Logistics Log

Supply chains hold the future for everyone

2009-09-03T17:43:00.001+02:00

Supply chains hold the future for everyone

September 01, 2009 - Alan Braithwaite andMartin Christopher, LCP Consulting
As the economic conditions get harder, therewill be just onemantra for CEOs and their Boards:“manage for cash”.

Companiesmay use a variety of terms to express this, talking about “tied up capital” and “freeing up cash flow”. But the focus is, quite simply, getting and keeping asmuch cash as possible. Formany companies, the extent to which they can do this – even their survival over the next 18months – lies in how well theymanage their assets in the supply chain.

And this will be harder than ever. Customers are demanding faster delivery in smaller lots with extended credit terms. Their aimis to take inventory out and pay later to release cash,while at the same time protectingmargins by avoiding obsolescence and write offs. Suppliers are seeing an accentuated decline in volumes, as their customers de-stock, and reduced manufacturing and supply efficiencies as batch cycles shrink. They are having to wait longer to get paid and often cannot pass that pain on since smaller suppliers, on which they are dependent,may simply stop trading. At the same time, commercial risk levels have increased as supply chains have become globally sourced, extended in time and geography, and intrinsicallymore vulnerable to invisible hazards, such as unexpected bankruptcy, capacity withdrawal, changes in service terms and regulatory change.

These challenging conditions do not stop with the downturn and underlying risks: the recovery phase may be equally traumatic. As production and distribution capacity exits themarket in response to poor conditions, there will be shortages during the upturn whichmay be exploited through rapidly rising prices. Inflationmay be linked with growth causing interest rates to rise and curtailing the recovery. We believe that how organisationsmanage their supply chains will be a critical success factor in their survival and success in the next few years. In the long run thismicro-economic performance willmake all the difference at the national level.

While supply chain thinking and ideas of best practice have developed and stabilised over the last 30 years, their application inmost companies is still relatively immature even though they have the potential to transform almost every business in every sector.While supply chain thinking and ideas of best practice have developed and stabilised over the last 30 years, their application inmost companies is still relatively immature even though they have the potential to transformalmost every business in every sector.Much of this success will depend not on new techniques but on the more effective application of techniques with whichmanagersmay already be familiar.However there is one key new capability required for the current economic climate.

Applying known techniques more effectively

Let’s start with re-visiting the big idea behind supply chainmanagement. It is that managing the interactions between the functions and entities in the chain for the benefit of the whole chain, rather than the individual,will yield a dramatically better overall performance. This can takemany forms, but typically organisations benefit frommore free cash due to less inventory and assets, better tradingmargins and lower operating costs.

We’d highlight five established maxims for success:
1. Reduce unprofitable complexity by truly understanding howboth customers and products erodemargin:

The universal experience is that 15% of customers and products erodemore than 50% of the profit potential. Designing this group out or designing their profitability back in is a key step to connect the supply chain to the company’s performance. The experience is that these unviable activities are often detracting fromprofitable activities as well as creating losses in their own right.We call this ‘cost to serve’ and have found it to be a profoundly powerful business tool.

2.Build customer service excellence into your supply chain:

Service excellence is often discussed as amarketing imperative, but seldom connected to the true cost of non-performance both in sales and recovery costs.Outstanding performance protects the customer base that you want to keep and avoids the costs to replace themwhen they leave, as well as making good yourmistakes.Operational excellence lead by supply chain design and planning is a critical capability.

3. Become the preferred customer of your key suppliers:

No company can survive without its suppliers and nurturing the ones that are long termcritical does not mean being soft with them. The experience is that if you align to them they will give youmore for less; but if you just negotiate on cost, you willmiss out on benefits and they will leave you high and dry when times get tough.

4. Design, plan and execute for agility:

In the current climate, demand will be unpredictable and volatile; companiesmust be able to respond without lots of inventory and huge capacity and asset surpluses to cope with change. Agility is about fast flexible processes tomeet real customer demand and put in place only inventory that will not be a risk to the business. Speed is the key; fast and accurate processes have been shown to improve customer service and reduce inventories andmanufacturing assets.

5. Synchronise and integrate to eliminate waste and cost:

Toyotamade the seven wastes famous and its practice of waste elimination has lead to world class status in manufacturing;TESCO has applied lean thinking equally effectively to its business. Both those companies would concede that there is still much more to play for; however they are in a strong position entering the downturn.

Collaboration – the new critical factor in success

Collaborating in order to share resources and leverage scale is the newmantra for competitiveness in a difficult economic world. Companies can no longer afford to try to control some aspects of their business on the basis that it 'might be' a competitive advantage. The future will be about both co-operating and competing through shared services and assets; service providers will need to create blocks of scale and give a level of cost and service transparency that has been lacking.

Thismay extend to shared supply,manufacturing capacity, and distribution and logistics. There are precedents for the competition authorities taking exception to exclusive industry arrangements and the sharing of cost and contracting data between competitors.Newspaper andmagazine distribution is a current running example where economics and service have forced service structures that have been viewed as anti-competitive. But that industry is still fiercely competitive on its content and the implications of the logistics alternatives would likely be reduced volumes and higher costs. Executives tiptoe on eggshells when approaching such potentially risky situations as theymay be inadvertently personally liable. In future the competition authoritiesmay need to adjust their thinking and guidance to reflect industrial and real competitive realities.

Together, the application of thesemaxims will release cash fromstock and assets, protect the profitable parts of the business and create the focus that will be needed to thrive in the recovery.Now is the time to act in order to be there and ready.

IBC Ltd.
http://www.logisticsit.com/

Simultaneous engineering

2009-07-22T01:48:00.000+02:00

Logistik der Zukunft

2009-07-20T23:32:00.001+02:00

Logistik I

2009-07-20T23:22:00.001+02:00

Handbuch Logistik

2009-07-20T22:39:00.001+02:00

Lean Six Sigma Logistics

2009-07-14T16:34:00.002+02:00

principles of Chaku-Chaku

2009-07-14T16:28:00.001+02:00

Chaku-Chaku is a takt flow job in which the operator moves the parts to be processed from one machine to another, walking a fixed path loading and unloading the machines.

In this example, the operator walk around the cell and unloads-loads the machines (automatic or semi-automatic) in the order of sequences 1 to 6.

The principle of Chaku-Chaku is to design the layout of necessary machines and equipment in the order of the work sequence, the closest from one another as possible.
The operator loads the part to be processed and walks to the next machine, and so on. If the machines do not unload themselves automatically, unloading will remain part of operator's job.

The parts don't dwell anymore in front of the machines, neither are they moved in batches, but are processed in a streamline, with a drastic reduction of leadtime.

Another highlight of this approach is the full responsibility given to the work cell for the entire production cycle and therefore a better management of deliveries, quality and traceability.

The key to line or cell Chaku-Chaku efficiency is the synchronization between operations and the operator path, in order to maximize his occupation. The U shaped cell is very suitable for this usage.

Can MES Play a Lead Role?

2009-07-14T15:14:00.003+02:00

Can MES Play a Lead Role?
by Stephanie Neil

Posted on Wednesday, February 06, 2008 2:50:50 PM

The criterion for selecting a manufacturing execution system has just changed. It used to be that if a company needed an application to schedule production, trace work in progress, or manage quality, the buying decision was based purely on software functions and price. Today, however, there's a new dimension that determines which MES software will take center stage: ERP alliances.

"We would not have selected a vendor that didn't have a relationship with SAP," says George Chappelle, CIO of Sara Lee Corp.

The reason? Pressure. External factors ranging from regulatory compliance, to global competition, to increasing customer demands are putting pressure on manufacturers to integrate internal operations so that everything runs like clockwork.

Sara Lee is under pressure from the FDA to implement a robust traceability system that can track materials and ingredients in case of a recall, for example. "In the food industry, traceability requirements are stringent today, and they'll be more stringent in the next three to five years," Chappelle says.

So, if Sara Lee's SAP ERP system is ordering raw materials, and its MES system, which is Siemens AG's SIMATIC IT, is consuming the materials, naturally the two must interface so that when something changes in one system, it is automatically reflected in the other. But these systems use data in very different ways. ERP is transactional; MES, on the other hand, works in real time. Aligning the two disparate systems to seamlessly share data in a global landscape can be a challenge. And Chappelle, like many CIOs, can't afford to have staffers spending valuable time doing the nuts-and-bolts integration work.

That's why, when Chappelle went searching for an MES system, he made at least one thing crystal-clear: "Our criterion was that the [MES and ERP] systems have technology integration," he says. And because Sara Lee already had SAP installed, it relied on Siemens to prove that the integration could be done — and done with no pain to Sara Lee.

Indeed, these days, it is up to the MES vendors to step up their integration efforts. ERP software vendors, such as SAP, Oracle Corp., and even Microsoft Corp., are already entrenched in user companies. These ERP companies have spent the past few years rebuilding technologies around Web services and composite applications that are flexible. So ERP is in a leading role and doesn't have to prove much to its manufacturing audience. Rather, it's time for the MES vendors to step into the corporate spotlight. The question is, can MES deliver a great performance?

It was only a few years ago that industry observers and plant managers, alike, described MES as "a mess" — the result of an unruly evolution that led to a complex, monolithic footprint requiring mass-customization. In fact, many companies, Sara Lee included, didn't even use commercial MES applications, but rather pieced together their own homegrown solutions.

Understanding the need to make MES a strategic part of the manufacturing enterprise, many MES vendors are gravitating toward a new manufacturing enterprise model that is based on industry standards and maps out in very specific terms how to connect production operations with business operations in order to meet corporate initiatives. In devising the model, MESA International, an industry organization, broke up the monolithic MES monster into value-added pieces that have a direct impact on whatever key business processes are important to the end user.

The hope is that MES will take on new meaning. " 'MES' is still a term that people recognize and can hang their hat on, but when you get down to specifics, it means different things to different people," says Matt Bauer, director of information software marketing at Rockwell Automation and chairman of MESA International.

MESA's collaborative plant-to-enterprise model focuses on functional areas, such as lean manufacturing, quality and regulatory compliance, PLM, the real-time enterprise, and enterprise asset management. These are all areas that have business impact versus the more technical functions — quality control, key performance indicator (KPI) measurements, and overall equipment effectiveness (OEE) — that MES traditionally has performed.

"We are starting to talk about [MES] as manufacturing excellence applications that lay across the infrastructure," Bauer says. For the first time, MES is gaining recognition within the enterprise as a value-added application. "There is a lot of shakeout going on in our space now," he says. "The lines that used to be drawn between the enterprise and the plant level are history at this point."

May the Force Be with You

Erasing the line that has always stood between the plant and the enterprise requires a great force. In this case, that force is ERP.

Enterprise software vendors SAP and Microsoft are both members of MESA, working alongside major automation players, such as GE Fanuc, Invensys' Wonderware, Rockwell Automation, and Siemens, as well as large manufacturers, including Chevron, International Truck and Engine Corp., and Sara Lee. It's a community of alliances on a mission to redefine the role of manufacturing operations management within the enterprise, members say.

Manufacturing plants are significantly different in 2008 than they were in 1998, says Chris Colyer, worldwide solution director for manufacturing operations at Microsoft. The advent of Ethernet and wireless technology is exposing the plant to the corporate network. "That presents a huge opportunity to drive efficiency, better data models, and better collaboration across multiple plants and multiple time zones," Colyer says.

To get that scalability across the organization, a large number of MES players have built out solutions on .NET Web services under a partnership program with Microsoft. That same group is also lining up behind SAP to become NetWeaver-certified or to build composite applications based on SAP's xApp, Manufacturing Integration and Intelligence (xMII).

SAP tried to break into the MES domain a few years ago and quickly realized it does not have the industry expertise required to deliver a robust end-to-end solution. As a result, the company established an ecosystem of dozens of partners, including most of the MES companies — but not all (see sidebar).

SAP established three levels of partnerships. The basic level is NetWeaver Certification. Siemens, for example, has five certified SAP interfaces for SIMATIC IT. It is what SAP calls a "low-touch" engagement" but is still a worthwhile notch on the MES belt. "It shows a commitment to make sure the applications are using the most effective ways of communicating with SAP's infrastructure," says Maryanne Steidinger, in Siemens' discrete industry marketing group.

The second level is a joint-development effort, involving integration roadmaps and co-marketing agreements. Wonderware sits in this category, having jointly developed three composite applications using xMII to unite aspects of MES and ERP within the same data model. iBASEt, too, has built composite applications, investing lots of time and money in development for the sake of integration.

"We can't have it be that integration scares off everybody and detracts from the value proposition," says Conrad Leiva, vice president of product marketing at iBASEt.

The third type of SAP partnership is a reseller agreement, which SAP, to date, has only with Visiprise. SAP's own staff sells and maintains the product, under the name SAP Manufacturing Execution by Visiprise. SAP has closed a handful of deals since the reseller agreement was set in place last summer.

But the agreement, which basically gives SAP an MES solution, helps Visiprise, too. Having that tight connection to SAP is a dealmaker, says Carter Johnson, senior vice president of corporate development at Visiprise. "There have been deals that we won through SAP that we otherwise would not have been involved with," he says.

But it's more than just a marketing and sales agreement. There is coding and integration happening in the background as well. "The benefit to the customer is that we are taking the burden of integration on ourselves," Johnson says.

Indeed, that's what end users are asking for. "I don't want to do any more integration," says Mike Brooks, staff technologist at Chevron. "What's more germane is interoperability." Chevron looks to the vendors to do that as well as standards, he says.

In fact, standards could be even more important than industry alliances, Brooks says. That's because they can provide the real framework that allows application plug-and-play. In reality, "this stuff should just work together without [our] having to do anything," he says.

At Chevron, Brooks encourages vendors, such as Hewlett-Packard, IBM, Microsoft, and SAP, to come up with a set of products and services centered on work processes, he says. MES, regardless of the brand, should drop in with little to no configuration involved.

And it shouldn't matter what ERP application it is either. Even Oracle, which claims to have its own MES solution, is starting to revamp its partner program to include vendors with industry specialties, industry observers say. Today, technology is aimed at open architectures.

"We are pushing for non-proprietary solutions anchored around pieces that handle meta-data and modeling solutions that understand processes in an open way," Brooks says. That's the mission behind the OpenO&M initiative, a collaborative effort between MIMOSA and the OPC Foundation. It's also MESA's mission.

To that end, manufacturing execution would evolve not as a system, but rather as a framework built around a company's work processes, culture, and industry directives. That means getting a fresh take on MES.

"It is a narrow slice of what needs to happen," Brooks says. "MES has become a brand for certain products out there, but it should [occupy] the space between control systems and business systems, and [define] how you manage operations there."

MES' Moving Pieces

MES should also integrate horizontally across the plant — even into engineering. That's why, if you take a close look, you will see that there are not many independent pure-play MES vendors still around. Many of the companies are getting scooped up by big automation companies that recognize they've been missing a big piece of the plant operations puzzle for far too long.

MES orchestrates what's happening on the factory floor and in the plant. As a result, many vendors and end users are beginning to see the value in connecting MES to applications other than ERP.

"I think a greater integration of the supply chain beyond the first tier will also be important in the coming years," says John Plassenthal, project manager of strategic integration at International Truck and Engine.

And with talk of the digital factory, tighter integration with PLM will be just as important. Siemens, following its acquisition of UGS last year, is working on creating ties between these two domains. And in the aerospace & defense industry, where engineering and manufacturing departments are beginning to work in tandem, corporations are urging best-of-breed MES vendors, such as iBASEt, Intercim, and Visiprise, to establish PLM alliances.

Intercim, for example, which merged with Pertinence earlier this year, recently rolled out a product suite based on .NET 3.0 that is designed to easily integrate with ERP as well as 3D engineering models.

The Intercim product, called Pertinence Suite powered by Velocity, is designed to be easily configured by subject-matter experts who don't have to know how to run program code. "We put business rules in to define how business functions," says Judson Plapp, vice president of marketing and corporate strategy at Intercim. "It has the ability to quickly implement new rules and changes so it can constantly evolve."

The company also has a new pricing model: "The software is free. You pay for credits based on usage," Plapp says. The software-as-a-service approach — much like the way many cell phone plans work — offers the product for little to no cost and lets the customer pay only for the amount used. That is a dramatic departure from buying a multimillion-dollar software license to accommodate multiple sites, Plapp says.

The Intercim technology and new pricing model are clear indications that MES is changing drastically.

"People are getting a better feel for where they are competitive," Rockwell's Bauer says. "But the chess pieces are still moving around. The game is still in progress."

While the vendors figure it out, it's important that manufacturers not become a passive audience, warns Chevron's Brooks. Get involved, whether it's through MESA or an industry-specific organization, he said. If everyone comes together and it's executed right, MES could steal the show.

DeepDive: Technology Directions - How Is Your Vision? by Stephanie Neil

2009-07-14T15:14:00.001+02:00

DeepDive: Technology Directions - How Is Your Vision?
by Stephanie Neil

Posted on

These days, manufacturers are thinking long and hard about the technologies they introduce into the enterprise. In recessionary times, those investments increasingly must follow the three “L’s” rule: They must be low-risk, low-cost, and layered.

Recognizing manufacturers’ need to do more with less, business intelligence software vendors are introducing “lightweight” tools, most of which are available in a software-as-a-service (SaaS) model. Emerging vendors, such as my-DIALS, Transpara, and PivotLink, claim these SaaS tools will empower the average user to make real-time operational and enterprise business decisions while controlling up-front costs. Not to be left out, established BI vendors, such as SAP, and best-of-breed software suppliers, such as SPSS, Inc., are simplifying user interfaces while maintaining some back-end heavy lifting in the form of sophisticated mathematical algorithms.

Of course, in these turbulent times when every penny and relationship count, companies are scanning the entire supply chain and manufacturing landscape to ensure that they are delivering the right product at the right time with quality built-in — to avoid recalls, warranties, and any other nasty and costly product problems.

While words like “optimization” and “efficiency” are often tossed about as the manufacturing mantra, managers are beginning to peel back operational layers to see what being more productive actually entails.

Layered Look

Before a company can effectively accelerate performance, it must have the right tools in place. And, following the trend toward lower risk and lower cost, vendors are offering new tools that layer on top of existing systems and extract actionable information.

Transpara, for example, offers a lightweight, Web-based tool that includes BI and visualization and can access existing back-end applications, from plant floor historians to finance systems. Transpara’s tool can track key performance indicators (KPIs), such as equipment utilization rates, and it repurposes the data for delivery to mobile devices — for example, a BlackBerry or iPhone. This layered approach makes larger back-end applications more accessible to the everyday user or executive on the road.

“The market is moving faster than a company can decide what to do,” says Transpara founder and CEO Michael Saucier. “The only way out of that dilemma is to push decisions down the food chain,” and, more important, “arm people with the right information.”

Similarly, myDIALS is a SaaS, lightweight BI tool that provides a dashboard in addition to some of its own business analytics. It, too, can connect to any business or operational system and pull customized KPIs into a visual display on a desktop. The result is an easy-to-understand summary of what’s happening behind the scenes in any particular operation. Customer Snap-on Inc., for example, taps into factory floor metrics using myDIALS in order to improve safety conditions.

While these two tools focus on what’s happening within the enterprise, PivotLink focuses on demand forecasting, optimizing inventories, and understanding cash flows.

The PivotLink product, delivered as an on-demand service, includes a data warehouse that collects sales, financial, and other operational data; a set of analytical tools that can generate reports against the data; and a Web browser interface for viewing graphical representations of the reports generated, which includes the ability to do “what-if” calculations.

The key, PivotLink CEO Quentin Gallivan says, is the ability to access BI for demand management in an easy-to-use SaaS model. “Traditional business intelligence [deployments] take six to 12 months. PivotLink can be up and running within 20 to 30 days and at one-tenth of the price” of a traditional on-premise application, he says.

While traditional BI vendors — from IBM to SAP — would argue that they, too, have Web-enabled versions of their products that make it easy to access information, these are typically more robust, complex versions of BI that are great for answering strategic business questions, such as whether to enter or exit a market. The lightweight versions offer a more on-the-spot vis-ual analysis well-suited to quick operational decisions.

“Traditional BI players still have value for strategic decision making when used in the hands of the business analysts,” says Wayne Morris, CEO of my-DIALS. “But [everyday users] don’t want to make the big strategic decision. They are totally focused on how to improve operational performance.”

Little Things Make a Big Difference

CDC Software is another technology vendor focused on enabling operational workers to use BI and analytics to make decisions. The company’s CDC Factory division makes an electronic kiosk that operators can use on the factory floor. A touchscreen interface with user-friendly graphics helps operators input information about the shift, the product, and the machine runtime, for example. If there’s a bottleneck slowing down the line, an early-warning signal flashes on the screen for operators and supervisors to see. Not only does this provide a clear, real-time picture of what’s happening on the line, but it also captures all of the information and provides plant performance metrics.

That kind of visibility can lead to performance improvements, experts say.

“What motivates people to do something is competition and peer pressure,” says Mark Sutcliffe, president of CDC Factory. “Obviously, if you do things more effectively everyday, the big numbers follow. It’s not rocket science, but it does require discipline and a framework and the [right] tools,” he says.

Another small vendor, As One Technologies Inc., delivers tools that work with existing plant systems and provide easy-to-use analytics. The company recently introduced a product, called Catalyst xM, that captures plant floor processes that manufacturing execution systems don’t typically capture. Catalyst xM, for example, tracks machine maintenance and pulls historical data that can be used to identify events that could yield a problem, says Jay Mellen, executive vice president for business development at As One. The system will send a text message, e-mail, or automated phone message to escalate management action.

“It automates the mundane actions to reduce the time it takes [to get things fixed],” Mellen says. And, while inspired by corrective and preventive action (CAPA) applications, “[Catalyst xM] is more focused on the automation of workflow,” he says.

The product also prompts users to enter information on why certain decisions were made on the plant floor, which can be fed into a BI system for analysis.

Of course, in production, quality is one of the most important business drivers. That’s why makers of quality management systems, such as IQS and CIMTEK, are adding analytical engines to their applications.

IQS recently added a quality intelligence reporting layer to its software that uses SAP’s Crystal Reports platform, as well as a quality analytics engine using MicroStrategy Inc. technology.

“What you want to know with quality are things like early-warning indicators,” says Lori Gipp, vice president of marketing at IQS. “With business intelligence, we are able to look at materials when they come into the plant or at the information going back and forth between engineers’ design changes.”

The point, Gipp says, is to manage changes in a manner that mitigates risk.

Similarly, CIMTEK offers a predictive analytics engine that can integrate with ERP, PLM, and MES systems, and can be used to build a complete quality record. The Magellan Quality Lifecycle Management is a SaaS product that provides OEMs with insight into the entire lifecycle of a product, from component quality to manufacturing testing.

Much like the PivotLink product, Magellan includes a data warehouse that can be used for analytics and to spot trends. The tool also sends out real-time alarms so that manufacturers can ensure that contract manufacturers, for example, are testing products correctly.

“The key to the system is the ability to get early warning signals before any disaster occurs,” says Chris Rehl, CIMTEK’s director of marketing. This wards off recalls and cuts costs related to warranty expenditures, he says.

But gaining actionable insight into quality issues is just one important way to drive performance. Increasingly, manufacturers must also factor in risk management and market volatility created, for example, by rising energy costs.

SAP has designed a Web-based business performance management framework that lets manufacturers plug in tools such as SAP’s Business Objects Risk Management product, which analyzes operational, financial, and human capital risks. Manufacturers can use the tool to perform what-if analysis, for example, looking at energy price trends.

Inside Out

Once you have visibility into your own enterprise’s performance, it’s time to start looking at everyone else in the supply stream. The supply network is becoming increasingly complex, and manufacturers need to be aware of what is going on not only with first-tier suppliers, but also with second- and third-tier suppliers. Also, as companies expand globally, new regulations and logistics risks enter the picture.

“The number one thing I get calls about is the feeling of being exposed,” says Jim Lawton, vice president and general manager at Dun & Bradstreet’s supply management solutions business. “After pursuing cost reduction strategies, [companies say the effort] is making their supply chain more brittle and susceptible to supply chain issues.”

Management Dynamics, a maker of on-demand supply chain and global trade management software, has layered SAP’s Business Objects BI technology on top of its applications to give manufacturers the ability to monitor overseas suppliers. The BI tools let manufacturers set and monitor KPIs, such as compliance with export and trade agreements or other issues that may produce supply chain bottlenecks.

Similarly, Dun & Bradstreet provides an on-demand service that helps manufacturers predict things such as when a second- or third-tier supplier may be in danger of going out of business. D&B tracks roughly 100 million companies in a database that includes variables such as financial, legal, regulatory, and operational data. On top of that, it adds predictive analytics to generate what it calls a “supplier stability indicator.”

“It can tell you if there’s a 37% chance that a company is going to go bankrupt within the next 90 days,” Lawton says. “The other piece of the equation is getting your arms around another company’s issues that may or may not be a problem for you.” For example, if a third-tier supplier is ready to go under, the D&B tool can help sort out how this change will impact your organization. The tool assesses factors like how much money is spent on the company, how many parts are bought, and which part of the product lifecycle is affected in order to help formulate next steps.

This can help a manufacturer accelerate its own performance because “it is clearly weeding out bad performers,” Lawton says.

Production Management and Analytics Lead Pharma/Biotech Technology Investments

2009-07-14T15:07:00.001+02:00

Production Management and Analytics Lead Pharma/Biotech Technology Investments

')" href="mailto:editorial@thomaspublishing.com?subject=Mail%20bag:%20Stephanie%20Neil" style="color: rgb(0, 51, 153); ">Stephanie Neil, MA Editorial Staff

A new report by ARC Advisory Group predicts widespread automation investments in the pharmaceutical and biotech industries, despite tightening budgets in the current financial crisis.

The report, “Automation Expenditures for Pharmaceutical and Biotech Industry Worldwide Outlook,” forecasts that these industry segments will invest more than $3 billion in automation technology by 2012. Much of that money will be directed at projects that will deliver immediate return on investment in areas such as manufacturing operations consolidation and applications standardization across the enterprise, the report says.

Because the discovery and commercialization of new drug products will remain the cornerstone of competitive advantage, pharmaceutical and biotech manufacturers are also focusing on production management software — such as MES — andanalytics software to increase productivity and flexibility as well as ensure product quality. The industry will also be focused on regulatory compliance and increasing automation while shortening time to market.

To that end, some suppliers offer analytics to help reduce production cycle time and throughput. Others provide analytics that can evaluate numerous solvent extraction schemes, reducing the number of experiments performed during the drug development phase. This ARC study will help users learn what others in the industry are doing and the capabilities of each supplier. The report also discusses strategies and tactics that suppliers and manufacturers can use to succeed in the rapidly changing worldwide pharmaceutical and biotech industry.

Statistical Education Resource Kit

2009-07-13T15:38:00.001+02:00

Statistical Education Resource Kit

This web site is organized by the following statistical topics:

Finally, A CEO Speaks Up on How to Renew America

2009-07-09T00:07:00.001+02:00

Finally, A CEO Speaks Up on How to Renew America

10:40 AM Monday June 29, 2009
by Steve Prokesch

A couple of weeks ago I met with GE's CEO Jeff Immelt and we were talking about the financial meltdown, the deep recession, and what it would take to fix America. He was outspoken about how business and government had let down the American people and the need for radical change.

That's fine, I said, but if he felt that way, why hadn't he spoken up publicly? Immelt ran from the room and quickly returned with a speech he was working on--one he delivered last week at the Detroit Economic Club. This was his speech and not something he had fobbed off to a speechwriter, he told me.

I urge you to watch it, here:

Immelt exhorted Americans to give up the notion that the U.S. can make it as a services-led, consumption-based economy, where "a mortgage broker is pulling down $5 million a year while a Ph.D. chemist is earning $100,000."

The country must refocus on manufacturing and R&D and must strive to be a leading exporter, he said. He announced that GE was opening an advanced manufacturing and software technology center outside of Detroit near the headquarters of Visteon, the auto parts maker that recently sought bankruptcy protection.

Coincidentally, "Restoring American Competitiveness," an article in the July-August special issue of the Harvard Business Review makes the same case about the importance of manufacturing. It warns that the erosion of the U.S. manufacturing base is seriously undermining the country's ability to innovate. (So much for the idea that we can succeed by letting other countries manufacture the products we invent!)

In his speech, Immelt offered a vision for how the business and government together can revive the economy and solve grand challenges such as clean energy and affordable health care. "We should welcome the government as a catalyst for leadership and change," he said, calling for a "real public-private partnership." (This from a self-described "Republican and free market guy.")

Finally, he lectured his fellow business leaders to take personal responsibility for turning things around. "We must end the impression that American CEOs are short-term speculators," he says.

Amen!

JUST-IN-TIME (JIT) PRODUCTION

2009-07-07T00:02:00.001+02:00

JUST-IN-TIME (JIT) PRODUCTION

Just-in-time (JIT) is defined in the APICS dictionary as “a philosophy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity”. It also has been described as an approach with the objective of producing the right part in the right place at the right time (in other words, “just in time”). Waste results from any activity that adds cost without adding value, such as the unnecessary moving of materials, the accumulation of excess inventory, or the use of faulty production methods that create products requiring subsequent rework. JIT (also known as lean production or stockless production) should improve profits and return on investment by reducing inventory levels (increasing the inventory turnover rate), reducing variability, improving product quality, reducing production and delivery lead times, and reducing other costs (such as those associated with machine setup and equipment breakdown). In a JIT system, underutilized (excess) capacity is used instead of buffer inventories to hedge against problems that may arise.

JIT applies primarily to repetitive manufacturing processes in which the same products and components are produced over and over again. The general idea is to establish flow processes (even when the facility uses a jobbing or batch process layout) by linking work centers so that there is an even, balanced flow of materials throughout the entire production process, similar to that found in an assembly line. To accomplish this, an attempt is made to reach the goals of driving all inventory buffers toward zero and achieving the ideal lot size of one unit.

The basic elements of JIT were developed by Toyota in the 1950's, and became known as the Toyota Production System (TPS). JIT was well-established in many Japanese factories by the early 1970's. JIT began to be adopted in the U.S. in the 1980's (General Electric was an early adopter), and the JIT/lean concepts are now widely accepted and used.

Some Key Elements of JIT

1. Stabilize and level the MPS with uniform plant loading (heijunka in Japanese): create a uniform load on all work centers through constant daily production(establish freeze windows to prevent changes in the production plan for some period of time) and mixed model assembly (produce roughly the same mix of products each day, using a repeating sequence if several products are produced on the same line). Meet demand fluctuations through end‑item inventory rather than through fluctuations in production level. Use of a stable production schedule also permits the use of backflushing to manage inventory: an end item’s bill of materials is periodically exploded to calculate the usage quantities of the various components that were used to make the item, eliminating the need to collect detailed usage information on the shop floor.

2. Reduce or eliminate setup times: aim for single digit setup times (less than 10 minutes) or "one‑touch" setup ‑‑ this can be done through better planning, process redesign, and product redesign. A good example of the potential for improved setup times can be found in auto racing, where a NASCAR pit crew can change all four tires and put gas in the tank in under 20 seconds. (How long would it take you to change just one tire on your car?) The pit crew’s efficiency is the result of a team effort using specialized equipment and a coordinated, well-rehearsed process.

3. Reduce lot sizes (manufacturing and purchase): reducing setup times allows economical production of smaller lots; close cooperation with suppliers is necessary to achieve reductions in order lot sizes for purchased items, since this will require more frequent deliveries.

4. Reduce lead times (production and delivery): production lead times can be reduced by moving work stations closer together, applying group technology and cellular manufacturing concepts, reducing queue length (reducing the number of jobs waiting to be processed at a given machine), and improving the coordination and cooperation between successive processes; delivery lead times can be reduced through close cooperation with suppliers, possibly by inducing suppliers to locate closer to the factory.

5. Preventive maintenance: use machine and worker idle time to maintain equipment and prevent breakdowns.

6. Flexible work force: workers should be trained to operate several machines, to perform maintenance tasks, and to perform quality inspections. In general, JIT requires teams of competent, empowered employees who have more responsibility for their own work. The Toyota Production System concept of “respect for people” contributes to a good relationship between workers and management.

7. Require supplier quality assurance and implement a zero defects quality program: errors leading to defective items must be eliminated, since there are no buffers of excess parts. A quality at the source (jidoka) program must be implemented to give workers the personal responsibility for the quality of the work they do, and the authority to stop production when something goes wrong. Techniques such as "JIT lights" (to indicate line slowdowns or stoppages) and "tally boards" (to record and analyze causes of production stoppages and slowdowns to facilitate correcting them later) may be used.

8. Small‑lot (single unit) conveyance: use a control system such as a kanban (card) system (or other signaling system) to convey parts between work stations in small quantities (ideally, one unit at a time). In its largest sense, JIT is not the same thing as a kanban system, and a kanban system is not required to implement JIT (some companies have instituted a JIT program along with a MRP system), although JIT is required to implement a kanban system and the two concepts are frequently equated with one another.

Kanban Production Control System

A kanban or “pull” production control system uses simple, visual signals to control the movement of materials between work centers as well as the production of new materials to replenish those sent downstream to the next work center. Originally, the name kanban (translated as “signboard” or “visible record”) referred to a Japanese shop sign that communicated the type of product sold at the shop through the visual image on the sign (for example, using circles of various colors to indicate a shop that sells paint). As implemented in the Toyota Production System, a kanban is a card that is attached to a storage and transport container. It identifies the part number and container capacity, along with other information, and is used to provide an easily understood, visual signal that a specific activity is required.

In Toyota’s dual-card kanban system, there are two main types of kanban:

1. Production Kanban: signals the need to produce more parts

2. Withdrawal Kanban (also called a "move" or a "conveyance” kanban): signals the need to withdraw parts from one work center and deliver them to the next work center.

In some pull systems, other signaling approaches are used in place of kanban cards. For example, an empty container alone (with appropriate identification on the container) could serve as a signal for replenishment. Similarly, a labeled, pallet-sized square painted on the shop floor, if uncovered and visible, could indicate the need to go get another pallet of materials from its point of production and move it on top of the empty square at its point of use.

A kanban system is referred to as a pull‑system, because the kanban is used to pull parts to the next production stage only when they are needed. In contrast, an MRP system (or any schedule‑based system) is a push system, in which a detailed production schedule for each part is used to push parts to the next production stage when scheduled. Thus, in a pull system, material movement occurs only when the work station needing more material asks for it to be sent, while in a push system the station producing the material initiates its movement to the receiving station, assuming that it is needed because it was scheduled for production. The weakness of a push system (MRP) is that customer demand must be forecast and production lead times must be estimated. Bad guesses (forecasts or estimates) result in excess inventory and the longer the lead time, the more room for error. The weakness of a pull system (kanban) is that following the JIT production philosophy is essential, especially concerning the elements of short setup times and small lot sizes, because each station in the process must be able to respond quickly to requests for more materials.

Dual-card Kanban Rules:

No parts are made unless there is a production kanban to authorize production. If no production kanban are in the “in box” at a work center, the process remains idle, and workers perform other assigned activities. This rule enforces the “pull” nature of the process control.
There is exactly one kanban per container.
Containers for each specific part are standardized, and they are always filled with the same (ideally, small) quantity. (Think of an egg carton, always filled with exactly one dozen eggs.)

Decisions regarding the number of kanban (and containers) at each stage of the process are carefully considered, because this number sets an upper bound on the work-in-process inventory at that stage. For example, if 10 containers holding 12 units each are used to move materials between two work centers, the maximum inventory possible is 120 units, occurring only when all 10 containers are full. At this point, all kanban will be attached to full containers, so no additional units will be produced (because there are no unattached production kanban to authorize production). This feature of a dual-card kanban system enables systematic productivity improvement to take place. By deliberately removing one or more kanban (and containers) from the system, a manager will also reduce the maximum level of work-in-process (buffer) inventory. This reduction can be done until a shortage of materials occurs. This shortage is an indication of problems (accidents, machine breakdowns, production delays, defective products) that were previously hidden by excessive inventory. Once the problem is observed and a solution is identified, corrective action is taken so that the system can function at the lower level of buffer inventory. This simple, systematic method of inventory reduction is a key benefit of a dual card kanban system.

Log.Punkt

2009-07-03T15:12:00.001+02:00

http://www.logpunkt.de/ejournal/index.html

2009-07-02T15:48:00.002+02:00

Early March, Industry Week published an article, titled "The Dead of the Supply Chain", arguing that the supply chain as it has traditionally been defined is no longer feasible. Gone are the days when supply chains were linear, static, in-country and tightly coupled to the brand owner or OEM's internal manufacturing.

Having spent time in studying the HP supply chain, I can fully agree with the statement. Indeed, supply chains such as ours have become global, outsourced and demand driven. Balancing demand and supply is critical to set-up and manage lean supply chains these days. In the article, Andrew Salzman describes five requirements that need to be addressed to achieve this:

B2B Integration
Business Process Management
Exception and Event Management
Business Intelligent
Operations management

I believe he misses a major point. The approach he promotes is an operational approach, which only covers part of the needs. Yes, OEM's and Brand Owners need to be able to react quickly when something goes wrong, yes, data needs to be normalized and aggregated, and stakeholders need to be connected. However, that only provides information on what's happening now and how potential problems can be resolved. It does however not use the present situation to improve the future.

What we need is "closing the loop", in other words combine the information on what has and is happening to be able to improve operations both in real time and over the duration. What does this mean? Well, first, there is a need to integrate suppliers and channel partners alike. Yes, this requires a B to B integration, but more importantly, it can only be achieved if collaborative relationships are built between partners. Developing those is a whole discussion in its own right, and I will defer this one to another entry. Building the electronic data transfer mechanisms is reasonably easy; building the trustworthy relationships is more difficult. Data needs to be put in a common format and will be used, through an operational data store, for exception and event management. However, the time dimension is not taken into account here. Indeed, it is by understanding trends, what has happened prior to specific events etc. that the dynamics of the supply chain is understood. Business Intelligence can be used here. Consolidated data is stored in a data warehouse for extended periods of time, analysis tools can then be used to understand what is happening and why.

This understanding allows the development of modeling tools that mathematically simulate how the eco-system will behave. This is where simulation comes in and where the difference is. Using simulation allows the analysis of multiple scenario's and the identification of how the supply chain should be transformed to be capable to react better to fluctuation in demand, absorption of events, and result in major reductions in risks of running a global supply chain. It is surprising to see how little companies are using simulation these days. It has been proven extremely valuable over and over again, but many companies seem to be bogged down in operational management, forgetting the importance of planning things right. Yes, when a fire burns, it needs to be extinguished, but doesn't avoiding the fire make more sense? This is why we, at HP, are focusing so much on business intelligence and intelligent decision making. Over and over again it has proven beneficial.

The Death of the Supply Chain

2009-07-02T15:48:00.001+02:00

The Death of the Supply Chain

Gone are the days when supply chains were linear, static, in-country and tightly coupled to the brand owner or OEM's internal manufacturing captivity.

Monday, March 09, 2009
By

The supply chain as it has traditionally been defined is no longer feasible. The changing nature of global business has had a dramatic effect on how companies design, build and deliver goods and services across virtually every industry. Gone are the days when supply chain were linear, static, in-country and tightly coupled to the brand owner or OEM's internal manufacturing captivity. Nowadays, globalization and outsourcing are pervasive -- thereby dramatically transforming the traditional notion of a supply chain from a traditional linear model to a highly dynamic demand-supply network.

Visibility: A Victim to a Highly Dynamic Demand-Supply Network

Often times, supply chain visibility is the first and most significant victim of this shift from a static, linear to a dynamic, networked model. Also militating against supply chain efficiency is the rapid pace of business: demand now moves at Internet speed, from around the globe, while supplies and finished goods can only travel as fast as a cargo jet, or, more often, an ocean-going freighter. This dichotomy between the speed of supply and demand makes the supply chain as much the problem as the solution to the problem. Without dramatically changing how the supply chain functions to compensate for this dichotomy, the supply chain itself becomes the main barrier to success for a modern, global company.

Visibility requires real-time information about not only what's happening inside the linear supply chain, but what's happening across a complex global network of suppliers, contract manufacturers (CMs), assemblers, distributors, channel partners, logistics companies, retailers, and, even, end consumers. These different stakeholders, by definition, have vastly different qualities and quantities of technology at their disposal in order to communicate with one another, and by themselves lack any self-organizing principle -- not to mention a common currency, time zone, and legal regime -- that could facilitate such a dialogue.

This makes the brand owner or OEM's task daunting at best. The Tower of Babel that has emerged from these dynamic demand-supply networks is largely incomprehensible to the vast majority of supply chain and ERP solutions today, most of which are designed to work within a linear supply chain largely defined by intra-company processes. These aging technologies have a singular difficulty in making the transition to supporting a networked, global, dynamic business model.

Technology Barriers

As the need for managing complex, multi-enterprise demand-supply networks vastly outpaces the ability of standard, on-premise supply chain management (SCM) and enterprise resource planning (ERP) systems, companies are increasingly realizing that their existing software and business models are inadequate for today's outsourced, multi-tiered, global 24/7 business world. Nowadays, companies require a new class of demand-supply management systems that are adept at managing external processes, partners and even buyers.

On top of this, the problems of integrating transactional data from multiple heterogeneous systems -- a key means by which a networked supply chain can automate supply chain operations -- is an ongoing issue across the enterprise, and one that is particularly problematic with respect to a demand-supply network. This limitation is due to the fact that heterogeneity among external suppliers and other partners is a given, and represents an enormous support burden for an on-premise system.

Five Requirements for Breaking the Supply Chain Barrier

With the shortfalls of on-premise ERP and SCM acting as a barrier to implementing the manufacturing enterprises of the 21st century, a growing number of companies have turned to an on-demand model to meet their demand-supply network goals.

Today's companies require a new class of demand-supply management systems that are adept at managing external processes, partners and even buyers. To support the kind of dynamic, demand-supply network that is needed today -- and well into the future -- companies must consider these five requirements:

B2B Integration: The ability to connect multiple stakeholders in a single networked environment provides the basis for the process and data integration needed to support a twenty-first century demand-supply network
Business Process Management: Managing a complex set of business processes from a single on-demand platform allows for a level of business process orchestration between partners that is largely impossible in an on-premise world.
Exception and Event Management: Once process management and data are standardized, exception and event management can be greatly facilitated as well. One of the problems that has always limited exception management across trading partners has been inconsistencies in how exceptions are defined and communicated across the network. With a single on-demand environment functioning as a data and process management hub, exception and event management can become highly automated and remediation can be greatly accelerated.
Business Intelligence: The ability to normalize and aggregate data and processes, and to directly connect all stakeholders across the demand-supply network, makes it an ideal launching pad for an expanded set of analytics and business intelligence services. The on-demand environment effectively creates its own data mart that readily lends itself to producing comprehensive analyses of a quality and reliability not possible in the on-premise world. This is a direct result of the increased visibility offered by on-demand services.
Operations Management: None of the above would be possible without an extremely well designed, highly functional, secure on-demand platform. Having the on-demand network owner function as the domain expert removes this burden -- and its costs -- from the individual stakeholders

By embracing an on-demand model, manufacturers who are shifting from a linear supply chain to a network system are able to work in concert with their entire demand-supply networks -- thereby maximizing visibility and better positioning themselves for success in this new paradigm of demand and supply management. The supply chain -- as we have known it -- is dead.

Andrew Salzman is the Chief Marketing Officer for E2open Inc. E2open provides SaaS-based demand and supply network solutions. www.e2open.com

Thought Leader -- Reducing the Supply Chain Footprint

2009-07-02T15:38:00.001+02:00

Thought Leader -- Reducing the Supply Chain Footprint

HP's Christian Verstraete brings a systems engineer's eye for the big picture to managing the supply chain's "ecosystem."

Wednesday, June 17, 2009
By Adrienne Selko

You might think that a person would run out of ideas after being at the same company for 30 years. Not the case with Christian Verstraete, who began his career with Hewlett-Packard as a systems engineer. These days he is pushing the lean frontier to see "how it can be incorporated into the wider view of the complete ecosystem." That view must extend beyond the boundaries of the enterprise and reach across the whole supply chain. For example, he warns, "Today companies must have a handle on risk management and mitigation across the supply chain while simultaneously reducing the variants. Rather than do Six Sigma within the company, do Six Sigma across the supply chain."

Q: How is HP able to continuously improve its supply chain?

A: Once we have identified potential improvements in our supply chain and before we implement the improvements, we develop a model. We inject multiple scenarios and variances and see how the model reacts. Simulation tools are relatively inexpensive and it is money that you can recoup very quickly by avoiding implementing the wrong thing.

Here's an example. In the mid '90s HP moved into the notebook business, and while they took off like rockets, we weren't making any money. We didn't understand why this was the case until we got our supply chain modeling people involved and discovered that there were a number of things that we hadn't taken into account. We revised our supply chain design and are now the largest notebook manufacturer in the world.

Q: HP won Wal-Mart's 2008 Home Entertainment Design Challenge. How did that happen?

Christian Verstraete
Chief Technology Officer / Manufacturing & Distribution
Industries Worldwide, Hewlett-Packard Co.

Responsible for thought leadership and innovation

Spends his time scanning trends and figuring out how to capitalize on them

Is busy figuring out ways to quantify "green" efforts

Proud of HP's efforts to help employees become environmentally conscious in
their own homes

A: It was actually very simple. Wal-Mart asked its top 100 suppliers to reduce the amount of packaging material in an effort to be environmentally responsible. One of our employees was contemplating how to protect the laptop when it was coming from China or Thailand. He found padded bags that were made from recycled material. He designed one package that was able to contain everything that the PC needs. It reduces shipping material by 97%, and it conserves fuel and reduces CO₂ emissions by removing the equivalent of one out of every four trucks previously needed to deliver the notebooks to Wal-Mart stores.

Q: Looking forward, what "green" issues do you see?

A: First of all you need to measure the result of your green efforts. We are among the first companies to calculate the carbon footprint of the supply chain. While it's still in its early stage of development, we hope over the next three to five years we will be able to more closely calculate and express all of the aspects of an environmental footprint. We need to go beyond emission only and look at water and other resources. We are teaming up with research institutes and universities to ensure that we take a holistic approach.

From a manufacturing viewpoint we need to move environmental concerns up to the product development stage so that design takes into consideration the whole life cycle as well as the end use. For example, if we put the paint in the plastic rather than paint the end product, we can ensure proper recycling.

Watching out for the environment is a priority not only for HP but also for Verstraete personally. "A company is a community of human beings," he says. "Everyone is responsible for doing their part at work and at home."

35 years later, bar codes, and scanning, are everywhere

2009-06-25T13:51:00.000+02:00

35 years later, bar codes, and scanning, are everywhere
Now bar codes are scanned billions of times a day
Matt Hamblen

June 25, 2009 (Computerworld) Tomorrow marks the 35th anniversary of the first time a laser scanner was used to "read" a bar code, according to Motorola Inc.

The company has a few of the pertinent facts from that day, including that the first scan occurred at 8:06 a.m., June 26, 1974, at a Marsh supermarket in Troy, Ohio. The bar code was imprinted on a 10-pack of Wrigley's Juicy Fruit gum.

There were bar code patent applications going back to the early 1950s, but a bar code alone couldn't do much. Jerome Swartz, an electrical engineer, invented the laser scanner used for reading bar codes. He also co-founded Symbol Technologies, which is now part of Motorola Enterprise Mobility Solutions, said Bob Sanders, vice president of the group.

The technology has grown to the point that bar codes are ubiquitous, Sanders said. Motorola estimates that a specific type of bar code called the Universal Product Code is used more than 10 billion times a day in applications that service 25 industries, including packaged goods, food services and medicine.

Bar codes are used everywhere, including to identify babies in delivery rooms and to track medicines used by critical care patients. They can be transmitted to cell phones to be read by a scanner directly from the phone for admittance to a baseball game. It won't be long before air travelers will check in for a flight with a handheld device displaying a bar code on its screen, instead of printing out the bar code, Sanders said.

One of its most clever applications is the use of a bar code on a packet of coffee that is read by a coffee maker to give specific instructions on the amount of pressure and heat needed for a specific kind of drink, Sanders said. Motorola provides the scanning technology in such machines, he said.

Bar codes have evolved to the point where two-dimensional bar codes can be read by cameras, instead of lasers. A related tracking technology is RFID, which uses a radio signal emitted from a chip to track a device. The RFID chip can include specific information about a product, such as a dress or a shirt, while a UPC has an optical pattern that is translated into 12 characters that provides more general information.

Only 10 of the 12 characters are used to identify the product, the first five describing the manufacturer and the second five the specific product. By itself, that information is meaningless, but when it is transmitted to a server with a database from a cash register with a scanner, a price can be determined.

Sanders said there are efforts underway to add more fields to the bar code, which could make it helpful in tracking certain products. A tainted food, for example, could be tracked down to a single item, such as a bag of peanuts.

"I don't see the bar code going away any time soon," Sanders said.

For at least a decade, inventors have talked about using bar codes as hyperlinks to find specific items on the Internet. A customer in a store, for example, could use a cell-phone camera to read a product's bar code and learn about competitor's products through a quick browser search. "Some groups are dabbling with that technology and its day will come, it's not far off," Sanders said. Some smartphones, such as the T-Mobile G1, already have an application that turns the phone's camera into a price tag scanner.

When bar codes and scanning were paired in the 1970s, the technology set off a national tremor among privacy advocates. "That worry has gone away, and people see the bar code as a productivity tool now. They see there's no secret society tracking them," Sanders said. "People were worried about bar codes on frequent shopper cards, until they discovered they might be used to save 50 cents on a purchase."

Chinese upper class growing

2009-06-18T15:17:00.001+02:00

The country's widening income disparity is considered to be one of its most pressing social problems, with the average income of 20 percent of the richest Chinese families 17 times higher than the poorest households, the CASS reported in its 2009 Blue Book on Chinese Society.

Material Handling Guides & Data

2009-06-18T14:14:00.000+02:00

Material Handling Guides & Data

Assistance with your racks, conveyors, shelving, and more

Product Type

Resource

CASTERS

Wheel Selection Guide

CARTON FLOW, Span Track

Selection Guide

CONVEYOR

Articles & Resources - award winning articles

CONVEYOR

Illustrated Conveyor Guide

CONVEYOR

C onveyor productivity PDF

DOCK BOARDS

Configuration WebTool

GUARD RAIL

Photo Gallery

GUARD RAIL

Video: Steel Guard Systems - (2.6MB WMV file)

HVLS FANS

Warehouse HVLS fan justification

LADDERS

Ladder Safety Certifications

LADDERS

Ladder Safety Article

LIFTS

Scissor Lift Specification Guide

LIFTS

Dock Lift Specification Guide

LOCKERS

Specification Guide

LOCKERS

Lockers: A primer

LOCKERS

Locker Comparison Guide

MATS & MATTING

Selection Guide

MEZZANINES

Decking Selection Guide

RACK, Cantilever

Specification Guide

RACK, Pallet

Online Estimator

RACK, Pallet

Pallet Rack Guide - 655.42 KB PDF

RACK, Pallet

Specification Guide

RACK, Pallet

Style Guide

RACK, Pallet

Seismic Zone Considerations

SAFETY CABINETS

The role of safety cabinets in fire prevention

SAFETY CABINETS

Door and Handle Styles

SAFETY EQUIPMENT

15 ways material handling can make your operation safer (PDF)

SAFETY NETTING

Conveyor Net Specification Guide

SAFETY NETTING

Rack Net Specification Guide

SHELVING, Metal

Specification Guide

SHELVING, Metal

Open vs. Closed

SHELVING, Rivet

Specification Guide

SHELVING, Rivet

Online Estimator

SHELVING, Rivet

Rivet Shelving brochure PDF

SHELVING, Rivet

Single Rivet vs. Double Rivet

SHELVING, Wire

Specification Guide

WIRE PARTITIONS

Partition Specification & Models (PDF)

WIRE PARTITIONS

Architectural Specifications

WORKBENCHES

Articles

--- http://www.cisco-eagle.com/

Cross-Dock Planning

2009-06-18T14:10:00.000+02:00

Cross-Dock Planning

Cross-docking is the process of moving goods straight from receiving to shipping to avoid unnecessary handling in a warehouse operation.

Execution of cross-docking can be planned or opportunistic. Opportunistic cross-docking occurs as part of the warehouse operation when outbound orders are matched with actual received quantities. This is often referred to as pick-on-receipt. Planned cross-docking is a pre-defined link between inbound and outbound, which directs what the warehouse should do.

Planned cross-docking is either defined by the host system or at the supply chain execution level. If done by the host, inbound order lines are linked to outbound order lines (including quantity required) through the inbound order.

On supply chain level, the cross-dock planning solution looks across nodes in the supply chain to determine which ASNs or inbound orders are to be cross-docked.

Capabilities

Workbench for selecting inbound orders and ASNs and assign cross-dock links and quantities to outbound orders – automatically or by user decision
Supports definition of cross-dock links on license (container) or order quantity level
Maintain and release cross-dock links
Configurable business rules for setting conditions for cross-dock proposals, including optional authorization steps
User-defined rules can include criteria for which items are eligible for cross docking, how to select outbound order line candidates, and how to allocate quantities to order lines (e g consider customer priority when short of supply).

Benefits

Increased use of cross-docking reduces handling costs in warehouses
Higher turnover rates and shorter lead time by better coordination of supply and demand
Improved ability to deal with shortage situations and rationing decisions
Use cross-dock planning to re-route goods in-transit in transportation hubs to match latest market demand

Cross docking

2009-06-18T14:09:00.000+02:00

Cross docking is as old as distribution but the issues associated with staging over the road (OTR) trailers and developing time critical delivery and shipping schedules have been replaced with simpler, more efficient methods. LoadBank International uses advanced bi-directional unit load conveyor staging to accommodate multiple receiving lanes and multiple shipping lanes all within close proximity of the OTR trailers. This allows greater flexibility in scheduling and lowers labor, space and transport-equipment costs.

Energizing Your Warehouse New Strategies For Greater Efficiency

2009-06-18T14:01:00.002+02:00

Energizing Your Warehouse
New Strategies For Greater Efficiency

By Merrill Douglas

In a tough economy, the universal battle cry is, "Do more with less!" We're all looking for new ways to squeeze a few more dollars, or a few more hours, from our operations while also delighting customers with ever-better service. In many cases, we're trying to achieve those goals while saving energy and reducing our environmental impact.

Warehouse operators can employ many excellent strategies to boost efficiency: warehouse management systems, wireless communications systems, materials handling automation, and well-designed cross-docking, for starters. Companies also are applying techniques that you might not have heard about before. Here's how some logistics professionals are making their warehouses smarter, faster, greener, and more economical.

LIGHTS, ACTION

One simple technique for saving energy and cutting costs in a distribution center is to replace older lighting systems with high-intensity fluorescents.

Warehouses traditionally have used mercury vapor lamps, which give off a bluish light, or sodium halide lights, which have a yellow cast, says Geoff Sisko, assistant vice president at TranSystems, a logistics consultancy in Woodbridge, N.J. Both types of bulb cast a cone-shaped light, making them a less-than-efficient warehouse solution.

"With these bulbs, items high up in the racks are cast in shadow," Sisko says. "And low down on the floor, wasted light spills into areas that are covered by racks."

In addition, such lights take a minute or two to achieve full brilliance. "They're also power hogs," Sisko adds.

Many companies are retrofitting warehouses with T5 fluorescent bulbs and fixtures (T5 refers to the diameter of the bulb, 5/8 of an inch, in this case). These bulbs emit a lot of light, and because of their horizontal shape, they cast it in a linear pattern.

"Arranging the lights correctly can provide good light from the top of the racks to the bottom along the aisles. And in open space, the lights can be positioned to distribute lighting evenly," Sisko says.

Officials at Lion Brand Yarn Company, the oldest yarn brand in the United States, were so pleased with the fluorescents they installed in a Carlstadt, N.J., warehouse five years ago, they're now retrofitting a second building with that technology as part of a major renovation.

"We currently use old-style fluorescent bulbs in the DC's ceiling," says Marty Leiderman, Lion Brand's distribution manager. The lighting contractors have specified T8 bulbs, which measure one inch in diameter.

"The contractors are tailoring the light to the application we need," Leiderman says. "As a result, we'll have the proper amount of even lighting throughout the building."

The new fixtures and bulbs are more energy efficient than the equipment that was available when the building was erected more than 30 years ago. "We get better light cheaper," Leiderman notes. Lion Brand expects to net a return on its investment in the new fixtures in less than two years.

Some companies are going one step further and using motion detectors to control their fluorescent lighting. "If the detectors don't sense movement in an aisle for a predetermined amount of time, the lights shut off, and only a few bulbs stay on to provide minimum light," Sisko explains. "As soon as somebody moves into the aisle and motion is detected, the lights come back on."

Another energy-saving technique that can be tied to a fluorescent lighting system is "light harvesting." When bright sunlight enters a room, a sensor sends a signal to a switch to dim the lights. When clouds roll in or the sun moves to the other side of the building, the fluorescent lights grow brighter. It has only recently become possible to control fluorescent fixtures in this way, Sisko notes.

This technique is obviously best suited to buildings with large windows -- not a common warehouse feature. "Manufacturing plants currently use it, and schools and offices could use it," Sisko says. A warehouse could install such a system in areas near the loading docks, which do get outside light.

If anyone is going to find a practical way to harvest light in a warehouse, it might as well be a company that makes its products from the fruits of the harvest. When Eden Foods, a Clinton, Mich.-based purveyor of organic foods, built an addition to its warehouse last year, it ran a five-foot-high window made of polarized plastic around the top of the facility.

"The polarized plastic reduces the amount of lighting needed in the building," says Michael Potter, Eden's president and chairman. "It also lets in warmth in the winter and blocks the sun in the summer to minimize energy consumption."

Optimizing the light and other elements to reduce the impact on the earth is part of Eden's corporate culture. So when it came time to build the 72,000-square-foot addition, Potter opted to follow guidelines established by the Leadership in Energy and Environmental Design (LEED) Green Building Rating System. Buildings earn LEED certification for attaining goals in sustainable site development, water savings, energy efficiency, materials selection, and quality of the indoor environment.

The addition, completed last year, incorporates recycled steel, highly efficient lighting, and a plumbing system that includes low-flush toilets. Eden also installed a bright white roof designed to reflect light and heat back into space, rather than absorbing it and contributing to global warming.

In the near future, Potter hopes to make the warehouse even more sustainable by adding alternative energy sources, such as solar panels or a wind turbine. "Solar panels are becoming increasingly more cost effective," he says.

A vendor exhibiting a windmill at a recent natural products expo told Potter he could build one sized to Eden's needs for $10,000. "That's a reasonable price," Potter says. "A significant return on investment and a positive impact on energy consumption with windmills is affordable, even for us."

GOING UP

Another way to achieve new heights in warehouse efficiency might be, simply, to achieve new heights. In crowded Asian cities, for example, vertical warehousing helps some companies beat the high cost of land, cut transportation costs, and reduce the operation's environmental impact.

Multi-story distribution centers haven't yet caught on in the United States, but that could change, says Steve Campbell, senior vice president, director of environmental and development services at AMB Property Corporation, San Francisco.

"Multi-story facilities are being discussed at length in the Los Angeles port area, and in the New York/New Jersey market," Campbell says. Officials at those ports are looking for ways to provide adequate distribution capacity in areas where there's little room left to expand.

AMB owns, operates, and develops industrial real estate in the Americas, Europe, and Asia, and its portfolio includes about eight million square feet of multi-story warehouse space. Tenants of AMB's vertical warehouses include logistics service providers Exel, Expeditors International, BAX Global, and FedEx. Some shippers also have embraced the concept, Campbell says.

A multi-story warehouse allows a company to operate in a dense urban area, rather than locating miles from the population center. That strategy offers several benefits.

First, it shortens transit time to customers. "Companies in dense urban areas tie up a significant percentage of total operating cost in transit time," Campbell says. "When they start to cut transit times, efficiency soars."

The second benefit is environmental; shorter trips burn less fuel. Also, it's easy to design "green" features into a facility that supports dense usage on a small site.

Third, a multi-story warehouse offers much more usable floor space per square foot of land, a real boon in a city where land is expensive. "A typical floor-area ratio (FAR) in the United States is about 35 to 40 percent," Campbell says. "In Japan, FARs reach as high as 375 percent."

A multi-story warehouse naturally requires different design solutions than a single-story facility. One approach for moving goods in and out of the higher floors is a pair of spiral truck ramps, one for upward-bound traffic and one for downward-bound.

Another solution is to serve just one floor with a ramp, and the balance of the building with both pallet lifters and freight elevators to allow for storage of goods that don't move in and out as quickly.

Because the upper levels of a multi-story warehouse must be engineered to bear heavy loads, a vertical warehouse can be more expensive to build than a one-story facility. If the cost of acquiring the land represents at least 50 percent of the total construction cost, going vertical is a good idea.

"Many Asian markets, such as Tokyo and Osaka, Singapore, and certain Chinese markets, have reached that tipping point," Campbell says.

American cities are nowhere near that tipping point, especially in the current economy with its depressed real estate prices. And certainly, Campbell concedes, recent trends in the United States have favored construction of mega-sized DCs on the outskirts of metropolitan areas. But that trend could reverse itself in favor of development closer to the urban core.

A LIFT FOR LIFT TRUCKS

Whether the warehouse occupies one story or more, you still need to move goods from one section of the building to another. Forklift trucks provide another focus for companies that want to make warehouse operations more efficient and economical.

Some companies that operate large electric forklift fleets have been testing the use of hydrogen fuel cells to power them. Because they emit nothing but water vapor, these cells are environmentally friendly. And while it takes hours to recharge conventional batteries, refilling hydrogen cells takes just seconds. "Companies place a hydrogen tank outside the warehouse, and refuel the lift truck just as you would a car," Sisko says.

Another plus is that a hydrogen fuel cell emits the same level of power all day. That's not true of a conventional battery. "As the battery begins to discharge, the power rating decreases. Less and less power is generated, and the lift truck slows down," Sisko explains.

Whatever its power source, eventually a lift truck will need maintenance. A service to help lift truck fleet managers squeeze costs out of that area was launched last November by AmeriQuest Transportation, Coral Springs, Fla.

Traditionally, AmeriQuest has focused its services outside the warehouse, providing fleet management and truck leasing to about 1,000 members, mainly commercial carriers and companies with private fleets. But when members repeatedly asked for help with their forklift fleets � particularly with buying parts, managing service, and buying whole units � AmeriQuest developed its new Materials Handling Services program, which includes lift truck parts procurement, lift truck fleet management, and lift truck remarketing.

Companies that maintain their own lift trucks are candidates for the parts procurement service. Normally, these parts pass through three layers of suppliers -- parts manufacturers, lift truck manufacturers, and lift truck dealers -- before reaching the end user. "By the time an end user gets a part, it has been faced with three markups," says Scott Grushoff, vice president and general manager of AmeriQuest Materials Handling.

To gain discounts for its members, AmeriQuest has negotiated agreements with parts manufacturers and large parts distributors. Members order the parts from AmeriQuest.

"We cut lift truck dealers and Original Equipment Manufacturers (OEMs) out of the equation," Grushoff says. "On average, members save more than 30 percent on the parts they buy." AmeriQuest's inventory includes replacement parts, batteries and chargers, tires and poly wheels, electric motors, and many electronic components.

Warehouse operators who don't service their own lift trucks may sign up for AmeriQuest's fleet management service. When a member needs service, AmeriQuest dispatches a technician from an authorized provider, with which it has negotiated rates and established service standards. On site, the technician calls an AmeriQuest employee who is an expert on lift truck repair, and the two collaborate on the problem. "There's no open checkbook for the technician to do any repairs he deems necessary," Grushoff says.

When the work is done, the repair service submits an invoice to AmeriQuest, which makes sure the vendor abides by the agreed rate and bills only for a reasonable amount of labor. Members also take advantage of AmeriQuest's rates for parts. At the end of the month, members receive a consolidated statement for all repairs performed.

AmeriQuest monitors repair records to make sure service shops don't send inexperienced technicians who repeatedly misdiagnose problems. It ensures that equipment still under warranty is treated correctly. It also provides software that corporate managers can use to monitor lift truck usage and maintenance across all their locations.

Under its third offering, AmeriQuest helps members find buyers for used forklift trucks.

Although AmeriQuest charges a fee for some of its truck fleet management services, there is no fee for using any of the services in the Materials Handling program, Grushoff says.

Building a Team

No matter how green the building or efficient the processes, you can't run a warehouse without people. When employees on the floor pull together as a team, opportunities to improve the operation abound.

One key to running a world-class warehouse is to develop a corporate culture in which management and employees share common values, says Ron Cain, president and CEO of third- party logistics provider (3PL) TMSi. A strong sense of community in the warehouse drives excellent performance because everyone's efforts are aligned. "There's a higher purpose than just showing up to work," Cain says.

A non-asset-based 3PL based in Fernandina Beach, Fla., and Portsmouth, N.H., TMSi typically staffs and manages logistics inside its customers' facilities. For example, TMSi has been running parts warehouses in Jeffersonville, Ind., and Jacksonville, Fla., for General Electric since 2002 and one in Cranbury, N.J., since 2008. Distributors and technicians use these parts to service washers, dryers, refrigerators, and other major appliances.

At each warehouse, GE provides the facility, the warehouse management system, and the customer orders, explains Edward Huttunen, parts distribution manager for GE in Louisville, Ky. TMSi, which staffs and manages the warehouse, is responsible for receiving, putaway, picking, shipping, arranging inbound and outbound transportation, and keeping inventory in good order and accurate.

COMMUNITY SERVICE

One strategy that TMSi's managers use to build team spirit on the warehouse floor is to encourage community service. In the GE facilities, the 3PL's employees have held food, clothing, and toy drives for charities that benefit children and have sometimes gone off site to volunteer for those organizations. "Collaborating for the sake of others encourages employees to feel like partners," Huttunen says. "It provides a different perspective of your fellow workers and generates camaraderie and strong bonds."

Employees at other TMSi-run warehouses have participated in walk-a-thons, run after-school programs, and led students in renovating houses for the needy. "Those facilities always outperform the others," Cain says.

Performance soars because public service projects get employees used to the idea of putting others first. "Once they do that, they become a true team built on trying to continue to improve," Cain says. That spirit spills over into the warehouse, where employees feel empowered to influence the culture and the processes.

TMSi's efforts to strengthen corporate culture in the warehouse go beyond philanthropy. The 3PL treats employees like valuable team members, encouraging them to share ideas and information among themselves, with GE and with GE's customers. For example, when distributors and technicians visit a GE warehouse to learn about the operation, TMSi staff are on hand to explain how they fill orders.

By the same token, TMSi includes floor staff in "action workouts" -- lean exercises in which GE's employees, customers, and distribution team collaborate to improve specific warehouse processes. Associates who work on the front lines have valuable insights, and they're thrilled when managers take their suggestions for improvement.

This kind of collaborative corporate culture gives employees a sense of ownership. "Employees are all over any kind of problem that touches their area," Huttunen says. "An employee with that attitude will seek out information and follow through without prodding from management."

In the current economic slump, when it's more important than ever to control costs, TMSi's teams have stepped up to the task. "They've worked with their associates and have been able to improve productivity through increased flexibility," Huttunen says. "They have also maintained a high-value proposition for our customers."

FULL SPEED AHEAD

"We're going to find a way to do it" could also be the cry of all logistics leaders who devise creative solutions for their warehouse operations. A smarter, faster, greener, more efficient warehouse puts a company in position to ride out tough times and keep speeding ahead.

Cross-docking

2009-06-18T13:57:00.002+02:00

Cross-docking

Cross-docking is a practice in logistics of unloading materials from an incoming semi-trailer truck or rail car and loading these materials directly into outbound trucks, trailers, or rail cars, with little or no storage in between. This may be done to change type of conveyance, to sort material intended for different destinations, or to combine material from different origins into transport vehicles (or containers) with the same, or similar destination.

Cross-Dock operations were first pioneered in the US trucking industry in the 1930's, and have been in continuous use in LTL (less than truckload) operations ever since. The US Military began utilizing cross-dock operations in the 1950's. Wal-Mart discovered the benefits of cross-docking in the retail sector in the late 1980's.

In the LTL trucking industry, cross-docking is done by moving cargo from one transport vehicle directly into another, with minimal or no warehousing. In retail practice, cross-docking operations may utilize staging areas where inbound materials are sorted, consolidated, and stored until the outbound shipment is complete and ready to ship.

Advantages of Retail Cross-Docking

Streamlines the supply chain from point of origin to point of sale
Reduces handling costs, operating costs, and the storage of inventory
Products get to the distributor and consequently to the customer faster
Reduces, or eliminates warehousing costs
May increase available retail sales space

Typical applications

"Hub and spoke" arrangements, where materials are brought in to one central location and then sorted for delivery to a variety of destinations
Consolidation arrangements, where a variety of smaller shipments are combined into one larger shipment for economy of transport
Deconsolidation arrangements, where large shipments (e.g. railcar lots) are broken down into smaller lots for ease of delivery.

Retail cross-dock example: Using the cross-dock technique, Wal-Mart was able to effectively leverage their logistical volume into a core strategic competency.

Wal Mart operates an extensive satellite network of distribution centers serviced by company owned trucks
Wal Mart’s satellite network sends point of sale (POS) data directly to 4,000 vendors.
Each register is directly connected to a satellite system sending sales information to Wal Mart’s headquarters and distribution centers.

Factors influencing the use of retail cross-docks

cross-docking is dependent on continuous communication between suppliers, distribution centers, and all points of sale.
Customer and supplier geography -- particularly when a single corporate customer has many multiple branches or using points
Freight costs for the commodities being transported
Cost of inventory in transit
Complexity of loads
Handling methods
Logistics software integration between supplier(s), vendor, and shipper
Tracking of inventory in transit

Cross docking

2009-06-18T13:57:00.001+02:00

Cross docking

Cross docking means to take a finished good from the manufacturing plant and deliver it directly to the customer with little or no handling in between. Cross docking reduces handling and storage of inventory, the step of filling a warehouse with inventory before shipping it out is virtually eliminated ^[1].>

Simply, stated cross-docking, means receiving goods at one door and shipping out through the other door almost immediately without putting them in storage ^[2].

Cross docking shift the focus from "supply chain" to "demand chain". For example stock coming into cross docking center has already been pre-allocated against a replenishment order generated by a retailer in the supply chain ^[2].

Cross docking helps retailers streamline the supply chain from point of origin to point of sale ^[3].

It serves number of objectives. It helps reduce operating costs, increase throughput, reduces inventory levels, and helps in increase of sales space ^[2].

Cross docking helps reduce direct cost associated with excess inventory by eliminating unnecessary handling and storage of product. Less inventory means less space and equipment required for handling and storing the products. This also means reduced product damages and product obsolescence ^[3].

Cross docking also encourages electronic communications between retailers and their suppliers thus creating further opportunities for gains in efficiency ^[3].

How cross-docking works?

On receiving goods workers put pallets in lanes corresponding to the receiving doors, a second team or workers sorts pallets into shipping lanes, from which a final team loads them into outbound trailers ^[4].

The following figure illustrates this:

Cross Docking at work
Source: http://web.nps.navy.mil/~krgue/Teaching/xdock-mba.pdf

Please note that this is a simplistic illustration of how cross docking works. Cross docking can take many forms like manufacturing cross docking, distributor cross docking, transportation cross docking, retail cross docking ( Wal-Mart uses this type) and opportunistic cross docking. Based on different classification exact execution of cross docking may vary. This discussion is beyond the scope of this text ^[4]. Please refer to http://web.nps.navy.mil/~krgue/Teaching/xdock-mba.pdf http://web.nps.navy.mil/~krgue/shape-submitted.pdf for more details.

To read about cross docking in detail and understand how cross docking works refer to K-mart first off the mark with new automated cross docking system http://www.colby.com.au/division/is/cs02.htm

Another interesting article is: Supply Chain Management the Wal-Mart Way A look at Wal-Mart's new mega-distribution centre in Cornwall, Ontario By Alexandre Daudelin An article originally published in the November 2000 issue of Gestion Logistique.

To read more about cross docking please go to Cross-docking: A common practice today, sure to grow tomorrow Modern Materials Handling; Boston; Mid-May 1998; Anonymous⁹

Reference:

1. Cross docking: A common practice today, sure to grow tomorrow -- Modern Materials Handling; Boston; Mid-May 1998; Anonymous; Volume: 53 Issue: 6 Start Page: 19-21 ISSN: 00268038

2. http://www.dmg.co.uk/distribution/library/9804i.htm

3. http://www.colby.com.au/division/is/cs02.htm

4. CrossdockingL Just-In-Time for Distribution Kevin R. Gue Graduate School of Business & Public Policy Naval Postgraduate School, Monterey, CA 93943 May 8, 2001 http://web.nps.navy.mil/~krgue/Teaching/xdock-mba.pdf

原文：http://projects.bus.lsu.edu/independent_study/vdhing1/othertopics/crossdocking.htm

Cross docking

2009-06-18T13:55:00.000+02:00

Cross docking

Der Begriff Cross Docking bzw. Kreuzverkupplung bezeichnet eine Warenumschlagsart, bei der Waren vom Lieferanten (Absender) vorkommissioniert geliefert werden. Das bedeutet, dass der Einlagerungsprozess und die dazugehörige Aktivität des Bestandslagers entfallen.

Das konzeptionelle Gegenteil des Cross Dockings ist die sortenreine Anlieferung, Einlagerung und anschließende Kommissionierung von Waren in einem Warenlager.

Ziele [Bearbeiten]

Ziele des Cross-Dockings:

Reduzierung der Lagerhaltungskosten
Reduzierung der Anzahl der Prozessschritte

Cross-Docking-Varianten [Bearbeiten]

Einstufiges System : Die Lieferanten kommissionieren die Waren (oder auch 'logistische Einheiten' genannt) bezogen auf den Endempfänger (Filialen oder Endkunden). Im einstufigen System werden die Waren 'wie vom Absender verpackt' über einen oder mehrere Umschlagpunkte an den Endempfänger weitergeleitet. Voraussetzung hierfür ist, dass der Absender die Waren (meist Paletten-weise) kennzeichnet - also die entsprechenden Endempfänger direkt auf/an der Ware angibt. Dieses Verfahren wird auch als Pre-Allocated Cross-Docking (PAXD) bezeichnet.
Zweistufiges System (auch Transshipment genannt): Die Lieferanten kommissionieren bezogen auf den Umschlagpunkt oder Cross-Docking-Punkt. Im zweistufigen System werden die logistischen Einheiten unverändert nur bis zum Umschlagpunkt geleitet. Am Umschlagpunkt erfolgt dann der eigentliche Umschlag in neue logistische Einheiten, welche von diesem Zeitpunkt an an den Endkunden adressiert sind. Dieses Verfahren wird auch als Break-Bulk Cross-Docking (BBXD) bezeichnet.
Mehrstufiges System: Ein mehrstufiges System beinhalten noch weitere Prozessschritte neben der eigentlichen Umkommissionierung. Diese können bspw. die Konfektionierung von Artikeln oder sog. Value Added Services sein. Das Zweistufige System ist somit nur als Spezialfall des mehrstufigen Systems zu sehen.

Cross Docking

2009-06-18T13:52:00.002+02:00

Cross Docking: Is it right for me?

This article is the first in a series of articles on the subject of cross docking.

Judging by the number of inquiries we receive relative to inventory management in distribution, a look at cross docking practices seems to make sense. This will be the first of a series of briefs on cross docking, how and where it works, and a look at some best practice ideas that might be useful to those of you in the distribution business (of all sizes). I’ll also be providing you links to some excellent online references for more information.

Most everyone is familiar with how those like Wal-Mart took the cross docking model, and essentially redefined supply chain efficiency. The results achieved are well-documented. For those of us involved with mid-size organizations, a compelling case can be made for considering cross dock principles in our distribution centers. If you are able to move material from receiving dock to shipping dock, and bypass storage, consider what you gain. Costs associated with holding inventory, protecting it, insuring it, picking it, counting it, and so forth.

Although the “cross docking” term is well ingrained in our supply chain lingo, it is important to understand the concept also applies elsewhere in our distribution centers (more on that later), notwithstanding what you call it. Let’s begin.

Inventory is the Real Issue

We all deal with a variety of costs in our supply chains. At the top of your list and my list are order-picking costs and inventory holding costs. Your goal is to minimize or eliminate both. In addition, freight cost reductions can also represent significant potential, particularly for those dealing with LTL’s and small package carriers. Most of you, who get this right, are using tools to better manage information, and to better manage or coordinate with your supplier chain partners. It is not necessary to be large in size to take advantage of a cross dock model. Many of today’s solutions are both modular and scalable. These tools allow you, the distributor, to better consolidate your shipments and shorten your cycle time.

Most of you deal with products from multiple vendors which enter your distribution centers. These products are typically not ready for direct transfer to your shipping docks. As a result, you must create a label for the product upon receipt, and then move the product to the correct shipping area. This increases costs because a non-value add touch point(s) is required. Essentially, the question is who does the work to prepare the product for shipment. We both would rather the vendor handle it, but that is not always reality. In our case, we scan the incoming shipment, a lookup is performed, and a new label is created and applied to the product, readying it for shipment. This approach is known by various names, one of which is “post-distribution”. If you negotiate with your vendors to label products that can be cross-docked directly to your shipping area, then you will see terms like, “transshipment ready”, “transload ready”(an incorrect usage), or “pre-distribution”.

When does cross docking begin to make sense? Begin with considering the order profiles of your key customers. Like us, you may have many customers who tend to order the same products in significant volumes throughout the year, or at least seasonally. In effect, supply and demand are pretty much predictable, allowing you to match each with the other. Begin with these products as candidates. Some products will be filtered out of this mix. For instance, those that require excessive handling in order to move, or products of an unusual shape, size, or excessive weight would be examples. Also, products that are FIFO, or date-sensitive make poor candidates.

When you engage in a supply chain enhancement such as cross docking, the players both upstream and downstream of you play key roles. In fact, they will define your success or failure. Our experience is that all can benefit when all are involved. Otherwise, you may simply be going through an exercise in which some costs are passed off to another link in the supply chain.

In upcoming briefs, we will look at the following areas. You are welcome to comment below with any questions or comments.

Am I wasting my time……is this a viable consideration for my company?
Cross dock layout alternatives that work
Getting started……understanding a simple system (and costs)

Am I wasting time: is cross-docking a viable consideration for my company?

This article is the second in a series of articles on cross docking

In concept and on paper cross docking looks great, but, what about actual implementation? What kind of return do we get on this investment? The short answer is the implementation can be challenging. However, with planning, a committed team of upstream and downstream participants, and possibly even a pilot program, it can pay significant benefits.

Cross docking does not have to be complicated. Some, even today, execute cross-docking using human-readable paper documentation as the driver. As mentioned in the original brief, cross docking can cover a wide range of distribution activities. In one door and directly out the other is one approach. Many cross dockers also add value in the brief (hopefully) interval between receiving and shipping. Others send product to a temporary buffer in the interval, in many of these cases an automated system (mini-load, AS/RS, etc.) serves as the buffer.

What might we potentially expect from a successful implementation?

Reduction in capital investment in facilities and equipment (less space required)
Reduction in inventory
Reduction in personnel requirements
Reduction in order cycle time
Reduction in product damage (reduced touches)
Reduction in freight costs

What are the gotchas, why we might fail?

Facility layout is poor
Internal information systems are not integrated
Little or no integration and collaboration within your supply chain
Compliance by all supply chain partners
Selected the wrong products
Reliable suppliers (accurate, on time deliveries)
Sufficient volume of activity
Understanding peak workload variations

Information will make you or break you

To best manage your inventory, you really need visibility into what you will be receiving, before receiving it. Advance Shipping Notices (ASN) are what provide this visibility.
Most of you are familiar with these, and probably already use them in some form. With ASN’s, you know what is arriving and when. With your Warehouse Management System (WMS) you know what is in your warehouse. Marry these with your order management system and you have the information necessary to match current inventory with order requirements, and get orders out the door efficiently (transportation covered shortly) You begin to see the need for cooperation and communication across the supply chain. The value (necessity) of EDI or internet connectivity becomes apparent. A level of information infrastructure is a must.

Supply chain partners are just that, partners in an integrated cross dock process. Select those that deliver products frequently, and deliver them on time. Most of you already have a solid handle on who are possible vendor partners, those with whom you are currently highly collaborative. Those whose products require a very limited number of touch points in the cross dock, if any touch points at all.

Touch points are work. Who does the work?

As a distributor or cross docker, identifying who “preps the products” for shipment is a fundamental consideration. For instance, incoming products were pre-labeled by the vendor for outgoing shipment (they did the work). Alternatively, the incoming products require labeling on your dock prior to outgoing shipment (you do the work). A third case might be the incoming products have been pre-labeled, but might need something additional, such as de-palletizing before outgoing shipment (we both do some work). A good answer to, “Who does what?” is “Who can do it most efficiently in the supply chain?”

Organizations that are process-driven, with a continuous process improvement mentality fit well in a cross dock environment. They tend to establish metrics, measure, and effectively use feedback for improvement. Those achieving high levels of efficiency will track and trace products throughout the entire supply chain to capture data which drives these improvements. Ongoing emphasis on training and education plays a key role.

In our next brief, we will touch on transportation, and then move into facility layout alternatives, what works, what does not, and links to a couple of good case studies and online tools. You are welcome to e-mail me with any questions or comments.

Upcoming briefs:

Cross dock layout alternatives that work
Getting started understanding a simple system (and costs)

Resources for additional information on cross docking. Both are worth a look.

Warehousing and Education Research Council’s (www.werc.org) guide to cross docking: Making the Move to Cross Docking
Kevin Gue, Professor, Graduate School of Business and Public Policy, Naval Postgraduate School, numerous articles, research, and tools with a focus on cross docking (http://www.scivis.nps.navy.mil/~krgue/index.html)

Cross Docking: What are the facility layout considerations?

This is the third in a series of articles on cross docking

If you started from scratch, many might simply build a cross dock facility with a much shallower depth than most warehouses. A depth of a hundred feet or so, with incoming product on one side that can be easily moved a short distance and loaded on the other side to an outbound truck. Most of us however, must deal with an existing facility, many times a large square box which is not generally the preferred layout. However, as long as the existing facility has a sufficient quantity of dock doors, yard space, and an adequate footprint, you may be fine…

Simply having a lot of dock doors does little for efficiency if the doors are located on opposite walls at a great distance from one another. Conveyor companies might love this, but there are better alternatives. Some recommend all the doors on one wall, or even at 90 degrees to one another. High speed movers would then travel between incoming and outgoing doors in closest proximity to one another. Proximity of high traffic incoming and outgoing doors is key. Distance equals costs. Many consider dedicating only a portion of their facility for cross dock duties as an acceptable workaround.

Pallet handling versus case handling create separate requirements. Congestion in dock areas will be a killer. Sufficient dock space is key to moving products quickly and safely. This is particularly true if the company is growing or deals with seasonal products. Ample space must be available for any pallet staging activities near shipping doors. If aisles are part of your logical pathways, then oversize them in high traffic areas.

One of the more complete reviews of cross dock design is by John Bartholdi and Kevin Gue in Transportation Science. They provide an analysis of the impact of “shape” on the performance of a cross dock operation. They considered a wide variety of designs and freight flow patterns, and offered the following summary:

“Shape matters. Freight must be moved across the dock and total distance traveled is a good estimate of labor costs. The best shape for small to mid-sized cross docks is a narrow rectangle or I-shape, which gets maximum use of its most central doors. For larger docks, alternative shapes are more attractive. The best shapes for larger docks will have piers branching out from a central area. These designs have more corners, for which they pay a cost. However, they achieve greater centrality, and so more distant doors are closer to other doors. For example, the T-shape is best for dock sizes between about 150 to 200 doors. For larger than 200 doors, the X-shape is best. Despite having four inside corners near the center of the dock, the worst doors are not far from the center. When freight flows are concentrated among few destinations, the point will be deferred at which a more complicated design becomes attractive. This is because the labor will be concentrated on a subset of the dock, and so the dock is, in effect, a smaller dock.”

Layouts designed on solid principles will address the “layout issue”. Although we have been focusing on the internal logistics of cross docking, we do need to make note of another obvious area of interest…. the “trailer spotting” issue. A poor spotting process defeats a quality layout. They work in concert. There are many issues you deal with in creating an optimum design for cross docking. In the next brief, we will take a look at cross docking in actual practice. This will include a couple of applications that deal with the issues we have discussed, and others. One application is complex, the other is a simple scalable system (actually including system costs).

Cross Docking: A retailer improves supply chain

This is the fourth in a series of briefs on cross docking

A recent project for a large retailer in the Southwest provided a good example of how an element of cross-docking might be deployed to reduce the footprint of distribution space required, reduce order fulfillment touchpoints, and shorten the logical pathway for fulfilling orders.

Incoming shipments are anticipated through the use of advanced shipping notices (ASN’s). Stretch-wrapped pallet loads arrive via truck throughout the day. They arrive at doors designated for cross-docking. These doors were selected based upon proximity to the material handling system which takes advantage of the facility layout. Pallets are unloaded by fork truck, the stretch wrap removed, and cases manually inducted into one of several conveyor staging lanes. Each lane represents a “wave” of orders which will be processed either that day, or a specific day later in the week. When a wave is released, it moves downstream, and the individual cases are sorted to a specific shipping lane whose products are destined for a particular store. Other products from static storage positions and non-conveyables destined for the same store are consolidated at this point.

As waves are released, the staging lane becomes immediately available for a subsequent wave. Multiple waves are processed daily. Pallets arrive at the receiving docks with man-readable labels indicating the destination store and day to ship. The individual cases on each pallet are pre-labeled (pre-distribution) with a unique identifier that corresponds to the ultimate destination retail store, the SKU number, and the quantity. When the case label is scanned for the identifier, a lookup into a warehouse control system database occurs, which provides the routing instructions, ie, the correct shipping door. Again, orders can be comprised of cases that are cross-docked from the staging lanes, product stored in static storage positions, and/or non-conveyables. The sortation management system routes all conveyables in the current wave directly to the correct shipping lane.

Order fulfillment occurs in waves, due to a limited number of shipping doors. Most shipping doors are dedicated to a specific destination store, while a handful of other doors will each serve a number of smaller retail stores. This distribution center demonstrates how cross-docking products that are good candidates, can be integrated with order fulfillment of inventoried products to enhance overall distribution performance.

Next month we will look at a scalable, “out-of-the-box” cross docking system, its layout, and cost to purchase and implement. It will include conveyors, controls, and software to support a basic cross docking system. We have taken a modular approach to a systems solution that can truly be modularized. Join us.

《唐诗三百首》

2009-05-25T11:59:00.000+02:00

回乡偶书	逢入京使	夜上受降城闻笛
桃花溪	江南逢李龟年	乌衣巷
九月九日忆山东兄弟	滁州西涧	春词
芙蓉楼送辛渐	枫桥夜泊	后宫词
闺怨	寒食	赠内人
春宫曲	月夜	集灵台·其一
凉州词	春怨	集灵台·其二
送孟浩然之广陵	征人怨	题金陵渡
早发白帝城	宫词

返回《唐诗三百首》

回乡偶书贺知章少小离家老大回，乡音无改鬓毛衰。儿童相见不相识，笑问客从何处来？返回	桃花溪张旭隐隐飞桥隔野烟，石矶西畔问渔船。桃花尽日随流水，洞在清溪何处边？返回
九月九日忆山东兄弟王维独在异乡为异客，每逢佳节倍思亲。遥知兄弟登高处，遍插茱萸少一人。返回	芙蓉楼送辛渐王昌龄寒雨连江夜入吴，平明送客楚山孤。洛阳亲友如相问，一片冰心在玉壶。返回
闺怨王昌龄闺中少妇不知愁，春日凝妆上翠楼。忽见陌头杨柳色，悔教夫婿觅封侯。返回	春宫曲王昌龄昨夜风开露井桃，未央前殿月轮高。平阳歌舞新承宠，帘外春寒赐锦袍。返回
凉州词王翰葡萄美酒夜光杯，欲饮琵琶马上催。醉卧沙场君莫笑，古来征战几人回！返回	送孟浩然之广陵李白故人西辞黄鹤楼，烟花三月下扬州。孤帆远影碧空尽，惟见长江天际流。返回
早发白帝城李白朝辞白帝彩云间，千里江陵一日还。两岸猿声啼不住，轻舟已过万重山。返回	逢入京使岑参故园东望路漫漫，双袖龙钟泪不干。马上相逢无纸笔，凭君传语报平安。返回
江南逢李龟年杜甫岐王宅里寻常见，崔九堂前几度闻。正是江南好风景，落花时节又逢君。返回	滁州西涧韦应物独怜幽草涧边生，上有黄鹂深树鸣。春潮带雨晚来急，野渡无人舟自横。返回
枫桥夜泊张继月落乌啼霜满天，江枫渔火对愁眠。姑苏城外寒山寺，夜半钟声到客船。返回	寒食韩雄(左)羽春城无处不飞花，寒食东风御柳斜。日暮汉宫传蜡烛，轻烟散入五侯家。返回
月夜刘方平更深月色半人家，北斗阑干南斗斜。今夜偏知春气暖，虫声新透绿窗纱。返回	春怨刘方平纱窗日落渐黄昏，金屋无人见泪痕。寂寞空庭春欲晚，梨花满地不开门。返回
征人怨柳中庸岁岁金河复玉关，朝朝马策与刀环。三春白雪归青冢，万里黄河绕黑山。返回	宫词顾况玉楼天半起笙歌，风送宫嫔笑语和。月殿影开闻夜漏，水晶帘卷近秋河。返回
夜上受降城闻笛李益回乐峰前沙似雪，受降城外月如霜。不知何处吹芦管，一夜征人尽望乡。返回	乌衣巷刘禹锡朱雀桥边野草花，乌衣巷口夕阳斜。旧时王谢堂前燕，飞入寻常百姓家。返回
春词刘禹锡新妆宜面下朱楼，深锁春光一院愁。行到中庭数花朵，蜻蜓飞上玉搔头。返回	后宫词白居易泪湿罗巾梦不成，夜深前殿按歌声。红颜未老恩先断，斜倚薰笼坐到明。返回
赠内人张祜禁门宫树月痕过，媚眼惟看宿鹭窠。斜拔玉钗灯影畔，剔开红焰救飞蛾。返回	集灵台二首之一张祜日光斜照集灵台，红树花迎晓露开。昨夜上皇新授□（“录”加竹头），太真含笑入帘来。返回
集灵台二首之二张祜虢国夫人承主恩，平明骑马入宫门。却嫌脂粉污颜色，淡扫蛾眉朝至尊。返回	题金陵渡张祜金陵津渡小山楼，一宿行人自可愁。潮落夜江斜月里，两三星火是瓜州。返回

Statistical Topics

2009-05-15T15:23:00.001+02:00

Statistical Topics

This topics list provides access to definitions, explanations, and examples for each of the major concepts covered in Statistics 101-103.

Describing and displaying data

Graphical displays: stemplots, histograms, boxplots,scatterplots.
Numerical Summaries: mean, median, quantiles, variance, standard deviation.
Normal Distributions: assessing normality, normal probability plots.
Categorical Data: two-way tables, bar graphs, segmented bar graphs.

Linear regression and correlation

Linear regression: least-squares, residuals, outliers and influential observations, extrapolation.
Correlation: correlation coefficient, r².
Inference in Linear Regression: confidence intervals for intercept and slope, significance tests, mean response and prediction intervals.
Multiple Linear Regression: confidence intervals, tests of significance, squared multiple correlation.
ANOVA for Regression: analysis of variance calculations for simple and multiple regression, F statistics.

Experiments and sampling

Experimental Design: experimentation, control, randomization, replication.
Sampling: simple, stratified, and multistage random sampling.
Sampling in Statistical Inference: sampling distributions, bias, variability.

Probability

Probability Models: components of probability models, basic rules of probability.
Conditional Probability: probabilities of intersections of events, Bayes's formula.
Random variables: discrete, continuous, density functions.
Mean and Variance of Random Variables: definitions, properties.
Binomial Distributions: counts, proportions, normal approximation.
Sample Means: mean, variance, distribution, Central Limit Theorem.

Hypothesis tests and confidence intervals

Confidence Intervals: inference about population mean, z and t critical values.
Tests of Significance: null and alternative hypotheses for population mean, one-sided and two-sided z and t tests, levels of significance, matched pairs analysis.
Comparison of Two Means: confidence intervals and significance tests, z and t statistics, pooled t procedures.
Inference for Categorical Data: confidence intervals and significance tests for a single proportion, comparison of two proportions.
Chi-square Goodness of Fit Test: chi-square test statistics, tests for discrete and continuous distributions.
Two-Way tables and the Chi-Square test: categorical data analysis for two variables, tests of association.

Wearable Sensors Watch Workers

2009-05-14T00:30:00.000+02:00

Wednesday, May 13, 2009

Wearable Sensors Watch Workers

Sensors that track social behavior highlight the benefits of face-to-face interaction.

By Kate Greene

Social sense: This sensor was worn by employees at a call center in Rhode Island to record activity and social interaction. MIT and New York University researchers correlated sensor data with productivity.
Credit: Sandy Pentland, MIT

Office workers who make time to chat face to face with colleagues may be far more productive than those who rely on e-mail, the phone, or Facebook, suggests a study carried out by researchers at MIT and New York University.

The researchers outfitted workers in a Rhode Island call center with a wearable sensor pack that records details of social interactions. They discovered that those employees who had in-person conversations with coworkers throughout the day also tended to be more productive.

The results aren't yet published, but they support research published last December by the same team. This study showed that employees at an IT company who completed tasks within a tight-knit group that communicated face to face were about 30 percent more productive than those who did not communicate in a face-to-face network.

"The big idea is that what you do on your coffee break and over lunch really matters for productivity," says Sandy Pentland, a professor at MIT's Media Lab, who led the study. "Face-to-face networks matter, and the implications are huge."

Many managers probably suspect a link between personal communication and productivity, says Pentland. Conventional wisdom suggests that face-to-face conversations are a useful way to create and maintain strong social networks, which could help workers solve complex customer problems or complete more calls at the center, he says.

However, some managers are slow to implement policies that foster this sort of communication because the connection has been difficult to prove with hard data, says Pentland. Usually, he says, workplace socializing is recorded using participant surveys, which tend to be filled with errors, since it can be difficult to remember the details of social interactions.

"There's all this knowledge that you see in anthropology and sociology [studies] that doesn't make it into management because it's sort of soft data," says Pentland. "But now we can tell which sort of folk wisdom is true . . . We can put some numbers on the table."

Pentland's study used a sociometer, a device about the size of a deck of cards, which participants wear around their necks as they would an identification badge. Each sociometer contains an accelerometer to measure their movement; a microphone that picks up their speech characteristics, such as intonation and cadence; a Bluetooth radio to detect other people wearing sociometers nearby; and an infrared sensor that can detect face-to-face interactions. Worn all day, the sociometers log workers' activity and conversations.

The data collected by each sociometer can, for instance, reveal how central a person is to a social network and how cohesive the network is overall. A more cohesive network is one in which all people talk to each other, thereby forming a closed loop. This may be an important measure of workplace social dynamics: workers in the most cohesive networks were about 30 percent more productive than those who weren't in such networks, according to the call-center study.

The researchers chose a call center for their research because productivity is constantly monitored and recorded--the number of calls and other tasks completed, and the time taken for each of them throughout the day.

"The thing that's really innovative is bringing social-network data together with productivity and performance data," says Eric Brynjolfsson, a professor at the Sloan Business School at MIT, who worked on the project.

The findings come at a time when telecommuting is booming, thanks to digital communication tools such as e-mail, instant messaging, and teleconferencing. Cameron Anderson, a professor at the Haas School of Business at the University of California, Berkeley, suggests that organizations could use such findings to weigh the costs and benefits of telecommuting, or to schedule break times for workers. "More interaction will likely bolster information transfer across individuals and departments," he says. "Studies have shown this is extremely important to organizational success."

In the case of the call center, Pentland notes that workers' break times were staggered, making it difficult for many of them to interact in person. "The people who managed to have more cohesive support groups were in atypical situations," he says. The next phase of the study is to see if productivity improves when workers are given opportunities for more direct social interaction.

"The underlying theme here is that humans are social beings," says Pentland, who will present details of the work at the Where 2.0 conference in San Jose, CA, next week. "Technology pushes us toward the abstract, and away from richer face-to-face communication." Without direct communication, he says, many physical signals, such as body language and facial expression, are lost.

Do's and Don'ts on Managing Risk in the Supply Chain

2009-05-11T14:17:00.001+02:00

Do's and Don'ts on Managing Risk in the Supply Chain

Nine tips to help your supply chain operate at peak efficiency.

Wednesday, April 15, 2009
By David Blanchard

Do's

Establish closer collaborative relations with distribution channels. Get closer to the demand signal and sense variations continuously. Use sell-through demand (rather than sell-in demand) from sales channels to establish supply needs.

Implement multi-echelon inventory optimization. Segment your product portfolio by demand variability and strategically position inventory at different levels in the supply chain. This will enable companies to use inventory strategically to reduce out-of stocks at the shelf, and helps buffer against supply disruptions at the least total system-wide inventory cost.

Incorporate rapid scenario planning in the S&OP process. Use ranged forecasting to derive a range of possible demand outcomes. Companies can then better manage their assets to meet expected probability of demand given the expected reliability of supply.

Improve supply chain visibility. Synchronize information systems to provide demand and supply visibility, to track events and exceptions in supply chain performance and to monitor leading indicators to try to sense supply chain problems before they occur. Additionally, increase collaboration and communication among both sourcing and selling partners.

Streamline programs with strategic customers. Implement customer program management strategies (e.g., special programs, consignment programs, incentives, aggressive lead times, etc.) with customers that control a relatively large portion of demand. This will ensure that when your customers take measures to spread their risks, you are not significantly impacted.

Don'ts

Stay short-sighted. Avoid becoming overwhelmed by the prospect of balancing risk factors against the cost and benefits of implementing risk-mitigation strategies.

Sacrifice other strategic initiatives. Companies who ignore customer service levels, costs or working capital for the sake of a risk management initiative do so at their own peril.

"Once and done." Analyzing risk management is not a one-time project, but must be continuously evolving to accommodate changing market conditions.

Focus on "operational noise." There's a tendency to focus on sensational risks like product recalls while ignoring smaller risks such as yield busts that can still create friction in the supply chain.

Source: Ramesh Raghunathan, senior director, manufacturing industry, i2 Technologies

Understanding Risk: Avoiding Supply Chain Disruption

2009-05-11T14:11:00.000+02:00

Understanding Risk: Avoiding Supply Chain Disruption

A supply chain disruption can cost a manufacturer up to $5 million, irreparably harm a brand and drive customers straight to the door of a competitor.

Monday, May 11, 2009
By

Discovering that a supplier is in danger of failing once a shipment has been missed is like getting caught in a rainstorm without an umbrella. Why? Because both situations can easily be avoided.

In 2008, 35% more companies filed for chapter 7 bankruptcy than in previous years, illustrating the increasing threat of failure in the supply chain. Given the economic meltdown, it's not a surprise. Manufacturers are searching for ways to reduce exposure to supplier failure. To do so, it is important for manufacturers to have insight into suppliers' operations to avoid surprises and disruptions in the supply chain. A supply chain disruption can cost a manufacturer up to $5 million, irreparably harm a brand and drive customers straight to the door of a competitor.

Risk management has historically been managed through a financial lens. Companies were under the impression that being financially stable trumped any other obstacles presented by the supplier. But as supply chains become increasingly global, and ownership moves further and further from the original equipment manufacturer, financial health is just the tip of the iceberg. Understanding supply risk requires much more than evaluating suppliers' financial conditions. Risk factors come in many shapes -- operational, managerial, geographic and more.

These pressures are driving intense effort and initiatives to reduce exposure to risk.

Market leaders are taking bold steps: increasing transparency when it comes to supplier information; monitoring suppliers on dozens of critical factors; working with suppliers to improve stability and operational performance and extending strategies beyond Tier 1 suppliers to protect the extended supply chain.

Supply Risk Strategy Starts with Supplier Data

The first challenge of supplier risk management is compiling all supplier information into one centralized location. Should be easy. But it's not. Supplier information lives in hundreds of places -- applications, divisions, systems and more. And supplier names may be entered in dozens of ways, e.g. IBM or Int'l. Business Machines, or maybe even Big Blue. Creating an accurate, consolidated and single source of truth about suppliers is the first step.

Once the suppliers are in a single location, the manufacturer can create master supplier lists broken into categories, such as single source and global, making it much easier to monitor suppliers' performance.

This system supports efforts to implement annual recertification of all registrants and allows access to external performance and financial data. The data can also be used to drive predictive indicators, giving insight into supplier viability as far out as 12 months into the future.

This central repository provides immediate visibility into what is being spent with each supplier and how critical that supplier is to the overall operation of the supply chain.

Manufacturers can determine the criticality of each supplier by asking the following questions:

What need does this supplier fill?
How essential is this supplier to the overall operations of the supply chain?
How does this supplier fit into the company plan for supplier diversity and sustainability?
What would happen if we were to lose this supplier? How would it be handled?

Understanding the criticality of a supplier allows the manufacturer to determine on a case-by-case basis how to address risk and put into place mitigation plans should a potentially damaging incident arise.

Beyond Financial Assessment

In today's economy, market leaders are looking far beyond financial health to evaluate and make informed assessments of a supplier's risk profile. Once there's a transparent, accessible and comprehensive set of supplier information, the next step is to monitor suppliers for behavioral changes. To be successful, manufacturers need to validate and enhance supplier-funded information -- which, as self-reported data, needs to be taken at face value only -- with a variety of other factors, which contribute to overall stability including:

Changes in the supplier's management team
EPA violations
OSHA incidents
Quality issues
Noticeable lags in response time to inquiries
OFAC violations

Changes in any of these conditions can be defined as parameters for raising an alert. For example, a financially stable supplier may in fact be about to lose it CEO to retirement -- which may cause a shake-up in management -- for better or for worse. Early visibility into that change, especially for a strategic supplier, gives the manufacturer time to act -- even if it's only to call the team in to discuss the transition and what they are planning to do to ensure it doesn't negatively affect customers.

Based on the criticality of the supplier and the nature of the alert received, the manufacturer can then chose to take action, such as calling or visiting the supplier, increase monitoring or take steps to terminate the relationship with the supplier and find a replacement.

Proactive Management Across the Enterprises Raises the Standard

The third step is to develop the supplier base through an analysis of risk associated with it. This includes evaluating supplier performance, establishing forward-looking supplier scorecards and implementing plans to further develop the individual suppliers' roles in the overall operation of the supply chain.

The final stage of establishing a strong supply base is extending the supplier enterprise by creating an integrated supplier network. This includes monitoring non-critical suppliers (tier two and three) in addition to the critical suppliers. It is important to have a firm understanding of how suppliers further down the line are operating and whether or not they are encountering potentially disruptive situations. Most manufacturers know the ins and outs of their most critical suppliers; it is problems with lower tiered suppliers that typically catch them by surprise.

To remain viable in this economy risk is something that manufacturers need to learn how to manage and ultimately use their advantage. By instituting better systems to evaluate suppliers and monitoring changes, manufacturers will never again be in the position where a missed shipment is the first indication of trouble.

Jim Lawton is senior vice president and general manager of D&B Supply Management Solutions (SMS). www.dnb.com.

Two Views on the Cause of the Global Crisis – Part II

2009-05-08T15:46:00.001+02:00

Lax regulation may have been the lever that pushed the world into the present financial crisis, but the fulcrum was the twin excesses of over-financialization and over-globalization, according to UC Berkeley economist Ashok Bardhan. In the case of over-financialization, financial asset bubbles rose to several times the global GDP, leading to an overheating of the economy. Meanwhile, over-globalization through global trade imbalances and risky cross-border lending created the pathway for the financial virus to spread. But there is also a self-correcting mechanism to these excesses. Global trade is receding and capital flows are falling thanks to the economic crisis. And government stimulus packages tend to squeeze out foreign investment through their focus on domestic growth. But despite this trend, there are larger issues with which to contend: the conflict between globalization, free-market principles, democracy, and national policy independence. All four cannot share center stage, so something will have to give to return to equilibrium. What that will be remains an open question for the moment. – YaleGlobal

Two Views on the Cause of the Global Crisis – Part II

The twin excesses – financialization and globalization – caused the crash

Ashok Bardhan

YaleGlobal, 6 May 2009



	Export overload: China's growing dependence on exports introduced an element of instability in global economy

BERKELEY: In their effort to explain the global crisis analysts have identified lax regulation and other attributes of the financial system as the principal culprits. To grasp fully the reason it also needs to be recognized that this is the first crisis of the modern era of globalization. If the proximate cause is the “laissez faire” to “laissez financer” progression in free-market idolatry, leading to bubbles in asset prices and the subsequent crash, then the facilitating condition was yet another quasi-bubble – a bubble in globalization. It may be easier to appreciate the virulence and speed with which the crisis has spread if we recognize that in addition to over-financialization domestically, there was perhaps over-globalization internationally.

While over-globalization was evident in ever-faster trade and capital flows and increasing off-shoring of production, over-financialization could be seen in rise in the size of financial assets relative to the real economy as indicated by gross domestic product. Globally, the holdings of financial assets, comprising equities, government and private bonds and bank deposits ballooned way out of proportion to global GDP, the primary underlying measure of real economic activity (see Figure 1). Similarly, the gross market value of outstanding derivative contracts more than doubled between mid-2006 and mid-2008. The share of financial services in GDP has increased dramatically in the US and UK in recent years; in the latter it has doubled in the last decade alone. In many countries, the financial sector grew to a size disproportionate to its primary raison d'etre - to efficiently bring savers and borrowers together, allocate savings to viable investments, and manage diversification of risk. Liquid and deep financial markets are necessary; indeed, they are the lifeblood of economic activity, but to extend the analogy, not if they cause high blood pressure to the economy!



	Figure 1. Global Financial Assets to Global GDP Ratio Enlarge image

Globalization too has played its role. A large part of the new trade volumes generated were a result of diversion from potential consumption by domestic consumers to consumption by consumers half-way across the world. There is an ongoing debate in China, for example, whether the economic wisdom of having nearly a 40 percent share of exports in GDP has served the developmental goals of the country well. At least some of the blame for income inequality, lopsided development and consumption stagnation in the country can be laid at the feet of the overgrown external sector.

Global imbalances, on which reams have been written, provided the financing for the insatiable appetite of US and other consumers, met by the unbounded capacity of China’s manufacturing machine. Footloose capital ran hither and thither for better returns and ended up in high risk investments. The US-China globalization axis may have been critical but by no means was it the only game in town. Reckless lending by western banks to East European clients drove much of the importing frenzy in those countries. It was finance that drove and propelled international trade, in addition to that generated by underlying patterns of global specialization and competitiveness.

Together with the financial sector, globalization, as we know it –global trade in goods and services, capital flows and off-shoring of production – seems destined to decline in the short term. The total market value of financial assets held worldwide has declined by about a third, or more than $50 trillion, in 2008 according to a report by the Asian Development Bank. Container traffic in the world’s busiest ports is down by more than 20 percent. While trade volumes show greater volatility than GDP, the figures for the former show a near precipitous decline relative to the former. The IMF expects global GDP to decrease by 1.3 percent in 2009, while economists from the World Trade Organization forecast a 9 percent decline for global trade in the same year, both the largest drops on record since World War II. Export volumes are expected to decrease in every major region of the world. Indeed, double-digit declines in real national variables are so rare that declines in export volumes of over 30 percent, such as in the case of Japan, make one wonder about the “bubble-like” nature of the underlying demand. On the other hand, while Euro area GDP and US GDP are both expected to contract in 2009, emerging economies are the one bright spot with a GDP growth forecast of 1.6 percent.

In addition to trade, global financial flows and cross-border investments are also expected to be adversely affected. The most dynamic economic region of the world, Emerging Asia, is expected to attract 40 percent less net private capital flows (which include portfolio and direct investments) in 2009. It is as if both ships and funds in search of a safe harbor are docked at home ports.

The prospect of offshoring, that recent offspring of globalization, presents a mixed picture. While any downturn can only serve to further intensify the ever-present cost-cutting impulse on the part of management, the fundamental nature of downsizing and restructuring underway in the US in key sectors, and the sharp cutbacks in many parent operations in the financial services sector suggest that even the seemingly unstoppable phenomenon of offshoring may slow down. Already, there have been some cutbacks in the number of employees of offshore call centers.

Increasing interventions by national governments in the economic management of individual nation-states also tend to slow down the globalization process. National stimulus packages have a domestic stance and are inward-oriented, regardless of whether there is an explicit “buy domestic” provision, since greater reliance on government spending inevitably leads to less “leakage” internationally. The mounting job losses, complexity of the financial crisis, increasing range of conflicting interests, issues of inequality and fairness, and last, but not least, compulsions of electoral politics in an increasingly democratic world will all lead to greater state intervention, curbing the power of the market.

Far too rapid and distorted growth in global economic linkages and the financial services sector, as well as their mutual feeding off each other, have brought into sharper focus contradictions facing the future evolution of the global economy, the resolution of which is bound to affect globalization. While the future shape of regulatory reform is being vigorously debated, it is not clear how continued globalization will be affected in the medium-term by the crisis.

All of this leads us to the following question: can we eat our cake, have it too, and trade it in on the global markets? Dani Rodrik has long pointed out the “inescapable trilemma of the world economy,” that “democracy, national sovereignty and global economic integration are mutually incompatible.” The present crisis shows that it is actually a quadrilemma. The international policy establishment must manage and reconcile the simultaneously conflicting pulls and pushes of, first, universal free market economic principles, operating; secondly, in individual nation-states, the primary arena of economic policy, which are largely shaped by, thirdly, a democratic polity that is in turn apprehensive and insecure about, fourthly, increasing free trade and international economic integration. It is difficult to see how the tenuous co-habitation of these four – globalization, free-market principles, democracy, and national policy independence – can survive in the present circumstances. Something may have to give way, if just a little...

Ashok Bardhan is an economist at UC Berkeley.

Rights:
ht 2009 Yale Center for the Study of Globalization

Premonition and Time Travel

2009-05-08T15:29:00.000+02:00

Premonition and Time Travel

According to its definition, a premonition is a foretelling of the future. Dreams are often premonitions of the subconscious. But what is the scientific basis of premonition? Seeing the future before it happens in your own current reality is time travel. Einstein's well accepted relativity physics states that time travel is possible, when one object is traveling faster than another object, especially as one object approaches the speed of light, relative to the other.

The earth and all of its inhabitants are traveling near the speed of light relative to a number of other objects in the universe. So let's explore the Twin Paradox theory of Time Travel and its relationship to dreams and premonitions. Einstein concluded that if there were two twins born on earth, and one of them boarded a space craft, traveled a round trip near the speed of light relative to his twin and returned to earth, his twin would be long dead. Scientists that examine sub-atomic particles confirm the factual nature of the Twin Paradox over and over again as they accelerate particles in large accelerators such as the CERN laboratory.

So based on this assumption, it is not a stretch to conclude that the twin that returns to earth after his travels, could examine the history books or a diary of his dead twin and see the entire life in a moment, relative to a short year or two that had passed on his own journey.

If you understand the nature of vibration in the body, especially relative to eastern chakras, you will begin to understand the nature of time travel in your own body. When your spirit resonates with your 7th and 8th chakras, you are removed from the limitations of your own earthly vessel and can travel near the speed of light, relative to your partner that is lying in bed next to you. This is what allows you, in a state of dreams or meditation, to witness the future before it happens.

Consider for a moment that you are a photon of light, traveling from the sun. According to Einstein's equations, you are traveling at the speed of light, so that you see the complete history of the universe, from beginning to end, in a single moment. This means that the time experienced in the universe from the moment of the big bang to now, around 14 billion years, can be viewed by the light, from beginning to end, in a moment. Cosmic Background Radiation can be thought of as a premonition of the future of the universe.

Because of the unique characteristics of relativity physics, it does not take a leap of understanding to conclude that although the twin that traveled away from the earth is only one or two years older, a much longer time has passed for his long dead twin, and he arrives back to earth to witness "the future" of his twin.

Everything in the universe is traveling near the speed of light, relative to something else in the universe. So it is easy to conclude that our future has already happened, relative to some other observer in the universe, and our dreams and premonitions are simply the electromagnetic signature of that observable future.

When we dream, meditate or otherwise become free from the bondage of our physical vessel, we time travel. We then have the ability to witness the past and the future, all in a moment. We become like God, which is the light of the universe. In the same fashion, we can consciously shape our futures because there are an infinite number of futures for all of us. Knowing what we want in our lives, especially relative to contributing to the higher vibration of humanity, allows us to shape and mold our future, just as an artist would shape a piece of art.

---http://bryanbrandenburg.blog.com/

Cyclists killed in Britain up by 11% in three years

2009-05-08T13:57:00.000+02:00

Cyclists killed in Britain up by 11% in three years

David Hencke, Westminster correspondent
The Guardian, Friday 8 May 2009

A Ghost Bike sits at Sussex Downs near Devils Dyke. The plaque reads 'Cyclist Killed Here'. Photograph: Katherine Rose

The number of cyclists killed and seriously injured on Britain's roads rose by 11% between 2004 and 2007 despite no significant increase in cycling, a report by the National Audit Office has disclosed.

It says despite an overall fall in the number of road deaths, the UK is behind other advanced industrial nations in terms of the number of cyclists and pedestrians who are injured and killed on the roads.

The report says that after falling throughout the 1990s the number of cyclists seriously injured or killed increased by 11% from 2004 to 2007. In 2007 alone 646 pedestrians and 136 cyclists were killed and 30,000 pedestrians and 16,000 cyclists injured.

The auditors found that a high profile advertising campaign to cut road deaths called Think! appeared to have little measurable effect on road casualties.

The report says the most dangerous place for cyclists and pedestrians is London. Seventeen pedestrians per 100,000 people are killed in the capital, compared with a national average of 11.

Tory MP Edward Leigh said: "In terms of the number of child pedestrians killed as a proportion of the population, we are way down the league. Our poor performance should be a matter of national debate."

Separate research published by the Cyclists Touring Club (CTC) found that where there are more riders on the roads there is generally a lower accident rate, contradicting a notion that a mass of inexperienced riders taking to the streets brings a spike in injuries and death.

guardian.co.uk © Guardian News and Media Limited 2009

Eckumsetzer

2009-05-08T11:58:00.001+02:00

Eckumsetzer

Mit einem Eckumsetzer werden in Anlagen und Fördersystemen Paletten (Stückgut) 90° zur Förderrichtung umgesetzt.

Abb.: Skizze

DER ECKUMSETZER BESTEHT IM PRINZIP AUS ZWEI KOMPONENTEN:

der Unterkonstruktion mit Hubsystem und integriertem Hubantrieb.
dem aufgebautem Förderelement z.B. Rollenförderer, Kettenförderer, usw.

Die jeweiligen Förderelemente werden je nach Anforderung ausgewählt und aufgebaut. Sehen Sie dazu die verschiedenen Produktblätter „Rollenförderer“, „Kettenförderer“ usw.

Der Eckumsetzer besteht aus einer Unterkonstruktion, die mit dem Boden verschraubt wird. Darauf wird das Hubsystem aufgebaut. Am Hubsystem wird das entsprechende Förderelement aufgebaut. Der Hubantrieb kann auf verschiedene Art und Weise erfolgen. Abhängig von der erforderlichen Hubkraft, Hubhöhe und der zur Verfügung stehenden Bauhöhe kommen Pneumatikzylinder, Getriebemotore oder elektrische Linearantriebe zum Einsatz. Der Hubantrieb ist standardmäßig unter dem Förderelement, positioniert. Durch die verschiedenen konstruktiven Lösungen können die Elemente optimal für Ihren Einsatz abgestimmt werden.

SENSORIK:
Die Übergabeposition wird mittels einem induktiven Sensor definiert. Bei frequenzgeregeltem Hubantrieb werden an der Übergabeposition 2 Sensoren verwendet. Der erste Sensor dient als Bremssensor, der zweite als Stopsensor.

SICHERHEIT:
Auf die Vermeidung von Scher- und Quetschstellen wurde bei der Entwicklung der Komponenten besonderes Augenmerk gelegt.

ABMESSUNGEN:
Bauhöhe	ca. 450 mm
Leistung Hubantrieb z.B. für Paletten mit 3,5 t	ca. 1,10 kW

Abb.: 90° Eckumsetzer unter Rollenförderer mit heb- und absenkbarem Kettenförderer

AUSFÜHRUNGEN:

Stahl lackiert oder pulverbeschichtet
Stahl verzinkt
Edelstahl

Eine Ausführung des Eckumsetzers die zum Einsatz in der Ex-Atmosphäre (Zone 1 bzw. 2 für Gas und Zone 21 bzw. 22 für Staub) geeignet ist, kann ebenfalls geliefert werden.

VORTEILE:

extrem niedrige Bauhöhe bei großer Hubkraft
kompakte Bauweise
flexibel in der Hubhöhe
genaue und spielarme Positionierung in den Endlagen

Fördermittel

2009-05-08T11:56:00.001+02:00

Automatische Hochregallageranbindung mit

Palettenrollenbahnen, Kettenförderer, Eckumsetzer, Verfahrwagen mit Kettenförderer, Verfahrwagen mit Rollenbahnen und Ausrichtstation.



Automatische Hochregallageranbindung mit

Verfahrwagen mit zwei Teleskopgabeln, Stirnregal mit Übergaberegalplätzen für die Regalbediengeräte.



Senkrechtförderer

für bahngebundene Förderanlagen, Fahrkorbausführung mit Rollenbahnen oder Kettenförderern, ausgelegt für eine oder zwei Paletten, mit Brandschutztor für bahngebundene Förderanlagen, ausgebildet für Euro-, Industrie-, Chemie- oder Sonderpaletten oder Gitterboxen, optional mit Stahlbaubühne.



Verfahrwagen mit Teleskopgabel

übernimmt Paletten aus dem Stirnregal eines Hochregallagers und übergibt diese an Gefällerollenbahnen zur Versandbereitstellung für den LKW. Beispiel 2 zeigt eine Palettenausrichtstation für Europaletten.



Automatisches Fließlager

Bestückung automatisch über einen verfahrbaren Senkrechtförderer, optimale Ausnutzung der Lagerhalle, einfache und sichere Palettenentnahme in der untersten Ebene mit Gabelhubwagen möglich, optimale Bereitstellung für LKW-Touren, automatische Gassenzuordnung durch Scannen der Paletten.



Verfahrbarer Senkrechtförderer

vollautomatische Bestückung des Fließlagers, kostengünstige und leistungsstarke Alternative zum Regalbediengerät, Konstruktion in solider Stahlausführung.



Wareneingang I-Punkt

Aufgabeplatz mit Zentriereinrichtung und Anfahrschutz, Palettenkonturenkontrolle nach Länge, Breite und Höhe, Palettenkufenfreiraumkontrolle, Gewichtskontrolle, Ausschleusestrecke mit Anzeige des Palettenfehlers, Identifikation der Palette über Scanner, automatisches Erzeugen eines Transportetikettes, vollautomatischer Weitertransport in ein Hochregallager, Brandschutztor für bahngebundene Förderanlagen mit Notstromversorgung.
Bespiel 2: Leerpalettenmagazin zur automatischen Zuführung von Leerpaletten in die Produktion, wahlweise für Euro-, Industrie-, Chemie- oder Sonderpaletten.



Gabelhubwagenauf- und -entnahmestation

für Förderhöhen von 75 mm auf beliebige Transporthöhe, in solider Ausführung , mit stabilen Anfahrschutz.



Kettenförderer

Sonderausführung als dreistrangiger Kettenförderer mit Ausrichtstation, Eckumsetzer und Rollenbahn. Beispiel 2: Kistenentstapler dient zum Entstapeln von zwei Kisten übereinander auf eine Transporteinheit.



Palettierroboter

vollautomatische Palettierzelle mit Palettenzuführung und Ausrichtstation.



Palettenkonturenkontrolle

Überprüfung von Länge, Breite und Höhe, Kufenfreiraumkontrolle, optische Anzeige des Palettenfehlers. Beispiel 2 zeigt einen Verschiebewagen mit Rollenbahn.

Fördergüter

2009-05-08T11:53:00.001+02:00



Karton	Kleinladungsträger	Reifen	Felgen


Europaletten	Industrie/Chemiepaletten	Kunststoffpaletten	IBC - Intermediate Bulk Container


Gitterboxen	Stahlbehälter	Automotiveboxen (kleine Auflagefläche /Füsse)


Fässer	Stahl-Coils	Wellpappenstapel	Spahnplattenstapel

Two Views on the Cause of the Global Crisis – Part I

2009-05-05T10:12:00.000+02:00

The global financial crisis that has devastated the world economy has spawned a growing literature on its causes. In part one of our two-part series, World Bank economist and Carnegie Endowment scholar Branko Milanovic argues that while analysts can quibble over the contributing factors to the financial meltdown, a deeper, more fundamental problem was the real cause: income inequality. Growing income inequality led to an abundance of investable funds searching for superior returns, which ultimately could only be achieved through riskier investments. But this only tells part of the story. That real income of the middle class has not risen over the past twenty years created a massive political problem: wealth redistribution. The solution came in the form of easier credit, which allowed the middle class, if not to save like the wealthy, at least to spend like them. But had there been less inequality would the outcome have been any different? As Milanovic notes, the middle class have higher priorities than excess investment returns, so there would have been less money chasing riskier assets. This would ultimately have led to more stable development. – YaleGlobal

Two Views on the Cause of the Global Crisis – Part I

Income inequality and speculative investment by the rich and poor in America led to the financial meltdown

Branko Milanovic

YaleGlobal, 4 May 2009



	Grounded: American middle class, with stagnating income, now has to bear the debt burden brought about by the income gap

WASHINGTON: The current financial crisis is generally blamed on feckless bankers, financial deregulation, crony capitalism and the like. While all of these elements may be true, this purely financial explanation of the crisis overlooks its fundamental reasons. They lie in the real sector, and more exactly in the distribution of income across individuals and social classes. Deregulation, by helping irresponsible behavior, just exacerbated the crisis; it did not create it.

To go to the origins of the crisis, one needs to go to rising income inequality within practically all countries in the world, and the United States in particular, over the last thirty years. In the United States, the top 1 percent of the population doubled its share in national income from around 8 percent in the mid-1970s to almost 16 percent in the early 2000s. That eerily replicated the situation that existed just prior to the crash of 1929, when the top 1 percent share reached its previous high watermark American income inequality over the last hundred years thus basically charted a gigantic U, going down from its 1929 peak all the way to the late 1970s, and then rising again for thirty years.

What did the increase mean? Such enormous wealth could not be used for consumption only. There is a limit to the number of Dom Pérignons and Armani suits one can drink or wear. And, of course, it was not reasonable either to “invest” solely in conspicuous consumption when wealth could be further increased by judicious investment. So, a huge pool of available financial capital—the product of increased income inequality—went in search of profitable opportunities into which to invest.

But the richest people and the hundreds of thousands somewhat less rich, could not invest the money themselves. They needed intermediaries, the financial sector. Overwhelmed with such an amount of funds, and short of good opportunities to invest the capital as well as enticed by large fees attending each transaction, the financial sector became more and more reckless, basically throwing money at anyone who would take it. While one cannot prove that investible resources eventually exceeded the number of safe and profitable investment opportunities (since nobody knows a priori how many and where there are good investment opportunities), this is strongly suggested by the increasing riskiness of investments that the financiers had to undertake.

But this is only one part of the equation: how and why large amounts of investable money went in a search of a return on that money. The second part of the equation explains who borrowed that money. There again we go back to the rising inequality. The increased wealth at the top was combined with an absence of real economic growth in the middle. Real median wage in the United States has been stagnant for twenty five years, despite an almost doubling of GDP per capita. About one-half of all real income gains between 1976 and 2006 accrued to the richest 5 percent of households. The new “gilded age” was understandably not very popular among the middle classes that saw their purchasing power not budge for years. Middle class income stagnation became a recurrent theme in the American political life, and an insoluble political problem for both Democrats and Republicans. Politicians obviously had an interest to make their constituents happy for otherwise they may not vote for them. Yet they could not just raise their wages. A way to make it seem that the middle class was earning more than it did was to increase its purchasing power through broader and more accessible credit. People began to live by accumulating ever rising debts on their credit cards, taking on more car debts or higher mortgages. President George W. Bush famously promised that every American family, implicitly regardless of its income, will be able to own a home. Thus was born the great American consumption binge which saw the household debt increase from 48 percent of GDP in the early 1980s to 100 percent of GDP before the crisis.

The interests of several large groups of people became closely aligned. High net-worth individuals and the financial sector were, as we have seen, keen to find new lending opportunities. Politicians were eager to “solve” the irritable problem of middle class income stagnation. The middle class and those poorer than them were happy to see their tight budget constraint removed as if by magic wand, consume all the fine things purchased by the rich, and partake in the longest US post World War II economic expansion. Suddenly, the middle class too felt like the winners.

This is what more than two centuries ago, the great French philosopher Montesquieu mocked when he described the mechanism used by the creators of paper money in France (an experiment that eventually crumbled with a thud): ‘People of Baetica”, wrote Montesquieu, “do you want to be rich? Imagine that I am very much so, and that you are very rich also; every morning tell yourself that your fortune has doubled during the night; and if you have creditors, go pay them with what you have imagined, and tell them to imagine it in their turn”.

The credit-fueled system was further helped by the ability of the US to run large current account deficits; that is, to have several percentage points of its consumption financed by foreigners. The consumption binge also took the edge off class conflict and maintained the American dream of a rising tide that lifts all the boats. But it was not sustainable. Once the middle class began defaulting on its debts, it collapsed.

We should not focus on the superficial aspects of the crisis, on the arcane of how “derivatives” work. If “derivatives” they were, they were the “derivatives” of the model of growth pursued over the last quarter a century. The root cause of the crisis is not to be found in hedge funds and bankers who simply behaved with the greed to which they are accustomed (and for which economists used to praise them). The real cause of the crisis lies in huge inequalities in income distribution which generated much larger investable funds than could be profitably employed. The political problem of insufficient economic growth of the middle class was then “solved” by opening the floodgates of the cheap credit. And the opening of the credit floodgates, to placate the middle class, was needed because in a democratic system, an excessively unequal model of development cannot coexist with political stability.

Could it have worked out differently? Yes, without thirty years of rising inequality, and with the same overall national income, income of the middle class would have been greater. People with middling incomes have many more priority needs to satisfy before they become preoccupied with the best investment opportunities for their excess money. Thus, the structure of consumption would have been different: probably more money would have been spent on home-cooked meals than on restaurants, on near-home vacations than on exotic destinations, on kids’ clothes than on designer apparel. More equitable development would have removed the need for the politicians to look around in order to find palliatives with which to assuage the anger of the middle-class constituents. In other words, there would have been more equitable and stable development which would have spared the United States, and increasingly the world, an unnecessary crisis.

Branko Milanovic is an associate scholar with the Carnegie Endowment for International Peace and a lead economist in the World Bank's research department, where he has been working on the topics of income inequality and globalization.

Rights:
© Copyright 2009 Yale Center for the Study of Globalization

India, Suddenly Starved for Investment

2009-05-05T10:11:00.000+02:00

May 5, 2009

India, Suddenly Starved for Investment

By VIKAS BAJAJ and SOMINI SENGUPTA

GURGAON, India — Sumit Sapra is a member of that ambitious, impatient generation of young Indians who rode the crest of the global economy. In five years, he changed jobs three times, quadrupling his salary along the way. Even when satisfied with his position, he kept his résumé posted on job sites, in case better offers came along. And he splurged. In three years, he bought three cars, moving up a notch in luxury each time. For weekend jaunts, he bought a motorcycle.

Mr. Sapra’s last and best-paying job was at the Indian headquarters of the financial services arm of General Electric, investing western money in Indian energy projects. But last December, foreign money dried up and Mr. Sapra, with a prestigious degree, was laid off.

“Earlier it was money chasing a few projects,” Mr. Sapra, 30, said of the change that seemed to come virtually overnight. “Now it’s the other way around.”

Not long ago, Indian leaders confidently predicted this country would emerge largely unscathed from the global economic crisis. It is now becoming clear that that view was too optimistic, nowhere more so than in this city south of New Delhi that was once the symbol of India’s economic boom.

A few short years ago, construction sites here buzzed 24 hours a day, crews working through the night, cramming down food from onsite trucks during breaks in the twilight. Now real estate sites lie fallow. The once-booming art market has slowed to a crawl. And charmed professionals with coveted degrees, like Sumit Sapra, are unemployed or taking pay cuts to hold on to their jobs.

India’s phenomenal growth of the last five years was powered in large part by huge injections of cash and investment. Investment accounted for about 39 percent of the country’s gross domestic product in fiscal year 2008, up from 25 percent five years ago. At its peak, more than a third of investment came from abroad, according to Credit Suisse. But in the last three months of last year, foreign loans and direct investment fell by nearly a third, to their lowest level in more than two years.

In a recent report, the International Monetary Fund said Indian companies were among the world’s most vulnerable, after American firms, because they borrowed aggressively during the boom. Using data from Moody’s, the credit rating firm, the I.M.F. estimated in a recent report that defaults among nonfinancial South Asian firms could climb to 20 percent in the coming year, up from an expectation of 4.2 percent a year earlier. (American firms are expected to default on loans at a rate of 23 percent.)

The decline in foreign investment has taken a big toll on sectors like real estate, manufacturing, infrastructure and even art, which was bolstered by demand from globalization’s nouveau riche here and abroad. In the last quarter of 2008, the economy’s growth rate plummeted to about 5.3 percent, the lowest in five years. While consumer demand, particularly in the countryside, has kept the economy growing, the sudden slowing in the flow of foreign funds will make it harder for the country to grow fast enough to pull hundreds of millions of people out of stifling poverty.

“If India wants to go back to the 8 to 9 percent growth rate, private investment and low cost of capital is essential,” said Jahangir Aziz, the chief economist for India at JPMorgan Chase.

Indian policy makers say they believe the country will grow at 6 percent in the coming year, but the I.M.F. forecasts growth of 4.5 percent.

To help fill the gap left by foreign investment, the government is spending more on infrastructure and social programs. The Reserve Bank of India, India’s central bank, has slashed its benchmark interest rates, but the cost of private loans has not fallen by as much.

After a wrenching 58 percent drop in the Indian stock market last year, the market is up 42 percent since its March low and some foreign money has started to flow into equities. But economists like Mr. Aziz say the government needs to do a lot more, though few expect bigger interventions until the current elections end and a new government takes power in late May or early June.

In the meantime, activity here in Gurgaon has slowed radically. Just off the highway from New Delhi, a giant hole in the ground sits where the country’s largest developer, DLF, had planned to build the nation’s biggest mall, aptly named the Mall of India.

DLF officials say that they may reduce the size of the mall and add office space to replace planned retail space.

In the boom, DLF built many of the earliest projects that transformed Gurgaon from a sleepy village into an expansive city that has become home to companies like Ericsson and I.B.M.

DLF turned to foreign lenders and investors like D. E. Shaw, the New York-based investment firm, because they provided money “at lower rates of interest and in larger amounts,” said Rajeev Talwar, an executive director at New Delhi-based DLF. “Today, you have no choice but to go to the Indian banks.”

But domestic lenders have become more reluctant to extend credit, and the interest rates they offer have made projects unfeasible. Last week, DLF reported that its profits fell 92 percent in the first three months of the year.

A subcontractor, Sunil Kumar Verma, who lays marble floors for builders in Gurgaon, said that business was so bad that half of his 40 workers had returned to their homes in Bihar, a poor eastern state where there was also little work for them.

“All they can do is sit, eat and sleep,” Mr. Verma said.

The art market reflects the collapse of the investment boom at the other end of the wealth spectrum.

Over the last years, gallery owners had no need to cultivate buyers. Money was no object. Many artists cranked out works at a furious pace. Not only did veteran collectors snap up the big-ticket items (a painting by M. F. Husain, for instance, or V. S. Gaitonde) but midlevel works in the range of $100,000 drew plenty of buyers, as well.

“There were queues. Shows were sold out prior to opening. We were all on a high,” said Arun Vadehra, who owns two galleries devoted to modern and contemporary art in Delhi and a third in London.

In industry, export companies have been hit hard — diamond polishing units and knitwear factories, for instance, are running at a fraction of their capacity.

The job market is another casualty. Not so long ago, as a lot of money chased a small pool of skilled professionals, salaries skyrocketed. Now, it’s the other way around, as Mr. Sapra, the former G.E. employee, said.

He has looked for work for several months and only last month heard back from a few potential employers. Like many of his peers, he says he will most likely have to settle for less money than he was making earlier — despite his master’s degree from the prestigious Indian Institute of Management.

In the good old days, he invested some of his money in property. Now, he would rather not look at how his assets are doing. He said it would just depress him.

Mr. Sapra is not the only one casting his gaze elsewhere. With the exception of a handful of issues, like food prices, politicians have not spent much time talking about the economy this election season.

Ajay Shah, an economist and columnist, said the next government’s challenge would be to reawaken the “animal spirits” of the private sector by removing restrictions on investment, loosening financial regulations and putting money into infrastructure.

But in India’s chaotic coalition politics, it is hard enough to predict who will come to power, let alone what they will do once they are there.

Wolfram Alpha and Google Face Off

2009-05-05T09:23:00.001+02:00

Tuesday, May 05, 2009

Wolfram Alpha and Google Face Off

Our exclusive test shows how the two Web engines compare when given the same queries.

By David Talbot

Last week, as physicist Stephen Wolfram was demonstrating his new Web-based "computation engine"--Wolfram Alpha--to the public, Google announced a data-centric service of its own. Alpha accesses databases that are maintained by Wolfram Research, or licensed from others, and deploys formulas and algorithms to compute answers for searchers.

Computation engine: The new Wolfram Alpha engine computes answers based on search terms. In this case, entering “Sydney New York” produced a flight path and comparative data on the two cities, much of which can be easily found via Google too.
Credit: Wolfram Research

Using some prelaunch log-in credentials provided by the Wolfram team, I decided to run my own Wolfram Alpha versus Google test. I used a handful of search terms that could produce data-centric answers and tried variations in a few cases to see what might happen.

This was an effort to get beyond the characterizations and produce some real data. I also wanted to explore the claims made during my visit to Wolfram Research last week: that Alpha can add unique value in computing answers based on your search queries.

Here's what I entered, and what I found.

SEARCH TERM: Microsoft Apple

WOLFRAM ALPHA: I got side-by-side tables and graphics on the stock prices and data on the two companies, plus a chart plotting the price of both stocks over time.

GOOGLE: The top hits were mostly news stories, from major and minor publications, containing both words.

VARIATION: When I changed the Google search term to just "Microsoft" or just "Apple," I got a chart with today's stock price up top; when I clicked that link, I received tons of information--comparable to what Alpha provides--but only on the single company.

SEARCH TERM: Sydney New York

WOLFRAM ALPHA: I got tables showing the distance between the two cities in miles, kilometers, meters, even nautical miles; a map of the world with the optimal flight path; and the fact that the trip spans 0.4 of the earth's circumference. I learned how long it would take to make the trip: 18.1 hours flying; 13 hours for a sound wave, 74 milliseconds for a light beam in fiber, and 53 milliseconds for a light beam traveling in a vacuum. I also got comparative populations, elevation in meters, and current local times.

GOOGLE: I got a mix of things: a form for finding flights between Sydney and New York; a Google Maps-plotted list of businesses in New York City that contain the word "Sydney"; and links to the municipal government of Sidney, a small town in upstate New York.

VARIATION: When I tried "Sydney New York distance" (adding the word "distance"), Wolfram gave me only the distance information mentioned above while Google gave me links to distance-finding websites. I opened the first one, was able to enter "New York" and "Sydney" in some forms, and wound up with much the same information provided by Wolfram (but without the light-beam and sound-wave details).

SEARCH TERM: 10 pounds kilograms

WOLFRAM ALPHA: The site informed me that it interpreted my search term as an effort to multiply "10 pounds" by "1 kilogram" and gave me this result: 4.536 kg2 (kilograms squared) or 22.05 lb2 (pounds squared).

GOOGLE: Google gave me links to various metric conversion sites.

Market watch: Entering “GM Ford” into the Wolfram Alpha engine produced tables comparing company data and stock prices, including charts plotting the price history.
Credit: Wolfram Research

VARIATIONS: Adding the word "in" changed everything. When I tweaked the search query to say "10 pounds in kilograms," the Wolfram site gave me the correct conversion: 10 pounds equals 4.536 kilograms. It also gave me the volumes (in various units) of 10 pounds of water. In a final, somewhat cheesy touch, it also told me that 10 pounds was 1.8 times the weight of Wolfram's book, A New Kind of Science. In Google's case, this revised search term produced the helpful calculated result up top: 10 pounds = 4.5359237 kilograms.

When I put in "10 lbs kgs," Alpha gave me the calculated result (the assumption was that I wanted multiplication), as it had with the full words. Google gave me metric conversion sites--the top one was a "Russian Brides Cyber Guide." (It offers both brides and metric conversions.)

When I tried "10 pds kgs," Alpha choked and didn't understand. Google helpfully asked if I meant "pounds" and gave me metric conversion sites, but not the calculated result.

SEARCH TERM: light bulb

WOLFRAM ALPHA: I was expecting some facts and figures on this ubiquitous technology but got a message saying that Wolfram Alpha "isn't sure what to do with your input."

GOOGLE: I got several links--starting with a Wikipedia entry--explaining what a light bulb is and providing some history.

VARIATIONS: When I tried "light bulb inventor," I got similar results: Alpha drew a blank, but Google gave useful links. When I tried "first light bulb," Alpha provided a table explaining that the light bulb was patented in 1878; under "people involved," it cited Thomas Edison.

SEARCH TERM: Aspirin Tylenol

WOLFRAM ALPHA: Alpha gave me molecular diagrams for aspirin and acetaminophen and lots of scientific information comparing their molecular weights, boiling points, vapor pressure, and so forth.

GOOGLE: Usefully (to nonchemists suffering from headaches), the top link was to a Wiki-answers page telling people whether they can take aspirin and Tylenol together. Other links gave information about toxicity, danger to kidneys, and the like.

SEARCH TERM: Stanford Harvard

WOLFRAM ALPHA: I got tables comparing data from the two schools: size of student bodies--broken down by full-time, part-time, undergraduate, and graduate--plus the number of undergraduate, master's, and doctoral degrees awarded, and similar data. Alpha listed Stanford's tuition as $25,000, which is incorrect, and no tuition for Harvard. As with all of Alpha's results, it gave me sources against which to check the information.

GOOGLE: Google gave me a collection of links (starting with a discussion board for students trying to make a college decision) and various news stories containing the two terms.

SEARCH TERM: Cancer New York

WOLFRAM ALPHA: I was expecting statistics on cancer rates in New York. Instead, the Wolfram site assumed I meant the constellation. It showed me where Cancer could be found in the night sky viewed from New York, told me when it would next rise and set, and included a map of the night sky.

GOOGLE: The first link was to Memorial Sloan-Kettering Cancer Center in New York. The second was to the New York State Department of Health's cancer page. The third was to the New York State Cancer Registry. Not bad.

VARIATIONS: Adding a second state (Cancer New York Nevada) confused Wolfram--it didn't know what I wanted. With Google, all the top results were Nevada-centric: a mix of news stories, lawyers' websites, and medical centers relating to cancer (the disease) in Nevada. No comparisons, no data, and not as helpful as it was when I just put "Cancer New York."

SEARCH TERM: Utah Florida population

WOLFRAM ALPHA: Alpha gave me tables containing the two states' populations from 2006, the population growth rate from 2000 to 2006 (including a chart that I could download), and the number of annual births and deaths in 2004.

GOOGLE: Even though Google just launched a new data-presentation service with access to public census and labor data, this search term did not bring me to the new data service. The first hit was to a U.S. census press release that itself contained links to population tables.

VARIATIONS: When I tried "Utah population," Google did give me a view of its new service: a simple chart of Utah's population from 1980 to the present.

When I changed the search term to "Utah Florida," Wolfram threw the almanac at me, giving side-by-side tables on population data plus high and low elevations of the two states, the dates that the states joined the union, the area of farmland, the household income and poverty rates, and so on. Google gave me random sites that contained the two words, starting with a mapped location of a business in Lake Mary, Florida, that contains the word "Utah."

Generally, I did not use search terms that clearly had no computable answer (and therefore would have stumped Wolfram). But I also didn't throw any softballs in areas close to the heart of its makers: physics, chemistry, engineering, and genomics. On hard-core scientific questions, it gives you tons of symbols and graphics and other information that would be useful to a researcher but obscure to most people. But on many common questions for which there is no obvious data element, you will not get much help. In any event, if its plans hold, you should be able to test it out yourself in two or three weeks.

Detecting Dirty Bombs from a Safe Distance

2009-05-05T09:21:00.002+02:00

Tuesday, May 05, 2009

Detecting Dirty Bombs from a Safe Distance

A modified NASA telescope could detect dangerous radioactive materials.

By Brittany Sauser

Tracking and locating hazardous radioactive materials has become an immense concern for the United States Department of Homeland Security. In the wrong hands, materials snatched from a hospital or a nuclear plant could be used to build a "dirty bomb" that might cause major harm to human health and the environment.

Researchers at the University of New Hampshire (UNH) have now built a highly sensitive device for detecting radioactive materials remotely, using spare detectors from NASA's Compton Gamma-Ray Observatory. The detectors were originally intended to measure gamma rays in space. "It is a very robust, reliable, and precise piece of instrumentation that has already been proven to work in space," says James Ryan, the lead researcher for the telescope and a professor of physics at UNH. "If it works in space, you bet it will work on the ground."

Security personnel currently use handheld detectors to locate radioactive materials, but these instruments are often affected by background radiation and cannot always pinpoint the source of radiation accurately. "This is an important area that needs new detectors," says Neil Gehrels, chief of the astroparticle physics laboratory at NASA's Goddard Space Flight Center, in Greenbelt, MD. "The challenge is to build a system that is sensitive and detects the kinds of gamma rays that would be of security concern, and two, to build a robust system that can be used in the field."

The new telescope, called Gamma-Ray Experimental Telescope Assembly (GRETA), can fit into the back of a truck, allowing security personnel to spot high-energy gamma rays simply by scanning an area. "Our instrument can detect different radioactive isotopes in different places with one exposure," says Ryan. The researchers also developed software to operate the telescope and analyze data in real time.

"Ryan's work is really outstanding, and he has one of the best systems for sensitive, wide-field gamma-ray detection," says NASA's Gehrels. "The detectors can sense sources from afar and use a technique that allows them to see exactly where the source is located." While there are other groups working on similar systems, Gehrels says that the UNH group is leading the field.

User interface: The researchers developed software to operate the telescope and analyze data in real time.
Credit: University of New Hampshire

The telescope comprises two different cylinder-shaped "scintillation" detectors that work in tandem, surrounded by large glass photomultiplier tubes. When a gamma ray hits the front detector, the energy is scattered and absorbed by the rear detector. The energy is then converted into visible light and detected by the highly sensitive photomultiplier tubes. The specific color and intensity of the light can identify the radioactive material involved, says Gerald Share, a visiting senior research scientist in the department of astronomy at the University of Maryland, who was not involved in the work.

"The instrument measures how much energy is deposited in each detector to calculate the total energy of the gamma ray," says Ryan. "This tells you what the radioactive isotope is." The researchers have hooked up the telescope to a laptop and developed software that is easy to control.

The researchers will present their work at the 2009 IEEE International Conference on Technologies for Homeland Security. "Since the 9/11 terrorist attacks, we realize we are in a dangerous world, and it is essential to put money into technologies like this," says Share. "We have no other choice."

Ryan says that the telescope could be used in a variety of national-security settings, such as for cargo inspections and to search for rogue nuclear weapons.

Moving Data around the Clouds

2009-05-05T09:19:00.001+02:00

Tuesday, May 05, 2009

Moving Data around the Clouds

A startup hopes to make it easier to hop between cloud-computing services.

By Kate Greene

In recent years, companies led by Amazon, Microsoft, and Google have helped usher in the era of cloud computing, in which businesses and individuals lease access to computing on demand, paying only for as much processing power as they need. And as often happens when a new industry emerges, there's been a flurry of startup activity in the cloud-computing industry over the past year or so.

One startup, called Cloudkick, hopes to provide a simpler way to manage data stored across several different cloud-computing services. Cloudkick provides a unified, Web-based interface for monitoring data regardless of the cloud provider hosting it.

Another feature launched recently by Cloudkick, called Cloudshift, lets customers transfer data between different cloud-computing providers with just a few clicks. It makes it possible to shift an application from Amazon's servers to those of competitors, such as Rackspace, with surprising ease. This means that businesses using Cloudkick can avoid being locked into one provider--a feature that could help save money if a different provider suddenly offers a cheaper service.

"A lot of companies are afraid to move into the cloud because they don't want one company to have all their data," says Dan Di Spaltro, cofounder of the startup. These companies worry that it will take significant time and resources to move data between providers because, as yet, there is no cloud-computing standard. Moving from one provider to another requires technical tricks, including converting data between file types used by different providers. "We tackle that interoperability problem," says Di Spaltro.

Cloudkick presented its product last month at the Under the Radar conference in Mountain View, CA, where it won a best-in-show award and best in category, by audience vote. The startup, founded by the venture firm Y Combinator, came out of stealth mode in March, has 1,600 customers, and manages about 12,500 servers. The company's management service and its new migration service--currently only available to a small number of customers--are both free, although it intends to launch payment plans in the future.

After signing in to the Cloudkick website, a user can add different cloud-computing accounts by entering the necessary log-in information. A dashboard then shows each of these services and the status of the servers being used. A person can set up e-mail alerts to warn if traffic dips below a certain level or if it spikes, for example. The company also provides graphs to visualize the average load on a machine--an indicator of the overall health of the system.

Cloud control: This graph shows load averages for several machines. It can alert a user if the system is nearing failure or if an application is behaving poorly.
Credit: Cloudkick

Moving data from one vendor to another is as simple as dragging and dropping an on-screen icon. But behind the scenes, there's much more going on. When data is stored on Amazon's servers using its Simple Storage Service (S3), for instance, it is saved in a proprietary format that keeps it from simply being moved to another service. To solve this problem, Cloudkick has written software that automatically unbundles the data from the S3 file system. This involves removing a layer of encryption that surrounds the data, explains Alex Polvi, cofounder of Cloudkick. The data can then be uploaded to another provider--the whole process takes about five minutes. "It's like ripping a CD," says Polvi.

Cloudkick isn't the only company offering novel ways to manage cloud-computing services. Companies including CloudStatus and RightScale also provide a way to monitor cloud servers via the Web. Cloudkick's advantage, according to Polvi, is that it keeps things as simple as possible and now gives users the ability to switch servers so easily.

Di Spaltro adds that eventually Cloudkick would like to let customers transfer between cloud providers based on preset pricing options, or based on the geographic location in which the heaviest load occurs. For instance, if one provider offers a deal below a certain price, Cloudkick could automatically transfer data over to that service. Or if a customer's servers experience a heavy load in one part of the world during a certain time of day, he or she could automatically transfer the load to servers in that location at that time, reducing lag and improving performance.

"The value proposition to moving workloads around is great," says Frank Gillett, an analyst at Forrester Research. He says that the portability Cloudkick offers will appeal especially to startups, "who are shopping around for the lowest price or want to move quickly."

However, Gillett adds that there's still a lot of uncertainty about cloud computing and the types of services that will be the most useful. "The concepts are getting ahead of the market need," he says. "It's cool to see these startups springing up as experiments, but let's remember: we're at the very beginning."

Cheaper Solar Concentrators

2009-05-04T09:36:00.000+02:00

Monday, May 04, 2009

Cheaper Solar Concentrators

Skyline Solar, a new startup, is combining conventional technologies to lower solar-power costs.

By Kevin Bullis

Skyline Solar, a startup that today announced its existence to the world, has developed a cheaper way to harvest energy from the sun. The company's solar panels concentrate sunlight onto a small area, reducing the amount of expensive semiconductor material needed to generate electricity.

Sun collectors: Skyline Solar combines conventional silicon solar cells with reflective parabolic troughs (shown here).
Credit: Skyline Solar

The technology will bring the cost of solar power in line with the average cost of electricity, at least in sunny areas, says Ben Eiref, Skyline Solar's director of product management. Currently, solar power can be far more expensive than electricity from conventional sources; many governments have resorted to subsidies to increase its use.

Skyline Solar has raised $24.6 million to date and has been awarded $3 million by the Department of Energy to speed up production. It has also installed a pilot power plant that can produce 24 kilowatts of electricity, and has started production of its solar panels with the goal of selling them later this year. They are designed for commercial installations in the 1-to-10-megawatt range, such as on food-processing and water-treatment facilities at the edges of cities or in rural areas.

The startup isn't the first company to attempt to reduce costs by concentrating sunlight onto smaller solar cells. But Skyline Solar says that it can better compete with other energy sources by combining two technologies that can be produced in high volume using existing equipment and that have been demonstrated in the field for decades: conventional silicon solar cells and reflective parabolic troughs, which are used now in solar thermal plants. In these thermal plants, the long, curved troughs concentrate light on tubes, heating up a fluid inside them that, in turn, is used to drive power-generating turbines. Skyline Solar has replaced those tubes with narrow solar panels, adding a heat sink to keep them from getting too hot. The troughs concentrate the light by about a factor of 10, increasing the power output of the panels by about the same amount as conventional solar panels without concentrators. (To compensate for the increased power output, the company has incorporated larger electrical contacts into the panels.)

Other companies are developing systems that concentrate sunlight much more--by hundreds of times--in an effort to further decrease the amount of expensive solar-cell material needed. Indeed, two of Skyline Solar's founders were part of the founding team at another concentrating-solar company, SolFocus, that was also developing a high-concentration system. But they decided that the technology, while promising, faced too many technical hurdles to be brought to market quickly.

While Skyline Solar's technology may be simpler and easier to bring to market, it's not guaranteed success, says Travis Bradford, a professor of management at the University of Chicago and a solar-industry analyst with the Prometheus Institute for Sustainable Development. "Parabolic troughs are known, so they know what the costs are, and they can make them at a predictable rate," he says. But like almost all concentrating-solar systems, they require a tracking system to keep the mirrors pointed at the sun. "Mirrors are probably cheaper to make than solar cells--for now. But when you add in the tracking, whether there's any real advantage is questionable."

What's more, Bradford says that prices for conventional silicon solar panels are falling dramatically, closing the gap between the cost of regular panels and the cost of the mirrors and the tracking system combined. Potentially, this makes it less worthwhile to concentrate sunlight.

Bradford notes, however, that if Skyline Solar does manage to keep its prices lower than those of the competition, it has a large potential market. The application that it's designed for--medium-size solar-power plants at the edges of cities, called distributed utility systems--is the fastest-growing segment of the solar market.

Sending Cell Phones into the Cloud

2009-05-04T09:27:00.001+02:00

Friday, May 01, 2009

Sending Cell Phones into the Cloud

New technology offloads processing from a mobile device to its cloud-based doppelganger.

By Christopher Mims

Face in the cloud: CloneCloud allows processor-intensive applications, like this prototype face-recognition application, to be offloaded to remote servers.
Credit: Intel Research Berkley The problem with mobile phones, says Allan Knies, associate director of Intel Research at Berkeley, is that everyone wants them to perform like a regular computer, despite their relatively paltry hardware. Byung-Gon Chun, a research scientist at Intel Research Berkeley, thinks that he might have the solution to that problem: create a supercharged clone of your smart phone that lives in "the cloud" and let it do all the computational heavy lifting that your phone is too wimpy to handle.

CloneCloud, invented by Chun and his colleague Petros Maniatis, uses a smart phone's high-speed connection to the Internet to communicate with a copy of itself that lives in a cloud-computing environment on remote servers. The prototype runs on Google's Android mobile operating system and seamlessly offloads processor-intensive tasks to its cloud-based double. Details of the project will be revealed at the HotOS XII conference in Switzerland later this month.

It's a trick not unlike the way that many Web-based applications, such as Google Docs, run on remote servers. The difference is that because CloneCloud creates a perfect copy of the phone's software, it can take on literally any processor-intensive task that it calculates it can do faster than the phone itself, after weighing the amount of time and battery life required to transfer the required data.

The big benefit of CloneCloud is battery-life extension, which would naturally follow from lower utilization of the phone's CPU. Chun imagines that this could become a competitive advantage for vendors, like free voice mail or unlimited data plans.

But CloneCloud wouldn't just make smart phones more efficient: it could also make them more capable. A test application developed by Chun performs face recognition on photos. It required 100 seconds of processor time on a standard Android phone, but it finished in only one second when run by a clone of the phone running on a desktop computer. Because the software runs on a cloud-computing platform, it can be scaled in terms of the amount of both memory allocated and processing power, both of which increase performance on computationally intensive tasks.

Security could be an important potential application of CloneCloud. Ya-Yunn Su, a researcher at NEC Laboratories, in New Jersey, who previously developed a prototype system similar to CloneCloud, notes that "as smart phones become mini general-purpose computers, more of the problems we see in desktops, like viruses, will become smart-phone problems." Virus scans, which involve checking the entire file system of a device, are exactly the sort of process that Chun envisions CloneCloud accomplishing in the background, even while the smart phone is off.

On the other hand, like all cloud-based services, CloneCloud could create a whole new class of security vulnerabilities--the sort that arise when all of a user's private data is stored on publicly accessible servers. "Even after you address the technical issues, how can you get users to trust the cloud?" asks Su.

Maniatis, Chun's collaborator on CloneCloud, notes that the team is working on a number of different methods to secure CloneCloud. One approach, known as "private data disclosure detection" or "taint checking," examines all of the variables in a program that could be affected by inputs from outside sources, in order to detect whether these inputs contain data inserted for malicious purposes. Taint checking is extremely processor intensive, which means that CloneCloud could be a unique enabler for it on mobile devices. "We're using execution in the cloud to run e-mail applications in an environment where you can do this emulation without waiting for the heat death of the universe for your smart phone to finish," says Maniatis.

CloneCloud could be bedeviled by another issue that prevented earlier research into offloading computation from mobile devices from being commercialized: network latency and bandwidth limitations. "When they did research on this in the late '90s," says Chun, "their wireless connection was a modem, 28.8 kbps. You can imagine that sending data on this connection could take quite a long time." Smart phones now use much faster wireless technologies: Wi-Fi, 3G, Bluetooth, and, eventually, 4G and WiMax. But the speed of the phone's connection and the power consumption required to transmit data may still limit the kinds of tasks for which CloneCloud can be used.

Chun says that network latency can be masked: the phone could guess what the outcome of a particular process might be and proceed until told otherwise, for example. But it's clear that some applications, like games, would require connections faster than those currently available and might rapidly drain a phone's battery.

Ultimately, Chun envisions that the research behind CloneCloud will help intelligently shuffle tasks to the fastest, or most power-efficient, processor in a data center. This application is especially relevant at Intel, which makes everything from the energy-sipping Atom processors used in netbooks to powerful (and power-hungry) Nehalem processors used in Web servers. "There will be a family of heterogeneous devices, and you would like to move the computing job to the one that makes most sense; from that standpoint, it is a great idea," says Knies.

The same approach could someday allow a computing environment to be unshackled from any one particular device. "You could come home and sit down at a mobile Internet device and have it transfer content and calculations to your desktop PC," says Knies. "You could imagine what that would enable in terms of sharing information between devices in the home and the mobile device you have on you all the time."

China's biggest particle accelerator set to work

2009-04-30T11:02:00.001+02:00

China's biggest particle accelerator set to work

(Xinhua)
Updated: 2009-04-30 13:59

BEIJING -- The building and testing of a machine that can create super X-rays capable of exposing the complicated structures of chemical compounds and proteins has been completed at Shanghai Zhangjiang High-tech Park in Pudong New Area.

The Shanghai Synchrotron Radiation Facility is expected to significantly boost China's capability and competitiveness in scientific research, especially in life sciences, officials from the Shanghai Institute of Applied Physics of the Chinese Academy of Sciences, the facility's key developer, were quoted as saying by Thursday's Shanghai Daily.

The 1.2 billion yuan (US$176 million) particle accelerator, China's biggest light facility, will also help in the study of viruses and new drugs and the development of technology.

Next month the synchrotron will be opened to universities, scientific institutes and companies for approved research.

The trial operation of the facility in about 60 projects since last month has already yielded results.

"We have found seven new structures including one enzyme which can break down an environmental toxicant," said He Jianhua, head of the institute's synchrotron radiation experiment division.

The institute is cooperating with the Shanghai Institute of Material Medica on researching treatment of bird flu and is expected to work with Sinopec on petroleum catalyzers.

"The machine will be an effective tool in research on viruses as well as for swine flu medicines although we haven't received a request yet," He said.

The facility was jointly proposed by the Chinese Academy of Sciences and the Shanghai government in 1995, with construction starting in December 2004.

The synchrotron's beamlines were adjusted from May last year to March. So far the facility has built seven beamlines and experimental stations for research and development in life sciences, new materials, physics and biochemical projects.

The particle accelerator can produce X-rays thousands of times stronger than normal X-ray machines capable of exposing the minute structure of human proteins.

"Thanks to the technology, we can know a protein structure within 20 minutes. Such a procedure usually took several months," said He.

The institute hopes to complete the facility's proposed 60 beamlines by 2020, and have 40 completed by 2015.

Streamlining Manufacturing Processes with SOA Frameworks

2009-04-30T10:43:00.001+02:00

Streamlining Manufacturing Processes with SOA Frameworks

SOA platforms and frameworks can dramatically simplify the 'default' manufacturing business processes implemented on an ERP system.

Friday, April 24, 2009
By

Most medium to large manufacturing companies (and many smaller ones as well) use some form or ERP system to help manage the data and processes related to their businesses. While ERP systems have strong transactional capabilities and are good at tracking and storing data, most of them have relatively poor process management capabilities, forcing users to tailor their businesses to the software rather than molding the software processes around what's required by the business.

For example, some of the most popular enterprise ERP systems ship with a rich set of process templates for Dispatch, Invoicing, Production Planning, Logistics, Stock Allocation and several other functions. However, they are designed around the concept of "Separation of Duty," where an assumption is made that every step in a business process may potentially be executed by a different party; in the majority of cases, however, a single person executes a process (for instance, an invoicing process), in which case the process can be dramatically simplified. Moreover, changes to default process templates in the ERP system are difficult and time-consuming, often requiring significant programming in proprietary languages such as "ABAP." Finally, integration with third party enterprise applications remains a significant challenge in the enterprise ERP world.

Enter SOA. SOA platforms and frameworks can dramatically simplify the 'default' manufacturing business processes implemented on an ERP system. In this article, we examine how the world's third-largest distiller, United Spirits Ltd., optimized a number of critical business processes via an SOA framework, saving well over $750,000 in the first year alone. The company in question uses a popular (and expensive) ERP system but the discussion on simplification of the process applies equally well to other ERP systems as well.

Invoicing and Dispatch

The default invoicing and dispatch process implemented over the existing ERP system within the company requires five steps and nine screens for each invoice creation. Designed for generality, where multiple people may be needed to execute separate steps, this process takes 12 minutes per invoice on average. Moreover, significant (and expensive) training is required for each person creating an invoice, making it difficult to scale the invoice creation process across offices located in different geographical locations.

When implemented over an SOA framework, the entire invoice-creation process is reduced to just two steps with two screens, requiring only 2 minutes per invoice. Invoicing data is now entered into customized HTML screens and the SOA framework manages the details of updating the ERP system by making the appropriate API ("BAPI") calls at the backend. The result is a dramatically simplified invoice creation process that requires no ERP-specific training, can be easily scaled across different geographical locations and is over 600% more efficient.

As an example, USL generates over 7,000 invoices per month. With the new, optimized SOA-based invoicing process, USL saves over 150 man-days per month. Moreover, non-tech-savvy personnel in remote locations and factories can easily create dispatch requests and invoices; this was not possible earlier since such personnel had to be pre-trained on the ERP system interfaces -- a difficult and expensive proposition.

Lifting Plans and Bulk Orders

A Lifting plan is an estimate of the sales that will possibly be made over a quarter, half-year or other fixed term. A bulk order is an estimate of what will be lifted in a larger order.

Lifting plans and Bulk Orders are both critical processes in the sales organization of most manufacturing companies. Very often, however, the IT systems of the manufacturer do not support the Lifting Plan and Bulk Order concepts. Even sophisticated ERP systems have inadequate support. For instance, in some ERP systems, the concept of a Bulk Order is tied to a single unit or plant and its functionality is inflexible and cannot be easily customized to match the needs of the business.

SOA technology helps resolve the problems created by inflexible IT systems. It is now possible to create application flows that compare the Lifting plan and Bulk Orders for each salesperson against actual orders, with the results being fed directly to the automated invoicing process discussed in the previous section. Further, the SOA systems enable managers to track differences between actual invoiced orders and the Lifting plan / Bulk Orders for each salesperson, enabling closer monitoring and better tracking of sales and salesperson performance. Benefits include fully automated processes with the Lifting plan and Bulk Order concepts integrated with invoicing and report generation and easy modification of processes without programming.

Logistics

Manufacturers normally ship goods on a regular basis to multiple distributors mostly via road and rail and sometimes by ship. In the typical case, distributors send trucks to a multiple manufacturing plants to pick up goods. Each distributor has a credit limit with the manufacturer. It this limit is exceeded, an explicit approval is normally required from a company manager to raise the credit limit.

The problem of securing credit change approvals efficiently is complicated due to several reasons: distributor vehicles may arrive at a company's production facilities at night; ideally, decisions on approvals should be made quickly since delayed approvals cause significant disruption and loss of profits for both the distributor and the manufacturer. Unfortunately, even with the powerful ERP systems that most manufacturers use today, the approval process is complicated: company managers need to manually log on to the ERP system to approve credit; bad internet connectivity can often prevent access to central company IT systems from remote locations; plus, the ERP interfaces used are typically poor and difficult to learn, requiring companies to spend significant time and resources in manager training.

SOA applications alleviate this situation by easily enabling approval requests on mobile phones. The initial approval request is processed by an SOA flow and placed on a portal that can be accessed by company provided mobile phones. The SOA flow then generates an SMS (Short Message Service) message that is sent to the GPRS-enabled mobile phone of the manager, who then accesses the secure portal by clicking a link in the SMS. The manager can now approve or reject the request in the portal directly over his/her mobile phone. Once the request is handled, the SOA flow automatically updates the company ERP system at the backend with the approved/rejected notice.

This process of using SOA flows to manage approval requests has several benefits. Managers no longer need to access the company ERP system via cumbersome client applications; all relevant information now available on their mobile phones. The learning curve is much lower, as are licensing costs (since fewer ERP client licenses are needed). There is also a significant cost and time saving for distributors due to faster turnaround times for approval requests.

Order Processing and Stock Allocation

Problems with enterprise ERP systems often have a negative impact on the stock allocation and order processing in a manufacturing unit. For instance, many ERP systems allocates stock immediately for any sales order by default. If orders are processed using the default templates, then by the time one reaches the last order in a batch, one may have run out of stock. Also, orders with higher priority that arrive in the middle of the batch cannot be processed because available stock has already been pre-allocated to previous orders. In such cases, the "rollback" needs to be performed manually -- a cumbersome and error-prone process.

All of these problems make it impractical to enter all orders into the ERP system in a single shot. In the typical case, orders not entered into the system until they are ready for dispatch. The lack of prioritized allocation of stock based on how the company wants to run its business is also a major hindrance.

Enter SOA. Using SOA flows, all orders can be entered into the system as they are produced. The orders are 'held' within the SOA flow while they are prioritized. Additional SOA flows are used to prioritize orders before any stock is allocated to each order. Once the orders are prioritized, a third SOA flow is invoked to pick up an order, allocate stock to it "just in time" and send it for invoicing via the optimized 2-step invoicing process discussed earlier in this article.

The benefits of this approach include, among others, highly flexible order processing tailored to enterprise needs, easier and flexible order prioritization, no manual rollbacks and "Just in time" stock allocation.

New Regulations

In almost any jurisdiction globally, new regulations (especially tax regulations) often have revenue implications for manufacturers. For instance, consider a manufacturer that outsources a task to a third party contract manufacturer (CM). For convenience, the manufacturer instructs the CM to sell directly to and end-user or distributor, collect the revenue and pay the Manufacturer its share after keeping the CM commission.

This process works well as long as there's no change in prevailing tax regulations. If for instance, as was the case in a European jurisdiction recently, the payment from the CM to the Manufacturer becomes subject to a new tax regulation (such as Service Tax), the CM has to deduct the new tax from the payment to the Manufacturer. The Manufacturer thus loses money unless the Manufacturer directly sells to the End-user.

A solution to this problem requires custom business processes to be implemented to "reroute" cash flows to legally circumvent a regulation. Using the previous example, a new business process is required to re-route the payment as follows: Manufacturer sells direct to End-user; Manufacturer instructs CM to dispatch goods to the End-User; Money flows from End-User to Manufacturer and from the Manufacturer to the CM, thereby avoiding the service tax.

Existing ERP systems cannot easily handle process-change-requests such as the above. A flexible SOA system, however, can implement such changes within days if not hours. The benefits include rapid, automated business process changes to circumvent new regulations, leading to added business flexibility and profitability

Summary

In this article, we have discussed several real, practical business problems that plague manufacturers every day. All of these examples have been taken from a large manufacturer -- specifically, USL -- the world's third-largest distiller of spirits. By moving to a flexible SOA platform, USL saved over $750,000 in the first year alone (on an investment of less than $200K) by optimizing its Invoicing, Logistics, Order prioritization/Stock Allocation and other processes. USL believes that in the coming years it will save several million dollars a year because of the flexibility of its SOA platform.

Atul Saini is the CEO and CTO of Fiorano Software Inc., a provider of enterprise class business process integration and messaging infrastructure technology. www.fiorano.com

Following Swine Flu Online

2009-04-30T10:37:00.000+02:00

Tuesday, April 28, 2009

Following Swine Flu Online

Tracking and communications could play a key role in combating a pandemic.

By Michael Day

Flu flow: HealthMap, created by Google and the CDC, annotates a global map with news articles, official medical alerts, and other data in real time. Credit: Google
Credit: Google

RESOURCES:
HealthMap

CDC

WHO

The World Health Organization (WHO) admitted on Tuesday that it's too late to contain swine flu, and experts say that it is now vital to track the spread of the virus in order to mitigate its effects. Vaccines and antivirals will be crucial to the effort, but tracking and communications technologies could also play a key role in monitoring the virus, distributing accurate health information, and quelling outbreaks.

Bloggers and social-networking sites were among the first to follow the outbreak's rapid spread from its epicenter in Mexico--where swine flu has been linked to more than 150 deaths--to cities across the United States and on to Europe, Israel, and New Zealand.

The need for fast information has seen the Centers for Disease Control and Prevention (CDC) build up a large following on Twitter. Groups ranging from fellow federal institutions, such as the National Institute for Occupational Safety and Health, to local Red Cross divisions, as well as many regular Twitter users, are employing the service to receive updates. Some experts, however, warn that Twitter can just as easily spread misinformation and panic. According to data from the medical tracking site Nielson, conversations related to swine flu reached 2 percent of all messages on Twitter over the weekend. By contrast, Google's Flu Trends, a site that aims to spot flu outbreaks by monitoring search queries related to flu symptoms and treatment, has shown little increase in activity in recent days.

Some Twitter users have also been criticized for spreading misinformation by, for example, warning friends and followers against eating pork, which is not related to the spread of swine flu. Evgeny Morozov, a fellow at the Open Society Institute, in New York, wrote in a blog post on Saturday, "Having millions of people wrap up all their fears into 140 characters and blurt them out in the public might have some dangerous consequences, networked panic being one of them."

Meanwhile, other Internet tools are helping to track the spread of the virus geographically. HealthMap, which was created by researchers from Children's Hospital Boston with support from Google, the CDC, the National Library of Medicine, and the Canadian Institute of Health Research, adds real-time news alerts, official medical information, and other data to a global tracking map.

Susan Perkins, a specialist in microbial evolution at the American Museum of Natural History, in New York, NY, who has previously applied geographical information systems to the study of how viruses evolve, hopes that Internet technology and "the new field of info-epidemiology" can make a difference in future epidemics, if not in the current swine-flu outbreak. "Sites like HealthMap or Google Earth are a good new way to visualize data," she says. "These readily accessible platforms also let people in diverse fields--public health, evolutionary biology, et cetera--share the same information."

Perkins believes that being able to process viral genomes more quickly could make a big difference: "In the future, I would hope that diseases will be able to be better tracked with software that can combine genomic information with real geographic information. That will give us the most power to solve--and then hopefully break--transmission patterns."

Others say that tracking the spread of the virus could help reveal how deadly it is, how easily it spreads, whether drug resistance is emerging, and how to target precious public-health resources. Jeffrey Herrmann, an applied mathematician and software engineer at the University of Maryland, has developed software that can analyze the spread of a disease and pinpoint the best locations for treatment or mass vaccination. He says that this approach "could be used by local public-health departments to determine how many sites and how many staff they need to dispense antiviral medication or vaccinate people."

The WHO's Pandemic Influenza Task Force decided on Monday to raise the alert to level 4 on the pandemic scale. This means that confirmed human-to-human transmissions are now causing community-level outbreaks.

"We might expect up to 30 percent to 40 percent of the population to become ill in the next six months," says Neil Ferguson, a member of the WHO task force and a professor of epidemiology at Imperial College London. He adds that the virus appears less lethal than H5N1 bird flu--but crucially, it's more contagious. In the six years since its emergence in 1993, H5N1 has killed 257 people; swine flu has already killed 150 in a matter of weeks. The last pandemic, Hong Kong flu, killed about 700,000 (1 in 1,000 of its victims) in 1968.

So far, no deaths have been reported outside of Mexico, but the consensus among virologists is that it is too early to say whether suggestions that the death rate is higher in Mexico will be borne out. Some have suggested that better treatment in the United States has made infections there less dangerous. Or it could be that the much greater number of cases seen so far in Mexico--there are now more than 2,000 suspected--has made some deaths there more likely.

Pharmaceutical firms, meanwhile, have begun the race to produce a vaccine. Switzerland's Novartis said on Tuesday that it had received the genetic code of the new virus strain, enabling it to begin work in earnest. The WHO estimates that an effective inoculation is still six months away, but this might be in time for a second wave of infection later in the year.

Peter Dunnill, a professor of biochemical engineering at University College London, warns that even if a vaccine is produced, not everyone will have access to it. "Based on calculations done in relation to H5N1, the global capacity for providing a vaccine at its most optimistic is less than 10 percent of the world's people," he says.

Antiviral drugs are likely to provide the first line of defense. In the United States, Homeland Security Secretary Janet Napolitano said recently that she will release a quarter of the 50 million courses of antiviral drugs in the national stockpile. She added that the Defense Department has another 7 million courses ready. But their effectiveness could be short lived--particularly if they are used now, and the virus resurfaces later in the year. Professor of immunology Peter Lachmann of the University of Cambridge says, "Tamiflu resistance is extraordinarily widespread and develops very quickly. We would be very lucky if this virus does not develop resistance."

IBM Systems Journal

2009-04-28T12:07:00.001+02:00

IBM Systems Journal

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Amazon warehouse case study

2009-04-28T12:04:00.001+02:00

Amazon warehouse case study

The Strategic Advantage of Global Process and Practice Networks

2009-04-28T11:58:00.001+02:00

The Strategic Advantage of Global Process and Practice Networks

6:42 PM Wednesday March 25, 2009

In our last post, we discussed talent development as an operational challenge. This time around we'll explore how the organization itself needs to change so that it develops a talent edge.

It goes without saying that no matter how much talent a company might have, there are many more talented people working outside its boundaries. Yet all too many companies focus solely on acquiring talent, on bringing talent inside the firm. Why not access talent wherever it resides?

Some might say there's no way of doing so without sharply increasing the cost of complexity. New institutional practices can reduce these costs, however, as companies become:

• Less transactional and more relational.
• Less "hardwired" and more "loosely coupled."
• Less focused on merely accessing external capabilities and more focused on rapid capability building for every participant.
• Less focused on the firm and internal silos and more supportive of richer cross-enterprise interactions and collaborations among workers.

By rethinking their institutional arrangements along these lines, companies can forge connections and carry out interactions less expensively and more rapidly and flexibly than they could through conventional institutional practices. They can also help their own talent connect more easily with other talent, beyond the four walls of the enterprise, to achieve higher performance levels.

In the past, executives have tended to be wary of cross-enterprise collaboration out of concern for a loss of intellectual property or disagreement over the distribution of rewards. However, these concerns are largely shaped by a zero-sum view of the world -- if one party gains, the other parties must inevitably lose.

Focusing on talent development helps to shift executives to a positive-sum view of the world -- as talent improves, more value gets created in aggregate and all participants have an opportunity to gain more than they had before.

But institutional innovations, while necessary, aren't sufficient. Companies must also participate in (and sometimes orchestrate) new organizational forms and structures called global process and practice networks. These play a key role in helping talent-driven companies access world-class talent beyond their boundaries.

The new generation of motorcycle assemblers emerging in Chongqing, China, is a leading example of a global process network. In this network, companies such as Dachangjiang cultivate rapid improvement in motorcycle design and performance through innovative working arrangements with their design partners. Rather than providing designers with detailed product blueprints, assemblers supply them with rough sketches accompanied by tightly specified performance requirements.

It's up to all relevant design partners to work together on their own initiative without the intervention of Dachangjiang to resolve issues and reach the assembler's aggressive performance targets. As highly specialized participants clash around ways to meet aggressive performance targets and still meet tight deadlines, creative new approaches emerge and learning increases across the network of participants. In the process, quality has gone up while costs have fallen by two-thirds.

Global practice networks, by contrast, are even looser forms of collaboration that involve participants from similar skill areas working on common performance issues. Global practice networks are emerging in such diverse areas as open source software and extreme sports.

Although they don't tend to refer to them this way, extreme surfers have used global practice networks to push the limits of their sport. In the 1950s, six-foot waves were considered challenging, yet today big-wave surfers successfully ride 60- to 70-foot waves. Big-wave surfers tend to congregate at specific beaches and breaks to learn their craft, and frequently connect at competitions and, increasingly, through the Internet. They gain from carefully watching each other and observing new techniques and practices under different wave conditions.

Their individual activities and interactions are more often than not orchestrated by commercial entities like surfboard makers and contest organizers, who define new challenges and motivate surfers to push their performance to the next level. Even where money is at stake, collaboration rules: At the 2008 Mavericks Surf Contest in Half Moon Bay, California, as the six finalists paddled out to catch the final set of waves, they agreed to share the prize equally, regardless of who was declared the winner.

Both kinds of global networks -- process and practice -- create opportunities for talent to come together and generate "productive friction": a powerful force that shapes learning, as people with different backgrounds and skills work together on real problems.

While many executives pursue the nirvana of a frictionless economy, aggressive talent development inevitably and necessarily generates friction. It forces people out of their comfort zone and often involves resolving differences among people with divergent views and experiences.

In designing these networks, several best practices are emerging:

First, organize the right environments to generate productive friction. In part, this requires:

1. Bringing together people with diverse experiences.
2. Investing the time required for them to develop shared understanding.
3. Defining aggressive performance requirements.
4. Providing employees with tools that help them negotiate the most promising approaches for achieving results.
5. Specifying action points that force participants to produce a solution meeting the performance requirements within a certain period of time.

Such actions are challenging enough when they occur inside a single firm, but things get all the more challenging -- and rewarding -- when companies connect talent across multiple institutional boundaries. Talented workers benefit from the broad range of experiences and approaches that diverse parties bring to a problem.

Second, innovate talent management within the firm. Leading companies recognize that today's career is no longer a straight shot up the corporate ladder. Instead, it involves what Cathy Benko and Anne Weisberg characterize as a "combination of climbs, lateral moves, and planned descents" along the "corporate lattice." They extend the concept of mass customization to a new approach for how work gets done and careers are built called "mass career customization."

In our next post, we'll look at the changes necessary at the strategic level to gain a talent edge. Meanwhile, what other organizational changes would corporations be advised to implement, assuming they were to take talent development as one of their highest priorities? What likely obstacles would they encounter as they seek to deploy global process and practice networks?

Four Fatal Flaws of Strategic Planning

2009-04-28T11:57:00.000+02:00

Four Fatal Flaws of Strategic Planning

3:47 PM Friday March 13, 2009
by Ed Barrows

Strategy execution is drawing a lot of attention these days, but that in no way means companies have abandoned their time-tested strategic planning processes. In fact, as far as management tools are concerned, strategic planning is as popular as ever, with 88% of large organizations engaging in some form of formal strategic planning, according to Bain & Company's 2007 Management Tools and Trends report. This number may still be on the rise as economic conditions force companies to search for new ways to jump-start business growth.

Yet despite this widespread adoption, managers continue to make fundamental mistakes that undermine otherwise well-intentioned strategy-formulation efforts. Here are four fatal flaws that consistently creep into strategic planning processes that, if avoided, can significantly improve both the process and the results.

Skipping Rigorous Analysis
Many managers believe their business experience and knowledge base alone equips them with all the information they need to conduct effective strategic planning. This belief is almost always untrue and serves only to undermine the kind of critical thinking from which truly creative strategies are born. A good strategic planning process takes full advantage of the numerous tools of strategic analysis — such as the five forces model, strategic group maps, or the value chain — to gain key insights regarding how the industry is evolving, how competitors are changing positions, and where an individual firm's sources of competitive advantage lie.

Eric Okerstrom, vice president of strategy management for Hagerty, a national specialty insurance agency that insures collectible automobiles and wooden boats, learned this lesson during his most recent strategic planning efforts. The company conducted extensive customer analysis and market segmentation work and, in so doing, realized that their brand wasn't as well known as they first thought. "Our entire leadership team believed that most participants in the collector market knew who we were and wanted to do business with us. What we found out during our analysis was that while our brand was strong amongst our core client base, there was room for improvement." It wasn't that Hagerty didn't have a known brand or delighted customers — they did. It was just that marketing perception and share data revealed that their name wasn't as widely recognized as they previously thought. "We reoriented a significant portion of our strategy and reexamined who our true competitors were because of the data we encountered during the analysis," says Okerstrom. They found that while the traditional end-user insurance purchaser was still important, it was equally important to focus more intensively on the general insurance agency channel that was recommending their product. Now they have adopted an innovative sales approach with a key distributor segment that will help them reach a major portion of the market they had not focused on previously.

Believing Strategy Can Be Built in a Day
In Hagerty's case, changing the minds of key managers took longer than one day. Yet many executive teams earnestly believe that effective strategies can be identified, explored, and agreed upon during abbreviated offsite meetings where the main driver of the agenda is the timing of snack breaks. While offsite meetings are useful forums in which to share information and address key issues, meetings should be adequately timed — over days or weeks if necessary — so that sufficient preparation and review and discussion can occur before and during the event.

MDI Group, one of Atlanta's largest IT and financial staffing organizations, has engaged in annual strategic planning each year for the past decade. In preparation for their yearly offsite, the leadership team, after examining a comprehensive package of performance information, completes a series of templates including a SWOT analysis and a key capabilities review. "We would discuss our SWOT analysis in the morning of the first meeting day, summarizing critical issues as we went. Then we would brainstorm how to address those issues immediately following lunch, with a hard stop no later than 3:00pm," recalls Mike Cleland, president of the IT division. "It always felt rushed, and it seemed like we never really got our arms around the underlying forces driving the key issues." In reality, they didn't. MDI leaders became frustrated as they kept encountering the same key issues year after year despite putting significant time and energy into the planning process.

So MDI modified its approach. For their most recent strategic planning efforts, the leadership team conducted the same up-front activities, but this time they identified four key issues a month before — not the day of — their meeting. Each key issue was assigned to an "issue team" comprised of senior managers for detailed analysis prior to the meeting. For three weeks each team applied a structured problem-solving approach to their issue, isolating root causes and identifying plausible courses of action. Teams then briefed their findings the day before the offsite to ensure all participants had a consistent understanding of the issue, the causes, the options, and — most important — the team's recommended plan going forward. The result was a streamlined process and better decisions. "It really accelerated the meeting," said MDI CEO Ella Koscik. "Also, we have a much higher level of confidence in our actions coming out of this meeting than we've ever had in the past."

Failing to Link Strategic Planning with Strategic Execution
According to a recent survey by the Conference Board, execution overall and strategy execution in particular hold the first and second positions when it comes to "top issues" in executive's minds. It's no wonder — executing strategy requires the work of the entire organization, whereas strategic planning only requires the top team. But part of a top team's challenge in execution often stems from the failure to link their work with ongoing strategy execution. In his article, "Obstacles to Effective Strategy Implementation" (Organizational Dynamics, Vol. 35, No. 1, 2006), Lawrence Hrebiniak of the Wharton School notes that "Strategic success demands a 'simultaneous' view of planning and doing. Managers must be thinking about executing even as they are formulating plan."

Prescolite and Progress Lighting — both brands of Hubbell (headquartered in Orange, Conn.) — show how to accomplish this in practice. Both businesses use what they dub the Long Range Strategic Planning (LRSP) process. This integrated strategic planning and execution system incorporates both strategy formulation activities, such as ongoing analysis of changes in market conditions, with execution activities like management of integrated strategic programs. At the start of the planning year, they perform a "deep dive" on critical competitive issues facing the businesses; the remainder of the year they focus on measuring and monitoring the progress they are making relative to the strategy. As they encounter unforeseen issues — which they usually do — they then analyze them within the confines of the LRSP process. They also maintain a running list of "must-do" integrated programs that they readjust as business conditions change. "We've refined the LRSP process over the past several years to not only make it more flexible and responsive to changes in market conditions, but to also make it more integrated," says Charlie Harris, vice president and general manager of the Indoor Lighting division. "The process today is at the center of what we do and largely responsible for driving successful execution of our brands' strategies." These businesses have made their strategy process a continuous and dynamic one — a more realistic approach than the once-a-year planning meeting that still dominates many corporate strategic planning efforts.

Dodging Strategy Review Meetings
Strategic plans quickly become obsolete when there is no activity in place to keep them alive. Worse, managers sometimes feel freed from execution accountability when reviews are continually rescheduled or dropped from the calendar altogether.

The most direct way to maintain a consistent focus on strategy is to schedule and hold regular strategy review meetings. At the end of the strategic plan formulation, managers should establish a strategic governance process where strategy review meetings — whether they are monthly or quarterly — are scheduled a year in advance. This way, managers can be sure the time for the sessions remains sacrosanct. A typical strategy review lasts anywhere between a half and a full day — so leaders must plan accordingly. To make the meetings productive, the leadership team should develop a standing agenda they can follow consistently each time they meet. The strategy that was created at the beginning of the execution cycle should be the topic of conversation at every meeting — no discussion of operational issues should be allowed. Consistent with avoiding fatal flaw number one, the necessary analysis should be prepared and the findings circulated before the meeting so that the session can be dedicated to guiding decision-making as opposed to conducting unbounded, unstructured discussion.

The Federal Bureau of Investigation (FBI) began holding regular strategy review meetings at the end of 2007, when they started developing a new strategy execution system. While the FBI maintains a vigilant 24-hour-a-day, 365-day-per-year focus on their top tactical priorities, they had never formally held strategy review meetings. "It was really interesting watching [Director Robert S. Mueller III] ask his staff how they were progressing on their parts of the strategy," noted Executive Assistant Director Tom Harrington of the FBI's Criminal, Cyber, Response, and Services branch. "People were watching to see if Mueller was serious about the strategy. By the end of the meeting, after some pretty intense questioning, it was clear he was." The FBI has gone on to hold strategy review meetings quarterly at the mandate of Director Mueller. Further, both their reporting process and meeting approach has gotten more refined. "The meetings get better every time. They're more focused now; we've come a long way from where we started," says Ryan Kennedy, the strategy management analyst responsible for facilitating the process. Running effective strategy review meetings is a learned skill but one that starts with scheduling and sticking to the strategy in the first place.

Ed Barrows is a lecturer at Babson College and the founder of edbarrows.com. He specializes in coaching executive teams to improve their strategy processes. Reach him at MUOpinion@harvardbusiness.org.

Boeing 737 manufacturing

2009-04-28T11:41:00.000+02:00

Boeing 737 manufacturing

Automotive Assembly line

2009-04-28T11:27:00.001+02:00

Automotive Assembly line

VanDer Lande conveyors

2009-04-28T11:25:00.000+02:00

VanDer Lande conveyors

AS/RS at beverage distribution center

2009-04-28T11:17:00.001+02:00

AS/RS at beverage distribution center

Streamlining Manufacturing Processes with SOA Frameworks

2009-04-24T17:15:00.003+02:00

Streamlining Manufacturing Processes with SOA Frameworks

SOA platforms and frameworks can dramatically simplify the 'default' manufacturing business processes implemented on an ERP system.

Friday, April 24, 2009
By

Invoicing and Dispatch

Logistics

New Regulations

Summary

Atul Saini is the CEO and CTO of Fiorano Software Inc., a provider of enterprise class business process integration and messaging infrastructure technology. www.fiorano.com

Inventory Optimization -- It's All About Uncertainty

2009-04-24T17:15:00.001+02:00

Inventory Optimization -- It's All About Uncertainty

A multi-echelon inventory optimization solution can drive global supply chains to peak efficiency by recommending precise inventory levels, lot sizes, replenishment plans and locations from end to end.

Friday, April 24, 2009
By

Every large enterprise today has an Enterprise Resource Planning (ERP) system as part of its core technology infrastructure. A common characteristic of ERP systems is that they manage lots and lots of static details that, once recorded, do not change. When supply chain operations fall under the ERP umbrella, the ERP systems can come up woefully short due to volatility and uncertainty for which they have no solution. ERP systems can only help companies have the right products at the right locations at the right time if supply and demand conditions cooperate by not changing.

In realty, of course, almost everything in the supply chain environment changes all the time. For instance, a transportation problem may trigger the need to find a different supplier or transportation mode, having much the same impact as a sudden labor strike. In fact, supply chains are already stretched to their limits, with factors such as fuel costs, working capital, credit scarcity, global labor rates, raw materials, exchange rates, customer demand, and many others in a perpetual state of flux. The only way to give the supply chain a competitive edge is to augment the capabilities of the ERP system: to monitor and respond quickly to changes in critical supply chain factors.

That's not easy in today's fast-changing economic, regulatory and globalized world. Volatility and uncertainty pummel the network of suppliers, producers, wholesalers, distributors, and retailers that convert raw material to finished products for our homes and offices. That supplier in China may ship you 100,000 units this week, but only 20,000 units next week. That shipment may take 10 days to arrive or 20. Demand can be steady for weeks, then spike or drop unexpectedly, confounding the forecasts and causing excess inventories or product shortages. Businesses are struggling with these issues, and losing the battle precisely because their ERP systems were designed to manage constants but are faced instead with volatility, uncertainty and change.

With Necessity Comes Invention

Technologies such as inventory optimization have emerged that augment and complement ERP systems to bridge the 'volatility-uncertainty gap.' Inventory optimization technology uses sophisticated mathematics to model crucial aspects of supply chain behavior and analyze how different parts of the chain depend on each other. Inventory optimization intelligently quantifies and 'dollarizes' the effects of volatile shipment lead times, fluctuating demand, imperfect forecasts and many other factors. The result is a set of recommendations for inventory levels and policies that minimizes the amount of working capital tied up in inventories while guaranteeing that customer service levels are met.

Managing inventory can be a daunting task for an enterprise with tens of thousands of products that are spread across hundreds of locations. The challenge is even greater when the locations are situated in different tiers or echelons of the enterprise's distribution network. In such multi-echelon networks, new product shipments are stored at a central facility, and then sent to local distribution centers prior to being shipped directly to the customer or store. All locations may be under the internal control of an ERP system that lacks visibility up and down the supply chain and across multiple levels. This system cannot create successful replenishment strategies for multiple echelons.

In this case, inventory optimization complements the ERP system by taking available (and often incomplete or flawed) supply, demand, forecast and production data from the ERP and related transactional systems, and returning optimal inventory targets back, right down to the individual product level. Inventory optimization tools formulate optimal policy decisions and can feed them into the ERP system for execution. To the ERP system it looks just like business-as-usual -- more detailed facts to handle -- because the optimization "magic" was done outside the system, where the factors of change and volatility were transformed into fact-like data the ERP system knows how to process.

With a multi-echelon approach to inventory optimization, demand forecasting and inventory replenishment decisions can be made at the enterprise level. Each echelon has visibility into the other echelon's inventory. The primary customer demand signal and other information at the distribution centers drive the forecasts in all echelons. In each echelon, order cycles are synchronized and replenishment decisions account for lead times and lead-time variations of all suppliers.

The only way to thwart the problems caused by volatility and uncertainty is to gain visibility into all the factors needed to improve inventory decisions across the supply chain. A multi-echelon inventory optimization solution can drive global supply chains to peak efficiency by recommending precise inventory levels, lot sizes, replenishment plans, and locations from end to end -- and help inventory planners decide where and how much stock to maintain to buffer against uncertainties.

For several years supply chain managers at industry-leading companies have been implementing inventory optimization programs to complement their ERP systems. The results are compelling: many have reduced inventory by 20-30%, dramatically improved service levels, and reduced cycle times by 15-20%. At a time of unprecedented uncertainty, it's one fact that has been reassuringly reliable.

Fred Lizza is CEO of Optiant. Optiant provides a robust multi-echelon inventory optimization solution called PowerChain. www.optiant.com

The Competitive Edge -- The Trillion-Dollar Club and the Health of U.S. Manufacturing

2009-04-23T22:07:00.000+02:00

The Competitive Edge -- The Trillion-Dollar Club and the Health of U.S. Manufacturing

The United States must take steps now to participate in the high-growth promise of these emerging economies.

Wednesday, April 15, 2009
By Thomas J. Duesterberg

The Peterson Institute for International Economics (IIE) has taken to calling six large emerging economies the "Trillion-Dollar Club," as all have, at least before the current recession, passed this threshold in national output. This group of nations -- to which I would add the Association of Southeast Asian Nations, or ASEAN -- is crucial to near-term global economic recovery, to the long-term health of the global economy, and especially to U.S. manufacturing.

Together, ASEAN plus the six -- China, Russia, India, Brazil, Mexico, and South Korea -- account for about 20% of world GDP. Emerging markets grew at an 8.3% rate in 2007, compared with 2.7% for the advanced economies. In contrast to the financial crisis of 1997 when many emerging markets were at the epicenter of the crisis, most of these countries have shown relative stability in the current recession -- in large part due to the lessons they learned in 1997.

Indeed, they could well help lead the world out of the 2008-2009 downturn. China especially has a robust stimulus plan in effect which IIE's Nick Lardy estimates will lead to a bottom in that country's slowdown this spring and a return to as much as 9% growth in the second half of 2009. India, Korea, and Brazil all have withstood the worst of the downturn and, together with ASEAN, could recover quickly if the massive stimulus in the United States and China manages to turn these economies around.

As we look beyond the debilitating recession still plaguing us, the six plus ASEAN will be a prime pillar of growth. The collective GDP of this somewhat artificial grouping is large enough to be an "engine of growth," has a higher potential growth rate than the debt-ridden and consumption-saturated industrial countries, and so is likely to be the primary focus of increased demand for manufactured goods once global recovery begins.

To take advantage of the growth opportunities, however, U.S. manufacturers will have to regain lost market shares both domestically and, especially, in Asia. About 30% of U.S. exports went to this grouping in 2008, but only 18% if free-trade partner Mexico is excluded.

Moreover, we have lost market share in the vital Asian region, primarily to China. Between 2000 and 2008, China increased its exports to other Asian destinations by 400%, while we saw an increase of only 19%. China now has more than twice the U.S. market share in Asia, the fastest-growing and most populous region in the world.

Several steps are needed to promote U.S. competitiveness in these markets. China, Korea, Japan and ASEAN have been aggressive in recent years in building a web of free-trade agreements (FTAs) spanning most of Asia. India is now negotiating entry into this network. At a minimum, the United States will have to find a way to join this free-trade network, or risk losing even more market share. A vital first step is ratifying the U.S-Korea FTA. Our trade with FTA partners is largely in balance.

Additionally, we will have to find a global path to rebalance the undervalued Asian currencies, an action which also will contribute to global economic stability in the coming decades and, hopefully, accelerate consumption growth in Asia.

Finally, in terms of domestic policy, the United States cannot keep undermining the competitiveness of manufacturers by raising taxes, imposing ever tighter controls on the energy economy, and stifling innovation through tighter regulation of private firms.

Dr. Duesterberg is president and CEO of the Manufacturers Alliance/MAPI, an executive education and business research organization in Arlington, Va.

Global supply chains and the CIO

2009-04-23T22:05:00.000+02:00

Global supply chains and the CIO

InformationWeek has a very interesting and timely article entitled “Global CIO: Global supply chains and the CIO.” This discussion goes hand in hand with what I’ve been thinking (and blogging) about recently. (See my post last month “The right supply chain management priorities during the downturn position you for future success“) Our natural inclination during a recession is to batten down the hatches and wait out the storm. Stop all spending, suspend projects, layoff anybody not critical to the functioning of the business. The question to ask is “How does this strategy position my company after the recession ends?” Don’t get me wrong. Companies should always be looking at trimming projects, processes and people that don’t contribute value to the organization. Cut out the fat so to speak. However, when these cuts start cutting into meat and bone, you’ve left your company weaker rather than stronger.

In fact, recessions are exactly the time to make careful, strategic investments in your business. In your article, you’ve identified some great areas on which to focus, both for cost cutting and for strategic investment. Some additional areas of investment are as follows;

Implement lean manufacturing: Take apart your processes, examine each piece, identify which steps add value to the customer and which steps are waste. Then you put the process back together, keeping the parts that add value and discarding the steps that don’t. Once you have your internal processes in order, reach out to suppliers and customers to help them improve. Then you continuously improve. Sounds simple but it’s devilishly difficult to do – especially when you are struggling to meet demands. But then again, in a down market meeting demands isn’t such a big issue…
Implement Sales and Operations Planning (S&OP): S&OP provides two key benefits; visibility to demand and supply projections into the mid to long term (typically 12- 18 months) and the ability to bring the various departments together (Sales, Marketing, Supply Chain Management, Finance) to define a plan that all understand and agree to.
Implement a Supply Chain Risk Management process: Companies that have the tools and processes to predict and mitigate risk as well as respond quickly when the unexpected happens will be able to survive a supply chain event relatively unscathed.
Implement tools and processes to help you respond to change: Successful companies have tools and processes that allow them to very quickly react to change and re-align on a corrected course. To successfully respond to changes you need tools that deliver supply chain visibility, provide the ability to simulate changes and responses, enable collaboration with your team inside and outside the company and provide alerting mechanisms to let you know when something has happened.

The interesting thing about these investments is that while they position your company for growth when the recession ends, they also are excellent tools to help you manage your business during the recession. And that can’t hurt.

John Westerveld is a Product Manager for Kinaxis, provider of the on-demand RapidResponse service that empowers multi-enterprise manufacturers with the collaborative and integrated demand-supply planning, monitoring, and response capabilities.

PepsiCo, GlaxoSmithKline

2009-04-23T21:54:00.000+02:00

PepsiCo shook up the fizzy-drinks industry by offering $6 billion in cash and shares to take full ownership of its two biggest bottlers. Tighter control of its distribution system will help PepsiCo to ship products to big retailers more efficiently.

GlaxoSmithKline (GSK), a drugs giant, agreed on a $3.6 billion deal to buy Stiefel Laboratories, a dermatology firm. The purchase is part of a strategy to reduce GSK’s reliance on blockbuster drugs by focusing more on consumer health-care products.

China cars: Double standards

2009-04-21T20:59:00.000+02:00

FROM THE ECONOMIST INTELLIGENCE UNIT
April 16th 2009
China is the world's second largest car producer, yet its cars are supposedly still not safe enough for western markets. What is going on?

China has overtaken the US as the world’s largest new vehicle market, and is already the world’s second-largest producer of cars. Yet this size appears to mean nothing abroad, with Chinese car-makers not even registering in the world’s dominant three markets of North America, western Europe and Japan. Now, one Chinese car-maker’s renewed – and once again failed – attempts to pass European safety standards are leading to accusations of foul play from certain motoring groups.

A total of 1.1m new vehicles were sold in China in March 2009, a monthly record and far outnumbering the 857,735 sold in the depressed US market. This is now the third month running that China has outsold the US, making it the world’s largest new vehicle market, while it is second only to the US in terms of production. Yet the profile of Chinese car-makers abroad is still spectacularly low, with Chinese brands woefully under-represented in all corners of the world apart from the handful that are very slowly starting to appear in Russia, the Ukraine and a few other Eastern European and South American markets.

Of course, the Chinese market itself is not dominated by domestic players. Germany’s Volkswagen Group is by far the largest seller of cars in China, followed by various Japanese, Korean and US car-making groups, including General Motors, Toyota, Honda, Nissan and Hyundai. If Chinese consumers themselves prefer to buy established, foreign brands with their attractive designs and more sophisticated technologies then what hope do the Chinese manufacturers have in penetrating the sophisticated home markets of their older and more established rivals?

The marriage of Chinese carmakers to Western counterparts was supposed to address some of these issues, by allowing local car-makers to tap into the technological expertise of their more experienced partners. Germany's Volkswagen hooked up with First Automotive Works (FAW) and Shanghai Auto (SAIC), which is also a joint venture partner of GM of the US. Japan's Honda and PSA of France have both joined forces with Dongfeng, while Germany's BMW is in bed with Brilliance Auto. There are countless other Chinese/western car and commercial vehicle making alliances. Yet in reality, the Western brands have benefited more from these alliances in terms of their access to the vast Chinese market than has happened the other way round.

Playing Fair?

Branding and perception issues aside, one of the biggest challenges that Chinese car-makers have is matching the stringent safety standards insisted upon by US, European and Japanese authorities. So far, they have failed miserably in this area. This was exemplified best by the experience of Chinese car-maker Brilliance Auto, which in 2007 was forced to put its European export plans on hold after one of its cars allegedly recorded the worst crash test results in the history of one European motoring association.

The treatment that Brilliance has received ADAC – which is Germany's and Europe’s largest consumer motoring body - has been questioned, however. The video of the disastrous crash test, which was supposedly carried out under Euro-NCAP conditions found its way onto YouTube, thereby ensuring global damage of the Brilliance brand and obliteration of the name in Europe. A subsequent test carried out in Spain which gave the same Brilliance BS6 car three Euro NCAP stars, as opposed to the one star it received in Germany, attracted nowhere near as much attention.

More recently, ADAC subjected another Brilliance car – the new BS4 – to more Euro NCAP style testing. Yet again, the car failed miserably, gaining no stars whatsoever this time, despite the fact that the BS4’s safety credentials were significantly improved on those of the BS6 which was originally tested.

As acknowledged by ADAC, however, the conditions of the new test were somewhat unfair. Although the BS4 was introduced in October 2008 when the old Euro NCAP rules were in place, the car was tested under the brand new, and considerably more stringent Euro NCAP rules. Under the old rating system, the car would have been awarded three stars, the same as a number of other European best-sellers including several Audi, Fiat and VW models.

ADAC’s treatment of Brilliance has led some to criticise it of foul play, even including one leading German business magazine. A lack of electronic stability control (ESC – or sometimes referred to as ESP) on the car, which seemed to automatically disqualify the BS4 from gaining any stars in ADAC’s eyes was judged as particularly unfair. The new Euro NCAP rules actually state that a car without ESP cannot be awarded the full five stars, no matter how well it performs on other tests but not that it should fail outright. More to the point, ESP is not even mandatory yet in the EU, although it is likely to made so in the future.

The fact that the tests were not carried out by Euro NCAP itself raises more questions. Indeed, Brilliance does not feature anywhere on Euro NCAP’s website, leading to suspicions about the accuracy of ADAC’s interpretation of Euro NCAP style testing. Perhaps most ironic of all is that Euro NCAP is not even an official standard, and there is no legal need for a car to pass its tests before it can be sold in Europe.

It is clear that the road into western Europe, not to mention the other difficult-to-crack markets of the US and Japan, is going to be a long and arduous one for Chinese car-makers, and indeed for manufacturers from other emerging markets. National motoring groups such as ADAC with their own agenda and keen to protect the interests of their domestic industries will not be making it any easier. As always, politics are at play here just as much as genuine safety concerns.

On the upside, the initial positive press that other non-established brands and cars have so far gained – notably India’s Tata Nano – suggests that new brands from emerging markets do have a chance of success if the process is managed well. Brilliance itself is not giving up, with the head of its European importer – himself a former VW board member - recently talking up the brand’s imminent European success, not least as it prepares a whole range of models to compete in Europe. With the recession and credit crunch tightening up purse strings in all markets, this could pose an opportunity for lower-cost emerging market brands to strike. But before they do so, they must be armed with a full set of ammunition, ready to fight off their adversaries

Tidal-Power System Hits Record Output

2009-04-17T10:42:00.001+02:00

http://link.brightcove.com/services/player/bcpid1827871101?bctid=6550992001

Tidal-Power System Hits Record Output

Marine Current Turbines' SeaGen system quadruples the world tidal-turbine power record.

Tuesday, January 06, 2009

By Peter Fairley

Tidal-power developments by British firms show this renewable power technology achieving impressive scale and continued design innovation. Bristol-based Marine Current Turbines (MCT) revealed last month that its SeaGen dual-turbine system achieved full power operation of 1.2 megawatts. MCT's power peak is four times the global record for a tidal-stream system set by the company in 2004, according to U.K.-based renewables journal REFocus, and 30 times more than the output from the tidal turbines pumping electricity in New York's East River.

An artist's impression of MCT's SeaGen.

Meanwhile, the U.K. Guardian reported yesterday that more large-scale demonstrations are on the way as Cardiff-based Tidal Energy prepares to test a one-megawatt version of its triple-rotor design off the coast of Wales by next year.

Hitting full power clears a major hurdle for MCT. As Technology Review reported last July, the company suffered a setback early on when the powerful tidal streams of Northern Ireland's Strangford Lough damaged one of its blades shortly after installation. In an odd way, it's an affirmation of MCT's design, which enables the dual rotors to be lifted clear up out of the water for easy maintenance and repair.

While at a considerably earlier phase of development, MCT rival Tidal Energy's triple-rotor concept provides an equally innovative means of ready repair. Tidal Energy's rotors sit at the corners of a three-legged platform that can be deposited on the seabed and held in place by the system's 250-ton heft. That should not only ease recovery of the system for maintenance, but also simplify installation by eliminating the need for a fixed foundation in the seabed.

To see these concepts in action, check out the MCT animation below and Tidal Energy's animation.

Robots Get Down to Business

2009-04-17T10:41:00.001+02:00

Robots Get Down to Business

At a conference in Boston, companies demonstrate robots for education, bomb disposal, agriculture, and more.

Friday, April 17, 2009

By Kristina Grifantini

Yesterday, at the RoboBusiness conference in Boston, companies demonstrated a number of robots designed for use in offices, the military, even down on the farm. While plenty of very cool, cutting-edge research is going on in robotics labs across the world, RoboBusiness focuses on those companies looking to turn that research into a profit. Here are some of the most promising robots on show at the event.

Segway's Firefighter: Aside from the zippy personal transporter that most people have seen out and about, Segway has an extensive line of robots based on a versatile and robust wheeled platform. At the conference, Segway premiered a rugged, new, wheeled firefighting robot. It has a powerful, rotating spray nozzle, which could also be used for crowd control, according to Will Pong, director of robotics at Segway. The robotic firefighter can move at 18 miles per hour for 10-12 miles without stopping, and can carry up to 400 lbs. The finished product is currently being tested and is already available for a few customers.

CCS Robotics' Receptionist: A secretary and tour guide by day, security guard by night: that's the role of a four-foot tall wheeled robot called Guiabot, designed by CCS Robotics and Mobile Robots. With lasers and sonar sensors in its base, CCS can autonomously navigate a random or pre-decided path, successfully maneuvering around people and objects in its way. First introduced last year as a guest-greeting robotic butler, Guiabot is now in beta testing and is targeted toward offices and hospitals. A visitor can use the touch screen on Guiabot's front to request the robot to show her around. A high definition camera on its head also lets remote users interact with people via the robot. CCS Robotics envisions a human security guard using several Guiabots to efficiently patrol a large area.

Harvest Automation's Gardener: Founded by former iRobot employees and announced last summer, Harvest Automation is developing small, wheeled robots that can pick up and move potted plants, filling a surprisingly big need in the nursery and greenhouse industries. When cultivating plants, suppliers must hire workers to move and space out pots in large fields. These small robots use local sensing to navigate, identify pots, and measure and maintain the correct distance between them. By automating this task, Harvest Automation aims to save suppliers millions a year.

RE²'s Handyman: A company based out of Pittsburg, called Robotics Engineering Excellence (RE²), is retrofitting bomb-disposal robots with different tools on their arms, for less dangerous industrial tasks. The company is currently designing a tool belt that a robot will carry around so that it can automatically attach different tools to the end of its own arm, without needing a human's help. So far they have prototypes of a gripper, knife, scooper and a rotating gripper, and are planning to make drill, wire cutter, and more, according to Patrick Rowe, vice president of research and development of the company.

Tags: security, robots, robotics, robotic hand, rovers, segway

Hijacking Mobile-Phone Data

2009-04-17T10:39:00.000+02:00

Friday, April 17, 2009

Hijacking Mobile-Phone Data

Researchers claim to be able to hijack cell-phone data connections.

By Erica Naone

In a presentation today at Black Hat Europe, a computer-security conference in Amsterdam, a group of researchers claimed to have found a way to hijack the data sent to and from mobile phones. The researchers say that the attack might be used to glean passwords or to inject malicious software onto a device.

Mobile phones are becoming ever more useful for transmitting data in addition to making voice calls, and they're increasingly being used for sensitive activities such as online banking, as well as for searching the Internet and downloading mobile games.

The new attack relies on a protocol that allows mobile operators to give a device the proper settings for sending data via text message, according to Roberto Gassira, Cristofaro Mune, and Roberto Piccirillo, security researchers for Mobile Security Lab, a consulting firm based in Italy. By faking this type of text message, according to the protocol an attacker can create his own settings for the victim's device. This would allow him to, for example, reroute data sent from the phone via a server that he controls. The researchers say that the technique should work on any handset that supports the protocol, as long as the attacker knows which network the victim belongs to and the network does not block this kind of message.

Some trickery is required to make the attack work, however. Ordinarily, to transfer settings to a device remotely, a mobile operator will first send a text message containing a PIN code. The operator will then send the message to reconfigure the phone. In order to install the new settings, the user must first enter the PIN.

So an attacker would need to convince a victim to enter a PIN and accept the malicious settings sent to the phone. But Gassira, Mune and Piccirillo believe that this shouldn't be too difficult. The attacker could send text messages from a name such as "service provider" or "message configuration," suggesting that changes to the device's settings are needed due to a network error. For many handsets, they say, the results of the configuration aren't shown to the user, giving the victim little chance to notice that anything is amiss.

Once a phone has been configured to route data through the attacker's server, this could reveal the user's login credentials or cookies. The researchers say that it may also be possible for an attacker to add unwanted content, such as unsolicited advertisements, to the Web pages that a user views on her phone. By combining this technique with other vulnerabilities, they say that an attacker might even be able to use the mobile device to target resources normally protected within the carrier's network.

David Wagner, an associate professor of computer science at the University of California, Berkeley, who has studied wireless security, cautions that more work needs to be done to identify what conditions are required to exploit the vulnerability and how widespread the problem may be. "I did see in the paper a number of caveats that raised questions in my mind about the degree to which this vulnerability would affect consumers, even if the vulnerability can be exploited," Wagner says. In particular, he notes, it is unclear whether some cell-phone providers may block fake messages or if others would stop an attacker from redirecting Internet traffic. Also, many users may not be fooled by the attack. "If any of these conditions are not met, the attack might be blocked," Wagner says.

The researchers concede that mobile operators could prevent the attack by implementing proper security measures. For example, operators could watch for text messages that show telltale signs of a configuration protocol and check that they originate from an authorized source. Other measures, such as showing the user how her device has been adjusted or monitoring Internet traffic that's being directed out of the carrier's network, might also help.

Mune says that the attack "could be feasible on quite a large number of networks and handsets," and that his team has successfully tested it with a variety of common handsets on large networks in Europe. Although the researchers aren't working with any mobile operators to resolve the vulnerability, they say that they have given notice to relevant parties and are open to helping with the issue if needed.

Kaiser‘s Tengelmann nutzt in allen Filialen Mobilcomputer

2009-04-16T20:15:00.001+02:00

Kaiser‘s Tengelmann nutzt in allen Filialen Mobilcomputer

Herford. Die Supermarktkette Kaiser’s Tengelmann hat sich für die „PL3000“ Mobilcomputer vom Auto-ID-Anbieter Nordic ID entschieden. Kaiser’s Tengelmann war anlässlich der Einführung eines neuen Warenwirtschaftssystems, das durch artikelgenaue Echtzeit-Bestandsführung für transparente Geschäftsprozesse sorgt, auf der Suche nach onlinefähigen Mobilcomputern.

„Unser Ziel ist es, Geschäftsprozesse wie zum Beispiel Disposition, Wareneingang, Warenausgang oder Inventuren papierlos und in Echtzeit durchzuführen – und das unmittelbar an und mit der Ware“, erklärt Lutz Endrikat, Bereichsleiter Organisation bei Kaiser’s Tengelmann. Eine hohe Verfügbarkeit und ein stabiles W-Lan-Roaming-Verhalten des Handhelds seien darum wichtige Kriterien bei der Entscheidung für die Geräte gewesen. „An dem PL3000 haben uns neben dem ausgezeichneten W-Lan-Roaming vor allem die Möglichkeiten zur Fernwartung und Softwareverteilung und das Standard-Betriebssystem Windows CE 6.0 überzeugt“, begründet Endrikat. Testnutzer hätten sich positiv über die Einhandbedienung, Nutzerfreundlichkeit und das große Display der Mobilcomputer PL3000 geäußert.

660 Mobilcomputer von Nordic ID sind im November 2008 zunächst in 300 Supermärkten von Kaiser’s Tengelmann eingeführt worden, in den restlichen 400 Filialen werden in den nächsten Monaten weitere 840 PL3000 ausgerollt. Zurzeit arbeiten 1500 Mitarbeiter mit den MDE-Geräten (mobile Datenerfassung). In der Endausbaustufe werden es rund 5000 sein.

Genutzt werden die Handhelds im gesamten Filialumfeld – von der Verkaufsfläche über das Lager bis hin zum Tiefkühlhaus. Auf den MDE-Geräten ist eine Standard-Webapplikation installiert, über die die Mitarbeiter per W-Lan und VPN mit dem Warenwirtschaftssystem im zentralen Rechenzentrum von Kaiser’s Tengelmann kommunizieren. Die Geräte sind für die Mitarbeiter die multifunktionale Schnittstelle zum Warenwirtschaftssystem – die Mobilcomputer ermöglichen es ihnen, mehr auf der Verkaufsfläche zu sein, dort per Scanprozess und über die Webapplikation zu disponieren, Warenein- und -ausgänge abzuwickeln, permanente Inventur durchzuführen oder Bestandsumbuchungen vorzunehmen. Durch die Handhelds sind die Mitarbeiter jederzeit über den aktuellen Filialbestand informiert. (sv)

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