Posted on Tue, Aug 10, 2010 @ 12:58 PM
Supply chains are designed for efficiency, predictable timing, low costs, and reliability. A certain comfort level develops after years of working with vendors; lanes of service are honed and things seem to work with only a few wrinkles. Then it rains. Rains like Hurricane Alex rained as it cut its path out of the Gulf and across Northern Mexico.
Hurricane Alex hit land June 30th as a category 2 Hurricane with winds of 105 mph and began pouring its heavy rain as it began to move across Northern Mexico. The flooding was extensive in the Eastern states of Tamaulipas, Nuevo Leon and into Coahuila. The subsequent flooding wreaked havoc on the railway and roads in many regions. This area of Mexico holds many of the Maquiladora industries and is the gateway to much of the industry in Mexico and from there into the United States.
Because of damage to rails and infrastructure caused by Alex, all of the railroads have embargoed rail crossing at Brownsville, TX; Laredo, TX and only and interchanges with the KCSM. (They had embargoed crossing to the FXE at Eagle Pass but partially lifted that restriction on July 8th.) The US railroads are sending crews and equipment to aid in the repairs but the damage is extensive. Cargo cars are backed-up and sidetracked far from the border and it will take several weeks to sort them out even after the crossings open again. Transportation and Logistics departments are scrambling to find ways to deliver their freight through alternate routes (some limited road access is still available). The railroads are working with customers to the extent they can, but when cars are blocked into yards with a hundreds of others, it can be hard to dig out a specific car for delivery.
After a disaster every company evaluates their emergency plans, and asks themselves if it is adequate. Hurricane Alex has proven to be no exception. Needless to say, these past weeks have been busy times for us logisticians. It serves as a reminder that despite all the best spreadsheets, flow-plans, and lean manufacturing practices, sometimes it rains, a cautious reminder that optimum planning should always remember that nature doesn’t pay attention to our flow-plans.
Written by Steve Klok, ADS Logistics.
Posted on Wed, Jun 23, 2010 @ 02:31 PM
A recent study has found that B2B Companies, which comprise many of ADS Logistics Customers, will likely face 5 key supply chain challenges as they seek to take advantage of the economic recovery, according to a new study by PRTM Management Consultants.
The study, Lessons Learned from the Global Recession, (you have to fill out a form to read the full report so we did it for you) found that most of the 350 manufacturing and service companies surveyed now believe there will be a significant upturn in demand from their customer base over the next few years.
However, the study also warns that many companies lack the supply chain infrastructure critical for meeting the emerging demands of managing an increasingly complex global market.
The 5 emerging demands identified by the study are:
1. Supply chain volatility and uncertainty have permanently increased
: Market transparency and greater price sensitivity have led to lower customer loyalty. Product commoditization reduces true differentiation in the B2B environments, and companies need to respect this reality.
2. Securing growth requires truly global customer and supplier networks
: Future market growth depends on international customers and customized products. Expanding supply chain globalization and complexity need to be managed effectively. Thus, finding supply chain management companies with integrated services such as ADS Logistics will play an increasingly important role.
3. Market dynamics demand specialized, cost-optimized supply chain configurations:
Customer requirements and competitors necessitate custom-tailored supply chains and product offerings.
4: Risk management involves the end-to-end supply chain:
Risk and opportunity management should span the entire supply chain—from demand planning to expansion of manufacturing capacity—and should include the supply chains of key partners.
5. Existing supply chain organization are not truly integrated and empowered
: The supply chain organization needs to be treated as a single integrated process. To be effective, significant improvements require support across all supply chain functions.
More than 85 percent of companies expect the complexity of their supply chains to grow significantly by 2012, yet many did not strengthen critical capabilities during the Recession. Additionally, more than two-thirds expect a higher number of product variations will be required to fulfill local customer expectations. Having an integrated and reliable supply chain process will be critical.
The study concludes with a 5-Point Agenda for Chief Operating Officers over the next 2 years to help them strengthen their supply chain process:
1. Improve customer access to supply chain data
2. Increase upstream and downstream supply chain flexibility
3. Focus on total supply chain cost engineering
4. Implement end-to-end supply chain risk management
5. Integrate and empower the supply chain organization
Ultimately, the main challenge for many companies is not to redefine their organization models, but to transition and manage the organizational change. When it comes to the metals industry, a company like ADS Logistics is ahead of the curve by providing integrated services such as their online inventory management system. The next 20 years will be particularly insightful as winners and losers emerge across all industries in this new economy.
Posted on Fri, Mar 12, 2010 @ 03:21 PM
We all have experienced it; whether at work or in our daily lives, when something goes wrong it almost always progressively worsens. It’s known as Murphy’s Law and was said to have evolved from the experiences of US Aerospace engineer Edward Murphy purportedly said, ‘if something can go wrong, it will.’
In the logistics field that ADS Logistics relies heavily on, all of us have experienced the travails and trials that accompany challenging situations. Whether it is a truck being late from the supplier, or a task that seems difficult to finish, no amount of planning can predict worst case scenarios. Even those involved in disaster planning acknowledge that worst case scenarios are difficult to anticipate, especially when they take on a life of their own.
Whether you are a shipper/receiver, customer satisfaction or superintendent, you may have heard the typical excuse from a carrier dispatch, ‘oh, we were only ten minutes late.’ In the field that Roll & Hold Warehousing operates in, time management is critical to our operations, our relationship with our clients and customers and supports our overall branding as a premier logistics provider. I have outlined a scenario below, whereby a ten-minute late delivery became a challenge that took on a life of its own.
1. Carrier arrived ten minutes late with critical material for the customer. Arrival scheduled for 13:30, should be at the customer by 14:20. (This was the anticipation in a ‘normal’ scenario)
2. Arrived 13:40. Driver was new, took ten minutes to back into the truck bay.
3. Driver had a ‘rack and tarp’ like this (for those who are not familiar with this type of trailer, it does take some more time than a trailer with a ‘slider to open). Add five extra minutes.
4. The first pallet is taken off at 14:00 hrs. Then things really got sticky as the propane tank ran out on the forklift. Another 2 min delay while another truck was brought in to take pallets off.
5. Material being received into the computer system until the program crashes (again) in the middle of receiving the bill. A few more minutes as we reboot and sign in again to complete receiving.
6. It’s now 14:10, and we are officially running late. Time to print tags, but the ribbon ran out on the printer and had to be changed. Add another five minutes.
7. Truck finally left the warehouse and arrived twenty-five minutes late at customer because driver was caught in early-afternoon traffic.
Here, a ten minute delay took on a life of its own and became a twenty-five minute delay on the customer end. Murphy’s Law kicked in and a range of scenarios, each inter-related, kept adding time to a situation thought to be ‘controllable.’
Now this may not happen everyday, but always bear in mind that when something does go wrong, or when a carrier is only a few minutes late, it almost never equates to the same time delay on the customer end.
Additionally, if you are caught in this situation, there is no point in trying to play catch up. Most accidents and safety/quality transgressions occur when we try to make up for time lost. There is no substitute for ensuring that that coil is secured, or the pin placement is correct and quality inspection is done correctly. As my boss Ryerson would say, 'better to be late and correct than early and wrong.'
And, if you think you had a rough week, see this.
Article submitted by Sean Bobb- Customer Satisfaction, Roll & Hold Warehousing