2015

What’s in Your Supply Chain Insurance Portfolio?

What’s in Your Supply Chain Insurance Portfolio?

The last few years have provided a number of opportunities (if that’s the best expression) to test what happens when disaster strikes at the heart of just one link in today’s convoluted supply chains. Flooding in Thailand, the Japanese earthquake and tsunami, and a number of other disasters left companies across the world struggling to make products available to their customers and remain profitable. With that in mind, does your company have adequate supply chain insurance to cover against all eventualities?   How Much Supply Chain Insurance is enough?   Of course there might always be circumstances in which insurance won’t protect your organisation. However, by taking steps to access the following four insurance types, you will at least be protected against the most likely scenarios: Cyber insurance: Who would have thought the day would come when supply chain insurance would be needed for electronic information? However, losing control of your ecommerce platform or your customers’ personal data can have effects just as damaging as physical losses. Cyber insurance has hence become an essential part of every supply chain insurance portfolio. First-party commercial property insurance: A good first-party commercial property insurance policy will cover your company against supply disruption resulting from loss or damage, not only to your own facilities, but also to those of upstream suppliers and downstream customers. Cargo insurance: Containers fall off ships all the time, truck hijackings and trailer thefts are commonplace. To make sure you can recover inventory losses resulting from such events, your supply chain insurance portfolio should certainly include cargo coverage. Trade disruption insurance: Neither first-party commercial property or cargo insurance will protect your organisation from a supply chain interruption caused by supplier bankruptcy, workers’ industrial action in the country of your supplier, or similar event; unless that event somehow results in suppliers’ property damage or the loss of goods-in-transit. Trade disruption insurance therefore, should be sought to plug the gaps left by the other two instruments.   Secure the Broadest Coverage When shopping around for the insurance products you need to cover your own company, it’s critical to try and secure policies that also protect you against events befalling first or second tier suppliers and customers, wherever they may be located. Supply chain insurance is not cheap and when things are peachy in your supply chain, it’s easy to wonder at the justification for premiums. It only takes one significant event...

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5 Quick Tips for Handling Seasonal Supply Chain Peaks

5 Quick Tips for Handling Seasonal Supply Chain Peaks

There’s a “ber” in the month, which means that for some, the festive season has arrived. Certainly in supply chain circles, it’s time to start anticipating the seasonal uplift in throughput and making plans to meet the extra demand. If this will be your first Christmas in a supply chain management role or you just need some ideas to avoid being caught out by the seasonal flood of orders, the following five tips for handling seasonal supply chain peaks should help you to plan ahead more effectively.   1. Extend your DC storage boundaries   Exceeding the standard capacity of your warehouses or distribution centre is a common seasonal issue. That means it might be time to get inventive with your use of space in your facility. Can some products be stored outside of the warehouse in your yard? Is it practical to close off some aisles and use them for packing or other processing tasks? With a bit of forethought, it’s surprising how much you can increase available storage space.   2. Prepare quick-hit training programs for temporary staff   Work with your human resources team to develop an abbreviated training program to quickly bring seasonal workers up to speed with your workflows, site layout, safety code and common procedures. This will enable temps to ramp up quickly and deliver optimum productivity.   3. Plan appropriate tasks for temps   Try to divide the workload in your facility in a way that keeps the most critical and complex tasks in the hands of your permanent workforce. Simpler and less skill-intensive activities are the ones to farm out to temporary staff during seasonal supply chain peaks.   4. Shift your shifts around   Consider extending standard shifts by an hour or two per day for the peak season; add an extra day if you normally operate five or six days per week, or even introduce an extra shift on a daily basis.   5. Prepare to work with some Plan B service providers   You might need to work with some extra carriers or other service providers during seasonal supply chain peaks. Identify the providers you want to work with now, and test them with some work before demand dictates that you use them. These are just a few ways to help you meet the seasonal supply chain peak at Christmas time. Perhaps the most important thing to bear...

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5 Tips for Selecting a Logistics Consulting Firm

5 Tips for Selecting a Logistics Consulting Firm

As you may be aware, a large part of what we do at Logistics Bureau Group is helping supply chain and logistics companies improve their business through our consulting services. That means that since The Logistics Bureau was launched back in 1997, we’ve had plenty of practice in understanding the customers who call on us for assistance.     As one who has made a career from matching consulting specialists to customers, I ought to be able to offer some guidance to you, the prospective customer; whether you are looking for a logistics consultant right now, or will be seeking one in the future. So here are five quick tips which, in my experience, will help you select a logistics consulting firm that fits well with your business and its project needs.   1. Practice due diligence and ask for a list of references, gather proof of technical qualifications and check that the prospect has worked on similar problems to the one you are trying to solve. 2. Look for a lead consultant who listens more than she talks. During your initial discussions, observe how well the consultant pays attention to what you and your colleagues have to say. It might be wise to think twice about engaging a consultant who wants to hear her own voice rather than yours. 3. Vet the consultant’s business plan thoroughly. Expect the plan to follow a clear methodology and to include milestones and quality control measures. 4. Assess the likelihood that the consulting team will accommodate your firm’s business culture. Some consulting organizations prefer to apply rigid industry standards, but in our experience, this only interferes with the customer relationship and hampers project progress. 5. Investigate the consultant’s approach to teamwork. When selecting a logistics consulting firm, you really can’t ask enough questions about teamwork and flexibility. The best partners will be those prepared to mentor and build rapport with your team, especially if you are engaging them for a major project that will require careful change management.   Consultants with the right qualities and the credentials to prove their worth might not come with a bargain basement price tag. But selecting a logistics consulting firm should be a process driven by the search for excellence, rather than one that laser-targets the lowest cost. If you keep these five tips in mind and consequently engage the right consulting company, you should find...

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Make Sure You Know Your Place in the Chain of Responsibility

Make Sure You Know Your Place in the Chain of Responsibility

Australia is a country famous for uniqueness … Kangaroos, wallabies, Duck-Billed whatchamacallits—the list goes on. In road transport legislation too, we have a set of regulations which while not totally unique, are not yet adopted on a widespread basis around the rest of the world. I say not yet … but I believe the time will come when the “chain of responsibility” concept becomes adopted in many western nations. In fact, COR legislation was recommended to the United States Congress in 2014 and is currently under consideration.     Back at home, knowing your place in the chain of responsibility is critical if your business is to steer clear of liability for something that happens literally a way down the Australian highway.   What is the Chain of Responsibility? In a nutshell, chain of responsibility legislation applies to pretty much any entity involved in a supply chain; at least if that supply chain involves goods transportation by road. Essentially, if a truck driver commits an offence under the Heavy Vehicle National Law (HVNL) and you exerted even a small degree of influence over the event, you can be held liable in part for the offence.   Here’s an example … As a simple example of how you might be liable for a driver’s HVNL breach, imagine you are responsible for unloading inbound deliveries from a supplier. Your team is under pressure when a truck comes in and consequently, the truck is held for some time before the goods on board finally get unloaded. As a result, the truck driver fails to take a scheduled break in his efforts to get back to base and is subsequently involved in an accident for which he is blameworthy. Now here’s the bad news … under COR law, you are potentially blameworthy too.   It Pays to Know Your Place This is of course, a simplified example, but hopefully the message is clear. If you and your company are in a position to influence the course of events in the transport of goods by road (and you are in Australia), you should know your responsibilities under COR legislation. So do yourself a favor; if you aren’t already aware, get yourself up to speed post-haste and know your place in the chain of responsibility.   See also related articles: Chain of Responsibility Part 1 – an Easy Guide Chain of Responsibility Part 2 –...

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Distribution Centre Performance: How Do You Measure Yours?

Distribution Centre Performance: How Do You Measure Yours?

As you may be aware, one of the businesses in the Logistics Bureau Group is Benchmarking Success, a company dedicated to helping supply chain enterprises to benchmark and measure performance. We founded the company because the complexity of increasingly global supply chains can make it challenging to keep a pulse on performance. Quite simply, we wanted to make that task simpler for our clients.     Just to illustrate how even a single supply chain component needs a set of relevant and meaningful key performance indicators to provide visibility for managers, I thought I’d share a brief insight into some of the most popular metrics for monitoring distribution centre performance.   Six Popular Distribution Centre Performance KPIs So here are six of the most popular distribution centre performance metrics being used around the world’s supply chains: On Time Shipment: Percentage of total order lines shipped on or before requested shipping date. Internal Order Cycle Time: Average time between receipt of customer order and the order being loaded onto vehicle for delivery. Dock to Stock Cycle Time: Average number of hours taken to put goods away in the warehouse. The time from the inbound unloading dock to the SKU storage location. Total Order Cycle Time: Average time duration between customer placing order and customer receiving the ordered goods. Order Picking Accuracy: Percentage of total orders that were correctly picked (correct quantity and quality of items on an order) Average Warehouse Capacity Utilised: Percentage of warehouse capacity used over a specific time period (could be month, quarter or year). Does your company use any of these popular KPIs? We’d love to hear about the ones you like and the ones you don’t and the reasons for your preferred choice of metrics.   Best Regards Rob O’Byrne Email or +61 417 417...

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