FedEx’s growing Supply Chain

by Maria Hartas, DCMME Graduate Assistant

Can supply chains directly meet end consumers? The answer is yes, and for companies like FedEx Office opening retail locations in Walmart stores, the company’s supply chain is turning into a customer-centric supply chain. FedEx recently opened the company’s 2,000th retail location in a Walmart in Chesapeake, Virginia, marking it the 150th such location of the 500 Walmart stores customers will be able to print and ship while shopping.

 

Why FedEx & Walmart?

Expanding FedEx storefronts in Walmart is a strategic move towards adopting a more customer-focused supply chain. For FedEx, offering the option to customers to ship and pick orders from a secure store location instead of an exposed porch or front door increases the sense of security and reliability of doing business with the company. In addition to consumer benefits, FedEx will increase its market presence through the Walmart network in more locations without incurring direct construction or development costs leveraging the existing store facilities. Walmart on the other hand, will benefit from increased traffic in stores; online shoppers could potentially switch from other e-commerce platforms that do not offer convenient pick-up locations and opt to couple online ordering with grocery shopping at a Walmart near them.

A robust, customer facing supply chain will continue to grow as more companies take a holistic approach in improving customer experiences, starting from raw materials to convenient store locations nearby.

How can a 3PL, like FedEx, enter new markets though its supply chain?

Why are companies adopting customer-centric supply chains?

Could FedEx and Walmart become more competitive by working together?

Sources:

https://www.supplychaindive.com/news/fedex-opens-2000th-retail-location-e-commerce/551928/

https://www.cnbc.com/2018/03/20/walmart-to-bring-fedex-shops-into-500-of-its-us-stores.html

 

How Augmented Reality is disrupting supply chains. – Abhilasha Satpathy

With over one billion AR enabled smartphones and tablets already in use, companies don’t have to wait for low-cost augmented reality glasses to start reaping the benefits of augmented reality. Here are five ways that AR is transforming the supply chain into a nimble tool for global distribution:

1) Pick-and-Pack Services

Augmented reality is being used in warehouses to more efficiently locate products and pack them in outgoing boxes. One of the costliest parts of running a “pick and pack” service is training new workers to navigate a large warehouse and find the one product they are searching for. AR glasses can paint an imaginary line on the warehouse floor to simplify the searching and training. During the peak holiday season, temporary workers need to be on-boarded quickly. AR shortens the learning curve by providing new hires with constant feedback on their glasses about how they are doing and what can be improved. Field tests of AR pick-and-pack systems have reduced errors by as much as 40%.

2) Collaborative Robotics

Robots are the ultimate human augmentation. Workers sitting comfortably at their desks can wear AR glasses that let them see what a robot in the warehouse sees. AR glasses can now chart the paths of robots through warehouses and use their strength to lift and move heavy cargo. Dangerous or repetitive tasks, such as loading a truck, can be delegated to robots that operate with human guidance when it comes to how to best load the items to achieve the maximum load. Additionally, logistics robots are able to scan each product for damage, check its weight, and abide by any package shipping instructions. By connecting robots with managers, customers can be automatically alerted if any products that aren’t available before the truck even leaves the warehouse.

3) Maintenance

Fixing a problem before it happens is the most cost-effective form of maintenance. With many aircraft engines now transmitting usage data via Wi-Fi when they are on the ground, augmented reality is assisting maintenance crews in reducing engine downtime by comparing engine data with the past history of other similar aircraft with avionics systems. These algorithms then suggest maintenance before a problem is likely to occur. For planes that spend most of their ground time at distant locations, AR can also enable more experienced maintenance teams at the airline’s hub to see what local technicians are dealing with and provide timely live support.

4) Last Mile Delivery

In logistics, the last-mile of delivery to customers is the most expensive. AR can save money by cutting the time spent on last-mile delivery nearly in half. According to a DHL report, drivers spend 40% to 60% of their day searching inside their own truck for the correct boxes to deliver next. Instead of having to remember how their truck was loaded that morning, augmented reality is used to identify, tag, sequence, and locate every parcel. Combined with artificial intelligence, AR glasses can also navigate the driver to the proper door or building gate for delivery. These systems will record each and every delivery so that new drivers will benefit from past driver experiences. In the near future, every driver will be given a graphic overlay of each building they encounter.

5) Procurement

The distributed ledger capability of blockchain is being combined with augmented reality to bring transparency and traceability to procurement. The entire supply chain falls apart when customers can’t be assured of a product’s origin or authenticity. Each year, billions of dollars’ worth of counterfeit pharmaceuticals are distributed to patients, and tens of thousands are dying. Using AR to identify and track each shipment from manufacturer to end user is a way to help solve this deadly problem. Recording each transfer of ownership on a blockchain can also assist in tracing the origin of fish or the source of harvested crops.

Big data drives the decision making behind the world’s distribution of products throughout the supply chain. Augmented reality is now poised to exponentially increase the speed at which data can be analyzed and acted on. The insights augmented reality bring to the supply chain can be used to power the next generation of the supply chain, which will feature autonomous vehicles and delivery drones.

References:

“5 Ways Augmented Reality Is Disrupting the Supply Chain.” Fortune, fortune.com/2018/03/01/5-ways-augmented-reality-is-disrupting-the-supply-chain/.

Questions:

  1. How does augmented reality help in reducing costs in supply chain?
  2. How is blockchain is being combined with augmented reality to bring transparency and traceability to procurement?
  3. How does augmented reality help in last-mile delivery?

How 3D Printing Impacts Logistics and Supply Chains- by Abhilasha Satpathy, DCMME Center Graduate Student Assistant

In recent years, 3D printing has brought manufacturing capabilities to several remote, hard-to-access areas across the globe. DHL, for instance, tells us that the U.S. Navy 3D prints drones on-demand on board its oceangoing vessels. NASA, meanwhile, is working to develop a 3D printer for the International Space Station. Shell is also experimenting with this remote manufacturing method on offshore oil platforms.

Pay-for-use or nonprofit fabrication shops are becoming more popular as well, offering public access to 3D printing tools, and some websites have begun aggregating 3D printing designs, allowing customers to compare and select printing services that work for their specific needs.These initiatives are disrupting the traditional manufacturing supply chain in several ways. In researching warehouse stocking practices in Amsterdam, DiManEx found that approximately 80% of stored products were sold only twice yearly, which led to write-offs, scrapping, and wasted materials. With on-demand, on-site printing, companies can move away from having to store excess spare parts and can instead deliver parts quickly and efficiently, whenever they’re required. Mercedes-Benz Trucks, for instance, allows customers to 3D print more than 30 cargo truck spare parts.

As 3D printing becomes more and more prevalent, expect to see increased supplier consolidation as well. For instance, logistics providers may offer added value by being the ones to process, print, and deliver 3D parts quickly and cheaply. In this way, the typical months-long process of designing, sourcing, and producing component parts can be cut down drastically. In the future, 3D printing warehouses may also take on the responsibility of material sourcing in addition to 3D end-to-end design, production, and delivery. As an example, consider Amazon’s bet on this technology: The company has patented a truck fitted with 3D printers that would allow for sophisticated mobile manufacturing capabilities. Increased responsiveness is also likely, as 3D printers allow for smaller batch sizes, which can positively impact quality control and open the door for expedited product development.

Finally, this kind of technological innovation is likely to bring about advanced customization options, as users will be able to select various aspects of the design, material, shape, size, packaging, and so on. And in gaining the power to make and deliver their own 3D-printed products, customers will no longer be limited to what suppliers themselves design and produce.

 

References:

3D Printing Finds Its Place in the Supply Chain. (n.d.). Retrieved from https://news.thomasnet.com/featured/3d-printing-finds-its-place-in-the-supply-chain/

 

Questions:

  1. How is 3D printing bringing about advanced customization options into supply chains ?
  2. How is 3D printing reducing wastage in supply chains ?
  3. How is 3D printing improving the efficiencies of supply chains ?

 

 

 

Disruptive Innovations and their applications in Supply Chain Management – by Abhilasha Satpathy, DCMME Center Graduate Student Assistant

Procurement and supply chain are at the cusp of a disruption with AI, IoT and blockchain technology. A digital transformation is ensuing with the promise of greater efficiency in business processes, operations, transparency and security.

Spend analysis

Spend analysis used in strategic sourcing, needs a shift from the traditional descriptive analytics model to more predictive and prescriptive analytics. Organizations can develop tools to enhance their spend analysis with public domain data — from social media, weather data, demographics, suppliers, competition and logistics to name a few — to help uncover insights that can save money and improve supply chain.

 

Supplier lifecycle management

The traditional supplier lifecycle management platform, when augmented by big data from the public domain, can offer meaningful information on suppliers and supply chain risks. An IoT solution can be employed to track the quality of the product at various stages of the supply chain thus improving the efficiency in the process and providing the metrics for supplier evaluation.

 

Strategic sourcing

Supplier bids are collected using online sourcing events, but a large part of the sourcing evaluation and award process is manual in nature. Using blockchain for through all steps of the process — proposals, quotes and bids — or auction, can offer greater efficiency and transparency.

 

Contract management

A blockchain platform and its smart contract framework coupled with IoT and AI, can help facilitate greater efficiency in compliance and obligation management. AI can help develop smart wizards to build contracts based on responses to specific questions and can further be enabled for pattern recognition to identify changes to standard clauses or introduction of non-standard clauses.

Order management

The traditional order management system is internal to any organization and facilitates the fulfillment process. Blockchain platform powered with AI and IoT can drive greater efficiency in orchestrating and streamlining purchase orders, shipment details, trade documents, goods receipts, quality assurance documents, returns and accounting.

Logistics

The logistics industry is an early adopter of AI, IoT and Blockchain, and is already reaping great business benefits. IoT in the logistics ecosystem can provide great insights on inventory management, shelf life, storage temperature, delivery routes, real-time tracking of freight and more

 

Reference:

https://www.ibm.com/blogs/blockchain/2018/04/digital-transformation-next-gen-procurement-and-supply-chain/

 

Questions:

  1. How are AI, IOT and blockchain transforming the logistics industry?
  2. How is blockchain helping in order management?
  3. How can AI help in contract management ?

How Increased Global Volatility in 2019 Will Change your Supply Chain

As we move into 2019 it is easy to see that this is going to be a challenging year as there is more volatility than normal because of the geopolitical climate we are in. From the trade war with China, tariff increases, and a less stable US economy on top of the standard sources of risks – natural disasters, labor disputes, etc. – 2019 is going looking to bring new challenges to supply chains and procurement teams. According to the article “Global Volatility & AI: How It Will Affect Your Supply Chain” by Rajesh Kalidindi, these additional risks are going to lead to several changes in how a procurement department and supply chain are run.

Firstly, you are going to see a shift towards scenario planning from procurement, or in other words “What If” analyses are going to be in higher demand for helping make procurement decisions that mitigate the impact of these growing risks. Next, you are going to see a shift in procurement priorities from straightforward, consistent cost reduction to ensuring continuous supply and limiting price increases – especially as tariffs, wages, and interest rates continue to rise. In order to help achieve these changes, organizations will begin to rely on predictive and AI-enabled technologies to fill the gaps in their current capabilities and what is being asked of them. This is the first step I moving towards AI-led business. Those who already have this technology in place with begin using it in conjunction with product design to provide new insights into New Product Introduction (NPI) that will enable companies to optimize the life cycle of their products by addressing supply risks from the get-go. All of these changes will lead to a need for new procurement and supply chain employees with greater digital literacy. All of this will lead to changes in the way supply chains and procurement departments look, and it all starts with the increased market volatility being seen in 2019.

 

Source: https://www.industryweek.com/technology-and-iiot/global-volatility-ai-how-it-will-affect-your-supply-chain

 

Questions:

  1. How long until we see the majority of supply chains using AI-enabled technology?
  2. With the onset of AI-led business, how will the role of a procurement officer change in a company?

What will happen to those companies that are behind the trend of predictive and AI-enabled technologies? Will they become insignificant or still have a role to play in the market?

Blockchain digitally transforming B2B processes

by Maria Hartas, DCMME Graduate Assistant

A blockchain pilot program has successfully been completed between Elemica, the leading Digital Supply Network for Process Manufacturer, and crossinx, a network for financial business collaboration solutions. The pilot program aims to redefine B2B processes and support multiple industry digital transformation.

The program consists of the two companies existing as nodes on a public blockchain connecting structures data with unstructured data. Additionally, two global chemical companies partook in transferring invoice, purchase order, delivery tender, and proof-of-delivery documents and data.

Further testing blockchain capabilities could enable a many-to-many connection of companies. Connecting to a digital network, supply chain data can be shared with all trading partners regardless of the network each is connected to. As expressed by crossinx CEO and founder Marcus Laube, the goal is “To use the blockchain to automate document exchange along the supply chain and make it more transparent. This is the basis for our Supply Chain Finance solution”.

A many-to-many connection with blockchain could lead to the:

  1. Ability to decentralize and free-up from intermediaries the exchange information between different stakeholders
  2. Simplification and enhancement of existing business processes
  3. Development of auto-ordering based on IoT information
  4. Automation of PO confirmations
  5. Creation of auto-invoice based on Pickup or PoD
  6. Auto-matching of invoices
  7. Ability of auto-payments
  8. Extension of technology to other complementary decentralized networks and from IoT devices

The pilot program will continue to push blockchain applications before full adoption of the technology.

  1. Can you think of alternative ways to solve potential Supply Chain Finance bottlenecks (manual order creation, invoice matching, payment generation/confirmation, and so on)?
  2. How can multiple shareholders avoid intermediaries in sharing documents and data?
  3. What are the benefits of blockchain technology in creating a shared network?

Source: https://www.supplychain247.com/article/automating_multi_tier_processes_elemica_crossinx_deliver_blockchain_pilot/news

 

DRONES IN GLOBAL SUPPLY CHAINS by Abhilasha Satpathy, DCMME Center Graduate Student Assistant

Two years ago, in an article in SCMR author Nick Vyas outlined real-life applications for drones in the healthcare industry, and predicted other use cases such as pipeline inspections or deliveries of parts and supplies in hard to access areas.

He also noted that “PINC, a provider of yard management systems, has deployed a solution that utilizes drones to identify the location of trailers, shipping containers, and other assets in hard to reach areas. Equipped to carry GPS, RFID, OCR, and barcode readers, the drones can fly overhead to quickly locate and identify assets that have been tagged in a yard or port.”

So, what is the state of drones in the supply chain today?

Companies are focused on improving inventory accuracy to achieve higher supply chain velocity. Tasks like taking inventory and cycle counting are still carried out by humans which can be done more than 300 times faster by drones.

What is the state of the technology? Today, the drone, or robot, flies autonomously in a gps-denied environment using advanced sensors. The company’s warehouse management system (WMS) feeds existing inventory information to the PINC application via integration. When the robot receives a task to count inventory – say the number of cartons on pallets in a storage bay – the software first creates the optimal path for the drone to travel based on mapping done previously.

The drone doesn’t need markers or lasers for guidance to navigate through warehouses. The robot is equipped with an optical system combined with computer vision and deep learning technologies. When it passes through an assigned location, which it knows by the X, Y and Z coordinates, it visually inspects inventory labels and takes photos of the inventory to be counted.

The digital images are processed in real time to generate a count, which is compared against the known count in the WMS system. Since the system manages by exception, after taking inventory, the application provides an exception report to the operator who can click on the exceptions, look at a photo to confirm a count and then, if needed, update the WMS.

Down the road, Yearling expects conversations about using drones in transportation to continue, if for no other reason than the amount of spend on transportation.

References:

https://www.logisticsmgmt.com/article/the_emerging_role_for_drones

 

Questions:

  1. How are drones being used in supply chain today?
  2. How do drones aid Warehouse Management Systems?
  3. How do drones improve inventory accuracy?