Sunday, May 14, 2006

Value? Technology, People, Process, and Profits!

What primary value do logistics operations by 3PL's bring to their clients? Technology! Building technology capabilities to outsmart traditional logistics competitors within supply chain planning and executing logistics operations will remain center-stage and THE focus in the future.

This subject is also a question that remains in the minds of 3PLs: How do we choose a cost-effective, yet effective technology that can serve our company and our customers better?
So yes, don't worry, I still maintain that people, and process, and then technology drive this equation (don't forget the STAR Process!)!

Working with asset and non-asset based 3PLs, 4PLs, Carriers (TL, LTL, Specialty Transportation as in bulk goods in Energy, Automotive etc.) and Railroads to improve Visibility and Supply chain integration, we find the need to deliver shipper-facing solutions on the rise substantially.

Taking a tailored solutions approach also requires that such applications are reliable and can sustain consistent value from operations.
Such strategies yield results and early ROI (Return-on-Investments) for 3PL's technology investments.

Next technology application that are critical are tactical tools like 24x7 (shipper portals) tracking, events management, online signed PODs / BOLs, Shipper communication for marked improvements in customer service- all these tools remain factors that help achieve successful business outcomes using technology implementation.

Some of the most preferred 3PL applications and their advantages include:

• Automate Rating and Bidding to maximize benefits for your shippers’ benefits -On time deliveries, service levels/price points, and reduced cost per lane. Internally, your operations is transformed to an automated platform that can electronically receive RFQs from Shippers, send out bids to Carriers and receive their Quotes, Select/commit to carrier partners for specific lanes upon receiving your authorization- using an integrated workflow for approvals.

• Optimizing for Profitability while enabling maximum capacity utilization of carrier/fleets and ensure shipper’s demand (delivery reliability) fill full truck-loads even in LTL situations helping reduce unused miles and cost-to-serve.

• Web Portals for Shipper/Carrier Management provides a simple yet universal view of events that happen within your supply chain network, and partners with a logistics planning-to-execution cycle for increased visibility to monitor and control movement of your shipper’s freight.

• Load Plan, Build and Routing Optimization based on a mathematical modeling technique that deliver assured profitability gains and improved asset utilization for lowering costs including personnel (workload management) in warehouses/D.C.s, pools etc.

• Automated Dispatch to Manage On-time Deliveries, Performance indicators while reducing Operational Congestion to absorb impact propagated due to uncertainties or delays. Automated dispatch and scheduling systems offers tremendous productivity, compliance and efficiency gains for 3PLs.

• Lower Transportation and Logistics Costs for your customers by increasing Supply chain Visibility, Inbound and outbound costs from improving Operation Effectiveness and maximizing Revenue margins from improved utilization of your capacity and fleet.

• Delivering Continuous Move opportunities that help implement Supply Chain Network Optimization and attain a Supply Chain Flawless Execution to evaluate private fleet decisions.
Some 3PL’s say, Show me the money.

3PLs can realize returns from technology in the following areas:

- Improvements in ratios of their logistics operations
- Real life dispatch productivity
- Capacity utilization
- Shipper demands serviced online
- Costs and Revenue management

Additionally, using an Optimized (mathematical model) using technology to improve drivers in key performance improvements can help unlock value (cost savings or increased revenues) and flexibility within 3PL operations while mitigating risks.


3PLs can identify processes and automate them along side optimizing them within their operations and firm up on possibilities to realize a step-level business transformation to lead the pack in delivering supply chain benefits to shippers and their businesses using technology.
Oh yeah...don't forget the people! Hire, train, develop, and foster your people by creating a culture, empower the believers, and SHARE THE SUCCESS!

Monday, May 08, 2006

House Approves SAFE Port Bill (SOS is SOL)

The Republican-led U.S. House of Representatives passed by a 421-2 vote wide-ranging maritime cargo and port security legislation, and in the process defeated a Democratic effort to include a requirement that all containers be inspected by radiation and density detectors at overseas ports.

The "Security and Accountability for Every Port (SAFE) Act" includes provisions to strengthen the Customs-Trade Partnership Against Terrorism and the Container Security Initiative, require more advance shipment information for screening, sets an implementation date for the Transportation Worker Identification Credential program and authorizes $400 million a year from Customs revenue for port security grants.

The effort led by Reps. Jerrold Nadler, D-N.Y. and Edward Markey, D-Mass., to attach the all-scan provision was rejected on a party-line vote. The bill would have required the Department of Homeland Security to set up a system within three years to only allow containers from large foreign ports into the country that had been scanned by non-intrusive systems prior to loading on a vessel. Smaller ports would have had five years to deploy technology to meet the requirement. The bill also required tamper-proof seals that can transmit an electronic alarm be included on every container. The bill was opposed by international container vessel operators, represented by the World Shipping Council, and the marine terminal industry, as well as by large retail importers, because they said the system for such an inspection regime had not been fully tested to ensure the inspection process doesn't cause severe backlogs and delays.

"It appears that House Republicans are more interested in protecting the special interests of shipping companies than protecting our ports from a terrorist attack," Markey said in a statement.

He decried the current analytical approach to selective inspection based on intelligence gleaned from shipping documents and validation of importers' supply chain security plans. "This type of 'screening' is like checking the IDs of airline passengers as they wait in line at the security checkpoint and then waving them right through without making them walk through the metal detector!" he said.

The Retail Industry Leaders Association and the American Association of Port Authorities issued statements applauding the House for the SAFE Port Act.

Meanwhile, the Senate approved an emergency supplemental appropriations bill for fiscal year 2006 that includes nearly $1.25 billion extra for Coast Guard and Customs and Border Protection security programs, as well as $227 million more for the port security grant program.
Let us hope that most of the 70 pieces of legislation, most related to the seriously un-focused Ship Only Scanned containers will be defeated or stagnate in committee. We need to find answers as an industry, and then guide our legislators to craft law that is feasible, based on fact, and functional.

Tuesday, May 02, 2006

100 Percent Secure U.S. Supply Chain

What Is the Cost of a 100 Percent Secure U.S. Supply Chain?

Everyone wants to be confident that growing international supply chains are secure and homeland security (or global security, for that matter) isn't threatened. The trick is to figure out how to do this without inhibiting the delicate balance of the increasingly global economy.
Just two years ago, a natural supply and demand imbalance at the Port of Long Beach caused major disruptions to the inventory levels of suppliers and retailers, regrettably just as the holiday season began. However, some national security officials report the likelihood of an attack through the global supply chain is so high that it is a matter of when, not if.
If supply were disrupted at just one major port, what economic problems would a U.S.-wide port shutdown cause, such as the airways stoppage during the September 11 disaster? A post-9/11 simulation exercise forecast that closing the nation's ports for 12 days would cost the economy roughly $58bn. We must ask a practical question: how can we establish a 100 percent secure supply chain without slowing the flow of the economy or imposing overly restrictive costs?
Most answers lead to the availability and use of more information, process automation, and new technologies not just by U.S. corporations, shipping companies, and domestic ports, but at factories and facilities at international origins as well.
Can we get buy-in from the rest of the world? Maybe...but we may have burned so much political capital after 9/11 and the Iraq debacle, that the sourcing nations may only pay us lip service until a "real" event presents itself. Scary, to say the least...