Healthcare logistics in Galicia

Why logistics for healthcare products it’s a so difficult task?

High number of different SKU (Stock Keeping Units)

Some of them have a very short period of validity.

In addition, some of them has to preserve special conditions (cold chain)

 

What are the most important thing that logistics company have to manage?

Surprisingly, the most important logistic resource is documentation, digital documentation is the most important resource that they have to manage. Documentation has to be always available so servers has to be running 24 hours 365 days, and if there is a problem, one backup server must turn it on and substitute failed server.

 

What’s more?

Blood, organs, vaccines, antibiotics, anticoagulants, paracetamol, ibuprofen, and thousands of different medicines…

 

An example

Servicio móvil is working for Galicia Healthcare Service (SERGAS) (SERvicio GAlego de Saúde) since 2013. They are managing the logistic of the whole community (688 hospitals) using a big warehouse (17000 m3) in the centre of the community (close to Santiago) where they stock more than 8000 different SKUs. Some of them has to be high controlled due to their period of validity or temperature. Their warehouse is full automatic with 46 shuttles that place and search all the products using more than 22000 different places.

Furthermore, they have 159 employees, 37 vehicles, that receive around 2000 product lines and send around 3500 orders per day.

Finally, I must say that all this logistic system saves 20 million € per year to our Healthcare Service.

 

In this video, you can see a very clear summary of the service of the company.

 

A3 THINKING METHODOLOGY

Hello to everyone,

Since we were the last lessons working on solving problems that have arisen in warehouses, I would like to introduce the A3 Thinking, which is a problem-solving tool. We were requested to use it in one of the last logistic activities, so I thought that it would be interesting to tell you more about this process.

A3 is also known as SPS, which stands for “Systematic Problem Solving” The process is based on the principles  PDCA (Plan-Do-Check-Act). Here we have an example of the worksheet used in “A3 problem solving” methodology.

The A3 approach is divided into a number of steps which can vary. Most often, eight (8) problem-solving steps are used.

  1. Problem description, Initial Perception (PLAN)
  2. Breakdown of the Problem, Problem Clarification (PLAN)
    • Mapping out for this step can be driven by a set of questions. For example, the “5 W’s (what, where, when, why, who) and 2H’s” (how, how many).
  3. Point of Cause, Setting Target (PLAN)
  4. Containment (PLAN)
  5. Cause and Effect, Ishikawa (PLAN)
  6. Follow Up Action, Corrective Actions (DO)
  7. Effect Confirmation (CHECK)
  8. Share the successfully implemented actions (ACT)

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In conclusion, by following this methodology we will be more efficient while we are solving problems or at least we will increase our possibilities to solve the problem using this process. It is very important, as the JP says always to create the perfect environment to work, removing things that are not relevant and starting with a solid base, as we can see in this tool where 5 points are based on planning our actions.

Nature’s “tin foil”

In the last blog I wrote about the imaginative transport vehicles of yore. In this blog I will tell you about something which is even older, yet is still very much thriving nowadays: “Leaf foil”.

Before the inception of aluminum foil, many cultures around the world has discovered the awesomeness of nature leaf as cooking stove (wrap food with leaves and put it in the coals or on hot rocks around the fire pit). Some leaves are also used to steam food or wrap before boiling to keep the ingredients together. In the following are some prime examples:

Image result for banana leaf food
Traditional Indian meal served on Banana leaf
  • Banana/Plantain leaves have been used for centuries as a way to wrap food for cooking and storage. They are also used as a way to carry pouches of food and can be used as a plate, too.

Image result for Bamboo leaf food
Vietnamese Bamboo leaves-steamed sticky rice with assorted toppings 
  • Bamboo leaves are used to steam food in by many Asian cultures. They need to be soaked in water before use to avoid cracking.
Image result for Corn Husk leaf food
Ecuadorian fish baked in Corn Husk with rice & cactus salsa
  • Corn Husks – Fibrous and strong, corn husk are used by many Hispanic cultures for various dishes. Like plantain leaves, they can be used not only for cooking, they also make great wraps for food you want to store or bring with you. Depending on what you used it for, they can be reused, too. They also leave a nice flavor on the food.
Image result for cốm làng vòng
Vietnamese’s young rice wrapped in Lotus leaves
  • Lotus – Another Asian specialty, lotus leaves get very large and can infuse the food with a nice, earthy aroma. They also need to be soaked (usually bought dried at the store) before using.

Why do leaves work as a food wrap or natural ‘tin foil?”

First, because of their “flexible” water content! Most people who use leaves as a food wrap buy them dried in packages at the store and then soak them to bring back the strength of the fibers that hold everything together. Doing that will also keep the food moist and aromatic when wrapped.

Image result for leaves to wrap food in

Many leaf types such as Lotus, Bamboo or Banana leaves are also water proof and therefore can serves as perfect transport packet for foods.

Image result for leaves to wrap food in

Another reason is because the essential oils found in many types of leaves. These oils are usually rich with antioxidant and antimicrobial content, which actively fights back certain pathogenic bacteria and spoilage organisms and thus helps preserving foods, even in high humidity and temperature condition.

Hopefully in the not too-far-away future, such incredible properties of wrapping leaves can be harnessed and used on an industrial scale in packaging, preserving and storing foods?

Source:
https://www.asianscientist.com/2014/12/in-the-lab/leaves-natural-packaging-packed-antioxidants/

Highways with recycled pneumatics: A reverse logistics case

Reverse logistics describes all operations related to the reuse of products and materials. It is the process of moving goods from their final destination for achieving value. It is true that supply chains have spent decades perfecting their forward logistics process, but reverse logistics has routinely been neglected. As a result, a lot of money is wasted every day in the form of product or space waste.

Nevertheless, the environmental consciousness and the companies’ social responsibility make possible the development of reverse logistics ideas as the recycled pneumatic roads:

The massive production of pneumatics and the difficulties involved in their destruction when their life cycle ends has been one of the most serious environmental problems in the world. As a solution for this problem, a new reutilization process of pneumatics came up. Due to the application of the pneumatics granulated rubber as a component in the asphalt layer, the highways containing this material are better and safer. This material may be applied both ways as a linking material and as sealing layer. Depending on the given use to the rubber, between 1000 and 7000 pneumatics per kilometre may be utilized. As a result, the highways build with pneumatic rubber have the following properties:

  1. Longer average lifetime
  2. Higher elasticity
  3. Higher resistance to cracking
  4. No water accumulation
  5. Higher grip

Some data:

  • In Spain, more than 1000 km of roads are made by using this material.
  • Durability of railroads:
    • Recycled rubber road: 30 years
    • Standard road: 5 years
  • Maintenance:
    • Recycled rubber road: each 10 years
    • Standard road: each 2-3 years
  • The construction of recycled roads requires around half of granular material.

For a better understanding of this product with recycled material I attach the fabrication process of the pneumatics, from being wasted to be rubberized asphalt:Recycling pneumatic process

To summarize, I want to emphasize the importance of reverse logistics, the supply chain does not finish when the product is sold, but when the product spoils or it is destroyed. If companies take care of it, many innovative processes and products may appear and solve several problems of the present. At the end the ideal objective of every supply chain must be to achieve a cyclic loop where there is no spoilage of products. In this case, this goal is very close, since the highways lifetime is 30 years.

Sources:

POOLS MADE OUT OF WHAT???

I have a friend in Colombia who created a company to reuse containers and use them as offices in construction sites, i have also seen in Colombia how they made a whole location into a containers dining, with up to 10 different restaurant offering their food in containers, it’s actually called “Los Contenedores” (The Containers in English), i have also seen how in different countries they were used for prefabricated houses, small ones but perfect for bohemian kind of nomad people that enjoy few space with just the things they need. But I have never seen containers used as pools!

Well, Canadian company Modpool is making pools out of reused containers to install in just a few minutes at home! They claim that containers are made to be very lasting and have pools available in two sizes: 2,4X6 meters and 2,4X12.2 meters, both with a depth of 1,35 meters and a price starting from 24.000 euros, with the advantage of reducing the containers carbon footprint.

The pool has a powerful filtering and maintenance system, and is able to warm the water in less than one hour from outside temperatures of -10 Celsius up to 30 Celsius.

I think the industry has made available such a big amount of used containers that people are getting every time more creative with the way of reusing them and putting them to produce again.

piscina_contenedor_02

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Images from: idealista.com

CARREFOUR OPENS A NEW COLD STORAGE IN BARCELONA’S ZAL PORT

ZAL Port (Zona de Actividades Logísticas in Spanish) is the intermodal logistic platform of Barcelona’s port, it was the first one to be built in Spain and it works as a logistics HUB for all kinds of merchandise coming from the Far East, southeastern Asia, Spain, Portugal, France, and Northern Africa. It is located 2 km away from the Prat Airport. With more than 100 companies operating in 635.000 square meters, which in the next years are going to be complemented with another 450.000 square meters, this platform drives the economy through efficiency and high value logistics.

Carrefour inaugurated this may 22 a cold storage in the ZAL Port constructed by CILSA which is the partnership that manages the ZAL Port with an investment over 12 million euros. The installation is 18.200 square meters and it is entirely dedicated to freezing and refrigeration, and will allow the rapid distribution to the chains locations. The company also has a storage in the ZAL Port of 45.000 square meters.

Carrefour built this cold storage in order to improve productivity and respond to the customer’s needs, which for they also have stores located in the center of the cities and neighborhoods, installations in the perimeter and online store, to adapt to whatever environment the client is immersed in.

Nave_Carrefour.Noti_

Image from granconsumo.tv

carrefour-cilsa

Image from noticiaslogisticaytransporte.com

A new way for distributing letters

Last month was tested in Sevilla an assited pedal tricycle for the distribution of mail packages.  The objective of this test was to check if the vehicle is viable, with a view to its possible use in certain parts of the country.

triciclo Correos para el reparto urbano

From my point of view, this idea would be really useful in Valencia due to the fact that now we have bike lanes, which connect every single point of the city.  Taking into account that Valencia is a very saturated city in terms of vehicles, the postmen would be more efficient if they could avoid the regular traffic jam.  Furthermore, this technique is focused on a higher respect of the environment because it helps for the reduction of pollution and the CO2 emissions.  Once implemented, then maybe some improves could be done, like to extend battery life or to increase the size of the trunk, but always listening to the workers’ opinion.  

At the end, society is turning back to previos times when cars were not almost used, or even were not invented, and it is due to the massive consume of everything that nowadays we do.

Source:

http://www.cadenadesuministro.es/noticias/correos-prueba-en-sevilla-un-triciclo-de-pedaleo-asistido-para-el-reparto/

Logistics with Freight Forwarders

A freight forwarder mainly acts to manage the transits of international products so that once they have been unloaded, they make the journey to their final destination.

Being transportation one of the principal functions for developing a logistics program, a freight forwarder acting as an intermediator between the shipper and the consignee their main objective is to optimize through the standardization of transport and
integrate processes and costs that in turn can also act as a consolidator, grouping the merchandise or cargo to monetize the transport of a container or other cargo unit.

In this order, this type of industry allows to assist in the preparation of the shipment, suggested prices on the costs of the air or port charges, consular fees, costs of special documentation and insurance, among other variables.

They can also recommend packaging methods that will protect the merchandise during transit, and if the exporter so requests, they can reserve the space required on a ship, plane, train or truck.

In the economic aspect, freight forwarders can boost trade between economies at very different stages of development because they can avoid artificial barriers that delay delivery and increase the cost to the end customer.

The video presents an example explaining how a freight forwarder works, the services they offer in order to help logistics clients to manage merchandise.

Sources:

http://www.emb.cl/negociosglobales/articulo.mvc?xid=1511

http://www.ateiavlc.org/el-transitario/

 

Mercadona: XXI century warehouse

Mercadona is a company that with its methods, administration, logistics and others has achieved the success it currently has, being the example to follow not only for many companies, but also that has been taken as a case study in universities.

Now I want to talk about the store of the 21st century as it is known. Looking for a better manner that its employees make the least possible effort and this causes fatigue, in the logistics center located in Ciempozuelos, Madrid, the whole process is automated.

What has been achieved with the new software is that the machine is able to depaletizar the shipments of the manufacturers and organize the orders for the stores in multi-reference pallets without the need for the employees have to be loading them.

With this, Mercadona not only has reduced the organize pallets’ time from 45 to 12 minutes, also has reduced work accidents because employees don’t have to carry anything.

In this center there are 4 buildings: dry, cold, containers and services. In the cold one there’re 3 temperature but one of them (-23) is totally automatic because is so difficult if not impossible for a human being there.

Here a video that most of you have seen in JP’s presentation but for those that haven’t watch it:

 

Sources:

http://blogdelogistica.es/el-almacen-del-siglo-xxi/

http://www.eleconomista.es/empresas-finanzas/noticias/4547920/01/13/Asi-funciona-el-corazon-logistico-de-Mercadona.html

AMAZON LOCKER EXPERIENCE

 

How many of you had a bad experience with a delivery company? Maybe because you were waiting for a long time due to the deliveryman was delayed.  In order to improve the customer experience, the companies take advantage of this fact stablishing a new service for collecting orders, the installation of collecting points in strategic positions of the cities.

Amazon is one of these firms, concretely its new service is named Amazon Locker Service and according to them you can receive orders at secure locations. Concretely, during the purchase process the client can choose the delivering in a specific Amazon Locker with no additional cost.

The process as simple as this, the client inserts the code sent to you by email or scans the bar code given, then a door is opened and he/she picks the package. You can watch the video explanation of Amazon below.

Additionally, this picking places can be useful when you want to return your product making comfortable this arduous task.

returns

However, there are a lot of companies using similar services as Correos or UPS as you can see in the pictures attached. However, the only disadvantage I have to say is this service usually is only available for small packages.

Concluding, this new service can improve the costumer experience of purchasing online because can reduce the clients awareness of order received. In addition, the delivery companies reduce the spending time to deliver packages concentrating a few in the same location.

What is SmARPro?

 

In my last work experience digitalization became a big topic for me. Interesting innovations are floating the market. During my research about logistics in the industry 4.0 I have found the project “SmARPro” (Smart Assistance for Humans in Production Systems). The goal is improvement in communicating in-between logistics, production and handling. This current lack of communication between control logic, the machines and the operators of production facilities and logistics systems is one of the main problems in today’s networked production. The SmarPro creates the possibility for standardized recording and processing of operating data by using the SmarPro platform. The SmarPro system combines the order levels consisting of control systems, warehouse administration systems and enterprise resource planning with the device level consisting of wearables and machines.

Bildschirmfoto 2017-05-23 um 09.58.14

A connection between man and machine is one of the main tasks of today’s technology. The SmarPro platform creates dies by combining data from SmarPro Wearables and SmARPro SmartDevices. The wearables give the employee the ability to visualize the knowledge that turns around machines and objects. The SmarPro platform connects the two levels of the entire system and creates an information exchange by processing the data. The SmarPro project focuses on people and machines as core components in production. SmarPro SmartDevices integrates machines into the generation of information. Sensors and communication elements enable the direct removal of information directly at the machine and the transmission of the collected data to the SmarPro platform. With the aid of the SmarPro Wearables, this information of the employees is context-based and displayed in the form of an Augmented Reality display depending on its current position. Information please directly on the object. Work instructions can be taken up by the human being without the user having to interrupt his work process. With SmarPro the information display changes fundamentally. So please do not hesitate to contact us.

For a deeper interest the following video will show the palletizing with the technique: https://www.youtube.com/watch?v=hkXhQLTZM1M

Mobile factories are versatile and modular, so it is important that the individual components are using the connection-capabilities as well. Components can interact with one another without imposing manufacturer dependencies and different interfaces. Thus, new devices can be added, old or defective can be removed and adapted at present, the adaptation of overall structures, such as production processes, can be dispensed with. Which is the perfect, the possibility of optimal adjustment. I really like this example in showing a new possibility of interaction, not only between human being, between all the tools which are integrated in the process. The goal of good communication is not only concerning human beings. I hope I could give the readers with my last post something with a matter of interest for everybody. I really liked focusing on the future aspects, I am excited to see what will happen in the next years. Many regards & a great summer for everybody out of FADE and MUGEPS.

Marius Heinzel

ECO-FRIENDLY SUPPLY CHAIN

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Supply chain as well as warehousing has always been viewed as an important cost for a business and too often being sustainable even more. Nowadays being eco-friendly is becoming more and more important and people, as well as big companies, started paying attention to the topic since the costs are now accessible. There is not anymore, the need to sacrifice profitability to achieve sustainability, companies need the partnership and collaboration of their supply chain.

For example, since 2002, Procter and Gamble has more than halved the impact it has on the environment across energy usage, CO2 emissions, waste disposal and water usage. All these operational results have led to nearly 1 billion dollars in cost saving. This company managed to create a win-win situation with all their partners. The levels of collaboration across the industry on sustainable logistic are ever-increasing and the retailers of the EU are leading the way in this field. This helped a lot the organization of P&G in EU.

As stated in the website of the company itself the suppliers of this company are critical partners in improving the environmental sustainability of the end-to-end supply chain. Since 2011 the External Business Partner Sustainability Scorecard has driven transparency and collaboration in their supply chain. They use more bio-alternative materials, sustainable packaging, renewable energy and logistic setups.

P&G recognize the link between gas emission and climate change therefore decided to act also in this field. The company in 2007 set the target to reduce the road kilometers travelled by trucks by the 30%. This means 80.000 less journeys by road per year and the truck remaining on the road are full. The also reduced the intensity greenhouse gas emissions (GHG) from their operation as well as helping the consumers to reduce their own GHG emission using their product. They started to transition from fuel sources toward cleaner alternatives and driving more energy-efficient modes of transporting finished products to the customers. They also chanced the packaging and the products that enable a more efficient consumer product and moreover educated the consumer to reduce GHG emission.

It is interesting to read how these small changes can affect a bigger mechanism and how also big company start paying attention also to this topic.

future-friendly

 

 

 

Source:

http://us.pg.com/sustainability/environmental-sustainability/policies-practices/climate-change

 

 

Triple sustainability

As we have to choose a triple sustainability company to our final project I decided to talk about this topic.

Sustainability is to manage today’s resources in the most efficient way without involving tomorrow’s resources. When we talk about triple sustainability we are talking about social, economical and environmental aspects.

Resultado de imagen de triple  sustainability

Social/people: pertains to fair and beneficial business practices toward labor and the community and region in which a corporation conducts its business.

Environmental/planet: refers to sustainable environmental practices. An environmental company endeavors to benefit the natural order as much as possible or at the least do no harm and minimize environmental impact.

Economical/Profit: is the economic value created by the organization after deducting the cost of all inputs, including the cost of the capital tied up. It therefore differs from traditional accounting definitions of profit. In the original concept, within a sustainability framework, the “profit” aspect needs to be seen as the real economic benefit enjoyed by the host society. It is the real economic impact the organization has on its economic environment.

So, today many companies are seeking triple sustainability because this not only helps our environment and society, they also help the company to have a better reputation and with that greater benefit.

Source:

http://www.ciudadesdelfuturo.es/la-triple-sostenibilidad-clave-para-la-competitividad-de-las-ciudades.php

https://en.wikipedia.org/wiki/Triple_bottom_line#Definition

IMPORTANCE WHEN CHOOSING AN ORDER PICKING SYSTEM

The productivity of a logistics center depends to a large extent on the efficiency of the picking process. Therefore, the parameters that I consider most important before selecting this process are the performance, flexibility and ergonomics of the picking system.

As we have already learned in class, there are 3 modes to make the picking, which will not cease to exist even if a picking system is included.

  • Goods to Person

The required articles are brought from the warehouse to the selector by means of conveyor technology. The picker collects the products for an order in one or several containers.

Example: Flexible voice-based solutions

Captura

  • Person to Good

The selector moves within specific zones of the goods, selects the desired number of items and places them in a container of orders.

 Link: Example

  • Automatically

In this case no manual action is required.

method that best fits a company depends on the specific application, however, four parameters must be considered before deciding on a specific solution:

Range of articles
Average order size
• Frequency of picking
• Weight and dimensions of the articles
Sources:

 

“The world’s largest seed warehouse”

The world’s largest seed warehouse appears fictional and is located in Norway. It was designed to be indestructible and last for eternity, since it can withstand earthquakes and missile impacts. This construction is 130 meters deep in the mountain in Svalbard, 130 meters above sea level and almost 1300 km north of the arctic circle 130. It is also known as “the vault of the end of the world” or “the ark of Noe of the seeds “

Resultado de imagen de monte donde se encuentra el almacen de semillas en noruega

From the entrance vestibule a corrugated steel pipe of about 100 meters goes into the interior of the mount and connects at the end with three vaults that contain seeds of about 865,000 varieties of different seeds. The main objective is to store all the possible seeds of the world in case of any disaster, scarcity or apocalypse, local or international. Those who have deposited their seeds there will be able to collect their samples once everything is finished.

It has a capacity for 5 million seeds and its vaults are kept at a temperature of -18 degrees. It is freely accessible to governments of all the countries of the world and any country is excluded.

Resultado de imagen de monte donde se encuentra el almacen de semillas en noruega

 Source:

https://es.wikipedia.org/wiki/B%C3%B3veda_Global_de_Semillas_de_Svalbard

AMAZON PRIME AIR

While doing this blog I discovered I have a special connection with Amazon because all the topics we were reviewing in class I related them with Amazon’s innovations and supply chain. This time Amazon is offering an innovating way of shipping and it is through Amazon Primer Air, which is a delivery system design by the company in order to grab packages to customers in less than 30 minutes using drones. Prime air aims to provide a faster and safer service delivery to customers that will improve the transportation efficiency of the company, as well as a it will increase productivity through the whole supply chain.

 

As you can see in the video the Prime air drops the package in the customer’s house and it continues its way for the other deliveries. Thus, the system delivery proves is efficiency by no wasting time between deliveries, as the first customer is serve, it will immediately depart to its next stop. So, it does not only benefit the customer by delivering products in a record time but also to the company who will increase its orders capacity.

amazon prime air

Amazon is in a constantly innovation processes herewith that the drone project has been a challenge for the company because until December 2016 it was test for the firt time. This trial took place in a rural town in Cambridge but in order to work properly Amazon should have to wait for the Federal Aviation Administration policies for flying over populated areas and beyond the line of sight of the operation, which could take years. So, unfortunately we would not see this awesome invention in small amount of time but it will revolutionize the way of shipping.

 

 

Sources:

https://www.amazon.com/Amazon-Prime-Air/b?node=8037720011

https://www.theverge.com/2017/3/24/15047424/amazon-prime-air-drone-delivery-public-us-test-mars

How will automation affect the future of work?

Last week we were talking about the design of the warehouse and the importance it had in terms of efficiency.

Nowadays, the role of warehouses has evolved from being mere facilities dedicated to the storage of goods to becoming centers that provide service and support to the organization. Therefore, designing a warehouse or a distribution center effectively has a fundamental impact on the overall success of the logistics chain.

Going deeper into the term of efficiency we reach the point of automation. Those companies that can afford to automate their logistics centers agree on the many advantages they offer (despite the high initial investment, which can be amortized over the years).

In the following video we can see the operations of an automatic warehouse located in Murcia (and some of these advantages):

https://www.youtube.com/watch?v=Te3TJfG9B5M

“This type of installation simplifies the warehouse management process, improving the management of stock and reducing the errors in the preparation of the order”, which results in an increase in the overall efficiency of the system. In addition, it reduces the use of the space and the staff requirements.

Accordingly, the debate arises as how automation (and especially the advantages associated with it) can affect society, in terms of employment. Much is being said recently about the fourth industrial revolution, universal basic income, and other concepts associated with the development of technology and its impact on the labor market.

I would emphasize this last paragraph of an article by The Economist that I found highly interesting:

“So who is right: the pessimists (many of them techie types), who say this time is different and machines really will take all the jobs, or the optimists (mostly economists and historians), who insist that in the end technology always creates more jobs than it destroys? The truth probably lies somewhere in between. AI will not cause mass unemployment, but it will speed up the existing trend of computer-related automation, disrupting labour markets just as technological change has done before, and requiring workers to learn new skills more quickly than in the past. Mr Bessen predicts a “difficult transition” rather than a “sharp break with history”. But despite the wide range of views expressed, pretty much everyone agrees on the prescription: that companies and governments will need to make it easier for workers to acquire new skills and switch jobs as needed. That would provide the best defence in the event that the pessimists are right and the impact of artificial intelligence proves to be more rapid and more dramatic than the optimists expect.”

Sources:

https://www.ingenieriaindustrialonline.com/herramientas-para-el-ingeniero-industrial/gesti%C3%B3n-de-almacenes/dise%C3%B1o-y-layout-de-almacenes-y-centros-de-distribuci%C3%B3n/

http://cronicaglobal.elespanol.com/ecoonomia/social-ecoonomia/la-renta-basica-universal-los-robots-y-el-boton-de-la-muerte_66977_102.html

http://www.economist.com/news/special-report/21700758-will-smarter-machines-cause-mass-unemployment-automation-and-anxiety

After autonomous driving comes …

With my passion for maritim topics, I found again something I was thinking about earlier. Many years ago, when I watched a ghostship movie, I was thinking if there will be any future possibilies for self-driving ships. Well, technology will make it possible…

The luxury brand Rolls Royce is currently developing the self driving ships. The first real robot ships should be able to cross our oceans by 2020. The company, which is actually developing cars and engines, has launched an initiative called ‘Advanced Autonomous Waterborne Applications (Aawa).’ It is currently testing a number of sensors in Finland on a 65 m long ferry. According to Levander (Vice-Presedent of RR Ocean Innovation), the autonomous ship control system is already ready for use. The draft on the picutre below shows their idea of modern shipping.

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Futuristic is also the control of the ship, when it starts a port. It is still a captain made of flesh and blood to take over. However, he will not be on board, but in a control center on land. There he places himself a virtual reality glasses on the nose and so immerses himself in a virtual command center.

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This picure shows the view through Virtual-Reality-glasses. The captain in a controll center somewehre in the headquater can see the environment around, the speed, possible obstackles, wind movement and much more. For transporting goods it also means less human ressource costs. The following video explains briefly the controll center process.

Our future brings incredible chances, improvement and new possiblites. But I am also asking myself, with the growing poplulation of human beings, won’t it be bad for us if machines start doing more and more jobs with a better and safer performance, compared to us … Where will this bring our society?

Sources:

http://www.ingenieur.de/Branchen/Schiffbau-Meerestechnik/Rolls-Royce-entwickelt-autonomes-Containerschiff accessed by the 18th of May 2017

http://www.spiegel.de/spiegel/autonom-fahrende-frachter-geisterschiffe-erobern-die-meere-a-1130154.html accessed by the 18th of May 2017

 

 

Supply Chain Risk Management

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While globalization, extended supply chains, and supplier consolidation offer many benefits in efficiency and effectiveness, they can also make supply chains more brittle and can increase risks of supply-chain disruption. Historic and recent events have proven the need to identify and mitigate such risks. That the reason that Supply Chain Risk Management (SCRM) is essential to a successful business. It is also a competence and capability many enterprises have yet to develop.

Resultado de imagen para  Potential Risks to an Organization and Its Supply Chain

The Supply Chain Risk Leadership Council (SCRLC) defines Supply Chain Risk as the likelihood and consequence of events at any point in the end-to-end supply chain, from sources of raw materials to end use of customers, and SCRM as the coordination of activities to direct and control an enterprise’s end-to-end supply chain with regard to supply-chain risks.

SCRM focuses on:

  • Identifying internal and external environments
  • Risk identification and assessment
  • Risk treatment
  • Continual monitoring and review of risks and their treatment.

The efforts to implement SCRM must address four principles:

  1. Leadership
  2. Governance
  3. Change Management
  4. The Development Of A Business Case.

Resultado de imagen para  Potential Risks to an Organization and Its Supply Chain

In the following table is demonstrated the potential risks to an organization and its Supply Chain by categories.

 

Category

Potential Risk

Samples

External, End to End Supply Chain Risks

Natural disasters

  • Epidemics
  • Earthquakes
  • Tsunamis
  • Volcanoes
  • Weather disasters (hurricanes, tornados, storms, blizzards, floods, droughts)

Accidents

  • Fires
  • Explosions
  • Structural failures
  • Hazardous spills

Sabotage, terrorism, crime, war

  • Computer attacks
  • Product tampering
  • Intellectual theft
  • Physical theft
  • Bombings
  • Biological and chemical weapons
  • Blockades

Government Compliance and Political Uncertainty

  • Taxes, customs, and other regulations
  • Compliance issues: Regulatory and restrictions
  • Currency fluctuations
  • Political unrest
  • Boycotts

Labor Unavailability and Shortage of Skills

  • Availability
  • Quality
  • Cost
  • Unrest
  • Strikes and slowdowns

Market challenges

  • Capacity constraints
  • Unstable prices
  • Lack of competition
  • Entry barriers
  • Capital requirements
  • Specific assets
  • Design patents
  • Process patents
  • Shrinking industry
  • Low supplier profitability
  • Certification
  • Cost trends
  • Recessions/Inflation

Lawsuits

  • Environmental
  • Health and safety
  • Intellectual property

Technological trends

  • Emerging technologies (pace/direction)
  • Obsolescence
  • Other technological uncertainty

Supplier risks

 

Physical and regulatory risks

  • Key Suppliers Located in High Risk Areas
  • Material Unavailability/Poor Planning
  • Legal Noncompliance / Ethical practices
  • Regulatory Noncompliance

Production problems

  • Capacity
  • Inflexible Production Capabilities (Long setup times)
  • Technological Inadequacies or Failures
  • Poor Quality
  • Lead Times

Financial losses and premiums

 

  • Degree of Competition/Profitability
  • Financial Viability

Management risks

 

  • Planning
  • Management Quality
  • Substituting inferior or illegal materials/parts
  • Lack of Continuous Improvement
  • Dependence on One or a Few Customer(s)
  • Poor Communication

Upstream supply risks

 

  • Any of the above external/supplier risks
  • Lack of visibility into subcontractors
  • No or poor relationships with subcontractors
  • Diminishing sources of supply
  • Transition “costs” for new suppliers

Distribution Risks

 

Infrastructure unavailability

 

  • Roads
  • Rails
  • Ports
  • Air capacity/availability

Assets-Lack of capacity or accidents

 

  • Containers
  • Trucks
  • Rail cars
  • Ships Airplanes

Labor unavailability

 

  • Truck drivers
  • Rail operators
  • Longshoremen Pilots

Cargo damage or theft

 

  • Physical damage
  • Theft and other security problems
  • Tracking the damage
  • Environmental controls (e.g., temperature, humidity)

Warehouse inadequacies

 

  • Lack of capacity
  • Inaccessibility
  • Damage
  • Environmental controls (e.g., temperature, humidity)
  • Lack of security

IT system inadequacies or failure

 

Long, multi-party supply pipelines

  • Increased chance of all problems above
  • Longer lead time

Internal Enterprise Risks

 

Operational

 

  • Loss of Inventory (damage, obsolescence)
  • Equipment loss, mechanical failures
  • Process Issues: reliability, robustness, Lead time variability, Inflexible Production Capabilities (long set up times, etc)
  • Capacity
  • Poor Quality
  • Environmental performance to permits / other

Government Compliance and Political Uncertainty

  • Taxes, customs, and other regulations
  • Currency fluctuations
  • Political unrest
  •  Boycotts

Demand Variability/Volatility

  • Drawdown of the stockpile
  • Exceeding maintenance replacement rate
  • Shelf life expiration
  • Surges exceed production, repair, or distribution
  • Shortfalls

Personnel Availability/Skills Shortfalls

  • Sufficient number
  • Sufficient knowledge, skills, experience
  • Union contract expiry
  • High turnover rate

Design uncertainty

 

  • Changes to requirements
  • Lack of technical detail
  • Lack of verification of product
  • Changes to product configuration
  • Poor specifications
  • Reliability estimates of components
  • Access to technical data
  • Failure to meet design milestones
  • Design for supply chain (e.g., obsolescence, standardization, and commonality)

Planning failures

 

  • Forecast reliability/schedule availability
  • Planning data accuracy
  • Global visibility of plans & inventory positions
  • Competition/bid process
  • Acquisition strategy
  • Manufacturability of a design
  • Program maturity
  • Subcontracting agreements

Financial Uncertainty/Losses

  • Funding availability
  • Workscope/plan creep
  • Knowledge of supplier costs
  • Strategic risk

Facility Unavailability/Unreliability/ Capacity

  • Facility breakdown
  • Mechanical failures
  • Sites located in high risk areas
  • Adequate capacity

Testing Unavailability / Inferiority / Capacity

  • Unreliable test equipment
  • Operational test qualifications
  • Operational test schedule
  • Integration testing
  • Transition from first test to mass production

Enterprise Underperformance/Lack of Value

  • Customer satisfaction/loyalty
  • Liability
  • Cost/profit
  • Customer demand
  • Uniqueness
  • Substitutability
  • Systems integration
  • Other application/product value

Supplier relationship management

  • Contract/supplier management availability and expertise
  • In-house SRM expertise
  • Lack of internal and external communication/coordination
  • Supplier development and continuous improvement Supplier communications

To summarize the SCRM is an integrated sub-process of a company-wide risk management process. The coordinated goal definition, risk identification, risk analysis, risk management, and monitoring and control of the efficiency of systems and measures make up the key elements.

Resultado de imagen para  Potential Risks to an Organization and Its Supply Chain

The proactive phase involves developing a corporate strategy that is in line with the objective to achieve a defined delivery capability in case of a harmful event, while striking an efficient balance between required capacities for recognizing and managing supply interruptions, and susceptibility to disruptions in the supply chain. 

References: 

The German way of handling plastic trash

The weather in Spain demands a lot of water consumption… and ends in a lot of empty plastic bottles. Here, you just throw them (preferably) in the plastic trash bin. In Germany it was the same until 2003. Back then, the government introduced a deposit system for plastic bottles and cans. So, every time you buy a drink, you have to pay up to 25 cents more for it. If you return the bottle, you get these 25 cents back.

You can imagine that no one was really excited about it because you need to bring the bottles back, but with the time I started to really appreciate this system. You can give the bottles back everywhere and the trash production has immensely declined. But you quite often forget to take all your bottles if you are going to the supermarket. Pictures like that are no rarity (especially students have this problem)

Bildschirmfoto 2017-05-18 um 11.15.27

And if you are too lazy to bring them back or want to drink before a party and don’t want to carry your empty bottles all around, you can still just throw them away, because the few cents usually don’t hurt your purse. There are even people walking around in Germany that collect deposit bottles to make their money with that..

But a little more information: There are two different sorts of deposit bottles: Multi-usage (8 to 15 ct deposit) and one-way (25 ct deposit). The multi-usage, as the name already says, are cleaned and filled up again. The one way bottles are shredded and get recycled to new bottles.

Now imagine how much waste could be saved if every country would introduce a system like that? (also think about the logistical side, the trash does not have to be removed or taken away as the people do this job)

 

Source:

http://www.spiegel.de/wirtschaft/service/mehrwegflaschen-einwegflaschen-im-pfandflaschen-wirrwarr-a-1031491.html

The 4 major drawbacks of warehouse design

I believe that warehouses are a critical necessity in the global chain to satisfy customers and therefore a poorly designed warehouse design can be an essential element in having a logistics problem in a Company.

Despite this element, I consider that the supply chain faces two other important barriers, such as the determination of picking techniques and the choice of technology. That is why given my experience, I will mention other extra points to the class, which would be important to keep in mind when designing a store.

picking

Photographic credits: macrovector

I.   Fixed costs. Always contemplate the investment (from the racks to conveyors, from forklifts to picking systems).  

II.     The difficulty of coordination with other functions, such as distribution and transportation. In this point there must be the flexibility and agility to adaccionar to the high peaks both the input and the delivery (output) of the warehouse. 

III.     What was considered optimum can stop being fast, so always take in to account the existence of a percentage of uncertainty in all the steps of the design. Example; (The internal flows of your warehouse may vary as well as the type of unit load. 

 IV.   Take into account that at some time the scope of the warehouse design is exceeded, so you can keep articles, boxes and pallets in the most unexpected places, but do not design to take everything that you do not have.

´´Remember that by introducing changes in warehouse design to achieve greater efficiency and more dynamism, increase supply chain sustainability´´.

PHARMACEUTICAL PACKAGING

The packages job is to protect the product it holds before it is use or it gets to the final consumer but this can vary depending on type of product is holding. Is not the same, packaging fruits than rice, the same thing occurs with packaging medicines or pharmaceutical products; they need specific material and cares to preserve what it has inside. That is why the packaging is very important in this kind of sector because it provides safety and helps to prevent contamination and microbial growth throughout the shelf life of the products. Pharmaceutical packaging equipment may ensure the high quality the products and safety of the packaging.

Nowadays, there have been many advancements in the packaging techniques, modern pharmaceutical packaging equipment are becoming more flexible and are more automated and integrated than the traditional packaging systems.

Pharmaceutical-Packaging-

The pharmaceutical industry is growing rapidly as so there are the developments in advanced pharmaceutical packaging equipment that have a much better reliability. The industry may suit to the patient rising needs and may obey to very strict quality norms. Depending on the measurements of medicine it requires different types of packaging that can be bottles, cartooning, ointment blister and tablets.

There are three major types of pharmaceutical packaging, which are: solid packaging, semi-solids packaging and liquid packaging. Those can have mandatories changes on the way of packaging. The solid packaging is use for tablets, capsules and powder packaging; The semi-solid that is more related to cream and ointment packaging. And the liquid packaging are for drops (eye or ear), aerosol (for nose congestion) and syrup packaging.

Finally, it is important to highlight that the pharmaceutical pachaking is a very profitable industry and it is estimated that for 2022 it will reach USD. 8.24 billion; This shows the importance the industry have towards the economy and the importance of packaging overall.

Sources:

http://www.openpr.com/news/539293/U-S-Pharmaceutical-Packaging-Market-Headed-for-Growth-and-Expansion-by-2020-PMR-Report.html

http://www.businesswire.com/news/home/20170510006398/en/Pharmaceutical-Packaging-Market-North-America-Grow-CAGR

Learning more about Supply Chain from LEGO, the world famous toy manufacturer.

Resultado de imagen para LEGOLEGO is a leading company in the toy-making industry and the sixth-largest enterprise in the field. The word “lego” is an abbreviation of two Danish words, “leg godt,” which means “play well.” In Latin, the word means “I put together.” The Danish company was founded in 1932 by Ole Kirk Kristiansen, whose small carpentry workshop failed at providing wood supplies. She switched from the workshop business to wooden toys. Then, he bought an injection-molding machine and started to create toys using plastic materials. Nevertheless, Brick-toy manufacturing was launched in 1958, giving the company more ways to compete and opening the door to unlimited building capabilities.

Resultado de imagen para LEGO manufacturer

The company has more than 5,000 employees around the world, and its main facilities are located in LEGOLAND in Denmark. The company has 12,500 warehouses and more than 11,000 suppliers. In addition to the production location in LEGOLAND, production sites are located in Switzerland, Czech Republic, the US and South Korea. Since the start of the company, LEGO has maintained a clear vision of “inventing the future of play.”

Imagen relacionada

Universities, companies and supply chain institutions incorporate the use of Lego into curriculum or program, especially for Supply Chain simulations, to provide hands-on learning opportunities. These simulations allow professionals and students to go through a process, apply fundamental principles to a situation, for example Lean Manufacturing, and then see the outcome and benefits of operational excellence.

One of the simulation game is the Lego Truck Game that demonstrates the relationship between material and production control through a number of departments in a total supply chain. During the workshop, the key of Lean is taught the concepts and then illustrated them with the simulation or game. Moreover, the simulation game help to create teamwork and delegation skills.

Resultado de imagen para LEGO simulation game

Lego changed marketing  a toy to an educational tool. This strategy has been effective as it shows in the following videos. 

References:

Netflix Stock and Delivery

Since we were learning about how to design a warehouse and what are the pros and cons of having more automated process I have looked for a very optimized warehouse and delivery system without automation. I found Netflix! This is the proof that not always to automate is better than manual process in order to deliver really fast.

In 2009, Netflix delivered movies to its customer’s mailbox within 1 business day. One of the main reasons of this deliver capacity was the employees ability for stoking movies. They could stock between 600 to 950 movies/hour, depending on how skilled the employee was. (see minute 0:24 of the video). They had a very standardised process regarding the storing part. In this aspect, employees needed to rest and perform several exercises intended for relax the muscles (see minute 1:11 of the video).

Blog netflix2

The other reason of Netflix success in the delivery aspect was that its stock was always in rotation, Netflix warehouse was almost empty. The rest of the DVD’s were in processing, in customer’s homes or in transit (see minute 2:07).

Video: https://www.youtube.com/watch?v=CWA0LKfEv3c&feature=related

 

Picking area: How to design

In the last class of Logistics, we were talking about picking area design. So, we can say that design is the best ally of efficiency when we talk about picking. We must take into account the next recommendations when we will design a picking area.

-Best routes: think about the movements that will be carried out by each operator and try to eliminate the passages without added value.

-Minimum distances: Excessive travels add minutes and increase risk. In addition to losing efficiency, the chances of a worker suffering a fall, blow or shock are increasing.

-Logic: Put the products that are most frequently chosen during the picking in the most visible and easy to reach places.

-Ergonomics: the responsibilities of a manager is to ensure the health of your workers. The most common selection shelves should be placed at a height between the waist and shoulder. In this way you avoid that the people in charge of carrying out the picking have to crouch or have to make manipulations of products over the shoulder.

In addition to design, it is necessary to take into account the training needs of the staff. Having well-prepared picking operators can mean that they earn minutes on a daily basis, while the confusion and insecurity caused by the lack of information is the formula for the start of delays and bottlenecks.

Resultado de imagen de picking

FLYPASS

bandera

 

One of the best things to do on weekends in Medellin is to go up the mountain into a town called Rionegro, in which many people have cottages and farms where they spend not only weekends but holydays as well. It is located at 45 minutes from the city and represents one the most frequented places not only by people that go for leisure but for people who live there and just go back and forth to the city every day.

The road to Rionegro is as all of them very narrow and have just one lane on each direction, many years ago they built another one because the airport moved its hub from the city to Rionegro, placing all international and national flights up there. So people have to follow this roads every day to go to the airport and to go to their houses or cottages.

It was until last year that the FlyPass came to Medellin as a solution for the traffic jam that emerge at the tolls in each of the roads that led to Rionegro, as there where only one lane for each direction, the toll split in two lanes for each direction but then narrowed again, making a bottle neck and creating really bad traffic jams especially in rush hours on Sundays and holydays when people were returning from Rionegro.

The FlyPass uses an electronic devise that gathers all the information bout the vehicle, its owner, license and serves as a payment method which has a monthly fee that can be reload, simplifying tasks such as toll payment and making them into more agile and cost effective solutions to the people. The devise attached to the windshield and turns into your electronic license that associates to a user account you create when subscribing, from which they debit the amount every time you pass through the FlyPass lane, meaning that not everyone can use that lane, only cars with FlyPass, which shortens the queue and the waiting time by eliminating the human interaction in the toll payment which is what makes it slow and inefficient.

This is the website http://www.flypass.com.co/flypass/#como-funciona and a short vide of how does it works.

Sustainable Transportation: Innovations

Supply chain managers not only want to reduce costs, they also want to be able to overcome their efficiency levels and to do it on a Green strategy.

Some of the innovations that can make a supply chain more Green are:

-Digitalization of communications:

Instead of using paper and printer cartridges today, transportation companies are more effective in exchanging information using smart devices and sensors.

-Communication between vehicles of the fleet:

Peloton Technologies is a pioneer addressing two of the industry’s biggest problems: fuel and safety. Through the use of radar sensors and some technological solution proposed by this company allows two trucks to progress almost in an integrated way. Driving less than 6 meters from each other, the aerodynamic fuel economy is used by 4.5% and 10% in the 2nd vehicle:

-Load efficiency:

Staxxon already offers a replacement of a normal rigid container, made of a foldable design. With this method, five empty and folded containers can fit in the same space as a normal non-folding container. This innovation would make it possible to reduce the number of ships needed to transport containers, as well as the number of trucks responsible for their transfer from ports:

In my opinion, these innovations are the result of research into the needs and initiative to make things work better, to make the supply chain greener and respectful of the environment.

INDUSTRY 4.0, WAREHOUSE and AUGMENTED REALITY

program-ba-5ccdea735569469.jpg

Warehousing, in this blog, is living a great moment since it is interesting and can lead to a multiple of different solutions. But I will try to make it a little bit more fun, but first an introduction.

Warehouse-based stockpiling of inventory has been transforming into high-velocity distribution center, which are considered to strategic in providing competitive advantage. Industry 4.0 can lead to a new evolution of these center’s because can make human and machine work better together.

Connected technologies didn’t only affected the private sphere of the home but also the manufacturing and distribution value chain. Industry 4.0 is the union of digital and physical systems experiences that impact every aspect of the production. It can be used in: designing and producing goods, as well as these finished goods are moved, warehoused and in the end distributed.

The “old way” of warehousing, the warehouse-based stockpiling, is slowly being left behind and every medium-big, big industry is implementing their work with high-velocity operations, thanks to this new way of warehousing. They are now called DCs: Distribution Centers, they are an important part of the supply chain and they might be key for the competitive advantage.

What kind of technology Industry 4.0 deal with?

Low-cost sensors, computer vision, Augmented Reality, wearables, Internet of Things, robotic prehensility, human-robot safety, analytics, high performance computing and so on, all of them are being used to enhance existing automation.

And here comes the fun part.

I’ve found a couple of beautiful examples of augmented reality which can help to have an idea of a small part of what Industry 4.0 deal with.

Here it is a video of a brilliant commercial, back in 2011, in London.

 

Here is National Geographic at the Rotterdam Train station in 2013.

 

and here there is another example of a partnership between Coca-Cola and WWF, aimed to raise awareness to help conserve the Artic Home of the polar bear.

 

These just a couple, the most interesting from my point of view, but on YouTube there are many more. What is amazing, is how far has the human gone so far and how many other great improvement can achieve.

Stay tuned! 🙂

 

Allocation of bin location

Last session we talked a lot about building a warehouse. We saw how the type of pallet or the type of machines used can influence the size of our warehouse.

What we did not consider is how influencing the allocation of the bin location can be. Should every product be stored on a fixed dedicated place or should we use a kind of chaotic system in which every product can be stored everywhere. Compare with figure:

    2                     1

                               Fixed Allocation                                   Dynamic Allocation

 

The advantage of the fixed Allocation is the easy way of handling. Every worker knows where to bring and pick a certain kind of product. No complicated information systems were needed. The downside is that the a lot of places in the warehouse might be empty while other section of the warehouse are overfilled.

Exactly this downside can be eliminated by a dynamic allocation. The product will be stored where a free place in the warehouse exists. Consequently demand variations between products can be settled and the usage rate of the whole warehouse is higher. And a higher usage rate of the warehouse lowers the overall demand of size of the whole warehouse. A disadvantage is that such a system needs IT-Support. Such an investment can be very high and challenging for small businesses. Moreover a chaotic allocation is only possible if the stored products are very similar in their characteristics.

 

Source:

TUM, Prof. Dr. Ing.  Gunther Reinhardt (2016), Script:Planning of a Factory

 

DHL Supply Chain

The growth in global manufacturing trading creates a complicated supply chain which is involving multiple parties with the same goal: to provide and excellent service to the customer.

Capturec

It is a challenge to align efficiently all the parties, taking into account the differences that may exist among them as duplicated data or unstructured and untraceable communications, which creates uncertainty about where your products are every time. Thus, the system  become reactive rather than proactive.

Captusdre

SOLUTION

One Collaborative Communications Platform 

Capture1

The platform provides end-to-end visibility with 100% live updated information, which will create confidence for the customer because he will now at every time in live where is exactly the product. Moreover will provide the necessary information in order to avoid and prevent any issue.

How it works?

Captgfgure

Throughout the order, the engineer, the courier, warehouse operative and all managerial users can connect directly by using live chat  by using the smart technology noticing every errors, delays or any issue that can arise.

In conclusion, the system creates an environment where, increase visibility and control, improved planning and probability and bring all contributors of the supply chain into a single collaborative platform  in order to increase efficiency by connecting all the parts.

Factors to Consider In Warehouse Layout Design

The last class we talked about the importance of layout in a warehouse about its main areas such as Docks, Picking store and reserve storage. Also as it arises the need to calculate the capacity of pallets that can be inside a warehouse considering the size of the same, for that reason we will see below the important factors to make a perfect design, which are:

Flow

This process is very essential because it allows the free space between the movements of the product which should be placed conveniently to avoid wasting time to have ease.

Accessibility

It is important to allow easy and quick access to each of the pallets within the warehouse. The space in the warehouse must be properly organized to obtain the articles with the greatest ease and identification possible for the acquisition of the merchandise.

Space

The space allocated for the activities inside the warehouse has to be calculated and compared to the remaining space for the good placement of the equipment and raw material. etc

Throughput

The type of product and the speed at which it flows in the system are evaluated. Checking factors that will have an impact on the speed of the system, which are the volume, fragility and flexibility.

Local plans

It is important that you comply with state regulations. Guaranteed safety in the work environment.

Site details

According to the characteristics of the place will define the final design of warehouse. Including other factors such as topography, drainage and soil condition as it should be designed with a raised floor to protect the materials.

Financial consideration

The main step is to consider the amount of money before you start with the warehouse design. Once the budget is made you can do the planning of the construction. Some of the designs are more expensive than others so you have to consider several factors.

 

 

 

7 principles of Warehouse and Distribution Centre Design

Few people really understand the discipline of warehouse design and as a result, there are literally thousands of facilities that are underperforming.

According to http://www.logisticsbureau.com, these are the 7 principles for designing a warehouse or a distribution centre:

1Determine the objective of the facility

The first step is to define the objectives and goals of the facility. What is it there for, what market does it service, is it part of a network, what types of good will be stored, what is the anticipated life of the facility.

2- Define volumes and functional requirements

The facts needed are:

a) Quantities of products to be stored.

b) The throughput velocities, including incoming goods, customers orders, interfacility transfers, dispatches and returns.

c) The nature of orders and specific picking requirements, for example, is picking performed in pallets, containers, cartons, or single units.

This is one of the hardest and most time consuming part of a design project. This is because most of the time enterprises do not have this data available. In cases where there is not much data or this is non existent, the designer must draw from his/her own expereince to fix assumptions around volumetric estimates. This is best performed with collaboration and agreement from the stakeholders involved.

d) What functions need to be provided for?

It’s imperative that the designer understands all of the functions that are to be included on the site footprint, for example,  warehouse, offices, gantry cranes, loading docks, forklift charging areas, dangerous or hazardous goods, cool or cold rooms, clean rooms, manufacturing or packaging operations, staff facilities, etc. Equally important is that relative dependencies between functions are determined so that the designer can correctly frame functional proximities for best flow and operation by staff.

3- Match storage modes, it systems and mechanised technologies with volumes

Once the data has been analysed, the designer is ready for equipment selection. Be it static racking equipment, mezzanines and the like, or mechanical equipment such as conveyors, carousels, stacker cranes etc., all equipment and systems must be applied according to their purpose, limitations and fit with the volumes handled.

For instance, it is a waste if an automatic storage and retrieval system is installed, when a conventional racking system will be enough. On the other hand, if the facts point to justification of a high-velocity automated system, it is foolish to ignore them for the sake of a more conventional system. A critical aspect of equipment selection is that the designer has expert knowledge of available equipment and technologies, and how to apply them.

This is a complex area that deserves careful consideration and the novice designer is well advised to seek advice from materials handling equipment and software suppliers, builders, and industry specialists to ensure that their design is well founded, robust and practical.

4- Flow

a) One-way flow.
The best warehouse operations are those that apply this principle. Whether straight, clockwise, counter clockwise, up or down, make sure it flows in a one-way direction. But here’s a tip. Be cautious when dealing with international customers, where cultural and religious beliefs point to specific requirements.

b) Flow vs. Capacity
The second rule of flow is that free movement has priority over storage capacity. If you are pressed with a choice, the experts agree that it’s better to hold flow sacrosanct, compared with building more stock or storage equipment. Why? Long after the warehouse construction has been completed, a team has to operate efficiently and safely in the warehouse year after year. If the design compromises on the size and quantity of aisles, for sake of more stock holding, beware: this can cause suboptimal performance over the life of the facility.

5- Close to zero materials handling movement

Keep the product handling by people to a mínimum. Ideally from 3-5 touches of the product, while goods are the in the warehouse.

6- Evaluate your options

The developed concept design options must be evaluated to ensure that the objectives are achieved. The two common approaches to assessment are:

a) Quantitative analysis: return investment, payback, cost per order to supply, cost per order cubic metre to name just a few.

b) Qualitative analysis: reviewing the advantages and disadvantages of options considered. Ideally the evaluation is best performed both individually and in a team workshop environment. It’s amazing what can be revealed when a team collectively focuses its attention at a project. Despite the meticulous job the designer may have performed, a workshop can often reveal a late insight, idea, or missed detail that can significantly impact upon the end design.

7- Consult widely as the design process is multifaceted, and normalyy involves executives, managers, and operators as well as equipment suppliers, builders, architects and councils

As part of the development process all should be regularly consulted as to planning and legal requirements, operational needs, preferences, ideas and opinions.

The best implementations typically features a cohesive and dedicated team charged with managing the project from early design phases through to completion.

 

 

ROBOTS IN AMAZON WAREHOUSE

While we were trying to organize Papeleria Dot.com warehouse, big companies do not have to worry about this issue because they have robots that do that job. For instance, Amazon has increase its warehouse staff with robots. Nowadays, Amazon counts with 45,000 robots inside 20 of their fulfillment centres.

The company bought those robots from Kiva Systems company in 2012 for automating the picking and packing process in the centres making Amazon even more efficient. The robots move through he warehouses for doing the picking, which normally is done by a person. The robots have an speed of 5 mph and can gold packages that weight up to 317 kilograms. Even though, the acquisition of robots it’s a very high investment, for huge companies such as Amazon worth it because it make them even more productive.

robot amazon.jpg

Amazon goal is to have a robot that is capable of picking or selecting individual objects no matter their order or placement without the need for assistance. Some of them are focus on picking items off the shelves, others zoom around with touch screens that are programed for being available all the time. Its main objective is to save retailers money and to make deliveries as fast as possible.

Their robot software and hardware can recognize objects, grab them, execute tasks, detect errors and recover as needed. The robots can picked and stowed in a minimum amount of time.

As it is shown in the video, the way the fulfillment center works is one of the key of success Amazon have for offering fast deliveries, without having problems of founding products or not knowing what they have in stock.

In conclusion, not all companies can afford this kind of technology for managing their warehouse but it is definitely a very good idea in terms of time and productivity for the companies than can have it.

Sources:
http://www.cnbc.com/2017/05/10/amazon-robots-warehouse.html
http://www.businessinsider.de/amazons-robot-army-has-grown-by-50-2017-1

 

Malvarrosa’s auto wrecker

Malvarrosa’s auto wrecker had been established in 1981.

A typical auto wrecker receives the car. After that, they unregister the car on the national register. And workers extract all the dangerous things like fuel, oils, batteries… Finally, the car is deposited in a big place outdoors, like the folowing picture.

Razones para visitar el desguace

Stock a car this way has three big disadvantages:

  • You need a big place to store them.
  • Some parts of the car are damaged for being outside.
  • If you need a part for your car you have to find the car, and dissemble it.

For these reasons, Malvarrosa’s auto wrecker decided some years ago to invest in a new place where using technology they can store a lot of parts in the same place.

Its warehouse it is organised by 12,5-meter-high shelves that contain 12800 boxes and 3200 pallets. They have different types of boxes in order to fit the box to the part and save place. In addition, they have a robotic system with 4 robots that deposit and bring whatever you want using barcodes and RFID technology .

I could write a lot about it, but I think it’s better to understand it seeing this video, it’ in Spanish but you could use youtube subtitles in order to understand it better:

 

HUMANITARIAN LOGISTICS

The number of humanitarian emergencies have growth largely during the last decade derived from natural disasters or conflicts developed by the human being. It is difficult not to think about the Haiti earthquake in 2010 and the Japan earthquake and tsunami in 2011.

humanitarianlogistics

When a humanitarian crisis occurs, different humanitarian organizations, like ONGs and cooperation public agencies, work to supply affected locations with basic necessity items and helping in the reconstruction of the places. The organizations must manage a huge quantity of human resources, materials and information between the damaged location and the rest of the world. Thus, the logistics is fundamental in these cases.

  • To manage the flow of materials and human resources: A huge number of deliveries of different types is produced (food, medicines, machines, vehicles and unsolicited). Additionally, it is important to consider that sometimes unsolicited supplies generate problems because they waste time and storage space needed for urgent supplies.
  • To manage the flow of information: It is necessary to analyse the problem in situ in order to stablish the potential needs and what the surface damages are. This is done to design a supply chain and implement it to know which resources the location needs and which information supply to the society.
  • To manage the financial flow: It is important to get liquidity rapidly in order to respond immediately to the disaster. Donations made are not received at the moment, sometimes they need months to get to the final destination. There are organizations that provide the emergency funds anticipating to the real emergencies.

Strange transport inventions

Having seen some interesting futuristic transport vehicles in our blog posts, an idea came to my mind: what about the now abandoned inventions, that once embodied hope and dream of mankind, but have long since been consigned to oblivion? Doomed for being too beautiful to exist in a world such as ours?

So here we are, looking at the relics of the past:

Ballephant

elephant-balloon

Traveling with conventional hot air balloons has its risk: the traveler is always at the mercy of the winds and can hardly control where he or she can go to. But a mighty yet friendly elephant may yet save the day. Surely nothing can go wrong?

Cinderella’s lost carriage

horse-monocycle

Straight from the fairy tales! Just imagine the look on the Fairy-Godmother’s face.

Horse-cycle

horsey

Not every one can afford to breed and keep a horse in their house. The maintenance cost is too high, and it takes too much space, which is also a cost. Not to mention safety issue and environmental responsibility.

But persistence is the key to everything. That and a pinch of boldness…

Giant Donuts Tricycle

bigwheel

Fast and furious in its purest form! This beast ought ta draw a manly tear or two from Dominic or Brian.

 Helicouplercouples-helicopter

Bad traffic ruins your romantic rendezvous? No parking lots left? Constant road construction work? Fear no more! With the helicoupler, now you can graciously, fabulously and intimately waltz your way into the moonlight.

Note: Emergency landing equipment (aka Umbrella) is sold separately.

The Aeroscraft

This weekend I was driving to my job and when I saw these huge wind turbines I thought about how to transport them without disturbing the regular drivers.  What almost everybody knows is that for carrying the components of a wind turbine lots of trucks are needed, and that this operation is extremely difficult and fragile.

Resultado de imagen de transportation of wind turbines

So, looking for more efficient ways of transportation, I found the possibility of using the Aeroscraft.  Worldwide Aeros Corp. (Aeros), the aircraft company, is proposing that its logistics product, the Aeroscraft, will provide wind power components manufacturer a more cost efficient solution for delivering current turbine products, as well as larger scale turbine components, from production to delivery site.

Motivated to become an international provider of advanced transportation solutions, Aeros developed the Aeroscraft that has the ability to carry a large payload of 66 tons to provide a hi-tech aviation vertical solution to moving heavy and oversized cargo, from point-of-origin to point-of-need, even to areas with limited or no infrastructure.

The Aeroscraft is a rigid variable buoyancy airship—a first of its kind—designed to control airlift in all stages of air or ground operations, including the ability to offload its payload without re-ballasting. The Aeroscraft is not a blimp, zeppelin or a hybrid vehicle.

Resultado de imagen de aeroscraft

If you want to read more:

http://www.windsystemsmag.com/article/detail/481/large-wind-turbine-blade-transportation-solution-the-aeroscraft

Need a job? How about people plugger?

Today I’m writing again about logistic processes with human beings, but this time it’s about living people.

Why I write about it? Well, I have to go to the university by bus soon and I heard that it will be crowdy, but then I was thinking about my time in China and had to laugh.  All of you know that in Asia, there are a looot of people and imagine what rush hours look like in big cities like Beijing, Tokio or Shanghai. I made once the mistake going somewhere during rush hour. NEVER EVER AGAIN IN MY LIFE! You don’t have any space left. I’m not saying that someone is in your private space of 30 cm. I’m saying that you can barely breath and you get intense body contact with more people than you’d like.

Bildschirmfoto 2017-05-09 um 12.25.05

But however, these people all must go to work and even though the trains come in 2-3 minutes rhythm, there are still too many people. That’s why they hired people in order to push people in the trains. I’m not kidding. Watch the video:

So if you have a little heavy metaller inside of your heart and love pogos, why not going to Asia and apply for a job as professional people plugger? (“Oshiya” is the correct japanse word for it)

But this job is getting more and more replaced by high tech automated systems with security gates in front of the train access.

Bildschirmfoto 2017-05-09 um 12.37.39

These gates close before the train gates close, so no more people can try to get in. Furthermore, they avoid suicides. In Spain, you can find such a system in Sevilla for example as well.

Another interesting fact: these barriers are already recognized in some cities as advertisement and selling space. In South Korea for example, the supermarket chain tesco uses this space as a virtual supermarket, where people use their smartphones to order from the gates what they want to have delivered to their homes.

Bildschirmfoto 2017-05-09 um 12.41.19

This system of course is not applicable during rush hours, but never the less it’s a great way for busy people to not waste time.

 

Sources:

https://cleantechnica.com/2014/11/17/hong-kongs-metro-success/

http://www.designboom.com/technology/tesco-virtual-supermarket-in-a-subway-station/

 

 

Walmart’s Inventory Management

From the previous lesson about managing inventory, I suppose we can also learn a thing or two by looking at Walmart’s inventory management practice. Walmart categorize their inventories into many types. Each type is intended to fulfill a certain role in the firm’s inventory and supply chain. In the following I will describe the most notable ones:

Finished Goods Inventory

Image result for fruits walmart

This type is the most significant in Walmart’s business. Finished goods are delivered to the company’s stores to support its operation. They are usually stay in storage for a very short time before being sold to the customers. This type of inventory is naturally replenished regularly.

Transit Inventory

Image result for Transit Inventory

The transit inventory type is the second most significant in supporting Walmart’s business. The name of this type is meant for the goods that are held in transit. As the supply chain of Walmart is on the global scale, many goods stays in transit from days to months. This type acts as support for replenishment of the Finished Goods mentioned above.

Buffer Inventory

Image result for Buffer Inventory

The Buffer Inventory type is kept in small quantity to prepare for the unpredictable demand fluctuations. Every Walmart stores reserve this type of inventory to ensure the capacity of the firm to satisfy customers in any situations.

Anticipation Inventory

Image result for black friday walmart

The Anticipation Inventory type is more or less similar to the Buffer Inventory type for the reason that its main purpose is also to prepare for an increase in demand. The difference between these two types is that the Anticipation Inventory type is based on seasonal changes, which means the increase in demand can be expected and anticipated. Most famous example for these seasonal changes are Black Friday and Christmas holiday.

The four inventory types above represent the most distinguishable categorizations of inventory. Each type have its own very clear purpose that fulfills the now-essential requirements of modern business that we can certainly learn from.

Image result for Walmart's Inventory Management Practice

Source:
http://panmore.com/walmart-inventory-management

Business Process Excellence BPE

Imagen relacionada

The last few decades, we have seen a lot of companies have implemented a host of different methodologies to improve the quality and efficiency of their outputs: Lean Manufacturing, TQM, Business Process Reengineering, Six Sigma, BPM, Business Performance Improvement, and so on.  What all these methodologies have in common is a focus on PROCESS: An activity through which something, tangible or intangible, is transformed into something else.

At its most fundamental level, BUSINESS PROCESS EXCELLENCE is NOT a methodology, it is about IMPROVING THE WAY THAT BUSINESSES CREATE AND DELIVER VALUE TO THEIR CUSTOMERS.

Resultado de imagen para key components of Business Process Excellence

Meanwhile, Lean and Six Sigma give companies supported tools and techniques to solve problems, and Business Process Management (BPM) looks at how aligning people, process and technology and automating key tasks can take business performance to the next level. However, the key is not just changing processes, is to change the way that people within a company work and behave.

That’s why BPE is about so much more than process improvement techniques. It’s about learning to solve problems and manage change, performance, and workplace culture to align with overall BUSINESS STRATEGIES.

Resultado de imagen para Business Process Excellence

The BUSINESS PROCESS EXCELLENCE has become a key factor for success, next to the sustainability, organizational change management and quality management.

References

Uber plans to offer flying electric cabs by 2026

Continuing with traffic congestion issue, Uber has another futuristic but more realistic solution, electric flying cars.

It is true that so many changes must be done in order to adapt actual conditions to this advancement, but this type of vehicle already exists.

The advances that are taking place yearly are amazing. I can not even imagine how our lives can be in 20 years, but this kind of changes are feasable solutions to daily problems that can improve a lot our daily lives.

Futuristic (or not) solution to traffic congestion

Three years ago, when I lived in Paris, I used to confront traffic congestion. It was horrible!!! Distances that usually took 10′ to pass, became hours at peak times, usually when I came back from work. I have awful memories about how much time I used to spend in my car, listenning podcasts to learn french.

Therefore, after my terrible experience, when I read ideas like this I feel so hopeful about how we could improve traffic circulation in congested cities.

A firm called “Boring Company” is studying a project to solve this situations. The solution is about  building multiple tunnels underground, accessible by a lift system. Each tunnel would have a railway which will transport each vehicle to a suitable point at a maximum speed of 200 km/h.

It is much more comprehensible when explained through images; therefore, the next video shows a simulation about how it could work.

Honestly, I wish we could use this kind of systems to avoid traffic congestions, that could help a lot of people to spend more time with family, friends and to balance work with social life.

Planning and Administration of Procurement in inventory

Generally, Procurement Planning and Administration focuses on a fundamental role in the storage and stock management of raw materials in terms of the entry, storage, purchase and exit of products, since one of the purposes of this Is the optimal distribution of the available space in function of the volumes of the products in the inventories, whether they are periodic or permanent. In addition, the control and determination of safety stock and articles with their respective rotations enters which are responsible for relating the outputs With stocks of products among others

In order to satisfy the great variability of a company in order that the stock of raw materials and elements for assembly and storage must be as low as possible. According to Pacifico and Witwer (1983), “planning leads to the most efficient use of the resources available in the production process, so that the maximum objectives can be achieved” .

Normally, once the objectives of the Inventory Management have been defined and the forecasting techniques of demand and certain costs of stock described, it is granted to the elaboration of a work plan that refers to the forecasting, checking and regulation of the time Invested in the different operations that comprise the manufacture of a product.

Next we will observe the models of inventory management where they are grouped into two important categories according to the demand Dependent or Independent:

Model for non-scheduled supply: In the demand this type is independent, it develops through the repercussions of the clients in the market. The most common model is the Economic Lot.

-Model for scheduled provisioning: In the demand is of dependent type. This model was developed through a production and sales program.

Unscheduled models are classified as continuous and non-continuous. Continuous orders are made when inventories decrease to a specific position while non-continuous ones make an inventory order each planned time.

The last class we were talking about the Stocks management was very interesting, I understand that through the knowledge of the models and the planning of the stocks management we will have the ability to measure and control our services in order to obtain the best results and maintain Continuous improvement in the area.

pro2

Sources:
– Arbones, E. (1989). Business Logistics. Spain. Editorial Boixereu.
– Ferrero, A. (1998). Organization and Business Administration. Mexico. Editorial Mc Graw – Hill.

IKEA’S INVENTORY MANAGEMENT

Since inthe last class we were taught about what is really important regarding inventory management is to manage it I was looking for a management way that I may like, so I found IKEA’s way:

Ikea has 298 stores in 37 countries and each one of these stores has a 9.500 products holding capacity. So how does Ikea manage its inventory? These are the main strategies that IKEA follows:

COST-PER-TOUCH INVENTORY TACTIC

This strategy consists in having customers select the furniture and retrieve the packages themselves. This tactic is used since some companies found out that the more hands touch the product, the more cost are associated with it. The higher is the capacity of a company to shorten the process a product gets into a customer’s hands the less pays for inventory. Every time the product is shipped, moved, and loaded, it costs money. IKEA saves costs with this guiding principle to minimise touches because it doesn’t have to pay the customer to retrieve the furniture and take it home.

MIN/MAX INVENTORY REPLENISHMENT SYSTEM

As an in-store logistics, IKEA uses this inventory management process to respond to store-level inventory reorder points and reorder products. The rules of this system are:

Minimum settings: The minimum amount of products available before reordering.
Maximum settings: The maximum amount of a particular product to order at one time.

The system responds to reorder points within the inventory, setting accurate reordering triggers for the minimum products available before reordering, as well as the maximum amount of a particular product to be ordered. These are based on business intelligence for inventory and the ongoing analysis of stock performance.

Sources:

Murphy or Logistic?

Murphy hold a special place in my heart because he is present in my everyday life since I have memory. In the last lesson we discussed about it, but seems he might not rule our lives. Can we defeat my dearest companion of misadventures? And If yes, how?

Since I believe in reason, I could not help it but started looking for proof.

First, a little introduction: Who is Murphy?

Murphy can be summarized in the proposition that if something can go wrong it will. An addition to this law reads: and usually at the worst time. This law is referred to Major Edward Aloysius Murphy Jr, an USAF engineer who was working on instrumentation for an aerospace medical research program, MX981. It used high speed rocked sleds to examine human tolerance to acceleration and deceleration. The human in this case was John Paul Stapp, and he was the one who committed to make these tests. It was not easy or safe at all, since he ended up having black eyes, because the eye-balls punched their eye-lids and other serious injuries. From this experiment, Murphy developed a more accurate guide and measurement of deceleration.

 

This is the video with the experiment.

 

If Murphy is based on a pessimistic view than maybe a positive attitude can win against him?

There is not the need to believe in a change for this change to occur. In libraries, there are plenty of books such as “Change your thoughts and your life will follow but this kind of book make me rather skeptical, I prefer a more rational view.

Can, then, maybe, a great organization, like in the case of logistic, defeat my dearest friend?

Logistic means also being organized, are these organization principles helpful?

The development of the so-called standard procedures in regular business processes is the first step when designing a new organization. The company need then to allocate functions to the single stations and adaptation of the different processes. There are, still, always those irregular processes, necessary to cope with such as: incorrect data, resources or employees, things that are often ignored or neglected. Then this organization is not enough.

My dear Murphy is still there.  The organization should also follow the Safety Principle which is the one that by flexible precautions for coping with errors, failures and irregularities the organization must be completed and made safe.

But the more a system is complex the more is difficult to organize and make it safe. Even by the most advanced simulations such systems cannot be improved substantially.

The Decoupling Principle which by inserting adequate material buffers or order buffers a logistic system can be separated into decupled system and stations, which are not critically affected by tailbacks, feedback and interruptions.

If this principle is observed than the decupled subsystem and performance stations can schedule independently and execute the orders they receive from outside the company, from adjacent station or from another center. A complex system needs all these principles to work properly: the delegation, the subsidiarity and the decoupling principle. A potential analysis reveals that whether these principles are observed in a company their disregard indicated organizational weak point points which can be eliminated within short time.

 

Seems than my dear Friend can be defeated using these principles, but I am also sure he will always try to find a way into our lives, so do not worry too much, he will be back. 😉

 

 

Sources:
http://aerossurance.com/safety-management/hf-murphys-or-holts-law
Comprehensive Logistic, Timm Gudheus, Herbert Kotzab, Springer Edition.

 

AMAZON WAREHOUSE DEALS

 

As people know Amazon is the world’s largest online retailer, who began as a book seller but has been growing in an speedy way that nowadays offer a variety of products and digital media. This popular firm was founded in 1995 by Jeff Bezos and is still one of the most important companies throughout the world.

While studying warehouses in class, I remembered I visited Amazon warehouse in Tennessee and I have always think about what do they do with the returned products, do they sell them, donate them or throw them away. That is why I take a look for its warehouse and I found there have a service called Amazon Warehouse Deals, which is part of the amazon.com group but is in charge of offering great deals on returned, warehouse-damaged, used or refurbished products that are in good conditions but do not suit to the high and strict standards of the firm.

AWDAmazon Warehouse Deals offer products such as open box items like TVs, laptops, tablets with huge discounts that can be either new or in open box conditions. They also offer other used products such as sport items, home and kitchen accessories, toys and games, among others. The purchases made in this warehouse is guaranteed because they are backed by Amazon’s satisfaction guarantee, a product can be returned according to the returns policy but are not replace.

Captura de pantalla 2017-05-03 a la(s) 13.58.27

For evaluating the product condition AWD, the company does a previous check by testing physical and functional conditions of the products and afterwards they upload it in the webpage.

Due to the variability of the stock AWD cannot predict the future availability of the items, so only what is in the page can be purchase. And that way even though they do not sell them at the same price, they still gain a profit with them and not waste them.

https://www.amazon.com/Warehouse-Deals/b?node=10158976011

This links takes you to the homepage of Amazon Warehouse Deals. If you want to take a look.

Smart Transport Robots supporting BMW

After graduating I was working in 2016 for BMW AG in the strategic sales development in the headquater in Munich. Because of my passion for this brand I tried to get as much insight knowledge as possible. This emloyer gave me the possibility to see different processes. Since I left the company I still keep in touch and read about company news and process change. For this Blog I found a nice article about supporting their logistic processes by a small automatic driving roboter.

Image result for BMW i3 and battery

In the BMW Innovationspark and the Wackersdorf utility center, the car manufacturer BMW is deploying a driverless transport system together with ‘Fraunhofer IML’. In the Oberpfalz location (a part in Bavaria / Germany – my former home), a fleet of ten self-propelled Smart Transport Robots (STR) are transportsing components through the halls and support the logistic processes. The STR uses existing batteries from the electric car BMW i3 on a sustained basis and can transport containers weighing up to 500 kilograms. The BMW i3 was launched in 2013 and is one of the german innovation flagships in electric mobility. BMW i is the new foundend brand for these future mobility.

The video of the german science institute  “Fraunhofer IML” shows the basic grabing work of this roboter. The special feature: the self-propelled transport robot does not need any induction loops installed in the ground for navigation, it travels freely through the logistics halls. With the capacity of 500 kg supports the daily business in the manufacturing halls and is amazingly flexbile because of the radio-navigation.

Sources:

Alibaba also exports to China

Introduction (Avoid if you know what Alibaba is)
Alibaba Group Holding Limited is a Chinese-American e-commerce company that provides consumer-to-consumer, B2C and B2B sales services via web portals.

It also provides electronic payment services, a shopping search engine and data-centric cloud computing services. The group began in 1999 when Jack Ma founded the website Alibaba.com, a B2B portal to connect Chinese manufacturers with overseas buyers.

Now, it is the world’s largest retailer as of April 2016 surpassing Amazon and Walmart, with operations in over 190 countries.

The main activity of Alibaba

Some years before, Alibaba and Aliexpress were exporting products from China to Europe. On their webpages you can buy everything that you want at a really cheap price (also less than a 1€)

 

The new activity

Now, Alibaba in order to get profit from its network and its transport, Alibaba starts to export products from Europe to China.

What are the advantages of China?

  • China is the biggest country of the world (1300 million of habitants almost the double of the whole Europe) 
  • First world economic power (PPP of 23,194.411 billion dollars more than the whole European Union).
  • Chinese people loves european products and especially spanish products like wines and hams.

 

What are the advantages of Alibaba?

  • Avoid language barrier.
  • Reduce initial costs of expansion.
  • A logistic operator that integrates a system of customs management and tracking of order.
  • Own payment method.
  • Marketing services.

 

 

Formula 1 Logistics

All of you who like to watch Formula 1 races, have you ever asked yourself how the race teams make it possible to be ready for a start in a completely different country every second week? This post will give you an overview about the enormous logistical effort.

A Formula 1 team travels around 160.000 kilometer in a season. This is a distance of almost four times around the world.  For those travels, each team has an own department which is responsible for the organization. On the one hand they have to book about 7.000 trips for the staff, including hotels, flights, transportation and visa applications. On the other hand they have to organize the transport of the needed equipment.
For the departments it is a huge difference where the race happens. Whereas a  trip in Europe will be organized by trucks, the logistical effort for races overseas is much more complicated. The average equipment a team brings  from one country to the other weights about 300 tons. This is about 24 full load trucks. For a race outside of Europe it more complicated. The Equipment and personnel has to be reduced to a minimum since everything has to be transported in airplanes. Since a few years the FIA has stated new regulations that each team is not allowed to bring more than 45 employees and 30 tons of equipment to a race overseas (This is only ten percent of the normal equipment). This is due to the fact that many teams exaggerated with their effort trying to bring all the material and staff to races overseas which was too much pain for the FIA.

A lot of effort for a race which takes only 2 hours.

Advantages and disadvantages of excess inventory

Inventory control is a strategy companies use to keep an appropriate level of materials, supplies and finished products on hand. Weighing the pros and cons can help small business owners determine the appropriate levels of inventory to stock.

Inventory Cost

When a company holds a high level of inventory, it ties up business funds that the company could use in other areas such as research and development or marketing. New product development and marketing can bring additional business to the company, but holding high inventory levels does not. The cost of the inventory is not recouped by the organization until the company sells the inventory or uses it to build customer orders.

Warehousing

Warehousing is another cost of holding excess inventory in a business. The cost of warehousing can include the warehouse space, utilities and maintenance of the storage area. Some supplies may require additional maintenance, such as temperature control to preserve the quality of the material. Companies that reduce inventory levels can store materials in a smaller area in the business and use the extra space for new product development.

Quality

Storing excess inventory can lead to quality problems such as degradation and potential obsolescence. Companies may stock high levels of inventory in anticipation of demand or for an existing order, but customers may change specifications or require different materials for future products. In this situation, the company must purchase new materials and supplies to build according to the new customer specifications. Businesses can identify and isolate quality problems easily with a smaller inventory quantity, as well.

Buffer

An excess inventory of finished goods can provide a buffer for increases in customer demand. The business is taking a risk by building and storing finished products in anticipation of customer demand, but it can reduce the lead time and improve customer satisfaction.

Bulk Purchase Savings

Small businesses can obtain a savings when purchasing some supplies in bulk quantities. Suppliers may give discounts to customers who order larger quantities. The business can also save on shipping costs for one large order instead of multiple shipments of smaller quantities.

Source:

http://smallbusiness.chron.com/advantages-disadvantages-excess-inventory-21908.html