Delays in fulfillment from Asian factories due to congestion at ports and other parts of the transportation system meant that many retailers were stuck with items that could not be sold because they missed the selling season.

Fragile supply chains

As supply chains became more volatile and uncertain, companies ordered more of everything “just to be safe,” he abounded.

This practice is a variation on the consumer hoarding habits that became evident during the height of the pandemic. As a result, when deliveries arrived, inventories skyrocketed.

Consumers changed their preferences. Faced with rising inflation and fear of a coming recession, people began to buy products with value.

To more info about logistics and supply chain we invite you to read our blog The latest about the rising costs in the supply chain

Since this shift was unexpected at the time orders were placed, it led to companies with the wrong inventory.

Some of the drivers behind these changes, particularly the consequences of the Covid-19 pandemic and the Russian invasion of Ukraine, could not have been predicted, and the scale and duration of the resulting disruptions were unprecedented.

However, some of the causes are well known and point to ways in which similar situations in the future could be mitigated.

Are you interested in learn more about supply chain? Visit our blog La importancia de la correcta alimentación de línea

As the Journal reports, while the strategy may provide some short-term relief, it may exacerbate the overall supply chain situation, he said.

Mountains of inventories

Trailers loaded with goods cannot be used to transport products moving through supply chains, further hindering flows of items that are already hampered by other blockages.

Meanwhile, retailers are using age-old practices, such as deep discounting of in-store prices, to clear excess inventory from their books.

The impacts caused by the Covid-19 pandemic and other global disruptions are partly to blame for the mountain of inventory that companies are now struggling to contain.

Find out how the pandemic affected the supply chain in our blog Covid-19 impact on the supply chain after the pandemic

These systemic shocks triggered huge fluctuations in demand and supply and thus the re-emergence of the whiplash effect.

Forecasting demand has always been an inexact science, the expert commented.

“Accurately predicting the fickle buying habits of consumers is a monumental task. Adjusting supply, especially when it is done for highly complex global supply chains tailored to just-in-time and make-to-order strategies, is even more difficult,” he said.

What to do in the face of changing demand?

He added that companies have gotten much better at learning how to take advantage of demand variability and gave the example of deferral (delaying final assembly of a product as late as possible to make demand forecasts more accurate) as a technique that mitigates inaccuracies when analyzing the market.

However, all statistical forecasting models are based on the past.

Know more about the latest news of supply chain, visit our blog The silent threat of the supply chain.

When outages are large enough to introduce a structural change in demand, no statistical model, whether based on ML or some other methodology, can provide a good forecast, he warned.

What does supply chain visibility provide?

He said the only defense against supply variability is supply chain visibility.

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Definition and differences between picking and packing

The terms picking and packing have entered the global logistics vocabulary to some extent, denoting work teams that have a place in every warehouse or distribution center.

Order picking in the logistics environment

The term picking is widely used in logistics as a synonym for preparation of requirements. Review and prepare the order for shipment.

However, if we adhere to the strictly English meaning of picking, as opposed to packing, this interacts with the action of picking up or removing objects, for which it would cover the first stages, being the movement of the operator towards the shelf is highlighted. and subtracting the given product.

Visit our blog to learn more Contract manufacturing and 3PL services in Mexico

Packaging or conditioning requests

Packing refers to the process of preparing and packing requests for their next shipment.

When the goods leave the pallet warehouse, the packaging process also includes the assembly of the pallets, which includes packing boxes, wrapping them with straps and/or stretch film and labelling.

In addition, depending on the picking process in the warehouse, there may be an intermediate phase between picking and packing. This occurs, for example, when batch picking or wave picking is used.

The relationship between picking and packing operations in the warehouse

In warehouses with a basic level of order preparation, it is common for certain employees to be tasked with specific picking tasks (picking and moving) and others with packaging (checking and destroying the packaging).

Picking and packing are usually sequential tasks, although it is possible to approximate them in time when using the pick-to-box method.

How can picking and packaging processes be made more efficient?

A warehouse management program opens up a multitude of modalities for optimizing the picking and packaging processes.

To more info, you can visit our blog What are the origins and advantages of 3PL?

Limit the number of movements and contact points.

The more you reduce the number of manipulations and movements, the more efficiency you will achieve. In addition, second chances are quite expensive: Ideally, picking and packing must work right the first time.

To limit the number of movements it is recommended:

Have a picking program: the system integrates a digital x-ray of the warehouse layout and is able to design the lists of requests to be made, taking into account, among other things, the location of the products and the idealization of the shipments other points logistics. limits

Ensure that the picking stations or dedicated area are equipped with all the necessary groups and packing materials to have everything at hand and avoid disruption in the processes.

Get to know the efficiency of the picking process

The management program allows data to be collected and displayed as KPIs for studying and evaluating warehouse operations.

The triumph of improving picking and packing lies in dividing the two operations into sub-processes and calculating the standard times used in all of them.

Do you want to know more? Click in our blog How is logistics evolving in Mexico?

Evaluate automation resolutions

Picking, understood as the removal and transport of loads, already has a long tradition in logistics systems.

The storage and retrieval machines remove the loads from the shelves and transport them, which automates picking.

The storage and retrieval machines remove the loads from the shelves and transport them, which automates the picking process.

Don’t forget the packaging

In order to optimize packaging, we do not have the ability to override the packaging materials used in the warehouse.

The installation of automatic packaging machines: systems that produce paper or windsock fillers deliver it directly to the operator who packs itsimply put it in the packaging.

The parameters between selection and packaging are often fluid, as the material flow in the warehouse is heavily intertwined.

We invite you to visit our blog What is the importance of picking in warehouse management?

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Well, once ports are finally cleared and tariffs are lowered, the way we manage and think about the supply chain will be very different.

Learn more about Supply Chain in our blog The silent threat of the supply chain

The supply chain is now a key axis of the C-suite

In October, business CEOs surveyed by McKinsey for the first time identified supply chain unrest as the biggest threat to the growth of their organizations and economies in their territories, greater than pandemic, labor shortage, geopolitical instability, war and house problem.

Bank of America further noted that “supply chain” claims on Fortune 500 company earnings calls in the third quarter were up 412% from the third quarter of 2020 and 123% from those of second-quarter 2021 earnings, once the boardroom has focused on the matter. already white-hot.

Trading continuity is more relevant than prices

These drivers are still relevant, but the unprecedented chaos caused by the Coronavirus has intimidated the competitive posture, including survival, of many organizations who have found they cannot, at this time, respond to consumer expectations.

The existential crisis caused by the pandemic has forced organizations to refocus their innovation and restructuring efforts to ensure business continuity by building resilience and flexibility.

“Operations and supply chain groups need to develop new skills and quickly. Playing with a more balanced scorecard will require several changes: minimizing the carbon footprint, increasing supply chain resilience, creating more transparency and ensuring accountability,” says Bain & Co in a new report.

If you want to more info about logistics, we invite you to visit our blog section when you can find value information to your company.

Buyer-supplier relationships have changed

Blockchain technology, which allows for secure and controlled data exchange, can be important for data exchange.

Companies will need to reach out to their suppliers and build interactions and trust, but they also have the potential to use data-sharing-capable approaches to make progress,” the report reads.

Do you are interested in learn more about supply chain? Visit our blog The latest about the rising costs in the supply chain

Supply chain resolutions are now standard

Bold organizations don’t wait around for supply lines to unravel: retailers with little storage space keep buying warehouses, shippers that don’t have a chance to discover containers keep making their own, and organizations that don’t have the ability to book with ocean carriers continue to charter ships, while those who remain dissatisfied with their online sales continue to buy e-business fulfillment operators.

Maersk and CMA CGM, by the way, appear to be on a collision course with Amazon and Alibaba in logistics, shipping and delivery.

They continue to use alternative ports, recycle products, switch to air travel, increase inland freight, take advantage of non-working time at the port, and divert resources from low-margin products to profitable ones.

GE and Stanley Tools are among organizations that have sought to ensure product safety through relocation of production, use of forward contracts, hiring of manufacturers, accelerated plant expansion, construction of new buildings, use of dual-source construction and closed contracts, or hard-source construction. 3D printed parts.

Inventory game has been broken

“Just-in-time is built to improve supply chain efficiency and economies of scale,” Nissan CEO Ashwani Gupta, Nissan COO, recently said.

To ensure they have enough to sell, retailers Nordstrom, PVH and Gap have tried “pack and hold” tactics: outrageous calls to avoid shortages with a bet they can keep unsold inventory and sell it as new the next day. year instead of making monumental discounts.

The Reuters report indicates that more organizations remain prepared to run aggressive constant replenishment programs and further automate their requests to avoid running out of sufficient inventory in the future.

Visit our blog Covid-19 impact on the supply chain after the pandemic to more info.

What is clear is that nearly 2 years after the planet learned of the existence of the coronavirus, the supply chain is still experiencing a series of unfortunate firsts: a historic degree of unreliability of carriers, rates record freight, lowest vacancies ever and more.

In A&T Supply Logistics we have the ideal logistics solutions to your company!

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How much did the costs in the supply chain increased?

Just when business and companies were starting to resettle their supply chain network with their inventory’s levels, the cost of supply chain management and logistics management increased about 20% and if we are talking about money is about $1.85 trillion dollars!

And what is affecting the supply chain sustainability?

There are various causes to this phenomenon and some of them are not fully related to supply chain problems, it can go from the rising inflation to the rapidly changing consumer demand after the pandemic.

On the other hand, we have direct transportation prices increasing about 22% and inventory costs about 26% compared to 2020 due to also a supply chain strategy of trying to get ahead the disruptions in orders.

It is very important to say that these dramatically changes in the costs of the supply chain were previously expected by the experts in the industry.

How do we solve this problem or at least reduce the damages?

In some supply chain news, we have seen that some companies are starting to expect drops in their profits due to high inventory levels and marketing strategies to reduce them and get rid of the costs.

Other solutions that companies are starting to implement is working closely with logistics provider in the area they are developing, geographically speaking.

Want to use the solution experts are using?

If your company right now is facing one of the impacts of the rising costs in the supply chain management, then you can also use the solution other are using…the help of a 3PL in Mexico and USA.

With an independent logistics solutions company, you will get your transportation, distribution, international load, storing, packaging and other sections in the supply chain handle by an expert third party.

Let us tell you more about our solutions to the supply chain management!

With our solutions, our digital communication channels and our premium service attention lines.

Have more questions about our services? Send them to us! We will be please to answer you.

Don’t forget to follow A&T Supply Logistics, the logistics solution of modern companies.

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What is Kitting Manufacturing?

Kitting is a logistics process that allows different components or products to be assembled by a third-party to make a full package or kits delivered to a client.

The primary objective of kitting in manufacturing is to eliminate time searching for components and administrate the needs for a production requirement.

There is a correlation between Kitting & JITS, to know more read our article about it here.

Kitting process in warehouse

A 3PL kitting process can help your warehouse with the receiving, processing and delivering goods to costumers, this way an expert is in charge of assembling individual items into kits ready for shipping them out.

This process will organize better your inventory and increase your efficiency by generating fewer SKUs and making it simpler for warehouse workers to have all kits in one place.

You can learn more about this logistic strategy for your kits by just clicking here.

Kitting Manufacturing in Mexico

In order to work with a kitting service provider in Mexico you have to make sure they have an IMMEX certificate that allows them to import temporally the goods being used in your kits.

A&T Sorting Company is one of the kitting providers in Mexico that works with the IMMEX program, you can learn more about it here.

Why use this service in Mexico and how to start?

Having a good supply chain administration in your company will allow to convert the components into finished products and deliver them to the costumer in better times, the benefits of working with a kitting service in Mexico will be:

• Having an efficient and cheap workforce assembling your kits
• Cutting delivery times to your U.S. clients
• A solution for the stopped storage from having your kits being assembled in other continents
• Less risks in the delivery process to the U.S. since can be done by ground transportation

Start now to assemble your kits with a Mexican supplier by contacting A&T Sorting Company, we can help all types of companies that need to improve their supply chain processes.

Contact us here to know more information!

You can also write us a mail to sales@atcorp.mx or make a call to (844) 419 2582.

Our LinkedIn.

“Otorgamos un servicio premium a clientes con proyectos de mínimo 1 mes”

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Familiarízate con los términos que usa un experto como un empleado valioso de almacén.

• Kaizen: Es una metodología japonesa para la mejora continua donde cualquier pequeño buen cambio trae en cadena un gran impacto a tu proceso de suministro
• OTD: On-Time-Delivery, se refiere a una métrica utilizada para medir la eficiencia de tus proveedores en sus tiempos de entrega acordados. De este tema surge la relación con los Inventarios y la falta de administración de las empresas.
• 3PL: Es una estrategia eficaz mediante el uso de un experto tercerizar las tareas de tu almacén para aumentar tu eficiencia.
• SRM: Supplier Relationship Management, es el nivel de confianza y todas las estrategias que existe en la relación entre tú y tus proveedores.
• MRO: Maintenance, Repair and Operating Supplies, son todos los suministros necesarios para el proceso del producto final sin verse directamente en él.
• JIT: Just-In-Time, es una metodología para solo tener lo necesario en tu almacén de acuerdo a la teoría lean para hacer eficiente tu administración. Todo esto impacta para bien tu almacén como lo que puedes leer en nuestro blog 4 Beneficios del KITTING & JITS.

Realiza auditorías a tus proveedores.

Administra bien tu MRO para ser un empleado valioso en almacén.

• Tener un registro histórico del material necesario por producción
• El tiempo que tardas en hacer el re-stock de este material
• El nivel de importancia por ítem de este inventario
• Conocer a detalle La importancia de la gestión de inventarios para aplicarlo en esta área

Trabaja de la mano de un aliado 3PL

¡Termina de ser el empleado mas valioso de tu empresa y acércala a las soluciones de subcontratación logística de A&T!

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