Severe weather events have hit supply chains hard in recent years, so as the Atlantic hurricane season looms just two weeks away, many companies are applying some hard-earned lessons to their logistics operations in an effort to avoid disruption and plan for a quick recovery from the next storm.
Traditionally spanning from June 1 to November 30, the six-month span has lately included painful and expensive hits to U.S. roads, rails, and warehouses by hurricanes Florence and Michael in 2018, and by hurricanes Harvey, Irma, and Maria in 2017.
To help businesses take steps to minimize that damage, transportation and logistics provider DHL provides a supply chain risk management platform called "Resilience360" that the company says can help users to predict, assess and mitigate the risk of disruptions. The company on March 25 released its first "Annual Risk Report," listing the top 10 supply chain risk predictions for 2019. Number four declares: "climate change impact heats up," saying that forecasters predict this year could be the warmest year on record, pitting companies against an increasing number of weather-related disruptions.
A forecast from Colorado State University's Department of Atmospheric Science backs that up, saying those disruptions are on track in 2019 to include 13 named storms, including five hurricanes.
While such massive storms are mighty forces of nature, DHL says companies can use technology to mitigate hurricane risk, since storms are usually detectable three to five days in advance through data supplied by weather radar, satellite imagery, and airplanes carrying sensors. "Companies can map their supply chains, see which supplies are where, and what routes they're using," Tobias Larsson, CEO of Resilience360, said in a May 15 webcast. "Then they can see the predicted path of the storm, whether it will impact their suppliers, and note whether those are critical suppliers, who provide high-volume or high-margin products."
Armed with that model, companies can build buffers of backup capacity so they can continue operating even if inventory flow comes to a halt because of flooding, power outages, and other impacts. "Many just-in-time supply chains have very low inventory levels because they are optimized," so they may have to contact alternative suppliers or load some goods into trucks and put their stock on wheels, Larsson said. "You can't mitigate 100 percent of the risk, but you can do better than your competition."
DHL applied many of those lessons to its own practices after Hurricane Maria swamped Puerto Rico in 2017, and the company was scrambling to get its 10 warehouses on the island back up and running, Ewar Rivera, the director of operations for DHL Supply Chain in Puerto Rico, said on the webcast. As a provider of third-party transportation and warehousing services, DHL helped its customers build up inventories, so they had enough "safety stock" to stay in business, even though the movement of goods through the region came to a standstill as Puerto Rico was lacking clean water, electricity, food, and fuel, he said.
Each DHL warehouse has a business continuity plan (BCP) that is drafted with input from customers and from providers of crucial services like internet, fuel, and water. Many BCPs also include pre-agreed standing orders, so a diesel vendor will continue to make deliveries even when communications are down. "We also used catering services to our facilities, so employees could get food while working and even take some home after work," Rivera said. "We were up and running faster than other companies in the area."
The New York-based insurance company Travelers offered similar advice for companies preparing for the upcoming hurricane season, pointing out that just because a manufacturer is located in the Midwest doesn't mean that the upcoming hurricane season won't impact them.
Far-flung supply chains mean that essential suppliers, customers, transportation routes, or other dependencies could be located in high-risk areas, spelling danger for their clients thousands of miles away from a storm's path, Travelers said. The insurer provided three points of advice for businesses planning for the upcoming hurricane season:Â
have a comprehensive contingency plan in place, including back-up suppliers and alternative transportation routes, and make sure suppliers have back-up plans as well.
establish an emergency communication plan for employees and suppliers in case operations are effected.
prepare to monitor social media and have a transparent response ready to address customer concerns, troubleshoot issues and communicate status updates.
Setting priorities before the storm hits is a crucial step in hurricane preparation, according to the American Logistics Aid Network (ALAN), a charitable group that coordinates donations of logistics goods and services to supplement non-profit organizations' response efforts following natural disasters.
In a May 14 blog post comparing storm preparation to the safety pamphlets found in airline seatback pockets, ALAN executive director Kathy Fulton advised people to "put on your own oxygen mask before helping others," saying that one of the most practical things you can do to help the cause of disaster relief is to be prepared to take care of yourselves and your loved ones.
Specifically, 48% of respondents identified rising tariffs and trade barriers as their top concern, followed by supply chain disruptions at 45% and geopolitical instability at 41%. Moreover, tariffs and trade barriers ranked as the priority issue regardless of company size, as respondents at companies with less than 250 employees, 251-500, 501-1,000, 1,001-50,000 and 50,000+ employees all cited it as the most significant issue they are currently facing.
“Evolving tariffs and trade policies are one of a number of complex issues requiring organizations to build more resilience into their supply chains through compliance, technology and strategic planning,” Jackson Wood, Director, Industry Strategy at Descartes, said in a release. “With the potential for the incoming U.S. administration to impose new and additional tariffs on a wide variety of goods and countries of origin, U.S. importers may need to significantly re-engineer their sourcing strategies to mitigate potentially higher costs.”
The new funding brings Amazon's total investment in Anthropic to $8 billion, while maintaining the e-commerce giant’s position as a minority investor, according to Anthropic. The partnership was launched in 2023, when Amazon invested its first $4 billion round in the firm.
Anthropic’s “Claude” family of AI assistant models is available on AWS’s Amazon Bedrock, which is a cloud-based managed service that lets companies build specialized generative AI applications by choosing from an array of foundation models (FMs) developed by AI providers like AI21 Labs, Anthropic, Cohere, Meta, Mistral AI, Stability AI, and Amazon itself.
According to Amazon, tens of thousands of customers, from startups to enterprises and government institutions, are currently running their generative AI workloads using Anthropic’s models in the AWS cloud. Those GenAI tools are powering tasks such as customer service chatbots, coding assistants, translation applications, drug discovery, engineering design, and complex business processes.
"The response from AWS customers who are developing generative AI applications powered by Anthropic in Amazon Bedrock has been remarkable," Matt Garman, AWS CEO, said in a release. "By continuing to deploy Anthropic models in Amazon Bedrock and collaborating with Anthropic on the development of our custom Trainium chips, we’ll keep pushing the boundaries of what customers can achieve with generative AI technologies. We’ve been impressed by Anthropic’s pace of innovation and commitment to responsible development of generative AI, and look forward to deepening our collaboration."
Specifically, the new global average robot density has reached a record 162 units per 10,000 employees in 2023, which is more than double the mark of 74 units measured seven years ago.
Broken into geographical regions, the European Union has a robot density of 219 units per 10,000 employees, an increase of 5.2%, with Germany, Sweden, Denmark and Slovenia in the global top ten. Next, North America’s robot density is 197 units per 10,000 employees – up 4.2%. And Asia has a robot density of 182 units per 10,000 persons employed in manufacturing - an increase of 7.6%. The economies of Korea, Singapore, mainland China and Japan are among the top ten most automated countries.
Broken into individual countries, the U.S. ranked in 10th place in 2023, with a robot density of 295 units. Higher up on the list, the top five are:
The Republic of Korea, with 1,012 robot units, showing a 5% increase on average each year since 2018 thanks to its strong electronics and automotive industries.
Singapore had 770 robot units, in part because it is a small country with a very low number of employees in the manufacturing industry, so it can reach a high robot density with a relatively small operational stock.
China took third place in 2023, surpassing Germany and Japan with a mark of 470 robot units as the nation has managed to double its robot density within four years.
Germany ranks fourth with 429 robot units for a 5% CAGR since 2018.
Japan is in fifth place with 419 robot units, showing growth of 7% on average each year from 2018 to 2023.
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."
Businesses are cautiously optimistic as peak holiday shipping season draws near, with many anticipating year-over-year sales increases as they continue to battle challenging supply chain conditions.
That’s according to the DHL 2024 Peak Season Shipping Survey, released today by express shipping service provider DHL Express U.S. The company surveyed small and medium-sized enterprises (SMEs) to gauge their holiday business outlook compared to last year and found that a mix of optimism and “strategic caution” prevail ahead of this year’s peak.
Nearly half (48%) of the SMEs surveyed said they expect higher holiday sales compared to 2023, while 44% said they expect sales to remain on par with last year, and just 8% said they foresee a decline. Respondents said the main challenges to hitting those goals are supply chain problems (35%), inflation and fluctuating consumer demand (34%), staffing (16%), and inventory challenges (14%).
But respondents said they have strategies in place to tackle those issues. Many said they began preparing for holiday season earlier this year—with 45% saying they started planning in Q2 or earlier, up from 39% last year. Other strategies include expanding into international markets (35%) and leveraging holiday discounts (32%).
Sixty percent of respondents said they will prioritize personalized customer service as a way to enhance customer interactions and loyalty this year. Still others said they will invest in enhanced web and mobile experiences (23%) and eco-friendly practices (13%) to draw customers this holiday season.