AuthorBenjamin Williams, RUSCA Blog Committee One of the many vital aspects of supply chain management is planning. Many companies take on this task by using a developed strategy known as integrated business planning (IBP), which is a long process that utilizes a variety of business functions. The goal of IBP is to balance consumer demand with company supply. In layman's terms, the goal of this process is to try to project future consumer behavior, which is statistically improbable. After IBP, companies shift into operational planning, which is focused on controlling the flow of resources and goods. During these processes, professionals must constantly make many decisions because issues always arise. However, sometimes these decisions can backfire and cause even more issues for the company. Aera Technologies is a new artificial intelligence that is programmed to ease the planning aspects of supply chain management. Aera uses programmable data crawlers that examine billions of rows of transactional data each month to carry out its tasks. These data crawlers look for patterns in decisions that historically work, or don't work, for the company and are able to provide professionals with guidance to make better decisions. Additionally, the AI merges information on the weather, lead times for logistics, and sustainability performance in order to deliver the best projections. A major benefit of these crawlers is that they don't take breaks and are made to have a negligible effect on how well the underlying source systems work. To generate wise just-in-time judgments that support a supply chain's seamless operation, machine learning algorithms are paired with business domain experience. Though the supply chain is chaotic and unpredictable, Aera wants to make this uncertainty simpler to manage by mastering supply chain decision-making. When issues differ from the original forecasted plan, the technology is programmed to make viable decisions in an automated manner. These decisions are then either approved or rejected by humans, which is necessary as even with this technology, sometimes humans are the only ones capable of curating a decision. Aera Technologies claims that for one global consumer goods company, the solution has made as many as 12,000 recommendations in a month; 74% of those recommendations were auto-accepted. One problem with human decision-making is that humans often make wrong decisions because of emotion or prejudice. Even worse, sometimes supply chain professionals make no decision at all, which is arguably the worst decision anyone can make. This technology created by Aera simply offers premeditated decisions that professionals can decide to utilize or reject. It is important to note that this technology has not created a completely automated supply chain. However, its development should be praised because its purpose is solely to aid supply chain management. The introduction of AI to the supply chain is a step in the right direction for businesses, allowing professionals to utilize this tech to eliminate waste and increase profits. SOURCES: https://logisticsviewpoints.com/2023/04/03/is-the-autonomous-supply-chain-a-pipe-dream/ https://www.businesswire.com/news/home/20221215005001/en/Aera-Technology-Named-a-2022-Top-Tech-Startup-in-the-Supply-Chain-and-Logistics-Space https://supplychaindigital.com/technology/technology-will-produce-self-healing-supply-chains AuthorKokoro Sugiura, RUSCA Blog Committee On March 30, 2023, a cyberattack targeted a software called 3CX, which is a phone system used for supply chain communication purposes. This software has over 12 million daily users and allows clients to voice or video call downstream customers. The attackers disguised themselves as part of the 3CX software and mainly targeted the application on Microsoft and iOS servers. They installed network-disrupting software, which allowed them to steal information from user profiles of Google Chrome, Microsoft Edge, Brave, Firefox, and other user profiles. An investigation revealed that the attack was most likely conducted by a North Korean-affiliated organization, based on the methods of commands and installation techniques used. This attack is a major problem as many global companies utilize this software, including McDonald's, BMW, Toyota, Ikea, Coca-Cola, and the UK's National Health Service. Furthermore, by backdooring many of these companies' systems, they have also been able to target cryptocurrency companies. The attackers are collecting data on cryptocurrencies, putting crypto companies at risk. Traces of the attack have been seen in countries worldwide, such as Brazil, France, and Germany. 3CX is advising companies to uninstall the Electron desktop app from desktops and download the web client app instead to mitigate risk. Additionally, a group of researchers is working to develop a tool that detects which devices have been impacted by the attack on 3CX, using IP addresses. The success of this attack shows the advance in expertise of North Korea, and the increased risk of cyber attacks as technology advances. Cryptocurrency and their funds, especially, pose an attractive target for hackers. SOURCES: https://www.bleepingcomputer.com/news/security/cryptocurrency-companies-backdoored-in-3cx-supply-chain-attack/ https://www.crn.com/news/security/3cx-supply-chain-attack-8-biggest-things-to-know https://www.axios.com/2023/03/31/supply-chain-cyberattack-north-korea https://techcrunch.com/2023/03/30/theres-a-new-supply-chain-attack-targeting-customers-of-a-phone-system-with-12-million-users/ AuthorNick Leung, RUSCA Blog Committee Recently, Apple CEO Tim Cook visited China for the first time since 2020, meeting with Minister of Commerce Wang Wentao. During this meeting, both sides were able to fully discuss certain issues such as Apple’s development in China as well as supply chain stabilization. This was the first visit between Wentao and Cook since videos and images of workers fleeing from an iPhone plant in China surfaced during the COVID-19 lockdowns. The point of this meeting for Cook was to discuss and find ways to move some production out of China due to all of these issues. Wentao stated that “China is willing to provide a good environment and services for foreign companies including Apple,” but given these production problems, it is unclear whether this remains possible. Cook has emphasized his “symbiotic” relationship with China, but it is likely that he has other intentions. Despite Wentao’s statement, Cook is further looking into how to rely less on China for manufacturing, which includes investing heavily in new production facilities in India. Many companies, including Apple, were significantly impacted throughout the pandemic by China’s strict COVID-19 guidelines. A perfect example is the complete unavailability of the iPhone 14 during last year’s holiday season, which had a major negative impact on revenue for the company. Apple lost approximately six billion in revenue from this lack of inventory, which is especially significant for a product that otherwise would have been one of the company’s most popular items, especially with the increased demand during the Christmas season. As Apple moves some of their iPhone manufacturing to India, they are on track to double its iPhone exports from last year. Apple’s long-term goal is to manufacture a quarter of their iPhones in the country, as stated by India’s Commerce Minister Piyush Goyal in January. As many western companies observe Apple’s withdrawal from China, this could push them to do the same, potentially damaging China’s export-dependent economy in the long-run. However, there have been some reports saying that India has not been doing as well as expected either, with an Apple engineer in India stating, “There just isn’t a sense of urgency.” Manufacturing in India is also complicated by difficulties with tariffs, logistics, and regulations. Nevertheless, India is still currently the best sourcing destination for Apple. SOURCES: www.cnbc.com/2023/03/27/apple-ceo-tim-cook-meets-with-china-commerce-minister-on-supply-chain.html https://www.ft.com/content/e5bc3ec2-b522-48c8-880f-7e981c14c9aa https://appleinsider.com/articles/17/12/06/apple-ceo-tim-cook-talks-chinese-supply-chain-censorship-and-more-in-interview AuthorAnthony Partazana, RUSCA Blog Committee One does not need to look far to see the state of disrepair of roads in the United States. Whether it be on a daily commute or a cross-country road trip, one will likely find roads filled with potholes and in a perpetual state of construction. However, this issue of road infrastructure in the US goes far beyond the interests of commuters, as the United States relies on its roads to transport trillions of dollars in goods. Therefore, at a time when consumer demand for express shipping is at an all-time high, the United States is struggling to maintain its infrastructure and attract manufacturing. While millions of Americans hope that the Bipartisan Infrastructure Law of 2021 will help bring jobs and manufacturing back, China has already invested more than the US in its infrastructure to maintain its lead in manufacturing. When the Biden Administration passed the Bipartisan Infrastructure bill in 2021, they touted it as a “once-in-a-generation investment.” While the bill was indeed a significant accomplishment for the US, these kinds of investments in infrastructure need to be made much more frequently to lure manufacturing back to the states. This is because, in 2022, China made a similar investment in infrastructure for $2.3 trillion over the course of one year, while the US infrastructure bill only allocated $1.3 trillion over five years. The US needs to correctly allocate spending to take advantage of current reshoring trends, as manufacturers are looking to return to the US due to rising costs and logistical issues overseas. The area that the United States needs to focus on improving is certainly its road infrastructure. According to the ASCE’s infrastructure report card from 2021, around 43% of public roads in the US are in “poor or mediocre condition”. However, only a small portion of the $1.3 trillion allocated for infrastructure will be invested in repairing roads. The White House has claimed that this investment in repairing roads is the single largest since the Eisenhower administration, further proving how badly the US has neglected to maintain its infrastructure. If the US wants to close the infrastructure investment gap that China is creating, they will need to increase funding for maintaining infrastructure, as well as investments in new projects to expand and build new infrastructure for trade. Many highways in the US cannot meet modern demands for commercial or even passenger traffic, and the US needs to find creative solutions to these issues. Whether it be investing in highways capable of use in autonomous vehicles or adding exits more suitable for commercial traffic, there are many steps that the US can take to close the infrastructure investment gap that China is creating. In order to attract manufacturers back to the states, the US will need to invest in all aspects of infrastructure. However, it is undeniable that roads are the backbone of supply chains, and without proper investment, the US will fall farther behind China in the race to attract manufacturing. Staying on time and on budget for projects funded by the Bipartisan Infrastructure Law will be vital in retaining manufacturing and securing further investment. SOURCES: https://www.freightwaves.com/news/u-s-lags-behind-china-in-race-to-improve-transportation-infrastructure https://www.thetrucker.com/trucking-news/the-nation/feds-states-rally-around-improving-nations-supply-chain-through-infrastructure-improvements https://infrastructurereportcard.org/cat-item/roads-infrastructure/ https://www.whitehouse.gov/briefing-room/statements-releases/2021/11/06/fact-sheet-the-bipartisan-infrastructure-deal/ AuthorRyan Salamante, RUSCA Blog Committee As of February 15th, 2023, DB Schenker, a German logistics company, and the Mediterranean Shipping Co. (MSC), an international shipping line based in Switzerland, formally signed an agreement that would ship 30,000 TEUs of cargo with net-zero emissions in 2023. By securing and committing to the use of 12,000 metric tons of biofuel, the two large corporations plan to decarbonize their ocean freights by pledging to the use of sustainable fuel. While this all sounds promising towards building an environmentally friendly supply chain, it is important to consider all aspects of what biofuels truly are, including the positives, as well as the areas of improvement that are attributed to these alternatives to fossil fuels. Ultimately, what makes biofuels a more environmentally friendly source of energy is that it is considered to have fewer negative effects compared to fossil fuels. According to “Biofuels may have fewer effects on the environment than fossil fuels”, an article posted by the Energy Information Administration, “when burned, pure biofuels generally produce fewer emissions of particulates, sulfur dioxide, and air toxics than their fossil-fuel derived counterparts.” This isn’t to say that biofuels are the absolute solution to reducing carbon emissions. In fact, the Energy Information Administration in their article also clarified this further by stating that “burning biofuels results in emissions of carbon dioxide (CO2), a greenhouse gas.” However, carbon emissions that result from biofuel combustion may be offset by the biomass feedstocks that are used for biofuel production. Therefore, while switching to biofuels is not that perfect solution, it is still a great alternative to fossil fuels and will help reduce carbon emissions by companies who are in the process of adopting a progressive mentality that supports sustainability and cleaner processes, such as DB Schenker and the Mediterranean Shipping Co. Understanding the basis of biofuels and how exactly they impact the environment, we can now look further into the details of the agreement between the two large corporations. According to a press release by DB Schenker, they have committed to certified second-generation biofuels that are derived from cooking oil.They plan on blending 12,000 metric tons of biofuel to between 20% and 30%, which will ultimately result in about 50,000 metric tons of blended biofuel to be used in MSC’s ships. By transferring to the use of biofuels in their logistics, Thorsten Meincke, Global Board Member for Air and Ocean Freight at DB Schenker ultimately states that the company’s goal is to “offer our customers a clean solution to help them achieve a real additional reduction in their emissions”. SOURCES: https://www.supplychaindive.com/news/db-schenker-msc-biofuel-agreement-to-reduce-ocean-supply-chain-emissions/643300/ https://www.eia.gov/energyexplained/biofuels/biofuels-and-the-environment.php https://www.dbschenker.com/global/about/press/db-schenker-and-msc-seal-important-biofuel-deal-832010 AuthorKhush Parikh, RUSCA Blog Committee Over the last few years, technology has advanced rapidly and become more integrated into daily life. This is especially true in the world of supply chain management, where Artificial Intelligence (AI) tools are being used to revolutionize how businesses manage their operations. AI-powered solutions such as Microsoft’s Dynamics 365 Copilot and Overhaul provide shippers with a way to quickly identify potential risks and then take actionable steps to mitigate them before any disruption can occur. The increased visibility that these solutions offer allows companies to remain agile while responding quicker than ever before when unexpected situations–including weather events altering shipments schedules, geopolitical or financial risk affecting delivery times, or cargo theft issues–arise. The data collected through AI algorithms paired with real-time operational insights help track deliveries down to each step so that preventative, rather than reactive, measures can be taken faster than ever before. Not only does artificial intelligence reduce transportation costs associated with traditional methods like manually monitoring shipment progress, but it also helps in reducing costs incurred by delays during transit. This is especially vital during transit along long distances, such as multi-leg journeys across borders. With AI keeping an eye out on possible disruptions from external factors like weather changes, which may affect air cargo, suppliers, and more, this feature enables users within the freight forwarding domain industry space to plan better and create finer schedules, thereby saving money spent over rerouting plans under unanticipated circumstances. Allowing smarter decisions against forecasted mishaps leads not only to shorter dwell times at distribution centers, but also to lesser CO2 emissions. This is due to less traffic caused by longer wait hours because of flights getting delayed due to inclement climate conditions or natural calamities. This promotes a greener environment, helping corporations better comply with corporate social responsibility programs. AI technologies have come a long way and continue making waves year after year in terms of investments made–both equity & debt alike. Some supply chain startups were able to raise hundreds of millions of dollars just recently, showing venture capitalists still believe in the possibilities digital technology can bring forth. This is facilitated largely by the constant R&D efforts done by a variety of IT firms using their skill sets to create and implement best practices in the field. These firms are strung together through partnerships with other organizations, forming an ecosystem of innovation. Overall, current market dynamics, especially large-scale demand uptick situations, are paving the way for a new era of sustainability standards and higher expectations. Companies like Baidu, Microsoft, IBM, Google, Amazon, Alibaba, and Tencent are among the leading-edge service providers at the forefront of these changes, reshaping the future workspace with their advanced core functionalities. SOURCES: https://www.marketwatch.com/press-release/global-artificial-intelligence-ai-in-supply-chain-and-logistics-market-size-report-analysis-2023-2029-2023-03-15 https://www.supplychaindive.com/news/microsoft-promotes-proactive-supplier-collaboration-ai-supply-chain/644827/ https://techcrunch.com/2023/03/07/overhaul-which-taps-ai-to-secure-physical-supply-chains-raises-73m-in-equity-and-debt/ AuthorPriya Patel, RUSCA Blog Committee Electric vehicles (EVs) rely on advanced battery technology to power their electric motors. The battery supply chain plays a crucial role in the production of EVs and the transition to a more sustainable transportation system. However, the United States is facing significant difficulty due to an EV battery catastrophe as the world experiences an EVboom. The most major element of an EV, lithium-ion cells, do not currently have a sufficient distribution network. Even though some American automakers are working to develop their own supply chains, many remain dependent on importation and manufacturing offshore. The auto industry must raise its labor and financial investments in response. Additionally, Congress must put into action a plan to boost American manufacturing capacity that includes the economical and environmentally responsible mining of vital minerals right here in the United States. In the long term, more infrastructure development will be required to build sufficient charging facilities to cope with the anticipated increase in electric auto sales. According to S&P Global Mobility, additional problems with the manufacturing of key battery elements are driving up the cost of products and automobiles, endangering the profitability of vendors and manufacturers. According to a study from last month, the leading companies in the industry intend to invest about $1.2 trillion by 2030 just on development and manufacture of millions of hybrid cars, as well as the batteries and commodities. The automotive industry information provider predicted that as suppliers of original equipment struggle to get crude material inputs, sales of rechargeable batteries and powered cars will see significant difficulties. These circumstances are challenging and unusual. But for those companies that decide to tackle the problems head-on and quicken their entry into the EV battery industry, there are tremendous prospects for expansion across the supply chain. Existing battery manufacturers are increasing their activities, vehicle OEMs are entering the market to suit their EV aspirations, and small new competitors leveraging technological innovations are the primary targets of these players. Altogether, the increase has sparked a previously unheard-of amount of investment, which energy producers must match if they want to remain competitive. The supply chain for EV batteries is global in scope, while mineral production is mostly concentrated in a small number of nations. Due to these elements, the battery supply chain is more susceptible to alterations in partnerships and trade policies, disputes and wars, new global laws, and environmental disasters. We can render the supply chain more durable and resilient by enhancing our relationships with other nations, strengthening laws, allocating more funds to domestic battery manufacture, and expanding battery recycling. SOURCES: https://www.industryweek.com/supply-chain/article/21244607/ev-has-a-problem-90-of-the-battery-supply-chain-does-not-exist https://www.mckinsey.com/industries/oil-and-gas/our-insights/could-supply-chain-issues-derail-the-energy-transition https://www.woodmac.com/news/opinion/EV-battery-supply-chain-2023-outlook/ AuthorKokoro Sugiura, RUSCA Blog Committee Since the COVID-19 pandemic, supply chain issues have been at the forefront of national attention. Port congestion has been a major issue, especially as globalization has allowed for greater import and export volumes. One of the root causes of port congestion is the imbalance of imports and exports that causes empty shipping containers to be shipped back into ports, where these empties take up space that could be used for imports. Reports indicate that worldwide, 27% of containers passing through ports are empty. In Southern California, there are 110,000 empty containers that have taken up valuable space in ports. However, a new invention, foldable shipping containers, could help solve this problem. Studies have shown that 57% of inland transportation costs can be saved with the use of these foldable shipping containers. Staxxon is a New Jersey based company that has been developing foldable containers. The past process of folding containers consisted of simply collapsing containers to the floor, which has left a detrimental impact on finances of businesses. It costs $25,000 to $40,000 to reposition containers at ports. Therefore whenever companies “fold” the containers to make space at ports, they lose that invested money. However, Staxxon has developed a design where the containers will be folded “accordion-style”, which shrinks the typical twenty-foot to forty-foot containers to about one-fifth of their original sizes. These containers will also be able to keep upright even when folded, offering the ability to stack bundle sets of the containers anywhere, on ship or port. In addition, these collapsible containers are not required to meet the dimensional standards of the International Organization for Standardization (ISO), allowing them to be adopted quickly. This could lead to reducing the need for temporary storage and creating more space at ports. In addition to businesses being able to reduce storage costs and inventory expenses when transporting goods, foldable containers will also soften the impact of businesses on the environment. Reductions in gas pollution from transporting vehicles can be expected. Staxxon has been accepting pre-order deals as the product's patent has been approved by the ISO. Other companies, such as 4FOLD in Europe, have also joined in on manufacturing this new technology. This new technology leads to anticipation of more efficient and fast exchanges at ports globally, and the hope that businesses can operate more effectively and in an environmentally friendly manner. As the first patent for shipping containers was given in 1956, with no further changes in container standards by the International Maritime Organization, these foldable containers are a significant innovation to the supply chain industry. SOURCES: https://www.recyclingtoday.com/news/staxxon-folding-shipping-containers-deposits-patents/ https://www.businessinsider.com/foldable-shipping-containers-could-help-supply-chain-crisis-2022-5?amp https://supplychaindigital.com/sustainability/foldable-shipping-containers-an-answer-to-port-congestion |
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