Impact of Coronavirus on International Logistics

Many industries have been affected since the coronavirus swept the globe, especially cross-border e-commerce. Now let’s talk about how cross-border e-commerce is affected.

The first is the platform. Affected by this epidemic, all cross-border e-commerce platforms will be affected to varying degrees. This is reflected in the difficulties of small and medium-sized sellers, slow logistics and delivery times, and foreign consumers’ short-term trust in Chinese goods. Based on various factors, although Amazon Global Open Store, eBay, AliExpress, Wish and other cross-border e-commerce platforms have issued policies and measures, they will inevitably affect the transaction value and business of cross-border e-commerce. Business platform. Revenue and other performance, and even operating results in the first half.

The second is the supply chain. In the short term, cross-border e-commerce goods will be out of stock.Most small and medium-sized cross-border e-commerce sellers have insufficient stocking, and there will be no stock when the products are sold out.

The third is logistics. China’s logistics has not yet fully recovered, and procurement is completely inoperable. In international logistics, the cost of small package express will increase greatly due to the reduction of flights. We must consider shipping, but the delivery time will be extended, and the consumer experience is not good. At present, many countries have completely stopped flights to China, and some countries have reduced flights to China. This will have a greater impact on logistics to countries such as Africa, especially for enterprises that use postal parcels as their main logistics method.

The changed distribution channels—taking masks as an example

Those days are very tough for me and everybody. Because when I was in China, in this moment, China was suffered the coronavirus, people could not be permitted in the streets. And the biggest problem was that we need to wear the mask when we wanted to go to supermarket. But it was very difficult to buy the masks in this time. Some retailers had some inventory about the masks, but some of them wanted to be paid for more money based on the situation of the supply and demand imbalance. Because the masks are really useful in this situation. Here you can see some information about the suggestion about wearing masks.

In this time, many manufacturers had seized the opportunity to product the masks for the public. Meanwhile, the National Health Agency had controlled the current factories. Once they had product masks, the masks would be uniformly deployed. The government just like a retailer, after receiving the demand of the province, they gave information to the factories. The factories delivered the masks like FTL to the province. At this moment, the distribute network just liked a Manufacturer Storage with Direct Shipping. There is a hand drawing about the direct shipping, may be interesting for you.

When the production gradually improved, the citizens also could get some masks in case to go shopping, but they needed to order the masks in the Internet first, and then when the community hospital received the masks, the citizens could pick the masks in this place with the previous order information. Meanwhile, the citizens also could reserve the protective suits from the manufacturer. The community hospital was a Cross-Dock DC. This distribution network is Manufacturer or Distributor warehouse Storage with Customer Pickup.

And there were established many small factories for produce different types of masks and other medical protective equipment. Mouths later, the situation of China is better than before. And the production of manufacturers is very high. However, the demands of masks inside China are saturated. Therefore, some manufacturers are taking the measure about shipping directly with the retailers provide the information flow. This has changed to the first one way. But the role of retailer is not the government anymore. It’s the real retailer.

Nowadays, the coronavirus spreads fast. All the world may need the qualified masks. There are many distributors who collect the materials and import to other countries by carriers, such as Amazon and Alibaba, some bigger companies. Then, there are many small distributors, they would like to do the resell to the customers in the abroad. This distribution network just called Distributor Storage with Carriers Delivery.

The world is changing, for every company, there won’t be one distribution network. With the marketing is changing, choosing the right distributed way to deliver could reduce the cost and attract more customer.

From here to eternity, HOW LOGISTICS CAN POWER THE FUTURE OF SPACE TRAVEL

When Adrian Dalsey, Larry Hillblom and Robert Lynn founded DHL in 1969, they didn’t know they would revolutionize the world of logistics. Today, DHL is the world’s leading logistics company. They have 380,000 employees in over 220 countries and territories that work to deliver over 1.5 million parcels per day.

In 2011, NASA resigned their famous Space Shuttle Program, making the way for new associations like Elon Musk’s SpaceX and Amazon organizer Jeff Bezos’ Blue Origin. These aspiring endeavors started winning worthwhile NASA agreements to supply outsider coordinations to the space station, utilizing unmanned self-ruling vehicles to convey everything from fresh food to scientific instruments.

In 2018 DHL began a venture called MoonBox shipping service in collaboration with Astrobotic Technology, Inc. a company that tries to make space available to the world. The organization’s lunar lander, Peregrine, conveys payloads to the Moon for organizations, governments, colleges, non-benefits, and people. They are presently tolerating little tokens for incorporation on its first shipment to the Moon. These mementos will be put away on the Moon for a considerable length of time to come.

La imagen tiene un atributo ALT vacío; su nombre de archivo es screen-shot-2020-03-31-at-20.18.51.png

This is a unique opportunity to commemorate special occasions such as your graduation, holiday, wedding, child’s birth, or loved one’s memory with a lasting symbol that will carry on their lunar lander. Life’s most important moments can be forever linked with the Moon.

You can learn more about MoonBox here. By the way, the website is really fun to use.

COVID19 impact on Logistics processes

Coronavirus has brought enormous losses to the global economy as a whole and to almost all industries in particular. The transport and logistics sector was the one of the first fields to feel he loses. First of all, most logistics providers were affected, especially the ones who worked with export and import to / from China.

“Air cargo to China makes up 38% of our company’s total exports. In imports, this figure is 40%, – says Stefan Haltmeier, CEO of German Quick Cargo Service. – Up to 90% of our exports to China are paid in this country. Due to the unplanned long holidays, many banks are closed, and payments from China are delayed. We must continue to make advance payments, as the CASS IATA (cargo agents settlement system) billing system charges us for the previous transportation costs. It also negatively affected the cash flow of our company. ”

“The biggest problem for us today is that due to the late resumption of the factories in China, many batches of products must be delivered to the consumer as soon as possible. This forces us to change the vector of work, reducing the number of multimodal transportations in favor of increasing aviation, ” says Ken Hui, CEO of Chinese FANS TRANS.

Due to the fact that many airlines have suspended or reduced the number of flights to China and other countries (both passenger and cargo), the total carrying capacity of air transport in this direction has decreased, and there has been a disbalance between the supply and the demand, which “drives the Chinese market crazy.” Airlines increase tariffs every two to three days, and the waiting time for consignments can reach up to 7 days officially, and up to unlimited period as a reality.

ZARA LOGISTICS

I have been watching Inditex for a long time and after coming to Spain, I was wondering how the strategy of this company was arranged.

On the logistics side, I decided to look at one of the brands that I have been watching in Russia, Zara.  It’s quite an interesting fact that in Spain this brand is considered a mass market, and in Russia it is often equated to middle class due to its retail prices and European origin.

The Spanish sewing empire Inditex has been improving its marketing strategy “Fast Fashion” for many years, often violating the generally accepted rules of retail.

The data I managed to find so far is that the company’s capitalization is huge and Inditex founder and owner Amancio Ortega, with his fortune of $62.7 billion, is the sixth richest man in the world after Bill Gates, Jeff Bezos and other celebrities.

By introducing elements of Lean Manufacturing and Theory of Constraints, Ortega with Inditex has incredibly accelerated the process of manufacturing, distributing and selling clothing for the mass market and made it more fashionable and affordable.

Let’s look at their approach to logistics.

In logistics, Zara uses Toyota’s “just-in-time” (JIT) principles. The products are also distributed centrally: stores around the world receive their products from central warehouses in Spain. But it is “his” models, sizes and colors that are sent to each store. They are ordered in advance by the sales managers. The delivery system is worked out so clearly that new products arrive at European stores within 24-48 hours, and in the U.S. and Asia – within 48 hours. This speed could not have been achieved without cargo aviation. It is expensive. However, small, fast-selling lots of goods give buyers a sense of exclusivity.

This is probably one of the reasons why in Russia, for example, Zara is considered a mid-sized segment.

That is why the company encourages quick purchases: do not put off for later, the next visit of a favorite thing in the store will not be anymore.

As a rule, Inditex competitors sew their products in China, using cheap labor. But about two-thirds of Inditex products are made in Spain, Portugal and Morocco, especially if they are expensive or complicated in style. Own factories in Europe allow you to win on time and not overpay for delivery of goods from Asia. Given the frequency of updating the range, the savings on transportation costs are huge.

Previously, Inditex was financed by commodity credits from its suppliers. The company bought raw materials with a delay of payment for 12-16 weeks, manufactured products in 1 week and sold them within 2-4 weeks. Thus, by the time of payment with suppliers the company had time to work out 3-4 full production cycles and earn not only on the raw materials, but also to postpone the development.

The principles of Lean Production and Theory of Constraints are also used in the organization of retail trade. Zara stores had no storage space and had to sell their entire collection in a month. And the company managed to reduce the production and distribution cycle of the new collection to 10-15 days.

Nowadays, the transportation and distribution of their products is undertaken entirely by external contractors – but they still play an active role in trying to reduce the greenhouse gas (GHG) emissions involved.

As written on the company’s web page, they have developed a tool to measure emissions based on different means of transportation in line with international standards laid down in the GHG Protocol, so that they can track progress, and offer improvement plans for their distributors to make reductions.

https://www.inditex.com/es/home

Parcel delivery: last mile future

Last mile delivery is getting a lot of attention! How so?

The cost of global parcel delivery, excluding pickup, line-haul, and sorting, amounts to ~ EUR 70 billion, with China, Germany, and the United States accounting for more than 40 percent of the market. Moreover, growth in this market is almost 300 percent in developing markets such as India.

The last mile delivery has a high percentage of total parcel delivery cost – often reaching or even exceeding 50 percent – makes it a challenge for those seeking to gain a competitive advantage.

The last mile logistics is seeing disruption from new business models that address customer demand for ever faster delivery, as well as new technologies that are likely to reach market readiness over the next ten years, including drones and autonomous ground vehicles (AGVs).

A growing group of consumers desires faster home delivery, yet most are highly price sensitive

Studies done in China, Germany, and the US with a total of 4,700 respondents show the following: Almost 25 percent of consumers are willing to pay significant premiums for the privilege of same-day or instant delivery. This share is likely to increase, given that younger consumers are more inclined (just over 30 percent) to choose same-day and instant delivery over regular delivery. However, the remaining ~ 70 percent of consumers still prefer the cheapest option of home delivery.

Get ready for a world where autonomous vehicles deliver 80 percent of parcels.

Autonomous vehicles including drones will deliver close to 100 percent of X2C and 80 percent of all items. Only ~ 2 percent will be delivered by bike couriers in the relatively small instant delivery segment.

Traditional delivery will account for the remaining ~ 20 percent of all items: big B2B customers with high drop factors (i.e., the number of parcels dropped per stop/recipient) and often special delivery requirements (e.g., hanging goods) will favor mostly human delivery as we know it today. The same is true for e-grocery delivery, as people will still want crates to be carried up to their apart­ments and returns to be handled directly.

This vision will become reality within the next ten years

The speed at which the outlined last-mile delivery scenarios can be reached will vary, depending on public sentiment, regulation, and labor costs.

Early adoption of these new autonomous delivery models will concentrate in developed countries, where labor costs are high enough to make the return on investment significant. In the developing world, however, labor costs will likely remain low enough to prevent any major technology change impacting the last mile over the next five to ten years.

In any event, regulation will need to change significantly (e.g., liability for damages caused by autonomous vehicles), but such regulatory challenges will be overcome in the next ten years, driven by the influence of the large automobile companies.

At the same time, public opinion concerning autonomous vehicles including drones has already started to shift – with 60 percent of consumers indicating that they are in favor of or at least indifferent to drone delivery.

Therefore, there is very little to suggest that the transformation will not kick in over the next ten years, at least in the developed world.

So what does that mean for any player in the market?

If a company operates in a high-labor-cost country, it better starts thinking about the future of the last mile now, as key foundations in HR, IT, and the investment strategy need to be laid down. Companies that fail to act soon will forfeit their chance to be among the contenders for the last mile in the long term. However, before we jump to conclusions, let us look at our findings in detail.

Digital TWIn for warehouse and distribution centers

Today I want to present to you the topic of digital twin for warehouse and distribution centers.

The goal is to get an insight, how it could be implemented and in which way that technology operates. I found a german startup company that present that topic really lively and shows in a graphical way how it could improve the daily business.

If you want to learn more about the company “Logivations – Consulting & Technology” click here.

Logivations uses a combination of a 3D model and feeds it with current live data. This data includes tracking, throughput or inventory of individual products or materials. Furthermore, they simulate the material flow, staff deployment and the use of forklift trucks.

According to the implemented data, the company is now able to identify unproductive processes and eliminate them. Below you will see a picture how a digital warehouse could look like:

Packing Process

Not only the pick-up time and the placement of the products can be optimized, also the packing process itself can be revolutionized. Choosing the correct transport container can significantly increase or decrease your transport costs. A twin tool can help you to identify the correct transport method and how to transport them in the safest and most cost-effective way.

A 3D-package builder is able to choose the correct transport container considering all relevant figures such as product dimensions, outer packaging, material flow and joint packaging restrictions. The results can you see below and can be directly depicted to the workstation over tablet or monitor. Therefore, the employees will get a guideline in order to help them to increase their efficiency.

However, the digital twin technology is not only useful for current products that need to be packaged, it can also be helpful for new products. Once you put in the data of a new customer order, you can calculate precisely how much it will cost and what storage or transport facilities are needed to fulfil that order. You will be able to determine whether it is beneficial for your company to accept that order or if the customer wish is simply not profitable for you.  

In conclusion, the digital twin technology can support the whole business organisation – starting from manufacturing until the customer received the order. The importance of that technology will tremendously increase in the next few years and enable the fact to simulate even unpredictable scenarios, like we currently see in the worldwide corona crisis.

If you want to learn more about that topic, “Logivations” offers a free webinar about optimized picking tours. It is held in English and on 6th of April.

Hypermarket’s “self-revolution”

Carrefour in China

The days of the hypermarket are getting worse.

Consumers, especially young consumers, prefer to purchase the required products in convenience stores and online shopping channels. At the same time, offline shoppers pay more attention to a pleasant shopping experience and promotions. Compared to physical stores, the relatively low prices of online shopping channels, convenient price comparison methods, and the ability to provide home delivery services are the main motivations that drive consumers to choose online shopping.

Public information shows that Carrefour China is also shrinking its stores and has closed some stores in cities such as Kunshan, Hefei, Shaoxing, and Hangzhou. According to relevant statistics, there were more than 15 Carrefour stores in Huaguan in 2015, and the first half of this year Carrefour closed three more stores in China.

Under heavy pressure, Carrefour’s transformation seems imperative.

In Carrefour ’s vision, its O2O business will integrate rich offline product lines and store resources, relying on offline stores to provide consumers with store delivery, mobile payment, app applications, and store return services.

But the reality is:


No matter how beautiful and developed the online platform is, the functions are perfect. Without traffic, it is equivalent to opening a physical store in the old forest in the mountains. Many companies tend to divert from physical stores to self-built platforms, and registered users grow rapidly, but the actual operation cannot be achieved, and the problem is that they do not control the traffic entrance. The e-commerce giants have tightly controlled this and will not give newcomers a chance. You pay a lot of money for users to install your app, which is often easily deleted by the user, or even if the user does not delete it, it is left behind. “

On the other hand, logistics, as one of the most critical elements of O2O business, also determines the stickiness and repurchase rate of users to a certain extent. According to reports, in Beijing, Carrefour chose a professional third-party cold chain logistics company-Vientiane Logistics. At this stage, users in the Beijing area can deliver the next day as soon as possible after ordering, and room temperature products that are ordered after 5pm can only be delivered the next day. This delivery time does not have an advantage in various home-to-home businesses that are fully blooming, such as speed and one hour.

Although they did a lot methods to improve their business, but eventually failed in logistics integration, leading to 19 years of withdrawal from China.

the importance of the rivers in the transportation

When we talk about the transportation through water in the logistics of the world we immediately think about the maritime carriage. However, before the development of this industry there was another way of moving merchandise which was developed even in the ancient Egypt when the Nile river was a crucial part of the economics of the empire and its later development around it.

Mapa del Antiguo Egipto. Río Nilo | Egipto, Egipto antiguo ...
Nile River

But the Egyptians were not the only civilization which used the rivers for logistic purposes. The romans used the Tiber to carry merchandise from Aventine or Umbria to Rome, although nowadays the river is no longer navigable, and it is mainly used for touristic purposes.

The Spanish empire also used the rivers across its territory in south America as well as in the Iberic peninsula. The conquerors used rivers like the Magdalena, located in the former viceroyalty of Nueva Granada (Ecuador, Colombia and Venezuela), to take out gold and other goods towards Caribbean see to then be transported to Europe; once in the peninsula, the Spanish used the Guadalquivir river to transport the goods inside the territory.

Guadalquivir river in XVIII century

The nowadays’ importance of the river transportation relies on the fact that it combines the advantages of the maritime transportation compared to other means of transport. If the river is navigable, it can transport huge amounts of merchandise with a lower cost than trucks. For example, the port of Rotterdam’s inland navigation connections can transport merchandise to Germany, France, Poland and even the Black see, by using waterways such as the Danubio river.   

Another example of inland navigation in Europe are the waterways developed by Germany, they use their principal rivers such as the Rhin or Elbe to transport merchandise in ships within the country, they have even developed infrastructure to improve the perform of the logistic in inner waterways. Germany has created a network of water channels that even have special bridges for the ships to better navigate (Kanalbrücken). The video posted below show the most important water bridge in Magdeburg.  

In the Americas rivers are also an important part of the logistic. Rivers such as the  Mississippi and Missouri in the United states, The Amazonas in Brazil, Colombia and Peru, The Plata in Argentina and Uruguay and the Magdalena in Colombia are important and growing transportation means for logistic operations in the continent.

Merchandise in Magdalena River (Colombia) and Mississippi river (USA)

Because of the epidemic , we are more united

Correos Express

Madrid, March 26,2020. – Correos Express – Group Correos urgent parcel subsidiary, They will collect all the healthcare material donated by the company free of charge and distribute it to reference hospitals throughout Spain.

The objective is to supply urgently, quickly and efficiently to hospital centers due to large influx of those infected with Covid-19, in a week that is highly critical.

“We want to provide all healthcare professionals with all the material so that they can work in complete safety,” defends David Barrero, Operations Director of Correos Express.

Whether a company is worthy of the people to trust it, buy their services, and delivery our truth to them, as to buy their stock, can be seen when the country’s difficult times, what this company did to their “mother”, and what was returned to the country.

Judging by a company’s value and corporate beliefs, whether this company can grow long-term, whether it can become stronger and stronger, and whether it can be worth the investment.

Under the severe situation of the epidemic, what adjustments have the express companies made to the logistics and distribution business and the express staff?

  1. Due to the impact of the epidemic, nearly half of the company’s operations were suspended, resulting in reduced logistics requirement, and the corresponding number of logistics company staff on duty decreased to meet the requirements of normal operations.
  2. Since there are different areas with different situation of epidemic, the company has been cancelled some routine of transportation to some areas, in order to avoid their staff to be infected.
  3. All the courier wear masks, gloves, and keep a distance of 1 meter from the client to implement non-contact pickup and collection service.

Although the service process may not be as efficient as usual, the safety factor is very high, which reassures customers. This is also the value of a logistics company.

All of this cannot be said to be perfect, but it is necessary. I hope everything passes as soon as possible.

Ánimo España

Innovations – online logistics

In this Post I would like to tell you that when reading various information and documents I was able to find this that I found super interesting for the innovation of online logistics.

As we well know, logistics is one of the key elements behind the success of any eCommerce, and it is essential to be up-to-date as well as to know the projects that will revolutionize logistics in a country and in the world. Today for any company it is of utmost importance to improve its services and products, this requires more technology and dramatic changes every day to keep up with globalization and thus be able to quickly and efficiently meet the needs of customers who each day they are more demanding.

Electronic commerce or e-commerce basically consists of the development of market actions, sales, customer service, portfolio management, logistics management and, in general, all commercial events and information exchange carried out through the internet. It can also be defined as the financial exchange that is carried out, through the network, between subjects that may be at a great physical distance, and that generally takes place through electronic means of payment.

The advantages that are managed in virtual businesses are the globalized market expansion that is achieved, and the speed with which businesses are managed. Although customer relationships are interpersonal and can cause business complications, the use of new technologies and their innovation have created changes that have improved communication with the customer and the company.

Go ChainGo

ChainGo aims to revolutionize logistics through blockchain technology, especially focused on the sea transport of goods. Currently inefficient industry systems, based primarily on the use of paper documentation, involve bureaucratic processes that result in delays and penalties.

Through the digitization and real-time monitoring of document processes using the great security of the blockchain ecosystem, ChainGo customers will be able to digitally transmit, certify and sign documents, as well as carry out a complete monitoring of cargo, in addition to that the creation of your API your solution is ready to be integrated into the current systems of the companies, with an easy and efficient adoption.

Manzaning

Manzaning is a Marketplace that allows users to make weekly purchases of food and fresh produce in local stores and municipal markets with home delivery. It is positioned as a platform that allows the digitization of small businesses and municipal markets, reconnecting them with a young and digital user, which will allow them to regain competitiveness against large online players.

 Unmanned life

The latest innovation in online logistics in Spain comes from the Artificial Intelligence-based Unmanned Life software platform that offers mission-based automation in a precise, controlled and flawless manner. Its software allows to direct, coordinate and manage fleets of different types of robots simultaneously to achieve industrial applications.

Nubalia

Jamboard – A digital whiteboard designed to spark team creativity in real time, anywhere. With your creative drawing tools or your drag system from Google Drive or your own mobile, you can make work easier, achieve greater collaboration and save time and work.

App Engine, Compute Engine and Chat from Hangouts: with these three Google Cloud Platform solutions, applications can be developed to quickly provide assistance to a user with a damaged or defective product, or simply to keep track of products sold, thus How to create a way to contact the customer through a Google form.

Geomarketing, geolocation and secure tracking with Maps: By using the intelligence of google Maps in Geomarketing you can plan the geographical expansion of your company, by analyzing the number of early establishments or their product, as well as carrying out an analysis of consumption data and real-time sales, which can be automatically stored in G Suite spreadsheets.

record in logistics ThE biggest hospital in spain

Credits: IFEMA

Difficult but not impossible, It is here where I would like to mention the importance of logistics, it is present in our day to day, as the teacher said in class, our environment is surrounded by “logistics”. These days you can see how in several sectors the movement of goods from one place to another has completely stopped and in other sectors it has increased and you could say that they are almost scarce.

Ifema “is a true symbol of what we are capable of doing when we work together,” said King Felipe VI last Thursday, when I visited the site that has enabled the Community of Madrid, the Ministry of Health and the Ministry of Health in just 48 hours. Military Emergency Unit. Given the critical situation that exists in the health network of the capital.

The construction of this emergency hospital was promoted, aimed at the adoption of new measures in light of the rapid evolution of the pandemic due to the COVID-19 coronavirus in the Madrid region. A multitude of companies and organizations, both public and private, have collaborated in its construction, among them the Military Emergency Unit (UME) of the Ministry of Defence, or companies in the distribution sector such as El Corte Ingles, Ikea or Carrefour, committed to donating clothing. bed with which to cover the needs of this emergency hospital.

The provisional hospital was set up in just 18 hours by members of the Armed Forces.

The modular design of the IFEMA fair is important, as it will help expand the availability of beds if necessary. The structure is based on a central part for the infirmary with full availability of services, toilets and showers.

Pavilion 9 of 21,000 m2 has 15 modules of 50 conventional stalls for a total of 750 beds. Hall 7 has 11 modules for 550 beds and two ICU modules with 32 beds in total. These are the current numbers, but it is expected to have 4,500 beds in total over the next few days, with a “high percentage of ICUs”, according to the Madrid Minister of Justice. With the capacity to reach 5,500 beds if necessary, with a separation between beds of 3 meters.

In addition to medical care, the IFEMA campus will act as a warehouse, with medicines, supplies and an entire pavilion dedicated to supply management, also for other hospitals. Regarding meals, the person in charge will be the company responsible for catering at IFEMA, which already has previous experience in hospital care.

In conclusion, we can see that in times of crisis it is essential to have fast and extremely organized logistics, since in this case we are talking of saving millions of lives. In some publications and videos, it can be seen that with regard to the high costs, many of them collaborate with the product delivery management by donating and assuming the expenses corresponding to the steps that are necessary to supply the installation needs of the hospital.

Here some links about IFEMA

https://www.youtube.com/watch?v=8TUfcX6cBpo

Some Knews link

https://www.20minutos.es/noticia/4209281/0/asi-es-hospital-mas-grande-espana-hecho-tiempo-record/

How cross-border e-commerce works

1. The overseas supplier first sends the goods to the logistics distribution center of the cross-border e-commerce company in the country where the product is produced, and the distribution center performs stock preparation and warehousing management. After the customer has successfully placed an order, the logistics and distribution centepicks,ships the product according to the order requirements, and delivers the “single” order as a single package to the international express company to the customer.

2.First, the overseas supplier sends the goods to the cross-border e-commerce company’s logistics center in the country, and the logistics center performs stock preparation and warehousing management: After receiving the user order, the logistics center picks and packs according to the requirements of each order and logistics company will deliver these parcels in batches to the logistics distribution of the e-commerce company in the overseas transit country, the transit d

3.The overseas supplier sends the goods to the cross-border e-commerce enterprise’s logistics distribution center located in the country, and the distribution center performs stock preparation and warehousing management; after receiving the customer order, the logistics center performs single order picking, packaging and shipment , to form a single package of a single order, and then integrate the packages with the same destination according to the delivery address, and the international logistics company will ship these packages to the re reassembles the entire batch of received goods into the original single package, and then sends these single packages to the buyer through the local logistics system.

How the astronauts store food?

Hey space geeks! ( Maybe I’m the only one). We are here another week with a short but curious article about space issues, that can help us to deal with the lockdown.

índice

We know (now) that with confinement there are also other struggles that we didn’t experience before, as how to stock all the food we need for a week in our little closets. So why don’t to learn from the best? If we talk about confined people it is better to go directly to the masters in this topic: The astronauts on the International Space Station ( ISS). Some of them have spent more than a year there, and stocking food for long time missions it’s incredibly difficult, in terms of space, expiration date and weight of the mission. I have found different videos that may be interesting for you.

First we have a deep explanaiton about how to prepared the food(mostly dehydrated food), stock there in the rocket and then in the ISS.

We have much more information on the internet, but and interesting presentation about how the food is stored at the ISS can be found here, where Thomas Pesquet, an ESA French Astronaut, explains how eat without gravity. The most interesting thing, concerning the subject, of the video, is to see where they usually eat ( and to be happy because in our confinement we have a bit more space than here), and where they store the food( you can see a deeper explanation, if needed here, by Frank the Winne, the boss of the European Astronaut Centre in Cologne).

In the last years they have also started to produce their own food, so it is easier for them to have fresh food and at the same time, it is better for the mission, as they can reduce the weight, that is the most expensive thing as you have seen in the first video.

Just to finish, in this video you have a short tour of the ISS, so you can understand and see the way they store their products in all the walls and even on the floor, trying to safe space from everything. In this case is not a short video, but if you have some time it can be interesting for you.

Some more information in general about this topic can be found here, where the NASA team explains all the process, since the food is on Earth until how they eat it at the ISS.

As always, let me know if you want more post related to the aeronautics or space field and if you have any doubt or something to add.

 

Alibaba Logistic’s Decisions

 This is a blog about the world’s largest B2B online marketplace Alibaba, that is the part of the Chinese holding company Alibaba Group. I am sure you heard about Alibaba and maybe some of you even tried it out. It is a trading platform for buyers and suppliers to exchange variety of products and possibly complete a transaction directly between each other.

As a wholesaler, Alibaba offers both small items in large quantities and large items in small quantities.

Alibaba is offering discounts for buying in bulk. Most of Alibaba’s manufacturers make consumer products. Customers can find individual products for sale (usually higher-priced items), but the majority of offerings are cheaper bulk items.

In 2019 this Chinese e-commerce behemoth Alibaba invested 23.3 billion yuan ($3.3 billion) in logistics affiliate Cainiao in a move to strengthen its logistics operations, according to the South China Morning Post.

Alibaba’s latest investment brings its stake from 51% to 63%.  Alibaba’s investment will probably be used to develop new technologies and services in an effort to improve its existing smart logistics network, which already includes warehouse robotics, drones, high-speed scanners, and self-driving vehicles. 

Alibaba found the logistics affiliate Cainiao since 2013 and in 2017 spent $807 million to acquire majority control of it. Alibaba’s decision to take further control of Cainiao is part of a growing trend of e-commerce giants bringing logistics operations in-house to bolster their services. 

You may check more information about Alibaba in general and some information about the response time, pricing policies, shipping standards and the money back guarantee at my video that you may also find on this blog.

Trump Urges Automakers to Start Making Ventilators

It seems unlikely that an automobile manufacturer would make a ventilator for a novel coronavirus patient. But in fact, they may be well suited to mass production of highly complex medical equipment, which is in desperate shortage.

Think of the carmakers’ vast supply chains, staffed by skilled engineers. They are used to producing to strict standards and sometimes use “clean rooms” in factories. There are even similarities between some parts of a ventilator and a car, such as a hose.

Days after ford motor Co. and general motors Co. said they would help produce the emergency equipment, Mr. Trump stepped up the pressure and on Friday used federal authority to speed production.

General motors must immediately reopen the plant it foolishly abandoned in lordstown, Ohio, or something else. Anyway, we’ve got to start making ventilators, now! Ford, build the ventilator!! General motors @ford motor company
— Donald j. trump, March 27, 2020

In any case, carmakers now have no choice. Days after ford motor Co. and general motors Co. said they would help produce the emergency equipment, Mr. Trump stepped up the pressure and on Friday used federal authority to speed production.

Even with a simplified product, there are still doubts about whether the carmakers will be able to do their part to make these medical devices, especially if they are a little unfamiliar to them.

THE LOGISTICS OF THE PyeongChang WINTER Olympics

As you all probably know the 2020 Tokyo Olympics have been postponed. It’s interesting how the IOC fought against the people that wanted them to postpone the Games with logistics. We can read more about this here.

After reading about this I became interested in the logistics of such a global event as the Olympic Games. And I came across lots of articles about what a chanllenge the 2018 Winter Olympics was. Basically the biggest concerns were related to the location, the capital of North Korea PyeongChang.

The games in North Korea are different from past Olympics because of the area. Previously, the games have been situated in urban focuses like Rio or London. In this case the area will carry less issues with traffic clog, yet the transportation framework despite everything presents issues. Open travel must be set up or enhanced for the strangely high volume of explorers.

Roadbuilding had been in progress to guarantee better transportation of cargo, while the competitors, media and onlookers travel by rapid rail. Another freeway is lessening travel from the Incheon International Airport to the Olympic scenes by around 40 minutes. The augmentation of a road from Seoul by 75 km diminished travel time by an additional 40 minutes. In general, an aggregate of 16 streets were constructed or extended to make the coordinations of the 2018 Winter Games conceivable.

The Olympic Games are not just a possibility for the atheletes to perform at their top cutoff points, yet for coordinations and distribution center administration organizations to convey world-class perfomances of their own. These organizations must keep up their concentration and execute flawlessly previously, during and after the 2018 Olympics had finished. Organizations, for example, Hanjin and Rock-It Cargo, similar to the a huge number of competitors who contend, had a mind boggling achievement to think back on for a considerable length of time to come.

For big cities around the world, the Olympic Games raises their popularity, yet in addition regularly leaves them obliged for enormous facilities they never use again. For coordinations suppliers, the Games are a chance to make huge edges on cost-in addition to contracts on one of the greatest, and most obvious stages on the planet. The upside, if everything works out positively, is getting your organization’s name joined to a successful Olympic Games—the drawback, in case of failure, is being responsable for shortages or delays.

Here you have a Logistics analysis of the 2018 PyeongChang Olympics. It’s just 7 minutes and it’s very interesting. I think this could be used for our professor to make some activities.

¿What are the challenges facing logistics on Black Friday?

Although Black Friday is a naturally American tradition (for Thanksgiving), either because of the influence of the United States or because of the very opportune date (end of November), it is true that in many places around the world this day has been taking on greater relevance and importance; for physical stores and e-commerce, it is an excellent opportunity because millions of entrepreneurs expect a great flow of people as well as a high volume of sales, which is a challenge to meet the demand generated by a day like Black Friday

But the key to properly managing the logistics of this day, focuses on how to manage all those customers who have a special interest to buy on this day, during the Black Friday is more than possible to achieve sales on a large scale, but it is also important to mention that selling too much and not knowing how to manage orders and customers in the physical stores, as well as shipments and deals with suppliers and transport companies, can trigger a number of problems.

Meeting such a concentrated demand in just a few days usually causes a lot of tension in the organizational structure of a supply chain and even in each of the intra-logistic units of the participants of the supply they are chain part of.

To do so, it is important to develop a great sales and service strategy during this stage, according to data taken from last year, that is, from Black Friday 2019, almost 14.5% of the annual shipments made by the various companies dedicated to this activity (Couriers and logistics operators in general) were made in a single day or, in the best of cases, in a few days before the peak day arrives.

In the following graphs we can see, according to 2018 statistics, which are the countries with the highest sales flow these days in relation to the United States:

As well as we can appreciate what people are most interested in buying in this season of great discounts:

Poor management of orders and shipments can lead to a negative user experience. In this sense, having a good or bad Black Friday will certainly affect the online reputation of e-commerce. Among the most relevant challenges that I can highlight with the logistics of this day, and which are commonly faced by companies:

Problems of lack of coordination between departments:It is very possible that the planning of the marketing and commercial departments is very imprecise (not knowing how such a concentrated demand will evolve in time) and that this will inevitably change the planning of the logistics area.
Problems of understaffing or overstaffing: Planning the appropriate number of employees to attend to the logistics area is usually complex,
but without a doubt, when the positions to be filled require a certain qualification or previous preparation that, for obvious reasons of lack of time, has not been provided to the worker, this may generate an increase in errors in certain logistics activities (picking, preparation of dispatch, lack of documentation accompanying the goods, etc.) that are difficult to foresee.
Operational flexibility issues: It also adds to the fact that our fellow travelers in the supply chain where we operate will also not be able to predict how, when and where demand will increase or decrease in a timely manner, a scenario of relative paralysis could be encountered due to lack of control or information that the various operators receive at each step of the supply chain.
• Problems in transport and delivery companies: Again caused by the fact of an uncontrolled massification of demand and during a short period of time, we can find that the companies that usually work with us can find themselves orphaned by vehicles or drivers.

I share with you these two videos of successful cases of companies that manage very well, a lot of orders on this day and that have a lot of experience around Black Friday:

Iot a game-changer in distribution network

The Internet of Things is connecting more and more devices every day, industries are implementing IoT to improve their efficiency and decision making. The number of connected devices in 2017 was larger than the global population with more than 8.4 billion.

Logistic companies like DHL are using IoT, to access to information of their workers to provide a safe working environment. Also companies with different types of distribution network, retail, wholesales, last mile, drop-off, like Walmart, Costco, Mercadona and Amazon, are implement IoT to take advantage of the data.

The IoT can be used in different sectors,this will improve the visibility and monitor the location of goods, people and trucks. The IoT improves the asset management, delivery, and supply chain, will provide the analytics to generate information, predictability and new business value and revenue.

Poh Khai, Senior Innovation Manager, at DHL said: “By exploring the use of IoT across our warehousing, logistics, and transportation systems, we can analyze the data generated at every critical point to identify ways to better manage inventory, better predict system maintenance, and better monitor and control supply chains. …. It strengthens our ability to ‘sense’ and improve our environment, turning data into valuable and actionable insights”

For more information, you can visit these articles

https://lot.dhl.com/harnessing-the-power-of-iot-for-the-logistics-industry/

https://www.sigfox.com/en/new-iot-powered-supply-chain-how-smart-logistics-tracking-creating-leaner-more-agile-global-economy

When supply chain meets chocolate

We all know Nestle, whether it is for their KitKat, their Nesquik chocolate powder. Indeed, this big multinational is the world leader in the food industry.

In order to be aligned with their green and sustainable plans, the company has taken actions regarding their cocoa supply chain. Their goal is to significantly reduce (and even eliminate) their supply of cocoa coming from protected areas which are threatened by deforestation, in West Africa.

This choice was probably not the most economical one, nor the easiest in terms of logistics. However, the company decided to change their distribution network in order to be aligned with their customers’ needs. Indeed, nowadays customers are more and more careful and regarding on the origin of the product they are buying. They demand for more environmental-friendly products (for instance, when they shop for chocolate), produced in a more ethical way. It is for example one of the reason why more and more people are changing their diets to eat more organic and/or plant-based food.

Now that we understood the consumer’s point of view, let’s go back to Nestle’s supply chain ! Nestle has defined the “Nestle Cocoa Plan” to achieve their objectives. Here are the actions they announced a few days ago, that aim to tackle deforestation.

From my personal point of view and as a customer of Nestle, I highly appreciate the changes and efforts they are doing to make the world a better place. Even though these changes might be helping their marketing strategies and change their brand perception positively, I still appreciate the fact that they decide to start changing their distribution network from the root.

In addition to these supply chain adaptation, they also worked on the human aspect of the question by eliminating child labor from, but also giving access to education to these children, empower women and train farmers in Good Agricultural Practices.

If you are more interested by the topic, I recommend you to check out their Youtube channel dedicated to have a more ethical and sustainable cocoa supply chain: https://www.youtube.com/user/NestleCocoaPlan/videos

Sources:

https://www.channelnewsasia.com/news/business/nestle-says-cuts-deforestation-in-its-cocoa-supply-chain-12583890

https://www.nestle.com/csv/raw-materials/nestle-cocoa-plan

Logistic TREND – Digital Twin technology

I would like to present you a future technology trend for logistics that will become more important in 2020. Digital twins are one of the most exciting developments that have risen over the past years. The digital twin technology allows the physical world and the digital world to be melded into one. Below you will find a short video, which explains what a digital twin is and in what kind of business areas it could be useful:

Process Optimization for Shipments

A digital twin can virtually predict everything that will happen in the physical world and therefore businesses are able to get a valuable insight for future planning and developments. A simulation with a digital twin can be used to collect product data, analyse packaging und use that information to identify weaknesses.

Imagine it would be possible to simulate a whole product process, starting from manufacturing until it reached the customer. Everything in that process can be analysed and, in the end, optimized. Potential problems can be identified before even shipping the real product, which allows cost reduction and improves efficiency.

Some companies already apply this new technology in their daily routine, for instance DHL. They describe 5 ways how digital twinning will revolutionize logistics:

https://lot.dhl.com/5-ways-digital-twinning-will-revolutionize-logistics/

If you are interested in that topic, please let me know. I really enjoyed that futuristic topic and maybe I will do another post to discuss this topic even further.

Restaurants and distribution network adversities during quarantine

Big Fast Food Chains, as McDonalds – have its business circle completed. McDonald’s replaces most of its suppliers through backward vertical integration (Buying Suppliers Companies) in order to reduce cost and ensure that its products are of top quality. They also have their own fleet of transportation, warehouses to manage stock and distribution to its restaurants (Franchisees). Financial muscle and well-structured distribution network, will allow this type of companies to overcome and easily keep on during quarantine.

However, small restaurants (entrepreneurs) are facing difficult times and even have a potential risk to go bankrupt, the situation will affect its distributors (That are losing fresh products) on their warehouses (Stock Keeping Unit) as the producers – who are also losing, as no many could purchase – have harvested or produced in advance products to keep food market running and stocked. At some point, if the quarantine gets expanded, we will face shortage of some products, as the producers are not able to keep producing as they used to.

Said so, after quarantine, both; big and small restaurants will face adversities on running their business as they were doing it, product variety will be quite hard to overcome, as distributors will principally focus on supplying large chains of restaurants, that will affect customer experience and probably return ability of its clients.   

It is advisable to proper tele work and start planning ahead with partners (Suppliers, Producers, clients, etc.) in order to have everything ready to go after the crisis is overcome, as many will go out and fill restaurants. As per the News, many entrepreneurs have fired its employees as strategy to survive, nevertheless, after quarantine, and having in mind that they could not properly train staff, losses in terms of bad service will be notified.

Companies shall take this period in order to re-establish strategies, check new systems for inventory control, developing new communications channels, offer mew marketing campaigns and properly study where to reduce cost.  

Coronavirus: New challenge to buy in Mercadona

I am going to talk about “Mercadona” which you can find it at every corner in Valencia.Mercadona is the Spanish distribution chain that sells the most own-brand or reseller branded products, accounting for 46.5 per cent of the total products sold. In addition, about 60% of the products it sells come from its own brands.Literally,we can buy basic things we need for life in here.

In this crisis time, Mercadona as a resource of people living .It is a huge responsibility to make sure enough physical supply.

“If there is anything that will make the situation worse it is fear,” said Juan Roig, chairman of Mercadona supermarket chain, who insists that the reason shelves are empty is because people are stockpiling rather than because there is a shortage.

“If you see the shelves are empty, that’s because they are sold out in that shop not because there aren’t more stocks in the warehouses. Our outlets are being restocked daily.”

Meanwhile  Aurelio del Pino, the head of ACES, an association representing large supermarket chains in Spain , assures that “supplies to the stores are absolutely guaranteed in every region of Spain.”

In Mercadona, we are seeing no disruption to the supply chain beyond the shortage of hand sanitizing gels and alcohol cleansers.

He insists that products are being restocked daily.

Supply and internal measures:
As they have assured, the stores will remain supplied, reinforcing and guaranteeing the supply of basic and basic necessities, so that our clients can make their daily purchases. In order to protect food safety, in no case and under no circumstances will product returns be accepted.

Supermarket delivery services full to capacity

For those who want to avoid the mayhem of visiting the supermarket, might online ordering and delivery to the door prove a solution? 

Take-away delivery services are still operating.Well, yes but there are reported difficulties from across the board of supermarkets with delivery slots not being available for up to a week in advance.  

the supermarkets in spain are currently facing severe delivery problems–they have chosen the different distribution network

Recently in Spain, the coronavirus spreads very quickly and the government has token some measures to control the situation just like the citizen can not leave home unless they have some reasons, such as walk the dog, buy daily necessities and so on. All the people have been told that “quédate en casa”. Many people obey this policy and they do not want to leave home. The supermarkets also have the limitation about the quantity of the customer in the same time. So sometimes customers need to stand in long lines. The waiting time also increases. Moreover, if you go to the supermarket too late, you may can not get the fresh meat, they are totally out of stock. Based on these three main reasons, the customers would like to order the necessities via Internet. It’s convenient and can reduce the risk of leaving home.

Many supermarkets have the responsibility to meet the demands of the customers. Usually, the supermarkets have the distribution network “manufacturer storage with direct shipping and in-transit merge, like Consum has the policy to deliver the goods to house that will need 7 euros. Mercadona needs 7.21euros for delivery service. About LIDL, every product needs 3.99 euros. All these supermarkets can provide the goods at the same day once you can get the opportunity. Suddenly, the demands of the carriers increased. They supermarkets are facing problem to delivery to home for customers. As for keeping the service, Mercadona has stopped the service in the Internet. They are concentrated on the off-line service.

With the problem, there are many profits in the marketing. We need to improve the situation while we need to take social responsibility. In my opinion, we can take some measures to solve the problem. First, the supermarkets could corporate with Glovo that is a platform to deliver food to home. Then, the supermarkets could strengthen the information infrastructure and renew the inventory on time and delivery them on time with the part-time workers. Finally, to reduce the waiting time to look for the product, they could use the “customer pickup”. The supermarkets could accept the order from the Internet o call, the customers could pickup in the store that can reduce the cost of transportation, though that could hurt the customer experience.

We are in a difficult situation. Ensuring the supply of basic living materials will make residents more confident and it can help to guarantee the order of society. The time of suffering will eventually pass! The delivery is essential factor in this environment that can help a lot!

Logistic solutions in supermarkets during coronavirus

The Coronavirus has triggered a crisis state that has stoped companies activity and it has confined people. Only the companies of some sectors are working properly. Supermarkets are one of them. They have seen a increase of earnings due to social alarm and the closing of others business.

Because of this situation they have taken actions to deal with. We find actions such as they have limited the maximun custmer number inside the supermarkets or they have given priority to elders to buy and others such as the stop of delivery orders and the reduction of schedule arguing they want to offer the best service.

https://www.lainformacion.com/estilo-de-vida-y-tiempo-libre/horario-mercadona-dia-carrefour-crisis-coronavirus/6552856/

But, really one of the most important reasons is they weren’table to satisfy four times the demand they had before the crisis with the same staff and they were forced to carry out those actions because they had to replenish supermarkets with the same workforce. Furthermore, customers go earlier to supermarket because they are scared and they want to find what they want. The consecuence is if basic products run out early, it won’t be clients after and they prefer to close two hours before.

Resultado de imagen de sin papel en supermercados

I ask… Do you think it will be problems with supermarket supplying?

Variability in PRODUCTS demand during coronavirus

Last class, we were talking about how do supermarkets predict the demand… Since this crisis started it has been very difficult to predict and satisfy the demand of some products for companies in spite of there are a lot of similarities between different countries.

We know different products that has highlighted from the rest such as toilet paper or alcoholic gel. But why have it happened? I have found a report that explain this. People make copulsive purchases because in time of crisis we change our habits. In this situation, we get stressed and we want to get control of the situation, we do what our neightbours do. This time, because of the crisis is related to health we buy hygienic products to feel we will cleaned as far as possible.

https://www.elmundo.es/economia/ahorro-y-consumo/2020/03/13/5e6ba72021efa07c248b4657.html

But, once we get all and enough basics and fear disappears because we assume the situation, we come to racional people. For example,
beer buying has skyrocketed almost 80% last days.

Entre los productos cuyo consumo se incrementa están la cerveza (+78%).

https://www.lavozdealmeria.com/noticia/4/sociedad/189519/adios-a-la-fiebre-del-papel-higienico-los-espanoles-ahora-quieren-cerveza

So, could they have predicted the demand with artificial intelligence? Could it predict the next high demanded product?

Receive delivery in 15 minutes? !

Yesterday, I helped my sister buy some medicines on a Chinese app. I did not expect that it would only take 15 minutes from the time I successfully paid the order to the time when my sister received the medicine delivery.

This speed really scared me! !!

The company’s name is “DINGDANG KUAIYAO”. DINGDANG is the translation of the Japanese anime Doraemon when it introduced the Hong Kong and Taiwan markets, which means that this app can provide many unexpected services like Doraemon’s magic. KUAI means fast and YAO means medicine.

The picture below is the Doraemon animation (DINGDANG) that was once popular in Asia.

The picture below is a courier photoshoot taken by my younger sister. There is also some record shown on the receipt with the picker’s name in the pharmacy and his/her temperature data.

As the whole world is now experiencing a virus “war”, citizens should go out as little as possible. People who are uncomfortable cannot go to the hospital to see a doctor, takeaway and express delivery need to be implemented, we need use contactless distribution, this application just solves this series of problems.


Their slogan is to deliver goods such as medicines to people in 28 minutes (in the core area). And provide 24 * 7 services.
Initially, DINGDANG KUAIYAO was designed to meet the users’ urgent need for medications, especially the drug purchase demand at night was as high as 35%. Later, they started a self-built distribution team to conduct 24-hour distribution and operate it with their own pharmacy. This is like a warehouse that stores goods. It also uses its own team during the transportation process (Compared to Amazon transportation, they have own transportation and delivery fleets and also cooperate with third-party carriers. However, due to the increase third-party transportation costs , Amazon is planning to reduce the proportion of third-party shipping.)

In order to solve the problem of delivering the medicines that customers urgently need in 28 minutes, DINGDANG KUAIYAO passed the electronic fence technology and combined with the actual traffic conditions to conduct an air-running test to divide the city into several core areas, thereby ensuring that each core area Prompt delivery. It also has a service for scheduling delivery. Users can schedule delivery time in advance according to their own time, thereby improving time efficiency.

DINGDANG KUAIYAO and 200 well-known pharmaceutical companies jointly created the “FSC (Factory Service Customer) Pharmaceutical Enterprise Alliance Health Service Project”, united traditional pharmaceutical companies, integrated industry resources, and through centralized procurement of alliance members’ raw materials, packaging materials, and auxiliary materials, Reducing the cost of medicines from the upstream of the industrial chain, thereby reducing the price of medicines, truly achieving direct industrial access to high-quality products, and reducing the burden of medicine on the people, is a link between users and manufacturers.

¿WHAT IS A BREAK IN STOCK OR UNAVAILABILITY AND HOW COULD IT AFFECT A COMPANY? – INVENTORY CONTROL

Throughout the supply chain, small mismatches and variations in demand forecasts with respect to actual demand create a snowball effect that starts out small but, if not attended to and regulated, as time goes on, the mismatch is transmitted from link to link throughout the chain, growing and eventually becoming a real inventory problem called: stock outs or overstocking.

When managing inventories, it is very important to foresee that this situation will arise one day in the company. For example, setting a minimum stock or safety stock for the items being sold. This planning is the responsibility of the manager or director of the supply chain.

Stock break is the situation that occurs when a customer wants to buy a certain product and the company does not have enough stock to serve it. In other words, it is the unsatisfied demand of the customer caused by the lack of stock of a certain product.

The dissatisfaction of the customer for not receiving his order due to the lack of units (breakage of stock), is not a problem that affects only the customer: the production chain, the warehouse, the purchasing department, the commercial forecast and of course the external customer can be easily affected by this evil that in some companies is even accepted with resignation as an inevitable modus operandi. WIP’s (work-in-progress) out of stock, production halts, panic orders, process delays, wastage in the warehouse and throughout the supply chain, loss of confidence, are some of the most immediate and often unexpected effects of a break in stock.

Among the risks to which companies would be exposed by not properly managing their inventory and produce breakage of stock are:

  • No planning of suppliers: the lack of information and control of their lead time causes us to order goods without any planning, that is, without a calendar and without taking into account the times of our suppliers, their reliability, their delivery schedules, the articles they supply from stock or to order, etc. Without supply planning, the pace of our needs will be out of balance with the pace of acquisition, which will end up causing stock breaks at one or more points in the chain.
  • Predicting variations in demand that are deficient or non-existent: a reactive warehouse is not preventive, therefore, it is doomed to assume the consequences of the lack of anticipation actions that prevent breakdowns.
  • Unexpected increase in demand: a clear example of this is the case of an article that unexpectedly becomes fashionable and whose demand far exceeds its availability in stock and the manufacturer’s production capacity.
  • Incorrect inventory data: stock is broken by bad information when you are confident that certain units are inventoried and there are actually fewer or no units left.
  • Unforeseen supply delays: due to transport incidents, manufacturing or quality failures, etc. When they occur in the case of raw materials or components, they can stop production or force urgent replanning.
  • Not knowing our own lead time, our stock levels, our production capacity, etc.: selling what we do not have available or compromising impossible deadlines due to not knowing our lead time causes identical effects as breaking stock.
  • Not locating stock in the warehouse even when it is in stock and available: this is a mistake that causes countless breakages in warehouses where the technology is not used properly or does not exist.

To avoid breakage of stock unavailability of these we can:

Optimal lot: it is the adequate and necessary quantity for the cost of an order to be convenient. If the supplier charges a fixed amount of 100 euros to serve each order, it is logical to place orders with the largest possible volume of products. In addition, storage costs must be taken into account.
Optimal ordering point: This section refers to the time in which the order is placed with the supplier. Here we must take into account the time it takes to serve us and the daily units we sell of the product.
Safety stock: or also called . These minimum units that are established for a product serve to cover an unexpected demand. For example, an unexpected influx of people to our digital or physical store for a marketing campaign.
Better coordination between departments: the lack of communication between different areas of the company is key.
Control the current life cycle of each product: Knowing the point at which each of our references is, market introduction, growth, maturity or decline, will allow us to objectively evaluate the stock levels that we must maintain so that they do not fall to excessively low levels in times when demand for them is predictable based on the moment in their life cycle.
Forecast of the demand with adequate margins of error: If we are distributors it is very important for the correct management of purchases and sales and if we are manufacturers it will be determinant
for planning the production.
Supplier planning: In order to avoid stock-outs it is essential that we work in the right direction: improving our relationships with suppliers, thus enhancing their ability to supply our company. Company and supplier do not have to act as a tandem, they are inevitably in the same tandem and therefore must join forces to establish a productive relationship that benefits both directly and indirectly to the final customer.

“Stock Unavailability”

Amazon in the covid-19 crisis

22 January 2020, Saxony, Lampertswalde: At a distribution centre, an Amazon sorting employee carries packages into a delivery van. In the hall, parcels from the online mail order company’s European logistics centres are unloaded, sorted and delivered to customers in the Saxon state capital. Photo: Sebastian Kahnert/dpa-Zentralbild/dpa (Photo by Sebastian Kahnert/picture alliance via Getty Images). Link

This entry is linked to Chloe’s post. As it is said in her link Amazon prioritizes the sale of costumer staples at the expense of consumer discretionary goods. On Tuesday, Amazon told its outsider merchants it would incidentally stop receipts and capacity of any merchandise other than necessities of sanitary supplies. It is public that Amazon is doing everything it can to meet the most significant shopper needs at the present time.

Amazon principales are key in the culture of the company, safety of its employees goes first, second it’s customer obsession, working backwards on behalf of the customer understanding their requirements and delivering the results. That is basically what Amazon workers do everyday, their environment is changing all the time so they are ready for unpredictable situations like the COVID-19 crisis.

Last I would like to say something about all the people working in the logistics sector these days. We all thank doctors, nurses, police officers for their hard work but let’s not forget about all the people at companies like Amazon and all the 3PL’s and couriers that give their best to deliver your orders everyday.

¿What happened to my luggage?

The airline industry claims that the technology implemented for the transportation of our luggage is increasingly better thanks to the tracking of objects, which is allowed with it. But millions of bags are still lost every year. So, is the technology implemented the right one or is enough being done to mitigate this problem? ¿Why do airlines still lose 25 million suitcases every year?

I find it a frustrating experience for millions of air passengers every year, but why does it happen? How can an industry that employs the latest technologies in its aircraft and air traffic control systems have such poor logistics when it comes to controlling our baggage?

In 2019, about 24.7 million bags were lost; about 4.65 billion bags are handled at airports each year. In 2018, 2.9% of them were lost due to bad handling, and although the rate has fallen by 70.5% in ten years, the accelerated growth of travellers around the world, in search of new experiences, maintains the problem. The SITA 2018 Baggage Report says this, estimating the cost of lost luggage in 2018 at $2.4 billion. That’s despite the fact that airports and airlines have been investing in technology to curb it for years. The International Air Transport Association (IATA) has taken action, imposing a standard on the industry to improve baggage tracking.

These figures tend to rise also in the busiest seasons of the year, during the summer holidays and at the end of the year. The trips that pose the greatest risk for incorrect luggage handling are those that involve the transfer of luggage from one plane to another or from one airline to another. In 2018, 10.67 million transfer cases were mishandled, representing 47% of all mishandled luggage. Of the cases of incorrectly
issued bags, 16 per cent were not loaded; mistakes due to ticketing, bag changes, security issues and other problems accounted for 15 per cent; and airport, customs, weather or space-weight restrictions accounted for 10 per cent. Late arrival bags accounted for 78 per cent of all incorrectly issued bags in 2018; 17 per cent had been damaged and 5 per cent had been lost or stolen.

A significant proportion of lost luggage is also due to passengers, or handlers, picking up the wrong piece of luggage.
But I think one of the most important factors may be the complexity of the system itself. In some airports, the airlines hire their own staff to move the luggage, but in others they are independent agencies hired by multiple airlines.
The International Air Transport Association (IATA) standard for coding baggage information dates back to 1989. The barcode label system exists from the 1950s. In some smaller airports, these labels are even scanned one by one on a routine basis, perhaps promoting the failure to properly check them and eventually losing them.

But finally the fact that many travellers go from place to place makes the bags end up in the wrong place. Those who travel to small airports within Europe might have some experience of this kind.

¿But what measures are being taken to combat the problem?

The implementation of RFID tags is one such industry-wide measure, a measure that could save the airline industry US$3 billion, although the system for implementing it could have significant costs for airlines, as new equipment and monitoring systems are much more expensive, but also more sophisticated as they include a chip or device in the tag that will allow the luggage of millions of passengers to be tracked in real time.


Because trying to locate lost bags and then return them to dissatisfied customers costs much
more time and money. Delta, for example, is experimenting with machine learning to detect
lost luggage patterns and identify weaknesses in the system, such as particular destinations or the types of bags that are more problematic than others.

Other innovations include airline applications, which offer the ability to update customers on where their bags are at any given time. While this does not necessarily affect the way travel
baggage is handled, passengers may have more information about it, should any anomaly arise, at the time of baggage collection.

On the other hand, last year, IATA introduced a new regulation, resolution 753, aimed at making airlines and airports take better care of our baggage. Suitcases must now be checked for correctness at several key points during the journey. These moments can be when they are loaded onto the plane and when they start their journey within the transfer system at airports.
But here it is not only a matter of having a clear and comprehensive regulation for the handling of our luggage, but also of finding a methodology or innovation from the logistic point of view that will allow the statistics on the loss of luggage to remain low, or ¿what do you think?

“Luggage routes within the airport”

"hospital indoor logistics robot" is employed to escort medical workers

More and more intelligent devices and artificial intelligence products are applied to the anti-epidemic front line, showing the hard power of China’s intelligent manufacturing.

It is understood that the robot can accurately complete the 24-hour non-contact autonomous distribution of clean materials such as hospital meals and medical supplies. At the same time, it can realize the functions of regular movement, meals and medical articles handling. Thus effectively improve the hospital operation efficiency, reduce the risk of cross-infection between doctors and patients, reduce the burden of medical staff.


Since the outbreak of new crown pneumonia, the hospitals in the open area have made active prevention and control deployment. The prevention and control of new coronavirus pneumonia is a systematic project involving space structure, human and material resources, etc. In order to reduce the input of medical staff, reduce the risk of cross-infection, and deal with the shortage of epidemic prevention materials, the hospitals in the area immediately raised the demand for robot services.

We will develop and produce disinfection robot, medicine delivery robot, human indicators monitoring robot, physiotherapy robot and a series of products suitable for clinical use in hospitals. These “iron guardians” will help the medical staff who are fighting against the epidemic, get out of the basic work, and better deal with the epidemic and treat the patients.

FOCUS ON AMAZON: an E-COMMERCE GIANT AT THE HEART OF POLEMICS

Since the beginning of the coronavirus crisis, the giant of the e-commerce business had to react quickly to readapt their business model and their supply chain. I decided to focus on two logistics issue before concluding and broadening the topic with two examples of other issues/decisions faced and made by Amazon during this crisis.

FIRST ISSUE: HOW TO DEAL WITH THE HUGE INCREASE IN DEMAND FROM THEIR CONSUMERS?

First, the Amazon company have seen a huge increase in orders from consumers all around countries currently in quarantine. Whether it is essential products such as medical supplies or random objects to pass the time during the lockdown (ex: boardgames), the company had to quickly react as their response time would highly increase.

Due to a high demand of the sanitary-related products, they made the choice to prioritize them in terms of shipments and deliveries in the United States. (Source: Business Insider) Thus, the company had to reorganize their operations and distribution processes to be able to cope with the higher demand, and prioritize the shipment of the most necessary supplies to their customers.

SECOND ISSUE: HOW TO KEEP THE BUSINESS RUNNING IF THE EMPLOYEES ARE WORKING IN A DANGEROUS ENVIRONMENT?

A few days ago, Amazon announced that the first coronavirus case has been detected within one of its warehouse in the United States. (Source: The Atlantic) Thus, the ethical question of “should we keep the business running or should we focus on the safety of our employees ?” has been risen by the managers of the company.

Image result for amazon employees

In France, Amazon warehouse’s employees began a strike as they were feeling unsafe to continue working in this situation and context. As some employees dropped out of work, Amazon already started contacting temporary workers to make sure they would have enough employees to make the company run during the crisis. In response to the strike, the company answered by offering a rise in the employees’ salary. (Source: Reuters)

CONCLUSION

To conclude, Amazon is in the center of many dilemmas right now. The challenges faced by the crisis are threatening multinational businesses. I am personally very curious to see how Amazon will continue to react during the next few weeks.   

It will also important to remind that the company also had to deal with non-logistics issues such as a high rise in the price of their medical supplies (due to the law of supply and demand). The company reacted quickly by asking their consumers to report any fraud that they were finding on their website.  (Source: Engadget)

A second example could be their financial situation which positively increased compared to other businesses.

Date: March 16th

Jeff Bezos, the CEO of the company even offered his help to the White House of the United States. (Source: Fox Business)

One thing is sure, Amazon (and of course, most of the other companies around the world) had to prove their capacity of adaption in terms of logistics, supply chain and distribution network but also in other domains in a very short amount of time, and will probably continue to do so in the next few weeks.

FASHION PUTS ITS LOGISTICAL CAPACITY AT THE SERVICE OF THE GOVERNMENT

The fashion giant Inditex will donate around 300,000 surgical protective masks to the Spanish state and is exploring giving up part of its textile manufacturing capacity for the manufacture of medical equipment. This week we have studied concepts of distribution networks, but in this post I would like to emphasize that the situation in Spain and in some countries of the world is so critical that the inventory of sanitary material is… COMPLETELY NON-EXISTENT.

Zara returns to its origins, but this time to fight the COVID-19

The production lines work against the clock, countries like China are starting to send quantities of gowns, masks, etc., to Spain, other countries like Italy, despite the aid received, are so many people infected by coronavirus that they do not have enough material to supply all those who need it.

Here is a link to a video of the mask production line:

Complete Automatic Face Mask Production Line

However, other designers integrated in ACME (Asociación de Creadores de Moda de España) such as Andrés Sarda or Dolores Cortés have also ceded their workshops for the production of sanitary ware. All united in the fight against the same enemy.

If you want more information I leave you several links that deal with the subject.

www.lavanguardia.com/vida/20200319/474260118566/firmas-de-moda-ponen-a-disposicion-sus-talleres-fabricar-material-sanitario.html

www.expansion.com/empresas/distribucion/2020/03/18/5e725516e5fdea2c468b45ce.html

Under the economic crisis, Is the supply chain moving forward or backward?

Economic crisis, a familiar and unfamiliar word to all of you, but you know that an economic crisis has come quietly.

Affected by this epidemic, the country ’s economy has stopped advancing, enterprises and factories have ceased production, and many industries have been implicated, losing a lot of money. Although this is only a temporary impact, through this fuse, a series of reactions will be triggered.

First of all, the US stocks experienced three fuses in a short period of time, the stock markets of other countries were also in a downturn, and the relatively value-preserving gold and bitcoin prices continued to fall. Although we cannot predict future trends, this is not a good start.


If the economic crisis comes, how will the supply chain be affected? And how will it develop?


In the economic crisis, people have reduced unnecessary expenditures. Similarly, the expenditure and demand of enterprises will also decrease. Many overseas branches or factories have moved back to the headquarters one after another, because this can improve the flexibility of the supply chain. The definition is to maintain cost-effective delivery capacity in the face of large fluctuations in unplanned demand and is currently considered to be the most critical factor in global supply chain management.


According to the sources of risk in the supply chain, supply chain risks can be divided into two categories, external risks and internal risks.

The external risks of the supply chain include natural disasters, social risks, changes in the economic environment, laws and regulations, and so on.
Internal risks within the supply chain include market demand risk, procurement supply risk, order fulfillment and logistics delivery risk, internal operational risk, financial risk, etc.


The way to improve the supply chain can be from the perspective of the supply chain: choosing the right supply chain partners, inventory management under the supply chain, cost management under the supply chain, information technology and customer relationship management.

The transportation during the Covid-19 crisis.

In these days of confinement, the uncertainty is the only thing which the people are thinking in, the time which this emergency is going to take to be solved is not clear and both the investors and the people are getting panicked, as a citizen myself I have seen and heard so many of my friends telling me that they need to get stocked. More than a hundred countries the shelves are being empty due to the panic shopping, people are taking all the goods like if this situation was the end of the world. The truth is that neither the coronavirus is the apocalypse, nor the supermarkets are going to get out of stock, they are well prepared with lots of inventory and safety stock.

Personal conversation with a friend of mine, few hours after the announcement of the emergency state in Colombia

But the investors seem to be as shocked as the natural people, all over the world the economies are suffering a new crisis, the stock markets are falling, and the companies are losing either money or value. This scenario is hitting the global commerce as well, and by doing so, the transportation and logistics industry is getting affected too. At the beginning of the illness the situation seemed to be under control and the commerce continued working as usual, however once the pandemic moved the epicentre to Europe, the fallout started.

Port with stocked Merchandise


Across the world the borders are being closed and although there are certain exceptions for the truck drivers, they don’t really know which documents are going to be asked to them for trespassing the earth borders. They state that the supply is warrantied, but the governments are not clear when talking about the requisites for having free mobility. Internationally speaking, there are merchandises stocked in Chinese ports which were produced before the breakout of the virus, although the situation is getting controlled in the homeland of the pandemic the principal destiny of these ones is Europe, which right now is in maximal alert. There is a 30% decrease in the container’s terminal activities, according to the “Asociación Nacional de Empresas Estibadoras”.

Even though the principal target of the exportations of china are Europe, the third party logistic is being also affected because the scale vessels are not able to stop in the European ports in order to continue to their main destinations. “About 40% of goods from China are in transit to third countries, so the crisis is not only limited to direct trade flows, but also causes the cancellation of stopovers of complete ships, and also reduces trade with other countries” for example, in Barcelona and Valencia 9 scales have been cancelled.

British Airways airplanes in London airport


Another affected industry is the air transportation, most of the flights have been cancelled and both, the cargo and the passengers demand has decreased. The airlines have lost huge amounts of money these days and most of them have cancelled operations while the virus is overcome. They are facing the most challenging situation on his history and are asking for some government help.

Uk, THE NEW LOGISTIC MANUFACTURER AGAINST THE COVID-19

In the midst of panic and confinement situation, measures taken from the government leaders of the different nations, the concern of the British state about a shortage of medical equipment arises, which forces the Prime Minister Boris Johnson to call urgently to the manufacturing industry.

Call for businesses to help make NHS ventilators

The aim is to increase production by making immediate changes to production lines, something that not all companies consider ready. However, time is running out, and every minute is gold, it is wartime, and it has to be made to work.

Ventilators are vital in the treatment of patients whose lungs have been attacked by the infection. The health secretary told that the country currently has 5,000 ventilators but said it would need “many times more than that”.

Interview Health Secretary Matt Hancock

But questions remain over how engineering firms with no experience of producing ventilators will be able start manufacturing the complex medical devices.

The use of NHS ventilators means that twice as much space must be used as usual, in the face of the collapse of hospitals. For this reason, the Best Westen hotel chain has ceded its rooms and other facilities to the government in case they were needed. In short, the United Kingdom wants to be prepared to face this health crisis.

I encourage you to comment on “ingenious” measures with which your countries will be alleviated from the lack of logistics that COVID-19 has created.

And if you are interested in knowing more about the news I recommend the following links and sources of the post:

Why doesn’t the UK have enough NHS ventilators?

www.bbc.com/news/business-51896168