The boss

Last week we were talking about Mercadona, a clear example of business success at many different levels: its close relationship with suppliers, the commitment to continuous improvement, the training of its workers and the commitment to the white label have been decisive in this race to triumph.

While it is true that one of the key factors of success is the figure of “The boss”. In the Mercadona philosophy the customer is the boss. The goal is to have the products with the highest quality and at the lowest price possible. But “The boss” exercises control not only in the mix of products and the layout of supermarkets, but also in the central axis of decision making related to the group’s logistics operations, as they do in other areas of the company.

Quality is now also the priority, within a scope of action that ranges from the provisioning of products to delivery to stores.

The key is, then, that the whole organization is aligned according to the consumer. “The solution to avoid problems lies in giving a correct sequential order to the objectives of logistics, and we have to start with quality, followed by the quantity, the time, the place, and finally the cost,” said Montanyà, Logistics General Manager of Mercadona.

As a positive example, Montanyà mentioned the change made in the automatic picking equipment of its platforms, which allows to stack and prepare several boxes at the same time, instead of one, as was done with the previous machinery. Although the investment in this last type of equipment had already been made, it was decided to substitute – beginning at the center of Guadix -, to gain in agility, which translates into less time in the presentation of the product to the consumer and in greater freshness and quality.

Besides putting the consumer in the center of the logistics operation Montanyà did not leave aside other important concepts in logistics, such as productivity. The design of logistics thought for the worker; collaboration with suppliers; respect for the environment – both that of the inhabitants close to stores and the environment – are other requirements of Mercadona’s supply chain.

Source:

https://www.alimarket.es/alimentacion/noticia/227744/el–jefe–tambien-manda-en-la-logistica-de-mercadona-23-11-2016-05-00

 

How will automation affect the future of work?

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

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

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

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

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

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

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

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

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

Sources:

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

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

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

E-commerce: The driver of green logistics

Spain is the fourth country in Europe to make more purchases through the internet, which is a challenge for companies in the sector, which don´t have the capacity to meet this demand. Coupled with shorter delivery times of digital orders, this is driving the growth of fleets of logistics operators.

In addition, due to pollution, some major cities such as Madrid or Barcelona restrict the entry of delivery vehicles to some areas of the urban center.

As a result, some delivery companies are making significant changes to their fleets, where electric vehicles are gaining weight. Specifically, Seur estimates a minimum term of 10 years to make the most of the urban distribution with electric vehicles, hybrids and other ecological transport.

Other projects, such as drone-sharing, pick-up boxes or the incorporation of small autonomous self-guided vehicles traveling on sidewalks, could play a key role in the future.

In my opinion

Often happens that, in order to adapt to the new demands of society, companies have to make changes in their procedures that not only solve a specific problem, but can also bring important benefits to society and the environment.

Investment in the development of more environmentally friendly transport models can not only translate into economic benefits for the company, but also contribute to the social and environmental development of our country.

It should be mentioned that Spain is an energy-depleted country and fuel consumption is 100% dependent on the exterior. This type of investment would help to reduce energy dependence as well as reducing pollutant emissions of CO2 and other gases harmful to the atmosphere, or noise pollution in cities.

Sources

http://www.cadenadesuministro.es/noticias/el-aumento-del-e-commerce-impulsa-a-los-operadores-logisticos-a-apostar-por-vehiculos-electricos/

http://www.muyinteresante.es/innovacion/articulo/ipor-que-son-buenos-los-coches-electricos

 

Tamara Boronat

DELL case: logistics as a competitive advantage

Consciously developing a competitive advantage is necessary to maintaining a business in a competitive environment. In the case of DELL, logistics was key to achieving this advantage and defeating rivals such as IBM and Hewlett-Packard.

Unlike its competitors, DELL has a business model that can be identified as “direct model”, in which DELL sells its PC´s directly to customers without using a retail channel.

Therefore it creates a direct relationship with each individual customer which they have segmented into groups to make it easier to approach (large organizations, small and medium businesses, and personal consumers).

The other aspect that makes DELLs supply chain unique is the Build-to-order strategy.

The success of his model is based on three pillars:

The first, maybe the most important, is to keep inventories at zero. The second is to produce nothing that doesn´t already have a buyer. And the third is to maintain a constant and detailed measurement of their performance.

The Role of Supply Chain in Maximizing Profit in DELL

The heart of Dell’s success is its integrated supply chain, which has enabled rapid product design, fabrication, and assembly, as well as direct shipment to customers. Inventories have been dramatically reduced through extensive sharing of information, a prudent choice given the risk of technological obsolescence and reductions in the cost of materials.

Even with reduced inventories, Dell’s strategic use of information has made possible a dramatic reduction in the elapsed time from order to delivery, giving DELL a significant competitive advantage.

Some of the vertical integration strategies that DELL uses are the following:

• Fast communication system
• Clear definition of what DELL does best
• Selection of partners who are the best in their respective fields
• Minimum number of suppliers
• Internet as a strategy to promote effective integration
• More emphasis on using assets rapidly than guarding intellectual assets

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Sources: 

http://www.dinero.com/negocios/articulo/la-batalla-logistica-dell/29712

http://mhlnews.com/blog/dell-laptops-logistics

Supply chain of DELL from Thushan Dharmawardana

Tamara Boronat