Friday, November 30, 2007

West Liberty State College Board Post

November 30, 2007

Michael J. Stolarczyk Appointed to the West Liberty State College Board of Governors

West Liberty State College recently welcomed Michael J. Stolarczyk to serve as a member of its Board of Governors. Stolarczyk is a senior director for Exel, the North American leader in supply chain management and contract logistics. The company is headquartered in Westerville, Ohio.

“I am honored to have been chosen to serve on the board of West Liberty State College. My parents attended West Liberty and talk so fondly of their time here, as well as speak eloquently of the education they received. It is my hope to support the college in its continued effort to offer an affordable, quality education, such as the ones my parents enjoyed. As this wonderful institution achieves university status in the near future, I know this memorable student experience will be preserved for generations to come. It is an honor and pleasure to serve Governor Manchin, the State of West Virginia, and the students of West Liberty,” said Stolarczyk.

In addition to his work at Exel, Stolarczyk is a member of the Board of Advisors for the West Virginia University’s School of Business and has held board positions with Ceske Pristavy, Maersk Logistic Czech Republic and Maersk Intermodal Europe. In February of 2002, Mr. Stolarczyk was named on Fast Company magazine's inaugural "Fast 50" global innovators list, which honors individuals whose achievements helped change their companies or society.

“We are pleased to announce the appointment of Mr. Michael Stolarczyk to the West Liberty State College Board of Governors. Stolarczyk has strong family ties to the college, as both of his parents graduated from WLSC. Although he lives a distance away, he is very eager to be an active member of the governing board and we look forward to working with him in the future,” said Lynne Exley, chair of the WLSC Board of Governors.

The West Liberty State College Board of Governors, consisting of representatives from the campus and surrounding communities, was established to provide oversight and direction on policy issues of the college.

This is a great honor for me...with both my parents being WLSC grads...also, by next year West Liberty will move up to University status. This is a great step forward for the campus and the region in general.

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Tuesday, November 27, 2007

Samskip Buys Reefer Company Icepak

Samskip agains makes an acquisition that finds one more puzzle piece to finish their long-term vision...Hassing, Winther, and the Icelandic crew continue to tactically evolve the Samskip brand...

Samskip has acquired the reefer logistics company Icepak, which has offices in the United Kingdom, Australia, and New Jersey and Seattle in the United States. Financial details were not disclosed.

Icepak has been operating for 15 years under the primary ownership of Debbie Woodliffe, Holly Coble and Paul Dean. All three will stay with the business and on the company’s board, which will now also include Peder Winther, chief executive officer of Samskip Reefer and Forwarding Logistics, and Simon Dwyer, managing director of Samskip U.K. Woodliffe will join the Samskip Reefer and Forwarding Logistics board based in Rotterdam.

“The Icepak business, its staff and shareholders will bring considerable experience and knowledge to our expanding global reefer logistics product," Winther said.
"Icepak will strengthen our global footprint and assist with our overall development plans, particularly within the U.S., Australia, Asian, South American and U.K. markets.”

Icepak shareholder Woodliffe said of the sale: “We feel the time is right for our business and the shareholders to have a like-minded partner to enhance our network and provide the necessary platform to complement our future growth plans.”

The acquisition of Icepak follows other recent Samskip purchases including Dutch multimodal transport company Geest North Sea Line, British short sea operator Seawheel and reefer centers from the Netherlands-based Kloosterboer in 2005.

Previously, Samskip had acquired Van Dieren Maritime and a 40 percent share in Silver Sea.

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Sunday, November 25, 2007

DP World raises $4.9 billion in stock sale!

DP World, the ship terminal operating company that U.S. politicians shunned, got a warm welcome from investors today as it was able to raise $4.9 billion through a sale of a 23 percent stake to the public.

Far more investors wanted to buy shares in the company than was available – the issue was oversubscribed by 15 times. With that strong demand, the company was able to sell stock for $1.30 per share, the top end of the range that investment bankers had set.

DP World paid $6.8 billion for P&O, the British port operator last year, but was later forced to sell assets in United States after a political firestorm erupted because of security fears raised by an Arab company owning marine terminals in the heart of major American cities.

DP World has 42 existing terminals and 13 new developments across 27 countries and has reportedly said it plans to double its capacity to 90 million containers by 2017.

DP World’s shares are slated to begin trading on the Dubai International Financial Exchange on Monday.

DP world continues to impress...just take this into consideration...

DP World agreed in early October to do a feasibility study to build a $250 million container terminal in Mariel that would start operating in 2012, this is a Havana port! Cuba! Big gamble!

"A deal is in the works. It is moving forward and they have signed various agreements," another person familiar with the plan told many press outlets.

DP World became is the world's third-largest container port business last year when it bought Britain's Peninsular &Oriental Steam Navigation Co. But, as you remember, it was forced to sell P&O's U.S. assets when the Bush administration came under fire for allowing an Arab-owned company to control U.S. ports. (Laughable!)

Critics said the deal involving the ports of New York City, Newark, Philadelphia, Baltimore, Miami and New Orleans posed a threat to U.S. national security. (Weak!)

P&O had planned for several years to rebuild Mariel port, 30 miles west of Havana on the north coast of the Caribbean island, and turn it into a modern container port.

The port of Mariel was the site of a massive boat lift in 1980, when a flotilla of vessels from Florida picked up 125,000 Cubans wanting to leave the Communist-run island.

Its strategic proximity to the United States makes Mariel an attractive investment looking ahead to a time when Cuba is no longer under a U.S. trade embargo, given limited port capacity in the United States, and could give whomever operates it a "first-mover" position in the very near future. Bring the big-ass boats (leviathan class) into Cuba...then feeder the US Gulf and East Coast...great connection for the Suez services I would think...

What would Tony Montana say? "You know what capitalism is? Getting -choose your expletive-!" Maybe that is what the other port operators will be saying about DP World in the very near future!

What do you think?

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Monday, November 19, 2007

New Section - My JoC Tens post:

Companies often think their picking operation is efficient as long as products roll out on time and customers are happy. But most picking operations in warehouses across America could use a reorganization, and its all about the process you know ... and training, and people, and systems!

The following are 10 tips to improve your warehouse operation.

1. Profile your orders.

Your most popular SKUs likely change with the seasons, so re-slot your warehouse to accommodate your business model, and review the setup at least once a year. This ensures that your “A” SKUs are in the correct storage media and physical location, reducing unnecessary travel for your order pickers. Your warehouse management system (WMS) should have a dynamic “slotting” module.

2. Analyze your current picking methodology.
Make sure your picking methodology suits your organization. Whether you choose single order, multi-order, batch picking with a single picker, or zone picking, the correct picking methodology is critical for optimizing productivity. Hey, you can always ask a 3PL to analyze it!

3. Use software to sequence orders.
Sequencing your orders by pick path, and batching together single lines, same-zone orders, and difficult picks — such as non-conveyable items — saves tremendous time on the distribution center floor. Again, your WMS software should be able to organize the workflow, and optimize sequence performance.

4. Create a warehouse within a warehouse.
On the one hand, you can gain tremendous efficiency by grouping together the 20 percent of your SKUs that complete 80 percent of your orders. This cuts travel time for your pickers. Be sure, however, that the 80-20 area or zone is properly designed to accommodate high-volume activity. On the other hand, this is kind of old-fashioned thinking; in this day and age of the Long Tail, you may not have the ability to utilize the 80-20 rule, because you may be selling “few of many,” instead of “many of the few!”

5. Evaluate your storage equipment to ensure proper application.
Placing slow-moving, low-cube items in bin shelving and fast-moving items in carton/pallet flow — or other appropriate storage options — improves storage density and picker productivity. This also allows you to better utilize the DC’s cube. Seasonal and other promotions can mess with this idea, so beware.

6. Create “wheelhouse” zones in your picking area.
You can increase picking productivity and improve order picker ergonomics by slotting your fastest-moving SKUs in the waist-to-shoulder or “wheelhouse” area of your storage media.

7. Designate only two or three standard shipping cartons.

With only two or three boxes to choose from — plus a few custom sizes if necessary — pickers will put orders together faster. Cutting down on sizes optimizes freight expenses and reduces corrugated spend. It also makes it easier to support a pick-path methodology.

8. Consider automation.
Order pickers spend about 60 percent of their time walking product or moving product around. Consider an automated solution, such as conveyance, to reduce their extensive travel time. Multi-level pick towers also save travel time and are quite innovative.

9. Understand your technology options.
Plenty of options are available to increase efficiency — including bar codes, radio frequency, pick-to-label, pick-to-light, and voice-activated technologies. These technologies are designed to provide different levels of increased picking productivity and improved accuracy.

10. Implement an incentive program for pickers.
Incentive programs can be extremely valuable to an organization. To ensure your program is effective, you must guarantee that productivity measurements are accurate, fair and equitable. Use key performance indicators (KPIs) to drive productivity.

Finding the right balance between these 10 suggestions is quite a task. Perhaps the best way to accomplish this is to secure the services of 3PL. However, significant strides can be made through consistent, common-sense approaches to your warehouse picking operations.

This is my entry for the new web site. Its called the JoC Tens and I am very proud to me in the first batch of posts. Check it out!

Thursday, November 15, 2007

Drewry: Labor costs deflate China's bubble, near-sourcing on the rise

Hey, I just reviewed this white paper and its pretty interesting...Drewry has always been a subtle shill for the ocean transport industry (and there is nothing wrong with that...the industry needs the support)and they remain bullish on China. I am more skeptical...going back to my "why not outsource in our back yard" posts earlier this year...Check out the link below and read the white paper.

So, the case can be made for "near sourcing" and China's cost structure may become much more expensive than anticipated (plus you have to add risk factors in having such far-flung supply chains). I still believe we are closer to outsourcing in states like West Virginia and Ohio than many people think.

But in the future that shirt stands a better chance of being produced in Mexico as rising labor costs in the Asian superpower are making companies consider shifting the sourcing of men's shirts and other products with short life cycles to countries closer to market, according to Drewry Supply Chain Advisors, a new division of Drewry Shipping Consultants.

A white paper from the London-based firm, Will China's Apparel Supply Chains Become Uncompetitive?, suggests that China has virtually no cost advantage relative to Mexico or Vietnam for the export of men's shirts when factoring in "logistics opportunity costs," such as loss of income from higher inventory, stock outs/lost sales and obsolete stock.

The decision to outsource to low-cost but remote countries has increased supply chain costs and reduced their performance due to longer lead times and greater risk for delays, said Drewry associate David Charlesworth at the white paper's launch in London on Thursday.

"Underestimation of opportunity costs skew the retailers' understanding of the price/reliability of logistics providers. It also leads to incorrect sourcing decisions -- although assessing all these variables is complicated and critically dependent on the specific market and products concerned," said Charlesworth, a former P&O Nedlloyd manager.

Spanish retailer Zara is a famous proponent of "near-sourcing." It makes a high proportion of its clothing in relatively high-wage locations in its home country and across Europe so that it can get a new range onto shelves in less than two weeks from design.

Drewry Research Director Philip Damas said supply chains need to be more responsive as product life cycles get shorter. The life cycle for men's shirts, he said, is on average about three-to-four months long, and importers and shipping lines are seriously underestimating the opportunity costs by not paying more attention to transit times or schedule reliability. The consultant's latest liner shipping schedule reliability study found that about half of all vessels tracked arrived in port later than advertised.

Damas said companies are contemplating sourcing to less remote countries than China because of the weakening of its traditional pillars of low labor costs, favorable exchange rates and low maritime costs. He also highlighted concerns over product quality, the environmental impact of longer transport distances and infrastructure bottlenecks as factors that could see a production shift away from China.

While maritime shipping carries the vast majority of the world's manufactured goods, Drewry's Sourcing/Mode Model assesses alternative transport modes.

A day saved in shipping a China-made shirt into the United States results in an estimated reduction in opportunity costs of about 1.8 cents, or about 0.2 percent of the product value. This is not sufficient, Drewry said, to swing the balance towards air transport, which it estimates carries about 10 percent of U.S. imports of Chinese shirts. Air freight becomes a viable option when the opportunity cost exceeds 5 cents per day.

High-value men's shirts imported into the Unites States from Italy for example have such high opportunity costs they warrant choosing the faster but much more expensive air transport option.

Mexico's combination of relative low wages, geographical position and absence of import duties is resulting in some companies switching production back there, and as such trucking into the United States is becoming more competitive, Drewry said.

Because logistics costs are a tiny fraction of the "delivered to DC" total cost -- Drewry estimates the ocean logistics chain cost for a shirt made in China for the U.S. market at just 1.5 percent of the DC cost, or 12 cents per shirt -- companies will continue lowest-cost sourcing unless they sense a very significant marketing disadvantage.

The consultants added that for big consumer markets like the United States and United Kingdom, foreign production of goods "is a fact of life for generations to come" due to the wide gap in labor costs.

Drewry said that based on information received from manufacturers the labor costs of a mid-priced shirt from China is about 10 percent to 30 percent of the ex-factory price. A 30 percent increase in relative labor costs in China, possibly triggered by a revaluation of the Yuan, would make China less competitive in terms of total product cost for men's shirts than Vietnam and Mexico for U.S. imports, when opportunity costs are taken into account.

"Our analysis shows that supply chains based on vendors located in intermediate offshore countries allow an effective combination of faster delivery times and relatively low labor costs," Damas said.

"We expect this near-sourcing logistics strategy to become more common, although it will not work for all products."

Drewry's white paper on China's apparel supply chains is available for free download by visiting

Friday, November 09, 2007

CHaINA Awards

Couple of weeks ago, the China Supply Chain Council presented its CHaINA Awards for the third times to celebrate superior achievements that are enabled by supply chain management in China.

Over 150 supply chain senior executives gathered to give recognition and compliments to five outstanding winners at a prestigious gala dinner held at the Shanghai Regent Hotel on November 8.

Here are some of the winners in this year's gathering:

The Best Supply Chain IT Solution was given to Seeburger for its recent JIT/JIS supply chain solution implemented at Benz Daimler Chrysler in Beijing. Over 150 suppliers are now live and using the system daily giving the manufacturer a competitive advantage in the China Automotive market and it has forced other OEM's to re-evaluate their SCM solutions.

The Award for China's Supply Chain Executive of the Year went to Dr. Dittmar Nerger, Head of Strategic Sourcing Healthcare at Bayer Healthcare for his years of management leadership and recent sourcing achievements in China.

The award for the Best 3PL Supply Chain Provider was presented to Kerry EAS for its innovative distribution solutions provided to Alfred Dunhill all over in China. Alfred Dunhill first started its business in China through 3rd party sales channel without self-owned shops and has now 39 self-owned stores and 27 wholesale stores all over China in less than 2 years.

The Award for Best Supply Chain Consulting Partner in China was awarded for the first time to IBM Global Business Services for the procurement transformation of Haier Group in Qingdao. Through the partnership with IBM, Haier managed to set up infrastructure for procurement innovation such as strategic sourcing, procurement engineering that paved the way for a dramatic cost reduction and supplier base optimization.

Amway China received the top Supply Chain Operational Excellence Award this year for its outstanding supply chain initiatives in China and abroad that resulted in a 20% logistics cost reduction, successful VMI operations between China and overseas factories and the rationalization of the number of logistics service providers.

When are they going to give out Best Supply Chain Blog Award? Who would you vote for? Lately, my vote would go to Eric Joiner...the Dawg is having his day...HA!

Thursday, November 01, 2007

53's On The High Seas

Big box stores will now be able to ship their goods to the United State in bigger boxes.

APL said that it will begin offering shippers the option to move cargo in 53-foot containers, a move it says could "make a significant difference to the economics of transpacific trade."

The Singapore-based carrier said it will take delivery of what it called the "world's first ocean-capable 53-foot boxes" on Nov. 7. It said the reinforced boxes are 200 pounds heavier and have stronger corner posts than domestic 53-foot boxes.

The boxes will be available to shippers using APL's premier weekly South China to Los Angeles service. The company plans to also look at deploying them elsewhere.

"Our objective is to move big-box economics farther back in the supply chain to the point where products are manufactured in Asia," said Ron Widdows, chief executive officer of APL. "We're responding to customers who want new levels of efficiency in their containerized trade."

While 20- and 40-foot containers are the most common size box used by container carriers, APL and other carriers also offer a variety of other size boxes, including 45-foot and 48-foot ocean containers.

Fifty-three-foot containers, which are the same size as domestic trailers pulled by 18-wheelers, are widely used domestically.

Trailer Bridge, a company that provides container service between the U.S. and Puerto Rico, has used 53-foot containers in its service for a decade.

Importers commonly ship cargo to the U.S. West Coast in 20, 40 or 45-foot boxes, then transload cargo into 53-foot containers or trailers at U.S. ports for truck or rail transport to the final destination in order to take advantage economies of scale of moving freight in bigger boxes.

A 53-foot box has 60 percent more capacity than a standard 40-foot container, and at nine feet, six inches high and 102 inches wide, are six inches wider than standard boxes. Two 53-foot boxes will hold about the same amount of cargo as three 40 foot containers.

Because more cargo can be moved by fewer trucks, APL said 53-foot boxes could reduce transportation costs, road congestion and pollution.

It predicted they "could become the transport method of choice for customers moving cargo to inland U.S. destinations," allowing cargo to be transported in the same container from Asian factory to U.S. stores without transloading.

APL's press release included laudatory comments about the larger boxes from executives at retailer Toys ‘R’ Us and New Balance, the athletic shoemaker.

The benefits touted by APL were familiar to John McCown, chief executive officer of the Puerto Rico carrier Trailer Bridge.

His company began using 53-foot containers in regularly scheduled ocean service to Puerto Rico in 1998, and since then "fundamentally all of our liner freight has moved in 53s and our customers have experienced the various benefits that come with these superior units."

Trailer Bridge has 3,800 53-foot boxes in service, and McCown said they've been specially designed for ocean use. The company also instituted regular service using 53-foot containers to and from the Dominican Republic earlier this year.