LSCMS Blog

The most popular search result when you google “Supply Chain dictionary” on the internet is the LSCMS website. Readers will be pleased to know that more than 5,000 terms and definitions are available FREE, off the Logistics & Supply Chain Management Society website at – www.lscms.org

This resource took a number of years to compile and is an excellent tool for students and professionals who want to clarify the meaning of a term or word. We strive to constantly upgrade the content and welcome feedback and contributions.

We are also looking for sponsors who want to work with us to print hard copies of this online resource. Whilst on-line searches are getting more and more popular, we do from time-to-time receive enquiries as to whether a physical, hard copy of this glossary is available. If you are interested to find out how to go about supporting or sponsoring this initiative, please contact the Secretariat at peter@lscms.org

A Qantas flight between Sydney and Adelaide on April the 13th used a 50-50 mix of conventional fuel and refined cooking oil. The biofuel costs far more than conventional fuel, partly due to its importation from the United States but Qantas says it is absorbing the one-off cost because it is keen to highlight the need for an Australian biofuel source, at a time when airlines and passengers around the world are dealing with high jet fuel and carbon emission costs.

John Valastro of Qantas says the flight is a commercial first in Australia. “It’s actually really significant because it’s the first commercial flight to be powered by sustainable aviation fuel in Australia and that’s a big step for this country,” he said. He says the flight will produce far less carbon emissions than if conventional jet fuel were used. “We’re talking about a 60 per cent reduction in the overall life cycle of the fuel, so that’s a substantial improvement,” he said. The biofuel component of the fuel used for the flight is from refined cooking oil.

Biofuels are sometimes criticised for cutting into potential food supplies but Qantas says it has used a product that is not a food crop. The oil came from and was refined in Houston before it was shipped to Australia. It has cost more than four times an equivalent flight using normal fuel, partly because of the shipping distance involved. Mr Valastro went on to say that passengers are not paying a surcharge. “We’re actually using this opportunity to highlight what needs to be done, getting people on board,” he said.

Aviation industry analyst Tom Ballantyne says Qantas and other airlines want governments to invest in the biofuels push. “We know we can make them, we know they’re exactly the same as jet fuel and have absolutely no impact on the operation of the aircraft,” he said. “The trick is making enough and building the infrastructure to provide that. “What is actually needed is money. A lot of the big airlines’ argument is that governments should invest money in the refineries which are required to produce these biofuels. They argue that very strongly, but so far many governments have been a bit slow in coming forward.” The hope is that biofuels will eventually cost about the same as current jet fuel. Peter Zurzolo heads the Future Farming Co-operative Research Centre. At Narrogin, south-east of Perth, he and others are trialing whether the common mallee eucalypt is a viable biofuel source. “Not only is it a common tree but it’s well understood. In WA alone, we know there’s about 13,000 hectares on about 1,000 farms,” he said. “We’re providing what we’re hoping is a long-term sustainable and regionally-based feedstock supply that can be competitively grown into different processing units, hopefully around regional Australia,” he said.

In a country already plagued with high costs, trucking operators will pay almost 7 cent more for diesel from July 1, 2014 under the Federal Government’s carbon tax package.

Unveiling the reform recently, Prime Minister Julia Gillard announced that the trucking industry would be exempt for two years when the tax begins on July 1, 2012.

The scheme will begin at $23 per tonne of carbon, rising to $24.15 the following year and $25.40 in July 2014 before moving to a market-based emissions trading scheme in 2015.

The $25.40 tax will increase diesel prices by 6.85 cents through a reduction in the fuel tax credit rate, which will continue to decline as the cost of carbon increases.

Once implemented, trucking potentially faces a double whammy on diesel prices from July 2014 because the fuel tax credit is reduced at the beginning of each financial year to account for government expenditure on the road network.

These costs could be further compounded by higher wages as CPI will move upwards as cost of food and other items will increase. Overall sad news for the competiveness of Australia’s trucking industry.

The Logistics Society will this year once again be a supporting organisation of LogiChem Asia.

LogiChem Asia is the only event specifically for those working in the chemical supply chain area. Featuring over 250 attendees, 70 speakers, 14 hours of roundtables and five streams, LogiChem Asia is the only event around able to give you the in-depth chemical specific supply chain analysis you need.

Eddy Setiawan, President, South East Asia of Dow Chemical will open our focus day on sustainability and discuss how sustainable supply chains impact directly on your bottom line.

LogiChem Asia will also devote individual roundtables to China, India, Vietnam, Indonesia, Singapore, Thailand and so much more.

The entire Asian chemical logistics supply chain will be here. A few speakers are listed below, for more check out our website www.logichemasia.com.

· Eddy Setiawan, President, South East Asia, Dow Chemical

· Berthold Alfes, Managing Director and Senior Vice President of Supply Chain Center APAC, Bayer MaterialScience Ltd

· Mary Scheibner, Global Supply Chain Director, BASF

· Adam Balarin, Vice President, Supply Chain, Unilever Vietnam

Amazon.com, Inc. has announced that it has reached an agreement to acquire Kiva Systems, a developer of mobile-robotic solutions that automate eCommerce order fulfillment and warehouse operations.

“Amazon has long used automation in its fulfillment centers, and Kiva’s technology is another way to improve productivity by bringing the products directly to employees to pick, pack and stow,” said Dave Clark, vice president of global customer fulfillment for Amazon.com. “Kiva shares our passion for invention, and we look forward to supporting their continued growth.”

“For the past 10 years, the Kiva team has been focused on creating innovative material handling technologies,” said Mick Mountz, CEO and founder of Kiva Systems in a statement. “I’m delighted that Amazon is supporting our growth so that we can provide even more valuable solutions in the coming years.”

Following the acquisition, Kiva Systems’ headquarters will remain in North Reading, Mass.

Under the terms of the agreement, which has been approved by Kiva’s stockholders, Amazon will acquire all of the outstanding shares of Kiva for approximately $775 million in cash, as adjusted for the assumption of options and other items. Subject to various closing conditions, the acquisition is expected to close in the second quarter

In what seems to be a trend in large organisations nowadays, Dell has jumped on the bandwagon and set up its Dell Supply Chain Management Institute in Xiamen, China with the claim to improve the country’s supply chain management practices.

The school will work with Tianjin University and Antai College of Economics & Management of Shanghai Jiaotong University, focusing on theories, concepts and challenges faced in supply chain management.

Charles Cheung, managing director of Dell China and executive director of its global supply chain operation, told China Daily that the new institute will generalise the company’s supply chain management cases into theories and provide supply chain management cases for research.

Dell’s supply chain school will focus on supply chain management, corporate strategies, application of information system models, partnership on the whole supply chain, change management and risk control.

“The cooperation between Tianjin University and Dell marks a good example of the combination of theory and practice in China’s supply chain field, and will actively promote the improvement of supply chain management in China,” Zhao Daozhi, director of the Institute of Modern Manufacturing and Logistics at Tianjin University, told China Daily.

Commncing Monday 20th February, the Logistics & Supply Chain Management Society will be featured on Channel News Asia’s, Invest In Me show that airs at 8.30 p.m. Singapore time with repeat telecasts being shown throughout the week. Episodes can also be downloaded from the Channel News Asia website.

In this programme, the Society shows its support in helping social enterprises in the region by providing Logsitics advice and hands on expertise to an events company with Logistics issues. Follow us as we make this journey with the Society’s President, Raymon Krishnan and other individual and corporate members towards resolving some of the common Logistics issues faced by SME’s.

Past episodes of the programme can also be viewed online at - http://www.channelnewsasia.com/investinme

Air pilot training school Alpha Aviation Group Philippines said it plans to expand operations in the Philippines to exploit the burgeoning demand in the low-cost carrier market, reports Manila’s Philippine Star.

Currently eighty per cent of its graduates fly with Airphil Express, Cebu Pacific, Zest Air and SEAir. International clients also include Air Arabia and Jet Airways, said the report but this expansion could see the school supply pilots to fly for other regional airlines. Like it has done in the maritime sector, qualified pilots from the Philippines could help drive down salaries of pilots for carriers like Tiger, Jetstar and the new low-cost offering from Qantas.

“We have invested in the state-of-the-art Airbus A320 Level D full flight simulator,” said Kunal Sharma, chief operating officer of the flight school at the Clark Freeport Zone in Pampanga.

“This is a multimillion-dollar investment that demonstrates our commitment to the Philippines, Philippine aviation, and training Filipinos for high-paying, professionally fulfilling jobs,” Mr Sharma said.

The company, which operates an Airbus A320 simulator at its four-bay simulator facility, is banking on the projected growth of the local commercial aviation industry. The new flight simulator will provide the company with the capability to deliver 6,000 hours of training annually – enough to train 300 new pilots.

Alpha Aviation Group commenced operation in 2006, and claims to be the world’s largest provider of Multi-crew Pilot License (MPL) pilots. The sector is currently driven by stiff competition among an expanding field of budget airlines, and an equally bullish regional market.

“Graduates of Alpha Aviation Group have established successful careers in the aviation industry. The training we provide is based on international standards, which prepares cadets to work anywhere in the globe,” said Capt Andrew McKenchnie, chief training officer.

It has been reported recently that DHL has launched a new multi-modal service operated by its global forwarding division between China and Japan, that is designed to cut costs by up to 60 per cent compared to air freight, and reduces transit time by up to three days compared to solely using an ocean freight service, the company announced.

What is interesting about this service is that DHL will be using 12 foot instead of the standard 20 and 40 foot containers that are in use globally today. Aside from the special equipment that may be needed to handle these multi-modal shipments, repositionong of empty containers back to China or Japan due to imbalance of demand between these two countries would be an added costs to overcome.

The multimodal service comprises the use of ferries, rail and trucks. Goods are picked up from any location in China, mainly Shanghai, Ningbo, Hangzhou, Suzhou, Nantong, Wuxi, Nanjing, Hefei and Wuhan, and brought to Shanghai by truck, taken across to Hakata in Japan by ferry and then transported across Japan via Japan Rail.

In Japan, pick-up and delivery is done through Japan Rail and taken across to Shanghai by ferry, with final delivery to destinations in China completed by truck.

The concept of CDN’s or Combined Distribution Network developed by LSCMS President, Raymon Krishnan, is gaining growing interest in industry.

Hershey and Ferrero, two of the world’s largest candy makers announced recently that they will work together to sweeten their supply chains and reduce their carbon footprint in North America. The two companies launched a collaborative warehousing, transportation and distribution initiative in North America this week.

Hershey, a $6 billion U.S. chocolate and candy maker, and Ferrero, the almost $9 billion manufacturer of brands such as Nutella and Ferrero Rocher chocolates, will join to reduce truck miles, carbon dioxide output and energy use.

Although details of the initiative were not released, the shippers are expected to share warehousing and distribution facilities and truck capacity. The alliance does not encompass manufacturing, selling or marketing activities, the companies said. They hope to realize gains from the pact as early as 2012.