by Jennifer Hart Yim | Jun 4, 2018 | Blog, Content Marketing, Current Events, Logistics, Manufacturing & Distribution, Marketing, Supply Chain
3-D printing opens up new revenue opportunities for supply chain, helping companies meet demand in real time, manage inventory without limiting products they offer, and increase lead time.
This article is part of a series of articles written by MBA students and graduates from the University of New Hampshire Peter T. Paul College of Business and Economics.
Spring has finally arrived in New England. However, with spring comes every vehicle’s most dreaded enemy, the pothole! My coworker Will recently fell victim to one such nemesis. His part-sourcing saga has me wondering how soon the narrative may change.
On what started as a normal morning, Will soon found himself calling a tow truck to get his car to the shop and a coworker to get himself to work. An unavoidable pothole caused one of his ball joints to fail, and limping anywhere was not an option. The silver lining of the day was that his very accommodating mechanic agreed that Will could source his own parts.
A sourcing saga ensued.
The layers of research he had to do was frustrating. Which manufacturers make the quality of product he wants? Then which distributors can provide him the quantity he needs when he needs them at the best price?
This meant calls to local auto part stores, price checking against online distributors, verifying brands & model numbers, accounting for lead times, stockouts, shipping and handling fees to determine how to get the best total value of quality, cost, and delivery.
Complex decisions like this are common in many sourcing scenarios.
But does it have to be?
What if distributors could better manage their inventory without limiting the products that they offer or increasing the lead times to their customers?
With 3-D printing, that may soon be attainable.
Rather than holding inventory from various manufacturers, a distributor could have license agreements with manufacturers to print parts on demand.
Revolutionary though this sounds, it’s not an unfamiliar model. Not so long ago, buying music meant going to a physical store to purchase or order an album. Now streaming services have license agreements with record companies to meet consumer demand in real time.
Jay Leno has been 3-D printing parts for his fleet of classic cars for nearly a decade. He admitted that initially the costs were prohibitive for most people. However now that 3-D printers are available at a wide range of price points, it is becoming more economical to print products on demand.
Printing parts with low inventory turns on demand would reduce inventory costs within the entire supply chain, having a positive impact on a company’s bottom line. High-value, low-volume parts like those of late model vehicles are the perfect candidates. In fact, BMW, Porsche, and Mercedes-Benz Trucks have begun 3-D printing spare parts older models and freight trucks.
3-D printing and logistics
The next logical progression to reduce overall supply chain cost is to move production as close to the customer as possible. Logistics companies are positioning themselves to be ready to integrate into this production model.
Both UPS and DHL have recognized the potential for end-of runway 3-D print capabilities and local 3-D “print shops.” UPS has partnered with SAP and Fast Radius to launch its On-Demand 3D Printing Manufacturing Network, which leverages 3-D printing technology, analytics and UPS’s global network to execute production at the location where capacity and logistics are optimum.
This summer, BMW Motorrad will provide spare-part printing capability directly to customers with BMW Motorrad iParts, a mobile 3-D printer designed to travel with you on the back of your BMW Motorrad motorcycle. Customers will use a mobile app to download a part file from the cloud-based library and print parts on the go. Although limited by the size of the printer, Motorrad rides will be able to replace small parts in nearly any location. Customers can even preload files so, no matter where they are — the side of a mountain or the middle of a desert — they can make spare parts.
These companies are not alone in seeing the value of 3-D printing on the go. Amazon made headlines when it first filed for a patent on a 3-D printing delivery truck. That patent was granted at the beginning of this year. Although a launch plan has not been announced, a major player with that capability is a definite catalyst for more innovation at the intersection of 3-D printing and logistics.
The future
[bctt tweet=”It’s clear that logistics and inventory management will not look the same 10 years from now. The question is: when and where it will be economical to print parts on demand?” username=”Fronetics”]
It’s clear that change is coming, logistics and inventory management will not look the same 10 years from now. The question is: when and where it will be economical to print parts on demand? Will it be at an end-of-runway distribution center, a local multipurpose 3-D printing shop, or on-site at repair shops? Will AAA be able to print a new ball joint in a roadside truck and change it out like it was no different than the services they offer for tires and battery today? I can’t wait to find out.
In the meantime, Will had to deal with today’s sourcing options. After many phone calls, dozens of emails, and multiple carpools to work, his car is back on the road. And he believes he got four new ball joints at a good value.
About the author
Ruth DeMott is a quality engineer at Pratt & Whitney currently pursuing an MBA at the University of New Hampshire. She holds a BS in Industrial Engineering from Worcester Polytechnic Institute (class of 2010). She has held roles of increasing responsibility in the manufacturing and quality engineering departments since joining Pratt upon completion of her undergraduate degree. She is involved in the New Hampshire Youth Rugby program, enjoys traveling, putting things together, and spending time with friends and family.
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by Elizabeth Hines | Apr 3, 2018 | Blog, Content Marketing, Current Events, Manufacturing & Distribution, Marketing, Supply Chain
In many cases, automation in manufacturing creates leaner, more efficient operations. Efficiency facilitates new opportunities and business growth, which in turn allow for job creation.
The rise of artificial intelligence (AI) and its applications in manufacturing have driven a palpable fear that mass job loss is on the horizon. We have to wonder: is the threat as real and as imminent as many think? Like many things, the answer is more nuanced than a simple yes or no.
A McKinsey Global Institute report predicts that automation could cause the loss of between 39 and 73 million jobs by 2030 in the U.S. alone. Clearly, the AI genie will not be put back into its bottle. However, this doesn’t mean that all jobs across all sectors will be affected evenly.
Generally, low-skill jobs are more susceptible to replacement by AI. This is especially true in industries like retail, which has worked to automate many aspects along the purchase journey, including processes designed to get packages into consumers’ hands faster.
Not the end of the world
Oddly enough, 73 million lost jobs doesn’t spell all doom and gloom. Yes, people will lose jobs — that is inevitable. Automation, however, will create many more.
Think about it: In many cases, automation creates leaner, more efficient operations. Efficiency facilitates new market opportunities and business growth, which in turn allow for expansion and job creation. And these new jobs aren’t the low-skill positions of their pre-automation predecessors. They’re operating new technology, supervising automated processes, and other higher-paying opportunities.
Amazon: Case in point
Consider the retail industry’s brick-and-mortar boom and bust and the rise of e-commerce. As stores shuttered, companies had to downsize the number of individuals they employed. Then, as e-commerce boomed, e-retailing companies were able to bring on more employees — often at higher salaries than in traditional retail.
Amazon’s expansion to the “once-thriving factory town” of Fall River, Mass., offers a prime example. The city, which boasted nearly 20,000 manufacturing jobs in 1991, saw that number dip below 4,000 by 2015 — in large part due to automation. The 2016 arrival of an Amazon fulfillment center was the single largest job-creation event in recent memory.
Employment at the Fall River center has crept above 2,000 in just over a year. And it’s apparent that number will keep rising and that humans won’t be phased out anytime soon. In fact, rather than replace human workers, Amazon’s technology helps each become more efficient. That stimulates Amazon’s growth and the need for more fulfillment centers and more talent to fill those jobs.
While the majority of the Fall River center’s jobs are not skilled and pay reflects that, other benefits such as overtime, tuition aid, and company shares make annual compensation comparable to or better than what local textile mills once paid. Fulfillment center jobs certainly pay above traditional retail and offer employees the opportunity to work withartificial intelligence — rather than in competition with it.
A double-edged sword
AI in the warehouse may stimulate job growth. But those most likely to lose their jobs to automation — low-skill workers — may not possess the transferable skills to be successful in the new wave of jobs created by technology. For example, would a former factory worker who put together boxes for fulfillment be hirable for a position operating custom box-cutting machinery?
Amazon, again, exemplifies a solution. The company offers its workers significant training and education to breach any skill gaps. Those who have never had experience in a warehouse or operating technology will need companies to invest in their training to ensure those who have lost their jobs to automation will have a place in the new economy.
History repeating
This isn’t the first time we’ve encountered such an issue. Before ATMs were the ubiquitous cash-dispensing machines, many thought them the great disruptor of the banking industry. The bank teller’s role was sure to become obsolete.
What actually happened is that ATMs led to more efficiently run banks. While some jobs were lost, banks were actually able to open up more branch locations, which led to the creation of more jobs.
Will automation in the warehouse cause the same scenario to happen? Will organizations become more efficient, allowing them to grow and hire more workers at better, higher paying jobs? In many cases, it looks like it already has.
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by Fronetics | Dec 14, 2017 | Blog, Logistics, Supply Chain
Here are our most-viewed blog posts from 2017 about the supply chain and logistics industries, including posts about some of the largest supply chain companies in the world, Starbucks and Amazon.
Throughout the year, we write innovative posts to help readers stay in the know with the latest news and happenings to the supply chain & logistics industries. These posts provide insightful and relevant information from thought leaders, current trends, and tips to stay ahead of your competitors. Here’s a look at our most popular posts from this year.
Here are our top 10 supply chain and logistics posts of 2017.
1. Supply Chain Putting the ‘Star’ in Starbucks
Starbucks’ closely managed supply chain may be the key to the premium coffee giant’s success. The international coffee giant has widely studied and acclaimed supply chain management practices, which, according to some, make Starbucks’ coffee and customer experience superior to those of its competitors. Read more.
2. 8 Must-Follow Logistics & Supply Chain Blogs for 2017
Supply chain professionals should be following these eight blogs to keep up with the latest industry news and happenings in the coming year. They cover a range of topics, from technology to strategy, and feature thought leadership by some of the brightest minds in the field. Read more.
3. Top 5 Trends to Know to Compete with Amazon’s Supply Chain
Supply chains must accept that they cannot equal the power of Amazon’s supply chain without embracing new trends. While supply chain entities struggle to stay competitive with the e-commerce giant, more organizations will look for ways to eliminate inefficiencies and boost operations. Fortunately, these five trends may alleviate some of the strains of competition by giving supply chain partners an advantage in the global market. Read more.
4. 5 Podcasts for the Supply Chain and Logistics Professionals
These podcasts bring the latest news and thought leadership in the supply chain and logistics industries right to your earbuds. Podcast’s popularity has skyrocketed since the smartphone became as necessary as car keys, giving you to-the-minute facts and information, right in the palm of your hand. If you’re looking to increase your podcast listening, here are five that highlight topics of interest to supply chain and logistics professionals. Read more.
5. What’s the Difference between Supply Chain Management and Logistics (Infographic)
Argentus’ infographic sheds light on the differences between these often-confused functions. Both Logistics and the wider Supply Chain are vital to how companies run today, but the two are still so often confused. We put together an infographic outlining some of the key differences and points of overlap between them. Read more.
6. 5 Books Every Supply Chain Professional Should Read
Add these books to your reading list to stay on top of industry trends and jump start your professional development. Read more.
7. What are the Supply Chain Impacts of Amazon’s Whole Foods Acquisition?
Amazon’s foray into the grocery space has larger implications for its overall strategy, and the possible benefits for the eCommerce goliath are diverse. Big news out of the grocery retail world as Amazon has announced its acquisition of major organic foods retailer Whole Foods Market – for an eye-popping $13.7 billion sale price that doesn’t look so massive given Amazon’s $136 billion sales volume in 2016. Read more.
8. Packaging Trends to Watch in 2017
Will sustainability trends from the consumer packaging industry have an impact on electronics manufacturing this year? Packaging trends suggest a wide range of startups, researchers, and big companies are committed to finding solutions that match the buzzwords du jour — sustainable, bio-degradable, natural, and eco-friendly. Read more.
9. The Top 3 Logistics and Supply Chain Blogs for 2017 – Readers’ Choice!
Our readers voted Morai Logistics, Women in Trucking, and the Oracle Supply Chain Management Blog as the top 3 logistics and supply chain blogs of 2017. Every year we ask our readers to vote for the best industry blogs. The results are always interesting — there’s really a lot of great supply chain and logistics content out there, plus it’s great to see where our readers are finding value. Read more.
10. The State of Supply Chains: The Supply Chain Has Gone Digital (Infographic)
2016 was the year of the digital supply chain — here’s a look at how things changed. The digital transformation has already reached most supply chain organizations. Per GT Nexus, 75% of executives surveyed recognized the digital supply chain as an important factor for the next five years. Read more.
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by Fronetics | Oct 24, 2017 | Blog, Current Events, Logistics, Strategy, Supply Chain
Cities should consider Amazon’s HQ2 search criteria as a roadmap for attracting innovative companies, empowering residents, and driving a healthy local economy.
We’re living through a seismic shift in the way business transactions are being conducted. E-commerce is now king. We might be tempted to think the decline of retail equates to business transactions being moved from physical space to a digital world. Will our cities and the shops that line their streets become obsolete in the face of e-commerce?
Amy Liu and Mark Muro of the Brooking Institute’s Metropolitan Policy Program contend that if Amazon’s recent search for a second headquarters (“HQ2”) has anything to show us, it’s that America’s cities still have an important role to play in the future of e-commerce.
How cities could change
Liu and Muro suggest cities take a close look at Amazon’s selection criteria for HQ2’s location and extrapolate the best ways to “build up the fundamental assets prized by innovative firms and industries.” In this way, cities can best “garner a bigger share of high-tech growth,” and furthermore, be a part of our nation’s gaining “a competitive foothold in the digital future.”
Liu and Muro draw four main takeaways from Amazon’s city selection criteria:
- Capacity to produce skilled, technical talent
- Access to domestic and global markets through modern infrastructure
- Connected and sustainable placemaking
- Culture and diversity
Cities that boast these characteristics will have the best chance at attracting the kind of companies that will shape the future of how we do business — e-commerce and beyond. These companies will employ and empower local talent. And not just highly skilled talent. I can’t help but think of this recent Wall Street Journal article about the impact that Amazon’s presence has had on Fall River, Massachusetts.
Such employment opportunities will attract new residents. New residents will boost the local economy. Strong local economies boost the health and well-being of the community. And the positive benefits snowball from there.
I’m speaking in generalizations here, but cities stand to gain quite a bit from considering Amazon’s HQ2 search criteria. Of course, there are plenty of negatives to making way for the Amazons of the world — the decline of Main Street being one of them. But if the digital world plays an increasingly important role in the ways we conduct business and commerce, isn’t there value in strategizing around it?
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by Jennifer Hart Yim | Jul 26, 2017 | Blog, Current Events, Logistics, Strategy, Supply Chain
Amazon’s foray into the grocery space has larger implications for its overall strategy, and the possible benefits for the eCommerce goliath are diverse.
This guest post comes to us from Argentus Supply Chain Recruiting, a boutique recruitment firm specializing in Supply Chain Management and Procurement.
Big news out of the grocery retail world as Amazon has announced its acquisition of major organic foods retailer Whole Foods Market – for an eye-popping $13.7 billion sale price that doesn’t look so massive given Amazon’s $136 billion sales volume in 2016.
Analysts across the retail industry are talking about the huge implications of this sale for a retail industry that many say is in the middle of a major meltdown, in part owing to Amazon’s massive growth in the eCommerce space. This foray into the grocery business is a big challenge to companies like Target, Wal-Mart, and others, and also a sign that reports of brick and mortar retail’s demise might be greatly exaggerated.
Anyone following the industry probably isn’t completely surprised by the acquisition, which serves as another example of Amazon’s constantly widening footprint across all aspects of Supply Chain. It follows on the company’s gradual conquest of the logistics space over the last few years, including the licensing of 20 Boeing 767 air cargo jets, the acquisition of wholesale shipping licenses, and forays into trucking. It shouldn’t be so surprising that the company is seeking to put one of the final puzzle pieces in place towards a completely vertically-integrated retail Supply Chain by buying brick and mortar stores – while also buying a major staging ground to improve its last-mile logistics, which is often said to be the “holy grail of eCommerce.”
It all fits into analysts’ understanding of Amazon’s quest for world domination.
That being said, the specific acquisition of a healthy lifestyle brand like Whole Foods is intriguing for sure. This is a brand with major goodwill and solid growth as consumers have looked to healthier choices over the past several years, so it makes sense from that perspective. But as many outlets have reported, Amazon’s foray into the grocery space has larger implications for its overall strategy, and the possible benefits for the eCommerce goliath are diverse. As Supply Chain 24/7 put it, this move is more than a disruption to retail – it could be a disruption to all of society.
Woah.
So let’s dive in: what is Amazon’s medium and long game with this acquisition? What are the possible benefits to the company and the potential disruption?
- Amazon gets to reap the sales of a popular and upscale grocery brand.
- It brings Amazon a step closer to perfecting its last-mile delivery strategy, which has been difficult to execute for high-turnover perishable items like groceries.
- It expands the company’s distribution network, adding 440 refrigerated warehouses within 10 miles of 80 percent of the population.
- It allows Amazon to place pressure on food suppliers’ profit margins by being even larger.
- It obviously gives the company more physical, brick and mortar presence, which allows it to eliminate some of its disadvantages compared to brick and mortar chains – for example the fact that people shopping online on Amazon can’t try on clothes or select fruit. The company has already dipped its toe into the brick and mortar waters with its Amazon Bookstores, now up to eight locations, but this represents a full-blown cannonball into that space, selling way more than just books.
- It allows the company to digitize the strongest parts of Whole Foods’ brick and mortar experience, adopting a hybridized approach at the same time as Wal-Mart looks to become more like Amazon.
- It allows the company a larger testing ground for its Amazon Go app, which allows customers to pay for grocery goods using a smart phone without ever interacting with a checkout counter. This has negative employment implications, obviously, for retail workers long-term.
- It gives the company more “touch points” with shoppers and avenues to sell higher-margin goods such as Kindle devices in grocery stores.
- It also delivers a massive new client to Amazon Web Services, a client who is currently using Microsoft’s Azure Cloud platform.
- It puts a number of Amazon’s biggest retail rivals on notice, including Target, Wal-Mart, and others, that they can expect more price competition.
When this move was reported, it sent stocks for Canadian grocery companies into a conniption, with some companies losing 3.5% of their value in a day’s trading. American grocery companies didn’t do much better, with Target, Walmart and Kroger all losing value as well. Whatever the outcome, it looks like this year’s retail industry upheavals might just be a taste of what’s to come.
This post originally appeared on the Argentus blog.
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