As we define future supply chain technology, I think we need to take "a hard left." Up to now, we have been
moving at a steady pace down a road that is well-known and safe. But this road is no longer sufficient to meet today's
supply chain challenges. We need to change our direction. Here I clarify the path less traveled but more promising for
supply chain leaders.
What do I mean? Let me explain. Supply chains currently use closed and proprietary technologies. Processes are based on
relational databases with rows and columns. I believe we need to move to open source technology. In other words, get used to
hearing the terms "blockchain" and "hyperledger." These are two new concepts that are here to stay.
What is the reason for this move to open, distributed technology? Currently, there are "dark holes" in the supply chain that
I believe will not be closed with the current approaches. These dark holes are typically handshakes, or interface points,
between applications where data does not flow, stopping visibility across the network. A dark hole could be the unloading of a
container from a ship, the receipt of a shipment, a transfer of ownership, a return, or a change in status. Dark holes usually
happen with the transference of ownership or change in status between two parties.
Let's examine the problem. Currently the product road maps for conventional technology providers are not focused on closing
these dark holes. Instead, the focus is on refining today's enterprise applications. It is unrealistic to think that vendors
like Infor, Microsoft, Oracle, and SAP will ever work together to erase the dark holes of information in the supply chain.
Likewise, it is very clear that while enterprise resource planning (ERP) systems will continue to be the backbone or system
of record for transactions within the enterprise, they are unable to form the backbone or system of record for a global value
network that consists of complex, nonlinear interactions between supply chain partners.
This transition from closed and proprietary solutions to open source capabilities will not happen quickly. I see adoption
occurring over the next five years. But if it works, I think that blockchain—which is defined as a distributed database
that acts as a shared, immutable ledger for recording the history of transactions—will be embedded in all of today's
current technologies.
While many may know blockchain as the engine powering the cryptocurrency and payment system Bitcoin, the possible use cases
for the technology in the value network are far more pervasive and powerful. Particularly promising is the
Hyperledger project, an open source blockchain platform started in December 2015 by the Linux Foundation to enable
blockchain-based distributed ledgers.
The Hyperledger project aims to bring together a number of independent efforts to develop open protocols and standards by
providing a modular framework that supports different components for different uses. This would include a variety of
blockchain technology variants with their own consensus and storage models and services for identity, access control,
and contracts.
What are the possibilities? Before I continue, let me make a confession: I am not a technologist. I cannot write code, and
when I worked for a software company, I quickly discovered that writing software requirements was not the best use of my
skill sets. Instead I like to paint big pictures and help others to fill in the gaps. But here are some use cases that
I developed through talking to technology experts and that we at Supply Chain Insights are considering testing as part
of our new Network of Networks Group.
Community registry. Today network registration involves onboarding to every network as an individual or as a company.
It lacks a system of reference for division/company or company/industry. What if we could have a community registry where we
have a single sign-on that could be accessed by all value networks? This schema would be carried in blockchain messaging,
enabling users to write information once and provide safe/secure communication across the network.
Replacement of EDI. Today EDI or electronic data interchange is the workhorse of the supply chain. Messages are transmitted and opened safely and securely. However, it operates in a batch manner, and there is latency as the message is opened. In addition, the passage and receipt of EDI requires sophisticated IT groups. As a result, it is more costly. Could blockchain replace EDI?
This is a stretch objective, but I think it's possible.
Lineage/track and trace. Tracking and tracing goods across multiple parties is cumbersome and lacks reliability.
Blockchain offers the ability to embed the origin and transfer points, destinations, and lot codes in the chain. This
could help companies better track and trace food, manage gray market goods (genuine branded goods sold by
unauthorized dealers) to eliminate counterfeit items, ensure compliance, and streamline recalls.
Safe and secure supply chains. As goods pass through the supply chain, multiple parties handle them. Blockchain
technologies enable companies to create a chain of custody. In the process, the handling requirements for each product could
be communicated on receipt.
Tracking social responsibility goals. Tracking a product's carbon footprint and point of origin for compliance with
internal or external social responsibility requirements is difficult. One thing is clear: Audits do not work. As we tackle
issues like fair labor, clean water, Congo metals/conflict minerals, and carbon consumption, blockchain can track the chain
of custody and help us to better understand and measure energy consumption, carbon emissions, and other social responsibility
goals.
Supply chain finance. The origin of blockchain is a desire to ensure safe and secure payment. Could we disintermediate
banks as we know them? Each time a supply chain transaction passes through a bank, there are charges. Could we drive a massive
restructuring of world banking to reduce bank charges for credit cards, wire transfers, and electronic fund transfer (EFT)/
automatic clearing house (ACH) payments?
Document sharing. In supply chain, we spend hours upon hours negotiating terms and conditions of contracts. After
completion, the filed contracts are never used again. We do not connect the contracts to supply chain execution. But what if
contracts could accompany a purchase order, and if conditions change, then rules would change the cost based on delivery
conditions? Or they would change delivery conditions, based on availability (dynamic dock scheduling) and weather? I think
this is all possible. I think blockchain along with
cognitive computing will allow value networks to connect supply chain documents to transactions in real time.
Today we do not know what is possible. However, the more I study this technology at the beginning of its hype cycle, the
more promising I think it is. I am excited to be a part of the group that is going to do some serious testing. Supply Chain
Insights has gathered together a cross-industry networking group of collaborative technology users and developers to study
what we are calling the
"Network of Networks." The Network of Networks will address the adoption of distributed and open
technology by the ecosystem of technology providers and business users to drive interoperability in value networks.
In the Networks of Network testing that we have planned, we will be using the IBM version of blockchain
to test the use of Hyperledger to improve network onboarding. Our goal is to test the open source version from IBM in
the digital sandbox/lab environment at Schneider Electric. We issued a call for participants in a webinar on January 11,
2017 and came together as a group at the next Network of Networks Session on April 13-14 at the Grande Lakes
Ritz-Carlton Hotel in Orlando, Florida. The results will be shared publicly at the upcoming
Supply Chain Insights Global Summit on September 5-8, 2017 at the Ritz Carlton, Reynolds in Oconee, Georgia.
We hope to see you there!
Artificial intelligence (AI) tools can help users build “smart and responsive supply chains” by increasing workforce productivity, expanding visibility, accelerating processes, and prioritizing the next best action to drive results, according to business software vendor Oracle.
To help reach that goal, the Texas company last week released software upgrades including user experience (UX) enhancements to its Oracle Fusion Cloud Supply Chain & Manufacturing (SCM) suite.
“Organizations are under pressure to create efficient and resilient supply chains that can quickly adapt to economic conditions, control costs, and protect margins,” Chris Leone, executive vice president, Applications Development, Oracle, said in a release. “The latest enhancements to Oracle Cloud SCM help customers create a smarter, more responsive supply chain by enabling them to optimize planning and execution and improve the speed and accuracy of processes.”
According to Oracle, specific upgrades feature changes to its:
Production Supervisor Workbench, which helps organizations improve manufacturing performance by providing real-time insight into work orders and generative AI-powered shift reporting.
Maintenance Supervisor Workbench, which helps organizations increase productivity and reduce asset downtime by resolving maintenance issues faster.
Order Management Enhancements, which help organizations increase operational performance by enabling users to quickly create and find orders, take actions, and engage customers.
Product Lifecycle Management (PLM) Enhancements, which help organizations accelerate product development and go-to-market by enabling users to quickly find items and configure critical objects and navigation paths to meet business-critical priorities.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
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Supply chain managers at consumer goods manufacturing companies are tasked with meeting mandates from large retailers to implement item-level RFID.
Supply chain managers at consumer goods manufacturing companies are tasked with meeting mandates from large retailers to implement item-level RFID. Initially these requirements applied primarily to apparel manufacturers and brands. Now, realizing the fruits of this first RFID wave, retailers are turning to suppliers to tag more merchandise.
This is one more priority for supply chain leaders, who suddenly have RFID added to their to-do list. How to integrate tagging into automated production lines? How to ensure each tag functions properly after goods are packed, shipped, and shelved? Where to position the RFID tag on the product? All are important questions to be answered in order to implement item-level RFID. The clock is ticking on retail mandates.
Different products, new RFID considerations
Hangtags, the primary form of apparel product identification, present a relatively easy way to attach an RFID tag. Pressure-sensitive labels likewise can carry an RFID inlay. The inlay, consisting of a microchip and antenna, holds the product’s unique identifying information. This tiny device is activated when the RFID reader passes by it. For nonapparel products, in many cases, there is no way to attach a hangtag. Therefore, a pressure-sensitive RFID label often must be put directly on the product. If the product is packaged in a box, the RFID carrier can be attached to or placed inside the box. Either way involves the use of just the right solutions, including the adhesive, shape, dimension, and placement. Moreover, there must be an efficient way to attach the labels to products. This requires process engineering and sometimes capital investment to integrate RFID labeling into highly automated manufacturing lines.
Metals, liquids, and low-surface-energy (LSE) materials pose hurdles for RFID item tagging. Tag and label inlays cannot be read properly through metals and liquids, and the pressure-sensitive labels do not always stick well to product surfaces containing silicone, vinyl, polyethylene, and polystyrene. Very small items are also difficult to tag. Metal paint cans, caulk or paste tubes, lipsticks, and reusable water bottles are just a few products that present RFID tagging challenges.
In other cases, it is not so much the product itself that hinders readability but rather the shipping method. For example, it is relatively straightforward to apply an RFID tag or label to a bag of fertilizer. But the fertilizer bags might be stacked 60 deep on a pallet. The pressure is too much. It damages the inlay, killing the tag’s readability. So, RFID tags, which were perfectly fine coming off the production line, are now dead from the stacking pressure.
Solutions and testing
RFID tagging and labeling programs take time to get right. While some manufacturers can set up a successful process in a few weeks or months, for others it can take six months, nine months, a year or longer. Variables influencing implementation time include capital equipment investments, the product types (for example, are the materials, shapes, or surfaces potentially problematic?), label supplier capacity and capabilities, and third-party testing rounds.
The good news is that best practices are being refined every day to incorporate RFID on difficult-to-tag products. A case in point is finding answers to RFID-inlay readability issues on metal or liquid products. There are ways to attach an RFID label to the product’s lid or cap.
The University of Auburn RFID Lab is the de facto U.S. authority on all things retail RFID. Through its ARC program, the lab works with end users to make sure RFID tags meet or exceed their required performance and quality levels. Walmart, for example, requires its suppliers to source from Auburn RFID Lab’s ARC program-approved inlay companies. “ARC is a test system and database that stores comprehensive performance data of in-development and market available RFID tags,” according to the lab’s website. “ARC has been working with end users to translate RFID use cases into specific levels of performance in the ARC test environment.”
High-quality RFID tags and labels are at the heart of it all. The following are some considerations to keep in mind when choosing an RFID tag and label provider:
What are their quality control and testing capabilities? Can they confirm that every tag is readable? Do they have software to verify that UPC and RFID information match up? Do they possess familiarity with Auburn’s RFID Lab approval process?
What is their capacity? How many thousands or millions of inlays do they create per day? Are there minimum order quantities?
What are their order management and shipping processes like? What is their delivery speed? How easy are they to order from? Where are their print facilities located?
Do they offer customization? Do they possess specialized equipment? Can they die cut irregular shapes, including very small dimensions? Do they possess adhesive expertise and application equipment? Do they have solutions for metal, liquid, and other difficult-to-tag items? Are they able to configure label rolls to work on automatic label dispensers?
It takes trial and error to implement RFID item tagging for nonapparel products. Effective, compliant programs do not manifest overnight. Collaboration with experienced label providers and the Auburn RFID Lab will help manufacturers overcome even the most complex RFID tagging challenges. There will be a roadmap to success, and the results in the form of better inventory visibility, swifter sell-through, and stronger sales will be well worth it.
Economic activity in the logistics industry expanded in August, though growth slowed slightly from July, according to the most recent Logistics Manager’s Index report (LMI), released this week.
The August LMI registered 56.4, down from July’s reading of 56.6 but consistent with readings over the past four months. The August reading represents nine straight months of growth across the logistics industry.
The LMI is a monthly gauge of economic activity across warehousing, transportation, and logistics markets. An LMI above 50 indicates expansion, and a reading below 50 indicates contraction.
Inventory levels saw a marked change in August, increasing more than six points compared to July and breaking a three-month streak of contraction. The LMI researchers said this suggests that after running inventories down, companies are now building them back up in anticipation of fourth-quarter demand. It also represents a return to more typical growth patterns following the accelerated demand for logistics services during the Covid-19 pandemic and the lows of the recent freight recession.
“This suggests a return to traditional patterns of seasonality that we have not seen since pre-COVID,” the researchers wrote in the monthly LMI report, published Tuesday, adding that the buildup is somewhat tempered by increases in warehousing capacity and transportation capacity.
The LMI report is based on a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).