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The SMB Mindset and Logistics Innovation According to Alibaba.com

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Small business importers – especially ecommerce vendors – are reshaping global trade. In this article, we summarize some of the key insights from our interview with Head of North America Supply Chain at Alibaba, Jamin Dick touching on what SMB importers are looking for in logistics, how tech can help, and Alibaba’s unique perspective for spotting supply chain pain points.


Last week, as part of our Future of Freight interview series, we sat down with Alibaba.com’s Head of North America Supply Chain, Jamin Dick.

In previous episodes we heard from logistics technology insiders, ocean carriers, and global freight forwarders on how tech is changing the industry.

This time we got to hear from the world’s largest B2B platform on how logistics digitization is impacting the landscape, and how logtech can be leveraged to serve SMB importers.

The market size is enormous…

Though SMBs have long gotten little attention from carriers and large freight forwarders, this segment actually makes up about 13% of the hundreds of billions of dollars spent on logistics for US and Europe imports.

And growing.

Platforms like Alibaba.com have made it easier than ever for SMBs to participate in global trade. But a key to understanding SMBs is that – unlike large or enterprise shippers – they may not consider themselves importers at all.

They generally won’t have a head of logistics who spends time thinking about the supply chain, how it works and how theirs can be optimized. For them logistics is secondary: they are a business/small retailer first, and they just want logistics to operate in the background and get them their shipments on time.

So what’s most important to SMBs, and how can logistics providers leverage tech to serve this important segment as the recent surge in eCommerce makes them even more prominent?

A few of Jamin’s insights that really resonated. You can also see the entire interview here.

Certainty is key

SMBs are generally not very sophisticated in terms of how logistics operates and what they can expect.

SMBs are really going to gravitate, towards services that provide them with certainty up front. they’re figuring out how to do a complex thing – to bring in a container of goods from China. And so if we can make it easier for them. I think that’s where the real opportunity is.

So logistics providers who can figure out, often through tech solutions, how to provide simplicity, reliability and give SMB importers certainty of what to expect during their shipment, will win the trust of this segment.

Keep it Simple, Stupid

Okay, we added the “stupid” – Jamin didn’t say that.

As the SMB segment grows and technology makes it easier for even large players to reach them directly, logistics providers are feeling the pressure to participate in this market.

And they can learn how to serve SMBs best from the suppliers who successfully sell to them.

Suppliers recognize that the most important thing they can do is make the right product and make it as easy as possible for the buyer to find and transact with them.

And in logistics, it should be the same. The more logistics providers can get out of the way, and simplify this complex operation, the better.

The less visible that we are as logistics providers, it’s actually a good thing to a seller or to a buyer in the US.

SMBs have a low tolerance for uncertainty in logistics because they’re focused on running their business efficiently. They want to know their exact cost unit ahead of time, and don’t want surprise fees later on.

One good example of this? Customs.

Jamin called out automated classification and electronic documentation as important examples of how tech is helping to simplify the SMB experience.

By automating the classification process, duties and taxes can more easily be calculated up front. Alibaba has made strides in this area to be able to estimate these costs accurately and ahead of time.

I think it 10 years ago, 15 years ago, you would find out that your container left a week later than planned or is stuck in customs, which is really challenging for a small business.

A lot of innovation has also focused on digitizing shipment documents and data, leading to better tracking and actionable messaging and updates. If there is a delay or disruption, these shippers can be updated avoiding last second surprises and improving the experience.

Lack of standards may be the biggest blocker

Logistics is often only as automated as the least digitized link in your supply chain. This is a recurring theme that also came up in our conversations with the Chief Digital Officer at Agility.

If digitized documents end up being printed out and sitting on someone’s desk to be processed, then that tech has only gotten you so far.

So digitizing entire processes is a big project that will require a lot of cooperation across industries and governments. And in Alibaba’s experience, that’s the biggest challenge to change that ecosystem.

Alibaba sees its logistics become quieter when all the data is reliable and digitized from the outset.

Buying, selling or participating as a logistics provider on a platform can solve for some of this lack of standardization. All the relevant trade and supply chain data on Alibaba, for example, is digitized already and ready to transact, which makes it that much easier to add the logistics part.

Thanks again to Jamin for taking the time to chat with us and share his insights.

Remember to join us for episode 5 of the Future of Freight, where we’ll explore how one of the world’s largest companies, Johnson & Johnson, views logistics innovation. We’ll talk to Neil Ackerman, Head of Advanced Supply Chain Technology at America Supply Chain at Johnson & Johnson.

Or kick back with highlights of some of the previous episodes, including Eric Johnson of the Journal of Commerce, Ralf Belusa of Hapag-Lloyd, and Biju Kewalram of Agility GIL.

Source: https://www.freightos.com/the-smb-mindset-and-logistics-innovation-according-to-alibaba-com/

Aerospace

Adept at adaptation

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Adept at adaptation

There may be challenges ahead for the industry, but UK-based AS9100 Rev D accredited precision engineering specialists, Bright Engineering says it is holding its nerve.

Being situated at the heart of East Lancashire’s aerospace belt might normally be seen as an overwhelming benefit for any small business involved in advanced manufacturing. However, as is the case for many subcontractors up and down the country, the grinding to a halt of the commercial aviation sector has proved to be a huge challenge, albeit not entirely insurmountable.

Bright Engineering services a number of industries with the supply of precision components and sub-assemblies and has customers across the UK, and several in the US. Bright counts aerospace as around 20-30% of its operating income, but is fortunate to be involved in many other sectors including green technologies, electronics and automation, as well as defence.

Pre-lockdown, the company had built up resilience on the back of strong multi-sector demand in 2018-2019, and in 2019 pressed ahead with a fairly extensive programme of machine tool investment upwards of £1 million. This expenditure signified Bright’s most major rejuvenation of the shopfloor and replacement of ageing machinery it had seen for several years, and followed a trade mission to Yamazaki Mazak’s headquarters and plant operations in Japan.

Bright’s latest CNC machines include the Mazak Variaxis i500 and the Integrex J200S

For Bright, the benefit of the trip not only extended to witnessing first-hand how the machine tool manufacturer handles quality, but allowed the business to forge new relationships which have endured. From this experience Bright now counts new customers and suppliers which have allowed it to strengthen the business throughout the pandemic.

One of these relationships led to a production order for ventilator components, which carried the business and its people through the dark days of the March 2020 lockdown.

“The medical order at the time of the Covid outbreak was a matter of pride for Bright and its workforce,” says managing director, Jon Hoyle. “It involved working day and night seven days a week until it was complete and our team enjoyed being part of this national effort. It kept us going mentally, as well as at an operational level.”

As the end of the lockdown emerged, Bright’s usual customers started coming back to life, although Hoyle admits in certain sectors it is still only coming back in fits and starts. Sales from the US have remained strong, whereas many buyers in the UK have remained on furlough. The result from this is all to do with adaptability. Pre-lockdown, Bright’s strategic aims were around building a long-term orderbook for the future.

Ready and willing

The company admits the vision is currently a bit shorter-term, but as sales director, Steve Amey says: “It ensures we remain flexible, listen to the needs of our customers and evolve the business plan on a monthly basis. That is the reality of 2020, and we believe that regular refinement of our working model will make us all the stronger in readiness for 2021. The capacity to spring back is ready and waiting.”

Of course, the business has utilised the much-welcomed furlough scheme as the pandemic has evolved. However, it has also taken many positive steps to guarantee operational stability in testing times. In certain cases, remote working has really proved positive for Bright and the workforce have made good use of products, such as Microsoft Teams, Skype, WhatsApp, etc. to really stay in touch, keep things moving for the clients, and transmit key messages to staff around the pandemic.

As well as staff communication, Bright has also engaged some really creative uses of Teams, as Amey continues: “Involvement in the Ventilator Challenge UK project was a fast-paced affair, with design and production requirements evolving several times a day. At one point, Teams was the catalyst for one of the quickest pieces of customer decision-making I have seen in my career.”

The episode Amey refers to was a dramatic win in terms of customer experience, and saw Bright on Teams chat with its own supplier partner, the customer, as well as the end user. The usual protecting of sources had to be put to one side for the good of the project, and in fact led to one of the proudest moments of collaboration Bright has been involved with. With Bright’s strategic input, using the customer’s CAD/CAM package over Teams, a component was redesigned, re-posted to CAM and sample component produced by Bright within 90 minutes of the initial technical query being raised.

Indeed, there have been some other real wins for the business during the course of the year too. As certain staff may have been off work for shielding purposes, the company’s apprentice cohort were relied upon more heavily.

“The conditions thrust on us by this pandemic have actually allowed our apprentices to shine,” states Hoyle. “20% of our workforce are undergoing training from Level 3 to HNC, and during the ventilator production our youngsters seized the challenge, often taking the responsibility that we would expect of a quality inspector or section leader. We got to see their very best attributes over a four-week period and it was impressive.”

Bright has rejuvenated its shopfloor and replaced ageing machinery

Further to keeping production moving, the apprentice team have at times, had slightly more interaction with their leaders, and less day-to-day pressures than any other normal year in the company’s history. Ensuring this time wasn’t wasted, it has allowed for accelerated periods of learning on Bright’s latest complex CNC machines, such as the Variaxis i500 and the Integrex J200S multi-tasking machines. In fact, it hasn’t gone unnoticed across any of Bright’s senior leaders that its apprentices have really seized the opportunity to develop their skills over the last six months.

On the horizon

As Bright looks to the near future, there is an equal mixture of concern and trepidation but also a feeling of opportunity. Hoyle believes there is a strong case for the government to continue some targeted support for the sector. Areas like East Lancashire, Motorsport Valley in the South East, West Midlands, Northern Ireland and the North East all provide a rich and varied contribution to the UK advanced manufacturing output as a whole. Plenty of people in the industry felt a continuation of the job retention scheme was necessary, particularly in a way that specifically encouraged part-time working. The Chancellor has since made his announcement, but Bright would also like to see business rate support as well as increased assistance for apprentices over the age of 18, particularly those on HNC programmes.

“Aerospace provides a large portion of business to UK subcontractors and government and companies themselves need to get to the other side of the pandemic in one piece,” concludes Hoyle. “For the foreseeable future, we control costs, look at alternative revenue streams and get even closer to our existing customers.

“Customers in the main aren’t looking to exploit the current situation. Instead they want reliable trustworthy supply chain partners and our continued support. We also talk to our competitors and listen to their problems and successes; sharing best practice is usually free of charge, but highly valuable, and that one successful collaboration could make all the difference to our joint future success.”

www.brightengineering.co.uk

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Source: https://www.aero-mag.com/bright-adept-at-adaptation-13102020/

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Aerospace

ElevAero acquisition strengthens Midlands based supply chain

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ElevAero acquisition strengthens Midlands based supply chain

Adam Bartram director of ElevAero (left) with FPL’s former owner Geoff Neale

ElevAero, a leading manufacturer and supplier of specialist fabrications, assemblies and machined components for the aerospace and defence sectors, has acquired 100% shares of Formrite Precision Limited (FPL). The acquisition took effect from the 1st of October 2020 for an undisclosed sum as ElevAero continues to expand from its base in Nuneaton (UK).

FPL has established facilities in Aldridge, West Midlands, supplying a range of tooling and precision components to the aerospace and industrial gas turbine industries. Core services provided by FPL include large fabrications, machined components, test rigs and ground support equipment and assemblies. The company has leading OEMs and large tiered engine suppliers in its customer base.

FPL manufactures large fabrications, machined components, test rigs and ground support equipment

ElevAero says the acquisition is a strategic purchase which will complement and enhance its cost-effective offering for aerospace component manufacture, assembly and low-cost sourcing and supply.

Adam Bartram, director and owner of ElevAero said: “We have been looking to acquire Formrite Precision for some time to strengthen our position in the marketplace and to offer our clients a total end to end supply option. In a challenging time for the aerospace industry we are very proud to be in a position to continue investing in the right opportunities that will provide our customers with reliable, competitive supply solutions whilst protecting and creating jobs in the Midlands.”

www.elevaero.com

https://formrite.co.uk

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Source: https://www.aero-mag.com/elevaero-acquisition-strengthens-midlands-based-supply-chain/

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Supply Chain

International Shipping: Requirements of Documents

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International movement of consignment defines two activities: Import and Export. In both these activities, many documents change hands forming a long chain of exchange. Documents start from the parties responsible for import and export, companies that are handling shipping and movement will look at another set of documents to move the consignment in international waters. Even the banks will have to look into the payments if it’s collected from the concerned parties. In this article, we would look into the set of documents that are essential to pave the way for a consignment to move to its destination.

International-Shipping

Purchase Order

The PO created is an official signed document to confirm that an order has been processed.  It comprises information about the parties that are involved, the consignment that is been sent, and the date of the agreement been signed.

Invoice

The invoice will have all the specifications about the nature of the product that is being moved, from its identification to its market value. It will also have the details on how it’s going to be paid.

This document is essential for the party responsible for importing the goods, as it has all the specifics of the transaction that will be submitted to tax authorities.

Air Waybill

The Air Waybill pertain all the shipping information: Names and addresses of the shipper and consignee, the price of the consignment, along with the details of a number of items shipped and their weight. Besides that, any special instructions about the package, whether it’s an inflammable or a fragile parcel should also be mentioned.

The Air Waybill is one such document that travels with the consignment from origin to destination.

It is often the case that this document contains special instructions to the package, such as being flammable or fragile. 

Bill of Lading

Bill of Lading is a crucial document as it offers the shipping lines with vital information throughout the cargo’s shipment process. It contains detailed information on where the consignment is headed, the details of the consignment, and how it needs to be handled. For more details, check our blog: The Significance Of Two Bills (Of Lading) In Freight Forwarding

Packaging List

Packing List is similar to the commercial invoice but does not include information on the market value of the goods that are being shipped. The Packaging list should also contain specifications, like:

  • Details of the goods
  • Invoice number
  • Weight of the package

Letter of Credit (LC)

Letter of Credit is released by a bank that confirms that the consignee’s payment will be processed on time based on the agreement. In situations, wherein the consignee is not able to process the payment on time, it’s the bank responsibilities to close the transaction by covering the remaining amount of money.

The fact that international shipping is complex and it has to take into account all the cumbersome legislation, the uncertainties, the distance between parties, etc. and hence the Letter of Credit is said to be an important document in an international movement of consignment.

Multimodal Bill of Lading

Where a consignment is moved from its origin to destination point it might have to use different modes of transport to deliver it to the final point of destination. All details with regards to transport need to be recorded in this document.

Certificate of Origin

The party responsible for the export of the goods, prepares the Certificate of Origin, taking into consideration the laws and standards of the other country, who is importing it. Sometimes the document needs the certification from Chamber of Commerce or a Consulate as this marks as a provenance of the cargo.

Proforma Invoice

Proforma invoice is created by the supplier or shipper to provide the purchaser or consignee with the details of the products with its rate as agreed upon by both parties. Based on the proforma invoice, the original invoice is prepared. It is also used as a way to declare the goods at customs.

These are some of the documents that are prepared while moving the shipment in the international waters. MyHubPlus, a 20Cube’s smart portal has the special feature of uploading all documents which can be instantly reviewed by the other party concern. This feature is an advantage as it encourages the use of paper and digitalises all processes.

Source: https://www.20cube.com/blog/international-shipping-requirements-of-documents/

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