Do market changes require the restructuring of the supply chain?

Retail is changing. The influence of e-commerce has continued to grow in recent years. Companies from all sectors have to react to this and adapt their distribution structure. How do consumer goods companies meet market requirements in terms of logistics? Do they adapt the supply chain structure in order to (better) fulfill certain service goals, for example?

The benchmark study conducted by Miebach Consulting in the consumer goods industry, with a focus on the cosmetics industry, reflects the current state of distribution structures and provides insights into the development of networks and applied design principles. In addition, the results point to conversion processes in the coming years - and thus provide important information for the company's own supply chain planning.

Miebach surveyed 20 consumer goods companies of different sizes. The focus of the survey was on the network structure, the supply chain related Key Performance Indicators (KPI), the special requirements of each region, their degree of orientation towards e-commerce, and ownership. A further focus was on identifying the warehouse locations.

The complete study report in English language can be requested free of charge using the form or by e-mail to Ralf Hoffmann (hoffmann@miebach.com), stating the contact details.

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Located 120 kilometers north of Jeddah in Saudi Arabia the King Abdullah Economic City (KAEC) is growing, adjacent to a fully equipped and functioning modern Port (King Abdullah Port – “KAP”) facility and with a future link to the rail network across the Kingdom.

According to the Kingdom’s “Vision 2030”, the new city on the Red Sea is planned to develop into a metropolis of 2 million inhabitants for the time after the oil era and serve as an economic center and logistics hub. A total of 100 billion US dollars has been estimated for the mega-project announced in 2005 by the former King Abdullah Bin Abdulaziz Al-Saud.

In the King Abdullah Economic City, a new distribution/logistics park, is being built for the Binzagr Company, which will also benefit from the port, rail infrastructure and the new regulations for the special economic zones.

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Unlike the planning of conventional warehouses, additional criteria must be considered for storage and material flow planning in pharmaceutical companies. All areas must be qualified from the very start of planning - including the areas of climate control, documentation of storage conditions (e.g. monitoring system), as well as entrance and access control, and particularly for material flow changes in the production area.

The following article examines the success factors for efficient and successful warehouse planning in climate-controlled areas for the pharmaceutical industry.

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The importance of company acquisitions is increasing among logistics service providers, but very few companies have created the organizational conditions to deal with the topic in a structured way. This conclusion is the result of a survey conducted in May and June of German financial investors and logistics service providers on mergers & acquisitions by the consulting firm Miebach Consulting in cooperation with DVZ.

"More and more companies recognize that M&A is a strategic tool for actively shaping growth opportunities. Nevertheless, it must be noted that there are only a few companies with an institutionalized M&A approach. If M&A is really to become part of the corporate strategy, the companies have to make significant progress" - says Dr. Klaus-Peter Jung, Member of the Management Board, Miebach Consulting.

The complete study report in German language can be requested free of charge using the form or by e-mail to Ralf Hoffmann (hoffmann@miebach.com), stating the contact details.

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Just as there are varying levels of athletic and sporting activities in the US such as recreational, junior varsity, varsity, collegiate, and professional; so too are there levels of continuous improvement concepts, implementations, and cultures within our organizations. All-time great athletes such as Tom Brady, Mia Hamm, Michael Jordan, and Lisa Leslie didn't start their careers at the highest levels of their game. They began like many other professionals do: by starting off at either young ages or at beginner levels and growing their craft and skillset over time.

This isn't news to anyone, yet when we approach our own continuous improvement journeys within our companies, often we immediately jump into very complex projects such as implementation of a Kanban system, or rolling out a Toyota Production System (TPS) based initiative, introduction of six sigma projects, or a full-blown launch of a Total Quality Management (TQM) system, without first having built some of the very beginning levels of continuous improvement and coaching into our culture.

There are a few significant elements of continuous improvement that will help a novice manager buildup their "junior varsity team" into a more professional continuous improvement organization, and that is the focus of this whitepaper.

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Industry 4.0 – for companies there‘s just no escaping it. Some have tried going on the offensive, others have tried watching and waiting, and yet others have even tried rejection, but no one can ignore it.

The term “Industry 4.0” refers to the networking of people, systems, and objects in real time within self-organized and optimized value chains. With “Industry 4.0” having lost ist luster, the term “digitalization” is increasingly replacing it. Digitalization describes the transformation of analog processes to digital ones. Digital technologies are omnipresent: at work, at home, and on the go in purses and pants pockets. There’s more to digitalization that just digitalized photos or DVDs replacing VHS, though. The following pages offer insight into the world of opportunities opened up by the use of digital technologies in logistics and production.

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Great Britain is leaving the EU - at least that much has been decided. But how will Brexit affect logistics and supply chain management?

Europe will soon be a little bit smaller. No one is quite sure how this will play out yet. There will be consequences - that much is sure. What challenges will crop up in logistics and what should the people in charge be doing?

The entire political debate surrounding Great Britain's exit from the European Union has been plagued by uncertainty. In addition to the uncertain outcome of negotiations between Great Britain and the EU, the presumed aftermath of the negotiated terms also remains unclear. At the same time, less than a year remains to make vital decisions - and that's before implementation even starts.

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In a world where the purchases made online steadily increases and consumers are becoming more demanding in terms of speed and flexibility of service, the urban last mile distribution of goods is a service that gains more relevance every day within the supply chain.

However, national governments - and even more so the municipal administrations - have begun to take restrictive measures for delivery vehicles' access to urban centers, especially in major metropolitan areas, with the aim to avoid congestion and protect the environment.

The two trends are clearly conflicting and require a profound change in the urban distribution model. In this publication we will analyze which are the main challenges of the current model and which solutions are appearing on the horizon.

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The increasing competitive pressure, the improved technical possibilities due to digitization but also the need to make work easier for the employees both in logistics and at the point of sale as well as the partly limited availability of staff are the reasons why automation and robotics have been getting more attention in consumer goods retailing in recent years.

In summer 2017, the EHI Retail Institute carried out a survey on leading retail companies in German speaking countries to further explain the opportunities and challenges of the usage of robotics in retail - both in intralogistics and at the point of sale. The results are demonstrated in the EHI whitepaper (available in German language). Miebach Consulting supports this project within the "Robotics for Retail (R4R)" initative as a cooperation partner.

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With the technology dependency rapidly increasing in business activities and the customers demanding close to immediate responses; having a technical disruption even for a short period of time, has only negative connotations.

The interconnection among the different technologies must be understood, documented, and monitored so that the information flows and the processes perform as expected. Who is responsible for this? A Data Governance Committee that understands not only the technology, but also the processes and the users.

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In today's globalized world of business, the ever-increasing requirements of customers regarding products and services has led to a new trend - nearshoring, which allows the companies to respond to customer needs with shorter delivery times and greater flexibility. Miebach Consulting has conducted an international study on this topic to determine how supply chains are affected by current and future shoring strategies, to evaluate the factors for shoring decisions and to show what shoring trends companies expect in the future.

One of the main conclusions of the study is that an increasing amount of companies (51 % of the participants) are producing in closer proximity to their markets instead of moving the production abroad. The study also shows that this percentage is going to increase even more, since 26 % of the participating companies believe that nearshoring is a trend that is going to have a very high or high relevance in a near future, above the offshoring and the onshoring or local production (22 % and 17 %, respectively). See figure 1.

Asked more in detail about which localization strategy they would choose and where they would like to implement it in the future, respondents pointed out that in Europe the preferred strategy will be nearshoring (69%), in America Onshoring will strengthen (43%), while offshoring is still a major trend in Asian countries (67%). See figure 2.

"Modern production processes ensure a stronger focus on customers and can be a competitive advantage given the right location strategy. This is where Near- and Onshoring become more important for companies. Especially the population within the major economic regions can benefit from job creation due to production in proximity to markets." - Bernd Müller-Dauppert, Member of the Management Board, Miebach Consulting GmbH.

The study participants expect an increase in supply chain complexity due to Near- and Onshoring trends. The process of choosing an optimal shoring strategy and subsequently selecting the ideal location therefore requires an integrated consideration of both supply chain and production networks.

In all, 127 companies from various sectors took part in the study. Around 1/3 of participants are from North and South America and 2/3 are from Europe.

The complete study brochure can be obtained for free from Miebach Consulting using the form or by e-mail to Ralf Hoffmann (hoffmann@miebach.com), stating the contact details.

A blog article dealing with the nearshoring trend from the perspective of logistics service providers you will find here. 

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The term 4th Party Logistics Service Providers - or 4PL for short - repeatedly comes up in public discussion. Already during the 90's many postulated the success of the concept but this was far away from reality. Comparing the publications, talks and other PR related activities at that time to the number of projects actually implemented it seems that the 4PL euphoria has been more marketing hype than an actual trend.

Long forgotten, the concept is now being revived - 4PL is back in the public debate. But what is this all about, why is this issue being taken up, which players are important and for which kind of industrial and retail customers could this approach be interesting? The following pages give answers to these questions.

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The strength of a businesses internal Supply Chain capability is a result of the need to adapt to ever changing market expectations. To cope with today’s exponential rate of change an increasing number of businesses are relying on external expertise to innovate and exploit supply chain opportunities. Miebach Consulting believes that collaboration is becoming an indispensable component of leading edge supply chains and the factors that need to be addressed to ensure success.

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This whitepaper gives an insight into current limitations and possibilities of robots in logistics, as well as answers and additional suggestions on the current state of robot-based automation, the feasibility of applications and their opportunities.    

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The strategic development of a company is a challenge for many logistics services providers, and previous methods only lead to insufficient solutions. While during the 90s and 2000s the focus was to successfully establish new businesses, it has now changed to attracting new business opportunities. This change is challenging the whole industry.

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Miebach’s participation at the 2016 LLamasoft Summercon Conference included a session on Ideal Supply Chain Design presented by Nick Banich.  The response from the presentation was very positive, and in consequence we have collaborated with LLamasoft to create an E-Book on the topic to be made available to those who were not in attendance.

“The idea of the ’10 Pillars of Supply Chain Design’ was to share the very high-level strategy that we ourselves employ when beginning a project of this nature for a client,” explained Nick, Miebach partner in the US. “By sharing this information with other supply chain professionals, Miebach and LLamasoft can show the value of our respective roles within a design project for our clients.  Between our expertise and the comprehensive Supply Chain Guru software, network designs are able to achieve a greater positive impact for the client’s overall business plan.”

Miebach’s LLamasoft Center of Excellence supports both owners and non-owners of the software across the full spectrum of supply chain design and transformation. 

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The study brochure about the new Miebach pharma survey 2016 with 256 participants is now available. The results show: The pharmaceutical industry is giving its supply chain and logistics a much greater importance than in the past. The top subjects in the pharmaceutical logistics are end-to-end supply chain visibility and optimizing the distribution networks. The increasing volume of refrigerated and frozen products and serialization of product codes are further challenges supply chain managers are facing.

"Our European study clearly shows that most pharmaceutical companies see the European market as a whole region, while national borders are becoming less important, except for specific legislation or distribution channels" - says Martin Eckert, Global Pharma Expert & Director, Miebach Consulting. Optimization of the distribution network has grown very much in importance (from 76 % to 86 %). The initiatives are aiming to transform many national networks into one more efficient and transparent European network, alongside with other many issues.

Topics like improving supplier management (86 %), end-to-end supply chain visibility (93 %), improving forecasting accuracy (84 %) and track & trace (82 %) are some of the most significant issues for the management, very much in line with the previous Miebach pharma study from 2012. Optimization through automation (64 %), outsourcing (62 %) and constructing new warehouses compliant with GxP guidelines (54 %) are also important topics.

The full study report including derived recommendations for action (available in English, German and Spanish language) can be obtained free of charge using the form or by e-mail to Ralf Hoffmann (hoffmann@miebach.com), stating the contact details.

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The heterogeneous Asian-Pacific area increasingly gains importance as a market, with China being the top-performer. The results of the current Miebach Study - Distribution to Asia-Pacific, with more than 126 participants, indicates that 20 % of the surveyed companies already earn more than 15 % of their total turnover in this area.

“All signs point to expansion in Asia-Pacific, although companies will have to adjust their delivery time and service level to European standards”, said Bernd Müller-Dauppert, member of the executive board of Miebach Consulting GmbH.

More than 75 % of participants expect an increase in delivery time requirements. As of right now, more than half of the exporting companies have to supply customers within 14 days; almost a quarter within three days. Two thirds of the participants additionally expect an increase in competition, which will result in an even higher service demand. To fulfill delivery time requirements, three quarters of companies pursue a supply chain strategy precisely for Asia-Pacific. Especially the strategic importance of agility and flexibility in the region is assessed highly, followed by the CPFR-concept (Continuous Planning, Forecasting and Replenishment) as well as supply chain transparency. Further important topics for Asian-pacific companies are supply chain differentiation by customer demands as well as the use of current IT-systems.

A majority of companies (41 %) distribute their products in all five Asia- Pacific regions and almost a quarter within four regions. Exporting companies with local production have on average eleven  mainly self-owned warehouses in Asia-Pacific. Only a small number of companies consider developed countries like Australia/ New Zealand and Japan/ South-Korea as attractive production locations. That indicates that companies are following consumer markets: Higher saturated markets have higher customer demands – therefore, a customer proximity is required.

Background of the Study: 

Miebach Consulting conducted a survey in June and July 2015 about distribution to Asia-Pacific. An online survey was used as research method, which was sent to companies from different industries. The survey was analyzed completely anonymously.

The complete study report in English language can be requested free of charge using the form or by e-mail to Ralf Hoffmann (hoffmann@miebach.com), stating the contact details.

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The article deals with three technological trends, which might revolutionize the world and have a major impact on supply chains: 3D, printing, robots and drones.

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