Articles in Category: Logistics

kevin brooks foodlinkThese days, mitigating metal price risk takes a lot of outside-the-box thinking and strategy. That’s why we caught up with Kevin Brooks, chief marketing officer of FoodLink Holdings, Inc., to see if/how the fresh food industry’s supply chain can shed light on how metals buyers go about buying their materials.

Kevin will be speaking at our upcoming event, Commodity/PROcurement EDGE.

MetalMiner: What exactly are the key things FoodLink does for food suppliers and buyers?

Kevin Brooks: In a nutshell, FoodLink helps fresh produce and perishable goods suppliers of all kinds manage their supply chain and commerce process from point of origin to point of sale. That typically means helping them track harvested inventory, print case and item labels and comply with various regulatory and buyer mandates for product traceability from the field to the warehouse and on through the sales, delivery and invoicing process. We provide a single portal enabling them to electronically transact with multiple retailers and transportation service providers, align product codes with purchase orders, manage continuous change while the product is shipping and issue invoices upon retailer receipt of product. We also help them with direct consumer outreach and merchandising through scannable codes on their product packaging.

For retail and wholesale buyers and category managers, FoodLink is a fresh food purchasing and quality management platform that facilitates collaboration and coordination with an extremely fragmented supply base. Typically, produce is excluded from whatever standard procurement system a retailer might use because the quirks of the category just don’t work with the mainstream vendor solution. There are also a lot of homegrown systems out there, so we act as an interface between their internal systems and the suppliers for produce, meat, seafood, deli and floral products.

Read on for examples of 3 best practices.

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MetalMiner has recently reviewed the news release issued by Goldman Sachs last week. Goldman Sachs makes a number of points of clarification with regard to its activities as a market maker and why it holds aluminum inventory positions.

MetalMiner has no opinion about Goldman’s inventory positions and, in fact, concurs with others that Goldman Sachs has the legal right to own and hold physical commodities in inventory. The Federal Reserve agreed in 2003 to allow banks to own warehouses and trade in commodities.

However, we couldn’t resist a bit of “Point, Counterpoint.” The following comes directly from Goldman Sachs’ website with MetalMiner commentary following (“MM”):

“During the financial crisis, warehouse companies played the important role of allowing metal producers, who are often unable to adjust immediately to changes in demand, to store excess metal in the face of weak consumer demand. In fact, LME aluminum inventories more than tripled from 1.2 million tonnes pre-crisis to more than 4.5 million tonnes by the middle of 2009. As a result, large amounts of metal accumulated at some locations.”

MM: No argument there, except low interest rates (otherwise known as cash and carry) didn’t harm the arrangement.

FREE Download: The latest Monthly MMI® Report – covering the Aluminum market.

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An article on the SDV Live logistics site on air and ocean freight rates may come as a surprise to consumers struggling to cope with freight costs arising from the Asian sea and air routes.

Certainly, we read a great deal about how low ocean freight rates are, but anecdotal evidence suggests many consumers are still squeezed by rates that do not appear to have fallen in line with market commentary.

Quoting Bolloré Logistics’ freight manager Denis Sanguinetti, the article laments lack of demand coupled with overcapacity, depressing growth prospects. Speaking first about ocean freight, Mr. Sanguinetti advises that in the second quarter alone, “20 new ships with a capacity of between 8,000 and 16,000 TEUs or twenty-foot containers will be delivered, mainly on the route from Asia to Europe.”

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Amazon Boxes Warehouse Line

Source: bizjournals.com

If you’re like most of the rest of the country, your life was in some small or large part affected last week by the crush of shopping commercials, crowds and other B2C craziness that accompanies Thanksgiving and Black Friday.

Or you kept the TV off, stayed away from strip-mall parking lots, and logged onto the likes of Amazon.com to get what you need.

Obviously, exponentially more Americans are using online shopping networks like Amazon.com rather than frequent their brick-and-mortar counterparts — that’s hardly a new trend. (Businesses, too, have Amazon Supply at their supply-chain-management disposal.)

What is interesting is that online shopping businesses such as Amazon are trying to shorten the supply chain and build even more warehouses closer to population centers this year, according to Ken Simonson, chief economist for the Associated General Contractors (AGC) of America.

After Simonson mentioned that tidbit during a recent webinar hosted by Reed Construction Data, I decided to get in touch with him to pick his brain a bit further on how big a blip online business warehousing is on the map of non-residential construction and, by extension, metal/material demand.

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Continued from Part One.

According to the Telegraph, over 100 German ship funds have already shut down as the crisis in global container shipping comes to a head, while 800 more funds are threatened with insolvency, according to consultants TPW in Hamburg.

In the UK, Britain’s oldest ship-owner, Stephenson Clark, dating back to 1730, went into liquidation this month, closing the final chapter of Britain’s coal trade and the industrial revolution, citing “incredibly depressed” vessel rates. Like large parts of the German container industry, the firm over-invested in the boom four years ago, betting too much on Asian growth rates.

Germany, however, is said to be the superpower of container shipping, controlling almost 40 percent of the world market; so if collectively they get it wrong, it goes wrong in a big way.

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The Baltic Dry Index (BDI) usually steals the headlines when it comes to discussion of the world’s shipping fleets, and is often quoted when analysis of the global economy refers to international trade.

The Dry Index is a measure of bulk shipping rates and although the Baltic Exchange quotes a range of vessel sizes and types, it is often the large dry bulk carriers carrying iron ore, coal and grains that steal the limelight.

This is hardly surprising; the volume of such bulk commodities is a measure of global economic activity and the rates charged for carrying such commodities are in part a reflection of the level of demand or volumes. But not in total, of course: the supply of space also plays its part as is the case in the current market.

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Everybody does an RFI in a sourcing process, and some of us at MetalMiner have personally been on the receiving end of some that include 235 questions or more — multiple spreadsheets, multiple tabs. So what is an RFI supposed to do?

MetalMiner interviewed Olivier Maurandy of Fullstep to see what he finds to be the fundamental differences between a “good” RFI and a “poor” one.

Don’t miss the rest of the segments in this series:

 

One of the biggest issues we see is companies going after everything — using the 80/20 rule, etc. — in optimizing their spend and streamlining their sourcing.

MetalMiner Editor Lisa Reisman interviewed Olivier Maurandy, VP Business Development for Fullstep, to get his take on strategic sourcing best practices. In this segment, Maurandy touches on whether a company should draw a line in terms of what’s too big or too small to negotiate in a sourcing process. Case in point: Logistics.

Please note: Fullstep is a sponsor of MetalMiner.

Every company has the ol’ time-honored step/”Chevron” process for strategic sourcing.

MetalMiner Editor Lisa Reisman interviewed Olivier Maurandy, VP Business Development for Fullstep USA, to get his take on strategic sourcing best practices. In this segment, Maurandy touches on how middle-market manufacturers and other companies can focus their sourcing processes.

Please note: Fullstep is a sponsor of MetalMiner.

 

We at MetalMiner are always on the lookout for sourcing efficiencies in the industrial metals supply chain — and those who make said efficiencies their business. That’s one of the main reasons we chose the sponsors that we did for our recent MetalMiner and Spend Matters conference, Commodity EDGE; they are all at the top of their game in their respective industries.

One of those sponsors, Triple Point Technology (TPT), operates in the commodity-supply-chain and risk management world. In a recent case study outlined in a Spend Matters Perspectives research paper, after hiring TPT, a global consumer packaged goods (CPG) company reaped numerous benefits, including “the ability to better manage overall margins due to complete pricing visibility across the marketing and sales functions.”

This clearly has implications in the metals sourcing world, and from a raw materials standpoint, Triple Point has made inroads into the coal and minerals supply chain specifically by acquiring QMASTOR, whose “Pit to Port is the most complete end-to-end mining software solution.”

How Exactly Does Pit To Port Work?

Basically, QMASTOR’s Pit to Port software is used to “plan, record, track, optimize, account, reconcile and report the tonnage, quality and value of bulk materials from mine to point of export or consumption,” according to TPT’s site.

Any management team, it goes without saying, needs the wherewithal to keep track of the millions of tons of coal and other raw materials and minerals — otherwise, inefficiencies would erode margins very quickly. In fact, according to QMASTOR, they are contracted out to manage 1 billion tons of “bulk commodity movements” per year in coal, iron ore, copper, nickel, bauxite, lead, molybdenum, silver, and gold.

“The system synchronizes operations, logistics, marketing and commercial functions,” which streamlines the view of the entire supply chain. QMASTOR’s software plays in some pretty big mining companies’ systems — BHP Billiton, Rio Tinto, Vale, Anglo American, and Xstrata, to name just a few.

Of course, if your manufacturing or distribution company is not a huge behemoth like the Rios and BHPs of the world, you may not be tracking billions of tons of materials. However, for midsize and larger manufacturers, understanding the basis of commodity management tools such as these can help retain — and even increase — profits.

Check back in for a follow-up on this post, in which MetalMiner plans to share insights from TPT/QMASTOR (and another recent acquisition, Algosys) on what lessons manufacturers can learn from the operation of these systems.

Image source: Triple Point Technology

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