How can we get hot food and undamaged from a Vending Machine

I used to live in Benimaclet, and everyday i passed in front of a vending machine which serves hot fast food, but i wasn’t used to these machines, from where i come, this doesn’t exist yet. I really appreciate seating at a restaurant, enjoying time, flavors, smells, and so on. So I don’t usually pay attention to that machine. One day, coming back at night i realize that I have nothing for dinner, and i just stop at that strange machine and took a hot hamburger, for my surprise, it was really yummy. From that day I promised myself to take a look at the logistics behind the vending machine, so, today is the day.

It isn’t a hard job, but neither easy.

 

Normally owners of vending machines, have several machines in different places and establishments, some of them working 24 hours 7 days a week. Also, they usually have different types of machines like: cold food, sweets, hot foods, drinks, and so on. This is really what makes the business complicate and careful planning.

The logistics behind the vending machines has a lot to do with inventories. Inventories should be done carefully, taking into account the range of each machine, the expiration date of each product, and that each machine should always have products available. Also, it has to be taken into account that there must be an adequate storage for food and with enough space to store stock. Additionally, the owners must have a vehicle for the replacement of the products and to allow the machines to have change available the all day, always available to meet a specific schedule. (Hostelvending, 2014)

These machines usually breakdowns, so it must have the support of technical staff to resolve the problems quickly, because it is seen that these machines are made for profit only when they get to sell about 15 products a day.

To conduct this business, you should get some important licenses as: business taxes, tax operating machinery, municipal tax card location and handling of food. (Vending machines, 2009). There are some statistics that say that this way of serving food will grow rapidly and in some cases will substitute the original way people use to eat, especially for people that doesn’t have enough time to take a break.  I just don’t agree with this kind of service, if we can call it service, what do you think?

Customer Order Decoupling Point

The Customer Order Decoupling Point refers to the point in the value chain of mass customization at which a customer triggers the production activities. All activities before the CODP are drive by a firm’s market research and planning department (Swamidass 2000, p. 138).This point, (also known as the freeze point, order penetration point), is the fork dividing customer-dependent and customer-independent production.

All activities at the left side of the decoupling point (Demand upstream) will start based on the forecast of the specific customer. All activities at the right side of the decoupling point (demand down stream) will start as soon as the customer order gets issued. These activities at the left side start based on the forecast of the specific customer too. Determining the CODP is a trade off between lead-time and value in the supply chain.

I think this point is very important because it will determinates how far a customer order will enter into the supply chain.  So in every company this is something essetian vbecause if  it calculates correctly, then they will save time, labor and money, there is not going to be waste of  goods and the orders and the production is going to be equitable.

Here is a video where explains the CODP more Widely.

The IKEA’s success

Five or six days ago, a friend of mine sent me a very interesting video which talks about Burger King, McDonalds, IKEA, etc. Though certainly the criticism is directed to the last one. At the end of this post, I’ll put the video, but firstly I would like to talk a bit about IKEA which has a successful career, although we have to assemble our purchase.

IKEA was founded in 1943, in Sweden. IKEA focused on offering a wide range of good quality, stylish, well-designed, and functional furniture at a low cost so that more people could afford it. IKEA kept cost reduction at the center of any decision making. It made efforts to improve its internal supply chain processes like packaging, warehousing, and transportation which contributed to its cost cutting objective.

IKEA’s supply chain management became the key factor for the success of the company. As a result IKEA managed its costs better than its competitors ans could offer products at 30% lower costs. Nowadays, we can say that IKEA is expanded around the world, by the year 1990, it had 89 stores in 21 countries, and it was operating 260 stores in 36 countries in 2008.

The Flat Pack

IKEA’s most differentiating factor is its flat packaging system which had significantly improved its operational efficacy. Assembled furniture is expensive to transport and store because you have to pay for a lot of air. By flat packing unassembled furniture and getting customers to pick their own products in store, IKEA drastically reduce its transportation and warehousing costs and can pass the savings to their customers (30% lower costs). Furthermore, this company doesn’t offer free home delivery as other furniture retailers do.

As IKEA was selling at very low costs, the competitors forced their suppliers to boycott IKEA. That led IKEA to design and engineer its furniture. The flat packing success started in 1955 when one of IKEA’s co-workers decided to remove the legs of a table so that he could fit in his car and minimize any damage in his transit. That idea allowed IKEA to test the flat packing in 1956, then it realized that flat packing could bring down the costs of transportation and storage drastically.

This happening also allowed minimizing the types of pallets used to store the products, so IKEA started focusing on designing functional furniture that could be disassembled and transported to its stores.

Now, I’d like to share with you the video mentioned above.

Another curious thing about IKEA are its stores, in particular their design. When you go to an IKEA store, they give you pencils and papers at the entrance to list down product details like item code and respective aisle number in the store’s warehouse. The store layout is designed in such way that customers have to pass through all of its products so that even a customer who enter with a planned shopping list would check out other products which he/she didn’t really want. Furthermore, customers have to pick the products displayed in the showroom in the form of disassembled flat packs. Customers are provided with flat trolleys for carrying their goods from the warehouse and in addition, there are some loading zones at the store’s exit where you could bring your vehicle and load the merchandise yourself, what a deal!

PEGASUS CARGO

Hi to everyone!

After Diana’s post I also want to note one avia company  🙂

Maybe you have heard about this company it is very famous turkish airlines and recently it became very famous low cost in Central Asia and Russia. It flyes 97 destinations and also flyes to the biggest and famous cities of Europe as Madrid, Berlin, Paris, Brussels, Bologna, Brazil and etc. Pegasus is Turkey’s most established private airline has been flying for 20 years and uses cutting-edge technology and they have Pegasus Cargo logistics. So they are as other “smart” (low cost) companies ship parcels. 

About the company:

Pegasus Airlines (Turkish: Pegasus Hava Taşımacılığı A.Ş.) is a low-cost airline headquartered in the Kurtköy area of Pendik,Istanbul, Turkey formed 15th April of 1990. Formerly a charter airline in partnership with Aer Lingus, Pegasus is now completely controlled by Esas Holding. In January 2005, ESAS Holdings purchased Pegasus Airlines and placed Ali Sabanci as the chairman. Two months later, he changed the airline from a Charter airline, to a Low-Cost airline. In 2007, Pegasus carried more passengers in Turkey than any other private airline. In 2008, it carried a total of 4.4 million passengers. In 2013 the passenger traffic grew even further to 16.8 million passengers carried. In 2012, Pegasus Airlines, the second largest airline in Turkey. Pegasus becomes a new Airbus customer and the first Turkish airline to order the A320neo. This is the largest single commercial aircraft order ever placed by an airline in Turkey, and was announced on December 18, 2012.

 

“Easy way to send”

Company’s slogan

Even if they started to fly to my country KYRGYZSTAN recently, Pegasus Airlines was bought 49% of our Kyrgyz air company Air Manas in June 2012. 22 March 2013 the air company had operated its first flight under the brand name Pegasus Asia. Pegasus not only has facilitated the distance between Central Asia and some post Soviet countries and made it really cheap comparing to other air transporting companies  but also has given us possibility to send and get  parcels very fast and for convenient price. 

P.S. Normally we (Central Asia) use only DHL and Fedex Ltd.for international shipping and it is expensive enough. My next post will be about this. 😉

 

P.S. #2 Have you known that Avia companies have their own yearly award named “Cargo Airline of the Year”?!

Each year, customers vote for their favourite carriers based on their efficiency and friendly ease of use. Awards are also given each year to the best ground handling company, the best GSA, the top charter broker –  and to a mystery global personality who receives recognition for a lifetime’s endeavour. The event culminates in a glittering London ball as award winners travel to London from around the world to collect their prizes.

http://www.aircargonews.net/cargoairlineoftheyear/home.html

 

 

Links to web pages of Pegasus Airlines and Pegasus Cargo:

http://www.flypgs.com/

http://www.pegasuscargo.com/

 

Delivery service of a restaurant

DeliveryBy.com is a useful software for small catering company that helps prevent delivery problems.

DeliveryBy.com is a SaaS (software as a service) that manages the Delivery service of a restaurant, covering online as well as telephone orders. The system allows restaurants to upload their menu, receive and manage the status of their orders in a very easy and intuitive way. Customers will be automatically informed about the status of their orders and all services include mobile support.

Click here to watch presentation of new technological service for restaurants.

How Logistics affects you

Hey Everybody I just want to share with you the way logistics affects us all both directly and indirectly

The US alone  is comprised of 566 railroads.

The approximate number of truck drivers moving America s  freight is 3.5 million,  which from a different perspective,1 in every 15 people working in the US is employed in the trucking industry.

Only in 2011 the transportation and warehousing sector totaled 4.292 million people.

Trucking is the dominate mode of transportation for the nation´s freight movement by approximamtely 71 %.The highest-valued imported prodcts in the U.S include : agricultural products 4.9%, industrial supplies 32.9 %, capital goods 30.4%( computers, telecommunications equipment, motor vehicle parts, office machines), consumer goods 31.8% (automobiles, clothing, medicines, furniture)

There are a total of 149 ports located in the U.S.                                                    American businesses transported over 19 billion tons of raw materials and finished goods in 2002, valued at 13 trillion dollars

All these facts mentioned above are quite astonishing. So,would you like to be part of it?

Industry 4.0

Kaizen was yesterday.  If you believe scientists and some OEMs, MUDA will soon be part of the past. Because Industry 4.0 will change especially logistics in a sustainable manner.

But first of all, what is Industry 4.0 ? It s a project in the high-tech strategy of the German Government. They are talking about the 4th Industrial Revolution, which already started. The goal is the intelligent – or Smart Factory – which is distinguished by resource efficiency, adaptability and the integration of business partners and customers in business and value processes. Industry 4.0 is promoting the computerization of traditional industries, for example manufacturing. Following the actual trend of production, customized products  will be manufactured under the conditions of high flexibilized mass- production. The basic principle is to connect all processes and machines to an intelligent network to allow them to communicate to each others.

But why should Industry 4.0 replace basic principles of Lean Manufacturing? Well it won´t replace all principles of Lean Manufacturing, but trusting Prof. Dr. Daniela Nicklas from “OFFIS – Institut für Informatik”, real-time optimized value-adding networks will replace the classic value-added-chains with its buffers. Machines will be able to communicate, they will order fresh supply when needed, request the status of the transportation system and so on. (mm-logistik.vogel.de) 

The central controlling system, as used  for example at the Toyota Production System, will now be decentralized. With the help of intelligent containers and RFID Tags, machines will get all the information needed to produce the product. The product will find its way through all of the production processes by itself. (www.logistik-heute.de)

In these times, information flows grow bigger and bigger and in my opinion, it is only a question of time until the first factory will be  adapted completely to Industry 4.0. And of course competitors will have to follow, if they want to continue being a competitor.

How logistics system made the JD the B2C online retailer empire

JD.com or Jingdong Mall formerly 360Buy, is a Chinese electronic commerce company headquartered in Beijing. It is one of the largest B2C online retailers in China by transaction volume.The company was founded by Liu Qiangdong in July 1998, and its B2C platform went online in 2004. It started as an online magneto-optical store, but soon diversified, selling electronics, mobile phones, computers, etc.

To an E commerce enterprise, there are three different logistics model: self-building logistics system; self-building logistics system combined the third-party logistics and totally with the third-party logistics. From the beginning, JD cooperated with the third-party logistics companies for the deliveries. With the development of the huge online shopping market, the third-party logistics could not meet the requirements more and more, then the company started the new logistics strategy which was constructing his own logistics system, namely the self-building logistics system.

JD invested heavily in his logistics area, and among the several biggest E-commerce enterprises, his logistics system was the most perfect, which made them occupy half of the Chinese B2C market. In addition, among most of the E-commerce enterprises in China, JD is the pioneer that started building their own largest warehousing, mainline transportation and distribution.

From 2009, JD invested to their own logistics company, starting the layout of the domestic logistics system. Now they have the north China, east China, south China, southwest China, middle China, and northeast China, six big distribution centres which covering most of the big cities in China. The area of their warehouse had already been more than 1,000,000 square metres in all by the end of 2012. And now they are still expanding through the warehouse, constructing the modern warehouses for more requirements. Regarding with the distribution for the 1 kilometre service, they started organizing own distribution team. Now they get almost 20,000 couriers, more than 900 franchising distribution sites, more than 300 self-collecting sites. With that configuration of the system, they released the 211policy in the cities and the surrounded cities close to the JD warehouse which means two 11 o’clock. The goods ordered before 11:00 a.m. will arrive to the customer in the same day; the goods ordered before the 11:00 p.m. will arrive to the customer before 15:00 p.m. the next day. Besides, JD has bought their transportation trucks more than 300 accelerating the allocation between the warehouses.

Now the online shopping business becomes more and more popular, almost many people tend to buying through the online way which makes the logistics system of the E-commerce enterprise more and more important. As one of the customers who also does shopping online, I realize deeply how the logistics becomes critical in this business. I usually choose the sellers with quicker delivery speed and the good delivery service provided by the couriers.

Online Electric Vehicles

That’s really an interesting concept. A very good, easy and cheap possibility of transportation by protecting the environment.

The blog of Logistics at MGEPS at UPV

    Imagine a transportation more economically and environmentally friendly than typical electric vehicles, not connected to a recharging station, nor does it ever need to be, and which recharges itself as it goes. If you are not very imaginative, just look up OLEV Technologies, Inc., as they have already created and began commercializing it.

                OLEV stands for On-line electric vehicles, and South Korea has recently implemented a tram system which runs on this technology. The vehicles are not connected to wires, nor plugged in to anything in order to be charged. They are charged by a series of magnets inside of the road, the fields of which are caught by a receptor, and used to charge the tram’s battery. While a traditional electric tram is connected to a network of wires, of which the entire network is turned on, the magnetic generators in the OLEV system only turns…

View original post 49 more words

SouthWest Airlines

During I’ve spend some months in the USA, I also flied with Southwest Airlines. It’s true they have great prices and good service, I was really satisfied with this airline.

The blog of Logistics at MGEPS at UPV

Hello to everyone, my chosen topic of today is again something related to travelling, this time I’m going to talk about the “low cost” united states airline, Southwest, wich I find very interesting because they operate in a very simple but intelligent way to operate, in order to save money and optimize time by the standardization of their processes positioned at the top of the main united states airlines successfully.

Southwest Airlines is a major U.S. airline and the world’s largest low-cost carrier, headquartered in Dallas Texas, Founded in March 16, 1967 and starting operations  in June 18, 1971. The airline has 44,831 employees as of December 2013 and operates more than 3,400 flights per day. Southwest Airlines began operations with a single aircraft type: Boeing 737. This enabled the drivers and maintenance personnel have greater ease in their work. Southwest is the largest operator of the 737 worldwide with over 550 in service, each operating an average of six flights per day.  They began…

View original post 290 more words

Online Electric Vehicles

    Imagine a transportation more economically and environmentally friendly than typical electric vehicles, not connected to a recharging station, nor does it ever need to be, and which recharges itself as it goes. If you are not very imaginative, just look up OLEV Technologies, Inc., as they have already created and began commercializing it.

                OLEV stands for On-line electric vehicles, and South Korea has recently implemented a tram system which runs on this technology. The vehicles are not connected to wires, nor plugged in to anything in order to be charged. They are charged by a series of magnets inside of the road, the fields of which are caught by a receptor, and used to charge the tram’s battery. While a traditional electric tram is connected to a network of wires, of which the entire network is turned on, the magnetic generators in the OLEV system only turns on when the vehicle passes over it, reducing wasted energy, and avoiding the magnetic field from being constantly imposed against the pedestrians walking over it.

                This technology is currently in use for the tram system, and is seeing installation and testing in high-capacity vehicles, such as high-speed trains.

How to meet customers’ needs

I’d like to write about the topic I had for my last OSS because I have really enjoyed surfing the net. My last topic was MASS CUSTOMIZATION. I’m going to give you a simple and brief definition in order to introduce this interesting concept which is getting more and more important within this business world.

MASS CUSTOMIZATION: in marketing, manufacturing, call centres and management, is the use of flexible computer-aided manufacturing systems to produce custom output. Those systems combine the low unit costs of mass production processes with the flexibility of individual customization (from http://en.wikipedia.org/wiki/Mass _customization). We can summarize it in a single picture:

This concept or this trend comes as a result of the main idea that customers always have the reason, as we could see in Mercadona, the customer is the boss, although Mercadona doesn’t really follow this idea…

MASS CUSTOMIZATION obviously supposes a change in the current relationship between production and consumption. A MASS CUSTOMIZATION company has to provide tremendous variety at prices comparable to standard goods and services, or better if possible. Therefore, the company that better satisfies its customers’ individual wants and needs will have greater sales.

This “new” trend started in the 1980s, it appeared as an alternative of Mass Production (focused on high production and low prices, though without considering enough customers’ wants). We can see the difference between these two different concepts:

Next picture shows the MASS CUSTOMIZATION cycle:

Here you are some webpages where you can enjoy creating your own possessions:

http://www.nike.com/es/es_es/c/nikeid?cp=EUNS_KW_ES_1_Brand_Core_NikeiD

http://www.adidas.es/personalizar?cm_mmc=AdieSEM_Google-_-mi_adidas-General-B-Exact-_-General-mi_adidas-X-General-_-mi%20adidas&cm_mmca1=ES&cm_mmca2=Exact

http://www.mymuesli.com/

http://www.mini.es/configurator/index.html?WT.ac=mde_mainstage_to-VCO

Of course, I think this concept will be related to 3D printing in a near future.

SouthWest Airlines

Hello to everyone, my chosen topic of today is again something related to travelling, this time I’m going to talk about the “low cost” united states airline, Southwest, wich I find very interesting because they operate in a very simple but intelligent way to operate, in order to save money and optimize time by the standardization of their processes positioned at the top of the main united states airlines successfully.

Southwest Airlines is a major U.S. airline and the world’s largest low-cost carrier, headquartered in Dallas Texas, Founded in March 16, 1967 and starting operations  in June 18, 1971. The airline has 44,831 employees as of December 2013 and operates more than 3,400 flights per day. Southwest Airlines began operations with a single aircraft type: Boeing 737. This enabled the drivers and maintenance personnel have greater ease in their work. Southwest is the largest operator of the 737 worldwide with over 550 in service, each operating an average of six flights per day.  They began with one simple notion: If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline. And you know what? They were right.

Southwest has been a major inspiration to other low-cost carriers, and its business model has been repeated many times around the world. The competitive strategy combines high level of employee and aircraft productivity with low unit costs by reducing aircraft turn around time particularly at the gate. Europe’s EasyJet and Ryanair are two of the best known airlines to follow Southwest’s business strategy in that continent. 

 

Simplicity is the style that defines Southwest Airlines, they provides the “Keep it simple” business model:

– National Fligths only and non-stop to save fuel

-Sparse costumer amenities

– No seating class distinctions

– No numbered seats

– No choices on type of aircraft (only one)

-Simplest pircing structure

-Frequent flier program

-No frills

-Few pretenses

-Peaunuts, not meals, to save money and keep the low-prices

Then:

-Good schedules for destinatios served

-Fewest Cancelations

-Best on time performance

-Safest airline worldwide

-Management training only one type of aircraft

-Employees appear to be happy

-Simplest customer-interface

-Highest customer ratings

-Most cnsistently profitable

As you can see, this business model can be applied for sure, Obviously they succeed while others fail, they ensure stability by provinding their well done skills and strategies, they even has their own plane parts stock or warehouse, so they dont waste time looking for pieces they need when is required, so I think they optimize time and costs while they provide a service costumer quality.

Here is a video about the company that you migth like.

Source: http://en.wikipedia.org/wiki/Southwest_Airlines

Regulations about pallets

When I was searching information, I read about the regulations of pallets because i think it is very important to know what makes a safety pallet for use in commerce.

Import regulations for packaging containers made from solid wood – IPPC standard

Many countries have put quarantine regulations in place to protect their native forests from the introduction of wood pests. In order to prevent the proliferation of differing import regulations, the International Plant Protection Convention (IPPC) Secretariat, part of the Food and Agriculture Organization (FAO) of the United Nations, has issued ISPM 15 (International Standards for Phytosanitary Measures) “Guidelines for Regulating Wood Packaging Material in International Trade”.

The key features of IPSM 15: 

IPSM 15 applies only to solid wood, with derived timber products and solid wood thinner than 6 mm (according to the EU Harmonized System) being exempt.

Treatment of the packaging by approved measures, which include heat treatment (HT) to a core temperature of 56°C for at least 30 minutes, for example by kiln drying (KD), provided that the above-stated specifications are achieved. Chemical pressure impregnation (CPI) is approved only if the required HT specifications are achieved, which is not generally the case. Another measure is fumigation with methyl bromide (MB) depending on concentration, duration and temperature.

Permanent and legible marking of the packaging must be provided on two opposite sides of the package. The mark is composed of the ISO 3166 two letter country code (e.g. DE for Germany), the regional identifier (e.g. NW for North Rhine-Westphalia) and a registration number issued by the regional phytosanitary authority to the packaging container manufacturer, the packer or the consignor (unique number beginning with 49). The treatment method is denoted by the abbreviation HT for heat treatment or MB for fumigation with methyl bromide. The letters DB may also be included where debarking is required.

Figure 1: Example of IPPC mark

IPPC symbol

Country code to ISO 3166, e.g. DE for Germany

Regional identifier, e.g. NW for North Rhine-Westphalia

Registration number, unique number beginning with 49

.Treatment method, e.g. HT (heat treatment), MB (methyl bromide), if applicable, DB (debarked)

 The use of debarked wood may be required

Official phytosanitary certificate is no longer required.
The phytosanitary authorities can provide information about the IPPC standard such as the countries to which it applies, the date from which it applies and its scope

Source:

http://www.tis-gdv.de/tis_e/verpack/holz/export/export.htm

 

OXXO: The mexican Mercadona?

After the interesting class we had about mercadona, i think is very important to talk to you about a big company in Mexico, named: OXXO.

Oxxo haves an interesting story, at the beginning OXXO was founded in Monterrey in 1977, following a FEMSA marketing plan to use company-owned stores to promote and market the Cerveceria Cuauhtémoc beer brands. This distribution method bypassed the traditional Mexican network of local wholesalers, in the first stores, the only products sold were beer, snacks and cigars. The success of the stores was such that the project kept growing and OXXO built new locations rapidly, becoming a ubiquitous presence in Mexican cities. In 1998, the 1000th store was opened. On July 6, 2011 was announced the opening of the 9000th store, established in Oaxaca.

Today OXXO operate the largest and most profitable convenience-store chain in Latin America—OXXO. With 11,700 stores strategically located in all over Mexico and now in Colombia, OXXO is the largest nationwide seller of Coca-Cola products in the country. In 2012 OXXO was opening 3 stores a day.

The commercial and marketing strategy of OXXO is to suit consumers’ needs, offering consumers convenient services such as nearby locations, 24 hour service in most cases, fast and comfortable shopping experience, easy access, and the ability to pay utility bills directly at our stores,  the possibility of paying flight tickets from Viva Aerobus and Volaris airlines in its over 11,700 stores, and now the customers can make deposits to debit cards for most of the Mexican banks. 

OXXO Business Model  focuses on developing key competencies, such as:

• Store segmentation according to the specific needs of the local customers.
• Price strategies that enable points of sale to compete with supermarkets, thus increasing revenues and traffic in the stores.
• Alliances with suppliers to achieve better purchasing terms and greater credit.
• Inventory optimization and waste reduction.
• Utilization of consumer information gathered through sales-point systems.
• Constant reduction of the average expense per store.

OXXO Numbers as December 31, 2013.

And talking about Logistics, OXXO has 16 distribution centers which are strategically located all around Mexico to support OXXO’s business operation, FEMSA Logístic is currently the supplier of 100% of the operation of distribution in Mexico to all its stores, in charge of the administration of a dedicated fleet. The challenge of operating the OXXO distribution network is in transporting the goods to all establishments caring for service, quality and cost of deliveries.

Solution came from the design of a specialized vehicle for retail; and operationally it covered the delivery of goods from the Distribution Centers to the stores, the administration of “Cross-Docks” to minimize costs and make more efficient deliveries; dynamic routing and restructuring of delivery points with the use of advanced technology tools.

 Here is a video explaining a little bit what OXXO is.

 

 

Vehicle Routing Problem: it’s there a perfect solution?

The Vehicle Routing Problem (VRP) it’s nothing new, this has been a challenge since the logistics and transportation has been part of business, in 1959 Dantzing and Ramser  proposed a way to resolve this transportation, distribution and logistics problem. The objective of VRP is to minimize the total rout cost. Since them a lot of heuristic and deterministic methods have been developed to find solutions to VRP.

The elements of VRP are:

• Transport Network. A network of roads, streets, railways.
• Fleets of vehicles. Group of motor vehicles owned or leased by a business.
• Customers/ Suppliers. Important to determinate the location of all our customers.
• Central Warehouse. Storage of goods.
• Demand/ Consumption. Entire listing of the quantity of the good that our clients would choose to buy.
• Solution Routes. Select the best routes possible.

This is so complex there’s even web pages dedicated to the study of VRP like NEO (Networking and Emerging Optimization) they have compiled a great amount of information and its open so all public can access to the information, they include  technical reports, many different variants of the problem, alternative algorithms and techniques for solving it, some well-known instances of the problem, the best-so-far solutions for those instances, and more.

This is an example how VRP represents in a drawing.

This is a video that will illustrate how can we calculate the best VRP solution.

 

 

 

“A PENNY SAVED IS A PENNY EARNED”

I am going to tell you the main aspects of Value Analysis (VA), as it is both the topic I had for my OSS and something a find really interesting. Nowadays, with an extremely competitive market, any small safe can be transformed in huge benefits at the end of the month. This is the basic idea that characterizes Value Analysis.

What is VA?

It can be defined as a process developed to improve the profitability of products. The purpose of the analyze is to keep the functionality of a product whilst reducing it´s cost. It will include a number of improvements that will make possible a reduction of costs keeping it´s quality. So two are the main concepts which are related one with the other:  value and costs. In relation to value, we should difference between use value (functionality) and esteem value (aspect). The difference of price between two products that accomplish the same function will be produced by the esteem value. For example, between two cars with the same engine but different appearance. Secondly, in relation with costs, these can be divided in two main groups: direct costs (related with one product) and indirect costs (related with all the products). While the first ones are easily controlled and managed, the difficult task will be to identify and manage the second ones.

Two are the main considerations when we apply VA: no cost is removed if it reduces the quality of the product or its reliability and saleability can´t be compromised.

A perfect example of a good implementation of VA was explained during the last lesson of Logistics. Mercadona decided to change the format of the oil bottles from a circular shape to an straight one. Quality and reliability were kept and saleability was not affected. At the same time, a reduction of costs took place as they could pack more bottles in the same box.

Different approaches of VA

– For existing products: in order to find gaps or problems that could be solved in the future.

– For new products (value engineering): less certain and poor levels of information.

– For product families: big advantages in terms of financial savings as it affects to a group of products.

– Competitive VA: is made of a competitor´s product.

Advantages for the company

– Reduction of costs. Protection of the profit margins.

– Better understanding of the production process.

– Implementation of new technologies and materials.

– Identifying a problem in it´s early stage allows to apply less aggressive corrective measures. Less costs.

– Review the compliance of the product with the actual legislation and changes that could occur with it.

– Continued improvement of the product. Allows you to be more competitive in the market.

– Avoids designing failures.

As identifying the costs, is one of the main issues of the VA, I post you this video were some basic information related with the types of manufacturing costs is explained.

FONTS: http://value-eng.org/knowledge_bank/attachments/200611.pdf

                 http://www.adi.pt/docs/innoregio_value_analysis.pdf

                http://www.chca.ca/media/pdf-education/ OR_value_analysis.pdf 

Traceability

Traceability gets more and more important. Being informed is trendy for many customers.

Traceability stands for the ability to verify the history, location or application of an item or product along the logistics chain. A product can be backtracked and identified from the separate unit until the whole finished product. So a product can be located at any time and any place via an unique identification number. You can see where is the product, who is handling the product at the moment and when is the product accepted to arrive during the whole process from the production till the disposal. (Compare: http://en.wikipedia.org/wiki/Traceability)

You can distinguish two different kinds of traceability: downstream and upstream tracing. By downstream tracing you see the way of the product from the producer to the customer. So the customer who ordered shoes online for example can go on the internet, type in the identification number of the shoes and see the actual status of the product. Moreover he can see exactly where they are at the moment and when they will arrive at his location.

Upstream tracing goes the other direction and is performed from the consumer back to the producer. So the customer can identify the producer and can exactly discover where the product comes from. Upstream tracing is very important concerning grocery and helps to guarantee food safety. Moreover upstream tracing is useful for product recalls, you can see who is responsible for any damage or problems. (Compare: http://www.gs1.org/traceability)

Traceability supports better communication within the whole supply chain and can be a competitive advantage by building loyalty. The customer can exactly follow the way of the product and his confidence is strengthened. As mentioned earlier being informed about what is going on gets more and more important for the customer.

Valenbisi

Today I’d like to write about Valenbisi because I appreciate this kind of service every single day since I am here in Spain and I think that there’s a brilliant working logistics system behind it.

Valenbisi is getting more and more in vogue. Instead of products being transported from one point to another people use Valenbisi for shifting wherever they want to. The logistics behind Valenbisi is easy, fast, comfortable, sustainable and cost-efficient.

Valenbisi is a public service offered by the company El Mobiliario Urbano S.L.U.. The company provides access to registered users to hire bicycles within Valencia.  The bikes are simply hired by self-service and are exclusive for the urban routes in Valencia. You can easily create your Valenbisi account online and get a card for using the service.  Only for less than 30 euro you can use the system the whole year. Furthermore there’s the possibility of a short-term contract. All over Valencia are placed stations for hiring and releasing the bikes.  You don’t have to care where to park your bike or how to hedge of thievery. The first 30 minutes of use are free of charge, for longer use the customer has to pay low charge.
(Compare “General conditions of access and use of the Valenbisi service (GCAU))

Moreover Valenbisi is a transportation system which is really friendly for the environment by producing no pollution at all.

Sometimes there are some little problems to find available bikes as well as to get free stations for parking them at special locations at special times. Like for example in the morning when many students drive to the university by Valenbisi, it can be a big problem to find a free station there. But El Mobiliario Urbano S.L.U. doesn’t ignore that and even tries to antagonize this problem by picking up some bikes by trucks.

In my opinion Valenbisi is really a great logistics invention and I didn’t want to miss it here in Valencia!

The logistics behind recycling

Since I came to Valencia, Spain, I recycle as much as I can. For me this is a new experience and it sounds a little silly but I´m really excited about it.

This is a process that includes the collaboration of the society, in which everyone has to make a little effort to make it real. It also involves private and public companies, which require the municipal waste as raw materials; the collaboration and contracts of the communities and municipalities of Spain; traders; and of course the important labor, discipline, and commitment of Ecoembes.

Ecoembes is the non-profit association who takes care of the environment through the recycling and the eco-design of the packaging in Spain. They make it possible to give a second life to the plastic, cans, and bricks (yellow container); cartons and paper (blue containers) that we placed in the containers. It is a large and complicated process which results in a reduction of landfills, less CO2 emissions, saving water, energy saving, and green job creation. To make it easier to understand I will explain it with the figure below that I have taken and translated from the web page of Ecoembes

To make it possible, Ecoembes has on the disposition to the citizens more than 500.000 containers yellow and blue, 24/7 the all year. Municipalities are the responsible for picking up the recycling containers and dropping into “selection plants” where are previously classified and then recycled.

The recycled material must be classified based on qualities and characteristics. In Spain geography, there are 96 sorting plants were packing light is separated into at least three fractions and each fraction must go to its corresponding recycler which is responsible for transforming them into new raw material. These fractions are: metals (steel and aluminum), plastics (PET, HDPE, and Plastic Film Mixture), and cartons.

It is not an easy logistic process; it takes time, precision, compromise, education, environment care, between others and all the factors involve has to be taken into account. For example, they work with indicators that take into consideration which is the most efficient way of taking the recycling materials(lateral load, igloo, back load, bagging, and others). This is a huge world, which I’m interested to know, collaborate, and discuss with anybody that feels that this is a way of making the world a better place to live.

What make our life fresher– the COLD CHAIN

Speaking of the Cold Chain, perhaps it is a strange word to the people. What is a Cold Chain? Is it a metal chain which taken out from the refrigerator? Or it is a chain store selling the ice-cream? The answers are surely wrong.

A Cold Chain is a temperature-controlled supply chain. The Cold Chain involves the transportation of temperature sensitive products along the supply chain through thermal and refrigerated packaging methods and the logistical planning to protect the integrity of these shipments. The definition of Cold Chain is first used in the food industry, many of the food products like the vegetable, ice-cream, or some sea food have to be kept in some special conditions, and thus the Cold Chain Transportation appeared. Now the Cold Chain are applied not only for the food industry, but also it has a large scale of application in the medical or aerospace area. And also with the globalization of trade, the Cold Chain becomes more and more important.

There are several means in which cold chain products can be transported, including refrigerated trucks and railcars, refrigerated cargo ships as well as by air cargo.

We can see a whole Cold Chain process through the figure as follows:

The cold chain is maintained over several transport activities, but with two potential breaches in its integrity. In the first case, it could involve the cargo being left exposed during the unloading process. In the second case, the product could have been stored in a refrigerated warehouse at a temperature below the product’s storage specifications. So the temperature should be controlled strictly of each activity of the logistics process, otherwise the final logistics aim will fail even with a tiny negligence.

Therefore, many technologies are used during a Cold Chain. The major cold chain technologies in providing a temperature controlled environment during transport involve:

1. Dry ice.
2. Gel packs.
3. Eutectic plates.
4. Liquid nitrogen.
5. Quilts.
6. Reefers.

 

Not only the technologies, the proper transportation season, the distance, the transportation ways, the product stack ways also should be considered during the Cold Chain logistics process.

The setting and operation of cold chains is dependent on the concerned supply chains since each cargo unit to be carried has different requirements in terms of demand, load integrity and transport integrity. Because of the additional tasks involved as well as the energy required for the refrigeration unit transportation costs for cold chain products is much higher than regular goods. The ongoing rise in standards of living and economic specialization will remain important drivers for years to come in the growing demand for perishable goods and the cold chain logistics supporting their transport.

Thanks for the Cold Chain, the people in an inland country also can eat the fresh seafood; thanks for the Cold Chain, the patient can get the fresh organ for transplant; thanks for the Cold Chain, makes the life fresher!

Cold Chain – case of strawberry transportation