Anything can happen in the supply chain–trucks break down, ships get rerouted, goods are stolen, parts are faulty, ports close, dockworkers go on strike, and supplier production lines go down. This uncertainty causes companies to buffer inventories beyond what is necessary to service forecasted demand just in case something goes wrong.

But this is an expensive process that ties up working capital and often leaves companies with unused excess inventory. In fact, studies have shown the annual additional cost of holding excess inventory can be 25-32 percent, according to The Retail Owners Institute.

Many companies handle supply chain anomalies with reactive planning systems. They quickly try to remediate problems with optimization algorithms once anomalies occur. But this is tantamount to looking in the rear-view mirror. Plus, lead times to ship products, procure new goods, or produce new goods are often lengthy, making it impossible to react to meet customer demand when supply suddenly changes. One new approach to dealing with supply chain uncertainty is to use machine learning to predict what might go wrong and use that as the basis for the supply chain planning processes. This approach uses scenarios constructed from predictive models.

Machine learning tools build these models from available historical data that can be applied to future scenarios. For example, let’s assume a company has 1,000 ASNs (advance shipment notices) in flight at any given moment. While each of those ASNs has a scheduled delivery date, if a planner, supply manager, or someone in receiving is asked where they all are, they will tell a story about a scheduled ASN that is expected to be late. How do they know? It’s because they have access to data that gives them this predictive signal and because they have learned how to pattern match that data to predict supply chain events.

INTRODUCING ONLINE PREDICTIVE PROCESSING

A new data platform called online predictive processing (OLPP) – essentially predictive applications – can automate this insight. It can create expected “scenarios” directly from machine learning models that predict which ASNs are likely to be late and estimate how late they will be. With OLPP, machine learning models can provide every ASN an “expected” date in addition to its scheduled date, creating a new “scenario” comprised of all live ASNs and their expected deliveries.

THE POTENTIAL OF WHAT-IF SCENARIO PLANNING

Scenarios are powerful. 3PLs can use them to warn receiving companies of anticipated changes, giving them an opportunity to plan around problems. 4PLs and manufacturers can do even more. They can propagate scenarios down their supply chains, surfacing production orders and even sales orders that are impacted by the anticipated events. This tool can plan around shortages, satisfy customers, and produce predictable revenues.

OLPP is a new technology that enables both the analytical processing required for the learning of predictions, as well as so-called “transactional” processing, to model inventory availability and power what-if scenario planning.

To learn models, OLPP platforms process volumes of historical ASN data such as carrier, source, destination, mode, port, size, weight, shipper and receiver, as well as exogenous data such as fleet data, weather data, and even news summaries. OLPP uses this past experience to train models that, when deployed and applied to live ASNs, provide a prediction of how late an ASN will be based on all of the experiential data it has seen.

Then, the OLPP platform can set the expected delivery dates according to these predictions and project inventory levels down the supply chain. The application can surface any expected shortages or overages based on these expectations and even let planners move other orders on the schedule in order to resolve problems.

The power of this approach to supply chain management is that instead of buffering excess inventory unnecessarily, trying to forecast supply chain glitches, or just reacting to them when they happen, companies can use data to train models to predict when they are “likely” to happen and use planning tools to proactively plan around these expected events, saving millions of dollars in inventory, vastly improving supply chain efficiency, and ultimately satisfying customers downstream.

Source: Inbound Logistics

2018 ShortSeaShipping Days to have Stronger International Focus

Bonn/Lübeck/Valetta, Date – The ShortSeaShipping Days will gain further in importance when the event is held for the third time next year.

The well-established ShortSeaShipping Days will then be held jointly with the European Shortsea Network’s annual conference for the first time. The organizer, the German ShortSeaShipping Inland Waterway Promotion Center (spc), is expecting around 500 participants to gather at the shortsea shipping industry meeting on June 20 and 21 in Lübeck, Germany. The Lübeck Chamber of Commerce and Industry is once again co-organizer of the event. Along with the conference, there will be around 40 companies from the shortsea shipping industry taking part in a trade show in the Lübeck Music and Congress Center.

The previous ShortSeaShipping Days held in 2014 and 2016 already provided many new impulses for development in shortsea transport. That ESN is holding its annual conference “Shortsea 2018” in conjunction with this event underlines the European dimension of the topic. ESN is a cooperative network of European shortsea promotion centers, including spc. “In securing this branch event we have managed to put a focus on internationalization, in this way targeting the needs of cross-border shortsea trade more strongly,” spc CEO Knut Sander explains. The annual ESN Shortsea Conference has previously been held in Paris, Lisbon, Copenhagen, and Barcelona.

The Lübeck Chamber of Commerce and Industry is again co-organizing the event, thus showing its support for the shortsea transport industry and its concerns. IHK managing director Lars Schöning says, “We want to provide the branchanother outstanding highlight with the third ShortSeaShipping Days next year, building on the success of the last two ShortSeaShipping Days in Lübeck.” He adds, “The conference’s even stronger international orientation corresponds to the direction the industry is taking and will thus make the conference even more attractive.”

The ShortSeaShipping Days provide an ideal framework to showcase the successful European networking for the national shortsea promotion centers within the ESN and for the industry. “The goal of the conference is to emphasize the importance of shortsea transportation for the development of European economic markets,” as Godwin Xerri, current president of ESN and head of the Maltese SPC, stresses. “We want to make everyone active in the supply chains to be thinking of shortsea shipping as an alternative.” ESN is also a channel for the exchange of information and contacts with DG Move, the body responsible for transportation in the European Commission. In this way, the association also remains close to topics of European transportation policy that are important to the maritime branch.

Topics of current interest in shortsea shipping will be on the agenda at the conference in Lübeck. These will include issues of sustainability, economic efficiency, logistics, development of European markets, and the effects of political regulation. An additional focus will be on developments and innovation in regard to automatization and digitization.

The conference and the accompanying trade fair are aimed at representatives from the entire transport chain such as consignors, forwarders, shipping lines, ports, and terminals. Registration is now open at the event’s website www.shortseashipping-days2018.de. You will also find regularly updated information about the conference there.

Source: ESN Special Newsletter