Best of 2011: Thailand Flooding Breakdown
It's the holidays, and we've got a special gift for you this year. Each day this week, Supply Chain Digital will select one top daily story from 2011 to feature here in our Best Of: 2011 section. Enjoy!
Starting in late July, the 2011 Thailand floods have been the region’s worst in 50 years, and have had a huge impact on the local and global supply chain. It’s going to take some creative supply chain management to solve the logistical problems caused by the heavy monsoon season. Factories are underwater, production plants have been evacuated, and some people are fighting for their lives.
Over 370 people have been killed so far due to the flooding. To better understand the breadth of this catastrophe, Supply Chain Digital takes a look at the logistics issues that supply chain managers are trying to solve all over the world.
- Car manufacturers have been among the hardest hit group, as Thailand is known for its contributions to the automotive supply chain. Honda, Toyota, Nissan and Ford were among the victims of the Thailand floods.
- Analysts predict that Thailand auto production will be down by about 130,000 units this year because of the flooding.
- Toyota has capacity to produce 550,000 vehicles per year in Thailand, but has stopped production in three plants until at least Nov. 5.
- Floodwaters have entered at least one of Honda’s production plants. The production center outside of Bangkok has capacity to produce 120,000 vehicles per year, but has been closed since Oct. 4.
- Nissan and Ford have both suspended production in Thailand. Nissan said today that it will keep production suspended until at least Nov. 4.
AERIAL FOOTAGE OF THAILAND FLOODING
- Thousands of affected workers in Thailand have been invited to work at Japanese firms to fight the supply chain disruption. The irony here, of course, is that Japan dealt with its own natural disaster and supply chain problem this year with the Fukushima Daiichi nuclear disaster.
- Another hugely affected area has been the computer hard drive manufacturing industry, which has seen prices skyrocket by up to 40 percent because of supply shortages.
- Western Digital, one of the world’s largest hard-drive disk manufacturers, has closed production facilities in Thailand due to flooding. HDD competitor Seagate is having similar problems.
- Samsung Electronics and Taiwan’s Acer are expecting bleak holiday season outlooks, as company statements surrounding the Thailand flooding have been released.
- The retail supply chain has also been affected, as stores such as Tesco, 7-Eleven and Big C have had shipments delayed and have seen inventory dwindle.
FedEx is Reshaping Last Mile with Autonomous Vehicles
FedEx is embarking on an expanded test of autonomous, driver-less delivery vehicles to develop its last-mile logistics.
The US logistics firm piloted autonomous vehicles from Nuro in April this year, and the pair will now explore that further in a multi-year partnership. Cosimo Leipold, Nuro’s head of partnerships, said the collaboration "will enable innovative, industry-first product offerings that will better everyday life and help make communities safer and greener".
FedEx will explore a variety of on-road use cases for the autonomous fleet, including multi-stop and appointment-based deliveries, going beyond more traditional applications of the technology in single-route movement of goods from A-B. Exponential growth in ecommerce is spurring its broader experimentation in new autonomy solutions, Fed-Ex says, both in-warehouse and on-road.
“FedEx was built on innovation, and it continues to be an integral part of our culture and business strategy,” said Rebecca Yeung, Vice President, Advanced Technology and Innovation, FedEx Corporation. “We are excited to collaborate with an industry leader like Nuro as we continue to explore the use of autonomous technologies within our operations.”
The changing role of couriers
Unlike structured delivery networks, operating under long-term partnerships and contracts, agility is where couriers deliver true value - and their ability to deftly solve last-mile fulfilment has most acutely been felt during the pandemic. For the billions of people around the world forced to stay at home to protect themselves and their communities from the spreading COVID-19 virus, couriers have been a constant. They may have been the only knock at the door some people experienced for weeks or months at a time.
But the last-mile has been uprooted by a boom in ecommerce, a shift that has been most apparent in the UK, US, China and Japan, according to the Global Parcel Delivery Market Insight Report 2021 by Apex Insight. These are markets with dominant economies and populations used to running their lives with a tap of a screen or double-click of a mouse.
“Getting last mile delivery right has long been a challenge for retailers,” says Kees Jacobs, Vice President, Consumer Goods and Retail at Capgemini. “In 2019, 97% of retail organisations felt their last-mile delivery models were not sustainable for full-scale implementation across all locations. Despite increasing demand from customers, companies were struggling to make the last mile profitable and efficient.”
Jacobs says that the pandemic alleviated some of these stresses in the short term. With no other option, consumers were understanding and tolerant, if not entirely happy, with longer delivery times and less transparent tracking. “But, as extremely high delivery demand continues to be normal, customers will expect brands to contract their delivery times,” he adds.
Last mile's role in ESG
Demand and volume weren’t the only things that have changed during the pandemic - businesses looked closer to home and as a result became more sustainable. Bricks and mortar stores were transformed from mini-showrooms to quasi-fulfilment centres. Online retailers and other businesses sought local solutions to ship more faster. In densely populated London, UK alone, Accenture found that delivery van emissions dropped by 17%, while Chicago, USA and Sydney, Australia saw similar emissions savings.