Saturday, February 28, 2015

Fine-Tuning Your Warehouse Layout

Developing an efficient and safe warehouse can be challenging. Here is some advice from Walt Swietlik, director of customer relations and sales support for loading dock equipment company Rite-Hite.
1. Know your business requirements. Before you design your facility, examine your books. The data will show you what to expect in terms of stock turns, returns, and volume, which is the starting point for determining the size of the warehouse, the storage capacity required, and the number of dock stations needed.
2. Be prepared for an onslaught of intermodal traffic. Look at the length and type of trailers coming in and out of your warehouse, and pay attention to whether or not intermodal traffic is increasing. Intermodal chassis are often a different height than standard trailers and may have an obstructed rear impact guard. It is important to make sure docks and restraints can accommodate both.
3. Allow extra space in the receiving area. The receiving area is one of the most important parts of the warehouse, and is often a hive of cross-docking activity. Working in a cramped space can cause injuries, and other profit-sapping mishaps.
4. Don't make interior doors too big. Why waste energy? Don't make your facility's doors any larger than they have to be—particularly in cooler or freezer areas. If you occasionally need a larger opening, put one larger door into your layout and keep the others smaller.
5. Design safety in from the start. You don't need to decide between safety and efficiency—they can go hand in hand. Make sure safety signage is always visible, but don't rely on it alone. Provide foolproof products and processes such as impactable doors or interlocked dock controls.
6. Ensure the yard supports the warehouse. Warehouses require schedules for inbound and outbound shipments. Congestion outside the warehouse, caused by parking area constraints, will affect these activities. It is important to understand the capacity of your yard to avoid potential bottlenecks.
7. Separate pedestrian and forklift traffic. Signs and painted lines aren't enough. About 110,000 forklift accidents occur each year, many involving pedestrians, according to OSHA. Physical barriers, both permanent and temporary, keep pedestrian and forklift traffic apart.
8. "Button up" your dock stations. Seals, shelters, and doors prevent contaminants from entering the building. A seal around dock stations saves energy, protects cargo, provides employee comfort, and improves the bottom line. Food manufacturers may consider vertical levelers in a "drive-thru" application. This allows trailer doors to remain closed until the trailer is positioned at the loading dock, providing an uninterrupted cold chain and additional level of security.
9. Take advantage of mezzanine opportunities. When a warehouse's physical footprint is limited, it can be expanded upward using mezzanines to add capacity. New forklift technology and safety equipment designed specifically for elevated platforms—such as reciprocating barriers that can't be open in both directions at the same time—make mezzanines a better and safer bet.
10. Protect your cargo from tampering. Trailers at the dock become an extension of your warehouse, so be sure to consider cargo security issues. Use interlocked controls that sense external tampering, and implement restraints that automatically "re-fire" if they lose proper engagement with the trailer's rig.

West Coast port cargo diverted east during slowdown likely to remain there

Feb 27, 2015, 3:06pm PST
Anthony Bolante
To avoid cargo sitting on the docks, some shippers diverted to the East Coast ports. East Coast ports saw more growth in the fourth quarter of 2014 than any of the previous 11 quarters.
Staff Writer-Puget Sound Business Journal
Email  |  Twitter
While shippers and businesses using West Coast ports struggled during months of slowdowns, East Coast ports picked up diverted cargo. The bad news for the West Coast is that it's likely some of that cargo will remain in the east.
The biggest East Coast ports had 10.2 percent more growth than the biggest West Coast ports in the fourth quarter of 2014, compared to a 1.6 percent difference from the year before.
In the quarter before the slowdowns began, West Coast ports had more growth than East Coast ports.
That traffic directly corresponds with slowdowns, according to Fitch Ratings, an agency that determines credit ratings at United States ports. In the fourth quarter of 2014, East Coast ports had more growth than any of the 11 previous quarters.
Some of that diverted cargo will never come back.
"With each labor event, some diverted cargo has not returned, and this seems to be the case for some West Coast ports coming out of this most recent contract negotiation," according to Fitch.
Along with the East Coast, shippers also diverted cargo to Canada and Mexico. The number of vessels and containers traveling through the Suez Canal and Panama Canal also increased, "to avoid costly delays moving goods through the West Coast," according to Fitch.
The Port of Seattle is mostly just a pit stop as goods make their way around the country.
While the Port of Seattle doesn't track exactly how much cargo shipped through the harbor moves outside the state, most of it is shipped elsewhere, said spokesman Perry Cooper.
When cargo isn't staying in Washington state, shippers have less incentive to use Washington state ports when others are more reliable.
"If the shippers are concerned [slowdowns around negotiations] will keep happening and they diverted their cargo and are happy with that service," Griffith said, "perhaps they will keep it there."
In the midst of this year's slowdowns, shipping company Hanjin announced it would no longer dock and unload at the Port of Portland. Hanjin accounted for 78 percent of container traffic volume at Terminal 6, one of Portland's four terminals.
That pattern isn't new.
Griffith said after the 2002 slowdowns one major carrier moved from the ports of Los Angeles and Long Beach to San Diego.
"They were treated very well, and they've stayed there ever since," she said.
West Coast ports operated at an average of 50 percent normal efficiency during contract negotiations between the dockworker's union and the association that represents terminal operators. After nearly nine months of negotiations and help from two federal officials, the two parties reached a tentative agreement last week.

Friday, February 27, 2015

IBM Pumps $4 Billion Into Cloud and Mobile Initiatives

Tech company shifts spending plans to target faster-growing segments

IBM also said Thursday that it anticipates a bigger impact from the stronger dollar than previously forecast.ENLARGE
IBM also said Thursday that it anticipates a bigger impact from the stronger dollar than previously forecast. PHOTO: MARK LENNIHAN/ASSOCIATED PRESS
International Business Machines Corp. is in the same bind as many of its corporate-tech peers: how to foster fast-growing but unproven initiatives while lucrative older businesses are slowing down. Having identified a set of promising new directions, the company plans to invest more in them.
At an annual meeting with analysts Thursday, the company said it will shift $4 billion in 2015 spending to what it calls the “strategic imperatives” of cloud, analytics, mobile, social and security technologies.
The spending plan, in turn, has prompted IBM Chief Executive Virginia Rometty to set a new financial target for those faster-growth segments: $40 billion in combined annual revenue by 2018, or more than 40% of the company’s expected total revenue.
It is an ambitious goal. Those businesses generated $25 billion in revenue last year, or 27% of total revenue, though the trend line has been rising for both figures.
“We did an awful lot last year,” Ms. Rometty said in an interview before the meeting. “We’ve reinvented this company one more time.”
Advertisement
But more needs to be done to counteract declines in other IBM businesses. The company said in January that total revenue from continuing operations declined 6% to $92.8 billion in 2014 and projected that total revenue wouldn’t grow in 2015.
The company also has run into a stiff headwind from the rising value of the dollar, which hurts IBM’s income statement when sales made abroad are converted into U.S. currency. IBM, while reaffirming its 2015 outlook, on Thursday boosted its estimate for foreign-exchange rates on its revenue growth. A rise in the value of the dollar versus foreign currencies has reduced the value of revenue IBM takes in abroad and converts to U.S. currency.
For its current quarter, IBM now expects currency to hurt revenue growth by more than 7 percentage points, above the hit of 6 to 7 points it projected in January. For the full year, IBM is expecting a foreign-exchange impact of more than 6 points, above previous projections for an impact of 5 to 6 points.
On Thursday, Ms. Rometty described the currency difficulties the company is facing as among the most extensive in recent memory.
The company in 2014 completed the sale to Lenovo Group Ltd. of its System X business in commodity-style servers; it had previously sold its personal-computer business to the Chinese company. IBM said Thursday that it continues to expect a 4-percentage-point impact to revenue growth in each of the first three quarters of 2015 because of the System X divestiture.
Shares in IBM fell 1.2% to $160.87 on the New York Stock Exchange.
Last October, IBM abandoned what turned out to be an overly ambitious long-term target of $20 a share in operating earnings by 2015. In January, it reported $16.53 a share for 2014. It also set a less-specific long-term goal of delivering “low single-digit” percentage growth in revenue and “high single-digit” growth in operating earnings per share.
Based on recent investments and divestitures, Ms. Rometty said before the meeting that she has “great confidence that we can and will achieve the long-term model we put out.”
IBM businesses that have posted lower revenue lately include some classes of technology services and software as well as IBM’s remaining lines of big computers. Besides the System X business, IBM last year also divested itself of its semiconductor-manufacturing business, agreeing to pay Globalfoundries Inc. $1.5 billion to take over the chip operations.
Hardware now accounts for less than 10% of IBM’s total revenue, Ms. Rometty said. The changes have dispensed with businesses that were a drag on earnings, she added.
Among its new priorities, IBM has put particular emphasis on online, or cloud, services. It has said it invested $1.2 billion in data centers to augment those it acquired with SoftLayer Technologies in 2013. It also invested $1 billion to accelerate commercialization of its Watson data-analytics technology.
IBM’s plan to invest $4 billion more on strategic initiatives won’t necessarily require spending cuts in other businesses, Ms. Rometty said. In many cases, she said, the company can take advantage of money freed up by operating at higher efficiency.
The company has taken charges for “rebalancing” its workforce—laying off some workers while hiring others with new skills—but doesn’t expect to reduce overall head count.
“It’s not a cost-cutting exercise,” Ms. Rometty said of the company’s actions. “It’s a very healthy remix.”
Presenters at the analyst meeting in New York, besides Ms. Rometty, included IBM’s chief financial officer, Martin Schroeter, cloud chief Robert LeBlanc and senior vice presidents John Kelly and Steven Mills.

TARGET’S COMMANDING M-COMMERCE SHARE

mobile shopping
pymnts_p
What's Next In Payments®
6:15 AM EST February 26th, 2015
Breach, what breach? What a difference a year makes.
Whatever hit to the bottom line Target experienced last year in the wake of the 2013 breach – and it was a big one — seems but a distant memory today. Target posted better-than-expected fourth-quarter earnings yesterday (Feb. 25), and its executives cited the retailer’s digital channels — specifically citing mobile growth — as a key contributor to that success. 
Target reported Q4 salethat increased 3.8 percent from the year prior and fourth-quarter revenue of $21.75 billion, an increase of 4 percent from the year prior. While digital sales and mobile commerce aren’t tipping the revenue scale in their favor just yet, Target’s executive team spoke to analysts about how mobile commerce is playing a larger part in Target’s digital channel growth. 
As reported in last week’s PYMNTS.com Mobile Transaction Tracker, mobile commerce growth is set to outpace e-commerce by three-to-one in the next five years, and it appears Target’s path is syncing up with that pattern. Here are a few stats that document the state of Target and mobile commerce.

40 Percent | Percentage Of Target’s Digital Orders Done Via Mobile (In Q4)


While a recent eMarketer study shows desktop/laptop e-commerce growth outpacing m-commerce three-to-one, Target’s statistics reveal the degree to which mobile is driving Target’s digital consumer engagement.
“In our digital channels for the fourth quarter overall, we saw a high single digit increase in visits — driven entirely by growth in mobile, which includes both tablets and smartphones,” Kathee Tesija, Target’s chief merchandising and supply chain officer said during the company’s earnings call. “Orders were up well over 50 percent, driven from strong conversion increases on both the conventional site and mobile. Mobile is becoming increasingly important to all digital retailers, and given the profile of our guests, it’s particularly important for Target, as mobile accounted for more than 40 percent of our digital orders in the fourth quarter.
According to a Fortune article, 2014 brought a mobile and e-commerce overhaul for Target as it “rewrote 75 percent of the code in its e-commerce platform, and now its website is considered by e-commerce experts to be up to par with its rivals and in some areas, namely mobile shopping, leading.”

50 Percent | Growth In Target’s Mobile Traffic (In Q4)


Mobile commerce is like the chicken and the egg. You can’t have mobile commerce without mobile traffic. But what’s important is turning that traffic into dollars. And at least in Q4, Target’s chickens (or eggs) seemed to have come home to roost.
“Mobile experience needs to make commerce as easy as possible,” said Jamil Ghani, Target’s VP of enterprise strategy — who noted that Target’s mobile-engaged customers make four times as many store visits per year. “We call it bricks-and-mobile, and we’re really excited to see how far we can take it.”
Target is seeing an increase in its mobile traffic each quarter. In its third-quarter earnings report, Tesija said digital sales were up 30 percent, and digital traffic growth from mobile grew more than 50 percent. Conversion was also up on mobile; Tesija didn’t indicate by how much, but suspected it would grow in fourth quarter due to the launch of Target’s upgraded mobile app to make purchases easier using a smartphone.

10 Percent | Percentage Of Consumers Who Bought In Store But Shopped Online While There On Black Friday


Score one for omnichannel! Not only has Target’s investments in digital channels helped bring more customers in its store, according to Kesija, but consumers are actually using its mobile app to shop while in the store (and then buy there too). Combining mobile commerce with its traditional retail is giving Target’s commerce revenue a larger digital share.
“Notably on Black Friday, 10 percent of our iPhone app revenue was from guests purchasing on their phone while they were simultaneously shopping in stores. Our flexible fulfillment efforts play a key role in supporting our digital growth and we’re pleased with the results from our store pickup program and our recent rollout from ship from store capability,” Tesija said. 
Target launched its new iPhone app for the holiday selling period, and shoppers used the app’s product-locating function more than 400,000 times before the end of the year. The next place the retailer will take it is likely to be its Android app, which hasn’t yet been upgraded with the new features for driving store traffic and sales.
Target may be onto something with its mobile app, as research from PayPal shows that consumers are more likely to make a mobile purchase through an app than a Web browser. In fact, in its survey, 64 percent of smartphone users reported using an app for purchases as opposed to the 52 percent who used mobile browsers.

Not Many | The Number Of Wal-Mart Customers Who Browse On Mobile And Then Buy 


While Target was able to produce hard stats about its mobile commerce revenue (at least percentages), Wal-Mart’s report on its mobile commerce are a bit more undefined. While mobile traffic is the gateway to producing more mobile commerce, Wal-Mart is still seeing a gap in it delivering mobile commerce.
“Mobile continued to be a big investment and area of high growth, nearly 70 percent of our walmart.com traffic during the holidays was from mobile devices,” said Neil Ashe, Wal-Mart’s President and CEO of Global eCommerce, during Wal-Mart’s earnings call earlier this month. “Those people used the app in a lot of ways to do their shopping online, to find a store, or to use the new store search tool we added late last year. This search tool allows customers to find product details and the aisle location of a specific item.”
For Wal-Mart, the mobile commerce market is still very much focused on encouraging mobile browsing and it hasn’t quite translated into mobile buying — at least not from the stats they’re releasing publicly. Wal-Mart’s executive team recognized, like many retailers, that there is still a gap between mobile browsing rates and mobile buying rates.