A posting on Everything Jersey.com indicates that regional contract talks between the International Longshoreman’s Association (ILA) and the New York Shipping Association, representing the ports of New York and New Jersey, broke down yesterday over issues related to local work rules and staffing. These regional talks are a part of the master contract extension agreed to in late December that averted a possible labor stoppage among all U.S. east coast ports. That contract extension goes until February 6^th.

The breakdown apparently involves local issues and statements quoted in the article indicate that union representatives initiated the current breakdown. Both sides are scheduled to meet again sometime next week. According to reports, it is unclear how these specific regional talks will impact either broader master agreement or any other east coast regional negotiations.

Supply chain logistics and transportation teams need to continue to keep abreast of these developments.

Bob Ferrari

The Role of Technology in Innovating Supply Chain

The following guest posting is contributed by Infosys Limited, one of other named sponsors of the Supply Chain Matters Blog. It is authored by Rakhi Makad, Industry Principal and head of consulting for Information Transformation in the Manufacturing Industry practice at Infosys.

Continuing from Part One, where we discussed the need to innovate supply chain, in this posting we explore how goals translates to business and technology needs:

What does the office of the Supply Chain need?

In the words of a supply chain executive – “I need up-to-minute visibility of end-to-end supply chain, integrating data from external partners and internal systems, to be able to identify bottlenecks and risks, and work together with all stakeholders to mitigate and optimize them swiftly”.

Asking for too much?

As you go higher in the supply chain hierachy, these needs become more strategic in nature but the essence is pretty much the same

What does this mean in technology terms?

• up-to-minute: in near real-time
• integrating data: variety of sources, high data volumes, different types of data
• identify bottlenecks and risk: visualization
• work together: collaboration
• mitigate and optimize: simulation, prediction, extreme processing
• swiftly: fast

Here enters in-memory computing and in-memory database technology. Let’s briefly look at how this provides for the requirements:

• in near real-time: replication of data, on the fly calculations
• variety of sources: heterogeneous systems including sensor/machine data
• high data volumes: column and row storage, data compression, partitioning
• fast, extreme processing: multi-core architecture, massively parallel processing
• simulation, prediction:  in-database functions

While supply chain KPI frameworks, reporting, analytics, performance management systems have been around for a while and most organizations would have some means in place for evaluating the performance of their supply chains, however, as said before, most of these solutions are built around technology constraints and moreover, most of these solutions are reactive or provide after the fact information on supply chain performance. Now, how can we leverage the capabilities that in-memory technology provides us for innovating our supply chain such that we can eliminate the inefficiencies that we saw earlier?

At our manufacturing innovation hub at Infosys, we have put together a workbench -“Supply Chain Optimizer” – based on SAP’s in-memory database technology platform SAP HANA. This workbench provides for applications that address different processes of the supply chain function – planning, inventory management, procurement, manufacturing and order fulfillment.  The four areas piloted with very positive results include:

• Supply Chain Performance Simulation
• Supply Chain Risk Management
• RFID Applied to Supply Chain Visibility and Counterfeit Detection
• Asset Utilization Optimization

At Infosys we are proactively working towards innovating our customer’s supply chain using in-memory computing technology. All of the above use cases address the key needs for in-memory computing i.e. data volumes, real-time decisions, online simulations, predictive capabilities, extreme processing and speed.

Other technology trends in the manufacturing industry, like 3D printing, Robotics, Internet of Things and Augmented Reality are also catching on and bringing in their own impact to the supply chain world. A lot of these technology trends generate huge amounts of data that can be analyzed for further improving the supply chain using Big Data/In-memory Analytics lending for further use cases for information driven efficiency. Infosys is also researching these technology trends, their impact on the supply chain function, our customers and the industry and building mathematical and statistical algorithms as a part of its innovation lab mentioned above.

Technology, and leveraged use of the most pertinent technology applied to supply chain responsiveness, will continue to be a disruptive force for every manufacturing and supply chain organization.  Is your organization adequately prepared to leverage today’s technology?

This concludes Part Two of this two part series.

For additional information regarding these concepts please visit:

 http://www.infosys.com/supply-chain/offerings/Pages/index.aspx 

 About the Author:

Rakhi Makad, Industry Principal, Information Transformation, Manufacturing Consulting & System Integration, Infosys Limited

Rakhi heads consulting for Information Transformation in the Manufacturing vertical at Infosys, this includes Business Intelligence & Analytics, Enterprise Performance Management, Enterprise Data Warehouse, Information Management and Big Data. In her current role, she leverages her extensive BI experience in giving directional guidance across BI strategy, performance management, BICC set-up, architectural framework, governance, business blueprinting, implementation and program management and delivery excellence across multiple clients. Rakhi represents Infosys in most external forums like MIT Supply Chain Innovation, SAPPHIRE, SAP Insider, ASUG etc on topics of thought leadership and innovation in the Information space, she regularly interacts with client IT and Business leadership and with analysts and industry experts.

She can be reached at rakhi_makad@infosys.com”

Since our inception in 2008, Supply Chain Matters has provided numerous commentaries related to Apple and its supply chain strategies.  Why not, it is clearly the most visible and recognized supply chain on the planet.

Thus, we were not all that surprised yesterday when The Wall Street Journal indicated that Apple is presumably working on a lower-priced version of the iPhone that could launch later this year. The WSJ points out that today, iPhone associated sales account for 48 percent of Apple’s revenues, yet the current high cost makes market share penetration within broader global markets a challenge. Apple’s market share in China has taken a major hit and remains low in other emerging markets.  Thus to continue its market growth momentum, Apple must further penetrate highly cost sensitive emerging markets.

The article further speculates that to achieve a lower-priced iPhone, the phone’s shell would be produced in plastics vs. the current aluminum design. Many other component parts could either remain the same or be recycled from previous models.

In our view, such descriptions of options are not all that simplistic and straight-forward.

In a September 2012 commentary, Time to Factor the New Realities for Low Cost Manufacturing and Supplier Social Responsibility, we opined that whether the objective is a new product launch, the peak consumer buying season, or an extraordinary market opportunity, there are new realities occurring in global based supply chains, and as community, we need to be aware of the implications. The notions that an OEM, even Apple, can dictate limitless flexibility or insist that virtual capacity exists is now being challenged by the realities of supplier social responsibility. There are unfolding implications in the need for increased automation of assembly tasks, flexible and multiple contract manufacturing sourcing strategies and better planning. Product marketing and executive teams may presume that the global supply chain will always respond to the needs for endless agility and flexibility to changing market needs or market opportunities, but certain and more complex new realities exist for Apple as well as the broader industry.

In other commentaries during 2012 we noted that the sheer visibility and brand image of Apple has placed the company’s supply chain practices under the looking glass. The current supply chain has been dealing with stark new realities, namely whether to shift its supply chain strategy among higher cost options to fund more social responsibility practices related to assembly and supplier labor costs.  The million plus workers who assemble Apple products are the emerging market consumers who desire to one day, own an iPhone. A lower-cost, higher volume iPhone product strategy has to be far more sensitive to considerations of margin and profit distribution among Apple’s contract manufacturing, channel and retail partners who will be instrumental in penetrating higher volume consumer markets such as China and India. It must either have to deal with the new realities of rising labor costs or be much more dependent on factory automation. As many senior supply chain executives and their teams are all too aware, there are distinct differences in the requirements between a high-volume, high-margin global supply chain strategy vs. a higher-volume, much lower-margin one that must cater to the unique channel distribution requirements of emerging markets. In some cases, it requires distinctly different supply chain structures. Unilever, Nestle or perhaps Lenovo are notable global benchmarks on how to balance these needs.

Whether Apple ultimately elects a lower-price, global distribution model will no doubt garner lots of senior management attention in the coming weeks.  However, make no mistake that the implications for Apple’s global supply chain and its ecosystem are far-reaching and way beyond simple changes in components.

Bob Ferrari