ECO-FRIENDLY SUPPLY CHAIN

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

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

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

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

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

 

 

 

Source:

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

 

 

INDUSTRY 4.0, WAREHOUSE and AUGMENTED REALITY

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

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

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

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

What kind of technology Industry 4.0 deal with?

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

And here comes the fun part.

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

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

 

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

 

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

 

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

Stay tuned! 🙂

 

Murphy or Logistic?

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

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

First, a little introduction: Who is Murphy?

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

 

This is the video with the experiment.

 

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

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

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

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

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

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

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

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

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

 

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

 

 

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

 

HOW PACKAGING INFLUENCES OUR DECISIONS ?

The other week during lesson we deal with the theme of packaging. I’ve always find this particular topic rather interesting because I’m also somebody whose guilty of having bought something just because I was attracted by the colors. Have you ever wondered that there is almost a science behind it?

Since the first moment we open our eyes in the morning till the time we go to bed in the evening we have many different needs. The basic ones are like eating, drinking and such. We can control our needs, thanks to our will, but most of the times we get influenced by the surrounding what we feel we need. Here is the key: what we feel we need but actually we don’t.

What trick all of us is the so-called smart packaging, which helps the targeted consumer feel an emotional attachment to a brand. Keep in mind that 1/3 of the consumer decision-making is based on the packaging. Impulse purchasing makes up almost 75% of the consumer spending, and if the package fails to project the right message then it might be left sitting alone on the shelf.

One crucial element is an icon: what the brand try to trigger every time is positive feelings, because marketing is based on emotions and the smart packaging ground his way of working on marketing which trigger our emotions. What all the companies try to do is to influence positive feelings toward the brand and the product. On the first step this lead to buying the product, then it may become loyal to it and in some cases also willing to pay more than its actual value.

 

Emotions are also connected to brand icons as memories and these feelings can create long-term relationship between the brand and the consumer. Nonetheless it influences purchasing decision. A right design can trigger a ripple effect: a friend take a photo of the packaging, he or she share it on Facebook, someone share it and by doing this there is the chance that other will see it and be interested in the product.

 

First impression matters also between the counter of the Supermarket. It takes only 7 seconds to make a judgement based on the first things we see on the package. The brand is represented by the packaging, and this promise to deliver also a quality experience. What are the elements that might catch the eye of the consumer?

1. Color
2. Images
3. Typography
4. Brand name influence
5. Structural design
6. Print finishes

 

Packaging has been proved as a crucial factor in decision-making, it is directly related to the perceived quality of the product and affect if the product is noticed on the shelf or not. It has been estimated that 60-70% of buying decisions are made in the store. The consumer, on average, leaves home to get back with a product serving a definite purpose but no strict decision has yet been made about the brand to go for. The final choice depends on a variety of factors. These on-sport decision making about choosing among alternatives is influenced by product perceptions, which is conceived by packaging design, knowledge about the brand, attitude towards brands and the consumer personality.

The more the brand costs the more the costumer wants to be involved and the less it costs the less he feels the need to a connection.

Did you ever think that also the color plays a role in this game?
Examples:

• Red = makes the adrenaline increase and the heart beat faster. The color is used to grab shoppers’ attention.
• Blue = with water and sky, it is a soothing color when in the pale hues, and somewhat mysterious, like the ocean

 

Now, next time at the Supermarket, what will you do? 🙂

HOW MUCH TIME OF AN AVERAGE LIFE IS SPENT WAITING?

Last time in class we discussed about queue. How to deal with it in a logistic way. This made me think about how long do we wait in our lives on average including pretty much anything.

Get ready for numbers then!
According to a Timex survey, Americans wait:

• on average of 20 minutes a day for the bus or train
• 32 minutes whenever they visit a doctor
• 28 minutes in security lines whenever they travel
• 21 minutes for a significant other to get ready to go out
• 13 hours annually waiting on hold for a customer service
• 38 hours each year waiting in traffic
• those living in Big cities wait in traffic more than 50 hours annually

= about 37 billion hours each year waiting in line somewhere
Human beings spend approximately 6 months of their lives waiting in line for things, it means like 3 days a year of queueing up. The average person spends about 43 days on hold with automated customer service in one lifetime. Those who take the bus will wait about 27 days of their lives waiting around on the platform or at the bus stop.

And what about our Phones?

• We spend 23 days a year on our phones
• 90 minutes a day
• 9 years of the average person’s life

 

The “Phone” means to call somebody but this is now the sixth most used feature. Before there are social media and gaming. Web browsing come top of the list with people spending 24% of their mobile browsing the web, closely followed by time spent on apps. 57% of the persons assert they don’t need any more an alarm clock and 50% of those who wear a watch use anyway the phone as first choice for knowing the time.

This lead me to the internationally famous queue for the launch of every iPhone, since 2007 they increased and expanded their features.

According to a source, intern at Bloomberg News, the first man in the queue have been waiting since August-25 – which means more than 10 days before the iPhone 7 was unveiled. In New York, strange things might happen: like a spot in sale for 300$ or other Apple fans who are paying other to queue for them. A “pro line-sitter” claim that he got paid 3.400$ per week just to wait there. Tents have been pitched on the pavement outside the shop and several people were sitting in foldable chairs.

In New Zealand, the queue was taken to another level: the first 100 customers got a robot to wait in line for them and this will allowed the customers to wait in line using FaceTime.

Source:
http://www.mobilestatistics.com/mobile-news/23-days-a-year-spent-on-your-phone.aspx
https://www.reference.com

 

Agrifood Supply Chain and Bontà Viva

 

During the last lecture, we had the chance to analyze and confront different Supply Chain in the agrifood industry. This lead to the discovery of this new concept of business. Globalization, along with rapid demographic changes and evolving regulatory and legislative interventions, dictates the increasing demand for high quality, value-added and customized agrifood products. It is only during the last ten years that the agrifood industry has recognized and started embracing this model of supply chain as a key concept for its competitiveness.

What is Agrifood?

This is the business of producing food agriculturally. These chains are designed to increase competitive advantage through collaboration in a venture that links producers, processors, marketers, food service companies, retailers and supporting groups such as shippers, research groups and suppliers. In general, this is comprised of a set of activities in a “farm-to-fork” sequence including farming (i.e. land cultivation and production), processing/production, testing, packaging, warehousing, transportation, distribution, and marketing. The basic characteristic is the market-focused collaboration, these businesses enterprises work together, combining market products and services, effectively and efficiently.

Bontà Viva

Grounding their business with these ideas, Bontà Viva, is expanding in the market. This is an Italian company, based in Rivoli and born in 1990. They have a solid experience in the sector and their idea is to become an excellence in the fresh vegetable soups. Their strength is in what they offer, directly related to how they offer it.

The idea comes from the States, where these ready-to-eat foods are very popular, with the added value of genuine and healthy food.

The company is split into two areas: the conventional and the organic-gluten free. The first account circa 100 recipes of soups, side dishes and salads while the second, ranks first in Italy in terms quality and number of recipes, at present 30. The company works in a factory of 12.000 square meters of which 6.000 are dedicated to the production facilities. Everything is equipped with tools using renewable energy and all the packaging are recyclable.

The Business Model

This company is working to be highly innovative, being sustainable is of great importance, as well as offer great quality of food and make profit from it. Their supply chain is completely transparent, they buy from certified firms and the ingredients are always prepared, cooked and preserved within 8 hours of arriving in the factory.

The preservations modes are two different:

• Blast chilling: from 80°C to 4°C for all the products that will be sell in the Italian market (this method guarantee 60 days of shelf life)
• Pasteurization: products that will be exported outside Italy and this method guarantee a shelf life of 120 days

Agrifood Supply Chain

Agrifood supply chains exhibit a set of unique characteristics that differentiate them from classical supply networks and raise the need for special managerial capabilities.

• Unique nature of the products as in most cases they refer to short life-cycle goods,
• High product differentiation,
 seasonality in harvesting and production operations,
• Variability of quality and quantity on farm inputs and processing yields
• Specific requirements regarding transportation, storage conditions, quality, and material recycling
• Need to comply with national/international legislation, regulations and directives regarding food safety and public health, as well as environmental issues (e.g. car- bon and water footprints)
• Need for specialised attributes, such as traceability and visibility
• Need for high efficiency and productivity of the expensive technical equipment, despite the long production times
• Increased complexity of operations, and the existence of significant capacity constraints.

This is an example of a general Agrifood Supply Chain.

Sources:

• http://www.italianfoodcompanies.net
• http://www.bontaviva.it

 

The Supply Chain in the Beauty Industry

My interest in skincare has always acted as a trigger in my life, it has always pushed me to discover what is behind this world and what are these companies selling.

The main problem in this field is the constant change of demand which means that what today is the most sold item tomorrow might be at the bottom of the shelf unsold. Often celebrities are used and abused for this purpose because just their presence might increase a lot the demand of a certain good.

The main purpose of these brands is to be able to satisfy the demand when is high, it requires punctual and reliable transportation as well as good storage and fast distribution. Paul Cali, director of North American logistics of the skincare company Avon, in New York, underlines how logistic play a major role in driving the customer satisfaction, it is a competitive advantage and the company need to make the most out of it.

Beiersdorf is one of the most important companies in the beauty industry with multiple brands such as Nivea, Labello Eucherin and Hansaplast sell all over the world. The headquarters are in Hamburg, Deutschland, but it works pretty much all over the world since almost 130 years. The company has circa 17.600 employees and more than 170 affiliates in the world. One of their key point is that they develop skincare products specifically tailored to regional needs in order to make the customer feel that they are local.

Mary Margaret York is the manager Procurement of raw materials in Beiersdorf and in the video she explains how and why the company divides the supply chain into 4 categories:

1. Plan = which is the idea generation
2. Source = the rough materials used in products
3. Make = where are they producing, how they are going to do it and to what market are they going to sell it
4. Delivering = plan the transportation and delivery across the world

Efficient supply chain management in such context is difficult. Warehouse management is another important aspect of this industry that requires particular attention since most of the product are perishable or need refrigeration.

These goods are also often sold into a variety of retail streams, which means that larger companies, like Beiersdorf, often target 4 different markets:

1. Consumer products to mass retailers
2. Beauty suppliers to salons and professional product groups
3. Luxury brands to department stores
4. Dermatological products to dermatologist

This is just a very amount of what is behind this huge market and all the work the companies need to face.

Sources:

1. http://www.inboundlogistics.com/cms/article/cosmetics-logistics-the-beauty-of-an-optimized-supply-chain/
2. https://www.youtube.com/watch?v=XEWsgIUiHyo
3. http://www.beiersdorf.com/about-us/our-profile/strategy
4. http://www.annualreport2015.beiersdorf.com