Supply Chain Movement » logistics

Emerging countries, cities and logistics

Martijn Lofvers — Fri, 21 Oct 2011 08:51:18 +0000

City logistics in emerging countries (like South America, India, China, etc.) is more challenging and of higher complexity than doing city distribution in Western regions (like Europe or North America).

This is not my statement but expressed by dr. Edgar Blanco from the MIT Center for Transportation and Logistics. Obviously, as a good academic, he also motivates this statement. In a nutshell, there are a number of reasons, all interacting with each other. The key reason is that the important logistical dimensions are completely different than what we are used to. Specifically, stores are much smaller (think of the size of a garage or smaller), there are really, really a lot of these stores. Added to this, the cities themselves are huge, at least in density (i.e. inhabitants per square meter) with the well-known problems related to congestion, emissions, etc. On top of this, due to a lack of trust in the chain, giving credit is not done, leading to a purely cash-driven supply chain.

Interesting, no? So how different is this to city distribution in the Netherlands or Belgium? I participate as professor Freight Transport and Logistics in the Dinalog funded project 4C4D (Cross Chain Control Centers for City Distribution). In this project, we look into coordination and consolidation in order to improve logistics flows into cities. Here, issues like retail ordering, sustainability (green zones), congestion, time windows, etc. are driving logistics’ efficiency. The focus of this research project is on Logistics Service Providers and retailers, leading to innovative distribution concepts based on sound business models, while meeting objectives and restrictions set by municipalities.

I wonder whether all these nice new innovative distribution concepts would survive in the city of Bogota. It seems that we in Europe and the US are used to a large amount of structure, data availability, and well-followed rules and legislation. Once, we take this out of the picture, the challenge is, next to new concepts, to find ways to set up a structure and the right information. So I would conclude, that city logistics in emerging countries is really harder but leads to richer business models than we are traditionally used to.

Tom Van Woensel, Professor at Eindhoven University of Technology, Faculty of Industrial Engineering and Innovation Sciences and Board Member of the European Supply Chain Forum.

Ecodesk 2011 Sustainability Transport & Logistics Report

Martijn Lofvers — Thu, 20 Oct 2011 14:58:20 +0000

The Ecodesk 2011 Sustainability Transport & Logistics Report is a thorough analysis of sustainability data and strategy, affecting the Transport & Logistics industry. The report includes a detailed analysis of 12 of the world’s major T&L companies. Each company is ranked via four sustainability metrics (carbon emissions (Scope 1+2+3), carbon emissions (Scope 1+2) energy usage and water usage) each broken down into two ranking permutations (gross and intensity). The report also includes exclusive interviews with sustainability managers from leading companies, including DHL, G4S and Eurostar. Each company is fully profiled, with details on sustainability strategy, employee engagement and sustainability record.

The best Movies and TV Series about supply chains

Martijn Lofvers — Wed, 03 Aug 2011 12:24:46 +0000

What are the best Movies and TV Series about supply chains? And why? What is the connection with supply chains? And in which Movies and TV Series is the development of logistics into supply chain management perfectly reflected?

According to the editors of the Dutch Supply Chain Magazine the following Movies and TV Series should be in this ranking:

• Lord of War (2005) with the best opening scene about the supply chain of a bullet, from manufacturing to the end customer: http://www.youtube.com/watch?v=9d0d6qgsvTw

• Traffic (2000) about the supply chains of drugs from Pakistan via Mexico to the United States

• Breaking Bad (TV Series 2008– ), especially the episode about setting up a distribution network in several American states in Season 2, Episode 12

• WALL.E (2008) about an unsustainable world

• Monsters, Inc. (2001) with an incredible scene in an automated warehouse for hanging doors

Any suggestions are welcome can be added in the featured discussions in the LinkedIn group Supply Chain Movement. Thank you for your contribution.

PS Great movies about company life, not specifically supply chains:
• Swimming with Sharks (1994), www.youtube.com/watch?v=UH9OLQh46FY
• Office Space (1999), www.youtube.com/watch?v=fPP2jz4jyxk
• Horrible Bosses (2011), www.youtube.com/watch?v=mh9cG5dzs-U
• Up in the Air (2009), about outsourcing firing people, www.youtube.com/watch?v=hnrDgLs8fQo
• Suitemates (TV Series 2010) about a ERP software company, www.suitemates.com

The Logistics Report 2011

Martijn Lofvers — Sat, 18 Jun 2011 08:39:59 +0000

The Logistics Report 2011 is a follow up to last year’s ground-breaking report hailing the launch of the Love Logistics campaign.

Produced by FTA in association with PwC and incorporating the evidence of both in-house and independent research, this year’s report takes a look at the challenges the logistics industry has had to face during the past year and how it has responded. Economic uncertainty; political turbulence in the run up to the General Election; and following the General Election; snow; erupting volcanoes; red tape and bureaucracy; 2010 gave the logistics industry more than its fair share of things to worry about.

As in other business sectors, many logistics companies had a very tough year. But this report shows that overall, and despite everything that was thrown at it, the logistics industry continued to deliver the goods for the UK.

That is an achievement of which everyone involved should be proud and for which the industry should receive due credit; after all, without a successful, efficient supply chain, our way of life would simply grind to a halt. Making that a reality still requires some work and FTA, through the Love Logistics campaign is striving to deliver that improved recognition and a fairer commercial environment that UK businesses both need and deserve. The Logistics Report 2011 provides the evidence to support the case.

State of Logistics Report 2011

Martijn Lofvers — Sat, 18 Jun 2011 08:31:59 +0000

The cost of the U.S. business logistics system jumped up 10.4 percent in 2010, making up more than half of last year’s decline. Business logistics costs rose to $1.2 trillion, an increase of $114 billion from 2009. This puts 2010 about on par with 2005, and still well below the pre-recession years. In 2010, logistics costs as a percent of the nominal Gross Domestic Product (GDP) climbed back up to 8.3 percent.

Both major components of the logistics cost model increased by slightly over 10 percent in 2010. Inventory carrying costs increased 10.3 percent in 2010. The increase in carrying costs was due to higher costs for taxes, obsolescence, depreciation, and insurance, which were offset by a further drop in the inventory carrying rate and warehousing costs. Transportation costs were up 10.3 percent from 2009 levels. Trucking, which comprises 78 percent of the transportation component, continued to lag behind the performance of other modes, rising only 9.3 percent compared to an average of 15.4 percent for the other modes combined.

2010 was certainly a better year than 2009, but did not turn out to be all we had hoped it would be. The recovery from the Great Recession has proven to be more elusive and prolonged than any other in our history. The slow growth presented another year of challenges for the logistics industry. Volumes firmed up early in the year, but dropped off in the second half. Demand for capacity began to equalize with available capacity in many sectors, but rates continued to be constrained. Inventories began to climb again and retailers pulled back on their ordering, because spending did not expand as expected. The economy began to falter in the second half of the year as the contribution from the various stimulus packages put in place to jumpstart and fuel the first year of the recovery faded. Or to put it another way, “The recovery remains distinctly subpar,” according to New York Federal Reserve Bank President William
Dudley.

The Council of Supply Chain Management Professionals (CSCMP) released the 22nd Annual “State of Logistics Report” presented by Penske Logistics on June 15, 2011 at the National Press Club in Washington, DC.

The report was delivered by author Rosalyn Wilson, with additional commentary provided by a panel of industry leaders representing various areas within the supply chain. The “State of Logistics Report” is widely used by supply chain management and logistics professionals and organizations as the premier benchmark for US logistics activity.