Companies use smart logistics strategies and the latest in technology to help predict and meet seasonal demand, but getting it right is still an art. Paul Dittman, former vice president in charge of the supply chain for Whirlpool Corp. and now a member of the supply-chain faculty at the University of Tennessee, Knoxville, offers four steps that companies can take to help master supply chain seasonality.

1. Keep it simple.
Companies affected by seasonal demand should rationalize their SKUs and make sure their product line is no more complicated than it needs to be.. Since most companies have to build in advance to meet seasonal spikes, having fewer SKUs will reduce forecast error, he explains, though this is an issue that most companies fail to think through. They don?t realize that they are dramatically hurting their ability to forecast accurately by allowing SKUs to multiply.

2. Keep inventory clean and lean.
Once a season is nearing its end, it is important to clean things out. Do whatever it takes to avoid carrying over inventory because it is a case of pay me now or pay me later. You will have to write down all that old stuff eventually and holding it simply ties up working capital and diverts dollars away from purchasing better material that ought to be stocked for the new season.

3. Build core products first.
Given that you have to build in advance and that you know the forecast is going to very inaccurate?in total and definitely at the SKU level?it makes sense to focus advance building on core, high volume SKUs that you know are going to move. Save your in-season capacity to build the peripheral stuff that is much smaller volume and has much higher forecast error associated with it. Too many companies think they have to go into the season with three months? of supply and so they build three months? of supply of every SKU. A better tactic is to have more than the proportional amount of inventory in the really high moving SKUs and much less in the others.

4. Adopt modular design.
The issue of flexibility is all about how fast can you respond when you see how the forecast is wrong, either on the high side or the low side. How fast can you turn your manufacturing operations on or off, or shift production around? A lot of times this goes all the way back to product design. The simpler and more modular the design, the faster a company can react.

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TNT Express? Boeing 757 has been wet-leased from Icelandair to TNT Airways - came into service last month. The aircraft’s inaugural flight in TNT livery was between Li?ge, where TNT Express has its air hub, and Barcelona, and as such was the first leg of its regular round trip, which consists of: Li?ge - Barcelona - Vitoria - Madrid - Li?ge. The Boeing 757 matches TNT’s 30 ton freight requirements for this service.

Source: TNT Express

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The worldwide market for Warehouse Management Systems (WMS) has had its best year in several years. After several slow years, the market grew by over 5 percent in 2004. The market was $1,067 million in 2004 and is forecasted to be over $1,339 million in 2009.

Based on the number of acquisitions and mergers in this market (there were over 20 acquisitions or mergers of companies with WMS solutions), the market?s growth has been surprisingly strong. While some acquired companies with WMS solutions can expect to continue to grow their revenues, historically mergers and acquisitions have more often served as a drag on growth.

ARC classifies WMS suppliers as being in one of three types of camps: Best of Breed suppliers, ERP suppliers who sell WMS solutions that are based on the same code base and data model as their larger ERP solution, and suppliers who differentiate themselves based on their knowledge of material handling and often sell WMS and Warehouse Control Systems (which control material handling equipment) as an adjunct to a much bigger material handling consulting or equipment sale.

Some prominent Best of Breed companies were acquired as well, like RedPrairie acquired LIS, HighJump Software was acquired by 3M, Catalyst International was acquired by ComVest Investment Partners and Yantra was acquired by Sterling Commerce.

Acquisitions of Best of Breed vendors can also create questions. When Best of Breed companies are acquired by private investment houses or companies with few roots in the software industry, customers can question how well they understand software in general and their particular industry in particular. Depending on the research cited, 50 to 80 percent of acquisitions never produce the anticipated benefits. The WMS market withstood the surge in acquisitions this year; the true test will be to see how well the acquired companies? revenues hold up in coming years.

Read full article from Steve Banker ARC Advisory Group

The Glossary of Terms in Logistics & Shipping is the most comprehensive paper-based dictionary and therefore the standard for defining terms used in the area of Logistics and Shipping. Use this powerful tool to expand your professional vocabulary and ensure that everyone on your team is speaking the same language. www.theKnowledgeTransfer.com

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Capgemini did publish the Transport Software 2005 market survey. This is an update of the survey conducted in 2003 on the transport software market in the Netherlands. This year?s edition also has a broader European scope. The report provides an overview of the main players in the market, their major challenges, the developments in the last three years and the expected trends. It also includes an analysis of the transport software functionalities which distinguish the various suppliers. The survey has been conducted among 39 software suppliers, covering almost the entire European market.

Local players must think globally
A majority of the participating transport software suppliers (65%) stated that more than 50% of their software implementations had taken place in their own local market. A few suppliers are seen as major players in various markets: SAP, G-Log, Manhattan Associates and Manugistics are those most often cited by other global suppliers. Capgemini concludes that the market for transport software is locally oriented, whereas large logistics service providers and shippers need software suppliers that are globally represented. Suppliers that can provide international support will be able to increase their market share

Mergers and acquisitions in logistics services are leading to the creation of European and global logistics service providers (LSPs). They have a strong need for the integration of the systems which they use. Software suppliers must grow in order to offer their customers a scalable, high-quality servic.

In-house development versus standard products
Internal software development by logistics service providers remains one of the main ?competitors? of the transport software suppliers. Suppliers are seeing their potential clients taking ?make-or-buy? decisions. The appropriate response is to provide flexible solutions which can be adapted to the customer?s requirements, for example based on software components

Customers in the chain (producers, traders and retailers) in the Industrial Products, Chemicals and Food sectors usually need standard products off the shelf. Companies of this type are often already using ERP systems and are therefore accustomed to using standardised software, with few if any customer-specific adaptations.

Wireless communication and functionality are the main trend
The main trends in transport software are the use of onboard computers and mobile/wireless applications. This shows that mobility remains an important driver in the transport software market. Mobile applications enable drivers to communicate with their head office. As a result, planning will become more real-time and hence more efficient.

The full survey, including a detailed overview of the functionalities of the transport software of each supplier, can be obtained from Marion Zaal of CapGemini.

The Glossary of Terms in Logistics & Shipping is the most comprehensive paper-based dictionary and therefore the standard for defining terms used in the area of Logistics and Shipping. Use this powerful tool to expand your professional vocabulary and ensure that everyone on your team is speaking the same language. www.theKnowledgeTransfer.com

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In line with Kuehne + Nagel?s strategy to expand European overland activities, a new consolidation hub has recently begun operation in Ashby de la Zouch (near Birmingham). The hub specifically deals with groupage consignments of up to 2,000 kilos, which are fed in on a daily basis from the company?s 18 locations across the UK and Ireland. Loads are consolidated for core export markets across Europe, with time scheduled departures. Prior to this, K+N?s groupage business was planned separately at each of its branches, but now will consolidate its export volumes through a central planning process.

Source: K+N

The Glossary of Terms in Logistics & Shipping is the most comprehensive paper-based dictionary and therefore the standard for defining terms used in the area of Logistics and Shipping. Use this powerful tool to expand your professional vocabulary and ensure that everyone on your team is speaking the same language. www.theKnowledgeTransfer.com

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TUI AG announces that it has agreed to acquire CP Ships Limited, a leading Canadian container shipping company, in an all-cash transaction for ?1.7 billion (US$2.0 billion), or US$21.50 per share. As of 30 June 2005, net debt of CP Ships was ?261 million (US$316 million). Pursuant to the terms of a support agreement between the companies, the Board of Directors of CP Ships has unanimously recommended that shareholders of CP Ships accept the offer.

The offer price represents a premium of 24.9% over CP Ships’ volume-weighted average closing price of the last three months, and 9.7% over CP Ships? closing share price on August 19, 2005, the last business day before the offer was announced.

The worldwide container shippping industry is in a phase of consolidation and concentration. The takeover of P&O Nedlloyd by Maersk Sealand which was cleared by the cartel authorities only recently has accelerated this process. The acquisition of CP Ships will accelerate the growth of Hapag-Lloyd, TUI?s container shipping business. The combined company will be a top five player, based on capacity, in the worldwide container shipping market and an important service provider across the North Atlantic. It will also offer stronger coverage in the Far Eastern, Australasian and South American trade lanes. In addition, Hapag-Lloyd believes its significantly increased size and presence in the world?s shipping lanes will increase its attractiveness to partners in alliances.

The combined group currently operates 139 ships (with a further 17 on order) delivering capacity of approximately 400,000 TEU on over 100 routes spanning the globe. Before the effects of consolidation the combined shipping business would have had sales of approximately ?5.7 billion and EBITDA of ?588 million in 2004.

Source: TUI pressrelease

The Glossary of Terms in Logistics & Shipping is the most comprehensive paper-based dictionary and therefore the standard for defining terms used in the area of Logistics and Shipping. Use this powerful tool to expand your professional vocabulary and ensure that everyone on your team is speaking the same language. www.theKnowledgeTransfer.com

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A group of 20 RFID vendors has announced the formation of a “patent pool” consortium intended to simplify and streamline users’ access to RFID intellectual property. The announcement made a splash with analysts.

Founders of the consortium, which is modeled after existing industry groups that license MPEG and DVD technology, include Alien Technology, Symbol Technologies, Avery Dennison, Thingmagic, Moore Wallace, AWID and Zebra Technologies.

Most notable among the RFID vendors yet to jump in is Intermec Technologies, which has been at loggerheads with end users and other industry players over its tight control of licenses for a number of important core patents it holds. Intermec?s absence, however, will not drain the consortium?s momentum, according to analysts.

The new group provides, according to Erik Michielsen ABI Research’s director of RFID, a clear migration path for scalable, long-term EPC Gen2, and should extinguish users’ concerns about RFID intellectual property. To keep momentum strong, however, ABI Research believes that silicon vendors need to show support publicly. To buoy the group’s credibility, the firm added, silicon manufacturers such as Texas Instruments and Philips need to sign on as charter consortium members.

Source: electronicnews

The Glossary of Terms in Logistics & Shipping is the most comprehensive paper-based dictionary and therefore the standard for defining terms used in the area of Logistics and Shipping. Use this powerful tool to expand your professional vocabulary and ensure that everyone on your team is speaking the same language. www.theKnowledgeTransfer.com

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RoHS, lead-free legislation, or to use its accurate but somewhat lengthy title ?Directive 2002/95/EC on the restriction of the use of certain hazardous substances in electrical and electronic equipment?, will be enforced throughout the European Community from 1st July 2006.

Its aim is simple ? to restrict the use of six substances within electrical and electronic equipment (EEE), thereby contributing to the protection of human health and the environment.

Although RoHS is a European Union (EU) Directive, manufacturers of EEE outside Europe must also abide by this legislation if the equipment they produce is ultimately imported into a EU member state.

The European semiconductor distribution market already showed signs of weakness in the first six months of the year, according to figures from the Distributors’ and Manufacturers’ Association of Semiconductor Specialists (DMASS). ?2005 seems to become a transition year, driven by a slow market and some uncertainties, which the European Union directives RoHS and the Directive on waste electrical and electronic equipment (WEEE) impose on the industry,? commented Gary Nevison, chairman of the industry group.

The Glossary of Terms in Logistics & Shipping is the most comprehensive paper-based dictionary and therefore the standard for defining terms used in the area of Logistics and Shipping. Use this powerful tool to expand your professional vocabulary and ensure that everyone on your team is speaking the same language. www.theKnowledgeTransfer.com

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A supply chain crisis is looming for European retailers following the blocking by the EU of imports of certain fashion goods from China. This could lead to empty shelves as import quota limits are quickly used up. The problems demonstrate some of the risks posed to retailers by reliance on global sourcing strategies.

As part of the June 10 2005 Shanghai Agreement between the EU and China annual import restrictions were set for ten categories of Chinese textile and clothing products. These quantitative limits for 2005 have been reached for Category 5 (Pullovers) and, at August 8, for Category 6 (Trousers).

According to Peter Mandelson, EU Trade Commissioner:

?This problem affects only two categories out of the total 10 involved, pullovers and trousers. The problem has been caused by importers trying to beat the restrictions after the Shanghai Memorandum of Understanding was signed on June 10. Prior to legislation implementing the MOU, Chinese and EU traders launched massive shipments of pullovers and trousers to get these goods into Europe under the wire. As a result, in these categories alone, the agreed quotas have been exceeded. We will not know the full extent of the problem until data has been collected after the middle of this month. In the meantime, shipments originating from the time of the signing of the MOU until July 11 have been allowed into Europe.

Final decisions, including some flexibility on the future management of the quotas will not be taken until early September and will be resolved in agreement with the Chinese authorities. However, although we hope that in the meantime we will be able to agree on some flexibility for pullovers.

The Commission has kept importers and retailers informed of developments at every stage. However, the sheer scale of their attempt to beat the restrictions has presented us with immense difficulties.

We will manage the situation with everyone’s interest in mind. Officials will be working on this throughout August. I will be in touch with my Chinese counterpart this week.?

Nevertheless several organization do now state that the limits for other categories will be reached soon. Furthermore they claim that 90% of the textiles has been ordered before the end of April 2005.

The Glossary of Terms in Logistics & Shipping is the most comprehensive paper-based dictionary and therefore the standard for defining terms used in the area of Logistics and Shipping. Use this powerful tool to expand your professional vocabulary and ensure that everyone on your team is speaking the same language. www.theKnowledgeTransfer.com

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As part of its on-going effort to accommodate strong international volume growth, UPS (NYSE:UPS) today announced a firm order for eight new Boeing 747-400 freighters from Boeing Co. Terms of the deal were not disclosed.

Deliveries of the 747-400’s will begin in June 2007 and run through 2008. UPS has selected General Electric to provide engines for the new aircraft. The Boeing 747-400 freighter has the capacity to carry a structural payload of 250,000 pounds with a range of 4,400 nautical miles.

“These Boeing 747-400 freighters will allow UPS to smoothly increase capacity on its most important international ‘trunk’ routes connecting Asia, Europe and North America,” said Bob Lekites, UPS vice president of airline and international operations.

UPS today relies on the Boeing MD-11 freighter as its primary international workhorse. UPS has 20 of those planes and another eight on order. The new 747-400 aircraft, which can handle a larger payload than the MD-11, will be used to “upsize” MD-11 routes as international volume grows.

In its most recent second quarter, UPS’s export volume grew an impressive 18.2%, led by Asia export volume gains of 39.5%. China again drove Asia with export volume rising 99%.

Source: UPS

The Glossary of Terms in Logistics & Shipping is the most comprehensive paper-based dictionary and therefore the standard for defining terms used in the area of Logistics and Shipping. Use this powerful tool to expand your professional vocabulary and ensure that everyone on your team is speaking the same language. www.theKnowledgeTransfer.com

paperback student version $ 19,99 hardcover executive version $ 29,99