Here we see what the competition can do in terms of shipping to Europe. A good percentage of the container rail traffic through Chicago and Will county is destined for Europe. currently a lot goes to New York and other East Coast ports. Going from Cleveland through the Great Lakes and the Gulf of St. Lawrence is a novelty.
Cleveland port readies for Europe box service | News | American Shipper.
But looking carefully at the article we see that the ocean carrier partnering with the Port of Cleveland is really using Ro-ro, and heavy lift ships, and some other specialized types of ship. I guess of they get some boxes to ship they could charter a ship or two. but it looks like more of a heavy machinery service. These goods won’t fit in a container, and need to be specially handled. They are oversize.
Of course if we had a Port in Chicago we could do the same thing here. It’s been defunct for quite a few years now.
We have heard a lot about the aging bridges of Illinois, and in the US as a whole. Does it matter to freight and logistics? This article gives some ideas.
Supply Chain News: What Happens to Logistics if Aging US Bridges are Deemed Impaired?
Here in Will County we have heard a lot. The I-80 bridge over the Des Plaines River needs widening. Reports surrounding the Illiana Motor Way indicated that if it were not built, many of the smaller bridges in the area will be overtaxed, on the arterial roads. And they are old— not enough has been spent on modernization.
Here in Joliet, there is a big need for a bridge at Houboldt road across the Des Plaines River. trucks entering and leaving the large Intermodal yards must get up to I-80, and they spend a lot of time and add to congestion going around as they have to do now. So bridges are important, and we need to think about how to get them improved. Otherwise they could be major bottlenecks and hazards for material movement.
One of the hot topics in the Chicago area now is how to leverage our ‘logistics cluster’, the galaxy of firms, infrastructure, and resources available in the area and working in logistics and supply chain fields. Our area is the third largest intermodal ‘port’ in the nation.
How to Harness the Economic Power of Logistics Clusters | Supply Chain @ MIT.
It’s especially notable in Will County, USF’s home area, where we have several large intermodal facilities and many warehouse and distribution operations, as well as excellent road and rail connections. And don’t forget water– the Des Plaines River is navigable, and barges use it quite often.
People are grappling with how to attract more business and keep what we have now. Naturally there are conflicting views of what to do, or even whether it will last. but this area has been a transportation hub for centuries, and that’s not likely to move away. We’re so close to millions of consumers and thousands of manufacturers that both supplies and consumer products will be served. Our area has to maintain its competitive edge, though. Just being big now doesn’t mean that supply chain operators can’t look for a faster or more cost effective route. So we need to use our power effectively to keep moving forward.
I think that requires a collaboration on a scale not seen before in the region. Politicians, policy makers, industry, and education need to develop common goals and objectives– no one group can do it alone. In the meetings I’ve attended, industry is ready and education is ready. It’s some politicians that are not seeing the picture, whereas others do. We are now a Mega-region, and need to start behaving like it for all our benefits!
At the Intermodal Institute we love our sports, like many of you. CH Robinson’s blog Transportfolio offers this extended football metaphor for supply chain and logistics planning.
Transportfolio — Guest Post: The X’s and O’s of Intermodal in Supply Chain Management.
You may be a fan of this kind of metaphor. We have to beware of reading too much similarity into the two situations. As a former college football player and coach, I learned that football games are often won by desire as much as by execution. The team that wants to win the most can frequently hand it to a team that has better talent, better plays, and better execution. For an example, watch the movie “Harvard beats Yale 29-29″, which is available through Netflix. Here is the IMDB listing. Tommy Lee Jones, (Al Gore’s roommate), was on the Harvard team, and takes part in the movie. It’s a piece of Americana.
I think SCM is more about careful planning, foresight, and imagining what can go wrong and acting to prevent it, rather than a simple desire to do better. In addition, you can learn by ‘watching the film’ — continuous improvement — if you have systems and dashboards that let you see exceptions, and take early action — ‘audibles’ — to make sure problems don’t happen.
Whoops, I’m falling into the metaphor trap. Ordinary players, by careful attention, can accomplish a lot in SCM if they have the tools and if the leadership has the desire to do it as well as possible. In football the coach always has the desire; it’s the players that need to find it.
Omni-channel is the latest hot topic. It means to supply more than one marketing channel, maybe all of your channels. E-commerce is the one giving companies the motivation to look at the problem. Many companies believe that consumers are using more internet ordering and perhaps less visiting stores.
bcg.perspectives – The Omnichannel Opportunity for Retailers.
The article makes an interesting point. e-influence is a word (well, maybe not, but it is almost a real word) which describes the phenomenon in which consumers do considerable research online before buying. they may buy at a store, or online; but there is an internet component in their decision making process. I use the word internet here to include mobile shopping and reviewing. Some scholars make a distinction, but I know that I use either device to do research. I may just look up where the store is before deciding how to buy, and what. but still, the internet/cell network plays a role.
So what should we invest in to improve customer satisfaction with every part of the buying experience? Quite a few publications have indicated information systems, particularly around ordering, are important areas of investment. But how should the fixed or infrastructure components of the distribution system be configured. should we have more warehouses closer to the customer, as Amazon seems to be doing? should we try to fill all kinds of orders from the same distribution center? Should we specialize, and have high performance centers for e-commerce deliveries, and others optimized for inventory and delivery to stores?
And how is our choice of transportation affected? Will we use more or less rail, more or less trucking, more or less package delivery? How will transportation costs be affected? They are now the fastest increasing component of fulfillment cost, and it’s clearly a concern for a lot of firms. And will using 3PLs help or hurt us in the new multi-channel world?
It’s a knotty problem. My logistics class members this fall are writing their papers on a case study of an individual type of product. They’ll select three different firms in a particular business, such as running equipment, and study these firms’ approaches in distributing to their different channels. It should be interesting to read what they find!
This blogger cites several studies that indicate the US has achieved a competitively attractive position in manufacturing compared to other countries. If jobs in manufacturing come back, what will they be like?
- First, they are likely to come to the Chicagoland and adjacent areas. We have extensive experience, workforce, and infrastructure that would be valuable.
U.S. Manufacturing In Position To Regain Millions Of Jobs By 2020.
- Second, they won’t be your father’s manufacturing jobs. They will be high-tech jobs using the latest equipment and technology. They will require computer skills and systems knowledge. And they will require strong knowledge of how business processes work and interlock to produce added value for customers.
- These jobs will be for team players. You will spend more time working with teammates figuring out how to improve the quality or speed of processes. You will spend more time working to assure the computer generated data from RFID and GPS systems gives the exact picture. You will be trained to handle faults and exceptions with expertise to prevent large failures. These computers will make mistakes faster and faster if we let them.
- Last, there will be more job growth in the areas that support an expanding manufacturing production, than there will be in the manufacturing sector itself. We’ll need folks who keep the machines running, who redesign them for more rapid product changes, who make sure we understand the customer’s need, who can assure that the information being exchanged by customers, suppliers, and manufacturers is correct and relevant. We will need people who know how to move the goods to, inside, and from the plants– the logistics experts. And we will need people who can make good decisions based on the masses of data we will be able to collect in these new manufacturing systems– systems analysts and operations analysts.
It won’t be possible to use the existing sources of employment figures by occupation to measure the impact of the growth. Economists and demographers need new measures. That’s because modern manufacturing is becoming so productive that the direct labor in the products themselves is a small part of the product cost. But the costs of supporting the system will grow!
Bruce Hartman, USF Intermodal Transportation Institute
It’s a really interesting question, especially with so many supply chains running through this area. If we in Will County and Chicago knew what a strategy looked like for companies, we could figure out how to make ourselves more valuable to groups of supply chains that might need our capabilities. The article is from Supply Chain Digest’s Dan Gilmore.
Just What is a Supply Chain Strategy?.
We should go back to strategy essentials. A strategy is really a theory of how the chain should work. And what’s a theory? There are some premises, and some consequences that we feel follow from the premises. In research we often represent it as boxes (hypotheses) connected by arrows (causality, or if-then consequences. A theory is a chain of consequences. Remember we can only prove a theory false by observations; we cannot prove a theory true. Same as physics– is the universe expanding? We can’t prove it, because we cannot observe the whole universe. All we can do is gather evidence that might prove it false.
For instance, Amazon might have a strategy theory like this:
Local Warehouses –> Next day delivery –> Meet Customer Need for Quick Access –> More sales of retail Items –> Compete with Bricks and Mortar Stores –> More Profit from routine use items
The last one might be a corporate strategy.
OK, now that we have the theory, we have to design the scorecard that tells us whether (1) the theory is true, and (2) we are actually executing steps in the theory, and (3) whether the measures measure what we think they are measuring.
Such a set of measures is known as a Balanced Scorecard.
So we measure things that tell us
- whether we are really succeeding in next day delivery (% of orders from local warehouses delivered next day)
- whether we are opening enough local warehouses (no of local warehouses operational year over year)
- whether customers who are served at the local warehouses are just as happy as if they bought at a retail outlet (survey % who would order again from Amazon local rather than going to a retail store for this item).
- Whether the customer service survey really measures what we think it does. (maybe test the questions on focus groups).
That way we can continuously refine our theory by observing the measures. When we find the measures show some part of the chain is false, we make changes in the hypotheses, or by really executing the processes that make for success in the steps.