Category Supply Chain Advantage

Chain Reaction Podcast Future Beyond COP 26

In this episode Tony Hines provides a short summing up of the recent COP26 event in Glasgow UK and discusses what's next for supply chains beyond COP. He also takes a look at the importance of supply chain partnerships and the benefits they bring to organizations. It is a way of accessing complementary skills. He revisits some early lessons that he thinks are just as important as ever for supply chain professionals and businesses that want to improve performance.  Cost, Time, Quality, Capabilities, Capacities, Experience and Expertise are all part of the rich mix that organizations manage to improve supply chain performance. This is discussed in the context of his 7V Framework used to do just that. He takes a look at some of the early lessons managing inventories and what it means for profitability. 

Chain Reaction Podcast Greener Cleaner Frictionless Trade

In this episode Tony Hines discusses greener, cleaner, frictionless trade as well as catching up on some news issues. The fire on the container ship off the coast of Victoria British Columbia is another reminder of the hazards involved in transporting chemicals. A new way to produce electric vehicles is discussed focusing on Arrival's Oxfordshire site. Some interesting innovations point to the green vehicle revolution and how it will differe from anything the industry has previously seen. It promises to deliver some real benefits. Moving freight by rail is discussed as a future option that has some environmental benefits too. Transaction costs causing friction in supply chains is discussed in the context of the UK's departure from the European Union and why friction is bad for supply chains. Externalities and the cost of pollution moving from producer to consumers and public clean up operations. Eighty per cent of the world's plastic bottles end up in land fill, in the oceans of the world or are burned releasing Co2 in the process. Producers keep the profits and externalise their costs.

Chain Reaction Podcast An Invitation to Supply Chain Research

In this episode Tony Hines discusses why supply chain research is such a rich area of knowledge generation with both practical relevance and academic rigour. The episode will be of particular interest to those doing research into supply chains as well as new entrants to supply chain management.

Chain Reaction Podcast Timing is Everything

Timing is everything says Tony Hines when it comes to achieving supply chain advantage. Whether it is how long it takes to procure goods, process work-flows or transport goods (raw materials, work-in-progress or finished inventories) to the customer. Time endows advantage. Of course time can also be a problem if you do not manage it well. Managing time in supply chains is a risk. Ther are uncertainities beyond your control that give rise to risks that you may not have factored in. Even the most savvy supply chain professionals are subject to it. Take the current issues in global supply chains with ports experiencing delays in handling cargo. Satelite pictures of ports in California showed about seventy ships lining up waiting to discharge containers at Los Angeles. Long Beach too has delays. About 40 per cent of US Container traffic passes through these two ports. In the UK too at Felixstowe which handles about 36 per cent of the UK container traffic there are similar problems. In the US it has been taking up to 14 days to get ships into port and in the UK 6 days. There is also increased dwell time in turning around containers. It has risen form 4 days to 10 in the UK. The Biden Administration brought those involved in the US crisis to the table to discuss practical solutions and gain commitments.  This is seen as a postive move and parties are keen to operate ports 24/7 to get the job done. In the UK the underlying problem is the shortage of 100,000 HGV drivers to clear the ports and get containers in the right places. Time is everything because these delays are costly for everyone the shippers, the ports, the hauliers, the customers and those managing the various operations. A number of large retailers have been agile in trying to manage the risk by hiring their own vessels to move goods. These are generally smaller ships to weave in between the larger ships and to drop cargo at smaller facilities to avoid the backlogs. Home Depot's Sara Caliga said the idea started as a joke saying they would charter the ships themselves to get the job done but that's exactly what they have done. Wal-Mart said their strategy was to hire smaller ships to move goods more quickly. IKEA, Target and Costco are all doing something similar. Cocal Cola said it was using smaller vessels usually used for grain or coal to move their products around. In the UK the John Lewis Partnership runs 34 department stores and about 374 Waitrose Stores and it too committed to charter ships on 16th September to ensure they had supplies for the run up to Christmas. Hiring ships is not cheap. It is also not a skill expected of retailers to run the shipping operation so it will be interesting to see how they do. These retailers are looking to secure the high velocity inventories the goods that make them most profit. Listen to the podcast and find out more.

Electricity shortages in China have impacted production capacity as factories in some of the biggest industrial areas have had to close. This is in addition to the problems experienced from the pandemic shutdowns that occur with China's no tolerance policy to Covid. This will mean more disruptions to some goods. Recent closures in Vietnam have also seen some production move from their to China but Vietnam is now opening up again. 

The UK is still impacted from the HGV driver shortage (100,000) meaning goods are not moving as quickly as they should. This is impacting the UK's largets container ports. This week the reintroduction of cabotage by the UK Government means that EU drivers can do more pick ups in the UK but this has not gone down well with UK hauliers who fear their work will be taken away by EU firms.

Chain Reaction Podcast Troubled Waters – Energy, Shortages, Ships and Policies

In this episode Tony Hines looks at the troubled waters everywhere in supply chains. As the world is slowly opening up trade again excessive demand for energy, shipping and other goods has put pressure on struggling supply chains grappling with labour shortages. In Europe wholesale gas prices increased by 60 per cent in just one day before falling back. This was a result of Russia controlling supplies into the EU. In the United Kingdom the rocketing price of energy has resulted in industries that are big energy users such as steel, chemicals, aggregates, ceramics and glass asking for the government to help out. Government policies to decarbonize and to switch to renewables and greener sources have put energy supplies at risk because they have not developed sufficient green and clean energy capacity at the same level that they have removed fossil fuels sources and nuclear. 

Shortages are everywhere in supply chains from supermarket food supplies through to fuel for transport and energy. This week in the UK David Lewis a former CEO of Tesco was appointed by the UK Government as an adviser on supply chains so let's hope he can bring some order to the chaos. Meanwhile the PM is on holiday not playing his fiddle but painting in Spain.  

In California we still have ships lining up to be unloaded at ports and now in the UK too at Felixstowe ships are waiting six days to get unloaded. Some large container vessels have been rerouted to Rotterdam and Antwerp and cargo is being sent to the UK on smaller vessels to avoid the queus. It is also taking 10 days to move boxes whereas this dwell time usually averages just 4 days.

Government in the UK are under pressure to introduce policies to hel out some industries that are big energy users. All in all we have troubled waters in supply chains.

Chain Reaction Podcast Just In Time Not Too Late

This episode discusses some issues affecting supply chains in the news this week. They include: Problems for Pig Farmers in the UK; The Oil Spill in the Amplify Pipeline in California; Ways to lower your carbon footprint in supply chains and what governments are doing to achieve net zero targets; There are still supply chain issues in the UK because of a shortage of HGV drivers and the shortages of fuel at service station forecourts. Increasing costs are driving up inflationary pressures along with wholesale gas prices all of which will feed into consumer prices. The UK is still adjusting to life outside of the European Union and a failure of planning and preparation has exacerbated the disruptions to supply chains being experienced.
 
 Many efficiencies achieved in supply chains have come about during the past thirty years as just-in-time systems were implemented. JiT reduces time taken to produce and move goods to customers but some of that good work has been undone by recent supply chain disruptions and people are beginning to question the approach. Tony Hines argues that efficiency is the key to having a successful supply chain and Just-in-Time is a concept and practice to do that. He argues you can be resilient and efficient but it takes a little work, keeping costs low in supply chains helps everyone and the benefits outweigh any disadvantages. Some of the key benefits are: lower cost; reduces carbon footprint; customers get goods when they want them and wastage is reduced in production.

Chain Reaction Podcast A Bevy of Black Swans: Reflections on Recent Disruptions

This episode takes a retrospective view of supply chain disruptions during the Pandemic. In it we examine the rhetoric of policy makers and the realities of disruption and in some cases the supply chain chaos caused by a failure of planning and execution. Evidence for the claims is brought into focus. Some of the unusual events were certainly that but were they really ‘Black Swans’. One could argue that if it is something beyond experience it is rightly described as a ‘black swan moment’ and yet we also see failures of adequate planning and execution that caused disruptions that might have been avoided.

Chain Reaction Podcast Energy Cost and Food Chain Disruption

Energy Supply, Cost and Disruption
This week's episode takes a closer look at energy cost and food chain disruptions occurring in the supply chain.  Energy usage in the UK still dominated by fossil fuel 47 per cent Gas and 2 per cent Coal. Last week the UK had to bring back a coal source when wind powered fell short of the target.

Border Controls and Food Supply Disruption
Border controls post Brexit have been called useless by Marks and Spencer saying they are not fit for purpose. It is not food that's in short supply according to Archie Norman but lorry drivers. Ian Wright of the Food and Drink Federation says big suppliers are prepared and the impact is highest on smaller suppliers.

UK Competitiveness
Britain's trade with the EU have fallen by £1.7 billion in July according to ONS statistics published last week.  There is some concern about UK competitiveness if the trend persists. Most commentators think it is only temporary.

Shipping Hold Ups
Shipping pressures remain as economies open up. Ship availability is in short supply along with container boxes. Ships are lining up at ports in Los Angeles. One executive noted that four weeks ago there were 40 waiting and this week there are 75 so it appears the problem is worsening.

Supply Chain Geography impact on cost
Time, cost and quality are essential ingredients in supply chains as we manage risk and complexity in networks of suppliers. The geography of supply chains became less relevant during the past 30 years but it now appears that geography is important to manage risk and build resilient supply chains.  Tony Hines discusses what this means for supply chain strategies and just-in-time systems.  Agility is necessary when supply chains are disrupted. Rethinking supply chains puts transport logistics at risk. It is more than just geography it is the economics of the geography along with the balance of risk and cost.

Where there's a will there's a way
What can government do to overcome HGV driver shortages. Tony Hines offers some policy choices that could be enacted immediately.

Disruption caused by a shortage of CO2
This has been caused by the increasing cost of gas energy.

Chain Reaction Podcast Fix the Weakest Link in Your Supply Chain

In this week's episode we follow up from last time and discuss what went wrong with supply chains in the past eighteen months and how to fix the weakest links in your supply chains.

Tony Hines makes the distinction between two types of problem that disrupt supply chains. His type 1 problem is one caused by issues in a particular supply chain. Type 2 problems are systemic and effect all supply chains. He gives specific examples of the two types he has identified and offers some suggestions on how to deal with them.

Pallet Board Problems Stateside (US)
Also in this episode is the problem in the USA with regard to pallet boards and a brief explanation of why it is happening.

Visibility in Your Supply Chain
Visibility is of paramount importance if you want to know where everything is in your supply chain to avoid disruptions and to plan for them when the data in your dashboard reveals the signals of trouble ahead.

Labour Problems and Supply Chain Disruption
Continuing problems with labour shortages are discussed in the US, UK and EU. The impact this is having on the farm to fork supply chain is permanent according to Ian Wright CEO of the Food and Drinks Federation (UK). Brexit has been the cause of much disruption in the UK Supply Chain and the Norther Ireland protocol is disrupting supplies to supermarkets there. 

Chain Reaction Podcast Retail Logistics Disruptions and Resilience

Since the pandemic began in 2020 disruption to supply chains has become expected.  Transport is at the centre of getting the right goods to the customer in the right place, at the right time and at the right price. On time and complete delivery was the mission for those delivering supply chain promises. Retail Logistics has been responsible for some great innovations in combining technologies to deliver goods to stores and their customers. It employs people in farms and production centres across the globe. Goods then have to be transported by road, rail and ship to their market destinations, wholesalers, retail customers and consumers. There are many challenges that retail logistics face beyond the normal supply chain issues such as natural disasters, crop failures, wars and government policies to name but a few. Each challenge brings with it a unique situation that retailers have to vercome to keep supply chains moving to deliver on time and complete. Retail supply chains have to be resilient. When the Covid 19 Pandemic emerged in March 2020 no one realised at that point all the challenges that supply chains would face. By April and May it became clear that there were problems getting personal protective equipment (PPE), Medical Supplies including ventilators and medicines. As people became sick with Covid and lockdowns closed production units and retail stores supply chains became stretched and cracks occurred in the system. The UK was continuing with its never ending saga of Brexit and that caused its own problems for retailers, food supply chains, fisheries and many other categories of goods brought into the UK from the EU or exported to it. Shortages began to emerge in supermarkets and customers began to stockpile food and household items at home. It got a lot worse before getting marginally better. However, by Christmas there were hold ups at UK Ports and the beauracracy introduced by all the new regulations and customs requirements added days to deliveries. Many EU  HGV drivers based in the UK retunred home to countries in Europe since they could no longer work in the UK due to the removal of 'freedom of movement'. Today it is estimated that there is a shortage of 100,000 HGV drivers and this is and has caused immense disruption to food supplies and other goods. In March 2021 The Ever Given owned by Evergreen ran aground in the Suez Canal and remained stuck in the middle of the canal for more than a week. It caused massive disruption estimated to be in the region of $10 million (US). Even when the ship moved allowing other ships to pass through they were now off schedule and empty contaner boxes had not returned to their next port for loading. This put pressure on container prices pushing them up by 5-600 per cent from just a year ago. Ships were also in short supply to move goods.Disruption to shipping and shipments of goods from China to Europe and the US has caused major delays for customers getting their supplies. Since 70 per cent of all goods are moved by seafreight this is no small problem. The Pandemic closed some major Chinese ports such as Yantian. It was pleasing to see the Ever Globe travel from Ningbo in China to Felixstowe in just 35 days so some sailings are getting back to normal. Looking at shipping more generally most of the world's big container ships are now built in the Far East in China, South Korea and Japan. These modern container ships are huge with the lates additions to the Evergreen fleet able to carry 23,600 TEUs. A much smaller vessel the MOL Comfort had its hull break in half enroute from Shanghai to Jedda some years back when carrying just 4,300 TEUs half of its actual capacity. So these larger vessels are cause for concern. The ships now being built all run on Diesel Oil so it will be interesting to see if the shipping industry is likely to contribute to the reduction of CO2 emissions by 2050.