Get a worldwide view at CSCMP's 2010 Annual Global Conference
CSCMP's Annual Global Conference will live up to its name with a keynote address focusing on the future of global trade. The Honorable Carlos M. Gutierrez, former secretary of the U.S. Department of Commerce and former chief executive officer and chairman of the board for Kellogg Company, will kick off the conference on September 27 in San Diego, California, USA.
Gutierrez started his career at Kellogg's by selling cereal to small grocery stores in Mexico City and eventually worked his way up to be the youngest CEO in the company's 100-year history. In 2005, President George W. Bush appointed him to be the 35th secretary of the U.S. Department of Commerce. In that position, he played a key role in the passage of CAFTA-DR, a trade agreement that expanded opportunities for U.S. exports throughout Latin America. Gutierrez now is the chairman of Global Political Strategies, an international consulting firm that focuses on geopolitics, global economics, and helping companies expand their international market opportunities.
The conference's focus on global trade continues the following day with a general session called "The Impact of the Panama Canal on Global Shipping." The presentation will be given by Alberto Alemán Zubieta, CEO of the Panama Canal Authority, and Professor Yossi Sheffi of the Massachusetts Institute of Technology. The closing session will feature scientist and futurist Jack Bacon, speaking on "Nonlinear Thinking for the Nonlinear World."
In addition to the general sessions, the conference will offer 20 educational tracks on topics ranging from "Accelerating Supply Chain Transformations" to "Best Practices in Manag ing and Optimizing Inventory" to "Third-Party Logistics—Getting the Strategy Right." Attendees can opt to participate in small-group discussions moderated by topic experts. The conference will also provide the opportunity to tour near-by logistics facilities, check out leading-edge technology and equipment at the "Supply Chain of the Future" exhibit, offer training at new pre-conference workshops, and more. For more information, visit cscmpconference.org.
Directory of executive recruiters is now online
You thought the recession would make it easier to find the perfect candidate to fill that important supply chain position ... but you're still looking. Or maybe you're the one searching for a new job in the "jobless recovery." Either way, working with an executive recruiter may help you find the right person or position sooner than you could on your own. But how do you find a recruiter who understands the needs of supply chain managers?
CSCMP's new online directory of executive recruiters is the place to go for that information. Located on CSCMP's web site under the "SCM Careers" tab, the directory lists global executive recruiting firms that specialize in customer service, inventory management, logistics, materials and information management, traffic and transportation, and warehousing. CSCMP does not endorse any of the recruiters but only lists firms that devote at least 80 percent of their time to supply chain management and logistics positions.
The directory, updated twice yearly, is available at no charge. Users who are not CSCMP members, however, must register before they are able to download it. Recruitment firms that are members of CSCMP or have used the Council's Career Center Services qualify for a free listing. Those that do not meet those criteria pay US $350 for a six-month listing. To be in the directory, firms must fill out a form. The deadline for submission for the next edition is August 9, 2010.
"State of Logistics Report" can help you move forward
For many, it may be a little painful to look back on 2009. But understanding where we were can often help us assess where we should be. For this reason, CSCMP's "State of Logistics Report" offers valuable data and analysis.
Released annually in June, the "State of Logistics Report" looks at the overall performance of the U.S. supply chain. The report tracks all costs associated with moving goods through the United States, such as transportation and inventory-carrying costs.
Not surprisingly, economist and report author Rosalyn Wilson found that logistics costs dropped considerably last year, falling from 9.3 percent in 2008 to 7.7 percent of U.S. gross domestic product in 2009. But the news is not all bad. The data also show improvement beginning in the fourth quarter, pointing to the recovery that is now under way.
This big picture can provide practitioners with a context for understanding their own organizations' performance and improve their own operations, said Rick Blasgen, CSCMP president and CEO. "This research presents data for company leaders to be able to capitalize on the recovery as it occurs, such as restructuring their distribution networks to maximize efficiency and minimize miles, investing in technologies to facilitate 'green' transportation, and improving real-time data flows to increase visibility and enhance productivity," he said.
CSCMP members can download the report for free at cscmp.org/memberonly/state.asp. Nonmembers can purchase the report for US $395.
Journal of Business Logistics announces two new editors
Dr. Stanley E. Fawcett of Brigham Young University and Dr. Matthew A. Waller of the University of Arkansas have been named co-editors of CSCMP's peer-reviewed academic journal, Journal of Business Logistics (JBL). Their terms will begin on January 1, 2011, and will run until December 31, 2015.
The primary responsibilities of the JBL's editors are to maintain the journal's academic integrity, identify and solicit manuscripts consistent with its objectives, manage the publication's review process and physical production, and identify and implement improvements.
Container imports at U.S. ports are seeing another busy month as retailers and manufacturers hustle to get their orders into the country ahead of a potential labor strike that could stop operations at East Coast and Gulf Coast ports as soon as October 1.
Less than two weeks from now, the existing contract between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance covering East and Gulf Coast ports is set to expire. With negotiations hung up on issues like wages and automation, the ILA has threatened to put its 85,000 members on strike if a new contract is not reached by then, prompting business groups like the National Retail Federation (NRF) to call for both sides to reach an agreement.
But until such an agreement is reached, importers are playing it safe and accelerating their plans. “Import levels are being impacted by concerns about the potential East and Gulf Coast port strike,” Hackett Associates Founder Ben Hackett said in a release. “This has caused some cargo owners to bring forward shipments, bumping up June-through-September imports. In addition, some importers are weighing the decision to bring forward some goods, particularly from China, that could be impacted by rising tariffs following the election.”
The stakes are high, since a potential strike would come at a sensitive time when businesses are already facing other global supply chain disruptions, according to FourKites’ Mike DeAngelis, senior director of international solutions. “We're facing a perfect storm — with the Red Sea disruptions preventing normal access to the Suez Canal and the Panama Canal’s still-reduced capacity, an ILA strike would effectively choke off major arteries of global trade,” DeAngelis said in a statement.
Although West Coast and Canadian ports would see a surge in traffic if the strike occurs, they cannot absorb all the volume from the East and Gulf Coast ports. And the influx of freight there could cause weeks, if not months-long backlogs, even after the strikes end, reshaping shipping patterns well into 2025, DeAngelis said.
With an eye on those consequences, importers are also looking at more creative contingency plans, such as turning to air freight, west coast ports, or intermodal combinations of rail and truck modes, according to less than truckload (LTL) carrier Averitt Express.
“While some importers and exporters have already rerouted shipments to West Coast ports or delayed shipping altogether, there are still significant volumes of cargo en route to the East and Gulf Coast ports that cannot be rerouted. Unfortunately, once cargo is on a vessel, it becomes virtually impossible to change its destination, leaving shippers with limited options for those shipments,” Averitt said in a release.
However, one silver lining for coping with a potential strike is that prevailing global supply chain turbulence has already prompted many U.S. companies to stock up for bad weather, said Christian Roeloffs, co-founder and CEO of Container xChange.
"While the threat of strikes looms large, it’s important to note that U.S. inventories are currently strong due to the pulling forward of orders earlier this year to avoid existing disruptions. This stockpile will act as an essential buffer, mitigating the risk of container rates spiking dramatically due to the strikes,” Roeloffs said.
In addition, forecasts for a fairly modest winter peak shopping season could take the edge off the impact of a strike. “With no significant signs of peak season demand strengthening, these strikes might not have as intense an impact as historically seen. However, the overall impact will largely depend on the duration of the strikes, with prolonged disruptions having the potential to intensify the implications for supply chains, leading to more pronounced bottlenecks and greater challenges in container availability, " he said.
A coalition of freight transport and cargo handling organizations is calling on countries to honor their existing resolutions to report the results of national container inspection programs, and for the International Maritime Organization (IMO) to publish those results.
Those two steps would help improve safety in the carriage of goods by sea, according to the Cargo Integrity Group (CIG), which is a is a partnership of industry associations seeking to raise awareness and greater uptake of the IMO/ILO/UNECE Code of Practice for Packing of Cargo Transport Units (2014) – often referred to as CTU Code.
According to the Cargo Integrity Group, member governments of the IMO adopted resolutions more than 20 years ago agreeing to conduct routine inspections of freight containers and the cargoes packed in them. But less than 5% of 167 national administrations covered by the agreement are regularly submitting the results of their inspections to IMO in publicly available form.
The low numbers of reports means that insufficient data is available for IMO or industry to draw reliable conclusions, fundamentally undermining their efforts to improve the safety and sustainability of shipments by sea, CIG said.
Meanwhile, the dangers posed by poorly packed, mis-handled, or mis-declared containerized shipments has been demonstrated again recently in a series of fires and explosions aboard container ships. Whilst the precise circumstances of those incidents remain under investigation, the Cargo Integrity Group says it is concerned that measures already in place to help identify possible weaknesses are not being fully implemented and that opportunities for improving compliance standards are being missed.
By the numbers, overall retail sales in August were up 0.1% seasonally adjusted month over month and up 2.1% unadjusted year over year. That compared with increases of 1.1% month over month and 2.9% year over year in July.
August’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were up 0.3% seasonally adjusted month over month and up 3.3% unadjusted year over year. Core retail sales were up 3.4% year over year for the first eight months of the year, in line with NRF’s forecast for 2024 retail sales to grow between 2.5% and 3.5% over 2023.
“These numbers show the continued resiliency of the American consumer,” NRF Chief Economist Jack Kleinhenz said in a release. “While sales growth decelerated from last month’s pace, there is little hint of consumer spending unraveling. Households have the underpinnings to spend as recent wage gains have outpaced inflation even though payroll growth saw a slowdown in July and August. Easing inflation is providing added spending capacity to cost-weary shoppers and the interest rate cuts expected to come from the Fed should help create a more positive environment for consumers in the future.”
The U.S., U.K., and Australia will strengthen supply chain resiliency by sharing data and taking joint actions under the terms of a pact signed last week, the three nations said.
The agreement creates a “Supply Chain Resilience Cooperation Group” designed to build resilience in priority supply chains and to enhance the members’ mutual ability to identify and address risks, threats, and disruptions, according to the U.K.’s Department for Business and Trade.
One of the top priorities for the new group is developing an early warning pilot focused on the telecommunications supply chain, which is essential for the three countries’ global, digitized economies, they said. By identifying and monitoring disruption risks to the telecommunications supply chain, this pilot will enhance all three countries’ knowledge of relevant vulnerabilities, criticality, and residual risks. It will also develop procedures for sharing this information and responding cooperatively to disruptions.
According to the U.S. Department of Homeland Security (DHS), the group chose that sector because telecommunications infrastructure is vital to the distribution of public safety information, emergency services, and the day to day lives of many citizens. For example, undersea fiberoptic cables carry over 95% of transoceanic data traffic without which smartphones, financial networks, and communications systems would cease to function reliably.
“The resilience of our critical supply chains is a homeland security and economic security imperative,” Secretary of Homeland Security Alejandro N. Mayorkas said in a release. “Collaboration with international partners allows us to anticipate and mitigate disruptions before they occur. Our new U.S.-U.K.-Australia Supply Chain Resilience Cooperation Group will help ensure that our communities continue to have the essential goods and services they need, when they need them.”
A new survey finds a disconnect in organizations’ approach to maintenance, repair, and operations (MRO), as specialists call for greater focus than executives are providing, according to a report from Verusen, a provider of inventory optimization software.
Nearly three-quarters (71%) of the 250 procurement and operations leaders surveyed think MRO procurement/operations should be treated as a strategic initiative for continuous improvement and a potential innovation source. However, just over half (58%) of respondents note that MRO procurement/operations are treated as strategic organizational initiatives.
That result comes from “Future Strategies for MRO Inventory Optimization,” a survey produced by Atlanta-based Verusen along with WBR Insights and ProcureCon MRO.
Balancing MRO working capital and risk has become increasingly important as large asset-intensive industries such as oil and gas, mining, energy and utilities, resources, and heavy manufacturing seek solutions to optimize their MRO inventories, spend, and risk with deeper intelligence. Roughly half of organizations need to take a risk-based approach, as the survey found that 46% of organizations do not include asset criticality (spare parts deemed the most critical to continuous operations) in their materials planning process.
“Rather than merely seeing the MRO function as a necessary project or cost, businesses now see it as a mission-critical deliverable, and companies are more apt to explore new methods and technologies, including AI, to enhance this capability and drive innovation,” Scott Matthews, CEO of Verusen, said in a release. “This is because improving MRO, while addressing asset criticality, delivers tangible results by removing risk and expense from procurement initiatives.”
Survey respondents expressed specific challenges with product data inconsistencies and inaccuracies from different systems and sources. A lack of standardized data formats and incomplete information hampers efficient inventory management. The problem is further compounded by the complexity of integrating legacy systems with modern data management, leading to fragmented/siloed data. Centralizing inventory management and optimizing procurement without standardized product data is especially challenging.
In fact, only 39% of survey respondents report full data uniformity across all materials, and many respondents do not regularly review asset criticality, which adds to the challenges.