This week marks the one year anniversary of the tragic grounding of the mega cruise ship Costa Concordia resulting in the loss of 32 lives and the evacuation of 4200 passengers and crew. At the time of the accident, Supply Chain Matters penned a commentary on the spillover effects of this accident on the broader shipping industry, where big mega-ships are the current operating principle. The world’s largest ocean container vessel, the 16,000 TEU capacity Marco Polo, operated by French line CMA CGM entered into service in mid-December, and we might add, a marvel of technology.
Shortly after the Concordia accident, there were estimates that an incredibly challenging salvage operation would take at least a year to complete and cost in excess of $500 million. There were also implications related to current cruise ship safety, crew training and ship evacuation procedures.
A video report from NBC News hosted by Yahoo Business provides images of the ship still sitting in its original spot as salvage cranes and floating platforms surround it. The person in charge of the righting and salvaging describes the incredible complexity of re-floating this vessel, which is not likely to meet its original salvage milestone. Meanwhile the sunken ship continues to sit within one of the most sensitive ecological areas on the Italian coast.
Incredibly, the captain of the vessel indicates that he has no regrets, and still believes he was misunderstood in escaping the vessel prior to all passengers. He places the blame on lower-ranking officers. This captain is yet to stand trial on the charges of multiple manslaughters, wrecking and abandoning ship, even as victim’s relatives attend a memorial ceremony one year later. One wonders if the Italian government and cruise industry is really invested and having Captain Schettino brought to justice.
The open question is whether the industry has learned from this tragic accident? With the advent of super technological-laden mega-ships, have ship crew training, safety, and evacuation procedures been vastly improved or are we all turning a blind eye on what occurred with the Costa Concordia. Does the existence of these large mega-ships, designed for ultimate operating efficiency and capacity come with appropriate safety and navigational measures to avoid another major accident with loss of life or considerable monetary and ecological damage.
These were the questions we posed one year ago.
What have we learned?
Each year, the Supply Chain Council (SCC), the organization that developed and continues to mature the Supply Chain Operations Framework (SCOR) model, sponsors that organization’s annual U.S. focused Supply Chain World North America Conference. This is the SCC conference where the broader supply chain community and their teams can network and gather current thinking on supply chain direction and required capabilities.
This author has attended many previous sessions of this event both as a participant and as a speaker. Last year’s event was enjoyed by most all those attending.
The 2013 event is being held from April 8-10, 2013 in St. Louis, with the overall theme: 21st Century Supply Chain- Gateway to the Future. The conference planning committee purposely chose the St. Louis area because of its proximity to major areas of aerospace, industrial and other manufacturing and supply chain services, as well as its location in the central part of the U.S. , which can ease travel time. Prior to the main event, SCC has scheduled its one day SCOR User Group meeting.
This year’s Supply Chain World North America conference begins with a networking reception on the evening of Monday, April 8th. There are two principal keynote speakers on the main agenda that begins on Tuesday. Kenneth A. Shaw, Vice President of Supply Chain Management Global Services and Support at Boeing’s Defense, Space and Security Group will provide the opening keynote while Jason Grebe, Vice President at Intel will provide the keynote on Wednesday. Other scheduled speakers during the two days of the conference include executives from Ingersoll Rand, Johnson & Johnson, Kraft Foods, LG Display, L’Oreal USA, St. Onge and others.
Each Annual Supply Chain World North America conference customarily includes an Industry Analyst or Influencers panel discussion as the culminating closing event, to summarize the messages from the various speakers, to exchange views on compelling supply chain issues of the day, and to take questions from conference attendees. This author is pleased to be once again invited to be a participant of this panel. Last year’s panel, which I moderated, garnered high feedback ratings. This year, Matt Davis, Supply Chain Research Director at Gartner will moderate the panel, allowing me to be more of an active panel participant.
Please consider joining us in St. Louis in April.
Readers can obtain more information and actually register for this upcoming premiere supply chain conference by double-clicking on the Supply Chain World North America ad located in our right-hand Conference panel.
Bob Ferrari, Founder and Executive Editor
Bill Simon, the head of Wal-Mart’s U.S. group announced plans to buy an additional $50 billion in U.S. sourced products over the next ten years. According to a Wal-Mart document, this initiative will include increased buying from existing U.S. based suppliers in categories such as sporting goods, apparel, storage products, games and paper products. It further includes the sourcing of new suppliers in textiles, furniture, pet supplies and outdoor categories. Wal-Mart indicates that it will collaborate with U.S. manufacturers on long-term product forecasts as well as making longer-term product commitments.
In its announcement, the retailer tried to diffuse building consumer belief that the majority of its retail items are sourced external to the U.S., indicating that according to data from its suppliers, about two-thirds of Wal-Mart U.S. procurement spend is related to U.S. sourced product. In the view of Supply Chain Matters, that statement would be more meaningful if it could be verified by an objective third-party audit.
As a U.S. combat veteran, this author was especially pleased with the further announcement of a pledge to hire more than 100,000 veterans during the next five years. Beginning on the Memorial Day holiday, Wal-Mart will offer a job to any honorably discharged veteran in his or her first 12 months off active duty, in both U.S. Wal-Mart and Sam’s Club stores, the home office, or in distribution centers. We however would offer a partial caveat to the implications of that statement, namely that Wal-Mart has been outsourcing distribution services to third-party logistics providers, and has been under fire for labor practices in those centers.
The retailer indicates that it has reached out to First Lady Michelle Obama to build upon this commitment. Missing is a statement that Wal-Mart will also reach out to its logistics and distribution services providers to add their voice in this hiring initiative. To his credit, Simon did call on the broader retail industry to come together to provide greater career opportunities for veterans.
Mr. Simon further committed to help existing Wal-Mart part-time employees to receive more information regarding full-time job openings and to bring more transparency to the retailer’s labor scheduling system so that part-time workers have further options for either more consistent weekly scheduling or to work further hours.
As we all would expect, these announcements have drawn mixed opinion in both business and social media. Our Supply Chain Matters overall perspective was best expressed in an article from Bloomberg Businessweek, Wal-Mart Tries to Improve Its Image. That commentary concludes that the retailer had to take some public actions in the wake of U.S. Department of Justice and SEC investigations alleging corruption by the company’s executives, labor activist groups such as OUR Walmart staging protests for more hours and better pay during the past Black Friday holiday weekend and not to mention that the retailer stands to gain $960 million in tax breaks because of its veterans hiring initiative.
We would add that the overall tone of the written announcement also triggers thoughts of political motivations. Wal-Mart has apparently timed the veterans hiring initiative to begin on Memorial Day, four months from today, no doubt in conjunction with a large public relations campaign. Why not begin the effort immediately? The announcement for expanded U.S. sourcing specifically mentions working with certain state governors which opens speculation as to whether the retailer will extract in-kind measures such as additional state tax breaks.
In any case, we should as a supply chain community, step back and applaud Wal-Mart for making these commitments and trust that they will be fulfilled. U.S. based supply chains will certainly benefit. As U.S. consumers, we need to add our own commitment to buy U.S. sourced and produced goods, when they are made available, and to support Wal-Mart employees in their needs for access to broader opportunities in making a decent wage and access to affordable healthcare for their families.
Beyond the retail industry, more U.S. sourced products imply more manufacturing and supply chain related jobs, which are certainly welcomed.
For our part, Supply Chain Matters will certainly continue to monitor Wal-Mart’s actions in following through with its stated commitments, and with its actions in influencing others in the industry to do the same.