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FIGURE 1
Denmark’s Maersk partners with 1,500 of its high-risk suppliers to mitigate their
environmental effects, integrating green principles into the world’s largest container
shipping company’s supply chain management.
facturer and a retailer. The companies found a way to le- improve supply chain efficiency. The key is to select the right
verage information technology by sharing data across their software based on need. Some companies still use different
mutual supply chains. The resulting channel is more effi- applications for different areas of the supply chain (procure-
cient because activities are better coordinated. On a large ment, transportation, etc.). This can lead to integration issues
scale, Procter & Gamble can track its products on Walmart’s and adversely impact supply chain efficiency. However, these
shelves through register scanner information provided by sat- days software applications that can address the entire supply
ellite links. The system offers Procter & Gamble real-time chain are available.
information that is used to manage its operations more ef- Selecting the right software application can help the sup-
ficiently. Figure 1 indicates this system’s information flow. ply chain become more agile and reduce processing times.
Drones are one of the most recent examples in product Supply chain management must consider that consumer
transportation to cut delivery costs and improve efficiency. buying patterns can change rapidly. Agile supply chains are
In August 2016, Domino’s Pizza successfully delivered a piz- flexible to consumer demand. The transportation industry
za order to a suburban New Zealand couple using a drone. could become more agile in its practices. The industry could
The company expects drones to be an essential addition to upgrade its IT systems to automate more of its operations,
its delivery fleet and generate new jobs for pilots and other include comprehensive shipment information and streamline
drone-related positions. its business processes.
Innovation adds value to an organization. Successful sup- Big data analytics is playing a large role in supply chains
ply chain innovation improves processes. Continuous im- today and is revolutionizing the industry in several ways. It is
provement initiatives in the supply chain need strong back- enabling complex supplier networks to collaborate and create
ing from the highest levels of management. Some companies knowledge-sharing networks. In transportation, big data an-
have applied lean manufacturing tools in their supply chains, alytics is being used to optimize delivery routes. The systems
translating into quicker flow and delivery time. Lower in- plan truck delivery routes based on historical traffic patterns.
ventory levels can lead to better product control and shorter Recent advances in geoanalytical mapping techniques allow
lead-times. companies to analyze millions of data points and model hun-
Toyota provides an excellent example of continuous im- dreds of potential route scenarios.
provement in supply chain management. Toyota develops Amazon uses big data analytics to fulfill orders quickly by
partnerships with its suppliers and dealers to encourage sup- linking with manufacturers and tracking their inventory. Big
ply chain improvement. Toyota places a heavy emphasis on data analytic systems select warehouses nearest the consumer
the need to modify and optimize its production processes to reduce shipping costs by up to 40 percent. In addition,
constantly, leading workers to bring innovative ideas to the graph theory (the study of graphics) is used to help determine
table. the best delivery schedule, route and product groupings to
reduce shipping costs further.
Leveraging technology
Leading manufacturing and retailing companies leverage Going green with supply chain management
technology for supply chain efficiency, translating into cost Today, consumers are becoming more aware of environ-
savings. A variety of software programs are available to help mental or green issues such as pollution and global warming.
Maritime shippers
could save a bundle
Digitized data sharing could offer at least 55 percent improvement
in five key areas for maritime shipping firms, according to a new
report.
“Competitive Gain in the Ocean Supply Chain: Innovation
That’s Driving Maritime Operational Transformation” surveyed
more than 200 executives and professionals, including terminal
operators, carriers, ship owners, logistics providers, shippers, port
authorities and other members of the global ocean supply chain.
The authors found that poor data sharing hampers efficiency
in five key areas that need process improvement: carrier-to-
terminal coordination and planning, supply chain visibility and
information sharing, terminal operations, cargo flow visibility and
predictability, and coordination across carrier alliances.
But a number of roadblocks impede such a transformation.
The industry is slow to change. Legacy systems are costly and
complex. Partners don’t share data; nor do they have standards or
industrywide agreements. And many are worried that data sharing
increases security problems.
McKinsey & Co. has estimated approximately $17 billion
of waste in port and carrier business processes alone. But the
report’s research partners (the Business Performance Innovation
Network, XVELA and Cargotec Corp.) wrote that the opportunities
are even greater when looking at the inefficiencies in the wider
ecosystem.
The surveyed professionals thought that solutions would
include big data and analytics, the industrial internet of things,
new software management systems, cloud services and
automation.
– Develop partnerships with suppliers, upstream and – Establish a strong compliance program in the organi-
downstream, in the supply chain, working toward the zation.
same goal and sharing best practices to improve pro- – Partner with experts in trade management that can
cesses constantly. help mitigate the risks of fines, court actions and cus-
– Secure backing from high-level executives in the or- tomer complaints.
ganization.
• Leveraging technology Diana Berry is a trade management services specialist at UPS.
– Implement software applications best suited for spe- She earned her bachelor’s degree in industrial engineering in her
cific needs. native country of Colombia and her MBA from the University
• Incorporating green supply chain management princi- of North Carolina at Chapel Hill. She also is a lean Six Sigma
ples green belt and is certified in global corporate social responsibility
– Invest in research and development of green technolo- from the Thunderbird School of Global Management. Berry was
gies. president of IISE’s Sustainable Development Division and is the
– Position the right talent in the right places. Provide in- founder and a current board member of the IISE Logistics and Sup-
house training to apply the concepts of green supply ply Chain Division. She currently serves as program chair for the
chain management. 2018 IISE Annual Conference and as governing board member of
• Implementing a strong regulatory compliance program the IE Body of Knowledge.