Supply Chain Risk. Business Continuity. Transport Vulnerability. Resilience. Articles and papers. Books and book chapters. Reports and whitepapers. And more.
Hitting two birds with one stone? Can you shrink manufacturing costs while at the same time operate in an environmentally friendly manner? Veolia Environment thinks it’s possible, and that is why WTG is featuring Veolia in an upcoming webinar titled Environmentally Friendly Initiatives to Shrink Manufacturing Costs. This live and interactive session is set to show you how to combine sustainability excellence and cost reduction targets to better focus your environmental performance initiatives.
What will you learn?
Effective design, implementation and operation of environment-friendly initiatives in a meaningful and cost-effective way:
Activate environmental performance while reducing costs
Maximise efficiencies with waste, treatment and recovery initiatives
Sustain seamless and comparable quality of service in multiple locations
Set sustainability excellence and cost reduction targets (case study examples)
Case study examples will illustrate how Veolia Environnement helps industrial customers globally enlarge, improve and speed up manufacturing processes, while improving their environmental performance.
This is a guest post by Professor Yossi Sheffi, Director, MIT Center for Transportation & Logistics
Many global supply chains benefit from the operational flexibility and distribution efficiencies provided by logistics clusters, yet we have a relatively poor understanding of these vital nodes. This lack of knowledge is even more pronounced when the broader economic benefits are considered.
One of the main motivations for writing my new book Logistics Clusters: Delivering Value and Driving Growth (MIT Press, October 2012), is to shed light on the crucial role played by logistics clusters in supply chain management and international commerce.
Logistics clusters are communities of companies that come together to share logistics expertise and know how. They can be found in most countries, often near consumer markets or within ports and airports. And they play host to a wide range of enterprises including the logistics arms of enterprises, third-party logistics services providers, distribution companies, and freight carriers.
In the loop
What advantages attract companies to these agglomerations? There are quite a few, not only for supply chain managers but also for the regions where these communities are located and for the global economy.
First, the growth of logistics clusters is self-reinforcing. They are the focal point of large volumes of freight, making it possible to achieve economies of scale and scope. Carriers and shippers use these gains to reduce the number of empty backhauls by identifying opportunities to pick up follow-on loads. And they exploit the scale of cluster-related freight activities by deploying larger conveyances to move freight and achieve higher vehicle utilization. Moreover, as the freight volumes in and out of logistics clusters grow, transportation service levels improve due to higher frequencies and more direct operations.
More efficient cargo flows lead to lower transportation costs and higher service levels, which attract additional companies to the cluster, creating a positive feedback loop. Further, by raising the efficiency bar they promote global growth, which increases the demand for cluster-based services and stimulates further trade growth.
Additionally, logistics clusters offer advantages based on the interchangeability of transportation and logistics assets. Since equipment such as rail cars, containers, trailers, and airplanes come in standard sizes and shapes, it can be shared by the community. The same goes for the logistics expertise that resides within these groupings. Sharing resources in this way enables the incumbents to withstand the variations in freight flows associated with the industries they serve.
A model for job creation
A powerful attribute – and one that is generally underestimated – is the ability of logistics clusters to create jobs. The port of Rotterdam employs 55,000 people directly and 90,000 indirectly. Los Angeles County supports more than 360,000 jobs in logistics. The Memphis International Airport in the U.S. is responsible for supports 220,000 jobs in the local economy, 95% of which are tied to cargo operations. In fact, more than one in three jobs in the Memphis area linked to the airport.
As I explain in the book, the employment opportunities in logistics clusters are wide ranging. There are blue collar jobs in areas such as warehousing, white collar positions in IT, customer service, and management, and work associated with value-add activities including light manufacturing and repairs. In its Louisville Worldport hub, UPS employs hardware technicians to repair Toshiba laptops, for instance.
These jobs are difficult to offshore, and not tied to the performance of a single industry. The late-stage customization of products that is carried in many clusters needs to be located in close proximity to end markets. In addition, the economics of transportation dictate that clusters should not be located too far from customers.
In many cases logistics clusters are also building highly valuable expertise in environmental sustainability. These freight hubs make it possible to improve vehicle utilization rates and to deploy larger conveyances, which lower the carbon footprints of supply chains.
The pitfalls
Logistics clusters also have a number of downsides that users should be aware of. Some local communities resent the noise, heavy traffic, and pollution that come with logistics clusters. In April 2012, a German court upheld a ban on night flights in Frankfurt Airport that restricts freight operations in the hub, for instance.
These entities are vulnerable to the economic downturns and geopolitical risks that are part and parcel of global trade. Rising energy prices and protectionist trade measures can undermine the viability of logistics clusters. Their competitiveness can also be affected by technological change. The port of Singapore, for instance, is investing in cranes that lift four containers simultaneously, making port operations faster and more efficient.
It should also be noted that not every logistics cluster is a success story; flawed decision making and inadequate resources can impede their development. Locations that initially appeared to be a perfect fit turn out to be less favorable. An example is Port Said at the northern mouth of the Suez Canal, which has not developed into the major global logistics hub envisaged by its creators.
Global competition is another factor to consider. Take for example, the expansion of the Panama Canal and the developing logistics clusters along the canal. This raises the competitive stakes on three fronts. First, there will be competition with transshipment ports in the Caribbean, Secondly, ports along the Atlantic Coast of the US and Latin America will compete to handle the larger container ships that the enlarged canal will attract. And thirdly, competition with other, non-canal routes is expected, specifically between the canal and the US Pacific Coast and rail combinations.
Bright future
Will these threats stymie the growth of logistics clusters? I think not. Trends such as globalization will continue to fuel the expansion of these communities. Indeed, as I argue in my book, more investment in logistics clusters is taking place in developing countries, notably China. Several European countries including Germany and the Netherlands are busy attracting logistics operations. Other countries should pay more attention to building and developing logistics clusters, so they can reap the full benefits that these remarkable communities have to offer.
Finally, almost to the day six months into my new job, a genuinely new post on husdal.com. My new line of work has kept me so busy that I haven’t had much time to think about supply chain risk, let alone post about. Besides, my new job is all about business continuity and crisis management, and I haven’t even read a single article on supply chain risk since I came here, so if there is to be a new post, it has to be about crisis management. And frankly speaking, supply chain risk is probably going to be a very seldom topic on this blog from now on, unless popular demand wants it otherwise.
What is a crisis?
You see, part of my job at Southern Region office of the Norwegian Public Roads Administration is to develop and maintain crisis management plans. One of the important questions to ask when developing contingency plans is the question “When is does a situation turn into a crisis? When is a crisis really a crisis? What makes a crisis a crisis? For that I need to define the term crisis.
An “ordinary” contingency is not a crisis
Obviously, within the Norwegian Public Roads Administration (or Highways Agency in the UK) there are contingency plans for a wide range of unexpected situations such as accidents, heavy snowfall in winter, flash floods in summer to mention but a few. There are also detailed detour plans if this or that link is closed. These are what I call “ordinary contingencies” that happen every day so to speak and that do not warrant extraordinary attention.
An extraordinary contingency is a potential crisis
It is only when the ordinary contingency plans fail or when the ordinary contingency measures are not enough that we have potential crisis at our hands. Hence I came up with this definition of a crisis:
A crisis is a situation following an unwanted event that cannot be resolved through an organisation’s ordinary contingency efforts, but that requires a coordinated and extraordinary effort across all/many organisational units, and often additional assistance from external agents.
This definition is translated from Norwegian and my choice of words in English may not be perfect or to the point, but I hope it brings the message across.
When incidents turn into crises
Essentially, what the crisis definition says is that any eventuality that is not covered in a contingency plan can become a crisis, simply because one does not know what to to, since it is not planned for or prepared for. However, even eventualities that are covered can turn into crises, if they are not managed properly. And importantly, even if an eventuality is not covered it may not always turn into crisis, if it is managed as it should be, despite the lack of contingency plan guidance.
Do you agree/disagree?
I’d love to hear you opinion on my definition of crisis. lease comment below or contact me directly.
Operational Excellence or OpEx for short, what does that imply and why should you care about it? Well, if you don’t know it, here’s your chance to learn more: A webinar by WTG webinars, the leading provider of B2B educational online events. I’ve been a media partner with them for several years now, and from a humbling and fumbling start their webinars have evolved into do-not-miss-events that you should make time for. I always do. many of them, if not most, are also available for on-demand viewing.
Operational Excellence – key issues
The upcoming webinar on Top 5 OpEx Success Strategies will help you become more successful, using Lean and OpEx to enable and accelerate business growth, Presented by Simon Law, a former manufacturing leader of the Toyota Motor Manufacturing Corporation, who worked as a team leader responsible for delivering 600 vehicle bodies per shift to two assembly plants for 11 years, the webinar is centered around these topics:
Top 5 blunders that make OpEx failand how to avoid them
How to Integrate and deploy OpEx strategically for growth in earnings & sales
Why a comprehensive management system that shows improvements is key for sustaining results and cultural change
Understand how to develop the right culture and the way it impacts upon your business performance
Real examples of the tools and behaviours highly successful companies are using to enable cultural change and sustainability of OpEx and Lean
The Effective Lean Enterprise
Along with the webinar WTG in cooperation with TBM is also releasing a white paper on lean enterprises. As applicable to companies that are just starting out on their lean journey as it is to those that might be further along, this white paper (download below) reviews 10 best practices for establishing and growing a continuous improvement program or Kaizen in Japanese.
This is an event that should not be missed: The 4th supply chain risk managment seminar in Barcelona, 25th and 26th October 2012. This annual event has been featured on my blog since its first inception in 2009, and over the last 4 years, the seminar has provided many of the world’s leading organisations with a platform to find real “in-process” solutions to their specific Supply Chain Risk Management issues.
New format
This year they have reshaped the seminar to incorporate one full day dedicated to General Supply Chain Management issues and a second full day to Supply Chain Risk Management challenges. Will that make it an even greater success? I think so. It could be a sign that thye are running out of supply chain risk topic, but I chose to think that it’s a sign of greater integration of risk thinking into supply chain management thinking. That is perhaps also why they changed the name, it is the the Supply Chain and Supply Chain Risk Seminar.
Key Issues
Day 1 is devoted to Supply Chain Management, while Day 2 is devoted to Supply Chain Risk Management, albeit, looking at the program in more detail, Day 1 isn’t exactly void of any risk-related topics.
Supply Chain Management
Supply Chain Collaboration
Supply Chain Finance
Increasing Supply Chain Visibility and Flexibility
Demand-Driven Value Network
Reduce Supply Chain Complexity to improve SC Efficiency
How to manage supply chain complexity in today’s global volatility?
Delivering Sustainable Profitable Growth through the Supply Chain
Increase Upstream and Downstream Supply Chain Flexibility
Establishing Reliable Supply Chains
Measurement & Metrics & ROI
Supply Chain Risk Management
Loss Mitigation
Supplier Risk Assessment and Monitoring
Securing Global Supply Networks
New Models for Supply Chain Risk
Supply Chain Disruption: Japan´s Tsunami business case
The role of total cost analysis (design versus disruption) in effective supply chain risk strategies.
The role of supply chain risk management in global competitiveness
End-to-end Supply Chain Risk Management
Successful business case of SCRM implementation
Measurement & Metrics & ROI
As always, there is an impressive list of speakers, taken from a wide range of different industries.
Links
Official website: 4th Supply Chain & SC Risk Management Seminar Barcelona 2012
Many of you may have wondered why there hasn’t been a new post on this blog for 6 months, and admittedly, I am quite embarrased about it, because I used to be such a regular blogger. Unfortunately my career change has led me down a path less in touch with supply chain risk, in particular the academic side of supply chain risk, and hence less to blog about. At least, that is how I have felt for the past six months.
Besides casting blogging aside for a while, I have been very busy with getting to know my new home area and I have also built a new house for my family (which I did blog about, albeit in Norwegian only). Add to that, my baby daughter has grown and no longer sleeps through the day or lies still on the floor, but demands full-time attention, round the clock, so my time for blogging is very limited. Good explanations, but bad excuses, I know.
That said, I hope to get back to blogging soon, because, despite what I first thought, my new job has ample opportunties/topics for blogging, although more related to business continuity and crisis managment, and less related to supply chain risk.
In our interconnected world, safety, reliability and efficiency can only be secured through collaboration between industries and government. This is the theme of a recently published report titled New Models for Addressing Supply Chain and Transport Risk. Written in collaboration with Accenture and published as an initiative of the Risk Response Network with the World Economic Forum, the report highlights the urgent need to review risk management practices to keep pace with rapidly changing contingencies facing the supply chain, transport, aviation and travel sectors.
Both shippers and motor carriers are impacted by travel time variability, but they react differently to it. While carriers focus on the immediate and short-term impact and how to solve the situation, .i.e how to deliver on time if still possible, shippers focus more on the strategic and long-term impact and on how to avoid the situation, i.e. how to prevent this from happening again. This is what Kelly Pitera, Anne Goodchild and Edward McCormack looked at in their recent paper titled Examining the Differential Responses of Shippers and Motor Carriers to Travel Time Variability. Here they describe the disparity in concerns and the strategies shippers and motor carriers are likely to engage in to address time travel variability.
Today is my last day at work as Researcher at Møreforsking Molde. It is a sad day, because I am leaving a very exciting field, namely supply chain risk, but also a joyous day, because I am returning to a field I left 5 years ago, namely transport vulnerability. From here I head off into a new direction, as announced earlier, where I will be Senior Adviser in Societal Security and Emergency Preparedness issues to the South Region of the Norwegian Public Roads Administration. To mark the switch from supply chain risk to transport vulnerability – which has always been a minor part of this blog but will now become the major part – here is paper devoted to that very topic.
Celebrating its 40th anniversary in 2012, the European Transport Conference or ETC is unique in Europe, attracting many transport practitioners and researchers to an event where they can find in-depth presentations on policy issues, best practice and research findings across a broad spectrum of transport modes and particularly related to Europe and European transport issues. This year’s conference is held 10-12 October in Glasgow, Scotland, UK.
Are economic imbalances and social inequality risk reversing the gains of globalization? Should we shift our concern from environmental risks to socioeconomic risks? Will further economic shocks and social upheaval roll back the progress globalization has brought? How well are the world’s institutions equipped to cope with today’s interconnected and rapidly evolving risks? These are the questions asked by the seventh edition of the Global Risk Report, just out.
This is a conference that you shouldn’t miss if transport reliability and vulnerability is what interestes you: The 5th International Symposium on Transportation Network Reliability (INSTR), will be held in Hong Kong from December 18 to 19, 2012. The INSTR series is the premier gathering for the world’s leading researchers and professionals interested in transportation network reliability, to discuss both recent research and future directions in this increasingly important field of research. The deadline for submitting abstracts is 30 January 2012, so there is still time to draft something and submit a full paper when due later.
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