Operations Rules News - Aggregated operations and supply chain news site

Inside Toyota Motor Corp.’s oldest plant, there’s a corner where humans have taken over from robots in thwacking glowing lumps of metal into crankshafts. God-like Craftsmen, Kami-sama in Japanese, are making a comeback at Toyota, the company that long set the pace for manufacturing prowess in the auto industry and beyond. Toyota’s next step forward is counter-intuitive in an age of automation: Humans are taking the place of machines in plants across Japan so workers can develop new skills and figure out ways to improve production lines and the car-building process.

In 2004, UPS announced a new policy for its drivers: the right way to get to any destination was to avoid left-hand turns. When better tracking systems emerged in 2001, the package delivery service took a closer look at how trucks performed when delivering packages. As a logistics company with some 96,000 trucks and several hundred aircraft, much of UPS’s business can be distilled to a series of optimization problems around reducing the amount of fuel used, saving time, and using space more efficiently.

The shipping container has remained pretty much unchanged since American Malcolm McLean invented it in 1956. But carbon fiber composites could transform this staple of global trade, according to Stephan Lechner of the European Commission’s Joint Research Centre.
While a composite container might cost EUR6000 ($8300) versus EUR2200 ($3050) or a steel container, at a diesel fuel cost of EUR1.6 per liter ($8.40/gallon), the composite container would break even after the container has traveled around 120,000 km (74,500 miles) on account of their lighter weight: 1.2 tonnes versus 2.2 tonnes for a steel container. They would also be corrosion-resistant to boot.

There is growing recognition that a reduction in supplier lead time variability has a bigger impact on inventories and supply chain performance than do equivalent decreases in average lead times. But can this perception be quantified? The answer is Yes, as nicely discussed during a recent Videocast on our Supply Chain Television Channel on Schneider Electric’s journey using Inventory Optimization software.

The drug nitroglycerin has long been an emergency room staple, a front-line drug that is often the first thing doctors try when a patient shows up with a heart attack. So when Baxter International, the country’s only manufacturer of injectable nitroglycerin, recently told hospitals that it was sharply cutting shipments of the drug, the news sent pharmacists and emergency room doctors into a panic. Hospitals have been struggling for years with intermittent shortages of the drug, but with the latest news, doctors worried they could actually run out. A report by a federal watchdog agency last month found that the number of annual drug shortages tripled from 2007 to 2012. Like the nitroglycerin shortage, many of the shortfalls involve generic injectable drugs, which are often made by just a handful of manufacturers. The report, by the Government Accountability Office, cited a study that found just three manufacturers produced 71 percent of the country’s sterile injectable cancer drugs in 2008.

A canary-yellow tag placed on each plant emits a radio frequency identification signal (RFID) that allows officials consulting a statewide database to track crops from bud to blunt. Tags with 24-digit IDs are staked into the soil or wrapped around individual plants while they grow in the dirt or hydroponically. The tags travel with the plants through a growhouse to harvest and as the pot flowers are dried and cured for flavor. For shipment to stores, each strain gets grouped into a batch that receives matching RFID tags, which remain on the packages until sale. During scheduled and unscheduled visits to dispensaries or growhouses, state officials use RFID scanners and electronic inventories to ensure that none of the plants go missing.

Two decades ago, Levi Strauss & Co. shook up the apparel industry with water quality guidelines currently used widely across the apparel supply chain. Now, as scarcity concerns become more acute around the world, it is piloting ways to reduce fresh water used in its jeans-finishing operation by encouraging contract facilities to recycle wastewater.

FedEX Chief Executive Fred Smith took a tough line with e-commerce companies, saying they need to shape up sloppy shipping practices or risk losing customers. A significant part of the industry’s Christmas-delivery mess, he said, stemmed from problems on the part of retailers.

The supply chain software market is evolving toward platforms that optimize end-to-end processes and juggle constraints at all levels.

“First, the available technology, including growing capabilities of robots and sensors – the cost of sensors has decreased significantly, computer visioning has improved and the power of computers has increased.Second, increased labor costs and trouble with the labor force in China will accelerate the introduction of robots – one example is Foxconn’s foxbots; another is Apple’s $10.5B tooling investment. As the CEO of Foxconn told us, it’s easier to manage robots than people! But understanding manufacturing and supplier risks is lagging – it could blindside us. Companies will still be surprised by events that they cannot control for which they are not adequately prepared. My recent work with Ford’s supplier network showed that there are still many hidden risks and the biggest exposures lie in unlikely places.”

Rolls-Royce’s Blue Ocean development team has set up a virtual-reality prototype at its office in Alesund, Norway, that simulates 360-degree views from a vessel’s bridge. Eventually, the London-based manufacturer of engines and turbines says, captains on dry land will use similar control centers to command hundreds of crewless ships.

There is a huge range of security technologies available to brands – from simple overt solutions like barcodes and holograms, to more sophisticated covert techniques. Choosing the right technologies as part of a multi-layered, anti-counterfeiting and anti-diversion strategy is a challenge in itself, translating that strategy into an practical, integrated security solution that can be easily deployed in the manufacturing and packaging process adds yet another layer of complexity.

When I first started looking at Apple’s environmental performance in 2005, Apple was nearly as secretive about its environmental performance as it is about the details of the latest iPhone. But now just 8 years later, Apple has led the industry with commitments to make its products and operations more sustainable, and has been progressively opening up vital information on its operations and supply chain.

The attention generated by Aston Martin’s global recall has spread beyond its own announcements to its reported sub-supplier, which has denied cooperation with the sports car marque. Instead of admitting to loopholes in supply chain supervision and quality management, Aston Martin identified sub-supplier Shenzhen Kexiang Mould Tool Co Ltd in its recall. Aston Martin claimed it believed Shenzhen Kexiang is also a victim of fake material after the latter denied producing for Aston Martin.

Japan has ranked among the top two auto exporters to the U.S. since the 1970s, shipping Toyotas, Hondas and Nissans more than 5,000 miles across the Pacific. It is poised to be eclipsed this year by Mexico, which as recently as 1990 sent fewer than a quarter of a million vehicles across its northern border. Mexico’s tally will reach 1.9 million in 2015, topping Canada as the biggest exporter of cars to the US.

Aston Martin, the luxury sports car manufacturer often associated with James Bond, has the same problem as Mattel’s (MAT) Hot Wheels: glitches in the Chinese supply chain.The company is recalling more than 5,000 cars manufactured since 2007 after it investigated after reports of throttle pedal arms breaking during installation. Its discovery: “Initial tests on the failed pedal arm have shown that the Tier Three Supplier used counterfeit material.”