Efficient Supply Chains Lead to Sustainable Results
A more sustainable supply chain should be natural by-product of smarter operations, not the goal
1 October 2020 // A notification from Apple’s new iPhone sleep tracking app recently popped up with good news for one of our team members: “Congratulations: Your sleeping heart rate is lower than average compared to other people your age.”
Well, hooray, we guess. Lower sleeping heart rates were never really the goal. We were focused on exercising as a way to feel better and live longer. But if that means a stronger ticker ends up not having to work as hard while we rest, then that’s a good thing. Thanks for noticing, Apple.
It’s the same with some of supply chain’s objectives, like sustainability. Analyst and “Talking Logistics” blogger Adrian Gonzalez gets it exactly right in a recent post: Sustainability is not a top-line goal for most enterprise management. Instead, it’s the healthy byproduct of other goals.
Gonzalez quotes his own firm’s Indago research, which indicates 60 percent of companies now define and measure sustainability. Yet, a research respondent summarized priorities: “I think sustainability is a good marketing tool but not a main driver for business. What is important, and will become more important, is efficiency. I think as efficiency increases, sustainability will follow.
We couldn’t agree more. Our own focus on transforming transportation efficiency delivers faster, less expensive and high quality goods to end customers. Yet, along the way we have won multiple Supply & Demand Chain Executive “Green Supply Chain” awards, and in 2018 Cisco Systems gave Morgan its “Excellence In Sustainability” award at that company’s annual supplier appreciation event.
Simply put, smarter decisions lead to fewer empty or partially loaded trucks, less excess inventory to warehouse, reduced reliance on expedited shipment methods, better control and reliability. As Gonzalez puts it, “If sustainability is truly a byproduct of efficiency, then transportation is where the two intersect.
“Regardless of how simple or complex your transportation operations are,” Gonzalez argues, “you should always ask questions that challenge the status quo and seek opportunities to reduce costs, improve service, reduce risks and enhance the customer experience.”
At Morgan, we’re world class at exploring those questions—and generating better results on the financial and ethical bottom lines for our clients. Need some help streamlining your own operations? Let us know; we’d be happy to review your data at no charge.
Heard On The Dock
“If sustainability is truly a byproduct of efficiency, then transportation is where the two intersect.”
--Adrian Gonzalez, President of Adelante SCM and founder, "Talking Logistics" blog
While You Were Shipping…
More Recent Stories You May Have Missed That Caught Our Eye
The Internet of Hyped Things. (Supply Chain Quarterly) According to Gartner, the Internet of Things (IoT) for Supply Chain hype cycle has hit bottom. Emerging from the current “Trough of Disillusionment,” the research firm expects IoT to develop new, useful applications over the next two to five years. Said Mike Burkett, Gartner VP and Distinguished Analyst, “IoT is in the trough because we see that many companies are implementing the technology, but they struggle to define the best opportunities for using its measurement and tracking capabilities. We see further potential to grow its use over the next several years.
We agree that technological implementation has raced ahead of processes. But we also have begun to realize significant transformational value from tracking across vendors and managing conditions from shock to tilt, tampering, temperature and humidity as they change. With our own ChronosCloud technology and mobile apps and sensors like those provided by Intel’s Connected Logistics Platform (ICLP), we are able not just to monitor goods but also gather the insights for transformational change.
Expertise and automation make the difference, it seems, between hype and hyper-productive.
Airlines Fraught, Turn To Freight (Wall Street Journal; subscription required for access) In an environment where profits are hard to find, the only four major carriers who came up positive for the third quarter did so by shifting to cargo. According to WSJ, Korean Airlines, Asiana, China Airlines and EVA Airways converted lots of seats to freight configurations to take advantage to heavy demand for Asia electronics exports. At China Airlines, cargo accounted for 93% of all revenue for the quarter, compared to about one third in the same period of 2019.
US carriers had more difficulty pivoting due to limitations of routes served and high fleet concentrations of narrow-body aircraft, which are less suitable for cargo conversion. Delta and American were the biggest worldwide losers.
Are You Ready for Peak Stress? (The LOADStar) Analysts are predicting a crushing fourth-quarter peak season for freight—with container shortages, rising prices, and reduced air and ocean availability. David Wystrach, Senior Director of Air Freight EMEA for Flexport told LOADStar, “The market is going crazy. There is a definite peak and rates are heading north quickly.”
Pay Them Now Or Pay Later? (Wall Street Journal; subscription required for access) In an effort to support and sustain key suppliers, manufacturers including Micron, General Dynamics and Lockheed are doing the unthinkable: They’re paying their bills ahead of time. “We’re in a symbiotic relationship,” General Dynamics CFO Jason Aiken told the Journal. If the supply chain dies, its host may not be far behind.
It’s true that supply chains are not a zero-sum game. At Morgan, our Inventory On Demand™ service can improve payment terms and ease the tug-of-war over inventory between suppliers and the enterprise.