AuthorAdam Seoudy, RUSCA Blog Committee Cargo theft is on the rise and in an unprecedented way. According to Andrea Miller in her article, Cargo theft spiked over 57% in 2023 vs. 2022, “Cargo theft incidents were up more than 57% in 2023 compared with the year prior [and] I think we’re at an all-time high. I haven’t seen cargo theft at this level” (Miller, 2024). This isn’t just a one-off incident as cargo theft has been steadily increasing yearly since the COVID lockdowns. Companies have been scrambling to find solutions to slow down the theft, but most cases have led to no avail. This is because the rise in theft has been so substantial and has occurred so rapidly. Experts have never seen anything like it and because of this, were not prepared for the historic spike in theft. Despite this, companies have begun to implement new technologies that are helping crack down on theft by tracking their inventory more effectively.
The reason that companies are opting for new technologies is because the threat of theft is no longer just physical. According to the article, Cargo theft, led by food and beverage, is surging across the U.S., “Thieves are targeting their victims through cyber scams and identity theft, creating fictitious pickups, also referred to as “strategic theft.” (Larocco, 2023). In addition, “bigger companies are getting better at spotting fraudulent activity, but it's the smaller mom-and-pop operators that need to be more vigilant” (Keith, 2023). Thieves have become more creative and have begun to implement more advanced techniques to steal cargo. This strategic theft has wreaked havoc upon smaller companies that don’t have the resources to combat it. In most cases, however, larger companies such as those in the Fortune 500, have been much more effective in slowing down the shrinkage. In addition to this, the theft has started to target more key points in the supply chain, through cities such as Los Angeles, Houston, Miami, Savannah, Newark, New Jersey, Memphis, and Chicago. Next, after analyzing the past years, it is only logical to look to the future. According to many reports, “freight security experts don't expect the problem to slow down in 2024” (Keith, 2023). This means companies must continue to innovate in their security practices as the thieves innovate in their methods to keep up. For example, according to the article, "Experts warn fleets to prepare for record-breaking cargo theft in 2024, “this is not just happening in California and Texas' usual high-risk freight markets. The practice has spread across the heartland” (Keith, 2023). This indicates that thieves are no longer just targeting the major ports, but taking a holistic approach by targeting smaller key ports along the entire supply chain. Most of the time, these points will have significantly fewer security measures. So, companies that primarily worried only about their main ports must now divert resources to implement more security in their smaller ports. Finally, it is natural to ask the question, what does this mean for supply chains across the country and what is the solution going forward? One thing is certain, companies need to take initiative and innovate their supply chain practices. Experts on the matter have mixed opinions, but there is one common consensus; invest in cybersecurity. Investing in cybersecurity has never been more crucial for companies’ supply chains until now. And as seen through countless examples in business, it is always better to be ahead of the curve than behind it when it comes to innovation. In doing so, companies and their supply chains will be more resilient and protected. This will also unlock more visibility into their supply chains, as they will be able to monitor their products much more closely. Works Cited Larocco, L. (2023, March 25). Cargo theft, led by food and beverage, is surging across the U.S. CNBC. https://www.cnbc.com/2023/03/25/cargo-theft-led-by-food-and-beverage-is-surging-across-the-us.html Larocco, L. (2023, March 25). Cargo theft, led by food and beverage, is surging across the U.S. CNBC. https://www.cnbc.com/2023/03/25/cargo-theft-led-by-food-and-beverage-is-surging-across-the-us.html Keith, S. (2023, December 1). Experts WARN FLEETS TO PREPARE FOR RECORD-breaking cargo theft in 2024. FleetOwner. https://www.fleetowner.com/safety/article/21278332/experts-warn-fleets-to-prepare-for-record-breaking-cargo-theft-in-2024 AuthorLiam Ripberger, RUSCA Blog Committee There are millions of frontline workers in America, who work as a crucial part of the supply chain industry, and yet, we are just beginning to learn about the mental health challenges these workers face. New data has revealed that frontline workers are more likely to face severe, job-related mental health challenges than other workers. In early February of 2024, meQuilibrium released a study that measures these challenges faced by the workers. meQuilibrium is a credible platform that aims to help people with their mental health by providing companies or individuals with personalized digital coaching and advice.
According to a study performed by meQuilibrium, frontline workers are 61% more likely to suffer from depression, while another 33% are likely to suffer from anxiety (Kalser). Depression and anxiety are serious mental health illnesses that are highly likely to impede most aspects of people’s lives, including their workplace performance and satisfaction. On top of this, a survey conducted by the Business Group of Health in 2022 revealed that over 44% of frontline workers reported cases of depression, anxiety, or substance abuse throughout the past year (Kalser). The Business Group of Health also conducted the same survey in 2023, in which 75% of frontline workers reported facing these mental health challenges (Kalser). In just one recent year, the percentage of frontline workers who reported struggling with these conditions increased by over 30%. Although so many of these workers are negatively affected by depression, anxiety, and other mental ailments, they were also found to be less likely to reach out for help or support from others. According to the same study from meQuilibrium, frontline workers were reported to be 30% less likely to seek professional help when stressed than other workers (Brody). Frontline workers were also 15% less likely than non-frontline workers to know about the mental well-being benefits provided by their employers, with only about half of employees being aware of these benefits (Brody). Many workers in any position are encouraged to take time off when they are struggling with mental health issues. However, frontline workers are reluctant to take days off because it would result in less pay. This could lead workers to only reach out for professional help when their conditions are peaking in severity. This issue could also be related to stigma about seeking help. For many years now mental health issues as a whole have been surrounded by stigma, which to this day still affects millions of people who do not want to be judged or stereotyped because of what they go through. The stigma around mental health issues can be especially prevalent in the workforce. This is because workers are scared that their conditions may, “hurt their reputation, compromise work relationships, or even jeopardize their job,” (Mordecai). However, this silence surrounding mental health has quite the opposite effect on companies whose employees remain silent. According to Dr. Don Mordecai, this effect can be quantified monetarily, and it can cost companies, “$9,450 per employee, per year in absenteeism and lost productivity,” (Mordecai). These numbers illustrate how the mental health crisis does not just affect the individual, but also entire companies as a whole, especially those with a large portion of frontline employees. Many of the mental health challenges that arise from frontline work can be attributed to the tendency for workers to work higher-stress jobs. Another portion of the worker well-being study done by meQuilibrium touched on employee stress perception. This highlighted how frontline workers were likelier than non-frontline workers to deny that they had any issues with stress. However, at the same time, the percentage of frontline workers who recognized that they had an issue with stress but did not reach out for any help was almost twice as high (Brody). The reason this line of work is more stress-inducing is for a number of reasons. According to Smith, it can be attributed to a number of reasons ranging from their minimal autonomy and lack of paid time off to their difficult shift hours and demanding customers (Kalser). Non-frontline workers do not deal with as many difficult and frustrating people day to day and are more likely to work regular hours with paid time off. The growing number of workers on the frontline who battle mental health issues is a call for companies to take action. The stigma surrounding the issue could be subdued with a greater emphasis on employee mental health benefits and more awareness. This stigma comes at the cost of many individuals’ mental health, as well as the productivity of the company affected. Tackling this issue would benefit all parties involved, and create a positive ripple effect throughout the supply chain of numerous companies. Sources: “Front-line workers are more likely to be anxious and depressed, survey finds” https://www.supplychaindive.com/news/frontline-workers-more-anxious-depressed/707676/ “Frontline Workers Have Greater Mental Health Needs, Yet Are Less Likely to Seek Help, Study Finds” https://www.prnewswire.com/news-releases/frontline-workers-have-greater-mental-health-needs-yet-are-less-likely-to-seek-help-study-finds-302056812.html “Mental Health in the Workplace - and the Cost of Staying Silent” https://business.kaiserpermanente.org/insights/mental-health-workplace/mental-health-stigma-costs#:~:text=The%20majority%20of%20employers%20and%20employees%20report%20workplace%20stigma%20around%20mental%20health.&text=Even%20in%20the%20most%20progressive,or%20even%20jeopardize%20their%20job. AuthorNathan Perez, RUSCA Blog Committee Recently, Electric Vehicles (EVs) have taken the world by storm. The rise of EVs have been a major hit in global markets. Even major car company General Motors has stated that they plan to produce fully EV by 2035. This growth has ultimately led several companies to create new strategies to maximize on this opportunity in the market.
Tesla, only until the last quarter of 2023, has been the leading producer of EVs worldwide and has just recently created a new parts distribution center in Greenville, South Carolina. The announcement comes just a few months after their first expansion into Newburgh, New York. They also plan to invest in Nevada for two sites. There will be one for batteries and the other for their new Semi-trucks. LG Chem, a supplier of cathode materials, and General Motors have signed a $19 billion deal together – only four months after their deal with Toyota. LG Chem’s plant will be located in Tennessee, where they will produce 60,000 metric tons of cathode material starting in 2026. The market is unprofitable as of now, however, many companies are introducing plug-in hybrids to try to bring even more popularity. The Chinese government has tried to bring even more focus to the EV industry. As of Q4 of 2023, Chinese Company BYD overtook Tesla as the leading producer of electric vehicles worldwide. This was enabled as the Chinese government provides subsidies, which encourages their automakers to invest in warehousing and logistics in foreign markets. However, the current decline of the Chinese economy has many worried as the price of automobiles has dropped. Despite this, BYD has not shown signs of stagnating growth as they still have plans in creating a plant in Mexico. The plant comes as a way to bypass U.S. tariffs on Chinese-manufactured EVs that are set at 27.5%. The Biden Administration is concerned for local car makers as BYD automobiles are affordable and have already gained popularity in Asian and European countries. The electric vehicles manufactured in Mexico will enjoy a 2.5% tariff, rather than the hefty 27.5%. Chinese electric vehicle manufacturers could use this opportunity to grow in the American market. The electric vehicle car market is ever-growing and changing. The rise of new competitors and the continued success of seasoned producers, proves that while currently unprofitable, the industry has a lot of promise for the future. The demand will only grow as the price of the EVs continues to drop. Sources: https://www.wsj.com/business/autos/china-offers-support-to-accelerate-ev-makers-global-push-9ae498ff?mod=autos_news_article_pos4 https://www.wsj.com/business/lg-chem-gm-sign-19-billion-deal-on-cathode-materials-b7888ccb?mod=Searchresults_pos2&page=1 https://www.supplychaindive.com/news/tesla-plans-parts-distribution-center-south-carolina/705351/ https://www.nytimes.com/2024/02/08/business/china-deflation.html?searchResultPosition=1 https://www.wsj.com/business/autos/chinese-ev-maker-byd-exploring-mexico-factory-as-entry-to-u-s-market-411360fa?mod=WTRN_pos2&cx_testId=3&cx_testVariant=cx_166&cx_artPos=1 AuthorCary Wong, RUSCA Blog Committee On January 5th, 2024, Boeing once again cracked national headlines in an unfortunate manner. During the ascend of an Alaska Airlines flight, a side door of the Boeing 737 MAX 9 plane was blown out, putting passengers in a very dangerous situation. It was a miracle that no lives were lost as the plane was still at a mid-level altitude, and no passengers were seated next to the door. This crisis was only one of several catastrophic events for Boeing over recent years. It has become clear that Boeing has many internal issues relating to their supply chain and quality control systems, which are in turn damaging their brand’s image. As a result, Boeing is reevaluating their supply chains in an attempt to develop solutions.
After the incident, the Federal Aviation Administration temporarily grounded all Boeing 737 planes before a cause of the issue could be found. Investigations from the National Transportation Safety Board revealed that the plane was missing 4 bolts vital to the door's stability. Boeing’s records from September 2023 revealed that in order to make repairs, the bolts were removed at the Boeing facility in Renton, Washington (Samora). However, Boeing employees forgot to reinstall these bolts, leading to the crisis. One of Boeing’s first moves in response to the investigation was to implement a “control plan to ensure all 737-9 mid-exit door plugs are installed according to specifications and added new inspections of the door plug assembly and similar structures” (Forecast International). The company added new protocols to fully document when the door plug is opened or removed at Boeing’s factory, ensuring it is reinstalled and inspected prior to delivery. These were much-needed moves by Boeing as they must prove and validate their stability and reliability. In addition to these new changes regarding the door plug, Boeing also pledged to incorporate new verification measures throughout their supply chain, such as additional inspections and collaboration with suppliers on product enhancements. While these new measures and protocols seem to be productive, some people believe that more should be done. Richard Aboulafia, managing director of the aerospace consultant firm, AeroDyanmic Advisory, called these changes “meaningless and superficial” (Fawkes). Aboulafia believes that until Boeing undergoes a cultural adjustment, not much will change. Cultural changes are not easy, but according to Aboulafia, it can start with Boeing bringing more people with technical knowledge into the higher ranks, rather than prioritizing investor returns. Regardless of how Boeing decides to go about it, it is clear that changes need to be made. Since the beginning of the year, Boeing’s stock price has dropped by more than fifteen percent. Without changes, the company and its image will continue to fall. Sources https://www.supplychaindive.com/news/ntsb-initial-report-4-bolts-missing-alaska-airlines-spirit-aerosystems-boeing-737-9-max-aircraft/707012/ https://flightplan.forecastinternational.com/2024/02/07/boeing-responds-to-initial-ntsb-report-on-max-9-door-plug-blowout/ https://www.ragan.com/boeing-comms-measurement/ https://www.pbs.org/newshour/show/boeing-under-pressure-amid-string-of-safety-and-quality-control-issues https://www.aljazeera.com/economy/2024/1/23/poor-quality-control-race-for-profits-behind-boeings-troubles https://www.nytimes.com/interactive/2024/01/23/business/boeing-alaska-airlines-door-plug.html AuthorShane-Anson Bootsma, RUSCA Blog Committee In recent years, supply chains have faced unprecedented strain, marked by disruptions ranging from raw material shortages to transportation bottlenecks due to the COVID-19 pandemic. Immediately post-pandemic, JIT practices were replaced with “just-in-case” practices, where retailers would hold onto excess inventory in the event of potential supply chain interruptions. However, actions taken in recent years have instilled a sense of confidence in the reliability and adaptability of supply chain infrastructures. This newfound assurance is driving businesses to embrace Just-In-Time (JIT) inventory management practices once again, which involve maintaining minimal inventory levels and replenishing stock only as needed.
JIT practices, characterized by minimal inventory levels and replenishment based on real-time demand, offer retailers a path to streamline operations, reduce holding costs, and enhance overall efficiency. This strategic shift reflects a broader industry sentiment favoring leaner, more agile inventory management approaches in response to evolving market dynamics. Industry analysts point to a confluence of factors driving this transition, including a stabilized supply chain environment and a return to comparatively stable demand patterns. Since companies, such as IKEA and Walmart, can accurately predict demand and satisfy said demand through supply chains, they are swapping back to JIT. Walmart has created new technology that aims to fix broken forecasting tools during the pandemic. This, in combination with the fact that “consumer spending has moderated”, has allowed merchants to “have smaller, more accurate shipments than [companies] have had in the past.” (Young) Since the re-implementation of JIT, Walmart has cut its inventory by 4.8% and has boosted sales with leaner inventories. David Guggina, executive vice president of the supply chain for Walmart, has stated that they are “not seeing the same level of disruptions upstream in the supply chain”, leading to JIT practices being more practical than in the past (Young) The return to JIT inventory management signifies a strategic pivot towards efficiency and responsiveness in a post-pandemic recovery landscape. Retailers aim to enhance operational resilience and adaptability while navigating uncertain market conditions by aligning inventory levels with real-time demand signals and minimizing excess stock. Sources https://www.wsj.com/articles/retailers-return-to-bringing-in-inventory-just-in-time-4613e3ee?mod=logistics_more_article_pos4 https://www.marketplace.org/2023/04/04/supply-chain-shortages-return-to-just-in-time-inventory/ https://medium.com/@thomasarnosander/retailers-shift-back-to-just-in-time-inventory-management-b712b456ba8b AuthorVaish Konda, RUSCA Blog Committee In recent years, the European Union has been pursuing the formation of a supply chain law to combat violations of environmental and child labor laws by companies operating within its states. However, the initiative faces resistance from Germany, citing concerns that such regulations could potentially harm businesses in their country (Kippenberg). Beyond Germany's worry about potential harm to businesses, other EU member states share similar reservations, highlighting the challenge of finding a common approach. This ongoing discussion emphasizes the necessity for a collaborative effort to balance ethical considerations with the economic interests of each country.
The German government believes that the EU supply chain law may lead to legal problems that would hinder the productivity of their companies. The current ruling political party, FDP, believes in the freedom to practice business without significant government intervention. Under this law, employees working at any part of a supply chain in Germany would be able to go to court while holding the company liable for previously unprotected categories, increasing the chances of businesses succumbing to legal troubles (Kippenberg). On the other hand, the ethical dimensions of the debate cannot be overlooked. Companies operating within the EU must be held accountable for their impact on the environment and their labor practices, especially concerning child labor. The proposed supply chain law seeks to address these concerns, urging respect for the environment by maintaining sustainable initiatives while also complying with important child labor laws. The right balance with regulatory government behavior is necessary for safe production in a supply chain. Multiple companies support the EU law and look forward to adopting it once it is instated. For instance, German retailer Vaude recently reacted to the FDP’s opposition by citing their support for a strong law that raises the importance of taking responsibility for supply chains while simultaneously maintaining a successful business (“VAUDE”). As more companies express support for such regulations, it becomes evident that the business community is aligning itself with the principles of ethical and sustainable business practices. In the era of globalization, the German government's actions encourage others who are unhappy with the law to oppose it, making it difficult for the union to address global challenges in supply chains. Currently, the European Union has postponed its decision about the supply chain law due to opposition from Germany, as it needs a “qualified majority of 15 EU countries representing 65% of the European Union population” to proceed forward (Blenkinsop). Sources: https://www.hrw.org/news/2024/01/29/germany-throws-spanner-works-eu-supply-chain-law https://www.reuters.com/markets/europe/eu-postpones-decision-proposed-supply-chain-due-diligince-law-2024-02-09/ https://www.linkedin.com/pulse/vaude-positionspapier-zum-fdp-beschluss-stopp-der-eu-lieferkettenrichtlinie-gux2f/?utm_source=share&utm_medium=member_ios&utm_campaign=share_via AuthorManuel Torres, RUSCA Blog Committee It’s no secret that many U.S. companies have been outsourcing to China for decades. However, there’s been strong consideration towards finding alternatives for China’s supply chains. In the article, China is ‘risky’ for supply chains and India a favored destination for U.S. firms, survey shows, author, Charmaine Jacob, reported many firms in the U.S. are seeking long-term investment in safe bets for the future of their outsourcing. She asserts, “U.S. firms are increasingly viewing China as a risky bet for their supply chains – neighbor India is set to benefit as companies look elsewhere to set shop” (Charmaine Jacob, 2024). In other words, many influences are going into why companies are viewing China as a potential risk for the future. There’s no ignoring the fact that their ties with the U.S. have been shaky which has set a hard picture for firms to imagine any foreseeable future outsourcing. It’s fair to say that some companies have begun to test the waters to find alternatives. Since many firms have realized the risk involved with China, there’s now a need to move on towards reshoring materials from countries such as India, Vietnam, etc. It’s important to note that there can’t be too much optimism as mentioned before that risk still lies in choosing other alternatives. These are the greatest concerns that author Charmaine Jacobs reports in her article. For example, technology company, Apple’s supplier Pegatron, ran into some of the major issues that lie within India and factory security. She maintains that “Apple supplier Pegatron had to temporarily cease operations at its factory in the Chengalpattu area near Chennai after a fire broke out” (Charmaine Jacbo, 2024). This goes to show there’s uncertainty with factories in India. Though optimism is still in the air for many U.S. companies, those won’t be able to replicate what Apple has done in terms of transitioning their supply chain to other countries. It’s also fair to address the U.S. constant push towards wanting to slowly part ways with Chinese ties, and the Biden administration creating influence for firms. What’s another strong alternative that’s been in consideration for U.S. firms? It would be Vietnam and it has been a viable option. Issues of course are included with Vietnam, such as lack of infrastructure, customer base, and price increases. Author, Charmaine Jacobs, claims that “According to LSEG data, $29 billion in foreign direct investments were pledged to Vietnam from January to November last year” (Jacobs, 2024). In other words, the investments towards reshoring exist and seem to become a trend that’ll be normalized sooner or later. Overall China isn’t going anywhere in terms of an “option”. It’ll remain in many companies' strategies. Although there are options on the table, it is becoming a reality for many firms. In the article, Mitigating China Supply Chain Issues in 2024, author, Optilogic, states: “Kearney’s latest Reshoring Index indicates that 96% of CEOs are considering reshoring, have decided to reshore, or are already reshored. Additionally, US imports of manufactured goods from the 14 Asian LCCs and regions tracked by Kearny in 2022 totaled 14.1% of US gross manufacturing output, 14.49% lower than the previous year”. (Optilogic, 2024) Furthermore, moves are being made in regards to reshoring and revealing the importance of the trend many CEOs have considered. With of course taking into account the risks that were mentioned before. To conclude, the push for reshoring has become slowly but steadily a trend. There the countless negative factors that come with China’s risky supply chain that make reshoring a pensive idea. Countries like India and Vietnam are first choices and companies such as Apple have begun to set a new precedent for U.S. firms to get involved in reshoring. Of course, it’s easier for them to expand due to their access to expand quickly. It’s a big step that’ll become the new norm for companies in hopes of getting rid of the reliance on one major supplier. Sources www.cnbc.com/2024/01/24/us-firms-prefer-india-over-china-for-supply-chain-needs-despite-risks.html www.optilogic.com/resources/blog/mitigating-china-supply-chain-issues/#:~:text=Chinese%20supply%20chain%20risk%20increased,and%20Vietnam%20for%20manufacturing%20goods. www.supplychaindive.com/news/china-sourcing-supply-chain-risks-everstream-2023/647602/. AuthorAdam Seoudy, RUSCA Blog Committee Consumers today are more environmentally conscious than ever before. They are always voting with their dollars, steering companies in the right direction, towards a greener future. This effect has undoubtedly made its way into the supply chain world, forcing companies to adapt their practices. As a result of societal pressure, we have seen many Fortune 500 companies implement new measures to satisfy their corporate social responsibilities. Amazon has launched their Carbon Neutral by 2040 plan, Apple has launched wind and solar farms, Patagonia has been environmentally conscious from the beginning, and many more. These major companies and many more have also started to make changes to their supply chains.
To begin, consumers today want to know where the products they buy come from and how they are made. And according to TradeBeyond, “This has given ethical sourcing an extremely important role in the total sourcing of products within the supply chain of numerous companies” (Staff). As mentioned previously, there has been a huge shift in what sourcing practices are deemed ethical by consumers today. And as a result companies are being forced to adopt new practices that customers can back, both ethically and financially. There are many companies that have already started to make the necessary changes, while many others have made public promises to follow suit. Now that it has been established that ethical sourcing is crucial, the next step is determining how this will be done. The answer is quite simple: Technology. Forbes believes “technology can improve supplier visibility by screening manufacturers and automatically flagging changes in their profiles based on first-party data, public information, and news stories” (Chorley). Even the most successful companies supply chain wise, usually only have tier one supplier visibility. In order to bypass this unfortunate blindspot, technologies must increase visibility across the entire supply chain which makes them very valuable. Finally, companies that have gotten ahead of the curve have surprisingly seen some immediate benefits. I say surprisingly because previously, companies viewed acting ethically and operating profitably as polar opposites. However, in reality, “A 2015 report by the World Economic Forum estimated that sustainable and ethical sourcing practices decrease supply chain costs between 9% to 16% while increasing revenues by up to 20% for responsible products and boosting brand value by 15% to 30%.”(Moncayo). This report completely dispels the notion that profitability and ethical supply chain practices work against each other. In fact, a future in which we work to rid ourselves of these so-called “tradeoffs” is the definition of progressive thinking. This is also a reason that the supply chain field is in such high demand. There is a massive need for imaginative and progressive supply chain professionals that will work to change the way that supply chains are operated and viewed. Sources www.forbes.com/sites/forbesbusinesscouncil/2023/04/04/the-economic-benefits-and-best-practices-of-ethical-sourcing/?sh=41c67d03d7ca. tradebeyond.com/blog/the-role-of-ethical-sourcing-in-supply-chain/. www.forbes.com/sites/jonchorley/2022/08/31/building-ethical-supply-chains/?sh=3ca388e28b23 How DHL Supply Chain is Leading the Trend Towards Logistics Automation in the Supply Chain Industry2/5/2024
AuthorLiam Ripberger, RUSCA Blog Committee DHL Supply Chain, one of the world’s most prominent third party logistics companies, plans to open four new automated warehouses in 2024, a big move towards new heights in warehousing efficiency. The 3PL company currently operates nine automated warehouses, which store approximately 800,000 bins. However, they estimate that the four additional warehouses will allow DHL to handle a whopping 1.2 million bins, which is a 50% increase in capacity (Domo). This statistic helps to illustrate the efficiency of automated warehousing, which, when done right, greatly improves the density of the bins and enables greater overall capacity. This is just one step in the trend of warehouse digitization that would not be possible without their recent business partnership.
In early November, 2023, DHL Supply Chain announced their partnership with AutoStore, a technology company that focuses on improving automatic storage retrieval systems. These big improvements in density and capacity are thanks to the machines provided by AutoStore that are able to accurately retrieve packages in as little space as possible. All four of DHL’s new warehouses will be equipped with this AutoStore technology, just as some of their previous warehouses were, which continues to solidify the effectiveness of technology in logistics. Although DHL Supply Chain is one of the biggest names in the logistics world, they are not the only company looking to reconstruct and digitize their warehouses. Many other well-known companies have made moves towards warehousing automation. Heinz is working towards building a $400 million fully automated distribution center, while Walmart is opening its third automated fulfillment center (Salgado). In all, more companies than ever before are implementing their own automated warehouses, so now the big question is, why is this such a big trend right now? Although the upsides to warehouse automation like efficiency, capacity, and accuracy are incredibly appealing, there have been a few main factors that have held companies back up until this point. The main barriers to entry were cost and accessibility. In recent years, we have witnessed breakthroughs in the effectiveness of artificial intelligence, and in technology as a whole. Due to the constant improvement of technology and artificial intelligence, automation is becoming more cost effective and available to the masses. This removes some of the major barriers to entry that companies just could not get past. Another major issue right now in the supply chain industry is companies are facing labor shortages. For years it has been a struggle to have a consistent workforce that is able to repetitively perform monotonous or demanding tasks in the warehouse. Automating these monotonous jobs will allow companies to optimize their workforce and place their employees in more strategic, human jobs. DHL Supply Chain’s push to warehouse automation is just one step in the direction of the digitization of logistics. In the future, we can expect more and more businesses to count on artificial intelligence and technology to push the limits of efficiency in this competitive industry. Sources “DHL Supply Chain to open four more automated warehouses” https://www.supplychaindive.com/news/DHL-Supply-Chain-AutoStore-warehouses-reinforces-robotics-and-automation-strategy/699805/ “North American Warehouse Automation Trends for 2024” https://www.swisslog.com/en-us/case-studies-and-resources/blog/north-american-warehouse-automation-trends-for-2024 “5 Warehousing Automation Trends You Should Know in 2024” https://articles.cyzerg.com/5-warehouse-automation-trends-2024 “DHL Supply Chain announce partnership expansion with AutoStore” https://supplychainchannel.co/dhl-supply-chain-announce-partnership-expansion-with-autostore/ AuthorNathan Perez, RUSCA Blog Committee On January 5th, 2024, Alaska Airlines flight 1282 saw one of its door plugs fly right off. This caused the Federal Aviation Administration (FAA) to ground all 737 MAX 9s for investigation purposes. To start, the FAA stated it would be doing full inspections and even raising its oversight on the production of Boeing airplanes. Through the investigation of the FAA, Boeing and its supplier Spirit AeroSystems have been compliant with all of their requests.
While the FAA has already finished its initial inspections, Boeing is doing all it can as it brought on retired Navy admiral Kirkland Donald to oversee their productions as the special advisor to the President and CEO. The oversight will look into both Boeing and Spirit AeroSystems as 70% of the plane is created by parts manufactured by Spirit. Donald and his team look into all the different types of management and qualities of production. The biggest issue that Boeing faces is their own goals. They want to get back to producing about 50 a month. For reference, they made 45 in December. However, this may cause more backlog in the future since they have to adhere to this investigation. This can only hurt as they try to catch their rivals Airbus who delivered 735 jets last year compared to Boeing’s 528. In 2023, Boeing was at a net loss for 9 months and only saw $1.5 billion in cash flow from the targeted $3 to $5 billion. Their biggest buyer in China, China Southern, has been hesitant to purchase more Boeing planes due to the current round of inspections. Boeing has already been trying to clear up their backlog of orders on the 737 MAX series to China, but with Beijing hesitant to sign off, it will not be easy due to the Alaska Airlines incident. Boeing and its ties to China are major as Boeing served as the connection for China to the World Trade Organization. Despite the problem with one of its bigger buyers, Boeing has still been able to land a deal with India Akasa Air. The deal comes with a mix of MAX 10s and MAX 8-200s jets with deliveries slated through 2032. The total number of Jets is 150. This is not a large amount, however, IndiaGo had a deal with 500 planes making it the largest deal in aviation history. While Boeing has just had their 737 MAX 9 take flight this weekend, it will be interesting to see how Boeing's production and supply will move going forward. Not only that but their buyers' situations will also be a major factor in determining if this year will be a failure or success. Sources https://www.wsj.com/business/airlines/boeing-faces-longer-wait-to-resume-max-deliveries-in-china-9277f534?mod=airlines_more_article_pos3 https://www.wsj.com/business/airlines/boeing-secures-order-for-150-max-jets-from-indias-akasa-air-a5245e18?mod=airlines_news_article_pos5 https://www.wsj.com/business/airlines/boeing-snafus-add-new-risks-to-2024-production-goals-de3a6b4c?mod=airlines_news_article_pos1 https://www.nytimes.com/2024/01/17/business/faa-boeing-investigation.html?searchResultPosition=5 https://www.supplychaindive.com/news/boeing-faa-alaska-airlines-door-incident-manufacturing-quality-investigation-spirit-aerosystems/704460/ https://www.supplychaindive.com/news/boeing-advisor-quality-management-737-max/704750 |
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