By Daniel MacGregor is Co-founder of Nexxiot AG.
The most recent big news in freight transportation is President Joe Biden’s Executive Order to boost competition in rail and maritime shipping, possibly setting the industry on course for seismic change. U.S. transportation regulatory agencies have been asked to crack down on anti-competitive conduct and opaque fee structures in both rail and maritime, to drive down consumer costs and wipe out corruption. Biden asked the Federal Maritime Commission to “take all possible steps to protect American exporters from the high costs imposed by the ocean carriers and crack down on unjust and unreasonable fees, which include detention and demurrage charges.” Some U.S. rail infrastructure is lacking. Many ports are at capacity. There is a shortage of truck drivers. The port hinterland is congested, and global shipping rates are soaring. Against this backdrop, the Biden Administration has demanded a comprehensive crackdown on excessive charges, intending to ramp up regulation and transparency. In the meantime, shippers and end-users are finding that uncertainty, risk and speculation are central to their strategies for global supply chain resilience. The White House stated that the dominance of a few freight carriers costs American importers and exporters dearly, and that operators have extracted exorbitant rates and charged excessive demurrage and “late” fees on shipments that aren’t picked up from terminals on time. The EO could mean maritime regulators will crack down on such practices to protect American shippers and consumers. In the transportation supply chain, it’s not so much the physical assets that are lacking, but the antiquated, siloed IT systems and processes. Thankfully, the supply chain digital revolution has been growing in presence for several years, and now it’s poised to deliver. The rise of digital freight forwarders temporarily filled the information gap, but pure data platform aggregators only analyze non-live, incomplete historical data to create rudimentary planning tools and business intelligence resources. Asset-light software platforms may be able to support some decision-making, but they lack up-to-the minute, high-resolution data accrued from active IoT sensors. In February 2021, I pointed out that in U.S. rail “current infrastructure has severe limitations, and old business practices cannot hope to deliver what customers now demand in the digital age.” I went on to say that “anyone who cares about the future of the railroads knows something must be done fast.” The article highlighted the mandate of the RailPulse program, which brings together such major freight fleet owners as Norfolk Southern, GATX Corporation, Genesee & Wyoming, TrinityRail and Watco. These are big players who will be dramatically affected by the shockwaves of regulations that may follow Biden’s Executive Order. The EO could also encourage rail regulators to take up a long-standing proposed rule on so-called reciprocal or competitive switching, the practice in which shippers served by a single railroad can request bids from a nearby competing railroad, if service is available. When developing cutting-edge IoT and AI engines for an industry like rail, there are many challenges to overcome. Sensors, device hardware and business models must be structured with clear value objectives from the start. It is not just a case of selecting hardware and hiring a team of data scientists. Developing and testing takes time. Managing version control when the whole world is switching to IoT-based, data-driven processes is highly complex. Nexxiot CEO Stefan Kalmund believes that “IoT logistics will be won and lost on the ability to disrupt business models across multiple processes throughout a global value network, at pace and in scalable ways. This all depends upon the ability to collect and process real-time data direct from assets and cargo itself. This means what was once just an inert object suddenly comes to life as active participants in supply chain processes.” Biden’s EO is part of a wider raft of measures meant to foster competition throughout the economy. This is a key part of the Administration’s strategic agenda and can be viewed as an acceleration event on the enablement of digital rail. If regulators demand transparency, deploying the latest in monitoring and automation technology will be no longer be viewed as optional.
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Published from the Denver Chamber of Commerce. Positions are not from the NoCO Chapter of ASCM.
A bill we opposed and have been updating you on most of this session, Senate Bill 176, “Protecting Opportunities and Workers’ Rights Act,” was postponed indefinitely in the House Judiciary Committee on Monday. While we agree that no employee should endure discrimination or harassment, we had concerns about a number of provisions in the bill. This legislation would have completely overhauled how workplace harassment claims are handled in our state, making numerous changes including:
We worked closely with bill sponsors Sen. Faith Winter (D-Thornton), Sen. Brittany Pettersen (D-Lakewood), Rep. Susan Lontine (D-Denver) and Rep. Matt Gray (D-Broomfield) on amendments to ensure the legislation would not have unintentionally created a backdoor for increased litigation. Any changes to the severe and pervasive standard would establish a new legal precedent in court. Paired with a wider definition of employee, this bill would have created an unpredictable legal environment. Ultimately, the bill was killed in committee in a 9-2 vote, with multiple Democratic members joining all four Republicans on the committee to vote against it due to concerns about the legal policies and the number of issues the bill was trying to address at one time. The Association for Supply Chain Management Northern Colorado has adopted the new ASCM branding standards while changing our name from APICS NoCo to ASCM NoCo.
The new image reflects an updated focus on supply chain management and importance of uniting all channel partners, throughout the world, under one common logo, set of branding standards and image. The Association for Supply Chain Management (ASCM) is the global leader in supply chain organizational transformation, innovation and leadership. As the largest non-profit association for supply chain, ASCM is an unbiased partner, connecting companies around the world to the newest thought leadership on all aspects of supply chain. April Stay Connected Event... Hirsh Precision Products Tour & Happy Hour Our Stay Connected events happen once a month and is a chance for supply chain professionals to visit other facilities and learn from their methods. We get to meet leadership in these companies and then end with a networking happy hour. Join us for the education as well as the fun! Hirsh Precision designs, manufactures, and ensures the quality of precision-machined parts and assemblies. Our cutting edge equipment, technology, and processes attract the attention of multiple industries. We had another fantastic tour on the APICS NoCo circuit. Hirsh Precision Products hosted our group in Boulder at their state-of-the-art facilities. Our tour guides were Steve Hirsh (Founder/Director of Engineering), Mike Hirsh (President/CEO), Peter Doyle (COO) and Mark Cartwright (Production Scheduling & Customer Service Manager). All four were on hand to give us an introduction to the company before leading us through the production floor. Hirsh's work mix is two thirds medical, dealing predominantly with metal and plastic media. They currently run 2 shifts. Their eventual goal is to run 24 hours. The shop is divided into half milling, half lathing functions. In 21 machining centers, they average around 70 setups per week. The sweet spot in Hirsh Precision's business model is 25-500 items per order: larger than prototype quantities, and smaller than mass production. Our tour was divided into three groups, giving plenty of opportunity to ask questions during the busy afternoon shift. Team Hirsh discussed how increasing their automation doessn't reduce their number of headcount, just changes the type of jobs and work. Like many front range manufacturers, finding skilled labor is one of their biggest constraints. Their newest machine, the Fastems 8760, showed off a rack of 30 pallets and the ability to self-schedule. After 1.5 years in operation at Hirsh, the machine is at 70% capacity. They hope to push it closer to operating a full 8760 hours every year... hence, the name 8760 Fastems. The tour visited their Quality Assurance room, which featured a controlled climate and two CMMs (Coordinate Measuring Machines). Hirsh performs two inspections for each batch: First Article and in process, the latter of which triggers at a different frequency interval based on the part. Our group also gained a glimpse into Hirsh's internal scorecards and paperless shop floor management. Their PSA, or Plan/Schedule Adherence, takes a snapshot of each production line two hours into a shift to make sure everything is on track. This way adjustments may be made quickly and are easily caught. The final PSA formats were designed by the operators themselves to ensure the system was smart and agile. Maintenance for all of Hirsh's machines is also treated as a production item so necessary maintenance appears in the schedule and isn't overlooked. All of this factors into the ERP and proprietary shop floor software that ensures Hirsh can produce their high-quality product in a timely fashion. If you missed our tour of Hirsh this time around, be sure to check out their webpage at http://hirshprecisionproductsinc.com/. This was a packed tour with impressive machinery, expert guides, and excellent learning all around. Thank you to the team at Hirsh Precision Products for hosting an amazing tour! Questions We Asked Hirsh1. Does your facility employ Lean techniques and how hard was that for your company to implement?
Hirsh Precision is committed to continuous improvement and has implemented a variety of lean techniques. Our business consists of high mix, low volume production, so our production processes are based more around processes than dedicated product cells. Our initiatives include optimizing quality assurance inspections, completing non-value added activities in parallel with production, organizing the work environment based on 6S principles, and conducting regular kaizen events to identify and eliminate waste. 2. What is the difference between yours and the production systems run by your competitors? Our motto, “Quality Work Delivered on Time” guides how we invest in systems and business processes. We invest in the latest technology and often customize our machine tool investments to ensure they fit our customers’ needs. We have created proprietary software to manage our production processes, and we have a culture that encourages innovation, collaboration, and the pursuit of excellence. 3. How has your Lean management system bridged the gap between your organization and your customers? Our customers appreciate the price reductions we can offer as a result of our lean initiatives. In addition, our lean initiatives allow us to maintain consistent lead times and carry virtually no inventory. The strong relationships we have with our key customers allow us to share information that helps us better understand their needs and how we can become a supply chain partner. 4. Does your company have more of a focus on productivity or quality? Quality! 5. What value has your company leadership seen as a result of your lean management techniques? In the past several years, our investments in new technology and lean initiatives have allowed our team to learn new skills. A focus on efficiency makes our workplace more creative, fun, and engaging. In addition, we’ve been able to effectively push back on customer requests to stock inventory for which demand is uncertain. 6. What message would you want to give someone who might be considering lean management for the first time in their organization?
March Stay Connected Event... Vergent Products Tour & Happy Hour THE LEADING PROVIDER OF HIGH-DISCIPLINE PRODUCT DESIGN, MANUFACTURING AND SERVICE Vergent Products delivered an excellent tour with several highlights! The company started in 1996 in Loveland with three employees, one of whom was Diana Precht, our tour leader and Chief Communications Officer. What started as a design firm is now a multi-dimensional supply chain company with 140 employees. Vergent Products was founded on two core principles: exceptional client experience and the engagement of a diverse team of experts focused on continually elevating their clients’ success. QUICK FACTS
Our group started by donning smocks to prevent electrostatic discharge along the tour. We then enjoyed cookies from the host while hearing a pre-tour overview from our guides. Our first tour stop was a circuit board assembly station for Rachio water sprinkler systems. Multiple generations of the board were displayed, along with product improvements such as 14 screws in the 1st generation board, 0 in the second, and 2 in the current generation. Vergent's in-house designed work order system is paperless to prevent static discharge, involves visual cues to ensure people have the proper training for each step of assembly, and includes RFID scanning for all consumables and expirable inputs. This ensures that any testing issues are traced back to the exact units of input. One of the simplest yet most effective cues we learned about was pass/fail tags in two different sizes: this prevents shipment of units with any concerns because the visual cue is clearly interpreted. Speaking of which, nearly 100% of Vergent's circuit boards undergo an optical test to verify product functionality. At one station, we watched workers x-ray circuit board components to ensure solder points. Three quality control checkpoints ensure an extremely high rate of success in product testing. Our guides described upcoming improvements, including flow racking and assembly station reconfiguration to reduce time and movement. The current time for a Rachio unit assembly is 4.62 minutes of labor per unit and 3.5 minutes is the target goal once changes are in place. Toward the end, we passed the quality lab, an environmental test chamber, inventory storage (including vendor managed inventory) and talked about the various supply chain solutions Vergent has instituted over the years. Today, Vergent functions as an Amazon fulfillment center, handles order fulfillment for several other big box customers, houses a warranty and service center, and continues to offer design services to customers. They don't envision slowing down any time soon. Fifty percent of their business is PCBA assembly, and they continue to offer test engineering and strategies, as well as product development. Be sure to make it to the next tour if you missed this one! After our tour, we continue to the Sports Station for our networking happy hour. It was a fantastic event! With APICS at the center of BASF’s supply chain learning solutions program, employees become a sustainable competitive advantage worldwide. At the forefront of BASF’s strategy to expand globally, the company focused on improved performance and increased integration of supply chain planning and execution processes. Creating a global work standard from which supply chain employees would operate was essential. Through the key elements that would strive this strategy – acquisitions, investments in process improvements and advanced software, in addition to an SAP implementation – the APICS body of knowledge was central. Based on proven best practices and employee training and certification programs, BASF has realized winning results. Interested in APICS education? See our information on classes...
January Stay Connected Event... MKS Instruments Tour & Happy Hour Brewery Lunch at Boulder BeerOur January tour featured a smaller, more intimate tour at MKS Instruments in Boulder. Lunch and conversation were enjoyed at Boulder Beer before we headed to the tour site down the road. Several attendees expressed their joy at being away from the office for an afternoon learning experience! Shane Coffey gave our group a brief history of the company and their beginnings before leading us through the process flow of two buildings on the MKS campus. Shane is a Manufacturing Engineer for the Integrated Process Solutions division at MKS, and served on the LEAN panel hosted by APICS NoCo in October. The group saw a machining floor, welding shop, wash stations, bead blast room, modification shop, water jet cutter, huge lathes, and much more. Many of the shops/stations visited were actively running. MKS didn't alert the floor that a tour would be coming through, as they are always ready to be observed. Shane answered questions about scheduling against capacity, volume, demand planning, QA and testing, and more as well as technical questions about the various areas the tour visited. He explained the flow of product and material, product preparation (including different methods of cleaning), and technological improvements (such as a 5-axis machining versus welding, or a robotic welder versus conventional welding).
Of note is the fact that all operators at MKS are trained in LEAN concepts upon hiring. Some examples of impact are a 25% increase in throughput and 25% reduction of WIP in the past 12 months. Shane explained that their culture was key to making the changes; using 6S as a vehicle, MKS leadership empowered operators to implement LEAN techniques and make improvements. The tour group saw how a simple kaizen-driven modification greatly reduced setup time in the machine shop as a tangible example of the many improvements MKS has instituted in recent years. A great deal was packed into our hour at MKS Instruments. Be sure to catch the next one if you missed this opportunity! Our tour guide, Shane Coffey, gave some insight into their process... 1. Does your facility employ Lean techniques and how hard was that for your company to implement? Absolutely! As for how hard it was to implement… I'll let you know when we're finished. Joking aside, it certainly is a journey, and we see so many opportunities to improve that some days it feels like we've only scratched the surface. To get to where we are today, though, it honestly hasn't been a major struggle. We're very fortunate to have employees who chose to embrace these ideas, and between that and support from leadership, we're able to move forward day by day. It takes discipline, for sure, but in my experience if there's a "kicking and screaming" feel to the transformation, that indicates root causes that need to be addressed - that might be very normal in industry as a whole, but not in the 10% of companies (or less) that are going to achieve Lean success. 2. What is the difference between yours and the production systems run by your competitors? That can be summed up in one word: CULTURE. We keep a laser focus on creating and sustaining a culture that encourages the best from all of our team members. We want to hear improvement ideas from our process experts on a constant basis, and if some of those ideas are daunting and radical, that's cause for celebration. Some of the things we try won't work out, and that's O.K.; if your improvements are successful 100% of the time, you probably aren't daring enough. It's all about a culture of safety that allows us to support one another, occasionally fail forward, and ultimately succeed. 3. How has your Lean management system bridged the gap between your organization and your customers? At this stage of our journey, our 6S efforts are probably the biggest advantage to our customer relationships. A few years ago, we could only dream of conducting a customer tour with hours (and hours) of clean-up. Now, we consider ourselves tour-ready at all times. That's not to say we're perfect, but we're proud of the current state and eager to show it off. And the response we've received has validated that - our customers often comment that we're among the cleanest machine shops they've ever seen, and that sets a tone for the relationship, letting them know they're working with professionals who take pride in their workplace and their work. 4. Does your company have more of a focus on productivity or quality? Quality. Of course we need to be productive, but our strongest value proposition is in providing custom solutions that our customers can't get anywhere else. From design to shipment, providing a solution that's reliable and correct out of the box is our mission. 5. What value has your company leadership seen as a result of your lean management techniques? We've definitely seen improvements in throughput and WIP levels, no question, but I think most would agree that our greatest value has been realized in our relationships with one another, our fellow business units, and our customers. We've been at this for over two years, but we're humble enough to recognize that this is just the beginning. We're excited about the "bottom-line" improvements, but we know that when we invest in our employees, empowering them to improve, in the long run there will be no limit to our potential. The ability of our team members to come to work in a place that values them and offers them ownership of their efforts, to get to see people smile or hear them say, "This is a good place to work"…you can't put a price on that, and ultimately it shows up on the balance-sheet, too. It's win-win-win. 6. What message would you want to give someone who might be considering lean management for the first time in their organization? What are you waiting for!? There's a lot to learn, and there are sure to be challenges, but you have to start. If you have support from top-level leadership, see about investing in some training at different levels. If you don't, learn what you can on your own and start applying it in small ways that will win hearts and minds. Lean is all about a mindset, and when people start to rally around that, you'll be amazed at what you can accomplish! Join us at our next Stay Connected event! See our upcoming calendar in Networking Events... APICS NoCo's Annual Holiday Party The Gondolier Italian Restaurant in Boulder Co-Hosted with ISM Denver We had a fantastic time at our annual year-end celebration! We honored our members with awards and welcomed our guests with door prizes and giveaways. We were joined by several members of the Institute of Supply Management (ISM), which brought a wonderful dynamic to the networking and conversations throughout the evening. Four key people/organizations were also recognized for their contributions over the past year: 1. Member of the Year: Patrick Jensen 2. Volunteer of the Year: Fiona Hill 3. Partner Company of the Year: Medtronic, received by Chris Ringwald 4. Sponsor of the Year: SWK Technologies, received by Kelly Meyer We couldn't be successful without our members and attendees, and our partner organizations. We greatly appreciate everyone who has attended, hosted, and sponsored our events. The 2nd place team from the recent Fresh Connection supply chain case competition shared briefly of their experiences and encouraged attendees to consider both participation in the APICS certifications. In particular, we'd like to thank SWK Technologies for their sponsorship of the evening, as it enabled us to have a very memorable party. We are looking forward to a phenomenal 2018!
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