Luggage Handling in Airports

This article was very interesting for me, to understand how the luggage handling actually works in the airports. It is a main service for us, students in different cities than our own, that we use airplanes many times in the year to go back to our homes.

Every year, more than 20 million passenger bags are mishandled, frustrating both passengers and airlines. In 2015, the airline industry spent over 2.3 billion dollars on mishandled bags alone. Luggage handling is a very complex process, making it important for airlines and airports to continuously work to improve the system. With over two billion bags carried through airports each year, it is vital to focus research to technological advancements to promote a more efficient and reliable process for travellers and airlines.

A lot of examinations made to gain an understanding of the way luggage travels through airports and research technological advancements to help the industry. To reach its final destination, luggage travels through a series of conveyors within an airport. Baggage handling systems read barcode tags, which many times are the source of many mishandling issues, as they fall off or cannot be read by scanners if they are dirty or facing the wrong direction. Many airlines are improving this specific part of the process to improve the overall system.

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The researched technologies are currently being tested and implemented by airports and airlines. Many airlines, can report less mishandled luggage numbers with the implemented technologies, a fact that shows in a way, that we can hope the problem to be basically handled in the future.

 

Leipzig – the new capital of European logistics

Every time I make orders from Ukraine or Germany, all my parcels pass through DHL Leipzig hub. And the other day I found an article of Russian journalist that made a visit to that hub and was able to see all the process with his own eyes. So I decided to translate it and size it and share with you 🙂

Every night from the hub planes, loaded with envelopes and parcels fly to different ends of the world. Leipzig is the largest in Europe depot of DHL.

I would like to have a look at four steps through which parcels pass inside the hub in order to be delivered at a right location.

Belts and downs of conveyors

It is difficult for a person to not get confused in an aluminium forest of conveyors. That is why everything is controlled by machines; people only correct their mistakes.

Belts and downs of conveyors

Each envelope, package and box has a barcode. It is thanks to it that the parcel does not go to Austria instead of Australia. The sorting line is controlled by a superhuman mind – a computer system with its own DHL software. Overhead, the snake of the sorting line creeps along. Each pallet on it has a unique number; therefore, passing through the first scanner, the parcel receives a temporary but exact address. It is difficult to lose cargo there: the system stores information about where the number was scanned for the last time and in what part of the transport tape the parcel landed. The operator can track the parcel at any time.

 

Sorting conveyor

On the second floor, there are no people: there runs an endless conveyor belt, not continuous, but consisting of separate cells. Each cell has a number that is associated with the parcel number while the parcel is travelling along the tape to the place where it is going to be packed into a large transparent container and loaded onto the aircraft.

Floor on wheels

To work in the hub, you do not need to have the mighty power. Thanks to rollers, mounted on the floor, even women can easily move on the floor heavy containers.

floor on wheels

Attractions for parcels

On these yellow slides, the parcels roll down from the sorting belt into the hands of the conveyor operator, who brings individual parcels to large aviation containers.

attractions

For additional scanning and to the desired exit, the parcels fly down the yellow screw hill, just like in the water park. Below them, they are insured by the operators of the line. In total, a journey from the plane that brings the parcel to Leipzig, prior to its loading on the flight to the destination airport, the parcel gets into the scanning device 4 times – in order not to get lost.

 

Artificial Intelligence Thriving the Supply Chain

At the beginning of class, Jose told us that logistic is often associated with “non-adding-value” activities. I was reflecting in what sense can this be changed, and the answer was quite clear: The magic word “Artificial Intelligence”.

AI bears a huge potential, which we still are not exploiting enough, since AI is in a development stage and the current apllication is quite unspectacular.

However, in the future prospect, AI stands to transform the logistics industry into a proactive, predictive, automated and personalized branch. With the help of AI, the logistics industry will shift its operating model from reactive actions to a proactive and predictive paradigm, which will generate better insights at favourable costs in back office, operational and customer-facing activities.

In my opinion especially the decision-making process during the time a product is shipped will be possible and allow us to add value during this process. The following aims to provide an example on that idea:

AI as Decision Support System
The Supply Chain of Fresh Food

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Let’s assume:

  • We deliver oranges from Valencia to Frankfurt
  • Our truck needs 3 days in order to drive more than 1.600 km
  • We have some quality determinants of our product = The shelf life: Influenced by humidity and temperature
  • SUDDENLY our truck ends up in a traffic jam, the delivery has delay!

→ Net present value (NPV) of cargo decreases

→ Threat to deliver rotten products (we may have more rotten products than agreed on in the contract)

Solution: AI as Decision Support System

  • Use of smart devices in the trucks: Sensors which make use of IoT, they constantly measure the quality determinants and report the state. The IoT is providing us with alternatives.
  • Make an investment decision: Search for closer markets OR renegotiate with  existing customer in Frankfurt and provide them a discount of the cargo.

 

Captura

Innovation in organ transportation, beating “heart in a box”

Since a couple of years I am a kidney patient. At this moment I have one working kidney and due to that my interest for organ transplantation grew. It can happen that in the coming years I have to undergo this technique but I was never aware about any details behind this process. Unfortunately there is still a long waiting list of not healthy people in need for organ transplantation. Finding the right organ and the possibility to get the organ in a safe and healthy way is still a very big issue which impacts the liveability of the patients. Organ transportation is a critical element of this process and a fundament for successful transplantation. But what are the developments in the world of organ transportation?

Since 1954 we already work on transplanting organs. The process hasn’t changed that much since then. fundamentally, organs still travel via coolers. The organ is removed from one human, sluiced with salt, putted in ice and sent to the other location where the other patient is waiting. This process got challenged and is about to change, based on research on the quality of organ transportation a technology innovation arose. To increase the compatibility of the organ towards their new body it needs to stay in functioning state and body temperature, also during transportation.

New devices are able to more accurately determine the health of the organ before it will be transplanted. These devices can real time monitor the health of the organ. They use a innovation called “ex vivo warm perfusion” that creates the circumstances in where an organ can stay longer outside a body. This creates a situation where organs can be delivered to way further destinations.
At this moment, regarding viability, kidneys can stay healthy and ready for transplantation with 36 hours frozen in ice. However hearts and lungs can unfortunately only stay out of the body in ice for 4 to 6 hours. These new ex vivo systems increases the amount of hours significantly.

“Beating heart in a box” proposition

This mentioned ex-vivo system brought us a new product, beating heart in a box. During transportation the box pumps warm, oxygenated and enriched blood through the heart which keeps it in working conditions. It’s a small box from maximum 1 m2 and made on wheels to ease transportation. Equipped with oxygen, blood, Batteries, and monitoring systems (humidity and temperature). Transmedics is one of the main suppliers on this new technology. And invented and produced the “heart in a box” as seen below.

heart in a box

The organ believes that it’s still in the body,” says Dr. Waleed Hassanein, president and CEO of TransMedics, the Andover, Mass.-based medical device company that’s developing the system. “The heart is beating. The lung is breathing. The liver is making bile. The kidneys are making urine.”

Because the organs are functioning during transport, doctors can monitor the organs and in some cases make them healthier, Hassanein adds. Antibiotics can be delivered to an organ to prevent or treat an infection. Clinicians can inflate sections of a donor lung that have collapsed.

So as we can see the technology is there and proven. However it is still an expensive process and obtaining all the medical certificates are the major challenges to bring this product to a majority market. Accessibility of the right organs is a big issues for patients who have to wait for a new organ. However this technology enhances the accessibility and can hopefully save life’s in the future!

 

A Brief History of the Pallet

The history of the pallet is a long and complicated one, and tied largely to the evolution of industrialization in the United States. Pallet-like platforms have been in use for hundreds of years, but it wasn’t until the 20th century that pallets as we know them today became a staple for many industries.

It Started With A Skid

Wooden skids were the original pallet predecessor, and were made of stringers fastened to top decks. They first appeared around the same time that low-lift trucks entered the scene in the late 1880s. The lift truck could only raise skids a few inches at most and required manual help. They were clumsy and difficult, as all prototypes are, but they got the job done: they allowed workers to move piles of product too heavy for arm muscles alone.

Stacking would arrive some time later, with the arrival of bottom decks after the 1910s. By 1926, newly minted forklift trucks were able to raise pallet loads on top of one another to create space-efficient stacks. Over the next two decades, pallets were slowly refined and enhanced to resemble what we recognize today: spacers were used to ease fork placement, and bottom decks were added for stability.

The Influence of World War II

Pallet development went into overdrive in the early 1940s once wartime production and shipment intensified. Pallet manufacturers realized two things: first, that to adjust shipment standards for each naval installation wasted resources; and second, that pallets were shipping not just to other American factories, but overseas as well.

That led to an effort to standardize sizes and improve capacity. Namely, square pallets measuring 48×48” that could accommodate loads up to 15,000lb. This was a step up from the 2,000lb loads that were more common earlier. This wide scale pallet mobilization also inspired the introduction of four-way pallets and more cost-effective options intended for single-use shipments.

In an effort to regulate the global shipment of millions of pallets, the wartime era was, arguably, the strongest instance of pallet standardization the world had ever seen.

Evolution Into Modernity

Pallets played a significant role in the early 1960s labor movement, when manual laborers began to worry about the future security of their jobs. Union disputes were common, as palletizers became a crucial concern for union workers who worried about having their jobs replaced by machines. For a number of years, the future of pallet handling was thrown into question: to what extent should they be handled manually versus automatically? History, of course, found room for both.

Meanwhile, in Europe, 1961 was a landmark year. It marked the creation of the European PalletAssociation and its mission to standardize pallet use across the continent. The EPA introduced the Euro pallet as a simple four-way entry pallet that could accommodate any forklift or elevating trolley and could be used in any country by any user. The Euro pallet, impressively, is still in use today.

Pallets Today

The pallet industry, like any other, has grown larger and more complex with time: more synthetic materials, different sizes, weights, and strengths have all affected the way we view the industry and use the pallets themselves. And while the field is more scattered and industry options more varied than ever before, the past shows us that all pallet innovation has grown out of necessity. It’s not hard to imagine that the future of pallets, whatever it is, will be born out of that very same need.

HOW MY USUAL DAY GOES

Want to share with you guys my usual day routine and how we can associated with what we had had learn in class. My day might be not that interesting but keep reading if you want to find out 🙂

I usually wake up at 7:00am because I go to the gym from 8:30 to 9:30 (try to :P) and my everyday breakfast is banana oatmeal. I have a reorder point method with my oatmeal because is something I consume every day, when the oatmeal reaches this point(picture) I usually go to mercadona to buy more. Why I use this method? The holding cost of having many boxes of oatmeal would be high for me because I don’t have the available space in my food cabine for a periodic review method and Mercadona is very close to my house, so my transportation cost is low.

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In a very busy day I can say that my distribution network is a milk run strategy with a direct shipping, Before going out of the house I will consolidate all the things I need for the day including food, sportswear, school supplies, every day needed things, etc. picking is directly from the reserve areas (my room, kitchen) and then to the consolidating area (my bed) I pack everything with a full truck load(my backpack) and leve.

My First stop is the gym, the transportation cost is going to be low because of my distribution network, but it would be difficult to control all the products I need for the day, I have to get Valenbici because I have a milk run strategy with a full truck load, and Valenbici is my best option to arrive quickly to my first destination.

Later after the gym, I get a shower and go to the library, here we usually get a study room and I notice that every book has their own identification, not necessary from GS1, but having identified each book can improve their inventory controls.

A 2:00 we take a break of studying and go for lunch, sometimes I’m in the mood for a salad in school, the queue sometimes are very long, but they grow due to variability and not disappear due to utilization.

After lunch, I usually go back to my warehouse to reload the truck, this time I only need less than a truck load because I have left only one more delivery of the day.

Later, I go to El Saler and pick up a girl I’m babysitting, here the picking process of the kids is like Amazon’s warehouse, the kids pick you. There are so many kids that their parents usually stay in their meeting point and the kids finds them, this way is more easies, like Amazon drone Warehouse (otherwise it would be impossible to find my kid XD)

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Finally, I get back home around 21:00, usually have to get Valenbici, but it’s impossible to find a parking space at that hour, Even though the information flow of Valenbici is quite good, because technologies like their app, are able to communicate the final consumer their availability or parking in real time.

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My route layout

 

That’s my usual Monday to Thursday day routine, thinking about it, we can find logistics in everything, it’s very interesting, didn’t notice it before..hope you guys enjoy it 🙂  

Martian logistics, because colonizing new planets is not all fun and games

Today while eating the merienda (remember guys, eating five times a day is important for a healthy life) I saw a chapter of Big Band Theory about Sheldon Cooper applying to a Mars colonization project. It made me think about how the Mars colonization would be. Humankind has dreamt on colonizing mars since decades ago, but it always seemed imposible til now, when we start to consider it not only as a possibility, but as a must… So, how would it be?

First of all, why should we go to Mars? A colony without a purpose would be senseless. Obviously an initial investment that will be basically without financial return would be needed, but this dependency on subventions cannot last forever; “donors” (states, entrepreneurs, philanthropic funds) would agree to bear the project only if it should lead to an entrepreneurial venture capable of ensuring its functioning independently.

MarsColonyStruct
This is how would look the habitations and greenhouses zones of the colony

An economic analysis of a colony, in order to be set within a framework as realistic as possible, had to be developed upon a scenario addressing, by priority, the following selection criteria:

  • Supplying products or services which would be specifically Martian, so as to mitigate competition from other locations (including terrestrial ones).
  • Discarding exports involving interplanetary transport of bulky masses (metals, semi-finished products), unless their value justifies the cost of travel (paying passengers, possibly some rare metals).

But this would only be the beginning of the problem. How would the habitants live?Which initial investment would be needed? How could we achieve a profitable operation over the long run? Which would be the cost of transfer of passengers to Mars? Could the colony comercialize Mars tourism?

All this questions, and far more, are answered in this interesting article, where a very detailed model of how the economy and the supply logistics of a martian proto-colony would operate is shown. The article is really worth the read, not only to the scienfiction nerds like me, but to everyone interested in logistics.

We know how logistics work on Earth, but, what about Mars?

Buy your DIA groceries via Amazon!

Group DIA is one of the key players in the Spanish retail industry development in the last 40 years.  Grupo DIA has more than 7,400 stores (DIA, 2018) in 3 different countries (Spain, Argentina and Portugal), and specifically in Spain it is the 3rd largest supermarket chain.

In fact, they have integrated a new key logistic activity that Grupo DIA successfully. The alliance with the most well-known e-retail worldwide which is Amazon. This allowed DIA to have access to hundreds of thousands of new consumers, but also to be part of a world-class purchase platform which, indeed, might impact on its brand perception.

DIA consider that digital transformation impulse is key to achieve best-in-class growth in the future. Based on this, the main logistic activities that are going to be evaluated are related to Physical distribution, which includes: Order Picking, Packaging and Outward transport. The alliance with Amazon gave DIA a great advantage.

At the beginning, this activity was focused only in Madrid and Barcelona. Since it was successful, and they have the goal of multiplying revenues by six (DIA Amazon, 2017), they are starting to expand to other cities. One of those is Valencia (DIA Amazon, 2018), we are able now to purchase through Amazon our groceries.

To have access we must download the Amazon Prime Now App follow the instructions that are clearly shown:

Dia 1

The E-Commerce Director of DIA, Diego Sebastián de Erice, mentioned that “One of the key issues is the control and management of stocks “so that there are no faults”; his responsibility is limited to the preparation of the order, since the shipment is handled by Amazon” (DIA Prime, 2017).

For this alliance, DIA is using their format called “La Plaza de DIA” which offers all the assortment from one store and it “obviously that includes a wide range of private-label items of Bonté, Delicious, and all our private-label — exclusive private-label products. And we see that — we are really seeing that that is a differentiation factor in the future of [line].

They are offering something amazing related to Outward transport, they offer to deliver the products in two hours if the order is higher than 25 Euros. This is really convenient for those new shoppers that do not have time for going to the physical store

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Ricardo Curras also said “What we have seen is — but it is very preliminary, is that we are gaining Amazon customers because what we have provided these La Plaza de DIA as the supermarket of Amazon Prime Now, the best Amazon customers.

The existing DIA app for online purchasing have really good LOGISTIC benefits for customers that are allowed to receive their products at home after purchasing online in the same day, this is really good. Now, inside the AMAZON Prime Now App, people would also be able to buy products from DIA, this is an amazing opportunity for DIA to be able to reach new customers. “Even though online purchasing still accounts for just over 1% of total sales” (DIA Prime, 2017), logistic activities regarding online purchasing are extremely important.

NITROGEN PACKAGING

Nitrogen is an inert gas that barely dissolves in water and is not combustible. Therefore, it is an ideal gas for inertisations in different industries. Its low boiling point (-196ºC) makes it the ideal refrigeration agent for freezing and refrigeration processes.

The Nitrogen applies in various sectors:

Chemical industryInerting or blanketing for flammable chemicals, bulk materials or powder, Temperature control in tanks and reactors, Freezing of pipes for repair and maintenance work.

Welding and cutting: Auxiliary gas for laser and plasma cutting, Gas for root protection in pipe welding.

Automotive and transport: Root protection in the welding of automobile components, Filling of aircraft tires and race cars.

Metallurgy and metal industry: Heat treatment of metals to provide a surface of more quality and flexibility, Lace of metal pieces, Fine in the production of steel and aluminum.

Environment: Recovery of volatiles (VOCs) from gas and vapor emissions, Recycling of plastics and tires through the cryogenic grinding process.

Feeding: Freezing and refrigeration of food, Gas for food packaging in modified atmosphere, Cryogenic grinding of spices, Cryo Cooking with nitrogen in haute cuisine.

Health: Cryogenic conservation of biological samples, Cryosurgery and dermatology, Propellant gas for medical devices.

Pharmaceutical industry: Auxiliary material for the production of active substances, Inertization of equipment, Temperature control in reactors.

 

PACKAGING

Bottles and liquid containers: Nitrogen in bottles and blocks of high pressure (200 and 300 bar) from a capacity of 1 to 235 m3. Also liquid nitrogen in fixed or transportable cryogenic containers (dewars) of various sizes.

Liquid supply: liquid nitrogen by tank truck offering cryogenic storage tanks of different capacities.

Supply On-site: For a greater demand of nitrogen exists installation of on-site generation plants.

Gas pipeline supply: To large consumer customers located in large industrial areas the supply is provided through a network of gas pipelines to ensure the greatest flexibility and reliability of supply.

 

 

Flexible wings, radical change in air logistics.

The research is not limited to the production of flexible wings, as scientists and engineers from different companies working for the Pentagon are also trying to change the shape of the surface of the wings, as is the case with the muscles, which are tightened and stretched as their thickness increases and decreases.

Skunk Works, a division of Lockheed Martin in Palmdale, California, also aims to make planes with small wings to replace the traditional ones so that, attached to the fuselage, they can fold and move closer together, just like birds do.

Resultado de imagen de flex aeronautical wings

NextGen Aeronautics, for its part, is working on a metamorphic wing that aims to replace the conventional wing of fighter planes with a much narrower wing that is much more favourable to speed, while Raytheon Missile Systems, from Tucson, is profiling a telescopic wing adapted to the needs of a cruise missile.

The aim of all this research is to create before next year a set of functional wing models capable of halving their length and thickness, so that aerodynamic technology is close to what were the first steps of aviation, the flexible wings of the Wright brothers, which for safety reasons were replaced in the early twentieth century by rigid structures combined with ailerons.

The increasing capacity of computers and the elasticity and weight of new materials allow us to think again a hundred years later of aircraft that mimic the flight of birds, although there are still a few decades to go before this technology, if it really confirms its validity, crosses the border of military vehicles and extends to civil aviatio

 

Shinkansen, the Japanese bullet trains

Shinkansen high speed trains are the fastest way to discover Japan, the most important one is still in production process and is called “Maglev”, it will be able to reach a speed of 501 km/h .

There are different types of trains that circulate in each of the Shinkansen lines. They take their names of different animals depending on their speed. There are express trains, which are the fastest, semi-express and local or urban trains.

To increase the competitiveness of Japan’s train stations, the government is carrying out actions to improve services and reduce costs, and also equipping stations with container terminals and innovative logistics systems.

But talking again about the Maglev, this train beat the previous world speed record at 590 kilometers per hour. This train works through a magnetic levitation system that uses linear motors installed near the rails and that causes the magnetic field to elevate the train up to 10 centimeters above the rails , eliminating contact and making the only element of friction be the air.

Central Japan Railway wants for the ‘Maglev’ to start operating in 2027 between the a station in the south of Tokyo and the city of Nagoya. The 286 kilometer journey, which the bullet train currently covers in 88 minutes, would be reduced to 40 minutes with the ‘Maglev’.

In the next video we can see a real test of the Maglev performance.

Queue management in Disney land

I went to Primark last summer in the season of sale and there was long queue. But they have organized small products inside the queue to distract the waiting time, which was one of the ways to organize queue. Before 2 months, due to some emergency, I went to hospital Clinico here in Valencia and I have to wait for 3 hours there to get my treatment because there was already a queue of patients. That was awful.

We have studied about queue management system and how it is applied to manage and analyze the flow of visitors and to prevent the formation of queues altogether. It can be applied in a retail store, hospital, mall, etc. But what if there are different places in one location and there is a need of queue management at every places. For example Disney land. There are numerous rides, museums, parks and long queues. Visitors are there to be entertained, but more clearly, to be entertained throughout every part of the Disney World experience. The Magic Kingdom at Disney World in Florida, which had more than 20 million visitors last year. So how they manage it?

Disney world has some interactive television through which a guest can watch a clip or play games while waiting and on some lines queuing system ask guests to text message jokes to a specified number and if their joke is selected then it will be read aloud in the live show. Moreover, they made change in 2014 by introducing smart phone app and magic band bracelets with embedded RFID chips that guests use to schedule ride times, character meet-and-greets, parade viewing, dinning and more. Also, by using Fastpass + from home, guests can adjust their schedules as much as 60 days before they arrive.

disney band

Next time be ready with Fastpass+ 🙂

https://www.qminder.com/disney-queueing/

http://www.foxnews.com/travel/2016/06/03/how-disney-manages-its-legendary-lines.html

My experience in the transport of goods management

This is my last blog and that is why I have decided to write about my professional experience in the logistics sector.

Last year I worked in a company dedicated to the manufacture in distribution brand and co-packing of beers, soft drinks and water. Among the clients of this company are Mercadona, Consum, LIDL, Carrefour … of which we have spoken during this course. I carried out my duties in the logistics department and, among other activities, I was in charge of managing part of the outbound transport from the factory.

Some of the tasks that involve the management of outbound transport is the planning of the load schedule in the facilities. To do so, I had to consider which client I was dealing with (because the quays are classified by clients), the destination and the time of delivery. However, sometimes there were problems in the production line and in the packaging that caused delays and entailed rescheduling the deliveries of the products. Also, on occasions, there were incidents related to transportation, such as punctures, traffic accidents, retentions or delays in the unloading. These situations that can not be anticipated in advance highlight the importance of a good planning.

Personally I have to say that at the beginning the idea of being responsible for the product to arrive correctly to the client scared me, but the knowledge of the existence of INCOTERM 2010 and the use of the Enterprise Resource Planning SAP system made it easier for me to work. The INCOTERM constituted a great discovery during the performance of this work.

The INCOTERM (International Commerce Terms) are terms of three letters that reflect, for both the seller and the buyer, the rules of voluntary acceptance of the conditions of delivery of the goods. Then, we can ask ourselves what the INCOTERM are for: they serve to regulate the expenses, regulate the norms of delivery of the merchandise, regulate the transfer of risks and facilitate the processing in the customs.

There are different types of INCOTERM, therefore, when choosing one, you must take into account the type of merchandise, the type of transport and who hires and pays it, who is obliged to pay for insurance, the place of delivery of the goods, who must pay the import and export customs obligations. As you can see there are many aspects that should be considered. That’s why I’m going to focus on the ones I used the most and that involved the from lower to higher obligation on the part of the seller. They are the following:

Ex Works (EXW): this system represents few obligations for the seller, because it is limited to putting the goods at the disposal of the buyer in their premises and in a packaging appropriate to the type of transport. On the contrary, the buyer assumes the costs and risks inherent to the transport.

Free Carrier (FCA): the seller loads the goods if the delivery is done in their premises. If it is to export the seller pays the tariffs. But it is the buyer who chooses the means of transport and the carrier. In this way, the transfer of expenses and risks occurs when the carrier takes charge of the merchandise.

Free On Board (FOB): the seller places the goods at the disposal of the buyer at the port of embarkation and on board to the designated vessel and carries out the customs procedures if necessary. The buyer chooses the ship, takes care of freight and insurance costs, and assumes the expenses and risks for the loss or deterioration that the merchandise may suffer from its delivery.

Delivered At Place (DAP): in this case the seller is responsible for the expenses. It closes a contract for the transport and unloading of the goods when arriving at the client. In this term the seller assumes the risks of transporting the goods until they reach their destination. The buyer pays the price of the goods as provided in the sales contract, after receiving it.

So, according to the modality chosen, I had to assign a loading and unloading schedule depending on the destination and the availability of docks (in EXW and FCA), or in addition, I had to contact transportation agencies, so I had to consider the costs to choose the appropriate transport (in DAP).

In the following drawing can be seen what I have explained, and also the others INCOTERMS.

INCOTERM

I hope this blog has been of your interest.

Source: https://www.searates.com/reference/incoterms/

 

Logistics, A Part of Everyday Life

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If we think for a moment of our favorite store or restaurant, perhaps the concept of logistics doesn’t come to mind at first. But if we contemplate how that particular establishment obtains the products and materials needed to conduct business each day, the importance of logistics to our consumer lifestyle are undeniable. This post is just a reminder, of how important logistics are in our every day life.

Logistics management is that part of the Supply Chain Management process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers’ requirements. (Maciek Nowak, 2015). Logistics can also be applied to business activities other than transportation, such as warehousing and material handling. Management is a critical element in successful logistics, due to the high degree of coordination and collaboration required among supply chain members.

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The transportation and logistics industry is one of the most important industries in the entire world. Anything that can be found in a shop, was once loaded in a truck and transported from one location to another. If there was not a logistics network, it would not be possible to purchase items across the nation from their location of origin. Thanks to the interstate system, each state is able to specialise in certain products and services from which all citizens can benefit.

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There are certain products, that are more time sensitive than others. Like fresh products and frozen food. Each day millions of goods, travel billions of miles through precise transportation networks in order to reach their final consumers in a timely manner. The fast and efficient nature of logistics, make customers able to purchase these goods in the ideal time.

Maciek Nowak, (2015). Trends in Supply Chain Management. Quinlan School of Business.

Moving day at the zoo: How do parks transfer their animals?

Planning for new arrivals starts months before their arrival.  

There is a lot of paperwork these days and tests to make sure the animals are fit and aren’t going to carry any diseases into the country. Then, about a month before animals arrive, zoo park workers go and visit them at the zoo to understand about how they are kept and managed for easier transfer to new surroundings.

Preparing the animal for the journey: Crate Training

Crate training is the corner stone of zoo animal transport. It may require a lot of work or very little, depending on the species. The aim is to:

▪ make the transport crate a safe familiar place that the animal enters voluntarily

▪ habituate the animal to spend time locked in the crate, ideally a length of time closes to traveling time plus extra time for unexpected delays

Preparing the animal for the journey: Health checks and ‘fitness to travel’

▪ Animals selected for transport are typically in fine health and if gravid, early term only.

▪ Many satisfactory examinations and tests precede transport day and are typically resolved early

▪ The concept of fitness to travel is applied until the moment of loading and can lead to cancelling shipments. This can be the result of sudden illness or injury, excessive anxiety, hyperthermia, any form of distress where there is a lack of confidence that this will resolve if transport continues.

Preparing the animal for the journey:feeding and watering

Decisions must be made regarding Feeding and watering prior to traveling to ensure best possible nutritional status by transport day and then lowest possible waste production during transport.

Decisions must also be made regarding feeding and watering in transport. Sometimes regulations oblige to provide water. Every stop over is an opportunity to water and feed.

Screen Shot 2018-05-16 at 20.18.44

Logistics of trip: Logistic specialist should concider such issues as:

▪shortest route vs cheaper route vs more comfortable route (eg support or holding facilities en route);

▪Carriers: passenger vs cargo vs charters;

▪Loading and offloading: cranes, forklifts, last-in-first-out;

▪Season/temperature, road transport sections;

▪Accompanying personnel;

· Crate design: IATA, experience, aircraft dimensions, pallets and change of pallets at stopover, door sizes, bridge height along the way, crane and forklift provisions

Vastu Shastra on the design of a layout.

While we were talking on last class about the design of layouts, some interesting facts were commented about designing layouts following the Vastu Shastra believe, that is why I have decided to learn what is exactly Vastu Shastra and try to apply it to the layout of the production centre of Halloween sweets!

This discipline holds that since man is cosmic, everything about individual life should be in complete harmony with the universe to attract well-being, harmony and prosperity.

The material world is made up of five elements, known as Panchabhuutas: Earth, Water, Fire, Ether and Air. Everyone on earth is physically built with these five elements.

The principles of Vastu depend on the balance of these elements and the interaction with humans and the environment. It also considers the intimate relationship that exists with the orientations and how these are linked to the earth’s electromagnetic field and its effect on human beings.

The cardinal point where the two directions meet is most important because it combines two forces emanating from both directions. The North East cardinal point is called Eshanya, the South East cardinal point is known as Agneya, the South West cardinal point as Nairuthrya and the North West as Vaayavya.

Our former Vastu Shastra seeks the greatest benefits of the sun’s rays. The sun is the only reliable source of vitamin D (vitamin D is absorbed by blood directly from bare skin and exposed to the sun), a vital source for sustaining life on Earth.

According to the strength of the sun, the east is of great importance. The sun’s rays, which come out from the east, emit more heat and less light. In the afternoon, however, the sun shines on the west, so this part receives more heat and a greater amount of infrared rays, which are harmful to health.

With all these reasons, it is explicitly stated in the Vastu Shastra that the part of the building with the greatest number of openings to the outside will always be the east and north sides.

The world’s basic source of energy is stored at the North Pole and the South Pole. It flows without interruption from the North Pole to the South Pole in the form of magnetic waves. Therefore the part of the building facing south should always have a larger surface area than the northern part, so that nothing will get in the way of the magnetic wave flow.

Following this basic indication, I have made a draft of what I think that would be a good distribution.

Captura

First, offices would be plenty of windows, both in the north and in the east. Also, main doors would be located in this wall.

Then, product flow goes from noth to south, where both unload and loading area are located in north and south wall, respectively.

Moreover, raw material and final product warehouses, as well as picking area, are located at the beginning and at the end of the production line to guarantee the energy flow.

Last but not least, I apologize for not being able to find cool videos for this blog.

Captura

Target opt for frequent deliveries

In the class of logistics we learned reorder point and periodic review method to control inventory. As the giant companies like Amazon and Walmart are taking market share from retailers, so it is really important for retailer to make strategy to reduce inventory in warehouse. Moreover, last class was about making complete warehouse, we decided to get all the order from suppliers in one time and we will store it and use it whenever requires, so that we do not have to rely on suppliers every now and then.

But, retailers do not want to store products and they do not consider it as beneficial. Target Corporation is the second largest discount store retailer in the United States behind Walmart. This company is testing a new distribution strategy to speed up its restocking and cut down its replenishment cycle from days to hours which will help them to reduce inventory in store and can make room for online fulfillment. The Company hopes to send shipments to stores in small quantity as per demand and not in bulk.  As Target used 70% of its online volume was handled by stores during the 2017 holiday season. Moreover, they have started implementing this system at the New Jersey “flow center”.

target

Chief Operating Officer John Mulligan said in a conference call with investors in March on Target’s quarterly earnings. “Shipping more orders from our stores reduces our costs, while allowing us to move faster,” he said.

Benefits:

  • Company can take corrective action if the first order was defective.
  • Changes can be applied according to customer feedback
  • Less holding cost

 

https://www.wsj.com/articles/target-tests-retail-flow-center-for-faster-nimbler-distribution-1526299200

Where does the journey start?

Sometimes we ask ourselves this question, and look in the label for an answer, here we can find where the products are produce and maybe who distributes them, but for example if we want to know where does the raw material comes from, or how many transformations process have been, it’s necesarry to have a good traceability process. Also, when we talk about logistics we usually think on how the product starts from raw materials until it reach the final consumer, but we never notice the importance of having the ability to track the products backwards. Many companies don’t think about this situation, or don’t even recognize the terminology.

What is Treaceability?

In simple word Treaceability is the ability to track and trace the source of raw materials to the final destination of the product. The supply chains of products continue to increase in scope and complexity. Companies operate more globally. Trading partners, regulators and consumers need and demand more information about the products they purchase and use. With this added complexity the ability to track the product becomes ever more important. Traceability enables products to be made visible across the supply chain, helps to building the fundamental blocks within quality control the risk management and other types of systems.

What information is need to have an efficient Traceability?

For managing a successful traceability we need three type of information:

  • Master data – data which is permanent or relatively constant over time and provides descriptive attributes to the identification of products, parties and physical locations (e.g. name of company, contact details, address)
  • Transaction data – data created from trade transactions triggering or confirming the execution of a function within a business process such as loading or unloading, or a business process in a business arrangement (e.g. time of production, best before date)
  • Visibility event data – data detailing physical activity of products or other assets answering the “What, When, Where and Why” at real-time (e.g. temperature log)

Besides the theory, I want that you guys understand the importance of traceability. For example in the food industry, if you get sick because you eat a Big Mac, you as a customer go and complain; What should Mc Donalds do? Imagine they do not have a good traceability system, they don’t have all their products identifies with barcodes and they have no idea where does their products come from.

Without this information they don’t know where to start searching for the possible causes of the complain. With a good traceability system where all the supply chain works together and identifies each product, when it comes to looking for possible causes of a problem is very easy, to know the supplier that delivered their product, the exact batch number of the raw material used in that specific Bic Mac, and with this information they don’t have to implement radical general solutions such as closing the restaurant.

If you guys want to know more about traceability and identification, here you can interact in a very dynamic way with all supply chain, and discover all the types of identification needed.

Really cool, check it out —> http://discover.gs1.org/cpg/

Logistics in Consum

In the first assignment of logistics as well as in many classes of this subject we have been asked to talk and investigate about Mercadona, the supermaket chain leader in Spain. But we haven’t talk too much about Consum, a big supermarket chain (not as big as Mercadona) mainly located in the Mediterranean coast ot the Iberian Peninsula. A very interesting point is that both supermarket chains were born in the province of Valencia. I’m pretty sure that you have seen many of them in Valencia, if you are an explorer maybe you have already been inside, in this post I’m going to tell interesting data about Consum and its logistic distribution.

Consum has 680 supermarkets and Charter franchises, a staff of 13,504 employees and 2.7 million customers registered as partners. It is located in the Valencian Community, Catalonia, Region of Murcia, Castilla-La Mancha, Andalucia and Aragon. Consum has its headquarters in Silla (Valencia) and also has 5 logistics platforms in Silla (Valencia), Quart de Poblet (Valencia), Riba-roja (Valencia), Prat de Llobregat (Barcelona) and Torres de Cotillas (Murcia).

consum inside

The main office of Consum is in Silla (Valencia), whose storage facilities have an area of 33,000 m2 and stores dry food, drugstore and perfumery products.

In the Valencian town of Quart de Poblet is the Platform of Fresh Products, which has a total area of 23,000 m2 between the facilities of meat, charcutería, dairy, frozen and oven. Another platform, located in Riba-roja, completes the supply of fresh products to the commercial network. Its more than 12,000 m2 are dedicated to the distribution of fruits, fish and vegetables.

Consum also has several platforms in Barcelona: general goods, which has 92,000 m2 and another one in Prat de Llobregat, with 13,500 m2. In Las Torres de Cotillas, Murcia, there is also the Regional Integration Platform, which has 76,000 m2

consum m2 superficie

The world’s largest retailer, Walmart.

αρχείο λήψης.png

When we talk about logistics, Walmart comes in our mind. The American multinational retail corporation, that runs chains of large department and warehouse stores. The company that started with a single store and grown to the world’s largest and emulated retailer.

The following words, made the initiative for me to write this post, and talk about this well-known and respected company. “I don’t believe there is a university in the world that doesn’t talk about Walmart and the supply chain,” said James Crowell, director of the Supply Chain Management Research Center at the Walton College of Business. “They are just so well respected because they do it so well.”

Στιγμιότυπο 2018-05-14, 20.13.14.png

Walmart began with the goal to provide customers with the goods they wanted whenever and wherever they wanted them. The company then focused on developing cost structures that allowed it to offer low everyday pricing. Walmart then concentrated on developing a more highly structured and advanced supply chain management strategy to exploit and enhance this competitive advantage and assume market leadership position. The entire organisation is committed to a business model of driving costs out of supply chains to enable consumers to save money and live better.

Στιγμιότυπο 2018-05-14, 20.13.42.png

Cross docking

This is a logistics practice, to replenish inventor. It means the direct transfer of products from inbound or outbound truck trailers, without extra storage. This happens by unloading items from an incoming semi-trailer truck or railroad car and loading these materials directly into outbound trucks, with no storage in between. This is the center  piece in Walmart’s strategy. Cross docking keeps inventory and transportation costs down, reduces transportation time, and eliminates inefficiencies.

Technology

In its pursuit of low consumer prices, Walmart embraced technology to become an innovator in the way stores track inventory and restock their shelves, thus allowing them to cut costs. Technology plays a key role in Walmart’s supply chain, serving as the foundation of their supply chain. Walmart has the largest information technology infrastructure of any private company in the world.

Supply Chain

Suppliers and manufacturers within the supply chain, synchronize their demand projections under a collaborative planning, connected through technology that includes a central database. What made Walmart so innovative, was that it has been sharing all these information with all their partners and back in the days, a lot of companies weren’t doing that. In fact, they were using third parties where they had to pay for that information.

Finally, Walmart streamlined supply chain management by constructing communication and relationship networks with suppliers to improve material flow with lower inventories. The network of global suppliers, warehouses, and retail stores has been described as behaving almost like a single firm.

Στιγμιότυπο 2018-05-14, 20.14.26.png

From all the above we understand, that Walmart’s supply chain management strategy has provided the company with several sustainable competitive advantages, including lower product costs, reduced inventory carrying costs, improved in-store variety and selection and highly competitive pricing for the consumer.

This strategy has helped Walmart become a dominant force in a competitive global market. As technology evolves, Walmart continues to focus on innovative processes and systems to improve its supply chain and achieve greater efficiency.

https://www.tradegecko.com/blog/incredibly-successful-supply-chain-management-walmart

Delta Cargo Online

Delta Cargo launched the online booking platform for its air transportation. The company also implemented a system of electronic contracts and the exchange of electronic documents. 77% of all work with documents now takes place online, making the shipping process easier and accurate than ever before. We can see that the companies which are not adjusting to the new technological systems won’t be able to be competitive and provide the desired service to their customers especially in logistics sphere.

The American carrier said that now customers can order, register, manage and track their shipments completely online, using a computer or mobile device, 24 hours a day, seven days a week. Customers can send their electronic air waybills (e-AWB) to the company’s website free of charge, which eliminates the failures in the preparation of the air waybill and significantly improves the speed of customer service. The new website provides complete end-to-end digital reservations, reception and tracking 24 hours a day, seven days a week, on laptops and mobile devices anywhere in the world.

Key features of the updated deltacargo.com website include:

  • Improved tracking and dispatch management with in-flight tracking progress from departure to arrival. GPS tracking can be added to any shipment during the booking process and viewed in real time, and in addition, the GPS history can be viewed throughout the delivery lifecycle. The air waybill will be displayed to display the customs status on the tracking page.
  • Full functionality for site visitors who do not have a Delta Cargo account number or a registered account at deltacargo.com. The number of guests’ facilities includes access to viewing flights and services, price quotes, real-time tracking, and the ability to fully edit the booking.
  • Registered customers can set up a website so that their preferred topics, functions or e-mail notifications are displayed on the preview page, as well as frequently used booking templates, in addition, customers can store payment information, which will shorten the time for the processing of applications. The website also provides a quick overview of the shippers with the industry’s first integration with the TSA system Known Shipper.
  • Full customization for the client, allowing it to save its reservation settings, select notifications and store frequently ordered items as templates.
  • The site also has a full step-by-step guide to booking and more advanced booking options targeted at experienced users, in addition, there is a flexible booking with profitable numerous offers for flights and services.
  • When registering, domestic and international air waybill details can be submitted for free, regardless of the direction of booking.

Boeing factory: the biggest warehouse in the world

During a visit to the Ford factory, which I was very impressed with, I wondered about how everything is arranged in the aircraft industry!

I started to search for information and find out that the Boeing Everett Factory, in Everett, Washington, USA is the biggest warehouse in the world.

Checking in at an amazing 4.3 million square feet, it is both the largest warehouse and the largest building in the world. To put it in perspective, you could fit 80 football pitches into it and still have some room left over. Originally constructed to build the Boeing 747, it now houses assembly for 767s, 777s and the massive 787 Dreamliner.

At a kilometre long and 500m wide, the building is the largest in the world by volume. The 28,000 plus employees are encouraged to make use of the 450 tricycles to get around, and stop off at six diners and coffee shops to fuel their journey.

Divided into various sections dedicated to different aircraft types, the factory operates 24/7 and uses no central heating or air conditioning.

Instead, Boeing relies on the one million light fittings to provide heat in Seattle’s chilly winter, and simply opens the giant sized doors in summer to let in more air.

Parts are sourced from all over the world including Australia, Italy, Korea and Japan and put together with painstaking precision.

There is some automation — in the form of driverless vehicles that deliver tool kits to the engineers and mechanics — but mostly the factory relies on hands on expertise to complete the high tech machines to Boeing’s specifications and those of the airline customer.

Every few days a shiny new aircraft is completed and shunted out for testing by Boeing’s own pilots before being handed over to their new owners.

Although staff are not allowed access to Wi-Fi and there are strict controls on mobile phones, the factory operates public tours — which bring in 300,000 people a year. Restricted to the upper deck of the cavernous space, public visitors must also surrender their phones — such is the concern about the theft of Boeing’s secrets!!

Watch this video, it´s amazing:

Autonomous Ground Vehicles (AGVs) with Lockers

Nowadays, different online companies opt for last mile to deliver the product and using different means to transport product as soon as possible. The variety of different delivery options and quality of delivery is main criteria for online consumer to evaluate the services and products. Therefore, it is important for a company to invest on good and reliable transportation facilities which incur less expense and provide good experience to the customer.

We all know about drone, it is very efficient when product needs to deliver in nearby location within minutes. It is assumed that around 1 supervisor is required per 8 drones. Second is a bike courier. This kind of bike courier is being used to supply prepared food and small number of parcel in nearby location.

Another is Automatic guided vehicle.

mckinseyfutureofparcels

This is considered to be future of last mile. In this, customer is notified of exact arrival time of a vehicle and customer has to collect their product from the locker which was assigned to them at the time of placing order. There is requirement of supervisor for 8-10 AGVs.

Benefits:

  • Accountability: There is minimum chance of product being misplaced as it is on constant tracking.
  • Scheduling: As AGV can be done on-time and time of transportation can be predicted, it is helpful in making reliable schedule to avoid waste.
  • Safety: AGVs are equipped with sophisticated collision avoidance systems, so damage due to vehicle is less. Moreover, AGVs always follow their guide path, stop if they encounter an obstacle and provide audible and visual warning of their presences, improving the safety of surrounding personnel.
  • Flexibility: Travel path can be changed according to requirements and then can be added to its system.

https://www.logisticsit.com/articles/2018/02/14/automated-parcel-delivery-%E2%80%93-the-future-of-last-mile/

https://amerden.com/2016/10/28/benefits-of-automatic-guided-vehicles/

 

Intralogistics – what does it mean?

Recently, people are increasingly using a phrase “intralogistics” in the operating environment.

Some industrial companies add the word “intralogistics” to their names. For example, LTW Intralogistics and Wynright Intralogistics.

Michael Schick, head of Wynright, defines intralogistics as “all directions of logistics within the” four walls “, which provides the provision, management, tracking and optimization of cargo movements and information flows.”

This concept explains the ability to deliver packages on time, while at the same time maintain a smooth operation of its conveyor.

Thanks to UPS, people began to understand the concept of logistics, as well as intralogistics as an extended function of logistics itself. In business, only a small percentage of profits settle, while a large percentage of losses go through the doors of logistics. Knowing this “secret,” such large companies as Wal-Mart entice their positions employees as executive directors from logistics companies.

So logistics is how we move things from point A to point B across the supply chain. Intralogistics is that same concept but related to how we get our product most efficiently from the receiving dock to the shipping dock in the warehouse, plant and distribution centre. The video is an example of intralogistics work:

How to travel like a plane on earth?

American entrepreneur Elon Musk, Space X and Tesla founder, had the idea for the Hyperloop in 2013. His aim was to develop a faster, more reliable, durable and safer means of transport that should be able to transport people and goods at a speed of 1,200 km/h along a pipe under low air pressure. That would make transportation more energy-efficient and more effective when compared to planes or trains, for instance.

Hyperloop_all_cutaway

Thirty members of the Delft University of Technology in the Netherlands have developed a capsule to transport people and goods at high-speed through pipelines – the ‘Delft Hyperloop’. The Delft Hyperloop pod is safe, fast, reliable and efficient. It can reach speeds of over 1,200 km/h and can carry both passengers and freight. With a mass of only 149 kg, the pod is highly responsive.

It is considered the means of transport. Hyperloop will cover thousands of kilometers in a few minutes, thus changing the mode of transportation by land. as the systems used are batatos and could even be emission-free as renewable energies are developed.

The first tests have been a success with this we see a glimmer of hope for terrestrial transport that will change all the patterns so far created, hopefully we all get to see this breakthrough.

“The Art of War” or… The Art of Logistics?

Sun Tzu, a general, military strategist and philosopher of the ancient China wrote in the V century b.C. a famous book called “The Art of War”. Most of you have probably already heard about this book, but for those who not, I’m going to explain a bit what it is about and how it is related with logistics.

The book is not only popular among military theorists, but has also gained wide acceptance among political leaders and business management. Despite its title, “The Art of War” is about strategies in a broad way, focusing on public administration and planning. The text describes theories for battles, but also defends diplomacy, logistics and the cultivation of relations with other nations as essential for the health of a State.

Battle_of_Oroi-Jalatu

The book highlights two material elements, space and number, and from which arise material consequences (logistics and provisioning) and moral; the spatial measurement, the calculation of cash and supplies. The moral elements are three; the spatial calculation, the calculation of the quantities, the comparisons with the enemy and the possibilities of victory. Among all of them, the victorious commander must take into account, above all, the organization (as logistics students we already know that logistics are a very important part or the organization in any topic).

Among the strategies that Sun Tzu wrote we can find the one of deception, in which the enemy must be shown the opposite of what we are going to do in order to win the battle. The enemy must be surprised by the attacks, because of this you have to deceive him, the troops that arrive at an anticipated time will be rested and calm and will have more security in winning the battle, but the troop that arrives later will tire more quickly and is more likely to lose the battle. That’s on of the reasons why logistics are so important in the war and in the life, if you calculate the time, the quantity, the space and so on, you will have a better control of everything and you will be able to do better strategies.

Logistics in the ancient Egypt

Logistic is not an invention of modern times.

Even in the ancient Egypt logistic appeared. This can be seen at the Pyramid of Cheops which is a logistical masterpiece. This Pyramid was build 2700 before Christus, has a weight of 6 tons and a height of 146 meter.

Until now it could not be completely proven how the Egyptians build the Pyramid.

Researcher know that most of the stones were quarried near the place where the pyramid was build.

Without modern transport possibilities and a weight of 2,5 kilo per stone, the workers managed to bring the stones with barges from the quarries. The distance between the building yard and the quarries were ~300 meters and had a difference of height between 15 to 25 meters.

The workers used sledges for transportation. For these sledges they build wooden tracks.

Was the ascent of the inclination more than 5°, the Egyptians probably used a rope roll to transport the material. The construction was made of wood and was placed every 75 meters on a ramp.

Ropes were attached to the sledge, brought up to the rope roll, slung over the cross-piece of the rope roll and back.

For this step, 11 workers for a slope of 5° were needed. On one side of the slope they walked upwards and on the opposite side, they walked downwards and pull the rope. With this technique they pulled up the stone by using their own body weight.

Once the stones were at the building yard and the plateau for the pyramid was build, the construction could start.

The first 30 meters were the most labour intensive since 50% of the total material was used.

For the construction 5 tracks go up the pyramid flan and at each track 2 double teams of workers were needed.

It was calculated that a total number of 6700 workers were necessary to build the Pyramid of Cheops within 20 years.

 

If you want to know more about the Pyramid of Cheops visit the following webpage:

https://www.cheops-pyramide.ch/khufu-pyramid/pyramid-construction.html

 

The supply chain behind the filling of the car tank

Everyone who has a car knows what means to have the fuel reserve light turned on … we have to replenish the fuel tank. But … what do we know about the supply chain that black gold follows? In this post I would like to describe in a general way the logistics required by the oil industry, since it is a sector that I am passionate about and in which I have had the luck to work in the oil refinery located in Castellón de la Plana.

The first thing I can say is that the oil industry is divided into three large sectors that keep the flow of fuel and materials constant.

oil and gas

The first sector is the exploration and extraction: UPSTREAM. This includes the search for potential underground and submarine deposits of crude oil and natural gas. The next step is the drilling of the exploratory wells to later drill and exploit the wells that carry the crude oil or natural gas to the surface.

Another sector is known as MIDSTREAM. This includes the transport and storage of crude oil before refining and processing it into fuels and elements that have become indispensable in our day-to-day life. Depending on the product and the distances, the transport options (to transfer the material to the refining center or to the port of embarkation for its export) can be through trucks or tank wagons, tankers or pipelines. After being driven to the plant it is stored in large tanks.

We all know that the storage of oil and natural gas is necessary to balance the fluctuations between supply and demand, and guarantee the supply of energy products in times of political and economic uncertainty.

The refining, commercialization and distribution of products derived from crude oil and natural gas constitutes the DOWNSTREAM. In the refineries, the crude undergoes a process of physical separation and then chemical processes to extract the different components that form it. The extracted derivates are fuels and petrochemicals. Thus, consumers receive products such as gasoline, kerosene, diesel, lubricants, asphalt, natural gas and liquefied gas, synthetic rubber, fertilizers, preservatives, packaging and plastics to make countless products that are part of our daily life (as pharmaceutical and orthoprosthetic products).

I can tell you that in Castellón, next to the refinery there is a petrochemical industry that uses as raw material materials obtained from the processing of oil in the BP refinery.

The following diagram is a summary of the value chain that the crude oil follows, from its extraction, transport and storage, to its refining and subsequent distribution.

BP

Finally, comment that although the largest oil production is located in the Middle East, the largest refining capacity is located in Europe, Asia and North America, so the logistics involved in this sector is a real madness.

If you want to expand this information you can see the following video.

 

Pause in Tesla’s supply chain

In last class, we had the Lego task in which we have to prepare our warehouse considering three factors; Inbound, Operations and Outbound. The task was helpful as with the Lego, we can modify it whenever we want from the feedback of professor and other students. But what if something happen to actual warehouse or a manufacturing site? What could be consequences on the customers?

During our visit to Ford, we saw that all assembling of different parts of a car is been done by robots or automated machine. There were hardly 1-2 workers to control the machine and the work was going smooth. The fully automated assembly machine helped Ford for efficient performance and increase the number of output. On the other hand, this automated machine create problem for another car company Tesla. The CEO of Tesla Elon Musk tweeted, “Yes, excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated.”

We all know Tesla. It a company specializes in electric vehicles. Recently, Tesla has shut down the production of Model 3 second time in 3 months. First time it was paused to increase the output and this time it is again paused to modify and improve automation. The assembly line that packages battery cells at the company’s gigafactory near the town of Reno, Nevada, has struggled because of mistake of a subcontractor. There is a problem in software and changes have to be done in mechanical and electrical elements.

Company has to produce 2500 cars a week in April but they only produced 2000 cars a week and unable to meet its production goal. Now production is again on hold. Moreover, stock has reduced more than quarter.

This kind of problem occurs in big companies but it is important to see how the problem is being solved and how product is being delivered to the customer on time.

More information on:

http://www.businessinsider.com/r-tesla-faces-angry-wall-street-as-ceo-musk-snubs-analysts-on-call-2018-5

https://www.buzzfeed.com/carolineodonovan/tesla-model-3-production-shutdown-delay-elon-musk?utm_term=.amvrlmggl#.iwY1M8kkM

 

 

Everything is Green

In our society today, environmental awareness plays a big role. For example the food production should be sustainable, plastics bags are banned from some stores in order to reduce waste and cars should have lower or even no (electric cars) emissions in order to be attractive to most customers. This “green” movement also has an impact on today’s logistics.

In general, the term green logistics describes a supply chain in which all activities are coordinated and carried out in such a way that their effect on the environment is as low as possible. The areas that are addressed include the means of transportation, the disposal of waste and residual material and the packaging which also makes the consumers’ contribution necessary since they are responsible for disposing and recycling a product’s packaging.

In regard to transportation this could start with just choosing the most efficient way to transport the goods, e.g., don’t drive with a half empty truck, but could also go as far as only using “green vehicles” for the transportation.

Also, during the production, green logistics includes efforts that are made in order to reduce the water consumption and keep it at a minimum by for example recycling processes that enable to reuse the water several times.  Sometimes, the production of goods (or the maintenance of vehicles and machinery) also results in water that also includes oil/grease, fuel and other waste that could harm the environment if this water is simply released into nature. To avoid this pollution, the installation of “interceptor tanks” can be helpful (see picture below).

Grease_Trap

This picture shows a simple version of such an interceptor tank or grease trap. The dirty water comes in on one side and several barriers are installed to stop the unwanted material. On the bottom, the solid particles accumulate and are then stopped by one of these barriers. At the same time, all fats and the fuel rise to the top and will float on the water due to their lower density and are also stopped by a barrier that is installed on the “ceiling” of this tank. The now relatively clean water continues to flow to outlet and exits the tank leaving all the unwanted stuff behind. This is one example of how a simple method can be used in order to make a production site more “green” and environmental friendly. This was just a small insight into “Green” logistics since it, of course, covers a much broader area and this blog would have to be way too big to describe it all in detail.

 

(Source for information of this blog: http://dlca.logcluster.org/display/LOG/Green+Logistics & https://www.glanvilleenvironmental.com/services/construction-civil-engineering/interceptor-tank-installation-drainage-sewer-diversions-manhole-construction/)

Flower Logistics

Tomorrow is Mother’s Day in Germany. And since I am in Spain for a half year I can’t celebrate this day with my mom. But nevertheless, I want to make her happy and therefore send her a little present.

Sending a bouquet of flowers seems therefore a very good option.

If you are searching for the possibility of sending flowers directly to a person, countless of different websites offering exactly this option and that not without reason. More than 22% of all Germans are buying flowers over the internet. The price for these flowers are obviously much more expensive than buying directly at a florist, but the online shops know that people which buy flowers over the internet have no other choice and will pay the higher price.

https://www.bitkom.org/Presse/Presseinformation/Online-Blumenversand-ist-ein-bluehendes-Geschaeft.html

The basics are always the same.

One possibility is to choose between different occasions like Birthday, Mother’s Day, Bereavement, Gratulations, to find a bouquet suitable for the corresponding event.

Once you have chosen the perfect bouquet of flowers, you can choose the size between small, medium and large.

After your decision you have the possibility to add extras, like a greeting card, chocolate, wine, champagne or a teddy bear.

After the online shop received your order and your payment, they will forward this order to a florist near the address of the recipient.

The florist will then create the bouquet of flowers with the descriptions of the internet, so the bunch is as close as possible to the expectations of the customer and since the customer indicate the exact date of the delivery, the florist will try to deliver the order close to this date. Variations plus or minus 1 day are hereby possible.

In my opinion these online shops for the delivery of flowers are a great possibility to give other people a little joy when you can not be there.

Logistics behind the Internet

When we think about logistics, we always think about product flow.. but what about information flow?

Currently, smartphones with 4G and Wifi have managed that, when we think about the Internet, we see a Wireless network, like if it works with magic. But, of course, it isn’t. Maybe we could have this perception, just like in my last post the magic of cinema, but behind this are physical cables that allows us to use this service. Thousand and thousand of km of cables that interconnect the whole world and allow us to use the Internet, play online games such as Fortnite (I like it), keep you social networks updated or read this super nice post, among others.

You can check all this connection here , a webpage where a map with all new connections is updated daily.

However, this technology is not new. The first cable started to be installed in 1854 and finished in 1866. The first message send with this cable was a letter from Queen Victory to EEUU president, needing 16h to finish the trip.

This cables has a average life of 25 years. In the end, they are exposed to many external factors, so it could be damaged or broken due to coral, finishing boats, or natural factors that affect them, for instance this could happen:

Sharks could break your Internet connexion!!!

However, the current improvements make possible to extend their useful life. The use of new materials and technologies has made possible for old cables to achieve speeds of 50 Tbps.

How are this cables installed?

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First of all, they moore the cable from the cable-laying vessel that is anchored near the coast to the shore by a team of divers who will take the cable to make its connection. The cable is buried for connection and “exits” a long way from the shore.

Once moored, a boat transports the cable perfectly rolled up so it can be installed without problems during the trip. Broadly speaking, the ship is “posing” on the ocean floor, controlling possible accidents, especially in fishing areas. Normally, most of the journey finishes without problems.

Some new research have get quantum communications in water, would this new technology  or satellites (even they are not as fast as cables) subtitute the current technology? We will see…

Kanban Logistics

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In this post, I decided to write about a case I read, about a large manufacturer of safety products which wanted to reduce the costs and free up some space in the plant with better logistics. The company creates products for military vehicles, aircrafts etc. They approached Kanban Logistics, with a need to free up some floor space in its manufacturing plant. After several discussions about the options and capabilities, the company decided to offer a comprehensive inbound logistics solution, including inventory management, packaging and transportation.

The strategy Kanban offered, included the storage of all parts used in the final product. Each day, Kanban provided the exact number of parts required for that day’s production run. Parts were organised, to minimize time and effort for assembly workers, greatly increasing productivity. Furthermore, Kanban created some kits for end customers on behalf of the company and shipped them directly, avoiding the time and cost of doing it at the factory.

As for the quality assurance, it was done by members of the company’s quality team, who maintained an office within Kanban’s facilities. When units were completed, workers simply insert them into the ready boxes and seal them up, freeing up significant space and labor. Other finished units, were sent back to Kanban for storage and order fulfilment.

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As we see from all the above, Kanban helped the company to handle the product and arrange outbound transportation using pre-approved carriers. They reduced significantly the price of storage and labor costs by all the services, and increased the throughput and productivity.

Rubber ducks, and how to see the positive side of a logistics disaster

Across the vast expanses of water making up more than two thirds of the planet, some 50,000 shipping vessels are bustling away, delivering the cargo that makes much of our world tick.

Dwarfing cruiseliners in size, freight behemoths transport millions of containers hundreds of thousands of kilometers a day – some ships can carry 20,000 at a time – while 33 million exist in total.

So, it is perhaps no surprise that not all make it to their destination safely.

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A containment of some 29,000 plastic yellow ducks, red beavers, blue turtles and green frogs were washed into the Pacific in 1992, the little toys began appearing on beaches around the world, from the west coast of America, to South America, Australia, and by 2007, Europe.

The travels of the ducks was used by oceangrapher Curtis Ebbesmeyer to map the global currents of our oceans, though they were already working on a model, tracking 61,000 Nike trainers lost overboard in 1990.

ducks_map

So in this way, a big disaster in the logistics process served as a way to better understand how the ocean currents works, and helped the researchers a lot.

Emotional waiting time

For the very last blog, once more time, I would like to come back with queuing because it happens to me almost every. However, the line will not mention, I want to share about the emotion and how to decrease the temperature with people who are bearing with that.


Based on New York Times’s article (by Alex Stone, published on 18 August 2012), occupied time (walking to baggage claim) feels shorter than unoccupied time (standing at the carousel), additionally, research on average, people overestimate how long they’ve waited in a line by about 36%.
They have several ways to make clients in the queue feel less stress, however adding a mirror is the most effective method with a reasonable price to do it due to the flowing reasons:

  • People love to look at themselves. For instance, in a hurried morning, a quick lipstick on lips, which make a lay feel happier, or put a tie on the right position helps a gentleman to feel more confident.
  • It helps to alleviate the negative feelings that often accompany waiting. Mirrors in an elevator can ever be turned into something fun, as these shows.
  • The placement of mirrors helps someone in a wheelchair to back in or out of the lift safety without having to turn.
  • Many people suffer from claustrophobia, which means fear of being in small or closed space from which they feel they cannot escape. In architecture field, a mirror always adds a sense of more space, thus making it feel less cramped and small and helping to avoid feelings of being trapped.
  • And the last thing, we feel good when somebody else ooks worse in the mirror :-p

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How the Germany beer factory save a million​ of Euro?

Germany is a beer country – and that’s so true. It’s not only a greeting which can bridge the gap between people but it also an essential beverage for German for lunch, dinner or even breakfast. Currently, German brewers have managed to create over 5,500 brands of beer (Source: Deutsche Welle online newspaper). And that number is growing because every week a new beer is released on the market.

I visited Tucher which is a brewery and beer brand based in Nurnberg. It was founded in 1672. Behind me, the capacity is nearly 4 millions liter of beer, if the cans are filled. Ultimately, it cost a million Euro. Germans keep empty beer bottles, cans to reuse and they refund a small amount of money for each glass is returned. When you buy a bottle which can reuse, the price will include the deposit so you can get money back when you return the bottle to the recycle machine or any retailer. Hence, if you go to Germany do not waste your money by throw the bottle away.

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Not only Tucher, every beer factor store the cans as the way to saving money for beer production. Factories collect bottle from the machine or retailers, they clean, refill and stick their label on the new bottle. Additionally, that’s very eco-friendly way to protect our environment.

In the Germany beer topic, The picture below I took in Oktoberfest which is the world’s largest beer festival, held annually in Munich, Bavaria, Germany. It is a 16- to 18-day folk festival running from mid or late September to the first weekend in October. Every year they bustle more than 6 million people from around the world attending the event. It’s full of people everywhere and every time.

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In conclusion, if you are going to a bar or club tonight, grab a bottle of beer, please do not leave it somewhere on the street, let give it back to anywhere can store it and sleep tight with a peaceful soul 😍

A Logistics Plan that saves Life!

You may think that a good logistic system is always important for the success of a company. But a good structured logistic plan can achieve more than just gain profits, it can save life!

In 2015, worldwide more than 126.670 human organs were transplanted to save a person’s life.

The most transplanted organs are kidneys, livers and hearts.

Sometimes the fresh human organs must travel across national borders. The time factor is hereby the most important aspect. If the logistic plan is not perfectly structured or complications occur during the carrying, the organ can get useless.

The most common process of organ transplantation starts with the brain death of the donor. After that, the doctors do everything to keep the organs alive.

https://www.interroll.de/blog/organtransplantationen-leben-und-logistik/

Organizations like the Deutsche Stiftung Organtransplantation in Germany and the Organización Nacional de Trasplantes in Spain support the doctors during the whole process. These organizations determine the respective recipient of the organ, organize the transportation process and coordinate the collaboration between the implantation centers.

After all necessary medical checks and after the respective recipient for the organ is found, the organ will be removed from the donor’s body and will be cleaned with a conservation fluid. Thereafter, the organ will be packed in a sterile bag and placed in a styropor box which is filled with ice. The life-saving organs will be delivered by car, plane, train or helicopter. 30 to 35 percent of all organs will be delivered through air transportation.

The kind of transportation depends on the corresponding distance to the implantation center and the duration the organ can survive without being supplied with blood. A human heart can still be useful until 4 hours without blood circulation and a kidney until 24 hours.

During the transport, the styropor box will have a temperature of 4 Degree Celsius to guarantee a good condition for the conservation of the organ.

The whole process can cost up to 16.000€.

Once reached the destination point, the organ will be handed over to a responsible person from the implantation center.

 

Click to access 2893_1_Hintergrund_Organtransport.pdf

PANTRY HOME LOGISTICS – STOCK ZERO

The best example of a daily logistics is your home, yes, your home, more concretely your pantry.

The pantry of our houses is as a warehouse in the factories. We have two kinds of products stored, perishable and non-perishable. All the foods and drinks are consumed as a FIFO (First In First Out) System, because this kind of products have sell-by-date. But in the case of toilet paper it doesn’t matter the system we use because de durability of this type of products is greater.

On the occasion of the economic crisis the consumer behavior has changed. Consumers buy more frequently and, consequently, store less quantity and throw away less food. That is, they rationalize purchases and the quantities of food they cook.

This trend coincides with a technique “Just in Time” or zero stock. This technique consists in that companies tend to have the minimum warehouse in order not to incur fixed costs and adjust their orders according to their sales forecast, transferring stock management to their suppliers. These in turn will do the same with their suppliers and so on.

Currently we only buy what is going to be consumed. The objective is to maximize the budget, limit the losses and store when the product has long duration and very attractive prices.

Below you can see an interesting video explaining how Toyota apply Just-In-Time concept:

The Airbus A400, a plane built in Seville, Spain. Or is it?

Well to make it short, the A400 is actually not built in Seville, Seville is just the place where the final assembly of the aircraft takes place. The “building” of the aircraft involves far more than just one country and has a pretty crazy supply chain which requires heavy transportation measures, an excellent timing, a good communication between all partners and a well-matched logistical operation.

First let’s answer the question of where the A400 is being built.

The manufacturing process of the A400 is conducted by six countries in total. These are, Germany, France, Belgium, Turkey, the U.K. and last but not least Spain. The exact parts for which each country is responsible are shown in the picture below.

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Basically the process “starts” in Turkey, Hamburg and the U.K and once the parts that are build there are finished they are transported to the next stop where they are needed to be joined together with other parts. These newly combined parts, e.g., the complete fuselage, are then again transported to the next stop until all finished parts reach Seville and are all added together in order to assembly and finish the plane. You can see the path of the parts in the illustration below.

a4001

This picture also shows the means of transportation that is needed to haul the big pieces in a fast way, the Beluga transportation plane which itself is pretty crazy but effective design.

Like I said in the beginning, the manufacturing of the A400 is done with a pretty crazy supply chain that definitely requires a very good coordination. If you would imagine that one step in the supply chain has delays and problems, the directly following steps are also impacted and in the end the whole production will take longer than planned.

To be honest, for me this concept of having so many parties involved in the production of one aircraft is a unnecessary complication that only begs for problems to happen. But who am I to judge, they probably had pretty capable people come up with that plan and thought things through.

(Source for all information and pictures: https://extendaplus.es/aeroespacial/files/2013/05/1.Alberto-Guti%C3%A9rrez-Industrial-aspects-and-GSC-A400M-Programme-23-May-2013-v-final_Alberto-Gutierrez.pdf)

The great logistics of cruises

Have you ever heard about the Titanic?. Your answer will be without any doubt: “YES”, well, let me just say that the Titanic was one of the first transatlantic Cruises in the history and for that reason it would be considered as an small cruise nowadays.

On the other hand, there are cruises like The Oasis of the Seas, its construction was completed in September 2009, in the shipyards of the company Aker Yards. It is the first of a series of 225,000 tones and 361 m long ships, with a capacity for 6300 passengers (the Titanic only had around 2200 passenger capacity) .

Inside the current cruises the passengers are able to find luxury restaurants, theaters, spa, gymnasium, library, water park, ice skating platforms, climbing walls, art gallery and other facilities dedicated to entertain the passengers.

Imagen relacionada

Due to the amount of people traveling inside and the huge quantity of services that the cruises offer, and in order to feed supply logistics (food, beverages, consumables, spare parts, etc.) of these ships, a cruise line must take into account aspects such as itinerary, occupation forecasts, local legislations (for example, for the supply of alcoholic beverages) and the technical characteristics of port and docks for the supply.

In addition, the dates and characteristics of the passage determine to a large extent the consumption of food and drink (in quantity and type of food), which requires a more specific forecast. It is not the same to supply the needs of a cruise on Christmas dates that in summer dates, with retirees or families that with young people, or touching the coasts of Norway or Argentina, for example.

Drone as a service

Since Jeff Bezos announced in 2013 that he was developing robotic delivery systems to take orders through the air, Amazon has filed dozens of patents related to its future Prime Air service. Beehives to accommodate unmanned aerial vehicles, nests in the streetlamps or parachutes for the packages are some of his original ideas for the drones to reach our homes.

You open the’app’ and ask for the food you’re lazy about going shopping for. Instantly, the robotic delivery boy leaves the gigantic building where he lives with his fellow robots and, in a few minutes, you can see him flying over your garden. After dodging a bird that crosses its path, the unmanned aerial vehicle launches a package that landed gently on the ground thanks to a parachute. Your shopping just literally fell from the sky.

We also found a large number of patent registrations from amazon here we have a series of images of the patents:

 

The hive:

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Street lamps as a nest:

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Mother ship:

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The Secret Journey of a Fashion Piece

Since I was a child I am interested in fashion, so everything related to it attracts my attention. I like to read articles and try to follow this topic. I understand that the path of a product from factory to store can be a highly complex process but nowadays technology and data are playing an increasingly important role in helping companies synchronise their supply chains.

Today the final leg of the journey (transporting a product from factory to store) is more important than ever, it’s not just about tracking physical garments as they make their way to retail but tracking and harnessing the data associated with these garments.

For large brands, it is more common to rent space in a warehouse, where items are shipped in from factories by air, truck or boat and then “picked and packed.” In the “pick and pack” process, workers unload the goods, identify each garment by barcode, determine the retailer for which it is destined and repack the piece to be sent out. In the years since the ‘Great Recession,’ larger retailers have begun charging fashion labels fees if their garments are not packaged exactly as requested, so brands must make sure their warehouse follows procedure.

From the moment product hits a warehouse, it must be out the door as soon as possible. The earlier it gets in the store, the longer the selling period will be. Any delays caused by logistics can disrupt the entire season!!

There are a lot of technological innovations that help companies to facilitate and optimize their processes. For example, ‘Quiet Logistics’ is one firm aiming to streamline the process, utilising Kiva robots to efficiently pick and pack products for clients including fast-fashion chains and fashion e-commerce start-ups.

In many cases, third-party retailers own the relationship with the consumer and the data generated by these interactions is critical to brands.  Currently, many designers receive this kind of feedback from retailers via email, phone or semi-automated technology systems. But with the implementation of tracking technology, such as RFID (Radio Frequency Identification) tags, product data can be fed directly into a designer’s own business management software. Major companies like Walmart have been using RFID tags for more than a decade, Bloomingdale’s began embedding the tags in garments about five years ago and more and more retailers are following suit.

Emerging ready-to-wear brands can’t typically afford to add their own tracking tags to garments but department stores that do use such devices are often able to report back on customer behaviour, which, in turn, helps to inform late-season orders. For example, if a retailer is unexpectedly selling out of a sweater style, the RFID tag will report that information directly to a brand’s business management software. The system instantly registers this and advises the brand to order more of the sweater from its suppliers. And if sweaters are an unexpectedly big category for a designer in a particular season, he or she may decide to offer more options the next time around, potentially changing the course of the brand.

For brands with sizable e-commerce businesses, tracking tags and business management software like Zedonk also help to fulfil orders across channels, by facilitating services like the in-store pickup. And as more brands start keeping less inventory on the floor, this kind of tracking allows shop clerks to be able to quickly identify what is available online — or in another physical store location — in a more seamless fashion. Brands including Burberry and Matches already employ iPads in store to help customers shop for items that may not be available in a particular store.

New technology is also helping brands glean insights into consumer behaviour by monitoring how they interact with products on the shop floor. Indeed, high fashion labels may set sartorial trends, but it is major retailers that are driving the growth of data collection around product inventory.

 

Swimming Cities & Airports

Aircraft Carriers, the pride of the navy, are like small, swimming cities with an airport. These “cities” have to be more or less self-sustaining for a long period of time. This means they have everything on board to keep the operations and the daily life of the crew running. Alongside the needed military equipment, this for example includes a medical center, a gym & stores just to name a few. All this is necessary to keep the crew of 3000 to 6000 people, depending on the class of the aircraft carrier, healthy, motivated and as happy as possible (3000 to 6000 people…that is about the size of my hometown’s population :D).

To achieve this, a lot of logistical effort is necessary since not all supply for the whole duration of the deployment can be stored on the ship from the start on. Food for the crew and fuel for the aircraft have to be delivered several times. This is either done by plane, helicopter or other ships. All methods are possibly dangerous since it is neither an easy feat to land a plane on a moving ship nor is it without difficulties to drive along the ship with another ship close enough to exchange fuel.

Another logistical effort that is being made on an aircraft carrier is the conduction of the operations on the flight deck (and below it). With around 80 aircraft on board the flight deck and its lower hanger storage level more or less resemble a very tiny but extremely busy airport. Therefore, a carful coordination of the airplanes’ starts and landings is crucial to avoid any accidents.

Since the flight deck is fairly small, the amount of launches and recoveries of aircrafts is limited but modern aircraft carriers have an angled deck (see main image) which increases this amount and also makes simultaneous launches and recoveries possible

Additionally, in order to make the busy work on the flight deck easier to coordinate the personal is wearing different colored clothes, depending on their function.(see picture below)

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For example, the people that are responsible for coordinating all movements of planes, the “shooters”, wear yellow clothes (see image below).

Flight-deck-officer-shooters-launch-an-FA-18C-Hornet

The different colored clothes might seem like a very simple method for such an advanced technology but they are certainly effective.

Aircraft carriers are a technological masterpiece and definitely require a large amount of logistics in many different areas so they are kept running and their crews can carry on with conducting their operations. Like it was said in the beginning, they are more or less cities and airports combined. The only difference is, everything has to be done on a much smaller space.

If you want to take a look at the daily life on an aircraft carrier follow this link:

http://www.businessinsider.com/photos-life-aboard-us-aircraft-carrier-2016-6

(Sources for information on this blog: https://science.howstuffworks.com/aircraft-carrier.htm & https://mashable.com/2016/06/23/what-its-really-like-to-live-and-work-on-an-aircraft-carrier/#vzy6Y47XdPqX )

The Logistics Performance Index

 

As the semester is about to end in a few weeks, it is time to look back at what we have learned. In the logistics class, we managed to understand that logistics is of great importance for any kind of company, in order to reduce the costs without decreasing the quality of the product sold. But logistics is not only a company problem, it is also a state priority. Many governments throughout the World now understand that the logistic performance of one country is linked to its economic development and growth. This is proved by the fact that with a poor logistics system, costs increase and thus the global potential of a product decreases as well, which reduces the imports and exports of a country and thus decreases its economic development. In order to understand how well a country is doing compared to others in a logistics point of view, the LPI (Logistics Performance Index), has been created in 2007.

Countries are ranked on a scale going from 1 to 5 based on six factors:

  • The efficiency of customs and border clearance (“Customs”).
  • The quality of trade and transport infrastructure (“Infrastructure”).
  • The ease of arranging competitively priced shipments (“Ease of arranging shipments”).
  • The competence and quality of logistics services—trucking, forwarding, and customs brokerage (“Quality of logistics services”).
  • The ability to track and trace consignments (“Tracking and tracing”).
  • The frequency with which shipments reach consignees within scheduled or expected delivery times (“Timeliness”).

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For ten years in a row, the most performing country in the World, in terms of logistics, is Germany (with a LPI of 4.12), followed closely by the Netherlands (with a LPI of 4.05). The least performing country is Somalia with a LPI of 1.77. There is a high correlation between the economic wellbeing of a country, and its level of Logistics Performance Index. Indeed, the best ten countries are all belonging to developed countries, whereas the worst ten are still in the developing stage. There are some exceptions to that rule, for example Vietnam is one of the most performing countries in term of LPI among developing countries (with a score of 3.15, ranking it to the 48thplace).

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Countries are then divided into four categories, based on their LPI level:

  • Logistics Unfriendly
  • Partial Performers
  • Consistent Performers
  • Logistics Friendly

 

This index allows us to understand the powerful impact that a country can have on the wellbeing of the logistics department in companies. Indeed, by reducing customs and by easing the transports and logistics regulations, logistics costs are reduced.

If you want to learn more on this topic, feel free to have a look at this paper: https://openknowledge.worldbank.org/bitstream/handle/10986/20399/904190WP0LPI0R00Box385316B00PUBLIC0.pdf?sequence=1&isAllowed=y

Why 3D printing will change logistics

The popularity of 3D printing went skyrocket last years and the technology gets more and more accepted in business models of companies. Even though we are not exposed a lot to this technology it is already evidently present within divergent industries from manufacturing to the food industry 3D printing is already being used. However, what has 3D printing to do with the logistics industry?
Recently DHL already posted a news article on 3D printing and the impact of this technology on their business model and how it will change in the future even more. The reason why this technology will impact the world of logistics relies in the fact that production companies will create and manufacture a range of items in total new ways.
At this moment the 3D technology is crossing the chasm and becomes available for the early majority market and more mainstream. Companies using 3D printing as additive manufacturing which can ease the way to create complex designs and effortless customizable goods. This enables companies t to on-demand design and produce new products and seamlessly individualizing them to meet the needs of end users.
Mass customization and on demand printing inventory levels are likely to decrease as companies more change to build-to-order instead of order-to-build. Mass customization has already a huge impact on inventory control and delivery but due to the developments of 3D printing it will get even bigger and bigger.
In addition, what will happen if the majority of consumer goods will be printed at home? Companies just deliver customers the correct structure and codes and for example toys, food, screws can be printed directly at home. No delivery or logistics involved and you have your product within one hour or even faster.

Obviously this is a vision for further in the future but it is not unlikely to happen. What we don’t know 3D printing is already a huge market in the manufacturing industry and sooner or later will be more available for consumer market.

Food for thought!

https://www.supplychaindigital.com/logistics/dhl-how-3d-printing-disrupting-logistics-industry

ZARA PACKAGING

Regarding my first post in the blog, I want to talk about Zara again, but in this case about packaging.

When you buy a Zara product by internet you receive it in a package like this:

Inside the box, the clothes are very well bent and with its plastics. But I wonder, is it necessary so much material in the package? Because the clothes can be only inside the box, without other papers, in order to decrease the costs in materials.

Maybe it is a reason for marketing, making to the customer to buy more by internet because when you receive the product you can be sure it is in perfects conditions and quality.

You can see a very interesting video about ZARA`s strategy below:

Drone Food Delivery

While watching the football match of Real and Barca, I got very hungry and noticed that I still have a discount available on deliveroo which soon will expire. So, since it’s lazy-sunday I decided to order some food. Unfortunately, I have to wait now 40 minutes until the Indian food will be delivered…

November 2016, Domino’s tested for the first time the new delivery innovation: drones. In New Zealand the first flying pizza touched the ground near Auckland, the delivery flight took under 5 minutes for 20 miles. Please, watch the video 🙂 :

Can drones revolutionise traditional logistics and supply chains? And can we soon expect to get our pizzas delivered within 10 minutes in front of our doorsteps?

Some basic facts on the pilot project:

  • Drone delivery offers tremendous benefits in the form of cheaper, faster shipping. This could accelerate the growth of online retail sales as free and fast shipping are the most enticing factors drawing consumers to shop online more often.
  • There are two main types of drone delivery companies are exploring: home drone delivery and supply chain delivery. Although home drone delivery receives the bulk of public attention, using drones to make deliveries within the supply chain can smooth out the fulfillment process and increase efficiencies.
  • Mainstream adoption of drone delivery will take place in stages over the next few years as regulations are put in place and drone technology improves. Right now, most tests are extremely limited in scope, take place in rural areas, and do not actually deliver packages to customers’ front doors. These tests will gradually progress, eventually bringing drone delivery to more customers in populated areas.

 

What distribution system is best for the farmer?

The cultivation and trade of citrus fruits, especially orange, is one of the bases of the economy of the Valencian community. This blog is not about the cultivation of the orange, but the different ways in which it is marketed. The management and logistics that is followed at each point of the chain, from the collection process to its manufacture, vary both the price of costs and the net margin that each agent obtains.

We can distinguish two main marketing channels: traditional and online sales. The process that is followed in both ways is different.

In the traditional channel, the farmer sells his production to a fruit and vegetable center that is responsible for collecting the fruit, transporting it to department stores where it is cleaned and sorted, packaged and stored until it is distributed to a wholesale market or directly to supermarkets and greengrocers. This process requires the professionalization of companies, and the participation of numerous operators that make the final price of the product more expensive.

The online sale follows a different logistics than the previous one. This system is based on the direct delivery of the product in 24 hours. After collection, oranges are distributed to families or to wholesalers in refrigerated transport.

As we see, these are two different management and marketing models. The first one stores the fruit in refrigerated chambers since the fruit is collected in advance at the right moment of maturation in order to supply the market, both nationally and internationally. The second collects the fruit of the field and commercializes it in the moment, transporting it to the domiciles in perfect state of maturation.

The following figures are a summary of the different channels of marketing of oranges:

Captura

I recommend you to see this video, which summarizes the process that follows the orange from its collection, its processing until its distribution to the customer (traditional channel).

 

 

 

 

 

 

 

 

Single is always better?

Is it an interesting title, isn’t it? 🤔 However, sorry, the topic today is not about a relationship, it’s about a kind of queue.  I’m pretty sure each of us, at least one time or a thousand time has been in a queue such as in a bank, in a post office, in an embassy or in a supermarket.

I found out that, a goal is to design a queue that will cut wait time and increase customer satisfaction often the choice between a single line and a multiple line, hence, which is more efficient?

The science of keeping lines moving, known as queue management, is a big deal to big business. Perhaps the most important role players are “line managers,” who monitor the flow of people, direct them to a cash register and, when needed, hold up signs saying how long it will take to check out. (NY Times, Michael Barbaro, Published on 23, June 2007)

How customer think about a single line queue?

Often customers dislike the look of a long line snaking around several turns. For instance, 9 people waiting in one line instead of three people in three different lines can be deceiving for an uneducated customer. He/she may immediately balk by seeing the number of people in a line stretching beyond what they consider the norm. If they relate 3 people wait with four minutes in a traditional system, they may automatically think 9 people wait will take twelve minutes neglecting to take into account that the single line is feeding to three cashiers through a more efficient system.

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Any benefit for customers from a single line queue?
People stand in the same line, waiting for a register to become available, there are no “slow” lines, delayed by a coupon-counting customer or languid cashier. It feels long, but conversely gives its users the pleasing feeling of almost constant progress.

The following reasons might be benefits for the customer:

  • They can simply jump in line without having to stop, choose, and then fret about which line they are in.
  • If a hang-up occurs at one cashier, they do not have to worry that it occurred in the line they chose. Instead, the single line will keep flowing to another point of service.
  • An impartial waiting and checkout system that automatically enforces the first come, first served rule, a universal truth in fairness.

This video clip explains the advantage of a single line queue in a mathematic way. You can have a look to understand more how it works.

 

With all mentions, and only in queueing case, I would say: single is more simple and better!

PepsiCo, The Problems of a Wrong Distribution Strategy.

pepsico

PepsiCo, The Problems of a Wrong Distribution Strategy.

When a company enters a foreign market, the keys to its success is the distribution strategy, the channels it uses, as well as market know-how and customer knowledge and understanding. The case study of PepsiCo, provides evidence of the situation that a company faces when its distribution strategy is not correct.

PepsiCo accessed the Ukrainian market, back in 1968 and since then has been trying to sustain its position in the market. Despite the fact that the supply-chain management has led Pepsi to gain local fame and popularity, it is inefficient in terms of cost, which reduces the ability of the company to earn higher profits. Pepsi needs to redefine and redesign its supply-chain strategy to meet the challenges faced in the market and sustain its position in the country, especially with these huge competitors joining in (f.e Coca – Cola).

Some possible solutions for Pepsi, if they want to gain competitive advantage in the market, is to invest further in its supply-chain management. Emphasis in research has been placed upon global supply-chain management, where the notions of channel strategies have been drawing the interest of all. Pepsi needs to incorporate these concepts and tools into its marketing strategy in order to enable efficiency in supply-chain management. Its focus needs to be on customer satisfaction in the market and cost efficiency along with a leadership strategy that takes into account cultural gaps that are affecting its ability to reach all customers.

http://www.scribd.com/doc/55459265/A-Study-on-Distribution-Channel-of-Pepsico