Aircargopedia Newsblast: October 2020!
Logo headerimg
19th October 2020  
 


Dear Air Cargo Professional:

Learn more about Inventory with this informative article written by Peter Canellis, PhD, PE, Professor of Management.

Read this article by Samrat Barari, CEO, Sunflower Technologies to find out how technology innovation is helping out global supply chain during COVID-19 outbreak.

In more World Air Cargo news, Air Cargo Belgium and Brussels Airport create BRUcare task force to address Coronavirus vaccine shipments. Emirates SkyCargo maintains supply chains for food and other perishables during COVID-19.

TIACA and Pharma.Aero call for urgent industry collaboration to address a concern for COVID-19 vaccines logistics. dnata becomes first to offer fully integrated, temperature-controlled cool chain for pharma cargo in Singapore.
  DJ Ghosh

D.J. Ghosh
President & Publisher
AIRCARGOPEDIA
WWW.AIRCARGOPEDIA.COM
”The Complete Encyclopedia for the Air Cargo Professional & Investor”


______________________________________________________________________________

Online Unmanned Cargo Aircraft Conference

Supply Chain and Technology Innovation during COVID-19 Outbreak

Since the last couple of months, the fast spread of the novel COV-SARS-2 disease, commonly known as COVID-19, is creating huge uncertainty and undefinable disruptions in the global supply chain.

The global supply chain is experiencing a big challenge to keep smooth supplies of food and medical instruments including masks and medicine highly required to the treatment, protection, and control of the pandemic. On another note, the pandemic control measures taken by countries worldwide have interrupted flows of finished goods and raw materials from Chinese plants to many parts of the world and later from other countries to China and other destinations.

The blockage of people and material movement disrupted every supply chain. It is a huge challenge to keep global supply chains of essential goods going while some parts of the supply chain have stopped operations. On the other hand, the wide and rapid spread of the virus in European and American continents has blocked the movement of materials globally. The resulting SC disruptions have caused shortages of medical and food supplies in different part of the world.

Given the novelty of COVID-19 outbreak, demand forecasting and order planning disaster relief management risk management and resiliency practices in SC operations and better understand logistics operations for epidemic control. Affecting by evolving lockdown rules, the demands of certain products have increased dramatically, and the demand patterns for many consumer goods have become more challenging to predict. To overcome these challenges, several firms are working closely with governmental bodies, health-care organizations, hospitals, and their business stakeholders to fight the pandemic. The use of contact tracing mobile technologies and digital health certificates become important tools for controlling the spread of the virus.

In responding to unprecedented disruptions, firms in retailing, e-commerce, technology, logistics, food service, health care, and manufacturing industries also play very critical roles. During the COVID-19 pandemic, we are observing rapid innovations in business models and the use of technologies. Many businesses have stepped up and repurposed production facilities intended for fragrances and hair gels to produce hand sanitizer. In addition to providing a valuable resource that may help save lives, this move helps keep workers on and facilities operating despite difficult economic conditions. Moreover, companies with limited experience are making hospital beds, ventilators, personal protective equipment (PPE). Supported by mobile applications, many new logistics services are created to deliver test samples, PPE, medicines and food supplies, and the emergence of ‘contactless’ delivery solutions.

With the closures of shopping malls and high streets, many companies realized they have to change the moves from multi-channel to omni-channel distributions to a completely digital and online trading environment by adopting digital technologies and cooperating with in logistics service providers to offer home deliveries. Even automotive companies are embracing more online shopping activities to deal with historically low foot traffic and extensive closure of many showrooms completely by trying to meet car buyer needs virtually. In addition, one company resolved a shortage of parts for life-saving ventilators in Italy by using 3D printing and making them available within a day (though they are being sued for their efforts). This trigger the creation of a role for additive manufacturing in the spare parts supply chain.

This Systems Integrators will mainly emphasize on analyzing how and why new practices and innovation in SCM and logistics are deployed during the pandemic. It will try to understand the critical success factors (CSFs) and lessons from these innovative practices. The purpose is to capture in-depth insights and understanding of how the adoption of technological advancement (e.g., Low code programming, Industry 4.0 technologies, Mobile Technologies, Big Data Analytics, Additive Manufacturing etc.), business model innovations (e.g., ambidexterity, agility, adaptation, improvisation, etc.). I would like to investigate how COVID-19 will impact global supply chain network design and the positioning of key players from different countries after the pandemic.

Samrat Barari

Samrat Barari, Entrepreneur,
CEO, Sunflower Technologies, US & Canada 
sunflower-technologies.com


Airbridge banner

Inventory: How Much is Too Much?

Inventory shortages that developed during the pandemic and caused supply chain havoc have prompted a revisit of inventory policy. Do we continue to work toward the Just-In-Time (JIT) ideal of “zero inventory” or concede to the more mundane (and realistic?) notion of “Just-In- Case” inventory?

We pay for inventory as protection against future disruptions. Accordingly, inventory is really a form of insurance. We hold inventory for a combination of reasons including:

• Anticipation of known future events (e.g., holidays and promotion campaigns)
• Hedge against possible future events (e.g., labor strikes, price increases)
• Safety to protect against unexpected demand and / or lead time increases
• In-Transit Product (inbound or outbound) that we own but has not reached final destination
• Preparation for production in batches or lots

But how much “insurance” should we carry? As the following example will illustrate, that will depend on three factors:

1. What the demand distribution pattern is over time
2. How happy we want to keep our customers given that the demand distribution over time is stable, and …
3. How much additional inventory we think we need to cover the reasons for keeping additional inventory listed above.

As an example, let’s consider a SKU that, from our perspective, is a final product to be provided to a customer. The table below provides data taken over almost two years (100 weeks). Explanations for the column labels are as follows:

Column Label Description
Low The low end of demand for a specific interva
High The high end of demand for a specific interval
Midpoint The midpoint of demand for a specific interval
# of Weeks The number of weeks that demand for the SKU fell within the Low-to-High range
Approx. Total The approximate total demand for the SKU (Midpoint x Number of Weeks)
Average The average demand across the 100 weeks for which we have data
Deviation The deviation from the average (i.e., Average – Approx. Total
Deviation2 The square of the deviation from the average
Weighted Deviation2 Deviation2x the number of weeks

Inventory img1

The final calculations are accomplished by adding the Weighted Deviations and dividing by the number of weeks in the study (100). This gives us the Variance, from which we take the square root to find the Standard Deviation (σ) which, in this case, is 111 units. Next, we chart the data in the table and find that the distribution is close to a “normal” distribution (i.e., the famous “Bell Curve”).

Inventory img2

Now for some good news: We know probability of demand for any specific quantity that follows the Normal Distribution! This is because, in addition to following a normal distribution, we know the value of our particular distribution’s average and standard deviation.

A look at our distribution’s numbers superimposed on a “standard” normal distribution (i.e., a normal distribution with an average = 0 and a standard deviation = 1) tells us what we want to know.

Inventory img3

First, we see that we can maintain a service level of 50% with “zero” safety stock. What does this mean? By definition, if we make average demand available for our customers every week, some weeks the average will e xceed their demand and some weeks it will not. That’s what makes an average an average. If the demand is symmetrical (as it is for a normal distribution) keeping average demand will satisfy our customers half of the time.

Of course, 50% customer satisfaction isn’t so great. After all, if we patronize a grocery store that operated this way (i.e., keeping only average demand available) on any given day we would expect to return home with only half of the items we set out to buy.

We also know that keeping one standard deviation above average demand will bring us to 84% coverage. Accordingly, if we add to our average of 1,000 units one standard deviation of 111 units (total 1,111 units), we get to the 84% level. Similarly, adding another standard deviation to bring us up to 1,222 units gets us to 97.5% coverage. Adding yet a third standard deviation brings us to 1,333 units and now we have happy campers 99.85% of the time.

The problem here is diminishing returns. What does this mean? The following arithmetic serves to explain:

The first Standard Deviation buys us a 68% increase in probability of meeting demand (84% - 50% equals a 34% increase. This increase, on a base of 50%, gives us a percentage increase of 68%.). The second Standard Deviation buys us a 16% increase in probability of meeting demand (97.5% - 84% equals a 13.5% increase. This increase, on a base of 84%, gives us a percentage increase of 16%).

The third Standard Deviation buys us a 2.5% increase in probability of meeting demand (99.85% - 97.5% equals a 2.35% increase. This increase, on a base of 97.5%, gives us a percentage increase of 2.4%).

These numbers are summarized in the table below.

Safety Stock (σ) Service Level (%) Absolute Percentage Increase (%) Incremental Percentage Increase (%)
0 50 0 0
1 84 34 68
2 97.5 13.5 16
3 99.85 2.35 2.4


As discussed above and summarized in the preceding table, each increase in standard deviation (or fraction thereof) gives us a decreasing “return on inventory” in terms of customer satisfaction. Accordingly, the answer to the question, “How much inventory is too much” has the universal answer: “It all depends …” The decision about how much to spend to improve or maintain customer satisfaction levels is unique to every combination of business, product, and customer.

Also keep in mind that a decision made as illustrated assumes that the distribution is stable so that fluctuations around the average are due to usual business operations. A decision must also be made as to how much inventory beyond the calculated amount is needed in order to accommodate hedging, safety stock, and the other reasons for holding inventory discussed at the beginning of the article.

What if you’re “not normal”?

It’s certainly possible that a demand pattern may be stable without being a normal distribution. In that case, you can still calculate an average and a standard deviation. A general rule of thumb is that two standard deviations provide good protection against stock-outs because anything above two standard deviations is considered to be “unusual”.

References

1. Adapted from Process Management – Creating Value along the Supply Chain, Wisner, J.D. and Stanley, L.L., Thomson South-Western, 2008

Peter Canellis

Peter Canellis, PhD, PE
Professor of Management
Vaughn College of Aeronautics and Technology
peter.canellis@vaughn.edu


Southwestcargo

Air Cargo Belgium and Brussels Airport Create BRUcare Task Force to Address Coronavirus Vaccine Shipments

18th October 2020

Air Cargo Belgium and Brucargo, the cargo division of Brussels Airport, have teamed up to form a joint task force to prepare for the safe and efficient import and export of a coronavirus vaccine, should one be discovered.

Dubbed BRUcare, the task force will work closely with the pharmaceutical companies served by Brussels Airport to map out the different scenarios that may arise if a vaccine is found. Because different types of vaccines require different forms of transport, packaging and storage (for example, some vaccines have to be shipped on dry ice, while others will demand refrigeration at 2-8 degrees Celsius), the task force will seek input from pharmaceutical companies as vaccines are developed so that Air Cargo Belgium and Brussels Airport will be ready as soon as possible to transport vaccines.

In order to quickly respond if a vaccine becomes available, the BRUcare task force will also work the pharmaceutical industry to determine a number of key components, including the manufacturing location of the vaccines, the number of doses per person, and the volume that a cargo pallet with vaccines will occupy.

Hosting the largest number of pharma-certified companies under the IATA CEIV program, Brussels airport is an important hub for the pharmaceutical industry. With 30,000 square meters of temperature-controlled areas, Brussels Airport has the largest number of square meters in Europe in first and second-line access to the tarmac to provide refrigerated storage of pharmaceutical products.

In announcing the BRUcare Task Force, Geert Keirens, Director of Air Cargo Belgium stated, “The COVID-19 vaccine story yet again shows the strength of Brucargo. Thanks to the community’s extensive experience in transporting vaccines, in particular the Ebola vaccine on dry ice, and the long-standing collaboration, our cargo community can offer a robust logistics platform for importing and exporting all types of COVID-19 vaccines, at the service of public health. In addition, ACB, thanks to a partnership with the province of Flemish Brabant, is focusing on a community control tower function, whereby COVID-19 vaccine shipments will be continuously monitored at Brucargo.”

In addition, Arnaud Feist, CEO of Brussels Airport Company, stated, “As Europe’s preferred airport for the transport of temperature-sensitive products, Brussels Airport has been investing for over 10 years in a range of services and products tailored to the needs of the pharmaceutical sector, one of the country’s key industries. We have, together with our community partner Air Cargo Belgium, set up the Taskforce BRUcure specially for the COVID-19 vaccine so that we can guarantee, in partnership with the major vaccine manufacturers, a reliable and rapid transport at our airport.”

Peter Canellis
Kevin Pflug


Air Canada Cargo

World Food Day: From the farm to the fork - Emirates SkyCargo maintains supply chains for food and other perishables during COVID-19

Dubai, UAE, 15 October 2020

When Emirates SkyCargo’s first freighter flight took off from Guadalajara, Mexico, on the 2nd of October, the cargo hold contained several tonnes of avocadoes and other vegetables grown and harvested in Mexico and destined for supermarket shelves in Europe and the Middle East.

In Kenya, Emirates’ 10 weekly flights in October 2020 from Nairobi airport transport, among other commodities, fresh fruits and vegetables such as green beans, pineapples, mangoes and avocadoes. The produce arrives in Dubai and then gets distributed to other regional markets in the Middle East and onwards to Europe.

Emirates’ flights taking off from Australia and New Zealand carry meat and a range of fruits including grapes and watermelons heading towards international markets.

Emirates

Coconuts and jackfruit from Thailand, mangoes from India, sweet potatoes from Egypt, blueberries from the UK, cheese from France and Italy, salmon from Norway, cherries from Chile, seafood from Pakistan, bakery products from the Netherlands and tropical fruits from Vietnam are just a limited selection of the food items that travel every day on Emirates’ flights across its global network of more than 130 destinations across six continents.

Consumers across the world have integrated international ingredients and produce into their daily diets for taste and nutritional reasons. Members of international diaspora also look for comfort food offerings from their home countries in supermarket shelves. With Emirates SkyCargo’s global network and flight schedule, food items from diverse origins retain their freshness as they are rapidly transported to their final destinations and the dining tables of consumers.

The growth of export markets over the last decade has also provided a boost to farming communities and agriculture in the various production markets. Emirates SkyCargo’s flights provide a quick and direct connection for farmers and exporters of food items to their international end customers, thereby supporting their livelihoods and the local economy.

With every new destination, Emirates SkyCargo opens up one more potential trade lane for food products across the world. As an example, Emirates SkyCargo, through its direct flights, helped create a market for tropical fruits from Vietnam in the Middle East and exports of these products increased nearly five-fold in just one year in 2017.

With COVID-19 and the disruption to international passenger aviation, the supply chain for food products was put into risk of disruption. However, Emirates SkyCargo worked very quickly to restore its international cargo connectivity, growing its network from just around 35 destinations on its freighter aircraft at the end of March to more than 130 destinations by early October on its freighter as well as passenger aircraft. Currently around 500 tonnes of food items are transported every day in the cargo hold of Emirates aircraft across the world.

As a socially responsible carrier, Emirates SkyCargo has ensured that adequate cargo capacity remains available on its widebody aircraft during the COVID-19 pandemic for the transport of urgent medical supplies as well as food items. By doing this, the air cargo carrier is able to help countries and supermarkets maintain their food supplies and at the same time help farmers reliant on food exports continue to make their livelihoods in these challenging times.

South African Airways
TIACA and Pharma.Aero call for urgent industry collaboration to address a concerning lack of readiness for COVID-19 vaccines logistics

Brussels and Miami, 10/14/2020

TIACA together with Pharma.Aero expressed a strong concern over the current state of air cargo readiness for the upcoming COVID-19 vaccines transportation, with only 28% [1] of the industry feeling well prepared for it today.

According to the results of our airfreight readiness survey, completed by 181 airlines, freight forwarders, ground handlers, airport operators and solution providers, majority of the industry players have begun preparation to handle, store, transport and deliver the future COVID-19 vaccines. They are setting up dedicated teams, engaging with partners, mapping and upgrading their capabilities, as well as developing new services. As compared to companies which are already in close engagement with vaccines manufacturers, companies not involved in direct conversations with the manufacturers felt the least prepared for the upcoming logistics challenge of vaccines transportation.

“We as an industry are as strong as our weakest link. To move the needle on industry readiness, we need to ensure everyone is engaged and informed. Only with a strong and transparent dialogue between pharmaceutical and air cargo sectors, governments, non-governmental organizations and healthcare institutions can we overcome these challenges. The sooner, the better,” – said Emir Pineda, Member of TIACA’s Board of Director and co-lead of the Sunrays project, initiated by TIACA and Pharma.Aero this August.

TIACA

Areas of priority
Focus on industry collaboration between pharma and air cargo sectors; improving visibility and transparency; building adequate capabilities; getting the support from regulators to speed up the process and remove cumbersome procedures, and the help from international organizations and donors to ensure no country is left behind will ensure maximum air cargo preparedness to meet shippers’ needs and expectations for speed, security, reliability and transparency and ultimately save lives.

Strengthening industry collaboration
• Vaccines manufacturers should involve all their air cargo logistics providers as early as possible
• All air cargo stakeholders shall be involved in the conversation, including airports and ground handlers

Ramping-up air cargo capabilities
• Each air cargo stakeholder should map its existing capabilities at each location and make this information available
• Dry ice, active containers, trained staff, and cold chain space availability should be secured early
• Infrastructure investment decisions should be made as early as possible

Improving visibility
• The use of tracking and monitoring devices should be encouraged and the approval process for their safe use in flight needs to start as soon as possible
• Rollout of digital solutions and data sharing platforms should be accelerated

Removing barriers
• Governments, customs authorities, and border agencies should be ready to facilitate and expedite all COVID-19-related goods
• International organizations, NGOs and donors should support cool chain capacity building efforts in least developed countries to ensure no one is left behind in the upcoming global immunization campaign

“We are still at early stages of industry preparation for the transportation of COVID-19 vaccines and there are still a lot of unknowns. Delivering COVID-19 vaccines is a life-saving mission which will need a combination of people, infrastructure, standards, packaging solutions and collaboration. Getting the equation right requires us to work together now,” – Nathan De Valck, Chairman of Pharma.Aero’s Board of Directors and member of the Sunrays project.


Turkish Cargo

dnata becomes first to offer fully integrated, temperature-controlled cool chain for pharma cargo in Singapore

Singapore, 8 October 2020

dnata, one of the world’s leading air services providers, has further enhanced its pharma handling capabilities in Singapore by launching cool dollies in its operations.

The company’s new, high-tech containers are specially designed to serve the pharmaceutical industry with a closed temperature-controlled system for seamless delivery of temperature-sensitive goods between cargo warehouses and aircraft. dnata is the first cargo handler to operate cool dollies at Singapore Changi Airport, offering customers excellent value services throughout the handling process.

Dirk Goovaerts, dnata’s Regional CEO for Asia Pacific, said: "It has become increasingly crucial for both airlines and freight forwarders to be supported by a reliable, certified handler that can protect their pharma shipments and ensure the products remain in perfect condition until they reach the end customer.

"We constantly invest in our people, facilities, equipment and processes to provide world-class services to our customers. Our latest investment in cool dollies underlines our commitment to ensuring the highest quality of supply chain management when handling temperature-sensitive cargo.

dnata

"We continue to enhance our operations to deliver the promises our customers make, every day."

dnata’s announcement to introduce another innovative solution to the Singapore market has been widely welcomed and supported by its partners and stakeholders, including the government and the airport operator.

Ho Yuen Sang, Director, Aviation Industry, Civil Aviation Authority Singapore (CAAS), said: "Air cargo continues to play an important role in enabling the flow of essential goods such as pharmaceutical supplies, even as passenger traffic has been impacted significantly by COVID-19. CAAS congratulates dnata on the launch of the cool dollies at Changi Airport today and commend them for continuing to invest in enhancing their capabilities during these challenging times. This is a good example of the spirit of innovation and collaboration that drives our aviation community to create more value for Changi’s customers."

Law Chung Ming, Director for Transport and Logistics, Enterprise Singapore (ESG), said: "Innovation in healthcare supply chain and logistics will be key in affirming Singapore’s status as a connectivity hub to handle high value and sensitive cargo flows. dnata’s partnership with local SME, Monzone, which provided the technical expertise for the development of Changi Airport’s first cool dollies, is testament of our ability to co-develop solutions to meet the region’s growing pharmaceutical needs. We look forward to facilitating more collaborations between corporates and our local SMEs, to drive the adoption of innovative solutions."

Lim Ching Kiat, Managing Director, Air Hub Development, Changi Airport Group (CAG), said: "CAG congratulates dnata for the implementation of cool dolly services in Changi Airport. Pharmaceuticals and perishables shipments are highly sensitive to temperature fluctuation and require stringent temperature control to maintain product effectiveness and freshness. The cool dolly services further enhance Singapore as a reliable and quality air hub for pharma and perishables products. Through close collaboration with our air cargo community, Changi Airport is committed to continuously develop our cold chain handling capabilities, providing shippers with the assurance of safe, reliable and efficient air transportation for their special cargo. Changi currently features the largest IATA CEIV Pharma certified air cargo community in Asia Pacific. Together with our community, we are preparing for the effective global air transportation of Covid-19 vaccines."

dnata’s new equipment allows the company to transport temperature-sensitive cargo to the highest international standards. Providing temperature-controlled storage from -18°C up to +25°C, the cool dollies mitigate risk of temperature deviations and contamination. They have a closed structure with alarms on opening and closing, as well as alerts if temperatures fluctuate above acceptable ranges. As they are fitted with solar panels, the cool dollies are both environmentally friendly and autonomous. The units are also hygienic and easy to clean, which is an important consideration for pharma cargo.

dnata operates a state-of-the-art, 1,400m² pharma and perishable handling centre at Changi Airport, which is capable of processing 75,000 tonnes of temperature-sensitive goods annually. It enables dnata’s cargo team to offer an uncompromised temperature-controlled handling and storage solution to airline customers in Singapore.

dnata’s cool chain facility was designed and built with flexibility and unique product handling requirements in mind, taking advantage of the latest cold storage technologies and designs. The temperature-controlled areas in the facility are modular, enabling teams to manage changing handling demands with dedicated climate control capability. A web-based monitoring system is also in place to facilitate real-time management of all areas. The cool chain facility enables dnata to provide its customers at Changi with a one-stop audit trail of all consignments whilst being processed through the facility.

To deliver more value for its customers, dnata has recently started offering a range of solutions to fast-track time-sensitive imports. The company’s services include priority clearance at its cargo centre and expedited deliveries to its customers’ warehouse facilities within the Changi Airfreight Centre / Airport Logistics Park Singapore (ALPS). dnata will soon offer the delivery of temperature-sensitive products in an unbroken cool chain island-wide, providing live tracking and updates to customers through its logistics partners.

dnata has been certified by IATA’s Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma) for its pharma handling processes at Singapore Changi Airport. The CEIV Pharma program was created to provide a globally consistent and recognized pharmaceutical product handling certification that focuses on airfreight and temporary storage. The stringent standards set by CEIV Pharma and the rigorous assessments conducted either meet or exceed many of the current worldwide regulations.

dnata has also earned the ISO 9001:2015 certification for cargo handling services, and been awarded Halal certification by Majlis Ugama Islam Singapura (Muis) for a special storage room in its Coolchain facility.

dnata is a global member of Pharma.Aero, a cross-industry collaboration of pharma shippers, CEIV certified cargo communities, airport operators and other air cargo industry stakeholders. In addition, dnata Singapore has recently joined the Singapore Association of Pharmaceutical Industries (SAPI) to further enhance its cooperation with industry stakeholders.

A global air services provider and the trusted partner of over 300 airline customers, dnata offers ground handling, cargo and catering services at 126 airports in 19 countries.

visit aircargopedia
new vendor banner


Subscribe banner
publications img white papers img
Contributors img showcase products
PRIVACY POLICY :
Our Privacy Policy can be found here. If you wish to opt out of these emails, please click the "Safeunsubscribe" link at the bottom of this newsletter.
  WWW.AIRCARGOPEDIA.COM
 “The Complete Encyclopedia for the Air Cargo Professional & Investor”
CONNECT WITH US    WIDGETS   
Google+ Facebook Twitter
 

Google+ Facebook Twitter


Google+ Facebook Twitter