot rates have led carriers to reduce their adherence to contracts.

Second, labor shortages have hobbled the middle mile. Transportation and trucking employment continues to recover, gradually climbing out of a low-water mark in April 2020 (Exhibit 2). However, this trajectory is not enough to keep pace with demand. According to the US Bureau of Labor Statistics, the sector gained only 3,800 jobs during the first three months of 2021. The forecasts for the Truck Driver Pressure Index for 2021 are higher than 2020, and low driver availability is further exacerbating matters.

Warehousing

Within warehousing, several factors are contributing to rising costs. Vacancy levels have dropped to all-time lows, while high absorption rates pushed rents 4.2 percent higher year over year in the first quarter of 2021 to $6.39 per square foot. Only nine of the top 50 US markets experienced rent declines during this period. 2 Gillam Campbell et al., Industrial Tenant Demand Study , Jones Lang LaSalle (JLL), June 27, 2021, us.jll.com.

At the same time, warehouse wages have returned to peak pandemic levels despite growth in employment. Retailers are competing for warehouse talent as they hire to expand capacity, offering increased pay, bonuses, and benefits. Amazon, for example, has announced that it is raising average starting wages to $18 per hour to attract more hourly workers, while Target plans to offer free undergraduate degrees to 340,000 staff members. Average hourly wages have climbed steadily from $17.59 in September 2020 to $18.68 in May 2021 (compared with a peak rate of $18.79 in August 2020). 3 “Current employment statistics: Employment and earnings table B-8a,” US Bureau of Labor Statistics, last modified October 8, 2021, bls.gov.

Direct to consumer last mile shipments have risen 14 percent per year from 2015 to 2020, driven primarily by the expansion of residential B2C delivery from accelerated e-commerce demand (Exhibit 3). In contrast, B2B volumes were flat during this period. Parcel integrators have responded by revising their B2C strategies and adjusting price and service levels. Although demand for B2C delivery continues to grow, national carriers have focused their investments in the B2B side of the business, given the channel’s more attractive margin and ROIC profile.

Therefore, current capacity investments by large integrators and the US Postal Service are insufficient to meet growing B2C parcel demand. Parcel providers have raised prices and added surcharges to account for the impact of increased B2C volumes on their networks. According to McKinsey analysis, that means retailers may need to pay between $1.15 and $6.15 per package in additional surcharges through October, and more increases are likely in the fall. The longest-distance shipments (zone five or higher) are expected to increase 15 to 40 percent.

Navigate the near term

Taken together, these trends have shaken supply chains and forced retail leaders to spend months trying to put out fires. They have also turned conventional supply-chain-management principles on their head in many markets, as legacy cost-optimization approaches such as vendor consolidation and just-in-time capacity are no longer sufficient to guarantee inventory will be available in the right place at the right time.

By taking a broader, total-cost-of-ownership (TCO) view that includes the full risk of stock-outs and missed sales, resilient retailers are pursuing bold near-term actions. Looking across retail verticals, we see seven actions supply-chain leaders must take to manage the chaos and mitigate disruptions:

1. Stand up a digital control tower Navigating the manifold disruptions will require retailers to maintain an end-to-end visibility to quickly identify issues and collaborate across functions to resolve them. However, the vast majority of retail supply chains are tracked and governed through multiple, often disconnected data systems managed by different teams. Implementing a digital control tower that connects data systems and generates insights across the end-to-end supply chain can create transparency and accelerate response times once bottlenecks are identified. In our experience, this approach typically improves fill rate by 10 percent and reduces excess inventory by more than 30 percent.

2. Strategically allocate inventory in the near term Many retailers were forced to make difficult trade-offs on how to deploy and manage inventory to best meet customer demand and protect sales during the peak months of the pandemic. Continuing to pull levers such as prioritizing markets for inventory deployment and ensuring promotional plans align with the pipeline of available and expected inventory can help retailers mitigate immediate disruptions and shore up resilience through the holiday season.

3. Optimize and prioritize purchase-order flows by mode To ensure that critical inventory is available when needed, retailers should prioritize purchase-order flows accordingly—for example, by front-loading floor-set and peak-season orders. Alternative transport modes (such as air freight) should also be considered even if they have traditionally been more costly. Taking a TCO view of supply-chain decisions can help retailers identify and appropriately prioritize critical inventory. In the near term, this will require retailers to lean on existing analytics capabilities. In the long term, investments in advanced analytics can automate the risk-assessment process and enable the dynamic assessment based on real-time visibility into inventory levels and recent supply-chain performance.

4. Reduce risk through strategic supplier fragmentation Retailers should resist the temptation to concentrate too much of their business with one supplier in pursuit of volume discounts. Fragmenting the supplier base can help mitigate capacity constraints at the individual supplier level and create opportunities to augment capacity as demand continues to fluctuate. This approach can look different at each leg of the supply chain.

Within ocean freight, retailers should revisit their arrangements with existing shipping carriers and explore options such as non-vessel-operating common carriers (NVOCCs) and freight forwarders to increase the probability that one of the counterparties will have capacity when needed.

In the middle and last miles, partnering with regional and local carriers can provide access when national carriers throttle capacity or implement surcharges. Since the spike in spot rates led many middle-mile drivers to leave their employers and start their own independent trucking companies, the landscape has become more atomized. The freight brokerage industry has thousands of small, local brokers that make first contact with these new trucking companies and arrange touchpoints for national-scale retailers. Similarly, expanding volumes have spawned a slate of new players, such as LaserShip, Lone Star Overnight (LSO), and PITT OHIO, that provide last-mile capacity, often at a 10 to 30 percent discount in their coverage areas.

Last, in warehousing, retailers have an opportunity to forge on-demand partnerships to secure space needed for short-term spikes. Tech services (for example, Flexe and Ware2Go) provide retailers with access to short-term capacity to meet periodic spikes without adding permanent space.

5. Build longer-term supplier partnerships Across supply-chain segments, investing in longer-term contracts (18 to 36 months) can reduce price volatility and enable suppliers to prioritize certain strategic accounts over those perceived to be more short term and transactional. This approach can be especially effective in ocean freight and warehousing. Freight carriers have publicly announced their intent to prioritize multiyear contracts when managing capacity and to design pricing models based on length of commitment. In warehousing, rents are nearly guaranteed to rise significantly with each contract cycle. Locking in longer-term contracts can convince landlords to limit rent increases during renegotiations on expiring contracts. Retailers should explore extended contracts with warehouse partners that include fixed annual increases as a way to secure capacity and predictable costs.

6. Double down on efficiency Optimizing operational performance to make the best use of existing capacity at each leg of the supply chain can help mitigate constraints in the near term. In the middle mile, capacity constraints have changed the breakeven math for transportation planners that may have previously favored other priorities, such as rush orders. Planners must now prioritize efficiency to reduce the total number of loads and refresh their assumptions to strike the right balance between truck utilization and speed. The breakeven math has also changed within the four walls of the warehouse: as labor costs increase, the value of productivity improvements also rises. Retailers can emphasize productivity improvements (such as redesigning warehouses, revisiting engineered labor standards, and investing in lean operations) as a form of risk mitigation to protect against disruption from labor shortfalls.

7. Consider investing in dedicated or private fleet capacity If external suppliers and internal productivity improvements together cannot bridge the gap to secure the required capacity, retailers with large, dedicated contract fleets can consider taking their operations in-house. Dedicated, private fleets are more expensive and add some management complexity, but many large trucking companies will prioritize service to dedicated customers over others, even using over-the-road (OTR) truckers to do dedicated moves to ensure service. This approach can increase reliability and reduce cost, since truckers pulled in from the OTR fleet work at the dedicated rate, rather than at the higher spot rate.

Embed and enable resilience for the future

The headwinds creating volatility across today’s supply chains do not show signs of slowing after this holiday season. While bold near-term actions will ensure continuity of supply for retailers’ immediate needs and lay the foundation for future flexibility, fortifying supply chains against continued shocks will require a thorough approach to embedding resilience (and the capabilities that enable resilience) for the long haul. This goal will require retailers not only to rethink their network design and strategic supplier-partnership approach but also examine their operating models and invest thoughtfully in their technology and analytics.

In our experience, effective supply-chain transformation efforts center on three themes that embed resilience and unlock value in the long term.

8. Clean-sheet the end-to-end network Since the network of the past will no longer be able to serve the needs of a more volatile future, retailers must remap supplier mix, locations, geographies, and existing assets (including distribution-center locations and routing). Recent disruptions in international trade have exposed vulnerabilities in retailers’ current supplier and geographic mix. Resetting the full supply chain must start with a reevaluation of where products are sourced and how the risk of disruption factors into the decision. Within the distribution network, clean-sheet efforts must take an integrated network approach to make the most of retailers’ physical assets. Beyond the existing distribution-center network, stores can function as delivery hubs for e-commerce orders. Routine replenishment runs can bring e-commerce orders to stores—for the buy online, pick up in store model—or serve as couriers over the final mile.

9. Operate cross-functionally to change buying and planning behaviors Retailers will need to make longer-term decisions on how better to coordinate buys, optimize assortment, and ensure they are minimizing disruptions to deliveries. They should take several factors into account. Accelerating timelines and planning can have a direct impact on freight availability and rates: the sooner retailers submit orders, the more likely the orders are to be accepted. Similarly, reducing SKU complexity can mitigate the risk of stock-outs by creating more flexibility further down the supply chain. Allocating inventory across an integrated network can enable retailers to locate goods closer to their ultimate destination, reducing cost and increasing the likelihood of achieving promised service levels. Advanced analytics is bringing more accuracy to unlock the value of forward deployment without adversely affecting working capital. Pulling these levers will require new operating models that enable seamless collaboration across supply chain, merchandising, planning, and buying functions, as well as a holistic view of how decisions in each function affect the total business.

10. Invest in automation and analytics investments Retailers can explore investments in advanced-analytics technologies and automation (including robotics) to improve service and reduce TCO to the network. Integrated analytics platforms can create industrial-strength end-to-end visibility by bringing together insights from supply chain, merchandising, planning, and buying to enable a TCO view across the go-to-market process. These tools create a shared fact base to enable more cross-functional decision making while streamlining transactional work that builds time into the process. Meanwhile, effective automation of distribution centers alone could boost profitability by 300 to 700 basis points. Traditionally, automation business cases considered only the benefit of reduced labor hours. In today’s world of high absenteeism and attrition, automation is a way to increase service levels and reduce the risk of lost sales from stock-outs. A McKinsey survey of supply-chain executives found 64 percent of respondents now cite automating warehouse roles as the top digitization and automation priority.

As supply-chain disruptions continue, volatility and uncertainty are here to stay for the foreseeable future. However, retailers have the opportunity to regain control by addressing these disruptions head-on in the near term and using these measures to lay the groundwork for future resilience. Once the immediate situation is stabilized, retail leaders will need to reimagine their supply chains to prepare for the next normal, starting with a clean-sheet view and empowering their organizations through new ways of working and future-ready tools.

None of the actions detailed above will have an instant impact or happen on their own. Still, retailers with the vision to transform their supply chain can capture a significant payoff. And just as important, these efforts will embed long-term resilience to help retailers weather future disruptions.

Manik Aryapadi is a partner in McKinsey’s Dallas office, Tom Bartman is an associate partner in the Miami office, Martha Jachimski is a consultant in the New York office, Sarah Touse is an associate partner in the Boston office, and Kumar Venkataraman is a partner in the Chicago office.

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Supply chain trends 2024: The digital shake-up

With digital opportunities sweeping the supply chain landscape, readiness and line of sight will be paramount to success

Advanced technologies are shaking up the supply chain world. With quickly evolving capabilities across generative AI, data analytics, automation, machine learning, Internet of Things (IoT), blockchain and more, the ‘smart’ supply chain is well on its way to becoming the new normal.

Enabled with a raft of technology developments, a new paradigm is emerging in supply chain management. One where organizations can respond quicker to day-to-day requests, proactively address problem solving, and reduce errors and inefficiencies. It can also provide greater visibility, transparency and traceability. Most importantly, organizations will be more resilient to future supply chain shocks.

With a future that promises autonomous, self-learning machines seamlessly managing the broader supply chain process, now is the time for organizations to overcome the inherent silos and enterprise systems that will restrict their progress.

To get started, organizations need to first embrace the trends that will define 2024. This includes learning about emerging technologies from AI to distributed ledger technologies, low-code and no-code platforms and fleet electrification. This will need to be followed by managing the migration to a new digital architecture and executing it flawlessly.

Organizations will need to intensely focus on mining relevant, clean and well-governed data if they want to make the most of their new technology investments. Data will also be crucial as organizations are pressured to meet evolving ESG and Scope 3 commitments.

These structural trends will shape new operating models and improve broad processes. To avoid being left behind, it is important for organizations to understand these trends and apply specific actions to begin their transformation sooner rather than later. This way they can create a more agile and responsive supply chain that can capture the promise of value creation, cost reduction and improved shareholder value.

Trend 1: Generative AI in operations

Generative AI (GenAI) is a subset of AI that has the potential to revolutionize supply chain management, logistics and procurement. Software engines powered by GenAI can process much larger sets of data than previous forms of machine learning and can analyze an almost infinitely complex set of variables. GenAI can also  learn  —and teach itself — about the nuances of any given company’s supply chain ecosystem, allowing it to refine and sharpen its analysis over time.

The list of opportunities for GenAI is extensive. It can help ensure procurement and regulatory compliance, streamline, and enhance the efficiency of manufacturing production workflows, or enable virtual logistics communication by using virtual assistants to handle routine inquiries and provide quick responses.

The use of AI is an enterprise-wide consideration, organizations must avoid dissipating effort across several single point disconnected AI implementations. Core business processes should be strategically rethought and redesigned to effectively leverage GenAI.

Key actions to take in 2024 include:

Planning professionals need to increase their skills in analytical modeling capability, cross-functional expertise, and relationship management to maximize collaboration.

Make decision-making a business discipline: Be performance led: Start with performance goals – Don’t let technology dictate your decisions.

Blend expertise with data analytics: Inject data into your existing processes. Data management will be critical to success

Develop an ecosystem of technology partners, business integrators, and academic experts to access skilled individuals.

Through 2024, 50% of supply chain organizations will invest in applications that support artificial intelligence and advanced analytics capabilities. 1

Trend 2: AI enabled no touch / low touch planning

With the continued focus on resilience and ESG coupled with the expansion of sites, flows, and partners, the pressure on supply chain planning is increasing. Existing planning capabilities have been unable to meet the demands of a more complex, multi-tiered, more nuanced world. The result is few companies can run effective scenario analysis to determine the financial consequences of important decisions.

AI enabled sales and operational planning (S&OP) and integrated business planning (IBP) applications will help eliminate the gap between supply chain planning and execution. Low touch planning will take large swaths of manual work out of the end-to-end planning process and leverage the power of advanced analytics to answer deeper questions with minimal human intervention. AI will be able to analyze data at scale, identify anomalies, search for patterns that lead to unexpected disruptions, and make suggestions on how to solve them—almost instantaneously.

From a technology perspective, the capabilities to enable low touch planning are like a control tower or its more advanced counterpart, the cognitive decision center which includes digital twin capabilities. These promise improved predictability, enhanced gross margins and free up resources to focus on value adding activities.

Low touch planning, improves predictability enhancing Return on Equity (ROE) by 2 to 4 percentage points, and adds 1 to 3 percent to gross margins across revenue, cost, and assets 2

Trend 3: The critical role of data

Data is still one of the core challenges facing supply chain management. Each day millions and millions of date records are generated across the supply chain from multiple systems. The proliferation of digital technologies, IoT devices, and advanced tracking systems have compounded the problem. This wealth of data has given rise to greater silos of data within the organization which in turn has led to disconnected data sets. Duplication and misinterpretation will become increasingly problematic, too. Critically, the fragmentation of data impedes the creation of a holistic view of the organization’s supply chain.

Consequently, data availability, quality, cadence, and consistency – are now critical considerations. Supply chain professionals must manage the complexities within their data landscape efficiently; to be able to make informed decisions and enhance their operations.

A solution is to adopt a use case-driven approach to proactively address data quality issues. By focusing on specific use cases, organizations can prioritize data quality improvements where they matter most, thereby gradually refining and improving their datasets.

Placing a laser focus on the critical elements of data availability, quality, reliability, cadence, and consistency. Data is the linchpin that enables businesses to make informed decisions, optimize processes and ensure resilience in the face of disruptions

Acknowledge that data management is an ongoing journey rather than a one-time destination.

Take an iterative approach to data management. This allows organizations to refine their data strategies, adjust to changing circumstances, and learn from experience.

Develop a value-driven roadmap. Data must be aligned with a clear purpose and tied to value generation, such as cost savings, enhanced efficiency, improved customer satisfaction and innovation.

Low touch planning, improves predictability enhancing Return on Equity (ROE) by 2 to 4 percentage points, and adds 1 to 3 percent to gross margins across revenue, cost, and assets 3

Trend 4: Transparency and visibility beyond Tier 1 and 2

The lack of visibility across the layered tiers of a supply chain has major implications for organizations across industries, particularly for meeting regulatory requirements, and for the identification and mitigation of supply chain risks.

Breaking the barrier of visibility beyond Tier 1 allows organizations to look across their extended supply chain into partners, build greater and deeper insights into root causes, identify new risks that occur further into the supply chain and drive ESG goals through better traceability and transparency.

Technology tools such as control towers and digital twins can surface critical sub-tier supplier relationships, highlight common sub-tier suppliers, factory locations and provide clear insight into the depth of an organization’s supply chain. When implemented at scale they can improve supply chain resilience.

Move towards a more collective and data-driven approach by using technology solutions and partnerships. Extend visibility of product flows to create more in-depth views of the supply chain ecosystem.

Create cross-functional teams to provide a fuller picture of key use cases, the scope of visibility and surfacing downstream problems.

Build on the visibility of others – with organizations each embarking on their own projects and control towers to build visibility, explore partnerships that may provide access to a wealth of data and insights.

Embed ESG measures within the technology for improved procurement decision making and performance management, and incorporate ESG performance metrics into supplier evaluations or scorecards.

Less than half (43%) Forty-three percent of organizations have limited to no visibility of tier one supplier performance 4

Trend 5: Low-code platforms

A supply chain is a dynamic and complex process that includes provisioning, raw material supply, warehousing and the distribution of manufactured products to consumers. Historically, this has resulted in multiple systems and data sources. Implementing software change in this environment is time consuming with a high probability of errors.

Most supply chain tasks can be fully or partly automated through low-code platforms, which use a wide range of Application Programming Interfaces (APIs) and pre-packaged integrations to link previously separate systems. These cut the development time, enabling companies to swiftly react and adapt their applications to new market conditions, disruptive events, or changing strategies. It enables business users with little technical knowledge to quickly build, test and implement new capabilities.

Potential applications span planning, manufacturing, product life cycle, supply chain collaboration, and track and trace. Low-code platforms are not just a technological upgrade; they represent a paradigm shift in how organizations approach their operations providing a pathway to a more agile and adaptable future.Consequently, data availability, quality, cadence, and consistency – are now critical considerations. Supply chain professionals must manage the complexities within their data landscape efficiently; to be able to make informed decisions and enhance their operations.

Define and document cross-functional processes, tasks, and timelines – identify suitable use cases..

Leverage low-code apps to go from managing supply chains to building agile, resilient and predictable supply chains.

Use low-code platforms to modernize legacy systems, automate processes and connect disconnected systems.

Empower stakeholders and business domain experts to create apps for insights, actionable tasks and collaboration in the supply chain.

More than two-thirds of enterprises have already adopted low-code to their supply chains 5

Trend 6: ESG and Scope 3 emissions

While many businesses have traditionally prioritized the collection of their Scope 1 (direct emissions) and Scope 2 (purchased electricity) emissions data, the focus has now shifted decisively toward Scope 3 emissions – that is, emissions incurred throughout the entire value chain. Although voluntary to date, the collection and reporting of Scope 3 emissions data is becoming a legal requirement in many countries.

Establishing a solid emissions baseline is essential for monitoring progress and setting ambitious reduction targets. Scope 1 and Scope 2 emissions are relatively straightforward to assess however, when extending this to the full supply chain, as in Scope 3, the complexity multiplies exponentially.

To target reductions in carbon emissions, companies need primary sources of information from their suppliers, and are starting to use hybrid carbon accounting methodologies to produce a more accurate assessment of Scope 3 emissions. Digital platforms are providing a centralized system for suppliers to input their emissions data, which can then be easily integrated into a company’s sustainability reporting.

Carry out supplier segmentation based on key criteria such as spend and criticality to business to identify and prioritize supply chain categories.

Establish and implement a supplier engagement program. Start educating suppliers about the significance of Scope 3 emissions data capture and your sustainability goals.

Analyze technology solutions for collecting carbon emissions data from your suppliers. Identify technology options that work for the size of your business and your industry and start implementation. Investing into technology solutions now will lead to cost savings in the long run.

Educate and support employees in understanding Scope 3 emissions, carbon reduction approaches and technology solutions to collect and manage carbon data. It is vital that a change management strategy is built into the decarbonization action plan.

Only 5% of supply chain emissions stem from direct manufacturing, whereas emissions originating within the supply chain can be 5 to 10 times greater 6

Trend 7: Electric vehicles, transport and logistics

The logistics sector is also undergoing rapid transformation. Some elements of future-ready transport and logistics networks are already in evidence such as the automation of warehouses and ports, and the increasing use of autonomous vehicles. Their adoption will expand as organizations commit to emissions reduction targets and battery technology evolves to extend distance limits for electric trucks, buses and delivery vehicles.

Organizations will continue to accelerate the electrification and automation of the logistics transport value chain – especially those that remain costly or manual, such as processing of air freight and last mile delivery. Similarly, the transition from autonomous vehicles overseen by humans to fully automated vehicles without human intervention is almost ready to expand from controlled closed-loop environments to public roads.

Smart logistics and transport will also be accelerated with the continued ramp-up of AI, IoT, data analytics and cloud across many use cases – improving traditional route optimization and applying machine learning, predictive and sensing capabilities to make material improvements to network efficiency, customer experience, risk reduction and sustainability targets.

Conduct a fleet assessment to evaluate fleet composition, routes and usage patterns to identify opportunities for electrification, prioritizing vehicles that travel frequently in urban areas.

Identify broad transport and logistics automation opportunities to automate labor-intensive activities.

Analyze data from vehicle telematics, IoT devices, delivery data, customer satisfaction and sustainability information to drive decisions.

Develop a plan to transition delivery fleets to electric vehicles. New cloud-based AI driven technologies can simulate future transport network designs to optimize routes that reduce distance driven and prioritized routes and vehicles for electrification.

Embed sustainability at every step by looking across sourcing, planning, making, delivering and returns for opportunities to reduce vehicle tailpipe emissions.

Battery electric commercial vehicles (BECVs) could reach between15% and 34% sales penetration by 2030 7

As we stand on the brink of 2024, the supply chain landscape is on the cusp of profound transformation. AI and other advanced technologies are quickly reshaping the very core of supply chain management. KPMG professionals believe organizations with the right approach and culture can harness these seismic shifts.

In 2024 organizations could gain fundamental opportunity by focussing on the strategic application of GenAi, adopting a low-touch planning approach, striving for data excellence and transparency, adapting to low-code platforms, prioritizing Scope 3 ESG data reporting, and planning for the electric future. Time is of the essence, and those who are ready and willing to adapt quickly will be better able to unlock value, reduce costs and embrace new models of success.

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1  https://www.gartner.com/en/articles/gartner-predicts-the-future-of-supply-chain-technology

2  KPMG case study analysis

3  https://www.prnewswire.com/news-releases/global-big-data-markets-report-2022-2027-challenges-and-opportunities-technologies-and-business-cases-regulatory-issues-industry-vertical-applications-companies-and-solutions-301471783.html

4  https://kpmg.com/uk/en/home/insights/2021/07/the-future-of-supply-chain.html

5  https://www.bloomberg.com/press-releases/2019-08-12/low-code-is-the-future-outsystems-named-a-leader-in-the-2019-gartner-magic-quadrant-for-enterprise-low-code-application

6  https://www.weforum.org/agenda/2021/01/tackling-supply-chain-emissions-is-a-game-changer-for-climate-action/

7  https://supplychaindigital.com/articles/logistics-readying-itself-for-ev-revolution

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Reverse logistics for empty pesticide containers: optimal design for sustainable management over wide areas

• Published: 12 September 2024

Cite this article

• Antonela E. Sorichetti   ORCID: orcid.org/0000-0002-2650-2207 1 , 2 ,
• Mariana González Prieto   ORCID: orcid.org/0000-0002-9123-5301 1 , 2 ,
• Andrea A. Savoretti   ORCID: orcid.org/0000-0001-5098-8641 1 , 2 ,
• Silvia E. Barbosa   ORCID: orcid.org/0000-0002-0434-0972 1 , 3 &
• José A. Bandoni   ORCID: orcid.org/0000-0002-9475-3825 1 , 3  

Empty pesticide containers (EPCs) are a source of high-quality high-density polyethylene with a few different colors and a practically constant quality over time; thus, EPCs are economically valuable and fully recyclable. There are two key aspects to the successful recycling of these containers, their cleaning and collection, the latter being especially challenging in areas where the distances between the generation nodes are large. This paper presents the development of a multi-period Mixed Integer Linear Programming model for the optimal design of a reverse logistics network for EPCs in large territorial areas and its application to the Buenos Aires province of Argentina. The model structure is based on the current legislation and reflects the interactions among society, development and the environment, allowing a quantification of the technical and economic implications of sustainable development. The proposed formulation takes into account investment and operating costs for each temporary collection center (TCC) and recycling plant, as well as transportation costs between nodes. The kilometers travelled to operate the network help to estimate the minimum number of vehicles required and the global climate change impacts of each studied alternative. Moreover, the model incorporates restrictions and operational alternatives commonly used in large territorial areas. This work is part of a broader project in collaboration with national agencies to develop tools to strengthen the political role and facilitate the implementation of the extended producer responsibility principle (EPR) in the context of EPCs management system. Moreover, the conclusions drawn from scenario studies serve as guidelines for its implementation in other countries or regions.

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Data availability

The data that support the findings of this study has been developed by the research group and are available from the corresponding author, González Prieto Mariana, upon request.

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The authors acknowledge the financial support granted by Comisión de Investigaciones Cientificas (CIC), the Consejo Nacional de Investigaciones Científicas y Técnicas (CONICET), the Universidad Nacional del Sur (UNS, PGI 24/M166) and Universidad Provincial del Sudoeste (UPSO) from Argentina.

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Sorichetti, A.E., González Prieto, M., Savoretti, A.A. et al. Reverse logistics for empty pesticide containers: optimal design for sustainable management over wide areas. Environ Dev Sustain (2024). https://doi.org/10.1007/s10668-024-05374-y

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Received : 18 September 2023

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Published : 12 September 2024

DOI : https://doi.org/10.1007/s10668-024-05374-y

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