The bridge, spanning 1.6 miles, served as a lifeline for the Port of Baltimore, facilitating the movement of goods crucial to the region’s economy. Known as the busiest U.S. seaport for autos and light trucks, in 2023, the Port of Baltimore handled 52.3 million tons of foreign cargo, valued at nearly $81 billion, including a record 847,158 cars and light trucks, as well as 1.3 million tons of roll on/roll off farm and construction machinery, according to the Maryland Port Administration. It is also a busy hub for shipments of coal, petroleum products, and sugar. In total, roughly 30 to 40 container vessels call the Port of Baltimore every week, unloading or loading some 21,000 TEU (containers).

The port is also a key economic engine for the city and the state, directly employing more than 15,000 workers and indirectly responsible for nearly 140,000 more jobs in trucking, warehousing and other related industries. It generates nearly $2.6 billion in total business income.

While President Joe Biden has pledged federal support for rebuilding efforts, supply chain and manufacturing leaders are focused on the impact from the immediate disruptions, which include the initial need to remove the vessel and the collapsed bridge from the shipping channel. 

The resulting closure of the port now has logistics, transportation, supply chain, and manufacturing professionals preparing for the impact of disrupted service. With vessel traffic suspended and cargo stuck in limbo, manufacturers such as food giant McCormick & Co. and automakers General Motors and Ford are assessing operational impacts and rerouting shipments as necessary, notes Mirko Woitzik, Global Director of Intelligence for Everstream Analytics.

Cargo currently en route is being diverted to alternatives, which Woitzik reports “is expected to strain labor and handling capacities at nearby ports such as Philadelphia and Norfolk, leading to spill-over congestion and delays.”

Experts also say the incident underscores the vulnerability of global supply chains. “The disruption comes as geopolitical conflicts and natural disasters wreak havoc elsewhere. Shipping headed for the Suez Canal is being disrupted from attacks by Houthi rebels, while drought is limiting shipping through the Panama Canal. What’s more, industrial actions in some key ports, including in Australia and Finland, are adding to delays. All that is to say, it won’t take much to hobble supply chains and reinflate price pressures,” notes Harry Murphy Cruise, Economist, Moody’s Analytics. 

Supply chain managers need to act quickly, adds Andrei Quinn-Barabanov, Supply Chain Industry Practice Lead at Moody’s. “The tragic Key Bridge collapse will inevitably lead to delays in deliveries that go through the I-95 corridor between Washington DC and New York or through the Port of Baltimore. Supply chain managers who get their deliveries via either of these routes need to immediately accelerate orders that are likely to be affected. Speed of action is critical.”

The silver lining, if there is one? 

“Although many automotive manufacturers import parts through the Port of Baltimore, we expect that they will be able to reroute parts quickly through other ports to avoid lengthy factory line shutdowns,” say Ben Ruddell and Richard Rushforth, professors in the School of Informatics, Computing, and Cyber Systems at Northern Arizona University. And while they expect major supply chain delays due to this bridge collapse, they believe those delays “should be measured in days or weeks, not months. The abundance of alternative ports on the U.S. Atlantic provides redundancy and resilience and will expedite supply chain adaptation, limiting overall consequences from this disaster.” 

2. Shield your system, protect your data. Transition to a browser-based user interface using APIs or CGI scripts to transfer data to and from the servers via firewalls. Browser-based systems are far more secure—they were initially developed by the U.S. Military to ensure data security and remote access speed.

3. Implement tighter controls on logins. Requiring strong, frequently updated password controls is essential, as is controlling who can create user logins. Monitoring this helps avoid human error that can leave your system vulnerable.

4. Work through Other platforms. Swiftly work through alternative software platforms while you identify the main system issues. This helps reduce the severity of the attack because it enables business continuity with minor impact on your customers. Our experience has shown us that customers who are open to working on alternative platforms significantly minimize their cargo flow disruption.

5. Leverage AI data ingestion tools. Use these tools to conduct major data input. This can replace or substitute for EDI connections in the short term by facilitating the process of importing large, assorted data files from multiple sources into a single, cloud-based storage medium.

6. Secure the main system. Ensure the main system is fully backed up and operational and free of viruses. Returning to the main system prematurely can create additional problems that negatively impact both customers and employees.

7. Vet platforms before an attack. When looking for the right platform, ask key questions, such as: How much of the core business can be supported on this platform? Do you need more than one? Does this align with my business objectives?

8. Integrate an emergency platform into your main system. The fail-over platform, which is a standby system available if the main system fails, should run as a mirror of the live environment. Cyber attacks often result in losing access to current data, which is a huge problem. Transitioning to live data saves an enormous amount of time and minimizes the impact on the customer. Keep in mind that advanced set up reduces transition downtime and helps maintain continuous operations. It is important to establish two-way connectivity between the systems so the backup system is up to date and new data can easily be restored to the original platform. Remember to have a data mirror in place prior to an event; this serves as insurance.

9. Implement a training program. With a small investment in training, employees can quickly learn how to work in a new, unfamiliar environment—which saves time and money in the long run. Conduct training for entire teams while applying a more frequent and comprehensive approach for key users.

10. Conduct occasional fire drills. Practicing how to handle a challenge that requires a calm, swift response ensures the team is prepared during a real-world crisis. There is a reason all children must practice fire drills at school. This is to prevent panic and ensure everyone knows how to quickly transition to a safe environment. The same is true with core systems as well.

Source: Bryn Heimbeck, Co-Founder and President, Trade Tech

Make Room for Twins

The popularity of supply chain digital twins is rising. These virtual replicas or simulations of a physical supply chain—created using real-time data and advanced technologies such as the Internet of Things, artificial intelligence, and machine learning—enable organizations to better understand, analyze, predict, and optimize their supply chain processes.

How great is the demand? According to Market.us, the worldwide supply chain digital twin market is projected to reach a value of $8.7 billion by 2033—a compound annual growth rate of 12% during the forecast period from 2024 to 2033.

The increasing complexity of supply chains, the need for greater visibility and control, and the rising demand for predictive analytics in supply chain management is driving the growth in this market, according to the report.

Top Trade Disruptors

While the pandemic is firmly in our rearview mirror, a new batch of disruptions have popped up to challenge the supply chain. The Q1/Q2 2024 Retail Sourcing Report from TradeBeyond outlines the top trade disruptors that are likely to throw a wrench into global sourcing plans and buying decisions in 2024. Here are the key highlights:

• Rate fluctuation: Extreme shipping rate volatility with attacks in the Red Sea have sent shipping rates surging since December, more than doubling the rates on some European lanes and creating substantially longer transit times.
• Looming uncertainty: The shipping crisis has made supply chain disruptions more likely, elevating fears of a return to the bottlenecks, component shortages, and product delays that supply chains endured in recent years.
• Tech spend coming: The pace of digitalization continues to accelerate in retail supply chains, with more than 90% of supply chain managers saying their companies are actively engaged in digital transformation. And 46% of supply chain executives anticipate that AI, cognitive computing, and cloud applications will be their greatest areas of investment in digital operations over the next three years.
• Manufacturing slump: The most recent GEP Global Supply Chain Volatility Index warned of continued downturn in global manufacturing through at least the first quarter of 2024 amid softened demand, especially in Europe.

Mega Money for Intermodal Projects

In a win for intermodal infrastructure, the U.S. Department of Transportation (USDOT) recently selected 37 projects to receive funding through the Bipartisan Infrastructure Law’s Mega and Infrastructure for Rebuilding America (INFRA) grant programs. Several of the projects will boost intermodal infrastructure across the country.

The Mega Program, also known as the National Infrastructure Project Assistance program, funds large, complex projects that are difficult to fund by other means and likely to generate national or regional economic, mobility, or safety benefits. Congress established the program in 2021 through the Bipartisan Infrastructure Law and dedicated $5 billion to the program over five years. The most recent awards were the second round of funding, worth roughly $2 billion.

INFRA is a competitive grant program that provides funding for multimodal freight and highway projects of national or regional significance to improve the safety, efficiency, and reliability of freight movement in and across rural and urban areas. The most recent annual program funding amount is $3.1 billion and the annual award amount is $1.5 billion.

Intermodal projects receiving grants in this round of Mega and INFRA funding include:

• America’s Green Gateway: Pier B Rail Program Buildout, Long Beach, Calif. The project will complete the Pier B On-Dock Rail support facility program by significantly enhancing container-on-rail service to and from the ports of Long Beach and Los Angeles.
• St. Lucie River Railroad Bridge Replacement Project, City of Stuart, Fla. The project will replace the existing 100-year-old St. Lucie River Railroad Bridge with a new double-track structure. By diverting freight traffic to rail, the project will increase safety for marine traffic, decrease the potential for blocked grade crossings and vehicle collisions, and shift single-occupancy vehicles to passenger rail travel.
• East River Berth Replacement Project, Garden City, Ga. The project will replace a port berth and two vessel berths at Georgia Ports Authority’s Port of Brunswick’s East River Terminal and will also reduce greenhouse gas emissions by supporting a modal shift from truck to rail for transporting commodities to the Port of Brunswick.
• Louisiana International Terminal Project, St. Bernard Parish, La. The project will construct a new container terminal on the Gulf Coast for the Port of New Orleans that is not air-draft restricted and can accommodate larger vessels.

Walmart Wings It

The nation’s largest retailer will soon boast the retail sector’s largest drone delivery footprint. Walmart recently unveiled plans to dramatically expand its drone capabilities across the Dallas-Fort Worth metroplex, adding more than 30 municipalities and towns in North Texas.

The expansion will enable the company to reach up to 1.8 million additional households—the most ever by a retailer offering drone delivery in a single market—and cover as much as 75% of the metro area.

Individuals who live within 10 miles of participating stores will be able to order thousands of items, ranging from snacks and beverages to baby wipes and over-the-counter medications, for delivery by drone in 30 minutes or less and potentially in as fast as 10 minutes.

The retail giant is partnering with drone delivery companies Wing and Zipline for the service; both are authorized by the FAA to fly drones beyond the line of sight of operators.

Walmart says it has safely completed more than 20,000 drone deliveries over some two years of test flights.

AI in Transportation: All Talk, No Action?

While artificial intelligence (AI) is one of the most buzzed-about topics within the supply chain sector, AI adoption is lacking severely in the U.S. transportation and logistics (T&L) market, according to new data from HERE Technologies and Amazon Web Services. In a multi-country survey of transportation and logistics professionals in the United States, Germany, and the United Kingdom, HERE found a significant gap in the adoption of basic data analytics.

The survey results underscore the untapped potential of AI—from data analytics supported by machine learning to optimized fleet routing, predictive maintenance, and streamlined processes for strategic decision-making.

Here are the report’s key takeaways:

• Only 50% of T&L professionals across the three countries say that their organizations utilize basic data analytics in their operations. At the same time, 25% of all respondents state their organization leverages AI capabilities.
• Cost (23%) is the leading barrier to tech implementation.
• Potential disruption to existing services (12%) and lack of internal expertise (11%) were the second and third most cited barriers to technology implementation.

Somewhat conversely, survey participants were optimistic about their progress toward supply chain visibility, with 86% reporting notable progress toward supply chain visibility and 18% considering their progress significant. Among modes, 50% indicate truck freight has the highest visibility, while 45% cite ocean freight as the least visible mode of transportation (see chart).

Manufacturers: .ru Prepped Against Cyber Attacks?

The manufacturing sector faced an unprecedented 165% surge in cyber attack attempts last year—many coming from Russian and Chinese actors, according to Armis, an asset intelligence cybersecurity company. Its new report reveals that the industry faces severe safety, production, and critical infrastructure risks if security gaps aren’t urgently addressed.

Key highlights include:

• Global attack attempts more than doubled in 2023, increasing 104%. The manufacturing industry weathered a much higher-than-average rate of attacks at a 165% increase.
• In 2023, manufacturing was one of the top industries exposed to attack from Chinese and Russian actors. Compared to other industries, manufacturing experienced an intensified threat landscape, with .cn and .ru domains contributing to an average of 30% of monthly attack attempts.
• The concerning trend of operational technology (OT) devices accessing the internet highlights further potential vulnerabilities, with around 80% of engineering workstations and 60% of supervisory control and data acquisition (SCADA) servers having internet access over the past year. The vulnerabilities in these devices increase the potential entry points for bad actors.
• Data further highlights a concerning number of exploitable devices owing to usage of end-of-life or end-of-support operating systems that are no longer actively supported or patched for vulnerabilities and security issues by the manufacturer. Additionally, 12% of utilities and 11% of manufacturers are still using legacy operating systems—exacerbating cyber weaknesses.

Top 5 Aerospace Supply Chain Disruptions

Aerospace is one of the top five industries impacted by supply chain disruptions, according to EventWatchAI, Resilinc’s global event monitoring platform, which collects information and monitors news on 400 different types of disruptions across 104 million global sources.

Here’s a look at what Resilinc identifies as the biggest challenges facing the aerospace industry.

#1 Factory fires. Fires and explosions at warehouses, factories, and plants, as well as investigations and force majeure due to fires, are the top disruption in aerospace and have been the leading supply chain disruption across all industries tracked by Resilinc for five consecutive years. Simple safety measures—such as stocking extinguishers and training employees—can reduce the potential risk of factory fires.

#2 Labor disruptions. In 2023, the aerospace industry saw approximately 887 labor disruptions—a 66% jump from the year prior—which include company, site, union, and national strikes as well as layoffs, labor walkouts, protests, and more. Labor disruptions were a particular problem across all forms of global transportation as well.

#3 Mergers & acquisitions. While M&As can positively affect the industry, leading to improved technologies and more resilient companies, it takes time to merge data, suppliers, and systems, which can cause challenges.

#4 Business sale. 2023 saw more than 800 business sale disruptions in aerospace. Business sales include the sale of factories and plants, the sale of assets and subsidiaries, and brand/portfolio sales. Similar to M&As, business sales can increase supply chain resilience as companies acquire new technology and expand portfolios. However, business sales can also create increased security threats and delays while assets and information change hands.

#5 Factory disruptions. Factory disruptions include accidents, closures, and temporary shutdowns at warehouses, plants, and factories. There can be many reasons for factory closures—including industry growth. Even the most minor delays and shutdowns can cause significant issues across the supply chain.

Flying High

The 10 largest aerospace companies in the world:

• Boeing, US
• Airbus, France
• United Technology, US
• Lockheed Martin, US
• Northrop Grumman, US
• GE Aviation, US
• Raytheon, US
• Rolls-Royce, UK
• Leonardo, Italy
• Safran, France

Loose Ends

After United Airlines and Alaska Airlines discovered loose parts on multiple Boeing 737 MAX 9 aircraft, grounding 171 planes, industry experts raised new concerns about how the aircraft is manufactured.

The Federal Aviation Administration completed inspections of 40 grounded planes and says it will “thoroughly review the data” to determine if it is safe to allow the planes to resume flying.

Complexity Clouds A&D

The aerospace & defense (A&D) industry is facing unique challenges created by geopolitical conflicts, sustainability regulation and expectations, and shifting demand, finds Deloitte’s 2024 A&D Outlook report.

Key takeaways for supply chains include:

The A&D supply chain remains complex. The A&D supply chain is a complex, globalized ecosystem of customers and original equipment manufacturers; multiple tiers of suppliers; and maintenance, repair, and overhaul providers. This complexity makes implementing diversification and transparency across the value chain extremely difficult, but imperative.

By maintaining strategic raw material reserves, committing to bulk buying of long lead time items, exploring alternate sources of supply, and digitizing operations, A&D companies may position themselves well to handle any continued fragility across the entire supply chain.

Digital transformation will make a difference. Digital transformation in the A&D industry is largely impacted by regulations, priorities, and resources—but those who are prepared to adopt digitalization and advanced technologies such as Generative AI could gain a competitive advantage.

Sustainability matters. The industry faces evolving consumer demands for enhanced technology, greater sustainability, reduced emissions, higher performance systems, and lower costs, which may all factor into decision-making on supply chain processes.

5 Sustainability Trends Driving Change in Aerospace

The aerospace industry should keep an eye on five sustainability trends, according to Bryan Christiansen, founder and CEO of Limble CMMS.

#1: Advanced aircraft design. Aircraft manufacturers can improve performance by making slight improvements to aircraft. They can enhance engine designs for improved fuel efficiency, improve aerodynamic designs, explore the use of lightweight fabrication material, and use advanced coatings.

#2: Use of sustainable aviation fuels. The utilization of sustainable air fuels (SAFs) is taking shape as airlines strive to achieve net-zero emissions. These fuels have similar chemical characteristics to fossil fuels but with fewer ozone depletion capabilities; they release carbon that has already been extracted from the environment. Emissions from SAFs have a shorter life cycle, which further reduces their ozone depletion rates.

#3: Urban air mobility. Two technologies—electric vertical takeoff and landing (eVTOL) aircraft and drone deliveries—are front runners in the urban air mobility sector. Although at an infancy stage, eVTOLs promise to revolutionize air travel for short and medium-distance flights. Companies are using drones for last-mile deliveries across cities, with their payload capacities increasing over time.

#4: Advanced propulsion technology. Modern and future aircraft will not rely only on fossil-powered engines. The push for sustainable flights is revolutionizing the design of aircraft and spacecraft propulsion systems.

#5: Optimize air travel management. Airlines can minimize their carbon footprints by digitizing air travel management and leveraging advanced technology to improve route planning and asset maintenance and enhance operational efficiency.

Additional risks that can result from unaddressed blind spots include wasted labor and inaccurate forecasts and commitments, says Carly West, senior director analyst with Gartner’s supply chain practice. These drive up transportation and inventory costs, among other expenses.

Putting Your Company’s Reputation at Risk

An inability to monitor suppliers’ practices creates ethical and compliance risks, given consumers’ rising expectations of social and environmental sustainability.

“Brands and retailers need to be able to ensure every supplier they use, even a backup supplier, meets their company’s standards,” says Eric Linxwiler, senior vice president of TradeBeyond, a provider of extended supply chain management solutions for retailers.

Are You Missing Sales Opportunities?

Poor supply chain visibility can mean missed opportunities, says Bart De Muynck, strategic advisor with Mojix, a provider of item chain management solutions.

For instance, customers who can’t locate misplaced items may leave a store without purchasing anything. Or, they might ask a salesperson to order the items, needlessly adding inventory.

Visibility allows companies to capture sales and provide a solid customer experience, without inflating inventory or shipping costs.

Minimizing Surprises

In supply chain operations, surprises due to poor visibility are rarely positive events, says Andrew Tait, managing director with Sigma7, which provides risk management capabilities.

Generally, it’s more effective to use visibility insights to understand and prepare for what otherwise would be a surprise.

Boosting Visibility to Suppliers

A first step in boosting visibility to suppliers is identifying all suppliers and assessing how they fit into the supply chain.

This analysis should include the degree to which the company depends on each vendor. A supplier that offers a commodity for which substitutes are readily available is likely less of a risk than one that provides a critical material for a key product and that isn’t easily replaced.

Tait recalls working with a pharmaceutical company that offered a tableted drug with sales in the billions. The company used talcum powder to keep the tablets from sticking together and held several months of safety stock.

Yet the company sourced the powder from a single vendor. If the vendor was unable to supply the powder, the company’s ability to make this product would be compromised for more than one year, while it sought FDA approval for a new vendor.

Billions in sales were exposed, even though a year’s supply of the talcum powder ran about $1,000.

Visibility can help companies focus on “the value at risk,” Tait says. When companies assess links in their supply chains, they can ask: If this goes wrong, what is the value at risk? And, what might cause things to go wrong?

Stay Aware of Internal Disconnects Between Functions

It’s not only external events that are of concern. Many supply chains are siloed within organizations. Blind spots to internal actions can also hamper performance.

Subodha Kumar, professor of statistics, operations, and data science at Temple University, recalls a food company that offered discounts to customers who ordered in bulk. However, poor visibility and communication between sales and operations meant supply chain costs spiked because of the promotion.

Blind spots can also occur in the disconnect between design and fulfillment. The engineers responsible for product design may lack a comprehensive understanding of the component lifecycle, and so may incorporate obsolete or hard-to-source parts in their designs. That can lead to disruptions in production and supply chain continuity.

“Engineers must be educated about the lifecycle of components, emphasizing the importance of choosing readily available and long-life parts,” says Doug Adams, senior vice president, global logistics, with Avnet, a distributor of electronic components.

Striving for Consistent and Complete Visibility

Even solutions that provide shippers and carriers end-to-end views of the shipments and inventory in their networks, such as RFID and integration with trading partners, can experience gaps. These might result from user error, a network node with limited technology, or a third-party logistics service provider that doesn’t offer visibility to goods in transit.

“The primary challenge is gaining complete, consistent visibility,” says Adam Mussomeli, supply chain and network operations leader with Deloitte Consulting.

The good news? Technology providers are beginning to acknowledge this challenge and are enhancing solutions to address it. For example, some logistics companies can provide visibility at the item and shipment level, based on data from carriers across the globe.

Building end-to-end supply chain visibility also requires gaining visibility into each function or segment of the supply chain. Because transportation is a large part of this, companies are investing in solutions to address transportation visibility challenges.

For instance, for in-transit goods, companies are using real-time transportation visibility platforms, transportation management systems, and Internet of Things (IoT) devices, among other solutions.

Multi-Organization Solutions Provide Visibility

Cimtech, which manufactures precision machined parts, welding, tube bending, and assembly for all types of industries, worked with General Electric Appliances (GEA) to gain visibility to projects that could reduce downtime and increase safety in GEA plants.

Historically, information-sharing has been handled through one-to-one connections between a supplier and customer. As supply chains have become more complex, companies need solutions that work across multiple organizations. Technology like blockchain and IoT can facilitate this.

Additional options include digital solutions, such as multi-enterprise supply chain platforms. Extending visibility across the entire supply chain, including upstream and downstream partners, into a unified platform creates a “control tower” view that enables real-time decision-making and enhances agility.

Gaining Predictive Insight and Visibility With AI

Artificial intelligence (AI) can help supply chain organizations gain both visibility and predictive insight. Say a store is scheduled to receive a pallet of products from a distribution center. When it enters the loading dock, computer vision with generative AI can detect the pallet.

Generative AI models can also be trained to understand the normal distribution of products on a pallet. Deviations from this expectation can then be flagged as anomalies, indicating potential product shortages. “Instead of a person inspecting the pallet, technology generates the data,” says De Muynck.

Visibility in the Yard

Solutions for visibility outside the warehouse or distribution center are also advancing. While yard management systems still manage moves and appointments, the technology that informs these systems is changing.

Along with RF terminals and barcodes that can track trailers, drones can travel a yard and determine the location and movement of the trailers in real time.

Trust Builds Visibility

Tackling blind spots requires a sense of trust that allows companies to confidently share information with suppliers and business partners.

For example, Mammoth Security, a security systems provider, invested in advanced inventory management software that provides real-time data to improve demand forecasting and inventory tracking accuracy. This helps minimize downtime, streamline operations, and boost client satisfaction.

The company has also strengthened relationships with its suppliers through regular communication, fostering trust. “This proactive approach helps us stay ahead of potential disruptions and maintain a smooth supply chain,” says Eugene Klimaszewski, president.

Talent Drives Visibility

Tackling supply chain blind spots requires access to relevant talent. As logistics becomes more technology-based, employees need to be similarly tech-savvy. “Leveraging technology can help to not only drive innovation, automation, and cost savings, but also attract and retain talent,” West says.

Improving Performance

As important as visibility is, it’s not enough.“Once organizations have gained new or quicker information, they need to consider what it means for how they operate,” Mussomeli says.

Better visibility should enhance operations. “You hear the saying, ‘don’t waste a good crisis,’” Spears says. Given the supply chain challenges of the past few years “we took the opportunity to improve ourselves,” he adds. n

GE Appliances Plugs Into Local Suppliers

Over the past few years, a key strategic element at GE Appliances (GEA) has been developing and growing its local supplier base. Since 2016, GEA has boosted spending with U.S. suppliers nearly three-fold, while increasing its supplier base by 233%.

This approach reduces risk by shortening delivery times, improving communication, and reducing transportation costs. It also allows for better control and visibility over the supply chain, as it reduces dependency on distant suppliers, and mitigates risks associated with geopolitical issues or trade restrictions.

“Growing our U.S. supply base, and specifically a regional supply base around our plants, enables us to work closely with our suppliers to achieve our goals,” says J Lionel Ramirez, vice president and chief procurement officer.

Early 2023 also saw the introduction of the GE Appliances Launchpad program. Designed to grow and develop diverse-owned suppliers, this program educates participants on GEA’s supply chain needs, among other information.

GEA worked with a Launchpad graduate, Cimtech Inc., a certified woman-owned business and manufacturer of precision machine parts and other products based in New Albany, Indiana. The two companies identified projects that could reduce downtime and increase safety in GEA plants. Cimtech provides a number of products and services, including channel weldments and justifier bar mounts, and will be part of future plant projects intended to reduce downtime.

Rhee Bros Gains real-time Visibility to Deliveries

Rhee Bros is one of the largest importers and distributors of Pan-Asian food in the United States. Because most of the company’s customers are in the grocery business, Rhee Bros experienced a spike in volumes during the pandemic and needed to scale quickly, says company president Robin Rhee.

To accomplish this, the company had to make several changes, including quickly expanding its fleet to service a growing customer base located across a larger geographic footprint. On top of that, it had to do this when available truck capacity and drivers were nearly impossible to find.

Rhee Bros has been working with Ryder, a provider of supply chain solutions, for more than 20 years, so Ryder is tightly integrated into Rhee Bros’ business. RyderShare, a visibility and collaboration platform from Ryder, has been key to addressing the challenges Rhee Bros faced.

RyderShare enables everyone involved in moving goods through a supply chain—from shippers to receivers to carriers and service providers—to easily see across the supply chain in real time, says Paul Woodmansee, Ryder’s director of customer logistics. They then can work together to prevent costly delays and find efficiency gains.

“Rhee Bros. and our customers can easily see where all of our deliveries are at any time, exactly what’s in them, and the minute they’ll arrive at their destinations,” Rhee says. With this information, Rhee’s customers can be staffed for deliveries and communicate with their customers as well.

If an issue arises with a delivery, Rhee and his team can see it in real time and work collaboratively to minimize delays. The data and insight have helped Rhee Bros improve delivery route planning, positively impacting productivity and profitability.

Lexmark Plays Shortstop

As disruptions upended many supply chains over the past few years, Lexmark, a provider of printing and imaging solutions, confronted multiple component shortages, as well as challenges in predicting component availability.

“We needed a different visibility tool to understand and react to the component shortages,” says Billy Spears, senior vice president and chief product delivery officer.

While Lexmark had enjoyed good visibility to its tier one suppliers, visibility to its other suppliers wasn’t as strong. To change this, Spears and his colleagues created a new system: Shortstop. While “nothing fancy,” he says, it ties the engineering record system, which contains the bills of materials for all products and other information, to suppliers across all tiers in the company’s supply chain.

Lexmark now can better predict when shortages might occur. It can optimize manufacturing and commit to a production schedule, even when the broader supply chain world of components remains in crisis. “There are multiple paths to recovery if you know about a shortage,” Spears says, noting that Lexmark can find additional suppliers, shift vendors, or in some cases, shop on the open market.

Also during this time, the container shortage was extending lead times and impacting Lexmark’s ability to get products to customers. To address this, Lexmark increased the number of carriers in each geographic region from one to four.

The company then needed visibility across its carriers, as well as a method for managing allocations between them. Spears and his team engaged a third-party software solution that leverages EDI to link Lexmark’s ERP system with its carriers.

Lexmark can allocate products based on rules it has established, and accounting for cost, availability, and other factors. The system also provides visibility and estimated arrival times for the containers, further boosting flexibility and capacity.

Both projects were up and running in a matter of months. “It was a quick return on investment,” Spears notes.

The Drive for Supply Chain Resilience

The Biden administration has initiated approximately 30 new actions designed to shore up the country’s supply chain infrastructure —  aimed at streamlining the availability of essential products for consumers, fostering reliable deliveries for businesses, fortifying agricultural and food systems, and promoting the creation of high-paying union jobs within the United States. These actions build on the Administration’s previous efforts to prioritize supply chain resilience, including the signing, in February 2021, of the Executive Order on America’s Supply Chains and the establishment in 2022 of the Supply Chain Disruptions Task Force, which collaborated extensively with stakeholders across states, Tribes, local governments, businesses, farms, labor, and global allies to address acute supply chain challenges precipitated by the pandemic.

Key Announcements & Strategic Initiatives

During a press briefing on Monday, President Biden and Secretary of Transportation Pete Buttigieg unveiled the key facets of the administration’s ongoing strategic supply chain efforts:

1. Establishment of the Council on Supply Chain Resilience

President Biden is inaugurating the White House Council on Supply Chain Resilience, an entity set to steer a comprehensive, government-wide strategy aimed at cultivating enduring supply chain resilience. The council will comprise high-ranking officials from various departments and agencies, seeking a cohesive approach to fortifying vital supply chains.

2. Strengthening Domestic Medicines Production

Utilizing the Defense Production Act, President Biden is empowering the Department of Health and Human Services (HHS) to invest in domestic manufacturing of critical medicines, medical countermeasures, and essential inputs vital for national defense. Additionally, measures are underway to address medical product and critical food supply chain resilience and shortages.

3. Enhancing Supply Chain Monitoring & Strategy

The Department of Commerce and Department of Transportation are also spearheading projects around effective supply chain monitoring, including the Supply Chain Center and the Freight Logistics Optimization Works program. These initiatives focus on leveraging industry expertise, data analytics, and partnerships to assess supply chain risks and optimize logistics decision-making.

4. Investments in Critical Supply Chains & Infrastructure

Significant investments are being directed towards advancing clean energy supply chains, revitalizing communities impacted by closures, fortifying food supply chains, and bolstering defense-critical supply chains through strategic financial allocations and comprehensive planning.

5. Engaging Global Partnerships

The Biden administration plans to engage with international allies and partners to fortify global supply chains through the establishment of early warning systems, innovative multilateral partnerships, and collaborative initiatives fostering labor rights and economic resilience.

The Road Ahead

These developments present a spectrum of opportunities and risks for companies operating in the United States, especially considering the intricate nature of today’s global supply chain landscape. The energy, food, and medical sectors are poised to reap rewards from the Biden Administration’s latest actions, given the investment and focus on their particular supply chains.The adaptation to new supply chain requirements, however, could initially lead to operational disruptions and increased costs. Organizations that can be agile and flexible in adapting their supply chains stand to benefit most.

These initiatives also underscore a global trend wherein governments are prioritizing securing national supply chains for critical industries — which could potentially lead to increased regulatory complexities and trade restrictions, posing challenges for multinational corporations operating across borders.

This massive plan from the Biden Administration to help tackle ongoing supply chain issues through both domestic tools and international partnerships as well as key data sharing and supply chain visibility initiatives could do well to reinforce America’s standing in the global supply chain ecosystem. It may also cause friction within the supply chain sector as shippers, transportation providers, manufacturers, and distribution facility operators all seek to understand and adapt to new initiatives.

The inaugural quadrennial supply chain assessment conducted by the council is slated for completion on December 31, 2024.

To hedge against global setbacks, consider product sourcing diversification and nearshoring. Both strategies can reduce risk by ensuring access to the necessary materials and labor resources.

Let’s take a deeper look at how both strategies not only reduce risk, but also optimize business efficiencies and create resiliency.

Product sourcing diversification. Businesses gravitate toward product sourcing diversification because it’s an effective way to spread their risk. By having multiple suppliers available for the same product, operations can fall back on a different supplier should one be impacted by unforeseen disruptions.

This strategy grew popular during the Trump administration because of tariffs placed on goods imported from China. Many companies were forced to rethink their dependence on trade with China and diversified elsewhere in Asia.

Businesses have looked specifically at India and Vietnam because they can offer the needed products at a cheaper price and lesser risk.

Spreading the risk is a key pillar to supply chain stability. The ability to still acquire necessary products, despite difficulties from events beyond their control, allows businesses to remain stable and trustworthy to their clientele.

Nearshoring. Moving supply chain operations to a country closer to the import destination, which still gives businesses the advantage of cost savings associated with offshore production, is a strategy that’s picking up steam. In an Accenture survey, 94% of companies said they are directly investing in nearshoring or onshoring, and 85% want their factories and material sources to be in the same hemisphere.

It’s easy to see why. Nearshoring not only spreads the risk, but also shortens lead times to result in faster cash-to-cash cycles, reduces inventory carrying costs, and facilitates more efficient visits by quality assurance and purchasing staff.

Nearshoring also helps businesses shift to a more practical “just in case” inventory management strategy, instead of the traditional “just in time” approach to foster better overall resiliency.

Most importantly, reaction time in a global setback is much faster with nearshoring. Being in the same time zone allows for easy communication and collaboration during a crisis.

Mexico is particularly attractive because it offers many more logistics options for moving goods. It’s not limited to ocean and air freight, which can prove to be a big difference during a global setback. Mexico also offers tariff stability due to the U.S., Mexico, Canada Agreement (USMCA).

Supply chain volatility requires businesses to do everything they can on the back end to minimize risk. Product sourcing diversification and nearshoring achieve those objectives and create more efficiencies.

By adopting these strategies, businesses reap the benefits of cost savings associated with overseas production and hedge against global setbacks or unexpected supply chain disruption.n

Q1 –

Do you have a hurricane preparedness plan?

That sounds like a basic question, but you’d be surprised how many companies (and individuals) don’t have one or they have one that is woefully out-of-date.  Start with the big picture and work your way down into the details. You’ll be glad you did.

Q2 –

Are you prepared for the wind or water that hurricanes bring?

Most hurricane-related damage is due to one or the other or both, which can result in flooding. Check to see if you’re in a flood zone, although non-zone areas have been known to flood. 

Q3 –

Speaking of flooding, what’s the status of stormwater management on your property?

Is there a retention pond within the general proximity of your operations? Get an assessment or evaluation of best-case and worst-case scenarios and adjust your hurricane plan accordingly.

Q4 –

What’s the status of your insurance? And does it include flood insurance?

If your policy is several years old, the limits of the policy may not reflect the cost of replacing items damaged during a storm. Recent inflation has made everything more expensive and increasing your coverage may be advised.

Q5 –

Are your emergency sources of power up to snuff given changes in roadways and the surrounding landscape, including HVAC systems?

Depending on where you’re located, a construction boom may be underway, which affects the infrastructure all around you.

Q6 –

Is the property where your operations are located have a resiliency response checklist?

This will be important when addressing things that need attention – and in what order – after a hurricane passes. And who is responsible for any claims that result from the storm?

Q7 –

Have you considered the ramifications on any structures you may have that are below ground?

For example, does your office (and home, for that matter) have underground parking? Be sure that proper signage and warnings are in place to prevent damage from underground water breaches.

Q8 –

Assuming your building (s) is damaged, closed, or flooded, do you have a temporary or remote location identified to set up emergency operations?

This falls in line with business continuance so that the hurricane doesn’t put you out of business temporarily or even permanently.

Q9 –

Are you prepared to assist your employees (and even neighbors) to find temporary shelter or other resources needed before, during, and after a hurricane?

Your business can’t continue if your employees are busy dealing with personal issues or losses as a result of a storm.

Q10 –

And finally, what and who do you contract with for post-event remediation and cleanup activities?

These will differ by location, but companies like ServPro and Paul Davis Restorations can be hired to help businesses and individuals recover from weather-related events, fires, and more.

Q11 –

All this being said, how do you avoid supply chain disruptions?

A company’s supply chain should be under continuous scrutiny. You should always have a Plan B or even Plan C that you can turn to quickly before or after a weather event occurs. Warehouse locations and delivery options must be flexible, and you must have an ideal quantity of products to access. Instead of “just-in-time” sometimes “just in case” is the way to go. 

About Tierra Group

Tierra Group is a Service-Disabled Veteran-Owned Small Business (SDVOSB) with global and domestic experience delivering critical services on time and within budget. The company deploys multi-disciplinary teams to provide customers with critical support services for the commercial, communities/residential, healthcare, industrial, government, and power/water utilities infrastructure sectors. www.tierrasolutions.com

Cutting-edge digital technologies already exist to address these issues. The best supply chain management solutions make every link in the chain completely transparent in real time, so that businesses can account for every element that affects their operations.

This level of clarity is possible because modern supply chain solutions connect your systems, taking information out of silos and into a centralized location. When a supplier experiences a supply chain disruption, your system flexes to account for the change in information, enabling your decision-making process.

Underpinning these solutions are Industry 4.0 technologies like cloud computing, Internet of Things, and artificial intelligence (AI). With the ability to automate core functionality and collect and analyze big data, advanced technology can help companies keep up their suppliers’ technology while staying ahead of the competition.

Cloud ERP Facilitates Resilience

Deploying enterprise resource planning (ERP) in the cloud affords dynamic functionality and enhanced security. The ERP system brings together all aspects of a business into one centralized location, so that all information—from suppliers to customers to sales—is connected.

Once a company has relocated or deployed their ERP in the cloud, they are ready to take advantage of its capabilities. But building a resilient supply chain doesn’t happen overnight. It starts with three strategies.

1. Focus on structural resilience. Massive shock events like the pandemic can drag companies into a chaotic muck that can create cycles of reactive decision-making. To get away from this tailspin, businesses must focus on a strong structure for their supply chain.

Modeling and testing are key to structure. Simulate how products and processes will need to change if suppliers experience disruption. The more data available, the more accurate a business model.

2. Stay agile with advanced analytics. Modern supply chain resilience emerges out of AI capabilities like machine learning (ML), where data solutions move beyond descriptive analytics to predictive analytics. ML can spot patterns in massive datasets, making forecasting more accurate and increasing confidence in planning and logistics.

3. Weigh long-term considerations. Resilience is a concept focused on the long term. But it can be tough to weigh those considerations when faced with uncertainty and volatility.

For example, when success is experienced in one period, there is a natural temptation to consider indefinite growth. But that can have its own cost by stressing supply chains. Some retailers that increased online sales during the pandemic eventually had their profitability eroded by high fulfillment costs and new supply chain pressures.

In building supply chain resilience, there is no magic solution or crystal ball. But the technology exists to help companies make the most informed decisions about how to create and manage success now and in the future.

The survey polled supply chain risk decision makers in industries including life sciences, semiconductors, food and beverage, agriculture, logistics, complex manufacturing, construction, energy, and renewables. Most respondents say they experienced larger-than-expected losses during the supply chain crisis, and many say they are still recovering.

The survey finds that most responded to disruptions by reducing supply chain complexity. For example:

• 83% have made supply chain changes.
• 18% completely transformed their approach.
• 58% plan to make significant changes over the next two years.