Logistics Viewpoints

A complete analysis of logistics trends, technologies, and services

This Week in Logistics News (October 1-5, 2012)

Chemical Industry | By •

As reported in the Wall Street Journal, a study conducted by the University of Pennsylvania’s Wharton School found that “men with shaved heads are perceived to be more masculine, dominant and, in some cases, to have greater leadership potential than those with longer locks or with thinning hair.” I was cheering the news, reading the article out loud to my wife in the next room, until I came to this disturbing section: men with shaved heads were also perceived to be “less attractive” than full-haired men. At that point, it was immediately clear to me that the study lacked any credibility, that the Wharton School is not what it used to be, and that even though no bald men were harmed in the research process, some were hurt afterwards.

In more important news…

A few years ago, I conducted a study of the third party logistics (3PL) market, and with the exception of a few niche providers, most 3PLs derived their revenue from only a handful of industries: Automotive, High Tech, Food & Beverage, Consumer Packaged Goods, and Retail. Near the bottom of the list was Chemical, due in large part to the specialized needs of the industry.

Today, however, as 3PLs seek new growth opportunities, they are starting to pay more attention to the chemical industry. Last year, for example, Transplace acquired SCO Logistics, a Philadelphia-based 3PL serving chemical companies (listen to my podcast interview with the CEOs of both companies). And this week, CH Robinson announced that it has formed a new division called ChemSolutions™ which will provide logistics services to chemical manufacturing and distribution customers globally. According to the press release:

ChemSolutions™ is capable of providing chemical bulk shipping, safety and sustainability, freight forwarding, customs brokerage, vendor and supplier compliance, global trade management, and multi-modal transportation to chemical shippers.

 

In order to serve the chemical market more broadly and effectively, ChemSolutions™ has earned RC14001™ certification, which combines Responsible Care and ISO 14001 certifications into a single process based on an international standard that is accepted by chemical manufacturers worldwide.

Also this week, ChemLogix — a provider of chemical industry consulting services, TMS technology, and transportation management services — introduced a new suite of logistics service brands to boost the visibility of its offerings. The new service brands, which include On-Demand Global TMS, RightSource LX, BULKTAINER, and RightRail LX, address the key areas “that support customer needs to Plan, Analyze, Control and Execute their supply chain operations.”

Simply put, and in the immortal words of The Jeffersons, the chemical industry is “moving on up” and “finally getting a piece of the [3PL] pie.”

In other 3PL news, Menlo Worldwide Logistics introduced CarbonNet™, “a carbon management program [that] combines custom-built software to capture, calculate and manage greenhouse gas emissions, with Lean processes and tools to uncover waste, design and implement reduction solutions.” CarbonNet is a cloud-based solution and was developed by Menlo’s IT team. The company has been piloting the program at 60 of its facilities in the United States this past year, and the goal is to offer this program to customers in the future. Here’s an excerpt from press release about how CarbonNet works:

The application is designed to be highly configurable, and can accept a wide variety of data inputs to catalog key emissions characteristics of a facility and the activities performed within, as well as the transport of products and materials between such locations. It can accept input as well from suppliers, vendors and other third parties whose activities could contribute to the makeup of a supply chain carbon footprint.

Although sustainability has dropped from the headlines here in the US since the economic downturn, it seems to me that 3PLs (especially those with global operations) continue to make investments in this area, such as investing in alternative fuel vehicles, participating in the Carbon Disclosure Project, and publishing sustainability reports. Why? A question I’ll address in a future posting.

Mobile, Social, and Cloud were among the technology headlines this week. Manhattan Associates announced the creation of Manhattan Mobility Labs, “a development team with a specific focus on mobile applications and their ability to extend the Manhattan SCOPE® platform of supply chain optimization solutions.” Current Manhattan Associates mobile applications include Store Inventory Management, Distributed Selling, Supplier Enablement, and Mobile Supply Chain Intelligence. Here is a quote by David Landau, vice president, product management, at Manhattan Associates:

“The creation of Manhattan Mobility Labs is a result of the collaboration we have with our customers in creating solutions that enable the mobile workforce and increase employee productivity. In addition to our current mobile offerings, we have several exciting upcoming initiatives, built on a common mobile framework and available on popular mobile devices and tablets.”

Just three weeks ago, SAP announced the opening of its new SAP Mobility Design Center “to help customers meet the growing need for individualized mobile solutions.” Is opening up mobility labs and design centers the beginning of a new trend in the software industry? This reminds me a bit of the days when software vendors were launching similar efforts around RFID — although this time around, customer demand for mobile solutions actually exists.

Oracle held its annual user conference, Oracle OpenWorld, this week. Among the many press releases issued was one announcing Oracle Social Relationship Management Suite, “an integrated enterprise service that enables companies to listen, engage, create, market, and analyze interactions across multiple social platforms in real-time providing a holistic view of the consumer.” I believe it will take a while before we see “social” capabilities embedded in Oracle’s supply chain and logistics applications, but the ball is at least moving in that direction…and another reason why supply chain executives need to think beyond Facebook, LinkedIn, and Twitter when it comes to social business.

The other release that caught my attention was the announcement that Oracle has expanded its Oracle Cloud services portfolio. You can read the press release for all the details, but the company says it has more than 10,000 customers and more than 25 million users worldwide using the services each day. “The pricing model is simple, predictable and based on a monthly subscription model…Customers can choose to sign up for month-to-month subscriptions or longer term contracts.” With regards to Oracle Cloud Application Services, the portfolio includes ERP Services, HCM Services, Talent Management Services, Sales and Marketing Services, and Customer Service and Support Services. I haven’t spoken to anyone at the company, so I don’t know if and when supply chain applications will be added to the list.

And with that, I’m off to shave my head. Have a great weekend!

Song of the Week (inspired by my posting this week): “Maps” by the Yeah Yeah Yeahs. “Maps, wait, they don’t love you like I love you…”

(Note: CH Robinson, Manhattan Associates, Menlo Worldwide Logistics, Oracle, SAP, Transplace are ARC clients and/or Logistics Viewpoints sponsors).

Green Chemistry and the Design of Chemical Supply Chains

Chemical Industry | By •

My colleague Asish Ghosh has retired—for the second time. Ten years ago he announced his first retirement, got his retirement party, and a few weeks later we called him back in to help us with a quick turnaround project. He then worked part time for another decade, retired again last week, and got his second retirement party. I’m not sure what the moral of this story is, except, perhaps, that two parties are better than one.

Asish’s last publication for ARC, assuming he is not shooting for a third retirement party, is a strategic report titled “Chemical Industry Trends, Challenges and Opportunities” (available to ARC clients only). There is a section in the report on “green chemistry” that has implications for chemical supply chains, including companies that manufacture, use, distribute, or transport chemicals. 

Green chemistry “efficiently utilizes renewable raw materials, eliminates waste, and avoids the use of toxic and or hazardous raw materials, intermediates, and products.” There are twelve principles of green chemistry, some of which only make sense if you have a degree in chemistry. But the core concepts behind these principles are the following:

  • Design processes to maximize the amount of raw material used in the final product;
  • Use safe, environment-benign substances, including solvents or catalysts, whenever possible;
  • Design energy-efficient processes;
  • The best form of waste disposal is not creating any waste in the first place.

In the United States, the Environmental Protection Agency (EPA) is promoting the “research, development, and implementation of innovative chemical technologies that accomplish pollution prevention in a scientifically sound and cost-effective manner.”  Further, “the design of greener, more sustainable products and processes has become a top priority for many chemical manufacturers.” According to Asish, if you go to the websites of the leading chemical companies, you’ll find “green chemistry” messaging all over them. 

It is a truism of supply chain management that once you design a supply chain – including the product design, the manufacturing processes, the sourcing strategy, and the manufacturing and distribution networks – you have locked in a very high percentage of the costs. In the chemical industry, green chemistry principles is a growing focus of supply chain design.

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