by Jennifer Hart Yim | May 20, 2015 | Blog, Manufacturing & Distribution, Strategy, Supply Chain, Warehousing & Materials Handling
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.
David Chadwick is an MBA student at the University of New Hampshire with a background in retail store management and electrical engineering.
If technology continues to advance, humans may be obsolete in the supply chain as a result of both automation and RFID utilization. Both technologies have been introduced into the supply chain over the past decade, resulting in a major shift in performance and costs. While automation is a process which can navigate product throughout facilities, RFID can improve efficiency dramatically as well as being the major driver for the elimination of human involvement in the supply chain.
RFID (Radio Frequency Identification) is a form of extremely low-power data communication between a RFID scanner and an RFID tag. The tags are placed on any number of items, ranging from individual parts to shipping labels. The RFID tag itself consists of a microchip and antennae, usually without a battery to power it. The tags can be printed using special printers, which wirelessly load the identifying information to the tags. The information on the tags can be used for a wide variety of tasks. When an item goes through the RFID scanners, information is read from the tag, which could include any amount of information, such as:
- Order ID number
- Product bin location
- Order status
- Serial numbers for individual product components
- Location logs
The information is not limited to just holding ID and serial numbers. Since the information can be updated and transferred through any RFID receiver when in range, it can be joined with other software to update databases, send information online, and more. The amount of information that RFID can provide can be matched with order management systems to track shipment and stock locations automatically as the products move through warehouses and trucks. Powerful receivers can also track the exact location of products within a warehouse in real time, instead of relying on time and location logs to determine the location. This has been a major benefit to UPS, who’ve had RFID tracking chips in their warehouses for over ten years.
The largest problem facing supply chain management today is the potential for the occurrence of devastating errors. These errors could lead to trucks leaving product behind, not stocking to capacity, losing product, or delivering to the wrong locations. There are numerous reasons for such errors to occur, but the most common factor in their inception is human error. Much of the errors faced result from manual inspection and control over product flow in warehouses by humans. Many systems still operate using written data tables and checklists, which can be written incorrectly. Despite major advancements in technology over the past decade, the digital world is being sourced by analog supply chains. This is an aspect which RFID control can create beneficial change.
RFID can lead to completely autonomous warehouses and distribution centers. This can be seen in current warehouses with high levels of automation, where picking machines transport bins of product to a central sorting area to be boxed, before returning to their location. Zebra uses this technique to ensure product location accuracy as a means of reducing lost merchandise. Zebra places a great deal of importance on product visibility and transparency as well as accuracy in locations. Implementation of RFID into this system can ensure that both the correct product and the correct quantities of product are collected at both points, thereby eliminating errors seen in traditional analog supply networks. Coupled with the potential for self-driving trucks and the ever expanding internet of things in the cloud, product information can be tracked at all stages of shipment and storage, increasing accuracy, efficiency, and accountability. Where warehouses and receiving departments had to endure a certain amount of shrinkage of products in the past, a fully utilized RFID-enabled supply network can determine exactly where product is at all times, ensuring that theft is discovered immediately and enforced.
While the reduction of human interaction in the supply chain and warehouses in general can be eliminated with enough technology, it is uncertain to what degree this technology will be implemented in all aspects of supply chain management. While there are huge benefits to operating in such a system, the major negatives include high initial costs and restructuring costs associated with implementing this network into existing, analog networks. Humanity may not be completely removed from the supply chain in the future, but this technology, as well as more advanced techniques for automation, will increase the efficiency and reduce the costs required to operate these newer supply chains dramatically while significantly reducing errors and inefficiencies.
by Jennifer Hart Yim | May 19, 2015 | Blog, Logistics, Strategy, Supply Chain
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.
Nicole Brooks is an MBA candidate at the University of New Hampshire.
Amazon keeps on innovating.
Just when you think that Amazon offers it all, they keep surprising their customers with more unbelievable plans and ideas to better improve our lives. With a mission “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices,” Amazon continues to be innovative in an effort towards a bright future. For example, Amazon was an industry leader with the introduction of 1-day shipping, shifting consumers to expect this new luxury as the standard.
In the previous three year’s first quarter financial statements, the company has experienced a decrease in their growth rate: approximately 30% during the first quarter three years ago and down to 20% in the first quarter of last year. This has pushed Amazon to begin considering alternative paths of business if they want to continue experiencing growth. As such, they have started to diverge into the services industry and have developed a platform that is used to match buyers and sellers for essentially all types of goods.
Amazon’s latest innovations include but are not limited to:
Kiva Robots
For the 2014 holiday season, Amazon put their new Kiva robots to work. Over 15,000 were placed inside the US fulfillment centers to “make operations more efficient” during the expected high volume holiday rush. They essentially eliminated the need for people to walk through the aisles to collect the necessary items for a shipment. The Kiva robots are programmed to know the placement of items within the shelving system and bring forth the shelf with the next needed item for the packers. The company’s forward looking decisions are based on Amazon’s future vision for what the industry leader could do next to make itself stand out.
Drones
Despite being turned down by the U.S. Federal Aviation Administration (FAA) in the early months of 2015, Amazon still fully intends to be able to deliver packages to customers utilizing their developed and tested drone technology. The video that can be viewed through the Amazon Prime Air webpage provides customers with an idea of what the drone would look like and what the process would be from the order being received at the warehouse to the package being delivered to someone’s doorstep.
Amazon has named this drone delivery service “Prime Air”. Prime Air has the goal and potentially the capability to offer customers 30 minute delivery. Yes, within a 30 minute time span from receiving an order Amazon wants to process it and be able to deliver those items. Of course, there would be a high premium associated with this, but it would minimize the need for companies to have to make purchases ahead of time, which for small companies, could be very beneficial for their bottom line. Currently, drones are being tested and allowed commercially in Canada as well as a handful of European countries. In Canada, for example, drones are only subject to be used when it is light outside, the weather is good, and the controller can keep the drone in his/her sight.
Amazon Home Services
Amazon formally introduced the Home Services platform to their website last month. This platform essentially is set up in the same manner as their goods and products platform, however instead of being shipped a product at the end, the customer is booking a service, such as plumbers, electricians, TV installation services, etc. This platform allows customers to look at the various offerings and to more easily compare different businesses and contractors based on the value that they perceive the service would ultimately be providing. The different home services, similar to a typical Amazon offering, will also have comments and rankings to help distinguish the variety of offerings.
Amazon Business
In light of the increasing “do-it-yourselfer” trend, Amazon has opened a distribution channel for those seeking high-tech electronic components and parts. In the past, these components would be bought directly through suppliers, authorized distributors, or various parts catalogs. Amazon, which caters to those who prefer to do their shopping online, has expanded their offerings with the Amazon Business platform. Consumers have the ability to create business accounts with multiple user access, set-up and utilize an approval system, and can qualify for free two-day shipping, among other benefits. With this specific addition, Amazon is expanding their platform to further cater to information technology and electronic industries, creating more of a reason for businesses to consider Amazon a one-stop shopping destination.
Amazon Destinations
Also recently announced, Amazon will begin offering an Amazon Destination platform for customers to quickly and easily be able to compare local hotels for a getaway. This is not yet currently available to customers, but once it is, similar to the offering above, will give shoppers an all-encompassing inside look at what the various hotels in the area have to offer as far as rate and amenities upfront.
The Future
At this stage, Amazon is a mature company with a well-developed online shopping platform coupled with industry-leading delivery and logistics offerings. Now with the expansions into service offerings, Amazon has proved that there is no limit to what they can do. Their steps have been logical and it only makes sense that they now spread their platform to consist of more things everyday consumers are looking for. We can already get any item imaginable through their website, why not any service. As the service offerings expand, it would not be a far stretch to say that in the coming years we will be able to plan weddings, book vacations around the world, and even possibly compare medical procedures through Amazon.com.
It’s difficult to accurately predict what Amazon will be doing fifteen years from now, but whatever they are doing, will mostly likely continue to shape consumer expectations and impact the surrounding business and consumer markets in ways we had not thought of beforehand.
by Jennifer Hart Yim | May 19, 2015 | Blog, Logistics, Strategy, Supply Chain
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.
Nicole Brooks is an MBA candidate at the University of New Hampshire.
Amazon keeps on innovating.
Just when you think that Amazon offers it all, they keep surprising their customers with more unbelievable plans and ideas to better improve our lives. With a mission “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices,” Amazon continues to be innovative in an effort towards a bright future. For example, Amazon was an industry leader with the introduction of 1-day shipping, shifting consumers to expect this new luxury as the standard.
In the previous three year’s first quarter financial statements, the company has experienced a decrease in their growth rate: approximately 30% during the first quarter three years ago and down to 20% in the first quarter of last year. This has pushed Amazon to begin considering alternative paths of business if they want to continue experiencing growth. As such, they have started to diverge into the services industry and have developed a platform that is used to match buyers and sellers for essentially all types of goods.
Amazon’s latest innovations include but are not limited to:
Kiva Robots
For the 2014 holiday season, Amazon put their new Kiva robots to work. Over 15,000 were placed inside the US fulfillment centers to “make operations more efficient” during the expected high volume holiday rush. They essentially eliminated the need for people to walk through the aisles to collect the necessary items for a shipment. The Kiva robots are programmed to know the placement of items within the shelving system and bring forth the shelf with the next needed item for the packers. The company’s forward looking decisions are based on Amazon’s future vision for what the industry leader could do next to make itself stand out.
Drones
Despite being turned down by the U.S. Federal Aviation Administration (FAA) in the early months of 2015, Amazon still fully intends to be able to deliver packages to customers utilizing their developed and tested drone technology. The video that can be viewed through the Amazon Prime Air webpage provides customers with an idea of what the drone would look like and what the process would be from the order being received at the warehouse to the package being delivered to someone’s doorstep.
Amazon has named this drone delivery service “Prime Air”. Prime Air has the goal and potentially the capability to offer customers 30 minute delivery. Yes, within a 30 minute time span from receiving an order Amazon wants to process it and be able to deliver those items. Of course, there would be a high premium associated with this, but it would minimize the need for companies to have to make purchases ahead of time, which for small companies, could be very beneficial for their bottom line. Currently, drones are being tested and allowed commercially in Canada as well as a handful of European countries. In Canada, for example, drones are only subject to be used when it is light outside, the weather is good, and the controller can keep the drone in his/her sight.
Amazon Home Services
Amazon formally introduced the Home Services platform to their website last month. This platform essentially is set up in the same manner as their goods and products platform, however instead of being shipped a product at the end, the customer is booking a service, such as plumbers, electricians, TV installation services, etc. This platform allows customers to look at the various offerings and to more easily compare different businesses and contractors based on the value that they perceive the service would ultimately be providing. The different home services, similar to a typical Amazon offering, will also have comments and rankings to help distinguish the variety of offerings.
Amazon Business
In light of the increasing “do-it-yourselfer” trend, Amazon has opened a distribution channel for those seeking high-tech electronic components and parts. In the past, these components would be bought directly through suppliers, authorized distributors, or various parts catalogs. Amazon, which caters to those who prefer to do their shopping online, has expanded their offerings with the Amazon Business platform. Consumers have the ability to create business accounts with multiple user access, set-up and utilize an approval system, and can qualify for free two-day shipping, among other benefits. With this specific addition, Amazon is expanding their platform to further cater to information technology and electronic industries, creating more of a reason for businesses to consider Amazon a one-stop shopping destination.
Amazon Destinations
Also recently announced, Amazon will begin offering an Amazon Destination platform for customers to quickly and easily be able to compare local hotels for a getaway. This is not yet currently available to customers, but once it is, similar to the offering above, will give shoppers an all-encompassing inside look at what the various hotels in the area have to offer as far as rate and amenities upfront.
The Future
At this stage, Amazon is a mature company with a well-developed online shopping platform coupled with industry-leading delivery and logistics offerings. Now with the expansions into service offerings, Amazon has proved that there is no limit to what they can do. Their steps have been logical and it only makes sense that they now spread their platform to consist of more things everyday consumers are looking for. We can already get any item imaginable through their website, why not any service. As the service offerings expand, it would not be a far stretch to say that in the coming years we will be able to plan weddings, book vacations around the world, and even possibly compare medical procedures through Amazon.com.
It’s difficult to accurately predict what Amazon will be doing fifteen years from now, but whatever they are doing, will mostly likely continue to shape consumer expectations and impact the surrounding business and consumer markets in ways we had not thought of beforehand.
by Jennifer Hart Yim | May 18, 2015 | Blog, Logistics, Strategy, Supply Chain
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.
Michael Hickey is a former fifth grade teacher turned business professional. His experience includes content marketing in the IT industry and operations management for United Parcel Service. He will complete his MBA from the University of New Hampshire in 2015. He enjoys long walks along the conveyor belt and Ben and Jerry’s ice cream. He lives with his wife, Betsy, in Dover, New Hampshire and they are expecting their first child in June.
4 questions to ask when determining if a 3PL is right for your company
Third-party logistics, or 3PL, is an industry on the rise thanks to the constant innovations in complementary industries like telecommunications, data analytics, and cloud technologies. To avoid confusion, let’s call 3PL what it is: outsourcing. But it’s not the kind of outsourcing that typically comes to mind when you hear the term. Rather, it’s a specific type of outsourcing related to the operations side of a company in areas like order fulfillment, inventory and warehouse management, or transportation of finished goods. As many companies, and perhaps your competitors, begin to employ some form of 3PL, you may be tempted to follow suit. But before you hand over the keys, consider whether or not 3PL is a good fit for your company by answering these four questions:
Question 1: What are your company’s core values?
Why do you exist as a company? What service or product do you provide that you believe is better than all others like it? And what are the core values that your company adheres to in good times and bad, for better or for worse? Core values make you who you are. They are the DNA of the company. Stonyfield Farm, for example, produces a variety of yogurts from their New Hampshire-based facility. One of their core values is that they use only organic ingredients, sourced from family-owned organic farms in their products. No ifs, ands, or buts. That’s a core value. It won’t change, during either boom or recession. And everything they do as a company must align with that. Your company’s strategic alignment stems from identification of its core values, and each decision you make as a company should work seamlessly with your strategic alignment.
Action step: Identify your core values. If 3PL conflicts with any core values, you should avoid forcing its implementation, even if there are cost savings to be gained.
Question 2: What are your company’s core competencies?
What are the things that your company does well? The Yankee Candle Company’s core competencies lie within their research and development and the chemists they employ. Their specialized skills and olfactory expertise drive the creation of precisely scented candles that make you say, “I know I smell a pumpkin pie, but I can’t find it anywhere!” Their competencies help them stand apart from the competition. You would be remiss to give over your core competency to someone else. If your expertise lies in local delivery and timely service, why outsource it to the guys with the brown trucks?
Action step: Identify your core competencies. If 3PL takes the place of any part of your core competencies, you could be weakening the overall value proposition of your company.
Question 3: Will using a 3PL provider allow you to enhance your core competencies to meet your company’s goals?
The purpose of debating whether or not to employ 3PL providers should not focus so much on reduced costs, which can be one of the foremost benefits, but rather whether or not it can enhance your core competencies and stimulate growth for your company. Is your goal to reach broader markets, but you lack the expertise to make it happen? Perhaps an e-commerce fulfillment provider could help you reach those markets. Do you have an outstanding product, but can only sell it to those within a small radius of your operations? Maybe this would be the appropriate time to call on the guys with the brown trucks.
Action step: Draw parallels between the service you wish to outsource and the goal it will meet.
Question 4: What is the cost to your company?
It’s the question that always needs to be considered. But don’t take this question at face value: we’re not just talking about how choosing a 3PL will affect the bottom line. Of course there will be monetary costs associated with hiring another company, and there is even a tipping point when using a 3PL may be cost ineffective. So after a careful cost/benefit analysis, consider the other costs associated with handing over part of your value chain to a third party:
Time costs: Does outsourcing add lead times or delivery times to orders? Decide whether possible time costs take away from your value proposition, or enable your company to meet larger goals.
Control costs: Are you willing to hand over direct control of part of your value chain to someone else? Keep in mind that it’s possible no one cares about your business quite as much as you do. Can you trust someone else to make the same kind of decisions you would make in respect to your company and its customers?
Reputation costs: What happens if a 3PL provider does not perform as anticipated? Will it put a blemish on your company’s image? If a farm outsources its delivery to a local trucking company, and the refrigeration in the trucks falters and causes food to spoil, will the customer assume that the trucking was bad, or do they just assume that the quality of the produce from the farm is questionable? It takes a long time to build up a reputation, and only a short time to dismantle it. Don’t risk it on a provider you can’t trust.
Action step: Vet your possible 3PL options to see whose values closely align with yours. It may prove to be a critical step in choosing the right provider as opposed to the cheapest one.
Third party logistics provides an avenue for companies to scale to capabilities they may never have had the ability to reach. Expanded consumer markets, faster delivery times, and more efficient inventory management are some of the benefits to be had. But before you get drawn towards the soft glow of higher revenues and wider margins through outsourcing, be careful to make sure that your choice to engage 3PL providers aligns with your company’s strategic plans. And if you do choose to outsource, take your time to find the right provider who can add the most value to your business, not just the least amount of digits on the balance sheet.
by Jennifer Hart Yim | May 18, 2015 | Blog, Logistics, Strategy, Supply Chain
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.
Michael Hickey is a former fifth grade teacher turned business professional. His experience includes content marketing in the IT industry and operations management for United Parcel Service. He will complete his MBA from the University of New Hampshire in 2015. He enjoys long walks along the conveyor belt and Ben and Jerry’s ice cream. He lives with his wife, Betsy, in Dover, New Hampshire and they are expecting their first child in June.
4 questions to ask when determining if a 3PL is right for your company
Third-party logistics, or 3PL, is an industry on the rise thanks to the constant innovations in complementary industries like telecommunications, data analytics, and cloud technologies. To avoid confusion, let’s call 3PL what it is: outsourcing. But it’s not the kind of outsourcing that typically comes to mind when you hear the term. Rather, it’s a specific type of outsourcing related to the operations side of a company in areas like order fulfillment, inventory and warehouse management, or transportation of finished goods. As many companies, and perhaps your competitors, begin to employ some form of 3PL, you may be tempted to follow suit. But before you hand over the keys, consider whether or not 3PL is a good fit for your company by answering these four questions:
Question 1: What are your company’s core values?
Why do you exist as a company? What service or product do you provide that you believe is better than all others like it? And what are the core values that your company adheres to in good times and bad, for better or for worse? Core values make you who you are. They are the DNA of the company. Stonyfield Farm, for example, produces a variety of yogurts from their New Hampshire-based facility. One of their core values is that they use only organic ingredients, sourced from family-owned organic farms in their products. No ifs, ands, or buts. That’s a core value. It won’t change, during either boom or recession. And everything they do as a company must align with that. Your company’s strategic alignment stems from identification of its core values, and each decision you make as a company should work seamlessly with your strategic alignment.
Action step: Identify your core values. If 3PL conflicts with any core values, you should avoid forcing its implementation, even if there are cost savings to be gained.
Question 2: What are your company’s core competencies?
What are the things that your company does well? The Yankee Candle Company’s core competencies lie within their research and development and the chemists they employ. Their specialized skills and olfactory expertise drive the creation of precisely scented candles that make you say, “I know I smell a pumpkin pie, but I can’t find it anywhere!” Their competencies help them stand apart from the competition. You would be remiss to give over your core competency to someone else. If your expertise lies in local delivery and timely service, why outsource it to the guys with the brown trucks?
Action step: Identify your core competencies. If 3PL takes the place of any part of your core competencies, you could be weakening the overall value proposition of your company.
Question 3: Will using a 3PL provider allow you to enhance your core competencies to meet your company’s goals?
The purpose of debating whether or not to employ 3PL providers should not focus so much on reduced costs, which can be one of the foremost benefits, but rather whether or not it can enhance your core competencies and stimulate growth for your company. Is your goal to reach broader markets, but you lack the expertise to make it happen? Perhaps an e-commerce fulfillment provider could help you reach those markets. Do you have an outstanding product, but can only sell it to those within a small radius of your operations? Maybe this would be the appropriate time to call on the guys with the brown trucks.
Action step: Draw parallels between the service you wish to outsource and the goal it will meet.
Question 4: What is the cost to your company?
It’s the question that always needs to be considered. But don’t take this question at face value: we’re not just talking about how choosing a 3PL will affect the bottom line. Of course there will be monetary costs associated with hiring another company, and there is even a tipping point when using a 3PL may be cost ineffective. So after a careful cost/benefit analysis, consider the other costs associated with handing over part of your value chain to a third party:
Time costs: Does outsourcing add lead times or delivery times to orders? Decide whether possible time costs take away from your value proposition, or enable your company to meet larger goals.
Control costs: Are you willing to hand over direct control of part of your value chain to someone else? Keep in mind that it’s possible no one cares about your business quite as much as you do. Can you trust someone else to make the same kind of decisions you would make in respect to your company and its customers?
Reputation costs: What happens if a 3PL provider does not perform as anticipated? Will it put a blemish on your company’s image? If a farm outsources its delivery to a local trucking company, and the refrigeration in the trucks falters and causes food to spoil, will the customer assume that the trucking was bad, or do they just assume that the quality of the produce from the farm is questionable? It takes a long time to build up a reputation, and only a short time to dismantle it. Don’t risk it on a provider you can’t trust.
Action step: Vet your possible 3PL options to see whose values closely align with yours. It may prove to be a critical step in choosing the right provider as opposed to the cheapest one.
Third party logistics provides an avenue for companies to scale to capabilities they may never have had the ability to reach. Expanded consumer markets, faster delivery times, and more efficient inventory management are some of the benefits to be had. But before you get drawn towards the soft glow of higher revenues and wider margins through outsourcing, be careful to make sure that your choice to engage 3PL providers aligns with your company’s strategic plans. And if you do choose to outsource, take your time to find the right provider who can add the most value to your business, not just the least amount of digits on the balance sheet.
