Print Page | Contact Us | Sign In | Join RVCF
RVCF Link
Blog Home All Blogs
RVCF LINK focuses on the challenges and trends relevant to today's changing retail landscape. Our newsletter contains case studies, articles of note, and original content regarding collaborative initiatives, research, and training occurring in the world of RVCF.

 

Search all posts for:   

 

Top tags: Omni-Channel  e-commerce  Inventory Management  3PL  Collaboration  Kaizen  Vendor Compliance  Amazon  Brick-and-Mortar  RVCF Fall Conference 2015  RVCF Fall Conference 2016  supply chain  Chargeback  EDI  Onboarding  Shortages  Chargebacks  Compliance Management  Holiday 2014  RVCF Conferences  RVCF Membership  Tariff  Audit  CBP  Economic Sanctions  exports  Holiday 2015  Imports  NAFTA  Ports 

How to Talk About Blockchain at Parties

Posted By RCVF Admin, Monday, December 10, 2018

RVCF Link Image

How to Talk About Blockchain at Parties
By Kirk White, Yusen Logistics


2018 is, among other things, the year of Blockchain.  And for all the buzz and hype, many still don’t know exactly what it does and what it will bring to the world of supply chain.  It’s very easy to say,  “oh…it’s going to revolutionize the Supply Chain by streamlining documentation, removing non-value-added steps to processes,  speeding up payments, eliminating errors or miscommunications, providing better scrutiny and validation to our factories and, not for nothing, making everything just a little safer…and I heard it has vitamin C and electrolytes to boot?”  Okay that last part is not verifiable….but not any more NOT verifiable than anything else. THAT is the rub.  Right now a whole bunch of blockchain is just potential.  It’s going to become concrete faster than you can imagine but as of this moment, since we quoted the Terminator so much so far,  “the future is not set…there is no fate but what we make for ourselves”.  

Anywhoo…As the season wraps up, many of our loyal readers will be going to various gatherings and holiday parties…and invariably, if your parties are like our parties, the subject of Blockchain will come up.  And you may be tempted to make a quick dash for the snack table…but fear not…as our gift to you, please see our handy dandy guide to talking about Blockchain in any social situation (you’re welcome):

Things you can say when someone asks you about your opinion on Blockchain: 

“This is  nascent technology”

Nobody has cracked this…YET. But a lot of folks are trying.  Think back to the early days (1995) of the ol’ internet. Think of the companies that got on that train early…think about those who didn’t.  But again,  NO ONE HAS CRACKED IT YET…mostly because…

“the application of using it for supply chain on a global scale doesn’t exist”

This won’t be able to be said for long because there are a bunch of pilot programs in the works as companies fight to be the “Facebook” of Blockchain.  The main issue is that there is nothing standard…no standard connection and the supply chain industry already has multiple means of getting and transferring data…some use EDI, some use inhouse systems, some just email things to you.  Getting this many disparate individual operators to suddenly agree on the next big ONE platform of communication is not going to be easy. People fear change. People think if it ain’t broke, don’t fix it.  People like to do things THEIR way.  And we haven’t even TOUCHED the learning curve!  However, it is inevitable that there will be a blockchain/supplychain revolution soon, because…

“A lot of companies are taking this seriously”

Once again, think back to 1995ish, those of you who were not in grade school or diapers then!  This whole “internet thing” was a novelty….email was a hoot, yes, but nothing to worry about, until it wasn’t a novelty… and there was something to worry about.  Think about how many business failed because they were late to the online game.  Borders Bookstore went out of business in 2011 and the industry mostly attributes this to their inability to get with the online program. They doubled down on inventory (esp CDs and DVDs) just at the moment Ecommerce and electronic distribution of media was becoming ubiquitous. They even outsourced their ecommerce to Amazon…and a chill was felt around the room.  Many of the big companies do not want a similar fate with regards to Blockchain. IBM/Maersk is leading the supply chain side of Blockchain with a joint venture called Tradelens. There is not much info available yet, a visit to their website (www.tradelens.com) yields a lot of high level marketing materials but not much else at this point.  They have an early adopter program that, as of this time, features @ 94 participants and are looking for a general release / expansion in 2019 and to begin adding an A.I. component by 2020.  With 154 million+ events moving through their system, they are an early lead in the race.  The significant pushback seems to be coming from other carriers who believe the system may prioritize Maersk to clients.

Not to be outdone, Microsoft has teamed up with Adents (www.adents.com/adents-novatrack )to create NovaTrack. Initially created for the pharmaceutical industry to track and trace product for safety, it has quickly expanded into a robust system that is adding  A.I., serialization capability, and Internet of Things components early in the process.    By teaming up with a powerful partner in Microsoft, a company whose products are more than likely already used in many potential clients’ computers, they may have an advantage to a completely new platform.  This might actually be a good time to ask…

“Would YOU like to be an innovator in this?”

Never hurts to ask…you are at a party.  What are the other people hearing, seeing, thinking about using.  A lot of this is going to live and die on the buzz of early adopters and pioneers.  In fact, many people will probably wait to enter the blockchain world until there is a clear cut favorite.  It’s like the Academy Awards (the Oscars)…the Best Picture is chosen by every member of the Academy. However, many members…a LOT of members…don’t actually go out and see all the movies up for best picture. They usually vote based on all the articles that come out picking the favorite films; the “who should win” so early hype and buzz is uber important for film makers.  This is a similar thing to what is happening now, IBM/Maersk, Microsoft/Adent and Amazon (more on them in a moment)…and not for nothing, all the other dark horses we’ve not heard of yet…are all working to be the word buzzing on everyone’s lips. And speaking of dark horses…  

“there is still a chance for an indie solution”

Adding a giant monkey into the wrench, Amazon has thrown their hat into the ring with AWS (Amazon Web Services) Amazon managed blockchain. They have a HIGHLY SCALABLE platform called Quantum Ledger Database (QLDB for short:  https://aws.amazon.com/qldb/ )  and their aim is to provide the ability for multiple users to create their own proprietary APIs (application program interface) using the Amazon blockchain and therefore remove the need for a central blockchain system….instead of ONE system that everyone adopts, companies could build their own blockchain enabled systems and use them as a differentiator/revenue generator.  Will this be a game changer or simply muddy the field so to speak?  Time will tell, but QLDB does seem to level the aforementioned muddy playing field a bit as organizations with a robust and agile IT dept could use the AWS blockchain fabric with their own innovative API and revolutionize the industry. For the moment the sky is wide open and one may say that a small company doesn’t have a chance against IBM or Microsoft but then again…nobody thought The Hurt Locker would beat Avatar for Best Picture now did they?

And since we’re talking…what have YOU heard?  Be sure to leave in the comments below any early “buzz” you have picked up in your travels. 

Sources:

http://www.nsweek.com/wp-content/uploads/2018/10/Luca-Amato_ibm.pdf

https://whichblockchain.com/news/microsoft-and-ardents-partner-in-blockchain-project-for-product-tracking-platform/

Kirk White is a corporate creative and a supply chain futurist. He has worked in every division of Yusen Logistics. After a brief stint in Transportation, he transferred to Corporate, where he coordinated Yusen’s Employee Empowered Kaizen system and served as a Specialist for the Business Process Re-engineering group, after which he moved to the Warehouse division to serve as the East Coast Quality Manger before ultimately joining the International division, where he hopes to use his Quality knowledge base to prove an asset to OCM.

 

 

Tags:  Blockchain  Supply Chain  supply chain systems  technology 

Share |
PermalinkComments (0)
 

California Proposition 65 Compliance for Retailers and Their Supply Chain Partners: Are You Up-to-Date on the Revised Warning Requirements?

Posted By RCVF Admin, Saturday, November 24, 2018

RVCF Link Image

California Proposition 65 Compliance for Retailers and Their Supply Chain Partners: Are You Up-to-Date on the Revised Warning Requirements?

by Melissa Proctor (Miller Proctor Law PLLC) 

Proposition 65 was adopted by the state of California as part of the Safe Drinking Water and Toxic Enforcement Act of 1986.  The law prohibits certain chemical discharges into California drinking water, requires warnings about chemicals in certain workplace settings, and requires companies to provide clear and reasonable warnings on certain products. Although Proposition 65 is very well known in California, many companies located outside of California are still not aware of the state law’s broad reach and potential for liability. The law prohibits companies (regardless of whether they are located in California or elsewhere) from knowingly or intentionally selling a product in California that could expose consumers there to a chemical that is identified on the Proposition 65 List of Chemicals—those that are known to cause cancer or reproductive harm.  This mandate applies to all companies in the supply chain of the products, from raw material suppliers, manufacturers, distributors and retailers.  There are a few exemptions from this broad prohibition, however. For example, the Proposition prohibition on products does not extend to, among other, government agencies and utilities, companies that have ten (10) employees or less, and entities that use chemicals but their exposures do not pose any significant risks of cancer or reproductive harm.

Proposition 65’s List of Chemicals currently contains over 900  naturally occurring and synthetic chemicals, and new chemicals are added yearly. If a product that is sold in California contains a listed chemical, a consumer product warning may be required. However, some chemicals have an established daily exposure level (i.e., safe harbor level). Safe harbor levels have been established for roughly 300 products. Consumer product warnings are not required if a product contains a listed chemical with an exposure level below the specified safe harbor level. The Proposition 65 list of chemicals can be found on the website of CA's Office of Environmental Health Hazard Assessment or OEHHA.[1]

In August 2016, the California legislature revised the Proposition 65 mandates –those new requirements took effect on August 30, 2018.  As part of the revision, the legislature clarified the roles and responsibilities of product supply chain partners and held that it is the manufacturer, distributor, importer and supplier that is required to take steps to comply with the law. The primary responsibility for providing Proposition 65 product warnings falls on the manufacturers, producers, packagers, importers, suppliers and/or distributors. Proposition 65 generally provides manufacturers (and others in the supply chain) with 2 options for compliance with the warning requirements. They can either affix an appropriate warning to the product, or they can provide written notice to the retailer regarding the required warning for the product and provide the actual warning materials that will be used.

The retailer must issue an acknowledgment that it received the notice and materials, and is thereafter responsible for placement and maintenance of the warning materials they have received.  If the retailer fails to post the warning or obscures it, only then will liability fall on the retailer for failing to warn consumers. However, retailers will retain primary responsibility for providing a warning when they sell a product under its own brand or trademark owned or licensed by the retailer or an affiliated entity, or if the retailer adds the listed chemical to the product.

New warning language requirements also took effect on August 30, 2018. Previously, the product warnings were informative only and many companies adopted a compliance strategy whereby they labeled and marked everything with a Proposition 65 warning—even when they did not know whether the products actually contained any listed chemicals or not.  These warnings were found to no longer be effective, and the California legislature decided to make the warnings more useful. The new warning requirement applies to products that were made or manufactured on or after August 31, 2018.  So, if there are products currently sitting on store shelves that contain the old Proposition 65 warning language, they can continue to be sold as long as the original warning was compliant with the previous rules.

The new warning format for products that contain listed chemicals that cause cancer requires the placement of a black and yellow (or black and white) triangle containing an exclamation point. The triangle symbol can be downloaded directly from the OEHHA’s website. The symbol must be followed by the following legend:

WARNING: This product can expose you to chemicals including lead which is known to the State of California to cause cancer. For more information, go to www.P65Warnings.ca.gov.


As shown above, the warning language must name at least one chemical. If the product contains multiple cancer-causing listed chemicals, there is no guidance provided under the new rules as to which chemical you should disclose in the warning – there is no requirement that you list the most prevalent of the listed chemical when selecting the one to identify.

Where a product contains listed chemicals that cause reproductive harm, the new warning format must also contain the triangle symbol noted above followed by:


WARNING: This product can expose you to chemicals including Bisphenol A (BPA) which is known to the State of California to cause birth defects or other reproductive harm. For more information, go to www.P65Warnings.ca.gov.

Again, the warning language must name at least one chemical.


If a product contains listed chemicals that both cause cancer and are reproductive toxins, then at least one of those chemicals must be listed for both reasons of concern.  For example, the triangle symbol noted above must be followed by:

WARNNG: This product can expose you to chemicals including Lead which known to the State of California to cause cancer, and Bisphenol A (BPA) which is known to the State of California to cause birth defects or other reproductive harm. For more information, go to www.P65Warnings.ca.gov.


An alternative short form warning option is available for smaller products, as follows—

 

WARNING: Cancer - www.P65Warnings.ca.gov.

WARNING: Reproductive Harm - www.P65Warnings.ca.gov.

WARNING: Cancer and Reproductive Harm - www.P65Warnings.ca.gov.


If you use the alternative short form, the font size must be at least 6pt but cannot be smaller than other customer information provided on the product, such as other warnings, directions and ingredient list.

In addition, if the product’s label provides information in more than one language, then the Proposition 65 warning is must also be provided in those languages as well.  

Companies can also choose to add more information to the warning language (e.g., how to lessen or avoid exposure, etc.), but that additional language should not dilute or lessen the effect of the warning.

For internet purchases, warnings must be provided by including the warning statement itself or a clearly marked hyperlink using the word “WARNING” on the website product display page. In the alternative, the warning can be prominently displayed to the purchaser prior to the completion of the purchase.  In addition to ensuring that the warnings are posted on their website, the retailers must also ensure that the customers receive the warning through the traditional methods related to the sale of consumer products. Further, for catalogues, the warnings should be placed near the description of the item.

In terms of Proposition 65 compliance programs, there is no prescribed method for designing and implementing compliance processes for the Proposition 65 requirements. For example, companies can test for all listed chemicals that may be contained in their products, which may be impractical as it would be very costly and time consuming given the number of chemicals currently on the list and the fact that other chemicals are added every year. As a result, many companies test their products selectively, looking for the common listed chemicals are used in their types of products (e.g., lead, cadmium, phthalates, etc. in textile apparel and footwear, BPA in plastic bottles and accessories, etc.). Other companies choose to look closely at Proposition 65 settlement cases involving products that are similar to their won, formulating their products based on those agreed-upon chemical limits or issuing warnings based on testing performed to those agreed-upon settlement levels.

For retailers, compliance strategies may include:

  • Requiring suppliers to indemnify and hold them harmless for Proposition 65 violations.
  •  Confirming that their existing insurance existing policies cover them for Proposition 65 lawsuits.
  • Assigning Proposition 65 responsibilities to company stakeholders.
  • Implementing an internal Restricted Substances List or adopting a third-party created list.
  • Requiring suppliers to provide documentation evidencing testing and compliance.
  • Conducting regular risk assessments and internal audits, which can be performed by third parties.
  • Verifying and tracking supplier compliance.
  • Integrating supplier compliance into sourcing decisions.
  • Incorporating compliance and certification requirements into new supplier vetting process.
  • Establishing processes for working with supply chain partners on providing warnings.
  • Establishing a process for issuing acknowledgments to suppliers.
  • Providing regular training for company personnel.
  • Rolling out record retention processes specific to Proposition 65 supporting documentation.
  • Documenting all Proposition 65 policies and procedures in writing.


For suppliers, manufacturers and distributors, compliance practices may include:

  • If feasible, negotiating language in their terms of sale or supplier agreements that requires retailers to notify the supplier of the receipt of any non-marked products that trigger Proposition 65 warning requirements—in this case, the supplier may accept the return of the products and replace them with marked products or provide labels to the retailer to apply to them directly.
  •  Requesting retailers to provide certifications confirming that they have received the warning notices and marking materials, and have marked or displayed those warnings.
  • If feasible, negotiating with the retailer the assignment of separate SKU’s for products that trigger Proposition 65 warning requirements and having them segregate orders placed with the suppliers so that only products marked with the required warnings are delivered into California.
  • If feasible, having the retailer agree to indemnify the supplier in the case of Proposition 65 claims.
  • Implementing an internal Restricted Substances List or adopting a third-party created list.
  • Assigning a dedicated person to assume responsibility for managing chemicals used in products, reviewing them prior to purchase, and managing them in the workplace.
  •  Rolling out testing protocols and providing compliance documentation relating to downstream supply chain partners upon request.
  • Performing regular risk assessments and audits.
  • Adopting process for providing warnings and notifying California retailers.
  • Establishing formal record retention processes.
  • Providing regular training for personnel, suppliers and subcontractors.
  • Documenting all policies and procedures in writing.


Above all, in order to stay updated on developments in the Proposition 65 arena, retailers and their supply chain partners should read and review proposed rules, as well as proposed amendments to the legislation and regulations. They should also work to identify listed chemicals commonly used in their types of products. They can review 60-day notices that are filed with the California’s Attorney General and settlements that affect products that are similar to their own to identify what kinds of products are being targeted and what chemical limits have been agreed upon by the parties.

Melissa Proctor is the founder of Miller Proctor Law PLLC, an international trade law firm located in Scottsdale, Arizona. For more than twenty years, she has advised companies on the full of array of international trade issues, imports, exports, embargoes and economic sanctions, anti-corruption compliance, and other agency requirements that impact the cross-border movement of goods, information and services. She may be reached at 480-447-8986 or melissa@millerproctorlaw.com.



[1] To access the list, see: https://oehha.ca.gov/proposition-65/proposition-65-list.

 

Tags:  Proposition 65  retailers  supply chain  Warning Requirements  warnings 

Share |
Permalink
 

Supply Chain: Cost Center or Sales Enabler?

Posted By RCVF Admin, Wednesday, October 24, 2018

 

RVCF Link Image

Supply Chain: Cost Center or Sales Enabler?
By Richard Wilhjelm, VP, Sales & Marketing, Traverse Systems
 

As I work with many senior supply chain executives, a common question I hear is: how can we be viewed more as sales enabler and less as a cost center?

The question isn’t surprising given the current economic environment. While as a whole the economy is performing extraordinarily well, there are underlying challenges the industry faces including intense competition, rising inflation, labor shortages, and soaring transportation costs due to capacity constraints and fuel increases. Add to that pile the uncertainty surrounding tariffs and it’s easy to see why senior financial executives remain cautious about future profit forecasts.

In this ever-dynamic industry, what’s the role that supply chain plays and how do we shift the conversation from cost center to sales enabler?

The Past

I think it’s safe to say that in the past supply chain’s role was to get the product from point A to point B as quickly and – more importantly – as economically as possible. Most retail organizations – particularly merchant organizations – believed that “if you buy it, they will come.” With money being cheap, the path to profitability was simply a factor of opening as many stores as possible, stocking them with as much inventory as you could, and letting top line growth lead the way.

Meanwhile, wholesale distribution organizations were rallying to a similar cry: “if you stock it, they will come.” The idea was that you beat the competition by stocking more lines than they did, as all customers seemed to care about was price and service levels.

For both retailers and wholesale distributors, supply chain’s marching orders were similar: get it there quick and get in there cheap.   You were measured by cost as a percent of sales. Supply chains were architected around how senior executives were incentivized, resulting in long, slow, and typically unresponsive supply chains.

Now

So how did we get to where we are now? We’re seeing record store closings while digitally native vertical brands are popping up all over the place and experiencing unprecedented growth. Does that mean retail as we know it is dying? Far from it. As astutely conveyed in a recent webinar conducted by IHL Group, retail has actually grown at a rate of 4.5% in 2017 and through July of 2018, has increased 5.5%. This is a far from the “retail apocalypse,” as noted by the IHL Group in “Retail’s Radical Transformation/Real Opportunities“.

In the wholesale distribution space, we are witnessing organizations configuring their operations to offer more retail-like fulfillment capabilities to their customers. Apparel brands are bypassing retailers altogether by opening their own stores and by selling directly to consumers on exchanges like Amazon and Walmart. Retail isn’t going away; in my opinion, it’s fragmenting as the traditional lines of retail are being blurred by other providers.

So, what has changed and how did we get here? While there are a multitude of explanations from technology to competition to the well-publicized Amazon effect, at the end of the day I think it comes down to the fact that consumers’ expectations and consumer behavior has changed.

The Future

Today’s fast fashion is a perfect example of changing consumer behavior and demand. The typical fast fashion retailer’s products are relatively inexpensive and they change their assortment frequently.

With lower price points, the consumer, typically a younger demographic, can change their style frequently and not break the bank. The impact to supply chain, however, is dramatic. In the fast fashion example, the typical lead time from idea to shelf went from 6+ months down to 3 weeks as noted by IHL Group.

Fast fashion isn’t alone as all supply chains are seeing pressure to compress lead times. The days of the long, slow, low cost supply chains are no longer sustainable for most industries. At one end of the supply chain, you have consumers demanding products cheaper and faster than ever before across multiple platforms. At the other end, lower price points combined with rising transportation costs and the end of cheap money are leading to the potential erosion of profits. I believe therein lies the opportunity for supply chain.

The Opportunity

With the days of the long, slow, cheap supply chains coming to an end, supply chain professionals are suddenly thrust into the spotlight to perform what seems – on appearance alone – to be impossible. They must not only improve service levels while reducing costs but also contribute to top line revenue growth through in-store and in-stock availability. Gone are the days when procurement and merchant organizations alone competed for market share. Nowadays, supply chain organizations are also sales enablers in a fierce battle for consumers’ hearts and wallets.

They are fighting the fight by ensuring stock is on-time and complete. And while there are countless tools to improve visibility, execution and inventory integrity, at the end of the day it will be incumbent upon the supply chain professional to traverse across these various systems to produce the winning combination of speed, low cost and higher margins. And now I insert the requisite cliché, “within every challenge lies opportunity.”

Side Note

As I wrote this article, Gartner just announced its top 25 Supply Chain Graduate programs. It doesn’t seem that long ago there weren’t 25 supply chain undergraduate programs, period, much less 25 graduate programs. I believe human capital, along with technology will be a big part of the equation moving forward.

 

Tags:  Supply Chain 

Share |
Permalink
 

A.I. Doesn't Always Mean the End of the World

Posted By RCVF Admin, Sunday, October 21, 2018

RVCF Link Image

A.I. Doesn't Always Mean the End of the World
By Kirk White, Yusen Logistics

Continuing our Supply Chain Futurist series but segueing off our Blockchain exploration to visit with another component of the coming revolution:  A.I.  Sometimes referred to as “artificial intelligence” and sometimes called “augmented intelligence”, A.I. is most commonly referred to as…OH NO SKYNET IS SELF AWARE AND THE TERMINATORS ARE COMING AND THEY WON’T STOP UNTIL WE ARE ALL IN THE MATRIX…simmer down.  It’s easy to get lost in the pure dystopian speculative fiction of it and it certainly doesn’t help that every single sci-fi book or movie that concerns A.I. (Haley Joel Osmet notwithstanding) usually ends up with some rag tag band of freedom fighters using homemade rockets to go…fight…win, and it is certainly of concern that our best Jeopardy and Chess minds have already fallen to our PC Overlords…but before we all hide in the desert, let’s remember that, presently, computers aren’t even able to recognize squiggly letters or discern which of these ten pictures contains an image of a car; so let’s not call John Connor just yet, okay?;

A.I., in its simplest form, is computer learning—An application with the ability to analyze anomalies and errors in performance and adjust for the next time around.  Imagine a young boy. He is learning to speak but has trouble with a few words.  He wants the tennis ball can interactive portal to the ether named after an ancient Greek library to play his favorite song, “raining tacos” (do NOT look this up…you will never get it out of your head). So he goes to the tennis ball can and says, “playsrainntacos” and the tennis ball can says “sorry I don’t understand” and he says again “playsrainntacos” and again the can says “sorry, I don’t understand” and so the boy’s father steps in and says “Play it’s raining tacos” and the can complies.  “Raining Tacos” fills the air.  And this cycle goes on a few times, because “raining tacos” is quite catchy.  And then suddenly, the boy says “playsrainningtacos” and the can says “Playing Raining Tacos” and the airways once again are alive with shells, meat, lettuce and cheese cheese cheese.  This is A.I.  The program “learned” by making an error.  Every time the request was misheard, and the adult voice provided the clearer correction, the application inside the tennis ball can took that information and made a new connection. “playsrainnintacos” = “play it’s raining tacos” and, just like a human brain (albeit way way way less complex) a new path was formed. 

Learning. 

Not so much.

Adapting based on anomaly is more like it.

But then again, isn’t that what learning IS?

There are three stages of A.I. and we are in the very early chapter in the very first book.  It breaks down like this:

Stage ONE:  ANI—Artificial NARROW intelligence.  We can train a computer to be an expert at ONE thing; better, faster, stronger at ONE thing.  Chess computers. Poker computers.  That random time some program wrote that Harry Potter Book.  Analyzing a bunch of data and identifying patterns and adjusting their programs to accommodate without the need of external assistance. This is what’s happening in our tennis ball can example above.  So yes…we have this NOW. This is the level of A.I. currently available in our world and it’s taken the entire history of computers to get to this point.

And we are working (but haven’t gotten there yet) towards:

Stage TWO: AGI—Artificial GENERAL Intelligence.  This is where it gets a weeeeee scary. This is human level intelligence.  And before you say, “well I’d say my phone is already smarter than Uncle Jerry”, it’s not. Because we’re not talking about math or memory skills here. We’re talking processing of data in CONTEXT.   If you think a moment about the last time you interacted with a friend or coworker and just “knew” he/she was having a bad day. Or maybe the last time your spouse or significant other was mad at you; how did you know?  Perhaps you picked up on a facial expression, a furrowed brow, a grimace, certain downward glance that elicited a “what’s wrong”.  You analyzed and processed based on physical indicators that a computer couldn’t even begin to process.  Computer would say “that’s a face”.Again, computers can’t even click a box that says “prove you’re not a robot”.  But it’s coming…that is the next level of A.I.  A computer with the ability to process based on random data sources and “intuit” based on non-logical indicators.  And then we will have true Artificial Intelligence. You can even make a new friend…until…

Stage THREE:  ASI—Artificial SUPER Intelligence. This is Skynet. This is when computers will surpass human processing and enter into the realm of…actually, that’s the scary part…no one really knows what that will be like.  Or what the programs will be like.

And here’s the final boil to your noodle. Many believe that, even though it’s taken DECADES to get from the first computer programs to ANI,  once AGI is achieved, ASI will happen like 20 minutes later. Because…computer stuff.

And then maybe the Matrix.

But for NOW… the world is beginning to see some serious plus-sides to ANI, especially in the world of supply chain. The immediate benefits are in the realm of analysis. The sheer speed at which data can be collected, examined and broken into patterns is astonishing.  Imagine a report that can predict potential disruptions in your product flow AS you’re uploading the P.O.  Oh, this shipment may be delayed because there is a 98% of a tropical storm happening the month it is supposed to ship based on 100 years of weather reports and there may be issues at the port because historically when these certain conditions happen, a month later there are labor disputes and oh,  the history of every order from this particular vendor tells us that October is their highest month of employee turnover—so may we suggest changing factories or marking this as a hot shipment?  And this is instant?  And it’s more than likely on the horizon.

Other benefits include “teaching” the supply chain. An SOP could be uploaded into the system and used to build automatic logic-based variances to conditions (+/- 5% quantity is okay to ship as long as it’s not #BR549) and communicated throughout the order process to pre-screen exceptions. 

The list is endless and many companies are already looking into this and it’s predicted that within one to two years, as many as half of all companies will be using some form of A.I. in their processes.

Next time, we’ll continue this journey into the future.  Any topics you’d like to see covered, please leave in the comments.

Until then, follow the white rabbit, Neo…

Author’s bio:

Kirk White is a corporate creative and a supply chain futurist. He has worked in every division of Yusen Logistics. After a brief stint in Transportation, he transferred to Corporate, where he coordinated Yusen’s Employee Empowered Kaizen system and served as a Specialist for the Business Process Re-engineering group, after which he moved to the Warehouse division to serve as the East Coast Quality Manger before ultimately joining the International division, where he hopes to use his Quality knowledge base to prove an asset to OCM.

 

Tags:  AI  Artificial Intelligence  Supply Chain  Supply Chain Systems 

Share |
Permalink
 

Yusen, We Have a Problem!: The Future Will Be Digitized

Posted By Administration, Thursday, June 14, 2018
Updated: Thursday, June 14, 2018



by Kirk White, Yusen Logistics (Americas) Inc.


"The Times They Are a-Changin'" – Bob Dylan

"Unfortunately, no one can be told what the Matrix is. You have to see it for yourself." – Morpheus

"The Future's So Bright, I Gotta Wear Shades" – Timbuk 3

Get ready.

This is one of THOSE moments. Believe it. Take note because you will one day (probably sooner than any of us can imagine) look back and realize that 2018 was the year where the supply chain went all digital on us. At this point, many may be thinking, "Wait! Isn't the supply chain digitized already? I get EDI from my carriers now."

Folks, you ain't seen nothing yet!

Just wait.

And while you're waiting, think about the last time you ordered a pizza. Did you call or go online? And if you went online, did you use their tracking service?

Shelly is making your pizza now.

Stan is boxing it up.

Get ready because Diana is bringing your pizza to you right now.

Hey, did you like your pizza? Want us to save it so you can order again.?

Perhaps you've got a smart phone app right now that allows you to order and pay for your favorite big chain coffee drink and then just run in and pick it up from the counter. Perhaps you have a device at your home that allows you to ask a virtual presence named after an ancient library (ask her where she got her name – go on – we'll wait) to play a favorite song, give you a news briefing, or even reorder dishwashing detergent that magically arrives within a day or two.

Have you ever actually contemplated how positively AMAZING that is? The original iPhone debuted in 2007 and didn't even record video. And Steven Soderbergh just released a movie filmed on one. That's a decade for you.

Moore's law dictates that computers will double in power every two years. So, let's wonder… If today, you can talk to a tennis ball can on your bureau and order flowers for your daughter's birthday or toothpaste that will be delivered tomorrow, what happens when the tennis ball can gains the ability to monitor your toothpaste levels based on your brushing habits and order it automatically so it's there the day you brush the last drop? What happens when that same tennis ball can gains the ability to track your daughter's purchasing, browsing, and social media habits, and then tells you, "She doesn't really like flowers, but would love tickets to see Yanni play at Madison Square Garden – should I order for you?" Are you excited? Are you slightly terrified? Are you maybe wondering if we are literally living in the prequel to The Terminator?

Pandora's box is open for business – and business is about to be booming.

There are two concepts at play right now that are going to dramatically alter the way our supply chain works – Blockchain and A.I. (Artificial or Augmented Intelligence).

A.I. is a scary term for a relatively innocuous process: programs using the current data that it receives to modify its future output. It's computers learning, so to speak, and maybe, yes, that is a little scary, but only because it just happens to be the major plot point of at least three post-apocalyptic sci-fi movies. However, if we move beyond Isaac Asimov's "Three Laws of Robotics" and Cyberdyne Systems and think about the actual process for a second, the benefit of A.I. to our supply chain is evident. A program might learn that a certain DC always short counts its inventory because they don't want to deal with partial boxes; or perhaps a factory always submits invoices with the product in "eaches" instead of dozens, even though the order goes out in dozens; or a certain team always confuses item # BR549 with item # BR594, causing mis-ships and unhappy DC's. The program can then systematically create fail safes and alerts, or even autocorrects in the case of the dozens/eaches issues so that these problems are caught and addressed before anything physically moves.

Blockchain deserves and will receive a series of articles on its own, but in a nutshell, it refers to data updated by multiple users in real time and stored over multiple server points (or "nodes") instead of a single repository. This process makes the information rather difficult to hack, but also decimates the bottleneck of a single information delivery source. Imagine getting real time updates on the location of your order to the SKU level based on GPS pings, and not having to wait for an EDI transfer from your carrier. AND if a hurricane should rear its ugly head at 3:00 am, by combining Blockchain with A.I., all of your ETAs could be updated from port to DC to final store instantly instead of waiting for a carrier rep to get in the office. And let's just see how far down the rabbit hole we can get by saying that if that one in-demand SKU was going to be advertised on your site the next morning but is now not going to be there for Memorial Day weekend, the ad itself could be automatically updated to reflect this without a human having to worry about it, and thus, avoiding a mass of angry shoppers having to get rainchecks. Plus, while we're here, perhaps the A.I. could "remember" that another store a county over has extras of that SKU and could set up a transfer and order a driverless truck to go pick it up – okay, now we're getting a little ahead of ourselves. Or are we?

And yes, the practical technology of A.I. is not quite there yet and Blockchain is so tied up in the Ponzi scheme that is Bitcoin that many are not ready for the associated risk, but nascent function is not always final use. Remember that Facebook was created for college students to share pictures and campus gossip and it's now one of the biggest marketing platforms in the known universe. Things change.

Things are changing.

Get ready.


Kirk White has worked in every division of Yusen Logistics. After a brief stint in Transportation, he transferred to Corporate, where he coordinated Yusen's Employee Empowered Kaizen system and served as a Specialist for the Business Process Re-engineering group, after which he moved to the Warehouse division to serve as the East Coast Quality Manger before ultimately joining the International division, where he hopes to use his Quality knowledge base to prove an asset to OCM.

CLICK HERE to return to the JUNE 2018 RVCF LINK

Tags:  Artificial Intelligence  Blockchain  Digital  Supply Chain 

Share |
PermalinkComments (0)
 

Vendor Compliance from a 3PL Perspective: Bridging the Gap: The Role of 3PL's in the Journey to "Shopping Redefined"

Posted By Administration, Thursday, December 18, 2014
Updated: Wednesday, December 17, 2014

by Scott Weiss, Port Logistics Group


Everyone recognizes that the retail industry is in the midst of a phenomenal transition driven by always-on digital consumers who are molding the shopping experience to fit their lifestyles. They expect speed, convenience, multiple product choices and ease of use. They want to shop whenever, wherever, and however they choose and demand fast delivery and no hassle returns. And while they may not recognize it yet, they want all of this delivered in a seamless, consistent brand experience.

On the demand side this shift has happened very quickly, mirroring the explosion in digital and mobile devices and it continues to accelerate. According to the U.S. Department of Commerce, online sales grew more than three times as quickly as total retail sales in the second quarter of 2014.1 While the long-term implications of that growth curve can hardly be overestimated, it's important to remember that these sales still represent only 6 percent of all retail business. As retailers invest millions on electronic storefronts and order management technology to capture digital customers, they also must continue to stock distribution centers and replenish their brick-and-mortar network.

The problem is that the traditional store-centered supply chain, which works so well for larger orders and case picking, is not well equipped to handle the very different and more complex picking, packing, and transportation requirements of B2C. This was a manageable problem when online sales were still a novelty. Volumes were small enough for most retailers to operate two separate supply chains with separate inventories – one for replenishment of traditional warehouses and stores and one to fulfill digital orders. Now, with B2C rapidly gaining momentum, retailers are faced with the monumental task of revamping their physical supply chains and rethinking their fulfillment strategies around omni-channel sales.

This issue is reflected in the growing importance that retailers give to these issues in the 2014 Retail Benchmarking Report, Omni-Challenge 2014: Double Trouble, recently released by Retail Systems Research. "Retailers are growing concerned about the inefficiencies created by attaching a digital selling environment to an operational model that was built with one physical selling environment– the store – in mind," the report says.2

The top fulfillment concern expressed by surveyed retailers is how to enable cross-channel transactions, such as allowing a customer to buy an item online and return it to a store. Along with a perceived general need to improve operational execution, the other issue most cited is the inability to allocate inventory in one channel to fulfill an order from another channel.

These concerns emphasize the need for true visibility across a retailer's entire inventory as well as cross-channel integration of order and fulfillment systems – changes that will help retailers become as channel agnostic as their consumers. As the RSR Benchmarking study concludes: For consumers, it's just shopping, redefined.

Getting to that point will be a journey requiring that requires significant investments in technology, integration, and process improvement -- and it will take time. While laying the groundwork for this eventual B2B/B2C convergence, retailers need interim strategies that will maximize sales and optimize service for all their customers.

Retail 3PL's are uniquely positioned to help retail customers' bridge this gap. Here is why:

  • Retail 3PL's typically have robust Warehouse Management System (WMS) solutions that provide a single view of inventory and enable order fulfillment from a single system regardless of where the inventory is physically located.
  • They have significant experience connecting to multiple customer order systems, a critical skill as new e-commerce order platforms must coexist with traditional ERP and legacy order systems.
  • They use proven techniques for optimizing the accuracy and speed of "each" picking within existing national DC networks.
  • Retail 3PL's already handle both B2B and B2C operations and have the flexibility to manage high volume case picking and transloading alongside B2C fulfillment.
  • Retail 3PL's have a flexible, cross-trained workforce that reacts quickly to new surges and peaks created by channel-specific sales strategies and their extensive "value-add" capabilities easily transfer from retail services (kitting, packaging, displays) to direct-to-consumer services (gift wrapping, relabeling, special packaging).
  • They understand returns processing and can scale up to meet the higher return rates of e-commerce channels.

In next month's article, we will review specific case studies and real-life examples of how 3PL's are helping retailer customers and retailers bridge the omni-channel gap.

[1] http://www.census.gov/retail/index.html#ecommerce
[2] https://www.rsrresearch.com/2014/08/12/omni-channel-retail-2014-double-trouble/


As Vice President, Business Development, Scott Weiss works closely with apparel, footwear, and housewares manufacturers of all sizes to ensure compliance with retailer routing guide requirements.  Port Logistics Group is a market leader in gateway port logistics services, operating over 5 million square feet of warehouse space.  Services include port drayage, import deconsolidation, warehousing and distribution, retail compliance, local transportation, and store delivery in key port locations of Los Angeles/Long Beach, New York/New Jersey, Seattle, and Savannah.  Scott may be reached at sweiss@portlogisticsgroup.com or (562) 977-7620.

CLICK HERE to return to the DECEMBER 2014 RVCF LINK

Tags:  e-commerce  Omni-Channel  Supply Chain 

Share |
PermalinkComments (0)
 

No Room to Pass along Higher Costs – Brands are Forced to Find Efficiencies within the Supply Chain

Posted By Administration, Thursday, October 9, 2014
Updated: Tuesday, October 7, 2014

by Bryan Nella, GT Nexus


A series of issues are shaping and impacting the apparel industry. Labor wages, trade relations, currency fluctuations, and shifting demographics, to name a few. While cost pressures such as rising labor costs have been neutralized by various factors including declining cotton and material prices, it's a matter of time before the pressures become too great and finished goods prices are forced to rise. As Bill McRaith, CSCO at PVH pointed out during a recent apparel sourcing panel discussion, in the long term, goods pricing will eventually go up. That's the reality. Price rises will happen. I just have to do a better job delivering goods than others.

At the moment, retailers and consumers won't pay more. Bryan Riviere, VP Global Supply Chain Product Development and Sourcing at Levi's pointed out during the same sourcing panel that in the supply chain there is opportunity to attack and deliver better margins instead of passing along costs. This is easier said than done. Consider the mounting pressures facing today's supply chains:

  • Uncertainty: Places like Vietnam, Thailand, and Cambodia were viewed as safe sourcing options in 2013. Recent events occurred and these locales have raised concerns. Political issues and strikes have led to instability. Brands must have flexibility in their supply chains so they don't get caught off-guard.
  • Slow growth in global trade: The WTO predicts trade will grow by 3.1 percent this year, a significant drop from the 4.7 percent it forecast in April. Forecasts for 2015 were recently cut from 5.3 percent to 4.0 percent.
  • New competition today: Not just from the U.S. or Europe. It's from Asia. Names like Alibaba are popping up and changing the landscape. On top of that, there's a significant increase in trade within Asia – goods being produced and sold in the region. This puts pressure on capacity, materials and labor.
  • Supplier issues: Short lead times, high frequency style changes, diversity in logistics, fragmented and fragile vendor bases (financially).
  • Retailer issues: Markdowns, changing buying patterns, omni-channel, fast fashion, real estate, declining foot traffic.
  • Consumers in charge: The consumer is dictating price, where they buy, where and how goods are shipped. Brands and retailers have to find a way to make and deliver the product while remaining profitable.

How can brands and retailers better serve consumers while increasing profitability? How can they position themselves to handle inevitable rises in production costs?

A Closer Look into the Supply Chain
Brands and retailers have to look at how they're producing and delivering goods and find new ways to be more efficient to remove costs. Passing along cost increases to consumers or suppliers is not an option.

Here are five ways for brands and retailers to attack inefficiency and improve profitability in the supply chain:

  • Allow your suppliers to take advantage of your credit strength: As the giant in your supply chain you're financially stronger than most trading partners involved in the transaction. Help them out through programs such as early payment discounts and raw materials consolidation.
  • Cut out layers in your supply chain by shipping direct to store: Crossdocking and other programs can bypass the DC to eliminate costs and deliver goods in less time.
  • Stay close to the source: Perform customization or other services overseas. Find ways to reduce domestic inventory.
  • Diversify your sourcing portfolio: Spread out your risk and exposure to rising costs overseas. Work with trading partners in different regions. Consider sourcing closer to home for faster turnaround.
  • Conduct a paper assessment and change how you transact: Identify where paper exists in your workflows and eliminate it. Find a more efficient way to communicate and collaborate with your network of trading partners.

The playing field has changed in recent years. Consumers are hard to read and extremely demanding. An attempt to raise prices is extremely risky. For many, the likely road to growth and profitability follows an internal roadmap; one that examines supply chain operations, identifies inefficiencies and deploys new models for transacting, collaborating and orchestrating the production lifecycle.


Bryan Nella is Director of Corporate Communications at GT Nexus, the world's largest cloud-based supply chain network. He has more than 12 years of experience distilling complex solutions into simplified concepts within the enterprise software and extra-enterprise software space. Prior to joining GT Nexus, Bryan held numerous positions in the technology practice at global public relations agency Burson-Marsteller, where he delivered media relations and communications services to clients such as SAP. In previous roles he has worked with clients such as IBM, MasterCard and U.S. Trust. Bryan holds a BA in Mass Communications from Iona College and a MS in Management Communications from Manhattanville College.

CLICK HERE to return to the OCTOBER 2014 RVCF LINK

Tags:  Risk Management  Supply Chain 

Share |
PermalinkComments (0)
 

Yusen, We Have a Problem!: An Industry That Is Upside Down? Supply Chain Risks Abound

Posted By Administration, Thursday, September 18, 2014
Updated: Tuesday, September 16, 2014

by Ron Marotta, Yusen Logistics (Americas) Inc.


Ever feel that your world is spinning out of control and the day-to-day work life of managing your supply chain is forever changing. It's not a perception but reality. Here are just some of the issues being faced in the supply chain today:

Changes in Sourcing

  • Proximity to demand – more than two-thirds of global manufacturing take place in industries closer to demand
  • Demand shifts – from China and Asia to Mexico and the U.S.
  • Proximity to innovation
  • Next shoring – it isn't about the shift of manufacturing from one place to another but adapting to and preparing for the changing nature of manufacturing everywhere
  • Fluctuating conditions – the ability to adapt design, production and supply chains rapidly
  • Nimble suppliers – low cost supplier vs. new supplier that has high tech capabilities and can work on demand
  • Lacking skill sets – untrained or undertrained individuals; educational institutions aren't producing workers with technical skills
  • Tailored product – no longer is the question, "Can you produce in one market or another?" but rather, "Can you tailor product to local needs and various global markets?"

Supply Chain Risks

  • Weather
    • Rising sea levels – potential impact to ports and transportation infrastructure
    • Extreme weather events – hurricanes, tornadoes, typhoons, and cyclones have impacted origins and consumer areas
    • Unpredictable winters – What will the winter be like for those in the Snowbelt states?
    • Droughts and water shortages – effects in the Western states
  • Terrorism – the risks are higher now than ever with the threats from ISIS and the unrest in Eastern Europe, Africa, Middle East, and China along with issues in Japan, Taiwan, and Southeast Asia
  • Piracy – an ongoing threat
  • Cyber crimes – widespread attacks on American consumers from Russia, China and others
  • Cargo theft – a record high at all levels of the supply chain
  • Labor Issues – shortages of drivers projected, ILWU issues remain at the ports

Technology Challenges

  • Supply chain visibility
  • Exception management tools
  • KPI's
  • Collaboration – from factory to floor, trading partners in one portal
  • EDI capabilities
  • Speed to market
  • Inventory costs
  • POS demand on a global basis

What does it all mean to your day-to-day job? At any given time one or more of these issues can impact your supply chain. Your company is at risk and you need to have contingency plans in place for supply chain disruptions. The world is changing and getting more fragile as the rules of world behavior become more dynamic. Locations where you source and sell are fragile. It is imperative that you become proactive.

How can you achieve this? Take a step back and look for the "broken links" in your supply chain. Now is the time to address issues that are present and patch them up. Open up the lines of communication and ensure everyone is on the same page – from your factories to your trading partners.

As the summer winds down and the fall/winter season approaches, weather related issues and the threat of our enemies remains high as any disruption to the global supply chains will impact our economy. As a group we can help each other in times of uncertainty; we may compete but we need to collaborate when we can and help each other for our mutual survival.


Ronald M. Marotta is the Vice President of Yusen Logistics (Americas) Inc., International Division, an NYK Group Company, responsible for the Origin Cargo Management Group and is based in Secaucus, NJ. Ron also serves as the NYK Group's Commercial Council Office Leader and works with all NYK Group Companies in their efforts to collaborate and provide integrated global logistics services to our mutual customers. Ron began his career at NYK almost twenty years ago as the General Manager of OCS of America, Inc. and helped to transform one of the original consolidators in Asia, into a modern consolidator and cargo logistics company. Over the past 19 years, Yusen Logistics has grown their international business over 1,100% and extended their service reach throughout the globe. Ron can be contacted at (201) 553-3803.

CLICK HERE to return to the SEPTEMBER 2014 RVCF LINK

Tags:  Risk  Supply Chain 

Share |
PermalinkComments (0)
 
          Innovative Retail Technologies EDI Academy