The Lifesaving Potential of Drones

Screen Shot 2019-11-18 at 10.24.23 am.png

By ASCM CEO Abe Eshkenazi, CSCP, CPA, CAE

Reading current news headlines, it’s clear that the global supply chain landscape is constantly being reshaped by innovation. This past week, it was drones garnering much of the media attention.

Wing, Alphabet’s X lab drone, was reported to have completed 80,000 tests since 2014, leading to new collaborations with Walgreens and FedEx for food and beverage delivery. In addition, Alphabet is working with Southwest Virginia retailer Sugar Magnolia to distribute a range of sweet and savory treats, gifts, stationery, and paper goods.

In the coming months, Amazon will test its much-hyped Prime Air service in a to-be-determined location. The company says the drones will depart directly from fulfillment centers with Amazon Prime packages on board.

Uber’s drones will land right on top of Uber Eats driver vehicles, and a thermal feature will be contained within the drones to keep food items cold or hot. Uber has completed tests at a McDonald’s neighboring San Diego State University, and nearby residents soon will be able to order drone-delivered meals.

Going beyond convenience to actually protecting lives, entomologists Bart Knols of Radboud University, Richard Mukabana from the University of Nairobi and social entrepreneur Guido Welter have come up with the idea to use drones to spray a control agent in Tanzanian rice paddies, a natural mosquito breeding habitat. Malaria infects more than 10 million people every year in Tanzania, killing 80,000.

Mailchimp Header

Across the ocean, UPS and CVS announced they have completed the first U.S. deliveries of prescription medicines — one directly to a consumer’s home; the other to a retirement community. The drones launched from a CVS store in Cary, North Carolina, then hovered about 20 feet over the properties before slowly lowering the medicines to the ground.

CVS President Kevin Hourican says this demonstrates what’s possible for customers who can’t easily get to stores: “CVS is exploring many types of delivery options for urban, suburban and rural markets,” he adds. “We see big potential in drone delivery in rural communities.”

According to McKinsey & Company, when it comes to rural areas, drones are surprisingly cost-competitive, at just 10% more than the price of typical delivery models. The firm predicts that rural drone deliveries could comprise 13% of anything-to-consumer deliveries by 2025.

Supply chain research for a better world

ASCM is committed to supporting academic institutions that are researching how emerging trends can advance supply chains and ultimately create a better world. One of our recently awarded grants enables professors at the University of Missouri – St. Louis to explore drone use in less developed countries, where lack of vaccines contributes to high death rates. The professors also are investigating how drones can successfully deliver vaccines to remote communities while overcoming challenges related to maintaining the cold chain during travel.

The ASCM Research Subcommittee is currently seeking grant proposals focused on emerging trends, processes, techniques and technologies that will have an impact on supply chains and value networks of the future. The deadline is January 31. We invite you to download the guidelines and submit your proposal here.

Generate Worth from Waste

Extract from blog by ASCM CEO Abe Eshkenazi, CSCP, CPA, CAE

Here in ASCM’s hometown of Chicago, about 55 million pounds of food is wasted each month, despite the fact that one in six Chicagoans suffers from food insecurity. Alan Reed, executive director of nonprofit Chicagoland Food & Beverage, says this regrettable fact is what compels his organisation to work with both industry and food banks “in order to find new and innovative ways to address these issues.”

Reed’s comments remind me of a recent Wall Street Journal article, which highlights why some food and beverage industry giants are starting to see their trash cans in a different way — as an exciting new value stream. Starbucks is reprocessing the outer layer of its coffee beans into a natural sweetener. Mondelez is making snacks from parts of the cacao plant unused during chocolate production. And Kellogg Co. is collaborating with a craft brewer to ferment discolored cereal that would normally become animal feed. The first runs of Cast Off Pale Ale (made from Rice Krispies) and Sling It Out Stout (made from Coco Pops) sold out in hours.

Some clothing manufacturers are even turning food waste into leather alternatives. “This is not just a solution to the problem of waste,” Carmen Hijosa, founder of Ananas Anam, told The Journal. “It also brings a new income stream.” Her a company works with pineapple farmers in the Philippines, who traditionally would have burned or left leaves to rot after harvesting. The resulting leather alternative, Piñatex, is now used by Hugo Boss to make shoes; for a sustainable-clothing line at H&M; and at Hilton Worldwide, which covers footstools with the material for what the company calls vegan hotel rooms.

Learn from the best

Five inspiring presentations are currently being shared on “Foodbytes,” the blog of food and agriculture financial services provider Rabobank. These food technology innovators discuss what they believe to be the most pressing industry challenges, as well as some exciting potential solutions. One of these involves packaging that can sense when a company’s distribution, handling and warehousing processes are increasing the risk of food spoilage. By pinpointing the problem area, this tool can bring about smarter supply chains.

 

Machine learning and artificial intelligence for retail supply chains

How retailers can incorporate machine learning and artificial intelligence into their supply chain: A snapshot of the recent ASCI Networking Breakfast panel event

 

By Harsha Illindala, Vice President, Solutions Advisor – APAC at JDA Software

 

I was lucky enough to host a panel at a recent ASCI breakfast on new advances in machine learning and artificial intelligence and how they are helping retailers optimise their operations and supply chain. I was joined by Michelle Grujin, Managing Director, Retail Industry Lead ANZ at Accenture and Marcy Larsen, Industry Solution Executive, Retail and CPG at Microsoft.

IMG_2990

IMG_2989

While these technologies are becoming increasingly important, we first discussed some of the macro trends influencing retail customers today, what makes them different to customers from 10 or 20 years ago to frame why investing in these technologies is so important:

  1. Hyper-personalisation

 

Retailers are now expected to customise the customer experience to the segment of one. Retailers need to cluster and segment more narrowly across all retail formats.

  1. Premiumisation

There is a growing interest in premium food, clothes and other merchandise. There has been growth in health, vegan and specialised foods. Customers are also concerned with ethical sourcing and fair trade. They want to believe in the product.

  1. Convenience

Convenience is the price of admission: customers expect retailers to be convenient to deal with. They prioritise this, often over price.

  1. Mobility

The ability to shop online from a Smartphone means customers are more mobile than ever before and can purchase from anywhere.

  1. Urbanisation and population

There is a changing population mix with more customers living in urban areas. Customers will favour retailers who prioritise inclusion and diversity and demonstrate authenticity.

  1. Talent

We then went on to discuss how talent in retail is changing. According to the 2019 Retail C-Suite Viewpoint surveyconducted by JDA Software and Microsoft, talent is a top three issue with the C-suite in retail.

The workforce is varied with more part-timers and a workforce with time constraints. The gig economy is mobilising millennials and the retired workforce. Employees now have the ability to achieve genuine flexibility and hold down several different styles of job which fits in with their lifestyle and personal constraints.

For retailers the focus is now less on workforce scheduling and more about engagement with employees. There is also a huge competition for skills so retailers need to create a dynamic environment which values their skills.

Engaging employees with technology that is as advanced, if not more advanced, than what they are able to access at home is important. Employees, just like customers, expect retailers to demonstrate inclusiveness, diversity and authenticity.

  1. Provenance in supply chain

Customers care about the claims made by brands and retailers about products. Smart looking packaging and brand advertising strategies are important. Environmental and societal influences, morality and accountability are priorities for the customer.

  1. Data

The influence of data is significant. Customer trust is established when the right data is provided. When there is transparency of data between suppliers – shipping through to store – it creates a better customer experience.

  1. Influence of digital

Customers expect the physical experience to be on par with the digital experience. Technology is transforming the customer: 75% of a customer’s visits to a store are influenced by digital and 58% of sales are impacted by digital, according to the 2019 Retail C-Suite Viewpoint survey.

Digital has changed the customer journey; digital is now the ‘front of store’. The customer journey has evolved to loyalty – discovery – research – purchase – fulfillment.

We then went on to discuss which technology, such as artificial intelligence (AI) and machine learning (ML), is emerging to help retailers meet the needs of the customer in light of these macro trends.

The Tech

We then covered technology that is playing increasing important role in the supply chain for retailers and why companies should be investing in them:

Technology for personalisation

36% of the C-suite in retail expect to undertake pilots using AI in personalised product recommendations, 20% for localised pricing and 29% for personalised product assortments.

AI helps retailers meet customer expectations around product availability and fulfillment choices – in-store, pick-up and delivery. Customers expect instant gratification when it comes to fulfillment.

AI also provides a flowing, single view of inventory and allows for dynamic allocation and fulfillment, predictive replenishment and a shorter product life cycle.

Technology for provenance in supply chain

AI and ML provide real-time visibility. Traditional systems such as ERP centric reports and dashboards are too slow, alternatively AI provides real-time and direct visualisation of supply chain data with ML identifying and weeding out data discrepancies.

Blockchain is becoming an increasingly common buzzword and is something that could old the answer to many provenance related issues. With Blockchain providing a method to manage forms of exchange, entities in a supply chain can with increased confidence know where each asset has originated

Technology for the workforce

Technology is changing rapidly and affecting supply chain practices. There are several workplace changes that will become more important to how supply chain operates.

With more virtual and contingent workers, automation, increased connectivity through workplace social networks (e.g. instant messaging, communities) and more advanced communication tools (e.g. virtual meetings, webinars) will become increasingly important. Apps (e.g. personal organisers, goal setting, real-time feedback, team activities) will play a role, as will gamification (e.g. realistic training scenarios to stress test and develop supply chain strategies). Artificial Intelligence (e.g. advanced data mining) will help identify business trends and opportunities.

Challenges in adoption

We went on to discuss the major challenges facing retailers in adopting these technologies.

Some of the key observations included:

  • 55% of retailers don’t have single view of inventory
  • 78% of retailers don’t have real time view of inventory
  • 50% of retailers believe their technologies are lagging
  • Most retailers have CDTOs / CDOs and in-house AI teams, but tangible and scalable innovations have been far and few between
  • Many retailers have started off by trying to understand “what will my data show”, but need to transition to “what action needs to be taken” as a result of those insights

Is technology simplifying supply chain or adding to complexity?

We went on to question whether an increasingly complex supply chain is being simplified or further complicated by technology. We agreed that technology can minimise store effort in handling product and create flexibility in flow volumes and mechanisms.

We also discussed automation. There are increased and more affordable automation solutions in warehouses and in-store. Automation delivers productivity but also narrows variations. This means there is a greater need to manage the inventory flow to leverage the automation. Retailers need to manage coordination across inventory planning, transportation, yard, dock and warehouse operations.

A big thank you to the ASCI for inviting me along to host this excellent and insightful panel.

If you have questions about how AI and ML can improve your supply chain, you can contact me at Sriharsha.Illindala@jda.comor visit the JDA website.

ASCI as Professional Accreditation Body

Extending an invitation to all Industry Peak Bodies in the Supply Chain

 

ASCI has positioned itself as the Professional Accreditation Body for the supply chain industry. In this capacity, it has developed a Professional Accreditation Scheme, in line with the criteria set by the Professional Standards Authority (PSA), which oversees the legislation for lawyers, accountants, etc.

Although ASCI has not yet obtained legislation for supply chain as a legislated profession, we are following the exact process in the expectation that we will one day be ready to seek formal legislation.

In doing so, the ASCI Professional Accreditation Scheme, in its current form, is the only one of its kind that is based on the PSA guidelines. To distinguish this from the offerings of other organisations, often also referred to as “Professional Bodies”, we need to understand the distinction between the various professional bodies in our industry. The term “Professional Body” is often used by Industry Peak Bodies in their reference to the fact that they serve the “profession”. They do indeed, but not as an accreditation body, rather an Industry Peak Body. They most often offer certification programs, rather than a professional accreditation scheme. Certification programs are not to be confused with a Professional Accreditation Scheme.

Here is the difference:

“Certification”, a formal process of assessing that an individual is qualified in terms of particular knowledge or skills. It requires the candidate to study a particular learning set and write an exam on this set of knowledge in order to obtain certification.

“Accreditation” which, as in the case of lawyers, accountants, engineers, etc provides independent recognition of achievements and maintenance of the exact standards required to join the community of professional supply chain professionals and practitioners.

Professionals and practitioners registered under the professional accreditation scheme, are recognised for their competence, ability, integrity, and service to the profession. It is a voluntary means of demonstrating professionalism and involves being held to account by your peers for your abilities and adherence to ethical standards.

It is in this context that ASCI has commenced discussions with several Industry Peak Bodies in the supply chain domain, with the objective to offer registration against the Professional Accreditation Scheme through these Industry Peak Bodies, to their members, making the scheme more accessible to the broader supply chain community. Peak Bodies that are interested in offering professional and practitioner registration to their members can do so by affiliation with ASCI.

If you represent a peak industry body then we want to hear from you. Contact Our National Office at professionalisation@asci.org.au to commence discussions. It is through our common passion for the sustainability of the supply chain community that we can collectively raise the bar of supply chain management in Australasia.

ASCI-6

Dr Pieter Nagel is Head of Professionalisation at ASCI. Contact him about collaboration or registration at professionalisation@asci.org.au

Be a Supply Chain Ambassador

Japanese Business Colleagues

Guest Blog: ASCM CEO Abe Eshkenazi, CSCP, CPA, CAE

“In the first three months of 2019, employees got so much more work done that they smashed productivity forecasts,” writes Alexia Fernández Campbell for Vox Media. “That’s great for businesses (they earn more money) and for the economy (GDP grows faster). The problem is that companies aren’t rewarding their employees for the extra hard work.”

A recent Gallup World Poll bears out the author’s conclusions, finding that 85% of workers are displeased with their jobs.

As I read this article and considered that unfortunate statistic, I couldn’t help but reflect on ASCM’s brand new 2019 Supply Chain Salary and Career Survey Report. With so many people feeling underappreciated and underpaid — in fact, there were a record number of strikes in the United States last year — this survey reveals that supply chain salaries are on the rise and industry professionals truly love their jobs.

The median supply chain salary in 2018 was $80,000, a 3% increase over 2017. Even more importantly, an overwhelming majority of respondents say they are very or extremely satisfied in their jobs.

This report confirms what all of us at ASCM and every supply chain professional already know: Supply chain careers are rewarding, both professionally and personally. We at ASCM are also proud to discover that the median salary for people with at least one APICS certification is 25% higher than those without. And, in addition to the power of APICS education to advance careers, our initiatives related to women in supply chain are paying off: The gap between men’s and women’s salaries is narrowing, especially for professionals under 40, where the difference is less than $1,000.

Put the findings to work

As we continue to face a vast talent gap, this report highlights numerous opportunities to attract more people to the supply chain. But ASCM can’t do it alone; we need your help.

Begin by talking to the young people in your life about why you are passionate about what you do. Describe your job and how it has a positive influence on the entire business, the lives of your customers and the communities in which they live.

Explain why you look forward to staying in supply chain for years to come (93% of respondents believe they will stay in the field; 44% say they definitely will).

And tell them about the work-life balance you enjoy (nearly all respondents receive holiday pay, and the majority receive three weeks or more paid time off, as well as flexible work schedules).

Then, take a moment to download the survey and post it in your social channels. Share something that you’re especially excited about with the hashtag #lovemyjob. As more and more people outside the industry experience our enthusiasm, they will see that supply chain professionals are highly sought after by employers, make a difference at our organisations and have truly fulfilling careers.

To find out more about APICS certification, visit Australasian Supply Chain Institute – the Premier Channel Partner – for Australian Semester schedules and prices.

Are we ready for Industry 4.0?

Guest Blog: Rob Stummer, CEO, Australasia, SYSPRO

Rob-1

With all the discussion around Industry 4.0, how ready are we for it in this region and how many manufacturers have fully embraced it? It’s widely agreed that manufacturing has experienced a decade of productivity stagnation and demand fragmentation and the fact is that this level of innovation is long overdue. It’s been proven that the Australasian organisations that have taken Industry 4.0 innovation to scale beyond the pilot phase have experienced unprecedented increases in efficiency with minimal loss of employees.

The main issue reported by McKinsey and the World Economic Forum is that most companies appear to be stuck in the pilot phase and despite all the research and evidence saying that it will lead to a sizeable increase in global wealth production, benefiting people throughout society, the Australia and New Zealand governments have not done enough to help its advancement.

Globally it is having an impact globally across multiple sectors, simplifying things by streamlining processes, reducing human labour, fostering global interconnectedness and leading to unlimited possibilities. But is Australasia really ready for Industry 4.0?

Screen Shot 2019-05-06 at 12.13.10 pm

Automation won’t take jobs

There has been a lot of scaremongering about the risk to jobs due to automation, but technology and changing consumer preferences are driving the demand for new skills and jobs. In many cases, these emerging technologies have improved processes without shedding jobs and have made businesses more competitive than they have ever been, resulting in lower prices for consumers, higher wages for employees or higher profits, leading to increased demand and more jobs.

The previous industrial revolutions have shown us that, in the long run, technology and other labour market changes have been positive for many employees, removing the jobs that nobody wants to do as they can be unpleasant, physically exhausting and dangerous or boring and repetitive.

In smart factories, the emphasis will be on adding value, and up-skilled workers will be highly sought after for their specialist knowledge and ability to innovate.

Will bots take over the world?

There are a lot of myths surrounding AI, and science fiction movies often portray it as robots with human-like characteristics taking control and using their super-intelligence against us. There’s no doubt that AI does raise a whole host of complex questions, and that the current way the industry does certain things will become defunct.

We can’t ignore the fact that the Australian manufacturers that are leveraging AI have made their companies far more efficient and productive. This is a trend that their leaders see as inexorable, and the pressure on them to adapt and compete is huge.

Automation is essential

Automation is working extremely well in several different manufacturing scenarios, particularly when finite precision is needed, in challenging or dangerous work environments, where repetition happens and when personalisation and configuration are required.

So, what does automation look like in practice in an industrial environment? There are many tasks that could be carried out by a robot; not only would they be more efficient, but also the employees could then focus on more complex work.

The real benefits of automation are what makes it truly worth the investment, including increased efficiency, reduced costs, improved safety and wellbeing for employees, due to avoiding monotony and a clear competitive advantage over manufacturers that choose not to automate. Automation is clearly the future of Australasian manufacturing and its influence will only increase as competition from China and other developing Asian nations grows.

Rob Stummer is CEO, Australasia, SYSPRO

 

 

Spacious Potential in the Sharing Economy

close up of row

Photo by Pixabay on Pexels.com

By ASCM CEO Abe Eshkenazi, CSCP, CPA, CAE

The sharing economy is no longer just a catchy turn of phrase; today, sharing, renting and subscription services are everywhere. AirBnB for your holiday rental; WeWork for freelancers who prefer the office environment; Rover for the pup’s midday walk; Uber and Lyft when you need someone to drive you places; and Zipcar, LimeBike or Bird Scooters when you’d rather do the driving yourself. The potential applications are endless.

Although only 19 percent of U.S. adults have engaged in a sharing-economy transaction, PwC research reveals that 83 percent of survey respondents believe these services make life more convenient and efficient, 76 percent say they are better for the environment, and 43 percent admit that owning things can feel like a burden.

As ownership becomes unfashionable, the fashion industry is also taking notice.

“In October, the mall fixture [Express] launched Style Trial, a service that allows customers to borrow up to three pieces — with no limits on exchanges, free shipping both ways and free dry cleaning — for $69.95 per month,” writes Jasmin Malik Chua in Sourcing Journal. “If a subscriber loves something to death, she can buy it at a discount for keeps. Otherwise, she can keep garments circulating in an eternally refreshed ‘closet in the cloud’ with virtually infinite options yet zero commitments.”

Jim Hilt, Express executive vice president and chief customer experience officer, explains that this allows customers to tap the company’s “full assortment and styling services without breaking the budget.”

In addition to this kind of flexibility and cost savings, sharing clothes eliminates the hassle of shopping malls and the time spent packing bags for donation — not to mention all those minutes staring at our wardrobes trying to decide if an item still sparks joy.

ASCI Banner ad 768x90

Shifting business models

Until very recently, most of us would never have considered staying in some random person’s home while on vacation, let alone sharing a sweater with a bunch of strangers. Yet today, Airbnb averages 425,000 guests per night — nearly 22 percent more than Hilton Worldwide.

“The data shows, renting and sharing are becoming increasingly popular alternatives,” the PwC report asserts. “Executives will be wise to assess the role of their product and brand in this model — are you squarely a purveyor of goods, or are you an enabler?”

For those supply chain managers bracing for change and facing some tough calls concerning clothing lifespans; quality control of shared garments; and logistics economics, especially for lower-cost items, there is some good news. The sharing economy is also flourishing in the education space, with LinkedIn Learning, Grow with Google, and a seemingly infinite number of instructive and informative videos on YouTube. Our own channel is bursting at the seams with customer success stories, webinars, research, annual conference sessions, and a multitude of supply chain education tailored to fit just right.

To join ASCM, joint membership is available through Australasian Supply Chain Institute for just $440 per annum. Visit our website for a full list of membership benefits.

Indian regulations rain on Amazon and Walmart’s e-commerce parade

By ASCM CEO Abe Eshkenazi, CSCP, CPA, CAE

Rainbow_Umbrella_(9183826720)

Amazon and Walmart subsidiary Flipkart is scrambling to revamp its supply chains, vendor relationships and systems. New regulations from the world’s fastest growing economy have undermined these retailers’ business models and obstructed their sales in India’s burgeoning e-commerce sector.

Previously, foreign companies were forbidden from holding their own online inventory and shipping it directly to customers. Amazon had found a workaround in the form of local subsidiaries of firms in which it had holdings, which opponents insisted was violating the spirit of the rule. Largely due to such proxy sellers, Amazon and Walmart had controlled almost 80 percent of India’s e-commerce.

ASCI Banner ad 768x90

But as of February 1, such goods are not permitted for sale by foreign companies. In addition, these firms are barred from entering into exclusive online sales agreements. A vendor’s inventory also will be considered under the control of an e-commerce marketplace if more than one-quarter of its sales are derived there.

The protectionist move follows ongoing complaints from domestic retailers over anticompetitive practices. Amazon and Walmart both requested a six-month postponement of the effective date but were denied.

“Thousands of products were pulled from Amazon.com Inc.’s India website Friday — the first direct impact from the country’s new e-commerce rules,” writes Corinne Abrams in the Wall Street Journal. The article goes on to explain that the restrictions are the latest effort by India to curb U.S. tech giants’ dominance in the country and “promote homegrown companies” as Prime Minister Narendra Modi seeks a second term.

“Both Amazon and Walmart have made big bets in India, where the e-commerce market is estimated to balloon to $72 billion in 2022,” Abrams adds. “Amazon has pledged to invest $5 billion to expand in [India], while Walmart’s takeover of India’s Flipkart for $16 billion was its biggest acquisition ever.”

Global supply chain know-how

The operations of these e-commerce giants have been thrown into disarray. As these companies, and others, navigate such severe regulatory pressure, success will hinge upon the effectiveness, responsiveness and flexibility of their supply chains.

ASCM provides the resources you need to plot your own course through the ever-shifting global marketplace. The APICS Certified Supply Chain Professional (CSCP) program enables individuals to master the fundamentals of supply chain strategy, business model design, relationship-building, risk management and much more. In particular, the CSCP learning system includes a module centered around monetary, regulatory and trade considerations; negotiation and collaboration; and international standards and compliance. Begin your journey toward this world-class certification today.

The Australasian Supply Chain Institute (ASCI) is the Premier Channel Partner for APICS and offers joint memberships with ASCI for local and ASCM for global membership for both corporates and individuals. Contact us today at http://www.asci.org.au/membership or enquiries@asci.org.au.

Climate Change Disruptors on the Rise

By ASCM CEO Abe Eshkenazi, CSCP, CPA, CAE

As I write this, the National Weather Service (NWS) is warning of severe cold here in Chicago, with wind chill temperatures expected to reach an excruciating 55 below zero. The NWS has even urged us to protect our lungs by minimizing talking and not taking deep breaths. Meanwhile, on the other side of the world, people in South Australia’s coastal capital of Adelaide are facing a different kind of lung injury — from dangerous air quality and ozone exposure. Adelaide recently reached 46.2 Celsius (nearly 116 degrees Fahrenheit), breaking a 130-year record.

When we talk about extreme weather statistics such as these, they are typically followed by warnings of disastrous sea levels, catastrophic Arctic ice decline, and life-threatening floods or hurricanes. “Not enough water to make Coke” and “sweltering Disney theme parks” do seem to pale in comparison. However, a recent Bloomberg article suggests that climate change will have a business impact that is devastating in its own way.

“Climate change is expected to cascade through the economy — disrupting supply chains, disabling operations and driving away customers,” author Christopher Flavelle writes, adding that numerous executives see “inherent climate-related risks with the potential to have a substantial financial or strategic impact on their business.”

Visit ASCI’s previous blog form Corporate Member – Nufarm – who utilises specific advanced analytics for predicting and planning for weather patterns.

One of the most commonly cited issues by company leaders is draught. Specifically, in addition to Coca-Cola fearing water shortages will threaten its bottling operations, Intel is concerned about escalating costs for the water-intensive process of semiconductor manufacturing.

Other professionals are kept up at night worrying about damage to their networks from hurricanes and wildfires (AT&T), global pandemics dissuading people from travel (VISA), and increased flooding and flood insurance premiums forcing mortgage holders to default on payments (Bank of America).

Interestingly, some organizations have identified opportunities amid the chaos, as climate change can “bolster demand for their products.” With more people facing illness, Merck & Co. sees the potential for “expanded markets for products for tropical and weather-related diseases,” Apple predicts disasters will make its iPhone “even more vital to people’s lives,” and Home Depot expects higher air conditioner and ceiling fan sales.

Sustainable supply chains

No matter where your company falls on the threat-versus-opportunity spectrum, climate change is altering the global economy immensely, and supply chains must transform to survive. At this time of both challenge and potential, ASCM is collaborating with a network of world-class organizations — including The Bill & Melinda Gates Foundation, Accenture, Deloitte and PwC — to create opportunities for the kind of supply chain innovation that will be mandatory in the coming years.

In addition, our new SCOR-Enterprise (SCOR-E) designation features an ecological dimension, which focuses on the circular economy, climate strategy, energy, water and waste, material usage, and product life-cycle stewardship. SCOR-E is the industry’s first and only corporate supply chain designation.

I hope you will make the most of these valuable member benefits. ASCM mission-driven strategic initiatives such as these draw on the power of supply chains to address pressing global issues and achieve the brightest futures for individuals, companies and communities.

For more information, please visit the ASCI website and select ASCI Plus Membership which include your local and global membership with ASCM.

Distribution Disruption Causes KFC Chicken Shortage

Last week, even the Colonel couldn’t help KFC restaurants in the United Kingdom. Approximately 800 of the 900 KFCs in the U.K. temporarily closed because of a chicken shortage, according to CNN Money.

The supply problem was pinpointed to issues with the restaurant chain’s new distribution partner, DHL. A KFC spokesperson described the issue as “teething problems” related to the transition that happened just a week before. DHL leaders reported that many of its deliveries were incomplete or delayed because of operational issues.

Although the exact details of this disruption management plan were not outlined in the article, KFC’s explanation to its customers was quick. The restaurant chain first alerted consumers via social media with a post that read, “Some chickens have now crossed the road, the rest are waiting at the Pelican Crossing.” KFC also set up a landing page on its website to report store operations.

Then KFC purchased a full-page ad in British newspapers to apologize to its clientele. The ad featured an empty chicken bucket with the chain’s initials scrambled to read “FCK,” a nod to an expletive that, in this case, means oops or whoops, along with an apology note. The company continues to offer humor-filled updates via social media. Although 95 percent of the restaurants have reopened, some are still operating with limited menus because of the distribution disruptions.

Public relations expert Rupert Younger, director of the Oxford University Centre for Corporate Reputation, applauded KFC’s effort to apologize and explain the issue to the public. “It speaks to a business that understand[s] that mistakes were made and they’re prepared to have fun at their own expense,” he said. He also told CNN Money that he was impressed that KFC’s ad did not outright blame DHL for the issue. Younger expects that KFC will soon face an increased demand because of its open, authentic and humorous apology.

I think we can all learn a lesson from KFC here. Disruptions happen, and supply challenges can be a headache for everyone involved. But, while you’re fixing the problem and planning for the future, transparency and a bit of humor can go a long way with your customers. A positive attitude can foster positive relationships going forward.

Risk and recovery

As KFC recovers from this supply chain challenge, no doubt the restaurant chain will update its disruption management strategy. One potential preventive measure could be to add protective capacity, which the APICS Dictionary defines as, “The resource capacity needed to protect system throughput — ensuring that some capacity above the capacity required to exploit the constraint is available to catch up when disruptions inevitably occur.”

When managing disruptions, it helps to have a risk management plan in place. APICS can equip you with the tools to build a risk management plan to anticipate and recover from disruptions. By participating in APICS Risk Management seminars and elective topic presentations at APICS 2018, you will learn about risk and supply chain management, how to assess and control risk, and more. In addition, earning your APICS Risk Management Education Certificate shows your employer that you are ready to tackle risks for your company. Visit apics.org/risk to learn more.

About the author
Abe EshkenaziAPICS CEO

abe-headshot