Business continuity in self-healing supply chains through the pandemic and beyond. By Roch Gautier

Before Covid-19, companies were already interested in the idea of a self-healing supply chain. Steve Banker of ARC Advisory Group stated in a recent Forbes article, ‘The term ‘self-healing supply chain’ is beginning to be used. This term reflects the idea that parameters should automatically update. It also includes the idea that the best plan is useless if unexpected events occur. It is important not just to create an optimum plan, but to replan using a robust control tower as needed. A self-healing supply chain is impossible without a robust supply chain digital twin.’

Business continuity refers to maintaining, adjusting or rapidly resuming business functions in the event of a major disruption. In a recent report titled ‘Beyond COVID 19: supply chain resilience holds key to recovery’ – Baker McKenzie and Oxford Economics cited that the pandemic has resulted in an unprecedented global supply chain crisis. Forecasting global recovery as early as H1 2021 in the hardest-hit manufacturing sectors, the firm alluded to digitalization of supply chains as strategic for businesses to achieve resilience and sustainability.

On this road to recovery, businesses must stay ahead of the curve. Recently, I’ve 20spoken with supply chain professionals in the process manufacturing industries to learn how their organizations were adapting and achieving business continuity by leveraging digital twins. Let me share some of what I have observed and learned.

Phase I: Protect the people and the business
Keep plant operations personnel safe
I learned about a North American company that rapidly incorporated social distancing constraints into their production planning and scheduling digital twins to help keep manufacturing operations personnel safe. While generating optimal manufacturing plans and schedules, the digital twin technology ensures operations personnel work in a section of the production facility with adequate physical distancing while considering complex manufacturing equipment constraints related to using alternating lines/equipment on various days of the week.

Gain insights to financial and operational implications of business scenarios

The other priority was to protect the financial health of the business. Many organizations mobilized a team responsible for evaluating the financial and operational implications of numerous short-to-mid-term business scenarios. I learned that a European company had been using their end-to-end supply chain planning optimization digital twin to analyze a number of scenarios every day. Their digital twin allows them to easily change time-period-specific data assumptions related to supply and demand conditions spanning their global supply chain. Supply ChainSince their digital twin makes use of holistic mathematical optimization methods, they were able to develop a portfolio of supply chain ‘game plans’ on how to best respond to circumstance. My takeaway is that supply/demand scenarios analysis has rocketed in importance in the process manufacturing industries since the beginning of the pandemic.

Phase II: Adjust processes to achieve continuity as supply/demand conditions fluctuate
Keep work-from-home and on-site teams aligned constantly
Maintaining business continuity and safe reliable supply chain and manufacturing operations became more challenging when people were directed to work from home. I learned a wonderful story about an Asian production site that is using a digital twin that helps their supply chain and manufacturing operations teams stay aligned and on the same page throughout the day. The technology allows them to interact with a live web-based view of the latest published schedule, view projected inventory positions, identify problems ahead of time and helps everyone maintain situational awareness about what is happening at the manufacturing facility and working towards a common goal.

Quickly adjust to keep demands, capacity, supply and operations execution in synch

I learned of a company that produces some materials that has been in higher demand in past months that leverages a scheduling optimization digital twin which helps them align demands, capacity, supply and operations execution team members daily. The digital twin allows them to adjust to changing conditions and helps them improve cash flow, ensure on-time shipping performance and flex production output.

Phase III: Prepare for the recovery
Monitor demand for signs of recovery and rebound
Most companies I have spoken to recently are reporting their demand forecasts are less accurate than before. In preparing for recovery, some are using digital twins to monitor changes in demand trends week-over-week as part of their weekly Sales and Operations Execution (S&OE) meetings.

Redesigning supply chain and manufacturing to be more resilient

The pandemic has exposed the vulnerabilities in today’s global supply chains. There is an opportunity for manufacturers to (re)design their businesses to make them more resilient. This will involve analyzing and building redundancies for critical product lines and associated production and supply capabilities including reviewing existing suppliers and locations; substitution options; as well as existing manufacturing locations and the current flexibility of manufacturing resources This is an area where an end-to-end supply chain optimization digital twin can be leveraged to explore and analyze various supply chain and manufacturing (re)design alternatives to build more resilient businesses Strengthen your supply chain with self-healing capabilities

Digital supply chain planning and scheduling twins are often used to make customer order promises and commitments. There are risks to customer service levels and on-time in-full KPIs if digital twins get out of synch with reality. Self-healing supply chain capabilities ensure that supply chain digital twins remain as accurate as possible, reflecting demonstrated plant, equipment and process performance. This is achieved by automatic detection of data inputs that may no longer be valid amongst the tens to hundreds of thousands of manufacturing data inputs used in supply chain digital twins. Self-healing supply chain capabilities help identify these proverbial needles in the haystack with minimal time and talent input.

Self-healing supply chain capabilities can also combine both predictive and prescriptive technology. For example, low-touch machine learning is used to predict with high degrees of certainty manufacturing equipment/asset failures weeks in advance. Prescriptive mathematical optimization methods in supply chain planning and scheduling digital twins make use of these advance equipment failure warnings to answer the question ‘When should we take planned downtime (in advance of the predicted failure event) to ensure minimal disruptions, costs and impact to customer order commitments and relationships?’

Digital twins are proving to be critical tools for many manufacturers in the process industries during these uncertain times. Digital twins provide insight so organizations can adapt to this new operating environment and keep supply chain and manufacturing operations running as nimbly and efficiently as possible. Building digital capabilities now will help organizations prepare for the ongoing uncertainty that is likely to continue into 2021 and beyond.

Roch Gautier is Senior Product Management Director at Aspen Technology, a leading software supplier for optimizing asset performance. Its products thrive in complex, industrial environments where it is critical to optimize the asset design, operation and maintenance lifecycle. AspenTech uniquely combines decades of process modeling expertise with machine learning.
www.aspentech.com

Lithium-ion – deploying a bespoke battery strategy. By Jon Divers

The speed with which organizations are embracing Lithium-ion technology is gaining pace. Spurred on by environmental concerns, cost assessment and efficiency drives, the move away from LPG and Diesel is growing at an accelerating rate. Even in a fast-changing market, many businesses are becoming increasingly knowledgeable about Lithium-ion, especially in terms of its varied benefits.

But while organizations may be aware of the appeal of Lithium-ion in terms of its ability to support 24x7 logistics operations with fast charging and no battery changes, they may not be aware it’s not a one-size-fits-all approach. In fact, there are a number of considerations that should be taken into account to identify which Lithium-ion setup is the most appropriate for Forklift 1each business order to unlock the highest reward from the technology. The wrong battery/charger combination will not recognize the advantages of a correct match to the application of individual customers.

Not all battery environments are the same
A warehouse or logistics environment is unique compared to other battery powered vehicle environments. For electric cars, for example, the technology is all about the distance achieved between charges and the weight of the battery pack. Achieving the best balance here achieves the greatest gains for the driver. Electric automotive manufacturers are constantly striving for higher density and lower weight batteries with the best range and shortest charge times.

However, the same constraints are not present in a warehouse for Materials Handling Equipment as the charger is almost always available close by and charging can be done regularly whilst the truck is stationary for a short period of time. And weight is a friend rather than a foe when it comes to a forklift or counterbalance truck for example, so different battery chemistries can be considered, such as the use of Iron Phosphate. Different manufacturers will use different chemistries, but Iron Phosphate is currently the safest cell chemistry and from an ecological point of view, it’s also non-toxic and harmless.

It’s not as simple as finding the biggest battery you can! And it’s more than just fast charging. It’s about a bespoke solution for each business, depending on its needs and setup.

Water, tap and bath
A simple way of explaining this is through a ‘water, tap and bath’ analogy – how long does it take for a tap to fill up the bath? It depends on how big the tap is, how fast the flow of water and how big the bath is. An efficient setup for one environment could be to have the biggest tap with the smallest bath; i.e. the biggest charger with the smallest battery. With a smaller tap (or smaller charger) and a big bath (big battery), it is going to take longer to fill, however this could be the optimum solution to work within the power requirements (or water pressure). Every application is and should be different for each business to gain the most value.

To deploy the most appropriate Lithium-ion strategy, the most important questions are; how long will the truck be working? And when are the breaks in any given shift? This determines how often the forklift will be put back on charge, which in turn dictates what size of charger and battery is best suited. This is then matched against the available power into the building.

Data analysis
But some businesses might think that they don’t have enough breaks, that their trucks are working non-stop. This is where a data recording device comes in to play. Trucks will either be working (the wheels are turning or the mast is moving – the truck is in use), standing (the truck is not moving, albeit turned on or off), or charging. The data recording device can capture that data every 20 seconds over five days, providing over 22,000 readings to identify where the potential breaks are and the typical energy consumed during a given period of time.

For example, a shift change might actually take 20 minutes from start to finish. But in that time, you can already have put nearly 50 per cent energy back into the battery. Capitalizing on breaks such as these can go a long way to supporting the increasingly common 24x7 operations of an organization.

Conclusion
Each different battery chemistry setup offers different characteristics to serve a variety of charging strategies – but it is key for each organization to capitalize on the bespoke nature of Lithium-ion in order to realize the most efficiencies out of the technology. By working with a consultant that is an expert in the field, the right Lithium-ion strategy can be identified and implemented rapidly. That way, not only will each business achieve the highest reward, but they will be safe in the knowledge that it will also be in the most efficient way possible – not just a one size fits all solution.

Jon Divers is Customer Service Director at Jungheinrich. Jungheinrich Customer Service, part of Jungheinrich UK Ltd, provides an extensive, 550 plus-employee strong, customer service support network. The network comprises specialist technical engineers and product quality managers, with a dedicated UK parts center and tailored service and maintenance packages.
www.jungheinrich.co.uk

Axel Schmidt explains how technology can be rapidly introduced to augment day to day worker experience and transform productivity while remaining compliant with social distancing guidelines

The speed of evolution within artificial intelligence and automation is exciting, yet for companies seeking rapid improvements in productivity, the ROI model is just not adding up. From the time and cost associated with automation to the constraints of very simplistic areas of application, full automation is not always an option.

Look closely at any warehouse environment, however, and there are very significant opportunities to augment the performance of the existing human workforce. While processes have been optimized in recent years there are still many aspects of worker activity that are less than optimal. From the physical challenges associated with juggling scanning devices while lifting items, especially at height, to the time wasted walking back to static work stations to input information and receive the next task, there are very significant opportunities to enhance the worker experience, and hence performance.

Furthermore, the Coronavirus pandemic has created a surge in ecommerce with many organizations operating within this space struggling to cope with an unforeseen labor shortage. This surging demand had them hiring huge numbers of additional frontline workers, with Amazon announcing a further 75,000 extra job openings to cope with demand.

Understanding Automation Reality
Warehouse efficiency has never been more important; yet with the continued labor shortages, it has never been more challenging. With the need to improve both productivity and accuracy businesses are understandably intrigued by the promise of automation. However, while the concept of lights out operations that can run 24x7, 8365 days a year is compelling, the reality is somewhat different.

Full automation is not achievable today for a variety of reasons. Firstly, it is incredibly complex. There is no simple switch for an efficient, completely automated environment. It takes time and money to train machines to perform required tasks – and few organizations have the skills to create the deep learning structure required. Given the speed of innovation within Skills 1many product cycles, time becomes a factor. If an item is only in production for a few weeks, even one season, there is not enough time to either train the technology to automate the process or, critically, achieve a return on investment.

Strengthening with technology
As businesses continue to operate in uncertainty created by the Coronavirus pandemic, it’s crucial for them to deploy initiatives that encourage social distancing. The objective is to prevent employees reverting back to old habits that could endanger them. Technology such as an app linked to a wearable device that can send a combination of acoustic, haptic, and in visual signals, every time the employee crosses a set threshold can underpin these initiatives.

The speed at which businesses are able to onboard new workers is essential when it comes to resolving a labor shortage. Technology such as wearable augmented reality devices can be a valuable tool as it can provide a perfect training ground for workers to master their job much faster while adhering to the government guidelines.

Keeping the workforce healthy and performing well requires the right equipment, including protective clothing and tools that enable workers to perform their roles safely and efficiently. Wearable technology such as barcode scanners can cut process times in half and provide instant feedback to workers which can help reduce typical picking errors by as much as 33 percent. Ensuring accuracy is key to cost saving as it can prevent expensive processes such as product returns, or time-consuming delays due to erroneous parts being removed from products.

So how can you appropriately prepare for a new virus wave or another potential global pandemic? Flexibility is the key to being able to do more with the same space. You need to be able to build, move and redesign workstations quickly, and then allocate workers flexibly in between. Deploying IT and training friendly technology in the warehouse and inventory almost overnight.

Empowering the human
Human beings are at the heart of the supply chain, although often the first association we make with supply chains is machinery, software, buildings, and transportation. But it is human skill that operates them, human ingenuity that manages them, and human shortcomings that identify the potential for substantial improvements. Greater enhancements can’t be made by eliminating the human aspects. Instead, organizations may be better off strengthening and empowering the human worker with technology.

The current challenges and vulnerabilities for global supply chains have been brought to light by the Coronavirus, so there is now an opportunity to reconsider the status quo in order to learn from the mistakes and safeguard supply chains into the future. Removing complexity and promoting flexibility with the support of technology is a good place to begin.

Axel Schmidt is Senior Communications Manager at ProGlove. ProGlove builds the lightest, smallest and toughest barcode scanners in the world, connecting the workforce to actionable information. The smarter workforce solutions from the German headquartered company are used by more than 500 renowned organizations in manufacturing, production, logistics and retail. ProGlove was founded in December 2014 after winning the Intel ‘Make it Wearable’ Challenge in Silicon Valley and is backed by growth focused investors Summit Partners, DICP and Bayern Capital.
www.proglove.com

Paul Adams describes why the UK rail sector must adapt to lure passengers back

With passenger numbers across UK rail networks still significantly below pre-pandemic levels, some bold changes are urgently required to increase usage of services and restore revenues. However, there are some significant barriers for the sector to overcome, including the need to introduce ‘flexible’ ticketing options that reflect recent changes to working practices and the need for effective communication to restore public confidence.

So how can this be achieved while also putting in place measures to mitigate the financial fallout caused by Covid-19?

In Q4 of 2019-20, rail passenger numbers in Great Britain fell to 394 million (down 11.4 per cent compared with Q4 2018-19). In order to lure passengers back to services, two main issues must be overcome; the need to make people feel safe when using rail transport and the importance of introducing ticketing options that account for recent changes in passenger needs.

A survey from Systra highlights the extent of impact of the pandemic on rail use, with 20 per cent of people now expecting to make fewer trips by public transport. Similarly, according to a July 2020 report, one third of UK rail passengers surveyed were concerned about using public transport and didn’t plan to use it as businesses opened up.

Covid-19 has created a new normal for rail use, resulting in a new generation of passengers, which can be split into three 6main groups. While the impact of lockdown on working practices means that many people are likely to work from home more often in the future, some will still be required to commute to a physical office space in order to work. Other workers may need to travel to an office less frequently, with more choice over when and how they travel. For the majority of people, usage of rail transport, like other forms of public transport, will be largely discretionary, for example, they may choose to undertake a long-distance journey to visit a relative or for a UK ‘staycation’.

To convince all of the above passenger groups to choose rail when travelling, it is vital that TOCs provide a clear message that this method of transportation is safe While the past issue of busy or overcrowded services is unlikely to arise for some time, upfront communication with passengers is needed at the point that they are deciding whether and how to travel, detailing the measures that have been put in place to keep them safe. This messaging should be reinforced on the day of travel, for example, through signage on station platforms, emphasizing the need for passengers to stay social distanced. Ideally, a co-ordinated approach should be taken to this activity, including the use of government-sponsored marketing to clearly demonstrate the steps the industry is taking to enhance the safety of public transport.

The effective use of data could also help train operating companies (TOCs) to ensure passenger numbers on services remain within safe levels, however, this relies on passengers pre-booking tickets. While multi-modal journey planners do not currently exist, this is the ultimate aim for the industry when it comes to journey planning and could go a long way to reassuring passengers in uncertain times. By inputting their end destination, passengers could receive a guarantee that social distancing and other safety measures will be in place from the start of their rail journey, right through to their destination of choice, even if that involves joining a connecting bus service.

A significant behavioral shift across the industry would also help to support efforts to attract passengers back onto services. Despite the right technology and ticketing systems already being in place to support mandatory seat bookings, TOCs are yet to implement such measures to facilitate social distancing on trains. One of the main problems is that this would require a rethink of station layouts to ensure passengers could only enter services with pre-booked tickets and seat reservations. The rail industry could also employ measures that are intuitive, based on an understanding of human psychology. For example, relatively simple tactics such as carefully chosen messaging and even physical infrastructure, such as ticket barriers, can help to influence passenger choice, as has been shown in other business sectors. In this case, implementing such measures would be for everyone’s safety.

The sector is also exploring a range of ticketing options that provide the flexibility rail passengers will expect moving forwards. To best reflect changes to ways of working over the last few months, railcards will

ideally need to commit passengers to a minimum level of travel in order for them to receive a discount, but provide users with complete flexibility in terms of when they use services. The sector could also learn lessons from the aviation industry by trialing dynamic pricing to encourage passengers onto less popular services.

As well as taking steps to increase passenger numbers, the UK rail industry will also need to put in place a bold cost-reduction strategy to address the financial fallout resulting from the pandemic. This is a focus of Government’s latest Emergency Measures Agreement (EMA) and will undoubtedly require close collaboration between individual TOCs to address some of the structures that currently lock in costs. For example, the current rate of change to rail services as the Covid-19 restrictions are eased warrants monthly timetable changes, which currently take a year to put in place. Addressing industry fragmentation would allow operators to overcome such issues as well as reducing fixed and real costs by leveraging scale. Attention should also be given to realizing efficiencies with regards to worker pay, levelling the playing field with other areas of the transportation industry.

While the UK is beginning to get back to business, action is still urgently needed by the rail sector to restore passenger confidence in services and improve its financial position. Through a combination of effective communication, innovative ticketing options and a joined-up approach to cost reduction, TOCs can get passengers back onboard and take a step closer to a positive new future for rail travel.

Paul Adams is a transportation sector specialist at Vendigital, a top-20 Management Consultancy, as listed in the FT’s Leading UK Management Consultancies Special Report. Operating from hubs in Europe, America and Asia, the firm specializes in advising corporates and other organizations in operational strategy, cost reduction and performance improvement.

The firm’s exceptional analytical capabilities, underpinned by bespoke software and sector expertise solve clients’ toughest cost and operational problems, with the benefits implemented quickly and effectively. By identifying and understanding strategic levers for improving operational and financial performance the firm gives its clients’ the confidence to act decisively.
www.vendigital.com

International transport managers are facing a unique set of challenges over the next few years, says Gary Dodsworth

The impact of Covid-19 on global trade has transformed logistics more widely into a ‘mission-critical’ operation to rival any A-list blockbuster.

And, while the ramifications of the Covid-19 pandemic will almost certainly stay with us for years, other challenges such as the protracted Brexit talks, the impact of China/US trade talks and the rise in border tariffs will not make for an easy life for importers or exporters over the next few years.

Post pandemic panacea?
The Covid-19 pandemic has made many businesses re-examine their reliance on globalized supply chains. The UK government is currently undertaking a study (‘Project Defend’) to see how it could diversify its trading relationships and reduce reliance on countries such as China. Across continental Europe, similar concerns are guiding the EU’s post-pandemic recovery plans. India too is exploring ways to reduce its reliance on imports from China.

This reaction is understandable. The scramble for PPE and other essential medical equipment early in the pandemic exposed many countries’ reliance on long, complex supply chains. This in turn reinforced pre-existing concerns about over-dependence on Chinese suppliers, which has led many governments and businesses to look at the reshoring option.

While this strategy sounds sensible in principle, in practice it is less of a silver bullet once you consider the details. Take the 4automotive sector for example. The costs of changing a supplier and sourcing from more than one provider to spread the risk is hugely expensive for an industry as complex as vehicle manufacturing. You need to spend a great deal of management time and effort to make sure the supplier you have chosen is capable, reliable and repeatable. Undertaking this process for several suppliers ‘just in case’ would be impractical and very costly.

Original equipment manufacturers (OEMs) we have spoken to agree that even if they had fair warning of the pandemic, there was very little they could have done to reduce its impact. So, while the reshoring trend sounds like a good idea, in practice it may not reap the rewards often cited.

This attitude can be seen on a bigger scale when you look at the recent moves by the Japanese government to establish a $2bn fund for businesses to examine their options to reshore manufacturing. Initial reaction Logistics 1from corporate Japan has been cool and such reluctance can be explained by the basic logic of supply chains – to create the most cost-effective and efficient ways of servicing the final market. That process is neither cheap or easy and usually involves clusters of specialisms working across complex global value chains.

The power of visibility
On reflection, while plenty of analysts are predicting a shift to reshoring, those at the sharp end are far less enthusiastic. In all likelihood, most manufacturers will continue to source products from China, with the caveat that they will invest in new technologies and systems to achieve better supply chain visibility.

When you order a product from an online retailer, you know when it has been picked and when it will arrive. It’s amazing how few industrial suppliers involved in just-in-time contacts are not yet able to do this. In our view, this will be a major area of investment for many manufacturers over the next few years.

Coping with the post-Covid landscape will probably involve strategies better able to cope with similar outbreaks. Clearly, improved supply chain visibility will provide optimum resilience against future pandemics, as opposed to the costly alternative of mass reshoring or going down the multi-source route.

US: China trade
While not directly affecting operational supply chains, ongoing spats between America and China will no doubt have a bearing on global trade routes. America continues to hit China with wide-ranging measures aimed at weaning itself off China-based supply chains and frustrating Beijing’s ambitions to become a global tech power.

As a result of this ongoing trade row, we’re seeing companies that make technology hardware, one of the industries where manufacturing has been most concentrated in China, moving production to other territories. Quanta Computer, the world’s largest notebook contract manufacturer and a big supplier of hardware for companies such as Google and Amazon, recently shifted production of servers out of China to Taiwan and to the US.

For manufacturers across the globe, this move away from China will necessitate a far more flexible approach to logistics. Working with third party providers with deep roots in all modes (air, sea freight and rail) will be increasingly important. For us, engaging global 3PLs with proven knowledge, local know-how and control over their own transport networks will become a key element of competitive advantage.

Brexit issues
While the UK continues to negotiate with Brussels on the fine details of Brexit, which will happen by 31 December 2020, issues such as tariffs and cabotage agreements are likely to have an impact on UK businesses.

Manufacturing and retail are likely to be the hardest hit sectors. Both have come to rely on ‘just in time’ supply chains involved in the delivery of everything from fresh food for the UK’s supermarkets to car-parts and other intermediate manufacturing inputs.

About half the food consumed in the UK is imported, with four-fifths of food imported from the EU alone. Even now – with the December deadline fast approaching – we still don’t fully know what we are preparing for.

Action plan
There are no easy or simple answers for logistics professionals facing such a range of global challenges. From our perspective salvation lies in three key strategic areas; supply chain visibility, partnerships and flexibility. The winners will be those that rely on actionable data to inform dynamic change to supply chains, should disaster strike. They will also be organizations with strong, co-operative relationships with suppliers and 3PL alike. Finally, they will forge partnerships with 3PLs that can provide fast and flexible supply chain alternatives should established routes be compromised.

Like the crew on the Apollo 13 mission, logistics managers are facing some important challenges. Now is the time to stay calm, think creatively about possible solutions and surround yourself with the best team you can.

Gary Dodsworth is a director at Rhenus UK. The Rhenus Group is a leading logistics service provider with global business operations and an annual turnover of €5.5 bn. Rhenus has business sites at 750 locations worldwide and employs 33,000 people. The Rhenus Group provides solutions for a wide variety of different sectors along the complete supply chain; they include multimodal transport operations, warehousing, customs clearance as well as innovative value-added services.
www.rhenus.com

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