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Guest Post

Making tomorrow a better world in logistics

By Michel Waterschoot, Sales Manager – Southern Europe, Northern Africa, Middle East, Descartes

The health crisis that we are currently experiencing, as well as its financial and economic consequences, should not mean we lose sight of the opportunities that can be leveraged today to help businesses continue growing and developing. This situation should be used as an opportunity to identify weaknesses and design innovative solutions, sharing feedback that is relevant for everyone involved so we can better prepare for the future. 

Maintaining levels of satisfaction

In food distribution, volumes have exploded. With people confined to their homes, consumers have used ecommerce for their daily shopping more than ever before. For some players in the sector it was suddenly necessary to absorb exceptional levels of increased demand. However, it comes at a cost, as businesses must continue to satisfy long-standing customers – in terms of delivery times, slots, product availability – while meeting the demand of new and existing customers.  With this increased and unprecedented influx of orders, demand simply cannot be met under the same conditions as before. The customer relationship is therefore called into question. The retailers’ objective is, if this type of critical situation was to reoccur, they need to be able to control the level of service delivered, in a way that reduces the risk of losing historical customers while attracting new ones. 

The health crisis can lead to accelerated digitalisation

Another shift that we have been able to observe in connection with the COVID-19 crisis is that some companies who were until now very reserved about the use of new technologies, are now reconsidering their options. To limit the contagion of the disease, governments around the world have encouraged the rollout of health measures that reduce contact between people, but also the exchange of physical documents, such as proof of delivery, CMR, invoices and more. Companies therefore had to put in place alternatives to paper regardless of their concerns, for instance with delivery drivers. Their route planning was turned upside down and many were no longer in their usual geographic area as drivers had to stretch capacity to meet the consumer demand. Without their usual paper routing processes they had to use the GPS of their mobile phone to find their way in some cases. In the future, they will undoubtedly be less reluctant to use dedicated technological tools adapted for this, such as smart route planning software. This health crisis may therefore have helped to move along the digitalisation of processes that are still too often paper-based.

Combining deliveries offers benefits for all

In transport, there were around 40% fewer heavy goods vehicles (HGVs) on the roads in April and May. Logistics managers must respond to delivery requests even if the volumes are insufficient and the trucks have to run with a light load or empty on certain routes. This can increase the average cost of delivery for the transporter, by up to + 73% per tonne / km in long distance transport. These figures clearly argue the case for combining delivery efforts and collaboration between couriers, transporters and shippers alike to pool personnel, stock, storage facilities and more. These initiatives have so far been limited across the UK and France for example, no doubt because of the problems around co-responsibility but also for cultural reasons. However, the current situation will help to change mentalities on this, and the promise of the potential benefits that can be leveraged will override these initial concerns. This would be good news in terms of global optimisation for companies, but also in terms of ecological impact.

The importance of good transportation management

Many European shippers subcontract their transport of goods but given the current climate, one could wonder if the companies which control their transport of goods do better than those which entrust it entirely to service providers. With a fleet of its own, shippers who keep control of their flow of goods, through specific contracts with their carriers, get more responsiveness and flexibility, precious in difficult times such as these, especially with regard to the last mile. Shippers can therefore now question their fleet management and find the right balance with their service providers and internal teams in order to get a balance and a transport management system that provides them with the visibility and capabilities they need.

Faced with this critical situation, many companies will encounter or are already experiencing difficulties, potentially jeopardising their activity. However, it’s clear this crisis can also generate positive results by rethinking processes that were undermined during this period. The impacts on the sector are, and will be, numerous, putting even more tension on each of the logistics links. We must observe and analyse the present to make tomorrow a better world.

WEBINAR: How distribution ​CFOs can drive supply chain success

The changing landscape of Distribution has evolved dramatically over the last few months. 

Navigating these changes relies on innovation and embedding process as well as integrating technology. 

This webinar from Sage covers;

  • How disruption is changing the landscape
  • Today’s distribution challenges
  • Why distributors need a new approach
  • Why the CFO needs to drive supply chain success
  • Questions you’ll need to answer as a CFO
  • Areas for supply chain innovation
  • Driving increased value

Helping you drive success across your organisation.

Q&A: Reimagining the supply chain post-COVID-19

Patrick C. Penfield (pictured) is Professor of Practice – Supply Chain Management and Director of Executive Education at the Whitman School of Management, Syracuse University. He is a Certified Fellow in Production and Inventory Management (CFPIM) and Certified in Integrated Resource Management (CIRM). Penfield has over 15 years of industry experience in Supply Chain Management working for companies including Johnson & Johnson and Philips Electronics. He was recently interviewed by the folks from Sage about the impact of COVID-19 on the supply chain – here is what he had to say…

Sage: What has COVID-19 taught the supply chain industry?

Prof. Penfield: Above all, we have begun to understand the vulnerability of the global supply chain. The reason for that is threefold:

  • We were unprepared for this particular situation
  • The requirements on supply chains are changing daily
  • Those changes are not universal; they depend on the sector, consumer sentiment etc.

I’ve been in supply chain management for 15 years and academia a further 17 years, and I can honestly say that here in the US, we’re very good at it: we’re nimble, agile and capable; and certainly the bigger companies can usually see trends rapidly enough to react. They want to be proactive, because supply chain efficiency is all about optimizing for customer demand. But COVID-19 caught everyone flat-footed. 

A further issue is government reaction. I don’t want to pick on any specific government; we could complain about China failing to disclose the severity of the disease, or all our governments for being either slow or ineffective to react. Equally, all the governments in the developed West have done an extraordinary job of pulling together resources where they can. So business has to recognize that they cannot always rely on government support being in the right place at the right time in the case of truly Black Swan events. 

Sage: How has business performed?

Prof. Penfield: We will rake over the coals of this event for years to come. For now, it’s too early for an academic analysis, but anecdotally our experiences and the stories we see in the press point to elements of both success and failure in the management of supply chains, again with the caveat that government interventions have influenced both.

In terms of realignment, we have seen some extraordinary pieces of work, where large companies have changed their operations almost overnight. From Walmart and Amazon to UK supermarkets like Tesco, the largest players have not just managed to keep the lights on, they have thrived. Many wholesalers in individual sectors have successfully developed direct-to-consumer offers where their retailers have shut down; again in a matter of days.

Here in the US, though, even in food sectors, we have seen some dramatic failures, too. We are throwing out milk, vegetables and fresh produce because the suppliers in these sectors have been accustomed to half of their product going to individuals and half to bulk purchases. The bulk purchases have stopped, but they have not been reactive enough to flip the switch and focus on individual purchases.

Sage: But moving to a consumer model is hard…

Prof. Penfield: Yes it is, but consumers are still there. That’s the key message: certainly there is a practical issue around packaging and branding, for example. But people do still want milk. Now, it’s true that Amazon has deeper pockets than a typical midsize manufacturer, but online shopping has been developing for the past fifteen years. Amazon, Walmart and the like are certainly pioneers, but both facing the consumer and facing back into the supply chain, digital tools are now available to simplify and optimize the supply chain across the board. In fact, a producer today faces a much lower cost to optimize their business than Amazon, which has invested for two decades to build these tools from scratch.

Where suppliers have fallen short is that they have allowed Amazon to capture their markets – indeed that was often true even before COVID-19. Many commentators suggest that the key output of the current crisis will be a rapid deterioration in the state of retail. I would agree with that possibility, but there is a more optimistic view: smart producers and businesses further up the supply chain will realise the value of investing in online channels. That means not only selling direct to consumers but also optimizing upward supply chains for flexibility when dealing with manufacturers and farms.

Sage: OK, but not everybody wants to become an online retailer, or indeed compete with Amazon…

Prof. Penfield: Indeed so. This brings us to dual sourcing. Perhaps the greatest lesson for supply chain professionals here is that we have focused so exclusively on leanness that it has made us blind to the importance of resilience. 

I believe wholeheartedly in global trade and global supply chains. Globalism is better for business than protectionism and global trade fundamentally makes the world a better place; for businesses, consumers and whole economies. But supply chain experts then also must keep their eyes open to the world in which they find themselves. 

The painful truth is that the pandemic was not completely without warning to the rest of the world. In February, China used significantly less energy than the same time the previous year. Also in February, the port at Long Beach in Los Angeles saw a significant reduction in the number of container vessels coming from China. There were signs of trouble ahead.

Larger businesses – and the smaller ones who partner with them, if communication was strong enough – could and should have noticed problems on the horizon. More importantly, they should have had a Plan B for alternative sourcing from other parts of the world. 

I think that in a restructured vision of commercial supply chains, we will see many more businesses shoulder the cost of secondary channels, rather than putting all their eggs in one basket. And whilst China has traditionally been the least-cost supplier of choice such that this crisis really emphasizes the issue, I’m not specifically beating up on China – economic, geopolitical and social problems can develop anywhere. It’s crucial that businesses can flex to alternative sources.

Sage: Hindsight is a wonderful thing! What is the path to a ‘new normal’ for distribution, logistics and the supply chain?

Prof. Penfield: We are a step away from a conversation about the new normal. We know that governments want and need the economy to return to some semblance of normality, and they will encourage businesses to work out their operational needs. Right now, companies are wrestling with the day-to-day challenge of how to protect employees when they come into work, particularly: 

  • the availability of personal protective equipment (PPE)
  • how to organize for social distancing where people might have previously operated in close confines
  • and how to create a testing regime when tests become widely available.

These can be particularly challenging in labour-intensive parts of manufacturing and logistics, from food production to warehousing and distribution. 

Only then will companies be able to raise their eyes towards the long-term, but where I am optimistic is that businesses will naturally aim to flex, initially for survival, but ultimately to find opportunity. That will include:

  • Working from home for a large number of employees, many of whom (although by no means universally) are finding personal benefit in the change, too.
  • As we discussed earlier, omni-channel retail; which means both traditional retailers embracing digital and wholesale/supplier organisations joining the direct-to-consumer market.
  • A significant restructuring of business, particularly to focus on core activities, with a shorter timeline of strategic visibility and less speculative activity.

Less positively, as a globalist, I think we will see new types of protectionism, often driven by political sentiment rather than the facts, which will shorten supply chains; for example some countries will want to protect their food sources by growing more at home. This will mean changes for logistics business in the medium term. 

Travel will take several years to return to 2019 levels. My area, academia, will certainly suffer as a result, as many colleges both here and in the UK attract a global cohort of students; but more subtly, changes to air travel will also affect global supply chains. When we travel less, we do fewer deals and operate closer to home. Furthermore, most people don’t know that passenger planes carry plenty of cargo, too; so the inevitable reduction in passenger flights will take its toll on commercial cargo.

We also need to realise that the base costs of transportation and logistics are going to go up. That may be mitigated by new efficiencies, but again, it will mean change and disruption. 

These are just a few of the effects. Every business should be re-examining its supply chain, truly understanding it – because supply chains are granular and intricate; testing for vulnerabilities and understanding the impacts.

Sage: And what about the long term?

Prof. Penfield: Our industry is changing. The prognosis had always been that we would see automation truly have an impact on logistics by around 2030; and major players in the space have been moving down the automation, AI and robotics paths for a decade or so.

Now, when you have a situation where people are not permitted into a workplace, that will inevitably turn minds to the value of automation. Automation ceases to be a way to shave a few percentage points off operational costs, it becomes a financial imperative, either to keep the business going, or to shore up competitiveness. And one of the big arguments against automation; that the cost of deployment is greater, at least in the short term, than paying employees, falls out of the equation.

I therefore think that supply chain professionals will look back in a couple of years and see COVID-19 as a clear stimulus for the acceleration of automation in logistics. Add to that the rapid improvement of capability in autonomous vehicles and I think logistics will look different in five years, not 20.

There is unquestionably a societal cost there. It will cost jobs, but if I can say one consistently positive thing, it is that supply chains are populated by problem solvers. We have the world’s most flexible and opportunistic people. We will get through COVID-19 as we have got through every other shock to the system. 

I hope that we don’t lose our global outlook because that would be a real shame. But as an industry, I am hopeful: disruption teaches us lessons, and those lessons – dual sourcing, inventory flexibility etc. – will feed strategies for everyone moving forward.

Staying on course: Business leadership during lockdown

By Oliver Wight EAME CEO, Les Brookes

In these unusual times it is essential for leaders to take ownership of a process that brings together virtual teams, allowing them to make decisions with visibility of challenges & opportunities for the continuous realignment of the business and its people. 

As part of our Recovery Series we have designed three programmes to enable businesses to take control fast. With diagnostics assessing your capabilities, focused workshops, practical implementation plans, and coaching delivered virtually, we work with you to deliver business benefits.

To find out more, click here.

Futureproofing supply chains in the face of uncertainty

The consequences of the Coronavirus pandemic have had serious implications on individuals and industries across the world for which no one was prepared for. Particularly in the case of supply chains, the crisis has clearly demonstrated that they are the backbone of our daily lives and any breakdown in the chain can have disastrous consequences for product fulfilment. A March survey reported that nearly 75% of companies reported supply chain disruptions in one form or another due to Covid-19. 

Even as the crisis continues to unfold, there are a number of lessons that can be learned, so businesses can come out the other side stronger and better prepared. One of the key factors is that we need to look beyond just the expenses of global supply chains. In fact, we will need to strengthen some of its most costly assets – the human front-line workers. And that will include increased investment in those who are working hard to deliver products to where they need to be.

Axel Schmidt, Senior Communications Manager, ProGlove, explains the elements that must be considered when it comes to reassessing, adjusting, and redesigning supply chains to be futureproof and resilient in the face of future challenges… 

Complexity and sensitivity

Supply chains are made up of a number of pricey elements, partly due to the fact that they are marked with an increasing degree of complexity. Typically, you find a plethora of agents and infrastructure components including manufacturers, service and transportation providers, fulfillment centers, hubs, technology, equipment, vehicles and – most importantly – human workers. This complexity faced with a crisis the current Covid-19 pandemic means that there is much uncertainty amongst businesses across all sectors. For example, 83% of EU-based businesses within the global automotive supply chain are ‘concerned’ or ‘very concerned’ about the ramifications of Covid-19.

Consumers – who will have to pay for the incurred expenses at the end of the day – are naturally sensitive to price increases. Customer demand is the strongest driver in the supply chain. So, while it may sound tempting to demand that organisations must spend more to get more, we must not forget the quandary they are facing. That is why today many supply chains are lean and stick to a Just-In-Time (JIT) approach.

Customers also add further complexity by buying through multiple different channels. While this multichannel approach improves the customer experience it also requires more manual work so that automation – which could be a cost saver under different circumstances – is not necessarily an option. Additionally, consumers often do not only shop for the most affordable prices, but often expect rapid fulfilment with overnight – or even same day – shipping, too.

With the current crisis, additional pressures have been placed on the retail supply chain. Consumers all over the world have been panic buying in fear of supplies running out. This created unexpected shortages, and the more the news about the scarcity spread the worse the situation got. As a result, more and more consumers took to online shopping. So, while many organisations around the world started laying off staff, retailers, healthcare suppliers and e-commerce businesses were overwhelmed with work and struggled to cope with an unforeseen labour shortage. Many businesses in these fields are now looking to hire huge numbers of additional frontline workers, with Amazon looking to hire a further 75,000 more to cope with demand. 

Strengthening the supply chain

Being able to onboard new workers quickly is essential when it comes to resolving a labour shortage. Technology such as wearable augmented reality devices can be a valuable tool as it can provide a perfect training ground so that workers can master their job much faster.

Businesses need to also help their workforce so they perform well and most importantly stay healthy. Sectors that were already vulnerable to Coronavirus are under greater pressure to cut costs and keep workers safe from potential health risks. Therefore, front line workers should be supported rather than let go or furloughed, where possible. Protective clothing ought to be provided, as well as tools that enable workers to perform their roles safely and efficiently, such as wearable technology. This technology, such as wearable barcode scanners, can cut process time in half and provide instant feedback to workers which can help reduce typical picking errors by as much as 33 percent. Avoiding this source of error can be a massive cost saving as it will help prevent expensive processes such as product returns when the wrong item was sent out or time-consuming delays due to erroneous parts being removed from products. 

So how can you appropriately prepare for a peak that is, or might be, coming your way? Or in other words: how do you do more with the same space? Flexibility holds the key. Thus, you need to be able to build, move and redesign workstations quickly, and then allocate workers flexibly in between. Technology, especially barcode scanning as the most important steering tool in the warehouse and inventory, needs to be flexible and IT friendly so it can be deployed and rolled out quickly and does not require countless hours of integration and training time.

Making the right match

Supply chains are all about human beings, even though it may sometimes appear differently. There is certainly all kinds of machinery, software, buildings, and transportation involved. Yet it’s human need that drives them, human skill that operates them, human ingenuity that manages them, and human shortcomings that identify the potential for substantial improvements. But rather than eliminating the human aspects, we need to strengthen and empower the human worker to allow for great enhancements. That said, it is important to reiterate that we need technology to support the frontline workers so they can deliver the best possible job.

The Coronavirus crisis has highlighted the above as it has underscored all the challenges and vulnerabilities that global supply chains currently have. Going forward, we will need to reconsider the status quo. We will need to remove complexity and promote flexibility. Technology can and will support us to do that if it is the right match – and making the right match is what we need to safeguard supply chains into the future.

INDUSTRY SPOTLIGHT: LGI End-to-end supply chain services

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‘Last Mile’ Lessons from Covid-19

By Simon Mardle, Principal at Capgemini Invent

Innovation is regarded as a necessity for businesses to function in unprecedented times, and COVID-19 has presented one such situation. The changing role of technology in our society is a window into the innovation catalysed by pandemic. From enabling remote working to allowing global audiences to attend virtual fundraising concerts from home, examples of innovative technology can be seen across the board. 

As many of us are now restricted to our homes, online shopping and delivery has been the lifeline for many. Innovation is needed to keep up with, and adapt to, the soaring demand for deliveries that the current situation brings, where technology is critical in addressing the last mile delivery challenge. The increased reliance on online shopping has led to supply chains and deliveries, even for retailers with well-established systems, to be tested to the maximum. The fragility of weak links in supply chains are being exposed, while safety and efficiencies are being held more accountable.

With 97% of retailers feeling that their delivery model is not sustainable, organisations need to re-examine the most expensive part of the supply chain. Last-mile delivery can benefit by relying more on technology to reduce errors and cost as well as being safer due to less human contact. 

Looking ahead to the coming months, retailers must re-think or adapt their approach to last mile delivery to ensure demand can be met. Traditional models can only take them so far; they must now become more reliant on digital technologies that reduce error, costs, and tasks that require repetitive human input – not allowing humans to value add. 

Autonomous delivery becoming a reality

Reducing human-to-human contact has become paramount to our current lives, with autonomous delivery offering this opportunity – it is likely autonomous delivery solutions shall come back into the spotlight. 

Unlike many advancements, COVID-19 was not the reason for halting the development of autonomous vehicles. With backlash over airspace restrictions and safety, autonomous vehicles as a last mile delivery solution has been more of a dream rather than a delivery reality.

That is, until now. COVID-19 has provided companies with the opportunity to demonstrate the benefits of autonomous delivery which far outstrips previous hurdles, such as costs and regulation. This includes the world’s first delivery service in Ireland, using drones to distribute medicine to vulnerable people under lockdown. The success of these drones will likely mean a larger roll out throughout Ireland and calls for a realisation that autonomous vehicle delivery is indeed a possibility. 

Recent research from Capgemini indicated that 49% of people are comfortable with self-driving cars running an errand on their behalf. The increased importance of reducing human contact, including lowering the number of people needed to make essential deliveries, has accelerated the need for automated deliveries and beyond. 

Behind the scenes – dark stores

An additional consideration for retailers to look at to improve their delivery capabilities is the introduction of more dark stores.

Dark stores are places where items are picked for delivery either using traditional labour based picking methods or through the use of automated storage and retrieval systems (such as micro-fulfilment) or through a mix of both, they are closed to the public and fulfil online orders only. Delivery time and the packaging process is optimised through purpose-built design, independent operations, and choice of location – usually within densely populated areas requiring shorter travelling distances to customers’ homes.

For same day delivery, the ‘last mile’ stage of the delivery process is one of the most expensive and tricky parts of the operation Dark stores offer retailers the opportunity to optimise the operation and also to team up with specialist delivery companies more simply and effectively. We have seen with Deliveroo’s partnerships with both M&S and Co-op, and Uber in France with Carrefour. 

Pre-COVID 19, one in four retailers used dark stores, however as society looks to resume whilst managing public concerns it would make sense for shops to continue this trend. Sainsbury’s in Blackfriars is one example of a supermarket ‘going dark’, and with limited disruption and contact with in-store customers, dark stores offer a great way for retailers to get to grips with huge consumer demand. 

Automation of supply chains 

As we have seen with autonomous delivery solutions, autonomation of supply chains is an additional component available to retailers. With 77% of shoppers more cautious about cleanliness and health and safety in the post-pandemic era and 62% choosing to actively switch to brands which prioritisation of product safety, automation offers real benefits.

Automation additionally reduces fulfilment errors, such as mislabeling packaging and sending incorrect orders. As well as costing the supplier money – analysis has shown warehouse automation could increase profit margins by a huge 8%, these mistakes also take up time, an ever-precious resource when demand is high.  

Any automated solution must consider how it will cope with demand peaks, either forseen or unforeseen.  For example there may be capacity to set up a temporary manual solution that can be operated alongside the automation to cope with demand beyond it’s design capacity. 

The sudden increase of consumer demand due to COVID-19 in the last few months has exposed vulnerabilities in supply chains. It has been a test like no other and businesses have had to adapt quicker than ever to maintain operational continuity and address unprecedented disruptions. For those organisations which have put money into automating and developing their supply chains, they will see these investments pay off to help meet the ebb and flow of demand with greater ease. With businesses due to reopen in the coming months the impacts of the ‘new normal’ will felt by delivery services across the board – ensuring the last mile is as efficient as possible is an investment worth making.

Why does integrated planning remain important during the coronavirus crisis?

By Oliver Wight EAME CEO, Les Brookes

Making decisions in a crisis is not just about adjusting to short-term changes but using scenario planning for the medium-term horizon to reactivate ‘usual’ operations at the right time.

Business processes are often system driven, but this typically only works well in times of stability.

Businesses with Integrated Business Planning have an effective view of ‘the truth as we know it’ and find that, despite COVID-19 pressures, they make decisions that are ‘roughly right’ rather than precisely wrong. Click here to read more

The Importance of Supply Chain Resilience

By Anne van de Heetkamp, VP of Product Management GTC, Descartes

Acknowledging potential weaknesses in your supply chain before they are exposed by elements beyond your control is of critical value. With current events in mind, managing future supplychain disruptions will be an integral component of corporate strategy.

Calling it Supply ChainResilience, Supply Chain Disruption, or Business Continuity Management (from the ISO 22301 standard) does not affect the necessity of having strategies in place that may make the difference between following or leading in a disrupted economy, and even between surviving or folding.

To identify potential soft spots, a review should not be limited to a single product flow or single supply chain element. For any company, the next big disruption does not have to be a pandemic; it can be something minuscule on a global scale yet have the same devastating effect on the ill-prepared, in particular trade lanes or in a particular industry. Unpredictable is not a reason to be unprepared. Creating supply chain resilience is a holistic exercise that involves more than just a few savvy logistics people. HR, finance, compliance/legal, to name a few, are all stakeholders in a healthy case of business continuity management.

How then to build a strategy? Like any other strategy, the process seems logical: review, assess, and mitigate. In this particular case: 1) review your trade lanes, products, and materials flow by matching them against risk categories (i.e., labour, business risk, global trade, nature, and materials), 2) assess risks for each combination, and 3) mitigate risks by either changing behaviour now or planning for alternate sourcing options should the anticipated risks become reality.

Trade Lanes and Risk Categories

The relevant components to review within the supply chain include the importing and exporting country or countries, the manufacturing locations, the finished goods, and the raw materials. Ideally, for finished goods and materials, the associated Harmonised System (HS) codes are made available. Scratch what does not apply and move to the following step where each of the ‘inputs’ is categorically reviewed.

As mentioned, this should not be an exercise limited to supply chain professionals. For example, labour risks can be associated with the likelihood of strikes, wage volatility, and the availability of appropriate labour resources—not necessarily areas that keep the supply chain brain occupied every day.

In similar fashion, other resilience elements expand across different areas of expertise. Business risks relate to cybersecurity, corruption, counterfeit products, and the chance of entering into business with bad actors that are on any of the denied party lists.

Global trade accounts for the compliance requirements related to the shipment of goods (i.e., licenses, documentation, permits, etc.), associates the products with the various duties and taxes, and identifies if Free Trade Agreements (FTA) apply and how to qualify for preferential treatment.

Arguably the most unpredictable, but not the least expected risk to account for, is nature. It’s important to identify the various kinds of disasters that may hit: natural hazards, pandemics/epidemics, flooding, earthquakes, hurricanes, volcanic eruptions, landslides, or drought can all play parts.

Lastly, consider materials. Understanding the market comes with insights into scarcity, sourcing locations and price fluctuations.

Risk Assessment

Risk assessments match the input with the risk categories. For example, how vulnerable is the manufacturing location when it comes to labour regulations, corruption, or flooding? Is there an FTA in place that could potentially lower the import duty burden? Where in the supply chain can a cyberattack be most expected? In short, some homework is in order to create a thorough risk profile.

For many components, the sources are readily available, such as the Corruption Index at, labour statistics on Statista or NationMaster, or duty rate information from the various global trade content providers (or the WTO).

Building Resilience

As with cyber-security risks (PEN tests) or a regular laptop virus scan, supply chain risk assessments will point out the components that need immediate attention or, in this case, are a high priority for alternate sourcing or routing options. It’s then time to build that resilience.

Look for options by analysing the market and trade lanes. Mine import and export data to identify alternative sources for goods and materials, even manufacturing locations. Map out alternative routes for products to get where they need to go. Document the reasonable options and share with as many people as possible—preparedness is of course an all-inclusive strategy.

Next and where possible: test run! Re-route shipments temporarily or source occasionally from a new supplier; in other words, make sure the alternative options are viable. In addition, communicate with external sources that would be part of continuity plans. Make them aware they are part of these plans; put people or suppliers on a retainer and try to agree on terms before disaster strikes so the projected costs can be anticipated better.

Lastly, keep those alternate plans up to date; otherwise, it may be too late to create and execute on alternate alternative plans.

IoT accelerates end-to-end supply chain visibility

By Ian Terblanche, Global Sales Director at Sigfox

The global supply chain and logistics market is set to exceed $15 trillion by 2024, developing at a CAGR of 6.0% from 2016 to 2024 by volume. However, in spite of these impressive growth figures, there has been a mere trickle of innovation in the supply chain market, set against rising levels of inefficiency. 

Arguably the greatest challenge facing enterprise supply chains in 2020 is a familiar one – a lack of end-to-end visibility. The fact is that a single shipment can include over 200 interactions and more than 25 different people, often across the globe, which raises a range of challenges for delivering unified data effectively. However, this complexity is not going away, and indeed as global logistics volumes continue to rise across almost every industry vertical, the need to move to a more efficient and optimised, data-driven approach becomes ever more pressing. 

There are many risks in the global supply chain, but the impact of malicious and criminal activities is increasing. Cargo freight crime prevention in the United Kingdom cost companies at least an estimated £24 million ($31 million) during 2018, according to the BSI. BSI recorded 921 cargo theft incidents across the UK during the first quarter of 2019. A wide range of methods are used to steal goods, including the use of GSM jammers to overwhelm anti-theft devices and alarm systems. GPS trackers are mitigated by storing containers in an overhead environment, blocking access to the satellites. 

However, by implementing a solution that relies on radio signals that are extremely difficult to jam, warehouse theft risk is reduced giving organisations peace of mind that their alarm systems won’t fail. Moreover, in the event that cars, motorcycles, lorries or utility vehicles are stolen, they continue to seamlessly transmit GPS coordinates when equipped with this type of technology, enabling quicker and easier vehicle recovery for the authorities and insurers. 

Indeed, it is increasingly the case that first-generation single-network technology is being replaced with hybrid devices that can surmount connectivity issues, whether physical, geographic or as a result of malicious activity. 

RFID was once held up as the holy grail of tracking movement of goods, but the truth is that its technology is heavily flawed. RFID needs a RFID tag on the tracked item and infrastructure in the form of readers (to sense tags) and antennas (to increase the range of those senses). Implementing this type of infrastructure requires complex planning and managing between manufacturer and suppliers, hefty initial investment, developing cloud applications, system integration experts and a significant amount of time too – a supply chain operating across 500 sites can take up to 2 years to plan, install and test RFID before it’s up and running. 

By approaching the problem differently, you’ll achieve different and better results. Ditching the complex nature of RFID and lookalikes for the lightweight solutions offered by wireless, low-emission networks really can revolutionise the way you track and manage across your supply chain.

It is often the case that organisations know when the shipment left the last checkpoint, for example a sea port, but do not have visibility of its exact location until the next checkpoint, which is often the next port. This level of granularity is not sufficient for many applications, especially involving foodstuffs of medical supplies, which can have specific storage and temperature logging requirements over such a distance and time. However, the Internet of Things (IoT) has the unique ability to capture vast amounts of extremely valuable data, helping businesses better understand the behaviour of people, environments and assets to give a real-time holistic view of the entire supply network.

By implementing connected devices across the supply chain, businesses gain a vast array of data that not only fulfills regulatory requirements, but also offers extremely granular insights into the efficiency and real time operation of their networks. From a full overview of routes travelled, warehouse delays and network gaps to ensuring vehicles deliver best performance limiting downtime and repairs, while ensuring driver safety is of the highest calibre, the opportunities are almost endless. 

We’re seeing our customers really reap the benefits of transforming their operations in this way with IoT and Sigfoxconnectivity. For example, real-time alerts about delays and transport conditions has allowed Michelin to reduce transit stock by 10%, increase Estimated Time of Arrival (ETA) by 40% and reduce Out of Stock (OOS) situations due to exceptional circumstances (such as bad weather) by a quarter. Cost reductions and an increase in customer satisfaction are but a few of the end benefits Michelin has been able to achieve. We are seeing increasing interest across geographical locations, including the UK, via our secure sensor network operator, WND UK, which recently hit the significant network milestone of 90% complete. 

This tide of innovation is beginning to deliver measurable results, such as for Deutsche Post DHL Group, which has outfitted about 250,000 DHL roll cages with Sigfox smart trackers. The result will be that the German parcel market leader will have powerful levels of visibility of the essential and valuable roll cages which are used to transport large volumes of parcels – about five million shipments in Germany each working day. 

IoT is gradually beginning to transform and digitise the global supply chain, providing companies with unprecedented visibility into their own operations. The accelerating pace of change means that businesses will increasingly need to be onboard, and up-to-speed in order to maintain competitive advantage. Just a few years ago, full supply chain visibility was just a pipedream – now it is a rapidly approaching business fact.

Case study: real time container tracking improves operations for B&M

Leading North West based waste management company deploys the PIN IoT tracking solution across its fleet of roro containers

Established in 1999, B&M Waste Services delivers integrated waste management and recycling solutions to businesses across the UK. Carbon neutral since 2011, B&M continues to invest in technology and innovation to improve the service it delivers to customers. 

The PIN IoT solution uses new technology to enable low cost, real time tracking of bulk containers and skips, via tracking devices with a 5-year battery life and software tailored specifically for the waste industry.

The solution enables the waste industry to avoid capital expenditure on new containers, typically for several years by eliminating loss, recovering theft and utilising excess inventory. It leverages dual tracking technologies, which means we can distinguish between normal operational movements and immediately alert when a 3rd party moves a container, tracing it to its onward destination.

Operating costs can be reduced by controlling the repair and maintenance process and moving containers around the network more efficiently.

“Each of our containers now has a digital identity, we can track every movement and understand exactly where assets are located”

Paul Curtis, Director

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