September 28, 2023

Chocolatiers: Leveraging Tech, Mitigating Supply Chain Disturbances

Businesses of all types are realizing they need leaders with supply chain experience. Additionally, those leaders need to be forward-thinking, tech innovators for the purpose of mitigating supply chain disturbances and improving efficiency to meet current and future customer demand.

A telltale sign of this noted need is Hershey’s latest executive appointment of its first chief technology officer (CTO), former vice president of supply chain optimization technologies at Amazon - Deepak Bhatia. In a rapidly evolving technology landscape, food and beverage companies like Hershey need someone who can guide them through the changes. Having a dedicated person overseeing technological issues is crucial for their business to adjust and adapt.

From the confectionery and salty snacks giant’s perspective, its supply chain is a growth enabler and an asset. This is the correct point of view, considering if there’s a supply chain bottleneck or other disturbance, that part of the company could become a liability, greatly impacting sales.

Another area of concern, warranting the investment of a CTO is the fact that more companies are incorporating AI into creating, shipping, storing and gauging supply and demand for their products. 

According to Supply Chain Dive, a Hershey executive said, “We enable growth by the availability of our product, consistency and the delivery of high quality, and then also making sure that we bring capabilities that fit the unique needs of our customers.”

With 24 manufacturing plants in Hershey’s supply chain and 70% of the company’s manufacturing capacity located in the U.S., there is plenty of room for disturbances to impact the bottom line. Having a point-person to utilize innovative tech to mitigate risks and prepare for future operational challenges and best practices is an incentive for the company - especially as Hershey prepares for a multiyear $1B push to boost its supply chain capacity by balancing existing capacity with future flexibility.

Links:

• https://www.manufacturingdive.com/news/hershey-CTO-amazon-chief-technology-officer/694157/

• https://www.supplychaindive.com/news/inside-hersheys-1b-push-to-boost-its-supply-chain-capacity/691799/

Help is on the Way: Supply Chains Continue Investing in Automation

To remain competitive and improve customer satisfaction, supply chain management repeatedly places automation as a top priority. This essential tool continues to revolutionize day-to-day tasks not only by making them easier and more reliable, but also by allowing real-time updates, tracking and valuable data insights.

Automatized solutions are expected to grow consistently in the next few years, as repeated disruptions continue to trouble the industry. Issues such as strikes, understaffing and the exponential growth of e-commerce are significant drivers for this trend.

The strategic investment and integration of tools will help supply chain management leaders increase speed of operations while reducing costs, labor expenses and errors. Innovative tools such as robotics, AI, data analytics and automated systems will provide valuable information on trends, inventory analysis and shortcuts that will increase productivity.

However, a few considerations must be taken into account. Understanding the operation as well as being clear on the challenges are important starting points. Some immediate requirements may include necessary structural adaptations, like upgrading to high speed internet as well as looking into standardizing management systems.

Flexible forms of automation are available for quick deployment - according to client need. Software, robotics and equipment have come together to transform the nature of the industry, with some forms of automation complementing human tasks through machine learning, while others automate the tasks.

Automated operations include:

• Streamlined operations - sorting, organizing inventory, picking orders, labeling packages, etc.

• Scanning and moving goods

• Shelf inspection - detect any immediate security or maintenance issues

• Better supply chain - risk reduction

• Tracking of goods in real time generating updated reports

• Smarter inventory management

• Accurate demand forecasting 

Decision makers are expected to continue deploying automated solutions in the coming years in order to maintain competitiveness and viability. This shift will not only positively influence products and services, but also impact the capability of reducing burdens on human resources, improving productivity and employee experience and driving worker retention.

Links:

• https://www.supplychainquarterly.com/articles/8650-orchestrating-the-new-heterogeneous-robot-fleet?oly_enc_id=3469B1040934H8X

• https://www.retaildive.com/spons/understanding-the-roi-of-warehouse-management-to-supercharge-your-peak-seas/693495/

• https://www.retaildive.com/spons/the-daunting-duo-the-holiday-season-meets-supply-chain-disruptions/693610/

UAW Strike Sends Shockwaves: Trucking Industry and Suppliers Brace for Impact

A targeted strike by the United Auto Workers (UAW) against the Detroit Three automakers - namely General Motors (GM), Ford, and Stellantis - is sending shockwaves through the logistics and supply chain sectors. The strike's ripple effects are poised to significantly impact the trucking industry and potentially drive smaller tier 2 and 3 suppliers into bankruptcy.

The U.S. auto industry plays a vital role in the nation's freight economy, with over $950B worth of cars, trucks, and parts being transported by trucks. The strike's disruption has already led to a notable increase in rescheduled over-the-road auto shipments from Mexico to the United States, as automakers prepare for potential supply chain disruptions.

Tom Gregorchik, VP of industry strategy at FourKites, revealed that approximately 8% of all over-the-road auto shipments from Mexico to the U.S. have been rescheduled, compared to the usual 5%. This has also resulted in a nearly doubled transit time for these shipments. As negotiations continue, it is expected that volumes from Mexico will continue to decrease, impacting the trucking industry and suppliers.

The U.S. Chamber of Commerce reports that around 5,600 U.S. suppliers and over 690,000 supplier jobs are closely tied to the Detroit Three. These suppliers account for a substantial portion of their business, and the smaller tier 2 and 3 suppliers, already grappling with rising costs and reduced profits, may face bankruptcy if the strike persists.

The impact extends beyond suppliers to dealership supply chains nationwide. Auto dealers, such as Tom Maoli, are already dealing with the aftermath of the chip shortage and previous supply chain disruptions. Prolonged strike-induced shortages in auto parts could disrupt the consumer transportation system, impacting people's ability to get to work.

The UAW strike against the Detroit Three automakers is causing disruptions in the automotive supply chain, affecting the trucking industry and potentially pushing smaller suppliers into bankruptcy. The impact extends to dealership supply chains and could have wide-reaching consequences for the overall economy if the strike continues.

Links:

• https://www.freightwaves.com/news/experts-warn-of-dire-supply-chain-effects-from-prolonged-uaw-strike

• https://www.freep.com/story/money/cars/2023/09/26/uaw-strike-gm-toyota-contract-talks-negotiations-detroit/70969011007/

• https://www.logisticsmgmt.com/article/uaw_big_three_strike_is_replete_with_supply_chain_implications

FMCSA Retracts 68 MPH Speed for Heavy Duty Trucks

This Monday, the Federal Motor Carrier Safety Administration (FMCSA) proposed a 68 mph speed limit for all heavy-duty trucks, before retracting the proposal due to the deliberation still being under consideration.  The verbiage was acknowledged by media and trade groups in a published section of the annual Department of Transportation report regarding agency priorities.  According to FMCSA spokesperson Kala Wright, the noted 68 mph maximum speed limit was not an official number.  She cited that the FMCSA needed to review the matter further before proposing the speed in a supplemental notice.

Despite the abrupt change, the 68 mph speed was one of the options being considered as a result of being included in the petitions for rulemaking.  It was also discussed in the 2016 notice of proposed rulemaking. 

The FMCSA will propose a top speed of 68 mph, the decision once made will need to be reviewed by the White House Office of Management and Budget (OMB) before it can be published and made public. 

Regardless of what the final decision will be, the official rule may not come into effect until 2025.  The FMCSA expects to release its latest proposal by December 29 of this year, but a previous speed limiter proposal that was under review at OMB took 15 months to be approved.  Either way, once the FMCSA submits its proposal, a top speed for heavy-duty trucks is expected to be present and once approved by the OMB, made official in the Federal Register. 

Links:

• 68 mph? FMCSA backtracks after ‘inaccurate’ reveal of speed-limiter intentions

• FMCSA pulls back top speed from speed limiter proposal

• FMCSA announced a 68 mph maximum in speed limiter mandate proposal – Then took it back

• Commercial Motor Vehicle Speed Limiters set at 68 MPH

• 68 mph max? FMCSA floats, then rescinds long-awaited truck speed limit