Showing posts with label AI & IoT. Show all posts
Showing posts with label AI & IoT. Show all posts

Sunday, October 18, 2020

Digital supply chain

 

Digital supply chain

Advances in digital technology are having a huge impact on the world around us and leading to big changes in customer behaviour. Nowadays customers are involved in social media and digitally responding and covering across a vast interconnected global community. This digital involvement is in a vast manner and covers globally. However many supply chains are not technically or digitally capable to handle this changed scenario. That's because they're structured in a very traditional and sequential way.

Let's take a look at how a typical company with a traditional supply chain would react to a sudden peak in demand. Imagine a celebrity post a picture of a bag on social media like Instagram creating excitement and generating a sudden demand for the product across the world. The bag manufacturers demand forecast was based on a backwards look at previous sales. So when their sales reports show their product has sold out unexpectedly they wake up and go into firefighting mode. The company adjusts its forecast to reflect the new level of demand and then realizes that they don't have the raw materials or the production capacity to make replacements. So they call their suppliers but they don't have the materials available. The bag (bank ?) manufacturer asks them to order new materials and utilizing expedite shipments which lead to additional costs. Finally, when the materials arrive and the products are produced they then have to be transported to the stores. This wasn't planned for in advance which means premium shipping costs. All in all, it has taken the company around four months to replenish their product with an additional incurred cost. Unfortunately, the customer just wasn't going to wait that long and in the meantime, they bought a similar product from a rival manufacturer. In the end, with the unplanned additional costs and the unsold products, the bag manufacturer made a loss out of the whole experience.

But it doesn't have to be like this, traditional supply chains must evolve interconnected smart and highly efficient supply chain ecosystems with layers to address custom solutions and digital operations. Companies who can set up and run customer solutions and digital operations ecosystems empower themselves to proactively manage and efficiently fulfil customer needs across multiple channels quickly identifying changes in demand and organizing their supply chain accordingly. In this way, they can turn their supply chain into a real competitive advantage and use it as an enabler for new digital business models.

Let's look at how a company with a digital supply chain would have reacted to a similar peak demand situation. The company's proactive sensing capability including social media tracking identifies a peak in demand early. The production plan is adjusted automatically thanks to a direct link between demand and manufacturing. At the same time, an updated demand plan is shared with all relevant suppliers who immediately include the new requirements in their material planning and adjust their manufacturing priorities accordingly.

Meanwhile, the customer can track the progress of the order keeping up-to-date on when it's being manufactured and when it will be delivered. And throughout the process, the supply chain transparency solution monitors relevant supply chain data from a variety of internal-external structured and unstructured sources, enabling proactive risk management for the last mile delivery to the customer. The company leverages an established flexible logistics network with a shared infrastructure. The result is that companies that leverage digital supply chain operations with the versatility and agility that's needed in the digital age. That means happy customers and flowing profits. Supply chains are extremely complex organisms and no company has succeeded in building one that's truly digital yet. The companies that get there first will gain a huge advantage in the race to industry 4.0 and will be able to influence the technical standards for the future of their industry.

Friday, October 16, 2020

HERSHEY: Sweetening the Supply Chain One KISS-(es) at a time

 

Hi, I’m Priyanka Sunil- A final year MBA student from Amrita School Of Business majoring in Operations and Marketing. Welcome to my progressive learning space for Logistics and Supply Chain Management.

This is my final blog in this space. I dedicate this one to the love of my life; CHOCOLATES!!!

I don’t trust people who say they don’t like chocolate. I love them. In fact, I can eat, sleep, and breathe chocolates. Today I’ll take you through the story of a century-old chocolate factory Hershey and their constant efforts to better their supply chain.

In its brown-and-silver wrapper, Hershey's Milk Chocolate was perhaps the best-known American candy bar of the 20th century. The company makes and distributes products similar to Hershey's, Reese's, Hershey's Kisses, Kit Kat, Twizzlers and Ice Breakers, and recently Hershey's Bliss chocolates, which are iconic brands.


(Photo: The Hershey Company)

 

Supply Chain Sustainability

Hershey is committed to the responsible procurement of the ingredients and raw materials it buys. It has implemented programs and strategies to contribute directly to sustainability and livelihoods of the communities in which it relies on to provide the ingredients for its goods, while taking the required measures to protect human rights and the people and habitats behind the ingredients that make the famous products of Hershey. Hershey released its first Human Rights Policy early in 2019. Today, Hershey makes is mandatory to include human rights training into the new employee orientation process for all global procurement professionals. Additionally, Hershey is well on-track to meet several 2020 responsible sourcing commitments and has already achieved its goals to source 100% certified and, 100% RSPO-certified mass balance palm oil, and 100% third-party certified sustainable virgin fiber pulp and paper products in the U.S. and Canada

Supplier Diversity

 Along with other suppliers, Hershey seeks the opportunities for qualified minority, women, veteran, LGBT, disadvantaged, and disabled owned companies to compete on an equal basis as primary suppliers in order to strengthen the base of world-class suppliers. To find certified diverse suppliers they use ConnXus database

Certified Ingredients-Cocoa Certification and Palm oil certification

Hershey is committed to sourcing 100 percent certified and sustainable cocoa for all chocolate products around the world.

Traceability to the Plantation Level

The Hershey Company is committed to increasing traceability and reliability in the supply chain of cocoa and is aggressively collaborating to this end with its manufacturers, as well as producers and customer governments.

 

How Hershey's supply chain is adjusting to changing demographics and population shifts

The 21st century saw the emergence of many crucial demographic changes that would have significant impacts on both the demand and supply dynamics of supply chain management. Hershey found that significant increases in global demand over the next 15 to 20 years would come from urban middle-class customers in developing markets. A typical trend of the supply chain of the global confectionery industry is to satisfy the bulk of demand from a manufacturing facility based in the same area. Hershey Company's history of opening manufacturing facilities in Johor, Malaysia, as a real-world example of how businesses can use demographic knowledge to influence important supply chain decisions. In order to determine which location will be better, the the organization used a decision system with weighted factors for consideration such as continuity of supply and various cost dimensions, including operational and logistic costs.

Hershey’s supply chain redesign

In early 2007, a three-year supply chain restructuring initiative was launched at Hershey, pairing an increase in manufacturing capability with a sharp decrease in the number of production lines. The move led go 1500 people losing their jobs. Around the same time, Hershey outsourced the production of certain low-value products and established a new production plant in Monterrey, Mexico. The initiative finished with about $185 million in annual savings. Three years later, the Hershey Company announced project Next Century as part of the company's ongoing efforts to create an advantaged supply chain and competitive cost structure. The Next Century capital invested in plant expansion of the existing West Hershey in distribution and administrative facilities located in Hershey, Pa. As part of the project, production was shifted from the company's century-old facility at 19 East Chocolate Avenue in Hershey, Pa., to a planned expansion of the West Hershey facility, which was built in 1992. Total capital expenditures were pegged at between $250m and $300m, with annual savings projected at between $65m and $80m at the program’s conclusion in 2014.

The company has spent $800 million in increasing its processing capabilities over the last five years and has made attempts to introduce the 2.0. supply chain. Through growing automation in its distribution centers and introducing late-stage differentiation, it has also concentrated on making its distribution activities more agile.

"Smart complexity" is a key part of the supply chain 2.0 vision. How do we balance the complexity that arises when meeting customer versus efficiency? How do we make sure it does not slow down the manufacturing network and slow down the supply chain.?

To an extent, the company addresses this issue is by evaluating the profitability of each stock-keeping unit (SKU).  This has helped them to increase efficiency for itself and productivity for its retail partners.

Hershey then went on exploring the beginning of the process: supply-chain design and analytics. Hershey approached LLamasoft Inc., a supply-chain design software provider. They helped Hershey make supply-chain design an internal capability. Hershey executives were made to involve and understand the full impact of major strategic decisions. The effort gave the company a high-level view of operations’ Also this helped it to detect any possible conflict between internal disciplines. LLamasoft has this Data Guru application that consolidates and transforms data from various sources into what can be used in a single supply-chain model. It identifies opportunities for future cost avoidance or cut – a major part of Hershey’s previous supply-chain overhaul initiatives. They report compound growth of 6.8 percent in net sales, and 21.4 percent in net income, between 2009 and 2013 due to this investment in technology

Fulfillment

Hershey takes a holistic perspective on digital and in-person purchases. They believe that in-store purchases can be driven by a strong e-commerce presence. Working with retail partners, Hershey also found that shoppers demand that each retailer's in-store assortment and digital assortment be similar. If only shipping is offered, the average price point goes up since retailers and vendors like Hershey prefer a higher price point. But if buy-online, pickup-in-store (BOPIS) is offered, lower price points may be available To run it all, they are increasing trips online, driving larger basket sizes, while maintaining margin profile.

Drop-Shipping

Hershey has been able to advertise "worry-free summer shipping" and brighten up the gloomy spots of the calendar by delivering chilled drop shipping straight to the customer

 With more manufacturing capacity, software upgrades,  M&A, dedicated resources for just a few basis points of overall sales and direct-to-consumer fulfillment, Hershey’s is showing us an all-new recipes for supply chain success.

 

References

https://www.scl.gatech.edu/education/professional-education

https://www.thehersheycompany.com/en_us/sustainability.html

https://www.thehersheycompany.com/en_us/sustainability/shared-business/responsible-sourcing.html

https://www.confectioneryproduction.com/news/29890/hershey-releases-latest-sustainability-report-focusing-on-support-for-its-entire-supply-chains/

https://www.supplychaindive.com/news/hershey-retail-ecommerce/540959/

https://www.supplychainquarterly.com/articles/1773-chocolate-bars-and-population-shifts-how-hershey-s-supply-chain-is-adjusting-to-changing-demographics

https://theferrarigroup.com/more-evidence-of-supply-chains-value-the-hershey-company/

 

 

Wednesday, October 14, 2020

Supply chain Predictors

 Welcome back Dear Readers, This is Dharunanand R pursuing MBA in Analytics and Operations from Amrita School of Business. In this week's blog on Supply Chain lets explore  "How Supply chain Predictor applications work ?"


Organizations today have to be prepared to handle Global incidents rapidly the volume of data available to organisation that is Greater complexity in understanding what data is necessary to better respond to major disruptions. Some organisations have realised the importance of using data to proactively manage supply chain risk better preparing their networks for external disruptions, durable corporate relationships and the degree of agility instilled with in operating model is what can help organisations to strengthen overall preparedness in the face of any disruptions. 




To mitigate recent crisis like covid pandemic, the systematic and proactive approach designed to allow you to take appropriate action. Supply-chain predictor software which is design to connect supply change with external data sets providing ability to detect major descriptions stemming from a wide range of events, such as financial,geopolitical, environmental and natural disasters 


The solution adapts a data driven supply chain approach that collates data from whole of the organisation and combines it with external data from sources such as data providers, news feeds and social media to provide her digital twin of the supply chain. It helps organisation to filter out the noise of these sources allowing them to focus on  possible issues and risk that are immediate and relevant. This can help to challenges related to operations planning, inventory management, production, and proactive risk management 


This geospatial view is obtained by combining small data sets from the bill of materials, sales and inventory management to provide digital twin of the supply chain network. This creates understanding of different manufacturers suppliers and distributors to illustrate the possible impact of any disruption with each chain of the network. We can use this technology to see the impact all over the world and the financial aspect related to it. 


These supply-chain predictor also offer additional planning capability which utilizes machine learning and past decisions to provide optimal solution for an incident. It is also used to gather news from social media which are filtered by using the data science algorithm sun News which are used to understand the current risk and what is going on in the world 


Finally this system is used to predict the different models that are associated with supply chain and have a holistic approach to plan for future 

Tuesday, October 6, 2020

Introduction of AI in Food & Beverage Supply Chain

The key factors in attaining a true end-to-end supply chain visibility are having transparency and traceability by embracing it with the power of IoT.

We all know how difficult it would be for a supplier catering to the food supply chain, and we also know how difficult that it would be to deliver perishable goods to their ultimate destination in the right quality, quantity and condition, at the correct place and time.

Speaking of the fact, unfortunately it is very common that the goods arrive at their destination damaged due to a deviation in temperature, or other mishap, during shipping.


Food & Beverage Supply Chain:

Based on the recent BCG (Boston Consulting Group) report it says that every year about 1.6 billion tons of food worth a sum about $1.2 trillion are lost or dumped as waste. Which is one-third of the food volume produced around the globe. The most alarming fact is that it is estimated that this number would hit 2.1 billion tons of food valuing $1.5 trillion annually by 2030.

These are caused due to violent truck hijackings, which account for about 24% of the cargo theft incidents happening around the globe, which was based on the Global Cargo Theft Intelligence and Advisory Report in 2018. Whereas the most targeted sector in the truck hijackings is food and beverage which is accounting for almost 27% of all the incidents around the globe.

When this kind of incidents happen when the goods are in transit, food and beverage companies suffer not only monetary losses but also the risk of losing their customer’s trust. However, the good news in that is that supply chain infrastructure and efficiency alone could reduce the amount of annual food waste by $270 billion around the globe.

Thus, leading for a need on the shipment condition, quality and ETA monitoring not only in the food and beverage industry, but also in many others. In fact, the capability to track and trace the shipments that which are in transit across the supply chain is quickly becoming a customer demand, rather a mere request. Because the global supply chains get bigger and more complex day by day, customer expectations have also been jacked up for timely deliveries leading to the up-to-the-minute order.

So, in order to overcome such pitfalls what if we could know not only the location of the product during transit, but also the condition such as temperature, humidity and damage. This kind of crucial information need AI and IoT for a smooth monitoring of the above-mentioned criteria or factors.

Supply Chain visibility through software:

As said above “The key factors in attaining a true end-to-end supply chain visibility are having transparency and traceability by embracing it with the power of IoT”.

But just having visibility wouldn’t be enough for such complex systems. Ultimately, the value comes from the capability to leverage the visibility to quickly react for the pitfalls and respond to problems that arise.

That’s where AI and IoT comes into the picture. Here we are taking an example of a software tool called Trace.ai by Bristlecone used by many companies to overcome these issues.

Trace.ai is an operational intelligence tool that empowers businesses to leverage 100% real-time visibility in their supply chain. Its features include:


Trace.ai provides a leading US-based manufacturer of accessories with the ability to:

  • Monitor real-time conditions like temperature, pressure, humidity and shock with the help of sensors. (Which answers the question “How is my product?”).
  • Track their product. (Answers “Where is my product currently?”).
  • Track orders and returns. (Answers “How is the customer experience?”)

Adding to that as a real time example Trace.ai provides service for a global manufacturer of glass panels for the telecommunications industry, where it enables

  • 100% real-time visibility on product condition and location.
  • Monitoring of product damage due to breakage and contamination.

So, with the help of such software that work based on the AI and IoT would prevent all the food and beverage loss in the global supply chain which is already in existence and being followed by many companies avoiding the wastage of food.

Happy Learning😀. Please share your valuable comments.


Tuesday, September 8, 2020

Logistics in ISS

 

Logistics in ISS

Since November 2, 2000, the International Space Station has been continuously crewed meaning humanity has had a permanent presence in space. The importance of this station cannot be overestimated — NASA literally filled out a book with all the ways that the ISS has benefited humans on earth. It has helped develop new treatments for cancer, enhanced technology for robotic surgery, improved techniques for data processing, and its benefits stretch far and wide. It is quite possibly humanity's most significant scientific experiment ever undertaken. It is also the most expensive single item humanity has ever built at an overall cost, of about $160 billion. Breaking that down, every astronaut spends around $7.5 million on the ISS.

The ISS is a joint project between Russia’s Roscosmos agency, Japan’s JAXA, Europe’s ESA, Canada’s CSA, and the US’ NASA. However, physically, it is split into the Russian segment and the US segment, these two countries more or less take responsibility for managing and supplying their side. The station is longer than 747 at more than 350 feet or 110 metres in length and has more interior space than the average six-bedroom house. However, as science experiments and equipment take up most of the room, space is still at a premium, so normally there is only a maximum of six onboard crew members at any given time. But there are thousands of people back on earth working to support the activities of those six.




Now that the international space station is built and operating, the whole mission is basically a big logistics problem—it involves getting people, food, water, supplies, and experiments up and down from the station in a consistent, cost-effective, and safe manner. Food is one of the only non-renewable resources onboard the ISS, as an example. It is possible to recycle water, to generate oxygen, to reuse supplies, but the food is one and done. That means consistent shipments have to be made from earth to station. The Russians provide about half of the food, and the Americans supply the other half. There are a few constraints to space food—it has to be shelf-stable as there are no refrigerators on board, it has to last about two years as resupplies only happen a few times a year, it has to be light as weight is precious on the resupply rockets, and it has to be easy to prepare as astronauts’ time is valuable. Within those parameters, the Russians use a system of canned food while the Americans use a system of flexible pouches which have the advantage of being lighter weight than the cans.

The NASA food is processed at the Johnson Space Center in Houston, Texas. The astronauts do a taste test long before they launch to determine which foods they like the most and they express those preferences. Based on those, NASA will produce and load more of the best-liked foods. The astronauts can choose from hundreds of items. There’s no special sourcing or special ingredients, although they do inspect the ingredients carefully after buying to be extra sure that they’re safe. No astronaut has gotten food poisoning in space and NASA wants to keep it that way. The food is then prepared fairly conventionally until the last step. Food is made shelf-stable and lightweight by these methods—thermostabilization or freeze-drying. With thermostabilization, heat is used to destroy microorganisms and enzymes that would cause food to spoil. With freeze-drying, the food is frozen and all moisture is removed. With this technique, there is no water left in the food, which is normally the bulk of its weight.

The space station has a water recycling system that recovers about 80% of the water onboard which means that they occasionally have to resupply water from the earth, it’s more efficient to ship food up without water in it since the water onboard can be reused for multiple meals and helps to keep it shelf-stable. Overall, freeze-drying reduces total food weight.


NASA currently pays $29,000 per pound for shipment to the Space Station. Each gallon of water they bring therefore costs them about a quarter of a million dollars. They’ll also typically include a few pieces of fresh fruit anytime a rocket goes up and, with these shipment costs, each apple is worth almost $10,000. This is why so much focus is put on minimizing weight. In addition to the food they make, some foods are just shipped up as it is. For example, if a crew member has a particular type of granola bar they like, the food preparation team will go out and buy some of those as a sample and perform some tests in their lab to figure out if it is “flight compatible”. They make sure that it’s not too crumbly or too liquid as they don’t want crumbs and liquids floating around into all the nooks and crannies of the station. Assuming it passes these tests, astronauts can pretty much bring what they want for snacks. It will be repackaged into NASA’s pouches. Once the food is produced and packaged, it is shipped to one of four launch sites—either the Mid-Atlantic Regional Spaceport in Virginia where Northrop Grumman Cygnus resupply spacecraft is launched from; Cape Canaveral, Florida where SpaceX Dragon spacecraft are launched from; Baikonur Cosmodrome in Kazakstan where Russian Progress resupply and Soyuz crewed spacecraft are launched from; or Tanegashima Space Center in Japan where Japanese Kounotori spacecraft are launched.

Similar to all, the food will be carefully prepared for the journey providing optimal nutrition for the spacecraft. Thanks to both of these weight-saving methods, crew materials, including food, constitute just a small part of the total weight of each rocket. The rest of the launch capability is geared towards equipment and experiments. Now, the difficulty of this supply chain is that launch dates often change. Even just getting a launch or landing date in the first place is difficult enough. Each site has its own set of constraints potentially preventing use. Even the angle of the sun relative to the ISS constrains when a spacecraft can dock. The other factor that can affect the supply chain is that rockets are imperfect. 5 of 117 resupply missions to date to the International Space Station didn’t make it for one reason or another, meaning there’s a failure rate of 4.3%. There was a nine-month period from 2014 until 2015, during which three resupply flights crashed. In times like these, having plenty of food, water, and supplies to back up is very critical for the ISS.

Sometimes, to stretch the food supply, NASA will have to extend the certified shelf life of food onboard. For this they keep a sample of each batch of food they make on earth, packaged and stored in the exact same conditions as on the ISS. Assuming a rocket doesn’t have any issues, it will typically make it to the ISS in about two to three days. Once the spacecraft is near the ISS, the crew will spend almost a whole working day dealing with the docking process. Once that’s completed, either the same day or the next morning, they will open the hatch where the crew care package is. This includes fresh fruits and vegetables and some items sent up by the crew’s families. One time, the crew care package even included real ice cream. While there isn’t normally a freezer on board, a portable freezer was sent up in order to transport samples from an experiment back to earth but, since it was empty on the trip up, the crew got this treat.

For the next few months, astronauts go through their food one container at a time scanning a barcode each time they open one to let mission control know what their inventory level is like. That way, if the food is going quicker or more slowly than expected NASA can adjust future shipments. Onboard, dehydrated food is heated up and hydrated using a food rehydrator. The point of putting so much effort into food on the ISS is for the psychological well-being of the astronauts. With long working hours bottled up in a small space for up to a year, the mental stress of the job is enormous so any effort that can help reduce it is worth doing.

NASA puts a good amount of work into a movie night. They have a large projector screen and, in addition to their onboard digital library of 500 movies, the crew can download new movies. The ISS does have an internet connection to get some movies. That same internet connection lets astronauts browse the web quite freely, even if it’s not quick. While the station does have 300 megabits per second of downlink capacity, the vast majority of it is dedicated to experimenting and other data and astronauts can regularly video call their families. The unloading process of resupply vessels is quite a slow process, partially because there isn’t much storage space onboard. Once a resupply vessel is unloaded, the crew starts loading it again with trash.

The Northrop Grumman Cygnus, Russian Progress, and Japanese Kounotori spacecraft is unable to return to earth so they actually, burn up like all the debris in the atmosphere. The SpaceX Dragon and space craftsmanship crewed Russian Soyuz return to earth so they can bring back samples and tests. The spacecraft will then undock and slowly drift away from the ISS until it disappears from view, the ISS is then ready for another delivery of humans or cargo—one of the most unique regular deliveries in our universe.

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