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Tag: supply chain

  • The Growing Importance of Supply Chain Visibility (SCV) in Ecommerce

    The Growing Importance of Supply Chain Visibility (SCV) in Ecommerce

    Supply chain visibility (SCV) is the ability to track and monitor a product or shipment from its origin to its destination. This allows businesses to stay informed on their shipments’ progress, anticipate delays, and make adjustments if needed.

    With eCommerce growth continuing at an exponential rate, supply chain visibility has become increasingly important for companies looking to remain competitive in today’s digital marketplace. Not only do businesses need to meet customer demands for fast delivery times, but they also need to manage costs, minimize losses, and ensure security. 

    Be that as it may, only 65% of companies are able to report full visibility across their supply chains, and 43% of small businesses are not tracking inventory levels at all. With economic uncertainty on the horizon and customer expectations at an all-time high, now is the time to invest in supply chain visibility so you don’t find yourself falling behind while your competition sails away with their loyal customers.

    Benefits of Supply Chain Visibility for Ecommerce Businesses

    There are a multitude of benefits to be realized through the implementation of supply chain visibility in eCommerce. These include:

    Improved customer satisfaction and loyalty

    The more visibility you have into your own supply chain, the better equipped you are to anticipate customer needs and deliver products in a timely manner. With improved visibility, eCommerce businesses can increase customer satisfaction by reducing their response times, improving delivery accuracy, and providing customers with real-time updates about the status of their orders. This helps foster greater loyalty from customers, which in turn increases the likelihood of repeat business.

    Reduced costs associated with inventory management

    “Knowing inventory costs is extremely important because they affect the majority of decisions one makes as a retailer,” explains Abir Syed, co-founder of UpCounting, an eCommerce accounting firm.

    Unsurprisingly, inventory management is the single largest expense for eCommerce businesses. For every dollar a US retailer generates through revenue, they have $1.35 tied up in inventory. As such, being able to accurately track and monitor inventory levels is essential for minimizing losses and maximizing efficiency.

    By leveraging supply chain visibility technology, businesses can reduce the amount of inventory they need to keep in stock and their associated costs. This can be achieved through better forecasting and planning, more precise order fulfillment processes, and improved inventory accuracy.

    Increased efficiency and speed of delivery

    Knowing where products are throughout their journey allows businesses to better plan and adjust for delays, ensuring customers get their items as quickly as possible. Supply chain visibility also facilitates increased collaboration between all parties involved in the delivery process, allowing for a transparent and overall more efficient supply chain.

    Enhanced flexibility and scalability in supply chains

    As the demands of customers and markets shift, businesses need to be able to quickly adjust their supply chains accordingly. With supply chain visibility, businesses can quickly adapt to changing conditions, such as unexpected spikes in demand or supply disruptions. This increased flexibility and scalability of the supply chain is essential for businesses to remain competitive and responsive. This scalability also benefits businesses as they grow and expand into new markets. 

    Increased control over returns management 

    Returns are an unavoidable part of eCommerce and managing them can be difficult. Supply chain visibility gives businesses the ability to track a returned item as it moves through the supply chain and make adjustments to minimize losses. This includes tracking returned items on their journey back to the supplier, identifying potential issues and quickly resolving any discrepancies.

    Challenges of Implementing Supply Chain Visibility

    While the benefits of supply chain visibility are clear, there are still some challenges associated with its implementation. These include:

    Establishing and maintaining relationships with suppliers

    Before any supply chain visibility technology can be deployed, businesses need to build relationships with their suppliers. This requires open communication and collaboration between all parties involved, as well as a certain level of trust.

    “When it comes to choosing partners, it’s wise to do some research to ensure the best deal possible while emphasizing transparency and flexibility. This is invaluable during times of frequent supply chain disruption,” explains Roei Yellin, Co-Founder & Chief Revenue Officer of 8fig, a planning and funding platform for eCommerce companies. 

    “Sellers shouldn’t be afraid to negotiate for a better deal and they should make sure that communication is open and honest. This is true of suppliers, 3PLs (third-party logistics providers) and any other partners brought in to help manage the supply chain,” concludes Yellin.

    Complexity of the supply chain and data formats

    Securing buy-in from all parties and managing the data exchange between different organizations is challenging. Not only do various supply chain participants have differing needs and processes, they also use different systems. Unifying these systems and ensuring harmonious data exchange can be difficult.

    To overcome this, businesses need to create a single source of truth that all supply chain participants can work from. This means creating common protocols and standards that all parties are comfortable with and can adhere to, and potentially leveraging a third-party solution to manage the data exchange.

    Costs associated with technology and infrastructure

    The technology and infrastructure required for supply chain visibility can be costly. Businesses need to invest in the right hardware, software, and people to ensure that the system is secure and effective.

    Fortunately, there are solutions to this issue. RFID and code-based tracking solutions, in particular, are relatively inexpensive and easy to implement. Companies such as Scurri allow you to easily create a single bar code for all carriers, as well as a reporting dashboard that gives you full control over your operations with actionable insights. 

    Cybersecurity concerns

    Data is the lifeblood of supply chain visibility and ensuring its security is paramount. However, supply chains are coming under increasing attack from hackers and malicious actors, making them vulnerable to data theft and manipulation.

    In fact, 97% of organizations say they have experienced the negative consequences of a supply chain cyber breach within their operations, demonstrating just how prevalent these attacks have become.

    As such, businesses need to ensure that they have the appropriate protocols in place to protect their data from cyber-attacks. This includes using secure networks and encryption, as well as regularly auditing system access and usage. Multichannel cyber security solutions, such as VMware, can also be of great help in mitigating cyber risks.

    Conclusion

    Supply chain visibility is becoming increasingly important in today’s volatile and highly competitive marketplace. However, if businesses are to reap the full benefits of a visible supply chain, they must first overcome the various challenges associated with implementation.

    Ultimately, with careful planning, a comprehensive approach to risk management, and the right technology in place, businesses can ensure that their supply chain visibility efforts are successful and that they remain agile and competitive in the long run. 

  • Semiconductor Delivery Times Shrink by Four Days

    Semiconductor Delivery Times Shrink by Four Days

    The tech industry received some of the best news it’s had in years, with delivery times for semiconductors shrinking by four days in September.

    The tech industry, automotive industry, and countless others have been plagued by a shortage of semiconductors amid wider supply chain issues. According to Bloomberg, the shortage may finally be easing, with a four-day delivery time reduction that is the largest in years.

    In many ways, the semiconductor industry was a victim of its own success. As the pandemic forced record numbers of employees to work from home, the demand for computers, smartphones, and tablets skyrocketed at a time when production was experiencing slowdowns as a result of lockdowns.

    As the pandemic has eased, demand for electronics has dropped and a decrease in lockdowns has helped supply catch up. While there’s still a long way to go, a reduction of this size is the biggest reason for hope those in the industry have had for a long time.

  • Honda Cutting Production by 40% in Japanese Plants

    Honda Cutting Production by 40% in Japanese Plants

    Honda is the latest automaker to be hit with supply chain issues, cutting production at two Japanese plants by up to 40%.

    The auto industry has been especially hard hit by the semiconductor shortage and supply chain issues. Companies have had to scale back production, cannibalize some models to finish others, and ship some vehicles without their full complement of electronics.

    Honda is the latest to have issues, according to Reuters, and is cutting production as a result. In early October, the company plans to reduce production by 40% on two lines at its Suzuka plant in western Japan. The plant in the Saitama prefecture will reduce production by roughly 30%.

    In the meantime, Honda plans to reduce its Saitama production by 40% in September while also reducing Suzuka production by 20% for the rest of the month.

    Honda’s announcement illustrates the ongoing challenges automakers are facing, even as much of the world is rushing to return to normal. It’s still unclear how long supply chain issues will last or when automakers will be back to full production.

  • CloudBees: 45% of Execs Are Only Halfway Through Securing Supply Chain

    CloudBees: 45% of Execs Are Only Halfway Through Securing Supply Chain

    The latest report from CloudBees is bad news for the cloud industry, with many companies still not fully securing their supply chain.

    Supply chain attacks have become increasingly common, with hackers viewing them as a high-reward attack vector. Rather than trying to compromise individual targets, a single, successful attack against a vendor whose software or APIs are used by thousands of companies can yield far greater results.

    Unfortunately, many companies have yet to fully secure their supply chain, according to CloudBees. Of the C-suite executives surveyed, 93% believed they were well-prepared for an attack. A deeper dive, however, showed a different story.

    A whopping 45% of execs say they are only halfway through the process of securing their supply chain, with only 23% nearly done. Even worse, a disturbing 64% say they don’t know who they would turn to first in the wake of an attack.

    “We discovered that as software becomes the primary source of customer experience and value, supply chain security is getting the attention it deserves and at the proper levels in the organization,” writes Prakash Sethuraman, Chief Information Security Officer, CloudBees. “However, this study reveals gaps that indicate supply chain security is not well understood, nor are systems as robust or comprehensive as they should be.

    “Bottom line, the results reinforce the concept that software supply chain security needs to go beyond “shift left” to “shift security everywhere” — with automation. The software you are developing must be as secure as possible, but it doesn’t stop there. The delivery process itself must be protected, and you have to be able to detect and instantly mitigate problems in production to consider your software supply chain as secure.”

  • How the Supply Chain Can Get its Resiliency Back

    How the Supply Chain Can Get its Resiliency Back

    The pandemic put an unprecedented strain on the supply chain, revealing the need for new technologies and strategies to overcome bottlenecks.

    Shipping delays and material shortages continue making headlines as manufacturers worldwide struggle to meet consumer demand for everything from auto parts to pharmaceuticals.

    COVID-19 exposed a glaring lack of agility in supply chains which, if left unchecked, will both sabotage the economic recovery and put lives in danger.

    Before 2020, many people would have described US supply chains as resilient. However, the past 18 months added a less desirable set of adjectives to the list, such as brittle, inelastic, fragile, and vulnerable. While the need for critical care medications surge, manufacturers lack the necessary insights to respond to site closures and impaired transportation routes that immobilize supply chains.

    Business Intelligence: Better Supply Chain Resiliency is Found in The Data Story

    Historically, data initiatives falter because of the massive number of spreadsheets and reports data scientists must read through and decipher before presenting actionable takeaways. Without access to real-time, actionable intelligence, decision-makers are stuck waiting for analysts to explain their findings.

    Bottlenecks like this hinder agility, making it impossible to adapt to unforeseen events in a timely manner, sacrificing productivity and efficiency.

    In hybrid work environments, stakeholders in disparate locations need self-service access to analytics to facilitate the kind of quick problem-solving customers demand, especially when they’re waiting for life-saving medications and other high-priority shipments. Business intelligence (BI) dashboards, accessible as-a-service, are quickly becoming the go-to tools for enterprises that count on real-time data intelligence for survival.

    Pharma manufacturers, logistics and distribution companies are fortifying their supply chains by augmenting BI dashboards with artificial intelligence like natural language generation (NLG). NLG technology augments data visualizations by “narrating” all underlying data in BI dashboards.

    Companies like Arria NLG embed no-code NLG plug-ins into BI dashboards, accelerating data understanding and informed decision-making.

    According to Gartner, 90% of the world’s top 500 companies will have converged analytics governance into broader data and analytics governance initiatives by 2023. Likewise, by 2025, data stories will be the most widespread way of consuming analytics, and 75 percent of stories will be automatically generated using augmented analytics techniques.

    Analytics presented in everyday vernacular extend data understanding across all lines of business. This not only gives supply chain and logistics companies a better understanding of their data, but it also makes actionable insights available more quickly to a broader range of decision-makers, not just the data scientists.

    Data storytelling communicates real-time insights in plain English to distribution and fulfillment managers into daily loads against capacity commitments, for example, exposing areas in which demand consistently outpace the committed capacity. In addition, the democratization of data enables companies to make faster, better-informed decisions and know what’s happening, what may be coming, and what to do next.

    Cloud-based, self-service analytics also represent an important milestone in AI adoption, with data-driven solutions at the center.

    As we saw in the early stages of COVID-19 vaccinations, manufacturers and treatment centers were ill-prepared to manage the flood of people seeking vaccinations. Leadership teams need real-time visibility of operations to align production sites, distribution centers and material flows.

    Transparency is the key to accounting for unexpected events that could affect supply and demand and lead to drug shortages. To move quickly from insight to action, pharma supply chains – from manufacturer to distributors and delivery – must have ready-access to the same real-time, actionable intelligence.

    Augmented analytics provide the answers to pivot without sacrificing productivity. Such adaptability and flexibility are the cornerstones of agility and supply chain resilience.

    According to Bain, Pharma companies that integrate flexibility and redundancy into the entire value chain, and that improve visibility, will be best positioned to predict chain disruptions and respond to them rapidly. Resilient supply chains bolster problem-solving capabilities throughout their organization and at manufacturing sites, empowering local organizations to make decisions that prevent disruptions in business continuity.

    Simply put, the sooner they can alert carriers to their need for more capacity, the better they can fill the gap.

    Closing Thoughts

    Supply chain resilience will be vital to navigating an increasingly turbulent market over the coming decade. Augmented analytics, which combines business intelligence and natural language AI, empower supply chains with data-driven, actionable intelligence to prevent manufacturing and shipping delays, which can have life and death implications.

    Supply chain and logistics companies don’t need to collect any more data to achieve better resiliency. They just need a way to more quickly extract, process and communicate the insights from their data so they can respond faster.

    Business intelligence and augmented analytics can make that goal a reality.

  • National Retail Federation CEO: This Is A Great Time For Innovation

    National Retail Federation CEO: This Is A Great Time For Innovation

    This is a great time for innovation,” says National Retail Federation CEO Matthew Shay. “There’s been a great increase in efficiency in the supply chain. Those gains are not going to be given back. Customers are going to continue to expect certain kinds of delivery and fulfillment opportunities that have been rolled out by retailers this year. They won’t give that up. They are going to want the convenience and they are going to expect to be able to maintain that in the future.”

    Matthew Shay, President and CEO of the National Retail Federation, says that the pandemic has made this a great time for innovation by retailers:

    This Is A Great Time For Innovation.

    Just look back a decade ago and the companies that were created in the midst of the great recession in 2008, 2009, and 2010. We saw a lot of new IPOs. This is a great time for innovation. Some of the predictions this year, for example, about the number of stores that would close or bankruptcies that we would see just haven’t materialized. Part of that is because consumers have been relatively healthy and part of that is because on a net basis we’ve seen new businesses opening to offset the closing. There’s an enormous amount of innovation taking place.

    On the issue of returns, there’s a big company located right here in Washington, D.C., Optoro, a big partner for many retailers helping them process returns efficiently. I’ve talked to senior executives at UPS today about shipping issues and there is a lot of innovation taking place. They are working very diligently and have a great delivery record so far. We are looking forward to getting all those gifts to American families. The biggest gift of all, of course, will be some additional pandemic relief.

    A Lot Of This Is Going To Be A Permanent Change

    The issue is how much of this consumer behavior has changed permanently and fundamentally? How much of us as Americans go back to our old behaviors? That’s going to play itself out. Certainly, a lot of this is going to be a permanent change. People will do more as we saw across all demographic groups, regardless of age, this entire year doing much more online. Some of that will remain sticky.

    There’s been a great increase in efficiency in the supply chain. Those gains are not going to be given back. Customers are going to continue to expect certain kinds of delivery and fulfillment opportunities that have been rolled out by retailers this year. They won’t give that up. They are going to want the convenience and they are going to expect to be able to maintain that in the future.

    With those kinds of innovations and that kind of resilience in the system against the backdrop of a year next year that could be extremely bullish if we get the vaccine rolled out, as we all believe it will be. I talked to a senior executive of one of the major pharmaceutical companies last week and they said early April or the end of May everyone that wants it will get it. We could be set up for a really big comeback for consumers next year.

    National Retail Federation CEO Matthew Shay: This Is A Great Time For Innovation
  • Apple Suppliers Expect Continued iPhone 13 Shortages

    Apple Suppliers Expect Continued iPhone 13 Shortages

    Industries throughout the market are experiencing supply chain problems and Apple hasn’t been spared from this issue.  Shortages for iPhone 13 and its varieties have caused customers to give up their search for the phone with no end in sight for the turmoil in the market.

    According to Apple component suppliers the company has told them demand for iPhone 13 and its varieties have weakened and decreased their production target by 10 million units, down from a 90 million due to lack of parts.

    Fortunately, there’s some good news for Apple and their investors… despite the component shortages they are expected to have record holiday sales.  Analysts project a sales increase of 117 billion in the 4th quarter of 2021, a 6% increase, due to incentives from partners and notable hardware improvements.

    The iPhone 13 appears to contain more than its usual incremental improvements with the addition of a significant upgrade to their camera and improved processing. Along with the improved hardware, some carriers are offering aggressive promotions up to allowing for free upgrades from iPhone 12 to iPhone 13.  However, due to the shortages consumers may continue to wait until (presumably) iPhone 14 arrives next year.

  • Building the Factory of the Future

    Building the Factory of the Future

    The COVID pandemic, despite its disruptive effects on every aspect of our lives (not to mention all the painful losses we’ve endured since 2020), has caused us to re-examine and rethink how we function in almost every area. From personal interactions, to how we work, how we conduct healthcare procedures, to how we eat and how much we cook, and everything in between; COVID has induced a multitude of changes, and many of them have been for the better. Let’s learn more about building the factory of the future below. 

    One industry that has been greatly affected by COVID is that of manufacturing. Manufacturers saw many issues arise due to the pandemic. They saw supply chain disruptions, delivery delays, increased costs,  rapid changes in demand, and general uncertainty. All of these issues only served to highlight the fact that manufacturing already needed a facelift. 

    Manufacturing Needs an Update

    A pandemic is certainly not the only unexpected event that could affect manufacturing. Other concerns are things like geopolitical unrest, natural disasters, and shipping disruptions. These, and other potential problems, mean that manufacturers must be prepared and have plans in place to keep moving forward, despite these harmful events. 

    Of course, the potential for the unexpected is certainly not the only reason why manufacturing needs to be updated. The manufacturing process itself is in great need of change as manufacturing, production, and distribution is currently responsible for a large portion of the world’s pollution. In fact, altering these processes to “greener” methods could eliminate 45% of global emissions. 

    Not only would updates to manufacturing processes be good for the environment, they would also be beneficial to manufacturers who are feeling the strain of trying to fill orders quickly, maintain product quality, work efficiently, increase flexibility, maintain safety, and improve sustainability, even as they reduce costs and increase production complexity. These manufacturers are under massive pressures which create other sustainability issues from within. 

    Manufacturing With Sustainability in Mind

    Bringing manufacturing up to speed with modern digitalization would increase both sustainability and efficiency. Not only that, but currently manufacturing represents 54% of the world’s energy consumption and 20% of global emissions. Rethinking just 5 areas of manufacturing could reduce emissions by an amount equal to eliminating all forms of modern transportation. With new AI and IoT technologies, these changes are 100% possible. 

    Sustainability in manufacturing is beneficial to all and could be invaluable. For instance, responsible waste management would reduce costs. New ideas behind sustainability drive innovation; green processes ensure early completion of regulatory requirements; and the company image is strengthened by its embrace of environmentally friendly processes. 

    The first step to achieving all of this is through shared data and connected tech. Manufacturing factories of the future must include adaptable technology, scalable production, and a versatile workforce. It also must include smart technologies such as wearable sensors for manufacturing workers, virtual twins to explore products and processes prior to manufacturing, industrial IoT, and cloud software for faster connections across physician and organizational barriers. 

    Through updating manufacturing processes and procedures, manufacturers can not only make a significant positive impact on the environment, but they can also plan for the future and be prepared for the unexpected without missing a beat.

    Learn more about building the factory of the future in the infographic below:

    Factory of the Future
  • Twitter’s Jack Dorsey: ‘Hyperinflation Will Change Everything’

    Twitter’s Jack Dorsey: ‘Hyperinflation Will Change Everything’

    Twitter CEO Jack Dorsey is adding his voice to the chorus of ones concerned about inflation, saying hyperinflation will change everything.

    Many financial experts are concerned about the impact the pandemic has had on the economy. In particular, ongoing supply chain disruptions have been driving the cost of common goods to all-new heights. Citigroup’s CEO, Jane Fraser, even went so far as to say this would be a “brutal winter” as a result.

    Dorsey believes the world is seeing hyperinflation, the effects of which will be profound.

  • Citigroup CEO: ‘We’re Probably In for a Bit of a Brutal Winter’

    Citigroup CEO Jane Fraser has bad news, warning that the markets are in for a “brutal winter.”

    The world economy is still recovering from the COVID-19 pandemic. Early lockdowns sparked a chain of events that have led to shortages and supply chain issues around the globe.

    Those supply chain disruptions spell more trouble ahead, according to Fraser, via Yahoo Finance.

    “We’re probably in for a bit of a brutal winter, particularly in the energy markets where there’s also some challenges there,” Fraser says. “But it’s not long-term structural stuff that we won’t adjust to.”

    “This too shall pass,” she added. “It’s going to pass probably in 2022.”

    Fraser’s comments are inline with other financial experts, many of whom believe the supply chain issues will continue to fuel inflation and wreak havoc on the market.

  • Supply Chain Issues Lead to Raspberry Pi’s First-Ever Price Increase

    Supply Chain Issues Lead to Raspberry Pi’s First-Ever Price Increase

    Raspberry Pi has announced it is raising its prices — for the first time ever — as a result of supply chain issues and component shortages.

    Raspberry Pi is the popular computing platform used by programmers, hobbyists and computer users around the world. It was originally marketed toward developing countries, as well as the education market, both of which often face budgetary constraints. Powered by ARM processors, the platform became widely popular outside its original target market.

    One of Raspberry Pi’s main appeals has been its price, with its latest 2 GB Raspberry Pi 4 costing a mere $35. When the 2 GB Raspberry Pi 4 was first introduced, it initially sold for $45, with the 1 GB model selling for $35. The Raspberry Pi Foundation ultimately discontinued the 1 GB model and lowered the price of the 2 GB model to $35.

    In a post for the foundation, Eben Upton says it is temporarily raising the price of the 2 GB to its original $45.

    Unfortunately, cost increases caused by the current shortage mean that this product is not currently economically viable at this reduced price point. We are therefore moving it back to $45 on a temporary basis.

    At the same time, the 1 GB model is coming back at $35.

    To support the many industrial customers who have designed the 2GB variant of Raspberry Pi 4 into their products, we are reintroducing the 1GB variant at the $35 price point. This provides a degree of choice: less memory at the same price; or the same memory at a higher price.

    Upton said the price hike is the result of supply chain shortages, the same changes impacting the entire tech industry.

    Our own commercial team, our licensees, and our partners at Sony have done a great job keeping components coming in the door and products going out. But despite significantly increased demand, we’ll only end up making around seven million units in 2021: pretty much exactly what we did in 2020. The result has been a shortage of some products, notably Raspberry Pi Zero and the 2GB variant of Raspberry Pi 4.

  • President Biden Signs Executive Order to Review Supply Chain

    President Biden Signs Executive Order to Review Supply Chain

    President Biden has signed an executive order authorizing a review of the US supply chain, including semiconductors.

    The US has suffered from a number of major supply chain crises over the last year. At the outset of the pandemic, medical professions struggled with a shortage of PPE. Most recently, multiple industries have been impacted by a shortage of semiconductors. The automotive industry, in particular, has been one of the hardest hit.

    President Biden’s executive order is not a short-term solution, but is an attempt to devise a long-term plan to address the country’s need for semiconductors, pharmaceuticals, rare-earth elements and large-capacity batteries.

    “And the bottom line is simple: The American people should never face shortages in the goods and services they rely on, whether that’s their car or their prescription medicines or the food at the local grocery store,” said President Biden when announcing the executive order.

    The supply chain review will also help pave the way for additional jobs, as well as secure existing ones, by ensuring workers have the critical supplies they need. For example, the semiconductor shortage recently halted production at three GM plants. Ensuring a safe supply of critical components will keep companies and entire industries running.

    “This is about making sure the United States can meet every challenge we face in this new era — pandemics, but also in defense, cybersecurity, climate change, and so much more,” continued President Biden. “And the best way to do that is by protecting and sharpening America’s competitive edge by investing here at home. As I’ve said from the beginning, while I was running: We’re going to invest in America. We’re going to invest in American workers. And then we can be in a much better position to even compete beyond what we’re doing now.

    “Resilient, diverse, and secure supply chains are going to help revitalize our domestic manufacturing capacity and create good-paying jobs, not $15 an hour — which is what we need to do someday. And sooner is better, in my view. But jobs that are at the prevailing wage.”

  • How to Do Diversity Right This Year in Business

    2020 was the year of supply chain disruption. After decades of industries striving for leaner supply chains, lockdowns and travel restrictions due to coronavirus blew the system over like a house of cards. As early as February, 70% of US businesses needed to assess their inventory. When lockdowns hit the United States, the general public discovered the shortage of necessary items, like PPE, on the shelf. 

    No business has gone completely unaffected by the pandemic. 97% of companies around the globe experienced pandemic-related supply chain disruptions. 76% of companies saw a decline in revenue, the average drop being around 23% compared to pre-pandemic levels. For some businesses, that decrease in revenue is enough to put them out of business. The problem is most prominent for small business, who lack bargaining power and receive less attention compared to large retailers.

    Over half the businesses that closed during the pandemic will never open again. Companies across the spectrum were not affected equally; in the first few weeks of the pandemic, 65% of businesses in high rent zip codes laid off staff while only 30% of those in lower rent areas did. Businesses catering to higher income people with unnecessary goods saw a drop in demand as the top quarter of earners cut spending by 17%. Meanwhile, the bottom quarter of earners’ spending went unchanged. Perhaps most troubling, minority business owners saw twice as much a decline in business ownership as their white counterparts in the first three months of the pandemic. Black business ownership dropped by 41%, Latinx by 32%, and Asian by 26%.

    These figures represent more than just personal tragedies. Beyond the individual business owners and employees who suffer, these closures could be a setback for racial equality. According to Robert Fairlie, Professor of Economics at the University of California, Santa Cruz, “the negative early-stage impacts [of the pandemic] on minority- and immigrant owned-businesses, if prolonged, may be problematic for broader racial inequality because of the importance of minority businesses for local job creation, economic advancement, and longer-term wealth inequality.”

    Just a few months later in 2020, public outrage over racial injustice exploded. The biggest impacts of the protests are on young adults: 70% of Millennials chose to shop with brands that demonstrate diversity and inclusion, 60% of all people said brands’ reaction to protests would influence their buying decisions in the future, and 53% of adults aged 18-34 said they have no desire to work for a firm that failed to speak up during the protests. Businesses ignoring the current social climate run the risk of losing both workers and customers in the long run.
    Diversity compliance is out. Embracing diversity as a business strategy is in. Diversity in the workforce leads to more product innovations, new patent filings, and more citations on patents. When companies work with local suppliers, including the minority businesses that remain, communities flourish. Not relying on faraway suppliers also means fewer disruptions caused by faraway lockdowns. Diversity is a positive-sum game, not a zero-sum.

    Why You Need Supply Chain Diversity

  • Ecommerce Is Growing Much More Rapidly Than Before

    Ecommerce Is Growing Much More Rapidly Than Before

    “Demand for space is actually increasing because ecommerce is growing much more rapidly than it was before,” says global logistics real estate company Prologis CEO Hamid Moghadam. “We probably got three, four, or five years of growth in a quarter or two. Ecommerce is a big tailwind for our business. It’s a pretty good business otherwise but ecommerce just supercharges it.”

    Hamid Moghadam, chairman, and CEO of Prologis, the global leader in logistics real estate, while discussing their earnings release says the pandemic has rapidly accelerated the growth of ecommerce worldwide: 

    Ecommerce Is Growing Much More Rapidly Than Before

    We started the year with a very optimistic outlook and of course, all of that was before COVID. When we got to the first-quarter results, they were strong, but we softened our outlook a bit because nobody really knew what we were facing. As the business has progressed in the second quarter we’re finding that demand for space is actually increasing because ecommerce is growing much more rapidly than it was before. 

    We probably got three, four, or five years of growth in a quarter or two. Ecommerce is a big tailwind for our business. It’s a pretty good business otherwise but ecommerce just supercharges it. 

    Our Business Is Vital To The Supply Chain

    We run a global business. If you look at our collections globally, the US is actually stronger than the global numbers. But if you look at the overall numbers they are actually running better than last year which was a record year. You might ask why in an environment like this that collections are running ahead of last year? The reason is pretty simple. Our business is vital to the supply chain. Even people whose businesses are not doing well have to keep their inventory somewhere and that’s usually in one of our buildings. 

    An interesting statistic is that 2.5 percent of global GDP goes through our billion square feet around the world. We’ve got pretty good visibility as to what’s going on in the global economy. Both on the good end and the soft end people need inventory and a place to store their goods.

    Houston Is The Softest Market In The US

    Houston is probably the softest market in the US. Globally, I would have to say France is probably one of the weaker markets. But generally, through this cycle, we’ve held up pretty well around the world. The primary reason is that unlike other cycles supply of space was very tight going into this downturn. Vacancies were under five percent and utilization rates were in the mid-80s. Both of those are records.

    I’ve been doing this for about 37 years and those are numbers that are unprecedented in our business. Unprecedented good.

    Ecommerce Is Growing Much More Rapidly Than Before, Says Prologis CEO Hamid Moghadam
  • Coronavirus: Apple Limiting iPhone Orders

    Coronavirus: Apple Limiting iPhone Orders

    Amid supply chain constraints as a result of the coronavirus pandemic, Apple is limiting online iPhone orders.

    According to CNBC, “Apple’s online store began limiting U.S. customers to two units of each iPhone model per person this week. Customers can still buy more than two iPhones in one order, but they would have to be different models — for instance, two iPhone 11s and two iPhone 11 Pros.

    “The restriction applies to the iPhone 8, iPhone 8 Plus, iPhone XR, iPhone 11, iPhone 11 Pro, and iPhone 11 Max.” Apple is also limiting orders of the new iPad Pro the company announced on Wednesday.

    The news is the latest indication the coronavirus has had a significant impact on Apple’s supply chain. The company previously announced it would miss its quarterly guidance as a result of the virus, while analysts believe the supply chain issues could persist and impact Apple’s 2021 earnings. Apple also warned its store personnel that warranty replacement iPhones were in short supply.

    Apple taking the drastic step of limiting purchases is further evidence the company doesn’t see its supply chain catching up anytime soon.

  • Coronavirus: Amazon’s First Warehouse Case Raises Supply Questions

    Coronavirus: Amazon’s First Warehouse Case Raises Supply Questions

    Amazon has reported its first coronavirus case in one of their warehouses, raising questions about the possible impact on supply lines.

    The Atlantic is reporting that an Amazon warehouse worker in Queens, New York has tested positive for coronavirus, prompting the company to email all the other workers to inform them.

    “We’re writing to let you know that a positive case of the coronavirus (COVID-19) was found at our facility today,” the email read.

    In the short-term, Amazon has closed the facility and is taking extra time to deep-clean it, while all employees were sent home with full pay. In the long-term, the revelation leaves a lot of questions about the supply chain at a time when companies’ capabilities are already being pushed to the limit. Amazon recently announced it would suspend shipments of all non-essential items in an effort to keep up with demand.

    Studies have shown that the coronavirus can live for up to 24 hours on cardboard, and as long as 72 hours on plastic or steel. If more warehouse workers test positive for the virus, it could raise concerns about transmission through the very supplies people are relying on to stay safely at home. As Amazon and other fulfillment centers have to close facilities to disinfect following confirmed cases, it could have a profound impact on the entire supply chain, causing delays that no one can afford.

  • Coronavirus: Amazon Taking Drastic Action to Meet Demand

    Coronavirus: Amazon Taking Drastic Action to Meet Demand

    Amazon is prioritizing shipments of essential items to its warehouses, as it struggles to keep up with demand in the face of the coronavirus pandemic.

    As governments, schools and companies take drastic measures to stop the spread of the virus, unprecedented numbers of individuals are staying home. With restaurants and bars closed in many areas, and grocery store shelves running light, people are having to rely on their home supplies and online shopping like never before. The new status quo has strained supply chains, prompting even Walmart to adjust hours to help give stocking crews a chance to catch up.

    Amazon has likewise felt the strain, and is now taking major action to try to meet demand.

    “As COVID-19 has spread, we’ve recently seen an increase in people shopping online which has had an impact on how we serve our customers,” reads a company blog post. “So in the short term, we are making the decision to temporarily prioritize household staples, medical supplies and other high-demand products coming into our fulfillment centers so we can more quickly receive, restock and ship these products to customers. Products already on its way to our fulfillment centers will be accepted. This does not impact products being delivered to customers, or products currently in stock in our store. Customers can continue to buy any in-stock product in our store, and we will continue to deliver them.”

    Amazon’s announcement is a major change and will likely have far-reaching financial consequences for companies that rely on Amazon to sell their products. Amazon has already faced tremendous skepticism from retail companies who are reluctant to rely on the company’s cloud solutions, as Amazon is one of their biggest competitors. Now that many companies are seeing one of their primary order fulfillment avenues suspend shipment of their products, even temporarily, companies may be more hesitant to rely as heavily on Amazon in the future.

  • U.S. May Tighten Noose Around Huawei, Cut Off Chip Supply

    U.S. May Tighten Noose Around Huawei, Cut Off Chip Supply

    In its ongoing battle with Chinese firm Huawei, the U.S. may be planning on tightening the noose by cutting off its access to chip suppliers, such as Taiwan’s TSMC.

    U.S. officials have been pressuring allies to ban Huawei from their networks as the U.S. has done. The campaign has met with only limited success, with even the UK opting to include Huawei in a limited role.

    It appears the U.S. may be shifting tactics and going after Huawei’s supplies. According to Reuters, the U.S. may “alter the Foreign Direct Product Rule, which subjects some foreign-made goods based on U.S. technology or software to U.S. regulations.

    “Under the draft proposal, the U.S. government would force foreign companies that use U.S. chipmaking equipment to seek a U.S. license before supplying Huawei – a major expansion of export control authority that could anger U.S. allies worldwide.”

    If the U.S. decides to go this route, it could do serious harm to Huawei’s business, but would also result in significant collateral damage. TSMC’s business would certainly be harmed, which could have ripple effects on its customers. As Reuters points out, if the U.S. goes with such a drastic measure, it’s sure to anger allies and may do far more harm than good.

  • IBM Says Blockchain-Powered Shipping Industry Platform Will Dramatically Reduce Costs

    IBM Says Blockchain-Powered Shipping Industry Platform Will Dramatically Reduce Costs

    Major ocean container carriers CMA CGM and MSC Mediterranean Shipping Company (MSC) are joining TradeLens, a blockchain-enabled digital shipping platform, jointly developed by A.P. Moller – Maersk and IBM. With the addition of these carriers on the TradeLens platform, nearly half of the world’s ocean container cargo will be using blockchain technology to dramatically improve costs and efficiencies.

    Bridget van Kralingen, Senior Vice President of IBM Global Industries, Clients, Platforms & Blockchain at IBM, discusses the addition of major ocean carriers to the TradeLens blockchain-enabled digital shipping platform in an interview on Bloomberg:

    Blockchain Technology Could Reduce Shipping Industry Costs By 20%

    Essentially we announced yesterday that with the addition of MSC and CMA on to the TradeLens blockchain more than 50 percent of the volume of the containers of the world’s shipping industry will be on a blockchain that we’ve developed in collaboration with Maersk. What this means is full transparency and a massive reduction of paper exchange. An average shipment takes about 200 document exchanges between the multiple parties; the freight forwarders, the shippers, the carriers, customs, and ports.

    The World Economic Forum estimates that’s about 20 percent wastage from inefficiencies in the supply chain. The technology of blockchain allows all these multiple parties to immutably store the records and advance the records as the shipments move. This means less wait times. It means carriers and shippers know where the goods are. It basically means things can be cleared a lot faster, all leading to bigger inclusion in the shipping industry.

    Starting To See Blockchain Technology For Enterprise Really Scale

    The whole ecosystem will benefit so much in terms of the efficiencies. If you think about it, rather than having to interface 200 document times, it occurs once by putting your data on the blockchain. This is a situation when the ROI for every single industry participant is very strong.

    The second thing, which is really important and why we’re starting to see the blockchain technology for enterprise really scale in terms of what IBM has been building for our clients across numerous industries, is that there’s a level of security in here and there’s a level of speed and efficiency. It’s easy to actually set up these networks. The difference is that these solve problems that no one company could solve on their own.

    Blockchain Technology Reducing Costs

    The way that the system works is that all the participants pay a very small amount to belong to the blockchain. It is a flat rate but does change according to volume. It is a very de minimis amount and the real way that the blockchain works is by many many participants belonging to the network and by the fact that those participants have a reduced cost.

    Another example of this is we have a blockchain in the consumer and retail industry called Food Trust which tracks provenance and sustainability of food built in conjunction with the industry. It allows food to be tracked and recalled in two seconds versus six days. That has got such a strong economic and consumer value. The other big payback is that for many of our clients they’re looking at the idea to have trackable, sustainable, consumer presentations. So you can put diamonds on a blockchain and say they aren’t conflict diamonds. This is very powerful for consumer provenance and sustainability.

    Blockchain-Powered Shipping Industry Platform To Dramatically Reduce Costs
  • Ecommerce is a Lot More Than Just Amazon, Says UPS CEO

    Ecommerce is a Lot More Than Just Amazon, Says UPS CEO

    Ecommerce is a lot more than just Amazon, says UPS CEO David Abney at the Davos 2019 conference. Abney says that their focus is really on helping small and midsize businesses compete with the bigger players by enabling them to offer two-day shipping.

    UPS recently introduced a product called Ware2Go which matches businesses with warehouse space in the US and around the world which makes faster delivery possible.

    David Abney, CEO of UPS, discussed how UPS is focused on helping small and midsize business compete with big companies in an interview on Fox Business at Davos 2019:

    Ecommerce is a Lot More Than Just Amazon

    Amazon is a good customer of ours. We work closely together. But people kind of associate Amazon with ecommerce, but ecommerce is a lot more than just Amazon. You have the other big retailers. It’s really those hundreds of thousands of those small and midsize etailers that has allowed us to be the ecommerce vendor of choice. We will continue to do that through our portfolio and through our technology.

    This hub is really designed to expedite and to enable these small and midsize businesses to where with today’s technology they can really compete with markets all over the world. If you look back a little while they couldn’t do that. This hub is just part of the strategy. But it’s our focus on small and midsize businesses. It is providing alternatives to these customers to where they can compete with the large ones.

    UPS Focused on Helping Small Businesses Compete

    More and more of the competition is having to do with being able to deliver to their customers within two days. That’s much easier for larger customers who have distribution centers all over the US and throughout the world. It was almost impossible for small and midsize.

    We just introduced a product that’s called Ware2Go. We are a broker between people who have warehouse space all across the country and the world enabling these smaller companies that need to store inventory to compete. It has gotten off to a great start.

    Ecommerce is Going to Continue to Increase

    I believe ecommerce is going to continue to increase. It’s so convenient for many people using their mobile device to just order what they are interested in getting. That is why we are putting such an emphasis on it.

    When we talk about ecommerce let me give you a couple of stats. Of European small and midsize businesses, only five percent export. You would think it should be much higher than that.

    However, from the US only one percent of small and midsize businesses export. That’s why trade agreements are so important. They would benefit small and midsize businesses. It’s also why any technology that we can provide them would be helpful to increase their exports. I believe there is a big runway for these smaller retailers.

    Retail Up 5.6% – It Doesn’t Sound Like a Slowdown to Me

    I think we have to be very careful. I think sometimes people can start to build bad news on top of bad news. I will just give you an example of the peak season that we just finished through December. Retail is being estimated across the market to have increased 5.6 percent. That doesn’t really sound like a slowdown to me. All online retail increased 17 or 18 percent.

    So again, healthy numbers. We think the US economy has held up reasonably strong. Internationally there are headwinds of course on trade-related issues. But still when you hear news that there is a slowdown theirs talk of one or two-tenths of a percent. It’s really not the kind of news that some people are taking it much further.

  • UNCS CEO: It’s an Amazing Time To Be a Consumer… Every Day is Black Friday

    UNCS CEO: It’s an Amazing Time To Be a Consumer… Every Day is Black Friday

    The CEO of United National Consumer Suppliers, Brett Rose, says that it’s an amazing time to be a consumer because every day is Black Friday. Rose predicts that this is going to possibly be the biggest Q4 in our history.

    Brett Rose, CEO of United National Consumer Suppliers, discussed Amazon and ecommerce in an interview on Fox Business:

    Amazon Has Huge Competitive Advantage

    All things considered, consumers want free shipping, not quick shipping. However, if all levels are equal with Amazon, Target, and Walmart, the one competitive advantage that Amazon has, that Target and Walmart can’t, is that Amazon has millions of these third-party resellers constantly filling their coffers with products. Target and Walmart are limited to what they have in stock that’s ready to go.

    There is no denying that Walmart has made some massive strides. But to come after Amazon is hefty. Like I said Amazon has a constant supply of products where their not just limited to what they’re curating on their own. They’re limitless in regards to what everybody is sending to them to go right to the consumer.

    Every Day is Black Friday

    Interesting times with tariffs. If you read everything that came out Chinese imports are up 15 percent over the same time last year. They’ve all front-loaded in preparations for the President’s tariffs which are now in full effect. All of these retailers pushed up orders in what might have otherwise taken months. It’s yet to be determined, but consumers still need goods. There’s always going to be a need, the price is just going to fluctuate.

    If numbers are indicative, everything these retailers are curating and everything the street is saying, it’s going to be one of if not the biggest Q4 in our history. Even if you look at Black Friday announcements, Black Friday is out already. Amazon has released their Black Friday items. BlackFriday.com, Macy’s, went live the other day with their sales. Retailers are vamping up to stay competitive. You go online now and you can figure out what retailers are selling for Black Friday.

    It’s an amazing time to be a consumer. Every day is Black Friday. Right now it really is. They’ve already released what the doorbusters are going to be.

    Still a Major Value in Having a Physical Presence

    There’s always going to be the consumer that likes to go to the store, likes to feel it, touch it, get the treasure hunt, but now with real-time shipping, free shipping, real-time inventory, it’s a great time to be a consumer. It’s certainly competitive. While Amazon is making strides they are still going after brick & mortar. Buying Whole Foods and some of the other retailers they are looking at, says there is still a major value in having that physical presence.