Supply Chain by the Numbers

- Oct. 4, 2012

  Supply Chain by the Numbers for Week of Oct. 4, 2012 - CSCMP 2012 Edition

Dell Outlet Rethinks 3PL Relationship; Natural Gas Truck Fuel not All that Sensitive to Raw Price Increases; Physical Internet Could Fill that Trailer Cube; US Needs to Address the Robot Gap



Level of actual trailer utilization in the US, according to University of Arkansas' Russ Meller, at the 2012 CSCMP conference in Atlanta. He gets there from statistics that say 25% of trucking miles are empty, and trailer cube utilization averages just 57% (so 57% x 75% = 42.6%). Meller and others are working on a concept called "the physical internet," based loosely in the idea that standard size containers and tightly defined logistics transaction standards (like data packets and TCP/IP on the internet). Though just vision right now, Meller's model of real carrier data showed tremendous potential cost and service improvements from such a system. The research is being supported by a good number of large companies -interesting.



14-15 Cents

Approximate increase in the equivalent cost per gallon for natural gas powered trucks versus traditional diesel per $1.00 increase in the current price of natural gas. That according to comments from legendary energy investor Boone Pickens this week at the CSCMP conference in Atlanta. This is important, because right now natural gas prices are at historic lows, just $3.00 per million cubic feet, giving it about a $1.50 cost advantage over diesel. But this mean that even if nat gas prices rose by $5.00 per MCF in the next few years, that would only increase the equivalent diesel cost by 75 cents or so.


Improvement in the net margins of the Dell Outlet business unit, which deals with repairs, returns, etc., and then aftermarker sales, after it adopted a "vested outsourcing " strategy for reverse logistics with 3PL Genco-ATC. This even as Genco's own margins also increased substantially, according to Dell's Raj Subramanian at the CSCMP's conference this week. Under the program, Genco was incented based on Dell's margin attainment.


Number of industrial robots in Japan per 1000 manufacturing floor workers, versus just 86 in the US currently, according to Stanford's Kevin O'Marah in a presentation this week at the CSCMP conference in Atlanta. Maybe the new Baxter robot just released from Rethink Robotics will help change those numbers soon.