Logistic delivers….as if by magic!!!

Looking for something interesting ….something new I found this article that I liked  * DHL Cabinet of Curiosities *

The DHL Cabinet of Curiosities is the latest in a range of innovative Augmented Reality apps by DHL, Official Logistics Partner of Cirque du Soleil®.

As we all know DHL is one of the biggest logistic companies in the world, so I was very surprised to see the relation that they created with the Cirque du Soleil.

Then of course I started looking the DHL web page http://www.dhl.com/en/logistics.html and as they say they are the world’s largest logistics specialist.

Why ? Well….because they offer freight transportation, warehousing and distribution, supply chain solutions – they cover it all.

They are all over the world , one of the 4 largest companies with : FedEX, TNT Express and UPS. His direct competition is FedEX.


They also bet for the ecologic proposition

Green Logistics Solutions

¨Climate change is one of the greatest challenges facing our generation. Increasingly authorities and consumers expect business to calculate, account for and reduce their emissions.¨
Reporting of greenhouse gas emissions (GHG) is the first step to greening your logistics.

DHL provides two services – a Carbon Report – and an advanced Online Carbon dashboard.

Carbon Report

  • Maps emissions generated from your transportation within the DHL network
  • Can be prepared on monthly, quarterly or yearly basis
  • Calculation adheres to ‘Greenhouse Gas Protocol Product Lifecycle Accounting and Reporting Standard’
  • Calculation adheres to EN 16258 ‘Methodology for calculation and declaration of energy consumption and GHG emissions of transport services’

Online Carbon Dashboard

Has all the benefits of the Carbon Report, plus:

  • Maps emissions from your entire transportation supply chain – including third part networks
  • Maps emissions to individual shipment level
  • Flexible views on different carbon reports – enables simple measurement of emission improvements
  • Ability to simulate and assess carbon footprint and efficiency
  • Assists in supply chain optimization and strategic decision making
In the same thought of the green proposition I found that for the Formula E, DHL provides an extensive range of green logistics services.
If you want to read and know more find here this interesting document :
Hope you´ll enjoy this post 🙂 🙂 🙂 !!!

Fast growing logistics in Samsung

Samsung SDS is increasing its presence in the transport logistics industry by expanding its fourth-party logistics segment based on its business associated with the parent Samsung Group.

According to industry sources, the logistics business unit of Samsung SDS recorded 2.4 trillion won (US$2.1 billion) in sales last year. The amount is highly significant in that it had stood at 500 million won or so in 2011, 627.6 billion won in 2012, and 1.8359 trillion won in 2013. In addition, the ratio of the business unit’s sales to the gross sales of Samsung SDS increased from 10 percent to 26 percent, and then to over 30 percent between 2012 and 2014.

At first, Samsung SDS was an IT service provider. The company set foot in the distribution industry in 2011, when it developed the logistics IT platform Cello at an investment of more than 100 billion won (US$89 million). Samsung SDS has since added transport logistics to Cello’s portfolio, while maintaining its major focus on B2B services. The platform provides optimal solutions in connection with global distribution companies without requiring any transportation vehicles or loading docks.

Samsung Electronics has adopted the Cello platform for its own physical distribution in Southeast Asia, Europe, and North America, and is planning to do so in Latin America this year. It is also planning to sell the service to third parties. The idea is to add 500 billion won (US$445 million) each to its logistics business sales associated with the Samsung Group and third parties within two years. According to stock market analysts, the logistics business division of Samsung SDS is forecast to record 3.2 to 3.4 trillion won (US$2.8 to $3.0 billion) in sales this year.

Samsung has a great opportunity to became to largest producer of smartphones. Now is a strong competitor for Apple and it is going up and one of the factors of their success is their supply chain management.

Crowdsourcing for the last mile problem

Last-mile crowdsourcing consists in leaning on a group of citizens for completing the last-mile delivery of parcels in a city. This model answers the need to cope with the increased congestion in cities and the resultant problems of inefficiency and negative environmental impacts of local deliveries.

Crowdsourcing has some potential advantages that cannot be ignored. For the logistics services providers, it might lead to lower operational costs and a more environmentally responsible profile if unnecessary deliveries are avoided, or if there is evidence that more environmentally-friendly means are used (e.g. consumers using public transport, their bikes, or just walk). For the society as a whole, having the same delivery needs covered with fewer vehicles on the road would translate to a reduction of emissions and congestion in their daily lives.

Probably the most well known initiative of this kind is “Bring.BUDDY”, conceived out of a students’ project at the School of Design Thinking, Potsdam University, with DHL as the project partner. The basic idea of “Bring.BUDDY” is that people who already move across the city could carry parcels for a part of the parcels’ trip. This creates a city logistics social network composed by city dwellers transporting parcels and packages on their way to their daily destinations.

In the Bring.BUDDY initiative, each member of the network shares his itinerary through social media, an application identifies opportunities for collecting packages along his route and informs the potential transporter through his smartphone. The application also identifies transfer points, where the package is passed on to another member of the network. It is estimated that for a typical inner-city delivery, a maximum of 3 persons will be required for delivering the package. To avoid issues related to the payment of the city dwellers (i.e. creation of a micro-company with low-wage informal employees) the initiative is rewarding the participants with a number of achievement points that later one can reimburse through services (e.g. public transport tickets), purchases from local stores, or donations to charitable organisations or welfare campaigns.


Wal-Mart is another company thinking of last-mile crowdsourcing as a business model of potential use. In its case the concept could be realised by having customers delivering packages. Currently, deliveries from Wal-Mart stores are fulfilled either by third party courier companies or in some metropolitan areas by its own “Wal-Mart to Go” service for same day deliveries. In the crowdsourcing scenario, Wal-Mart customers sign-up to deliver packages from the Wal-Mart stores to other customers living along their way home. As a return, these customers get discounts on Wal-Mart products, effectively covering their cost of petrol. This is not seen as a solution for all company stores or products, but most probably for metropolitan areas and high-priced products.

Of course real-life implementation of last-mile crowdsourcing is not an easy task. Open issues that still remain to be resolved are the legal, insurance and security ones. Especially regarding security, everyone is comfortable with having a branded courier knocking at their door, but what about a strange supposedly neighbour? On the other hand, although it might sound a strange comparison, pizza delivery has for many years employed a mechanism with similar potential security issues due to the part-time employees used.

Implication of Bruselas terrorist`s attack  in logistec management

All flights have been suspended at Brussels Airport following the two explosions which had killed 30 people and 230 more injured. The airport was lockdown betwen march 22 and 23 until 6:00 AM. All inbound flights was diverted to nearby airports in the region.

Source: 9 News

The cargo area of Brussels Airport was closed down for security reasons. Both cargo handling agents and customs officials ceased operations. As a result, no cargo can enter or leave the cargo area, resulting in significant impact to airfreight operations and was expect potential delays in cargo clearance. In case of urgent inbound cargo with final destination Brussels, Amsterdam’s Schiphol Airport can be considered as an alternative destination airport.

Also, the French-Belgian border was closed and French media sources reported that security at other French border points was heightened due the terrorist attacks. Additional police officers was deployed at the frontier and sensitive public areas such as transport hubs.

As precautionary measures, the UK also tightened its borders with Belgium and France and announced that intensify efforts at the UK-Belgian and UK-French border. This includes enhanced searching of inbound tourist vehicles, additional opening of car boots / transit vans, a heightened Border Force presence at ports, targeted Border Force presence at specific ports, with additional security checks on some flights and specialist search dogs deployed at key ports including St Pancras and Dover.

Eurostar services between London and Brussels was suspended, SNCB/NMBS train stations was closed. Thalys suspended all of its services, which operates in France, Belgium, Netherlands and Luxembourg. Eurostar and Deutsche Bahn rail services was canceled; all trains from Paris was suspended.

In Netherlands also indicated that police was deployed to Hoofddorp Train Station, where an international train from Brussels was stopped.

In Paris, the Gare du Nord railway station was closed due a security alert, believed to be a suspicious item of luggage. The station are remain on heightened alert when it reopens as the terminal operates services to Brussels.

There are a lot of implications when occurt terrorist attack, as we can see there was closed airports, border, train station, services and reduce operation in logistic and other department across Eurozone and this affect all the operations arround the world.


P:D ratio and order fulfillment options

Our discussions in class and our cases refer currently to the topic of process and time. We also talked about the P:D ratio and although this is a more theoretical topic, it is interesting to see what is behind it.

The production lead-time P describes how long it takes to manufacture a product and the demand lead-time D could be referred to as the lead time quoted by the firm to the customer. The comparison of P and D helps a company to select a suited strategic order fulfillment option (order fulfillment is the process a company responds to a customer’s order). The main difference between the options is the way that final users’ requirements are taken into consideration.

Post 4_Table

* Pull-type production:

  • production is based on actual demand
  • assembly / manufacturing process after receiving customer order à pulled by demand
  • quantity to produce per product specification is one / only a few

* Push-type production:

  • production is not based on actual demand
  • quantity to produce per product specification is high


See more:





Click to access ch10.pdf


Santa Claus Challenge

“Logistics doesn’t make happiness but can take it wherever is needed”


Regarding what professor José Pedro García wrote one day we want our colleagues to read our posts meanwhile they are waiting for the bus” I thought it could be interesting to write this time about how Santa Claus manage in modern times to deliver all the presents in Christmas. In addition, I consider that this topic is quite related with logistics. According to Unicef, there are 2.200 million of children in the world. Assuming that only the 50% of them are good kids and having in mind the world average of 2’5 children per house we can conclude that Santa Claus only needs to visit 440 millions of homes (if the good kids live together). Therefore, how he managed to guarantee that all the products are going to be delivered on time?

Nowadays Christmas campaign is not about one man flying during only 24 hours with reindeer from the headquarter in Lapland. In fact, there exist logistic centres around the world and the story behind this is more complex. Is more about designing a good business plan able to face this situation. Market research, planning, inventory, logistics and suppliers are some of the key words in this gear. During this period of time, logistics has a great relevance due the increase of commercial transactions and movement of products. Such is the case that hiring in companies of the logistic sector increase a 20% regarding the previous months.

Therefore, it can be observed a major volume of sales and as a consequence an increase of the work load. The latter affects specially transport companies which have to deliver a service with a high efficiency and great results but having the same resources of the rest of the year. Furthermore, time has an important role. The delivery of a product to a customer out of time can create a bad perception of the company. At the same time, it acquires a great value not to make mistakes in the delivery which can be avoid by using software like WMS (standard protocol for serving georeferenced map images which a map server generates using data from a GIS database), RFID technologies (allows contactless identification of objects using radio waves) or voice directed warehousing (use of speech recognition software in warehouses and distribution centers to make verbal orders)

To sum up, logistics have a huge impact in the results of cost, productivity, quality of the service and efficiency of the Christmas Campaign. It is related with the supplying, the management platform and the transport to stores. In addition, the logistics is responsible to determine the quantity needed for each product, to decide the volume of each product that each store should have and the right moment for this. To conclude, it can be said that the logistics involved in the Christmas Campaign maybe is not within reach of Santa Claus due it requires a huge planning of the supply chain and stock management.

papá noel

Image 1. Imports and exports. Icontainers. <http://www.icontainers.com/es/2015/12/03/la-logistica-de-papa-noel-en-el-s-xxi/&gt;. [Accessed: 16/03/16]

Eco-industrial parks

Today I would like to write a post that relates environment with logistics. With this aim, I am going to make a little explanation about the ‘eco-industrial parks’ (EIPs).

Eco-industrial parks are industrial parks in which businesses cooperate with each other and with the local community integrating technical, financial and logistical solutions in an attempt to reduce waste and pollution, efficiently share resources.

In Denmark there is an EIP called Kalundborg. In this EIP there are numerous symbiosis between the industries placed there, for example, there is a coal-fired power plant which provides energy to the other industries placed on this EIP and also sells the steam for a pharmaceutical manufacturer and a refinery.


In this case, there are a lot of materials that are constantly being transported like ethanol, water, waste, sulphur, etc. Some of them are transported through pipes between companies (avoiding the use of trucks, trains, ships and planes) and some of them are transported by trucks, but they only drive short distances.

Therefore, thanks to the nearness of the industries and as their products are useful for each other, they can reduce enormously the cost of transportation, making logistics easier and reducing the environmental impact as well.

You can also watch a video (2:35 mins): https://youtu.be/1yCYGOxnpSY

Joaquín Sánchez Planelles


More information:


When we study the process time we need to see the useless time to determine the improvements. One important aspect which can help us to reduce the useless time is the design of the workspace. We need to establish the area required based on the type of process or product offered, which influences the number of workers and machinery needed.

For the calculation of the workspace must be determined three surface types: static surface, gravitation surface and evolution surface. The static surface is occupied by the worker and machinery, gravitation surface is the necessary space to develop the work, and the evolution surface is the surface required for the routes of materials and workers. Thus the total area required to develop a job is given by the following formula:

Total surface = Static surface + Gravitation surface + Evolution Surface

To learn more about this calculation see the following document:  http://personales.upv.es/jpgarcia/LinkedDocuments/4%20Distribucion%20en%20planta.pdf  (p. 16 – 18)

We can see applied this knowledge to the mascletá (https://en.wikipedia.org/wiki/Masclet%C3%A0). The mascletà is performed in an enclosure, in front of Valencia town hall, in which the static surface would be determined by the workers, firecrackers and machines. The gravitation surface would be the full enclosure because, as you can see in the video, the workers move in the enclosure to provide the service. Finally, the evolution surface for this workspace would be the route that is done to move firecrackers from the factory to the town hall square and the pyrotechnical travel to the town hall balcony of Valencia.

In the same way, if you work in an office, the static surface would be formed by the worker, the desk, the computer and the office supplies. The gravitation surface would be the office, and the development surface could be the route that is performed to other offices, the printer or the room material.


Figure 1. Office distribution. Source: Own elaboration.

Outstanding image: Reproduced from <http://valenciaplaza.com/donde-ver-la-mascleta-online-en-directo>

Aurea Jordán

Logistics in Fallas: the art of management

Fallas tradition (Festivity of International Tourist Interest)

Fallas are groups of huge painted cardboard and wood figures which depict current events and famous people. Each neighborhood makes its own Falla they are erected on one night known as the “plantà”, it is the moment when Fallas top part is finally put in place (15 th March).


Image 1. Fallas. Lovevalencia. <http://www.lovevalencia.com/programa-de-fallas-2016.html>. [Accessed: 03/17/2016].

“Plantà” Na Jordana 2016. See video 1, minutes 2.42-4.30.

Video 1. “Plantà” Na Jordana 2016. Youtube. <https://youtu.be/8QBNR5MoDIY>. [Accessed: 03/17/2016].

Logistics in Fallas

At the end of the first week of March “gondola trucks” invade the public atmosphere. This type of long and plane truck move the monuments from the artisan to the squares. At the “plantà” moment the Fallas community develops an important key factor because they represent the human resources for move and manage the Falla’s.


Image 2. Logistics Fallas. Dotahur. <http://www.dotahur.es/transportes-realizados/transportes-especiales-fallas>. [Accessed: 03/17/2016].


Image 3. Fallas transportation. ABC. <http://www.abc.es/toledo/ciudad/20150409/abci-fallas-camino-toledo-201504091301.html>. [Accessed: 03/17/2016].

The art of management

770 Fallas monuments require an effort of coordination of logistics and human resources. From my personal experience it is possible identify the following key issues for manage these monuments:

  1. Highly profitable pricing: Falla’s are based on the talent of the artist and the feelings of the viewer.
  2. Retail and on-line commerce: key partners throughout the world wide web (suppliers, customers, others).
  3. Business to business marketing: using social networks like Facebook or transportation logistic companies.
  4. Customer relationship management: this traditional work offer the possibility of stimulates the flow of information and materials using ICT Tools.
  5. Merchandising, advertising and promotion: is an important source of revenues in Falla’s commissions.
  6. Sales training and development: the guild brings together the development and enhancement of this work.
  7. Workplace mediation: traditional relation, from parents to children in some cases.
  8. Strategic and business plan: necessity of planify long term sustainability.
  9. Recruitment and selection: traditional artisan professional formation (FP) studies.
  10. Market research: promoted by falla’s commissions, artisan develop a research market for identify key partners and suppliers.


Image 4. The art of management. World4esolutions. <http://world4esolutions.blogspot.com.es/2015/03/management-and-administration.html>. [Accessed: 03/17/2016].

Throughout the fallas fabrication process

Fabrication of Fallas monuments. See video 2, minutes 5.10-7.14.

Video 2. “Fallas fabrication. Youtube. <https://riunet.upv.es/handle/10251/1658>. [Accessed: 03/17/2016].

Recommended news of interest relaed with Logistics:



How modern technologies influence logistics

While the globalisation connects different markets and opens new opportunities for companies to grow their businesses, an efficient logistics process becomes a mayor priority in the value chain. Regarding soaring competition, increasing complexity and the need to speed up the logistics process, modern technologies become an indispensable part of it.

What are these new technologies? How do they improve the logistic process and what are the benefits for the companies that implement new logistics technologies within their system? To answer these questions, let’s first have a look at some important innovations in the field of logistics technologies, which are the key drivers to improve logistics management processes.

Information: Information is one of the most relevant factors in order to increase efficiency in logistics operations. Due to pressure on costs, a lot of companies have relocated their production to low-cost countries in emerging markets around the world. As a result, you may find yourself trying to manage a global logistics operation. But, uncontrolled logistics costs can spiral and wipe out any savings a company gains at the production level. Therefore it is essential to gather information at each stage of the logistics chain so that the company can identify  inefficiencies and improve operational costs.

Networks: Networked communications can improve market logistics operations by linking members of your supply chain. Sharing essential market and operational information helps increase productivity and reduce lead times. A single integrated network supports a logistics chain that can respond rapidly to change or new opportunities

Tracking: Cargo theft is a growing problem, with annual losses at some $30 billion, according to the Federal Bureau of Investigation. Machine to machine (M2M) technology is making logistics more secure; a mobile transmitting device attached to the cargo allows operators to track and monitor the cargo throughout its journey using global system technology and wireless communications. Any attempt to interfere with the security device sends an alert signal to the operator to initiate a response.

Portals: You can use website portals to provide members of your logistics chain with access to information and applications to support purchase order management, demand forecasting, shipping notices and bar-code label generation. This can improve collaboration between supply chain members and make it easier to manage essential logistics information.

RFID: Radio frequency identification tags provide information on a product and its journey through the supply chain. You can program the tags to capture certain types of information, such as when and where products are manufactured, packed and shipped. The data can be used to improve the efficiency of warehouse and inventory management and other logistics operations.

Computer aided programs: Computer aided programs can be used to optimize capacity planning. Capacity planning includes warehousing, transportation, material handling and human resources. Computer aided operation research models such as linear programming and waiting line models can be used in planning capacity with the objective of providing high quality customer service by investing minimum in capacity.

5 benefits provided by implementing logistics technology:

  • Efficiency Gains – Significant gains happen when old, manual processes are performed by new system functionality or are totally eliminated by a new way of working within a software application. More efficient logistics operations allow companies to lower costs and operate with greater efficiency.
  • Competitive Advantage – These systems allow companies to offer a higher level of customer service through better communicate and issue resolution. Disruptions and issues are resolved faster compared to competitors who rely on manual processes.
  • Responsiveness – Logistics systems create a flexible supply chain. Here, multiple parties communicate easily as freight moves and collaborate on how to best overcome challenges while still meeting customer’s expectations.
  • Compliance – A company is assured of performing its due diligence to meet government requirements (import/ export, screenings, classifications, etc.) with automated processes provided within the system.
  • Analytics – Reporting becomes standardized, on time, and in most cases on demand. With the system stored data, analysts can mine trends, identify recurring problems, and uncover cost savings that are missed with manual data collection methods.

Border controls in Europe influence waiting times in logistics

“We are still able to keep our logistics running but we see increasing risks”, Dieter Zetsche (Chairman of Daimler AG and Head of Mercedes-Benz Cars)

Our last session in logistics was about process and time. We talked also about waiting times and I think this Is a really interesting topic and it’s getting even more interesting because of some current changes and new challenges. Due to the recently implemented border controls in a lot of European countries (remember: European refugee crisis) waiting hours are exploding and elaborated just-in-time processes of companies need to be adapted. So, the logistic sector is confronted with a new and challenging task.

For me it is interesting because my personal experience is related to this topic. In the past years it was so easy to go just for a lunch to Austria (if you are living close to the border), you didn’t nearly notice crossing the border. But the last weeks, it got more time intensive due to border controls and people sometimes decided not go to Austria because they did not want to be caught up in a traffic jam to come back to Germany. But what about the logistic sector? Companies cannot avoid crossing the border just because of waiting hours.

  • Trucks have to wait directly behind a border and wait for the permission to enter the country
  • Especially smaller trucks (7,5 t) are controlled (more than large trucks (40 t))
  • Especially the automotive sector is suffering due to just-in-time processes of parts, e.g. Daimler: Only just-in-time delivery, nearly no expensive warehouses, parts and semi-finished goods from all over the world are delivered directly to the assembly line
  • But also the transboundary trading with consumer goods is suffering
  • 1 hour of waiting at the border = ~ 50 € additional costs for logistic / transportation companies (according to German association of road haulage) and then they even have to pay again because if they cannot deliver the parts within a certain time frame, e.g. Daimler requests a penalty
  • > 2 hours traffic jam is critical because driving hours then get exceeded quickly, this results in more truck drivers’ rest periods and often the motorway service areas behind control stations are very crowded –> domino effect –> 2 hours traffic jam could result in 10-12 hours delay (according to Association Supply Chain Management, Purchasing and Logistics (BME)) –> abrupt increase of costs for haulers and in the end for the consumers
  • Also economic problems:
    • 57 Million international truck transports p.a. in the EU
    • 70 % of German foreign trade goes into the EU, 80 % of these imports and exports via the street

Conclusion: Border controls are confronting the logistic sector with a new challenge and can be expensive not only for companies but also for the population.




Hubs and Hub Location in Parcel Networks

Reading Aurea’s entry from March, 1st about facility location I immediately had to think about my last project at the German university where I’m studying. Together with a big German parcel company we were looking for heuristics to solve the hub location problem. The hub location problem can be seen as an extension of the facility location problem incorporating network design aspects. Hub location problems consist of two components, the location of hub facilities as well as the allocation of customer nodes to these hubs. Hubs are facilities that serve as consolidation and switching points. Using a hub and spoke network instead of a point to point network reduces the number of routes needed and can help to achieve full truck loads.

One thing that is very important in this context is that location and allocation have to be optimized simultaneously as they affect one another. These interdependencies as well as the size of many hub location problems make an exact mathematical solution quite difficult. Therefore heuristics are often used. Heuristic methods have the advantage that they are rather simple to implement but the problem is that they don’t guarantee an optimal solution. In our project we used the modeling software AIMMS which is just one software of many that is used in the field of mathematical optimization and decision support. As the project was really complex and mathematical I don’t want to go into more detail at this point. Instead I’m going to use the example of the parcel company to explain how hubs work and how they affect network design which was a subject of our logistic class.

A recent example is the DHL Hub in Leipzig which was just opened in 2008 and is one of the most modern airfreight logistic centers. The location in central Germany was chosen as it can be seen as “the heart of Europe” which allows to link Europe with the major markets in America and Asia. Besides the good air link (there are no restrictions on nighttime flights which allows the airplanes to come in at any time) the location is also well connected to rail and roads. It is located at the Berlin – Munich and Dresden – Magdeburg highway junction which allows a fast transportation to nearly all parts of Germany. DHL serves destinations in more than 220 countries around the world. Given this huge size of network direct connections between every site are neither economically reasonable nor possible.

Germany Hub &amp; Spoke Map

Major hubs like Leipzig allow to re-sort and consolidate the packets. Packets from all over the world arrive in Leipzig to be distributed to other German or European cities (blue arrows). The other way around packets from Germany and Central Europe are collected in Leipzig from where they are spread out into the world (red arrows).




If you are interested in this topic you can watch this video (I consider minutes 1:17 till 4:51 the most important):


Or if you prefer reading and like more information I found another article about the Leipzig Hub: http://www.dpdhl.com/content/dam/dpdhl/logistik_populaer/leipzig_hub/hub-leipzig_en.pdf

Wal-Mart SCM

In the late 1970s, with about 200 stores, Wal-Mart was a relatively small retailer. At that time, Sears and Kmart dominated the retail market. Since then, Wal-Mart gained significant market share from these retailers and became the largest and most profitable retailer in the world. Today, Wal-Mart is admired for its collaboration and technology driven supply chain practices and is leading the retailing industry with its innovative supply chain practices.

“People think we got big by putting big stores in small towns. Really, we got big by replacing inventory with information.” – Sam Walton, Founder of Wal-Mart.

Factors of the success:

  • Cross-docking

Cross-docking is an inventory management system. The retailer (XRT) made it popular. Through cross-docking, inbound shipments are unloaded directly into outbound trailers at distribution centers. Cross-docking can lower the time required to transport merchandise. Also, it lowers the inefficiencies in the system. It saves the retailer billions in storage costs.

It gives the retailer leeway to implement its everyday low price, or EDLP, strategy. The EDLP strategy is important to gain trust among customers. This philosophy emphasizes the retailer’s commitment to offer low prices to the customer every day. This ensures that buyers don’t stay away in the hope of frequent promotional activity.

Lowering supply chain costs also helps in the economics of implementing programs—like the Savings Catcher, Save Even More, Ad Match, and rollbacks.

  • Economies of scale

In the last 12 months, Walmart earned over $483 billion in revenue. That’s more than the following four companies combined—Costco (COST), Kroger (KR), Tesco (TSCDY) (TSCO.L) in the United Kingdom, and Carrefour SA (CA.PA) (CRRFY) in France.

Walmart spent over $358 billion to purchase merchandise for its stores in fiscal year 2014. That kind of scale gives the company immense bargaining power with its suppliers. At the same time, it’s a huge task to juggle the large number of suppliers from across the world.

  • Distribution

Walmart uses a combination of owned and leased facilities and fulfillment centers to distribute its products. In the US, about 80% of Walmart’s products were shipped from these facilities in fiscal year 2014. Suppliers transported the rest of the products directly to the stores.

  • Fulfilling the e-commerce promise

Lately, Walmart has also been using its network of supercenters and other retail stores to double as fulfillment centers for e-commerce sales. This is an especially important element of Walmart’s supply chain—if the retailer wants to stay relevant in the fast-paced world of e-commerce.

Amazon (AMZN), Walmart’s nemesis in online sales stakes, is quickly expanding its network of fulfillment centers. Walmart’s existing store network gives it a natural advantage over Amazon. As a result, Amazon is being forced to invest more in distribution.

Walmart’s stores are also being used to offer the click-and-collect facility to customers. Customers can order online and collect their purchases at selected outlets. The service is being tested for groceries. It’s only available at about five locations in the US. However, it’s being used more extensively in countries like the United Kingdom.


Wal-mart is a great example of how logistics should work and which success could bring a good-planned logistics. I suggest also to watch the video as it show more aspects and giving wide explanation of how works the supply chain managment.

Wal-Mart video of the Supply Chain

Nestlé Coffee – The Supply Chain


Today, a jar of instant coffee can be found in 93 per cent of British homes and increasingly consumers are trying out different types of coffee, such as cappuccino, espresso, mocha and latte. The expanding consumer demand for product choice, quality and value has led to an increase in the coffees being made available to a discerning public. ‘value’ is the way in which the consumer views an organisation’s product in comparison with competitive offerings. So how does coffee get from growing on a tree perhaps 1,000m up a mountainside in Africa, Asia, Central or South America, to a cup of Nescafe in your home, and in millions of homes throughout the world?

cafe image-5

The supply chainis the sequence of activities and processes required to bring a product from its raw state to the finished goods sold to the consumer. For coffee, the chain is often complex, and varies in different countries but typically includes:

  • growers – usually working on a very small plot of land of just one or two hectares. Many do some primary processing (drying or hulling) themselves
  • intermediaries – intermediaries may be involved in many aspects of the supply chain. They may buy coffee at any stage between coffee cherries and green beans, they may do some of the primary processing, or they may collect together sufficient quantities of coffee from many individual farmers to transport or sell to a processor, another intermediary, or to a dealer. There may be as many as five intermediary links in the chain
  • processors – individual farmers who have the equipment to process coffee, or a separate processor, or a farmers, co-operative that pools resources to buy the equipment
  • government agencies – in some countries the government controls the coffee trade, perhaps by buying the coffee from processors at a fixed price and selling it in auctions for export
  • exporters – they buy from co-operatives or auctions and then sell to dealers. Their expert know-ledge of the local area and producers generally enables them to guarantee the quality of the shipment
  • dealers/brokers – supply the coffee beans to the roasters in the right quantities, at the right time, at a price acceptable to buyer and seller
  • roasters – people like Nestlé whose expertise is to turn the green coffee beans into products people enjoy drinking. The company also adds value to the product through marketing, branding and packaging activities
  • retailers – sellers of coffee products which range from large supermarkets, to hotel and catering organisations, to small independent retailers.

A supply chain is only as strong as its links. Different relationships exist between organisations involved in the separate stages of the chain – whether it is in the structuring of product distribution, arrangements for payment and arrangements for handling, or in storing the product. At the heart of these relationships is the way in which people treat each other. Long-term business relationships need to be based on honesty and fairness – parties to a trading agreement need to feel that they are getting a fair deal.

Cafe diagram-1

I include here a video where you can see the sustainable and global perspective that nestle plays in its supply chain adhering value in every step of their process.



The aim of this post is to show you how there are some new companies, usually called start-ups, that are trying to introduce radical innovations in the logistics market.

One of the most used ways to transport goods is putting them into intermodal containers that will be transported by cargo ships, by trains or by trucks:


Image: Example of numerous containers on a cargo ship.

As a good logistic practice, most of the companies try to keep always the containers full of goods in order to reduce costs, but that is not always possible.

So, some guys (some of them from the UPV) saw this problem as a business opportunity and designed intermodal containers that can be folded, so they occupy much less space on cargo ships allowing to reduce the CO2 emissions.

The start-up from UPV is called Navlandis, and they say that their foldable container reduces the impact of empty containers in maritime transport in economic terms (by 50%), and in terms of CO2 emissions (by 16%). Navlandis achieves this by reducing the needs of space in transport, storage of empty containers and the charge-discharge operations, both by 80%.

The best way to understand how can be possible a folding container, you can watch the following video from another company that designs folder containers called Staxxon (it only takes 1:30 mins):


Therefore, I only wanted to share with you some innovations that can be applied for logistics and some of them come from really close to us.

Additional information:
News about Navlandis (English): http://www.climate-kic.org/start-ups/navlandis/
News about Navlandis (Spanish): http://www.economia3.com/2015/09/11/56329-la-startup-valenciana-navlandis-gana-un-premio-de-sostenibilidad-por-su-contenedor-maritimo-plegable/
Official webpage of Staxxon (English): http://staxxon.com/


Ikea Business Model

Nowadays it is possible identify IKEA with the idea of providing a range of home furnishing products that are achievable to many people. It’s very important identify the significance of sourcing, packing and distribution in this company.  See video 1, minutes 4.19-5.35.

“The IKEA Concept exists in every part of our company, from design, sourcing, packing and distributing through to our business model. Our aim is to help more people live a better life at home.”

Video 1. Inside Ikea. Source: “How do they do it – Ikea”. Youtube. <https://youtu.be/fGFB1wAFmwo>. [Accessed: 03/09/2016].

Vision and business idea

Ikea form long term partnerships with supplier, optimizing highly automated production and producing large orders. They design their products often on the factory floor using creativeness and team building. See video 2, minutes 1.51-3.08.

“To create a better everyday life for the many people.”

Video 2. Ikea: generating value. Source: “Life at home – where our vision begins”. Youtube. <https://youtu.be/MJ6YL3IekYs> [Accessed: 03/09/2016].

Decision Support System (DSS): Computer Integrated Manufacture (CIM)

The strategies of Ikea are possible with the Decision Support System (DSS): Computer Integrated Manufacture (CIM):

  • Automated version of the manufacturing process, and
  • Product design and process, planning and control, and the manufacturing process are replaced by automated technologies.

This production methodology allow integrated systems and dynamic flows through the company. For a CIM example see video 3, 0.14-1.00.

Video 3. CIM example Source: “CIM – Computer Integrated Manufacturing training system by Lucas-Nuelle”. Youtube. <https://youtu.be/c1j6PJu2xy0> [Accessed: 03/09/2016].


About the IKEA group – IKEA. IKEA /US/EN. Available at: http://www.ikea.com/ms/en_US/this-is-ikea/company-information/index.html [Accessed March 9, 2016a].

The IKEA Concept – IKEA. IKEA /US/EN. Available at: http://www.ikea.com/ms/en_US/this-is-ikea/the-ikea-concept/index.html [Accessed March 9, 2016b].

Arjonilla Domn̕guez, S.J. & Medina Garrido, J. ̌Aurelio, 2010.La gestin̤ de los sistemas de informacin̤ en la empresa: teoría y casos prc̀ticos, Madrid: Pirm̀ide.

The importance of giving the right goods, to the right place at the right time

Is logistics limited to be only an important part of companies? The answer is no and that’s exactly what I would like to show along this post. Being more open minded, we’ll be able to realize that logistics is everywhere even in catastrophic disasters. Therefore, I would like to focus in the important role that supply chain coordination plays in this kind of events where the donation of support is unpredictable and more efficient and effective solutions are needed.

In first place, the humanitarian logistics involves those activities where goods and help are provided to relieve some needs and also is included the fast assistance to a population that has been affected by a sudden disaster, whether natural or induced. In these cases a high coordination in the supply chain management is needed by all the parts involved (government, humanitarian organizations, civil society and military) to guarantee a high efficiency regarding costs and speed.

When a disaster takes place, the supply chain is activated along with everything that entails. The first step to carry out is to determine which services and goods are necessary to start asking for and receiving donations to supply these needs. Trained staff to deliver the donations and specialized teams composed, for example, by doctors and nurses among others are also needed. In addition, it has a great relevance the building and maintenance of infrastructures. This include the existence of warehouses where store the supplies and inventory support. In humanitarian logistics not always the suppliers are known. They can be vendors, donors or both which generates a big uncertainty about what will be provided from the latter and what will have to be secured by vendors. Regarding to the inventory, this can be hard to manage but it is interesting for the humanitarian agencies to have an inventory policy to ensure a steady stream of supplies from warehouses to its points of distribution. Another significant aspect is the distribution network where the transportation and distribution varies depending on the location of the disaster and the possible ways to arrive there.

figure 1. Humanitarian

Figure 1. Information chain

To sum up, a great uncertainty is related with humanitarian logistics despite sometimes can be anticipated which allows a best use of the resources available and a greater acquisition of them. Moreover, collaboration and coordination are the keys for a successful response on this kind of events where the speed is the main driver of the gear.

Below you will be able to watch a short intro about the role of logistics in dissaster events.



Tomasini, R., Wassenhove, L., 2009. From preparedness to partnerships: case study research on humanitarian logistics. International Transactions in Operational Research, 16(5), pp. 549–559.

International Aid and Trade, 2004. Geneva Palexpo Conference and Exhibition Centre, 28-29 January 2004, Geneva.


After studying the logistics network of Spanish pharmacies, I would like to explain in this post why this topic is interesting and how wide the logistic system is. Before start reading the following post, it is important to note that the post is about the logistic in the pharmacies, which is different from the medical logistics regarding hospitals.

First of all, the process of pharmacy logistics begins at the local pharmacy, where the customer asks for specific products. With the customers’ demands, the pharmacy is able to determine their needs, and they can purchase their goods either directly at the labs or at different warehouses. The products are stored in different ways, e,g, in full-line wholesalers, such as corporations, in short-line wholesalers or in common warehouses, as well as in a cooperatives.

Ein Bild

Source: http://www.aaiss.com/Jornadasalmeria/Documentacion/Mesa%20Farmacia/LA%20DISTRIBUCION%20FARMACEUTICA%20EN%20ESPANA%20JORNADAS%20INSPECCION.ppt

The second aspect of the pharmacy logistics is the transportation, which is observable in two stages. The first stage is the transportation from the lab to the different warehouses and the second stage reaches from the warehouses to the end destination, i.e. the pharmacy.  It is important to underline that the transportation and the logistic patterns is a business of the labs and/ or the warehouses, implying that the pharmacies are not responsible for the transportation.

There are a big number of logistic partners who make the transportation between the warehouses to the pharmacies, such as:

All the logistics and transportation aspects are underlying rigid and specific standards, which is why they all adapt a similar way to transport the goods, based on the law of each country. Some of the logistic partners have a specific department just for the transport of pharmacies, like DHL Parma. It is possible to view all the information about the products, how to transport them and the different labs by clicking on the following website:http://www.aemps.gob.es/industria/regLabFarma/home.htm.

Furthermore, there are some congresses and fairs each year, where the involved parties have discussions about the relevant transport topics and its products and thereby implementing new, innovative and effective ways for the transportation and storage of drugs.  It is a meeting not only on a national but on an international level, which involves many countries.

In conclusion, the Spanish network around the Spanish pharmacies have to take a huge quantity of factors and players into consideration (labs, law, cooperatives, pharmacies, specialized logistic companies, huge number of workers) when transporting medical goods from one point to another. I am thrilled to observe the future development of that sector.



My post for this week is related with the HOF3M proposal. Looking for information to solve this proposal I found something interesting is FARM BOOK.

Farmbook.info is a free agricultural trading community that helps companies and individuals to promote and market their products and services at competitive prices. This integrated platform combines the benefits of a business directory, search engine and a tool for interacting with potential customers.

Farmbook.info is the only resource for businesses, which allows searching of agricultural products, raw materials and services through a navigation system map.

In any corner of the country in which they reside, the search system Farmbook allows buyers and sellers to search near you or across the country. Whether you are looking for something specific, or just want to watch the games on the site, make it easy.

The system makes it easy whether you are looking for something specific, or just want to see the items on the site the information portal provides facilities for:

  • find new suppliers and customers;
  • explore new products and business opportunities;
  • use of additional resources business information

Farmbook How does it work?

In order to access the ads on the site must pass registration and add information about the products or services they offer or want to buy. You can also add photos or videos of products description. Or just create a page, a business card of your company. Once registered, you can search for listings in the radial distance from you, browse the map or just the type of goods. If you find what you want, you can contact the owner of the ads, sending a message or contact him through his website.
You can find agricultural products, equipment and raw materials, building materials, land, agricultural facilities, services and personnel.

I think this website it´s very helpful for buyers and also for sellers.

Hope you enjoyed my post , here you have the website : http://www.farmbook.info/es/

if you want to know more 🙂 . It´s in english , spanish, deutsch and PYCCKии



It is hard not to know about Kellog’s. Also known as the “Kellog Company”, the American cooperation is most famous for producing and selling cereals, amongst lots of other convenience foods. In this blog post, we are exploring how Kellog’s products are being delivered from their manufacturing locations (18 in total) and delivered in more than 180 countries all over the world. We will also have a closer look the Spanish contribution.

Kellog’s is currently implementing a new supply chain infrastructure, which should, accourding to the company, enable it to save up to $475 million a year by 2018 (https://www.tradegecko.com/blog/supply-chain-management-factory-supermarket-shelves-kelloggs).
Therefore, the supply chain of Kellog’s includes all activities, from developing the product to delivering to the final consumer. Mainly, the supply chain of Kellog’s follow the lean manufacturing approach to streamline processes and eliminate waste. But how is this lean manufacturing implemented?

The supply chain in its industry is normally structured into three different sectors: The primary sector, which is responsible for sourcing raw materials; the secondary sector, which is responsible for manufacturing the raw material and for the shipment to wholesalers and warehouses and the tertiary sector, which is the services sector of the companies in order to improve business processes along the chain.

Having described Kellog’s in the introduction, we can subsume that Kellog’s is most active in the secondary sector. It is a tough position in the industry and difficult to produce margins and therefore only logical to introduce the lean manufacturing system.

The logistic department of Kellogg’s in Spain supports part of Europe (70% of the manufactured products are send to more than 23 countries). The factory  is composed by a factory in Valls, Tarragona, which is able to store 30.000 pallets and it is able to sort the products into two different lines, one for normal temperature and the other control one  (for the products with chocolate). The factory is a good display of the technology and innovation used in the production process of Kellog’s. The company has computerized stock-holding systems integrated to ensure delivery on time with minimal overproduction, enabling the company to set competitive prices.

Further, Kellogg’s introduced new technologies in its logistic products, making its distribution even more effective.  One of the new technologies are the new labs GS1. They enable a They faster the reception of the orders. Check this video for know more about GS1 and Kellogg’s https://www.youtube.com/watch?v=EEikcbcGWJo.

One of the main features of its logistic products is the capacity of adopting the products depending of the clients necessities (see the importance of the relationbetween marketing and logistics). Besides, Kellogg’sdoes not only transport products to the supermarket but also to petrol stations, hotels, hospitals, etc. The transportation is carried out by trucks on a national level, but the company also usesmarine shipments, depending on what is best for their clients. Kellogg’s is partnering for transportation with companies such as DHL, ID Logistic, Carreras, Sertrans, Azcar andKuehne + Nagel.

I hope you enjoyed the blog post. If you want to know all the information in detail, you can find further information here.



When a process is going to be designed we must know the different types of processes that exist, these are: 1) By projects: one or a few products with a long production period, 2) Batch: different products in the facility are obtained, it can be job-shop or flow-shop, and 3) Continuous flow: always the same product in the same facility. One tool which can help you to identify the process is the product-process matrix.


Figure 1. Product-Process Matrix. Source: Reproduced from <http://www.referenceforbusiness.com/management/Or-Pr/Product-Process-Matrix.html>

Some factors influencing the design processes are capital intensity, the flexibility of workers, vertical integration, the customer participation in the process, the nature of demand, the level of quality of the product or service, the learning effect, the planning, and financial evaluation.

To optimize the production system, it must be simplified, machined, automate and integrate. For this, often are used CAD / CAM tools. Waiting time, transport time, and processing time should be established.

In the following video you can see from minute 2 the logistics facility of Desigual (http://www.desigual.com/). The process is an example of simplification, machining, automation and integration. You can see more information about the process design of Desigual in http://www.ssi-schaefer.de/fileadmin/ssi/images/us/asd/asd_industry_software_case.pdf .

Aurea Jordán

Last-mile delivery at Masco

Last time we talked about distribution network designs and six ways to deliver. One of these options is Distributor Storage with last-mile delivery and I found a quite interesting article about the impact of last mile delivery.

The last-mile delivery as the “last leg of the supply chain” in which consumer products are delivered to the home is a crucial part of Masco’s (kitchen cabinet manufacturer, Michigan, U.S.) supply chain: “Our delivery network is part of our value proposition to customers and their consumers”.

Masco even received a first-place rating from JD Power for its delivery model and service standards. But why is Masco so successful?

  • Outsourcing last-mile delivery through partnership with two big logistics providers that specialize in last-mile delivery: 3PD and Cardinal Logistics –> breadth and depth of delivery options, physical assets, and cost efficiencies
  • Transactional-style business relationship –> providers adjust to Masco’s volume, constant price per unit
  • No necessity to maneuver a 28-foot trailer along residential streets
  • No special caring about the customer’s home (e.g. to destroy the customer’s carpet in his house when delivering kitchen stuff)
  • Order-tracking possibility for customers –> new for heavy goods, last-mile was a black hole

3PD’s view:

  • Investments in technology that automates communication among the various parties involved in the last mile
  • Offering a three-hour window the night before delivery and a phone call 30 minutes before arriving at a consumer’s house (–> customer service)
  • About 12 minutes after delivery, customer receives an automated call to ask whether service parameters met customer’s expectations –> every-day measure of customer satisfaction


“Any supply chain is only as strong as its weakest link,” notes Streamlite’s Rover. “A company can move a product from China to the United States, clear it through Customs, move it to a distribution center, and fulfill it in record time. But if it doesn’t deliver the product to consumers quickly enough, they are not happy, and the company’s supply chain has failed.

Post 2_Last-mile delivery_v3

See more at: http://www.inboundlogistics.com/cms/article/the-last-miles-lasting-impact/

People or machines ?

My last post was about the innovation in the warehouse but today I am going to talk about innovation in good distribution. Due to a lot of companies, big companies, are investing amounts of money in the innovation area and they have created automatic cars and trucks.

I’m want to show you the Mercedes Truck this iis scheduled for 2025, but truckers should not worry because the company has said they will still need human support. The truckers will oversees the autonomous system and the autonomous system will monitors the driver. In Nevada, EEUU, this type of trucks are already in the roads but only can use the autonomous system in the highways. These trucks can drive with real traffic and autonomous system helps to save fuel. You can see the Freightliner truck.

These companies want mantain the truckers but other as Google are creating a autonomous truck used to deliver home purchases without requiring the intervention of any human, it has a load area in which a kind of electronic storage, as we can see available in train stations, for example. These safes include a keyboard and various security systems. Also, the door of these compartments will also have a system that will read credit cards, in addition to accepting mobile payments, which means the user will be able to pay for the product to receive it directly. When the vehicle approaches the home where I have to make the delivery, the user will receive a warning message including a code so you can get your package. After that the truck can follow his way.

Advantages for this technology:
-Less delivery time.
-Less fuel.
-Less costs as much as for the company and the customer.
-More security.
-More effective because the truck driver can be reviewing the merchandise from the tablet. (Mercedes and Freightliner).

-Smaller number of persons employed (Google).
-New technology that can not be tested one hundred percent.

What do you think?

Alejandro Rodriguez Barea


The location of a facility directly affects the logistics of a company. This affects the production system, the volume of production which will be manufactured and how it will be distributed. The location of an installation must be a strategic decision (long-term).

A new installation requires a major investment and also determines the competitiveness of the company (product costs, poor planning, operator costs, etc.). The location affects the operations department (transport), personnel, and finance, among others.


Source: Reproduced from <http://www.gaebler.com/Starting-a-Business-Location.htm&gt;. Accessed: 03/01/2016.

If a company has more distribution points, transport costs are lower but the cost of the facilities is higher. Therefore, it seeks to reach a point of equilibrium. When we choose the location we must take into account factors such as transport, labor supply, space for expansion, living conditions, among other factors.

Some important exact and heuristic (quantitative) methods used to select a location are: center of gravity method, factor – rating analysis, break – even analysis, and set covering models . We can also use other mathematical programming methods. To learn more about these methods, you can see the links below.

Center of gravity method http://www.shmula.com/distribution-center-location-optimizing-your-logistics-network/9312/
Factor – rating analysis http://www.prenhall.com/divisions/bp/app/russellcd/PROTECT/CHAPTERS/CHAP09/HEAD06.HTM
Break-Even analysis (pp. 81-84)


Set covering models http://www.geog.ucsb.edu/~forest/G294download/MAX_COVER_RLC_CSR.pdf
Mathematical programming methods http://math.nsc.ru/LBRT/k5/Kochetov/Papers/Kochetov_Facility%20Location.pdf

Aurea Jordán


Digitalization and Big Data in Logistics

In the last lecture on February 26th, 2016 we defined logistic management as the management of material and information flow and talked about how the importance of the information flow has been underestimated for a long time. In my previous job as student research assistant I learned a lot about Industry 4.0 and digitalization which vastly increases the amount of data collected. This large amount of data is also called big data. The picture below shows how the amount of data will grow within the next years.

big data

source: http://www.emc.com/leadership/digital-universe/2014iview/executive-summary.htm

As it seems to be an important trend that affects logistics I decided to dig deeper into digitalization which enlarges the information flow in a significant matter.

I found a video about the trade fare “transport logistic 2015” for logistics, mobility, IT and supply chain management in Munich (https://www.youtube.com/watch?v=O7zLOriQ5FY). They show different examples on how real-time information can be used in order to increase transparency and efficiency and avoid unplanned costs for different transportation modes (minutes 1:39 until 2:55). At the end the Chairman of the Executive Board BVL concludes that a lot of things will change within the industry due to the ongoing digitalization. Moreover they assume that every third successful business model of today will probably no longer exist in 2020.

The video of BIBA (https://www.youtube.com/watch?v=uVcLbA2R9l8) talks more about the technologies that can be used in order to digitalize logistics. Currently telematics, RFID and various sensor systems are used to digitalize the physical logistic process. As nowadays the position of a vehicle is usually known they are now working on identifying the conditions of goods as well as possible manipulation of the good. Watch minutes 0:54 to 2:02 to see how this works.

All in all I can conclude that even though digitalization can pose a challenge at first it has the potential to improve logistics significantly and make our lives a lot easier.

Interesting Job Supply Chain, Logistics and Distribution Network Design Modelling Consultants

Reading an article I found this job that it´s quite interesting:  Distribution Network Design Modelling Consultants.

What´s this job about  ???

  1. Customer location
  2. Order size and frequency
  3. Transport costs
  4. Transport vehicle types
  5. Transport modes
  6. Warehouse (Distribution Centre) size, location, resources, costs…
  7. Service level requirements
  8. Factory and supplier locations
  9. Ports of entry for imported products

Features and benefits of the supply chain modeling project work :

  • Reduced distribution costs
  • Improved understanding of customer service needs and options
  • Improved understanding of service costs
  • Appropriate balance of storage, inventory and transport costs
  • Graphical mapping of customer demand and density
  • Access to leading distribution network modeling tools and methods
  • Also, this type of work is often linked with customer profitability analysis, product profitability analysis and Cost To Serve (CTS) audits

             Supply Chain, Logistics and Distribution Modeling - Network Design & Optimisation - Example Map

Example of a project.

Some others interesting articles about this: