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Supply Chain by the Numbers

- June 26, 2014 -

  Supply Chain by the Numbers for Week of June 26, 2014

Why 166 is an Important Number; Lego Piecing Together Expanded Factory; World Energy Consumption Hardly Slowing Down; Unilever's "Perfect" Logistics Network



That is the divisor for the cubic measurement of a parcel under the new dimensional pricing systems that will be adopted by both UPS and FedEx for 2015 on all shipments, after previously implementing the scheme for air shipments and on ground parcels over 3 cubic feet, based on recent announcements. To explain, rather than rating parcels based only on weight, UPS and FedEx will use a laser system to measure length, width and height in inches. Multiplying those dimensions together calculates the parcel's cube. Divide that by 166 to calculate the dim weight. If the parcel weighs more than that, the actual weight is used. If the weight is less, it is rated up to the dim weight level. The increase in total shipping costs from the change will range from 5-25%, depending on  the shipping profile, parcel experts say.




Rise in global energy consumption in 2013, according to the just released annual Statistical Review of World Energy, from BP. Since most of that energy was from fossil-fuel sources, it can be assumed there was a rise in CO2 emissions last year along the same lines. Though oil remained the top used energy source again last year, its share of the energy market fell for the 14th straight year, to 32.9%, oil's lowest level since BP began tracking the measure in 1965. Coal-based energy consumption grew 3% in 2013, making it the fastest growing fossil fuel., and its share of global primary energy consumption reached 30.1%, the highest level since 1970 - but most of that growth was from China. Renewable sources grew rapidly, but powered just 3% of the energy consumed.


The percent of current logistics costs that that Unilever would have in North America if it had a "perfect" logistics network, according to a very interesting analysis provided by the company's Matt Algar, at the Llamasoft user conference in Ann Arbor this week.  It then calculated the cost components (network inefficiencies, operating variances, etc.) that accounted for the difference between the theoretical perfect network and what it costs really were. With that understanding, it could better understand its true tradeoffs, and where logistics costs could more effectively be reduced. Very interesting - more on this soon.



Planned increase in headcount - from 2000 to 3000 - at a Lego toy factory in Mexico, as the company continues to pursue a regional manufacturing strategy. The move will significantly increase Lego's production capacity there for the US and the broader Americas market, the company said this week. "When planning expansions we want to secure that factories' capacities can meet demand in the longer run, meaning that capacity is not necessarily utilized fully straight way," said a company spokesperson. The expansion in Lego's factory in Monterrey, Mexico is expected to be ready by this September. Lego also has factories in Europe, and has plans for a factory in China by 2017, though sales there so far have been below expectations.

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