Commentary – Inbound Logistics https://www.inboundlogistics.com Fri, 08 Nov 2024 22:13:06 +0000 en-US hourly 1 https://wordpress.org/?v=6.6.2 https://www.inboundlogistics.com/wp-content/uploads/cropped-favicon-32x32.png Commentary – Inbound Logistics https://www.inboundlogistics.com 32 32 Canada’s Supply Chain Act Is in Effect. Complying May Be Easier Said Than Done. https://www.inboundlogistics.com/articles/canadas-supply-chain-act-is-in-effect-complying-may-be-easier-said-than-done/ Fri, 08 Nov 2024 21:50:55 +0000 https://www.inboundlogistics.com/?post_type=articles&p=42197

Involuntary servitude, debt bondage, child labor, and other variations of forced labor generate more than $150 billion in revenue per year globally. The scope of the problem is, quite frankly, staggering.

Consequently, governmental bodies around the world have passed anti-slavery legislation that seeks to hold businesses accountable for combating modern slavery in the supply chain. However, passing this legislation is by no means a guarantee of progress.

The most recent regulation attempting to curtail involuntary labor is Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act, which went into effect on January 1, 2024. To comply, organizations that operate or do business in Canada must detail how they and their business partners are working to phase out forced labor from their operations.

However, making and documenting progress will be easier said than done given the intricacies and vastness of modern supply chains. So, what meaningful steps can organizations take?

Supply chain mapping: A prerequisite for compliance

In 2024, the first year Canada’s new law is in effect, any company that does business in Canada and has $20 million or more in assets must submit a detailed report that outlines how the organization is working to prevent the use of forced labor in its supply chain.

This initial filing is designed to establish a baseline that businesses will be measured against in subsequent years to determine whether they’ve followed through on rooting out unethical practices deep within their supply chains and improving transparency across the board.

The biggest challenge for most businesses will be understanding the complex layers of their product supply chains. Many organizations have visibility into the labor practices of Direct or Tier-1 partners; however, visibility may be limited when it comes to Tier 2, 3+ sub suppliers and subcontractors. It’s critical to identify all links in the supply chain so the organization can do its due diligence regarding forced labor risk.

This is where supply chain mapping becomes important. Supply chain mapping is the practice of collecting data about the production of a good or service for reporting purposes. While it involves several manual components, supply chain mapping is only feasible at scale with the right technology.

A business’ specific technology implementation will depend on its goals and the compliance regulations it needs help adhering to. In this case, Canada’s supply chain labor transparency law requires business to report data on the structure of the company’s supply chain, its policies regarding forced labor, the parts of the business that are at risk of using forced labor, and what steps the business is taking to reduce this risk. In many cases, a supply chain management platform can provide the level of visibility that’s required to gather and track this data.

As supply chain leaders begin the process of identifying and collecting labor data from their sub-suppliers, they’ll likely encounter differing levels of engagement. Certain suppliers may be forthcoming and responsive, while others may be hesitant and slow to respond.

However, it’s important to emphasize the necessity of compliance and that failure to comply may jeopardize future partnerships. They should document their responses within their supply chain mapping solutions to ensure that auditors are aware that they performed their due diligence.

Taking steps toward a slavery-free supply chain

Policies like Canada’s anti-forced labor act are a valuable first step toward eradicating modern slavery, but they will only be effective if compliance follows.

To respond to these emerging regulations with greater agility, supply chain leaders need visibility into every supplier and contractor that touches their supply chain — and their policies regarding working conditions and forced labor. With a foundation of mapped supply chains, companies can more easily perform the requisite due diligence to understand and mitigate risks beyond their tier-1 partners.

Eliminating modern slavery from the supply chain is a massive, seemingly incomprehensible problem. It’s the efforts of individual supply chain leaders that can help move the needle in the right direction.

]]>

Involuntary servitude, debt bondage, child labor, and other variations of forced labor generate more than $150 billion in revenue per year globally. The scope of the problem is, quite frankly, staggering.

Consequently, governmental bodies around the world have passed anti-slavery legislation that seeks to hold businesses accountable for combating modern slavery in the supply chain. However, passing this legislation is by no means a guarantee of progress.

The most recent regulation attempting to curtail involuntary labor is Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act, which went into effect on January 1, 2024. To comply, organizations that operate or do business in Canada must detail how they and their business partners are working to phase out forced labor from their operations.

However, making and documenting progress will be easier said than done given the intricacies and vastness of modern supply chains. So, what meaningful steps can organizations take?

Supply chain mapping: A prerequisite for compliance

In 2024, the first year Canada’s new law is in effect, any company that does business in Canada and has $20 million or more in assets must submit a detailed report that outlines how the organization is working to prevent the use of forced labor in its supply chain.

This initial filing is designed to establish a baseline that businesses will be measured against in subsequent years to determine whether they’ve followed through on rooting out unethical practices deep within their supply chains and improving transparency across the board.

The biggest challenge for most businesses will be understanding the complex layers of their product supply chains. Many organizations have visibility into the labor practices of Direct or Tier-1 partners; however, visibility may be limited when it comes to Tier 2, 3+ sub suppliers and subcontractors. It’s critical to identify all links in the supply chain so the organization can do its due diligence regarding forced labor risk.

This is where supply chain mapping becomes important. Supply chain mapping is the practice of collecting data about the production of a good or service for reporting purposes. While it involves several manual components, supply chain mapping is only feasible at scale with the right technology.

A business’ specific technology implementation will depend on its goals and the compliance regulations it needs help adhering to. In this case, Canada’s supply chain labor transparency law requires business to report data on the structure of the company’s supply chain, its policies regarding forced labor, the parts of the business that are at risk of using forced labor, and what steps the business is taking to reduce this risk. In many cases, a supply chain management platform can provide the level of visibility that’s required to gather and track this data.

As supply chain leaders begin the process of identifying and collecting labor data from their sub-suppliers, they’ll likely encounter differing levels of engagement. Certain suppliers may be forthcoming and responsive, while others may be hesitant and slow to respond.

However, it’s important to emphasize the necessity of compliance and that failure to comply may jeopardize future partnerships. They should document their responses within their supply chain mapping solutions to ensure that auditors are aware that they performed their due diligence.

Taking steps toward a slavery-free supply chain

Policies like Canada’s anti-forced labor act are a valuable first step toward eradicating modern slavery, but they will only be effective if compliance follows.

To respond to these emerging regulations with greater agility, supply chain leaders need visibility into every supplier and contractor that touches their supply chain — and their policies regarding working conditions and forced labor. With a foundation of mapped supply chains, companies can more easily perform the requisite due diligence to understand and mitigate risks beyond their tier-1 partners.

Eliminating modern slavery from the supply chain is a massive, seemingly incomprehensible problem. It’s the efforts of individual supply chain leaders that can help move the needle in the right direction.

]]> 3 Key Questions to Answer Before the DSCSA Stabilization Period Ends https://www.inboundlogistics.com/articles/3-key-questions-to-answer-before-the-dscsa-stabilization-period-ends/ Thu, 07 Nov 2024 19:56:11 +0000 https://www.inboundlogistics.com/?post_type=articles&p=42093

The Drug Supply Chain Security Act (DSCSA) was signed into law in 2013 to protect consumers from contaminated, stolen, and counterfeit drugs. The U.S. Food and Drug Administration (FDA) allowed a stabilization grace period for companies to meet its requirements. Unless they have applied for an exemption, life sciences and healthcare supply chain organizations must comply with the serialized traceability requirements by Nov. 27, 2024 (more on that below).

Here are three questions to ask yourself before the stabilization period ends:

1) How ready is the industry for EPCIS data exchange?

Electronic Product Code Information Services (EPCIS) is a standard for capturing and sharing detailed information about the movement and status of products across the supply chain. In the context of DSCSA, EPCIS is used to exchange transactional data, including what’s being transferred, the complete record of transactions, and a statement confirming compliance with DSCSA standards.

A recent Partnership for DSCSA Governance survey shows confidence in stabilizing these systems across the three major segments of their supply chains. On a scale of 0-5, manufacturers rated themselves 4.15, wholesale distributors 3.42, and dispensers 3.29.

Despite claims of readiness, the survey revealed few organizations were sending and receiving serialized data for most products. Only one in 10 wholesale distributors said they received a complete set of serialized data for more than 80% of purchased products. Dispensers fared better, with three in 10 receiving complete serialized data for 80% of purchased products.

Why is the industry so confident if many aren’t receiving serialized product data?

It’s all in the definition. Here, readiness means linking with a partner and sending a test file. However, it should mean exchanging EPCIS transitions at scale across all use cases. As transaction volume grows, wholesalers and dispensers will find new issues, increasing resolution time.

2) Will Waivers, Exceptions, and Exemptions help?

The FDA has defined a Waiver, Exception, and Exemption application process for companies seeking relief from DSCSA requirements. Although the FDA advised organizations to submit requests by Aug. 1, waiver requests are open for submission anytime. Failure to comply with DSCSA regulations by the deadline without a waiver, exception, or exemption can lead to legal action.

Delaying the DSCSA go-live date for a waiver doesn’t guarantee approval; the FDA requires detailed justification, supporting documentation, and product circumstances. On Oct. 9, the FDA offered an exemption to supply chain members facing data exchange challenges.

3) What is the optimal way to manage DSCSA exceptions?

DSCSA compliance exceptions could delay product delivery and receiving. Organizations must resolve every exception before the trading partner can send the product downstream or sell it to patients, impacting company profits and medication availability.

Once the life sciences and healthcare supply chain begins exchanging serialized product data (and assessing the quality and accuracy of this data) in earnest, the number of compliance exceptions will surge. Just look at the three months following the launch of the European Union’s Falsified Medicine Directive, which experienced high discrepancies with a nearly 7% alert rate.

Handling compliance exceptions is time-consuming and lacks a defined system under DSCSA, exacerbating the anticipated higher exception rate. As the industry transitions to sharing serialized product data, technical challenges will arise, adding complexity to processes like exception investigations, root cause analysis, and partner coordination.

While some DSCSA solutions address compliance exceptions, they are limited, focusing primarily on formatting errors in EPCIS files and relying mainly on email alerts.

With the Nov. 27 deadline nearing, pharmaceutical supply chain organizations are striving to meet DSCSA’s electronic data exchange standards. Despite progress, challenges implementing serialized data exchange persist across all transactions, meaning continuous efforts are necessary even after the compliance deadline.

]]>

The Drug Supply Chain Security Act (DSCSA) was signed into law in 2013 to protect consumers from contaminated, stolen, and counterfeit drugs. The U.S. Food and Drug Administration (FDA) allowed a stabilization grace period for companies to meet its requirements. Unless they have applied for an exemption, life sciences and healthcare supply chain organizations must comply with the serialized traceability requirements by Nov. 27, 2024 (more on that below).

Here are three questions to ask yourself before the stabilization period ends:

1) How ready is the industry for EPCIS data exchange?

Electronic Product Code Information Services (EPCIS) is a standard for capturing and sharing detailed information about the movement and status of products across the supply chain. In the context of DSCSA, EPCIS is used to exchange transactional data, including what’s being transferred, the complete record of transactions, and a statement confirming compliance with DSCSA standards.

A recent Partnership for DSCSA Governance survey shows confidence in stabilizing these systems across the three major segments of their supply chains. On a scale of 0-5, manufacturers rated themselves 4.15, wholesale distributors 3.42, and dispensers 3.29.

Despite claims of readiness, the survey revealed few organizations were sending and receiving serialized data for most products. Only one in 10 wholesale distributors said they received a complete set of serialized data for more than 80% of purchased products. Dispensers fared better, with three in 10 receiving complete serialized data for 80% of purchased products.

Why is the industry so confident if many aren’t receiving serialized product data?

It’s all in the definition. Here, readiness means linking with a partner and sending a test file. However, it should mean exchanging EPCIS transitions at scale across all use cases. As transaction volume grows, wholesalers and dispensers will find new issues, increasing resolution time.

2) Will Waivers, Exceptions, and Exemptions help?

The FDA has defined a Waiver, Exception, and Exemption application process for companies seeking relief from DSCSA requirements. Although the FDA advised organizations to submit requests by Aug. 1, waiver requests are open for submission anytime. Failure to comply with DSCSA regulations by the deadline without a waiver, exception, or exemption can lead to legal action.

Delaying the DSCSA go-live date for a waiver doesn’t guarantee approval; the FDA requires detailed justification, supporting documentation, and product circumstances. On Oct. 9, the FDA offered an exemption to supply chain members facing data exchange challenges.

3) What is the optimal way to manage DSCSA exceptions?

DSCSA compliance exceptions could delay product delivery and receiving. Organizations must resolve every exception before the trading partner can send the product downstream or sell it to patients, impacting company profits and medication availability.

Once the life sciences and healthcare supply chain begins exchanging serialized product data (and assessing the quality and accuracy of this data) in earnest, the number of compliance exceptions will surge. Just look at the three months following the launch of the European Union’s Falsified Medicine Directive, which experienced high discrepancies with a nearly 7% alert rate.

Handling compliance exceptions is time-consuming and lacks a defined system under DSCSA, exacerbating the anticipated higher exception rate. As the industry transitions to sharing serialized product data, technical challenges will arise, adding complexity to processes like exception investigations, root cause analysis, and partner coordination.

While some DSCSA solutions address compliance exceptions, they are limited, focusing primarily on formatting errors in EPCIS files and relying mainly on email alerts.

With the Nov. 27 deadline nearing, pharmaceutical supply chain organizations are striving to meet DSCSA’s electronic data exchange standards. Despite progress, challenges implementing serialized data exchange persist across all transactions, meaning continuous efforts are necessary even after the compliance deadline.

]]> Improving Global Rail Container Visibility https://www.inboundlogistics.com/articles/improving-global-rail-container-visibility/ Thu, 07 Nov 2024 14:44:42 +0000 https://www.inboundlogistics.com/?post_type=articles&p=41985 Steamship lines carry millions of containers loaded with commodities essential to world commerce. Many containers move throughout North America to and from inland destinations by rail. This environment is still subject to visibility gaps.

Without accurate information about container location and events, delivering cargo on time and on budget can be challenging. Centralized visibility across rail carriers with machine learning, near-real time dashboards, and critical event data can help ocean carriers close visibility gaps for containers moving on rail.

Spotty Information

Event feeds for rail containers moving can be spotty, and include only a few reporting events after the container leaves the port or the inland ramp before it arrives at the destination. Ocean carriers employing several rail carriers also bear the burden of having to use multiple websites to gain information on container location.

Having access to a centralized, trusted source of granular movement information can provide ocean carriers with enhanced visibility to their shipments, better forecast import arrival information, and provide accurate outbound export volume forecasts.

A granular feed for rail shipments from the West Coast to an inland ramp, for example, should contain 100-150 reported events. For a movement from the East Coast to an inland ramp, 20-40 events should be reported.

With ocean carriers often providing or coordinating the drayage of the import shipment to the end customer, the most important piece of information is the estimated time of arrival (ETA) at the inland destination ramp. This time is closely monitored to coordinate the container pickup with the motor carrier.

In addition to standard ETAs, machine learning techniques can be applied to reevaluate or “re-trip” the ETA during each step of the journey to provide a more accurate arrival time. Re-trip algorithms evaluate the container’s current location, destination, and past lane volumes to more accurately predict an arrival time.

Additional critical events are essential to managing container shipments. Having a centralized resource to track arrival times, estimated times of grounding, pick up numbers, estimated times of notification, actual notifications, last free day, and outgate times helps the ocean carrier avoid costly detention fees for excessively held containers at the inland rail ramp. With relatively tight margins on a shipment, this can be a sizeable cost savings.

Dashboards and Insights

A huge benefit to ocean carrier customer service teams handling end customer shipment details is centralized, real-time event dashboards and insights. These allow customer service teams to set up their own customer-specific insights that accurately track container locations and critical information across multiple railroads.

A single dashboard with multiple insights can be created for each Beneficial Cargo Owner that tracks current locations; estimated arrival times; held, delayed and late containers; containers with notifications in the past; and containers not yet loaded to rail. A schedule option within the dashboards can also be set up to proactively alert to conditions that require attention.

Whether the shipment is an import or an export, better visibility can mitigate downstream impacts to changed ETAs and delayed shipments.

]]> Steamship lines carry millions of containers loaded with commodities essential to world commerce. Many containers move throughout North America to and from inland destinations by rail. This environment is still subject to visibility gaps.

Without accurate information about container location and events, delivering cargo on time and on budget can be challenging. Centralized visibility across rail carriers with machine learning, near-real time dashboards, and critical event data can help ocean carriers close visibility gaps for containers moving on rail.

Spotty Information

Event feeds for rail containers moving can be spotty, and include only a few reporting events after the container leaves the port or the inland ramp before it arrives at the destination. Ocean carriers employing several rail carriers also bear the burden of having to use multiple websites to gain information on container location.

Having access to a centralized, trusted source of granular movement information can provide ocean carriers with enhanced visibility to their shipments, better forecast import arrival information, and provide accurate outbound export volume forecasts.

A granular feed for rail shipments from the West Coast to an inland ramp, for example, should contain 100-150 reported events. For a movement from the East Coast to an inland ramp, 20-40 events should be reported.

With ocean carriers often providing or coordinating the drayage of the import shipment to the end customer, the most important piece of information is the estimated time of arrival (ETA) at the inland destination ramp. This time is closely monitored to coordinate the container pickup with the motor carrier.

In addition to standard ETAs, machine learning techniques can be applied to reevaluate or “re-trip” the ETA during each step of the journey to provide a more accurate arrival time. Re-trip algorithms evaluate the container’s current location, destination, and past lane volumes to more accurately predict an arrival time.

Additional critical events are essential to managing container shipments. Having a centralized resource to track arrival times, estimated times of grounding, pick up numbers, estimated times of notification, actual notifications, last free day, and outgate times helps the ocean carrier avoid costly detention fees for excessively held containers at the inland rail ramp. With relatively tight margins on a shipment, this can be a sizeable cost savings.

Dashboards and Insights

A huge benefit to ocean carrier customer service teams handling end customer shipment details is centralized, real-time event dashboards and insights. These allow customer service teams to set up their own customer-specific insights that accurately track container locations and critical information across multiple railroads.

A single dashboard with multiple insights can be created for each Beneficial Cargo Owner that tracks current locations; estimated arrival times; held, delayed and late containers; containers with notifications in the past; and containers not yet loaded to rail. A schedule option within the dashboards can also be set up to proactively alert to conditions that require attention.

Whether the shipment is an import or an export, better visibility can mitigate downstream impacts to changed ETAs and delayed shipments.

]]> The Lean, Green Supply Chain: Where 1+1=3 https://www.inboundlogistics.com/articles/the-lean-green-supply-chain-where-113/ Tue, 05 Nov 2024 03:00:46 +0000 https://www.inboundlogistics.com/?post_type=articles&p=41984 While many organizations across the globe use lean practices to improve product and service quality, and reduce costs, they do not necessarily integrate environmental concerns in their lean thinking. Lean and green thinking have different drivers and approaches, but can be compatible using complementary and integrated systems.

Separate (But Sometimes in Parallel)

In a lean supply chain, direct interaction with supply chain partners can enable a company to reduce total inventory levels, decrease product obsolescence, lower transaction costs, react more quickly to market changes, and respond more promptly to customer requests. At the same time, considering the environmental impact and related bottom-line effects of their decisions and actions can enhance fundamental supply chain changes.

Lean can also add value to green efforts by reducing many types of environmental impacts, connecting green practices to stronger financial drivers and improving the effectiveness of green procedures.

Unfortunately, environmental wastes and risks are not usually included in the wastes targeted by lean. Despite that, lean practices help reduce some environmental impacts because they focus on eliminating waste.

Separately, green initiatives attempt to minimize environmental impacts by reducing CO2 levels and the consumption of natural resources among other things, while lean initiatives tend to minimize waste in the supply chain by removing non-value-added activities, reducing inventories and supply lead time.

Lean and Green: Combined

For the long term, integrating—and possibly combining—lean and green thinking and methodology in supply chain management is crucial to help supply chains to become more efficient, streamlined, and sustainable.

Implementing green and lean supply chain practices simultaneously influences the sustainable development of businesses. For example, lean supply chain tools not only improve an organization’s economic performance, but they also contribute toward environmental performance by reducing logistics activity, cutting CO2 emissions levels, and reducing the consumption of natural resources.

Manufacturing, retail and supply chain management all realize that while consumers generally want to be more sustainable, they also demand value.

Lean, Green Framework

To accomplish this, companies need a formalized, combined framework to solidify the relationship between lean and green and their impact on business sustainability.
Some places to start, in addition to the (modified) Seven Wastes of Lean, are:

Product design. Supply chain professionals can offer valuable input to product design to both minimize cost and lessen the impact on the environment.

Sustainable materials. Being a proactive steward of natural resources is a key part of green supply chain solutions.

Transportation. Sustainable transportation includes improved fuel performance, increased use of electric and liquified natural gas vehicles, more efficient routing, and better use of backhauls.

Circular supply chain. A closed-loop system that aims to eliminate waste by continually reusing, recycling, and refurbishing materials and products.

Synergies will result from simultaneously integrating lean and green (think 1+1=3), even if you have to make trade-offs and balance divergent goals.

]]> While many organizations across the globe use lean practices to improve product and service quality, and reduce costs, they do not necessarily integrate environmental concerns in their lean thinking. Lean and green thinking have different drivers and approaches, but can be compatible using complementary and integrated systems.

Separate (But Sometimes in Parallel)

In a lean supply chain, direct interaction with supply chain partners can enable a company to reduce total inventory levels, decrease product obsolescence, lower transaction costs, react more quickly to market changes, and respond more promptly to customer requests. At the same time, considering the environmental impact and related bottom-line effects of their decisions and actions can enhance fundamental supply chain changes.

Lean can also add value to green efforts by reducing many types of environmental impacts, connecting green practices to stronger financial drivers and improving the effectiveness of green procedures.

Unfortunately, environmental wastes and risks are not usually included in the wastes targeted by lean. Despite that, lean practices help reduce some environmental impacts because they focus on eliminating waste.

Separately, green initiatives attempt to minimize environmental impacts by reducing CO2 levels and the consumption of natural resources among other things, while lean initiatives tend to minimize waste in the supply chain by removing non-value-added activities, reducing inventories and supply lead time.

Lean and Green: Combined

For the long term, integrating—and possibly combining—lean and green thinking and methodology in supply chain management is crucial to help supply chains to become more efficient, streamlined, and sustainable.

Implementing green and lean supply chain practices simultaneously influences the sustainable development of businesses. For example, lean supply chain tools not only improve an organization’s economic performance, but they also contribute toward environmental performance by reducing logistics activity, cutting CO2 emissions levels, and reducing the consumption of natural resources.

Manufacturing, retail and supply chain management all realize that while consumers generally want to be more sustainable, they also demand value.

Lean, Green Framework

To accomplish this, companies need a formalized, combined framework to solidify the relationship between lean and green and their impact on business sustainability.
Some places to start, in addition to the (modified) Seven Wastes of Lean, are:

Product design. Supply chain professionals can offer valuable input to product design to both minimize cost and lessen the impact on the environment.

Sustainable materials. Being a proactive steward of natural resources is a key part of green supply chain solutions.

Transportation. Sustainable transportation includes improved fuel performance, increased use of electric and liquified natural gas vehicles, more efficient routing, and better use of backhauls.

Circular supply chain. A closed-loop system that aims to eliminate waste by continually reusing, recycling, and refurbishing materials and products.

Synergies will result from simultaneously integrating lean and green (think 1+1=3), even if you have to make trade-offs and balance divergent goals.

]]> Bridging the Divide: How Connector Countries Can Shape the Future of Global Trade https://www.inboundlogistics.com/articles/bridging-the-divide-how-connector-countries-can-shape-the-future-of-global-trade/ Fri, 25 Oct 2024 20:30:43 +0000 https://www.inboundlogistics.com/?post_type=articles&p=42099 The global trade landscape is undergoing a significant transformation. The events of 2022, particularly the war in Ukraine, have served as a stark catalyst, pushing the world economy towards a bipolar structure with the United States and China at its center. This realignment has had a ripple effect: Trade within these blocs is experiencing a surprising decline of more than 12%, underscoring a critical need for intermediary nations— connector countries—to act as bridges and facilitate economic exchange. 

As geopolitical tensions continue to simmer, the role of connector countries in fostering stability and ensuring the smooth flow of goods and services across borders becomes increasingly crucial. 

The Double-Edged Sword of Geo-Economic Fragmentation: Diversification vs. Division

The rising tide of geo-economic fragmentation threatens to drown the hard-won gains of decades of globalization. While proponents tout diversification and regional strength, the reality is a divided world, locked in a zero-sum competition that threatens to stifle innovation and growth.

Yes, fragmentation offers some initial benefits. Diversifying trade partnerships can mitigate risk from regional instability. Regional blocs can foster specialization and efficiency. But these advantages are fleeting. Fragmentation tends to breeds competition, not collaboration. This can easily escalate into trade wars, protectionism, and currency manipulation—all hindering global economic growth.

Think beyond efficiency gains within blocs. A fragmented world means a world choked by conflicting regulations, making international trade a bureaucratic nightmare. More importantly, access to essential resources and innovative technologies becomes restricted, crippling the economic potential of those outside dominant alliances.

Globalization’s core tenet—free trade and open markets—has demonstrably lifted millions out of poverty around the globe over the last several decades. Fragmentation throws a wrench in this progress. The answer does not lie in retreating to isolated blocs but in finding a new equilibrium. The world needs strong regional partnerships that promote trade and investment. However, these partnerships must remain open to cooperation with others.

The ideal world is one where collaboration reigns supreme. 

The Challenge and Opportunity of a Shifting Manufacturing Landscape

Enter connector countries: the Switzerland of the trade world. These neutral players, with strong ties to major economies, offer a critical solution. 

Firstly, they allow businesses to maintain trade relationships across multiple blocs. Companies can continue working with established partners, albeit through slightly different routes. While these do extend supply chains, they preserves valuable relationships and minimizes overall disruptions to existing business operations. Imagine a company with a trusted supplier in China. If tensions escalate, a connector country can potentially help circumnavigate to minimize immediate interruption to operations.

Secondly, connector countries mitigate risk. By relying on multiple trade routes and these intermediaries, global economies tend to become less vulnerable to disruptions in any single region. Think of a major conflict impacting a key trade route; these countries offer alternative channels to keep goods flowing, continuing to support the overall resilience of the global trade system.

Finally, connector countries promote stability. As they become crucial facilitators of trade, they incentivize peaceful resolutions to escalating trade disputes. Knowing alternative routes exist, nations are often more willing to find diplomatic solutions to avoid complete trade breakdowns. Countries like India, Vietnam, Mexico, etc. with their strategic location and robust economy, exemplify this perfectly. They stand poised to play a vital role in fostering cooperation between major blocs—an increasingly valuable role in a fragmented world.

Supply chain disruptions will continue to remain a concern, but companies and economies will continue to adapt. The focus will need to shift from solely chasing low costs to a more balanced approach that considers affordability, ethical sourcing, and sustainability, all while dealing with the evolving geopolitical landscape. Technology, particularly supporting connected business processed with real-time information flow and timely decision making, is crucial in this evolution. It empowers businesses to navigate the complexities of new trade routes, optimize material flows across dispersed locations, and balance demand and supply efficiently.

As technology continues to evolve, these intermediary nations will play an increasingly critical role in ensuring the smooth flow of goods and fostering global economic cooperation. By leveraging their strategic positions and embracing innovative solutions, connector countries can transform potential disruptions into opportunities for growth and collaboration, driving forward the engines of global trade and economic development.

]]> The global trade landscape is undergoing a significant transformation. The events of 2022, particularly the war in Ukraine, have served as a stark catalyst, pushing the world economy towards a bipolar structure with the United States and China at its center. This realignment has had a ripple effect: Trade within these blocs is experiencing a surprising decline of more than 12%, underscoring a critical need for intermediary nations— connector countries—to act as bridges and facilitate economic exchange. 

As geopolitical tensions continue to simmer, the role of connector countries in fostering stability and ensuring the smooth flow of goods and services across borders becomes increasingly crucial. 

The Double-Edged Sword of Geo-Economic Fragmentation: Diversification vs. Division

The rising tide of geo-economic fragmentation threatens to drown the hard-won gains of decades of globalization. While proponents tout diversification and regional strength, the reality is a divided world, locked in a zero-sum competition that threatens to stifle innovation and growth.

Yes, fragmentation offers some initial benefits. Diversifying trade partnerships can mitigate risk from regional instability. Regional blocs can foster specialization and efficiency. But these advantages are fleeting. Fragmentation tends to breeds competition, not collaboration. This can easily escalate into trade wars, protectionism, and currency manipulation—all hindering global economic growth.

Think beyond efficiency gains within blocs. A fragmented world means a world choked by conflicting regulations, making international trade a bureaucratic nightmare. More importantly, access to essential resources and innovative technologies becomes restricted, crippling the economic potential of those outside dominant alliances.

Globalization’s core tenet—free trade and open markets—has demonstrably lifted millions out of poverty around the globe over the last several decades. Fragmentation throws a wrench in this progress. The answer does not lie in retreating to isolated blocs but in finding a new equilibrium. The world needs strong regional partnerships that promote trade and investment. However, these partnerships must remain open to cooperation with others.

The ideal world is one where collaboration reigns supreme. 

The Challenge and Opportunity of a Shifting Manufacturing Landscape

Enter connector countries: the Switzerland of the trade world. These neutral players, with strong ties to major economies, offer a critical solution. 

Firstly, they allow businesses to maintain trade relationships across multiple blocs. Companies can continue working with established partners, albeit through slightly different routes. While these do extend supply chains, they preserves valuable relationships and minimizes overall disruptions to existing business operations. Imagine a company with a trusted supplier in China. If tensions escalate, a connector country can potentially help circumnavigate to minimize immediate interruption to operations.

Secondly, connector countries mitigate risk. By relying on multiple trade routes and these intermediaries, global economies tend to become less vulnerable to disruptions in any single region. Think of a major conflict impacting a key trade route; these countries offer alternative channels to keep goods flowing, continuing to support the overall resilience of the global trade system.

Finally, connector countries promote stability. As they become crucial facilitators of trade, they incentivize peaceful resolutions to escalating trade disputes. Knowing alternative routes exist, nations are often more willing to find diplomatic solutions to avoid complete trade breakdowns. Countries like India, Vietnam, Mexico, etc. with their strategic location and robust economy, exemplify this perfectly. They stand poised to play a vital role in fostering cooperation between major blocs—an increasingly valuable role in a fragmented world.

Supply chain disruptions will continue to remain a concern, but companies and economies will continue to adapt. The focus will need to shift from solely chasing low costs to a more balanced approach that considers affordability, ethical sourcing, and sustainability, all while dealing with the evolving geopolitical landscape. Technology, particularly supporting connected business processed with real-time information flow and timely decision making, is crucial in this evolution. It empowers businesses to navigate the complexities of new trade routes, optimize material flows across dispersed locations, and balance demand and supply efficiently.

As technology continues to evolve, these intermediary nations will play an increasingly critical role in ensuring the smooth flow of goods and fostering global economic cooperation. By leveraging their strategic positions and embracing innovative solutions, connector countries can transform potential disruptions into opportunities for growth and collaboration, driving forward the engines of global trade and economic development.

]]> Temperature-Sensitive Mail Order Pharmaceuticals: How AI Offers a Solution to the Risk of Spoilage and Degradation https://www.inboundlogistics.com/articles/temperature-sensitive-mail-order-pharmaceuticals-how-ai-offers-a-solution-to-the-risk-of-spoilage-and-degradation/ Thu, 24 Oct 2024 02:42:59 +0000 https://www.inboundlogistics.com/?post_type=articles&p=42094 An investigative article by The New York Times in August 2024 reported that melted capsules, cloudy insulin, and ineffective pills are potential risks as extreme heat across the country could be compromising the safety of medications.

The article went on to say that with millions of Americans relying on mail-order prescriptions, the internal temperatures of delivery trucks, which can reach up to 150 degrees Fahrenheit, far exceed the recommended range for drug storage.

Pharmaceuticals that are temperature sensitive—such as inhalers, certain antibiotics, and other drugs—are particularly vulnerable to temperature fluctuations. Any wrinkle in the supply chain can jeopardize the efficacy of certain pharmaceutical products.

Temperature Variations Greatly Influence Product Safety and Viability

Despite claims from mail-order pharmacies about weather-resistant packaging, studies reveal that medications often spend significant time outside safe temperature ranges, potentially altering their effectiveness and endangering patients’ health.

Research published in the Journal of the American Pharmacists Association underscores the challenge of maintaining recommended temperature ranges during mail-order pharmaceutical deliveries:

When medications are mailed between residential addresses, keeping the packages within the recommended temperature range throughout transit may be more difficult than the general public may realize. Study results established that packages spent a majority of transit time outside of USP recommended temperatures regardless of the shipping method, carrier, or season.

Counterintuitively, both temperature extremes (above and below the recommended range) were observed when shipping in the summer and winter seasons. Pharmacists should counsel patients about potential temperature excursions that may occur when mailing medications. Further studies are warranted to evaluate the impact of different packaging types on temperature variations and excursions during transit.

Mail-order pharmaceuticals pose significant challenges to consumers, especially as more individuals rely on these services.

AI’s Role in Safeguarding Pharmaceutical Deliveries

Artificial intelligence stands to transform the online pharmacy industry by not only streamlining processes such as prescription management, inventory tracking, and customer communication, but also by collaborating with pharmaceutical suppliers to prevent spoilage.

Amazon Pharmacy, for example, is leveraging AI to enhance its same-day delivery service, initially launching in New York City and Los Angeles. By incorporating generative artificial intelligence and machine learning, this service is designed to accelerate prescription processing, potentially enabling treatment delivery within a few hours. AI can not only help control problems caused from temperature anomalies, but it may optimize operations and improve patient care.

As an AI consultancy, we have first-hand experience in optimizing cold chain logistics for pharmaceutical shipments. For example, a specialized logistics provider for temperature-sensitive pharmaceutical products faced a unique challenge in maintaining the integrity of its cold chain during transportation.

With stringent temperature requirements and regulatory compliance standards, they struggled to ensure consistent temperature control across their supply chain, leading to occasional product spoilage and compliance issues.

Leveraging advanced temperature monitoring sensors and predictive analytics, a real-time temperature control system was designed to continuously monitor temperature variations during transit. The system utilized machine learning algorithms to analyze historical temperature data, predict potential deviations, and trigger proactive interventions to maintain optimal storage conditions.

Real-World Impact

The company achieved a 99% temperature compliance rate, eliminated product spoilage, and exceeded regulatory compliance standards. AI transformed their operations, ensuring the safe and timely delivery of temperature-sensitive pharmaceuticals.

The problem of perishable pharmaceuticals, particularly those delivered via mail order, is a significant concern that can be effectively addressed through the application of AI and machine learning. As the reliance on mail-order prescriptions continues to grow, it is imperative to implement innovative solutions that safeguard the integrity of these medications and protect patient health. AI offers a powerful tool in this endeavor, enabling the online pharmacy industry to deliver medications safely and efficiently, even in the face of challenging environmental conditions.

]]> An investigative article by The New York Times in August 2024 reported that melted capsules, cloudy insulin, and ineffective pills are potential risks as extreme heat across the country could be compromising the safety of medications.

The article went on to say that with millions of Americans relying on mail-order prescriptions, the internal temperatures of delivery trucks, which can reach up to 150 degrees Fahrenheit, far exceed the recommended range for drug storage.

Pharmaceuticals that are temperature sensitive—such as inhalers, certain antibiotics, and other drugs—are particularly vulnerable to temperature fluctuations. Any wrinkle in the supply chain can jeopardize the efficacy of certain pharmaceutical products.

Temperature Variations Greatly Influence Product Safety and Viability

Despite claims from mail-order pharmacies about weather-resistant packaging, studies reveal that medications often spend significant time outside safe temperature ranges, potentially altering their effectiveness and endangering patients’ health.

Research published in the Journal of the American Pharmacists Association underscores the challenge of maintaining recommended temperature ranges during mail-order pharmaceutical deliveries:

When medications are mailed between residential addresses, keeping the packages within the recommended temperature range throughout transit may be more difficult than the general public may realize. Study results established that packages spent a majority of transit time outside of USP recommended temperatures regardless of the shipping method, carrier, or season.

Counterintuitively, both temperature extremes (above and below the recommended range) were observed when shipping in the summer and winter seasons. Pharmacists should counsel patients about potential temperature excursions that may occur when mailing medications. Further studies are warranted to evaluate the impact of different packaging types on temperature variations and excursions during transit.

Mail-order pharmaceuticals pose significant challenges to consumers, especially as more individuals rely on these services.

AI’s Role in Safeguarding Pharmaceutical Deliveries

Artificial intelligence stands to transform the online pharmacy industry by not only streamlining processes such as prescription management, inventory tracking, and customer communication, but also by collaborating with pharmaceutical suppliers to prevent spoilage.

Amazon Pharmacy, for example, is leveraging AI to enhance its same-day delivery service, initially launching in New York City and Los Angeles. By incorporating generative artificial intelligence and machine learning, this service is designed to accelerate prescription processing, potentially enabling treatment delivery within a few hours. AI can not only help control problems caused from temperature anomalies, but it may optimize operations and improve patient care.

As an AI consultancy, we have first-hand experience in optimizing cold chain logistics for pharmaceutical shipments. For example, a specialized logistics provider for temperature-sensitive pharmaceutical products faced a unique challenge in maintaining the integrity of its cold chain during transportation.

With stringent temperature requirements and regulatory compliance standards, they struggled to ensure consistent temperature control across their supply chain, leading to occasional product spoilage and compliance issues.

Leveraging advanced temperature monitoring sensors and predictive analytics, a real-time temperature control system was designed to continuously monitor temperature variations during transit. The system utilized machine learning algorithms to analyze historical temperature data, predict potential deviations, and trigger proactive interventions to maintain optimal storage conditions.

Real-World Impact

The company achieved a 99% temperature compliance rate, eliminated product spoilage, and exceeded regulatory compliance standards. AI transformed their operations, ensuring the safe and timely delivery of temperature-sensitive pharmaceuticals.

The problem of perishable pharmaceuticals, particularly those delivered via mail order, is a significant concern that can be effectively addressed through the application of AI and machine learning. As the reliance on mail-order prescriptions continues to grow, it is imperative to implement innovative solutions that safeguard the integrity of these medications and protect patient health. AI offers a powerful tool in this endeavor, enabling the online pharmacy industry to deliver medications safely and efficiently, even in the face of challenging environmental conditions.

]]> AI Power Drives Supply Chain Gymnastics https://www.inboundlogistics.com/articles/ai-power-drives-supply-chain-gymnastics/ Mon, 21 Oct 2024 09:30:06 +0000 https://www.inboundlogistics.com/?post_type=articles&p=41970 If you’re reading Inbound Logistics, you already drank the supply chain Kool-Aid. But many others in our audience are tasting the inbound logistics brew for the first time.

“Inbound logistics makes sense,” they say as they sip. “But it’s a lot more complicated than just letting my vendors and logistics partners control my inbound flow.  I just don’t think I can handle that.”

It tastes great, but all those inbound data points make it more filling. Would a chaser make that brew more palatable? Got one for you: AI. Inbound logistics and AI is a combination that really shines in times like these.

Amplifying your inbound programs using artificial intelligence will give you more choices and more alternatives, and flatten the impact of disruptive events, such as the recent ones that have likely affected you: hurricane devastation, strikes, low tide in the Panama Canal, blockage in the Suez Canal, collapsing bridges, rocket and drone attacks on maritime commerce, BRICS’ attack on the greenback as the world’s trade reserve currency, wars, trade wars, rail disasters, over-regulation. Enough!

Maintain margins during supply chain disruptions? Sure. But it’s also important to lock in customers with your brand when things go sideways for them. Stew Leonard Jr., president of Stew Leonard’s, said that the regional supermarket was going to have to do “some supply chain gymnastics” to ensure customers have plenty of the products they know and love.

Blending AI with your efforts to match your supply more closely to demand makes all those extra data points more manageable. Whatever management tools you use for data analytics—from basic spreadsheets to a best-in-class TMS, and including tie-ins with your logistics intermediaries, brokers, forwarders, and 3PLs—you can fire up decision-making on the fly by using AI to make sense of all those increased data points.

Many leading logistics partners are investing in AI right now to serve you better, faster and more efficiently. Tie their solutions to controlling your inbound flow.

Inbound logistics and AI drive enterprise efficiency in normal times, if we ever have normal times again. But that combination can mean the difference between surviving the next catastrophe and losing customers, market share, and maybe much more. It will earn you a gold medal in supply chain gymnastics.

]]> If you’re reading Inbound Logistics, you already drank the supply chain Kool-Aid. But many others in our audience are tasting the inbound logistics brew for the first time.

“Inbound logistics makes sense,” they say as they sip. “But it’s a lot more complicated than just letting my vendors and logistics partners control my inbound flow.  I just don’t think I can handle that.”

It tastes great, but all those inbound data points make it more filling. Would a chaser make that brew more palatable? Got one for you: AI. Inbound logistics and AI is a combination that really shines in times like these.

Amplifying your inbound programs using artificial intelligence will give you more choices and more alternatives, and flatten the impact of disruptive events, such as the recent ones that have likely affected you: hurricane devastation, strikes, low tide in the Panama Canal, blockage in the Suez Canal, collapsing bridges, rocket and drone attacks on maritime commerce, BRICS’ attack on the greenback as the world’s trade reserve currency, wars, trade wars, rail disasters, over-regulation. Enough!

Maintain margins during supply chain disruptions? Sure. But it’s also important to lock in customers with your brand when things go sideways for them. Stew Leonard Jr., president of Stew Leonard’s, said that the regional supermarket was going to have to do “some supply chain gymnastics” to ensure customers have plenty of the products they know and love.

Blending AI with your efforts to match your supply more closely to demand makes all those extra data points more manageable. Whatever management tools you use for data analytics—from basic spreadsheets to a best-in-class TMS, and including tie-ins with your logistics intermediaries, brokers, forwarders, and 3PLs—you can fire up decision-making on the fly by using AI to make sense of all those increased data points.

Many leading logistics partners are investing in AI right now to serve you better, faster and more efficiently. Tie their solutions to controlling your inbound flow.

Inbound logistics and AI drive enterprise efficiency in normal times, if we ever have normal times again. But that combination can mean the difference between surviving the next catastrophe and losing customers, market share, and maybe much more. It will earn you a gold medal in supply chain gymnastics.

]]> How Procurement Can Prepare for the Inevitable, Sustainable Future https://www.inboundlogistics.com/articles/how-procurement-can-prepare-for-the-inevitable-sustainable-future/ Fri, 18 Oct 2024 16:39:41 +0000 https://www.inboundlogistics.com/?post_type=articles&p=42048

Sustainable procurement isn’t always easy for businesses, but most significant initiatives take work, and you’d be hard-pressed to find a cause more worthy than saving the planet. And with the maturation of the global economy, businesses have come to realize that collaborating with socially responsible, environmentally friendly suppliers delivers many rewards.

Greener supply chains not only lessen negative environmental and social impacts, they retain and attract similarly minded customers – and it’s a rapidly growing market. In a survey included in the Deloitte 2024 CxO Sustainability Report, 59% of respondents said their companies have started using sustainable materials like recycled and lower-emitting products. And with the same percentage increasing their energy efficiency, it’s easy to see why more companies are embracing sustainability.

Still, it’s up to chief procurement officers to untangle this web of global supply chains, dizzying individual country standards, and more in order to ensure sustainability goals are met.

4 Main Challenges

There are challenges to creating sustainable practices; however, they are surmountable. The following looks at the primary ones to expect, accompanied by some insight to help you understand and handle them.

Up-front investment: Sustainability costs more than using those traditional products and processes that harm the environment – at the moment. With the growth of sustainability, supply chain competitiveness will lower prices. Businesses should continue to press sustainability efforts in order to escalate greater savings and environmental benefits.

Tracking and measuring: Different supply chains use different tracking methods. There’s also a lack of standards when it comes to carbon output and tracing responsibility. Further, businesses measure sustainability in numerous ways, so results on a single product can vary. Keep this in mind, and when you’re buying products for a volume of clients, plan for an exponential increase in difficulty.

Navigating supply chains: Regulations differ from region to region, so navigating sustainability requirements and updates can be complex. Keep in mind that this is especially true in less mature markets, simply because the value of sustainability is not yet fully understood.

Building a culture: Most procurement is stimulated by cost savings, not carbon reduction. Businesses must place emphasis on a carbon culture, not a capital one, which will lower their consumption and footprint. When you have a culture revolving around sustainability, you can drive procurement change.

Boosting Supply Chain Visibility

Arguably the greatest issue in sustainability is a lack of visibility into the supply chain. Varied data flows, differing systems, and limited collaboration among stakeholders can all muddy the view. When systems don’t play well together and data anomalies emerge, tracking goods and operations can be maddening. Making matters worse are siloed operational units and a wariness about sharing “their” data.

An absence of clear insight into environmental and social impacts makes identifying problems and meeting standards difficult. It can also cause operational disruptions that undermine efforts. It’s vital to map out the supply chain systematically, identify data gaps, and make sure your visibility tools are up to snuff. This will allow you to better integrate systems, assure data integrity, and strengthen supplier relationships.

Those in procurement can further boost their supply chain visibility by focusing on collaboration and data exchange with suppliers. First, though, establish clear guidelines for information sharing, leverage technology with real-time data transmission, and agree on shared sustainability goals.

Get real with artificial intelligence

Emerging applications of artificial intelligence (AI) can further visibility. With analytics powered by AI, enterprises can analyze huge datasets, unearth trends, and gain insights that produce better decision-making.

For example, AI used with cloud platforms and the Internet of Things (IoT) allows real-time monitoring and traceability across a supply chain. This enables leaders to locate where operational improvements are needed. Automated data capture and classification can also bolster forecasting and optimization. And, AI systems can recommend ways to reduce disruption and fortify workflows. They can also suggest alternate suppliers, facilitate production schedule changes, and route optimization.

Machine learning can automate rote manual tasks as well. Eliminating the manual input of data also prevents accuracy issues. And when it comes to business intelligence, predictive analytics can anticipate and head-off possible high carbon impact.

Things are getting real when it comes to AI and sustainability.

The inevitable future

Sustainable procurement is the path to the future because it protects the resources we all need to actually have a future. Its continued momentum is constantly attracting customers who understand the need for sustainability, as well as consumers who are inclined to frequent and remain loyal to companies who support the planet’s health.

The demand for more “green products” will continue to grow – and their costs will decrease. As a result, more and more businesses will make sustainability a pillar of procurement. Businesses that don’t evolve will increasing fall behind competitors who have invested in what is an inevitable, sustainable future.

]]>

Sustainable procurement isn’t always easy for businesses, but most significant initiatives take work, and you’d be hard-pressed to find a cause more worthy than saving the planet. And with the maturation of the global economy, businesses have come to realize that collaborating with socially responsible, environmentally friendly suppliers delivers many rewards.

Greener supply chains not only lessen negative environmental and social impacts, they retain and attract similarly minded customers – and it’s a rapidly growing market. In a survey included in the Deloitte 2024 CxO Sustainability Report, 59% of respondents said their companies have started using sustainable materials like recycled and lower-emitting products. And with the same percentage increasing their energy efficiency, it’s easy to see why more companies are embracing sustainability.

Still, it’s up to chief procurement officers to untangle this web of global supply chains, dizzying individual country standards, and more in order to ensure sustainability goals are met.

4 Main Challenges

There are challenges to creating sustainable practices; however, they are surmountable. The following looks at the primary ones to expect, accompanied by some insight to help you understand and handle them.

Up-front investment: Sustainability costs more than using those traditional products and processes that harm the environment – at the moment. With the growth of sustainability, supply chain competitiveness will lower prices. Businesses should continue to press sustainability efforts in order to escalate greater savings and environmental benefits.

Tracking and measuring: Different supply chains use different tracking methods. There’s also a lack of standards when it comes to carbon output and tracing responsibility. Further, businesses measure sustainability in numerous ways, so results on a single product can vary. Keep this in mind, and when you’re buying products for a volume of clients, plan for an exponential increase in difficulty.

Navigating supply chains: Regulations differ from region to region, so navigating sustainability requirements and updates can be complex. Keep in mind that this is especially true in less mature markets, simply because the value of sustainability is not yet fully understood.

Building a culture: Most procurement is stimulated by cost savings, not carbon reduction. Businesses must place emphasis on a carbon culture, not a capital one, which will lower their consumption and footprint. When you have a culture revolving around sustainability, you can drive procurement change.

Boosting Supply Chain Visibility

Arguably the greatest issue in sustainability is a lack of visibility into the supply chain. Varied data flows, differing systems, and limited collaboration among stakeholders can all muddy the view. When systems don’t play well together and data anomalies emerge, tracking goods and operations can be maddening. Making matters worse are siloed operational units and a wariness about sharing “their” data.

An absence of clear insight into environmental and social impacts makes identifying problems and meeting standards difficult. It can also cause operational disruptions that undermine efforts. It’s vital to map out the supply chain systematically, identify data gaps, and make sure your visibility tools are up to snuff. This will allow you to better integrate systems, assure data integrity, and strengthen supplier relationships.

Those in procurement can further boost their supply chain visibility by focusing on collaboration and data exchange with suppliers. First, though, establish clear guidelines for information sharing, leverage technology with real-time data transmission, and agree on shared sustainability goals.

Get real with artificial intelligence

Emerging applications of artificial intelligence (AI) can further visibility. With analytics powered by AI, enterprises can analyze huge datasets, unearth trends, and gain insights that produce better decision-making.

For example, AI used with cloud platforms and the Internet of Things (IoT) allows real-time monitoring and traceability across a supply chain. This enables leaders to locate where operational improvements are needed. Automated data capture and classification can also bolster forecasting and optimization. And, AI systems can recommend ways to reduce disruption and fortify workflows. They can also suggest alternate suppliers, facilitate production schedule changes, and route optimization.

Machine learning can automate rote manual tasks as well. Eliminating the manual input of data also prevents accuracy issues. And when it comes to business intelligence, predictive analytics can anticipate and head-off possible high carbon impact.

Things are getting real when it comes to AI and sustainability.

The inevitable future

Sustainable procurement is the path to the future because it protects the resources we all need to actually have a future. Its continued momentum is constantly attracting customers who understand the need for sustainability, as well as consumers who are inclined to frequent and remain loyal to companies who support the planet’s health.

The demand for more “green products” will continue to grow – and their costs will decrease. As a result, more and more businesses will make sustainability a pillar of procurement. Businesses that don’t evolve will increasing fall behind competitors who have invested in what is an inevitable, sustainable future.

]]> Solving the Southeast Asia Logistics Puzzle https://www.inboundlogistics.com/articles/solving-the-southeast-asia-logistics-puzzle/ Thu, 17 Oct 2024 20:36:15 +0000 https://www.inboundlogistics.com/?post_type=articles&p=42041 Southeast Asia has long been the go-to area for manufacturers seeking cost-effective solutions to cut production costs and remain competitive. And now, countries like Indonesia, Thailand, Singapore, and Vietnam are upping their game to create a more efficient supply chain capable of handling even more goods.

This change is being driven by the continuing rise of the global ecommerce sector and an increasingly sophisticated and demanding consumer base. 

New Normal Emerges

The shift is a legacy of the Covid-19 pandemic, when traditional, physical shopping was abruptly halted by lockdowns. Consumers were driven online, putting the supply chain under more stress than ever before. And when the pandemic ended, a new normal emerged—one in which consumers with more expendable income continued and increased their web-based purchases.

The ecommerce boom in Southeast Asia is driving significant changes in the logistics sector. As the region continues to develop its infrastructure and adopt new technologies, the logistics industry will play a crucial role in supporting the growth of ecommerce. Companies that can navigate the region’s unique challenges and leverage technological advancements are likely to succeed in this dynamic market.

Overcoming Hurdles

As a major manufacturing hub, Southeast Asian region faces a number of logistical hurdles as it vies to keep up with demand. The region needs five times the space for logistics than is currently available to tackle the current supply-demand imbalance, according to a report by Knight Frank.

That is compounded by a shortage of available infrastructure, forcing logistics players and third-party logistics (3PL) providers to seek innovative solutions to use the limited resources they have more efficiently.

As a result, the sector is now in a state of flux with players coming and going.

Over the past few years, a number of bigger companies have set up shop while several smaller operations have expanded their horizons and shored up their operations as they look to weather the storms that lie ahead. That means they need the right support for their supply chains—be it freight forwarding, warehousing, project logistics, and more—in a fiercely competitive market.

Some companies bring their own logistics setups and supply chains with them for new large-scale projects. However, what might have worked for them elsewhere—like Europe—will not necessarily be the right model for Southeast Asia. The region’s logistics sector is notorious for its complex laws and regulations, not to mention compliance issues, which can present challenges to getting local projects off the ground. 

Infrastructure Investments

The region is ramping up its facilities and capabilities, including expansions to ports, roads, and warehouses. 

Construction is underway in Malaysia for the Pengerang Energy Complex, Kuala Linggi International Port expansion, and the Batu Kawan Industrial Park 3. Malaysia’s biggest port operator, Westports Holdings Bhd., is also considering external strategic investors to help fund a 39.6-billion-ringgit ($8.3-billion) expansion that will see capacity nearly double in coming decades.

Singapore is building what will be the world’s largest automated terminal when its Tuas Port is completed in 2040 at an expected cost of S$20 billion ($15 billion). 

PSA Singapore (PSA), which operates a container transhipment hub in Singapore, unveiled the PSA Supply Chain Hub @ Tuas (PSCH), a central part of its strategic expansion in Tuas Port, at a groundbreaking ceremony in October 2024. (Artist impression of the PSCH, scheduled to be completed by 2027, shown above)

With traffic volumes forecast to exceed the Straits’ capacity by 2030, Thailand has proposed bypassing the shipping lane entirely, with a plan to build a $28-billion 62-mile ‘land bridge’ that will link two seaports and cut travel time by four days. The Thai government has also announced plans to invest a further US$19 billion in 150 infrastructure projects, amongst which is the Thai-Chinese mega high-speed railway which will connect Nakhon Ratchasima to Nong Khai, as part of the Belt and Road Initiative (BRI). 

Meanwhile, since the start of its “Build-Better-More” program, the Philippines inaugurated the Samar Pacific Coastal Road project in July 2023, and more projects are due for completion including the Malolos Clark Railway in 2024 and Bulacan International Airport to decongest Ninoy Aquino International Airport in 2027.

One Key Piece of the Puzzle

There is one vital ingredient to the recipe for success that should not be forgotten: experience.

The complexity of local laws means that a project in Kuala Lumpur will have very different requirements from those in East Malaysia, where restrictive immigration laws present challenges for the free flow of foreign manpower and expertise. This, in parallel with East Malaysia’s poor infrastructure, makes new players reluctant to venture into the area.

Having a well-established local logistics partner with a sound understanding of local laws and regulations can make the difference between success and failure in keeping projects and the cargo they need moving seamlessly. 

]]> Southeast Asia has long been the go-to area for manufacturers seeking cost-effective solutions to cut production costs and remain competitive. And now, countries like Indonesia, Thailand, Singapore, and Vietnam are upping their game to create a more efficient supply chain capable of handling even more goods.

This change is being driven by the continuing rise of the global ecommerce sector and an increasingly sophisticated and demanding consumer base. 

New Normal Emerges

The shift is a legacy of the Covid-19 pandemic, when traditional, physical shopping was abruptly halted by lockdowns. Consumers were driven online, putting the supply chain under more stress than ever before. And when the pandemic ended, a new normal emerged—one in which consumers with more expendable income continued and increased their web-based purchases.

The ecommerce boom in Southeast Asia is driving significant changes in the logistics sector. As the region continues to develop its infrastructure and adopt new technologies, the logistics industry will play a crucial role in supporting the growth of ecommerce. Companies that can navigate the region’s unique challenges and leverage technological advancements are likely to succeed in this dynamic market.

Overcoming Hurdles

As a major manufacturing hub, Southeast Asian region faces a number of logistical hurdles as it vies to keep up with demand. The region needs five times the space for logistics than is currently available to tackle the current supply-demand imbalance, according to a report by Knight Frank.

That is compounded by a shortage of available infrastructure, forcing logistics players and third-party logistics (3PL) providers to seek innovative solutions to use the limited resources they have more efficiently.

As a result, the sector is now in a state of flux with players coming and going.

Over the past few years, a number of bigger companies have set up shop while several smaller operations have expanded their horizons and shored up their operations as they look to weather the storms that lie ahead. That means they need the right support for their supply chains—be it freight forwarding, warehousing, project logistics, and more—in a fiercely competitive market.

Some companies bring their own logistics setups and supply chains with them for new large-scale projects. However, what might have worked for them elsewhere—like Europe—will not necessarily be the right model for Southeast Asia. The region’s logistics sector is notorious for its complex laws and regulations, not to mention compliance issues, which can present challenges to getting local projects off the ground. 

Infrastructure Investments

The region is ramping up its facilities and capabilities, including expansions to ports, roads, and warehouses. 

Construction is underway in Malaysia for the Pengerang Energy Complex, Kuala Linggi International Port expansion, and the Batu Kawan Industrial Park 3. Malaysia’s biggest port operator, Westports Holdings Bhd., is also considering external strategic investors to help fund a 39.6-billion-ringgit ($8.3-billion) expansion that will see capacity nearly double in coming decades.

Singapore is building what will be the world’s largest automated terminal when its Tuas Port is completed in 2040 at an expected cost of S$20 billion ($15 billion). 

PSA Singapore (PSA), which operates a container transhipment hub in Singapore, unveiled the PSA Supply Chain Hub @ Tuas (PSCH), a central part of its strategic expansion in Tuas Port, at a groundbreaking ceremony in October 2024. (Artist impression of the PSCH, scheduled to be completed by 2027, shown above)

With traffic volumes forecast to exceed the Straits’ capacity by 2030, Thailand has proposed bypassing the shipping lane entirely, with a plan to build a $28-billion 62-mile ‘land bridge’ that will link two seaports and cut travel time by four days. The Thai government has also announced plans to invest a further US$19 billion in 150 infrastructure projects, amongst which is the Thai-Chinese mega high-speed railway which will connect Nakhon Ratchasima to Nong Khai, as part of the Belt and Road Initiative (BRI). 

Meanwhile, since the start of its “Build-Better-More” program, the Philippines inaugurated the Samar Pacific Coastal Road project in July 2023, and more projects are due for completion including the Malolos Clark Railway in 2024 and Bulacan International Airport to decongest Ninoy Aquino International Airport in 2027.

One Key Piece of the Puzzle

There is one vital ingredient to the recipe for success that should not be forgotten: experience.

The complexity of local laws means that a project in Kuala Lumpur will have very different requirements from those in East Malaysia, where restrictive immigration laws present challenges for the free flow of foreign manpower and expertise. This, in parallel with East Malaysia’s poor infrastructure, makes new players reluctant to venture into the area.

Having a well-established local logistics partner with a sound understanding of local laws and regulations can make the difference between success and failure in keeping projects and the cargo they need moving seamlessly. 

]]> Ecommerce and Logistics Partner Up https://www.inboundlogistics.com/articles/ecommerce-and-logistics-partner-up/ Mon, 14 Oct 2024 16:57:27 +0000 https://www.inboundlogistics.com/?post_type=articles&p=41768 Partnering with logistics companies helps brands tap into economies of scale, with bulk shipping rates, shared warehousing, and optimized delivery routes.

Customer experience is also key. Consumers demand not only quick delivery but also flexible options for receiving and returning products.

Finally, the trend toward consolidating multiple vendor relationships into a single, comprehensive logistics partner streamlines communication, billing and contracting which often leads to lower costs. By going deeper into the merchant’s business, logistics providers can be more strategic, helping to creatively solve problems with merchants.

Logistics companies are responding to increased demand by offering new pick-up and drop-off options, streamlining the experience with QR codes and package-free returns, and consolidating multiple shipments into bulk deliveries.

The evolving relationship between ecommerce companies and logistics providers is driven by the need to reduce costs, enhance customer satisfaction, and streamline operations. As these partnerships develop, we can expect further innovations in the logistics sector that will ultimately benefit logistics companies, merchants, and consumers.

Ripe for Consolidation

Traditionally, warehouses and 3PLs have focused on outbound orders rather than managing returns—but with the rate of ecommerce product returns approaching 18%, reverse logistics is increasingly becoming a key concern for both merchants and their 3PL partners.

Without a strategic plan for managing reverse logistics, the majority of returns end up getting discarded. This approach isn’t just terrible for the environment, it also forces merchants to foot reverse logistics costs for products they won’t resell.

In response, warehouses and 3PLs are offering new services to support and streamline reverse logistics. For example, many warehouses and 3PLs now invest in software to house procedures for processing, grading, and getting items ready for inventory again, so that they can easily determine which products are viable for resale.

These providers are also expanding services into refurbishment and re-commerce, which helps merchants build a sustainable option for reselling gently used or open-box products on a secondary branded platform. This model helps to promote a second life for used products and to generate a secondary source of revenue for the merchant.

To increase capabilities quickly, many logistics providers are turning to partnerships and acquisitions that can help them tap into new market opportunities.

For instance, last year, UPS acquired Happy Returns, a reverse logistics company with a network of drop-off locations where customers can deliver box-free returns for a frictionless returns experience. By pairing Happy Returns’ existing drop-off centers with its network of 5,200 UPS Stores, UPS was able to expand its base of drop-off centers to more than 12,000 U.S. locations.

In the future, partners that offer package-free drop-offs may get into the inspection, refurbishment and re-packaging space so that items can go directly to a warehouse for fulfillment, or possibly even drop-ship directly to a new buyer from the drop-off center.

By using existing resources, and adding new partnerships and acquisitions, they can consolidate and streamline the reverse logistics process for merchants.

]]> Partnering with logistics companies helps brands tap into economies of scale, with bulk shipping rates, shared warehousing, and optimized delivery routes.

Customer experience is also key. Consumers demand not only quick delivery but also flexible options for receiving and returning products.

Finally, the trend toward consolidating multiple vendor relationships into a single, comprehensive logistics partner streamlines communication, billing and contracting which often leads to lower costs. By going deeper into the merchant’s business, logistics providers can be more strategic, helping to creatively solve problems with merchants.

Logistics companies are responding to increased demand by offering new pick-up and drop-off options, streamlining the experience with QR codes and package-free returns, and consolidating multiple shipments into bulk deliveries.

The evolving relationship between ecommerce companies and logistics providers is driven by the need to reduce costs, enhance customer satisfaction, and streamline operations. As these partnerships develop, we can expect further innovations in the logistics sector that will ultimately benefit logistics companies, merchants, and consumers.

Ripe for Consolidation

Traditionally, warehouses and 3PLs have focused on outbound orders rather than managing returns—but with the rate of ecommerce product returns approaching 18%, reverse logistics is increasingly becoming a key concern for both merchants and their 3PL partners.

Without a strategic plan for managing reverse logistics, the majority of returns end up getting discarded. This approach isn’t just terrible for the environment, it also forces merchants to foot reverse logistics costs for products they won’t resell.

In response, warehouses and 3PLs are offering new services to support and streamline reverse logistics. For example, many warehouses and 3PLs now invest in software to house procedures for processing, grading, and getting items ready for inventory again, so that they can easily determine which products are viable for resale.

These providers are also expanding services into refurbishment and re-commerce, which helps merchants build a sustainable option for reselling gently used or open-box products on a secondary branded platform. This model helps to promote a second life for used products and to generate a secondary source of revenue for the merchant.

To increase capabilities quickly, many logistics providers are turning to partnerships and acquisitions that can help them tap into new market opportunities.

For instance, last year, UPS acquired Happy Returns, a reverse logistics company with a network of drop-off locations where customers can deliver box-free returns for a frictionless returns experience. By pairing Happy Returns’ existing drop-off centers with its network of 5,200 UPS Stores, UPS was able to expand its base of drop-off centers to more than 12,000 U.S. locations.

In the future, partners that offer package-free drop-offs may get into the inspection, refurbishment and re-packaging space so that items can go directly to a warehouse for fulfillment, or possibly even drop-ship directly to a new buyer from the drop-off center.

By using existing resources, and adding new partnerships and acquisitions, they can consolidate and streamline the reverse logistics process for merchants.

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