Logistics at the automotive industry

Following the session “Logistics DES at the automotive industry” I would to introduce some reflections:

1. How the automotive industry could manage and deliver a huge number of assets and information during the process of assembling a car?
2. Which role develop the human resources in those process?
3. Are this elements facilitating or enhancing the value proposition of this companies?

First of all, the automotive industry integrates all their efforts through the entire organization independent of the location implementing of Enterprise Resource Planning (ERP: http://bit.ly/1jw8dK7) or Computerized Maintenance Management system (CMMS: http://bit.ly/1TQuCko). The commonly adopted methodologies in this business sector are: just in time promoted by Toyota and the Fordism introduced by Henry Ford in 1913. For deepen in these two methodologies of management see Video 1 and Image 1 Ford production system and Video 2 and Image 2 the Toyota production system.

Video 1. Ford production system at the first stage <http://bit.ly/1TOKaE6&gt;. [Accessed: 05/29/2016 ]

Video 2. Toyota production system. <http://bit.ly/1XGQQGL>  [Accessed: 05/29/2016 ]

Image 1. Ford assembling line. Reproduced from <http://bit.ly/1VoqTvi>. [Accessed: 05/29/2016]

Image 2. Toyota production system. Reproduced from <http://bit.ly/25rcYHW&gt;. [Accessed: 05/29/2016]

Secondly, in order to maximize this flow of management the human resources are the basis of these models. Independently of the computerization of a wide variety of processes and tasks the human resources develop a key role in management and supervision of this processes. For example the machines are programmed and repaired by human resources (at least in a first stage).

Some participative tools can be applied in order to dynamise and expand the capabilities of Information and communications technology tools, see Table 1:

Table 1. Participative management tools for expand teambuilding and creativity of people.

Tool	Application
Six Thinking Hats	http://bit.ly/1VojH2m
Ishikawa diagram	http://bit.ly/1VojXi1
Dotmocracy	http://bit.ly/25r4bpf

Source: Own elaboration.

A part from the extended Belbin methodology (Team Role Inventories) and as a complement to the involvement and empowerment strategies is quite interesting predefine the following topics, see Table 2, Video 3 and Video 4:

Table 2. Human resources matrix.

Tool	Application
Polyvalence matrix (specially for semiautonomous groups)	http://bit.ly/1Z6Q8By
Verticality matrix	http://bit.ly/20Q3YsA

Source: Own elaboration.

Video 3. Belbin roles. <http://bit.ly/1qUItKL>. [Accessed: 05/29/2016 ]

Video 4. Employees skills matrix template <http://bit.ly/25u9bwX>. [Accessed: 05/29/2016 ]

Thirdly, following Kotler and Wirtz Service Marketing: People, Technology, Strategy, 7th edition:

“Firms’ market offerings are divided into core product and supplementary service elements”

If we consider logistics at the automotive industry taking in consideration information and human resources these elements are facilitating.

Finally, in the present learning object it has been offered an approach to the automotive industry from the perspective of service, sales and logistics.

Airfield transportation

Today I will talk about a small company and you may probably not know a lot about it, but most probably you will have gotten in touch with one of their products. If you have ever taken a plane to go somewhere, and I’m sure you did, you will have used a COBUS 3000 or a similar bus for transportion from the terminal building to the aircraft or the other way around. In case you still don’t know what I’m talking about, here is a picture:

The Cobus Industries GmbH, a german company founded in 1983 in Wiesbaden, is a highly specialized producer of buses used for transportation of people at aiport airfields. Having  only 49 employees currently contracted, the company generates 58 million € annual turnover and holds a worlwide market share of around 90% in its niche market. For comparison: The three largest manufacturers of buses in the world are the chinese manufacturers Yutong and Kinglong on the first two places and Daimler on the third position. These big players produced 47. 474, 33. 924 and 32 888 buses in 2012, while Cobus only produced about 400 buses at the same time.

Cobus is successful, because the company has found a niche market. Buses that are used at airports are special in a way that they require certain characteristcs which normal buses from the streets do usually not have. I will just name some of these:

• Big capacity: A Cobus 3000 can carry up to 112 passengers, while a standard bus of the same size has only a capacity of 50.
• Increased width: Since airfield buses don’t leave the airport area, they don’t need to fit street regulatory framework
• More and bigger doors on both sides of the bus: Allows passengers to enter and leave the bus quickly. This is important due to strict time schedules at airports
• Fewer seats: Bus rides at the airport usually does not take more than a few minutes. So the number of seats is reduced to a minimum to increase capacity
• Separate storage place for heavy luggage

Cobus buses are not produced in own factories, but by third party manufactures in different regions of the world. By doing so, production can be closer to the target market and maintanance can provide a better and more cost effective service. Since 2011, there is also a electric version of buses available. The first airport that shifted airport transportation completely from fuel consuming buses to electric buses was Schipol Airport in Amsterdam in 2014.

Sources:

1. http://www.handelsblatt.com/unternehmen/industrie/bushersteller-chinesen-ueberholen-daimler/7959010.htm
2. http://www.cobus-industries.de/
3. https://de.wikipedia.org/wiki/Cobus_Industries
4. https://www.sci.de/fileadmin/user_upload/en/pressreleases/pdf/2013/Pressemitteilung_MC_Bus.pdf
5. http://cobus.junio.vistec.net/files/artikel_nfz-schweizer_idee_erobert_airports.pdf

Optimizing the supply chain with BIG DATA

We stated previously on our blog that “big data”might be the future in terms of how we do transportation and where the logistic industry is moving. But what is big data? Big data is huge. Big data gathering takes place everywhere: Google, Facebook, Twitter, Instagram, Youtube and many, many more. Almost every action one can take in the internet is being recorded and stored for someone to analyse. And how big is “big data”? IDC says that in 2010 (6 years ago!!!), the size of digital universe became bigger that a zettabyte (bigger than 1,000,000,000,000,000,000,000bytes).

After considering how big “big data” is, we should first draft a strategy on how to implement “big data” into ones business before we become specialized on the logistics parts.
First, the business should set clear goals for what big data should be used. It is crucial that Data scientists, analysts and developers work in close collaboration to identify how big data can be used to achieve what. Secondly, it is imperative that data becomes operational from the start, meaning data should be transformed into a usable action plan while being as accurate as possible. Data inaccuracy was and still is today, especially when considering the vast amount of data, a huge problem.
Thirdly, having error-free data becoming action,it is time to iterate the process of data management. Iterate the data enriching and refining by adding new data and eliminate unnecessary and inaccurate data from your “data management pipeline”. While looking for trends and patterns within these final data sets, continue this iteration until you can use a vast amount of data and transfer it into an action that add value to your business.

How can this data management of big data be put to use for logistics? How will it affect supply chain providers, its solutions and its technologies? Once this process is established, big data can support data warehouse optimization, 360-degree customer analytics, real-time operational production and delivery intelligence and many, many more.

Sources that create data in the whole supply chain are various. An overview of data sources can be seen in the picture (Figure1) below. The figure further shows how important the data is from its source and how good it can be utilized:
Figure1. Importance and Current Performance of Big Data Projects in Companies with Big Data Initiatives

 

Source:

Click to access Big_Data_Report_16_JULY_2012.pdf

 

However, while many firms have noted the tremendous potential of Big Data for supply chain management, many of them have not yet integrated it into their operations because they lack the financial, technological or human resources to do so. While these are clearly challenges, it is estimated that the digital universe will be over 40 trillion gigabytes by 2020 – a significant portion of that being data that can be leveraged to generate business insights. As time passes, those firms who have integrated Big Data into their supply chains, and both scale and refine that infrastructure will likely have a decisive competitive advantage over those that do not.

Figure2. Supply Chain Management and Big Data

 

Source:

Click to access Big_Data_Report_16_JULY_2012.pdf

The aspects that could be improved by the Big Data are the possible benefits for the supply chain management, customized production and service, automatic sourcing, optimized pricing, etc. Although there are countless opportunities to leverage big data, we will focus in this post explaining the real-time delivery tracking, where Big data management systems can be used to strengthen fulfilment, by hardware devices as well as through software for warehousing and processing, the data inputs from bar codes, radio frequency identification (RFID), GPS.

These systems are able to capture traffic sensor data, road network data and vehicle data in real time.It will allow logistics managers to optimize the capacity schedule delivery.One of the advantages will be the possibility of address the unforeseen, for example, track packages and vehicles in real time (no matter where they are), automated notices sent to customers in the event of a delay, and provide customers with real-time delivery status updates in case of traffic jams and many more

Besides, vehicle sensor information can be used for predictive maintenance, which will increase the life of business equipment, by scheduling preventive maintenance based on current and historical data. Others examples con be found in the article of How to Optimize Supply Chain Management with Big Data, such as “a firm can configure its transportation business intelligence system to route notification of delivery delays to customer service centres automatically; customer service representatives can then anticipate, and respond to, customer complaints appropriately.”

Nevertheless many are still the knowledge require into a company to get the maximum profits into the supply chain management throughout the Big Data.

Some of them:

1. A data warehouse system for Hadoop providing a SQL interface but also allowing the plug-in of other custom MapReduce programs.
2. Parallel Processing. Distributing data and business processing across multiple servers simultaneously to reduce data processing times.
3. Pattern Recognition. Techniques to sense patterns in data that can be used in decision making
4. Survival Mining. A use of predictive analytics to identify when something is likely to occur in a defined time span

 

RESOURCES:

http://www.infoworld.com/article/2607706/big-data/how-to-build-a-big-data-supply-chain.html?page=2

http://meridianapps.com/

http://supplychaininsights.com/wp-content/uploads/2012/07/Big_Data_Report_16_JULY_2012.pdf

https://www.cleverism.com/how-to-optimize-supply-chain-management-big-data/

 

Kuehne + Nagel Group for Iveco

I find this case interesting and recommend you to read as it tells how Iveco solve the problem to transport to Russia by establishing a partnership with a huge logistics company Kuehne + Nagel, which helps Iveco to enter to the Russian market.

BACKGROUND

Iveco designs, manufactures and markets a wide range of light, medium and heavy commercial vehicles, off-road trucks, city and intercity buses and coaches as well as special vehicles for applications such as fire-fighting, off-road missions, defence and civil protection.
The company which is part of the Fiat Industrial Group employs a staff of more than 26 000. It manages production sites in 11 countries throughout Europe, Asia, Africa, Oceania and Latin America, where it manufactures vehicles featuring the latest advanced technologies. 5 000 sales and service outlets in over 160 countries guarantee technical support around the globe.
Since 2001, Kuehne + Nagel has been providing various logistics services to Iveco in several countries. On a total of 300 000 square-metres of warehouse space, up to 160 000 stock-keeping units are stored per depot and well over 60 000 tons of incoming and outgoing cargo are handled annually, which result from nine million order lines ranging from small components to entire engine blocks and cabs. With the responsibility to deliver the whole aftermarket, Kuehne + Nagel is distributing the Iveco stock via overnight shipments by its Europe-wide automotive distribution network, utilizing innovative processes such as pick-by-voice technology as well as RFID and Internet-based tracking & tracing of shipments.

Here are more commercial video, but it explains what is the company Kuehne + Nagel is about.

 

That video is interesting as it explains the logistics and warehousing system in the european part.

CHALLENGE

Facing an increasing market demand and strong business growth also in Russia, Iveco in 2008 decided to entrust Kuehne + Nagel with warehousing services as well as overland transportation services in this country too. To fully cover the supply of all of Iveco’s service centres throughout Russia, both a suitably located centralized logistics centre and a powerful domestic delivery network was needed.

SOLUTION

With over 63,000 employees at more than 1000 locations in over 100 countries, the Kuehne + Nagel Group is one of the world’s leading logistics providers. In Russia, where in 1992 it was among the first international companies to establish its own organisation, today a workforce of around 800 people in 17 locations provides a complete range of transport and logistics services and operates facilities with a total warehouse space of more than 131 000 square metres.
Kuehne + Nagel’s existing warehouse in Sholokhovo, strategically located near Moscow, turned out to be best-suited for the specific needs of Iveco. In this facility, the logistics company dedicated more than 2 500 square-metres with a total of 16 500 store cells exclusively for the vehicle manufacturer’s spare parts. The storage space includes shelf zones with sections for fragile and outsized items, zones for floor storage of bulky freight (such as cabs, chasses and hoods) as well as a special entresol space with various cells for small parts. The majority of the spare parts are sent from Iveco’s distribution centre in Turin, where daily over 100 articles destined to Russia are handled. Kuehne + Nagel transports these regular shipments with four to five weekly FTL by road via Slovenia, Hungary, Slovakia and Ukraine – a journey which takes an average of 8 days.
In case of express orders, this time can be drastically reduced using airfreight mode. On behalf of Iveco, Kuehne + Nagel also takes full care of customs clearance, being particularly experienced in this respect in Russia. Except outsized cargo, which is transported in bulk, Iveco spare parts are typically shipped on pallets which are fully labelled with all necessary information about the shipment. Glass components are most complex to transport and can easily be damaged, which is why Kuehne + Nagel packages and stores these with utmost care.
In order to optimize both customs clearance and the subsequent unloading of the trucks, Kuehne + Nagel and Iveco have jointly worked out intelligent and efficient loading schedules.
Since 2012, Kuehne + Nagel is also managing the door-to-door distribution of Iveco spare parts throughout Russia. By daily truck departures from the Sholokhovo warehouse, approximately 1500 shipments are annually delivered to over 40 sales and service outlets of Iveco in the country.

RESULTS

Based on its long-standing experience as logistics provider to the international automotive industry and its powerful road transportation network, Kuehne + Nagel has helped to increase the efficiency and responsiveness of the supply chain of Iveco’s spare parts division to and throughout Russia. For Iveco, the logistics solution designed by Kuehne + Nagel has been a key leverage to further improve customer satisfaction and parts business profitability in an increasingly competitive aftersales market.

www.kuehne-nagel.com (http://www.kn-portal.com/)

Demographic changes also effect the logistics industry – BMW’s answer

Last time we also talked about safety in logistics. Since we already had a very informational and interesting blog post about warehouse safety, I was wondering whether older and younger people need to be considered differently regarding safety. Are older workers responsible for more accidents e.g. in warehouses than younger workers? And if so, do we have a problem because of our changing demographics? To answer this question, I really found some interesting articles and researches and they all show that the changing demographic actually affects the logistics industry (http://www.highjump.com/blog/featured/how-changing-demographics-will-affect-the-supply-chain/ or https://www.fom.de/download/1942-2014_POMS_MK_HA_SB_1.pdf). In the United States, for instance, the population older than 65 will grow from 12.5% in 2000 to 16.6% in 2020 (the corresponding numbers for Germany are 16.4% and 21.6%, and for Japan 17.1% and 26.2%). Thus, in many developed economies, increasing numbers of workers are even contemplating when to retire. That’s a major problem for some sectors, like road freight, where labor shortages due to retirements are already beginning to take their toll.  But there are already measures taken:

Looking at the transportation side, technical support is very important:

• Plains: Evolving cockpit technology, more computer-based flying and new navigation and control systems –> automating some aspects of flying which makes flying easier for older pilots due to less required concentration but also more e-skills needed
• Ship’s officers: training on stress and time management, on new laws and regulations and automation in cockpit
• Rail and truck drivers: New technologies inside (e.g. driver assistance) and outside the vehicle (e.g. traffic management, car-to-infrastructure systems) support drivers, but also require more e-skills. It supports truck drivers especially in large city centers or in traffic jams but for longer trips, adaptions in the truck cockpit are necessary to make living more convenient for older drivers

Looking into a plant, BMW implemented some interesting changes because their average age of the plant’s workers was expected to rise from 39 to 47 by 2017 and older workers tend to call in sick for longer periods and in general must work harder to maintain their output. In addition, they are more expensive: Across the developed world, the health care costs for a person over 65 are roughly three times the costs for someone between the ages of 30 and 50. Traditional approaches like firing, early retirement or moving older workers to less physically demanding jobs are not a long-term solution, especially when there are no young people to take their places (and it doesn’t fit in the company’s philosophy anyway). Thus, BMW implemented around 70 changes together with their employees (examples below), mainly physical changes to the workplace, design and equipment changes, changes in work processes and changes regarding ergonomic and quality concerns:

• New wooden flooring together with weight-adapted footwear, for example, reduced knee and feet strain and exposure to static electricity jolts
• Special chairs at several workstations, which allowed them to work sitting down or to relax for short periods during breaks
• Vertically adjustable tables meant that workstations could be adapted to each worker’s height, reducing back strain. It also facilitated job rotation during a shift because the tables could be quickly adjusted to suit incoming workers
• Flexible magnifying lenses help workers distinguish among small parts, reducing eyestrain and mistakes
• Large-handled gripping tools reduce strain on arms
• Stackable transport containers ease physical strain and facilitate personnel rotation during shifts
• Manual hoisting cranes reduce strain on back
• Physiotherapist developed strength and stretching exercises, which he did with the workers every day for the first few weeks
• Job rotation across workstations during a shift in order to balance the load on workers’ bodies; It was decided that workers could stay at workstation A (mild or moderate strain) for an entire shift but that they should rotate between B (most physically demanding) and C (least physically demanding) to reduce the possibility of injury.

All measures were tested in one pilot line with an average age of 47 which then achieved a 7% productivity improvement in one year, equaling the productivity of lines staffed by younger workers. And only a few months later, absenteeism had dropped to 2%, below the plant average. Thus, follow-up projects were implemented in other locations, even in the U.S.

 

But some of these measures can also be easily adapted to warehouses and elderly employees working there:

• Automatically adjustable seats and easy entrance in pallet transporters
• Cranes to lift heavy boxes or to pick material out of a vertical / horizontal shelf
• Big screens to operate shelf access equipment
• Magnifying lenses to distinguish better among small parts, reducing eyestrain and mistakes
• Job rotation in some cases
• Powered exoskeleton (wearable mobile machine that is powered by a system of motors or pneumatics, originally designed for use in defense settings, but it can be applied for simple limb movement and for mobility assistance for aged and infirm people as well – to do heavy lifting)

An interesting video (I recommend especially minute 3:00-4:40) explains and resumes the important facts of current changes in a nice way. http://www.dcvelocity.com/dcvtv/news/90459209001/

So basically, tecnical developments and automation can support elderly employees working in the transportation sector. Warehouses and plants need to be redesigned in the next years e.g. through ergonomic tools to support elderly employees best and keep company’s performance high. To make things more complex, managers in the logistics industry should also consider specific requirements for disabled people and immigrants working in the warehouses and plants and a more and more developing multi-language employee base in their warehouse or plant design.

 

https://hbr.org/2010/03/the-globe-how-bmw-is-defusing-the-demographic-time-bomb/ar/1

https://www.pwc.com/gx/en/transportation-logistics/pdf/pwc-tl-2030-volume-5.pdf

https://www.fom.de/download/1942-2014_POMS_MK_HA_SB_1.pdf

http://www.highjump.com/blog/featured/how-changing-demographics-will-affect-the-supply-chain/

http://www.pwc.com/gx/en/industries/transportation-logistics/tl2030.html

https://www.researchgate.net/publication/43199510_How_BMW_Is_Defusing_the_Demographic_Time_Bomb

 

 

 

 

 

TIME OF MEASURING

At present there are many car companies with assembly lines. Ford is one of the most famous assembly lines. This assembly line had its beginnings at the beginning of the 20th century, but the technology involved in these processes has changed a lot as can be seen in the video. The sequence of processes and the material flow of these factories must be perfectly synchronized to avoid wasting time and money.

When designing an assembly line, you must take into account the number of activities to be performed and the proximity between activities. If you want to minimize the distances traveled to minimize the cost, you can design a matrix that relates the activities and identify if: 1) It is absolutely necessary that two activities are together, 2) Especially needed, 3) Important, 4) Certain importance 5) Indifferent, or 6) Harmful. So in the case of a car assembly line it is important the proximity of the materials used in each activity.

To improve the assembly line it is necessary to know the initial times and, once the improvements are implemented, to verify that the changes have reduced the time spent on the activity. There are many tools to study times. You can use the timekeeping (the time should be multiplied by a correction factor, prevent that the timed person sees the timekeeping). It can also be used Methods Time Measurement (MTM) that breaks down the movement in micro movements. Another tool used for large magnitudes is sampling.

Here you have some templates to study times: http://www.systems2win.com/c/timeObservation.htm

The improvement of activities is facilitated through the use of process simulation tools. These tools allow you to make changes in the process and see how these changes affect the process. This reduces the costs of testing on the actual process, allows more testing, and reduces the need for pilot plants.

References:

http://www.history.com/this-day-in-history/fords-assembly-line-starts-rolling

https://www.uclm.es/area/ing_rural/AsignaturaProyectos/Tema%205.pdf

http://www.lean.org/common/display/?o=2192

http://www.mtm.org/

https://www.arenasimulation.com/what-is-simulation/business-process-modeling-software

Image: http://peru21.pe/multimedia/imagen/t-343055

CEVA Logistic -¨Making business flow¨

My post of today is about one of the world’s leading supply chain management companies, CEVA designs and implements industry leading solutions in both freight management and contract logistics. This company is acting in more than  17 regional clusters around the globe, more the 160 countries.

It´s working also in Romania,there the company has approximately 110 employees and operate in 3 site locations across the country. CEVA company dedicates to delivering effective and robust supply chain solutions across a variety of industry sectors, including Automotive, Consumer & Retail, Energy, Healthcare, Industrial and Technology.

At CEVA, sustainability is a holistic business approach to create and continuously improve a sustainable company delivering long term value for all our stakeholders: customers, employees, suppliers, investors and the communities in which we operate.

The company believes that sustainability is everyone’s job and that a sound corporate sustainability governance framework promotes strong leadership by all their  management. Sustainability is the foundation of good management practices, contributing to the long-term success of companies and better risk-adjusted returns for the customers.

They know that the commitment to sustainability helps them to serve their customers better, is the foundation of good citizenship and reduces the impact of environmental, social and governance risks to the company. It permeates the way they do business, driving them to innovate and be creative in everything from warehousing operations to transportation, from solution design to procurement policy.

Here is a short video about the company :

 

Shoppings clubs & ‘Kapeju Decor’

Today I am going to talk about the company I work for and how we manage the logistics and warehouse I am not able to say the name of the company so from now we are going to call this company ‘Kapeju Decor’

Kapeju Decor is selling furniture and decoration through the internet, specially our clients/customers are the shopping clubs around Europe, so first I’m going to introduce the shopping clubs and the way are working.

The shopping clubs are ‘private clubs’ where you have to be registered to see what they are selling, usually they sell exclusive brands with special offers for a limited time, that is a selling campaign. So these shopping clubs are the way that Kapeju Decor is reaching the final customer.

I am going to divide this post in two parts:

• How kapeju decor produce its products.
• How kapeju decor sells its products.

First to continue with the shopping clubs I am going to talk about

How kapeju sells its products:

There are some steps that they follow, first they design their own products and they look for a supplier that can made that product for them in the price and in the time that is required, then they establish the dates of the next campaigns in the sopping clubs, three weeks before starts the selling campaign kapeju have to send the list with the products, the prices and some samples, if all is correct then the campaign starts and completes. And now is when the production machine start to produce.

How Kapeju produce:

The business model of kapeju is not based on having the products that are selling in stock, they are in a very trend market that changes very fast so, how can they sell products through the internet without stock in less than 12 days?

This  is how it works, before the selling campaign is active on the shopping club, Kapeju decor makes its own safe and prepare everything to start to produce, kapeju control their suppliers to avoid problems or lacks of raw materials or anything that can make the production line stops. Once the campaign is active, kapeju receive the provisional sells and communicate to the suppliers to start producing, and then when the campaign finish kapeju have around 10 working days to deliver the goods to the warehouse of the shopping club that usually is in other country. When the goods are finished, 2- 3 days before the deadline, kapeju contract a transport company to send the goods in a trailer, all the suppliers of Kapeju are in the Valencian Community, so the trailer have to pass over every supplier warehouse to pick up their goods and when the trailer finish to pick goes directly to the destination arriving on time and distributing the goods.

THE SITUATION OF THE RAIL FREIGHT TRANSPORTATION IN SPAIN

In my last post I talk about the train connection for goods transportation  between Spain and China. In my today post I am going to talk about the current situation of freight transport by train in Spain.

Freight transportation by train supposes already of the  5% of the spanish freight transport.  This number represents a value much lower than the european middle of railway transportation that is situated between 12 and 25%. The situation in EEUU is very different where the railway transport represents half of the freight transport (42%) in all the country.

The use of the train for move goods has grown slightly in the most developed european industries in the last years. With the exception of with the exceptions of Spain and France as is possible to say in the next chart.

Source: Eurostat

The railway sector has several problems that explains the low percentage on the total transportation in Spain. One of them is the low development of the private operators that report a strategy of low prices from Renfe Mercancias (Public Company). Thanks to this strategy private operators only control the 20% of the market share since the liberation of the market ten years ago.

In the next links is possible to see an interactive map of the number of freight trains that travel around Spain in two days (13-14 March, 2016) and a map of the spanish railways.

Interactive map: https://astroide.cartodb.com/viz/5b6b5838-1aa7-11e5-858b-0e018d66dc29/embed_map

Spanish railways: http://www.bueker.net/trainspotting/map.php?file=maps/iberian-peninsula/iberian-peninsula.gif

The spanish railway has to add some technique issues like the difference with the width of the european railway. This difference makes that the trains must do a change in the french border to connect with the european width with the corresponding loss of time.  Other problems are the low level of investment in contraposition with other government’s commitments like AVE.

Spanish freight trains have length limitations and they can not use wagons for transport two containers like in EEUU. In last years the main investments are located in connect the railways with the most important industrial centers and ports with the biggest volume of containers. Other point of investment are the logistic platforms and intermodal terminals with the intention of create an integrate and sustainable model of transport. In the following image is possible to see a doble-stack rail transport from EEUU.

Source: BNSF Railway

The low use  of train is doing that trucks are the kings of spanish transport. It goes against the european transport police that expects for 2050 the use of train and ships for distances of more than 300 km. The reduction of the truck’s transportation and the increase of the train will decrease the level of CO2 and will decrease the traffic problems.

With the underdevelopment of the rail transport Spain is losing the opportunity of be the gate for the goods that come from America and Africa to Europe.  It is important that administration and companies work together to achieve a better rail transport for have a more efficient transport and to get new opportunities of business. However is clear that is a hard work to do until take profit of the investments and achieve the grow of this sector.

Links of interest:

http://politikon.es/2011/05/05/la-asignatura-pendiente-del-ferrocarril-espanol-mercancias-i/

http://politikon.es/2009/09/05/trenes-y-mercancias-en-espana-i/

Big Data: opportunities to improve Logistics and Transportation performance

One of the pillars of Logistics is data. Collecting data is not the basis of this business but according with the previous posts is very important in order to answer the questions:

1. How much do we store?
2. How many movements per hour do we need?

On the one hand, due to the significance of this topic I would mix the knowledge acquired in class with my own experience. In my everyday activities I’m work with a lot of data: number of datasets, classification, type of content, among others. At this moment is quite interesting mediate about these topics related with Logistics. For example: number of pallets or boxes, classification in conveyors, type of content (liquid, solid, others), among others.

According to the visit of Richard Stallman’s (http://bit.ly/1TCp62n)  at the Polytechnic University of Valencia the past 05/16/2016, let me introduce this TEDx video: Free software, free society at TEDxGeneva 2014. This video shown the implications of free software and proprietary software and suggested interesting reflexions related with the property of this systems. See Video 1 (minutes 1:55-5:38).

Video 1. Free software. <https://youtu.be/Ag1AKIl_2GM> [Accessed: 05/17/2016].

On the other hand; open data, public sector information and big data represents one of the most valuable assets of public and private organizations in order to try give an answer to this open questions introduced before. This information supported by management tools which support information flows through the entire organization like Customer Relationship Management (CRM) or Enterprise Resource Planning (ERP) could dynamize the interexchange relation between customer and supplier. See Video 2 (08:00-10:00): Using Open Door Logistics and Geographic Data to Plan Routes. In addition, I recommend visualize the Video 3: Big Data and Transport (2 minutes).

Video 2. Big Data: datasets. <https://youtu.be/kGoAHczxOsA> [Accessed: 05/17/2016].

Video 3. Big Data: Transport. <https://youtu.be/VXjDhzWfCF4> [Accessed: 05/17/2016].

Datasets related with Logistics:

• GSHHG – A Global Self-consistent, Hierarchical, High-resolution Geography Database: http://1.usa.gov/1XAl3Yo
• The Humanitarian Information Unit (HIU) World Country Polygon Datasets: http://1.usa.gov/1TZsUJ8

Finally, let me introduce the following topic: Is the Big Data the future of Logistics?

The big data could increase the velocity of communication, dynamize the volume of this communication and ensure their viability. Nowadays Big Data represents and strategic asset strategic asset to be considered by sustainable organizations. See Video 4 (2:21).

Video 4. Big Data: Logistics. <https://youtu.be/OCCIX1cnzbQ> [Accessed: 05/17/2016].

The hidden face of logistics

As we had the opportunity to see along all our posts, logistics is everywhere and forms part in many processes in a wide variety of sectors. As a consequence, the organs transplants are not an exception. Only in our country, more than 100.000 transplants had taken place since 1965 which is the year when this practice started. Time, as usually in logistics, plays an important role in a process where coordination between all the parts involved is crucial. The aim of this post is to give a basic idea of how it works the organs transplant and clarify the existent link between this and logistics.

In first place, the organs transplant is known as a complex medical treatment where organs, tissues or cells are transplanted from one person to other i.e. a damaged organ is substituted by one that functions correctly. The process starts when the donor has been diagnosed of encephalic death and a quick call has to be made to notify this fact so it is possible to start with the organization of the organs’ offer to the different transplant teams and prepare the operatives. There is a transplant coordinator who is responsible for providing the clinical, analytical and anthropometry data with the objective of facilitate the assessment of the possible use of the organs. All the data related with the steps of the transplant and the time that takes place is pointed in a dossier.

Video about organs transplants (1:52 – 3:45)

There are mainly four aspects where logistics is involved which are, in first place, the material means that are needed for the extraction of several organs, location of the personnel and coordination of the transport. Regarding the transport, the mechanism chosen for performing this task varies according the distance which is divided in:

• Local donor: it is in the same city than the team on charge of the extraction and transplant but in different hospital. Therefore, the coordinator of the hospital organizes the displacement.
• Short distance: sanitary cars or helicopters are used when the distance is lower than 200 km.
• Long distance: private flight companies are hired and in some cases the air army realizes the transport. At least two hours are needed for preparing the flight so the coordination is essential between the hospitals involved and the ONT (National organization of transplants).

Secondly, it is important the preparation of the multiorgan extraction. The organ when is take from the body needs to be cooled, clean and preserved (the conditions will change in function of the organ or tissue). It is important to have a stock of the fluids used for the preservation, a sterile container and an isotainer for its transport. In addition, the third point consists on having good intrahospital coordination in the moment of the extraction. Moreover, the last step is based on the reposition of the stock.

Image 1: Surgical material needed for the organ transplant.

To sum up, the coordination of organs transplants involves a wide spectrum of aspects such as legal, clinical, organizational and human which takes place between hospitals and governmental institutions. There are evidences that point Spain as one of the countries with the most effective model of transplants. This success can be justified by the new surgical techniques and medical treatments together with an increase of organs donated. All this cannot be possible without logistics, which is responsible for the coordination of the transplant, the transport on time of the organ, the right stock repositioning, the use of a informatics system which is able of search information and channeling reports and requests for donor and transplant, among others.

 

INNOVATION IN FOOD TRANSPORT

 

My post of this week is about the innovation in food transport specially about how o innovation in global cold chain transport is helping to reduce food and medical waste.

The fact that demand is being increasingly large and  technological capabilities are improving ,help to boost trade in goods such as pharmaceuticals, foods, and other items that require temperature-controlled transportation.

Food and drugs are racking up the air miles. While there is currently a movement towards transporting with ocean vessels, air cargo is still the mode of choice for many shippers of temperature-sensitive goods. In fact, these goods have helped boost air cargo use, which has otherwise been in a slump.

Innovation in remote sensors are decreasing waste and increasing control So, where’s the innovation in all of this demand for temperature-controlled goods? It’s in the sensors – the ability to monitor temperature ranges and adjust as needed while goods are being transported.

While much of this innovation involves the air cargo market, it is also appearing more and more in ocean freight. Logistics providers such as DHL, FedEx, UPS, Kuehne + Nagel and DB Schenker all provide solutions that utilize sensors, either based on GPS or RFID, for tracking and monitoring temperature and humidity levels throughout transportation.

Web-based, real-time monitoring, including report generation, is also included. Among these solutions is FedEx’s SenseAware, introduced in 2009. It is a multi-modal solution that provides location monitoring, as well as:

• monitoring temperature
• light exposure
• relative humidity
• shock
• barometric pressure

With these services, it can provide near real-time visibility and insight into shipments. Since 2009, FedEx has adapted this solution, incorporating it into its other services and industry-focused solutions, including aerospace, manufacturing, oil and gas, healthcare and fashion.

The benefits of cold chain innovation are about more than just profit .There are many significant benefits to this monitoring, including compliance with regulatory authorities, and allowing users to be proactive instead of reactive.

Furthermore, it allows for intervention when necessary, whether it’s re-icing cold chain shipments or inspection and repackaging of damaged goods. On a broader scale, users are provided the insight needed to make better business decisions, resulting in a strong customer experience and often a higher profit margin.

Hope you will gone find interesting this post.

REVERSE LOGISTICS

A review of the ‘logical’ or ‘common’ logistics  is what is called the ‘Reverse logistics’. With that concept it is tried to get another step. Once a logistic process has been implemented in a company, then is when the efficiency, the reduction of costs and the effectiveness is researched, like that the concept was born.

As the Council of Logistics Management define:

‘Logistics is the process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.’

However, by the same author,’ Reverse logistics is the process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal’.

Then, which is the explicit difference between them? Particulary, reverse logistics works on the opposite way as the standard does, looking for what is aprreciate by the final customer, trying to get the core of the value removing every part of the logistical process unnecessary which do not increase the value of what is being serving.

This review and analysis of the standard logistics what becomes in Reverse logistics have serious reasons that support the need of the implementation.

First of all, alows a trader to receive products back from the consumer or send unsold merchandise back to the manufacturer to be taken apart, sorted, reassembled or recycled. Also, when the product changes the life-cycle could be a particulary keystone this analysis.

Gains can include: increasing speed of production, reducing costs (transportation, administrative, and any kind of repairs), or retaining customers (if it is satisfactory) moreover, more value can be extracted from returned goods instead of wasting power of man, time and costs of raw materials used in the original supply chain. And with all of this, to improve customer satisfaction and loyalty.

For more information, check out the resources:

http://www.rlmagazine.com/edition01p12.php

http://www.amertranslogistics.com/services/reverse-logistics/

http://cerasis.com/2014/02/27/reverse-logistics-management/

http://www.aalhysterforklifts.com.au/index.php/about/blog

Outside the comfort zone – Trucks in West Africa

We have talked a lot about logistics in Europe and transportation within European standards. But one of the videos we saw during the lecture about a man who was stacking bricks on his head in order to unload a boat made me think about other parts of the world. How are goods transported in other countries and what differences might be in the obstacles they have to face in order to get something from the factory to the shops. While looking for this I found an interesting documentary about West African truckers (check out https://www.youtube.com/watch?v=KYFEoWwDvxY to see the whole documentary).

In the documentary a journalist accompanies a truck from Lagos in Nigeria 288 miles to Accra in Ghana. For the whole trip it takes the group 5 to 6 days as they have to go through Benin and Togo and passing these boarders can take quite a while.

Image 1: Map of West Africa¹

They are transporting soap for a huge corporate multinational which is why they have a brand new truck from a Chinese brand and enough money to bribe the multiple guards and policemen at the boarders. This gives them a huge advantage over other truck drivers that work for smaller companies. One of the difficulties all truck drivers have to face are the roads. Even though most roads are paved there are a lot of potholes so the drivers have to stop and roll through them carefully. Moreover the trucks mostly go in convey so that they won’t get attacked. This is a possible risk as even the police could attack them (something I find really hard to imagine if you grew up in an environment like I did). This also gets us to the most important point that I already mentioned before: crossing the border. The back-up traffic from the boarder can be several miles long and informal economies arise in the boarder towns. To cross the border you have to pass numerous check-points which are completely chaotic and as no one is wearing a uniform you don’t know who is official and who isn’t. At almost every check-point they require export taxes or other kinds of bribes. All of this leads to delays and with every stop the prices for the goods the final customer has to pay go up.

Jeremy D. Foltz and Daniel W. Bromley from the University of Wisconsin-Madison have examined “the economics of petty corruption in West African trucking”.² They analyzed the data from over 900 trucks driving along three key trucking corridors (920 km from Mali to Burkina Faso, 1057 km from Burkina Faso to Ghana and 1020 km from Burkina Faso to Togo), which together were stopped over 25,000 times by seven different types of officials. The results show that in West Africa petty corruption is widespread, omnipresent and uncompromising. But what means petty corruption? The authors distinguish between small-scale, in their words petty corruption and large-scale government corruption. The authors argue that petty corruption is especially a problem for landlocked countries because they cannot bring the goods in via ports but rely on the truck delivery method.

So let’s get some more data about the West African trucking business. The West African trucking business is quite disorganized. You can find many independent operators with a single truck, a few firms may own several trucks and only a really small number of firms own a large number of trucks. Along the corridors mentioned before the costs of transport average around $3.53 to $3.93 per kilometer. This includes fixed and variable costs (petrol, driver salaries, bribes and tolls). Variable costs represent about 40% to 45% of the total costs. The cost of bribes are estimated to account about 1-5% of the total cost and 2-10% of the variable costs. Experts suggest that eliminating the bribes on these roads could lead to an increase in exports between 1 and 5%. But who are these people who require these bribes from the drivers. At the boarders you can find regular barriers and check points operated by the police, customs or gendarmerie. There might also be forestry agents, unions or health inspectors who might also have other random locations where they stop trucks.

Image 2: A truck driver being stopped at the boarder

When stopping a truck they ask the driver for the driver’s license and registration papers. This makes it impossible for the truck driver to leave as they have his paperwork and allows the officials to threaten him to delay the delivery unless he pays a bribe. Drivers can negotiate the bribes as a long discussion also doesn’t allow the officials to check the next trucks. There is no clear evidence what happens to the bribes once they are obtained by the officials. But it is quite likely that the money is moved up the chain of command.

The empirical evidence suggests that the bribe payments are influenced by the characteristics of the driver, the truck and which type of official is in control of the stoppage. Amounts may also vary from country to country.

Sources:

¹ http://www.capacityplus.org/technical-brief-2/content/addressing-west-africa’s-health-workforce-crisis

² http://www.csae.ox.ac.uk/conferences/2011-edia/papers/733-foltz.pdf

 

Logistics hubs and warehouse design

Last week I sent a package to my brother which is living in Brighton (UK). I did it through a company called TNT, at the moment that I paid the fees I received an email with a code in order to check where is the package in every moment, so some days later I got into the website I typed the code and I saw that:

Image 1: Detail of the traceability of the package that I sent with TNT.

I read ‘Garonor Road Hub’ and ‘Northampton Hub’ and my curiosity lead me to Google it and the results showed me that both of them are logistics hubs where TNT has warehouses in order to distribute the packages around Europe.

Garonor is placed close to Paris and Northampton is located pretty much between Birmingham and London.

Garonor was built around 1970 close to the airport of Charles de Gaulle and two important highways. It was created originally to reduce the number of trucks that used to drive into the city of Paris and little by little increased the number of companies and nowadays there are more than 200 companies and 2500 workers.

Image 2: Detail of Garonor Road Hub (France).

Messaging and delivering companies like TNT use to take the packages from your home / office to the local office and some trucks or vans take the packages from each office to a logistic center or hub. In my case, as I am sending a package from Spain to England, the package goes through several hubs. On this way they can reduce the costs of delivering packages because they transport a lot of packages from one logistic center to another using trucks, planes or boats, trying to reduce the distance from this hub to the last delivering point.

Another way to reduce costs is locating these hubs close to important infrastructures or logistic areas, for instance, Garonor is close to one of the most important airports of Europe and TNT also has a huge hub in the Liege airport (Belgium) called TNT European Express Centre.

Image 3: TNT European Express Centre, Liege airport (Belgium).

According to the last lessons, I wonder these warehouses are designed following the patterns from the cross-dock warehouses because they don’t use these buildings for storing goods, and as faster they deliver the goods (less time in warehouse) better service are offering, so the design of the warehouses are a key point of the success of the company.

As the size of some of these hubs is really big and are cross-dock warehouses, they have to design extremely big delivering and picking zones, due they are constantly receiving goods and sending them. So, maybe the designers has to focus more on how to be able to manage the high number of trucks and delivering and picking operations instead of the way that are going to store the goods into the warehouse.

In the following video (42 secs) you can watch some operations from the TNT European Road Hub in the Netherlands:

https://www.youtube.com/watch?v=hziW_fn0icU

—

Joaquín Sánchez Planelles

 

REFERENCES:

https://fr.wikipedia.org/wiki/Garonor

http://www.tntliege.com/48_TNT+Euro+Hub+at+a+glance.html

https://www.youtube.com/watch?v=hziW_fn0icU

DRONE, ANOTHER POINT OF VIEW

Nowadays drones appear as an innovative tool with many possibilities. One of the known uses of drones is as messaging tool for transporting products. According with this use, as my colleagues mentioned before, Amazon is working on the Prime Air program where the drones are used to deliver its products to the customers. But, can drones be used for another purpose?

At present, there are many companies which offers different services related with the use of drones. Being a flightless element with suitable proportions for carrying cameras and sensors, drones are used to take aerial images and videos. In the agricultural sector, drones are used for taking pictures of the field, create 3D maps, or for phytosanitary treatments. Drones can also be used as operational support to replace the use of helicopter monitoring for prevention and control of fires, people search or first aid transport, among others.

Figure 1. Phytosanitary treatment with drone. Source: Reproduced from <http://www.dronetools.es/control-de-plagas-y-tratamientos-fitosanitarios/>

The different uses of drones explained before help the logistics of the companies. A drone reduces time of delivery and costs, improves the treatment of the field, generates more security and, in general, improves life of people.

One interesting application of drones is the delivery of drugs to remote places where the people can’t achieve medicines in winter due to the snow, or because they need to travel a lot of kilometers to arrive to a pharmacy, or maybe because they are too old. This is an interesting example where a technology facilitates the distribution and at the same time the life of people.

References:

http://www.amazon.com/b?node=8037720011

http://xn--airdroneespaa-tkb.com/

http://www.dronetools.es/aplicaciones/

http://www.dronplanet.com/servicios-drone/

Aurea Jordán

Platoon of Autonomous Trucks

 

Six major manufacturers in the world of trucks have demonstrated that their autonomous vehicles can travel on the roads of Europe. Among them are giants like Daimler, Scania and Volvo, which we had already taught at one time or another their progress with intelligent vehicles.

The initiative is organized by the Dutch government, and by the name of European Truck Platooning challenge . A squad truck – at least a dozen – plagued technology that allows you to move independently, one after another. They have been circulating for a week, the largest independent exercise we remember in the old continent.

The teams began their journey from different parts of Europe, but the end of this adventure was in the Port of Rotterdam. The intention of companies and organizations involved is to show other governments on the continent that can carry goods with some autonomy.

One participant is Scania, a company of Volkswagen. They tell us that has been circulating autonomously for more than 2,000 kilometers, spanning four borders. No accident has occurred in the time taken tests.

The concept of assembling a squad with autonomous vehicles call it “platooning” and comment that can reduce fuel consumption by up to 15%, thanks to the proximity that can lead to another. We understand that the system is more complex, but in short we can say that the way to connect is through WiFi vehicles.

In the following video you can see what happened, it is quite long, even collects part of the final conclusion:

 

Another example of how automation is looking to be efficiently involved in all distribution channels. This technology can only be applied on motorways, but it represents a dark future for truck drivers, who see their work is gradually replaced by safer, ecological and less expensive solutions.

Victor Vera

 

 

Internet of Things impacts Supply chains…..How???

 

Internet of things……where the Web and the physical world will meet 

   Most of peoplet think of electronics or wearables – the types of technologies that are driving adoption of a highly personalized “smart” consumer lifestyle,when someone says about the Internet if Things(IoT). But there’s much more to the IoT story, and more specifically, its impact on the supply chain.

Here you have a short video :

IoT revolution will permit us to connect those solutions by intelligently enchacing people, processes, data, and things via devices and sensors.

This intelligence can become a true in many different ways when it comes to supply chain data and intelligence – from automation of the manufacturing process to improved visibility within the warehouse.

In today’s IT industry, companies are staying competitive by adopting new technologies, streamlining business processes and innovating new services to increase productivity and save costs. In the logistics and supply chain, the traditional supply of goods is based on established agreements between manufacturers and suppliers.

Orders are made in advance and tracking is done by various stakeholders in the supply chain, i.e., assembly lines, manufacturers and logistics managers. With the use of smart technologies such as active RFID (executable codes in tag), it is possible to envision that goods may be transported without human intervention from manufacturers to suppliers.

Warehouses will become completely automatic with goods moving in and out; forwarding of the goods will be made, using intelligent decisions based on information received via readers and positioning systems to optimise transiting routes.

Suppliers will have the flexibility to purchase parts from various manufacturers (possibly from competing manufacturers) and buy them in a sequence of individual orders. Such automation creates a dynamic production and transportation network and provides better asset management to improve the overall efficiency in the supply chain.

If you want to know more here you have some interesting videos :

and a short one but pretty interesting one ….

The “new silk route”: From Yiwu to Madrid

In 2014 was inaugurated the largest railway for merchandise transport of the world that links Madrid (Spain) with the city of Yiwu (China) and has a distance of 13052 km. That line forms part of a big project from the chinese government and it follow the three lines that links german cities and chinese cities. 

These lines had a volume of 400 trains in 2015 that suppose more than 30000 containers and 200 in the current year The spanish route has had a volume of 40 trains since the first shipment at the end of 2014.

The Madrid-Yiwu route recorre 8 countries (Spain, France, Germany, Poland, Belarus, Russia, Kazakhstan and China) as is possible see in the following map.

Source: Daily Mail Online

This route means an improvement in the possibility of transport products to China for the european producers. Moreover they have a new way of connect with the most important country for european imports.

Transport by train represents one important alternative to the maritime transport with a reduction of already 10 days of shipments time. While a train spends 21 days in cover its route a boat arrives to China from Spain in already 30-35 days. That time is superior in the case of boats that departure from Germany where the save of time is bigger than in the spanish case.

Ship a container in a boat from Spain to China costs 1200 $ and send a container in the train have a cost of 2000 $. That means a biggest cost but it is lower than the cost of a ship by airplane that has a high cost but is the fastest way of make a shipment. Another interesting characteristic of the train shipment is its friendly environmental level in comparatio with the shipment by boat.

The time of the train route is increased because the train must do 3 changes of railway width, one in Irún (Spain), other Brest/Malaszewicze (Russia/Belarus) and the last in Dostyk/Alashankou (Russia/China). When that problem will be solutioned the train route between China and the UE will be more competitive.

One of the problems that explains the low growing of the Madrid-Yiwu line in comparison with the German lines is that the train arrives full of Chinese products and go to China half full. However the expectations are that the traffic of the route grows until 2 times per week in the following years.

The next map is about the project from China for develop a new silk road with the objective of improve their communication with Europa creating a Eurasian hub. In an intent for reduce the dependance of their commerce of the maritime transport.

Source: ElEconomista

 It is clear that the German connection are working but the question is: Will the spanish companies capable of take profit of that new connection with China? The line open a new option for connect with the fourth market for the spanish exports.

Links of interest:

https://www.theguardian.com/business/2014/dec/10/silk-railway-freight-train-from-china-pulls-into-madrid

http://grupobicex.blogspot.com.es/2016/01/el-tren-mas-largo-del-mundo.html

http://economia.elpais.com/economia/2016/03/18/actualidad/1458329302_446055.html

ARE ROBOTS THE FUTURE IN WAREHOUSE?

Big companies are actually the ones introducing robots into the warehouse. However this innovative technology has allowed the creation of new companies dedicated in this sector, in the development on robots, which will be introduce in a close future into the diary activity in a manufactory, etc.

Many are the questions about robots. Its shape, possible disadvantages, benefits, dangers, and so on. Some of this question may be answer giving some examples of companies that are already using some robots.

I. Amazon: use square, simple and with wheels, which are connecting with WIFI, in order to receive orders, from the Amazon´s informatics system. Point that should be underline is that the robots are able to get adapted to the speed of the worker ( when he is doing the picking)

Features:

• Weight 145 kg
• Able to lift up 340 kg
• Speed 5,5 km/h

Amazon believes that the logistic by robots in big warehouses increases the efficacy. Amazon will hire 170 engineers in Varsovia. With the new innovations in robotics, let the win capacity in storage 50%. Also, let to process the orders faster between the click and the delivery.

 

II. Coca-Cola Iberian Partners, introduce (in it´s Warehouse in Galsacano) at the end of October the conclusions of the European Project Pan-Robots à intelligent truck that it will revolutionize logistics buildings and warehouses. The main objective is to develop and validate an automated system base in LGV (laser guided trucks).

Features:

• Able to identify person
• Delete blind points
• New improvements: more flexibility, speed and freedom
• Increment of the productivity

⇒ Pan-Robots trailer: https://www.youtube.com/watch?v=KIz2aBU-AXw

⇒ Pan- robots Projects AGV (in this warehouse only are working robots) HIGHLY REMCOMEND IT TO SEE https://www.youtube.com/watch?v=dlQ1B2FcxiE

III. Starship is a company that propose the shipping of small parquets, in an independently way. In 5 a distance of 5 kilometers between the packaging and the delivery.

Features:

• Not driver
• Speed 6 km/h
• 9 kg load
• The travel is controlled by the end customer through an APP
• Reduce the distribution cost between 5 and 10 times

 

IV. Construction Robotics has design a robot that will increase the productivity, thanks to its capacity of laying bricks at high speed. Whereas a builder is able to locate between 300 and 500 brick in a day the robot is able to locate 800 and 1200 in a day. So the human work together with the robot is the same as 3 builders in terms of productivity.

⇒ See how Sam works: https://www.youtube.com/watch?v=OKoQMD0QZQs

 

¤ Sum up, it is estimated that more than the 50% of the warehouses’ workers will be replace by robots in a period of ten years. Even the new sophisticated technologies for storage and picking will be, also change by robots. ⇒But, however it depend on the economic profitability productivity by works hours plus the labor cost and the change for the robots. At the same time it is needed more research and investment to achieve the mains goals without any danger.

 

 

http://noticiaslogisticaytransporte.com/logistica/18/04/2016/nuestro-futuro-robotizado/77908.html

http://www.construction-robotics.com/

http://www.cocacolaiberianpartners.com/es/

http://www.pan-robots.eu/

http://www.nexotrans.com/nexolog/noticia/kuehne//nagel/arrienda/nave/11.400/metros/cuadrados/zal/port/barcelona/80806/

http://logistica.cdecomunicacion.es/noticias/sectoriales/14921/el-proyecto-pan-robots-quiere-revolucionar-la-manutencion

http://www.cocacolaiberianpartners.com/rojo-y-en-botella/coca-cola-iberian-partners-presenta-el-pan-robots-en-galdakao–un-robot-carretilla-que-revolucionara-el-terreno-logistico

http://www.pan-robots.eu/video/

http://cordis.europa.eu/result/rcn/160857_es.html

 

KFC’s supply chain

KFC’s supply chain can be summed up in 3 process:

• First, raw material is procured.
• All product preparation at the branch.
• Warehouses replenish each branch according to requirement.

 

The main requirements planning

Manager of the store orders the use of term-type orders filled, raw materials into frozengoods, dry goods, wet goods (short shelf life of bread, vegetables, etc.), the number of weekly orders are 1,1,2 – 4, ordering volume = demand – inventory. Demand is thepurchase cycle, lead time and safety stock of, and, ordering the manager considering thehistorical sales data and promotional activities, or weather factors to calculate theturnover of an order cycle, and then converted according to the amount of thousands of round needed the number of raw materials. Demand plans to form form, set the table,including raw materials, estimated demand, not yet reached the volume of the end of thestock, order quantity, the amount of allocation of the purchase details, the form signed bythe store manager sent to distribution centers .

Inventory File

Every day before work, the staff of the provisions of the inventory of raw materials inventory and registration. This data is the order quantity is essential calculations, this data can alsobe used for costing the same day.

Supply resource file

It is affected by supply-side arrival time. This time depends on the time of transmission andprocessing orders, supplier response time of the order, the efficiency of distribution centers.

Procurement Plan

Distribution Center branch of the restaurant received orders for processing, such as thenumber of orders found abnormal fluctuations in a restaurant, the communication andconfirm, the restaurant orders must be received 15 points in the end of the afternoon, after

La Han GroupLa Han Group ordering the distribution center personnel view existing inventory and shipment data are not revised order, the next day by email or fax sent to the supplier, which according to thequantity and date for production and transportation to distribution centers.

Distribution Planning

According to the distribution centers indicated by the restaurant’s order number and the required raw material arrival time in the system, picking orders and shipments to generate summary tables, pickers, picking, packing, shipping transportation officer under the distribution plan summary arrangements, including: capacity approval, vehicle selection,delivery routes, transfer. The assessment team through the delivery vehicle loadingefficiency, punctuality rate of fuel consumption and goods, safe rate were carried out.

Strong points of the supply chain management:

1. strong support for the normal operation of the enterprise and rapid expansion;
2. various restaurants on the basis of accurate demand planning procurement strategy makes the company’s inventory costs are greatly reduced;
3. distribution center in the entire logistics system in a central location, status and role of information systems to be truly reflected;
4. demand forecasting, distribution planning and other aspects of quantitative and standardized management reflects the high level of enterprise management.

 

Warehouse Safety Hazards

As we were talking about warehousing and potential warehouse design I started to wonder about safety issues and how they could be included in the warehouse design. When we visited Alnut a supplier of Mercadona in one of our other master courses we could observe that safety has the highest priority in every facility. This includes the people working there as well as the products that are produced (or in the warehouse case are stored). Before we could enter the fabric we had to cover up all our hair (for the men the beards as well) and put on a clean overall. The floor was marked with lines where it is safe to walk so we won’t get into the way of the worker with their forklifts etc. In the following I want to talk a little about warehouse safety hazards and possible ways to avoid them and provide a safe working environment. (To write this I consulted the following website: http://premierhandling.com/top-10-warehouse-safety-hazards-avoid/)

• Heavy Equipment Accidents: Heavy equipment as forklifts for example can cause horrible accidents especially if your employees get used to working with them, stop being careful and underestimate the possible danger. Remind your employees about the potential hazards and try to provide a diversified environment so your employees never get too bored and comfortable.

• Slips and Trips: Warehouses always bear the risk of slipping or tripping. To avoid slipping and tripping remove loose material, liquids or boxes on the floor, unnecessary steps or ridges, dark areas. Anti-slip floor tape could be another possibility.

• Falls: Similar as slipping and tripping there is always the risk of falling, this can be above as well as on ground level. Train your employees to always stay aware of their surroundings. Guard railing should be used for steps and drops between floors.

• Fires: One of the most dangerous but also preventable safety hazards. To prevent fires make sure that you have the building permits, clearly marked exits, exit strategies and fire extinguishers in place. Also avoid worn and exposed wires or leaking flammable fluids and gasses as main causes of fires.

• Crushed: Even though it sounds rare in the beginning there could be the possibility of workers getting crushed to death for example when augers or press machines are involved. Again it is important to provide sufficient training when dealing with these kind of instruments. Also avoid moving around big and heavy stuff in narrow areas.

• Exposure to Harmful Substances: Harsh chemicals as for example asbestos can endanger your employees seriously. Make sure that your warehouse is free of harmful substances. If you are dealing with chemicals always make sure that all safety measures are implemented

• Ergonomics: Working in a warehouse can be a tough job and the wrong movements over and over again can lead to pain and injury. Once again train your employees so proper lifting techniques is one of the most important things to learn. Moreover design your warehouse in an ergonomic way so that the human body is not forced to perform unusual poses.

• Moving Parts: Machines with moving parts can be a safety hazard when they are used improperly or you wear jewelry or loose clothing. Therefore always pay attention to warning labels and be aware of your surrounding.

• Falling objects: When things are stacked it is quite likely that once and again something might fall. Store heavy loads on the ground and always make sure that everything is stacked properly to avoid a shifting load or round objects from falling down the shelves.

• Lack of safety education: As mentioned before training and safety education is a key aspect of a safe warehouse. Therefore the lack of it can pose a serious safety threat. Don’t be afraid to spend some money on training and repeat the training after a few years. Another method that can be helpful is the 5S method (for details about consult Alirio’s post from April, 26^th 2016)

And if you are not yet convinced that working in a warehouse can be a dangerous job you might want to watch the following video.

https://www.youtube.com/watch?v=KTnGZ37sZqM

Still not convinced? Here are some statistics about the warehouse safety in the United States:

• 20,000 workers are injured in forklift accidents alone each year and 25 percent of those accidents happen when a forklift overturns.
• 100 people are killed in those forklift accidents each year.
• Tripping, falling and slipping make up most of what it calls “general industry accidents.” Slip and fall accidents make up 15 percent of all accidental deaths, 25 percent of all injury claims and 95 million lost work days each year.
• How much can a worker injury cost a company? According to the National Safety Council, the average direct cost to a company is $38,000 and $150,000 in indirect costs.

If you want to know more numbers you can take a look at http://www.kokeinc.com/material-handling/warehouse/shocking-safety-warehouse-statistics/.

So I hope I could convince you all that warehouse safety is a very important topic that every company should consider when planning and operating a warehouse.

Purchase order procedure

Related with my last post “The role of procurement of goods and services” (http://wp.me/p4mzlO-El), I would deepen in the purchase order procedure. According to the last session of Logistics to design a warehouse it is necessary to set two different sets of data:

1. How much do we store?
2. How many movements per hour do we need?

As a result for reflection of the questions introduced before, I recommend watching two videos:

On the one hand, “Our Brains Can Store 10x More Than We Thought!” See Video I (minute 0:00-1:09). This video present a first approach to storage in an accessible and intuitive way.

Video I. A first approach to storage. Source: <http://bit.ly/1O0x86Z [Accessed: 05/05/2016]

On the other hand, the case of Diageo presents their enabled ‘one-touch’ supply chain strategy. This strategy allows this company increase in Sydney DC capacity from 10,000 to 26,000 pallets, during peak periods improved distribution and purchase order procedure, enhancing stock control between 3-5%.  See video II (0:22-6:45)

Video II. Managing a purchase order. <http://bit.ly/1IHUwBE> [Accessed: 05/05/2016]

Following my post “3 Key tools for inventory management” (http://wp.me/p4mzlO-qi) it is possibly identify a wide variety of graphic tools as the Flow diagram, The ABC analysis or Geographical analysis which supported by information and communications technology (ICT) could integrate all the purchase order procedure throughout the company enhancing all the process, specially related with questions like: how much the company do store. Other complementary tools as bar-coding or Radio Frequency Identification (RFID) are presented in Image I.

Image I. Supply chain performance. Source: Reproduced from <http://bit.ly/1TqbtB4>  %5BAccessed: 05/05/2016]

In addition, information systems could support planning, activities and control. For deepen in this topic see the post “Information system to support planning, activities and control” (http://wp.me/p4mzlO-ul). In order to improve the planning and control activities eProcurement introduces an innovative methodology to dynamize the flow of information and canalize the exchange relationship throughout the internet in a business-to-business (B2B), business-to-consumer (B2C) or Business-to-government (B2G) connection. This methodology for buy and sell supplies could be integrated with other systems like: Electronic Data Interchange (EDI) or Enterprise Resource Planning (ERP).

See an example of Purchase order procedure using eProcurement at Image II.

Image II. eProcurement purchase. Source: Reproduced from The University of New South Wales  [Accessed: 05/05/2016]

Solution for multichannel logistics

Together with the company GRENZEBACH, BLG LOGISTICS yesterday presented the robot-assisted storage and picking system „G-Com“ at BLG’s Frankfurt logistics center. G-Com is an innovative, dynamic, and scalable order picking system.

BLG was the first company in Europe to apply a robot-aided logistics concept. The central element of this new concept, which has been demonstrating its effectiveness in regular operation since October 2014, is that people no longer have to go to the racks, but the racks come with the goods to the people.

This is made possible by a technical system developed by Grenzebach. “G-Com” is based on the idea of a mobile order picking warehouse: the racks are taken to a multifunctional, flexible and, on top of that, ergonomically designed pick station (“stargate”) fully automatically. The rugged intelligent transport vehicles with a low design height used for this purpose (“Carrys”) slide under the mobile racks, lift them up and transport them via a defined route to the so-called stargates.

Flexible G-Com System

The crucial criterion for installation of G-Com is at the same time its greatest advantage: In the logistics center at Hanauer Landstraße, Frankfurt, there are 800 racks and 75 carrys, and the goods are picked to five „Stargates“. For BLG LOGISTICS, the scalable storage and picking system works according to the principle „you only buy what you need“ and it can be dynamically adjusted to changing market conditions and customer requirements. If the order volume increases, for example, either more transport units can be added to increase the performance or additional racks can be installed to increase the capacity. The number of carrys is based on the number of stock placements and removals per hour and per day. Other factors are the planned number of shifts per day, the size of the warehouse, the average transport weight, and the number of putaway and removal bins.

Efficient, Ergonomic and Customer-Oriented

For the jury of the German Award for Supply Management the interplay of several factors was convincing and decisive for their selection – technology and customer orientation, efficiency by minimizing distances in the warehouse, ergonomics by virtue of these reduced distances and a lower number of lifting operations as well as mobility, scalability and flexibility of the system which, for its part, can relocate.

This way of logistics is really impressive, it could cut up the errors and wasted time, but on the other hand people are loosing jobs, so probably not in many countries it could be good. But possibly in near future most of logistics company will use this way.

I advise you to see a short video, that explaining how it works on practice.

sources:
www.blg-logistics.com
www.engelbert-strauss.de/

INVENTORY LEVEL

When you create or work with products or materials, you must have a determined level of inventory in the warehouse to prevent breaking stock. If your stock breaks, you would not be able to serve customers and, consequently, you could lose them. For this reason, it is advisable to create a model that fits your demand and also create an inventory ordering system that fits your model. You should avoid having more inventory than necessary stored, which would increase the costs of storage, or to have less inventory than necessary, which could lead to breaking stock.

The reorder point method and the periodic review method can help us to achieve a level of effective and efficient inventory. These methods are explained below.

The reorder point method (ROP) is based on the request of some products to your supplier when the available quantity in your warehouse is below a certain level. As it is shown in the Figure 1, the quantity requested should cover the period from the reception of an order until it returns to receive another order. We should take into account the demand and the standard deviation to calculate the reorder point (R) because we should have enough product in stock to cover the period L.

Figure 1. Reorder point method graphic. Source: <http://www.infosysblogs.com/supply-chain/2013/01/rop_using_apo_ctm.html>

As it is shown in Figure 2, periodic review method is based on the periodic review of the inventory. When we check the inventory level we see if it is below the determined level. If it is below the level, we request product, if it is not below the level, we forget the inventory until the next review.

Figure 2. Periodic review method graphic. Source: <http://www.supplychainmusings.com/2008/05/replenishment-policies-and-inventory.html>

For example, if you work in a hospital pharmacy you need to have always the drugs that the patients need but you have a limited space so you have to control the inventory. You can apply the periodic review and check the inventory one time per day, but the best way to control the inventory is to have a reorder point because, thanks to the barcodes, the number of drugs in stock is always controlled and you can request more when the stock arrives to a certain level thanks to databases.

 

References:

https://docs.oracle.com/cd/A60725_05/html/comnls/us/inv/roplan.htm

Aurea Jordán

Stocks & Inventory

After being analysing cases in lectures where the different kind of stocks and the bests ways of keeping inventory were involved, I thought that could be interesting to write a post where I’ll review these topics deeply.

As it is well known, the stock is the set of goods or products which belongs to an organization or individual that used them to achieve certain objectives. It results important to have always the necessary quantity, in the moment or place wished in the most economical way that is possible. Furthermore, there exist different kinds of stocks that are classified according to their function or the point of view of its management.

• Functional stock:

– Safety stock: it consists on having a volume of existences over the quantity which is really needed to face possible fluctuations on demand or unexpected delivery delays.

– Cycle stock: products or goods that supply the common customers demand. This stock is depleted over the time.

– Presentation stock: it is the one visible to customers for serving the most imminent sells.

– Seasonal stock: the aim of this stock is to face the expected sales that take place in a specific season (e.g.: ice cream, sunglasses, etc.).

– Stock in transit: it is going round on the different stages of the productive and commercial process.

– Recovery stock: are products or goods already used that can be reused partially or completely for new ones.

– Dead stock: are those products that can’t be reused so should be discarded.

– Speculative stock: accumulation of stock when it is believed that the demand will increase considerably.

• Operational Stock:

– Optimum stock: establish a good relation between attend adequately the demand and acquiring maximum profit having in mind the holding costs.

– Zero stock: there is only the stock necessary to supply a specific demand.

– Physic stock: is the quantity of product available on that moment on the warehouse.

– Net stock: is the physic stock removing the unmet demand.

– Available stock: is the physic stock adding the orders in progress to suppliers minus the unmet demand.

Additionally, is essential to maintain a control over the stock that is available and have an inventory where all the products are listed and ordered by categories, the features of each are detailed and the price is specified. Below are shown the different types of inventory:

• Periodic inventory

The company realize a regular control of the stock after a given period of time. This kind of inventory doesn’t allow the company to have exact information about the inventory problems or shortage.

• Cyclic inventory

Consist in request orders with a volume higher than what is really needed due it is cheaper instead of ordering according the demand of that moment. This inventory is useful to minimize the cost of emission of the order and storage of a product.

• Permanent inventory

The permanent inventory is made by having in mind a factor that is of the company’s interest such as value, marketing, etc. The periodicity is established according the factor considered. This inventory allows the company to know which is the existence or value of the products

In addition, not all the products that are stored have the same value. For that reason, some companies like to use the ABC method which allocate to each product a different degree of control based on its value. As a consequence, the products are classified on three groups. In first place, there is the Group A which is composed by a small number of items but they represent a high percentage of the total value of the stock (60-80%). Group B is composed by a higher number of products with a total value of 30-40% and Group C represents a great amount of items however only the 5-20% of the total value of the stock is related with them. To sum up, products that belong to group C requires a continuous revision and maximum control while others don’t because they are considered less important.

https://www.youtube.com/watch?v=qLGC_hlzu6A

Video about the ABC system (1:07 – 1:29).

 

To conclude, there exist different kinds of stocks which are managed in different ways  and have different value. For that reason, it results important to really understand all the concepts treated throughout this post to be able of manage in the best way the stock and inventory of a warehouse.

Drones supplying.. yes or not?

It is in fashion right now to heard about drones being used as ‘air trucks’ without pilot: Cheaper and faster. But are they possible in Spain? and legal?

Amazon, the international monster supplier is working on that very hard. And actually the prototype has been already built, the world knows its apperance. “The design allows long fly at a very low cost, to descend and then ascend with great security and agility distances,” said Kristen Kish, project spokesman Amazon Prime Air.

The weight is less than 25 kg, and the dream the company will follow is to deliver a package with less than 30kg in 30 minutes as maximum. Obviuosly (we cannot expect less from Amazon in a situation like this) the security will be really high, with several sensors called “Perceives and avoids”.

“Drones will not be in the real world until we can prove that they are truly safe” Kish asured.

But we wonder… and what in Spain? laws allow this kind of traffic?

Nowadays the answer is: not.

The drones law is right now provisional, and a the end of 2015 was supposed the release of the new one, however without a confirmed parlamente was not possible, and as still we have not stablished goverment, this task is becoming more and more longer.

The Director of (AESA) Agencia Estatal de Seguridad Aérea has already sent the law to ministers involved, but without a confirmed goverment that’s not possible.

The project-law says:

• Flight within urban core is allowed, without maintaining visual contact with the drone.
• From 2kg to 5kg: with the new law will be possible to pilot a drone of 5kg with a 500 metres of distance.
• Fly in Controlled Airspace is allowed as well when before was not legal. Obviously, according some specific rules.

Then we can check how this segment will increase in Spain the next years, starting with the laws.

 

H&M’s (supply chain) strategy is essential for its success

H&M, founded in 1947, nowadays has about 3500 stores in 55 countries, making $20.3 billion yearly sales. One of the basic pillars of its success its quick turnaround time on styles: Lead-time for H&M products is only 2 weeks (in Europe) – where traditional companies like GAP need about 6 months to design and execute new styles. But how can H&M achieve this?

 

Designing, planning and controlling

• 100 in-house designers at the headquarters in Stockholm analyze emerging fashion trends and translate them into product designs, another 400 designers expand these styles into H&M collections
• Inventory levels for each style are determined by designers, buyers and pattern-makers, tailored to region and store (e.g. high-fashion limited editions only in certain stores in key markets)
• 20 production offices around the world place orders, ensure that products are delivered on time and at an agreed-upon price, enforce fair labor standards at supplier factories and choose the right suppliers
• Reverse Logistics: Customers can hand in unwanted clothes, H&M collects these unwanted garments from any store and recycle it –> improves brand, customer gets discount on next shopping, sustainability (20% of specific clothing line are made entirely from recyclables)

 

Suppliers as strategic partners

• All manufacturing is outsourced to ~ 900 suppliers, mainly in Europe and Asia
• Suppliers are graded by H&M based on their performance and are vertically integrated
• 80% of its retail inventory is manufactured in advance and the remaining 20% are introduced during the year, based on present-day market trends
• Short product life cycle and quick respond supply chain system
• Each store is linked to a global ERP system delivering information to warehouses, production offices, suppliers, etc. –> allows forecasting and quick reactions to new trends and avoids overstocking

 

Transportation and warehousing

• Transportation is outsourced, mainly shipping and rail transportation (due to economic sustainability)
• Currently 13 DCs or call-off warehouses (but plans to centralize them into a smaller number of bigger hubs)
• Transportation either directly to stores or to DCs /Call-off warehouses with one centralized stock room to replenish item levels in stores quickly and according to selling trends (based on the ERP data)
• Electronic Point of Sale (EPOS) system in the stores –> connects store floor to the Call-off warehouse’s stock room –> no storage in stores necessary
• Mini load system for fast moving items and high bay racking for 50,000 pallet locations to improve storage efficiency
• Challenge: flat and hanging garments –> automated hanging garment system to handle both flat and hanging garments

 

Thus, flexibility and short lead times reduce the risk of buying the wrong items. Together with a well-connected software and communication and well-selected suppliers, this allows H&M stores to restock quickly with the bestselling products at economical prices.

 

http://www.businessinsider.com/hm-produces-new-fashions-in-two-weeks-2014-9

http://www.businessinsider.com/charts-showing-hms-explosive-growth-2014-9

https://erply.com/in-the-success-stories-of-hm-zara-ikea-and-walmart-luck-is-not-a-key-factor/

https://www.youtube.com/watch?v=KPCInVxPHNg

http://www.pierau-logistics.co.uk/project/hm/

http://de.slideshare.net/candelaaldao/hm-supply-chainmanagemen

Ford and its providers

As most of you should know, there is a factory of Ford placed in Almussafes, surrounding the factory there are several providers from Ford.

These companies are placed there basically to save costs and time transporting the pieces from one company to another, they used to transport the goods by trucks but they developed a system more efficient, faster and cheaper than trucks and it is called Direct Automated Delivery (DAD).

Through this system the car pieces are transported from the assembly point at the supplier’s plant to the assembly point in the production line at Ford through aerial tunnels. These tunnels are completely closed and automated.

Image 1: Image of one tunnel from the road.

Some of the pieces that are transported through aerial tunnels are the doors, hoods and tail gates.

Pieces are transported by individual conveyors which are controlled by the telecommunications network of the company. Tunnels are 16 meters wide and there is pretty much 1 km of extension.

Image 2: Internal image from one of the tunnels.

This strong connection between Ford and its providers allows to Ford make orders on time, they are able to ask for pieces every several hours, therefore, they don’t need to store big quantities of pieces.

Image 3: Map of the industrial area where Ford and its providers are placed, tunnels are represented by green lines.

Therefore, this system reduces the cost (transport, storage, packaging costs and so on), also brings more agility for the quality problems of the pieces and the relationship between Ford and its providers is more fluent.

 

BIBLIOGRAPHY:

http://www.camionactualidad.es/noticias-camiones/reportajes-camiones-vehiculo-industrial/item/3905-transporte-en-ford-almussafes

http://www.lasprovincias.es/v/20111109/economia/multinacional-magna-conectara-tren-20111109.html

https://riunet.upv.es/bitstream/handle/10251/11459/memoria.pdf?sequence=1

 

—

Joaquín Sánchez Planelles