Exotics Recycling Program of One Man’s Waste…Recycling Featured at About.com

Charlotte, NC May 25, 2012. After the rapid growth of the recycling component of its business, First Alliance Logistics Management (www.falm.com) has recently launched One Man’s Waste…Recycling, a new subsidiary that specializes in the recycling of exotics. The goal of One Man’s Waste…Recycling LLC are simple – helping companies reduce or eliminate their solid waste, while saving them money.

While One Man’s Waste…Recycling helps companies divert such common items as packaging residuals, including OCC (old cardboard), shrink wrap and used pallets, it specializes in helping companies recycle exotic or hard-to-recycle materials. Examples of these include materials such as rubber belting, old gloves, or textiles.

“Our company name is based on the old adage, ‘One man’s waste is another man’s treasure,’ explained Glenn Merritt, President of First Alliance Logistics. The company has been quietly building the recycling component of its business for the past few years and because of its success, recently launched it as a separate entity – One Man’s Waste…Recycling.

One Man’s Waste…Recycling was recently featured at About.com. The article provides an overview of how the company helps companies review their waste stream baseline and develop a customized management plan in support of such initiatives as Zero Waste or Zero Landfill. It works to identify markets for waste materials, develop a site recycling plan, and train employees to ensure success.

For more information on One Man’s Waste Recycling LLC, contact them at 1-888-900-4840 or visit them at www.falm.com.

SCDigest Editorial Staff

Lurking Concerns Supply Chains have become too Lean; Can Risk Potential be Quantified?

In a recent commentary, IDC Manufacturing Insights analyst Simon Ellis asked a simple question – is it really possible to determine the optimum level of redundancy or “slack” in a supply chain?

There have been many articles in recent years noting that the sometimes extreme focus on Lean has left many supply chains “brittle,” subject to big hits in the face of a disruption. Those views came to the forefront again recently after the earthquake/tsunami in Japan, which caused supply chain disruptions in a number of industry sectors.

Apple, for example, saw wait times for customers trying to order an iPad 2 rise form 3-5 days to 4-5 weeks due to component supply problems from Japanese vendors.

In his research note, Ellis cites recent research coming out of the University of Toledo and McGill University in Canada that showed that resource efficiency, with a level of redundancy built in, drives higher financial returns than a more hard core Lean strategy — based on the financial performance of all publicly traded U.S. firms from 1991 to 2006. (We will look at this specific research in more detail soon.)

“While this finding might initially be viewed as somewhat self-evident, the dilemma goes right to the heart of supply chain risk management. Do I build in redundancy, “slack” as McGill called it, with its accompanying short-term costs, or does the inherent chase for cost efficiency cause me to strive for the highest possible utilization levels and “hope” that nothing major goes wrong?” Ellis ponders. “It is, essentially, the same debate that companies have been having more broadly about supply chain risk and the appropriate levels of mitigation.”

Research out of Georgia Tech has shown the powerful negative impact a supply chain disruption can have on a company’s share price – and impact that usually lasts well after the original disruption has been solved.

As shown in the chart below from that research, on the day a company announced a supply chain disruption, its stock price falls about 7% versus peer companies by industry, size, etc.

So, in the end, how much supply chain redundancy is enough?

“The question is, of course, unanswerable and reflective of one of my favorite online contractions: YMMV (your mileage may vary),” says Ellis, adding that rhe right level of redundancy in the supply chain will depend upon the unique nature of your business and will be a function of a few key drivers:

● The level of unpredictability in your supply
● The volatility of your demand
● To what degree do you currently “sweat” your assets
● The planning horizon (short versus longer term)

“Part of the real challenge is I don’t think we have generated a lot of insight in the industry yet about how to really quantify the cost of a potential supply chain disruption,” said SCDigest Dan Gilmore. “We can obviously do it after the fact, but in the planning process it is difficult in many cases, making it challenging to weigh the potential benefits of added redundancy and other mitigation strategies.”

June 2, 2011 by Rick LeBlanc  

When committing to purchasing a new piece of materials handling equipment such as a pallet truck, one of the most problematic decisions to arrive at can be whether to opt for a new truck or try and find a second hand model that fits the bill, according to Midlands Pallet Trucks.

There are pros and cons to both routes and as pallet trucks play such a vital role in ensuring the smooth running of a busy warehouse or factory space, understanding the ramifications of each potential solution is often time well spent.

For any owner or manager responsible for budgeting, sales and bottom line figures, cost undoubtedly be a primary consideration. For that reason, second hand pallet trucks can seem like an attractive prospect as they will usually be available for less than the original cost of the model. The downside to pallet trucks sourced in this way is that they may be a more expensive option in the long run if the manufacturer warranty has run out due to the age of the equipment.

It is possible to find new budget pallet trucks without having to resort to second hand pieces by contacting a specialist supplier such as Midland Pallet Trucks. With a choice of brands and sizes, the range has been developed to cater for most technical requirements and budgets.

In any piece of industrial equipment, the correct care and maintenance procedures must be rigorously followed and carried out at the manufacturer recommended intervals. When purchasing used pallet trucks, unless from a source known and trusted, it can be difficult to know if the appropriate time and attention has been spent on the equipment upkeep.

For any mechanical piece of equipment, or factory kit used by employees, health and safety is of the utmost importance. As pallet trucks, be they small hand pallet trucks or larger high lift pallet trucks, are used to lift heavy loads precisely as a safer and more efficient option for employees than manual movement of goods, complete trust that the equipment has been well maintained, serviced and checked is essential.

This level of confidence is not always possible with a second hand truck as it is impossible to know how the device has been treated and used previously. A new pallet truck though is a totally known entity, purchased from the supplier in perfect working order and with a clean sheet in terms of maintenance. This allows the owner to be fully appraised of the history of the truck, guaranteeing all safety checks, routine maintenance and necessary replacements of parts are carried out in a timely manner by qualified professionals.

While a second hand pallet truck may seem like an attractive prospect at first glance, it is also important to question whether the equipment will have the most up to date technology and safety features as can be found on newer models. Any piece of equipment over a few years old will likely be missing at least one or two of the new advancements made in pallet truck design and manufacture.

Even simple considerations such as improved material strength or more modern scales on weighing scale pallet trucks can make a huge difference to productivity and usability. Older trucks purchased prior to some new technologies can be a false economy as they will need to be replaced much sooner than a newer model in order for the workplace to continue to run efficiently.

To find out more about pallet trucks and pump trucks, for help on choosing the correct equipment for your needs and to order online, visit http://www.midlandpallettrucks.com

From Logistics Management

Transportation and logistics professionals can’t seem to get a break. Just when we thought that the economy was finally experiencing a slow albeit unsteady upturn, fuel prices began creeping higher, forcing freight rates back on the front burner.

According to the U.S. Freight Rate Index—an indicator tracking the average cost per mile of land transport in the U.S.—the double-digit increase in the price of fuel has pushed the average cost per mile from $2.22 in 2010 to $2.39 in 2011, up 7.7 percent. That means a manufacturer with an annual transportation operating expense of $100 million in 2010 can expect to add $7.7 million more for 2011.

And there’s more bad news: Many are predicting the cost per mile to get even worse with the global demand for oil increasing and the availability of truck drivers decreasing. To help us sort out how these factors are affecting America’s distribution networks, we turn to four network strategy experts from three leading supply chain and logistics consulting firms.

According to Marc Wulfraat, president of Montreal-based MWPVL International, the key question many companies are now evaluating is: At what point does it make economic sense to add more distribution facilities to reduce inbound and outbound miles?

Paul Evanko, senior vice president of York, Pa-based St. Onge Company, agrees with Wulfraat’s assessment. “Many are making the move towards smaller distribution centers (DCs) located close to major markets, to ports, and to inland-intermodal logistics centers.”

But it isn’t only the price of fuel that has shippers rethinking their distribution networks. The implementation of new business strategies has also been another major driver. “Almost every company that we’ve helped with logistics strategy in the last two years is reengineering their logistics network to either enhance customer service or to help launch a new customer channel,” says Todd Soller, retail strategist for global firm, Kurt Salmon.

Mike Jones, president of St. Onge, is also seeing the same changing business strategy scenario play out in many of the studies that his firm is doing. “Recent network studies have not only been initiated by ongoing mergers or acquisitions, but also by corporate edicts looking for cross-divisional synergistic opportunities,” says Jones. “With the latter, while the individual businesses may operate with great autonomy, the corporate parent still wants them to look at opportunities to share distribution and supply chain resources.”

Whether driven by reducing costs or by new business strategies, rethinking your distribution network has now become more relevant than ever. With typical cost savings of 15 percent and more, these studies also result in allowing companies to service their customers more quickly. “This can make a huge difference with how a company is perceived by its customer,” notes Soller.

“The ability to get product to market in one to two days when the competition can only deliver in three to five days is considered to be a serious weapon,” says Wulfraat. “It may be worth it to spend more to buy more market share.”

Which begs the question: Is your network up to par? In the next few pages, our experts share six essential tips for network modeling success. With a combined 83 years of experience and over 150 network studies under their belts, you might want to heed their advice as you optimize your network.

Tip 1: Involve high-level management. Traditionally, in many DC projects, business owners and stakeholders don’t get involved until the very end when they give their approval on the overall output. But in a network strategy study, our experts agree that engaging high-level management early on is a must.

“Don’t have them show up on the 15th week of a 16-week study and start throwing curve balls and challenging the assumptions,” explains Jones. “Get them involved from the beginning to establish your assumption sets.”

Soller also recommends involving managers from sourcing, product development, merchandising, and sales to get all of their perspectives for inclusion in the overall solution design. “These managers bring perspectives to the table that make the overall result much more effective; it also ensures buy-in and belief that the new network is a good decision for the business.”

Soller cites, for example, how a sales manager can bring to light specific needs of individual customers, allowing you to address them within the network, rather than creating a one-size-fits-all solution for all customers.

Tip 2: Ask the right questions. A good distribution network redesign encompasses a number of key areas of the business that all need to be considered and questioned. Wulfraat lists some of critical questions that need to be answered: What are the storage and throughput capacity constraints associated within my existing distribution network? What perceived service level requirements are required for major markets being served in order to be competitive? If the delivery lead-time is changed then what is the anticipated impact on sales revenues for a given market? What are the logistics operating expenses, one-time expenses, inventory assets and capital investments required for the baseline scenario? How do these compare to alternative scenarios?

Evanko then points to a few questions concerning different forms of sourcing: Should you be sourcing your products locally, importing, or returning manufacturing to the U.S. or to countries closer—also known as near-shoring?

Our experts agree that despite the buzz, near-shoring is not imminent. In fact, they expect most companies to continue to outsource the manufacturing of low-value items such as toys and clothes to China. “As labor becomes more expensive in China, then manufacturing isn’t moving back here. It will move further south in Asia into Indonesia, Malaysia, Vietnam, and India,” says Evanko. “Those countries still have a labor cost advantage over China.”

Tip 3: Use an effective network modeling packaged tool. Up to a certain scale, modeling your network in house using home-grown spreadsheets and databases can get cumbersome—if not impossible. Choose one of many commercially available network modeling tools.

“These tools can help a company develop a very robust initial solution and build the capability within your organization to continually monitor what’s happening within the logistics network,” explains Soller.

Wulfraat cautions, however, against solely depending on these tools to optimize the network. “A software tool will help to figure out a small but important subset of the overall information that is needed for a study,” he says. “But truthfully, the CEO does not care if you used a hammer or a drill for the job. The CEO wants to understand the financials, customer service impacts, and risk sensitivities.”

What’s the consensus? In any good network model redesign, you need both. “It’s important to involve the business owners within the organization in conjunction with using the analytics available in the tools,” concludes Soller. “The business owners help you ask the right questions and the tools assist you in developing more sophisticated answers to those questions.”

Tip 4: Perform an inventory optimization study. According to St. Onge’s Evanko, one of the most overlooked areas in many network designs is inventory. While adding more DCs may reduce transportation costs, it also requires you to carry more inventory—and many times this inventory is far from optimal. “But it can be made optimal by coordinating an inventory optimization study with the network design study,” says Evanko.

After the modeling tool identifies the number of facilities needed and roughly where they should be located, Evanko suggests using algorithms to determine the right amount of inventory to achieve a specific level of service that can be customized for each of the facilities.

Jones points out that how you deploy inventory becomes more and more important the more facilities you have: What products are you going to stock? Where are you going to stock them? “We’re getting customers wanting us to supplement the network study to answer more tactical level questions,” says Jones. “It’s not just how many facilities and where they’re located, but how am I going to deploy the inventory, route my trucks, and in some cases look at the design of the facilities themselves.”

 Tip 5: Make sure there’s labor. Certain areas have become hotbeds for distribution primarily because of their proximity to the U.S. population.

Evanko points out, however, that these popular areas that companies gravitate toward means that there could be fierce competition for the labor force. Turnover rates become high because workers would rather work down the street for another DC that’s offering 25 cents more an hour.

He recommends analyzing the local labor market of the candidate locations to determine not only if there’s an adequate labor supply, but also to determine if socio-demographic characteristics are amenable to jobs in light manufacturing and distribution.

Tip 6: Take your time. Depending on the complexity of the network, the availability of the data, and the experience of the project team, a typical network study can take up to six months.

“I’m amazed at how many companies are making big, multi-million dollar decisions, but for some reason don’t spend the time to do it right,” says Jones. “They have to do it in five to six weeks. Most of these studies rarely take less than three or four months to do right.”

Last year, a record-breaking 9,500 respondents — representing a diverse cross-section of readers from office managers to executives, at mom-and-pop retailers to global corporations — cast their votes and shared their accolades. Now, here’s your chance to be heard.

Share this link with your colleagues and rally them behind your provider: www.inboundlogistics.com/top10

Pallet companies are bracing to pay over $31 per box on their next nail delivery in May, according to a recent conversation at LinkedIn. While some industry veterans have seen days at $40 or more per box in the past, for newer industry members the move upward is concerning, with one manufacturer reporting having already weathered 30-38% increases since January, while bracing for additional increases anticipated over the next few months. Korean steel manufacturer Pohang Steel Company (Posco) recently raised the price of wire rod to US$1080 per metric ton, which translates into $24.50 per 50 pounds of wire, according to Ian Carter of Crane Point Industrial LLC. Ian noted that rod pricing from Posco can push upward when auto production increases, and as a result not necessarily follow world market conditions.

Another item of concern on the horizon, Ian cautioned, is an anti dumping duty (ADD) petition filed against imports from UAE. The Department of Commerce announced the launch of the investigation on April 20, with a preliminary injury determination anticipated for release around May 16. If the ITC determines that there is a reasonable indication that steel nail imports from the UAE are materially injuring, or threatening material injury to, the domestic industry, the investigation will continue, and Commerce will be scheduled to make its preliminary determination in September 2011. If it is successful, Ian noted, there will be additional upward pressure on the price.

China is also talking about export taxes for wire rod. ―An export tax or tax rebate is put in place to either discourage or encourage the export of an item,‖ Ian explained. ―For years the Chinese Government offered an export tax refund to stimulate sales and expansion of the steel industry. Now as the finished goods manufacturers push forward, the export tax on wire rod helps keep world steel prices above the internal prices.‖

―Pallet core shortage, metal (nails), coupled with fuel rates rising will make it an interesting year….,‖ summarized Manuel Padilla of Oakland Pallet Co.

Consumers will drive the need for greater supply chain collaboration over the next decade, according to a study by the Consumer Goods Forum and Capgemini titled “Future Value Chain 2020: Building Strategies for the New Decade.”

The report predicts that, over the next decade, supplier production will be brought into line with predicted and actual demands from consumers, rather than based on the forecasting models used today. Future products will be shipped to collaborative warehouses in which multiple manufacturers store their products. Competing firms will then collaborate to collect and deliver the goods. They will be driven by demand for carbon-efficient distribution and limited supply chain capacity.

“The trends highlighted in the report underline the need for even more collaboration among all parties in the value chain as we move through these challenging times. We should treat this as an opportunity to urgently act through putting in practice new plans and strategies that better suit the changing needs of our consumers,” said Nigel Bagley, Director for Industry Affairs, Unilever, and Co-Chairman of 2020 Future Value Chain.

The study identified 10 trends impacting this change over the next ten years

1. Increased urbanization and the rise of megacities will impact the size of stores, logistics and the supply chain, and distribution infrastructures.
2. An aging population will have economic and political consequences related to the amount of money spent on necessities like food and drink, and the type of delivery services, store formats and locations
offered to older consumers.
3. The increasing spread of wealth will lead to a growing middle class in developing regions, impacting consumption and availability of food items and providing a source of growth for manufacturers and retailers.
4. The increased impact of consumer technology adoption will be reflected not only in consumers’
own behavior but also in their ability to influence the buying behavior of other consumers as the use of social and digital media continues to spread.
5. An increase in consumer service demands will define new service models, offered via the Internet,
that move beyond selling individual products and will bring different types of “solutions” to consumers and shoppers.
6. The increased importance of health and well being will have significant ramifications as sales of healthful products and services are expected to nearly quadruple in the coming five years.
7. Growing consumer concern about sustainability will lead consumers to look to governments and companies to play a major role in combating climate change.
8. Shifting economic power to countries like China and India will cause trade areas to evolve and a new generation of globally competitive companies from these developing markets to emerge.
9. Scarcity of Natural Resources like energy, water and food will become a growing issue as demand is projected to outstrip easily available supplies over the next decade, resulting in increasing production costs.
10. Increased regulatory pressure will be seen particularly for hot-button areas like the environment, sustainability and food safety.
11. Rapid adoption of supply chain technology capabilities will enable a more synchronized value chain with greater visibility and traceability.
12. The impact of next-generation information technologies like cloud computing will lead to a new way to deal, jointly, with business and technology in the consumer goods industry.

The report draws on insights from 200 executives from some of the world’s leading retailers, consumer goods manufacturers, academics, third party providers and industry organizations. The report examines the changing trends that will have the greatest impact on the industry over the next decade, outlines a number of strategic objectives being put in place as consumer product manufacturers and retailers build strategies for the next 10 years, and provides examples of tactics that can help the industry achieve these objectives.