Last year’s hurricane season dealt a devastating blow to Texas, Florida and, most notably, Puerto Rico. Recovery efforts are still continuing, and will be for a long time.
But in the immediate aftermath of a natural disaster, ensuring that critical supplies reach affected populations is paramount. Food, water, medicine and other life-sustaining materials must be quickly transported, stored and distributed so as to do the most good. But how?
The Logistics Hurdle
In disaster relief operations, logistics is often the biggest hurdle. In fact, as much as 80 percent of disaster relief costs go toward transporting, warehousing, and distributing goods and services to affected communities.
ALAN’s disaster relief work is built on strong relationships among supply-chain businesses, relief organizations, and governments.
That Challenging Last Mile
When managing a supply chain under desperate conditions, the greatest logistics challenge is the notorious “last mile.”
Flooded roadways… devastated distribution centers… disabled communications.. Often all of these converge in the last mile of a relief effort. Critical medicine can be shipped thousands of miles only to spoil in the sun as relief workers tend to victims.
Frank Clary is a project director at global logistics provider Agility. He knows just how challenging that last mile can be. In his view, 3PLs are just one resource in the disaster relief tool kit – and not even the most important one. Clary has seen NGOs and voluntary organizations active in disaster (known as “VOADs”) perform feats that hardly seem possible. Under the worst possible conditions these organizations not only establish logistics, but also create medical and food relief infrastructure — within days.
“We couldn’t do it, but humanitarian aid groups do it all the time,” Clary said. “We learn a lot from them.”
Companies that rely on wood pallets to transport their wares now can feel even better about their choice.
The latest research from Virginia Tech indicates that a whopping 95% of all wood pallets are now being recycled. According to trade publication Environmental Leader, the two-year study showed that “wood pallets are increasingly being reused as long as possible, and then are being converted to mulch, animal bedding, or biofuel.”
Avoiding the Landfill
Both municipal solid waste (MSW) and construction and demolition (C&D) landfill facilities were surveyed. The study found that, over the last 20 years, the number of pallets entering landfills has dropped by 86%.
And pallets that do end up there are often recycled by the waste facilities themselves. Several factors have contributed to this recyling trend at landfills, such as:
Limited space, and
Desire to be more waste efficient
So now many waste facilities also sort and recover several different types of debris.
“Of those wooden pallets that arrive at landfills, both MSW and C&D facilities recycle even further. The results show that landfill facilities have increased their wood and wood pallet recovery areas over the past two decades. For MSW facilities, this number increased from 33% to 62% of facilities, while for C&D facilities, the number increased from 27% to 45%.” — Laszlo Horvath, assistant professor, Virginia Tech
Pallet recycling has become a rapidly growing segment of the pallet industry in recent decades. As perceptions have changed, pallet users have gravitated toward more sustainable solutions.
But they also have financial incentives for recycling. Savvy business owners know that reconditioned pallets are just as sturdy and dependable as the originals, and they’re typically offered at a substantially lower price than new pallets of similar quality.
According to the Virginia Tech researchers, U.S. businesses are particularly inclined to recycle their pallets when they are located within close proximity to a pallet recycler or a company that grinds pallets into mulch.
Remember when “Amazon” was a rain forest or a river, and a “tweet” was the sound a bird made? Just as the digital world has changed beyond recognition in the last 20 years, so too has third-party logistics (3PL).
Over the past several years, the 3PL industry has greatly expanded its global footprint. That trend is expected to grow. Why? More than 80% of all Fortune 500 companies currently use warehousing, distribution, software services, and domestic and international transportation management. And these services form the crux of the 3PL landscape.
A research report from Global Markets Insight indicates that third-party logistics will be well over a $1 billion industry by 2022. That’s an annual increase of 4.4%.
These kinds of increases require continual evolution and adaptation. Let’s take a look at some of the major trends in 3PL’s:
In the Clouds
3PL providers are increasingly utilizing extensive cloud-based technologies. These systems enable businesses to store a massive influx of data. But they also allow clients to easily access their systems, and they improve the overall effectiveness of a company’s logistics.
In addition, the emergence of “big data” analytics, smart technology, and data sharing continues to help 3PL’s evolve. For example, increased data sharing is expected to help improve tracking services across the supply chain. And experts predict that the amount of big data will grow from 3.2 to 40 zettabytes by the year 2020. (See sidebar, “How Much Is a Zettabyte?”)
Also, with the increased use of mobile apps, customers will be able to track the details of their shipments and process freight shipments from anywhere. This will further fuel the industry trends.
The business landscape of 3PL industry will grow increasingly complex as supply chain operations expand massively worldwide. So 3PL market players will need to stay on top of the game. They’ll have to understand international legal implications and regulatory compliance if they want to maintain their position.
The emergence of new markets, currency exchange, and international trade will serve as growth indicators for the 3PL’s of the future.
Experts expect that heavy deployment of automation will push 3PL industry size over the next few years. For one thing, automated warehouses use up about 40% less floor space than traditional warehouses. Increasingly, warehouse 3PL’s are relying on automated lifts and robotics to reduce the amount of space needed for storage. (See related article, “Warehouse Automation: How Far Should You Go?“)
On-road automation is another area where expansion is expected. Self-driving trucks are already undergoing extensive testing on U.S. roads. For instance, one San Francisco-based company (Otto) has been developing these trucks and testing them on California roadways since January 2016. Uber acquired the company in August 2016 for $680 million, and testing continues today:
Keeping It Green
Green logistics is increasing being adopted by prominent 3PL providers to address growing environmental concerns. High-impact partners like 3PL’s have found that they can make their clients feel good by doing good.
For instance, new innovations are making it more possible to limit the carbon impact of the carrier route. Amazon’s Prime Air is a case in point. The service’s drones could provide an energy-efficient alternative for those nooks and crannies that electric vehicles can’t reach. (See related article, “Delivery Drones: Coming Soon to a Warehouse Near You.”)
Route and load optimization and efficient packaging are some other measures undertaken as a part of the green logistics initiative.
The global growth of online retail is expected to generate lucrative avenue for 3PL’s. Did you know that Amazon has increased its distribution space by an astounding 1000% in the last 10 years?
In fact, retail giants such as Amazon are likely to transform into full-fledged 3PL providers. By the same token, companies operating in the core transportation sector are also expected to penetrate the global 3PL market. Which means current 3PL key players will need to brace themselves for additional challenges and continue to develop technologically advanced and upgraded services in order to sustain their business position.
Did you know that any “green” changes you make in your workplace not only help the planet, but can improve your company’s efficiency?
The New Year is always a time for evaluating the past and looking towards the future. So this year, why not consider these five ways to make your workplace more eco-friendly in 2018:
Improve Waste Diversion
Pretty much every business could do more to reduce and divert its waste output. But you won’t know until you take a good look at what you’re currently discarding.
One way is to engage your staff in an interactive waste audit. This gets everyone involved in identifying what’s in the trash and what can be diverted away from landfills. (New York City and other communities actually impose fines on companies that fail to properly recycle.)
A waste audit helps you to measure the different types of waste generated at your business. The results will help you to figure out how much waste your creating and how effective your current recycling (or composting) programs are. It will also help identify opportunities for reducing the amount of waste you send to the landfill, and potentially save the company some money.
For a free downloadable guide on how to conduct a waste audit, Click Here.
Warehouse automation is everywhere these days. At Amazon and other online retailers, for instance, “pickers” work side-by-side with robots. (See related article “Warehouse Automation New Frontiers.”)
And with good reason. In many instances, warehouse automation has been shown to improve efficiency, speed, reliability, accuracy and (eventually) cost savings.
Is It Right for You?
But just because automation is so prevalent doesn’t mean it will solve every material-handling issue or be the right fit for your facility. Humans are still better at a lot of things. Indeed, even at Amazon — the mother of all robotic warehouses — machines are not quite ready to take over completely.
As you can see, the science of warehouse automation encompasses all kinds of methods to bring inventory directly to the worker, in order to minimize his or her movements within the facility. Some of the most popular systems are carousels, vertical lifts, automated storage and retrieval systems (AS/RS), mini-loads, and automated guided vehicles (AVGs). A separate category of automation includes conveyors that move and direct inventory to the next appropriate operation.
Case in point: A mid-sized industrial distributor made a $3 million investment in carousels linked with an active conveyor. Alas, the system’s performance and reliability were so poor that it was abandoned, at a significant loss to the company. But in hindsight, the owner realized that, even if the system had worked perfectly, it still would have been a really bad investment.
Why? Because even though the automation enabled him to cut his workforce in half (for a savings of $300,000 per year), the five-year return on his $3 million investment would still have been minus 19%.
Like all business decisions, the choice of whether to invest in automation boils down to a reasonable expectation of adequate ROI.
Did you know that every day in America, 13 people go to work and never come home?
That’s right. In 2015 (the most recent statistical year) 4,836 workers were killed on the job.
Another 3.3 million people per year suffer a workplace injury from which they may never recover. No one wants to get hurt on the job. But best safety practices are often neglected because they take a little extra time and effort.
As a result, serious workplace injuries are far too common.
Did you know that most lean manufacturing concepts were developed from the philosophies of Benjamin Franklin?
And Henry Ford cited Franklin as a major influence on his own business practices, which included Just-in-Time manufacturing.
Let’s take a look at some of the guiding principles for implementing a lean manufacturing protocol…
First and foremost is waste reduction/elimination. Historically, this is the foundation of modern-day lean manufacturing, identified by Toyota Production System in the 1990’s.
Many of the other principles revolve around this concept. There are seven basic types of waste in manufacturing:
Overproduction (production ahead of demand)
Unnecessary Motion (moving people or equipment more than is required to perform the task)
Excess Inventory (all components and finished product not being processed)
Production of Defects (leading to rework, salvage and scrap)
Waiting (i.e., waiting for the next production step or interruptions of production during shift change)
Transportation (moving products that are not actually required to perform the task)
Overprocessing (resulting from unnecessary work that adds no value)
Waste reduction/elimination involves reviewing all areas of your organization, determining the source of all non-value-added work, and reducing or eliminating it.
Continuous improvement is sometimes referred to by the Japanese word “kaizen,” which literally means “change for the better.”
As the name implies, continuous improvement promotes constant, necessary change toward achievement of a desired state. The changes can be big or small, but they must lend themselves toward improvement.
To be effective, continuous improvement should be a mindset throughout the entire organization. Lean manufacturing experts suggest that you not get caught up in only trying to find the “big ideas,” as small ideas can often lead to big improvements.
For instance, at Toyota, the culture of continual aligned small improvements has yielded large results in overall improved productivity.
Respect for Humanity
The most valuable resource for any company is its people. Without them, the business simply will not succeed.
When employees do not feel respected, they tend to lose respect for their employer. This can become a major problem when a company is trying to implement lean manufacturing principles.
To achieve this, levelized production takes into consideration both forecast and history.
Your customer orders most likely fluctuate daily. Let’s say on Day 1, they want 10 black and five red parts. The next day, they want 12 red and seven black. On Day 3, they only require 13 parts.
Using levelized production:
On Day 1 you would set the level volume at 15 parts per day, and production would replenish the 15 parts that were ordered.
On the second day, the order is 19 parts (four parts higher than our levelized production volume). Production would still build 15 parts and the shipping area would take four parts from an inventory called “fluctuation stock.”
On the third day, the order was 13 parts, which is two less than the levelized volume. So two parts are put back into fluctuation stock.
The basis behind just-in-time production is to build what is required, when it is required and in the quantity required. In conjunction with levelized production, this principle works well with the pull system. It allows for movement and production of parts only when required.
The goal in lean manufacturing is to maintain finished product inventory at the lowest levels possible, while ensuring delivery does not suffer. Of course, it is nearly impossible to carry zero inventory, particularly in facilities where short lead time is essential. So you will need to carry a store of parts to pull from when required.
To facilitate just-in-time production, companies typically employ a system of “kanbans.” A kanban is a hand-sized card that moves with the product or material. It signals when the product is to be built or when the material can be moved.
The kanban basically serves as a work order or pick list. But it also serves as a visual control, to identify the contents of each box. A third function of a kanban is inventory control, to determine the amount of finished product on hand.
On May 18, 2015, “as the light was fading at the end of a bitterly cold day,” zoologist Tony Martin dropped his last rat bait pellet onto a peninsula at the western tip of an island near the South Pole.
“We had finished. We had really finished,” Martin wrote in his final transmission.
Another consideration was that Martin’s team of conservationists needed the containers to be recyclable and/or biodegradable. They wanted to leave virtually no evidence that they had even been there.
But to save the tortoises and other threatened wildlife populations, the folks at Bell Labs had to ensure that their product would survive the trip to the Galapagos and the tropical Ecuadorian climate. In addition, the containers had to meet the Galapagos project’s strict environmental guidelines.
In 2010, police in Dubai intercepted a container from a Liberian-registered ship that had originated from Pakistan. Suspecting narcotics smuggling, they searched the container’s cargo—heavy bags of iron filings—but found nothing.
Almost as an afterthought, they then decided to check the pallets on which the bags had rested. Inside each pallet was a hollowed-out section containing 500 to 700 grams of heroin.
Which only goes to show you that pallets typically go unnoticed. (A fact that the drug smugglers were no doubt counting on.)
Invisible, But Everywhere
Think about it… This unassuming construction of beams and planks has carried most every object on the planet, at one time or another.
“Pallets move the world,” according to Mark White, an emeritus professor at Virginia Tech and director of a pallet and container research lab.
And, while they may not look like much, these simple shipping containers play a major role in the history of our economy. But just when did the ever-humble pallet become such a warehouse staple?
It All Began…
Before the birth of pallets, wooden crates, boxes, barrels, and kegs were the mechanisms of choice for transporting and storing goods. Skids were also sometimes used. (As you no doubt already know, a skid is similar to a pallet but does not have bottom deck boards.)
In fact, the use of skids dates back to Ancient Egypt and Ancient Mesopotamia, in the 1st millennium B.C.
It wasn’t until the early 1920’s, shortly after the modern forklift was invented, that skids evolved into pallets. (This, of course, helps to answer that age-old question: Which came first, the pallet or the forklift? It was, indeed, the forklift.)
Recognizing that skids did not provide the support and stability often required for heavier loads, bottom planks were added to the design in 1925. And the pallet was born.
This addition resulted in an improved weight distribution and a decrease in product damage. It also led to the concept of stacking, which allowed goods to be moved and stored with extraordinary speed and versatility.
Needless to say, the dawn of the pallet revolutionized the way merchandise was gathered, stored and protected. It wasn’t long before every warehouse across the globe began relying on these simple wooden structures to load and store their goods.
Then the war came. The Big One — WW II. And the popularity of pallets skyrocketed.
Mass production of all kinds of goods, especially for the military, increased sharply. Pallets were used by thousands of small and mid-sized business throughout North America.
As a result, it quickly became obvious that pallet standardization was necessary. Every link in the handling chain needed to know just what it was receiving and had to be prepared to receive it.
That’s when the U.S. Navy’s Bureau of Ordnance set up a Materials Handling Laboratory in Hingham, Massachusetts. Their purpose was to engineer the job of handling as much war material on pallets as possible.
Working together, the Allied countries established a universal 48 X 48 standard size pallet to accommodate easy of shipment and storage of ammunition and other war materials.
One important feature of the standard pallet size is that it fits common 8’ 6” and 9’ 2” railroad box cars beautifully. In addition, the square shape simplified loading and unloading, as well as warehouse stowage.
Pallets Helped Us Win the War
Pallets played a huge role in the Allied forces winning the war. Tens of millions of pallets were employed.
In fact, according to one historian, “The use of the forklift trucks and pallets was the most significant and revolutionary storage development of the war.”
During this time, a resourceful Navy Supply Corps officer, looking for a way to improve turnaround times for materials handling, invented the “four-way pallet.” With notches cut in the side of the pallet, forklifts could now pick up pallets from any direction.
The design change was a relatively minor refinement that resulted in a doubling of material-handling productivity per worker.
This archived 1950’s video footage shows how surprisingly modern warehouses had become by that time:
Today there are approximately 450 million new pallets produced in North America each year. About 1.9 billion pallets are in use at any given time.
Today’s pallets are designed to withstand enormous weights and be lifted on and off trucks, ships, and planes. You might even say that, without them, it’s uncertain whether the global economy would be as strong as it is today.
For a virtually invisible object, pallets are everywhere!
We started off our energy efficiency series for industrial businesses with a discussion of peak energy demand identification. The goal was to identify peak energy demand times and shift the load to flatten your energy curve. This month we cover Part Two of the series: Weekend Energy Use.
The series on energy efficiency measures at a glance:
Peak energy demand identification
Weekend energy use
Compressed air systems
Weekend Energy Reduction
Energy efficiency plays a key role in operational efficiency — it has a direct impact on your business results. Some industrial businesses run weekend shifts, while others may close the shop down for a day or two but unnecessarily leave equipment on. Either way, by putting a little attention toward your weekend energy use, you can lower your total operating costs.
To start, review your energy profiles to find energy waste. If you are a small shop without sophisticated energy management software, you can create your own energy profiles based on interval data by using the charting functions of Microsoft Excel. If provided by your utility, an easy way to collect your detailed energy data is through the Green Button initiative.
According to the US Department of Energy, “The Green Button initiative is an industry-led effort that responds to a White House call-to-action to provide utility customers with easy and secure access to their energy usage information in a consumer-friendly and computer-friendly format. Customers are able to securely download their own detailed energy usage with a simple click of a literal ‘Green Button’ on electric utilities’ websites.”
Once you gain insight into your weekend energy use, it is time to share those insights.
Often weekend energy savings boils down to employee energy awareness. If your employees can see that their wasteful habits make a difference, they are more likely to feel inclined to do something about it.
Per Energy Lens, the most effective way to engage your employees in energy savings is by providing them with targeted facts and figures. “Specific figures are generally best for raising energy awareness among staff. For example: Unnecessarily leaving equipment switched on when we go home is wasting x kWh, y dollars, and z lbs CO2 each day. If your building operates continuously every day, investigate the energy consumption of different shifts.”
The use of energy in industry affects every single citizen directly through the cost of goods and services, the quality of manufactured products, the strength of the economy, and the availability of jobs.” – The National Academies of Sciences, Engineering, & Medicine
When it comes time to share results, savings related to specific days, times, and activities are more motivating than sharing the building’s total energy savings.
Reduction in energy demand can also be achieved by regular production shutdowns (including shutdowns for scheduled maintenance or retooling) and off-shift periods. Savings can be substantial. And data and analytics can offer visibility into shutdown levels to help you optimize savings.
Once energy waste is targeted and employees are engaged, it is time to track performance. Energy Lens offers five rules for tracking your energy performance on a monthly basis (click on the link to read more about each rule):
Remember that months are very different in calendar terms;
Only compare the average kW between months;
Restrict the energy that contributes to each monthly average;
Use energy data that contains the necessary level of detail; and
Be aware of seasonal variations in energy consumption.
You Need a Game Plan
Independent studies indicate that U.S. industry as a whole could reduce energy use by 14% to 22% in the near term through cost-effective efficiency measures. Tackling weekend energy efficiency initiatives can help you reduce your energy use and lower your total operating costs — along with lowering the costs to our environment, to our national security, and to irreplaceable resources.
Summary game plan:
Identify specific weekend energy waste to target
Quantify the energy waste
Raise energy awareness and encourage employees to reduce energy waste
Track the energy performance of the days, times, areas, and uses of targeted energy waste
Share and display achieved savings (and celebrate!) to motivate for continued progress