Logistics Legends: The Silk Road

You know what I’ve been geeking out over lately? No, it’s not the latest algorithm for optimizing delivery routes or a new AI-powered inventory system. It’s something way older and cooler: The Silk Road. After I saw the BBC documentary called, you guessed it, “The Silk Road”, my life would never be the same.

First off, let’s clear something up: The Silk Road, despite its name, isn’t a single road. Nope, it’s not a silk-lined, straight-shot highway from China to Europe. It’s more like a bunch of meandering paths going all over the place, a bit like your headphone cords after they’ve been in your pocket for five minutes​​. The Silk Road covered some 4,000 miles of formidable terrain, from the Gobi Desert to the Pamir Mountains. And here I thought my morning commute was tough. I can just imagine some poor trader, loaded down with silk, staring at his camel and saying, “You sure there’s not a shortcut?”​​.

The stuff the Chinese traded was pretty amazing: silk, jade, porcelain, tea, spices. On the other side, Europe sent horses, glassware, textiles, and manufactured goods. What really amazed me though, is that the Silk Road wasn’t just about moving products; it was the internet before the internet! Ideas, cultures, and technologies were traded along with those goods. It was a true information superhighway, only instead of Wi-Fi signals, they had camels​​.

The Silk Road wasn’t just a trade network, it was the beating heart of globalization, pulsating with life and exchange before the term even existed. Talk about being ahead of your time! Now, it’s on UNESCO’s World Heritage List, and I bet those traders never saw that coming. They were probably too busy negotiating camel prices or sand-proofing their silk bundles​​.

The Silk Road is an absolute legend of logistics. It makes my modern-day logistics look a bit less shiny, but it sure gives me a ton of inspiration. If they could sort out trade routes across continents with nothing more than camels and a sense of direction, I reckon I can manage my spreadsheets.

In conclusion, watching the BBC documentary I told you is mandatory! 😊

How Shein is Dominating Cross-Border E-Commerce with Supply Chain Advantage

Online fashion retailer Shein is one of the world’s largest e-commerce companies, with a valuation of over $15 billion. One of the key factors driving its success is its advanced supply chain capabilities, which allow the company to deliver products quickly and efficiently to customers in over 220 countries.

Shein’s supply chain advantage begins by using data analytics and artificial intelligence. The company collects vast amounts of data on customer preferences, market trends, and production processes and uses AI algorithms to analyze this data and make data-driven decisions. This allows Shein to quickly respond to changes in demand and supply and optimize its inventory management and production processes to minimize waste and maximize efficiency.

Another critical factor in Shein’s supply chain success is its use of cross-border e-commerce. The company has built a global logistics network with over 50 fulfillment centers, warehouses, and partnerships with major logistics providers such as DHL and FedEx. This allows the company to offer fast and reliable delivery to customers worldwide, with average delivery times of just 7-10 days. By leveraging its cross-border e-commerce capabilities, Shein has expanded its customer base and increased its market share in the highly competitive online fashion industry.

Overall, Shein’s supply chain advantage has been a critical driver of the company’s rapid growth and success in the highly competitive world of cross-border e-commerce. By leveraging data analytics, vertical integration, and a global logistics network, Shein has been able to deliver high-quality fashion products to customers worldwide with speed and efficiency. As e-commerce grows and evolves, companies like Shein will likely continue to lead the way with advanced supply chain capabilities.

The Short Food Supply Chain Trend

With globalization and the increase in population, the distance between the producer and the consumer has increased, with many intermediaries being added in the supply chain that makes it difficult to follow the treatment of the product, causing problems such as extensive food waste, food security, environmental damage, unfair distribution of added value and profits among chain members and so forth, as well as provide reasons for an increasing interest in the quality of food, locally produced food and food producing practices.

This has led to a trend called Short Food Supply Chain that seeks to go back to the roots to pursue economic, environmental and social sustainability, revitalizing the rural population and strengthening the relationships between producers and between consumers and producers, while gaining control over the sale price by reducing the number of intermediaries.

The problem with SFSC is that, since there are few intermediaries, producers must cover the marketing and distribution of their products, something of which they lack specialized knowledge, with the main problem being the spoilage of the food during its distribution. Therefore, SFSCs require corresponding innovative logistics solutions, like smart packaging to ensure the state of the food and the hiring of LPS and freelancers to whom to delegate the distribution.

Another way to solve this problem has to do with the relationship between producers mentioned in the second paragraph. The relationship between the producers takes place through alliances (or clusters of producers), where producers share resources with each other, including those for marketing and distribution. This is the case of the organic farms in Berguedà, with Salt de Colom sharing its facilities with the other farms to prepare the orders and send them together to their customers, many of whom share among all of them.

References

Sociedad Española Agricultura Ecológica, S. E. A. E. (2020, November 25). Vídeo d´experiències: Cal Pauet – Ecoavícola – dpagès – salt del colom – 7é simposi pae. YouTube. Retrieved March 27, 2023, from https://www.youtube.com/watch?v=0wUpWbASO5U

Todorovic, V., Maslaric, M., Bojic, S., Jokic, M., Mircetic, D., & Nikolicic, S. (2018). Solutions for more sustainable distribution in the short food supply chains. Sustainability, 10(10), 3481. https://doi.org/10.3390/su10103481

Sustainable and Stylish: Patagonia Leading the Way

What if I told you that it’s possible to enjoy high-quality outdoor clothing while also being environmentally responsible? You might think that sounds too good to be true, but one company has been leading the way in sustainable supply chain management for decades: Patagonia.

Sourcing and Reducing Waste

Patagonia is a California-based outdoor clothing brand that is not only committed to producing high-quality products but also doing so in an environmentally responsible way. It has been a leader in sustainable supply chain management since the 1990s, when the company became one of the first to use recycled polyester in its clothing (Check how Patagonia in recycling plastic bottles into fiber). Today, Patagonia continues to push the envelope when it comes to sustainable practices in its supply chain.

One of the ways Patagonia is working to create a more sustainable supply chain is by using sustainable materials in its products (Learn more about Patagonia’s actions toward sustainability) The company is committed to sourcing sustainable fibers and materials, such as organic cotton and recycled polyester, and reducing waste in its production process. Patagonia also works to ensure that its suppliers meet strict environmental and social standards, ensuring that the materials used in its products are ethically and sustainably sourced.

Programs for Impact: Repair, Reuse, and Recycle

In addition to sourcing sustainable materials, Patagonia has implemented several programs to reduce its environmental impact. For example, the company operates a program called “Worn Wear” (Check it here) which encourages customers to repair and reuse their clothing rather than throwing it away. Patagonia also operates several recycling programs, including a program to recycle old Patagonia products and a program to recycle plastic bottles into polyester fibers used in Patagonia clothing.

Renewable Energy and Supplier Support

Patagonia is also committed to reducing its carbon footprint through the use of renewable energy sources. The company has installed solar panels on its buildings, and its Ventura headquarters is powered by 100% renewable energy. Patagonia also encourages its suppliers to use renewable energy and has set a goal to be carbon neutral by 2025.

We are committed to doing better, moving towards 100% renewable and recycled raw materials by 2025 and increasing the number of Fair Trade certified sewn products across the entire line.

(Quote from Lombard Odier)

In 2017, Patagonia even sued the Trump administration over its decision to reduce the size of two national monuments, Bears Ears and Grand Staircase-Escalante, arguing that the decision was illegal and would harm the environment. The lawsuit was eventually dismissed, but Patagonia’s bold stance on the issue earned the company widespread recognition and respect.

A Moral Obligation to Save the Planet

In conclusion, I would like to share Patagonia founder Yvon Chouinard’s quote, that is indeed very inspiring and aligned with the company’s vision: “Who are businesses really responsible to? Their customers? Shareholders? Employees? We would argue that it’s none of the above. Fundamentally, businesses are responsible to their resource base. Without a healthy environment, there are no shareholders, no employees, no customers, and no business.”

Yvon Chouinard. (n.d.). AZQuotes.com. Retrieved March 07, 2023, from AZQuotes.com Web site: https://www.azquotes.com/quote/750460

Unveiling the Wonders of Blockchain in Logistics

Blockchain, cryptocurrency, big data, machine learning… I’ve heard these fancy words so many times in recent years but never thought about the true potential of the technology that lies behind these fancy names. Until I finally decided to learn. Honestly, after spending several days investigation on the topic I was completely blown out by the impact of blockchain on logistics. Here’s why.

No! Wait a minute. What was blockchain again?

Blockchain is a secure, tamper-proof way (it cannot be modified or altered without detection) for multiple people to store and share data. It is a decentralized database that stores records (called blocks) that are linked and secured with cryptography. Cryptography is a method of storing and transmitting data in a secure and encrypted form. Cryptography is used to protect data from unauthorized access and to ensure its integrity and authenticity.

In simple words, it’s a super-secure space for sharing data. Here you can check a very useful video by Simplilearn with more information about blockchain.

Pros of Blockchain in Supply Chain

In recent years, blockchain technology has emerged as a promising solution to many challenges in the supply chain industry. Blockchain technology has the potential to transform the supply chain in several ways, including:

Transparency

Blockchain technology allows all parties involved in the supply chain to access and track the complete transaction history of a product, creating greater visibility and accountability in the supply chain.

Traceability

Blockchain technology enables the tracking of products at every stage of the supply chain, allowing for quick identification of any problems.

Efficiency

Smart contracts and automation can reduce the time and cost associated with manual processing, increasing the efficiency of supply chain operations.

Security

The decentralized nature of blockchain makes it resistant to cyber-attacks and data breaches, providing a high level of security.

Sustainability

Blockchain can provide detailed information about the production process, helping consumers make informed decisions and encouraging companies to adopt more sustainable practices.

Real-life examples

In fact, many large companies are now implementing blockchain technology into their services.

In 2018, DHL and Accenture developed a blockchain-based prototype to track pharmaceuticals across the supply chain, with the goal of increasing accuracy, streamlining processes, and reducing annual freight spend. The prototype can handle a high volume of unique serial numbers and transactions per second. The project aims to reduce the risk of counterfeit pharmaceuticals in emerging markets, which account for up to 30% of pharmaceutical products. The blockchain technology used provides enhanced safety standards and reduces costs for all stakeholders involved in the supply chain. For more information check this article published on the official DHL web-site.

Walmart, a leader in supply chain management, is now using blockchain to create an automated process for handling invoices and payments of its 70 third-party freight carriers. The implementation of a blockchain network has not only solved payment problems but has also resulted in significant operational efficiencies. Check this Harward Business Review article to find out the key lessons for creating a blockchain network to improve business processes based on Walmart’s case.

Wow! It’s actually a really useful technology. But… the old saying goes, all that glitters is not gold. Blockchain has its cons.

Cons of Blockchain in Supply Chain

First of all, there is a privacy problem. While blockchain technology is secure, the transparency of the ledger means that transactions are visible to all participants, raising concerns about data privacy.

On top of that, the lack of clear regulatory frameworks for blockchain technology can lead to uncertainty and ambiguity, creating legal and regulatory challenges for companies using the technology.

Finally, blockchain technology is complex and requires technical expertise to implement and manage effectively. The current design of most blockchain systems is limited in terms of scalability. The more participants in a network, the more computing power and time it requires to validate and add new transactions to the ledger.

The future of blockchain

As we can see, blockchain technology offers an exciting opportunity for logistics companies to revolutionize their operations and gain a competitive edge in the industry. With fast advancing technologies the cons of blockchain will soon be balanced and it will be an essential part of the businesses in the nearest future.

I strongly believe that despite some challenges and limitations, the potential benefits of blockchain in logistics are truly awe-inspiring and can revolutionize the way we manage our supply chains, making them more transparent, secure, and efficient than ever before. So, let’s embrace the power of blockchain and take logistics to the next level!

the race for covid-19 inoculation

At the beginning of the pandemic, the global objective was to “flatten the curve” of contagions. One year later, the objective is to “accelerate the curve” of vaccination to achieve immunity in the shortest time possible, a medical and logistical challenge at global scale.

Eyes are on the global race to vaccinate the population to stop the advance of the Coronavirus pandemic. Until March 31, 2021, a total of 595.92 million vaccines have been administered globally acccording Our World in Data.

The total number of vaccination administered give us a preliminar idea of what is happening but, do not reflect the number of people vaccinated because most of the vaccines available needs two doses to generate the desired immunity. In the following graph we can see the share of population by country that at least have recieve one dose of vaccination.

From there, we can analyze possible factors that might caused that some countries, such as Chile have already reached the 35% of the population in their vaccination campaign, aiming the ambicious objective of reaching 80% of population by the first semester of 2021.

Sanitary and logistical capacity installed to be able to carry out mass vaccinations.

A system that is based on a strong network of primary health care centers at the city council level makes it easy to create a calendar according to the age of the population in order to prioritize patients who are older and at risk of disease, also seen in Israel strategy. Nevertheless, health centers and hospitals are not enough, specially when the sanitary system its reaching limits as consequence of the outbreak.

For Chilean politician, the logistics plan must include the use of adapted areas, such as: schools, colleges, public gyms, stadiums, and even drive-in’s were up to four people can recieve the shot. In this logistic bet, dozens of vehicles line up to enter a health circuit where the first stop is vaccination and the second, a parking lot, which functions as an observation area for possible adverse reactions. For them, the aim is to multiply the number of people vaccinated, reaching 15.000 vaccination centers, and being able to inoculate up to 319,014 people in a day.

Vaccination Drive in’s in Chile.

Massive and diversified purchasing strategy to have vaccine availability.

Diversification of suppliers has worked in the midst of a global context of limited distribution, especially for those high-income countries that bet only on vaccines produced in the West. In the contrary, the case of Chile, which vaccinates 3 times faster than Spain, has reached agreements for the acquisition of 36 million vaccines and has already bought the companies Pfizer and Johnson & Johnson, Sinovac, AstraZeneca and they are still in negotiation processes for the purchase of Sputnik V and Cansino to ensure availability of supplies, in addition to be part of the Covax program. The European Union, for its part, bet mainly on AstraZeneca and Pfizer, which have had logistical problems to produce and deliver the committed quantities, with contracts that favor them in these cases and with agreed quarterly deliveries, added to the preventive suspension of the vaccination for 2 weeks due to suspected side effects, causing a delay in vaccination throughout the region.

Mobilise all available resources

About 3.7 billion of the 6.8 billion doses of vaccines have been purchased by wealthy countries, according to an analysis by Duke University. Those who have been able to negotiate purchases by investing large amounts of public funds and generating price and volume agreements. Then there are the middle-income countries, which, with limited purchasing power, use other strategies to get ahead of the line, such as India and Brazil, which have managed to negotiate large commitments for the main vaccine candidates as part of the agreements. manufacturing.

There is also the case of Chile, which, although it does not have the capacity to manufacture or develop vaccines, can host clinical trials, which has allowed it to negotiate purchase agreements, and despite being the second most unequal country in the OECD, only behind Mexico, it has privileged resources and extensive business connections with vaccine producing countries.

Global logistic challenge

Imperial College of London researchers say integrated modelling for accurated prediction on how optimize procesess and flexible planning approach to multifactorial problems will be essential for manufacturers to meet the global COVID-19 vaccine demand.

In the current climate supply chains could face significant disruption from closed borders and limited international travel and transportation and additional pressures caused if personnel cannot work due to health issues, or if production processes break down. Their expert recommendation is: Optimising production, It is essential that manufacturers tackle capacity limitations and identify an efficient strategy that will enable them to be effective. Scale-out of manufacturing reduces the risk of losing production and supply capacity, by increasing the availability of operational facilities over a wider geographic area. This means that if one facility fails, others will be able to continue with production. Re-routing supply chains and distribution networks  it’s vital that supply chain networks are agile and flexible to mitigate risks related to route, and to be responsive to needs. In the early stages, vaccine availability will be insufficient to immediately cover global demand, so strategies will have to be decided at governmental and global levels to decide who will be prioritised for the initial doses. This will define the target for the supply chain and will change over time.

Coca-Cola bottlers, an example of automated warehousing.

Based on the usage of different technologies such as warehouse automation, the company wants to continuously improve its supply chain management.

Coca-cola company

Coca-Cola is one of the most popular drinks and famous brand in the world. More than 1,9 billion of Coca-Cola are sold everyday in more than 200 countries.

Logistically, this is a big challenge. The soft drink already arrives and its parteners’ plants in syrup form and is then mixed with carbon dioxide and sugar.

Coca-Cola warehousing

The material handling activities are carried out through shuttle cars equipped with digital trolleys and aisle equipment, infeed/outfeed bays, infeed/ outfeed single-pallet vertical pallet lifts, steering shuttles, and dispatch sequencer shuttles.

Automated Guided Vehicles complete the material handling phase. They can move pallets (Finish Good or Empty Pallet stacks), picking up or depositing the load unit without human intervention.

Meanwhile and operator will could coordinate, manage, and control all the material handling operations, from pallets storage managing, inventory, shipping and communications.

This way of work optimizes space utilization and guarantee the maximum throughput, aiming at the automated management of internal logistics from the automated warehouse towards the production departments and vice versa.

Coca-Cola supply chain partners – a global network model

Coca-Cola is a global company that operates at the local level, that is why there are around 300 bottling partners worldwide. The process starts with procurement of raw materials (agricultural products such as sugar, cane and fruit and water). The most important ingredients, water and sugar, are sourced locally by each partner.

The following step in Coca-Cola supply chain is the production of the concentrate, which is mixed with water, sugar and carbon dioxide by the bottling plants.

After mixing, the bottlers package, market and distribute the finished beverage to grocery stores, restaurants, etc.

Therefore, the management of supplier relationships and the continuous monitoring of suppliers is of great importance to the company.

When the water bottle can also be drunk

Last week we talked about packaging and how supermarkets adjust their logistics to the packaging to satisfy customer expectations. In one part of the class, we talked about water packaging, so I remembered one that was presented as an ideation example in a startup program I took two years ago. And that was an innovative edible, biodegradable and jelly-based package for water called Ooho.

Ooho edible water bottle | Object in Focus

If we take a deep look at Ooho’s idea, we can see that the package is coming from Skipping Rocks Lab, an innovative sustainable packaging company based in London. They are explorers in the use of natural elements extracted from plants and algae to create containers with low environmental impact. With this and all their products, they try to combat a real environmental problem, which is plastic pollution, substituting the arrival of 1 billion plastic bottles in the ocean every year and ending with the emission of 300 million kilograms of CO2. This type of packages not only can reduce the environmental impact of bottles but also can transform the whole logistic process for supermarkets and water suppliers as a new unit load support device.

Although it might be a possible alternative to plastic containers for some liquids (in my opinion, an awesome solution in terms of creativity and ideation), it looks like it hasn’t been accepted by customers and they face a supply chain logistics problem due to Ooho’s short lifespan. So as Bill Gross explains in the following video, this might be an example of one of the most important factors for startup/innovation failure which is bad timing but this doesn’t mean that in the near future we end up eating from jelly bags.

The single biggest reason why start-ups succeed | Bill Gross

Santiago Bernabéu becomes a Distribution Center

Because of the big problem related to COVID-19 Real Madrid C. F. has facilitated the stadium to the government to be a key logistic partner during epidemic as a solidarity act.

Real Madrid is cordinated with different organism such as Top Sports Commission, Madrid Ministry and the Government in order to manage all together the supply and distribution of sanitary materials from donations.

As we saw in class a distribution center is a warehouse or other specialized building which is stocked with products to be redistributed to retailers, to wholesalers, or directly to consumers. In this case, they receive a lot of donations from different people or organisms most related with sports and then they distribute to the hospitals, residences, etc, acording to the government. See the following picture for a better understand of situation.

In this situation, this building can be consider a key partner because it finds inside the city, it’s one of the best comunicated points of the whole city and it has a lot of space to carry out the activity.

If you are more interested, here you can see more information:

https://www.abc.es/deportes/real-madrid/abci-madrid-y-crean-gran-centro-aprovisionamiento-material-sanitario-bernabeu-202003261331_noticia.html

https://logistica.cdecomunicacion.es/noticias/sectoriales/37324/el-santiago-bernabeu-sera-un-gran-centro-logistico

Distribution Network Consum

Currently, Consum carries out its activity in the supply chain sector through a commercial network made up of more than 730 supermarkets between Consum and Charter franchises. It has a workforce that exceeds 15,363 workers, more than 3,300,000 member-clients and is present in the Comunidad Valenciana, Cataluña, Murcia, Castilla-La Mancha, Aragón and Andalucía.

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.

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.

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?