Opinion

What Will Pop Up in Your Supply Chain in 2017?

What Will Pop Up in Your Supply Chain in 2017?

New Year is traditionally a time both to look back at what has gone on, and to anticipate what the coming 12 months will bring. In logistics especially though, it’s always wise to keep a keen eye on the future horizon, so I thought I’d put together a few lines on something that might just crop up … or rather “pop up” on your supply chain innovation radar during the year to come. “Pop-up fulfillment” is the catchy, if unoriginal term (borrowed as it probably is from the retail “pop-up store” concept) for the use of third-party warehouse (and perhaps logistics) assets to service a seasonal or similar short-term need for inventory storage and transportation.   Pop Up Fulfillment: The Uberisation of Warehousing? The concept of short-term inventory storage is nothing new. With the staggering growth in ecommerce though, and the need for supply chains to compete more effectively (for example by putting inventory as close to end-customers as possible) it is being utilised in a more dynamic way by companies prepared to break with warehousing convention. As innovative shippers lock onto the pop up idea, equally innovative service and software providers are ready to capitalise on the demand for warehouse real estate. Take U.S. based warehouse marketplace, FLEXE for example. The FLEXE platform has been likened to an AirBnB for warehouse space, since it connects shippers needing short-term space (with no strings) with companies looking to utilise excess warehouse capacity.   3 Ideal Uses for Pop-up Fulfillment Aside from the FLEXE offering in the United States, it’s not too easy to see how or where the market for on-demand warehousing will be serviced, but given the evident gap that it fills, the concept is likely to spread globally. It’s certainly not inconceivable that pop-up fulfillment will be accessible for your company (should you need it) before 2017 draws to a close. Why would you need it? Well, there are at least three possible ways a logistics operation can make use of a pop-up warehouse or fulfillment centre:     1: A solution for seasonality: This can work in one of two ways. If demand for your products typically spikes significantly at certain times of the year, you can “pop up” one or more warehouses to accommodate your inventory build. This can be especially useful for putting your inventory closer to customer concentrations, thereby improving availability and ensuring customers...

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Supply Chain Leaders: Are You Psychopaths or Saviours?

Supply Chain Leaders: Are You Psychopaths or Saviours?

According to a recent psychological study in Australia, supply chain leaders are a ruthless, calculating lot, drawn to their chosen careers because the supply chain is action-packed and opaque in nature. This commercial environment apparently appeals to the nature of those with psychopathic tendencies; traits which appear in the supply chain management profession at about the same level as in the prison inmate population.   An Objective View of Supply Chain Leaders? Was I shocked when I read the details of this study? A little, I must admit. Far be it from me to challenge the (presumably) objective research performed in the field of psychology, but my experience of supply chain management professionals (which can hardly be considered “limited”) doesn’t really concur with the findings of a Queensland-based group of forensic psychology researchers. For that reason, I felt compelled to write this post, to explore the research findings a little further, and then share what I believe are some of the benefits which supply chain leaders bring to society—achieved through leadership qualities which would seem to fly in the face of what we might expect from people with psychopathic tendencies.   Psychopathic Tendencies of Supply Chain Leaders Let’s start by looking at the findings of the research, conducted by a forensic psychologist from Bond University in Queensland and reported publicly by The Australian Financial Review Magazine. According to the study, 21% of participating supply chain leaders showed substantial levels of psychopathic behaviour, which include: Insincerity A lack of empathy Low levels of remorse Egocentricity Superficiality A ruthless and calculating ability to make decisions without emotion Presenting the study findings to a Melbourne congress of the Australian Psychological Society, the lead researcher stated that supply chain leaders are capable of a cold and clinical approach to decision-making, considering little else but the possibilities for commercial gain. So that’s the result of objective research, but what is it about the field of logistics and supply chain management that seemingly attracts psychopathic individuals like a floodlight attracts insects? Personally, I prefer to consider the profession, and those who work within it, as an honourable and essential segment of commerce without which, the world would be a much worse place in which to live.   The Good That Supply Chain Leaders Do If supply chain leaders really are prone to psychopathic tendencies, as the study would seem to suggest, the same might be...

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Supplier Days: A Great Way to Jump Start Supply Chain Collaboration

Supplier Days: A Great Way to Jump Start Supply Chain Collaboration

It’s also no secret that supply chain collaboration, while invaluable, is something easier said than done. If this is something your company is endeavouring to master, a great place to start is with your direct suppliers. One way to get the collaborative ball rolling with suppliers is to host a supplier day (or a series of them). Let’s take a look at how supplier days can work and the benefits to be obtained from using them to promote supply chain collaboration.   The Objective of Supplier Days The main purpose of a supplier day is to host representatives from your direct suppliers at your plant or distribution centre, inviting them to take part in a one-day program of collaborative activity. During that day, you will offer a tour of your facility and present some information about how your business and supply chain operates. The remaining slots on the schedule would allow for one-to-one (or team-to-team) discussions between your team members and those of each supplier, to generate ideas and begin formulating plans for ongoing collaborative initiatives. Ultimately, the goal of a supplier day is to jump start supply chain collaboration by cementing relationships between individuals and teams, and identifying ways in which collaborative efforts can deliver add value/reduce costs within your supply chain.   Maximising the Value of Supplier Days In order to get the best from a supplier day, activities should be carefully planned. Aside from promoting collaboration, you can derive extra value from the event by tapping into the knowledge of each supplier. There is no better time to do that than while providing a day’s hospitality and giving them a close-up insight into your operation. Try to steer clear of discussions about pricing, but instead focus on how each supplier can help you to reduce operational costs and/or improve your product and service quality. To aid this approach, it can be helpful to revisit your factory or DC floor with each supplier and let them see how their materials/products are used or how they flow through your facility.   Tips to Aid Supply Chain Collaboration With Supplier Days Remember that a supplier day should provide value for the companies that you invite as well as for your own organisation. The following tips will help you to plan supplier days in a way that actively encourages supply chain collaboration: Listen more than you talk: The focus for...

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3 Steps to Keep Forced Labour Out of Your Supply Chain

3 Steps to Keep Forced Labour Out of Your Supply Chain

Australian fashion companies have been making the news lately, but not all of them in a good way. At least two luxury clothing brands were publicly criticised for their inability or unwillingness to disclose the sources of their products, leading to speculation that slavery or forced labour might be an issue within their supply chains.   Keep an Eye on the Neighbours Of course the problem of forced labour is an issue for supply chains everywhere in today’s global economy, but with Southeast Asia’s (home to Australia and New Zealand’s closest trading neighbours) notoriety as a hotbed of modern slavery, it behoves Australian retailers especially, to protect their reputations by ensuring product and material sources are squeaky clean, at least to the first two or three tiers of supply. That’s not necessarily an easy task, but it’s certainly possible, as companies like Cotton On and Kmart have demonstrated. If your organisation sources materials or products from overseas (or even if your first or second-tier suppliers do), the following steps are strongly recommended to safeguard its reputation in a society increasingly sensitive to human injustices. 1. Map All Supply Chain Sources It’s no longer OK to be satisfied that your direct suppliers claim no involvement with forced labour. The sensible—if onerous—thing to do is to map all your supply chain sources to at least two-levels deep, but ideally all the way back to the source of raw materials. 2. Assess The Risk Once you know the location of all material sources in your supply chain, you should base next steps on a risk assessment. The assessment itself should not prove too difficult. Quite simply, if your company is connected with suppliers in China, Southern Asia, or Central Africa, these will be your high-risk regions. 3. Audit all Your Known Suppliers This step can be expensive, but not as expensive as a loss of reputation might be if forced labour is discovered in your supply chain. An audit means someone—either from your company or appointed to act on its behalf—physically visits the suppliers to investigate working conditions and the employment status of their workers. A physical audit of suppliers is the only sure way to uncover forced labour or similar unethical practices. The alternative, should any of your suppliers be acting unethically, is to try and limit damage if the public eventually discovers the issue. Before discounting the expense of auditing...

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Hiring and Retaining the New Supply Chain Workforce

Hiring and Retaining the New Supply Chain Workforce

Skills requirements for the supply chain workforce are changing fast, driven mainly by the growth in globalisation and the technology advances which will continue to transform the way supply chains operate. Moreover, tribal knowledge; the inherent wisdom acquired and held by veteran employees, is under threat as industries feel the effect of an aging workforce. As recently revealed in Logistics Bureau’s 2015 Australian Supply Chain Report, the logistics and warehousing sector fields a workforce comprising nearly 40% of employees over 45 years of age.   The New Supply Chain Workforce: What’s Changing? Careers in supply chain are in demand, but still there is a shortage of candidates with the right mix of skills to be effective at a transformational time in the industry. In short, supply chain companies need more generalists, but can’t afford to lose the specialist knowledge held by employees who may soon step down from full-time employment and enjoy their well earned retirements. It’s pretty much a seller’s market out there too, so if your company can’t offer something to make it stand out from other supply chain workforce buyers, hiring top talent isn’t going to be easy. Similarly, retention can be tricky when other employers are trying to lure your best employees away.   Preparing the New Supply Chain Workforce So what does it take to hire and retain the right talent in 2016 and beyond? Three words can answer that question—visualise, prioritise, and collaborate! Visualise: Perhaps I should really say “help employees to visualise”. What I’m talking about here is providing clarity around the potential career path of each individual in the supply chain workforce. Give your employees a view of their growth opportunities within your organisation. Companies which do this enjoy better employee engagement and retention. Prioritise: Unless your company is very small indeed, it’s time to shift the approach to recruitment and raise its priority. If you want to hire the best talent you can afford, waiting until you have an appointment to fill is probably a mistake. Companies which have the most success in hiring for the new supply chain workforce are those which remain constantly on the lookout for recruits. When openings do become available, those companies already have their finger on the pulse and target potential talent which they’ve already identified. Collaborate: The need for collaboration kicks in when your new hires are on board. Don’t waste any time...

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Has Ecommerce Supersized the Supply Chain Warehouse?

Has Ecommerce Supersized the Supply Chain Warehouse?

While researching online for some blog post ideas, I came across a great article from Newsweek, written back in 1995. The author of the article was predicting that among other shortcomings of the Internet, it could never realistically support activities such as booking airline tickets, reserving restaurant tables, or buying products online. Famous Last Words At that time, I’m sure the article’s author would have been only one of many people forecasting that ecommerce would be a fad, soon to fade into obscurity. Today though, I’m sure those same people have all dined on their own words many times over. The impact of ecommerce has been profound and nowhere more so than in the supply chain world. Not only has Ecommerce supersized the shopping environment, it appears to have supersized the supply chain too–in more ways than one.   Coming Soon: Supersized Supply Chain Warehouses Take warehouses for example. As we highlighted in our recently published Australian Supply Chain Report, the demand for warehouse space in Australia is forecast to increase, particularly in Brisbane, Melbourne and Sydney. What we didn’t mention in the report is that the size of warehouses looks set to increase exponentially over the next few years, in response to a growing volume of imports and the boom in e-tail shopping. Supersized supply chain warehouses will become the norm, as multi-channel distribution creates the need for larger sheds. The extra space is necessary to accommodate operations shipping high volumes of single-line, small-package orders. As the Panama Canal expansion inevitably leads to the arrival of the latest monster cargo vessels into Australian ports, the need for supersized supply chain warehouses will increase still further. Within the next two or three years, distribution centres exceeding 200,000 square metres will be a common sight, although you might have to look outside city limits to see them. The sheer size of these sheds will require that they are located away from the current zones of industry in cities like Melbourne and Sydney.   Supersized Warehouses Appearing Everywhere The imminent construction of supersized supply chain warehouses is not unique to Australia. Ecommerce is already driving a trend in giant-warehouse construction around the globe; especially as online retail behemoths like Amazon continue to expand their operations. In China, the United States, and Europe, the largest distribution centres are already approaching the 200,000 square metre mark. For example, JD.com, China’s largest online-sales organisation...

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