This Week in Logistics News (April 17-21, 2017)

In case you’re wondering, my daughter did pass her driving test a couple of weeks ago. And the garage door company is coming this morning to replace the crumpled door. So all is good in my little slice of the world.

Now, moving on to this week’s supply chain and logistics news…

This morning apparel retailer Bebe Stores announced that it is closing all of its stores by the end of May. Contrast that with the news this week, as reported by Recode, that Amazon won a patent “for an on-demand manufacturing system designed to quickly produce clothing — and other products — only after a customer order is placed” and you can see why the number of retailers that have filed for bankruptcy in the first quarter of 2017 already equals the total from all of last year.

Here are some additional details from the article and an image from the patent:

The computerized system would include textile printers, cutters and an assembly line, as well as cameras designed to snap images of garments that would provide feedback on alterations needed in subsequent items. In order to increase efficiency, the goods would be manufactured in batches based on factors such as the customer shipping address, the patent says.

“Once various textile products are printed, cut and assembled according to the orders, they can be processed through a quality check, photographed for placement in an electronic commerce system, shipped to customers and/or stored in a materials handling facility for order fulfillment,” the patent reads. “By aggregating orders from various geographic locations and coordinating apparel assembly processes on a large scale, the embodiments provide new ways to increase efficiency in apparel manufacturing.”

Source: Amazon patent

It’s not known whether Amazon is actually working on building such an on-demand manufacturing system for apparel, what is known, however, is that the company will likely become the largest apparel retailer this year. What this patent shows to me is that Amazon is looking to redefine and raise the bar on fast fashion, so Zara better take notice.

On the software front, just when you thought “Does the market need another transportation management system (TMS)?” along comes Haven TMS. Here are some details from the press release:

With Haven TMS, Haven evolves from a logistics quote marketplace into a full-featured transportation management system (TMS) with collaboration, procurement, and analysis modules.

Haven TMS allows users to manage the entire transportation logistics workflow on one platform and streamline critical processes. With features such as collaborative booking, a tracking notification system, and full document management capabilities, Haven TMS allows users to pull data out of siloes and turn logistics into a competitive advantage. And, with views into both their own rate cards and prevailing spot rates all in one place, users can connect with best-in-class providers, ultimately finding the most appropriate partner for their needs.

I haven’t seen a demo of the solution, so I can’t comment on its functionality. But the evolution from marketplace to full-featured TMS is what some dotcom startups did in the early 2000s to survive and it turned out to be a smart move. Simply put, the overall value proposition of a TMS is much greater than that of a marketplace, and a TMS aligns better with the way shippers and carriers actually work together, which is mostly via contracts not spot quotes. For related commentary, see The Rebirth of Transportation Marketplaces (UberCARGO, Cargomatic, and Freight Friend).

Finally, one of my predictions for 2017 was that we would see a rise in cyber attacks, with supply chain and logistics operations becoming new targets. Well, it seems like a growing number of manufacturers are responding to this threat by buying cyber insurance. As reported in the Wall Street Journal:

Factories are increasingly computerized, automated and digitally integrated with other parts of a company and keeping those networks secure is critical. “It’s hard to think of an area of our business that is not touched by this, as business is only becoming more connected,” said Eric Dobkin, director of insurance and risk management at drugmaker Merck & Co. in an email.

A wake-up call for manufacturers came in December 2014 when the German Federal Office for Information Security reported that a cyberattack caused “massive damage” at a steel plant it didn’t name.The report highlighted how cyberattacks can be more destructive than prosaic events like floods that are covered by typical P&C policies.

Manufacturers paid $36.9 million in premiums for cyber-specific policies in 2016, according to Advisen Ltd., an insurance consulting firm, based on its sample of over 9,000 mostly U.S. companies. That is up 89% from the year before. Manufacturers accounted for 12.6% premiums tracked in 2016 compared with 9% the year before.

For related commentary, see my post from last September, The Day a Cyber Attack Brings the World’s Supply Chains to a Halt.

And with that, have a happy weekend!

Song of the Week: “Come” by Jain