Supply Chain Article

Daniel de Wolff’s picture

By: Daniel de Wolff

For years, companies have managed their extended supply chains with intermittent audits and certifications while attempting to persuade their suppliers to adhere to certain standards and codes of conduct. But they’ve lacked the concrete data necessary to prove their supply chains were working as they should. They most likely had baseline data about their suppliers—what they bought and whom they bought it from—but knew little else about the rest of the supply chain.

With Sourcemap, companies can now trace their supply chains from raw material to finished good with certainty, keeping track of the mines and farms that produce the commodities they rely on to take their goods to market. This unprecedented level of transparency provides Sourcemap’s customers with the assurance that the entire end-to-end supply chain operates within their standards while living up to social and environmental targets.

Julia Canale’s picture

By: Julia Canale

Believe it or not, the technology that brought you Bitcoin is beginning to make waves in the food manufacturing industry. This technology, called blockchain, is a digital ledger maintained across several computers, then linked through a peer-to-peer network. The system's design makes it difficult to change, hack, or modify the data. In the past few years, however, this service—initially designed to protect cryptocurrency investments—has been revamped as Blockchain 2.0, allowing the same security to be available for transactions of any kind. This 2.0 design is known as Blockchain as a Service (BaaS).

Benefits of blockchain 2.0

In 2020, many flaws in the current food supply chain were exposed, not only in the United States, but globally. Pandemic panic buying led to food shortages around the world, resulting in a rise in theft, fraud, and counterfeiting—three sure ways to increase foodborne illness outbreaks. The benefits of blockchain become obvious in the event of a foodborne illness outbreak, because traceability can be reduced to seconds. Therefore the response is greatly accelerated, potential product loss is minimized, and long-range costs and damage to the brand can be significantly reduced.

Zach Winn’s picture

By: Zach Winn

More and more people are doing their shopping from home these days, and whether they’re ordering groceries, home office equipment, or Covid-19 tests, they increasingly expect their deliveries to be fast and on time.

Companies have struggled to keep up with the rise in orders and expectations. One of their biggest challenges is optimizing the so-called last mile of delivery—when a driver takes packages from a regional hub to their final destination.

Wise Systems, a startup that began as a class project at MIT, is offering a dispatch and routing platform designed to make the last-mile delivery experience better for everyone, from drivers to dispatchers to customers.

Wise Systems’ routing solution is built on algorithms and machine learning models that continually improve as they gather more data. The company’s web app, meanwhile, gives a high level of visibility into fleet operations in real time. The mobile app also leverages an often-underappreciated asset in the industry: the drivers on the ground. It enables them to make notes on unique stops, communicate with dispatchers, and confirm deliveries.

Sachin Waiker’s picture

By: Sachin Waiker

Know who invented the first digital camera? It was Kodak—or more accurately, an engineer at the historic camera company who conceived the technology and built a prototype in 1975. But corporate leadership had no interest in pursuing the idea, given the company’s dominant position in the market for film cameras.

During the next two decades, that narrow view would prevent Kodak from adapting to shifting consumer tastes, and its core products and brand went the way of the dodo.

How businesses adapt—or don’t—has long been of interest to Michael Hannan, professor emeritus of organizational behavior at Stanford Graduate School of Business and of sociology in the School of Humanities and Sciences. His most recent research draws a clear link between long-term specialization and adaptiveness: Businesses that have catered to the same target consumer group for a long time tend to struggle when they pivot to new products and markets.

Tom Stacey’s picture

By: Tom Stacey

Europeans and other Western nations have dominated automotive excellence for more than a century. Whether it is the satisfying thud of the door closing on a Volkswagen from Wolfsburg, or the beauty of a Ferrari from Modena, these brands are iconic—and very lucrative for their manufacturers. When we think of reliability, the Germans, and latterly the Japanese, have had it sewn up. But if you rest on your laurels, an upstart will soon be chasing at your heels.

The Chinese are not exactly upstarts in the traditional sense: It’s more than a decade since they surpassed America to become the most prolific automakers in the world. But despite reaching that milestone in 2008, China’s cars were still mostly clones of cheap Western vehicles.

Knowledge at Wharton’s picture

By: Knowledge at Wharton

After more than a year of being pummeled by pandemic-related supply chain shortages, computer maker HP had some good news to report during its third-quarter earnings call last month. Revenue is up 7 percent over the prior-year period, even though it fell short of projections.

The problem isn’t demand. Chief executive Enrique Lores told Barron’s, “We are selling everything we can produce.” Yet supply chain problems persist, especially across Southeast Asia where many factories have been forced into Covid-19 lockdowns.

“We could have grown more if it wasn’t for the shortage of components,” Lores said.

Although well past the initial shock wave of the pandemic, industries across the spectrum are still grappling with ripple effects that threaten to sink profitability. Gad Allon, Wharton professor of operations, information, and decisions, said now is the time for business leaders to rethink their reliance on China as the main supplier for everything from computer chips to shoes.

Stavros Karamperidis’s picture

By: Stavros Karamperidis

Ningbo-Zhousan may not exactly be a household name, but find something in your house made in China, and it’s quite likely it was delivered from there. Ningbo-Zhousan, which overlooks the East China Sea some 200 km south of Shanghai, is China’s second-busiest port, handling the equivalent of some 29 million 20-foot containers every year.

At the time of writing, the port has more than 50 ships waiting to dock. This is because the Ningbo-Meishan terminal, which handles about one-fifth of the port’s total volumes, has been closed for a week after a member of staff tested positive for Covid. With still no word of a reopening, many more ships have diverted to alternative ports.

Lauren Dunford’s picture

By: Lauren Dunford

Manufacturing is stepping up investment as the U.S. economy recovers from the challenges of 2020. Nearly 40 percent of manufacturers have increased CapEx spending, with less than 7 percent planning to spend less, the National Association of Manufacturers reports.

With that investment, factories have substantial room to reduce waste and improve profitability. In many plants the key efficiency metric, overall equipment effectiveness (OEE), stands at just 60 percent—meaning 40 percent of potential production capability is lost. In contrast, state-of-the-art factories regularly achieve 85 percent OEE.

Getting to real-time insight

Digital tools can be an important lever to help factories and entire manufacturing ecosystems dramatically reduce waste. As a foundation, most digital technologies start by providing real-time insight into what’s going on, what’s going wrong, and why. With that information, operators can act more quickly to fix issues as they occur and even prevent problems.

Matt Mong’s picture

By: Matt Mong

During a recent interview with Dirk Dusharme, host of Quality Digest’s QDL, we discussed project-based manufacturing, the umbrella term that covers the types of manufacturing done on a project-driven schedule. Some refer to this as “engineer to order” (ETO), a niche in engineering-focused manufacturing.

As repetitive high-volume manufacturing has been offshored to China, Vietnam, and other locations, many U.S. manufacturers have moved toward mass customization (sometimes called “made to order”) for the consumer market. These typically involve a base product to which the customer can add variations. Project-based products, on the other hand, are unique to each customer from the ground up and have grown significantly now that the technology is able to support it.

Project-based products are largely targeted at the B2B customer. The types of industries that are project-based include those that manufacture equipment for wind turbines, aerospace and defense, and biotech, as well as contract pharmaceutical developers. These projects tend to be long-term and complex.

Ravi Anupindi’s picture

By: Ravi Anupindi

Inoculating the planet from Covid-19 presents an unprecedented logistical challenge like none we’ve seen before. Mobilizing for a world war may be the closest comparison, but in this case, the enemy is invisible and everywhere.

Some of the vaccines require super-cold storage at virtually all points along the journey until they reach someone’s upper arm. And the vaccines are primarily being produced in wealthier countries, though the need, especially now, is greatest in the poorest.

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